(5507-H) Building Value For Tomorrow

Transcription

1 (5507-H) Building Value For Tomorrow

2 CONTENTS COVER RATIONALE 2 Corporate Information 3 Five-Year Performance Highlights 4 Corporate Diary 5 Directors Profile 10 Chairman s Statement 12 Managing Director s Report 17 Corporate Governance Statement 24 Statement of Directors Responsibilities 24 Additional Compliance Information 25 Audit Committee Report 29 Statement on Risk Management and Internal Control 31 Corporate Social Responsibility 33 Financial Statements 114 Analysis of Shareholdings 116 List of Properties 117 Notice of Annual General Meeting Proxy Form The theme Building Value For Tomorrow is inspired by Land & General s visionary management style. We are constantly planning for the future and creating end products and services which are distinctive from the rest. We leverage on our ability to innovate and reward our customers with an improved quality of life and peace of mind. Optimistic and bold, the theme captures the essence of our Company s confidence in our ability to enrich all the stakeholders of Land & General Bhd.

3 CORPORATE INFORMATION DIRECTORS Dato Hj Zainal Abidin Putih Chairman Low Gay Teck Managing Director Ferdaus Mahmood Executive Director Dato Ir Dr A Bakar Jaafar Dato Hj Ikhwan Salim Dato Hj Sujak YM Tengku Maruan Tengku Ariff Wing Kwan Winnie Chiu Hoong Cheong Thard SECRETARIES Wong Wai Foong (MAICSA ) Lim Poh Yen (MAICSA ) Lee Siw Yeng (MAICSA ) AUDIT COMMITTEE Dato Hj Ikhwan Salim Dato Hj Sujak Chairman Dato Ir Dr A Bakar Jaafar Hoong Cheong Thard NOMINATING COMMITTEE Dato Hj Zainal Abidin Putih Chairman Dato Ir Dr A Bakar Jaafar Wing Kwan Winnie Chiu REMUNERATION COMMITTEE Dato Ir Dr A Bakar Jaafar Chairman Hoong Cheong Thard Wing Kwan Winnie Chiu REGISTERED OFFICE 8trium, Level 21 Menara 1 Jalan Cempaka SD 12/5 Bandar Sri Damansara Kuala Lumpur Tel : Fax : CORPORATE OFFICE 8trium, Level 21 Menara 1 Jalan Cempaka SD 12/5 Bandar Sri Damansara Kuala Lumpur Tel : Fax : lgb@land-general.com Website : AUDITORS Ernst & Young Chartered Accountants LISTING Main Market of Bursa Malaysia Securities Berhad SHARE REGISTRARS 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 FIVE-YEAR PERFORMANCE HIGHLIGHTS FY 2013 FY 2012 FY 2011 FY 2010 FY 2009 OPERATING RESULTS (RM 000) Revenue 216, ,799 44,202 30,214 37,611 Profit before tax 72,761 43,499 13,878 30,950 17,714 Profit after tax 57,177 33,120 10,213 29,682 15,315 Profit attributable to owners of the Company 43,969 30,369 10,213 29,682 15,315 KEY FINANCIAL POSITION DATA (RM 000) Total assets 549, , , , ,572 Total borrowings 66,764 57, ,264 Shareholders fund 327, , , , ,168 Total equity 349, , , , ,168 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 (%) 16.36% 11.35% 3.98% 12.80% 7.65% Return on Total Assets (%) 13.24% 9.14% 4.00% 9.79% 6.75% Gearing ratio (times) Price to earnings ratio (times) * The capital reduction exercise was effected on 21 October 2009 REVENUE (RM 000) ,293 PROFIT BEFORE TAX (RM 000) , , , , , , , , ,714 BASIC EARNINGS PER SHARE (RM) NET ASSETS PER SHARE (RM)

5 CORPORATE DIARY APRIL Extraordinary General Meeting ( 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%-owned 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. Retirement of Ms Lim Fong Een as Secretary of the Company. 5 SEPTEMBER th Annual General Meeting ( AGM ) 28 NOVEMBER Appointment of Dato Ir Dr A Bakar Jaafar as Senior Independent Director of the Company. 9 APRIL Announcement on the details of new corporate proposals: (i) Proposed renounceable rights issue of RM77,779,589 nominal value of five (5)- year, 1%, irredeemable convertible unsecured loan stocks ( ICULS ) at 100% of the nominal value of RM0.13 each on the basis of RM0.13 nominal value of the ICULS for every one (1) existing ordinary share of RM0.20 each in L&G held on an entitlement date to be determined and announced later ( Proposed Rights Issue of ICULS ); and (ii) Proposed acquisition of one (1) block of thirteen (13)-storey stratified office floors being constructed over a piece of freehold land held under Geran 825, Lot No. 3, Presint 3, town and district of Putrajaya, state of Wilayah Persekutuan Putrajaya by Maple Domain Sdn Bhd, a wholly-owned subsidiary of L&G, from Mayland Avenue Sdn Bhd, a whollyowned subsidiary of Malaysia Land Properties Sdn Bhd, for a total cash consideration of RM72,485,000 ( Proposed Acquisition ). 20 MAY Submission to Securities Commission Malaysia (Private Debt Securities) for the proposed issuance of the ICULS pursuant to the Proposed Rights Issue of ICULS under the Guidelines on Private Debt Securities. Submission to Bursa Malaysia Securities Berhad ( Bursa Securities ) for the admission of the ICULS to the Official List of Main Market of Bursa Securities and listing of and quotation for the ICULS and listing of and quotation for the new L&G Shares to be issued arising from the full conversion of the ICULS on the Main Market of Bursa Securities. 17 JUNE Approval of the proposed issuance of the ICULS pursuant to the Proposed Rights Issue of ICULS under subsection 214(1) of the Capital Markets & Services Act 2007 by Securities Commission Malaysia (Private Debt Securities) vide its letter dated 17 June JUNE Approval for the admission to the Official List and the listing and quotation of the Rights ICULS to be issued pursuant to the Proposed Rights Issue of ICULS and approval for the listing of and quotation for up to 598,304,530 new L&G Shares to be issued pursuant to the exercise of the ICULS by Bursa Securities vide its letter dated 27 June JULY Announcement on the resignation of Dato Muhammad Khairun Aseh as Director of L&G w.e.f. 3 June JULY EGM in relation to the Proposed Rights Issue of ICULS and Proposed Acquisition. Shareholders approval obtained at the EGM in respect of the Proposed Rights Issue of ICULS and Proposed Acquisition. 6 AUGUST Announcement on the execution of the Trust Deed constituting the terms and conditions of RM77,779,589 nominal value of five (5)-year, 1%, irredeemable convertible unsecured loan stocks at 100% of the nominal value of RM0.13 each to be issued pursuant to the Proposed Rights Issue of ICULS. 7 AUGUST Announcement on the acquisition of the entire issued and paid up share capital comprising 2 ordinary shares of RM1.00 each fully paid in Pillar Quest Sdn Bhd (Company No M) as new subsidiary of L&G. 15 AUGUST Announcement on the entitlement date for the Rights Issue of ICULS. 25 SEPTEMBER th AGM 4

6 DIRECTORS PROFILE DATO HJ ZAINAL ABIDIN PUTIH Independent Non-Executive Chairman Dato Hj Zainal Abidin Putih, a Malaysian aged 67, 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 from 2003 until He had also served in Government Agencies as the Chairman of Pengurusan Danaharta Nasional Berhad, a member of the Malaysian Communications & Multimedia Commission and a member of the Investment Panel of the Employees Provident Fund. Dato Hj Zainal is the Chairman of CIMB Bank Berhad, CIMB Bank (L) Ltd and sits on the board of CIMB Group Holdings Berhad, CIMB Investment Bank Berhad, Southeast Asia Special Asset Management Berhad (SEASAM) and CIMB Group Sdn Bhd. 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 a trustee of the National Heart Institute Foundation (IJNF) and the Perdana Leadership Foundation, and is a member of Perbadanan Putrajaya. 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 Nominating Committee of L&G. 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. 5

7 DIRECTORS PROFILE (CONT D) LOW GAY TECK Managing Director FERDAUS MAHMOOD Executive Director Mr Low Gay Teck, a Malaysian aged 48, was appointed 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 Group which he joined in In 2002, he was appointed Director of the Mayland Group and assumed the position of Managing Director in Mr Low has been involved in property development and project management for the past 25 years, handling and implementing projects such as residential, commercial, shopping complex, hotel, golf course, condominium and service apartments. 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 Currently, Mr Low sits on the Boards of a few subsidiaries of L&G and is a committee member of the Tabung Amanah Land & General Berhad. Encik Ferdaus Mahmood, a Malaysian aged 58, was appointed 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. 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 six (6) out of six (6) Board meetings held during the financial year ended 31 March Currently, he sits on the Boards of a few subsidiaries of L&G. 6

8 DIRECTORS PROFILE (CONT D) DATO IR DR A BAKAR JAAFAR Senior Independent Non-Executive Director DATO HJ IKHWAN SALIM DATO HJ SUJAK Independent Non-Executive Director Dato Ir Dr A Bakar Jaafar, a Malaysian aged 63, was appointed Director of L&G on 18 October 1999 and redesignated as the Senior Independent Director of L&G on 28 November 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 at 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 continued 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 (UTM) at Perdana School of Science, Technology and Innovation Policy, as well as Co-Chair UTM Ocean Thermal Energy Centre (OTEC) Research Group. 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. Dato Hj Ikhwan Salim Dato Hj Sujak, a Malaysian aged 56, was appointed 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 Group 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 six (6) out of six (6) Board meetings held during the financial year ended 31 March He is the Chairman of Audit Committee of L&G. He attended four (4) out of six (6) Board meetings held during the financial year ended 31 March Currently, Dato Ir Dr A Bakar sits on the Boards of several private limited companies and is the Chairman of the Remuneration Committee as well as a member of the Audit Committee and the Nominating Committee of L&G. 7

9 DIRECTORS PROFILE (CONT D) YM TENGKU MARUAN TENGKU ARIFF Independent Non-Executive Director HOONG CHEONG THARD Non-Independent Non-Executive Director YM Tengku Maruan Tengku Ariff, a Malaysian aged 60, was appointed 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 Mr Hoong Cheong Thard, a Malaysian aged 44, was appointed 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 ) 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 six (6) 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. 8

10 DIRECTORS PROFILE (CONT D) WING KWAN WINNIE CHIU Non-Independent Non-Executive Director Ms Wing Kwan Winnie Chiu, a Permanent Resident of Malaysia aged 33, 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 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 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 has accumulated considerable years of experience in the property development business covering various aspects of project development and retail management. Ms Winnie Chiu is currently, the President and Executive Director of Dorsett Hospitality International Limited (formerly known as Kosmopolito Hotels International Limited), a company listed on the Hong Kong Stock Exchange. Ms Winnie Chiu also sits on the Boards of several private limited companies which are incorporated in Malaysia. Ms Winnie Chiu is the daughter of YBhg Tan Sri Dato David Chiu, who is the CEO of the Mayland Group 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 Ms Winnie Chiu was appointed member of the Nominating Committee and Remuneration Committee of L&G on 10 July 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. 9

11 CHAIRMAN S STATEMENT to RM72.8 million, from RM43.5 million In keeping with this strong performance, the Group s pre-tax profit jumped 67.4% a year ago OVERVIEW Our country clocked a 5.6% growth in economy in 2012 in the face of an environment where advanced countries is seen struggling amidst global economic uncertainty, according to reports by Bank Negara Malaysia. With the lingering Eurozone crisis still very much on our radar and the United States battling to revive its economy, we have stepped into 2013 cautiously. Double-digit growth in domestic demand and a conscious effort to slowly liberalise sub-sectors of our economy has been a catalyst for Malaysia s resilient economy. The Government is set on climbing the economic ladder with a diverse set of Government Transformation Programmes and Economic Transformation Programmes that aim to place Malaysia as a significant economic force in the coming years. The property sector in Malaysia faced the impact of cooling measures this year, following tightening measures by Bank Negara. Cooling measures have been felt across Asia in the past few years, sending a strong signal that Government and policy makers desire stable and sustainable growth. Nevertheless, the conclusion of the 13th General Election has brought renewed confidence to investors and buyers and released pent-up demand for property. 10

12 CHAIRMAN S STATEMENT (CONT D) FINANCIAL HIGHLIGHTS We are pleased to report that the Group s revenue grew 65.4% to RM216.3 million for the year ended 31 March 2013, from RM130.8 million reported the year before. In keeping with this strong performance, the Group s pre-tax profit jumped 67.4% to RM72.8 million, from RM43.5 million a year ago. Profits and revenue were principally derived from our property division, led by the successful completion of the 8trium, and the two on-going development projects namely The Elements@Ampang and Damansara Foresta. The Property division saw its revenue rise 77.2% to RM191.5 million for the year, from RM108.1 million before. This sterling effort pushed the division s pretax profit higher by 51.8% to RM65.9 million from RM43.4 million the previous year. Our Education division continued to contribute a stable revenue of RM11.8 million for the period, while pre-tax profit eased 5.7% to RM5.0 million. The Other Business division grew its revenue by 15.0% to RM13.0 million, and returned to the black with a pre-tax profit of RM1.9 million against a loss of RM5.1 million in the previous year. The strong performance by Land & General demonstrates the continued growth of the Group as an astute entrepreneur with the ability to capitalize on changing business environments and opportunities in Malaysia. CONTINUED GROWTH We have successfully completed 8trium on schedule in the quarter ended September We are also proud to see Damansara Foresta clinching the award for Best Landscape Architecture in 2013 for Malaysia and the Asia Pacific region by the International Property Awards. Our latest in the pipeline development project, Tuanku Jaafar Golf and Country Resort (TJGCR) is an upmarket residential development in Negri Sembilan on a 200 acre site. TJGCR has an estimated Gross Development Value of close to RM600 million and is scheduled to launch in the first half of Stretching our muscles beyond Malaysia is a project in Australia, a joint venture under Hidden Valley Australia Lty Ltd (HVA) covering an area of 2,500 acres located north of Melbourne. Key features include a residential retirement estate. ACKNOWLEDGMENT To our customers, business associates, government authorities and valued shareholders, thank you for your continued support and cooperation. To fellow Board members, the management and our employees, thank you for the good work that has contributed to greater achievements each year. We look forward to our continued relationship and a fruitful year ahead for everyone. On behalf of the Board, I would like to express our thanks to Dato Muhammad Khairun Aseh, who resigned as Director on 3 June 2013, for his contribution and dedication to the Group. We wish him well in his future endeavours. Dato Hj Zainal Abidin Putih Chairman 20 August

13 MANAGING DIRECTOR S REPORT This strong performance comes on the back of a 65.4% rise in revenue to RM216.3 million, against RM130.8 million before BUSINESS AND OPERATIONS Who We Are L&G is a property development and investment group with total assets of almost RM550 million and more than 300 employees. We conduct our business through our Property and Education divisions, with minor activities in other areas including oil palm cultivation and clubhouse management under a division for Other Businesses. Our core property development business is in Malaysia, focused on the Greater Klang Valley and Seremban. Overseas, we are involved in a joint venture development in Melbourne, Australia, known as Hidden Valley. Objectives & Strategy Since 2009, L&G has focused on a philosophy of developing high-rise residential properties which provide with innovative and functional layouts together with comprehensive and state-of-the-art facilities and a high standard of security. In our residential development projects, we focus on our properties sustainability and liveability while supporting continued capital appreciation in the future. L&G has since explored ways to strengthen its property investment segment, with a view to building a portfolio to provide a steady income stream for the future. It is the Group s ongoing effort to seek suitable landbank in the right locations in keeping with its objective of driving its continued robust growth. Financially, it is L&G s goal to reposition itself as a property player from mid-sized to large market capitalisation on Bursa Malaysia through both organic growth and via acquisitions. REVIEW OF FINANCIAL RESULTS OVERVIEW OF GROUP RESULTS Revenue Profit/(loss) before tax FY2013 FY2012 FY2013 FY2012 RM 000 RM 000 RM 000 RM 000 Property Division 191, ,149 65,875 43,376 Education Division 11,816 11,392 4,983 5,261 Others 12,985 11,258 6,631 (1,973) Share of results of jointly controlled entities - - (4,728) (3,165) 216, ,799 72,761 43,499 Summary L&G posed an 67.4% jump in pre-tax profit to RM72.8 million for the year ended 31 March 2013, from RM43.5 million in the year before, with the property division being the single largest contributor. This strong performance comes on the back of a 65.4% rise in revenue to RM216.3 million, against RM130.8 million before. 12

14 MANAGING DIRECTOR S REPORT (CONT D) FY 2013 FY 2012 FY 2011 FY 2010 FY 2009 OPERATING RESULTS (RM'000) Revenue 216, ,799 44,202 30,214 37,611 Profit before tax 72,761 43,499 13,878 30,950 17,714 Profit after tax 57,177 33,120 10,213 29,682 15,315 Profit attributable to owners of the Company 43,969 30,369 10,213 29,682 15,315 Revenue and Pre-tax Profit The strong rise in the group s revenue and pre-tax profit arose from the successful completion of the 8trium, coupled with the sales and development of The Elements@Ampang and Damansara Foresta Phase 1 during the financial year under review. 8trium, The Elements@Ampang and Damansara Foresta contributed RM189.6 million (2012: RM80.4 million) to the property division s revenue, and RM66.2 million (2012: RM27.9 million) to pre-tax profit. Revenue 89% 6% 5% The Education division s revenue remained stable, posting a revenue of RM11.8 million (2012: RM11.4 million). Its pre-tax profit eased slightly from RM5.3 million to RM5.0 million, mainly due to the cost of implementing its on-going internationalisation programme. Our division for Other Businesses registered a revenue of RM13.0 million (2012: RM11.3 million) and a pre-tax profit of RM1.9 million (2012: pre-tax loss of RM5.1 million). This was mainly due to the exceptional income of:- a special dividend of RM2.6 million received from its quoted investments in Vietnam Industrial Investments Limited; and a write back of the provision for redemption of land no longer required of RM12.3 million. As at the balance sheet date, the Group has a low gearing of 0.2 times, with a zero net gearing. Together with our healthy cash and bank balances of RM172.4 million (2012: RM million), we are in a strong position for future acquisitions. Pre-tax Profit Gearing RM'000 90% 3% Property Education Others 7% FY 2013 FY 2012 Deposits, Cash & Bank Balances 172, ,802 Borrowings 66,764 57,511 Shareholders' Funds 327, ,451 Gearing Ratio (times) Growth in Net Assets per share RM'000 FY 2013 FY 2012 FY 2011 FY 2010 FY 2009 Total Assets 549, , , , ,572 Shareholders' Fund 327, , , , ,168 Issued And Paid Up Share Capital 119, , , , ,305 Net Assets per share (RM)

15 MANAGING DIRECTOR S REPORT (CONT D) The Group s robust growth is reflected in the continued rise in its total and net assets as well as the improvement in net assets per share. The Group s total assets grew by more than 15% during the year to RM549.7 million (2012: RM476.0 million), while net assets rose by 15.8% to RM327.0 million (2012:RM282.5 million). Net assets per share grew 17.0% to 55 sen (2012:47 sen). Total Assets (RM 000) , , , , ,572 Cumulatively, total assets have grown by more than 56% over the five-year period from 2009 to 2013, while net assets grew 63.4% over the same period. Net assets per share grew almost 66.7% over the five years. With the scheduled completion of Elements@Ampang in the first half of 2014, coupled with the on-going sales and development of Damansara Foresta as well as other projects in the pipeline, we expect this growth to continue strongly going forward. Net Assets per Share (RM) Net Assets Net Assets per share Net Assets (RM Million) REVIEW OF OPERATING ACTIVITIES From a global perspective, the financial year under review was dominated by the global economy s slow recovery. The European sovereign debt crisis remained a concern amid the absence of concerted action, while in the US, growth remained lacklustre. In Asia, growth continued to be driven by China, the world s second largest economy, which, however, has begun showing signs of moderation. The Malaysian economy grew by 5.6% in Robust domestic demand and strong fiscal stimulus contributed to the strong economic growth which boosted the construction sector. The property sector, in Malaysia and elsewhere in Asia, faced the impact of cooling measures introduced to respond to large inflows of capital. Nonetheless, the interest rate environment remains favourable for continued growth in the property sector. 14

16 MANAGING DIRECTOR S REPORT (CONT D) PROPERTY DIVISION Our Property Division comprises two streams of activities under Property Development and Property Investment. The companies involved in property development are:- 100%-owned Sri Damansara Sdn Bhd (8trium and Damansara Foresta) 50.01%-owned Elite Forward Sdn Bhd (The Elements@Ampang) 100%-owned Bright Term Sdn Bhd (Tuanku Jaafar Golf and Country Resort development project- in the pipeline) 50%-owned Hidden Valley Pty Ltd (Hidden Valley) 8trium 8trium is L&G s premium integrated commercial project in Bandar Sri Damansara, Kuala Lumpur, with 276 office suites in two business suite towers. The office suites range in size between 500 and 1,040 square feet. The two-level retail podium with an area of 108,073 square feet has been taken up by retailer Courts Mammoth under a long-term lease for their first Court Mega Store in Malaysia. L&G has in May 2013 moved its corporate and operations offices to 8trium occupying Level of Menara 1. Damansara Foresta Damansara Foresta is a high-rise residential development set amid 42 acres of lush natural greenery, located in L&G s flagship project and mature township, Bandar Sri Damansara in Kuala Lumpur. In keeping with L&G s philosophy of innovative design, Damansara Foresta s key feature is the preservation of existing greenery to support contemporary living amid nature. Some 21 acres has been turned into a private green reserve with eco-friendly outdoor facilities such as a jungle track, tree house, gazebos, yoga area and others. We are very proud that Damansara Foresta was awarded the Best Landscape Architecture in 2013 for Malaysia and the Asia Pacific region by the International Property Awards. The 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 8 to 10 years. Sri Damansara Sdn Bhd undertook a soft launch of Phase 1 in January 2012, which was met with a very good response. Phase 1 comprises four residential tower blocks with 928 units ranging from 1,425 to 1,610 square feet in size. Buyers took up some 80% of the units in the first two blocks opened for sale in the soft launch. To date, close to 90% of the 928 units have been taken up. Currently, the construction of Phase 1 is approximately 20% completed. The Elements@Ampang The Elements@Ampang is a premier lifestyle residential serviced apartments, comprising two 42-storey towers consisting of 1,040 units, ranging in size from 520 to 1,570 square feet. The Elements@Ampang is imaginatively designed for the urban elite, and is a choice collection of freehold service apartments at Jalan Ampang s prestigious embassy row district. Without having to leave the development, residents can still get their adrenaline pumping and occupy their time in the comfort and safety of the Elements many facilities - such as gym, infinity pool, sauna, jacuzzi and more. A joint development project with the Mayland Group, the project has an estimated GDV of RM760 million. The project, which commenced works in January 2011, is scheduled for completion in 2014, with vacant possession targetted for the second quarter of Tuanku Jaafar Golf and Country Resort This project is L&G s latest development project, an upmarket residential development in Negri Sembilan. The Tuanku Jaafar Golf and Country Resort (TJGCR) will have a modern tropical concept with bungalows, link cluster houses, semi-detached cluster homes and apartments. Development order for the TJGCR project has been obtained and it is scheduled for launching in the 1st half of Hidden Valley This is currently L&G s sole overseas project. Covering an area of 2,500 acres north of Melbourne, the project offers residential bungalow lots, a retirement estate, hotel and retail centre built around an 18-hole golf course and clubhouse, a country club and equestrian centre. Hidden Valley is creating a sustainable township with environmentally friendly infrastructure and green design concepts to ensure long-term sustainability, as well as facilitating a lifestyle of health by providing a holistic environment that is the ideal setting for the sustainable way of life our residents desire. 15

17 MANAGING DIRECTOR S REPORT (CONT D) EDUCATION DIVISION Sekolah Sri Bestari is a private school established in December 1995 under L&G s wholly-owned subsidiary Lang Education Sdn Bhd. It is located on a 15-acre site in L&G s flagship Bandar Sri Damansara township. Comprising a kindergarten, primary and secondary schools, Sekolah Sri Bestari is central to L&G s commitment to the homeowners of Bandar Sri Damansara, contributing towards their children s futures and enhancing the value of their homes. What perhaps make Sekolah Sri Bestari so special is our family culture. A large number of our students go through kindergarten, primary and secondary, and are highly successful in their examination results. Like any family, we provide a safe, happy and secured environment for our dear students to grow and learn together. To meet the needs of the school s more than 1,000 students, the school has implemented an internationalisation programme since January 2012, with the recruitment of some foreign teacher mentors. OTHER BUSINESSES Plantation L&G has close to 2,500 acres of estate land operated under its wholly-owned subsidiary, Clarity Crest Sdn Bhd. Of the total, 56% is planted with oil palm - 1,384 acres and 32% with rubber acres. The plantations provide a steady flow of income to the group. Clubhouse The Sri Damansara Club is wholly owned by L&G, and is part of its commitment to the homeowners of Bandar Sri Damansara, as a continuing contribution towards the enhancement of the value of their homes. FORWARD LOOKING STATEMENTS Priorities and Progress L&G has set on renewing its resilience and expanding its ability to meet future challenges by bolstering its balance sheet and financial health. With that underway, the group is planning to embark on a new phase, which is to reposition itself as a mid-sized to large property player by market capitalisation on Bursa Malaysia via organic growth, fund raising exercise and acquisitions. Fund Raising Exercise In April 2013, L&G proposed to undertake a fund-raising exercise where the proceeds would be utilised to part finance the acquisition of a 13-storey office building in Precinct 3, Putrajaya, for RM72.48 million cash. This is an exercise which would meet the group s objective of growing its property investment portfolio to build a stream of recurring income and to boost its market capitalization where both the asset base and the capital base of L&G will be further strenghened. These proposals were approved by shareholders at an Extraordinary General Meeting held on 31 July The fund raising exercise is a renounceable rights issue of RM77.78 million nominal value of 5 year, 1%, Irredeemable Convertible Unsecured Loan Stocks (ICULS) at 100% of the nominal value of RM0.13 each. The rights issue will be on the basis of RM0.13 nominal value of the ICULS for every one existing share of RM0.20 each in the Company held on the entitlement date which is on 29 August The 13-storey office building proposed to be acquired through its wholly-owned subsidiary Maple Domain Sdn Bhd and is scheduled for completion with Certificate of Completion and Compliance in the second half of Outlook Our unbilled GDV and current development pipeline projects as at to-date are in excess of RM3.0 billion in GDV which is sufficient for our property development in the coming years. In the meantime, we will continue to search for attractive development opportunities to replenish our pipeline going forward. We are confident that the Property Division will continue to expand with the on-going Elements@Ampang, the newly launched Damansara Foresta and the soon to be launched Tuanku Jaafar Golf and Country Resort project in Negeri Sembilan. While risk remains of instability in the global financial system, prospects for the global economy appear better than in At home, Bank Negara has forecast that Malaysia s economy will grow between 5% and 6%, anchored by resilient domestic demand and a gradual improvement in the external sector. L&G remains optimistic that it will sustain its performance in the year ahead. The Group is confident that it will remain resilient with a continuous stream of sustainable projects in the pipeline. Low Gay Teck Managing Director August 2013

18 CORPORATE GOVERNANCE STATEMENT The Board of Directors ( the Board ) of Land & General Berhad ( the Company ) is fully committed to the Principles and Recommendations of the Malaysian Code on Corporate Governance 2012 ( MCCG 2012 ). The Board constantly strives to ensure that good corporate practices are carried out throughout the Group as fundamental to fulfilling its responsibilities, which include protecting and enhancing shareholder value as well as the financial performance of the Company. Composition of the Board of Directors The Board currently comprises eight (8) Directors of whom six (6) are Non-Executive Directors and two (2) are Executive Directors. The Board s composition is well balanced with four (4) Independent Non-Executive Directors, two (2) 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 Group. A brief profile of each Director is set out on pages 5 to 9 in the Directors Profile of this Annual Report. Gender Policy The Company has not developed any gender diversity policy and does not practise any gender biasness as both genders are given fair and equal treatment. Any new appointments to the Board shall always be based on merits, capability, experience, skill-sets and integrity. Board Charter The primary objective of the Company s Board Charter is to set out the roles and responsibilities of the Board, the division of authority and responsibilities of the Board and Management, terms of reference and composition of board committees, and other administrative policies and procedures in relation to the operation of the Board as a whole. The Board will regularly review the Board Charter to ensure it remains consistent with the Board s objective and responsibilities, and all the relevant standards of corporate governance. The Board Charter can be found from the Company s website at Code of Conduct The Company has adopted a Code of Conduct for Directors relating to ethical practices. A separate set of Code of Ethical Practices relating to Group s business operations was formulated for Management and staff. The Code of Conduct for Directors can be found from the Company s website at Roles and Responsibilities 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 Group s operations and corporate accountability. The details of the roles and responsibilities of the Chairman and Managing Director are clearly stated in the Board Charter of the Company. In furtherance of their duties, all Directors have access to the advice and service of the Company Secretaries, the internal auditors and, if so required, independent professional advisors, at the Company s expense. Independent Directors 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. The Board, in principle, agreed that the tenure of an independent director should not exceed a cumulative term of 9 years as long tenure may impair independence. 17

19 CORPORATE GOVERNANCE STATEMENT (CONT D) Independent Directors (cont d) However, on exceptional circumstances, the Board would seek shareholders approval at the Company s annual general meeting to obtain shareholders mandate for an independent director who had served more than 9 years to continue in office as independent director after making the necessary assessment on the performance of the said independent director. In accordance with Recommendation 3.1 of the MCCG 2012, the Board had conducted evaluation, reviewed and assessed the performance and independence of all the Independent Directors (including Dato Ir Dr A Bakar Jaafar who has served the Board for a cumulative term of more than 9 years) and was satisfied that all the Independent Directors met with the independence criteria stated under Paragraph 1.01 of the Main Market Listing Requirements ( Listing Requirements ) of Bursa Malaysia Securities Berhad ( Bursa Securities ). Board Meetings 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 2013, 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 Group via the Managing Director s Report as well as approves the quarterly financial results of the Group. 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 2013 is as follows : Directors No. of Meetings Attended Dato Hj Zainal Abidin Putih 6/6 Low Gay Teck 6/6 Ferdaus Mahmood 6/6 Dato Ir Dr A Bakar Jaafar 4/6 Dato Muhammad Khairun Aseh * 5/6 Dato Hj Ikhwan Salim Dato Hj Sujak 6/6 YM Tengku Maruan Tengku Ariff 6/6 Wing Kwan Winnie Chiu 4/6 Hoong Cheong Thard 6/6 Note: * Dato Muhammad Khairun Aseh resigned w.e.f. 3 June 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 Group and the Company, financial and corporate proposals and minutes of the Board Committees. The Directors are thus given sufficient time to peruse the matters that will be tabled at the Board meetings to enable them to 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 Board appointed qualified Company Secretaries to support the Board in carrying out its roles and responsibilities. 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. 18

20 CORPORATE GOVERNANCE STATEMENT (CONT D) Board Committees To assist the Board in the discharge of its duties effectively, the Board has delegated certain functions to the following Board Committees, each operating within clearly defined terms of reference and the details of which could be found in the Board Charter, a copy of which is posted on the Company s website. Here are the summary of key functions of the Company s Board Committees and activities which had taken place: 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 Group 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) Nominating Committee The Nominating Committee consists exclusively of Non-Executive Directors with a majority being Independent Directors. The Nominating 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 Nominating Committee undertakes an annual review of the contribution of each Director through a self-assessment exercise. Upon completion of the review and assessments, the Nominating Committee submits its comments and recommendations to the Board for further discussion and/or approval, whichever is appropriate. Further, the Nominating Committee has undertaken a Board and Board Committees assessment to evaluate the board effectiveness as a whole and the independence of the Independent Director who has served in that capacity for more than nine years. The Nominating Committee met once during the financial year under review. iii) 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 Board appointed a Managing Director and an Executive Director to assist the Board in running the day-to-day operations of the Group. The remuneration of the Managing Director and Executive Director were determined based on their leadership skills, knowledge, experience, performance and the Group s performance, both financial and operational. The remuneration of the Non-Executive Directors was determined by the Board as a whole based on their time commitment, number of scheduled meetings and contribution to the Company. The Board has not formalised any formal written policy and procedures for Directors remuneration and would consider it at an appropriate time in future. The Remuneration Committee met once during the financial year under review. Re-election of Directors 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 of Association 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

21 CORPORATE GOVERNANCE STATEMENT (CONT D) Appointment of Director The Board as a whole makes decisions on appointment of Director, upon recommendation by the Nominating Committee. The Nominating Committee shall undergo a selection and nomination process when determining the suitability of the potential candidates considering the potential candidates expertise that can complement the experiences, backgrounds and perspectives of the Board and also to make positive contribution to the Board s performance. Orientation Program, designed specifically to the newly appointment Director, is provided to effectively supply useful information of the Board and the Company to the said Director. Directors Training 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. The Directors also 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 of Bursa Securities 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. For the Company, In-house Directors Trainings have been organised periodically. The training programmes which the existing Directors of L&G involved during the financial year were as stated below. Dato Hj Zainal Abidin Putih Briefing on Pillar 3 Disclosure 23 April 2012 Seminar on BNM Requirements for ICAAP Process 30 April 2012 Seminar on Corporate Governance Today and the Directions Moving Forward 14 June 2012 Seminar on Gap Analysis and Proposed to-be Capital Allocation and Performance Management Framework 3 July 2012 Seminar on Basel Pillar 2 ICAAP Requirements (Part 2) 11 July 2012 Seminar on Proposed Refinements to the Capital Allocation and Performance Management 15 August 2012 Framework and Introduction to SREP Seminar on Anti-Money Laundering Act: Financial Crime Risk CIMB Perspective 10 September 2012 In-house Directors Training 7 January 2013 Challenges in Managing Business Risks and Recent Changes to Tax Laws and Procedures Briefing on Financial Services Act (FSA) and the new Islamic Financial Services Act (IFSA) 11 March 2013 Implication for Directors Low Gay Teck Advocacy Session on Disclosure For CEOs and CFOs 5 June 2012 Seminar on Finance for Non-Financial Managers 13 June 2012 Conference on The 15 th National Housing & Property Summit & 29 August 2012 Conference on CFO Thought Leadership Roundtable 11 September 2012 Forum on CEO Forum Malaysia in the New Global Context 19 September 2012 Forum on 4 th World Chinese Economic Forum 12 & 13 November 2012 In-house Directors Training 7 January 2013 Challenges in Managing Business Risks and Recent Changes to Tax Laws and Procedures Conference on The 15 th Malaysia Strategic Outlook Conference January

22 CORPORATE GOVERNANCE STATEMENT (CONT D) Directors Training (cont d) Ferdaus Mahmood Conference on The 15 th National Housing & Property Summit & 29 August 2012 Property and Real Estate Investment in Sabah 7 November 2012 In-house Directors Training 7 January 2013 Challenges in Managing Business Risks and Recent Changes to Tax Laws and Procedures Dato Ir Dr A Bakar Jaafar Paper presentation on Ocean Thermal Energy Development in Malaysia: Progress Toward a 2 July 2012 Sustainable Energy Future at Japan Cabinet Secretariat for House Ocean Policy, Ocean Economic Policy Foundation (by Dato Ir Dr A Bakar Jaafar) Paper presentation on Submissions to CLCS and Negative Notes Verbale: Options to July 2012 Affected Coastal States and Unresolved Boundaries off Pedra Branca, Middle Rocks, and South Ledge at MIMA Maritime Boundary Delimitation Workshop (by Dato Ir Dr A Bakar Jaafar) Presentation on Policy Intervention via Economic Instruments for Enhancement of Local October 2012 Biomass Industry to EU-Malaysia Capacity Building Programme 7 (by Dato Ir Dr A Bakar Jaafar) Presentation on Prospects of Converting Ocean Thermal Energy to Hydrogen Fuel, Off 23 October 2012 Sabah Trough Malaysia at the University of Malaya IOES Second South China Sea Conference (by Dato Ir Dr A Bakar Jaafar) In-house Directors Training 7 January 2013 Challenges in Managing Business Risks and Recent Changes to Tax Laws and Procedures Dato Hj Ikhwan Salim Dato Hj Sujak In-house Directors Training 7 January 2013 Challenges in Managing Business Risks and Recent Changes to Tax Laws and Procedures YM Tengku Maruan Tengku Ariff In-house Directors Training 7 January 2013 Challenges in Managing Business Risks and Recent Changes to Tax Laws and Procedures Wing Kwan Winnie Chiu Director s Training in Hong Kong on Duties and Responsibilities of a Director, Disclosure Regime, 13 November 2012 Insider Information and Connected Transaction Rules Hoong Cheong Thard Conference on Asia Property Conference May 2012 Seminar on DTZ Research Seminar January 2013 Directors Remuneration The Executive Directors remuneration comprises basic salary and allowances including other customary benefits made available by the Group. Any salary review takes into account market rates and the performance of the individual and the Group. 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. 21

23 CORPORATE GOVERNANCE STATEMENT (CONT D) Directors Remuneration (cont d) The aggregate remuneration of the Directors of the Company categorised into appropriate components for the financial year ended 31 March 2013 was as follows: Directors Fees Meeting Allowance Salaries Benefits in kind Total RM 000 RM 000 RM 000 RM 000 RM 000 Executive - - 1, ,342 Non-Executive* The number of Directors of the Company whose total remuneration falls within the respective bands for the financial year ended 31 March 2013 is as follows: Band Number of Directors Executive Non-Executive RM50,000 and below - *5 RM50,001 to RM100,000-1 RM100,001 to RM150,000-1 RM450,001 to RM500, RM800,001 to RM850, Note: *includes a Non-Independent Non-Executive Director who resigned w.e.f. 3 June 2013 Financial Reporting The Board aims to present a balanced and understandable assessment of the Group 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 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 Bursa Securities. The Directors are also responsible for keeping proper accounting records, which disclose with reasonable accuracy at any time the financial position of the Group, and for ensuring that the financial statements comply with the Companies Act, 1965 and applicable approved Accounting Standards in Malaysia. Internal Controls 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 Group s corporate objectives, as well as to safeguard shareholders investments and the Group 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 Group 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 Risk Management and Internal Control in the following section of this Annual Report. 22

24 CORPORATE GOVERNANCE STATEMENT (CONT D) Relationship with External Auditors The Group 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. Relationship with Shareholders and Investors 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 Group. Such information is communicated to shareholders and investors through various disclosures and announcements to the Bursa Securities, 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 Group. The Directors, Senior Management Personnel and the external auditors are present during these meetings to respond to questions raised by shareholders. At the 49th AGM held on 5 September 2012, the shareholders were informed their right to demand a poll at the opening of the AGM. Following that, the Managing Director of the Company gave a slide presentation to the shareholders on the Group s operating and financial performance for the financial year under review which included up-to-date operating activities of the Group. In compliance with the Listing Requirements of Bursa Securities, all announcements made by the Company to Bursa Malaysia with effect from January 2009 such as the Group s quarterly financial results, annual reports and other mandatory announcements are made 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 Group. YBhg Dato Ir Dr A Bakar Jaafar is the Senior Independent Director of the Company to whom concerns or queries regarding the Group can be directed. Address : YBhg Dato Ir Dr A Bakar Jaafar c/o Land & General Berhad 8trium, Level 21 Menara 1, Jalan Cempaka SD 12/5 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 numbers of the following personnel: Mr K C Ng Lee Siw Yeng Chief Financial Officer Secretary Telephone : Telephone : Fax : Fax : kcng17@land-general.com sylee@land-general.com 23

25 STATEMENT OF DIRECTORS RESPONSIBILITIES IN RESPECT OF THE AUDITED 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 Group and of the Company at the end of the financial year and of the results of the Group and of the Company of the financial year then ended. In preparing the financial statements for the year ended 31 March 2013, 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 Group 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 Group 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 Group and of the Company and, hence, for taking reasonable steps for the prevention and detection of fraud and other irregularities. ADDITIONAL COMPLIANCE INFORMATION Material Contracts 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 36 to the Audited Financial Statements. Sanctions and/or Penalties Imposed There were no fines or sanctions imposed on the Company and its subsidiaries, Directors or management by the relevant regulatory authorities. Non-audit Fee The amount of non-audit fee payable to the external auditors for the financial year ended 31 March 2013 has been reflected under Note 8 to the Audited Financial Statements. 24

26 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. MEMBERS AND MEETINGS 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: Attendance/ Audit Committee Position on the Board Number of meeting held 1 Dato Hj Ikhwan Salim Dato Hj Sujak Chairman of Audit Committee Independent Non-Executive Director 6/6 2 Dato Ir. Dr. A. Bakar Jaafar Senior Independent Non-Executive Director 6/6 3 Hoong Cheong Thard Non-Independent Non-Executive Director 6/6 TERMS OF REFERENCE 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 ( MIA ); or b) if he is not a member of the MIA, 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 (3) months of that event, the Board shall appoint new members to make up the minimum number of three (3) members. 5. No alternate director is to 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 (3) years. 25

27 AUDIT COMMITTEE REPORT (CONT D) TERMS OF REFERENCE (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 pertaining to the Company and the Group; 4. To have unrestricted access to both the internal and external auditors and to all employees of the Group; 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 have the right 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, its scope and nature. the result of their evaluation of the system of risk management and 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 Group s risk management and 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 situation that may arise within the Company and the Group 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 Group s quarterly financial results and year ended financial statements, prior to the approval by the board of directors focusing particularly on: i) changes in or implementation of major accounting policy and practices; ii) significant and unusual events; iii) significant audit issues and adjustments arising from audit; iv) going concern assumption; v) compliance with approved accounting standards and other legal requirements; and vi) compliance with Main Market Listing Requirements of Bursa Malaysia Securities Berhad. 26

28 AUDIT COMMITTEE REPORT (CONT D) TERMS OF REFERENCE (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 (4) times in each financial year. 2. The quorum for each meeting shall be two (2) members, provided that the majority of members present at the meeting must be independent directors. 3. The Managing Director, the Executive Director, the Chief Financial Officer, the Group 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. SUMMARY OF ACTIVITIES OF THE INTERNAL AUDIT FUNCTION AND THE AUDIT COMMITTEE DURING THE FINANCIAL YEAR ENDED 31 MARCH 2013 Internal Audit Function The internal audit function of the Group was carried out by 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 Audit function is to assist the Board and the Audit Committee to evaluate the system of internal control and to provide their recommendation to the Board and the Management for further improvement. 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 Group 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 Group. During the financial year, the costs incurred for the internal audit function was RM144,

29 AUDIT COMMITTEE REPORT (CONT D) SUMMARY OF ACTIVITIES OF THE INTERNAL AUDIT FUNCTION AND THE AUDIT COMMITTEE DURING THE FINANCIAL YEAR ENDED 31 MARCH 2013 (CONT D) Summary of Activities of the Audit Committee During the financial year ended 31 March 2013, 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 the extend of the Group s compliance with the provisions set out under the Malaysian Code on Corporate Governance 2012 for the purpose of preparing the Corporate Governance Statement and the Statement on Risk Management and Internal Control pursuant to the Main Market Listing Requirements of Bursa Malaysia Securities Berhad; 2. Reviewed the updated risk profile of the Group and the adequacy and integrity of the internal control systems to manage these risks; 3. Reviewed the external auditors scope of work and audit plan for the year; 4. Reviewed the audit plans for the Group prepared by the internal auditor; 5. 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; 6. Reviewed related party transactions entered into by the Group and the draft proposal to seek shareholders mandate pursuant to the Main Market Listing Requirements of Bursa Malaysia Securities Berhad; 7. Reviewed the quarterly unaudited financial results of the Company and the Group before recommending them for the Board s approval for announcement to Bursa Malaysia Securities Berhad; 8. Reviewed the audited financial statements of the Company and the Group 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); and 9. Had two (2) sessions of discussions with the External Auditors without the presence of the executive members of the Board and other employees. DATO HJ IKHWAN SALIM DATO S HJ SUJAK Chairman of Audit Committee (Independent Non-Executive Director) 10 July

30 STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL INTRODUCTION The Malaysian Code on Corporate Governance requires listed companies to maintain a sound system of risk management and internal controls to safeguard shareholders investments and the Group s assets. The Bursa Malaysia Securities Berhad s ( Bursa Securities ) Listing Requirements require directors of public listed companies to include a statement in their annual reports on the state of their risk management and internal controls framework. The Bursa Securities Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers ( Guidelines ) provides guidance for compliance with these requirements. Set out below is the Board s Statement on Risk Management and Internal Control, which has been prepared in accordance with the Guidelines. BOARD S RESPONSIBILITY The Board recognises the importance of sound system of risk management and internal controls to safeguard shareholders investment and the Group s asset. The Board acknowledges its primary responsibility to ensure that risks in the Group are identified, measured and managed with appropriate system of risk management and internal controls, and to ensure that the effectiveness, adequacy and integrity of the risk management and internal control systems are reviewed on an on-going basis. The review covers, inter alia, financial, operational and compliance system controls and risk management procedures of the Group. However, such procedures are designed to manage rather than to eliminate risks that may impede the achievement of the Group s business objectives. Accordingly, a sound system of risk management and internal control can only provide reasonable, and not absolute, assurance against material errors, misstatement, losses or fraud. The Group 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 In April 2002, the Group 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 Group 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 assisted by independent external consultants and presented to and approved by the Board. The Enterprise Risk Management ( ERM ) policy forms an integral part of good management practice for the Group. The purpose of this policy is to foster a proactive risk management culture within the Group s companies and departments. Compliance to the ERM policy is mandatory. At the date of the annual report, the ERM framework, policy and the Group risk profile have been implemented and subject to periodic review as and when necessary. INTERNAL AUDIT FUNCTIONS The internal audit function of the Group was carried out by Advent Corporate Advisory Sdn. Bhd., an independent professional services provider which provided the Board with much of the assurance it requires regarding the adequacy and effectiveness of the Group s system of controls, procedures and operations. Internal audits are undertaken to provide independent assessments of the adequacy, efficiency and effectiveness of the Group 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

31 STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (CONT D) INTERNAL AUDIT FUNCTIONS (CONT D) The internal audit function reviews the internal controls in the key activities of the Group 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 Group. The system of internal control has been structured in such a manner that it has provided reasonable assurance that the likelihood of a significant adverse impact on objectives arising from a future event or situation is at a level acceptable to the business. It achieved this through a combination of preventive, detective and corrective measures. 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 Group s internal control system, that are regularly reviewed by the Board and are described below: Defined appropriate level of delegation and reporting lines 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 Group Procedures & Authorities (GPA) Manual, which are continuously reviewed and improved upon to reflect changes in business structures and processes. This provides a sound framework of authority and accountability within the organization and facilitates proper corporate decision making at the appropriate level in the organization s hierarchy; 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; Deliberation and approval on the quarterly financial information which have been reviewed by the Audit Committee; The risk management and control framework and ensure that it is embedded into the culture, processes and structures of the Group, where the framework is responsive to changes in the business environment and clearly communicated to all levels; and In respect of material joint ventures and associated companies, the conduct of the Board s representations from the Group 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 Group. In addition, one of the Group s subsidiaries had been accorded the ISO 9001:2008 accreditation for its operational process. REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS The external auditors have reviewed the Statement on Risk Management and Internal Control intended to be included in the annual report of the Company for the financial year ended 31 March 2013 and reported to the Board that nothing has come to their attention that causes them to believe the Statement on Risk Management and Internal Control is inconsistent with their understanding of the process the Board has adopted in the review of the adequacy and integrity of internal control of the Group. CONCLUSION The Board has received assurance from the Managing Director, Executive Director and Chief Financial Officer that the Group s risk management and internal control system is operating adequately and effectively, in all material aspect, based on the risk management and internal control system of the Group. The Board is of the view that risk management and internal control system in place for the year under review and up to the date of issuance of the financial statement, is adequate and effective to safeguard shareholders investment and the Group s asset. Notwithstanding this, reviews of all control procedures will be continuously improved and enhancement of the existing system of risk management and internal controls will be made, taking into consideration the changing business environment. 30

32 CORPORATE SOCIAL RESPONSIBILITY AT LAND & GENERAL BERHAD The Board acknowledges that practices that support corporate and social responsibilities are keys to the sustainability of Land & General Berhad ( L&G ) Group. 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 Group operates. The Board believes that Corporate Social Responsibility ( CSR ) goes beyond donating money and other resources to worthwhile causes and therefore, the Group has embedded CSR activities in various forms in its daily business operations and will continually make conscientious efforts to improve its CSR activities within its means for the betterment of the community and environment. For the financial year ended 31 March 2013, the Group continued to maintain its on-going CSR activities. WORKPLACE The Company recognises that the employees are invaluable assets of the Group and play a vital role in achieving the vision and mission of the Group. Towards this end, the Group constantly promotes human capital development. Opportunities are given to the Group s employees to participate in In-house training. The Group also sponsors its employees to attend external training programmes, seminars and conferences conducted by industry professionals. Study and exam leave are given to employees who upgrade themselves with new skills and knowledge. The Group supports and sponsors Land & General Berhad Sports Club and its activities to foster its commitment to build a strong sense of shared welfare among the Land & General family. 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 in conjunction with the Annual Dinners, the Group presents long service awards and quality awards to deserving employees to recognise their commitment and dedication. The Group is an equal opportunity employer and has always been 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 safer workplace. 31

33 CORPORATE SOCIAL RESPONSIBILITY AT LAND & GENERAL BERHAD (CONT D) COMMUNITY As part of its social responsibility to the community, the Group endeavours to continuously give its full support to events that are beneficial to the community at large. L&G had made generous donations to Kiwanis Club of Bukit Kiara and IJN foundation for charitable events. Through its subsidiaries, the following CSR activities were undertaken. Complimentary use of function rooms at the Sri Damansara Club ( SDC ) for holding of Bandar Sri Damansara Residents Association s (BDSRA) meetings upon request. Use of the SDC s swimming pool for water therapy programme for special children from certain schools within its vicinity. Provision of a piece of land in Bandar Sri Damansara for BSDRA s office and police station without rental charge. Holding of Majlis Berbuka Puasa celebration for children at the Rumah Kasih Harmoni, Paya Jaras where each of the orphans who attended the event received duit raya generously donated by L&G and Sekolah Sri Bestari. Funds were also raised from the students, parents and staff of Sekolah Sri Bestari for the said orphanage. Organisation of a charity project Raise and Run by the students of Sekolah Sri Bestari where funds were raised and donated to charitable organisations chosen by the students committee. ENVIRONMENT As for caring for the environment, the employees continue to put in considerable efforts from reusing paper in the office, switching off lights and electrical equipment during the lunch hour. For project planning, development and implementation, environmental dimension was integrated by maintaining the verdure of development site and following the natural topography as much as possible and not going against them. This concept was applied in the Damansara Foresta Project where out of the 42 acres of land, 20 acres of land will be developed and the remaining shall be maintained as green. Respect for the environment has been fostered in the employees of the Group through informal discussions and developing environment-sustaining projects. The Company is seriously working towards developing sustainable projects. MARKETPLACE The Group conducts its business in accordance with a high standard of business ethics and in compliance with all relevant legislation. The Group continues to concentrate on the development and adoption of good corporate governance in all aspects of its business operations. To inculcate good business ethics as its corporate culture, the Board has formalised Code of Conduct and Ethical Practice for Management and Staff of the L&G Group to uphold the spirit of good corporate and social responsibilities and accountability. To facilitate appropriate communication and feedback channels, a formal whistle-blowing policy and procedures were implemented. 32

34 Financial Statements 34 Directors Report 37 Statement by Directors 37 Statutory Declaration 38 Independent Auditors Report 40 Statements of Comprehensive Income 41 Statements of Financial Position 43 Consolidated Statement of Changes in Equity 44 Company Statement of Changes in Equity 45 Statements of Cash Flows 46 Notes to the Financial Statements 113 Supplementary Information