Contents. 2 Corporate Information. 3 Corporate Structure. 4 Group Financial Highlights. 5 Profile of Directors. 11 Chairman s Statement

Transcription

1 Annual Report 2012

2 Contents 2 Corporate Information 3 Corporate Structure 4 Group Financial Highlights 5 Profile of Directors 11 Chairman s Statement 14 Statement on Corporate Governance 25 Additional Compliance Information 26 Statement on Internal Control 28 Audit Committee Report 33 Financial Statements 141 Analysis of Shareholdings 144 List of Properties 145 Notice of Annual General Meeting Form of Proxy

3 Corporate Information BOARD OF DIRECTORS Azmi Hashim Executive Chairman Shalina Azman Non-Independent Non-Executive Deputy Chairman Tan Sri Dato Chen Wing Sum Independent Director Tan Sri Lee Lam Thye Independent Director Dato Ab. Halim bin Mohyiddin Independent Director Dato Larry Gan Nyap Gan Nyap Liow Independent Director Dato Che Md Nawawi bin Ismail Independent Director P ng Soo Theng Independent Director Soo Kim Wai Non-Independent Non-Executive Director Lee Keen Pong Managing Director Shahman Azman Deputy Managing Director COMPANY SECRETARIES Johnson Yap Choon Seng (MIA 20766) Chua Siew Chuan (MAICSA ) PRINCIPAL PLACE OF BUSINESS 2.01 PJ Tower 18 Persiaran Barat Petaling Jaya Selangor, Malaysia Tel : Fax : Website : REGISTERED OFFICE Level 7, Menara Milenium Jalan Damanlela Pusat Bandar Damansara Damansara Heights Kuala Lumpur, Malaysia Tel : Fax : / AUDITORS BDO Chartered Accountants 12th Floor, Menara Uni.Asia 1008 Jalan Sultan Ismail Kuala Lumpur Tel : Fax : SHARE REGISTRAR Securities Services (Holdings) Sdn Bhd Level 7, Menara Milenium Jalan Damanlela Pusat Bandar Damansara Damansara Heights Kuala Lumpur, Malaysia Tel : Fax : / STOCK EXCHANGE LISTING Bursa Malaysia Securities Berhad Main Market (Listed on 28 November 1972) Stock name : AMPROP Stock code : Amcorp Properties Berhad

4 Corporate Structure Significant Operating Companies PROPERTY DEVELOPMENT & INVESTMENT ENGINEERING & INFRASTRUCTURE Malaysia Amcorp Prima Realty Sdn Bhd Distrepark Sdn Bhd 100% 100% Mechanical & Electrical Engineering Blue Star M&E Engineering Sdn Bhd 51% Regal Genius Sdn Bhd 100% Power Engineering & Construction Taifab Properties Sdn Bhd 100% AMBC Transmission Sdn Bhd 85% Living Development Sdn Bhd 100% Power Generation HDCam Sdn Bhd Prisma Tulin Sdn Bhd 60% 41% Amcorp Perting Hydro Sdn Bhd 100% Augustland Hotel Sdn Bhd Bangi Hotel Sdn Bhd 40% 20% Highway Operation Kesas Holdings Berhad 20% London Country Realty Limited 100% Neo Elements Limited 100% NEOd Investments LLP 75% Old Burlington Limited 100% Ten Acre (Mayfair) Limited 25% Annual Report

5 Group Financial Highlights Financial Year Ended 31 March Revenue (RM 000) 340, , , , ,831 Profit for the year (RM 000) (14,170) 18,451 35,920 50, ,668 Profit for the year attributable to owners of the parent (RM 000) (10,669) 17,678 33,660 48, ,976 Basic earnings per share (sen) (1) Profit on Total Equity (%) (4) Gross dividend declared/proposed per share (sen) Net current assets (RM 000) (35,251) 44, ,685 98, ,504 Total assets (RM 000) 679, , , , ,650 Equity attributable to owners of the parent (RM 000) 354, , , , ,244 Net asset per share attributable to owners of the parent (sen) 37 * 39 * * Before share consolidation exercise Profit for the year (RM 000) Basic earnings per share (sen) 120, ,000 80,000 60, , , , (20,000) (5.00) Equity attributable to owners of the parent (RM 000) Net asset per share attributable to owners of the parent (sen) 700, , , , , , , , Amcorp Properties Berhad

6 Profile of Directors AZMI HASHIM Executive Chairman Encik Azmi Hashim, a Malaysian, aged 63, was appointed to the Board on 16 October He is an accountant by training and has worked in various professional accounting firms both internationally and locally. In Amcorp Properties Berhad ( AMPROP ), he has held the position of General Manager and was appointed Managing Director and Director/Adviser on 16 October 1991 and 1 January 1998 respectively, prior to his appointment as Chief Executive Officer on 1 February Encik Azmi was redesignated Executive Chairman of AMPROP on 30 July Encik Azmi also sits on the Board of Sapura Industrial Berhad. SHALINA AZMAN Non-Independent Non-Executive Deputy Chairman Puan Shalina Azman, a Malaysian, aged 45, was appointed to the Board on 30 July She holds a Bachelor of Science in Business Administration majoring in Finance and Economics from Chapman University in California and in 1993, she obtained her Masters in Business Administration from University of Hull in United Kingdom. Puan Shalina first gained invaluable experience in the media industry when she was a Business Development Officer with RCE Capital Berhad ( RCE ) in From 1995 to 1999, she was with Amcorp Group Berhad ( AMCORP ) as Senior Manager, Corporate Planning. In January 2000, she rejoined RCE as the Executive Director and became the Managing Director on 1 September She held the position until 31 July 2002, prior to assuming her current appointment as Deputy Managing Director of AMCORP. Apart from AMCORP, Puan Shalina also sits on the Board of RCE. Annual Report

7 Profile of Directors TAN SRI DATO CHEN WING SUM Independent Director Y. Bhg. Tan Sri Dato Chen Wing Sum, a Malaysian, aged 80, has been a Director of the Company from 8 August 1997 to 8 December He resigned from the Board when he was elected President of the Senate and on 29 May 2003, he was re-appointed as Independent Non-Executive Director of the Company following his retirement as President of the Senate. Tan Sri Dato Chen is by profession, an advocate and solicitor. He read law in Lincoln s Inn, London and now serves as Consultant to Messrs Michael Chen & Co. He also read Philosophy and Education in the Chinese University of Hong Kong. He has been involved in politics and Government service since 1964 and has served as member of Parliament from 1964 to 1986 and member of the Senate from 1997 to He has also served as Parliamentary Secretary, Secretary General of Alliance, Minister with Special Function, Vice-President of MCA, Deputy President of MCA, Minister of Housing, Local Government and New Village, Treasurer General of Barisan Nasional, Deputy President of the Senate and President of the Senate during his tenure as member of Parliament and the Senate. He has held positions of Chairman and Director in various corporations during 1972 to He also has vast experience in international affairs and during his term of office as President of the Senate, he had officially visited Japan, China, Middle East and Latin America. Tan Sri Dato Chen is also the Deputy Chairman of Malaysian South-South Corporation Berhad. TAN SRI LEE LAM THYE Independent Director Y. Bhg. Tan Sri Lee Lam Thye, a Malaysian, aged 66, was appointed to the Board on 1 March Tan Sri Lee worked as a temporary school teacher after completing his secondary education at St. Michael s Institution, Ipoh and a trade unionist before entering politics in He was elected State Legislative Assemblyman for Bukit Nenas, Selangor from 1969 to 1974 and served as Member of Parliament for Bandar Kuala Lumpur/Bukit Bintang from 1974 to Following his retirement from politics in 1990, he continued to serve in public services by contributing actively in the social arena. He has served as Chairman of the National Services Training Council, member of the Malaysian Human Rights Commission from 2000 to 2002 and member of the Special Royal Commission to enhance the operation and management of the Royal Malaysian Police from February 2004 till May Tan Sri Lee is the Chairman of the National Institute of Occupational Safety and Health (NIOSH) under the Ministry of Human Resources, and the Vice Chairman and Member of the Executive Council of the Malaysia Crime Prevention Foundation. He also serves as Chairman and member of Board of Trustees of various foundations and charitable organisations. From 1990 to 2012, he received various awards for his contribution to the nation. His directorships in other public companies include MBM Resources Berhad, Media Prima Berhad and S P Setia Berhad. 6 Amcorp Properties Berhad

8 Profile of Directors DATO AB. HALIM BIN MOHYIDDIN Independent Director Y. Bhg. Dato Ab. Halim bin Mohyiddin, a Malaysian, aged 66, was appointed to the Board on 30 July He resigned from the Board on 12 August 2011, and was re-appointed as Independent Director of the Company on 1 November He graduated with a Bachelor of Economics in Accounting from University of Malaya in 1971 and thereafter joined Universiti Kebangsaan Malaysia as a Faculty member of the Faculty of Economics. He obtained his Master in Business Administration from University of Alberta, Canada in Dato Ab. Halim joined KPMG Malaysia in 1977 and had his early accounting training in both Malaysia and the United States of America. He was made Partner of the firm in Prior to his retirement in October 2001, he was the Partner in charge of the Assurance and Financial Advisory Services Divisions. He was also looking after the Secured e-commerce Practice of the firm. He is a council member of the Malaysian Institute of Certified Public Accountants (MICPA) and was the President of MICPA from 2004 to He is a member of the Malaysian Institute of Accountants (MIA). His directorships in other public companies include Amway (Malaysia) Holdings Berhad, Digi.Com Berhad, ECM Libra Financial Group Berhad, HeiTech Padu Berhad, Idaman Unggul Berhad, Idris Hydraulic (Malaysia) Berhad, KNM Group Berhad, Kumpulan Perangsang Selangor Berhad, Petronas Gas Berhad, RCE Capital Berhad, Tahan Malaysia Berhad and Utusan Melayu (Malaysia) Berhad. DATO LARRY GAN NYAP LIOU Independent Director Y. Bhg. Dato Larry Gan, a Malaysian, aged 57, was appointed to the Board on 30 July He is a Certified Management Consultant and Chartered Accountant. Dato Larry Gan was with Accenture, a global management and technology consulting firm for 26 years until his retirement in December He was a worldwide partner for 16 years and held many global leadership positions including Managing Partner ASIA and Managing Partner Corporate Development Asia Pacific. He was Chairman of the CEO Advisory Council and member of the Global Management Council from 1997 to He served as Chairman of the Association of Computer Industry Malaysia (PIKOM), Vice President of the Association of Asian Oceania Computer Industry Organisation, and a member of the Ministry of Science and Technology Think Tank, Copyright Tribunal, and the Labuan International Financial Exchange Committee. Dato Larry Gan is presently the Chairman of Cuscapi Berhad, Catcha Media Berhad and Diversified Gateway Solutions Berhad and a Director of AmBank (M) Berhad, Tanjong Public Limited Company, Tien Wah Press Holdings Berhad, AmIslamic Bank Berhad, Saujana Resort (M) Berhad, Prestariang Berhad, Formis Resources Berhad and AMMB Holdings Berhad. He also serves as a Director of the Minority Shareholders Watchdog Group, Chairman of British Malaysian Chamber of Commerce and Advisor to the Center for South East Asia Architectural Heritage. Annual Report

9 Profile of Directors DATO CHE MD NAWAWI BIN ISMAIL Independent Director Y. Bhg. Dato Che Md Nawawi bin Ismail, a Malaysian, aged 62, was appointed to the Board on 30 July Dato Nawawi holds a Bachelor of Laws from the International Islamic University of Malaysia and practiced as an advocate and solicitor in a legal firm between 1990 and Dato Nawawi was the Deputy Commissioner of Police of the Malaysian Police Force until his retirement in February He had held several key positions during his 36 years of service with the Malaysian Police Force including the position of Head of Criminal Investigation Department in the State of Sabah and Perlis, OCPD Cheras, Deputy Director Commercial Crime Division and Deputy Director, Criminal Investigation Department in Bukit Aman. Dato Nawawi also sits on the Board of RCE Capital Berhad. P NG SOO THENG Independent Director Mr. P ng Soo Theng, a Malaysian, aged 57, was appointed to the Board on 1 June He holds a Bachelor of Science in Valuation and Estate Management from the University of the West of England (formerly known as Bristol Polytechnic). Mr. P ng is a Fellow of the Royal Institution of Chartered Surveyors (RICS), a Member of the Institution of Surveyors Malaysia (ISM) and Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS). Mr. P ng joined Messrs C H Williams Talhar & Wong, one of Malaysia s leading real estate professional firm in 1981 and had held several senior positions until his redesignation where he now serves as Consultant of the firm. He was made Partner and Director of the firm in 1989 and Senior Executive Director in In C H Williams Talhar & Wong, his forte was undertaking consulting appointments and business development for the firm. Mr. P ng was involved in the valuation exercise for the listing of several REIT companies as well as the sale, structuring, acquisition and due diligence for several high profile transactions involving hotels, commercial properties and commercial development projects. His prior experience stems from a near three year stint in the public sector where he rose to the rank of Acting State Director at the Valuation & Property Services Division, Ministry of Finance. SOO KIM WAI Non-Independent Non-Executive Director Mr. Soo Kim Wai, a Malaysian, aged 51, was appointed to the Board on 30 July Mr. Soo is a Chartered Accountant (Malaysian Institute of Accountants), a Certified Public Accountant (Malaysian Institute of Certified Public Accountants), Fellow of the Certified Practising Accountant (CPA), Australia and Fellow of the Association of Chartered Certified Accountants (ACCA), United Kingdom. He joined Amcorp Group Berhad ( AMCORP ) in 1989 as Senior Manager, Finance and has since held various positions. He was appointed as a Director of AMCORP on 13 March 1996 and subsequently as Managing Director on 1 January Before joining AMCORP, he was in the accounting profession for 5 years with Deloitte KassimChan from 1980 to 1985 and with Plantation Agencies Sdn Bhd from 1985 to Apart from AMCORP, his directorships in other public companies include AMMB Holdings Berhad, Kesas Holdings Berhad and RCE Capital Berhad. He also sits on the Board of British Malaysian Chamber of Commerce. 8 Amcorp Properties Berhad

10 Profile of Directors LEE KEEN PONG Managing Director Mr. Lee Keen Pong, a Malaysian, aged 50, was appointed Chief Executive Officer on 30 July 2007 and then to the Board as Executive Director on 19 November He was promoted to Managing Director on 21 February Mr. Lee joined Amcorp Group Berhad ( AMCORP ) in 1991 and has held various positions including Managing Director of Mezzanine Capital (Malaysia) Sdn Bhd and was Head of Direct Investment and Property of AMCORP before he was promoted to his current appointment. Prior to that, he has many years of audit and consultancy experience with two international accounting firms, Coopers & Lybrand and KPMG. Mr. Lee is a Chartered Accountant (Malaysian Institute of Accountants, Institute of Chartered Accountants England and Wales) and a Certified Public Accountant (Malaysian Institute of Certified Public Accountants). He has served as co-opted member on the Financial Statements Review Committee of Malaysian Institute of Certified Public Accountants. His directorships in other public companies include Kesas Holdings Berhad and MCM Technologies Berhad. SHAHMAN AZMAN Deputy Managing Director Encik Shahman Azman, a Malaysian, aged 37, was appointed to the Board as Non-Independent Non-Executive Director on 2 June He was redesignated to Executive Director of the Company on 1 June 2010 and promoted to Deputy Managing Director on 21 February After graduating from Chapman University, U.S.A. with a Bachelor of Communications, Encik Shahman joined Amcorp Group Berhad ( AMCORP ) in He was subsequently promoted to General Manager spearheading the Corporate Planning and Strategy portfolio. In 2001, he joined MCM Technologies Berhad, a subsidiary of AMCORP, as General Manager of Corporate Planning and Strategy. His last held position in MCM Technologies Berhad was Chief Investment Officer. Encik Shahman later joined RCE Capital Berhad as Director of Corporate Affairs on 1 April 2004 and was promoted to Director of Strategic Business Unit on 1 January His directorships in other public companies include AMCORP and RCE Capital Berhad. Annual Report

11 Profile of Directors DETAILS OF MEMBERSHIPS IN BOARD COMMITTEES Azmi Hashim Shalina Azman COMMITTEES OF THE BOARD Audit Committee Nomination and Remuneration Committee Tan Sri Dato Chen Wing Sum Member Member Tan Sri Lee Lam Thye Dato Ab. Halim bin Mohyiddin Dato Larry Gan Nyap Liou Chairman Chairman Dato Che Md Nawawi bin Ismail Member Member P ng Soo Theng Options Committee Chairman Member Soo Kim Wai Member Member Lee Keen Pong Shahman Azman Notes: Member Save as disclosed below, none of the Directors have any family relationship with any Directors and/or major shareholders of the Company: (i) (ii) (iii) Encik Azmi Hashim is the brother of Tan Sri Azman Hashim ( TSAH ), a major shareholder of the Company; Puan Shalina Azman is the daughter of TSAH; and Encik Shahman Azman is the son of TSAH. None of the Directors have any conflict of interest with the Company. None of the Directors have been convicted for offences within the past 10 years. 10 Amcorp Properties Berhad

12 Chairman s Statement On behalf of the Board of Directors, I am pleased to present the 46th Annual Report and Audited Financial Statements of the Group and the Company for the financial year ended. Review of results I am pleased to report that for the financial year ( FY ) ended the Group made a record profit after tax of RM103.7 million. This was achieved on the back of our success in our recent investments in London commercial properties and from higher contribution from our associate companies. This achievement represents a continuing record of profitability for the Group for the 4th consecutive year since its transformation into a focused property, engineering and infrastructure Group. The Group s shareholders fund at amounted to RM661.2 million and this translates into a net asset value per share of RM1.15. The Group s gearing ratio has been reduced from 32% in FY 2011 to 20% in FY 2012 and the Group s cash and cash equivalents increased from RM28.9 million to RM152.0 million. Strategy and Operations review Property Investment The Group s strategy to venture into the London property market has proven to be timely and rewarding. During the financial year the Group disposed the freehold office buildings located at 40/50 Eastbourne Terrace, Paddington, London which was acquired less than 2 years earlier, for a net profit of RM70.0 million, giving a return on equity in excess of 116%. Following its first large and successful foray into the London commercial property market, the Group continued to focus on prime central London areas by acquiring 2 properties to add to its property portfolio. The first one is a residential block which was converted from a commercial block in fashionable Baker Street and the second, an existing and tenanted 5-storey 10 units apartment block in Lexham Gardens, Kensington. Annual Report

13 Chairman s Statement Encouraged by the recent invaluable experience and knowledge of the London property market, the Group aims to capitalise on its success by expanding its technical capability and the breadth of targeted property investment opportunities in London. In line with this aim, at the end of the FY 2012, the Group entered into a joint venture investment with 2 other prominent UK based companies, Native Land Limited and Grosvenor Limited to participate in the development of Pavilion D, a block of 53 upmarket and trendy suites in the multiple-award winning NEO Bankside project, located on the banks of river Thames and next to the Tate Modern museum, with an investment valuation of GBP62.5 million. Native Land Limited is an award winning property developer that specialises in the London residential and mixed-use markets while Grosvenor Limited is a household UK property developer and investor for more than three centuries. NEO Bankside had recently won the Development of the Year in the RESI Awards 2012, Best Large Development in the Evening Standard New Homes Awards 2012 and overall winner of the London Evening Standard Awards 2012 and in the prestigious International Property Awards 2011, NEO Bankside was awarded the Best International Development - Multiple Units. Subsequent to the financial year and in June 2012, the Group disposed its Lexham Gardens apartment block with a net gain of approximately RM6.6 million. This investment was also held for less than 2 years and provided a return on equity in excess of 33%. In addition, the Group has also started to market its Baker Street apartment units in Hong Kong, Singapore and London and has so far seen encouraging sales. The sale of these Baker Street units will contribute significantly to the Group s future profitability. Continuing its focus on prime central London areas, in July 2012, the Group re-invested its profits and capital via a joint venture with HPL (Mayfair) Pte. Ltd., a wholly owned subsidiary of Hotel Properties Limited which is listed on the Singapore Stock Exchange and a UK company to acquire a building block in the highly prestigious and exclusive Mayfair, London area with a total expected capital outlay of GBP23.8 million. The project plan involves the redevelopment and conversion of the existing commercial building into high-end residential apartments in this famous London location. As part of the Group s effort to reduce its non or low yield income producing assets, the Group disposed its land in Sepang, Selangor for a cash consideration of RM122.3 million. Part of the proceeds was utilised for the acquisition of retail and office lots, business suites and car park bays within a mixed commercial development known as Amcorp Trade Centre ( ATC ) located in Petaling Jaya, Selangor with a net lettable area of more than 177,000 sq ft for RM84.9 million. The balance was utilised to reduce borrowings to further improve the Group s debt ratio. ATC generates a sustainable net rental yield in excess of 7% per annum and steps are in place to further enhance this current rental yield. Property Development Apart from the active involvement in London, the Group also launched its Pearl Avenue housing project in Sibujaya, Sarawak with a gross development value ( GDV ) of RM50.3 million comprising 170 units of 1½-storey and doublestorey terrace houses. The Group s current and fully sold Seri Mutiara housing project in Salak South, Selangor with a GDV of RM48.4 million is expected to be completed in the 4th quarter of FY 2013 and the on-going and all-bungalow housing project at Kayangan Heights, Shah Alam, is also progressing well with the completion of 27 units Kenanga Woods bungalows and the in-progress 15 units Begonia Crescent bungalows with a GDV of RM100.4 million. The progress made has enhanced the overall landscape and breadth of the area. The Group s total unbilled sales for property development currently stand at RM36.3 million. (L to R) : Evening Standard New Homes Awards 2012, RESI Awards 2012 and London Evening Standard Awards Amcorp Properties Berhad

14 Chairman s Statement Power and Infrastructure The Group s 4MW hydropower plant operational since December 2009, located at Sg. Perting, Pahang continues to perform efficiently with a higher electricity output. Our mini-hydro plant is known as an outstanding model of a mini hydro plant in Malaysia. Hydro power is one of the renewable energy sources falling under the feed-in-tariff mechanism. Under the Renewable Energy Act, the Group is eligible to sell its renewable energy for a duration of 21 years, ending in year In July 2012 the Group signed a new power purchasing agreement incorporating a tariff rate that is higher than the existing rate by 44% for every MW generated. This tariff increase will enhance the project s current profitable operation. The Group is currently carrying out feasibility studies as part of its effort to increase the capacity of its existing hydropower plant, in addition to working on a second hydropower plant as an expansion plan. The Group has also initiated plans to tap on other renewable energy resources such as solar power using solar photovoltaic systems and is currently in the midst of finalising the action plans. The Group aims to expand its renewable energy business and has identified a potential investment of more than RM140 million over the next two years for it to participate in the industry s need to diversify out of traditional energy resources through the Government s Economic Transformation Programme. Engineering The Engineering Division continues to expand its transmission projects in Peninsular Malaysia and during the financial year secured projects from Tenaga Nasional Berhad ( TNB ) with a total contract value of RM67.9 million and of which two projects with a contract value of RM11.9 million, were completed in FY Maintaining the continuous growth of transmission works, in May 2012 AMBC Transmission was awarded with another transmission project from TNB with contract value of RM24.6 million. Blue Star M&E Engineering continued to focus on its mechanical engineering works on Heating, Ventilation and Air-Conditioning ( HVAC ) for shopping malls, office buildings, hospitals and hotels. For FY 2012 the company had a total contract worth of RM133.6 million and recently, it secured two new contracts worth RM62.5 million for the St Regis, Kuala Lumpur and Shah Alam Hospital taking the total HVAC contract value to date to RM196.1 million. Dividend A special dividend of 3 sen per ordinary share, less tax of 25% was paid on 12 October 2011 in respect of the financial year ended. The Board is proposing a final dividend of 3 sen per ordinary share, less tax of 25% for approval of the shareholders at the forthcoming Annual General Meeting. If approved by shareholders, the total dividend payout for the financial year ended will be 6 sen per ordinary share. Outlook The Group will continue to focus on its property, engineering and infrastructure division with selected investments in central London properties and the continuous development of its existing land banks. The Engineering division is gathering strength and continues to search out for growth opportunities locally and regionally. With the Group s recent active involvement in renewable energy, the infrastructure division s long term growth prospect is expected to be enhanced. Barring any unforeseen circumstances, the Group can look forward to another profitable year ahead and create value for shareholders. Acknowledgements On behalf of the Board, I would like to extend our appreciation and gratitude to our shareholders, customers, suppliers, bankers, business associates and various government authorities for the support and continued trust in us throughout the years. Last but not least, I would like to extend my sincere gratitude to my fellow Board members for their contribution and guidance and appreciation to our dedicated management team and committed staff for their hard work and continuous effort over the years. Azmi Hashim Executive Chairman 3 August 2012 Annual Report

15 Statement on Corporate Governance The Board of Directors of Amcorp Properties Berhad ( AMPROP or the Company ) recognises the importance of safeguarding and promoting the interests of shareholders. The Board is committed to uphold the value of good corporate governance by continuously advocating transparency, accountability, integrity and responsibility to enhance long term shareholders values and safeguarding the stakeholders values. The Board is pleased to report on the corporate governance practices of the Company and the manner in which the Company has complied with the principles and best practices as set out in the Malaysian Code on Corporate Governance (Revised 2007) ( Code ). BOARD OF DIRECTORS Board Composition and Balance The Group is helmed by an effective and experienced Board comprising individuals of caliber and credibility from a diverse professional backgrounds with a wealth of experience, skills and expertise. The Directors together as a team set the values and standards of the Company and ensures that the Group s business is properly managed to safeguard the Group s assets and shareholders investment. A brief profile of each Director is set out in the Profile of Directors section of this Annual Report. The Board s composition of eleven (11) members, comprising three (3) Executive Directors, two (2) Non-Independent Non-Executive Directors and six (6) Independent Directors is in compliance with paragraph of Bursa Malaysia Securities Berhad Main Market Listing Requirements ( Listing Requirements ). The independent directors which make up more than half the Board play a crucial role in the exercise of independent assessment and objective participation in Board deliberations and the decision-making process. The independent directors do not participate in the day-to-day management of the Company and do not engage in any business dealings and are not involved in any other relationship with the Company which could materially interfere with the exercise of their independent judgement. The role of the Executive Chairman, Encik Azmi Hashim and Managing Director, Mr. Lee Keen Pong are separate with clear distinction of responsibility between them. The Executive Chairman is primarily responsible for the orderly conduct and working of the Board whilst the Managing Director is responsible for the day-to-day running of the business and implementation of Board s policies and decisions. The Board has not identified any independent director as the senior independent director. Any concerns relating to the Group may be conveyed by the stakeholders to any of the independent directors. The Board through the Nomination and Remuneration Committee conducts an annual review of the performance of the Board to ensure that it is continuously effective. The review is conducted via a set of questionnaires to assist the reviewer in his assessment and is spread over the following three (3) key areas: the effectiveness of the Board as a whole; Board size, composition and balance; and contributions of individual Directors/Managing Director to the Board. 14 Amcorp Properties Berhad

16 Statement on Corporate Governance Duties and Responsibilities The Board s principal focus is the overall strategic direction, development and control of the Group. In support of this focus, the Board maps out and reviews the Group s medium and long term strategic plans on an annual basis, so as to align the Group s business directions and goals with the prevailing economic and market conditions. It also reviews the management s performance and ensures that necessary financial and human resources are available to meet the Group s objectives. The Board s other main duties include regular oversight of the Group s business performance, and ensuring that the internal controls and risk management processes of the Group are well in place and are implemented consistently to safeguard the assets of the Group. On-going succession planning and training which is aligned to the organisation s objectives are put in place to ensure orderly management transition in the Group. Board Meetings and Supply of Information The Board meets at least four (4) times annually with additional meetings convened as and when deemed necessary. During the financial year, the Board met five (5) times where it deliberated and considered a variety of matters including the Group s financial results, budget and strategy, corporate proposals and strategic issues that affect the Group s business operations. The Board and Board Committees meetings are planned in advance prior to the commencement of a new year and the schedule is circulated to the Directors and Committee members well in advance to enable them to plan ahead. Board members are given at least seven (7) days notice before any Board meeting is held. The agenda for each Board meeting and papers relating to the matters to be deliberated at the meeting are forwarded to all Directors for perusal prior to the date of the Board meeting. The Board papers are comprehensive covering agenda items to facilitate informed decision-making. 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 at the next Board meeting. The Board also peruse the decisions deliberated by Board Committees through minutes of these Committees. The Chairman of the Board Committees is responsible to inform the Directors at Board meetings of any salient matters noted by the Committees and which require the Board s notice or direction. All proceedings of Board meetings are minuted and signed by the Chairman of the meeting in accordance with the provisions of Companies Act, There is a schedule of matters reserved specifically for Board s deliberation, such as approval of corporate plans and annual budgets, recommendation of dividends, acquisitions and disposals of undertakings and properties of substantial value. Where a potential conflict of interest arises, it is mandatory for the Director concerned to declare his interest and abstain from the deliberation and decision-making process. The Board has complete and unrestricted access to information relating to the Group s businesses and affairs. The Board may require to be provided with further details on the matters to be considered. Senior management are invited to attend the Board meetings to brief and provide comprehensive explanation on pertinent issues. Professional advisers appointed by the Company for corporate proposals to be undertaken by the Company would also be invited to render their advice and opinion to the Directors. The Directors, whether collectively as a Board or in their individual capacity, have the liberty to seek external and independent professional advice, if so required by them, in furtherance of their duties at the Company s expense. Annual Report

17 Statement on Corporate Governance The Directors are notified of any corporate announcements released to Bursa Malaysia Securities Berhad. They are also notified of the impending restriction in dealing with the securities of the Company at least thirty (30) days prior to the targeted release date of the quarterly financial results announcement. All Directors have direct access to the advice and services of the Company Secretaries. The Company Secretaries are responsible in ensuring that Board procedures are met and constantly advise the Directors on compliance issues. Details of attendance of Directors at Board meetings during the financial year are as follows: Name of Director No. of Meetings Attended Azmi Hashim 5/5 Shalina Azman 5/5 Tan Sri Dato Chen Wing Sum 5/5 Tan Sri Lee Lam Thye 4/5 Dato Ab. Halim bin Mohyiddin 5/5 Dato Larry Gan Nyap Liou 4/5 Dato Che Md Nawawi bin Ismail 5/5 P ng Soo Theng 5/5 Soo Kim Wai 5/5 Lee Keen Pong 5/5 Shahman Azman 4/5 Appointment to the Board The proposed appointment of new Board members as well as the proposed re-election/re-appointment of existing Directors who are seeking re-election/re-appointment at the annual general meeting are first considered and evaluated by the Nomination and Remuneration Committee. Upon its evaluation, the Nomination and Remuneration Committee will make recommendations on the proposal(s) to the Board for approval. The Board makes the final decision on the proposed appointment or re-election/re-appointment to be presented to shareholders for approval. Re-election of Directors In accordance with the Company s Articles of Association, one-third (1/3) of the Directors are subject to retirement by rotation at every annual general meeting and provided always that all Directors shall retire from office at least once every three (3) years but shall be eligible for re-election. Directors who are appointed by the Board are subject to re-election by the shareholders at the annual general meeting held following their appointments. Directors of or over 70 years of age are required to submit themselves for re-appointment annually in accordance with Section 129(6) of Companies Act, Amcorp Properties Berhad

18 Statement on Corporate Governance Directors Training The Board acknowledges the importance of continuous education and training in order to broaden one s perspective and to keep abreast with the current and future developments in the industry and global markets, regulatory updates as well as management strategies to enhance the Board s skills and knowledge in discharging their duties. Orientation programme is initiated for newly appointed Directors to familiarise them with the Group s business. All the Directors have attended the Mandatory Accreditation Programme prescribed by Bursa Malaysia Securities Berhad. During the financial year under review, the Company had organised in-house seminar on Budget 2012 National Transformation Policy: Welfare of Rakyat, Well Being of the Nation conducted by external consultants for the Directors and senior management. The Directors also continued to attend and participate in various training programmes, briefings, conferences and seminars, which they have individually considered as relevant and useful to further enhance their business acumen and professionalism in discharging their stewardship responsibilities. Some of the programmes attended by the Directors during the financial year ended are as follows: Key Areas Topics Corporate Governance The Securities Commission's New Corporate Governance Blueprint What does it mean for your Company ICAA MICPA Forum: - Improving Corporate Governance in Malaysia Capital Markets The Role of Audit Committee Securities Commission-Bursa Malaysia Corporate Governance Week 2011: - Stand Up & Take Charge: Shareholders Rights to Shareholders Responsibilities Directors Duties & Obligations Leadership Financial, Taxation & Investment Performance Planning (Job Analysis KRAs & KPIs Workshop) The Board s Responsibility for Corporate Culture Selected Governance Concerns and Tools for Addressing Corporate Culture and Board Performance Board of Directors Workshop Sustainability Programme for Corporate Malaysia Consumer Products, Finance, Technology & Closed End Funds Director and Senior Executives Compensation Seminar Negotiate to Win Masterclass Budget 2012 National Transformation Policy: Welfare of Rakyat, Well Being of the Nation Forensic Accounting Budget 2012 Tax Seminar Laws & Regulations Updates of 2011 new & revised FRSs and new Listing Requirements of Bursa Malaysia Securities Berhad Amendments to the Valuers, Appraisers and Estate Agents Act 1981 Annual Report

19 Statement on Corporate Governance Key Areas Business & Economics Topics Third World Chinese Economic Forum Promoting Trade Between Malaysia and UK Moving Towards a Developed Nation and High Income Economy Credit Suisse Market Outlook Lunch Seminar Will We Ever Achieve Meritocracy The MIA-AFA Conference Converge, Transform, Sustain: Towards World Class Excellence Credit Suisse Market Outlook Seminar Premier Luncheon with Lord Stephen Green, Minister of State for Trade and Investment (UK) 15th Asian Investment Conference The Nomination and Remuneration Committee has reviewed and is satisfied that the Directors have received the necessary training during the financial year under review which enhanced their effectiveness and contribution to the Board. Directors Remuneration All Non-Executive Directors are paid Directors fees as approved by the shareholders at the annual general meeting based on the recommendation of the Board. The determination of the level of fees of the Non-Executive Directors is a matter decided by the Board as a whole to ensure that it is sufficient to attract and retain the services of the Non-Executive Directors which are vital to the Company. Meetings attendance allowance are paid to Non-Executive Directors in accordance with the number of meetings attended during the financial year. Individual Directors will abstain from participating in the discussion and decision of their own remuneration. For the Executive Directors, the remuneration packages link rewards to individual as well as corporate performance and achievement of key performance indicators, taking into consideration the market and industry practice. Long term incentives are implemented through share option scheme. The Company has in place Directors and Officers liability insurance ( D&O ) and the Directors are required to contribute jointly to the premium of the D&O policy. Details of the remuneration of the Directors of the Company for the financial year ended are as follows: Aggregate Remuneration Category Executive Directors (RM) Non-Executive Directors (RM) Total (RM) Fees Other Emoluments Defined contributions Benefits-in-kind 4,000 4,286, , , , ,000 15,120 91, ,000 4,386, , , Amcorp Properties Berhad

20 Statement on Corporate Governance Analysis of Remuneration Range of Remuneration No. of Executive Directors No. of Non-Executive Directors RM50,000 & below - 7 RM200,001 RM250,000-1 RM950,001 RM1,000, RM2,250,001 RM2,300, RM2,300,001 RM2,350, The disclosure of Directors remuneration is made in accordance with Appendix 9C, Part A, item 11 of the Listing Requirements. The Board is of the opinion that the disclosure of Directors remuneration through band disclosure is sufficient to meet the objectives of the Code. Separate and detailed disclosure of individual Director s remuneration would not add significantly to the understanding of shareholders and other interested persons in this aspect. WHISTLE BLOWING POLICY The Group in its effort to enhance corporate governance has put in place a whistle blowing policy to provide an avenue for employees and stakeholders to report genuine concerns about malpractices, unethical behaviour, misconduct or failure to comply with regulatory requirements without fear of reprisal. Any concerns raised will be investigated and a report and update is provided to the Audit Committee. BOARD COMMITTEES The Board has delegated certain responsibilities to the Board Committees which operate within defined terms of reference approved by the Board to assist the Board in discharging its fiduciary duties and responsibilities. The Board Committees include the Audit Committee, Nomination and Remuneration Committee and Options Committee. The Board Committees exercise transparency and full disclosure in their proceedings. Where necessary, issues deliberated by the Board Committees are presented to the Board with the appropriate recommendations. The ultimate responsibility for the final decision on all matters however, lies with the Board. The Board Committees in AMPROP are as follows: Audit Committee The Audit Committee comprises three (3) Independent Non-Executive Directors and is in compliance with the Listing Requirements. The members of the Audit Committee are as follows: 1. Dato Ab. Halim bin Mohyiddin (Independent Director) Chairman 2. Tan Sri Dato Chen Wing Sum (Independent Director) 3. Dato Che Md Nawawi bin Ismail (Independent Director) Annual Report

21 Statement on Corporate Governance The Audit Committee s principal role is to reduce conflicts of interest particularly between management and shareholders and to ensure that the Group s assets are utilised efficiently. As part of the Audit Committee s responsibilities, they would review the Company s financial statements, related party transactions and the system of internal controls. They may also consider whether procedures on internal audit are effective at monitoring adherence to the Company s standards and values. During the financial year, the Audit Committee held five (5) meetings whereby the external auditors attended two (2) of the meetings and also met with the Committee members without the presence of the management and Executive Directors at one (1) of the meeting. A full Audit Committee Report enumerating its membership, summary of the terms of reference and a summary of activities during the financial year are set out in the Audit Committee Report. Nomination and Remuneration Committee The Nomination and Remuneration Committee comprises entirely of Non-Executive Directors and its members are as follows: 1. Dato Larry Gan Nyap Liou (Independent Director) Chairman 2. Tan Sri Dato Chen Wing Sum (Independent Director) 3. Dato Che Md Nawawi bin Ismail (Independent Director) 4. Soo Kim Wai (Non-Independent Non-Executive Director) The role of the Nomination and Remuneration Committee, set out in its terms of reference, includes among others, the following: (a) Appointment and Evaluation (i) (ii) To consider and recommend candidates for directorship to the Board and membership to Board Committees based on the following broad criteria: - skills, knowledge, expertise and experience; - professionalism; - integrity; and - for independent non-executive directors, the ability to discharge their duties. Reviewing annually the required mix of skills, experience and other qualities, including core competencies, which Directors should bring to the Board. (iii) Assessing annually the effectiveness of the Board as a whole, including its size and composition, the committees of the Board and the contribution of each individual Director. (iv) Reviewing the training needs of Directors. (b) Remuneration (i) To recommend to the Board on the framework or broad policy for the remuneration of the Company s or Group s Chief Executive and other senior management as the Committee is designated to consider. 20 Amcorp Properties Berhad

22 Statement on Corporate Governance The Nomination and Remuneration Committee meets at least once in a financial year and whenever required. The Committee met twice during the financial year. During the financial year, the Nomination and Remuneration Committee undertook the following: evaluation exercise on the effectiveness, composition and balance of the Board as well as effectiveness of the Committees and contribution of each individual Director of the Company; reviewed all Directors who are due for re-election/re-appointment at the Company s Forty-Fifth Annual General Meeting to determine whether or not to recommend their re-election/re-appointment; reviewed the training courses attended by the Directors; reviewed the remuneration package for the Executive Chairman, Chief Executive Officer and Executive Director; reviewed and recommended the promotion of the Chief Executive Officer and Executive Director of the Company to Managing Director and Deputy Managing Director respectively and their remuneration package; reviewed the renewal of Service Agreement for the Executive Chairman; reviewed the establishment of Options Committee of the Company; reviewed the terms of Contract of Service for the Executive Director; and reviewed and recommended the appointment of Y. Bhg. Dato Ab. Halim bin Mohyiddin as an Independent Non-Executive Director and Chairman of the Audit Committee. The Committee also reviewed the size of the Board and had concluded that it was appropriate. Options Committee The Company, with the approval of its shareholders obtained at the Extraordinary General Meeting held on 21 September 2011, had established the Employees Share Option Scheme ( Scheme ) and the Scheme was implemented on 28 September The Options Committee was established on 30 September 2011 to administer the Scheme in accordance to the Bylaws governing and constituting the Scheme as approved by the shareholders. The members of the Options Committee are as follows: 1. Azmi Hashim (Executive Chairman) Chairman 2. Shalina Azman (Non-Independent Non-Executive Deputy Chairman) 3. Soo Kim Wai (Non-Independent Non-Executive Director) 4. Lee Keen Pong (Managing Director) 5. Yap Choon Seng (Group Chief Financial Officer/Company Secretary) The Options Committee meets as and when required. There was no meeting held during the financial year. Annual Report

23 Statement on Corporate Governance ACCOUNTABILITY AND AUDIT Financial Reporting The Board endeavours to present a balanced and comprehensive assessment of the Group s financial performance through the annual audited financial statements and quarterly announcement of financial results to shareholders. The Board is assisted by the Audit Committee to oversee the Group s financial reporting processes and the quality of its financial reporting. Directors Responsibility Statement The Directors are required by the Companies Act, 1965 to ensure that the financial statements prepared for each financial year give a true and fair view of the state of affairs of the Group and the Company as at the end of the financial year, and of the results of their operations and cash flows for the financial year. The Directors consider that in preparing the financial statements, the Directors have consistently used and applied the appropriate and relevant accounting policies and made judgements and estimates that are reasonable and prudent. The Directors have a general responsibility in ensuring that the Company and the Group keep proper accounting records in accordance with the provisions of the Companies Act, 1965 to enable the preparation of the financial statements with reasonable accuracy. The Directors are also responsible for taking reasonable steps to safeguard the assets of the Company and the Group to prevent and detect fraud and other irregularities. Internal Control The Board acknowledges its overall responsibility in maintaining an internal control system that provides reasonable assurance of effective and efficient operations, compliance with laws and regulations, as well as internal procedures and guidelines. However, the Group s system of internal control is designed to manage and not eliminate the risk of failure to achieve the Group s objectives, hence the internal control system can only provide reasonable and not absolute assurance against the risk of material errors, fraud or loss. The Statement on Internal Control, which provides an overview of the state of internal control within the Group, is set out on pages 26 to 27 of this Annual Report. Audit Committee The Audit Committee conducts a review of the Internal Audit Function in terms of its authority, resources and scope as defined in the Internal Audit Charter adopted by the Group. The minutes of the Audit Committee meetings are tabled to the Board for perusal and for action where appropriate. Relationship with Auditors The Company, through its Audit Committee, has established a transparent and appropriate relationship with the Company s auditors, both internal and external. It is the policy of the Audit Committee to meet the external auditors to discuss their audit plan, audit findings and the financial statements. The Audit Committee also meets the external auditors without the presence of the management and executive Board members. The roles of both the internal and external auditors are further described in the Audit Committee Report. 22 Amcorp Properties Berhad

24 Statement on Corporate Governance RELATIONSHIP AND COMMUNICATION WITH SHAREHOLDERS AND INVESTORS Communication with Shareholders The Board is committed to provide shareholders and investors accurate, useful and timely information about the Company, its businesses and its activities. The Company has regularly communicated with shareholders and investors in conformity with the disclosure requirements. The Company s annual general meeting remains the principal forum for dialogue and interaction with shareholders and provides an opportunity for the shareholders to seek and clarify any issues and to have a better understanding of the Group s business and corporate development. The Group ensures that timely disclosures are made to the public with regard to the Group s corporate proposals, financial results and other required announcements. Corporate and financial information of the Group as well as the Company s announcements to Bursa Malaysia Securities Berhad are also made available to the public through the Company s website at Investor Relations The Board also encourages and values dialogues with its investors. Personnel of the Company have always looked forward to holding discussions with analysts and shareholders from time to time. Primary contact for investor relations matters is Mr. Johnson Yap Choon Seng, the Company Secretary and Group Chief Financial Officer. Mr. Johnson Yap, aged 42, has been with the Group for 5 years. He obtained his Master in Business Administration at National University of Singapore and is a Fellow of the Association of Certified Chartered Accountants (ACCA). He is also a member of the Malaysian Institute of Accountants (MIA). Contact Details Telephone number : cosec@amcorp.com.my CORPORATE SOCIAL RESPONSIBILITY The Group recognises the importance of corporate social responsibility ( CSR ) as an integral part of business and strongly pursue its belief of caring for and sharing with people, business associates and the community. In this respect, the Group continued its initiative to strive for a balanced approach in achieving its business profitability and the expectation of its stakeholders and the community thereby creating value to our shareholders and enhancing the long term sustainability of the Group. In its CSR initiatives, the Group partnered with National Kidney Foundation ( NKF ) in support of the various events, programmes and activities organised by NKF. The Group through sponsorship participated in the Roasters Chicken Charity Run 2011 and World Kidney Day 2012 in aid of NKF. As in previous years, the Group continued with the collection of old newspapers campaign, of which the old newspapers are then sent to the Community Recycle for Charity via NKF. Annual Report

25 Statement on Corporate Governance The Group recognises the importance of preserving the natural environment and is committed to achieving good standards of environmental performance, preventing pollution and minimising the impact of its operations. Additionally, the Group also promotes a culture of waste minimisation and resource optimisation. In our office environment, we ensure that waste is re-used or re-cycled as far as possible. The Group continuously contributes to local charities, voluntary organisations and support numerous charitable causes both in cash and in kind. We donated RM30,000 to Masjid al-istiqamah Kayangan Heights to ease their daily operational and maintenance cost. In addition, we also donated a van to Masjid Darul Husna Sibu Jaya, sponsored gifts for the underpriviledged children from Rumah K.I.D.S and Shelter Homes Shelter 1 and contributed to the residents of a disabled home for their outing to Zoo Negara. We also extended Amcorp study grant to deserving students pursuing ACCA course with the hope to build future generations of exemplary young leaders who possess the ambition to excel in whatever they do. The Group s employees are the most important asset, the major contributors to the organisation s success and growth. Training and career development are conducted to equip employees with the necessary skills and knowledge as well as to achieve their potential. We also take a proactive approach in providing opportunities for our employees to obtain professional and nationally recognised qualifications and in encouraging continuous professional development programmes that are conducted internally and externally. A great deal of effort and resources are channeled into the Group s CSR programmes and the top management is directly involved in the Group s CSR efforts. We look upon the giving back to society in the hope of making a difference in the many lives we touches. This Statement on Corporate Governance is made in accordance with the resolution of the Board of Directors dated 24 May Staff Wellness Programme Conquering Mt. Kinabalu with istmas Chr Rumah. K.I.D.S 24 ills upgra de prog ramme Amcorp Properties Berhad e New Y ear goo dies for elderly Games wit h Shelter 1 Staff participation in AWAM hunt Staff sk Chines Carolling w r s Shelte ith orpha ns n Agathia Gifts for children

26 Additional Compliance Information 1. Material Contracts Save as disclosed below, there were no material contracts entered into by the Company and/or its subsidiaries involving Directors and/or major shareholders interests, either still subsisting at the end of the financial year or entered into since the end of the previous financial year: Conditional sale and purchase agreement ( SPA ) dated 17 June 2011 entered between Living Development Sdn Bhd, a wholly-owned subsidiary of the Company, and Melawangi Sdn Bhd ( MSB ), a wholly-owned subsidiary of Amcorp Group Berhad, which in turn is the holding company of the Company, to acquire 30 retail lots of Amcorp Mall, 10 office lots located within Amcorp Mall, PJ Tower and Amcorp Tower, 7 business suites of Menara Melawangi and 1,454 car park bays, all located within the commercial mixed development known as Amcorp Trade Centre for a total cash consideration of RM75,000,000. The SPA has been completed on 30 September Share Buy-Back The information on share buy-back during the financial year is set out in Note 25 to the Financial Statements. 3. Options or Convertible Securities No options or convertible securities were issued by the Company during the financial year. 4. Depository Receipt Programme There were no Depository Receipt Programme sponsored by the Company during the financial year. 5. Non-Audit Fees There was no non-audit fees paid or payable to the external auditors by the Group for the financial year ended. 6. Profit Guarantee There was no profit guarantee given by the Company during the financial year. 7. Imposition of 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 during the financial year. 8. Variation in Results There were no variances of 10% or more between the audited results for the financial year and the unaudited results announced. 9. Utilisation of Proceeds During the financial year, there were no proceeds raised from any corporate proposal. 10. Recurrent Related Party Transactions The information on recurrent related party transactions for the financial year is set out in the Financial Statements. 11. Employees Share Option Scheme The Employees Share Option Scheme ( ESOS ) implemented on 28 September 2011 is the only employee share option scheme of the Company in existence during the financial year ended. Since the commencement of the ESOS, there were no options granted to the eligible Directors and employees of the Company and its subsidiaries. Not more than 50% of the shares available under the ESOS would be allocated in aggregate to the eligible Directors and senior management. Annual Report

27 Statement on Internal Control The Board of Directors ( Board ) is responsible for the Group s system of internal control and for reviewing its adequacy and integrity. However, the Group s system of internal control is designed to manage and not eliminate the risk of failure to achieve the Group s objectives, hence it can only provide reasonable and not absolute assurance against material misstatement or loss. The Board of Amcorp Properties Berhad is pleased to disclose that: (i) (ii) there is an on-going process for identifying, evaluating and managing the significant risks faced by the Group throughout the financial year; and the said process is regularly reviewed by the Board and accords with the Statement on Internal Control: Guidance for Directors of Public Listed Companies. The Board summarises below the process it has applied in reviewing the adequacy and the integrity of the system of internal control: (i) The Board has appointed the Audit Committee to examine the effectiveness of the Group s systems of internal control on behalf of the Board. This is accomplished through the review of the internal audit department s work, which focuses on areas of priority as identified by risk analysis and in accordance with audit plan approved by the Audit Committee. The Group has an Internal Audit Division which is independent of the activities it audits. The Internal Audit Division is headed by Mr. Alex Yong Min Onn, aged 34, since October He is a Certified Internal Auditor, a Fellow of the Association of Certified Chartered Accountants (ACCA), a member of the Malaysian Institute of Accountants (MIA) and the Institute of Internal Auditors (IIA) Malaysia. (ii) The Group s Risk Management framework is outlined in the Group s Risk Management Policy. The Audit Committee shall assist the Board in evaluating the adequacy of the Group s Risk Management framework. A Risk Management Committee comprising members of senior management monitors the risks faced by the Group and the Risk Management Committee reports to the Audit Committee. The Risk Management Committee is chaired by Encik Azmi Hashim, aged 63, who is also the Group s Executive Chairman. The operations of the Group are exposed to a variety of financial risks, including interest rate risk, foreign currency risk, credit risk and liquidity and cashflow risk. The nature and extent of the risks and the measures taken by the Group to minimise those risks are disclosed in the notes to the financial statements. (iii) The framework of the Group s system of internal control and key procedures include: A management structure exists with clearly defined lines of responsibility and the appropriate levels of delegation. Key functions such as accounts, tax, corporate secretarial, treasury, insurance and legal matters are controlled centrally. The Corporate Secretarial Department is headed by the Company Secretary, Mr. Johnson Yap Choon Seng, aged 42, who is also the Group Chief Financial Officer. He was appointed as the Company Secretary in year He obtained his Master in Business Administration from the National University of Singapore and is a Fellow of the Association of Certified Chartered Accountants (ACCA). He is also a member of the Malaysian Institute of Accountants (MIA). 26 Amcorp Properties Berhad

28 Statement on Internal Control The management determines the applicability of risk monitoring and reporting procedures and is responsible for the identification and evaluation of significant risks applicable to their areas of business together with the design and operation of suitable internal controls. Policies and procedures are clearly documented in the Corporate Policy Manual and Standard Operating Procedures of most of the Operating Units in the Group in which their operations must comply. Corporate values, which emphasises ethical behaviour, quality products and services, are set out in the Group s Employee Handbook. (iv) The Group also practices Annual Budgeting and monitoring process as follows: There is an annual budgeting process for each area of business and approval of the annual budget by the Board. Actual performance compared with budget together with explanation of any major variance is reviewed monthly while budget for the current year is reviewed at least semi-annually. There were no material losses incurred during the current financial year as a result of weaknesses in internal control. Annual Report

29 Audit Committee Report MEMBERS OF THE AUDIT COMMITTEE The Audit Committee of Amcorp Properties Berhad consists of: Name Designation Directorship Dato Ab. Halim bin Mohyiddin* Chairman Independent Director Tan Sri Dato Chen Wing Sum Member Independent Director Dato Che Md Nawawi bin Ismail Member Independent Director Note: * Dato Ab. Halim bin Mohyiddin is a member of the Malaysian Institute of Accountants. He resigned on 12 August 2011 and subsequently appointed on 1 November MEETINGS AND ATTENDANCE During the financial year ended, the Audit Committee held five (5) meetings. The details of attendance of the Audit Committee members are as follows: Name No. of Meetings Attended Dato Ab. Halim bin Mohyiddin 5 / 5 Tan Sri Dato Chen Wing Sum 5 / 5 Dato Che Md Nawawi bin Ismail 5 / 5 The representative of the Internal Audit attended all the meetings held during the financial year. Other senior management personnel and the representatives of the external auditors also attended these meetings upon invitation to brief the Audit Committee on specific issues. SUMMARY OF TERMS OF REFERENCE The summary of the terms of reference of the Audit Committee are as set out below: 1.0 Composition 1.1 The Board shall elect the Audit Committee members from amongst themselves and consist of not less than three (3) non-executive directors, with a majority of them being independent directors. The Chairman of the Audit Committee shall be an independent director. 1.2 At least one (1) member of the Audit Committee must be a member of the Malaysian Institute of Accountants (MIA) or have the relevant qualifications and experience as specified in the Listing Requirements of Bursa Malaysia Securities Berhad. 1.3 No alternate director shall be appointed as a member of the Audit Committee. 28 Amcorp Properties Berhad

30 Audit Committee Report 1.4 Any vacancy in the Audit Committee resulting in non-compliance of the said requirements must be filled within three (3) months. 1.5 The term of office and performance of the Audit Committee and each of its members shall be reviewed by the Board at least once every three (3) years. 2.0 Quorum and Procedures of Meetings 2.1 Meetings shall be held not less than four (4) times in a financial year. The meetings shall have a quorum of two (2) members; the majority of the members present must be independent directors. 2.2 The Company Secretary shall act as Secretary of the Audit Committee. 2.3 The Audit Committee may invite other Board members, senior management personnel, a representative of the external auditors and external independent professional advisers to attend the Audit Committee meetings. 2.4 The Audit Committee shall meet with the external auditors without the executive board members present, at least twice in a financial year. 3.0 Authority 3.1 The Audit Committee is authorised by the Board to: investigate any matter within its terms of reference; have full and unrestricted access to any information pertaining to the Company and the Group; have direct communication channels with the internal and external auditors, and with the management of the Group; and have resources which are required to perform its duties and to obtain external legal or other independent professional advice it considers necessary. 3.2 Where the Audit Committee is of the view that a matter reported by it to the Board has not been satisfactorily resolved resulting in a breach of the Listing Requirements, the Audit Committee shall promptly report such matter to Bursa Malaysia Securities Berhad. 4.0 Duties and Responsibilities The Audit Committee shall review and, where appropriate, report to the Board of Directors the following: (a) Risk Management and Internal Control The adequacy and effectiveness of risk management, internal control and governance systems instituted in the Company and the Group The Group s risk management policy and implementation of the risk management framework The appointment or termination of members of the risk management committee The report of the risk management committee Annual Report

31 Audit Committee Report (b) Internal Audit The adequacy of the internal audit scope and plan, functions, competency and resources of the internal audit function and that it has the necessary authority to carry out its work Any appraisal or assessment of the performance of members of the internal audit function, including the Head of Internal Audit; and approve any appointment or termination of senior staff members of the internal audit function (c) External Audit The external auditors audit plan, the scope of their audits and their evaluation of the system of internal controls The appointment and performance of external auditors, the audit fee and any question of resignation or dismissal (d) Audit Reports Internal and external audit reports together with management s responses and, where necessary, ensure that appropriate action is taken on major deficiencies in controls or procedures that are identified, including status of previous audit recommendations Findings of internal investigations and related management responses (e) Financing Reporting The quarterly results and the year end financial statements of the Company and the Group, focusing particularly on: changes in accounting policies and practices significant adjustments arising from the audit significant and unusual events going concern assumption compliance with accounting standards and other legal requirements (f) Related Party Transactions Any related party transaction and conflict of interest situation that may arise within the Company or the Group. (g) Allocation of Share Options Verification on the allocation of share options to ensure compliance with the criteria for allocation of share options pursuant to the share scheme for employees of the Group at the end of each financial year. (h) Other Functions Any such other functions as the Audit Committee considers appropriate or as authorised by the Board of Directors. 30 Amcorp Properties Berhad

32 Audit Committee Report SUMMARY OF ACTIVITIES The Audit Committee had carried out the following activities during the financial year: Financial Results a. Reviewed the quarterly unaudited financial results of the Group prior to recommending them for the Board s approval. b. Reviewed the annual financial statements of the Group with the external auditors prior to submission to the Board for their consideration and approval. The review was focusing particularly on changes of accounting policy, significant and unusual events and compliance with applicable approved accounting standards in Malaysia and other legal and regulatory requirements. Internal Audit a. Reviewed the annual audit plan for adequacy of scope and coverage on the activities of the Group. b. Reviewed the audit programmes, resource requirements for the year and assessed the performance of the internal audit function. c. Reviewed the internal audit reports, audit recommendations made and management s responses to these recommendations and actions taken to improve the system of internal control and procedures. d. Monitored the implementation of the audit recommendations to ensure that all key risks and controls have been addressed. e. Reviewed the Control Self-Assessment ratings submitted by the respective operations management. f. Reviewed the Statement on Internal Control to ensure that it is consistent with their understanding of the state of internal controls of the Group and recommended the same to the Board for inclusion in the Annual Report. External Audit a. Reviewed with the external auditors: the audit planning memorandum, audit strategy and scope of work for the year the results of the annual audit, their audit report and management letter together with management s responses to the findings of the external auditors b. Reviewed the performance of the external auditors and made recommendations to the Board on their re-appointment and remuneration. c. Held a discussion with the external auditors without the presence of management and executive board members. Annual Report

33 Audit Committee Report Related Party Transactions a. Reviewed the related party transactions entered into by the Group. b. Reviewed the recurrent related party transactions of a revenue or trading nature on quarterly basis in accordance with the mandate given by shareholders. INTERNAL AUDIT FUNCTION The Group has an Internal Audit Division which is independent of the activities it audits. The costs incurred by the Division for the financial year was RM222,000. The Division reports directly to the Audit Committee and assists the Committee in the discharge of its duties and functions. Its role is to provide independent and objective reports to the Board on the organisation s management, operations, records, accounting policies and internal controls. The Internal Audit Division presents its Internal Audit Plan, which includes the scope and functions of the Internal Audit for the financial year for consideration and approval of the Audit Committee at the beginning of the financial year. This Internal Audit Plan is subject to review at the quarterly meetings of the Audit Committee in response to changes in the operational, financial and control environment. The scope of internal audit functions performed by the internal audit encompasses audit visits to all relevant subsidiaries of the Group on a regular basis. The objectives of such audit visits are to determine whether adequate controls have been established and are operating in the Group, to provide reasonable assurance that: business objectives and policies are adhered to operations are cost effective and efficient assets and resources are satisfactorily safeguarded and efficiently used integrity of records and information is protected applicable laws and regulations are complied with The emphasis of such audit visits encompass critical areas of the Group such as revenue, cost of sales, expenditure, assets, internal controls, operating performance and financial statements review. Audit reports are issued to highlight any deficiency or findings requiring the management s attention. Such reports also include practical and cost effective recommendations as well as proposed corrective actions to be adopted by the management. The audit reports and management s responses are circulated to the Managing Director, Audit Committee and the Group Chairman for review and comments. Follow-up audits are then carried out to determine whether corrective actions have been taken by the management. 32 Amcorp Properties Berhad

34 Financial Statements 34 Directors Report 39 Statements by Directors 39 Statutory Declaration 40 Independent Auditors Report 42 Statements of Financial Position 44 Statements of Comprehensive Income 45 Statements of Changes in Equity 47 Statements of Cash Flows 51 Notes to the Financial Statements 140 Supplementary Information on Realised and Unrealised Profits or Losses

35 Directors Report The Directors have pleasure in submitting their report together with the audited financial statements of the Group and of the Company for the financial year ended. Principal Activities The principal activity of the Company is that of investment holding. The principal activities of the subsidiaries and associates are set out in Notes 49 and 50 to the financial statements respectively. There have been no significant changes in the nature of the principal activities of the Company and those of the subsidiaries and associates during the financial year. Results Group RM 000 Company RM 000 Profit for the financial year 103,668 21,611 Attributable to: Owners of the parent 101,976 21,611 Non-controlling interests 1, ,668 21,611 Dividends Dividends paid, declared or proposed since the end of the previous financial year were as follows: Company RM 000 In respect of financial year ended : Special dividend of 3 sen per ordinary share, less tax of 25%, paid on 12 October ,894 The Directors propose a final dividend of 3 sen per ordinary share, less tax of 25%, amounting to RM12,894,319 in respect of the financial year ended, subject to approval of members at the forthcoming Annual General Meeting. 34 Amcorp Properties Berhad

36 Directors Report Reserves and Provisions There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in Note 26 to the financial statements. Issue of Shares and Debentures The Company has not issued any new shares or debentures during the financial year. Options Granted Over Unissued Shares No options were granted to any person to take up unissued ordinary shares of the Company during the financial year. Treasury Shares During the financial year, the Company repurchased 30,000 ordinary shares of RM0.50 each listed and quoted on the Main Market of Bursa Malaysia Securities Berhad from the open market at an average buy-back price of RM0.495 per ordinary share. The total consideration paid, including transaction costs, of RM14,963 was financed by internally generated funds. The shares repurchased were held as treasury shares in accordance with Section 67A of the Companies Act, As at, the number of ordinary shares in issue after the share buy-back is 573,080,837 ordinary shares of RM0.50 each. Further details are disclosed in Note 25 to the financial statements. Directors The Directors who have held office since the date of the last report are: Azmi Hashim Tan Sri Dato Chen Wing Sum Tan Sri Dato Lee Lam Thye Dato AB. Halim bin Mohyiddin Dato Gan Nyap Gan Nyap Liow Dato Che Md Nawawi bin Ismail Soo Kim Wai P ng Soo Theng Shalina Azman Shahman Azman Lee Keen Pong Annual Report

37 Directors Report Directors Interests The Directors holding office at the end of the financial year and their beneficial interests in the ordinary shares of the Company and of its related corporations during the financial year ended as recorded in the Register of Directors Shareholdings kept by the Company under Section 134 of the Companies Act, 1965 in Malaysia were as follows: - Number of ordinary shares of RM0.50 each - Balance at Acquired Disposed Balance at Shares in the Company Azmi Hashim - Direct 17, ,667 Tan Sri Dato Lee Lam Thye - Indirect 150,000 - (150,000) - Other than as disclosed above, no other Directors in office at the end of the financial year held any interest, direct or indirect, in shares and debentures of the Company and of its related corporations. Directors Benefits Since the end of the previous financial year, none of the Directors of the Company have received or become entitled to receive any benefits (other than those disclosed as directors remuneration in the financial statements) by reason of a contract made by the Company or a related corporation with any director or with a firm of which a director is a member or with a company in which the director has a substantial financial interest other than the following: (a) (b) remuneration received by certain directors as directors/executives of the immediate holding company and its subsidiaries; and by virtue of transactions entered into in the ordinary course of business as disclosed in Note 44 to the financial statements. Other than the Employees Share Option Scheme ( ESOS ) as disclosed in Note 24 to the financial statements, there were no arrangements at the end of the financial year nor at any time during the financial year where there subsist any arrangements of which the Company or a related corporation is a party, whereby the directors might acquire benefits by means of the acquisition of shares in, or debentures of the Company or any other body corporate. 36 Amcorp Properties Berhad

38 Directors Report Other Statutory Information Regarding the Group and the Company (a) Before the statements of comprehensive income and statements of financial position of the Group and of the Company were made out, the Directors took reasonable steps: (i) (ii) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and have satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts; and to ensure that any current assets other than debts, which were unlikely to realise their book values in the ordinary course of business, had been written down to their estimated realisable values. In the opinion of the Directors, the results of the operations of the Group and of the Company during the financial year have not been substantially affected by any item, transaction or event of a material and unusual nature except for the effects arising from the disposal of a subsidiary resulting in an increase in the Group s profit for the financial year by RM70,038,000 as disclosed in Note 9 to the financial statements. (b) From the end of the financial year to the date of this report, the Directors are not aware of any circumstances: (i) (ii) which would render the amounts written off for bad debts or the amount of the provision for doubtful debts in the financial statements of the Group and of the Company inadequate to any material extent; and which would render the values attributed to current assets in the financial statements of the Group and of the Company misleading; and (iii) which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate. In the opinion of the Directors: (i) (ii) there has not arisen any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report is made; and no contingent or other liability has become enforceable, or is likely to become enforceable, within the period of twelve (12) months after the end of the financial year which will or may affect the ability of the Group and of the Company to meet their obligations as and when they fall due. (c) As at the date of this report, there does not exist: (i) (ii) any charges on the assets of the Group and of the Company which have arisen since the end of the financial year to secure the liabilities of any other person. any contingent liabilities of the Group and of the Company which have arisen since the end of the financial year. The Directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements which would render any amount stated in the financial statements of the Group and of the Company misleading. Annual Report

39 Directors Report Significant Events During the Financial Year Significant events during the year are disclosed in Notes 8, 9, 10, 11 and 15 to the financial statements. Subsequent Events to the end of the Reporting Period Subsequent events to the end of the reporting period are disclosed in Note 45 to the financial statements. Immediate and Ultimate Holding Companies The Directors regard Amcorp Group Berhad as the immediate holding company and Clear Goal Sdn. Bhd. as the ultimate holding company, both of which are companies incorporated in Malaysia. Auditors The auditors, BDO, have expressed their willingness to continue in office. Signed on behalf of the Board in accordance with a resolution of the Directors. Azmi HASHIM Executive Chairman Lee Keen Pong Managing Director Petaling Jaya 22 June Amcorp Properties Berhad

40 Statement by Directors In the opinion of the Directors, the financial statements set out on pages 42 to 140 have been drawn up in accordance with applicable approved Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at and of the financial performance and cash flows of the Group and of the Company for the financial year then ended. On behalf of the Board, Azmi HASHIM Executive Chairman Lee Keen Pong Managing Director Petaling Jaya 22 June 2012 Statutory Declaration I, Yap Choon Seng, being the Officer primarily responsible for the financial management of Amcorp Properties Berhad, do solemnly and sincerely declare that the financial statements set out on pages 42 to 140 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, Subscribed and solemnly declared by the abovenamed at Petaling Jaya this 22 June 2012 Yap Choon Seng Before me: Annual Report

41 Independent Auditors Report to the Members of Amcorp Properties Berhad Report on the Financial Statements We have audited the financial statements of Amcorp Properties Berhad, which comprise the statements of financial position as at of the Group and of the Company, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 42 to 139. The financial statements of the Group and of the Company for the financial year ended 31 March 2011 were audited by another firm of chartered accountants, whose report dated 23 June 2011, expressed an unqualified opinion on those statements. Directors Responsibility for the Financial Statements The Directors of the Company are responsible for the preparation of financial statements that give a true and fair view in accordance with Financial Reporting Standards and the Companies Act, 1965, in Malaysia, and for such internal control as the Directors determine are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements have been properly drawn up in accordance with applicable approved Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of and of the financial performance and cash flows of the Group and of the Company for the financial year then ended. 40 Amcorp Properties Berhad

42 Independent Auditors Report to the Members of Amcorp Properties Berhad Report on Other Legal and Regulatory Requirements In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following: (a) (b) (c) (d) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act. We have considered the financial statements and the auditors reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 49 to the financial statements. We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes. The audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act. Other Reporting Responsibilities The supplementary information set out in Note 51 to the financial statements is disclosed to meet the requirement of Bursa Malaysia Securities Berhad. The Directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants ( MIA Guidance ) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad. Other Matters This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report. BDO AF : 0206 Chartered Accountants Chan Wai Leng 2893/08/13 (J) Chartered Accountant Kuala Lumpur 22 June 2012 Annual Report

43 Statements of Financial Position as at Assets Group Company Note RM 000 RM 000 RM 000 RM 000 (Restated) Non-current assets Property, plant and equipment 7 43,591 34,766 1,930 1,878 Investment properties 8 198, , Investments in subsidiaries , ,692 Investments in associates , , , ,128 Investment in a jointly controlled entity 11 27, Other investments 12 7,986 7,336 6, Biological assets 14-3, Land held for property development 15 70, , Long term receivables 16 5,731 15, Deferred tax assets 17 5,719 6, , , , ,631 Current assets Property development costs , , Inventories 19 9,460 10, Trade receivables 20 41,427 39, Other receivables 21 11,825 17,029 78, ,018 Accrued billings in respect of property development 15,946 1, Amounts due from contract customers , Tax recoverable 9,790 11,673 5,259 6,939 Deposits, cash and bank balances ,023 40,731 10, , ,025 94, ,802 Total Assets 909, , , ,433 The accompanying notes form an integral part of the financial statements. 42 Amcorp Properties Berhad

44 Statements of Financial Position as at Group Company Note RM 000 RM 000 RM 000 RM 000 (Restated) Equity and Liabilities Equity attributable to the owners of the parent Share capital , , , ,731 Treasury shares 25 (972) (957) (972) (957) Reserves , , , , , , , ,352 Non-controlling interests 15,416 17, Total Equity 676, , , ,352 Liabilities Non-current liabilities Bank borrowings , , Hire purchase creditors 28 1,433 1, Long term payables 29 1,852 2, Deferred tax liabilities , , , Current liabilities Trade payables 30 37,689 43, Other payables 31 14,053 50, , ,407 Progress billings in respect of property development - 1, Amounts due to contract customers 22 10,501 5, Bank borrowings: - bank overdrafts 27 1,145 10,077 1,145 7,680 - other borrowings 27 13,585 79,093-72,782 Hire purchase creditors Taxation 1,166 2, , , , ,188 Total Liabilities 232, , , ,081 Total Equity and Liabilities 909, , , ,433 The accompanying notes form an integral part of the financial statements. Annual Report

45 Statements of Comprehensive Income for the financial year ended Group Company Note RM 000 RM 000 RM 000 RM 000 Revenue , ,111 42,408 17,085 Cost of sales 32.2 (215,375) (68,537) - - Gross profit 41,456 41,574 42,408 17,085 Other operating income 78,061 61,577 28,884 85,401 Distribution expenses (2,655) (1,842) - - Administrative expenses (35,733) (28,337) (21,954) (20,513) Other operating expenses (5,052) (18,019) (19,715) (715) Operating profit 33 76,077 54,953 29,623 81,258 Finance costs 36 (13,835) (17,820) (4,624) (5,244) Share of results of associates 38,819 15, Profit before taxation 101,061 52,331 24,999 76,014 Taxation 37 2,607 (1,344) (3,388) (278) Profit for the year 103,668 50,987 21,611 75,736 Other comprehensive income/(expense): Foreign currency translations 663 (2,186) - - Fair value changes in available-for-sale financial assets Share of other comprehensive income/(expense) of associates 234 (638) - - Other comprehensive income/(expense), net of tax 1,741 (2,452) Total comprehensive income 105,409 48,535 22,343 75,859 Profit for the year attributable to: Owners of the parent 101,976 48,681 21,611 75,736 Non-controlling interests 1,692 2, ,668 50,987 21,611 75,736 Total comprehensive income attributable to: Owners of the parent 103,720 46,244 22,343 75,859 Non-controlling interests 1,689 2, ,409 48,535 22,343 75,859 Earnings per share attributable to the equity holders of the Company (sen): Basic, on profit for the year The accompanying notes form an integral part of the financial statements. 44 Amcorp Properties Berhad

46 Statements of Changes in Equity for the financial year ended Attributable to owners of the Company Share capital Share premium Treasury shares Capital reserve Exchange translation reserve Fair value reserve Retained profits Total Noncontrolling interests Total equity Group RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Balance as at 1 April , ,842 (957) 881 (9,638) 1, , ,433 17, ,627 Profit for the financial year , ,976 1, ,668 Foreign currency translations (3) 663 Fair value changes in availablefor-sale financial assets Share of other comprehensive income of associates Total comprehensive income , ,720 1, ,409 Transactions with owners Shares repurchased (Note 25) - - (15) (15) - (15) Dividend paid (Note 39) (12,894) (12,894) - (12,894) Dividend to non-controlling interests (2,874) (2,874) Total transactions with owners - - (15) (12,894) (12,909) (2,874) (15,783) Disposal of a subsidiary (81) - (593) (593) Balance as at 287, ,842 (972) 881 (8,657) 1, , ,244 15, ,660 Attributable to owners of the Company Share capital Share premium Treasury shares Capital reserve Exchange translation reserve Fair value reserve Retained profits Total Noncontrolling interests Total equity Group RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Balance as at 1 April , , (6,829) - 139, ,208 15, ,189 Effects of the adoption of FRS (698) (62) (251) (313) Restated balance as at 1 April , , (6,829) , ,146 15, ,876 Profit for the year ,681 48,681 2,306 50,987 Foreign currency translations (2,171) - - (2,171) (15) (2,186) Fair value changes in availablefor-sale financial assets Share of other comprehensive expense of associates (638) - - (638) - (638) Total comprehensive income (2,809) ,681 46,244 2,291 48,535 Transactions with owners Shares repurchased (Note 25) - - (957) (957) - (957) Dividend to non-controlling interests (827) (827) Total transactions with owners - - (957) (957) (827) (1,784) Balance as at 31 March , ,842 (957) 881 (9,638) 1, , ,433 17, ,627 The accompanying notes form an integral part of the financial statements. Annual Report

47 Statements of Changes in Equity for the financial year ended Share capital Attributable to owners of the Company Non-distributable Distributable Share premium Treasury shares Fair value reserve Retained profits Total Company RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Balance as at 1 April , ,842 (957) , ,352 Profit for the year ,611 21,611 Fair value changes in availablefor-sale financial assets Total comprehensive income ,611 22,343 Transactions with owners Shares repurchased (Note 25) - - (15) - - (15) Dividend paid (Note 39) (12,894) (12,894) Total transactions with owners - - (15) - (12,894) (12,909) Balance as at 287, ,842 (972) 1, , ,786 Share capital Attributable to owners of the Company Non-distributable Distributable Share premium Treasury shares Fair value reserve Retained profits Total Company RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Balance as at 1 April , , , ,291 Effects of the adoption of FRS Restated balance as at 1 April , , , ,450 Profit for the year ,736 75,736 Fair value changes in availablefor-sale financial assets Total comprehensive income ,736 75,859 Transactions with owners Shares repurchased (Note 25) - - (957) - - (957) Total transactions with owners - - (957) - - (957) Balance as at 31 March , ,842 (957) , ,352 The accompanying notes form an integral part of the financial statements. 46 Amcorp Properties Berhad

48 Statements of Cash Flows for the financial year ended Group Company RM 000 RM 000 RM 000 RM 000 (Restated) Cash Flows From Operating Activities Profit before taxation 101,061 52,331 24,999 76,014 Adjustments for: Share of results of associates (38,819) (15,198) - - Write back of impairment loss on: - Land held for property development - (45,677) Trade and other receivables (722) (177) - (2) - Advances to subsidiaries (40,000) Write back of accrued development costs - (8,833) - - Impairment loss on: - Property, plant and equipment Investments in subsidiaries , Investments in associates - - 3, Available-for-sale financial assets: unquoted investments quoted investments Property development cost Trade and other receivables Property, plant and equipment written off Investments in subsidiaries written off Bad debts written off: - Others Write-down in value of inventories Loss/(Gain) on disposal of property, plant and equipment and leasehold land 106 (1,805) Gain on disposal of a subsidiary (70,038) (Gain)/Loss on disposal of associates (712) 10,324 (7,434) (6,650) (Gain)/Loss on disposal of investments classified as available-for-sale financial assets: - quoted investments (17) unquoted investments Depreciation of property, plant and equipment 2,487 2, Depreciation of investment properties 2,869 3, Dividend income (74) (101) (42,408) (17,085) The accompanying notes form an integral part of the financial statements. Annual Report

49 Statements of Cash Flows for the financial year ended Group Company RM 000 RM 000 RM 000 RM 000 (Restated) Cash Flows From Operating Activities (Cont d) Unrealised gain on foreign exchange (469) (45) (148) - Unrealised loss on foreign exchange 430 1, Interest income (1,146) (731) (7,999) (6,744) Interest expenses 13,526 17,515 4,624 5,244 Accretion of interest implicit in long term receivables (794) (690) - - Accretion of interest implicit in long term payables Waiver of debts by subsidiaries - - (13,180) (31,642) Waiver of debts to subsidiaries - - 3,011 1,502 Operating profit/(loss) before working capital changes 9,030 15,502 (21,441) (18,364) Decrease/(Increase) in biological assets 3,846 (1,028) - - Decrease/(Increase) in land held for development 116,486 (412) - - Increase in property development costs (11,217) (1,699) - - Decrease in inventories 1,178 5, (Increase)/Decrease in trade and other receivables (292) 32,911 (228) 26 Increase/(Decrease) in trade and other payables 752 (18,443) Decrease/(Increase) in amount due from subsidiaries ,741 (6,722) (Increase)/Decrease in amount owing to subsidiaries - - (18,498) 16,797 Cash generated from/(used in) operations 119,783 31,922 57,820 (7,707) Net tax refunded 2,640 5,892 3,312 4,421 Interest received 1, Interest paid (13,526) (17,515) (4,423) (5,127) Net cash from/(used in) operating activities 110,043 21,030 57,385 (8,410) The accompanying notes form an integral part of the financial statements. 48 Amcorp Properties Berhad

50 Statements of Cash Flows for the financial year ended Group Company RM 000 RM 000 RM 000 RM 000 (Restated) Cash Flows From Investing Activities Net cash inflow from disposal of a subsidiary (Note 9.3.1(a)) 129, Purchase of investment properties (164,251) (38,372) - - Deposit paid (1,051) (8,756) - - Purchase of other quoted and unquoted investments - 5 (5,198) - Redemption of preference shares by an associate 9,800-9,800 - Proceeds from disposal of other quoted and unquoted investments Proceeds from disposal of property, plant and equipment and leasehold land 215 3, Proceeds from disposal of associates (Note 10) 10,216 18,650 10,216 18,650 Purchase of property, plant and equipment (Note 40) (10,736) (725) (92) (136) Subscription to ordinary shares and redeemable convertible preference shares of subsidiaries (Note 9) - - (7,600) (32,789) Contribution to a jointly controlled entity (Note 11) (27,546) Dividends received - quoted associates 21,141 6,445 21,141 6,445 - subsidiaries ,208 6,561 Net cash (used in)/from investing activities (32,913) (19,513) 44,631 (1,009) The accompanying notes form an integral part of the financial statements. Annual Report

51 Statements of Cash Flows for the financial year ended Group Company RM 000 RM 000 RM 000 RM 000 (Restated) Cash Flows From Financing Activities Shares repurchased (15) (957) (15) (957) Net bank borrowings obtained 62,634 2,933 (72,782) 4,452 Net loan repaid to minority shareholders - (5,570) - - Net hire purchase and lease financing repaid (597) (716) (368) (365) Dividends paid (Note 39) (12,894) - (12,894) - Dividends paid to minority shareholders in subsidiaries (2,874) (827) - - (Placements)/Withdrawals of deposit pledged with licensed bank (56) Net cash from/(used in) financing activities 46,198 (4,218) (86,059) 3,130 Net increase/(decrease) in cash and cash equivalents 123,328 (2,701) 15,957 (6,289) Cash and cash equivalents at beginning of the year 28,857 31,945 (6,835) (546) Effect of exchange rates on cash and cash equivalents (160) (387) - - Cash and cash equivalents at end of the year 152,025 28,857 9,122 (6,835) Cash and cash equivalents at end of year comprised: Deposits, cash and bank balances (Note 23) 153,170 38,934 10, Bank overdraft (Note 27) (1,145) (10,077) (1,145) (7,680) 152,025 28,857 9,122 (6,835) The accompanying notes form an integral part of the financial statements. 50 Amcorp Properties Berhad

52 1. Corporate Information Amcorp Properties Berhad is a public company limited by shares, incorporated and domiciled in Malaysia. The Company is listed on the Main Market of Bursa Malaysia Securities Berhad. Its registered office is located at Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, Kuala Lumpur and the principal place of business is located at 2.01, PJ Tower, AMCORP Trade Centre, No. 18 Jalan Persiaran Barat, Petaling Jaya, Selangor. The immediate holding company is Amcorp Group Berhad and the ultimate holding company is Clear Goal Sdn. Bhd., both of which are companies incorporated in Malaysia. The financial statements are presented in Ringgit Malaysia ( RM ), which is also the Company s functional currency. All financial information presented in RM has been rounded to the nearest thousand, unless otherwise stated. The financial statements were authorised for issue in accordance with a resolution by the Board of Directors on 22 June Principal Activities The principal activity of the Company is that of investment holding. The principal activities of the subsidiaries and associates are set out in Notes 49 and 50 to the financial statements respectively. 3. Basis of Preparation The financial statements of the Group and of the Company are prepared under the historical cost convention unless otherwise indicated in this summary of significant accounting policies. The financial statements comply with Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia. The Group and the Company have adopted the new and revised Financial Reporting Standards ( FRSs ), Issues Committee ( IC ) Interpretations and amendments to FRSs and IC Interpretations issued by the Malaysian Accounting Standards Board ( MASB ), as set out in Note 5.1 below, which are effective from the beginning of the current financial year. 4. Significant Accounting Policies 4.1 Basis of Consolidation The consolidated financial statements include the financial statements of the Company and all its subsidiaries made up to the end of the reporting period. The financial statements of the subsidiaries are prepared for the same reporting date as the Company. Subsidiaries are those entities in which the Group has the power to exercise control over their financial and operating policies so as to obtain benefits from their activities. In assessing control, the existence and effect of potential voting rights that are currently exercisable or convertible are taken into account. Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control and continue to be consolidated until the date that such control ceases. Annual Report

53 4. Significant Accounting Policies (Cont d) 4.1 Basis of Consolidation (Cont d) Acquisitions of subsidiaries are accounted for using the purchase method of accounting. Under the purchase method, the cost of an acquisition is measured as the aggregate of the fair values, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity instruments issued, plus any costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, except for non-current assets that are classified as held for sale which shall be recognised at fair value less costs to sell. The excess of the cost of acquisition over the Group s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities represents goodwill. The excess of the Group s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition is recognised immediately in profit or loss. Non-controlling interest represents that portion of profit or loss and net assets of a subsidiary attributable to equity interest that are not held by the Group. Non-controlling interest is measured at the non-controlling s share of the fair value of the identifiable assets and liabilities of the subsidiary at the acquisition date and the non-controlling s share of changes in the subsidiary s equity since then. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance. Intra-group balances and transactions and the resulting unrealised profits are eliminated on consolidation. Unrealised losses are eliminated on consolidation and the relevant assets are assessed for impairment. The consolidated financial statements reflect transactions and balances with external parties only. The Group has applied the revised FRS 3 Business Combinations in accounting for business combinations from 1 January 2011 onwards. The change in accounting policy has been applied prospectively in accordance with the transitional provisions provided by the Standard. Changes in the Company s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of consideration paid or received is recognised directly in equity and attributed to owners of the parent. When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between: (i) (ii) the aggregate of the fair value of the consideration received and the fair value of any retained interest; and the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. Amounts previously recognised in other comprehensive income in relation to the subsidiary are accounted for (i.e. reclassified to profit or loss or transferred directly to retained earnings) in the same manner as would be required if the relevant assets or liabilities were disposed off. The fair value of any investments retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under FRS 139 Financial Instruments: Recognition and Measurement or, where applicable, the cost on initial recognition of an investment in associate or jointly controlled entity. 52 Amcorp Properties Berhad

54 4. Significant Accounting Policies (Cont d) 4.2 Business Combinations Business combinations from 1 July 2010 onwards Business combinations are accounted for by applying the acquisition method of accounting. Identifiable assets acquired, liabilities and contingent liabilities assumed in a business combination are measured at their fair value at the acquisition date, except that: (i) (ii) (iii) deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognised and measured in accordance with FRS 112 Income Taxes and FRS 119 Employee Benefits respectively; liabilities or equity instruments related to share-based payment transactions of the acquiree or the replacement by the Group of an acquiree s share-based payment transactions are measured in accordance with FRS 2 Share-based Payment at the acquisition date; and assets (or disposal groups) that are classified as held for sale in accordance with FRS 5 Non-current Assets Held for Sale and Discontinued Operations are measured in accordance with that Standard. Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred and the service are received. Any contingent consideration payable is recognised at fair value at the acquisition date. Measurement period adjustments to contingent consideration are dealt with as follows: If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within equity. Subsequent changes to contingent consideration classified as an asset or liability that is a financial instrument within the scope of FRS 139 are recognised either in profit or loss or in other comprehensive income in accordance with FRS 139. All other subsequent changes are recognised in profit or loss. In a business combination achieved in stages, previously held equity interests in the acquiree are remeasured to fair value at the acquisition date and any corresponding gain or loss is recognised in profit or loss. The Group elects for each individual business combination, whether non-controlling interest in the acquiree (if any) is recognised on the acquisition date at fair value, or at the non-controlling interest s proportionate share of the acquiree net identifiable assets. Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non-controlling interest in the acquiree (if any), and the fair value of the Group s previously held equity interest in the acquiree (if any), over the net fair value of the acquiree s identifiable assets and liabilities is recorded as goodwill in the statement of financial position. In instances where the latter amount exceeds the former, the excess is recognised as a gain on bargain purchase in profit or loss on the acquisition date. Annual Report

55 4. Significant Accounting Policies (Cont d) 4.2 Business Combinations (Cont d) Business combinations before 1 July 2010 Under the purchase method of accounting, the cost of business combination is measured at the aggregate of fair values at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued plus any costs directly attributable to the business combination. At the acquisition date, the cost of business combination is allocated to identifiable assets acquired, liabilities assumed and contingent liabilities in the business combination which are measured initially at their fair values at the acquisition date. The excess of the cost of business combination over the Group s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities is recognised as goodwill. If the cost of business combination is less than the interest in the net fair value of the identifiable assets, liabilities and contingent liabilities, the Group will: (i) (ii) reassess the identification and measurement of the acquiree s identifiable assets, liabilities and contingent liabilities and the measurement of the cost of the business combination; and recognise immediately in profit or loss any excess remaining after that reassessment. When a business combination includes more than one exchange transaction, any adjustment to the fair values of the subsidiary s identifiable assets, liabilities and contingent liabilities relating to previously held interests of the Group is accounted for as a revaluation. 4.3 Goodwill on Consolidation Goodwill arising on the acquisition of a subsidiary represents the excess of the cost of the acquisition over the Group s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the subsidiary recognised at the date of acquisition. Goodwill is recognised as an asset and is measured at cost less accumulated impairment losses. Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. For the purpose of impairment testing, goodwill from the acquisition date is allocated to each of the Group s cash-generating unit ( CGU ) or groups of CGUs that are expected to benefit from the synergies of the combination in which the goodwill arose. The test for impairment of goodwill on consolidation is in accordance with the Group s accounting policy for impairment of non-financial assets. Where goodwill forms part of a CGU or groups of CGUs and part of the operation within that unit is disposed off, the goodwill associated with the operation disposed off is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed off in this circumstance is measured based on the relative values of the operation and the portion of the CGU retained. 4.4 Investments in Subsidiaries In the Company s separate financial statements, investments in subsidiaries are stated at cost less any accumulated impairment losses. The investments are reviewed for impairment in accordance with the Group s accounting policy for impairment of non-financial assets. 54 Amcorp Properties Berhad

56 4. Significant Accounting Policies (Cont d) 4.5 Investments in Associates An associate is an entity, including an unincorporated entity, in which the Group has significant influence but not control or joint control over the financial and operating policies of such an entity. Investment in associate is accounted for in the consolidated financial statements using the equity method of accounting (except when the investment is classified as held for sale, in which case it is accounted for in accordance with FRS 5, Non-current Assets Held for Sale and Discontinued Operations) and are initially recognised at cost. Under the equity method of accounting, the Group s share of its associate post-acquisition profits or losses is recognised in the income statement and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. The cumulative post-acquisition changes in net assets of the associate are adjusted against the carrying amount of the investment. Equity accounting is discontinued when the Group s share of losses of an associate equals or exceeds its interest in the associate, unless if the Group has incurred legal or constructive obligations or made payments on behalf of the associate. Unrealised gains on transactions between the Group and the associate are eliminated to the extent of the Group s interest in the associate. Unrealised losses are eliminated on consolidation and the relevant assets are assessed for impairment. Goodwill relating to an associate is included in the carrying amount of the investment and is not amortised. Any excess of the Group s share of the net fair value of the associate s identifiable assets, liabilities and contingent liabilities over the cost of the investment is excluded from the carrying amount of the investment and is instead included as income in the determination of the Group s share of the associate s profit or loss in the period in which the investment is acquired. After the application of the equity method, the Group determines whether it is necessary to recognise any additional impairment loss with respect to the Group s net investment in the associate. In applying the equity method of accounting, the most recent available financial statements of the associate are used. Where the reporting dates of the Group and the associate are not coterminous, equity accounting is applied on the management accounts made to the financial year end of the Group. Uniform accounting policies are adopted for like transactions and events in similar circumstances. In the Company s separate financial statements, investment in associate is accounted for at cost less any accumulated impairment losses. 4.6 Investment in a Jointly Controlled Entity A jointly controlled entity is a joint venture that involves the establishment of a corporation, partnership or other entities over which there is contractually agreed sharing of joint control over the economic activity of the entity. Joint control exists when the strategic financial and operational decisions relating to the activity require the unanimous consent of all the parties sharing control. In the Company s separate financial statements, an investment in jointly controlled entities is stated at cost less impairment losses, if any. Annual Report

57 4. Significant Accounting Policies (Cont d) 4.6 Investment in a Jointly Controlled Entity (Cont d) The investment in jointly controlled entity is accounted for in the consolidated financial statements using the equity method of accounting. The Group s share of the profit or loss of the jointly controlled entity during the financial year is included in the consolidated financial statements, after adjustments to align the accounting policies with those of the Group, from the date that joint control commences until the date that joint control ceases. When necessary, in applying the equity method, adjustments are made to the financial statements of the jointly controlled entity to ensure consistency of accounting policies with those of the Group. Unrealised gains on transactions between the Group and its jointly controlled entity are eliminated to the extent of the Group s interest in the jointly controlled entity; unrealised losses are also eliminated unless the transaction provides evidence on impairment of the asset transferred. Adjustments to the carrying amount may also be necessary for changes in the Group s proportionate interest in the jointly controlled entity arising from changes in the jointly controlled entity s equity that have not been recognised in the jointly controlled entity s profit or loss. Such changes include those arising from the revaluation of property, plant and equipment and from foreign exchange translation differences. The Group s share of those changes is recognised directly in equity of the Group. Upon disposal of such investment, the difference between the net disposal proceeds and its carrying amount is included in profit or loss. 4.7 Foreign currencies (a) Functional and Presentation Currency Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. The consolidated financial statements are presented in Ringgit Malaysia ( RM ), which is also the Company s functional currency. (b) Foreign Currency Transactions and Balances In preparing the financial statements of the individual entities, transactions in currencies other than the entity s functional currency (foreign currencies) are recorded in the functional currencies using the exchange rates prevailing at the dates of the transactions. At the end of each reporting period, foreign currency monetary assets and liabilities are translated into the functional currency at exchange rates prevailing at the end of the reporting period. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the date of the transactions. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Exchange differences arising from the settlement of foreign currency transactions and from the translation of foreign currency monetary assets and liabilities are recognised in profit or loss. 56 Amcorp Properties Berhad

58 4. Significant Accounting Policies (Cont d) 4.7 Foreign currencies (Cont d) (b) Foreign Currency Transactions and Balances (Cont d) Exchange differences arising on the translation of foreign currency non-monetary items carried at fair value are included in profit or loss for the period except for the differences arising on the translation of non-monetary items in respect of which gains or losses are recognised directly in other comprehensive income. Exchange differences arising from such non-monetary items are recognised directly to other comprehensive income. (c) Foreign Operations The results and financial position of foreign operations that have a functional currency different from the presentation currency of the consolidated financial statements are translated into the presentation currency as follows: (i) (ii) (iii) Assets and liabilities for each financial position date presented are translated at the closing rate prevailing at the end of the reporting period; Items of income and expenses are translated at average exchange rates for the financial year, which approximates the exchange rates at the dates of the transactions; and All resulting exchange differences are recognised in other comprehensive income and are accumulated in exchange translation reserve within equity. Exchange differences arising from monetary items that form part of the Company s net investment in a foreign operation and that are denominated in the functional currency of the Company or the foreign operation are recognised in profit or loss of the Company or of the foreign operation, as appropriate. In the Group s financial statements, such exchange differences are recognised initially in other comprehensive income and accumulated in equity under exchange translation reserve. On disposal of a foreign operation, the cumulative amount recognised in other comprehensive income and taken to equity under exchange translation reserve will be reclassified to profit or loss. Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated at the closing rate at the end of the reporting period. 4.8 Property, Plant and Equipment Items of property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred. Annual Report

59 4. Significant Accounting Policies (Cont d) 4.8 Property, Plant and Equipment (Cont d) Freehold land and capital work-in-progress are not depreciated. All other property, plant and equipment are depreciated on the straight-line basis so as to write off the cost of the assets to their residual values over their estimated useful lives. Depreciation on capital work-in-progress commences when the assets are ready for their intended use. The estimated useful lives and annual depreciation rates of the Group s property, plant and equipment are as follows: Leasehold land 99 years Buildings 2.0% to 4.0% Mini hydro power plant 21 years Plant and equipment 10.0% to 33.3% Motor vehicles 20.0% Furniture and fittings 10.0% to 20% The residual values and useful lives of assets are reviewed at each financial year end with the effect of any changes in estimate accounted for on a prospective basis. Property, plant and equipment are reviewed for impairment in accordance with the Group s accounting policy for impairment of non-financial assets. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. The difference between the net disposal proceeds, if any, and the net carrying amount is recognised in profit or loss. 4.9 Investment Properties Investment properties are land and/or buildings which are held for rental yields or for capital appreciation or for both or land held for a currently undetermined future use. The investment properties are stated at cost less accumulated depreciation and impairment losses. The depreciation policy adopted for investment properties is similar to property assets under property, plant and equipment as disclosed under Note 4.8. Investment properties are reviewed for impairment in accordance with the Group s accounting policy for impairment of non-financial assets. An investment property is derecognised when either it has been disposed off or when the investment property is permanently withdrawn from use and no future economic benefits are expected from its disposal. The difference between the net disposal proceeds, if any, and the net carrying amount is recognised in profit or loss in the period of retirement or disposal Biological Assets New planting expenditure incurred on planting and upkeep of immature oil palms and interests incurred during the pre-cropping period are capitalised at cost as biological assets. Upon maturity, all subsequent maintenance expenditure is charged to profit or loss and the costs of biological assets are amortised to profit or loss on a straight line basis over the expected useful lives of the oil palm trees. Replanting expenditure is similarly capitalised and amortised on the afore-mentioned basis. 58 Amcorp Properties Berhad

60 4. Significant Accounting Policies (Cont d) 4.11 Property Development Activities (a) Land held for Property Development Land held for property development consist of land on which no significant development work has been undertaken or where development activities are not expected to be completed within the normal operating cycle. Such land are classified as non-current assets and are stated at cost less accumulated impairment losses. Costs include the cost of land and all related acquisition costs and costs incurred subsequent to the acquisition on development activities. The recognition and measurement of impairment losses is in accordance with the Group s accounting policy for impairment of non-financial assets. Land held for property development is transferred to property development costs (under current assets) when development activities have commenced and are expected to be completed within the normal operating cycle. (b) Property Development Costs Property development costs comprise cost of land and related acquisition costs and all costs that are directly attributable to development activities or that can be allocated on a reasonable basis to such activities. Cost includes interest on borrowings used to finance the purchase or construction of specific projects and other direct expenditure and related overheads incurred in the process of development. On completion of development, unsold properties are transferred to inventories and classified under completed properties held for sale. Property development costs not recognised as an expense are recognised as an asset, which is measured at the lower of cost and net realisable value. (c) Revenue and Expense Recognition When the financial outcome of a development activity can be reliably estimated, property development revenue and expenses are recognised in profit or loss by using the stage of completion method. The stage of completion is determined by reference to the proportion that property development costs incurred bear to the estimated total costs for the property development, where appropriate. When the financial outcome of a development activity cannot be reliably estimated, property development revenue is recognised only to the extent of property development costs incurred that is probable will be recoverable, and property development costs on properties sold are recognised as an expense in the period in which they are incurred. Any expected loss on a property development project including costs to be incurred over the defect liability period is recognised as an expense immediately irrespective of whether the outcome of a property development activity can be estimated reliably. (d) Accrued/Progress Billings The excess of revenue recognised in profit or loss over billings to purchasers is classified as accrued billings within current assets and the excess of billings to purchasers over revenue recognised in the profit or loss is classified as progress billings within current liabilities. Annual Report

61 4. Significant Accounting Policies (Cont d) 4.12 Construction Contracts (a) Revenue and Expense Recognition When the outcome of a construction contract can be estimated reliably, contract revenue and contract cost are recognised over the period of the contract as revenue and expenses respectively using the percentage of completion method, determined by the proportion that contract costs incurred for work performed to-date bear to the estimated total costs for the contract, where appropriate. When the outcome of a construction contract cannot be ascertained reliably, contract revenue is recognised only to the extent of contract costs incurred that are estimated to be recoverable and contract costs are recognised as an expense in the period in which they are incurred. When it is estimated that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately. (b) Gross Amount Due from/(to) Customers for Contract Work Amount due from/(to) customers for contract work is the net amount of cost incurred for construction and engineering contracts-in-progress plus profit attributable to contract-in-progress less foreseeable losses, if any, and progress billings. Contract costs incurred to-date include costs directly related to the contract or attributable to contract activities in general and costs specifically chargeable to the customers under the terms Impairment of Non-Financial Assets The carrying amounts of non-financial assets (other than investments in subsidiaries, associates and jointly controlled entity, inventories, assets arising from construction contracts, property development costs and deferred tax assets) are reviewed for impairment at the end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, the asset s recoverable amount is estimated to determine the amount of impairment loss. For goodwill, intangible assets that have an indefinite useful life and intangible assets that are not yet available for use, the recoverable amount is estimated annually or more frequently when indicators of impairment are identified. An impairment loss is recognised if the carrying amount of an asset or a cash generating unit ( CGU ) exceeds its recoverable amount. A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or group of assets. Impairment losses recognised in respect of CGUs (or groups of CGUs) are allocated first to reduce the carrying amount of any goodwill allocated to the units (or groups of units) and then to reduce the carrying amount of the other assets in the units (or groups of units) on a pro rata basis. The recoverable amount of an asset or CGU is the higher of its fair value less costs to sell and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pretax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. 60 Amcorp Properties Berhad

62 4. Significant Accounting Policies (Cont d) 4.13 Impairment of Non-Financial Assets (Cont d) An impairment loss is recognised to profit or loss in the period in which it arises, unless the asset is carried at revalued amount. Any impairment loss of a revalued asset is recognised directly against the revaluation surplus account for that asset to the extent that the impairment loss does not exceed the amount held in the revaluation surplus account. Impairment loss on goodwill is not reversed in a subsequent period. An impairment loss for an asset other than goodwill is reversed if, and only if, there has been a change in the estimates used to determine the asset s recoverable amount since the last impairment loss was recognised. The carrying amount of an asset other than goodwill is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of impairment loss for an asset other than goodwill is recognised to profit or loss unless the asset is carried at revalued amount, in which case, such reversal is treated as a revaluation increase Inventories of Completed Properties Held for Sale Completed properties held for sale are stated at the lower of cost and net realisable value. Cost includes cost of land and attributable construction cost Financial Assets The Group recognises all financial assets in its statement of financial position when, and only when, the Group becomes a party to the contractual provisions of the instruments. Classification and Measurement Financial assets are initially measured at fair value plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs. The Group determines the classification of its financial assets depending on the nature and purpose of the financial assets at the time of initial recognition. The categories of financial assets applicable to the Group are loans and receivables and available-for-sale financial assets. The Group does not have any financial assets that are to be categorised as at fair value through profit or loss or held-to-maturity investments. (a) Loans and Receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Trade and other receivables, deposits, cash and bank balances are classified as loans and receivables. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when loans and receivables are derecognised or impaired, and through the amortisation process. Annual Report

63 4. Significant Accounting Policies (Cont d) 4.15 Financial Assets (Cont d) (b) Available for Sale Financial Assets Available-for-sale financial assets are non-derivative financial assets that are designated as available for sale or are not classified as loans and receivables, held-to-maturity investments or at fair value through profit or loss. Available-for-sale financial assets include quoted and unquoted equity and debt instruments. Subsequent to initial recognition, quoted equity and debt instruments are measured at fair value. A gain or loss from changes in fair value is recognised in other comprehensive income, except that impairment losses, foreign exchange gains or losses on monetary instruments and interest calculated using the effective interest method are recognised in profit or loss. The cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment when the financial asset is derecognised. Dividends on an equity instrument are recognised in profit or loss when the Group s right to receive payment is established. Investments in unquoted equity and debts instruments where fair value cannot be reliably measured, are measured at cost less impairment loss. Regular Way Purchase or Sale of Financial Assets Regular way purchases or sales of financial assets are recognised and derecognised using trade date accounting. Trade date accounting refers to: * the recognition of an asset to be received and the liability to pay for it on the trade date which is the date the Group commits itself to purchase or sell an asset; and * derecognition of an asset that is sold, the recognition of any gain or loss on disposal and the recognition of a receivable from the buyer for payment on the trade date. Impairment of Financial Assets The Group assesses at the end of each reporting period whether there is any objective evidence that a financial asset is impaired. Financial assets are considered to be impaired when objective evidence indicates that a loss event has occurred after the initial recognition of the assets and that the loss event had a negative effect on the estimated future cash flows of that asset that can be reliably estimated. Losses expected as a result of future events, no matter how likely, are not recognised. For a quoted equity and debt instrument, a significant or prolonged decline in the fair value of the investment below its cost is considered to be objective evidence of impairment. When loans and receivables are impaired, the carrying amount of the asset is reduced through an allowance account and the amount of the loss is recognised in profit or loss. Impairment loss is measured as the difference between the asset s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the asset s original effective interest rate. 62 Amcorp Properties Berhad

64 4. Significant Accounting Policies (Cont d) 4.15 Financial Assets (Cont d) Impairment of Financial Assets (Cont d) If, in a subsequent period, the amount of the impairment loss on loans and receivables decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor s credit rating), the reversal of the previously recognised impairment loss is recognised in profit or loss. When an available-for-sale financial asset is impaired, the cumulative loss in relation to decline in fair value previously recognised in other comprehensive income, is reclassified from equity and recognised in profit or loss as a reclassification adjustment even though the financial asset has not been derecognised. The amount of cumulative loss that is reclassified is the difference between the acquisition cost (less any principal repayment and amortisation) and current fair value, less any impairment loss on that financial asset previously recognised in profit or loss. Impairment losses recognised in profit or loss for an investment in an equity instrument classified as available-for-sale is not reversed through profit or loss. Increase in fair value, if any, subsequent to the impairment loss, is recognised in other comprehensive income. If the fair value of a debt instrument classified as available-for-sale, increases in a subsequent period and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed with the amount of the reversal is recognised in profit or loss. An amount of impairment loss in respect of financial assets carried at cost is measured as the difference between the carrying amount of the financial asset and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment losses are not reversed in subsequent periods. Derecognition of a Financial Asset A financial asset is derecognised when, and only when, the contractual right to receive cash flows from the financial asset has expired or the Group transfers the financial asset without retaining control or transfers substantially all the risks and rewards of ownership of the financial asset to another party. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised directly in other comprehensive income is recognised in profit or loss Cash and Cash Equivalents Cash and cash equivalents include cash in hand, bank balances, deposits with licensed banks, bank overdrafts and highly liquid investments which are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. The statements of cash flows are prepared using the indirect method. Cash and cash equivalents (other than bank overdrafts) are categorised and measured as loans and receivables in accordance with Note Annual Report

65 4. Significant Accounting Policies (Cont d) 4.17 Equity Instruments An equity instrument is any contract that evidences a residual interest in the assets of the Group and the Company after deducting all of its liabilities. Ordinary shares are classified as equity instruments. Distributions to holders of ordinary shares are debited directly to equity and interim dividends declared on or before the end of the reporting period are recognised as liabilities. Final dividends are recognised upon the approval of shareholders in a general meeting. Costs directly attributable to equity transactions are accounted for as a deduction, net of tax, from equity Treasury Shares Shares repurchased by the Company are held as treasury shares and are measured and carried at the cost of purchase. Treasury shares are presented in the financial statements as a set-off against equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of treasury shares. Should such shares be re-issued by re-sale in the open market, the difference between the sales consideration and the carrying amount of the treasury shares is shown as a movement in equity. Where treasury shares are distributed as share dividends, the cost of the treasury shares is applied in the reduction of the share premium account or distributable retained profits or both Hire Purchase and Finance Lease Arrangements and Operating Leases A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and rewards incident to ownership of the leased assets. All other leases are classified as operating leases. Assets acquired under hire purchase arrangements are recognised and measured in a similar manner as finance leases. (a) Assets Acquired Under Hire Purchase and Finance Lease Arrangements Assets acquired under hire purchase and finance lease arrangements are stated at the amounts equal at the inception of the arrangement to the lower of the fair values and the present values of the minimum hire purchase or lease payments. The corresponding obligations are taken up as hire purchase or finance lease liabilities. Hire purchase or lease payments are apportioned between the outstanding liabilities and finance charges which are charged to profit or loss over the period of the hire purchase/lease term so as to produce a constant periodic rate of interest on the remaining balance of the liabilities for each period. The depreciation policy of property, plant and equipment acquired under hire purchase and finance lease arrangements are consistent with the Group s depreciation policy as set out in Note 4.8 above. (b) Operating Lease Operating lease payments are recognised as an expense in the profit or loss on a straight line basis over the period of the relevant leases. 64 Amcorp Properties Berhad

66 4. Significant Accounting Policies (Cont d) 4.20 Financial Liabilities The Group recognises all financial liabilities in its financial statements when, and only when, the Group becomes a party to the contractual provisions of the instruments. Classification and Measurement Financial liabilities are initially measured at fair value plus, in the case of financial liabilities not at fair value through profit or loss, directly attributable transaction costs. Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities. The Group does not have any financial liabilities at fair value through profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Other financial liabilities of the Group include trade and other payables, loans and borrowings. A gain or loss on other financial liabilities is recognised in profit or loss when the liabilities are derecognised and through the amortisation process. Derecognition of a Financial Liability A financial liability is derecognised when, and only when, it is extinguished, i.e. when the obligation specified in the contract is discharged or cancelled or expires. An exchange between an existing borrower and lender of debt instruments with substantially different terms are accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of a financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss Financial Guarantee Contracts A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, net of transaction costs. Subsequent to initial recognition, financial guarantee contracts are amortised in profit or loss using the straight-line method over the contractual period or, when there is no specified contractual period, recognised in profit or loss upon discharge of the guarantee. When settlement of a financial guarantee contract becomes probable, an estimate of the obligation is made in accordance with FRS 137, Provisions, Contingent Liabilities and Contingent Assets. If the carrying amount of the financial guarantee is lower than the obligation estimated, the carrying value is adjusted to the obligation amount and accounted for as a provision. Annual Report

67 4. Significant Accounting Policies (Cont d) 4.22 Provisions Provisions are recognised when the Group has a present legal and constructive obligation as a result of past events and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the effect of the time value of money is material, the amount of provision is measured at the present value of the expenditure expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Where discounting is used, the increase in the amount of a provision due to the passage of time is recognised as finance cost Borrowing Costs Borrowing costs that are directly attributable to the acquisition, construction, production and preparation of assets until they are ready for their intended use or sale are capitalised as part of the cost of those assets. Other borrowing costs are recognised as an expense in the period in which they are incurred Contingent Liabilities and Contingent Assets A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Group does not recognise a contingent liability but discloses its existence in the financial statements. A contingent asset is a possible asset that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group. The Group does not recognise a contingent asset but discloses its existence where the inflows of economic benefits are probable, but not virtually certain. In the acquisition of subsidiaries by the Group under business combinations, contingent liabilities assumed are measured initially at their fair value at the acquisition date, irrespective of the extent of any noncontrolling interest Employee Benefits (a) Short Term Employee Benefits Wages, salaries and social security contributions, paid annual and sick leave, bonuses and nonmonetary benefits are recognised as an expense or included in the costs of assets, where applicable, in the period in which the associated services are rendered by employees of the Group. (b) Post-Employment Benefits Defined Contribution Plans The Group provides post-employment benefits by way of contribution to defined contribution plans operated by the relevant authorities at the prescribed rates. 66 Amcorp Properties Berhad

68 4. Significant Accounting Policies (Cont d) 4.25 Employee Benefits (Cont d) (b) Post-Employment Benefits (Cont d) 4.26 Income Taxes Defined Contribution Plans (Cont d) Defined contribution plans are post-employment benefits plans under which the Group pays fixed contributions into a separate entity (a fund) and will have no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods. The Group s contributions to defined contribution plans are recognised as an expense in the income statement in the period to which the contributions relate or included in the costs of assets, where applicable. Termination Benefits Termination benefits are recognised as a liability and an expense when the Group is committed to terminate the employment of current employees according to a detailed formal plan without possibility of withdrawal. Termination benefits falling over more than twelve (12) months after the end of the reporting period are discounted to present value. Tax expense is the aggregate amount of current and deferred taxation. Current and deferred taxes are recognised as income or expense in profit or loss except to the extent that the taxes relate to items recognised outside profit or loss, either in other comprehensive income or directly in equity or a business combination. Current tax is the expected tax payable on taxable income for the year, computed using tax rates enacted or substantively enacted by the end of the reporting period. Deferred tax is provided using the liability method on temporary differences at the end of the reporting period between the carrying amounts of assets and liabilities and the amounts attributed to those assets and liabilities for taxation purposes. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences and unutilised tax losses and unused tax credits to the extent that it is probable that future taxable profit will be available against which the assets can be utilised. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and is reduced to the extent that it is no longer probable that the related tax benefits will be realised. Tax rates enacted or substantively enacted by the end of the reporting period are used to determine deferred tax. Annual Report

69 4. Significant Accounting Policies (Cont d) 4.26 Income Taxes (Cont d) Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis Revenue Recognition Revenue is measured at the fair value of the consideration received or receivable for the sale of goods or rendering of services in the ordinary course of the Group s activities. Revenue is recognised when it can be measured reliably and to the extent that it is probable that the economic benefits associated to the transactions will flow to the Group. The following specific recognition criteria must also be met before revenue is recognised. (a) Sales of Goods Revenue from sale of goods is recognised upon the transfer of significant risks and rewards of ownership to the buyer of the goods, net of discounts and returns. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods. (b) Revenue from Services Revenue from services is recognised upon rendering of the services. (c) Revenue from Sale of Properties Revenue from sale of properties on property development activities is recognised based on the policy as disclosed in Note 4.11(c). (d) Revenue from Construction Contracts Revenue from construction contracts is recognised based on the policy as disclosed in Note 4.12(a). (e) Dividend Income Dividend income is recognised when the right to receive payment has been established. (f) Interest Income Interest income is recognised on an accrual basis using the effective interest method. (g) Rental Income Revenue from letting of properties is recognised on an accrual basis over the period of tenancy. All intra-group revenue are eliminated on consolidation. 68 Amcorp Properties Berhad

70 5. Adoption of New FRSs, Amendments to FRSs and IC Interpretations 5.1 New FRSs Adopted During the Current Financial Year During the financial year, the Group and the Company have adopted the following new and revised FRSs, IC Interpretations and Amendments to FRSs and IC Interpretations that are relevant to their operations and which are effective from the beginning of the current financial year: FRS 3 FRS 127 IC Interpretation 4 IC Interpretation 17 IC Interpretation 18 Business Combinations (Revised) Consolidated and Separate Financial Statements (Revised) Determining Whether an Arrangement Contains a Lease Distribution of Non-cash Assets to Owners Transfer of Assets from Customers Amendments to: FRS 5 Non-current Assets Held for Sale and Discontinued Operations FRS 7 Improving Disclosures about Financial Instruments FRS 138 Intangible Assets IC Interpretation 9 Reassessment of Embedded Derivatives Amendments to FRSs classified as Improvements to FRSs (2010) The adoption of the new and revised FRSs, Interpretations and Amendments to FRSs and Interpretations did not result in any significant effects on the results and financial position of the Group and the Company nor any significant changes in the presentation and disclosure of amounts in the financial statements other than those as disclosed below: (a) FRS 3: Consolidated and Separate Financial Statements This Standard supersedes the existing FRS 3 and now includes business combinations involving mutual entities and those achieved by way of contract alone. Any non-controlling interest in an acquiree shall be measured at fair value or as the non-controlling interest s proportionate share of the acquiree s net identifiable assets. The time limit on the adjustment to goodwill due to the arrival of new information on the crystallisation of deferred tax benefits shall be restricted to the measurement period resulting from the arrival of the new information. Contingent liabilities acquired arising from present obligations shall be recognised, regardless of the probability of outflow of economic resources. Acquisition-related costs shall be accounted for as expenses in the periods in which the costs are incurred and the services are received. Consideration transferred in a business combination, including contingent consideration, shall be measured and recognised at fair value at acquisition date. Any changes in the amount of consideration to be paid will no longer be adjusted against goodwill but recognised in profit or loss. Annual Report

71 5. Adoption of New FRSs, Amendments to FRSs and IC Interpretations (Cont d) 5.1 New FRSs Adopted During the Current Financial Year (Cont d) (a) FRS 3: Consolidated and Separate Financial Statements (Cont d) In business combinations achieved in stages, the acquirer shall remeasure its previously held equity interest at its acquisition date fair value and recognise the resulting gain or loss in profit or loss. The Group applied this standard prospectively in accordance with the transitional provisions of revised FRS 3. Assets and liabilities that arose from business combinations whose acquisition dates were before 1 July 2010 are not adjusted. During the financial year, the newly acquired subsidiary was accounted for in accordance with this new Standard. (b) FRS 127: Consolidated and Separate Financial Statements This Standard supersedes the existing FRS 127 and replaces the current term minority interest with a new term non-controlling interest which is defined as the equity in a subsidiary that is not attributable, directly or indirectly, to a parent. Accordingly, total comprehensive income shall be attributed to the owners of the parent and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. The Group applied this standard prospectively in accordance with the transitional provisions of FRS 127. The effects on the adoption of FRS 127 as compared to the previous accounting treatment on the current financial statements are as follows: Increase/ (Decrease) RM 000 Consolidated statement of financial position Reserves 384 Non-controlling interests (384) Consolidated statement of comprehensive income Profit attributable to owners of the parent 384 Profit attributable to non-controlling interests (384) Total comprehensive income attributable to owners of the parent 384 Total comprehensive income attributable to non-controlling interests (384) 70 Amcorp Properties Berhad

72 5. Adoption of New FRSs, Amendments to FRSs and IC Interpretations (Cont d) 5.1 New FRSs Adopted During the Current Financial Year (Cont d) (c) Amendments to FRS 7: Improving Disclosures about Financial Instruments The Amendments to FRS 7 require enhanced disclosures about fair value measurements. Disclosure of fair value measurements of financial instruments has been enhanced by classifying them using a threelevel fair value hierarchy. In addition, specific disclosures on significant transfers between Level 1 and Level 2 of the fair value hierarchy and a detailed reconciliation for fair value measurements in Level 3 of the fair value hierarchy are now required. In accordance with the transitional provisions of Amendments to FRS 7, the new disclosures have not been provided for in the comparative period. The adoption of these Amendments affect only the disclosures in financial statements and did not have any financial impact on the Group and the Company. 5.2 New and Revised FRSs, IC Interpretations and Amendments to FRSs and IC Interpretations That Are Not Yet Effective and Have Not Been Early Adopted Effective for annual periods beginning on or after IC Interpretation 19 Extinguishing Financial Liabilities with Equity 1 July 2011 FRS 124 Related Party Disclosures (Revised) 1 January 2012 Amendments to FRS 7 Disclosures - Transfers of Financial Assets 1 January 2012 Amendments to FRS 112 Deferred Tax - Recovery of Underlying Assets 1 January 2012 The Group and the Company will adopt the above FRSs, IC Interpretations and the relevant amendments when they become effective and they are not expected to have any significant impact on the financial statements of the Group and the Company upon their initial application. 5.3 New Malaysian Financial Reporting Standards ( MFRS ) Framework On 19 November 2011, the Malaysian Accounting Standards Board ( MASB ) announced the issuance of the new MFRS framework that is applicable to entities other than private entities. However, the Group has elected for the continued use of FRS for the financial year ending 31 March 2013 as a transitioning entity affected by the scope of MFRS 141 and/or IC Interpretation 15. The Group would subsequently adopt the MFRS framework for the financial year ending 31 March The subsequent adoption of the MFRS framework would result in the Group preparing an opening MFRS statement of financial position as at 1 April 2012 which adjusts for differences between the classification and measurement bases in the existing FRS framework versus that in the new MFRS framework. This would also result in a restatement of the financial performance for the financial year ending 31 March 2013 in accordance with MFRS which would form the MFRS comparatives for the financial year ending 31 March Annual Report

73 5. Adoption of New FRSs, Amendments to FRSs and IC Interpretations (Cont d) 5.3 New Malaysian Financial Reporting Standards ( MFRS ) Framework (Cont d) The MFRSs and IC Interpretations expected to be adopted are as follows: MFRS 1 MFRS 2 MFRS 3 MFRS 4 MFRS 5 MFRS 6 MFRS 7 MFRS 8 MFRS 9 MFRS 10 MFRS 11 MFRS 12 MFRS 13 MFRS 101 MFRS 102 MFRS 107 MFRS 108 MFRS 110 MFRS 111 MFRS 112 MFRS 116 MFRS 117 MFRS 118 MFRS 119 MFRS 120 MFRS 121 MFRS 123 MFRS 124 MFRS 126 MFRS 127 MFRS 128 MFRS 129 MFRS 132 MFRS 133 MFRS 134 MFRS 136 MFRS 137 MFRS 138 First-time Adoption of Malaysian Financial Reporting Standards Share-based Payment Business Combinations Insurance Contracts Non-current Assets Held for Sale and Discontinued Operations Exploration for and Evaluation of Mineral Resources Financial Instruments: Disclosures Operating Segments Financial Instruments Consolidated Financial Statements Joint Arrangements Disclosure of Interests in Other Entities Fair Value Measurement Presentation of Financial Statements Inventories Statement of Cash Flows Accounting Policies, Changes in Accounting Estimates and Errors Events After the Reporting Period Construction Contracts Income Taxes Property, Plant and Equipment Leases Revenue Employee Benefits Accounting for Government Grants and Disclosure of Government Assistance The Effects of Changes in Foreign Exchange Rates Borrowing Costs Related Party Disclosures Accounting and Reporting by Retirement Benefit Plans Separate Financial Statements Investments in Associates and Joint Ventures Financial Reporting in Hyperinflationary Economies Financial Instruments: Presentation Earnings Per Share Interim Financial Reporting Impairment of Assets Provisions, Contingent Liabilities and Contingent Assets Intangible Assets 72 Amcorp Properties Berhad

74 5. Adoption of New FRSs, Amendments to FRSs and IC Interpretations (Cont d) 5.3 New Malaysian Financial Reporting Standards ( MFRS ) Framework (Cont d) The MFRSs and IC Interpretations expected to be adopted are as follows: (Cont d) MFRS 139 Financial Instruments: Recognition and Measurement MFRS 140 Investment Property MFRS 141 Agriculture Improvements to MFRSs (2008) Improvements to MFRSs (2009) Improvements to MFRSs (2010) IC Interpretation 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities IC Interpretation 2 Members Shares in Co-operative Entities and Similar Instruments IC Interpretation 4 Determining whether an Arrangement contains a Lease IC Interpretation 5 Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds IC Interpretation 6 Liabilities arising from Participating in a Specific Market Waste Electrical and Electronic Equipment IC Interpretation 7 Applying the Restatement Approach under MFRS 129 Financial Reporting in Hyperinflationary Economies IC Interpretation 10 Interim Financial Reporting IC Interpretation 12 Service Concession Arrangements IC Interpretation 13 Customer Loyalty Programmes IC Interpretation 14 MFRS 119 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction IC Interpretation 15 Agreements for the Construction of Real Estate IC Interpretation 16 Hedges of a Net Investment in a Foreign Operation IC Interpretation 17 Distributions of Non-cash Assets to Owners IC Interpretation 18 Transfers of Assets from Customers IC Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments IC Interpretation 20 Stripping Costs in the Production Phase of a Surface Mine IC Interpretation 107 Introduction of the Euro IC Interpretation 110 Government Assistance No Specific Relation to Operating Activities IC Interpretation 115 Operating Leases Incentives IC Interpretation 125 Income Taxes Changes in the Tax Status of an Entity or its Shareholders IC Interpretation 127 Evaluating the Substance of Transactions Involving the Legal Form of a Lease IC Interpretation 129 Service Concession Arrangements: Disclosures IC Interpretation 131 Revenue Barter Transactions Involving Advertising Services IC Interpretation 132 Intangible Assets Web Site Costs Currently, the Group does not expect any material impact on its financial position and performance arising from the adoption of the above MFRSs, Amendments to MFRSs and IC Interpretations. However, the financial impact may change or additional impacts may be identified, prior to the completion of the Group s first MFRS based financial statements. Annual Report

75 6. Significant Accounting Judgements and Key Sources of Estimation Uncertainty The preparation of financial statements in conformity with Financial Reporting Standards requires the directors to exercise their judgements in the process of applying the Group s accounting policies and which may have significant effects on the amounts recognised in the financial statements. It also requires the use of accounting estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities as at the date of the financial statements and the results reported for the reporting period and that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Although these estimates and assumptions are based on the directors best knowledge of events and actions, actual results may differ. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. 6.1 Significant Judgements in Applying the Group s Accounting Policies In the process of applying the Group s accounting policies, the directors are of the opinion that any instances of application of judgement are not expected to have significant effect on the amounts recognised in the financial statements, apart from those involving estimations which are dealt with below. 6.2 Key Sources of Estimation Uncertainty The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below. (a) Property Development/Construction Contracts The Group recognises revenue from property development and construction activities and the related expenses in profit or loss by using the percentage of completion method. The percentage of completion is determined by the proportion that property development/contract costs incurred for work performed to-date compares to the estimated total property development/contract costs. Significant judgement is required in determining the stage of completion, the extent of the property development/contract costs incurred, the estimated total property development/contract revenue and costs, as well as the recoverability of the property development/construction contracts. Total property development/contract revenue also includes an estimation of variation works that are recoverable from customers. In making the judgement, the Group evaluates by relying on past experience and the work of specialists. (b) Impairment of Assets The Group assesses impairment of property, plant and equipment, land held for development and property development costs when the events or changes in circumstances indicate that the carrying amounts of the assets may not be recoverable. In assessing such impairment, the recoverable amount of the assets is estimated using the latest available fair value after taking into account the costs to sell or expected value in use of the relevant assets. 74 Amcorp Properties Berhad

76 6. Significant Accounting Judgements and Key Sources of Estimation Uncertainty (Cont d) 6.2 Key Sources of Estimation Uncertainty (Cont d) (c) Deferred Tax Assets Deferred tax assets are recognised for unutilised tax losses, unabsorbed capital allowances and other deductible temporary differences to the extent that it is probable that taxable profit will be available against which the tax losses, capital allowances and other deductible temporary differences can be utilised. Management judgement is required to determine the amount of deferred tax assets that can be recognised, based on the assessment on the probability of the availability of future taxable profits and likely timing. The total carrying amount of deferred tax assets recognised on unutilised tax losses, unabsorbed capital allowances and other deductible temporary differences of the Group as at the end of the reporting period is RM10,380,000 (2011 : RM21,731,000). The unrecognised unutilised tax losses, unabsorbed capital allowances and other deductible temporary differences are disclosed under Note 17. (d) Impairment Test on Investments in Subsidiaries and Impairment of Amounts Due from Subsidiaries The Directors review the investments in subsidiaries for impairment when there is an indication of impairment and assess the impairment of amounts due from subsidiaries when the receivables are long outstanding. The recoverable amounts of the investments in subsidiaries and amounts due from subsidiaries are assessed by reference to the fair value of the underlying assets. 7. Property, Plant and Equipment Group 2012 Freehold land Leasehold land Buildings Mini Hydro power plant Plant, equipment and motor vehicles Furniture and fittings Total RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Cost Balance as at 1 April ,837 27,368 5,633 3,962 43,528 Additions , , ,632 Disposals (970) (46) (1,016) Write offs (8) (8) Effects of changes in exchange rates Balance as at ,209 27,398 5,695 4,110 54,140 Annual Report

77 7. Property, Plant and Equipment (Cont d) Group 2012 Freehold land Leasehold land Buildings Mini Hydro power plant Plant, equipment and motor vehicles Furniture and fittings Total RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Accumulated depreciation/ Accumulated impairment losses Balance as at 1 April ,719 1,637 2,488 2,759 8,762 Charge for the year , ,487 Disposals (667) (28) (695) Write offs (7) (7) Effects of changes in exchange rates Balance as at ,976 2,953 2,348 3,110 10,549 Balance as at comprised: - Accumulated depreciation ,976 2,953 2,348 3,110 10,455 - Accumulated impairment losses ,976 2,953 2,348 3,110 10,549 Net book value as at ,233 24,445 3,347 1,000 43,591 Group 2011 Freehold land Leasehold land Buildings Mini Hydro power plant Plant, equipment and motor vehicles Furniture and fittings Total RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Cost Balance as at 1 April as previously reported 1,109-6,161 27,185 6,785 5,593 46,833 - effects of adopting Amendment to FRS , ,161 27,185 6,785 5,593 47,017 Additions , ,843 Disposals (565) - (324) - (1,598) (69) (2,556) Write offs (90) (2,642) (2,732) Effects of changes in exchange rates (24) (20) (44) Reclassification (799) Balance as at 31 March ,837 27,368 5,633 3,962 43, Amcorp Properties Berhad

78 7. Property, Plant and Equipment (Cont d) Group 2011 Freehold land Leasehold land Buildings Mini Hydro power plant Plant, equipment and motor vehicles Furniture and fittings Total RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Accumulated depreciation/ Accumulated impairment losses Balance as at 1 April as previously reported - - 1, ,940 4,192 10,202 - effects of adopting Amendment to FRS , ,940 4,192 10,264 Charge for the year , ,314 Additional impairment during the year Disposals - - (158) - (1,012) (31) (1,201) Write offs (90) (2,594) (2,684) Effects of changes in exchange rates (7) (18) (25) Reclassification (731) Balance as at 31 March ,719 1,637 2,488 2,759 8,762 Balance as at 31 March 2011 comprised: - Accumulated depreciation ,719 1,637 2,488 2,759 8,668 - Accumulated impairment losses ,719 1,637 2,488 2,759 8,762 Net book value as at 31 March ,118 25,731 3,145 1,203 34,766 Plant, Company 2012 Buildings equipment and motor vehicles Furniture and fittings Total RM 000 RM 000 RM 000 RM 000 Cost Balance as at 1 April , ,296 Additions Disposals - (369) - (369) Balance as at 609 2, ,519 Accumulated depreciation Balance as at 1 April ,418 Charge for the year Disposals - (233) - (233) Balance as at ,589 Net book value as at - 1, ,930 Annual Report

79 7. Property, Plant and Equipment (Cont d) Plant, Company 2011 Buildings equipment and motor vehicles Furniture and fittings Total RM 000 RM 000 RM 000 RM 000 Cost Balance as at 1 April , ,894 Additions - 1, ,034 Disposals - (554) - (554) Write offs - - (78) (78) Balance as at 31 March , ,296 Accumulated depreciation Balance as at 1 April ,466 Charge for the year Disposals - (253) - (253) Write offs - - (76) (76) Balance as at 31 March ,418 Net book value as at 31 March , , Property, plant and equipment include the following assets acquired under hire purchase: Group Accumulated Net book Depreciation Cost depreciation value charge RM 000 RM 000 RM 000 RM Motor vehicles 4,318 1,164 3, Motor vehicles 3,925 1,169 2, Company 2012 Motor vehicles 2, , Motor vehicles 2, , Amcorp Properties Berhad

80 7. Property, Plant and Equipment (Cont d) 7.2 There are no encumbrances on the Property, Plant and Equipment of the Group and of the Company other than the assets stated under Note 7.1 and the following assets of subsidiaries which have been charged to financial institutions in consideration for term loans facilities granted as disclosed in Note 27.1 and Note 27.4: Group RM 000 RM 000 Net book value Buildings 10,304 - Mini hydro power plant 24,445 25, Investment Properties Group RM 000 RM 000 Cost Balance at beginning of year 298, ,347 Additions 164,251 38,372 Disposal of a subsidiary (Note 9.3.1(a)) (262,656) - Effects of changes in exchange rates 187 (3,651) Balance as at end of year 199, ,068 Accumulated depreciation Balance as at beginning of year 4,984 1,454 Depreciation charge for the year 2,869 3,562 Disposal of a subsidiary (Note 9.3.1(a)) (6,454) - Effects of changes in exchange rates 58 (32) Balance at end of year 1,457 4,984 Net carrying amount at 31 March 198, ,084 Fair value 254, , On 30 September 2011, a wholly-owned subsidiary of the Company, Living Development Sdn. Bhd. ( LDSB ), acquired 30 retail lots of Amcorp Mall, 10 office lots located within Amcorp Mall, PJ Tower and Amcorp Tower, 7 business suites of Menara Melawangi and 1,454 car park bays, all located within the commercial mixed development known as Amcorp Trade Centre ( the Property ) from Melawangi Sdn. Bhd. for a cash consideration of RM75,000,000. Part of the Property amounting to RM10,372,000 is classified under property, plant and equipment as it is occupied by the Group. Subsequent thereto, LDSB acquired further units within the Property for a cash consideration of RM9,900,000. The total cash consideration on the acquisition of the units within the Property is amounted to RM84,900,000. Annual Report

81 8. Investment Properties (Cont d) 8.2 On 13 October 2010, the Company announced that the Company had entered into an Agreement For Sale ( Agreement ) with British Land Offices (Non-City) Limited to purchase a freehold property known as Baker Street, 405 Durweston Mews, London W1, United Kingdom ( the Property ) for a cash consideration of GBP16,250,000, equivalent to approximately RM79,576,000 ( Proposed Acquisition ). The Company nominated its subsidiary, Country Realty Limited to complete the Agreement and to take transfer of the Property on 29 March The Property comprise of 19 high-end residential apartments arranged over 6 upper floors with 2 lettable commercial units across the ground and lower ground floors. At the end of the reporting period, the investment properties of the Group consist of two (2) parcels of freehold land with buildings thereon which are located in London, United Kingdom and one (1) leasehold land and buildings thereon which is located in Petaling Jaya, Malaysia. The investment properties with a carrying amount of RM188,199,000 (2011: RM255,120,000) have been pledged to financial institutions for term loan facilities granted to the Group as disclosed in Note 27.1 and Note The fair values of the investment properties are arrived at based on the directors estimates by reference to independent valuations and comparisons with latest transacted prices. The amounts of rental income and operating expenses recognised in the profit or loss during the financial year in relation to the investment properties, all of which are revenue generating, are as follows: Group RM 000 RM 000 Rental income 17,675 26,377 Direct operating expenses 3,518 4,047 Depreciation 2,869 3, Investments in Subsidiaries Company RM 000 RM 000 Unquoted shares, at cost 499, ,296 Deemed capital contribution to a subsidiary 199, , , , Amcorp Properties Berhad

82 9. Investments in Subsidiaries (Cont d) Company RM 000 RM 000 Accumulated impairment losses: - at beginning of year (294,772) (145,937) - addition (13,670) - - transferred from impairment loss on amount due from subsidiaries upon: - capitalisation of debts as cost of investment in a subsidiary (Note 21.1(b)) - (99,229) - classification of debts as deemed capital contribution to a subsidiary - (55,056) - written off - 5,450 (308,442) (294,772) 390, ,692 Loan to a subsidiary is unsecured, interest free and no repayment term is stipulated. The loan is deemed by the Company as a capital contribution to the subsidiary. 9.1 Group s and Company s Equity Interest in Subsidiaries The Group s equity interest in the subsidiaries and their respective principal activities are as set out in Note Acquisition of Subsidiaries/Addition Interests and Subscription of Shares in Subsidiaries Acquisition/Incorporation of Subsidiaries in the Current Financial Year On 30 November 2011, the Group incorporated Neo Elements Limited, a wholly-owned subsidiary of the Group. Neo Elements Limited is incorporated in the British Virgin Islands with an issued and paidup share capital of GBP1.00 comprising 1 ordinary share of GBP1.00 each or equivalent to RM5 each. The acquisition has no material financial effect to the Group Acquisition of Subsidiaries in the Previous Financial Year On 10 December 2010, the Company acquired the following two (2) wholly-owned subsidiaries for a cash consideration of GBP1.00 or equivalent to RM5 for each company: (a) (b) Riverich Limited; and Country Realty Limited. The above acquisitions have no material financial effect to the Group in the previous financial year. Annual Report

83 9. Investments in Subsidiaries (Cont d) 9.2 Acquisition of subsidiaries/addition interests and subscription of shares in subsidiaries (Cont d) Subscription to Additional Shares Issued by Subsidiaries During the Financial Year During the financial year, the Company subscribed to the following additional shares issued by the following wholly-owned subsidiaries: (a) (b) 600,000 new ordinary shares of RM1.00 each issued by Distrepark Sdn. Bhd. at an issue price of RM8.33 per ordinary shares for cash consideration; and 2,599,998 new ordinary shares of RM1.00 each issued by Regal Genius Sdn. Bhd. at an issue price of RM1.00 per ordinary shares for cash consideration. The subscription of new shares has no financial impact to the consolidated financial results for the current financial year Subscription to Additional Shares Issued by Subsidiaries in the Previous Financial Year In the previous financial year, the Company subscribed to the following additional shares issued by the following wholly-owned subsidiaries: (a) (b) (c) 25,000 new ordinary shares of RM1.00 each issued by Amcorp Management Services Sdn. Bhd. at an issue price of approximately RM7,038 per ordinary shares and 25,000 new redeemable convertible preference shares of RM1.00 each at par by way of capitalisation of inter-company advances of RM175,982,000; 100 new ordinary shares of RM1.00 each issued by Walleng Enterprises Sdn. Bhd. at an issue price of RM288,101 per ordinary share for cash consideration; and 4,999,998 new ordinary shares of RM1.00 each issued by Amcorp Power Sdn. Bhd. at par settled by way of capitalisation of inter-company advances of RM1,021,000 and the remaining consideration by way of cash. The subscription of new shares had no financial impact to the consolidated financial results in the previous financial year. 9.3 Disposal of Subsidiaries Subsidiaries Disposed/Struck Off During the Financial Year (a) On 17 June 2011, a wholly-owned subsidiary of the Company, Walleng Enterprises Sdn. Bhd. ( WESB ), entered into a conditional Share Sale and Purchase Agreement ( SSPA ) with Golden Spectre Limited ( GSL ) (WESB and GSL hereinafter collectively referred to as the Sellers ) and Britel Fund Trustees Limited ( the Purchaser ) to dispose off the 60% equity interest in Westlink Global Investments Limited ( WGIL ) held by WESB. The remaining 40% equity interest in WGIL is held by GSL. WGIL is a property investment company whose principal asset is a commercial property located at 40/50 Eastbourne Terrace, Paddington, London W2 6LG ( the Property ). 82 Amcorp Properties Berhad

84 9. Investments in Subsidiaries (Cont d) 9.3 Disposal of Subsidiaries (Cont d) Subsidiaries Disposed/Struck Off During the Financial Year (Cont d) (a) The Sellers disposed off their respective equity interest in WGIL including advances to WGIL to the Purchaser for a sale consideration net of bank loans of GBP45,509,000. The disposal was completed on 6 September 2011 with a net cash consideration of RM132,213,000 to WESB and resulted in a gain of RM70,038,000 to the Group and WGIL ceased to be a subsidiary of the Group. The effects of disposal to the Group were as follows: As at the date of disposal RM 000 Net assets disposed: Investment property 256,202 Trade and other receivables 1,761 Cash and bank balances 3,050 Trade and other payables (2,653) Provision for taxation (1,856) Borrowings (157,172) Shareholder s loan (36,564) Non-controlling interests (593) 62,175 Gain on disposal to the Group 70,038 Consideration from disposal 132,213 Cash and bank balances of subsidiary disposed (3,050) Net cash inflow on disposal 129,163 Annual Report

85 9. Investments in Subsidiaries (Cont d) 9.3 Disposal of Subsidiaries (Cont d) Subsidiaries Disposed/Struck Off During the Financial Year (Cont d) (a) The effects of the disposals on the financial results of the Group up to the date of disposal are as follows: Management account up to the date of disposal RM 000 Revenue 12,164 Other operating income 7 Depreciation and amortisation (1,502) Other operating expenses (1,446) Profit from operations 9,223 Finance costs (6,881) Loss before taxation 2,342 Taxation 349 Net profit for the period 2,691 (b) On 28 December 2011, the Company entered into Sale and Purchase Agreements to dispose the entire equity interest in the following two (2) wholly-owned subsidiary companies for a cash consideration of RM2.00 each ( Disposals ): i. Cemara Angkasa Sdn. Bhd. (formerly known as AMDB Engineering Services Sdn. Bhd.) ( CASB ); and ii. Cemara Sejati Sdn. Bhd. (formerly known as AMDB Technics Sdn. Bhd.) ( CSSB ). The Disposals have been completed on even date. CASB & CSSB were dormant and the Disposals have no material effect to the Company and the Group. (c) An indirect subsidiary of the Company, Netcoin Sdn. Bhd. had been struck off from the register of Companies Commission of Malaysia upon the application by the Company Subsidiaries Struck Off/Wound Up in the Previous Financial Year (a) The following direct and indirect subsidiaries of the Company have been struck off from the register of Companies Commission of Malaysia and the Companies Registry of Hong Kong respectively upon the application by the Company: (i) Beringin Indah Sdn. Bhd. (v) Jelas Warna Sdn. Bhd. (ii) Kaktus Permai Sdn. Bhd. (vi) AMCE Builders Sdn. Bhd. (iii) Kaktus Ceria Sdn. Bhd. (vii) Taifab Trading (M) Sdn. Bhd. (iv) Taifab Hongkong Limited (viii) Gerak Rasmi Sdn. Bhd. 84 Amcorp Properties Berhad

86 9. Investments in Subsidiaries (Cont d) 9.3 Disposal of Subsidiaries (Cont d) Subsidiaries Struck Off/Wound Up in the Previous Financial Year (Cont d) (b) Ideal Resort Sdn. Bhd. ( IRSB ), a direct subsidiary of the Company had held its Final Meeting to conclude the members voluntary winding-up. The Liquidator has lodged a Return relating to Final Meeting with the Companies Commission of Malaysia and the Official Receiver on 28 September IRSB had since been dissolved on 28 December The above striking-offs and winding up have no material financial effect to the Group. 10. Investments in Associates Group Company RM 000 RM 000 RM 000 RM 000 Unquoted shares, at cost 122, , , ,007 Allowance for impairment losses (4,648) (10,628) (3,000) (5,879) Group s share of post- acquisition results net of dividend received 8,111 (16,960) , , , , The Group s effective interest in the associates and their respective principal activities are as set out in Note During the financial year, Prisma Tulin Sdn. Bhd. redeemed 9,800,000 preference shares of RM1.00 each held by the Company at RM1.00 per share. The Group and the Company also received cumulative dividend on preference shares of RM5,744,000 in accordance with the terms of the preference shares The movements of allowance for impairment losses are as follows: Group Company RM 000 RM 000 RM 000 RM 000 At beginning of year 10,628 27,820 5,879 23,071 Addition - - 3,000 - Disposal (5,980) (17,192) (5,879) (17,192) At end of year 4,648 10,628 3,000 5,879 Annual Report

87 10. Investments in Associates (Cont d) 10.4 The summarised financial information of the associates are as follows: Group RM 000 RM 000 Assets and liabilities Total assets 1,449,521 1,588,666 Total liabilities (854,113) (1,022,836) Net assets 595, ,830 Results Revenue 335, ,032 Profit for the financial year 144,836 74, In the current financial year 2012, the Company disposed off 2,086,800 ordinary shares of RM1.00 each in Lafarge Concrete (Malaysia) Sdn. Bhd. ( LCM ), representing 30% of equity interest in LCM for a total cash consideration of RM10,216,000. The disposal resulted in a gain of RM712,000 and RM7,434,000 to the Group and the Company respectively In the previous financial year 2011, the Company disposed off 2,000,000 ordinary shares of RM1.00 each in Selaman Sdn. Bhd. ( SSB ), representing 40% of equity interest in SSB for a total cash consideration of RM20,000,000. The disposal has resulted in a net loss of RM10,324,000 to the Group and a net gain of RM6,650,000 to the Company The financial year end of the direct and indirect associates are coterminous with the Company except for the following: Companies Financial year end Prisma Tulin Sdn. Bhd. ) 30 June Augustland Hotel Sdn. Bhd., ) Bangi Hotel Sdn. Bhd., ) 31 December Planergo (Pte) Limited. ) 86 Amcorp Properties Berhad

88 11. Investment in a Jointly Controlled Entity Group Company RM 000 RM 000 RM 000 RM 000 Investment in a jointly controlled entity 27, The Group s effective interest in the jointly controlled entity are as follows: Country of Group s effective Jointly controlled entity incorporation equity interest Principal activities NEOd Investments LLP United 75 - Property investment Kingdom Subsidiary of NEOd Investments LLP NEOd Trade Limited United 75 - Property trading Kingdom 11.2 On 19 March 2012, Neo Elements Limited ( Neo Elements ), a wholly-owned subsidiary of the Company had entered into a joint venture with Native Land Limited ( Native Land ), Bankside 4 Limited ( Bankside4 ) and Clan PavD LLP ( Clan ) ( Joint Venture ) via a members agreement ( Members Agreement ) in relation to the jointly controlled entity, NEOd Investments LLP ( NEOd Investments or JV Entity ), which is a limited liability partnership incorporated under the laws of England and Wales. (Neo Elements, Native Land, Bankside4 and Clan shall collectively be referred to as Members ) The Members had agreed to set up NEOd Investments for the acquisition of Pavilion D of the prime residential development known as NEO Bankside, 5 Sumner Street, London, SE1 9RE ( the Property ) for a total purchase consideration of GBP49.6 million ( Acquisition ). The Property comprised of 53 residential units with a total area of 49,854 square feet, one (1) retail unit with a total area of 2,959 square feet and four (4) car park spaces. 15 residential units will be targeted for sale before the actual completion date. NEOd Investments has obtained a bank loan up to GBP27.5 million to finance the acquisition with Neo Elements taking an equity stake of between 69% to 75% equivalent to GBP16.5 million to GBP20.0 million depending on the number of pre-sale units. On execution of the Members Agreement, the Neo Elements had made a contribution of GBP5.625 million with the balance on completion of the Acquisition, expected in July Annual Report

89 12. Other Investments Group Company RM 000 RM 000 RM 000 RM 000 Available-for-sale financial assets Quoted in Malaysia: - shares 2,309 1,906 1, Unquoted - bonds 5,464 5,160 5,464-7,773 7,066 6, Other investments Golf club membership Less: Allowance for diminution in value (185) (204) (37) ,986 7,336 6, The investment in unquoted bonds represents an investment in medium term notes which is secured, bears a fixed rate coupon at 9.00% (2011: 9.00%) per annum payable semi-annually in arrears and has a remaining maturity period of 4 years as at (2011: 5 years). 13. Prepaid Lease Payments Long leasehold land Group RM 000 RM 000 Cost/Valuation Balance at beginning of year: - as previously reported effects of the adoption of Amendment to FRS (184) - - Accumulated amortisation Balance at beginning of year: - as previously reported effects of the adoption of Amendment to FRS (62) Net carrying amount - - Following the adoption of the Amendment to FRS 117 in the previous financial year, leasehold land of the Group is regarded as a finance lease and has been reclassified to property, plant and equipment. This Amendment is applied retrospectively. 88 Amcorp Properties Berhad

90 14. Biological Assets Group RM 000 RM 000 Oil palm plantation development expenditure Balance at beginning of year 3,846 2,818 Additions during the year 280 1,028 Disposal (4,126) - Balance at end of year - 3,846 The oil palm plantation development expenditure was not amortised during the previous financial year as the plantation had not reached maturity. 15. Land Held for Property Development Group RM 000 RM 000 Cost At beginning of year: - freehold land/leasehold land 222, ,695 - land related/development expenditure 31,894 31, , ,177 Additions: - land related/development expenditure Reclass to property development costs: - freehold land/leasehold land (513) - - land related/development expenditure (1,533) - (2,046) - Disposal: - freehold land/leasehold land (116,935) - At end of year: - freehold land/leasehold land 105, ,695 - land related/development expenditure 30,810 31, , ,589 Annual Report

91 15. Land Held for Property Development (Cont d) Group RM 000 RM 000 Accumulated impairment losses At beginning of year (66,507) (112,184) Write back of impairment loss - 45,677 Reclass to property development costs 1,219 - At end of year (65,288) (66,507) Net carrying amount 70, ,082 On 9 January 2012, the Company s wholly-owned indirect subsidiary, Amcorp Industrial City Sdn. Bhd., disposed off a parcel of leasehold agriculture land together with the biological assets as disclosed in Note 14 held under PN 89668, Lot 8590, Mukim of Labu, District of Sepang, State of Selangor measuring approximately 1, acres to Premier Land Resources Sdn. Bhd. for a total cash consideration of RM122,329,000. The disposal did not result in any gain or loss to the Group. 16. Long Term Receivables Group RM 000 RM 000 Long term receivables comprised: Retention sums receivables from engineering and construction contracts 24,097 38,363 Less: Retention sums receivable within 12 months (included under current assets - trade receivables Note 20) (18,366) (23,246) 5,731 15, The long term receivables are receivable as follows: Group RM 000 RM 000 Within 2 years 1,728 12,387 Between 3 to 5 years 4,003 2,730 More than 5 years - - 5,731 15, Amcorp Properties Berhad

92 16. Long Term Receivables (Cont d) 16.2 The currency exposure profile of long term receivables are as follows: Group RM 000 RM 000 Ringgit Malaysia 5,731 3,711 United Arab Emirates Dirham - 11,406 5,731 15, Deferred Tax The deferred tax (assets)/liabilities are made up of the following: Group Company RM 000 RM 000 RM 000 RM 000 At beginning of year (3,600) (5,861) - - Recognised in profit or loss (1,894) 2, Effects of changes in exchange rates 3 (5) - - At end of year (5,491) (3,600) - - Presented after appropriate offsetting as follows: Deferred tax assets (10,380) (21,731) - - Offset against deferred tax liabilities 4,661 15, Net deferred tax assets (5,719) (6,063) - - Deferred tax liabilities 4,889 18, Offset against deferred tax assets (4,661) (15,668) - - Net deferred tax liabilities 228 2, Annual Report

93 17. Deferred Tax (Cont d) The components and movements of deferred tax liabilities and assets during the financial year prior to offsetting are as follows: Group Balance as at Recognised in profit or loss Effects of changes in exchange rates Balance as at RM 000 RM 000 RM 000 RM 000 Deferred tax liabilities Excess of capital allowances over depreciation 3,685 1,042-4,727 Land held for development, at fair value 14,105 (13,943) Other taxable temporary differences 341 (344) 3-18,131 (13,245) 3 4,889 Deferred tax assets Unutilised tax losses (12,049) 12, Investment tax allowance (6,522) - - (6,522) Unabsorbed capital allowances (3,160) (698) - (3,858) (21,731) 11,351 - (10,380) (3,600) (1,894) 3 (5,491) 2011 Group Balance as at Recognised in profit or loss Effects of changes in exchange rates Balance as at RM 000 RM 000 RM 000 RM 000 Deferred tax liabilities Excess of capital allowances over depreciation 2,019 1,666-3,685 Land held for development, at fair value 4,186 9,919-14,105 Other taxable temporary differences 443 (97) (5) 341 6,648 11,488 (5) 18,131 Deferred tax assets Unutilised tax losses (4,201) (7,848) - (12,049) Investment tax allowance (6,259) (263) - (6,522) Unabsorbed capital allowances (2,049) (1,111) - (3,160) (12,509) (9,222) - (21,731) (5,861) 2,266 (5) (3,600) 92 Amcorp Properties Berhad

94 17. Deferred Tax (Cont d) The amount of temporary differences for which no deferred tax assets have been recognised in the statement of financial position are as follows: Group Company RM 000 RM 000 RM 000 RM 000 Unutilised tax losses 303, ,851 1,376 1,376 Unabsorbed capital allowances 64,809 64,811 59,459 59,459 Other deductible temporary differences 61,212 61, , ,893 60,835 60, Property Development Costs Group RM 000 RM 000 (Restated) Property development costs at beginning of year: - freehold land/leasehold 111, ,945 - development costs 70,176 81,233 - accumulated impairment losses (2,422) (2,057) - accumulated costs recognised in profit or loss (10,676) (26,494) 168, ,627 Costs incurred during the year: - freehold land/leasehold land 1, development costs 50,708 16,949 52,568 17,791 Reclass from land held for property development: - freehold land/leasehold land development costs 1, impairment loss (1,219) Cost recognised in profit or loss during the year (39,116) (12,729) Elimination/Transfer of completed projects: - freehold land/leasehold land (3,984) - - development costs - (25,095) - accumulated costs recognised in profit or loss 3,984 24,630 - (465) Annual Report

95 18. Property Development Costs (Cont d) Group RM 000 RM 000 (Restated) Disposal: - freehold land/leasehold land (1,775) (1,502) - development costs (825) (2,911) - accumulated impairment losses accumulated costs recognised in profit or loss - 3,917 (2,235) (496) Additional impairment loss - (365) Property development costs at end of year: - freehold land/leasehold land 107, ,285 - development costs 121,592 70,176 - accumulated impairment losses (3,276) (2,422) - accumulated costs recognised in profit or loss (45,808) (10,676) 180, , Included in the property development costs incurred during the financial year is interest expense of RM651,000 (2011: RM220,000) capitalised at rate of 5.8% (2011: 5.8%) per annum Certain parcels of leasehold land of a subsidiary with a total carrying amount of RM20,575,000 (2011: RM20,368,000) have been pledged to a licensed bank as security in consideration for a term loan facility granted to the subsidiary as disclosed in Note Inventories Group RM 000 RM 000 (Restated) Inventories of completed properties 11,127 12,826 Raw materials and consumable stores ,264 12,968 Impairment of inventories (1,804) (2,330) 9,460 10,638 The carrying amount of inventories of the Group as at which are carried at net realisable value is RM4,980,000 (2011 : RM5,566,000). 94 Amcorp Properties Berhad

96 20. Trade Receivables Group Company RM 000 RM 000 RM 000 RM 000 Trade receivables 23,061 15, Retention sums receivable within 12 months 18,366 23, ,427 39, The trade receivables of the Group and of the Company are stated after deducting allowance for impairment loss of RM8,496,000 (2011: RM8,672,000) and RM283,000 (2011: RM284,000) respectively. The movements of allowance for impairment loss during the financial year are as follows: Group Company RM 000 RM 000 RM 000 RM 000 At beginning of year 8,672 9, Addition Write back (722) (176) - (2) Write off - (979) - - Effects of changes in exchange rates - (1) - - 8,496 8, The Group s normal trade credit periods range from 14 to 90 days (2011: 14 to 90 days). The Group s and the Company s historical experience in collection of trade receivables falls within the recorded allowances and management believes that no additional credit risk beyond the amounts provided for collection losses is inherent in the Group s and the Company s trade receivables As at, the Group has significant concentration of credit risk in respect of its trade receivables arising from exposure to debts due from one (1) (2011: one (1)) major customer amounting to RM17,026,000 (2011: RM33,052,000) representing 36% (2011: 61%) of the total net trade receivables, including retention sums receivable after twelve (12) months as disclosed in Note The currency exposure profile of trade receivables is as follows: Group Company RM 000 RM 000 RM 000 RM 000 Ringgit Malaysia 24,301 15, Pound Sterling 4 2, United Arab Emirates Dirham 17,122 21, ,427 39, Annual Report

97 20. Trade Receivables (Cont d) 20.5 The ageing analyses of the trade receivables of the Group and of the Company are set out below: Individual Group Gross impairment Net 2012 RM 000 RM 000 RM 000 Neither past due nor impaired 21,707-21,707 0 to 60 days past due 11,772-11, to 120 days past due 3,459-3,459 More than 120 days past due 12,985 (8,496) 4,489 49,923 (8,496) 41,427 Company 2012 More than 120 days past due 283 (283) - Group 2011 Neither past due nor impaired 29,972-29,972 0 to 60 days past due 4,013-4, to 120 days past due 2,376-2,376 More than 120 days past due 11,455 (8,672) 2,783 47,816 (8,672) 39,144 Company 2011 More than 120 days past due 284 (284) - Trade receivables that are individually impaired comprised those debtors who are in significant financial difficulties and have defaulted on their payments. These receivables are not secured by any collateral. Receivables That are Neither Past Due Nor Impaired Trade receivables that are neither past due nor impaired are credit worthy debtors with good payment records with the Group. None of the Group s trade receivables that are neither past due nor impaired have been renegotiated during the financial year. Receivables That are Past Due but Not Impaired As at, the Group has trade receivables amounting to RM19,720,000 that are past due but not impaired. Trade receivables that are past due but not impaired relate to customers that have existing continuous business relationship and track records with the Group. Based on past experience of credit assessments and communication with the customers, the directors of the Group are of the opinion that the balances are still considered to be fully recoverable. 96 Amcorp Properties Berhad

98 21. Other Receivables Group Company RM 000 RM 000 RM 000 RM 000 Other receivables 11,766 17, Amounts due from subsidiaries , ,888 Amount due from an associate ,825 17,029 78, , The above amounts are stated after deducting the following: (a) Allowance for impairment loss on other receivables Group Company RM 000 RM 000 RM 000 RM 000 At beginning of year Addition Write back - (1) - - Write off - (150) (b) Allowance for impairment loss in relation to amounts due from subsidiaries Company RM 000 RM 000 At beginning of year 85, ,125 Write off - (44,458) Transfer to impairment loss on investments in subsidiaries upon: - capitalisation of debts as cost of investment in a subsidiary - (99,229) - classification of debts as deemed capital contribution to a subsidiary - (55,056) Write back - (40,000) At end of year 85,382 85, The amounts due from subsidiaries are unsecured and are repayable on demand. The amounts due are interest free except for a balance (before allowance for impairment loss) of RM81,522,000 (2011 : RM192,618,000), for which interests are charged at a rate of 3.50% (2011: 3.50%) per annum. Annual Report

99 21. Other Receivables (Cont d) 21.3 The currency exposure profile of other receivables is as follows: Group Company RM 000 RM 000 RM 000 RM 000 Ringgit Malaysia 9,467 2,189 78, ,018 Pound Sterling 2,106 14, United Arab Emirates Dirham ,825 17,029 78, , Amounts Due from/(to) Contract Customers Group RM 000 RM 000 Contract costs 380, ,789 Profit attributable to work performed to-date 9,750 10,625 Allowance for foreseeable losses (647) (710) 389, ,704 Less: Progress billings (399,776) (377,613) (10,038) (2,909) Amounts due to customers for contract work 10,501 5,090 Amounts due from customers for contract work 463 2, Deposits, Cash and Bank Balances Group Company RM 000 RM 000 RM 000 RM 000 Deposits with licensed banks 128,100 8,442 10,000 - Cash and bank balances 26,923 32, As reported in the statements of financial position 155,023 40,731 10, Less: Deposits pledged with licensed banks (1,853) (1,797) - - As reported in statements of cash flows 153,170 38,934 10, Cash and bank balances of the Group include balances amounting to RM9,946,000 (2011: RM9,600,000) which are maintained in designated Housing Development Accounts ( HDA ) pursuant to the Housing Development (Control and Licensing) Act 1966 and Housing Developers Regulations 1991 in connection with property development projects undertaken by certain subsidiaries. 98 Amcorp Properties Berhad

100 23. Deposits, Cash and Bank Balances (Cont d) 23.2 As at, deposits with licensed banks of the Group amounting to RM1,853,000 (2011: RM1,797,000) have been pledged to licensed banks in consideration for banking facilities granted to the Group and hence, not available for general use The currency exposure profile of deposits, cash and bank balances is as follows: Group Company RM 000 RM 000 RM 000 RM 000 Ringgit Malaysia 32,653 27,768 10, Pound Sterling 117,678 8, United Arab Emirates Dirham 4,692 4, ,023 40,731 10, The effective interest rates of cash designated under the Housing Development Accounts and deposits with licensed banks as at the end of the reporting period are as follows: Group Company % % % % Cash at banks under HDA 1.25 to to Deposits with licensed banks - RM 1.90 to to GBP Share Capital Ordinary shares of RM0.50 each: Group and Company Number of shares Number of shares ( 000) RM 000 ( 000) RM 000 Authorised 1,000, ,000 1,000, ,000 Issued and fully paid 575, , , , All the ordinary shares rank pari passu with regard to the Company s residual assets. Annual Report

101 24. Share Capital (Cont d) 24.2 Employees Shares Option Scheme ( ESOS ) The Company implemented an ESOS on September 28, 2011 (effective date), which enables the granting of options to eligible directors and employees of the Group to subscribe up to 15% of the issued and paidup ordinary share capital of the Company. The ESOS is governed by the by-laws which were approved by the shareholders on August 29, 2011 and is administered by an Options Committee, members who are appointed by the Board. The ESOS shall be in force for a period of 5 years to September 27, 2016 and may be renewed for another 5 years. The salient features of the scheme are as follows: (a) (b) (c) (d) (e) (f) (g) eligible persons are Directors and Employees who have been appointed or confirmed in service in any company within the Group (except dormant subsidiaries), subject to any minimum period as may be determined by the Options Committee, and has not tendered his/her resignation or subject to any disciplinary proceeding; not more than 50% of the new Shares available under the ESOS shall be allocated, in aggregate, to Directors and senior management staff. In addition, not more than 10% of the new Shares available under the ESOS shall be allocated to any individual director or employee who, either singly or collectively through persons connected with the director or employee, holds 20% or more of the issued and paid-up capital of the Company; the options allocated is subject to the maximum allowable allocation based on the respective category of that eligible person as per By-Law 7.1 of the ESOS and is based on the performance, seniority and number of years of service; the option is personal and is non-assignable and may be exercised in respect of such lesser number of new shares provided that the number shall be in multiples of and not less than 1000 new shares; the option price shall be at a discount of not more than 10% of the 5 Day-weighted average market price of the Company s ordinary shares on Bursa Malaysia preceding the respective dates of the offer in writing to the grantee or at the par value of the ordinary shares of the Company, whichever is higher; subject to the discretion of the Option Committee, the eligible persons to whom the options have been granted have no right to participate by virtue of the options in any share issue of any other company within the Group; and the share options, by virtue of By-Law 12.1 of the ESOS, may be exercised at any time during the Option Period subject to the following limits: (i) For option holders who has served within the Group for less than 5 continuous years: Cumulative % of maximum allowable allocation of ESOS options commencing from the effective date Year 1 Year 2 Year 3 Year 4 Year Amcorp Properties Berhad 20% 40% 60% 80% 100%

102 24. Share Capital (Cont d) 24.2 Employees Shares Option Scheme ( ESOS ) (Cont d) (g) the share options, by virtue of By-Law 12.1 of the ESOS, may be exercised at any time during the Option Period subject to the following limits: (Cont d) (ii) For option holders who has served within the Group for at least 5 continuous years: Cumulative % of maximum allowable allocation of ESOS options commencing from the effective date Year 1 Year 2 Year 3 Year 4 Year 5 20%+ 40%+ 60%+ 100% 100% [5 x Years]% [5 x Years]% [5 x Years]% Years is the total number of years: (a) (b) from the date of appointment or confirmation, to the date of first offer; and from the date of first offer to the next anniversary of the date of first offer. All unexercised options shall be exercisable in the last year of the Option Period. Any options that remain unexercised at the expiry of the Option Period shall be automatically terminated. There were no options granted during the financial year. 25. Treasury Shares The shareholders of the Company, by a resolution passed at an annual general meeting held on 3 September 2010, had granted an approval to the Company to buy back its own shares of up to 10% of the issued and paid-up share capital of the Company. During the financial year, the Company repurchased its issued ordinary shares of RM0.50 each from the open market as summarised below: Number Total Number of shares consideration Highest Lowest Average ( 000) RM 000 RM RM RM Balance at 1 April , Share repurchased during the financial year: April June Balance as at 2, Annual Report

103 25. Treasury Shares (Cont d) The total consideration paid, including transaction costs, of RM972,000 was financed by internally generated funds. The shares repurchased were held as treasury shares in accordance with Section 67A of the Companies Act, The Company has the right to cancel, resell and/or distribute the treasury shares as dividends at a later date. As treasury shares, the rights attached to voting, dividends and participation in other distribution is suspended. None of the treasury shares repurchased had been sold or cancelled during the financial year. As at the end of the reporting period, the number of ordinary shares in issue after the share buy-back is 573,080,837 ordinary shares of RM0.50 each. 26. Reserves Group Company RM 000 RM 000 RM 000 RM 000 Non-distributable: Share premium 103, , , ,842 Other reserves: - capital reserves fair value reserves 1,852 1,008 1, exchange translation reserve (Note 26.1) (8,657) (9,638) - - (5,924) (7,749) 1, Distributable: Retained profits (Note 26.2) 276, , ,171 91, , , , , Exchange translation reserve Group RM 000 RM 000 At beginning of year (9,638) (6,829) Currency translation gain/(loss) 900 (2,809) Realisation of reserve upon disposal of a subsidiary (Note 26.2) 81 - (8,657) (9,638) 102 Amcorp Properties Berhad

104 26. Reserves (Cont d) 26.2 Retained profits Group Company RM 000 RM 000 RM 000 RM 000 At beginning of year 187, ,583 91,454 15,718 Realisation of reserve upon disposal of a subsidiary (Note 26.1) (81) Dividend paid (12,894) - (12,894) - Effect of the adoption of FRS (698) - - Profit for the year 101,976 48,681 21,611 75,736 At end of year 276, , ,171 91, The Company has an estimated tax credit balance under Section 108 of the Income Tax Act, 1967 of RM15,982,000 (2011: RM20,280,000) which, subject to agreement with the tax authorities, is available to frank dividends out of future reserves. In addition, the Company has an estimated tax exempt profit of RM43,260,000 (2011: RM43,260,000) which, subject to agreement with the tax authorities, is available for distribution as tax exempt dividends The Finance Act 2007 introduced a single tier company income tax system with effect from the year of assessment Under the single tier tax system, tax on a company s profit is a final tax and dividends distributed to shareholders will be exempted from tax. With the implementation of the new system, companies with credit balance in Section 108 account are allowed either to elect for an irrevocable option to disregard the available tax credit balance as at 31 December 2007 or to continue using such credit balance for the purpose of dividend distribution. The Company did not elect for an irrevocable option to disregard the available Section 108 as disclosed in Note 26.3 above and is therefore allowed to utilise the tax credit until such time the credit is fully utilised or upon expiry of the six years transitional period on 31 December 2013, whichever is earlier. 27. Bank Borrowings Group Company RM 000 RM 000 RM 000 RM 000 Secured Term loans 139, , Bai Istisna 24,327 24, , , Annual Report

105 27. Bank Borrowings (Cont d) Group Company RM 000 RM 000 RM 000 RM 000 Unsecured Overdrafts 1,145 10,077 1,145 7,680 Other borrowings - 72,782-72,782 1,145 82,859 1,145 80,462 Total borrowings 165, ,839 1,145 80,462 Less: Amount due within one year Current portion of term loans and Bai Istisna (13,585) (6,311) - - Overdrafts (1,145) (10,077) (1,145) (7,680) Other borrowings - (72,782) - (72,782) (14,730) (89,170) (1,145) (80,462) Non-current portion 150, , The term loans and Bai Istisna borrowings are repayable as follows: Group RM 000 RM 000 Within 1 year 13,585 6,311 Between 2 to 5 years 104, ,545 More than 5 years 46,030 18, , , A secured term loan with a carrying amount of RM45,000,000 as at (2011: Nil) is granted by a licensed bank to a subsidiary, Living Development Sdn. Bhd. to part finance the acquisition of Amcorp Trade Center ( ATC ) units. The term loan is repayable in one hundred and twenty (120) monthly installments commencing from 30 April 2012 to 30 March The term loan is secured by way of a first legal charge over the ATC units which are included in property, plant and equipment and investment properties as disclosed in Note 7 and Note 8, assignment of the rental income from ATC units and a corporate guarantee provided by the Company. 104 Amcorp Properties Berhad

106 27. Bank Borrowings (Cont d) 27.2 Secured term loans with a carrying amount of RM80,147,567 as at represents two (2) term loan facilities granted during the financial year by a financial institution to two (2) subsidiaries, Riverich Limited and Country Realty Limited to part finance the acquisition of two (2) investment properties in London (hereinafter referred to as the Properties ). The term loan of Riverich Limited is repayable by a bullet payment of GBP5,000,000 when the term loan matures on 2 August 2013 while the term loan of Country Realty Limited is repayable by a bullet payment of GBP11,375,000 when the term loan matures on 29 March The term loans are secured by way of a first party first legal charge over the Properties (Note 8), a charge over Debt Service Reserve account with minimum deposit of at least three (3) months interest payment, assignment of the rental income and a corporate guarantee provided by the Company A secured term loan with a carrying amount of RM14,750,000 as at (2011: RM5,000,000) is granted by a licensed bank to a subsidiary, Amcorp Prima Realty Sdn. Bhd. to part finance a development project undertaken by the subsidiary as disclosed in Note 18. The term loan is repayable in seven (7) quarterly instalments commencing from to 30 September The term loan is secured by way of a fixed charge over certain titles of the leasehold land which are included in property development costs as disclosed in Note 18 and a corporate guarantee provided by the Company. Significant loan convenants of the term loan include debt to equity ratio of the subsidiary shall not exceed 75:25 times The outstanding borrowings under the Bai Istisna facility is granted by a licensed bank to a subsidiary, Amcorp Perting Hydro Sdn. Bhd. ( AMPH ) to finance the construction of a 4 MW Mini Hydro Power Plant in Sungai Perting, Bentong, Pahang as disclosed in Note 7.2. The Bai Istisna borrowings are repayable in thirty (30) half-yearly instalments commencing from The Bai Istisna borrowings are secured by a debenture incorporating first fixed and floating charges over all present and future assets of AMPH and a corporate guarantee from the Company A secured term loan with a carrying amount of RM155,993,000 as at 31 March 2011 represents a term loan facility granted by a foreign financial institution to a subsidiary, Westlink Global Investments Limited ( WGIL ) to finance the acquisition of a commercial property located at 40/50 Eastbourne Terrace in London. The term loan was repaid on 6 September 2011 upon the disposal of Westlink Global Investments Limited. Annual Report

107 27. Bank Borrowings (Cont d) 27.6 The currency exposure profile of bank borrowings is as follows: Group Company RM 000 RM 000 RM 000 RM 000 Ringgit Malaysia 85, ,846 1,145 80,462 Pound Sterling 80, , , ,839 1,145 80, The effective interest rates of bank borrowings as at the end of reporting period are as follows: Group Company % % % % Fixed rate Term loan - GBP Bai Istisna Floating rate Term loan - RM GBP Overdrafts 8.10 to to to to 9.30 Other borrowings to to Hire Purchase Creditors Group Company RM 000 RM 000 RM 000 RM 000 Future minimum payments: Payable within 1 year Payable between 2 to 5 years 1,545 1, ,333 2,038 1,480 1,362 Future finance charges (202) (206) (135) (150) Present value 2,131 1,832 1,345 1,212 Payable: Within 1 year (shown under current liabilities) Between 2 to 5 years (shown under non-current liabilities) 1,433 1, ,131 1,832 1,345 1, Amcorp Properties Berhad

108 28. Hire Purchase Creditors (Cont d) The effective interest rates of hire purchase liabilities as at the end of the reporting period are as follows: Group Company % % to to to to Long Term Payables Group RM 000 RM 000 Retention sums and progress claims payable after 1 year (Note 30) 1,852 2, The long term payables are repayable as follows: Group RM 000 RM 000 Within 2 years 628 1,724 Between 3 to 5 years 1, More than 5 years - - 1,852 2, The long term payables are payable in Ringgit Malaysia. 30. Trade Payables Group RM 000 RM 000 Trade payables 30,951 38,483 Less: Amount payable after 12 months classified as long term payables (Note 29) (1,852) (2,648) 29,099 35,835 Accrued property development costs 8,590 7,302 37,689 43,137 Annual Report

109 30. Trade Payables (Cont d) 30.1 Amount payable after twelve (12) months relates to retention sums and progress claims in relation to construction contracts The Group s normal trade credit periods range from 30 to 90 days (2011: 30 to 90 days) The currency exposure profile of trade payables is as follows: Group RM 000 RM 000 Ringgit Malaysia 29,591 28,599 Pound Sterling - 5,706 United Arab Emirates Dirham 1,360 3,050 United States Dollar Euro ,951 38, Other Payables Group Company RM 000 RM 000 RM 000 RM 000 Deposit received and other payables 14,053 13, Shareholder s loan - 36, Amounts owing to subsidiaries , ,573 14,053 50, , , The amounts owing to subsidiaries are unsecured and repayable on demand. The amounts owing are interest free except for a balance of RM7,359,000 (2011: RM3,736,000) which attracts interest at rates ranging from 1.90% to 2.25% (2011: 1.65% to 2.25%) per annum Included in other payables of the Group is an amount owing to a minority shareholder amounting to RM3,771,000 (2011: RM3,600,000). The amount owing is unsecured, interest free and repayable on demand The shareholder s loan in the previous financial year represents advances from a minority shareholder and is unsecured, interest free and repayable within 12 months. The shareholder s loan as at 31 March 2011 represents advances of GBP8,566,000 from a minority shareholder of Westlink Global Investments Limited ( WGIL ) provided for the purpose of funding part of the consideration payable for the acquisition of an investment property as disclosed in Note 8. No interest was payable on the advances provided. The shareholder s loan was by WGIL on the date of disposal. 108 Amcorp Properties Berhad

110 31. Other Payables (Cont d) 31.4 The currency exposure profile of other payables is as follows: Group Company RM 000 RM 000 RM 000 RM 000 Ringgit Malaysia 13,147 11, , ,407 Pound Sterling ,024 4,580 - United Arab Emirates Dirham ,053 50, , , Revenue/Cost of Sales 32.1 Revenue is derived from the following sources: Group Company RM 000 RM 000 RM 000 RM 000 Sales of completed properties 126,958 13, Development properties 50,789 16, Construction and engineering contracts 52,960 45, Rental of properties 19,100 27, Sales of services 5,364 4, Dividend income: Unquoted shares: - subsidiaries ,227 8,524 - associates ,141 8,514 Quoted shares Others 1,590 2, , ,111 42,408 17, Cost of sales comprised: Group Company RM 000 RM 000 RM 000 RM 000 Cost of completed properties sold (124,476) (7,695) - - Cost of property development units sold (39,149) (13,558) - - Contract costs recognised as an expense (46,480) (42,087) - - Cost of property management (4,016) (4,580) Cost of services (371) (582) - - Others (883) (35) - - (215,375) (68,537) - - Annual Report

111 33. Operating Profit Group Company RM 000 RM 000 RM 000 RM 000 Operating profit includes: Dividend income/(gross): Available-for-sale financial assets: - quoted in Malaysia Interest income 1, ,999 6,744 Accretion of interest implicit in long term receivables Rental income Gain/(Loss) on disposal of: - property, plant and equipment and leasehold land 51 1, a subsidiary 70, associates 712 (10,324) 7,434 6,650 - quoted investment Gain on foreign exchange: - realised unrealised Write back of impairment loss on: - land held for property development - 45, trade and other receivables advances to subsidiaries ,000 Write back of accrued development costs - 8, Waiver of debts by subsidiaries ,180 31,642 Bad debts recovered Amcorp Properties Berhad

112 33. Operating Profit (Cont d) Group Company RM 000 RM 000 RM 000 RM 000 After charging: Auditors remuneration: - current under-provision in prior year (39) others Depreciation of: - property, plant and equipment 2,487 2, investment properties 2,869 3, Property, plant and equipment written off Impairment loss on: - property, plant and equipment property development costs investments in subsidiaries , investments in associates - - 3, trade and other receivables quoted investments unquoted investments Rental of land and buildings Hire of equipment and motor vehicles Investments in subsidiaries written off Bad debts written off: - others Waiver of debts to subsidiaries - - 3,011 1,502 Loss on foreign exchange: - realised unrealised 430 1, Loss on disposal of: - property, plant and equipment unquoted investments Write-down in value of inventories Related company transactions: - Administrative fee charged ,000 12,000 Annual Report

113 34. Employee Information Group Company RM 000 RM 000 RM 000 RM 000 Staff costs including directors emoluments comprised: Salaries, wages, allowances and leave pay 17,395 15,040 5,061 3,930 Amount contributed under defined contribution plan: - EPF 2,225 1,681 1, Payment made under Voluntary Separation Scheme Others 2,305 1,694 1, ,925 18,536 7,364 5, Directors Remuneration Group Company RM 000 RM 000 RM 000 RM 000 Directors of the Company: - Fees Other emoluments 5,266 3,804 5,266 3,804 Directors of subsidiaries : - Other emoluments 1,579 1, ,037 5,103 5,458 3,996 Estimated value of benefits-in-kind of directors: - The Company Subsidiaries ,622 5,600 5,965 4, Finance Costs Group Company RM 000 RM 000 RM 000 RM 000 Interest on term loans and other borrowings 13,526 17,515 4,423 5,127 Accretion of interest implicit in long term payables Related company interests ,835 17,820 4,624 5, Amcorp Properties Berhad

114 37. Taxation Group Company RM 000 RM 000 RM 000 RM 000 Current year income tax (453) (1,321) 3, Deferred tax (income)/ expense resulting from origination and reversal of temporary differences (1,894) 2, (2,347) 921 3, Taxation (over)/under provided in prior years: - current income tax (260) 415 (284) (118) - deferred tax Total tax (income)/ expense (2,607) 1,344 3, The general income tax rate in Malaysia for the year under review is 25% (2011: 25%) of taxable income. A reconciliation of tax (income)/expense applicable to profit before taxation at the applicable statutory tax rate to the tax (income)/expense at the effective tax rate of the Group and Company is as follows: Group Company RM 000 RM 000 RM 000 RM 000 Profit before taxation 101,061 52,331 24,999 76,014 Share of results of associates (38,819) (15,198) ,242 37,133 24,999 76,014 Taxation at the rate of 25% (2011: 25%) 15,561 9,283 6,250 19,004 Tax effect in respect of: Different tax rates in foreign jurisdiction 53 (276) - - Expenses not deductible for taxation purposes 5,923 6,745 8,158 25,737 Income not subject to tax (19,975) (3,738) (10,736) (44,345) Tax savings arising from utilisation of previously unrecognised: - unabsorbed capital allowances (31) (24) unutilised tax losses (4,526) (3,955) - - Deferred tax assets recognised on unutilised tax losses and investment tax allowance - (7,848) - - Deferred tax assets not recognised Taxation (over)/under provided in prior years: - current income tax (260) 415 (284) (118) - deferred tax Total tax (income)/ expense (2,607) 1,344 3, Annual Report

115 38. Earnings Per Share 38.1 Basic The basic earnings per share is calculated based on the profit for the year attributable to owners of the Company and is based on the weighted average number of ordinary shares in issue during the financial year RM 000 RM 000 Profit attributable to owners of the Company (RM 000) 101,976 48,681 Weighted average number of ordinary shares in issue during the financial year ( 000) 573, ,861 Basic earnings per share (sen): Profit for the year Diluted The diluted earnings per share for the current and previous financial year is equal to the basic earnings per share for the respective financial years as there were no outstanding dilutive potential ordinary shares at year-end. 39. Dividend Group and Company 2012 Gross dividend per share sen Amount of dividend net of tax RM 000 Special dividend paid 3 12,894 The Directors are proposing a final dividend of 3 sen per ordinary share, less tax of 25%, amounting to RM12,894,319 in respect of the financial year ended, subject to approval of members at the forthcoming Annual General Meeting. The financial statements for the current financial year do not reflect this proposed dividend. This dividend, if approved by shareholders, will be accounted for as an appropriation of retained profit in next the financial year. 114 Amcorp Properties Berhad

116 40. Note to the Statements of Cash Flows Purchase of Property, Plant and Equipment Property, plant and equipment were acquired by the following means: Group Company RM 000 RM 000 RM 000 RM 000 Cash purchase 10, Hire purchase and lease financing 896 1, Aggregate cost 11,632 1, ,034 The principal amount of instalment payments for property, plant and equipment acquired by hire purchase and lease financing are reflected in cash outflows from financing activities. 41. Capital and Other Commitment (a) Capital commitments Group RM 000 RM 000 Approved and contracted for Capital and other expenditure relating to the purchase of: - investment properties - 71,268 - investment in a jointly controlled entity 70, leasehold land for development 5,187 - (b) Other commitments Group RM 000 RM 000 Non-cancellable operating lease commitments Future minimum IT maintenance fee payable: - Not later than 1 year Later than 1 year and not more than 5 years Future minimum rental payable: - Not later than 1 year Later than 1 year and not more than 5 years ,819 Annual Report

117 41. Capital and Other Commitment (Cont d) (b) Other commitments (Cont d) Company RM 000 RM 000 Non-cancellable operating lease commitments Future minimum rental payable: - Not later than 1 year Later than 1 year and not more than 5 years 824-1,373 - (c) The Group as lessor The Group has entered into non-cancellable lease arrangements on an investment property for terms ranging from one (1) to three (3) years. The Group has aggregate future minimum lease receivables as at the end of the reporting period as follows: RM 000 RM Not later than 1 year 4, Later than 1 year and not more than 5 years 4,235-9, Contingent Liabilities Group Company RM 000 RM 000 RM 000 RM 000 Unsecured corporate guarantees given to licensed banks for facilities granted to subsidiaries - Limit of guarantee , ,336 Amount utilised ,146 55,259 Letter of credit Bank guarantees and performance bonds: - secured 13,952 12, unsecured 17,987 15,130 2,439 2,352 32,059 27, ,585 57, Amcorp Properties Berhad

118 43. Segment Reporting The Group has three operating segments that are organised and managed separately according to the nature of products and services, specific expertise and technology requirements, which require different business and marketing strategies. The Group s operations comprise the following business segments: (i) Property Property development, property investment and property management services. (ii) Engineering and Infrastructure Electrical and power engineering contractors and fabrication of electrical equipment, manufacture of power and oil transformers, management of toll operations and maintenance of highway. (iii) Others Investment holding activities and Group level corporate services and treasury function. All inter-segment transactions have been entered into in the ordinary course of business and have been established under negotiated terms and conditions Operating Segments 2012 Property Engineering and infrastructure Others Consolidated RM 000 RM 000 RM 000 RM 000 Segment revenue Total revenue 202,680 60,998 71, ,173 Inter-segment revenue (4,335) (2,600) (71,407) (78,342) External revenue 198,345 58, ,831 Segment results Segment results 84,370 3,262 (13,495) 74,137 Interest income ,940 Operating profit 84,839 3,893 (12,655) 76,077 Finance costs (7,130) (2,272) (4,433) (13,835) Share of results of associates - 18,404 20,415 38,819 Profit before taxation 77,709 20,025 3, ,061 Taxation 89 (1,089) 3,607 2,607 Profit for the year 77,798 18,936 6, ,668 Annual Report

119 43. Segment Reporting (Cont d) 43.1 Operating Segments (Cont d) 2012 (Cont d) Property Engineering and infrastructure Others Consolidated RM 000 RM 000 RM 000 RM 000 Segment assets Segment assets 535,159 78, , ,076 Investments in associates - 98,138 27, , , , , ,650 Segment liabilities 178,184 50,671 4, ,990 Additions to non-current assets consist of: - Property, plant and equipment 10, ,632 - Investment properties 164, ,251 - Biological assets Land held for property development , ,612 Depreciation and amortisation 3,352 1, ,356 Other material items of (income)/ expense included in the Group s profit or loss: - Gain on disposal of a subsidiary (70,038) - - (70,038) Non-cash expenses other than depreciation and amortisation , Amcorp Properties Berhad

120 43. Segment Reporting (Cont d) 43.1 Operating Segments (Cont d) 2011 Property Engineering and infrastructure Others Consolidated RM 000 RM 000 RM 000 RM 000 Segment revenue Total revenue 67,240 51,947 41, ,626 Inter-segment revenue (9,175) - (41,340) (50,515) External revenue 58,065 51, ,111 Segment results Segment results 73, (20,753) 53,532 Interest income ,421 Operating profit 74,195 1,156 (20,398) 54,953 Finance costs (13,593) (2,625) (1,602) (17,820) Share of results of associates 2,371 11,673 1,154 15,198 Profit before taxation 62,973 10,204 (20,846) 52,331 Taxation (3,459) (1,370) 3,485 (1,344) Profit for the year 59,514 8,834 (17,361) 50,987 Segment assets Segment assets 722,378 92,956 23, ,319 Investments in associates - 98,771 28, , , ,727 52, ,286 Segment liabilities 244,290 50,980 83, ,659 Annual Report

121 43. Segment Reporting (Cont d) 43.1 Operating Segments (Cont d) 2011 (Cont d) Property Engineering and infrastructure Others Consolidated RM 000 RM 000 RM 000 RM 000 Additions to non- current assets consist of: - Property, plant and equipment ,043 1,843 - Investment properties 38, ,372 - Biological assets 1, ,028 - Land held for property development , ,043 41,655 Depreciation and amortisation 3,937 1, ,876 Other material items of (income)/ expense included in the Group s profit or loss: - Write back of allowance for impairment in value in respect of land held for property development (45,677) - - (45,677) - Write back of accrued development costs (7,983) - (850) (8,833) - Loss on disposal of an associate ,324 10,324 Non-cash expenses other than depreciation and amortisation 580 1, , Amcorp Properties Berhad

122 43. Segment Reporting (Cont d) 43.2 Geographical Information For the purpose of disclosing geographical information, revenue is based on the geographical location of customers and non-current assets are based on the geographical location of the assets. Non-current assets do not include deferred tax assets and financial instruments. Total RM 000 RM 000 Segment revenue Malaysia 243,227 81,905 United Kingdom 13,604 26,377 United Arab Emirates - 1, , ,111 Segment non-current assets Malaysia 316, ,798 United Kingdom 149, ,084 United Arab Emirates , , Information About Major Customers Revenue from transactions with major customers who individually accounted for 10% or more of the Group s revenue are as follows: RM 000 RM 000 Segment Customer A 122,328 - Properties Customer B 10,946 16,958 Engineering and infrastructure Customer C 8,646 14,191 Properties 141,920 31,149 Annual Report

123 44. Related Party Transactions Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party or when both parties are under the common control of another party. Related party relationships exist between the Company and its subsidiaries and between the Company and its immediate and ultimate holding companies. The details of the subsidiaries are disclosed in Note 49. The Group s immediate holding company is Amcorp Group Berhad which holds 73% equity interest in the Company. The ultimate holding company of the Group is Clear Goal Sdn. Bhd.. In addition to the related party transactions and balances disclosed elsewhere in the financial statements, the other significant related party transactions and balances are set out below Transactions and year-end outstanding balances between the Company and subsidiaries (a) Transactions between the Company and the subsidiaries are as follows: Company RM 000 RM 000 Rental charged by subsidiary Interest charged to subsidiaries 7,323 6,741 Rental of land and buildings charged to subsidiaries Interest charged by subsidiaries Administrative fees charged by subsidiaries 12,000 12,000 Waiver of debts by subsidiaries 13,180 31,642 Waiver of debts to subsidiaries 3,011 1,502 (b) The year-end outstanding balances with subsidiaries together with their terms and conditions thereon are disclosed in Notes 21 and 31 to the financial statements. The amounts receivable from and payable to subsidiaries are expected to be settled in cash Transactions and year-end outstanding balances with associates Detail of associates are disclosed in Note 50. The transactions and outstanding balance with associates are as follows: Group RM 000 RM 000 Internal audit service to Kesas Holdings Berhad Amcorp Properties Berhad

124 44. Related Party Transactions (Cont d) 44.3 Key management personnel compensation Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group and Company either directly or indirectly. The key management personnel of the Group and Company are the directors of the Company and their remuneration for the financial year are as follows: Group and Company RM 000 RM 000 Short-term employee benefits 4,578 3,379 Defined contribution plans ,458 3,996 Benefits-in-kind ,965 4, Transactions and year end outstanding balances with other related parties (a) The transactions entered into by the Group and the Company with companies in which a substantial shareholder of the Company namely, Tan Sri Dato Azman Hashim ( TSDAH ) has substantial financial interests and other related companies Name of related parties AMMB Holdings Berhad Group ( AMMB Holdings Group ) Clear Goal Sdn. Bhd. Group ( Clear Goal Group ) RCE Capital Berhad Group ( RCE Capital Group ) Dato Azhar Bin Hashim Michael Chen & Co. CH Williams Talhar & Wong Blue Star Limited Relationship Group of companies related to TSDAH, a director and a deemed substantial shareholder of the group and an associate of Clear Goal Sdn. Bhd. Group Group of companies related to TSDAH, a director and a deemed substantial shareholder of the group, the ultimate holding company and its subsidiaries Group of companies related to TSDAH, a director and a deemed substantial shareholder of the group and an associate of Clear Goal Sdn. Bhd. Group A person connected to TSDAH A company in which Tan Sri Dato Chen Wing Sum, a director is a Consultant A company in which P ng Soo Theng, a director is a Consultant Shareholder of Blue Star M&E Engineering Sdn. Bhd. Annual Report

125 44. Related Party Transactions (Cont d) 44.4 Transactions and year end outstanding balances with other related parties (Cont d) (a) The transactions entered into by the Group and the Company with companies in which a substantial shareholder of the Company namely, Tan Sri Dato Azman Hashim ( TSDAH ) has substantial financial interests and other related companies (Cont d) Name of related parties Fizam Auto Service Sdn. Bhd. The Singing Shop Sdn. Bhd. Liberty Premier Sdn. Bhd. Relationship A company in which TSDAH and Azian Hashim are substantial shareholders and Azmi Hashim is a director. Azian Hashim is a person connected to TSDAH and Azmi Hashim, a director of the Company A company in which Shalina Azman is a shareholder. Shalina Azman is a person connected to TSDAH and a director of the Company A company in which Shalina Azman is a shareholder and a director. Shalina Azman is a person connected to TSDAH and a director of the Company Details of transactions entered into during the financial year are as follows: Group RM 000 RM 000 Purchase of Amcorp Trade Center from Clear Goal Group (Note 8.1) 75,000 - Purchase of air tickets and related travel services from Clear Goal Group Rental income received from: - AMMB Holdings Group Clear Goal Group Liberty Premier Sdn. Bhd The Singing Shop Sdn. Bhd Rental charged by: - AMMB Holdings Group Clear Goal Group Purchase and upkeep of motor vehicle from Clear Goal Group Interest paid to Clear Goal Group Rental of IT equipment from Clear Goal Group 2 - Consultancy services charged by Clear Goal Group Restaurant service provided by Clear Goal Group Singing lesson fee paid to The Singing Shop Sdn. Bhd. 7 - Purchase of gift voucher from Clear Goal Group 80 - Bank balances placed with AMMB Holdings Group 7,128 6, Amcorp Properties Berhad

126 44. Related Party Transactions (Cont d) 44.4 Transactions and year end outstanding balances with other related parties (Cont d) (a) The transactions entered into by the Group and the Company with companies in which a substantial shareholder of the Company namely, Tan Sri Dato Azman Hashim ( TSDAH ) has substantial financial interests and other related companies (Cont d) Details of transactions entered into during the financial year are as follows: (Cont d) Company RM 000 RM 000 Purchase of air tickets and related travel services from Clear Goal Group Rental charged by Clear Goal Group Management fee charged by Clear Goal Group 42 - Restaurant service provided by Clear Goal Group Rental of IT equipment from Clear Goal Group 2 - Purchase and upkeep of motor vehicle from Clear Goal Group (b) The transactions entered into with companies or persons connected to Tan Sri Dato Azman Hashim Details of transactions entered into during the financial year are as follows: Group RM 000 RM 000 Upkeep of motor vehicles charged by Fizam Auto Service Sdn. Bhd (c) The transactions entered into with companies related to a Director. Details of transactions entered into during the financial year are as follows: Group RM 000 RM 000 Professional fee paid to Michael Chen & Co Professional fee paid to CH Williams Talhar & Wong (d) The transactions entered into with minority shareholders of subsidiaries Group RM 000 RM 000 Technical fees paid to Blue Star Limited 2,492 2,239 The related party transactions described above were carried out based on negotiated terms and conditions and mutually agreed with the related parties. Annual Report

127 45. Subsequent Events to the end of the Reporting Period 45.1 On 15 May 2012, Country Realty Limited ( CRL ), a wholly-owned subsidiary of the Company, had sold 5 apartments and 3 car park spaces in the property located at Baker Street and 4-6 Durweston Mews, London W1U 6RN, United Kingdom for a cash consideration of GBP5.80 million. Following the disposal, CRL still owns 14 apartments, 2 commercial units and 5 car park spaces. Based on the current exchange rates, the estimated net gain on disposal is approximately RM8.56 million On 20 May 2012, the Company signed a Share Sale Agreement ( SSA ) with International Trading Group (Holding) SAL ( ITGH ) and Universal Distributors (UNIDIST) Holding SAL ( UDH ) (ITGH and UDH hereinafter collectively referred to as Purchasers ) to dispose off the 100% equity interest in the issued and paid-up share capital of Riverich Limited ( Riverich ) held by the Company. Riverich is a property investment company whose principal asset is a residential property located at 101 Lexham Gardens, London W8 6JN ( the Property ). AMPROP is disposing Riverich to the Purchasers for a sale consideration of GBP9,327,500, to be adjusted (if any) by any changes in the Net Assets of Riverich on completion date ( Consideration ). The Consideration will be fully satisfied in cash and the estimated net gain on disposal for the Group is approximately RM4,922,000. The disposal was completed on 21 June 2012 and Riverich ceased to be a subsidiary of the Company On 12 June 2012, the Group acquired Trans Crest Projects Sdn. Bhd., a wholly-owned subsidiary of the Group for a cash consideration of RM2. Trans Crest was incorporated in Malaysia under the Companies Act, 1965 on 21 May 2012 with an authorised share capital of RM100,000 comprising 100,000 ordinary shares of RM1.00 each and its issued and paid-up share capital is RM2.00. Trans Crest Projects Sdn Bhd is currently dormant. The acquisition has no material financial effect to the Group On 14 June 2012, an indirect subsidiary of the Company, Hornbeam Sdn. Bhd., had received notification from Companies Commission of Malaysia ( CCM ) that the company had been struck off from the register of CCM upon the application by the company. The strike off has no material financial effect to the Group and the Company. 46. Financial Instruments A financial instrument is any contract that gives rise to both a financial asset of one enterprise and a financial liability or equity instrument of another enterprise. Financial assets of the Group include deposits with licensed banks, cash and bank balances, trade and other receivables and available-for-sale financial assets. Financial liabilities of the Group include trade and other payables and bank borrowings. 126 Amcorp Properties Berhad

128 46. Financial Instruments (Cont d) In respect of the company, financial assets and financial liabilities also include amount due from and amount owing to subsidiaries respectively Financial Risk Management Objectives and Policies The Group s operations are subject to a variety of financial risks including currency risk, interest rate risk, credit risk, market risk and liquidity and cash flow risks. Risk is defined as uncertain future events which could influence the achievement of the Group s objectives. The Group s overall financial risk management objective is to seek to address and control the risks to which the Group is exposed and to minimise potential adverse effects on its financial performance that may result from its exposure to such risks and to enhance shareholder value where appropriate. The Board is primarily responsible for the management of these risks and to formulate policies and procedures for the management thereof. The risks are managed by regular risk reviews, internal control systems, on-going formulation and adherence to financial risk policies and mitigated by insurance coverage where appropriate. Various risk management actions are taken depending on the assessment of the impact and likelihood of the risk. (a) Credit Risk Credit risk is the risk of financial loss attributable to default on obligations by parties contracting with the Group. The Group s main exposure to credit risk is in respect of its trade receivables. The Group seeks to control credit risk by spelling out the guidelines and procedures on extending credit terms to customers. Customers risk profile are reviewed regularly with a view to setting appropriate terms of trade and credit limits. Where appropriate, customers may be required to provide security and advance payment before goods or services are rendered. The Group has endeavoured to avoid concentration of risk in one customer or a group of customers. The Group avoids, where possible, any significant exposure to a single customer. However, in the ordinary course of business, certain subsidiaries in the Group s Engineering and Infrastructure Segment, namely AMBC Transmission Sdn. Bhd. and Amcorp Perting Hydro Sdn. Bhd., have trade receivables that are solely from their offtakers, the national electricity utility companies. As such, the counter party risk is considered to be minimal. The maximum exposure to credit risk without taking into consideration any collateral held or other credit enhancement is represented by the carrying amount of financial assets in the financial statements, net of impairment allowance. None of the Group s financial assets are secured by collateral or other credit enhancements. The Group s management considers that the financial assets that are neither past due nor impaired and past due but not impaired as at the end of the reporting period are of good credit quality. The credit risk for cash and cash equivalents is considered negligible, since the counterparties are reputable banks with high quality external credit ratings. Annual Report

129 46. Financial Instruments (Cont d) 46.1 Financial Risk Management Objectives and Policies (Cont d) (a) Credit Risk (Cont d) As at the end of the reporting period, other than the amounts due from subsidiaries, constituting 99.5% (2011: 99.9%) of total receivables, there were no significant concentrations of credit risk. The maximum exposure to credit risk for the Company are represented by the carrying amount of each financial asset recognised in the statement of financial position. (b) Liquidity and Cash Flow Risks Liquidity or funding risk is the risk of the inability to meet commitments associated with financial instruments while cash flow risk is the risk of uncertainty of future cash flow amount associated with a monetary financial instrument. The Group practices prudent liquidity risk management to minimise the mismatch of financial assets and liabilities. The Group s cash flow is reviewed regularly to ensure that the Group is able to settle its commitments when they fall due. The Group manages its liquidity risk with the view to maintaining a healthy level of cash and cash equivalents approriate to the operating environment and expected cash flows of the Group. Liquidity requirements are maintained within its undrawn committed borrowing facilities at all times and are sufficient and available to the Group to meet its obligations. The Group maintains a mix of shortterm money market borrowings and medium/long term loans to fund working capital requirements, capital expenditure and long term projects. Maturity Analysis The table below summarises the maturity profile of the Group s and of the Company s financial liabilities based on contractual undiscounted repayment obligations On demand or within one year Between 2 to 5 years More than 5 years Total Group RM 000 RM 000 RM 000 RM 000 Trade payables 37,689 2,048-39,737 Other payables 14, ,053 Bank borrowings 15, ,070 49, ,111 Hire purchase creditors 788 1,545-2,333 67, ,663 49, , Amcorp Properties Berhad

130 46. Financial Instruments (Cont d) 46.1 Financial Risk Management Objectives and Policies (Cont d) (b) Liquidity and Cash Flow Risks (Cont d) 2012 On demand or within one year Between 2 to 5 years More than 5 years Total Company RM 000 RM 000 RM 000 RM 000 Other payables Amount owing to subsidiaries 109, ,107 Bank borrowings 1, ,145 Hire purchase creditors , , , On demand or within one year Between 2 to 5 years More than 5 years Total Group RM 000 RM 000 RM 000 RM 000 Trade payables 43,137 2,940-46,077 Other payables 50, ,089 Bank borrowings 90, ,470 23, ,467 Hire purchase creditors 622 1,416-2, , ,826 23, ,671 Company Other payables Amount owing to subsidiaries 137, ,573 Bank borrowings 80, ,462 Hire purchase creditors , , ,231 (c) Foreign Currency Risk The Group is exposed to foreign currency risk when the Company or its subsidiaries enter into transactions that are not denominated in their functional currencies. The Group s principal foreign currency exposure as at the end of the reporting period related mainly to receivables, cash and bank balances and payables denominated in Pound Sterling ( GBP ) and United Arab Emirates Dirham ( AED ). The Group s and the Company s foreign currency exposure profiles in respect of their financial assets and financial liabilities are disclosed in the following notes. Annual Report

131 46. Financial Instruments (Cont d) 46.1 Financial Risk Management Objectives and Policies (Cont d) (c) Foreign Currency Risk (Cont d) The Group minimises foreign currency risk which it does not wish to be exposed to by closely monitoring the movements in the exchange rates and where appropriate, measures are implemented with a view to limit risks due to exposures and fluctuations by entering into forward foreign currency exchange contracts within the constraints of market and government regulations. As at the end of the reporting period, no forward foreign currency exchange contracts were entered into as the timing of the receivables are uncertain or are intended to settle obligations or further investments in the same currency. The Group does not speculate in foreign currency derivatives and in line with FRS 7, does not regard its investments in foreign operations/subsidiaries as subject to foreign exchange risk. The Group s and Company s exposure to foreign currencies in respect of its financial assets and financial liabilities which are not denominated in the functional currency of the Company or its subsidiaries are as follows: 2012 GBP AED Total Group RM 000 RM 000 RM 000 Financial assets Trade and other receivables 570 4,737 5,307 Deposits, cash and balances 24,768 3,335 28,103 25,338 8,072 33,410 Financial liabilities Trade and other payables (4,915) (170) (5,085) Net currency exposure 20,423 7,902 28, GBP AED Others Total Group RM 000 RM 000 RM 000 RM 000 Financial assets Trade and other receivables 16,045 9,951-25,996 Deposits, cash and balances 516 1,822-2,338 16,561 11,773-28,334 Financial liabilities Trade and other payables (144) (357) (1,128) (1,629) Net currency exposure 16,417 11,416 (1,128) 26, Amcorp Properties Berhad

132 46. Financial Instruments (Cont d) 46.1 Financial Risk Management Objectives and Policies (Cont d) (c) Foreign Currency Risk (Cont d) Included in trade and other receivables as at 31 March 2011 was a loan of RM16,019,000 receivable from subsidiaries whose functional currency is denominated in Pound Sterling ( GBP ). As such, any strengthening in GBP will give rise to a gain in foreign exchange in the profit or loss of the subsidiaries which are consolidated in the Group GBP Company RM 000 Financial assets Trade and other receivables 80 Financial liabilities Trade and other payables (4,580) Net currency exposure (4,500) In the previous financial year, the Company was not exposed to any foreign exchange risk. Foreign Currency Risk Sensitivity Analysis The following demonstrates the sensitivity of the Group s and Company s profit after tax to a 5% strengthening in the GBP and AED against the RM, with all other variables, in particular interest rates, held constant and based on the financial liabilities that are exposed to foreign currency risk as at the end of the reporting period :- Increase/(Decrease) Group Company RM 000 RM 000 RM 000 RM 000 Against RM GBP 1, (225) - AED A 5% weakening of the above currencies against the respective functional currencies would have the equal but opposite effect to the amount shown above, on the basis that all other variables remain constant. Annual Report

133 46. Financial Instruments (Cont d) 46.1 Financial Risk Management Objectives and Policies (Cont d) (d) Interest Rate Risk The Group is exposed to interest rate risk for changes in interest rates primarily for floating rate debt obligations and placements in money market. The Group finances its operations by a mixture of internal funds and bank borrowings. The interest rate profile of borrowings is regularly reviewed against prevailing and anticipated market interest rates. The interest, repayment and maturity profiles of borrowings are structured after taking into account on whether the funds used are for short-term or long-term purposes and the interest rate outlook, the matching cashflows that are used to service the interest and the economic life of the assets or operations being financed. Where necessary, the Group would manage its cashflow interest rate risk by using floating-to-fixed interest rate swaps. Approximately, 14% of the Group s borrowings are at fixed rates which were entered into in respect of the Group s investments in a mini hydro power plant. Interest Rate Risk Sensitivity Analysis If annual interest rates have been 50 basis points higher/lower respectively, with all other variables being held constant and based on borrowings with floating rates as at the end of the reporting period, the profit of the Group for the current financial year will be lower/higher by RM49,000 (2011: RM298,000) while the profit for the Company for the current financial year will be higher/lower by RM33,000 (2011: lower/higher by RM302,000) respectively as a result of increase/decrease in interest expense on those borrowings. The sensitivity analysis for the Group has been prepared on the basis of the Group s net exposure to interest rate risk after setting off its floating rate borrowings with fixed deposits available as at the end of the reporting period. (e) Other Price Risk The Group is exposed to equity price risk fluctuations arising from its investments in quoted shares and bonds, which are classified as available-for-sale financial assets. These investments are carried in the books at their quoted or observable market prices which is more adequately disclosed in the fair value Note 12. Equity Price Sensitivity Analysis The Group has considered the sensitivity of these financial instruments to market risk and are of the view that its impact is insignificant Financial Instruments by Category The carrying amounts of financial assets and financial liabilities presented in the statements of financial position are based on the measurement categories as defined in FRS 139. All financial assets are categorised as loans and receivables except for quoted shares, unquoted shares and bonds which are categorised as available-for-sale financial assets as disclosed in Note 12. All financial liabilities are categorised as financial liabilities measured at amortised cost. 132 Amcorp Properties Berhad

134 46. Financial Instruments (Cont d) 46.3 Fair Values of Financial Instruments The fair value of a financial instrument is the amount at which the instruments could be exchanged or settled in an orderly manner between knowledgeable and willing parties in an arm s length transaction. The information presented herein represents estimates of fair values as at the end of the reporting period. Quoted market prices, when available, are used as the measure of fair values. For unquoted financial instruments and long term receivables, fair values are estimated using net present value or other valuation techniques which involve a certain degree of uncertainty depending on the assumption used and judgements made regarding risk characteristics, discount rates, estimates of future cash flows and other factors. Changes in these assumptions could materially affect these estimates and the resulting fair value. Fair value information for property, plant and equipment and investments in subsidiaries and associates are excluded as they do not fall within the scope of FRS 132 which requires fair values to be disclosed. The fair values of the financial assets and financial liabilities reported in the statements of financial position approximate the carrying amounts of those assets and liabilities because of the limited terms to maturity of these financial instruments, except for the following: Carrying amount Group Fair value Carrying amount Company Fair value 2012 RM 000 RM 000 RM 000 RM 000 Financial liabilities Hire purchase creditors 2,131 2,167 1,345 1, Financial liabilities Hire purchase creditors 1,832 1,851 1,212 1,224 The Company provides guarantees to lenders for financing facilities extended to certain subsidiaries which are disclosed in Note 42. The fair value of such financial guarantees is negligible as the probability of the subsidiaries defaulting on the financing facilities is remote. The fair value estimates were determined by application of the methods and assumptions described below: Investments For quoted investments, the estimated fair values are generally based on quoted market prices or dealer quotes. For unquoted investments, fair values has been assessed by reference to market indicative interest yields or net tangible assets where applicable. Annual Report

135 46. Financial Instruments (Cont d) 46.3 Fair Values of Financial Instruments (Cont d) Receivables, Payables and Borrowings The fair values of receivables, payables and term loans are estimated using the discounted cash flow analysis based on current lending/borrowing rates for similar types of lending/borrowing arrangements Fair Value Hierarchy As at, the Company and Group Available-for-sale assets of RM6,824,000 (2011: RM933,000) and RM7,773,000 (2011: RM7,066,000) respectively, are carried at fair value and measured based on Level 1 fair value measurement which are those derived from quoted prices (unadjusted) in active markets for identical assets except for unquoted bonds. Unquoted bonds are carried at fair value and measured based on Level 2 fair value measurement which are those derived from inputs for the asset that are based on observable market data. 47. Capital Management Policy The Group s objectives when managing capital are to safeguard the Group s ability to continue as a going concern and to maintain an optimal capital structure so as to provide returns for shareholders and benefits for other stakeholders. In order to optimise the capital structure, or the capital allocation amongst the Group s various businesses, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, buy back issued shares, take on new debts or sell assets to reduce debt. The Group monitors capital utilisation on the basis of the gearing ratio. This ratio is calculated as total debts divided by total capital. Total debt is calculated as total borrowings (including short term and long term borrowings as shown in the statement of financial position). Total capital is calculated as the sum of total equity and total debt. The gearing ratio are as follows: RM 000 RM 000 Total debts 167, ,671 Total equity 661, , , ,104 Gearing ratio 20% 32% 134 Amcorp Properties Berhad

136 48. Comparative Figures The following comparative figures have been reclassified to conform with current year s presentation: As previously reported Reclassifications As restated Group RM 000 RM 000 RM 000 Statements of financial position Current assets Property development costs 165,961 2, ,363 Inventories 13,040 (2,402) 10,638 Statements of cash flows Cash flows from operating activities Decrease in trade and other payables (18,228) (215) (18,443) Interest paid (17,730) 215 (17,515) 49. List of Subsidiary Companies Subsidiaries Country of incorporation Group s effective equity interest Principal activities AMBC Transmission Sdn. Bhd. * Malaysia Electrical and power engineering construction AMBC Controls Sdn. Bhd. * Malaysia Fabrication of electrical equipment Amcorp Prima Realty Sdn. Bhd. Malaysia Property development Amcorp Equipment Trading Sdn. Bhd. * Malaysia Investment in securities Amcorp Leisure Holding Sdn. Bhd. * Malaysia Investment holding Amcorp Management Services Sdn. Bhd. * Malaysia Financial, property and management services * Subsidiaries not audited by BDO Annual Report

137 49. List of Subsidiary Companies (Cont d) Subsidiaries Country of incorporation Group s effective equity interest Principal activities Amcorp Power Sdn. Bhd. * Malaysia Investment holding Amcorp Property Holdings Sdn. Bhd. * Malaysia Investment holding Amcorp Property Management Co. Sdn. Bhd. * Malaysia Property management services Amcorp Realty Sdn. Bhd. * Malaysia Property investment Arab-Malaysian-Toda Construction Sdn. Bhd. * (Company in liquidation) Malaysia - 51 Construction Blue Star M & E Engineering Sdn. Bhd. * Malaysia Engineering services Cemara Angkasa Sdn. Bhd. * Malaysia Dormant Cemara Harapan Sdn. Bhd. * Malaysia Property investment and investment holding Cemara Sejati Sdn. Bhd. * Malaysia Investment holding Country Realty Limited * British Virgin Islands Property investments Distrepark Sdn. Bhd. Malaysia Property development HDCam Sdn. Bhd. Malaysia Property development Hornbeam Sdn. Bhd. * Malaysia Dormant Living Development Sdn. Bhd. * Malaysia Property investment Mawar Delima (M) Sdn. Bhd. * Malaysia Property development Medan Delima Sdn. Bhd. Malaysia Property development and management Mekar Angkasa Sdn. Bhd. * Malaysia Investment holding * Subsidiaries not audited by BDO 136 Amcorp Properties Berhad

138 49. List of Subsidiary Companies (Cont d) Subsidiaries Country of incorporation Group s effective equity interest Principal activities Neo Elements Limited British Virgin Islands Property investments Perumahan Taman Pinji Sdn. Bhd. Malaysia Property development Pulau Indah Marina Resort Sdn. Bhd. * Malaysia Dormant Regal Genius Sdn. Bhd. Malaysia Property development Riverich Limited * British Virgin Islands Property investments Sejati Pelita Sdn. Bhd. Malaysia Property development Selaju Sdn. Bhd. * Malaysia Investment holding Seng Hock Realty Development Sdn. Bhd. Malaysia Property development and property investment Syarikat Kompleks Damai Sdn. Bhd. * Malaysia Dormant Taifab Properties Sdn. Bhd. * Malaysia Property development, property management and property investment Walleng Enterprises Sdn. Bhd. * Malaysia Investment holding and provision of treasury services Zaklan Sdn. Bhd. * Malaysia Investment holding * Subsidiaries not audited by Subsidiary is consolidated based on unaudited management financial statements for the financial year ended. The financial statements of this subsidiary is not required to be audited in its country of incorporation and it is not material to the Group for the financial year ended. Annual Report

139 49. List of Subsidiary Companies (Cont d) Indirect subsidiaries Country of incorporation Group s effective equity interest Principal activities AMDB Commercial Services Sdn. Bhd. * Malaysia Management services Amcorp Industrial City Sdn. Bhd. * Malaysia Property development Amcorp Perting Hydro Sdn. Bhd. * Malaysia Own, operate and maintain a renewable energy power plant Amcorp Services Sdn. Bhd. * Malaysia Management services Arnica Corporation Sdn. Bhd. Malaysia Property development Cemara Angsana Sdn. Bhd. * Malaysia Dormant Exotic Enterprise Sdn. Bhd. * Malaysia Investment holding Gubahan Ceria Sdn. Bhd. * Malaysia Dormant Mayang Zaman Sdn. Bhd. * Malaysia Property development Netcoin Sdn. Bhd. * (Struck off during the financial year) Malaysia - 97 Investment holding Nikmat Segar (M) Sdn. Bhd. * Malaysia Dormant Rich Avenue Sdn. Bhd. Malaysia Property development Westlink Global Investments Limited * * Subsidiaries not audited by BDO British Virgin Islands - 60 Property investments 138 Amcorp Properties Berhad

140 50. List of Associated Companies Associates Country of incorporation Group s effective equity interest Principal activities Kesas Holdings Berhad * Malaysia Investment holding Planergo (Pte) Limited * Republic of Singapore Hotel operation Prisma Tulin Sdn. Bhd. * Malaysia Hotel operation Lafarge Concrete (Malaysia) Sdn. Bhd. * Malaysia - 30 Manufacture of ready mixed concrete Indirect associates Augustland Hotel Sdn. Bhd. * Malaysia Hotel and apartment development and operation AmTrustee Berhad * Malaysia Trustee service Bangi Hotel Sdn. Bhd. * Malaysia Development, construction, management and maintenance of hotel Kesas Sdn. Bhd. * Malaysia Management of toll operations and maintenance of highway Lafarge Concrete Industries Sdn. Bhd. * Malaysia - 30 Producer and seller of readymixed concrete Lafarge Concrete (East Malaysia) Sdn. Bhd. * Malaysia - 30 Manufacture and sale of ready-mixed concrete * Associates not audited by BDO Annual Report

141 51. Supplementary Information Disclosed Pursuant to Bursa Malaysia Securities Berhad s Listing Requirements Realised and Unrealised Profit or Losses The breakdown of retained profits of the Group and of the Company into realised and unrealised profits or losses pursuant to the directive issued by Bursa Malaysia Securities Berhad dated 25 March 2010 is as follows: Group Company RM 000 RM 000 RM 000 RM 000 Total retained profits of the Company and its subsidiaries: - realised 278, , ,171 91,454 - unrealised 5, , , ,171 91,454 Total share of retained profits from associates: - realised (3,366) (19,608) unrealised (4,198) 1, Retained profits as per financial statements 276, , ,171 91, Amcorp Properties Berhad

142 Analysis of Shareholdings as at 25 July 2012 Authorised Capital : RM500,000, Issued and Paid-Up Capital : RM287,730, Class of Shares : Ordinary shares of RM0.50 each Voting Rights : One (1) vote per shareholder on show of hands or one (1) vote per ordinary share on a poll DISTRIBUTION OF SHAREHOLDINGS Size of Shareholdings No. of Shareholders % of Shareholders No. of Shares % of Shares Less than 100 3, , to 1,000 18, ,877, ,001 to 10,000 11, ,572, ,001 to 100,000 1, ,350, ,001 to less than 5% of issued shares ,806, % and above of issued shares ,372, Total 35, ,080, THIRTY LARGEST REGISTERED SHAREHOLDERS No. Name of Shareholders No. of Shares % 1. Amcorp Group Berhad 290,372, BBL Nominees (Tempatan) Sdn Bhd - Pledged Securities Account for Amcorp Group Berhad 3. EB Nominees (Tempatan) Sendirian Berhad - Pledged Securities Account for Amcorp Group Berhad 4. Maybank Nominees (Tempatan) Sdn Bhd - Pledged Securities Account for Amcorp Group Berhad 55,000, ,000, ,000, Blue Ribbon International Limited 7,279, Azlan bin Hashim 5,900, CIMB Group Nominees (Tempatan) Sdn Bhd - Exempt AN for Libra Invest Berhad 4,444, Soo Ngik Soo Yeh Joo 4,034, Raja Karib Shah bin Shahrudin 3,347, Chow Soi Wah 2,951, Annual Report

143 Analysis of Shareholdings as at 25 July 2012 THIRTY LARGEST REGISTERED SHAREHOLDERS (Cont d) No. Name of Shareholders No. of Shares % 11. Citigroup Nominees (Asing) Sdn Bhd - Exempt AN for OCBC Securities Private Limited (Client A/C-NR) 2,643, Infotech Mark Sdn Bhd 1,968, JF Apex Nominees (Tempatan) Sdn Bhd - Pledged Securities Account for Teo Siew Lai 1,503, Low Pek Kok 1,346, CIMSEC Nominees (Asing) Sdn Bhd - Exempt AN for CIMB Securities (Singapore) Pte Ltd (Retail Clients) 1,337, Nor Azrini binti Azlan 1,306, Toh Ean Hai 1,175, Tan Yu Wei 1,125, Adam Shah bin Azlan 1,100, HLG Nominee (Asing) Sdn Bhd - Exempt AN for UOB Kay Hian Pte Ltd (A/C Clients) 1,030, Alfa Erat Sdn Bhd 1,000, Neo Soon Chong 900, Public Invest Nominees (Asing) Sdn Bhd - Exempt AN for Phillip Securities Pte Ltd (Clients) 24. Kenanga Nominees (Tempatan) Sdn Bhd - Pledged Securities Account for Mary Ting Siew Ding 884, , Low Mei Lan 733, Gan Kai San 700, Low Pek Lay 670, Maybank Nominees (Tempatan) Sdn Bhd - Pledged Securities Account for Ch ng Meng Kwee 611, Chan Tin Wai 600, HDM Nominees (Asing) Sdn Bhd - UOB Kay Hian Pte Ltd for Pax Realty & Development Pte Ltd 572, ,317, Amcorp Properties Berhad

144 Analysis of Shareholdings as at 25 July 2012 SUBSTANTIAL SHAREHOLDERS Name of Substantial Shareholders Direct Interest Indirect Interest No. of Shares % No. of Shares % Tan Sri Azman Hashim 158, ,372,745 (1) Amcorp Group Berhad 417,372, Clear Goal Sdn Bhd ,372,745 (1) Note: (1) Deemed interested by virtue of Section 6A of the Companies Act, 1965 through shareholdings in Amcorp Group Berhad. DIRECTORS SHAREHOLDINGS Name of Directors Direct Interest Indirect Interest No. of Shares % No. of Shares % Azmi Hashim 17,667 - # - - Note: # Negligible Note: The analysis of shareholdings is based on the Record of Depositors as at 25 July 2012, net of 2,380,600 treasury shares. Annual Report

145 List of Properties held as at Approximate Net Book Date of Area Expiry Description/ Age of Value Acquisition/ Properties (m 2 ) Tenure Date Existing Use Buildings RM'000 Revaluation Kayangan Heights, Shah Alam Daerah Petaling, Mukim Bukit Raja Selangor Darul Ehsan 681,754 Leasehold 99 years Land held under development N/A 163, Amcorp Trade Centre 67,037 Leasehold Commercial 15 years 87, Daerah Petaling Selangor Darul Ehsan Baker Street & 4-6 1,917 Freehold N/A Commercial Newly 84, Durweston Mews, London W1U 6RN and Residential refurbished United Kingdom Block 1, Menyan Land District and 2,821,399 Freehold & Land held under N/A 45, Block 17, Seduan Land District Leasehold development Sibu, Sarawak 99 years 101, Lexham Gardens 772 Freehold N/A Residential 7 years 37, London W8 6JN United Kingdom Pajam Mukim of Setul Negeri Sembilan Darul Khusus Sebana Cove, Daerah Kota Tinggi Mukim Pengerang Johor Darul Takzim 674,459 Freehold N/A Land held under future development 269,513 Freehold N/A Land held under future development N/A 25, N/A 7, Salak South 9,722 Freehold N/A Property under N/A 5, Daerah Kuala Lumpur development Mukim Petaling, Kuala Lumpur Seremban City Centre 3,293 Freehold N/A Commercial 13 Years 4, Jalan Pasar, Seremban buildings Negeri Sembilan Darul Khusus Mukim of Labu 209,930 Leasehold Agricultural N/A 3, Dearah Sepang 99 years land Selangor Darul Ehsan 144 Amcorp Properties Berhad

146 Notice of Annual General Meeting NOTICE IS HEREBY GIVEN THAT the Forty-Sixth Annual General Meeting of Amcorp Properties Berhad will be held at Dewan AmBank Group, 7th Floor, Bangunan AmBank Group, 55 Jalan Raja Chulan, Kuala Lumpur on Thursday, 6 September 2012 at a.m. for the following purposes: AGENDA AS ORDINARY BUSINESS 1. To receive the Audited Financial Statements for the financial year ended together with the Reports of the Directors and Auditors thereon. 2. To declare a final dividend of 6% less 25% income tax for the financial year ended 31 March To approve the payment of Directors fees of RM192,000 for the financial year ended 31 March Resolution 1 Resolution 2 4. To re-elect the following Directors who retire pursuant to Article 136 of the Company s Articles of Association: (i) (ii) (iii) Encik Azmi Hashim Y. Bhg. Dato Che Md Nawawi bin Ismail Mr. Soo Kim Wai Resolution 3 Resolution 4 Resolution 5 5. To re-elect Y. Bhg. Dato Ab. Halim bin Mohyiddin who retires pursuant to Article 119 of the Company s Articles of Association. Resolution 6 6. To consider and if thought fit, to pass the following resolution: THAT Y. Bhg. Tan Sri Dato Chen Wing Sum retiring pursuant to Section 129(6) of the Companies Act, 1965 be and is hereby re-appointed as Director of the Company to hold office until the next Annual General Meeting. 7. To re-appoint Messrs BDO as Auditors of the Company and to authorise the Directors to fix their remuneration. Resolution 7 Resolution 8 Annual Report

147 Notice of Annual General Meeting AS SPECIAL BUSINESS To consider and if thought fit, to pass the following resolutions, with or without modifications: Ordinary Resolutions 8. Authority to Issue Shares Pursuant to Section 132D of the Companies Act, 1965 THAT subject always to the Companies Act, 1965, provisions of the Company s Memorandum and Articles of Association and the approval from the relevant authorities, where such approval is necessary, full authority be and is hereby given to the Directors pursuant to Section 132D of the Companies Act, 1965 to issue and allot shares in the Company at any time and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion deem fit, provided that the aggregate number of shares issued pursuant to this resolution does not exceed ten percent (10%) of the issued capital of the Company for the time being and that the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company. Resolution 9 9. Proposed Shareholders Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature THAT subject to Bursa Malaysia Securities Berhad Main Market Listing Requirements, approval be and is hereby given for the Company and its subsidiaries to enter into the recurrent related party transactions of a revenue or trading nature with the related parties as specified in Section 2.2 of the Circular to Shareholders dated 15 August 2012, provided that the transactions are in the ordinary course of business which are necessary for day-to-day operations and on normal commercial terms which are not more favourable to the related parties than those generally available to the public and are not detrimental to the interest of the minority shareholders of the Company and that the aggregate value of such transactions conducted pursuant to the shareholders mandate during the financial year be disclosed in the annual report of the Company; Resolution 10 AND THAT such authority conferred shall continue to be in force until: (i) (ii) the conclusion of the next Annual General Meeting ( AGM ) of the Company, at which time it will lapse, unless by a resolution passed at the AGM, the authority is renewed; the expiration of the period within which the next AGM of the Company is required to be held pursuant to Section 143(1) of the Companies Act, 1965 ( Act ) (but must not extend to such extension as may be allowed pursuant to Section 143(2) of the Act); or (iii) revoked or varied by resolution passed by the shareholders of the Company in general meeting, whichever is the earlier; AND THAT the Directors of the Company be and are hereby authorised to complete and do all such acts and things (including executing such documents as may be required) to give effect to the transactions contemplated and/or authorised by this resolution. 146 Amcorp Properties Berhad

148 Notice of Annual General Meeting 10. Proposed Renewal of Share Buy-Back Authority THAT subject to the Companies Act, 1965 ( Act ), rules, regulations and orders made pursuant to the Act, provisions of the Memorandum and Articles of Association of the Company, Bursa Malaysia Securities Berhad ( Bursa Securities ) Main Market Listing Requirements and any other relevant authorities, approval be and is hereby given for the Company to purchase ordinary shares of RM0.50 each in the Company as may be determined by the Directors from time to time through Bursa Securities upon such terms and conditions as the Directors of the Company may in their absolute discretion deem fit and expedient in the interest of the Company ( Share Buy-Back Mandate ) provided that: Resolution 11 (i) (ii) the aggregate number of ordinary shares of RM0.50 each in the Company which may be purchased and/or held by the Company at any point of time pursuant to the Share Buy-Back Mandate shall not exceed ten percent (10%) of the issued and paid-up share capital of the Company for the time being; the maximum funds to be allocated by the Company for the purpose of purchasing its own shares shall not exceed the aggregate of the retained profits and the share premium account of the Company based on the audited financial statements for the financial year ended of RM100,171,704 and RM103,842,246 respectively; (iii) the authority conferred by this resolution will be effective immediately upon the passing of this ordinary resolution and will continue to be in force until: (a) (b) (c) the conclusion of the next Annual General Meeting ( AGM ) of the Company, at which time the said authority will lapse unless by an ordinary resolution passed at the general meeting of the Company, the authority is renewed, either unconditionally or subject to conditions; the expiration of the period within which the next AGM of the Company is required by law to be held; or revoked or varied by an ordinary resolution passed by the shareholders in general meeting, whichever is the earlier; (iv) the shares so purchased by the Company pursuant to the Share Buy-Back Mandate to be retained as treasury shares which may be distributed as dividends and/or resold on Bursa Securities and/or cancelled; AND THAT the Directors of the Company be and are hereby authorised to take all such steps as they may consider expedient or necessary to implement and give effect to the Share Buy-Back Mandate. Special Resolution 11. Proposed Amendments to the Articles of Association of the Company THAT the proposed alterations, modifications, deletions and/or additions to the Articles of Association of the Company as set out in Appendix I of the Annual Report 2012 be and are hereby approved. Resolution 12 Annual Report

149 Notice of Annual General Meeting Ordinary Resolutions 12. Proposed Termination of the Company s Existing Employees Share Option Scheme ( ESOS ) ( Proposed ESOS Termination ) THAT, subject to the approval of the option holders (if any) of the Company s existing ESOS, the passing of Resolution 14 below and the implementation of proposed establishment of a new employees share scheme, the Company be and is hereby authorised to terminate the Company s existing ESOS which was implemented on 28 September 2011; Resolution 13 AND THAT the Directors of the Company be and is hereby authorised to do all such acts as they may consider necessary or expedient to give effect to the Proposed ESOS Termination with full power to consent to and to adopt such conditions, modifications, variations and/or amendments as may be required by the relevant regulatory authorities. 13. Proposed Establishment of a New Employees Share Scheme ( Proposed ESS ) THAT, subject to the passing of Resolution 13 above and the approvals of all relevant authorities for the Proposed ESS being obtained, the Company be and is hereby authorised: Resolution 14 (a) (b) (c) (d) to establish, implement and administer the Proposed ESS for the benefit of the eligible executive directors and employees of the Company and its subsidiary companies which are not dormant ( Group ) who meets the criteria of eligibility for participation in the Proposed ESS ( Eligible Persons ) in accordance with the By-Laws which is set out in Appendix II of the Circular to Shareholders dated 15 August 2012 ( Circular ); to appoint a trustee to facilitate the implementation of the Proposed ESS (if required); to provide money or other assistance (financial or otherwise), and/or to authorise and/or procure any one or more of the subsidiaries of the Company, to provide money or other assistance (financial or otherwise) from time to time if required to enable the trustee to subscribe for and/or acquire new or existing ordinary shares of RM0.50 each in the Company (or any other par value of the Company, as may be determined and/or amended from time to time) ( Shares ) and/or payment of equivalent cash value to the Eligible Persons provided that the Company or any subsidiaries of the Group shall not provide such money or assistance (financial or otherwise) if it would be in breach of any laws of Malaysia and where the lending subsidiary is a foreign corporation, the relevant laws of the place of incorporation of the lending subsidiary; to make the necessary applications to Bursa Malaysia Securities Berhad ( Bursa Securities ) and do all things necessary at the appropriate time or times for permission to deal in and for the listing of and quotation for the new Shares that may hereafter from time to time be allotted and issued pursuant to the Proposed ESS; 148 Amcorp Properties Berhad

150 Notice of Annual General Meeting (e) (f) (g) to modify and/or amend the By-Laws of the Proposed ESS from time to time as may be required/permitted by the authorities or deemed necessary by the authorities or the Board of Directors of the Company or any committee of the Proposed ESS established or appointed by it provided that such modifications and/or amendments are effected and permitted in accordance with the provisions of the By-Laws relating to modifications and/or amendments; to do all such acts, execute all such documents and to enter into all such transactions, arrangements and agreements, deeds or undertakings and to make such rules or regulations, or impose such terms and conditions or delegate part of its power as may be necessary or expedient in order to give full effect to the Proposed ESS and terms of the By-Laws; and to allot and issue and/or procure for delivery from time to time such number of Shares which may be made available under the Proposed ESS including new Shares which may be made available under the Proposed ESS including the new Shares which may be issued and allotted pursuant to any other schemes involving new issuance of Shares to be implemented by the Company shall not at any point in time in aggregate exceed fifteen percent (15%) of the issued and paid-up share capital of the Company or such other percentage of the issued and paid-up share capital of the Company (excluding treasury shares) that may be permitted by Bursa Securities or any other relevant authorities from time to time during the duration of the Proposed ESS; AND THAT the Directors of the Company be and is hereby authorised to give effect to the Proposed ESS with full power to consent to and to adopt such conditions, modifications, variations and/or amendments as it may deem fit and/or as may be required by the relevant regulatory authorities; AND THAT the proposed By-Laws of the Proposed ESS, as set out in Appendix II of the Circular, be and is hereby approved. 14. Proposed Allocation of ESOS Award and Restricted Share Grant ( RSG ) Award to Azmi Hashim, Executive Chairman of the Company THAT, subject to the passing of the Resolutions 13 and 14 above, the Directors of the Company be and are hereby authorised at any time and from time to time to grant to Azmi Hashim, Executive Chairman of the Company, such number of Shares in the Company which will be vested in him at a specified future date and to allot and issue and/or deliver such number of ESOS options, Shares and/or the equivalent cash value or combinations thereof comprised in the Proposed ESS granted and/or awarded to him from time to time, provided always that not more than ten percent (10%) (or such percentage as allowable by the relevant authorities) of the Shares available under the Proposed ESS shall be allocated to any eligible Director or employee who, either singly or collectively through persons connected with the eligible Director or employee, holds twenty percent (20%) or more of the issued and paid-up share capital of the Company, subject always to such terms and conditions and/or any adjustment which may be made in accordance with the By-Laws governing and constituting the Proposed ESS as set out in Appendix II of the Circular. Resolution 15 Annual Report

151 Notice of Annual General Meeting 15. Proposed Allocation of ESOS Award and RSG Award to Lee Keen Pong, Managing Director of the Company THAT, subject to the passing of the Resolutions 13 and 14 above, the Directors of the Company be and are hereby authorised at any time and from time to time to grant to Lee Keen Pong, Managing Director of the Company, such number of Shares in the Company which will be vested in him at a specified future date and to allot and issue and/or deliver such number of ESOS options, Shares and/or the equivalent cash value or combinations thereof comprised in the Proposed ESS granted and/or awarded to him from time to time, provided always that not more than ten percent (10%) (or such percentage as allowable by the relevant authorities) of the Shares available under the Proposed ESS shall be allocated to any eligible Director or employee who, either singly or collectively through persons connected with the eligible Director or employee, holds twenty percent (20%) or more of the issued and paid-up share capital of the Company, subject always to such terms and conditions and/or any adjustment which may be made in accordance with the By-Laws governing and constituting the Proposed ESS as set out in Appendix II of the Circular. Resolution Proposed Allocation of ESOS Award and RSG Award to Shahman Azman, Deputy Managing Director of the Company THAT, subject to the passing of the Resolutions 13 and 14 above, the Directors of the Company be and are hereby authorised at any time and from time to time to grant to Shahman Azman, Deputy Managing Director of the Company, such number of Shares in the Company which will be vested in him at a specified future date and to allot and issue and/or deliver such number of ESOS options, Shares and/or the equivalent cash value or combinations thereof comprised in the Proposed ESS granted and/or awarded to him from time to time, provided always that not more than ten percent (10%) (or such percentage as allowable by the relevant authorities) of the Shares available under the Proposed ESS shall be allocated to any eligible Director or employee who, either singly or collectively through persons connected with the eligible Director or employee, holds twenty percent (20%) or more of the issued and paid-up share capital of the Company, subject always to such terms and conditions and/or any adjustment which may be made in accordance with the By-Laws governing and constituting the Proposed ESS as set out in Appendix II of the Circular. Resolution To transact any other business of which due notice shall have been received. 150 Amcorp Properties Berhad

152 Notice of Annual General Meeting NOTICE OF DIVIDEND ENTITLEMENT NOTICE IS ALSO HEREBY GIVEN THAT the final dividend of 6% less 25% income tax for the financial year ended, if approved by the shareholders, will be paid on 25 September 2012 to depositors who are registered in the Record of Depositors at the close of business on 12 September A Depositor shall qualify for entitlement only in respect of: (a) (b) shares transferred into the Depositor s Securities Account before 4.00 p.m. on 12 September 2012 in respect of transfers; and shares bought on Bursa Malaysia Securities Berhad ( Bursa Securities ) on a cum entitlement basis according to the Rules of Bursa Securities. By Order of the Board JOHNSON YAP CHOON SENG (MIA 20766) CHUA SIEW CHUAN (MAICSA ) Secretaries Petaling Jaya 15 August 2012 Notes : 1. In respect of deposited securities, only members whose names appear in the Record of Depositors as at 29 August 2012 shall be eligible to attend, speak and vote at the Forty-Sixth Annual General Meeting. 2. A member of the Company entitled to attend and vote at the Meeting is entitled to appoint a proxy/proxies to attend, speak and vote in his stead. A proxy may but need not be a member of the Company and there shall be no restriction as to the qualification of the proxy. 3. A member shall not be entitled to appoint more than two (2) proxies to attend and vote at the Meeting and a member who appoints two (2) proxies shall specify the proportion of his shareholdings to be represented by each proxy. 4. Where a member is an authorised nominee as defined in the Securities Industry (Central Depositories) Act 1991, it may appoint at least one (1) proxy but not more than two (2) proxies in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said account. 5. A member who is an exempt authorised nominee is entitled to appoint multiple proxies for each omnibus account it holds. 6. The instrument appointing a proxy in the case of an individual, shall be in writing under the hand of the appointer or his attorney duly authorised in writing or if the appointer is a corporation either under its common seal or under the hand of an officer or attorney duly authorised. 7. The instrument appointing a proxy must be completed, signed and deposited at the Registered Office of the Company at Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, Kuala Lumpur, Malaysia not less than forty-eight (48) hours before the time appointed for holding the Meeting or any adjournment thereof. Annual Report

153 Notice of Annual General Meeting Explanatory Notes on Special Business: (i) Resolution 9 - Authority to Issue Shares Pursuant to Section 132D of the Companies Act, 1965 The Ordinary Resolution proposed under item 8 is for the purpose of seeking a renewal of the general mandate ( General Mandate ) and if passed, will empower the Directors of the Company pursuant to Section 132D of the Companies Act, 1965, to issue and allot new shares in the Company from time to time provided that the aggregate number of shares issued pursuant to the General Mandate does not exceed 10% of the total issued share capital of the Company for the time being. The General Mandate, unless revoked or varied by the Company in general meeting, will expire at the conclusion of the next Annual General Meeting ( AGM ) of the Company. As at the date of this Notice, no new share in the Company was issued pursuant to the mandate granted to the Directors at the Forty-Fifth AGM of the Company held on 21 September The General Mandate will provide flexibility to the Company for any possible fund raising activities, including but not limited to funding future investment, working capital, acquisitions or such other purposes as the Directors consider would be in the interest of the Company. (ii) Resolution 10 - Proposed Shareholders Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature The Ordinary Resolution proposed under item 9, if passed, will allow the Company and its subsidiaries to enter into recurrent related party transactions of a revenue or trading nature pursuant to paragraph of Bursa Malaysia Securities Berhad ( Bursa Securities ) Main Market Listing Requirements. This authority, unless revoked or varied at a general meeting, will expire at the conclusion of the next AGM of the Company. (iii) Resolution 11 - Proposed Renewal of Share Buy-Back Authority The Ordinary Resolution proposed under item 10, if passed, will allow the Company to purchase up to 10% of the issued and paid-up share capital of the Company. This authority, unless revoked or varied at a general meeting, will expire at the conclusion of the next AGM of the Company. (iv) Resolution 12 - Proposed Amendments to the Articles of Association of the Company The Special Resolution proposed under item 11 is to amend the Company s Articles of Association in line with the amendments to the Bursa Securities Main Market Listing Requirements. (v) Resolution 13 - Proposed Termination of the Company s Existing Employees Share Option Scheme ( ESOS ) The Ordinary Resolution proposed under item 12, if passed, will allow the Company to terminate the Company s existing ESOS prior to its expiry. (vi) Resolution 14 - Proposed Establishment of a New Employees Share Scheme ( Proposed ESS ) The Ordinary Resolution proposed under item 13, if passed, will allow the Company to establish a new employees share scheme which comprises: (a) (b) a new ESOS which will entitle the eligible Executive Directors and employees, upon exercise, to subscribe or acquire the Company s ordinary shares at a specified future date at a pre-determined price; and a restricted share grant ( RSG ) which entitles the eligible Executive Directors and employees to receive fully paid-up ordinary shares in the Company. (vii) Resolutions 15, 16 and 17 - Proposed Allocation of ESOS Award and RSG Award to Azmi Hashim, Lee Keen Pong and Shahman Azman The Ordinary Resolutions proposed under items 14, 15 and 16, if passed, will allow the Company to offer and grant to Azmi Hashim, Lee Keen Pong and Shahman Azman, options to subscribe or acquire the Company s shares at a specified future date at a pre-determined price and to receive fully paid-up ordinary shares in the Company under the Company s employees share scheme. Further information on the Proposed Shareholders Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature, Proposed Renewal of Share Buy-Back Authority, Proposed Termination of the Company s Existing ESOS and Proposed ESS are set out in the Circular/Statement to Shareholders dated 15 August 2012 which is despatched together with the Company s Annual Report Amcorp Properties Berhad

154 Appendix I Proposed Amendments to the Articles of Association of the Company The proposed alterations, modifications, deletions and/or additions to the Articles of Association of the Company are as follows: Article No. Existing Articles Proposed Amendments 1. Interpretation Interpretation No Provision No Provision Exempt Authorised Nominee means an authorised nominee defined under the Central Depositories Act which is exempted from compliance with the provisions of subsection 25A(1) of the Central Depositories Act. Share Issuance Scheme means a scheme involving a new issuance of shares to employees and/or Directors. 5(c) no Director shall participate in a share scheme for employees unless shareholders in general meeting have approved the specific allotment to be made to such Director. no Director shall participate in a Share Issuance Scheme unless shareholders in general meeting have approved the specific allotment to be made to such Director. 110(a) Proxy. A proxy may but need not be a member of the Company and a member may appoint any person to be his proxy and the provisions of sections 149(1)(a) and (b) of the Act shall not apply to the Company. Proxy. A proxy may but need not be a member of the Company and a member may appoint any person to be his proxy and the provisions of sections 149(1)(a) and (b) of the Act shall not apply to the Company. There shall be no restriction as to the qualification of the proxy and a proxy appointed to attend and vote at a meeting of the Company shall have the same rights as the member to speak at the meeting. 110(e) No Provision Exempt Authorised Nominee. Where a member of the Company is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account ( omnibus account ), there is no limit to the number of proxies which the Exempt Authorised Nominee may appoint in respect of each omnibus account it holds. Annual Report

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156 Form of Proxy Amcorp Properties Berhad (6386-K) I/We NRIC No./Company No.: of being a member/members of AMCORP PROPERTIES BERHAD, hereby appoint of or failing him/her, of or failing him/her, the Chairman of the Meeting as my/our proxy to vote for me/us and on my/our behalf at the Forty-Sixth Annual General Meeting of the Company to be held at Dewan AmBank Group, 7th Floor, Bangunan AmBank Group, 55 Jalan Raja Chulan, Kuala Lumpur on Thursday, 6 September 2012 at a.m. and at any adjournment thereof, in the manner as indicated below: NO. RESOLUTIONS FOR AGAINST 1. To declare a final dividend of 6% less 25% income tax for the financial year ended. 2. To approve the payment of Directors fees. 3. To re-elect Encik Azmi Hashim as Director. 4. To re-elect Y. Bhg. Dato Che Md Nawawi bin Ismail as Director. 5. To re-elect Mr. Soo Kim Wai as Director. 6. To re-elect Y. Bhg. Dato Ab. Halim bin Mohyiddin as Director. 7. To re-appoint Y. Bhg. Tan Sri Dato Chen Wing Sum as Director. 8. To re-appoint Messrs BDO as Auditors of the Company and to authorise the Directors to fix their remuneration. 9. Authority to issue shares pursuant to Section 132D of the Companies Act, Proposed Shareholders Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature. 11. Proposed Renewal of Share Buy-Back Authority. 12. Proposed Amendments to the Articles of Association of the Company. 13. Proposed Termination of the Company s Existing ESOS. 14. Proposed Establishment of a New Employees Share Scheme. 15. Proposed Allocation of ESOS Award and RSG Award to Azmi Hashim. 16. Proposed Allocation of ESOS Award and RSG Award to Lee Keen Pong. 17. Proposed Allocation of ESOS Award and RSG Award to Shahman Azman. Please indicate with an X in the spaces provided above as to how you wish your votes to be cast. In the absence of specific directions, your proxy will vote or abstain at his/her discretion. Signed this day of No. of Shares Held CDS Account No. Signature of Shareholder/Common Seal Tel no. (During office hours): Notes: 1. In respect of deposited securities, only members whose names appear in the Record of Depositors as at 29 August 2012 shall be eligible to attend, speak and vote at the Forty-Sixth Annual General Meeting. 2. A member of the Company entitled to attend and vote at the Meeting is entitled to appoint a proxy/proxies to attend, speak and vote in his stead. A proxy may but need not be a member of the Company and there shall be no restriction as to the qualification of the proxy. 3. A member shall not be entitled to appoint more than two (2) proxies to attend and vote at the Meeting and a member who appoints two (2) proxies shall specify the proportion of his shareholdings to be represented by each proxy. 4. Where a member is an authorised nominee as defined in the Securities Industry (Central Depositories) Act 1991, it may appoint at least one (1) proxy but not more than two (2) proxies in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said account. 5. A member who is an exempt authorised nominee is entitled to appoint multiple proxies for each omnibus account it holds. 6. The instrument appointing a proxy in the case of an individual, shall be in writing under the hand of the appointer or his attorney duly authorised in writing or if the appointer is a corporation either under its common seal or under the hand of an officer or attorney duly authorised. 7. The instrument appointing a proxy must be completed, signed and deposited at the Registered Office of the Company at Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, Kuala Lumpur, Malaysia not less than forty-eight (48) hours before the time appointed for holding the Meeting or any adjournment thereof.

157 Please fold here Stamp The Company Secretary Amcorp Properties Berhad Level 7, Menara Milenium Jalan Damanlela Pusat Bandar Damansara Damansara Heights Kuala Lumpur Malaysia Please fold here

158 Amcorp Propert ies Berhad (6386-K) 2.01 PJ Tower, 18 Persiaran Barat, Petaling Jaya, Selangor, Malaysia. T : F :