ANNUAL REPORT Level 5 Block D, Sri Damansara Business Park Persiaran Industri Bandar Sri Damansara Kuala Lumpur

Transcription

1 ANNUAL REPORT 2012 Level 5 Block D, Sri Damansara Business Park Persiaran Industri Bandar Sri Damansara Kuala Lumpur T F Igb@land-general.com Website :

2 A L A N D & G E N E R A L B E R H A D ( H ) A N N U A L R E P O R T (5507-H) Contents A force to be reckoned with in the property investment and development business, Land & General Berhad stands solid and proud, as symbolised by the slate background. The shadow of the leaf is indicative of the Company s growing commitment to sustainable eco-developments much like the upcoming Damansara Foresta. It is, indeed, the shape of things to come as the Company remains steadfast in its mission to provide value to its customers. Corporate Information 2 Five-Year Performance Highlights 3 Corporate Diary 4 Directors Profile 5 Chairman s Statement 10 Managing Director s Review of Operations 13 Corporate Governance Statement 16 Statement of Directors Responsibilities 22 Audit Committee Report 23 Statement on Internal Control 27 Corporate Social Responsibility 29 Financial Statements 31 Analysis of Shareholdings 115 List of Properties 117 Notice of Annual General Meeting 118 Proxy Form

3 2 L A N D & G E N E R A L B E R H A D ( H ) Corporate Information D I R E C T O R S Dato Hj Zainal Abidin Putih, Chairman Low Gay Teck, Managing Director Ferdaus Mahmood, Executive Director Dato Ir Dr A Bakar Jaafar Dato Muhammad Khairun Aseh Dato Hj Ikhwan Salim Dato Hj Sujak YM Tengku Maruan Tengku Ariff Wing Kwan Winnie Chiu Hoong Cheong Thard S E C R E T A R I E S Wong Wai Foong (MAICSA ) Lim Poh Yen (MAICSA ) Lee Siw Yeng (MAICSA ) A U D I T C O M M I T T E E Dato Hj Ikhwan Salim Dato Hj Sujak, Chairman Dato Ir Dr A Bakar Jaafar Hoong Cheong Thard N O M I N A T I O N S C O M M I T T E E Dato Hj Zainal Abidin Putih, Chairman Dato Ir Dr A Bakar Jaafar Dato Muhammad Khairun Aseh R E M U N E R A T I O N C O M M I T T E E Dato Ir Dr A Bakar Jaafar, Chairman Dato Muhammad Khairun Aseh Hoong Cheong Thard R E G I S T E R E D O F F I C E Level 5, Block D Sri Damansara Business Park Persiaran Industri Bandar Sri Damansara Kuala Lumpur Tel : Fax : C O R P O R A T E O F F I C E Level 5, Block D Sri Damansara Business Park Persiaran Industri Bandar Sri Damansara Kuala Lumpur Tel : Fax : lgb@land-general.com Website : A U D I T O R S Ernst & Young Chartered Accountants L I S T I N G Main Market of Bursa Malaysia Securities Berhad S H A R E R E G I S T R A R S Symphony Share Registrars Sdn Bhd (Company No D) Level 6, Symphony House Block D13 Pusat Dagangan Dana 1 Jalan PJU 1A/ Petaling Jaya Selangor Tel : Fax :

4 A N N U A L R E P O R T Five-Year Performance Highlights OPERATING RESULTS (RM 000) FY 2012 FY 2011 FY 2010 FY 2009 FY 2008 Revenue 130,799 44,202 30,214 37,611 46,734 Profit before tax 43,499 13,878 30,950 17,714 2,308 Profit after tax 33,120 10,213 29,682 15,315 2,593 Profit attributable to owners of the Company 30,369 10,213 29,682 15,315 2,593 KEY FINANCIAL POSITION DATA (RM 000) Total assets 475, , , , ,419 Total borrowings 57, , ,081 Shareholders fund 282, , , , ,886 Total equity 291, , , , ,886 Issued and paid up share capital 119, , ,661* 598, ,305 SHARE INFORMATION (RM) Basic earnings per share Net assets per share Share price as at 31 March ( 000) Weighted average number of ordinary shares in issue 598, , , , ,305 FINANCIAL RATIOS Return on Equity (%) 14.91% 5.41% 13.35% 8.85% 1.14% Return on Total Assets (%) 9.14% 3.99% 9.51% 5.04% 0.51% Gearing ratio (times) Price to earnings ratio (times) * The capital reduction exercise was effected on 21 October ,950 43,499 Profit Before Tax (RM 000) 2,308 17,714 13, ,799 Revenue (RM 000) 46,734 37,611 30,214 44, Basic Earnings Per Share (RM) Net Assets Per Share (RM)

5 4 L A N D & G E N E R A L B E R H A D ( H ) Corporate Diary April Extraordinary General Meeting ( EGM ) in relation to the acquisition of ten (10) parcels of land improved with 27-hole golf course with a club house including other supporting facilities, five (5) parcels of vacant residential development land, forty-four (44) parcels of vacant bungalow plots, a single storey bungalow house and a parcel of industrial plot designated for TNB substation located within the Tuanku Jaafar Golf and Country Resort, Sungai Gadut, Seremban, Negeri Sembilan Darul Khusus by Bright Term Sdn Bhd, a wholly-owned subsidiary of the Company, from Seremban Golf Resort Berhad (Receiver & Manager Appointed)(In Liquidation) for a total cash purchase consideration of RM25 million ( the Acquisition ) Shareholders approval obtained at the EGM of the Company in respect of the Acquisition 26 May Announcement in relation to the Acquisition that all conditions precedent pursuant to the Sale and Purchase Agreement entered into between Bright Term Sdn Bhd, a wholly-owned subsidiary of the Company, and Seremban Golf Resort Berhad (Receiver & Manager Appointed) (In Liquidation) on 22 December 2010 have been satisfied and fulfilled 24 June Announcement that the Acquisition will be completed within fourteen days from the date of confirmation of the removal of the caveats, i.e. with effect from 23 June August 48th AGM 24 August Re-designation of YM Tengku Maruan Tengku Ariff as Independent Non-executive Director from Non-independent Non-executive Director 5 September Resignation of Mr Lau Tiang Hua as Director and as the Chairman of the Audit Committee of the Company Appointment of Dato Hj Ikhwan Salim Dato Hj Sujak as the Chairman of the Audit Committee of the Company 30 September Announcement in relation to the acquisition of 0.01% equity interest in Elite Forward Sdn Bhd by Synergy Score Sdn Bhd, a wholly-owned subsidiary of the Company from Forward Splendour Sdn Bhd (As a result of the said acquisition, Elite Forward Sdn Bhd became a 50.01% subsidiary of the Company) 16 December Announcement in relation to credit facilities of RM90 million granted by OCBC Bank (Malaysia) Berhad to Sri Damansara Sdn Bhd ( SDSB ), a wholly-owned subsidiary of the Company, to enable SDSB to undertake a condominium project known as Damansara Foresta in Bandar Sri Damansara 21 February Announcement in relation to the shareholders ratification for the provision of additional financial assistance and additional provision of financial assistance to Elite Forward Sdn Bhd, a 50.01% subsidiary of the Company, which is held through its wholly-owned subsidiary, Synergy Score Sdn Bhd 5 April EGM in relation to the shareholders ratification for the provision of additional financial assistance and additional provision of financial assistance to Elite Forward Sdn Bhd, a 50.01% subsidiary of the Company, which is held through its wholly-owned subsidiary, Synergy Score Sdn Bhd ( the Proposals ) Shareholders approval obtained at the EGM of the Company in respect of the Proposals 18 May Announcement in relation to provision of financial assistance by the Company or its subsidiaries to Hidden Valley Australia Pty Ltd, a jointly controlled entity of the Company 29 June Appointment of Ms Wong Wai Foong, Ms Lim Poh Yen and Ms Lee Siw Yeng as Secretaries of the Company 5 September 49th AGM Retirement of Ms Lim Fong Een as Secretary of the Company

6 A N N U A L R E P O R T Directors Profile Dato Hj Zainal Abidin Putih Independent Non-Executive Chairman Dato Hj Zainal Abidin Putih, a Malaysian aged 66, was appointed Chairman of L&G on 1 June He is a Fellow of the Institute of Chartered Accountants in England and Wales (ICAEW), a member of the Malaysian Institute of Certified Public Accountants (MICPA) and the Malaysian Institute of Accountants (MIA). Dato Hj Zainal qualified as a Chartered Accountant of the ICAEW in 1972 and has very extensive experience in audit throughout his career as a practising accountant. He also has a good working knowledge of taxation and has been involved in management consulting especially those involved in acquisition, take over, amalgamation and restructuring of companies and company flotation. Dato Hj Zainal was formerly the Country Managing Partner of Messrs Hanafiah Raslan and Mohamad and was an Adviser with Messrs Ernst & Young Malaysia until his retirement on 31 December He was the President of MICPA from 1989 until 1991 and the Chairman of the Malaysian Accounting Standards Board (MASB) from 2003 until He had also served in Government Agencies as the Chairman of Pengurusan Danaharta Nasional Berhad (Danaharta), a member of the Malaysian Communications & Multimedia Commission and a member of the Investment Panel of the Employees Provident Fund (EPF). Dato Hj Zainal was awarded the Darjah Setia Negeri Sembilan (D.S.N.S.) by the Yang Di Pertuan Besar Negeri Sembilan and the Jaksa Pendamai (J.P.) by the Yang Di Pertua Negeri Melaka in 1995 and 2008, respectively. Dato Hj Zainal is the Chairman of CIMB Bank Berhad and sits on the board of CIMB Holdings Berhad, CIMB Investment Bank Berhad, CIMB Sdn Bhd and Southeast Asia Special Asset Management Berhad (SEASAM). He is also the Chairman of Dutch Lady Milk Industries Berhad. He sits as a Board Member of Tenaga Nasional Berhad and Petron Malaysia Refining & Marketing Bhd (formerly known as Esso Malaysia Berhad). Dato Hj Zainal is also the Chairman of Mobile Money International Sdn Bhd and a director of several private limited companies. He is also a Trustee of the National Heart Institute Foundation (IJNF) and the Perdana Leadership Foundation. Dato Hj Zainal does not have any family relationship with any Directors and/or major shareholders of L&G and he does not have any conflict of interest with L&G. He has no convictions for any offence over the last ten (10) years. He attended six (6) out of six (6) Board meetings held during the financial year ended 31 March Dato Hj Zainal is the Chairman of the Nominations Committee of L&G.

7 6 L A N D & G E N E R A L B E R H A D ( H ) Directors Profile (cont d) Mr Low Gay Teck, a Malaysian aged 47, was appointed a director of L&G on 15 October 2007 and was re-designated Managing Director of L&G on 1 January Mr Low holds a Bachelor of Civil Engineering from Footscray Institute of Technology, (now known as Victoria University), Australia (1988). Prior to joining L&G, Mr Low was with the Mayland which he joined in In 2002, he was appointed Director of the Mayland and assumed the position of Managing Director in Mr Low has been involved in property development and project management for the past 20 years, handling and implementing projects such as residential, commercial, shopping complex, hotel, golf course, condominium and service apartments. Currently, Mr Low sits on the Boards of a few subsidiaries of L&G. Mr Low does not have any family relationship with any Directors and/or major shareholders of L&G and he does not have any conflict of interest with L&G. He does not hold any directorships in any other listed companies and he has no convictions for any offence over the last ten (10) years. He attended six (6) out of six (6) Board meetings held during the financial year ended 31 March Mr Low is a committee member of the Tabung Amanah Land & General Berhad. Mr Low Gay Teck Managing Director Non-Independent Executive Director Encik Ferdaus Mahmood, a Malaysian aged 57, was appointed an Executive Director of L&G on 16 June Encik Ferdaus started his career as Trainee Accountant with Tractors Malaysia Bhd in 1974 and joined United Estate Projects Sdn Bhd (UEP) (initial developer of Subang Jaya, Selangor) in 1976 where his last position was the Credit Controller. Subsequently, in 1980, Encik Ferdaus made a decisive switch in his career into the main stream of the property industry and since then has garnered extensive experience in this industry especially in the areas of marketing, sales, credit control and property management. In 1990, Encik Ferdaus joined L&G as the General Manager in one of the property subsidiaries of L&G. In 1998, he was appointed the Chief Operating Officer to head the property operations of L&G in Australia and returned to Malaysia in 2005 to be based in Kuala Lumpur as the Director of Property Division, L&G. Currently, he sits on the Boards of a few subsidiaries of L&G. Encik Ferdaus does not have any family relationship with any Directors and/or major shareholders of L&G and he does not have any conflict of interest with L&G. He does not hold any directorships in any other listed companies and he has no convictions for any offence over the last ten (10) years. He attended five (5) out of six (6) Board meetings held during the financial year ended 31 March Encik Ferdaus Mahmood Executive Director Non-Independent Executive Director

8 A N N U A L R E P O R T Directors Profile (cont d) Dato Ir Dr A Bakar Jaafar Independent Non-Executive Director Dato Ir Dr A Bakar Jaafar, a Malaysian aged 62, was appointed a Director of L&G on 18 October He is an engineer by profession and holds a Bachelor of Engineering (Honours) degree in Mechanical Engineering from the University of Newcastle, Australia, a Master of Environmental Science from Miami University and a Doctorate in Marine Geography from the University of Hawaii@Manoa. He served in the Malaysian Civil Service for over 22 years in various positions including as the Director-General of the Department of Environment from 1990 to He continues to serve the Malaysian Government as the Elected-Member to the Commission on the Limits of Continental Shelf, UN HQ, New York ( ) ( ) ( ). He is also an Adjunct Senior Fellow of the Maritime Institute of Malaysia, an Adviser to the National Technical Committee on Continental Shelf, and Visiting Professor at the University of Technology Malaysia at Perdana School of Science, Technology and Innovation Policy. Currently, Dato Ir Dr A Bakar sits on the Boards of several private limited companies. Dato Ir Dr A Bakar does not have any family relationship with any Directors and/ or major shareholders of L&G and he does not have any conflict of interest with L&G. He does not hold any directorships in any other listed companies and he has no convictions for any offence over the last ten (10) years. He attended five (5) out of six (6) Board meetings held during the financial year ended 31 March Dato Ir Dr A Bakar is the Chairman of the Remuneration Committee as well as a member of the Audit Committee and the Nominations Committee of L&G. Dato Muhammad Khairun Aseh Non-Independent Non-Executive Director Dato Muhammad Khairun Aseh, a Malaysian aged 34, was appointed a Director of L&G on 15 October Upon obtaining his law degree, Dato Muhammad Khairun chambered and practised law with a leading and reputable law firm in Kuala Lumpur where he gained extensive experience in various aspects of legal matters. He was conferred the Darjah Indera Mahkota Pahang (DIMP) which carries the title Dato by Kebawah Duli Yang Maha Mulia Sultan of Pahang in conjunction with His Royal Highness 77th birthday in October Presently, Dato Muhammad Khairun sits on the Boards of several private limited companies. Dato Muhammad Khairun does not have any family relationship with any Directors and/or major shareholders of L&G and he does not have any conflict of interest with L&G. He does not hold any directorships in any other listed companies and he has no convictions for any offence over the last ten (10) years. He attended four (4) out of six (6) Board meetings held during the financial year ended 31 March Dato Muhammad Khairun is a member of the Nominations Committee and the Remuneration Committee of L&G as well as a committee member of the Tabung Amanah Land & General Berhad.

9 8 L A N D & G E N E R A L B E R H A D ( H ) Directors Profile (cont d) Dato Hj Ikhwan Salim Dato Hj Sujak, a Malaysian aged 55, was appointed a Director of L&G on 1 December He holds a Bachelor of Science (Economics & Accounts) from Queen s University Belfast, UK (1977). In 1977, he began his career as an auditor with Coopers & Lybrand, UK and joined Nestle (M) Sdn Bhd as Finance Executive in In 1980, he moved on to be the Financial Planning Manager of Kumpulan Low Keng Huat Sdn Bhd. Currently, Dato Hj Ikhwan runs his private business, Konsortium Jaringan Selangor Sdn Bhd. He is also a Board member of Malaysia Steel Works (KL) Berhad, Glomac Berhad and several private limited companies. Dato Hj Ikhwan does not have any family relationship with any Directors and/or major shareholders of L&G and he does not have any conflict of interest with L&G. He has no convictions for any offence over the last ten (10) years. He attended five (5) out of six (6) Board meetings held during the financial year ended 31 March Dato Hj Ikhwan Salim Dato Hj Sujak Independent Non-Executive Director YM Tengku Maruan Tengku Ariff, a Malaysian aged 59, was appointed a Director of L&G on 1 July He holds a Bachelor of Mechanical Engineering (Design) Degree from University of Huddersfield, United Kingdom (1979). YM Tengku Maruan started his career as a credit officer with Citibank Berhad, Kuala Lumpur (Citibank) in 1980 where he was exposed to various aspects of the banking industry. In 1985, YM Tengku Maruan left Citibank holding the position of Manager and joined Southern Bank Berhad as the Head of Personal Banking Division where he was involved in all aspects of budgeting, credit, product marketing and business development. Subsequently in 1996, he joined Rohas Sdn Bhd ( Rohas ) as the General Manager and also served on the board of several companies related to Rohas until his retirement in While in Rohas, he was responsible for various business operations such as manufacturing, education, property management and investments. Currently, YM Tengku Maruan sits on the Boards of several private limited companies. YM Tengku Maruan does not have any family relationship with any Directors and/or major shareholders of L&G and he does not have any conflict of interest with L&G. He does not hold any directorships in any other listed companies and he has no convictions for any offence over the last ten (10) years. He attended six (6) out of six (6) Board meetings held during the financial year ended 31 March YM Tengku Maruan Tengku Ariff Independent Non-Executive Director

10 A N N U A L R E P O R T Directors Profile (cont d) Ms Wing Kwan Winnie Chiu Non-Independent Non-Executive Director Ms Wing Kwan Winnie Chiu, a Permanent Resident of Malaysia aged 32, was appointed Director of L&G on 17 July Ms Winnie Chiu holds a BSc Business Management from King s College, University of London, UK (2002). In 2002, Ms Winnie Chiu launched her career in the property development business by her appointment as Director of Malaysia Land Properties Sdn Bhd ( Mayland ). She continues to serve on Mayland s board and is responsible for the overall project development and retail management of Mayland. Ms Winnie Chiu joined Far East Consortium International Limited ( FECIL ) (a company listed on the Hong Kong Stock Exchange) in 2005 as Director of Property Development and was responsible for the overall project development and overseeing the FECIL group s hotels development. Ms Winnie Chiu is the Executive Director of Kosmopolito Hotels International (a company listed on the Hong Kong Stock Exchange). Ms Winnie Chiu has accumulated considerable years of experience in the property development business covering various aspects of project development and retail management. Prior to joining Mayland and FECIL, Ms Winnie Chiu worked in a few major international banks such as Credit Suisse where she gained much experience in financial management. Currently, Ms Winnie Chiu sits on the Boards of several private limited companies. Ms Winnie Chiu is the daughter of YBhg Tan Sri Dato David Chiu, who is the CEO of the Mayland of Companies and she does not have any conflict of interest with L&G. She has no convictions for any offence over the last ten (10) years. She attended four (4) out of six (6) Board meetings held during the financial year ended 31 March Mr Hoong Cheong Thard Non-Independent Non-Executive Director Mr Hoong Cheong Thard, a Malaysian aged 43, was appointed a Director of L&G on 1 June He is a member of the Institute of Chartered Accountants in England and Wales (ICAEW) (1992) and holds a Bachelor in Mechanical Engineering degree from Imperial College, University of London, UK (1989). Mr Hoong has extensive experience in mergers and acquisitions as well as international capital markets. He was an investment banker for over 12 years and had held senior positions at Deutsche Bank, Hong Kong and UBS, Hong Kong where he was responsible for corporate finance business in Asia. Mr Hoong was the Chief Executive Officer of China LotSynergy Holdings Ltd (a company listed on the Hong Kong Stock Exchange) (2006) prior to joining Far East Consortium International Limited ( FECIL ) (a company listed on the Hong Kong Stock Exchange) in September 2008 as Managing Director. As the Managing Director of FECIL, Mr Hoong is responsible for the formulation and implementation of the FECIL group s overall strategies for development. Mr Hoong also sits on the Boards of several public companies which are incorporated and listed overseas and private limited companies which are incorporated in Malaysia. Mr Hoong does not have any family relationship with any Directors and/or major shareholders of L&G and he does not have any conflict of interest with L&G. He has no convictions for any offence over the last ten (10) years. He attended five (5) out of six (6) Board meetings held during the financial year ended 31 March Mr Hoong is a member of the Audit Committee and Remuneration Committee of L&G.

11 10 L A N D & G E N E R A L B E R H A D ( H ) Chairman s Statement O V E R V I E W Despite the global economy being put on edge by the protracted Eurozone debt crisis, the Malaysian economy turned in a steady 5.1% Gross Domestic Product (GDP) growth in 2011, compared with a 7.2% expansion the previous year. Whilst a further slowdown may be possible, Bank Negara Malaysia has projected a 4% to 5% growth for The economy should remain stable as domestic demand is expected to be supported by continued expansion in private sector economic activity and public sector expenditure. The Malaysian property market meanwhile posted in 2011 its most buoyant performance in five years. The number of transactions increased by 14.3% to 430,403 and rose by 28.3% in value to RM137.8 billion last year, according to the Property Market Report released by the Finance Ministry s Valuation and Property Services Department. Against this positive scenario, on behalf of the Board of Directors of Land & General Berhad ( L&G or the Company ), I am pleased to inform that L&G and its subsidiaries ( the L&G or the ) made significant strides forward, as reflected in the results for the financial year under review. P R O J E C T S S T R E A M During financial year ended 2012, Sri Damansara Sdn Bhd, a wholly-owned subsidiary of L&G held a soft launch of Phase 1 of the Damansara Foresta project. The fully integrated condominium development, located in the burgeoning township of Bandar Sri Damansara, features residential units that elegantly combine space, natural lighting and care for the environment. Complete with top-notch facilities, it is also highly accessible given its excellent location between Kuala Lumpur and Petaling Jaya. At the same time, construction of the is in progress, following the launch of its Tower A and Tower B in April and October 2011 respectively. The 8trium project has been successfully completed according to schedule. This accomplishment has definitely spurred us to strive even harder and smarter. L&G is certainly back in the game!

12 A N N U A L R E P O R T Chairman s Statement (cont d) In the new financial year, the L&G is looking at starting up an exciting project in Seremban, Negri Sembilan, where 200 acres will be developed as mixed residential units within a gated environment. Approval for the development of the project is currently in process. The L&G is also constantly on the lookout for joint-venture projects and land acquisitions, especially in the Klang Valley, Johor Baru and Penang. O P E R A T I N G E N V I R O N M E N T The strong housing starts and building plan approvals recorded nationally last year generally reflect a level of confidence among developers and investors consistent with the Malaysian economic outlook. In fact, international property-advisory group IP Global had in April listed Kuala Lumpur as the top destination for property investors across Asia-Pacific seeking to diversify their portfolios with affordable properties. It cited Malaysia s economic stability as a prime reason. The condominium market in particular was quite active in 2011, according to the WTW Property Market Report 2012, and may moderate this year though still continuing on an uptrend. In addition, with Bank Negara Malaysia acting to tighten lending and the introduction of loan assessment based on the applicant s net income from the start of 2012, some impact on sales may be felt. F I N A N C I A L P E R F O R M A N C E The surge in L&G s revenues and profits for the financial year ended 31 March 2012 is the result of concerted team effort and much hard work. The recorded a turnover of RM130.8 million, a 196% increment from last year s RM44.2 million whilst the s profit before tax rose to RM43.5 million, representing a hefty 213% increase from the previous year s RM13.9 million. It is heartening to see the Property Division returning as the s core business as well as the main revenue and profit contributor. It has risen to the challenge of not only maintaining the strong momentum that has been established, but also continuing to build on it. With regards to L&G s education business, further resources will be committed to expand the activities to bolster the already steady stream of income this business segment is producing. Meanwhile, Elite Forward Sdn Bhd s ( Elite Forward ) accounts have been consolidated with that of the L&G as it has now become a 50.01% subsidiary of Synergy Score Sdn Bhd ( Synergy Score ) which is a wholly-owned subsidiary of L&G. This is as a result of Synergy Score acquiring a 0.01% equity stake on 30 September 2011 in Elite Forward from Forward Splendour Sdn Bhd which is a related company of Mayland Parkview Sdn Bhd, the major shareholder of L&G. P O S T B A L A N C E S H E E T E V E N T At an Extraordinary General Meeting held on 5 April 2012, L&G shareholders approval was obtained in relation to the proposed shareholder s ratification for the provision of additional financial assistance of RM16.45 million and the proposed additional provision of financial assistance to Elite Forward of an aggregate amount of up to RM43.56 million. These proposals were necessary to assist Elite Forward to continue to support and raise adequate project financing for the construction of the

13 12 L A N D & G E N E R A L B E R H A D ( H ) Chairman s Statement (cont d) P R O S P E C T S Current projects are progressing smoothly and new projects are coming on-stream in a timely fashion. As such, the L&G s profitability is expected to continue to improve in the new financial year. Uncertainties in the economic environment caused by external factors may pose some challenges. However, the believes that the challenge it sets itself exceeds other challenges as L&G has begun to position itself as a premium developer in the Malaysian property market through the delivery of high quality products and services. A C K N O W L E D G M E N T One of our Directors, Mr Lau Tiang Hua, who was also the Chairman of the Audit Committee, relinquished his position on 5 September On behalf of the Board of L&G, I extend my sincere gratitude to him for his services and contributions as Director and Chairman of the Audit Committee. I would also like to thank Dato Hj Ikhwan Salim Dato Hj Sujak for accepting the appointment as Chairman of the Audit Committee on the same day. My heartfelt thanks goes to my fellow Board members, the management and all employees, as well as the shareholders, stakeholders, bankers, business associates and government authorities for their invaluable support and understanding throughout the year. Last but not least, we thank all our customers and anyone who has helped to contribute to the success of the L&G. Dato Hj Zainal Abidin Putih Chairman 3 August 2012

14 A N N U A L R E P O R T Managing Director s Review of Operations O V E R V I E W The solid performance achieved in the financial year just ended, re-affirms a new resilience in Land & General Berhad s ( L&G or the Company ) operations and its enhanced profile in the Malaysian corporate landscape. The s Profit Before Tax (PBT) of RM43.5 million for the financial year ended 31 March 2012 represents a jump of 213% over the RM13.9 million posted the year before. This was achieved on the back of a turnover of RM130.8 million, up 196% from RM44.2 million before. The admirable results are directly attributable to the pursuit of and intense focus on sustainable achievements over the past few years. These stem from the resources and concerted efforts accordingly devoted to the s core business of property development. Promising progress has been posted on this front during the year under review, with the launch of the a premier lifestyle residential serviced apartments project being well-received by the public and its construction under way, coupled with the 8trium@Bandar Sri Damansara which is scheduled for completion by the third quarter of In early 2012, the held a soft launch of Phase 1 of Damansara Foresta, a home within nature concept condominium project in Bandar Sri Damansara which received overwhelming response from the public. L&G remains actively on the look-out for potential sites mainly at the Greater KL region, Penang and Johor Baru with emphasis within the Klang Valley where the action is, for development whether on its own or through strategic alliances, with a view to increase the s revenue apart from expanding its landbank. This manifests the s commitment to its shareholders, investors and customers to generate steady profits, grow shareholders value and deliver quality products on time. Elsewhere, the s education business, pursued through Sekolah Sri Bandar Sri Damansara and its plantation business located at Sungai Jernih, Kerling, are continuing to generate steady streams of income. F I N A N C I A L P E R F O R M A N C E A principal share of the s revenue and PBT of RM130.8 million and RM43.5 million respectively achieved in the financial year under review was contributed by the Property Division. The marked improvement in its performance was boosted by both the sales of 8trium@Bandar Sri Damansara and the particularly towards the final quarter of FY2012 and also their respective on-schedule constructions progress. The Property Division s turnover of RM108.1 million for FY2012 is almost five-fold higher than the RM21.9 million posted a year earlier, and represents an 83% contribution to L&G s total revenue. The Property Division s PBT figure has also increased from RM6.1 million to RM43.4 million. OVERVIEW OF GROUP RESULTS FY2012 RM 000 Revenue FY2011 RM 000 Profit/(loss) before tax FY2012 RM 000 FY2011 RM 000 Property Division 108,149 21,929 43,376 6,087 Education Division 11,392 10,884 5,261 4,928 Others 11,258 11,389 (1,973) 4,560 Share of results of jointly controlled entities (3,165) (1,697) 130,799 44,202 43,499 13,878 The remaining contribution to the s earnings came from the Education Division s turnover of RM11.4 million and PBT of RM5.3 million, which was lowered by the loss of RM1.9 million incurred by Other Division on the back of a turnover of RM11.3 million coupled with the share of losses suffered by the s joint venture in Australia. The loss by Other Division arose mainly from the decline in market price of the s quoted investments at the end of the financial year resulting in the recognition of fair value losses of RM8.8 million. For the financial year under review, the accounts of Elite Forward Sdn Bhd ( Elite Forward ) have been consolidated into that of L&G as it has become a 50.01% subsidiary.

15 14 L A N D & G E N E R A L B E R H A D ( H ) Managing Director s Review of Operations (cont d) P R O P E R T Y D I V I S I O N With the s Property Division contributing revenue and PBT of RM108.1 million and RM43.4 million respectively for the financial year ended 31 March 2012, we are confident that the Property Division will continue to expand with our steady stream of projects that include, the on-going the newly launched Damansara Foresta@ Bandar Sri Damansara as well as mixed residential development project in the pipeline located within the Tuanku Jaafar Golf and Country Resort in Negeri Sembilan. Damansara Foresta@Bandar Sri Damansara In line with the s commitment of creating a new benchmark in development, the s wholly-owned subsidiary Sri Damansara Sdn Bhd undertook a soft launch of Phase 1 of Damansara Foresta comprising four residential tower blocks with a total of 928 units on 6 January The development is conceptually aimed towards preservation of the existing greenery with a showcase of eco-friendly outdoor facilities such as jungle track, tree house, gazebos, yoga area and many more. On the OVERVIEW OF PROPERTY DIVISION FY2012 RM 000 FY2011 RM 000 Revenue 108,149 21,929 Profit before tax 43,376 6,087 whole, the soft launch has received extremely good response with 80% of the units being taken up to-date for the first three blocks opened for sale then, and the remaining block to open for registration in the third quarter of this year. Damansara Foresta is a gated residential development set in the midst of 42 acres of lush natural greenery located in the mature township of Bandar Sri Damansara, in Kuala Lumpur. The whole project comprises 4 phases with an expected Gross Development Value (GDV) in excess of RM2 billion. This project is targeted for completion over a period of eight to ten years. Currently, the construction of Phase 1 is approximately 10% completed. The Meanwhile, the joint venture project between L&G and the Mayland known as The has recorded a take-up rate of approximately 60%. The with an estimated GDV of RM740 million is a premier lifestyle residential serviced apartments, comprising two 42-storey towers consisting of 1,040 units. Situated near the heart of the city, the provide its residents with a balance of vibrant city living and the need for a quiet escape with its resort-themed jacuzzis, rooftop zen gardens and many other in-house facilities. Undertaken by the s 50.01% subsidiary, Elite Forward, Tower A of the was launched in April 2011, followed by Tower B in October The project which is strategically located in Ampang, Kuala Lumpur commenced constructions of foundation works in January 2011 with handover of vacant possession targeted towards the second quarter of trium@Bandar Sri Damansara The 8trium, which was launched in mid 2009, has to-date recorded sales of its office suites worth approximately RM92 million or 94% of the total sales value of RM98 million. The 8trium has two corporate office blocks, each 21 storeys high with two levels of retail podium comprising approximately 105,000 sq ft. These modern business suites buildings with in-house facilities and retail podium are expected to be ready for handing over of vacant possession to its owners in the third quarter of New Development Project In addition, a new development project with an estimated GDV of RM555 million is in the pipeline. The project site which is located within the Tuanku Jaafar Golf and Country Resort in Negeri Sembilan was purchased in 2011 by Bright Term Sdn Bhd, a wholly-owned subsidiary of L&G. The proposed development is based on a modern tropical concept and would include bungalows, double storey semi-detached cluster homes, link cluster houses and apartments. Applications for planning approvals have been submitted to the relevant authorities and are currently awaiting approvals. Overseas As for the s 50% joint venture project in Australia which is managed by Hidden Valley Australia Pty Ltd ( HVA ), the project had experienced delays in obtaining the authorities approval for the commencement of development work in the financial year ended 31 March The delays arose due to new policies implemented by both the Country Fire Authority and also the Department of Sustainability in 2011 to reduce the possibility of the recurrence of 2009 bush fire disaster in Australia which claimed several lives. The joint venture management had engaged consultants to work closely with the

16 A N N U A L R E P O R T Managing Director s Review of Operations (cont d) respective authorities for the past nine months to address the authorities concerns so that HVA can recommence its development work soon. HVA s development project in the near future is to embark on a Retirement Estate project which consists of 298 independent living units with a GDV of approximately AUD176.3 million and scheduled for completion over a period of 10 years. E D U C A T I O N D I V I S I O N Sekolah Sri Bestari continues to contribute positively and steadfastly to the in terms of revenue and profitability. Revenue and PBT reached RM11.4 million and RM5.3 million respectively. With a student population totalling about 1,100 as of 31 March 2012, the school continues to innovate and improve its status and appeal as a quality education institution. Sekolah Sri Bestari has launched a new programme called SSB Going Global at the meet-the-parents session in January OVERVIEW OF EDUCATION DIVISION FY2012 RM 000 FY2011 RM 000 Revenue 11,392 10,884 Profit before tax 5,261 4,928 Its intention is to broaden the horizon of learning by injecting an international flavour into the school management and methodology as well as its culture and curriculum as to enable the school to be on a level where it competes with international school. The SSB Going Global programme also encourage a more student-centred learning as opposed to teacher-centred learning, with the objective to make learning more exciting, challenging, hands on, more fun and give students more opportunity to learn through discovery. The range of subjects offered will be expanded. Various facilities were improved, including upgraded school libraries and acquisition of a large selection of new books and resources with a global emphasis. Under the programme, three teacher-mentors one each from Britain, Canada and the USA have been recruited to provide guidance to the students and teachers in achieving the objectives. O T H E R S The s plantation business operated under its wholly-owned subsidiary, Clarity Crest Sdn Bhd, provides a steady cash flow from the 1,009 hectares of land planted with oil palm (403 ha) and rubber (327 ha). The targets to complete the planting of the balance area by next financial year. O U T L O O K With the Eurozone debt crisis continuing to cast uncertainties over economic activities across the globe, Malaysia s Gross Domestic Product (GDP) growth eased to 5.1% in 2011 after a strong 7.2% expansion the year before. Bank Negara Malaysia has projected a 4% to 5% GDP growth for this year, which will still be a good performance considering the challenging circumstances. Against this backdrop, L&G remains guardedly optimistic about the financial year ahead and confident that its continuous stream of sustainable projects and timely delivery of premium products, which are both innovative and relevant to the discerning consumers, will enable the to weather the challenges. H U M A N C A P I T A L In recognition of the importance of the s key asset that is human capital, home-grown talent is constantly being cultivated while fresh ones are judiciously sourced, all the while building a culture of teamwork, passion and dynamism. The significant advancement that the has achieved in the past few years makes evident the soundness of this course of action. T H A N K Y O U I take this opportunity to express my gratitude and thanks to all our employees for sharing in the s vision as shown by their dedication and hard work. My appreciation also goes to our customers, stakeholders, business partners, government authorities and fellow Board members for their support and trust in all that L&G stands for. Low Gay Teck Managing Director 3 August 2012

17 16 L A N D & G E N E R A L B E R H A D ( H ) Corporate Governance Statement The Board of Land & General Berhad is fully committed to the principles and best practices of the Malaysian Code of Corporate Governance. The Board constantly strives to ensure that the highest standards of corporate governance are practised throughout the as fundamental to fulfilling its responsibilities, which include protecting and enhancing shareholder value as well as the financial performance of the Company. T h e B o a r d o f D i r e c t o r s The Board currently comprises nine (9) Directors of whom seven (7) are Non-Executive Directors and two (2) are Executive Directors. The Board s composition is well balanced with four (4) Independent Non-Executive Directors, three (3) Non-Independent Non-Executive Directors and two (2) Executive Directors. The Company is led and controlled by an experienced Board made up of professionals and entrepreneurs who have a diverse range of business, financial and technical skills and experience. This mix of skills and experience is essential for the successful attainment of the corporate plans and objectives of the. A brief profile of each Director is set out on pages 5 to 9 in the Directors Profile of this Annual Report. The roles of the Chairman and the Managing Director are clearly defined, with each carrying out his duties and responsibilities within the Company. The Chairman heads the Board and is responsible for ensuring the effectiveness of the Board. The Managing Director has overall executive responsibility for the day-to-day business operations and the implementation of the Board s decisions. All the Directors have an equal responsibility for the s operations and corporate accountability. The Independent Non-Executive Directors are independent of Management and are free from any business or other relationship with the Company which could interfere with the exercise of their independent judgment. This ensures an unbiased and independent view in the decision-making process. In the furtherance of their duties, all Directors have access to the advice and service of the Company Secretary, the internal auditors and, if so required, independent professional advisors, at the Company s expense. B o a r d M e e t i n g s Dates for Board meetings are scheduled in advance at the end of the previous financial year to enable Directors to plan ahead and fit the year s meetings into their own schedules. Board meetings are held every quarter and additional meetings are convened as and when necessary. Additional Board meetings are held when there are important corporate exercises or issues that require the urgent consideration or decision of the Board. During the financial year ended 31 March 2012, a total of six (6) Board meetings were held. At the quarterly Board meetings, the Board reviews inter alia, the business issues and performance of the via the Managing Director s Report as well as approves the quarterly financial results of the. The Board also notes the decisions, recommendations and issues deliberated by the Board Committees through the minutes of these committees. The Record of attendance of Board meetings of each Director for the financial year ended 31 March 2012 is as follows: Directors No. of Meetings Attended Dato Hj Zainal Abidin Putih 6/6 Low Gay Teck 6/6 Ferdaus Mahmood 5/6 Dato Ir Dr A Bakar Jaafar 5/6 Dato Muhammad Khairun Aseh 4/6 Dato Hj Ikhwan Salim Dato Hj Sujak 5/6 YM Tengku Maruan Tengku Ariff 6/6 Winnie Chiu Wing Kwan 4/6 Hoong Cheong Thard 5/6

18 A N N U A L R E P O R T Corporate Governance Statement (cont d) B o a r d M e e t i n g s (cont d) To ensure effective conduct of Board meetings, a structured formal agenda and Board meeting papers relating to the agenda are circulated to all Directors prior to each Board meeting. Board meeting papers include progress reports on operations, quarterly results of the and the Company, financial and corporate proposals and minutes of the Board Committees. The Directors are thus given sufficient time to enable them to peruse the matters that will be tabled at the Board meetings, participate in the deliberations of the issues to be raised and to make informed decisions. Senior Management are invited to attend Board meetings to furnish additional details or clarification on matters tabled for the Board s consideration. Advisers and professionals appointed by the Company in relation to corporate exercises may also be invited to attend the Board meetings to provide explanations or clarifications and advice to the Directors. The Company Secretary attends all Board meetings as well as Board Committee meetings and ensures that accurate and proper records of the proceedings of such meetings are kept. B O A R D C O M M I T T E E S To assist the Board in the discharge of its duties effectively, the Board has delegated certain functions to the following Committees, each operating within clearly defined terms of reference: i) Audit Committee The Audit Committee, comprising wholly Non-Executive Directors with a majority being Independent Directors, is responsible for reviewing and monitoring the work of the s internal audit function as well as ensuring that an objective professional relationship is maintained with the external auditors. Further details of the Audit Committee are contained in the Audit Committee s Report in the next section of this Annual Report. ii) Remuneration Committee The Remuneration Committee, which comprises entirely Non-Executive Directors, is authorised to review, assess and recommend to the Board the remuneration of the Executive and Non-Executive Directors in all forms, using other independent professional advice as necessary. The Remuneration Committee met once during the financial year under review. iii) Nominations Committee The Nominations Committee consists exclusively of Non-Executive Directors with a majority being Independent Directors. The Nominations Committee is authorised to identify and recommend the appointment of new directors to the Board. However, decisions on the appointment of new directors are made by the Board of the Company. The Nominations Committee undertakes an annual review of the contribution of each Director through a selfassessment exercise. Upon completion of the review and assessment, the Nominations Committee submits its comments and recommendations for each Director to the Board for further discussion and/or approval, whichever is appropriate. The Nominations Committee met thrice during the financial year under review. R e - e l e c t i o n o f D i r e c t o r s In accordance with the Articles of Association of the Company, all Directors who are appointed by the Board are subject to election by shareholders of the Company at the first Annual General Meeting ( AGM ) after their appointment. The Articles also provide that one-third of all the remaining Directors must retire from office at every AGM and, if eligible, may offer themselves for re-election. This provides an opportunity for shareholders to renew the mandates of each Director. The election of each Director is voted on separately at the shareholders meeting.

19 18 L A N D & G E N E R A L B E R H A D ( H ) Corporate Governance Statement (cont d) D i r e c t o r s T r a i n i n g All Directors of the Company have attended the Mandatory Accreditation Programme ( MAP ). Newly appointed Directors are invited to attend an in-house orientation programme which is usually conducted after their effective appointment date. Pursuant to the amendments to the Listing Requirements in relation to the Continuing Training Programme which came into effect on 1 January 2005, the Directors had decided that they shall continue to attend relevant training programmes conducted by external experts. In addition to this, internal management shall, from time to time, provide updates regarding any latest amendments pertaining to the listing requirements and statutory provisions or new regulations and accounting standards imposed by the relevant authorities. During the current financial year, the Directors have attended appropriate training programmes conducted by external experts to equip themselves with the knowledge to discharge their duties more effectively and to keep abreast of developments in the marketplace. During the current financial year, the Directors have attended the following training programmes: Dato Hj Zainal Abidin Putih Seminar on Banking Insights 8 & 9 April 2011 Conference on CIMB Regional Compliance, Audit & Risk 8 July 2011 Conference on The 2011 Institute of Internal Auditors International July 2011 Seminar on Islamic Finance Business: Global Developments 13 July 2011 Seminar on Impact of the New Financial Institutions Legislations across 14 July 2011 Europe and the US with focus on Basel III Talk on The Cost of the Eurozone Break-up 13 September 2011 Seminar on Board IT Governance & Risk Management 18 & 19 October 2011 Seminar on The New Paradigm Expectations of AC of Internal Audit 6 December 2011 Seminar on Key Amendments to Listing Requirements 2011 and 18 January 2012 Corporate Disclosure Guide Conference on McClosky South African Coals Export 1 & 2 February 2012 Seminar on Electricity Industry Reform Markets and Strategy Discussions on 16 March 2012 Maintaining the Vertically Integrated Utility Low Gay Teck Seminar on Passion for Extraordinary Sales Performance 20 June 2011 Summit on 14th National Housing and Property Summit & 15 September 2011 Congress on FIABCI Asia Pacific Real Estate Congress & 14 October 2011 Seminar on Key Amendments to Listing Requirements 2011 and 18 January 2012 Corporate Disclosure Guide Ferdaus Mahmood Seminar on Planning and Development in Selangor The Way Forward 28 April 2011 Summit on 14th National Housing and Property Summit & 15 September 2011 Talk on Overseas Marketing 5 October 2011 Congress on FIABCI Asia Pacific Real Estate Congress & 14 October 2011 Talk on Singapore Property Market Updates 2 November 2011 Seminar on Key Amendments to Listing Requirements 2011 and 18 January 2012 Corporate Disclosure Guide Talk on Investment Opportunities in Penang 7 March 2012 Dato Ir Dr A Bakar Jaafar Seminar on Key amendments to Listing Requirements 2011 and 18 January 2012 Corporate Disclosure Guide Dato Muhammad Khairun Aseh Seminar on Subprime Mortgage Crisis Avoidable or Inevitable 19 & 20 April 2011 Seminar on Business Innovation 4 July 2011

20 A N N U A L R E P O R T Corporate Governance Statement (cont d) D i r e c t o r s T r a i n i n g (cont d) Dato Hj Ikhwan Salim Dato Hj Sujak Conference on Directors Duties Conference July 2011 Seminar on Green Solutions for Property Development 2011 Greener Cities 4 October 2011 Seminar on Key amendments to Listing Requirements 2011 and 18 January 2012 Corporate Disclosure Guide YM Tengku Maruan Tengku Ariff Seminar on Key amendments to Listing Requirements 2011 and 18 January 2012 Corporate Disclosure Guide Winnie Chiu Wing Kwan International Travel Bureau Asia Conference in Singapore October 2011 Stanford Executive Programme in Leadership Development in USA 21 & 22 January 2012 Hoong Cheong Thard Seminar on Liaoning New Town Development in Hong Kong 25 October 2011 Seminar on Hong Kong Financial Reporting Update in Hong Kong 6 January 2012 D i r e c t o r s R e m u n e r a t i o n The Executive Directors remuneration comprises basic salary and allowances including other customary benefits made available by the. Any salary review takes into account market rates and the performance of the individual and the. The Non-Executive Directors remuneration comprises fees that are linked to their expected roles and level of responsibilities. The Directors annual fees, which are determined by the Board as a whole, are approved by shareholders of the Company at each AGM. The aggregate remuneration of the Directors of the Company categorised into appropriate components for the financial year ended 31 March 2012 is as follows: Meeting Benefits Fees Allowance Salaries in kind Total Directors RM 000 RM 000 RM 000 RM 000 RM 000 Executive 1, ,275 Non-Executive The number of Directors of the Company whose total remuneration falls within the respective bands for the financial year ended 31 March 2012 is as follows: Number of Directors Band Executive Non-executive RM50,000 and below *6 RM50,001 to RM100,000 1 RM100,001 to RM150,000 1 RM450,001 to RM500,000 1 RM800,001 to RM850,000 1 * Includes an independent non-executive Director who resigned during the financial year under review

21 20 L A N D & G E N E R A L B E R H A D ( H ) Corporate Governance Statement (cont d) F i n a n c i a l R e p o r t i n g The Board aims to present a balanced and understandable assessment of the s financial position and prospects in all their reports to shareholders, investors and regulatory authorities. The assessment is achieved primarily through the quarterly financial results and by both the Chairman s Statement and the Managing Director s Review of Operations which are contained in the Annual Report. The quarterly financial results are reviewed by the Audit Committee and approved by the Board before being released to the Bursa Malaysia. The Directors are also responsible for keeping proper accounting records, which disclose with reasonable accuracy at any time the financial position of the, and for ensuring that the financial statements comply with the Companies Act, 1965 and applicable approved Accounting Standards in Malaysia. I n t e r n a l C o n t r o l s The Directors acknowledge their responsibility to maintain a sound system of internal controls covering not only financial controls but also operational and compliance controls as well as risk management. This system is designed to manage, rather than eliminate, the risk of failure to achieve the s corporate objectives, as well as to safeguard shareholders investments and the s assets. The Board seeks regular assurance on the continuity and effectiveness of the internal control system through independent review by the internal and external auditors. To enhance risk management, the Company set up a Risk Management Committee in March 2002, which completed formalising the Risk Management Policy and Framework for the by the end of In 2007, a new Enterprise Risk Management (ERM) framework was introduced to update and further enhance the existing risk management framework. Details of the ERM framework are disclosed in the Statement on Internal Control in the following section of this Annual Report. R e l a t i o n s h i p w i t h E x t e r n a l A u d i t o r s The has established a transparent and professional relationship with the external auditors primarily through the Audit Committee and the Board. The Audit Committee has met with the external auditors in relation to the audit of the annual financial statements without the presence of the Executive Directors and Management twice in respect of the financial year under review. The external auditors are invited to attend the annual general meetings of the Company and are available to answer shareholders queries on the conduct of the audit and the preparation and content of the audit report. The external auditors are also invited to attend other shareholders meetings of the Company to keep themselves informed of the status of the Company s corporate exercises. R e l a t i o n s h i p w i t h S h a r e h o l d e r s a n d I n v e s t o r s The Board recognises the importance of timely dissemination of information to shareholders and investors to ensure that they are well informed of all major developments of the Company and the. Such information is communicated to shareholders and investors through various disclosures and announcements to the Bursa Malaysia, including the quarterly financial results, annual reports and where appropriate, circulars and press releases. The AGM represents the principal forum for dialogue and interaction with shareholders. At every AGM, the Board encourages and welcomes participation from shareholders to ask questions regarding the resolutions being proposed at the meeting and also other matters pertaining to the business activities of the. The Directors, Senior Management and the external auditors are present during these meetings to respond to questions raised by shareholders. At the 48 th AGM held on 10 August 2011, the Managing Director of the Company gave a slide presentation to the shareholders on the s operating and financial performance for the financial year under review which included up-to-date operating activities of the.

22 A N N U A L R E P O R T Corporate Governance Statement (cont d) R e l a t i o n s h i p w i t h S h a r e h o l d e r s a n d I n v e s t o r s (cont d) In compliance with the Main Market Listing Requirements of Bursa Malaysia, all announcements made by the Company to Bursa Malaysia with effect from January 2009 such as the s quarterly financial results, annual reports and other mandatory announcements are available at the Company s website: The website also contains current corporate and non-financial information to provide general information and the on-going business activities of the. YBhg Dato Ir Dr A Bakar Jaafar is the Senior Director of the Company to whom concerns or queries regarding the can be directed. Address YBhg Dato Ir Dr A Bakar Jaafar c/o Land & General Berhad Level 5, Block D, Sri Damansara Business Park, Persiaran Industri, Bandar Sri Damansara Kuala Lumpur : a.bakar.jaafar@land-general.com In addition, to enable the public to forward queries to the Company, the aforesaid Company s website contains the names, contact addresses and telephone number of the following designated personnel: Ng Kee Chye Chief Financial Officer Telephone : Fax : kcng17@land-general.com Lee Siw Yeng Secretary Telephone : Fax : sylee@land-general.com

23 22 L A N D & G E N E R A L B E R H A D ( H ) Statement Of Directors Responsibilities In Respect Of The Audited Financial Statements Directors are required by company law to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the and of the Company at the end of the financial year and of the results of the and of the Company of the financial year then ended. In preparing the financial statements for the year ended 31 March 2012, the Directors have: adopted suitable accounting policies and then applied them consistently; made judgements and estimates that are prudent and reasonable; ensured applicable accounting standards have been followed, subject to any material departure and explained in the financial statements; and prepared the financial statements on the going concern basis unless it is inappropriate to presume that the and the Company will continue in business. The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the and of the Company and to enable them to ensure that the financial statements comply with the Companies Act, The Directors are also responsible for safeguarding the assets of the and of the Company and, hence, for taking reasonable steps for the prevention and detection of fraud and other irregularities. Additional Compliance Information M a t e r i a l C o n t r a c t s There were no other material contracts subsisting at the end of the financial year entered into since the end of the previous financial year by the Company and its subsidiaries which involve the interests of Directors and major shareholders except as disclosed under Note 35 to Note 37 to the Audited Financial Statements. S a n c t i o n s a n d / o r P e n a l t i e s I m p o s e d There were no fines or sanctions imposed on the Company and its subsidiaries, Directors or management by the relevant regulatory authorities. N o n - a u d i t F e e The amount of non-audit fee payable to the external auditors for the financial year ended 31 March 2012 has been reflected under Note 8 to the Audited Financial Statements.

24 A N N U A L R E P O R T Audit Committee Report The Audit Committee was established on 8 August 1991 to act as a Committee of the Board to fulfill its fiduciary responsibilities relating primarily to business ethics, policies and practices, and financial management and controls. M E M B E R S A N D M E E T I N G S The Audit Committee held 6 meetings during the financial year ended 31 March The members of the Audit Committee and the record of their attendance are as follows: Directors/Members Position on the Board No. of Meetings Attended 1 Dato Hj Ikhwan Salim Dato Hj Sujak (1) Chairman of Audit Committee Independent Non-Executive Director 3/3 2 Dato Ir Dr A Bakar Jaafar Independent Non-Executive Director 6/6 3 Mr Hoong Cheong Thard Non-Independent Non-Executive Director 4/6 4 Mr Lau Tiang Hua (2) Chairman of Audit Committee Independent Non-Executive Director 3/3 Note: (1) Dato Hj Ikhwan Salim Dato Hj Sujak was appointed as Chairman of Audit Committee w.e.f. 5 September (2) Mr Lau Tiang Hua ceased to be the Chairman and member of the Audit Committee w.e.f. 5 September 2011 following his resignation as Director of Land & General Berhad. On behalf of the Board, I would like to record our sincere thanks and appreciation for Mr Lau Tiang Hua s past contributions to the Audit Committee. T E R M S O F R E F E R E N C E The terms of reference of the Audit Committee are as follows: Membership 1. The Audit Committee shall be appointed by the Board from amongst their number and shall consist of at least three members, all of whom must be non-executive directors, with a majority of them being independent directors. 2. At least one member of the Audit Committee: a) must be a member of the Malaysian Institute of Accountants; or b) if he is not a member of the Malaysian Institute of Accountants, he must have at least three (3) years working experience and: Must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act 1967; or Must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act 1967; or c) fulfils such other requirements as prescribed or approved by Bursa Malaysia Securities Berhad. 3. The members of the Audit Committee shall elect a Chairman from amongst their number who shall be an Independent Non-Executive Director. 4. In the event of any vacancy in the Audit Committee, within three months of that event, the Board shall appoint new members to make up the minimum number of three members. 5. No alternate director shall be appointed as a member of the Audit Committee. 6. 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 years.

25 24 L A N D & G E N E R A L B E R H A D ( H ) Audit Committee Report (cont d) T E R M S O F R E F E R E N C E (cont d) Authority The Audit Committee is authorised by the Board: 1. To investigate any activity within its terms of reference; 2. To have the resources required to perform its duties; 3. To have full and unrestricted access to information about the Company and the ; 4. To have unrestricted access to both the internal and external auditors and to all employees of the ; 5. To have direct communication channels with the external auditors and person(s) carrying out the internal audit function or activity (if any); 6. To obtain external legal or other independent professional advice as necessary; and 7. To be able to convene meetings with the external auditors, the internal auditors or both, excluding the attendance of other directors and employees, whenever deemed necessary. Functions The functions of the Audit Committee shall be: 1. To review with the external auditors and report to the Board: the audit plan their evaluation of the system of internal controls their audit reports, to ensure that their recommendations regarding management weaknesses are implemented the annual financial statements and recommend the adoption of the financial statements the audit fees 2. To review with the internal auditors and report to the Board: the s internal control procedures, including organisational and operational controls the internal audit s scope of work, functions, competency and resources and that it has the necessary authority to carry out its work the Annual Audit Plan the results of audit findings and other relevant reports the assistance given by the Company s officers to the internal auditors the regular management information and to ensure that audit recommendations regarding management weaknesses are effectively implemented any related party transactions and conflict of interest that may arise within the Company and the including any transaction, procedure or course of conduct that raise questions of management integrity 3. To review, approve and note the following relating to the internal audit function: To review any appraisal or assessment of the performance of members (or the independent professional service provider firm as the case may be) of the internal audit function. To approve any appointment or termination of senior staff members (or the independent professional service provider firm as the case may be) of the internal audit function. To note resignation of internal audit staff members (or the independent professional service provider firm as the case may be) and providing the staff members (or the independent professional service provider firm as the case may be) an opportunity to submit his/their reasons for resigning. 4. To review the s quarterly financial results and year end financial statements, prior to the approval by the board of directors focusing particularly on i) changes in or implementation of major accounting policy changes; ii) significant and unusual events; and iii) compliance with accounting standards and other legal requirements.

26 A N N U A L R E P O R T Audit Committee Report (cont d) T E R M S O F R E F E R E N C E (cont d) Functions (cont d) 5. To review and recommend the appointment of the external auditors. 6. To review on any removal or resignation of the external auditors. 7. To undertake such other functions as may be agreed to by the Audit Committee and the Board. Meetings 1. Meetings shall be held not less than four times a year. 2. The quorum for each meeting shall be two members present and a majority must be independent directors. 3. The Managing Director, the Executive Director, the Chief Financial Officer, the Financial Controller, and the Internal Auditors shall normally attend the meetings. Other Board members and employees may attend the meetings upon the invitation of the Audit Committee. 4. At least twice a year, the Audit Committee shall meet with the external auditors without the presence of management and executive directors. 5. The Company Secretary shall be the Secretary of the Audit Committee. Minutes of each meeting shall be kept and distributed to each member of the Audit Committee and of the Board. 6. The Chairman of the Audit Committee shall report on each meeting to the Board. S U M M A R Y O F A C T I V I T I E S O F T H E I N T E R N A L A U D I T F U N C T I O N A N D T H E A U D I T C O M M I T T E E D U R I N G T H E F I N A N C I A L Y E A R E N D E D 3 1 M A R C H Internal Audit Function The internal audit function of the was carried out by an in-house internal audit department but due to retirement and deployment of staff, the function is subsequently outsourced to Advent Corporate Advisory Sdn Bhd, an independent professional services provider whose principal responsibility is to undertake regular and systematic reviews of the system of internal controls, so as to provide reasonable assurance that such systems continue to operate effectively and efficiently. The Internal Auditors had carried out audits according to the internal audit plan. The following activities were carried out during the financial year: 1. Reviewed the system of internal controls and key operating processes based on the approved annual plan and recommending improvements to the existing system of controls; 2. Ascertained the extent of compliance with established policies, procedures and statutory requirements; 3. Ascertained the extent to which the Company s and the s assets are accounted for and safeguarded from losses of all kinds; 4. Carried out ad hoc audit assignments and special reviews; and 5. Identified opportunities to improve the operations of and processes within the. During the year, the costs incurred for the internal audit function was RM209,679.

27 26 L A N D & G E N E R A L B E R H A D ( H ) Audit Committee Report (cont d) S U M M A R Y O F A C T I V I T I E S O F T H E I N T E R N A L A U D I T F U N C T I O N A N D T H E A U D I T C O M M I T T E E D U R I N G T H E F I N A N C I A L Y E A R E N D E D 3 1 M A R C H (cont d) Summary of Activities of the Audit Committee During the financial year ended 31 March 2012, the Audit Committee performed its duties as set out in its terms of reference. The main activities undertaken by the Audit Committee were as follows: 1. Reviewed and appoint outsourced internal auditor; 2. Reviewed the audit plans for the prepared by the internal auditor; 3. Reviewed the external auditors scope of work and audit plan for the year; 4. Reviewed the internal audit reports, recommendations and management s response, and discussed actions taken with Management to improve the internal control system based on internal audit findings; 5. Reviewed the quarterly unaudited financial results announcements with the Managing Director and the Financial Controller before recommending it for the Board s approval; and 6. Reviewed the audited financial statements of the Company and the prior to the submission to the Board for their consideration and approval (to ensure that the audited financial statements were drawn up in accordance with the provisions of the Companies Act, 1965 and the applicable Financial Reporting Standards in Malaysia). DATO HJ IKHWAN SALIM DATO S HJ SUJAK Chairman of Audit Committee (Independent Non-Executive Director) 29 May 2012

28 A N N U A L R E P O R T Statement On Internal Control I N T R O D U C T I O N The Board of Directors of Land & General Berhad is committed to maintaining a sound system of internal controls for the and is therefore pleased to provide the Statement on Internal Control, which outlines the key elements of this system within the. B O A R D S R E S P O N S I B I L I T Y System of Internal Control The Board of Directors recognises the importance of sound internal controls and risk management practices for good corporate governance. The Board has the overall responsibility for maintaining a sound system of internal control and for reviewing their adequacy and integrity so as to safeguard shareholders investment and the s assets. The system of internal control covers, inter alia, financial, operational and compliance system controls and risk management. However, the system of internal control is designed to manage rather than to eliminate risks that may impede the achievement of the s business objectives. Accordingly, the internal control system can only provide reasonable, and not absolute, assurance against any material misstatement or losses. The has in place an on-going process for identifying, evaluating and managing significant risks that may affect the achievement of business objectives for the year and up to the date of this report. The top five risks are reported to the Board on regular basis for their deliberation. Enterprise Risk Management (ERM) In April 2002, the established a Risk Management Committee ( RMC ) which comprises senior management. Tasked with reviewing and formulating a risk management policy, the Committee reviewed the operations and systems within the and recommended that a risk management policy be adopted. The recommended risk policy has since been approved and adopted for implementation since Updates on the risk policy were done regularly by RMC and assisted by independent external consultants. During the current financial year, in January 2012, an independent external consultant was engaged to assist the Board to conduct review on the effectiveness of existing Risk Management framework. As a result of the reviews, Enterprise Risk Management (ERM) policy, framework and the risk profile were updated and approved by the Board in February The ERM policy forms an integral part of good management practice for the. The purpose of this policy is to foster a proactive risk management culture within the s companies and departments. Compliance to the ERM policy is mandatory. At the date of the annual report, the ERM framework, policy and the risk profile have been implemented and subject to periodic review as and when necessary. Internal Audit Function The internal audit function of the was carried out by an in-house internal audit department but due to retirement and deployment of staff, the function is subsequently outsourced to Advent Corporate Advisory Sdn Bhd, an independent professional services provider, both of which provided the Board with much of the assurance it requires regarding the adequacy and effectiveness of the s system of controls, procedures and operations. Internal audits are undertaken to provide independent assessments of the adequacy, efficiency and effectiveness of the s internal control systems, and reports are made to the Audit Committee on a quarterly basis. The Audit Committee also has full access to both internal and external auditors and receives reports on all audits performed.

29 28 L A N D & G E N E R A L B E R H A D ( H ) Statement On Internal Control (cont d) B O A R D S R E S P O N S I B I L I T Y ( c o n t d ) Internal Audit Function (cont d) The internal audit function reviews the internal controls in the key activities of the s business based on the annual audit plan, which is presented to the Audit Committee for approval. Since the adoption of the risk policy, the internal audit function has taken on a risk-based approach when preparing its audit strategy and plans, after having considered the risk profiles of the operating companies and divisions of the. The audit reports that were tabled to the Audit Committee for their deliberation on quarterly basis include management response and corrective actions taken or to be taken in regard to the specific findings and recommendations. The Management as a whole is responsible for ensuring that the necessary corrective actions on reported weaknesses are promptly taken. The Audit Committee presents its findings regularly to the Board. Other key elements of internal control The other key elements of the s internal control systems are described below: Defined delegation of responsibilities to committees of the Board and to Management, including organizational structures and appropriate authority levels; Documented internal policies and procedures set out in the Procedures & Authorities (GPA) Manual, which are continuously reviewed and improved upon to reflect changes in business structures and processes; The Board receives and reviews regular reports including key operating statistics from the Management on the performance of operating units; A detailed budgeting process requires all business units to prepare budgets annually which are reviewed and approved by the Board; The Board deliberates and approves the quarterly financial information which have been reviewed by the Audit Committee; and In respect of material joint ventures and associated companies, there are Board level representations from the to oversee the administration, operation, performance and executive management of these companies. Financial and operational information of these companies is provided regularly to the Management of the. In addition, one of the s subsidiaries had been accorded the ISO 9001:2008 accreditation for its operational process. R E V I E W O F T H E S T A T E M E N T B Y E X T E R N A L A U D I T O R S The external auditors have reviewed the Statement on Internal Control and reported to the Board that nothing has come to their attention that causes them to believe the statement is inconsistent with their understanding of the process adopted by the Board in reviewing the adequacy and integrity of the group system of internal controls. C O N C L U S I O N The Board is of the view that the system of internal controls being instituted throughout the is sound and effective. Notwithstanding this, reviews of all control procedures will be continuously carried out to ensure the ongoing effectiveness and adequacy of the systems of internal control, so as to safeguard shareholders investments and the s assets.

30 A N N U A L R E P O R T Corporate Social Responsibility AT LAND & GENERAL BERHAD In the pursuit of the Company s business objectives, the Board is not only committed to further appreciate stakeholders value but to contribute, in meaningful ways, to the well being of its employees and the environment and community in which the operates. The Board believes that Corporate Social Responsibility ( CSR ) goes beyond donating money and other resources to worthwhile causes and therefore, the has institutionalised CSR activities in various forms in its day-to-day business operations and will continually make conscious efforts to improve its CSR activities within its means for the betterment of the community and environment. For the financial year ended 31 March 2012, the continued to maintain its on-going CSR activities. W O R K P L A C E The recognises that human capital is an important asset to its success and towards this end, the constantly promotes human capital development. The had undertaken the following : In-house training as well as sponsorship to external training programmes or seminars and conferences conducted by industry professionals were provided to the s employees; Study and exam leave were given to employees who upgrade themselves with new skills and knowledge; and Talks on relevant topics such as Medical talk on causes, risk and prevention of cancer was organised as part of the Staff Development programme. Moreover, the fostered its commitment to build a strong sense of shared welfare among the Land & General family by : Publication of an annual in-house magazine Titian ; Supporting the Land & General Berhad Sports Club and its activities; and Disbursing staff discount for eligible employees for purchase of properties undertaken by the. To recognise employees contribution and loyalty as well as to instill better working relationship amongst the employees and with Management, the Company holds Annual Dinners and celebrates the birthdays of employees on a regular basis. In conjunction with the Annual Dinner, the Company presents long service awards to recognise committed, dedicated and loyal employees. The also prides itself as being an equal opportunity employer by vigilantly guarding against all forms of discrimination and has actively promoted mutual respect among the staff. Aside from compliance with all labour law provisions, an Occupational Safety and Health ( OSH ) Committee has been in operation since 1995 to organise activities and address OSH issues of employees to provide a safe workplace. The OSH Committee meets regularly and had initiated various activities for the benefit of the employees of the which included regular health and safety programmes such as fire drills and safety checks on fire-fighting equipment. C O M M U N I T Y As part of its social responsibility to the community, the endeavours to continuously give its full support to events that are organised by the Bandar Sri Damansara Residents Association ( BSDRA ) which are beneficial to the local community. The following efforts have been undertaken: The Sri Damansara Club, which is wholly owned by the Company, allows the BSDRA complimentary use of the Club s function rooms for holding their meetings such as the BSDRA s monthly committee and annual general meetings and also sponsors refreshments during the said meetings. The Sri Damansara Club also makes available its swimming pool for a water therapy programme for special children.

31 30 L A N D & G E N E R A L B E R H A D ( H ) Corporate Social Responsibility (cont d) AT LAND & GENERAL BERHAD C O M M U N I T Y ( c o n t d ) Through its wholly-owned subsidiary, Sri Damansara Sdn Bhd ( SDSB ), the Company, had for a number of years, provided a piece of land in Bandar Sri Damansara belonging to SDSB for the BSDRA s office and a police beat. Through the combined efforts of SDSB, the BSDRA and the police, the police beat was subsequently upgraded to a police station on 11 January 2009 to cater to the needs of the growing population in Bandar Sri Damansara. The new police station is located adjacent to the BSDRA s office. Hitherto, the Company does not charge any rental for the usage of the land which is currently occupied by the BSDRA s office and the new police station. The also extends a hand to the poor and the less fortunate especially to the orphanages. Through Sekolah Sri Bestari, which is owned by its wholly-owned subsidiary, a Majlis Berbuka Puasa celebration was held during the year for children from the Rumah Baitul Kasih. The Company gave a token donation to the said orphanage and each of the 58 orphans who attended the party on 19 August 2011 received duit raya which was generously donated by the students parents of Sekolah Sri Bestari. In addition, the Sekolah Sri Bestari s students held a Canteen Day 2011 on 20 October 2011 and managed to raise RM400 which was donated to Tastputra Perkim, a center for spastic children. Furthermore, the has maintained the Tabung Amanah Land & General Berhad which was set up in 1996 as a means whereby the can channel funds towards social development and the preservation of the environment. The Board of the Company had decided to distribute the existing funds in the Tabung to worthwhile educational purposes. E N V I R O N M E N T As for caring for the environment, the employees have been putting in considerable efforts from reusing paper in the office, switching off lights and electrical equipment during the lunch hour to the integration of the environmental dimension in project planning, development and implementation inter alia, as much by following the natural topography and by maintaining the verdure of development site, and not going against them. Respect for the environment has been fostered in the employees of the through informal discussions and developing environment-sustaining projects. The Company is seriously working towards developing green sustainable buildings in one of its upcoming projects and hopefully, to obtain the Green Building index rating. M A R K E T P L A C E The conducts its business in accordance with a high standard of business ethics and in compliance with all relevant legislation. The continues to concentrate on the development and adoption of good corporate governance in all aspects of its business operations. Indeed, the commitment to CSR permeates the entire organisation and all its activities, including corporate governance and the practice of good business ethics, because it is more than just a mission. For the, CSR is both a moral obligation and a collective responsibility.

32 Financial Statements Directors Report Statement by Directors Statutory Declaration Independent Auditors Report Statements of Comprehensive Income Statements of Financial Position Consolidated Statement of Changes in Equity Company Statement of Changes in Equity Statements of Cash Flows Supplementary Information