CORPORATE | HUMAN RESOURCE EVENTS 2010 detached houses at Bandar Putra, Tanjung Lumpur, Kuantan....

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FEBRUARY 18-19 Re-certification Audit of ISO 9001: 2008 by SIRIM.

25 Briefing for academic visit from 30 students of IKIP (Diploma in Journalism) at Kuantan, Tembeling Resort.

MARCH1 Staff and Management Gathering at EDC Hall, 3rd

Floor of Kompleks Teruntum, Kuantan.

22-25 Assessment of Q-Lassic in-house Course for technical staff.

27 Launching of latest design of 2 storey semi-detached houses at Bandar Putra, Tanjung Lumpur, Kuantan.

APRIL 2-4 Participation in MAPEX I Exhibition at East Coast

Mall, Kuantan.

17 PASDEC’s Friendly Bowling Tournament with Ministry Of Finance at Megalanes, Berjaya Megamall, Kuantan.

30 PASDEC’s staff programme on Work Quality Improvement.

MAY 11 Senior management gathering with YAB Chief

Minister of Pahang at Hyatt Regency Kuantan Resort, Kuantan.

15 PASDEC’s Friendly Golf Tournament with various Pahang Government Department at Maran Hill Golf Resort, Maran.

15 Participation in Project Exhibition in conjunction with “Festival Hari Guru Peringkat Kebangsaan 2010’ at East Coast Mall, Kuantan.

CORPORATE | HUMAN RESOURCE EVENTS 2010

JANUARY 28 Management Luncheon with the Chairman at Hyatt Regency Kuantan Resort, Teluk Chempedak, Kuantan.

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22 Community programme for Ujian Penilaian Sekolah Rendah (UPSR) students co-organized with (PERKIM) Temerloh Branch at Temerloh Municipal Council Hall, Mentakab, Pahang.

22 Special promotion programme at Rompin Permai Project, Rompin.

22 Participation in Sports Carnival at Perbadanan Memajukan Iktisad Negeri Terengganu (PMINT).

JUNE 10-13 PASDEC Sales Carnival 2010 at Kuantan Parade,

Kuantan.

21 14th Annual General Meeting of PASDEC Holdings Berhad at Meranti 1, Hyatt Regency Kuantan Resort, Teluk Chempedak.

23 Signing of Memorandum for proposed National Halal Gelatine Plant in Pahang at the 7th MIHAS.

23 “Green Technology Application in Construction Sector” seminar at Kuantan Tembeling Resort.

25-27 & 28-30 Emotional Spiritual Quotient (“ESQ”) Training

for PASDEC Staff by ESQ Training Leadership, Kuantan.

CORPORATE | HUMAN RESOURCE EVENTS 2010 (CONTINUED)

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JULY

AUGUST

SEPTEMBER

JULY14-16 Tree planting program in conjunction with

PASDEC’s Sales Carnival at Sekolah Rendah Jenis Kebangsaan Cina Chung Ching, Tanah Putih, Kuantan, Sekolah Rendah Jenis Kebangsaan Cina Semambu, Kuantan and Sekolah Rendah Jenis Kebangsaan Tengku Panglima Perang, Indera Mahkota, Kuantan.

20-28 2nd round of tree planting program at Sekolah Rendah Jenis Kebangsaan Tamil, Indera Mahkota, Sekolah Rendah Jenis Kebangsaan Bukit Setongkol, Sekolah Rendah Jenis Kebangsaan Cina Pooi Ming, Tanjung Lumpur, Sekolah Menengah Pelabuhan, Balok and Sekolah Rendah Kebangsaan Tanah Putih, Kuantan.

AUGUST3-4 Property Development Course at Hotel Putra,

Kuala Lumpur.

4-6 Tree planting program at Sekolah Rendah Kebangsaan Balok Baru and Sekolah Menengah Tanjung Lumpur, Kuantan.

5 Staff and Management Gathering at 3rd Floor, EDC Seminar Hall, Kompleks Teruntum, Kuantan.

9 Participation in launching of Pahang Biodiversity-Biotechnology Strategic Action Plan at Dewan Jubli Perak Sultan Haji Ahmad Shah, Kuantan officiated by YAB Deputy Prime Minister of Malaysia.

19 Breaking of fast at the month of Ramadhan with the Pahang Chief Minister at his official residence.

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OCTOBER

NOVEMBER

DECEMBER

SEPTEMBER23 Hari Raya Gathering 1431H/2010 at Kompleks

Dagangan Mahkota, Kuantan.

27 Groundbreaking of East Coast Auto City at Bandar Putra, Kuantan by YAB Pahang Chief Minister.

OCTOBER5 Hari Raya Aidilfitri Celebration at Kuantan Bricks

Office, Pancing Timur, Kuantan.

11-14 Participation in Planning & Managing OSH For Construction Workers at NIOSH, Bangi.

19 Participation in 2011 Post Budget Dialogue at INTAN, Bukit Kiara, Kuala Lumpur.

20-21 In-House Training Need Analysis (Basic) at Hotel Citi View, Kuantan.

22 Participation in MAPEX III Exhibition at Kuantan Parade, Kuantan.

23 PKNP/PASDEC Group Family Day 2010 at Pantai Balok, Kuantan.

26 Participation in 2011 Budget Seminar at Hyatt Regency Kuantan Resort, Kuantan.

NOVEMBER10 Appreciation Dinner with Media at Pondok Laguna,

Putra Square, Kuantan. 13-14 Emotional Spiritual Quotient (“ESQ”) Training for

selected staff at Pelangi Beach Resort, Balok, Kuantan.

13 Hi-Tea at Astana Villa, Bandar Indera Mahkota, Kuantan.

18 Community programme with the Kg. Pasir Panjang community/villagers in conjunction with Hari Raya Aidiladha 1431H/2010 celebration.

DECEMBER13 ‘Breakfast with CEO’ programme kick-off.

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ANALYSIS OF SHAREHOLDINGSAs At 25 April 2011

Authorised Share Capital : RM500,000,000Issued and Paid-up Capital : RM205,978,000Class of Shares : Ordinary Shares of RM1.00 eachVoting Rights : One vote per shareholder on a show of hands or one vote per ordinary share on a

poll

Analysis Of Shareholdings

Size Of Shareholdings No. Of Shareholders % No. Of Shares %

1 - 99 5 0.10 161 0.00100 - 1000 1,824 36.09 1,797,637 0.871001 - 10000 2,459 48.65 10,612,619 5.1510001 - 100000 667 13.20 20,718,633 10.06100001 – to less than 5% of issued shares 96 1.90 37,559,900 18.235% and above of issued shares 3 0.06 135,289,050 65.68

Total 5,054 100.00 205,978,000 100.00

Directors’ Shareholdings

No Name Direct Indirect No. Of Shares Held % No. Of Shares Held %

1. Dato’ Sri DiRaja Haji Adnan bin Haji Yaakob - - - -

2. Dato’ Abdul Ghani bin L. Sulaiman - - - -

3. Dato’ Haji Lias bin Mohd Noor - - - -

4. Dato’ Dr. Hamdan bin Jaafar - - - -

5. Dato’ Haji Mohamad Nor bin Ali - - - -

6. Dato’ Mohamed Amin bin Haji Daud - - - -

7. Dato’ Sri Khalid bin Mohamad Jiwa - - - -

8. Dato’ Abdullah bin A. Rasol - - - -

Substantial Shareholders

No Name Direct Indirect No. Of Shares Held % No. Of Shares Held %

Perbadanan Kemajuan Negeri Pahang 106,395,650 51.65 - -Ciri Ehsan Sdn. Bhd. 18,563,800 9.01 - -Pembinaan Sri Jati Sdn. Berhad 15,806,600 7.67 - -

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ANALYSIS OF SHAREHOLDINGS (continued)

As At 25 April 2011

Thirty Largest Shareholders (Without Aggregating Securities From Different Securities Accounts Belonging To The Same Person)

No. Name No. Of Shares %

1. Bank Kerjasama Rakyat Malaysia Berhad - Perbadanan Kemajuan Negeri Pahang 100,918,650 48.992. Ciri Ehsan Sdn. Bhd. 18,563,800 9.013. HLG Nominee (Tempatan) Sdn. Bhd. - Hong Leong Fund Management Sdn. Bhd. for Pembinaan Sri Jati Sdn. Berhad 15,806,600 7.674. Perbadanan Kemajuan Negeri Pahang 4,300,000 2.095. Yeoh Kean Hua 2,140,000 1.046. Poo Choo @ Ong Poo Choi 1,709,800 0.837. Chin Kian Fong 1,586,000 0.778. Alliancegroup Nominees (Tempatan) Sdn. Bhd. - Tan Kian Chuan 1,420,000 0.699. Perbadanan Kemajuan Negeri Pahang 1,177,000 0.5710. Chuah Chew Hing 1,134,100 0.5511. Ciptaan Meriang Sdn. Bhd. 1,059,900 0.5112. FEAB Properties Sdn. Bhd. 1,000,000 0.4913. Lee Chee Heang 1,000,000 0.4914. Zenith Aim Sdn. Bhd. 867,900 0.4215. Chin Kee Meng 735,900 0.3616. Ooi Chai Tiew 657,200 0.3217. OSK Nominees (Tempatan) Sdn. Berhad - Chin Kiam Hsung 545,000 0.2618. Tew Kim Thin 520,000 0.2519. Kenanga Nominees (Tempatan) Sdn. Bhd. - Chin Kiam Hsung 514,800 0.2520. Chuang Show Chuan 509,600 0.2521. Tan Swee Heng 506,400 0.2522. TA Nominees (Tempatan) Sdn. Bhd. - Chuang Nee Wang Kim Lien 487,700 0.2423. Chin Sin Lin 462,000 0.2224. Wong Moi @ Wong Yoon Lan 460,000 0.2225. Yeoh Meng Ghee 410,000 0.2026. Citigroup Nominees (Tempatan) Sdn. Bhd. - Pheng Yin Huah 400,000 0.1927. Yeoh Phek Leng 371,000 0.1828. Loo Chiew Hoe 365,700 0.1829. Yeoh Swee Leng 360,000 0.1730. Lee Siow Eng 347,500 0.17

Total 160,336,550 77.84

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LIST OF PROPERTIES AS AT 31 DECEMBER 2010

DESCRIPTION OF AGE OF BUILT-UP LAND NET BOOK VALUE @ YEAR OF PROPERTY/ BUILDING AREA AREA 31.12.2010 ACQUISITION/No PROJECT / TITLE / LOCATION TENURE EXISTING USE (YEARS) (sq.m) (ACRES) (RM) REVALUATION

KUANTAN

1 Kompleks Teruntum Leasehold(99 yrs) Building / Commercial

Lot 2.15 22 years 0.01 1,403,717 1991

Lot 2.16 “ 0.01

Lot 3.13 - 3.15 “ 0.14

Lot G-20 “ 0.02

19 th floor “ 0.20

Lot 2.20-2.23 0.03 103,530

PN 398 Lot 146 Sek.18 (Master title) Leasehold(99 yrs) Building / Commercial

Bandar Kuantan, Daerah Kuantan Expiring 08.06.2075 (2.10 Ac.)

2 Bukit Tenggek - Pahang Cement Leasehold (99 yrs) Vacant land / 49.42 421,449 1996

HS(D) 15538 / PT.992 Expiring 03.06.2095 Building / Residential

Mukim Ulu Kuantan, Daerah Kuantan

3 Mahkota Square Leasehold (99 yrs) Vacant land / 1.04 5,837,915 1996

PN 1872 Lot 40 Sek. 5 Expiring 31.03.2081 Building / Commercial

Bandar Kuantan, Daerah Kuantan

4 Kuantan Waterfront Leasehold (99 yrs) Commercial 30 years 2.40 1,966,272 1996

PN 5601, Lot 38 (Medan Pelancung) Expiring 23.04.2072 (Shop Lots)


5 Balok Perdana Gebeng - Zone 3C Leasehold (99 yrs) Vacant land /

HS(D) 24191 - (HS(D) 24229 Expiring 16.01.2099 Building / Residential 1.63 128,687.72 1996

PT 9889 - 9927 (39 Lot)

Mukim Sg. Karang, Daerah Kuantan.

6 Balok Perdana Gebeng - Zone 4 Leasehold (99 yrs) Vacant land /

PN.4500 Lot 9730 (HS(D) 20038) Expiring 16.01.2099 Building / Residential 14.60 1,152,663 1996

Mukim Sg. Karang, Daerah Kuantan

7 Balok Perdana Gebeng - Zone 6 Leasehold (99 yrs) Vacant land /

PN.4501 Lot 9731 Expiring 16.01.2099 Building / Residential 33.20 2,621,124 1996


8 Balok Perdana Gebeng - Zone 3A Leasehold (99 yrs) Vacant land /

PN.7467 Lot 11083 (Phase 1 to 6) Expiring 16.01.2099 Building / Residential 35.34 1,817,949 1996


9 Balok Perdana Gebeng - Zone 3A Phase 7 Leasehold (99 yrs) Vacant land /

PN 12807, Lot 11084 Expiring 16.01.2099 Building / Residential 6.72 530,541 1996


10 Balok Perdana Gebeng Leasehold (99 yrs) Commercial - 7.27 573,963 1996

HS(D) 35053 to HS(D) 35302 Expiring 16.01.2099

PT 15340 to 15619 (250 lot)


11 Balok Perdana Gebeng Leasehold (99 yrs)

PN 12822, Lot 11087 (Zon 2B) Expiring 16.01.2099 Commercial 33.19 2,620,335 1996

PN 12823, Lot 11088 (Zon 2c) Commercial 2.59 204,479

PT 14854, Lot 11093 (Zon 5) Residential 14.52 1,146,347


12 Chendor Utama Leasehold (99 yrs) Vacant land / - 163.54 2,653,796 1997

Mukim Sg. Karang, Daerah Kuantan Expiring 30.09.2100 Building / Residential

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LIST OF PROPERTIES (continued)

AS AT 31 DECEMBER 2010

DESCRIPTION OF AGE OF BUILT-UP LAND NET BOOK VALUE @ DATE OF PROPERTY/ BUILDING AREA AREA 31.12.2010 ACQUISITION/No PROJECT / TITLE / LOCATION TENURE EXISTING USE (YEARS) (sq.m) (ACRES) (RM) REVALUATION

13 Putra Square - (Transit Quarters) Leasehold (99 yrs)

PN 5569, Lot 423 Sek.20 (HS(D) 19051) Expiring 19.12.2106 24.68 37,158,777 1996


14 Habour Park’ Gebeng (Industrial Land) Leasehold 99 yrs. Vacant land /

Mukim Sg. Karang, Daerah Kuantan Land title application Industry 164.2 10,778,230 1996

- PTK 3/3/24313

15 Astana Golf Resort (Housing/Villas) Leasehold (99 yrs) 24.99 7,641,868 1998

Mukim Kuala Kuantan, Daerah Kuantan Expiring 22.05.2092 Vacant land /

Building / Residential

16 Mahkota Idaman (Sektor III ) Leasehold (99 yrs) Building / Commercial 1,352,000 1996

HS(M) 44389 / PT.55557 Expiring 24.05.2097 233.00 sm 0.06

HS(M) 44404 / PT.55572 165.00 sm 0.04

HS(M) 44405 / PT.55573 143.00 sm 0.04

HS(M) 44406 / PT.55574 143.00 sm 0.04

HS(M) 44407 / PT.55575 143.00 sm 0.04

HS(M) 44408 / PT.55576 143.00 sm 0.04

HS(M) 44409 / PT.55577 143.00 sm 0.04

Mukim Kuala Kuantan, Daerah Kuantan

17 Mahkota Perdana III (Sektor III ) 1996

HS(D) 24695 / PT.78434 Leasehold (99 yrs) Vacant land /

Mukim Kuala Kuantan, Daerah Kuantan Expiring 29.04.2102 Building / Residential 2.61

18 Bandar Putra Freehold Building / Residential 161.64 57,462,849 2003


19 Apartment Medan Warisan

HS(D) 13234 / PT.41392

13552.52mp. (Master Title) Leasehold 99 yrs. 4-storey Apartment

HS(D) 13235 / PT.41393 Expiring 12.04.2086 Building / Commercial

13621.08mp. (Master Title)

Bandar Kuantan 1,436,578 1996

Lot G3 Block G 12 years 80.99 sm

Lot G6 Block B 92.55 sm




Lot 106 Block B 87.32 sm








20 Project Pasdec Pesona - PN 7736 Leasehold 99 yrs. Vacant land / 19.48 753,763 1996

Lot 108560 Mukim Kuala Kuantan, Expiring 18.04.2105 Building / Residential

Daerah Kuantan

21 Bukit Perdana Leasehold (99 yrs) Vacant land / 57.42 5,152,104 1998

HS(D) 24965 [ PN 7220 Lot 105661 ] Expiring 02.01.2104 Building / Residential


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22 Brick Factory (PN. 472 / Lot 27892) Leasehold 60 yrs. Industry / 14 years 20.10 79,477 1996

Mukim Kuala Kuantan Expiring 10.05.2046 Brick Factory

Daerah Kuantan

23 Resort [HS(D) 10793 / PT.29819 Leasehold 99 yrs. Apartment 11 years 13.21 8,410,032 1992

(PN4075 / Lot 9)] Mukim Kuala Kuantan, Expiring 12.12.2092 Building / Commercial

Daerah Kuantan

24 Kuantan Piazza

HS(M) 65652 / PT.83065 Leasehold 99 yrs. Vacant land 5.93 1,816,016

Mukim Kuala Kuantan, Daerah Kuantan Expiring 17.04.2106 Building / Commercial

25 Bandar Damansara Kuantan Freehold Building / Residential 19.73 35,476,988 2005


26 Housing Sector 3, BIM (Mentega Land) Leasehold (99 yrs) Vacant land / 28.96 982,932 2007

HS (D) 34944, PT.102786 Expiring 30.05.2096 Building / Residential


ROMPIN

27 Agriculture land at Rompin

HS(D) 3329 / PT.2545 Leasehold (99 yrs) Vacant land / 391.36 178,851 1996

HS(D) 3330 / PT.2546 Expiring 15.01.2094 Agriculture 468.93

Mukim Rompin, Daerah Rompin (Kg. Sembayan)

28 Rompin Permai Freehold Building / Residential 2,298,160 1996

HS(M) 2034 / PT. 2422 0.08

HS(M) 2035 / PT. 2423 0.07

HS(M) 2045 / PT. 2433 0.07

HS(M) 2046 / PT. 2434 0.07

HS(M) 2047 / PT. 2435 0.07

HS(M) 2056 / PT. 2444 0.02

HS(M) 2065 / PT. 2453 0.02

HS(M) 2066 / PT. 2454 0.02

HS(M) 2068 / PT. 2456 0.02

HS(M) 2069 / PT. 2457 0.02

HS(M) 2091 / PT. 2479 0.02

HS(M) 2095 / PT. 2483 0.02

HS(M) 2096 / PT. 2484 0.02

HS(M) 2101 / PT. 2489 0.05

Mukim Pontian, Daerah Rompin

BENTUNG

29 Pusat Komersil Sri Ketari

HS(D) 14117 / PT.18008 (S.D. to Strata) Leasehold (99 yrs) Building / Commercial 590.00 sm 0.15 133,274 1996

HS(D) 14119 / PT.18010 (S.D. to Strata) Expiring 02.01.2096 183.00 sm 0.05

Bandar Bentong , Daerah Bentung

30 Bukit Tinggi

HS(D) 14686 / PT.18197 Leasehold (99 yrs) Vacant land / 90.49 35,628,204 2002

Mukim Bentung, Daerah Bentung Expiring 01.09.2101 Buiding / Residential

MARAN

31 Quarry Land Kg. Kuala Sentul Leasehold (21 yrs) Vacant land / 17.17 91,673 1996

HS(D) 605 / PT.8139 Expiring 14.08.2015 Industries (Quarry)

Mukim Chenor, Daerah Maran

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PEKAN

32 Bandar Baru Peramu - Commercial Centre Leasehold (99 yrs) Building/Commercial 6.63 665,499 1996

Mukim Pekan, Daerah Pekan Expiring 11.04.2093

TEMERLUH

33 HS(D) 15689 PT.12438 Freehold Commercial lot 5.40 5,909,050 1996

HS(D) 15692 PT.12441 Shoplot 0.07

HS(D) 15693 PT.12442 Shoplot 0.04

HS(D) 15694 PT.12443 Shoplot 0.04

HS(D) 15695 PT.12444 Shoplot 0.04

HS(D) 15696 PT.12445 Shoplot 0.04

HS(D) 15697 PT.12446 Shoplot 0.04

HS(D) 15698 PT.12447 Shoplot 0.04

HS(D) 15699 PT.12448 Shoplot 0.04

HS(D) 15700 PT.12449 Shoplot 0.10

HS(D) 15701 PT.12450 Shoplot 0.07

HS(D) 15702 PT.12451 Shoplot 0.04

HS(D) 15703 PT.12452 Shoplot 0.04

HS(D) 15704 PT.12453 Shoplot 0.04

HS(D) 15705 PT.12454 Shoplot 0.04

HS(D) 15706 PT.12455 Shoplot 0.04

HS(D) 15707 PT.12456 Shoplot 0.04

HS(D) 15708 PT.12457 Shoplot 0.04

HS(D) 15709 PT.12458 Shoplot 0.04

HS(D) 15710 PT.12459 Shoplot 0.04

HS(D) 15711 PT.12460 Shoplot 0.04

HS(D) 15712 PT.12461 Shoplot 0.07

Mukim Mentakab, Daerah Temerluh Industry / Commercial

34 CT 3479 Lot 1207 Freehold Vacant land / 25.53 24,184,414 1995

CT 1546 Lot 1131 Buiding / Residential 30.38

CT 1169 Lot 1129 10.34

Mukim Mentakab, Daerah Temerloh

RAUB

35 Raub Perdana 2 Leasehold (99 yrs) Vacant land / 110,000 1996

HS(D) 7725 / PT.19143 Expiring 02.01.2100 Building / Residential 72.92

HS(D) 7737 / PT.18226

Mukim Gali, Daerah Raub

HS(D) 6838 / PT.16730 Leasehold (99 yrs) Building / Commercial 0.04

HS(D) 6939 / PT.16831 Expiring 03.01.2093 0.05

HS(D) 6940 / PT.16832 0.04

HS(D) 6941 / PT.16833 0.04

HS(D) 6942 / PT.16834 0.04

HS(D) 6943 / PT.16835 0.04

HS(D) 6944 / PT.16836 0.04

HS(D) 6945 / PT.16837 0.04

HS(D) 6946 / PT.16838 0.04

HS(D) 6947 / PT.16839 0.04

HS(D) 6948 / PT.16840 0.04

HS(D) 6949 / PT.16841 0.06

Mukim Gali, Daerah Raub

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36 Cheroh Perdana (Cheroh Maju 3)

Mukim Gali, Daerah Raub Leasehold (99 yrs) Vacant land / 3.75 1996

Expiring 19.04.2086 Building / Residential

37 Quarry Land Kg. Besu (Lot 1595)

HS(D)10608 PT.3653 Leasehold (21 yrs) Vacant land / 19.97 172,860 1996

Mukim Sega, Daerah Raub Expiring 11.07.2023 Industries (Quarry )

JERANTUT

38 Perumahan Kuala Tembeling

HS(D) 391 / PT.667 Leasehold (99 yrs) Vacant land / 12.50 303,300 1996

HS(D) 392 / PT.668 Expiring 11.03.2076 Building / Residential 79.88

HS(D) 393 / PT.669 4.00

HS(D) 394 / PT.670 19.00

Mukim K. Tembeling, Daerah Jerantut

SELANGOR

39 Kota Warisan, Sepang

Mukim Dengkil, Daerah Sepang Freehold Building / Residential 3.26 8,410,080 2006

Selangor

2,087.60 269,769,746.45

FINANCIAL STATEMENTS

Statements Of Financial Position 51

Statements Of Changes In Equity 53

Statements Of Cash Flows 56

Notes To The Financial Statements 58

Directors’ Report 44

Statement By Directors 47

Statutory Declaration 47

Independent Auditors’ Report 48

Statements Of Comprehensive Income 50

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DIRECTORS’ REPORT

The directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2010.

PRINCIPAL ACTIVITIES

The principal activities of the Company are investment holding and provision of management services to the subsidiaries.

The principal activities of the subsidiaries are described in Note 16 to the financial statements.

There have been no significant changes in the nature of the principal activities during the financial year.

RESULTS Group Company RM RM

Profit net of tax 4,476,096 13,937,022

Profit attributable to: Owners of the parent 1,043,766 13,937,022Minority interests 3,432,330 -

4,476,096 13,937,022

There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the finan-cial statements.

In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature.

DIVIDENDS

At the forthcoming Annual General Meeting, a final tax exempt (single-tier) dividend in respect of the financial year ended 31 December 2010, of 2% on 205,978,000 ordinary shares, amounting to a dividend payable of RM4,119,560 (2 sen per ordinary share) will be proposed for shareholders’ approval. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in equity as an appropriation of retained earnings in the financial year ending 31 December 2011.

DIRECTORS

The names of the directors of the Company in office since the date of the last report and at the date of this report are:

Dato’ Sri DiRaja Haji Adnan bin Haji Yaakob Dato’ Abdul Ghani bin L. Sulaiman Dato’ Haji Lias bin Mohd. Noor Dato’ Dr. Hamdan bin Jaafar Dato’ Abdullah @ Mohamad Nor bin Ali Dato’ Mohamed Amin bin Haji Daud Dato’ Sri Khalid bin Mohamad Jiwa Dato’ Abdullah bin A. Rasol

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DIRECTORS’ REPORT (continued)

DIRECTORS’ BENEFITS

Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the Company was a party, whereby the directors might acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by the directors or the fixed salary of a full-time employee of the Company as shown in Note 9 to the financial statements) by reason of a contract made by the Company or a related corporation with any director or with a firm of which he is a member, or with a company in which he has a substantial financial interest.

DIRECTORS’ INTEREST

None of the directors in office at the end of the financial year had any interest in shares in the Company or its related corporations during the financial year.

EXCHANGEABLE BONDS

On 15 November 2006, the Company issued RM150 million Rainbow Exchangeable Bonds (“REBs”) at 100% of its nominal value comprising two (2) series as follows:-

(a) RM15 million REBs (“Series I”) exchangeable into 4,792,333 ordinary shares of Road Builder (M) Holdings Berhad issued for a maturity of 5 years from the issue date; and

(b) RM135 million REBs (“Series II”) exchangeable into 40,785,500 ordinary shares of YTL Cement Berhad issued for a maturity of 7 years from the issue date.

During the year, RM7 million of Series II REBs have been exchanged. Details of the REBs are disclosed in Note 27 to the financial statements.

OTHER STATUTORY INFORMATION

(a) Before the statements of comprehensive income and statements of financial position of the Group and of the Company were made out, the directors took reasonable steps:

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts; and

(ii) to ensure that any current assets which were unlikely to realise their value as shown in the accounting records in the ordinary course of business had been written down to an amount which they might be expected so to realise.

(b) At the date of this report, the directors are not aware of any circumstances which would render:

(i) the amount written off for bad debts or the amount of the provision for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent; and

(ii) the values attributed to the current assets in the financial statements of the Group and of the Company misleading.

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DIRECTORS’ REPORT (continued)

OTHER STATUTORY INFORMATION (CONTINUED)

(c) At the date of this report, the directors are not aware of any circumstances which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading.

(e) As at the date of this report, there does not exist:

(i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which secures the liabilities of any other person; or

(ii) any contingent liability of the Group or of the Company which has arisen since the end of the financial year. (f) In the opinion of the directors:

(i) no contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which will or may affect the ability of the Group or of the Company to meet their obligations when they fall due; and

(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of the operations of the Group or of the Company for the financial year in which this report is made.

SIGNIFICANT EVENTS The significant events during the year are as disclosed in Note 38 to the financial statements.

SUBSEQUENT EVENTS Details of the subsequent events are disclosed in Note 39 to the financial statements.

AUDITORS The auditors, Hanafiah Raslan & Mohamad, have expressed their willingness to continue in office.

Signed on behalf of the Board in accordance with a resolution of the directors dated 27 April 2011.

Dato’ Sri DiRaja Haji Adnan bin Haji Yaakob Dato’ Abdul Ghani bin L. Sulaiman

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We, Dato’ Sri DiRaja Haji Adnan bin Haji Yaakob and Dato’ Abdul Ghani bin L. Sulaiman, being two of the directors of Pasdec Holdings Berhad, do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 50 to 122 are drawn up in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2010 and of its financial performance and cash flows for the year then ended.

Signed on behalf of the Board in accordance with a resolution of the directors dated 27 April 2011.

Dato’ Sri DiRaja Haji Adnan bin Haji Yaakob Dato’ Abdul Ghani bin L. Sulaiman

STATEMENT BY DIRECTORSPURSUANT TO SECTION 169 (15) OF THE COMPANIES ACT 1965

STATUTORY DECLARATIONPURSUANT TO SECTION 169 (16) OF THE COMPANIES ACT 1965

I, Goh Song Han, being the officer primarily responsible for the financial management of Pasdec Holdings Berhad, do solemnly and sincerely declare that the accompanying financial statements set out on pages 50 to 122 are in my opinion correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the abovenamed Goh Song Han at Kuantan in the state of Pahang Darul Makmur on 27 April 2011. Goh Song Han

Before me,

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INDEPENDENT AUDITORS’ REPORTTO THE MEMBERS OF PASDEC HOLDINGS BERHAD (INCORPORATED IN MALAYSIA)

REPORT ON THE FINANCIAL STATEMENTS

We have audited the financial statements of Pasdec Holdings Berhad, which comprise the statements of financial position as at 31 December 2010 of the Group and of the Company, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 50 to 122.

Directors’ responsibility for the financial statements

The directors of the Company are responsible for the preparation and fair presentation of these financial statements in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors’ responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2010 and of their financial performance and cash flows for the year then ended.

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INDEPENDENT AUDITORS’ REPORT (continued)

TO THE MEMBERS OF PASDEC HOLDINGS BERHAD (INCORPORATED IN MALAYSIA)

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

In accordance with the requirements of the Companies Act 1965 in Malaysia, we also report the following:

(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries have been properly kept in accordance with the provisions of the Act.

(b) We are satisfied that the accounts of the subsidiaries that have been consolidated with the financial statements of the Company are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information and explanations required by us for those purposes.

(c) The auditors’ reports on the accounts of the subsidiaries were not subject to any qualification material to the consolidated financial statements and did not include any comment required to be made under Section 174(3) of the Act.

OTHER MATTERS

The supplementary information set out in Note 42 on page 122 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

Hanafiah Raslan & Mohamad Sandra Segaran a/l Muniandy@KrishnanAF: 0002 No. 2882/01/13(J) Chartered Accountants Chartered Accountant

Kuantan, Pahang, Malaysia27 April 2011

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STATEMENTS OF COMPREHENSIVE INCOMEFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010

The accompanying accounting policies and explanatory notes form an integral part of the financial statements.

Group Company Note 2010 2009 2010 2009 RM RM RM RM

Revenue 4 85,143,352 103,180,662 12,028,056 6,666,246Cost of sales 5 (60,425,412) (81,956,407) - -

Gross profit 24,717,940 21,224,255 12,028,056 6,666,246

Other items of income: Interest income 319,070 778,418 19,593,163 - Other income 7,498,842 2,152,264 132,251 2,889,339

Other items of expense: Administrative expenses (9,670,619) (11,497,877) (5,790,979) (1,145,029) Other expenses (9,856,632) (13,890,641) (4,008,481) (3,588,672) Finance costs 6 (6,114,003) (7,021,166) (5,455,789) (4,474,910)

Share of loss of associates (67,849) (109,962) - -

Profit/(loss) before tax 7 6,826,749 (8,364,709) 16,498,221 346,974

Income tax expense 10 (2,350,653) (341,547) (2,561,199) -

Profit/(loss) net of tax 4,476,096 (8,706,256) 13,937,022 346,974

Other comprehensive income: Net gain on available-for-sale financial assets - Loss on fair value changes (8,039,922) - - - - Transfer to profit or loss upon disposal 7 (3,190,544) - - -

Other comprehensive income for the year, net of tax (11,230,466) - - -

Total comprehensive income for the year (6,754,370) (8,706,256) 13,937,022 346,974

Profit/(loss) attributable to: Owners of the parent 1,043,766 (4,419,244) 13,937,022 346,974 Minority interests 3,432,330 (4,287,012) - -

4,476,096 (8,706,256) 13,937,022 346,974

Total comprehensive income attributable to: Owners of the parent (10,186,700) (4,419,244) 13,937,022 346,974 Minority interests 3,432,330 (4,287,012) - -

(6,754,370) (8,706,256) 13,937,022 346,974

Earnings per share attributable to equity holders of the Company (sen): Basic, for profit/(loss) for the year 11 0.51 (2.15)

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STATEMENTS OF FINANCIAL POSITIONAS AT 31 DECEMBER 2010

Group Company Note 2010 2009 2008 2010 2009 RM RM RM RM RM (restated) (restated)

Assets Non-current assets Property, plant and equipment 12 13,123,227 17,967,756 21,253,139 377,657 240,568 Land held for property development 13(a) 142,164,607 133,034,224 143,719,629 - -Investment properties 14 7,172,754 7,344,537 7,516,320 - -Investments in subsidiaries 16 - - - 67,563,097 49,944,281 Investments in associates 17 3,200,077 3,267,926 3,377,888 - -Marketable securities 22 86,136,047 42,880,748 46,201,959 - -Deferred tax assets 32 2,005,827 1,422,641 - 276,527 -Intangible asset 15 808,242 808,242 823,258 - -

254,610,781 206,726,074 222,892,193 68,217,281 50,184,849

Current assets Property development costs 13(b) 132,546,926 157,699,937 164,918,543 - -Inventories 18 22,789,831 24,754,487 11,610,309 - -Trade and other receivables 19 84,405,964 94,177,830 85,181,807 220,214,692 228,575,428 Other current assets 20 552,317 266,647 - 185,008 103,297 Cash and bank balances 23 22,538,481 19,109,073 25,175,685 5,953,496 4,563,132

262,833,519 296,007,974 286,886,344 226,353,196 233,241,857

Total assets 517,444,300 502,734,048 509,778,537 294,570,477 283,426,706

Equity and liabilities

Current liabilities Retirement benefit obligations 24 671,153 128,064 284,294 371,535 -Loans and borrowings 25 33,178,852 34,257,449 41,980,006 64,275 51,137 Trade and other payables 28 36,375,585 47,401,727 46,847,872 3,097,123 3,873,934 Other current liability 29 - 269,041 - - -Tax payable 3,773,388 1,242,827 1,008,875 3,598,376 887,561

73,998,978 83,299,108 90,121,047 7,131,309 4,812,632

Net current assets 188,834,541 212,708,866 196,765,297 219,221,887 228,429,225


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STATEMENTS OF FINANCIAL POSITION (CONTINUED)


Group Company Note 2010 2009 2008 2010 2009 RM RM RM RM RM (restated) (restated)

Non-current liabilities Retirement benefit obligations 24 3,001,159 3,080,185 2,357,942 - -Loans and borrowings 25 56,246,043 66,087,071 58,009,684 46,549,480 51,661,408 Deferred tax liabilities 32 - - 315,924 - -

59,247,202 69,167,256 60,683,550 46,549,480 51,661,408

Total liabilities 133,246,180 152,466,364 150,804,597 53,680,789 56,474,040

Equity attributable to owners of the parent Share capital 30 205,978,000 205,978,000 205,978,000 205,978,000 205,978,000Share premium 43,007,997 43,007,997 43,007,997 45,515,750 45,515,750Other reserves 31 37,174,883 - - - - Retained earnings/ (Accumulated losses) 36 98,037,240 96,993,474 101,412,718 (10,604,062) (24,541,084)

384,198,120 345,979,471 350,398,715 240,889,688 226,952,666 Minority interests - 4,288,213 8,575,225 - -

Total equity 384,198,120 350,267,684 358,973,940 240,889,688 226,952,666

Total equity and liabilities 517,444,300 502,734,048 509,778,537 294,570,477 283,426,706

The comparative figures for 2008 is as at 1 January 2009. The comparative figures for 2009 and 2008 have been restated following the reclassification of prepaid land lease payments to property, plant and equipment (Note 2.2).


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STATEMENTS OF CHANGES IN EQUITYFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010

Attributable to owners of the parent Non-distributable Distributable Non-distributable Total equity Premium attributable paid on to owners Total Fair value acquisition Total of the Share Share Retained other adjustment of minority Minority Note equity parent capital premium earnings reserves reserve interests interests 2010 RM RM RM RM RM RM RM RM RM

Group

Opening balance at 1

January 2010 350,267,684 345,979,471 205,978,000 43,007,997 96,993,474 - - - 4,288,213

Effects of adopting

FRS 139 58,303,620 58,303,620 - - - 58,303,620 58,303,620 - -

408,571,304 404,283,091 205,978,000 43,007,997 96,993,474 58,303,620 58,303,620 - 4,288,213

Total comprehensive income (6,754,370) (10,186,700) - - 1,043,766 (11,230,466) (11,230,466) - 3,432,330

Transactions with owners

Acquisition of

minority

interests 16 (7,720,543) - - - - - - - (7,720,543)

Premium paid

on acquisition

of minority

interests 16 (9,898,271) (9,898,271) - - - (9,898,271) - (9,898,271) -

Total transactions

with owners (17,618,814) (9,898,271) - - - (9,898,271) - (9,898,271) (7,720,543)

Closing balance at 31

December 2010 384,198,120 384,198,120 205,978,000 43,007,997 98,037,240 37,174,883 47,073,154 (9,898,271) -

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STATEMENTS OF CHANGES IN EQUITY (continued)

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010

Attributable to owners of the parent Non-distributable Distributable Total equity attributable to owners Total of the Share Share Retained Minority2009 Note equity parent capital premium earnings interests RM RM RM RM RM RM

Group

Opening balance at 1 January 2009 358,973,940 350,398,715 205,978,000 43,007,997 101,412,718 8,575,225

Total comprehensive income (8,706,256) (4,419,244) - - (4,419,244) (4,287,012)

Closing balance at 31 December 2010 350,267,684 345,979,471 205,978,000 43,007,997 96,993,474 4,288,213


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STATEMENTS OF CHANGES IN EQUITY (continued)



Non-Distributable Distributable Profit/ Share Share (Accumulated capital premium losses) Total RM RM RM RM

Company

Opening balance at 1 January 2010 205,978,000 45,515,750 (24,541,084) 226,952,666

Total comprehensive income - - 13,937,022 13,937,022

Closing balance at 31 December 2010 205,978,000 45,515,750 (10,604,062) 240,889,688

Opening balance at 1 January 2009 205,978,000 45,515,750 (24,888,058) 226,605,692

Total comprehensive income - - 346,974 346,974

Closing balance at 31 December 2009 205,978,000 45,515,750 (24,541,084) 226,952,666

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STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010

Group Company 2010 2009 2010 2009 RM RM RM RM

Operating activities

Profit/(loss) before taxation 6,826,749 (8,364,709) 16,498,221 346,974 Adjustments for: Property, plant and equipment written off - 2,263,101 - - Reversal of allowance for impairment of trade and other receivables (432,202) (92,534) - - Depreciation of property, plant and equipment 1,249,622 1,225,295 45,911 32,028 Depreciation of investment properties 171,783 171,783 - - (Gain)/loss on disposal of investments (3,190,544) (896,176) - 14,471 (Gain)/loss on disposal of property, plant and equipment (2,873,662) (29,285) - 22,048 Bad debts written off - 108,663 - - Impairment loss on inventories 191,912 - - - Reversal of impairment loss on inventories (143,033) (89,665) - - Impairment loss on investments in marketable securities - 11 - - Impairment loss on investments in subsidiaries - - - 2,250,000 Reversal of impairment loss on investments in marketable securities - (88,193) - (27,396) Impairment loss of intangible assets - 15,016 - - Impairment loss of property development costs 241,244 3,538,636 - - Share of loss of associated companies 67,849 109,962 - - Reversal of provision for reclamation costs - (557,076) - - Property development costs written off - 191,328 - - Provision for retirement benefits 636,918 809,963 371,535 - Impairment loss on receivables 1,848,692 2,120,747 107,379 247,711 Interest expense 6,114,003 7,021,166 5,455,789 4,474,910 Interest income (385,773) (710,776) (19,593,163) (2,889,339) Dividend income (3,233,376) (3,822,731) - (5,920,326)

Total adjustments 263,433 11,289,235 (13,612,549) (1,795,893) Operating cash flows before changes in working capital 7,090,182 2,924,526 2,885,672 (1,448,919) Changes in working capital Decrease/(increase) in receivables 7,797,937 (11,399,546) 8,171,646 1,680,972 Decrease/(increase) in inventories 1,915,777 (13,054,513) - - (Increase)/decrease in land held for development (9,130,383) 10,685,405 - - Increase in property development costs 24,911,767 3,488,642 - - (Decrease)/increase in payables (28,900,871) 1,505,312 (18,395,628) (1,837,400)

Total changes in working capital (3,405,773) (8,774,700) (10,223,982) (156,428) Interest paid - (2,546,255) (1,658,026) - Taxes paid (116,915) (1,710,352) (126,910) - Retirement benefits paid (172,855) (243,950) - -

Net cash flows from/(used in) operating activities 3,394,639 (10,350,731) (9,123,246) (1,605,347)

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STATEMENTS OF CASH FLOWS (continued)


Group Company 2010 2009 2010 2009 RM RM RM RM

Investing activities

Proceeds from disposal of investment 7,008,399 2,305,569 - 2,305,569 Purchase of property, plant and equipment (178,473) (190,244) - 76,227Proceeds from disposal of property, plant and equipment 6,830,042 78,636 - - Interest received 385,773 710,776 19,593,163 2,889,339Dividends received 3,218,782 3,578,390 - -

Net cash flows (used in)/from investing activities 17,264,523 6,483,127 19,593,163 5,271,135

Cash flows from financing activities

Proceeds from term loans 7,351,072 10,000,000 - - Proceed from revolving credits - 400,000 - - Repayment of term loans (17,277,175) (7,375,500) (7,000,000) - Repayment of obligations under finance leases (393,050) (376,771) (85,378) (127,165)Interest paid (4,310,415) (2,183,738) (1,994,175) (2,183,738)

Net cash flows (used in)/from financing activities (14,629,568) 463,991 (9,079,553) (2,310,903)

Net increase/(decrease) in cash and cash equivalents 6,029,594 (3,403,613) 1,390,364 1,354,885

Cash and cash equivalents at 1 January (2,350,909) 1,052,704 4,563,132 3,208,247

Cash and cash equivalents at 31 December (Note 23) 3,678,685 (2,350,909) 5,953,496 4,563,132


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NOTES TO THE FINANCIAL STATEMENTSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010

1. Corporate information The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Bursa

Malaysia Securities Berhad. The registered office of the Company is located at 14th Floor, Kompleks Teruntum, Jalan Mahkota, 25000 Kuantan, Pahang Darul Makmur.

The holding corporation of the Company is Perbadanan Kemajuan Negeri Pahang, a statutory body incorporated in

Malaysia under the Pahang State Enactment No. 12, 1965.

The principal activities of the Company are investment holding and provision of management services to the subsidiaries. The principal activities of the subsidiaries are described in Note 16. There have been no significant changes in the nature of the principal activities during the financial year.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 27 April 2011.

2. Summary of significant accounting policies

2.1 Basis of preparation

The financial statements of the Group and of the Company have been prepared in accordance with Financial Reporting Standards (“FRS”) and the Companies Act 1965 in Malaysia. At the beginning of the current financial year, the Group and the Company adopted new and revised FRS which are mandatory for financial periods beginning on or after 1 January 2010 as described fully in Note 2.2.

The financial statements have been prepared on a historical cost basis except as disclosed in the accounting policies below.

The financial statements are presented in Ringgit Malaysia (“RM”).

2.2 Changes in accounting policies

The accounting policies adopted are consistent with those of the previous financial year except as follows:

On 1 January 2010, the Group and the Company adopted the following new and amended FRS and IC Interpretations mandatory for annual financial periods beginning on or after 1 January 2010.

• FRS 7 Financial Instruments: Disclosures • FRS 8 Operating Segments • FRS 101 Presentation of Financial Statements (Revised) • FRS 123 Borrowing Costs • FRS 139 Financial Instruments: Recognition and Measurement • Amendments to FRS 1 First-time Adoption of Financial Reporting Standards and FRS 127 Consolidated and Separate Financial Statements: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate • Amendments to FRS 2 Share-based Payment – Vesting Conditions and Cancellations • Amendments to FRS 132 Financial Instruments: Presentation • Amendments to FRS 139 Financial Instruments: Recognition and Measurement,

FRS 7 Financial Instruments: Disclosures and IC Interpretation 9 Reassessment of Embedded Derivatives

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NOTES TO THE FINANCIAL STATEMENTS (continued)


2. Summary of significant accounting policies (cont’d.)

2.2 Changes in accounting policies (cont’d.)

• Improvements to FRS issued in 2009 • IC Interpretation 9 Reassessment of Embedded Derivatives • IC Interpretation 10 Interim Financial Reporting and Impairment • IC Interpretation 11 FRS 2 - Group and Treasury Share Transactions • IC Interpretation 13 Customer Loyalty Programmes • IC Interpretation 14 FRS 119 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and Their Interaction

FRS 4 Insurance Contracts and TR i-3 Presentation of Financial Statements of Islamic Financial Institutions will also be effective for annual periods beginning on or after 1 January 2010. These FRS are, however, not applicable to the Group or the Company.

Adoption of the above standards and interpretations did not have any effect on the financial performance or position of the Group and the Company except for those discussed below:

FRS 7 Financial Instruments: Disclosures Prior to 1 January 2010, information about financial instruments was disclosed in accordance with the requirements

of FRS 132 Financial Instruments: Disclosure and Presentation. FRS 7 introduces new disclosures to improve the information about financial instruments. It requires the disclosure of qualitative and quantitative information about exposure to risks arising from financial instruments, including specified minimum disclosures about credit risk, liquidity risk and market risk, including sensitivity analysis to market risk.

The Group and the Company have applied FRS 7 prospectively in accordance with the transitional provisions. Hence, the new disclosures have not been applied to the comparatives. The new disclosures are included throughout the Group’s and the Company’s financial statements for the year ended 31 December 2010.

FRS 8 Operating Segments

FRS 8, which replaces FRS 114 Segment Reporting, specifies how an entity should report information about its operating segments, based on information about the components of the entity that is available to the chief operating decision maker for the purposes of allocating resources to the segments and assessing their performance. The Standard also requires the disclosure of information about the products and services provided by the segments, the geographical areas in which the Group operates, and revenue from the Group’s major customers. The Group has adopted FRS 8 retrospectively. These revised disclosures, including the related revised comparative information, are shown in Note 37 to the financial statements.

FRS 101 Presentation of Financial Statements (Revised)

The revised FRS 101 introduces changes in the presentation and disclosures of financial statements. The revised Standard separates owner and non-owner changes in equity. The statement of changes in equity includes only details of transactions with owners, with all non-owner changes in equity presented as a single line. The Standard also introduces the statement of comprehensive income, with all items of income and expense recognised in profit or loss, together with all other items of recognised income and expense recognised directly in equity, either in one single statement, or in two linked statements. The Group and the Company have elected to present this statement as one single statement.

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2. Summary of significant accounting policies (cont’d.) 2.2 Changes in accounting policies (cont’d.)

FRS 101 Presentation of Financial Statements (Revised) (cont’d.) In addition, a statement of financial position is required at the beginning of the earliest comparative period following

a change in accounting policy, the correction of an error or the classification of items in the financial statements.

The revised FRS 101 also requires the Group to make new disclosures to enable users of the financial statements to evaluate the Group’s objectives, policies and processes for managing capital (see Note 35).

The revised FRS 101 was adopted retrospectively by the Group and the Company. FRS 139 Financial Instruments: Recognition and Measurement FRS 139 establishes principles for recognising and measuring financial assets, financial liabilities and some contracts

to buy and sell non-financial items. The Group and the Company have adopted FRS 139 prospectively on 1 January 2010 in accordance with the transitional provisions. The effects arising from the adoption of this Standard has been accounted for by adjusting the opening balance of retained earnings as at 1 January 2010. Comparatives are not restated. The details of the changes in accounting policies and the effects arising from the adoption of FRS 139 are discussed below:

• Equity instruments Prior to 1 January 2010, the Group classified its investments in equity instruments which were held for non-

trading purposes as non-current investments. Such investments were carried at cost less impairment losses. Upon the adoption of FRS 139, these investments, except for those whose fair value cannot be reliably measured, are designated at 1 January 2010 as available-for-sale financial assets and accordingly are stated at their fair values as at that date amounting to RM101,184,368. The adjustments to their previous carrying amounts are recognised as adjustments to the opening balance of retained earnings as at 1 January 2010.

• Impairment of trade receivables Prior to 1 January 2010, provision for doubtful debts was recognised when it was considered uncollectible. Upon

the adoption of FRS 139, an impairment loss is recognised when there is objective evidence that an impairment loss has been incurred. The amount of the loss is measured as the difference between the receivable’s carrying amount and the present value of the estimated future cash flows discounted at the receivable’s original effective interest rate. As at 1 January 2010, the Group has remeasured the allowance for impairment losses as at that date in accordance with FRS 139 but no adjustments is required to be made to the opening balance of retained earnings as at that date.

• Financial guarantee contracts During the current and prior years, the Company provided financial guarantees to banks in connection with

bank loans and other banking facilities granted to its subsidiaries. Prior to 1 January 2010, the Company did not provide for such guarantees unless it was more likely than not that the guarantees would be called upon. The guarantees were disclosed as contingent liabilities. Upon the adoption of FRS 139, all unexpired financial guarantees issued by the Company are recognised as financial liabilities and are measured at their initial fair value less accumulated amortisation as at 1 January 2010.

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2. Summary of significant accounting policies (cont’d.) 2.2 Changes in accounting policies (cont’d.)

FRS 139 Financial Instruments: Recognition and Measurement (cont’d.)

• Inter-company loans During the current and prior years, the Company granted interest-free loans and advances to its subsidiaries.

Prior to 1 January 2010, these loans and advances were recorded at cost in the Company’s financial statements. Upon the adoption of FRS 139, the Company charged interest on these loans and advances.

The following are effects arising from the above changes in accounting policies:

Increase/(decrease) As at As at 31 December 1 January 2010 2010 RM RM

Statement of financial position Group Investment in securities (non-current) - available-for-sale financial assets 47,073,154 58,303,620 Other reserves - fair value adjustment reserve 47,073,154 58,303,620 Company Trade and other receivables - loans and amount due from subsidiaries 19,467,215 - Trade and other payables - loans and amount due to subsidiaries 1,658,026 - Increase/(decrease) Group Company 2010 2010 RM RM Statement of comprehensive income Interest income - 19,467,215 Other expenses - 1,658,026 Profit before tax - 17,809,189 Income tax expense - 1,335,689 Profit net of tax - 16,473,500 Other comprehensive income for the year, net of tax (8,039,922) -

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Improvements to FRS issued in 2009 - Amendments to FRS 117 Leases Prior to 1 January 2010, for all leases of land and buildings, if title is not expected to pass to the lessee by the end of

the lease term, the lessee normally does not receive substantially all of the risks and rewards incidental to ownership. Hence, all leasehold land held for own use was classified by the Group as operating lease and where necessary, the minimum lease payments or the up-front payments made were allocated between the land and the buildings elements in proportion to the relative fair values for leasehold interests in the land element and buildings element of the lease at the inception of the lease. The up-front payment represented prepaid lease payments and were amortised on a straight-line basis over the lease term.

The amendments to FRS 117 Leases clarify that leases of land and buildings are classified as operating or finance

leases in the same way as leases of other assets. They also clarify that the present value of the residual value of the property in a lease with a term of several decades would be negligible and accounting for the land element as a finance lease in such circumstances would be consistent with the economic position of the lessee. Hence, the adoption of the amendments to FRS 117 has resulted in certain unexpired land leases to be reclassified as finance leases. The Group has applied this change in accounting policy retrospectively and certain comparatives have been restated. The following are effects to the statement of financial positions as at 31 December 2010 arising from the above change in accounting policy:

Group 2010 RM

Increase/(decrease) in: Property, plant and equipment 77,268 Prepaid land lease payments (77,268)

The following comparatives have been restated: As previously As stated Reclassification restated RM RM RM Consolidated statement of financial position 31 December 2009 Property, plant and equipment 17,888,278 79,478 17,967,756 Prepaid land lease payments 79,478 (79,478) -

1 January 2009 Property, plant and equipment 21,171,451 81,688 21,253,139 Prepaid land lease payments 81,688 (81,688) -

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2.3 Standards issued but not yet effective

The Group has not adopted the following standards and interpretations that have been issued but not yet effective:

Effective for annual periods beginning on or after Description FRS 1 First-time Adoption of Financial Reporting Standards 1 July 2010 FRS 3 Business Combinations (revised) 1 July 2010 Amendments to FRS 2 Share-based Payment 1 July 2010 Amendments to FRS 5 Non-current Assets Held for Sale and Discontinued Operations 1 July 2010 Amendments to FRS 127 Consolidated and Separate Financial Statements 1 July 2010 Amendments to FRS 138 Intangible Assets 1 July 2010 Amendments to IC Interpretation 9 Reassessment of Embedded Derivatives 1 July 2010 IC Interpretation 16 Hedges of a Net Investment in a Foreign Operation 1 July 2010 IC Interpretation 17 Distributions of Non-cash Assets to Owners 1 July 2010 Amendments to FRS 132: Classification of Rights Issues 1 March 2010 Amendments to FRS 1: Limited Exemption from Comparatives FRS 7 Disclosures for First-Time Adopters 1 January 2011 Amendments to FRS 7: Improving Disclosures about Financial Instruments 1 January 2011 IC Interpretation 15 Agreements for the Construction of Real Estate 1 January 2012

Except for the changes in accounting policies arising from the adoption of the revised FRS 3 and the Amendments to FRS 127, as well as the new disclosures required under the Amendments to FRS 7, the directors expect that the adoption of the other standards and interpretations above will have no material impact on the financial statements in the period of initial application. The nature of the impending changes in accounting policy on adoption of the revised FRS 3 and the Amendments to FRS 127 are described below.

Revised FRS 3 Business Combinations and Amendments to FRS 127 Consolidated and Separate Financial Statements

The revised standards are effective for annual periods beginning on or after 1 July 2010. The revised FRS 3 introduces a number of changes in the accounting for business combinations occurring after 1 July 2010. These changes will impact the amount of goodwill recognised, the reported results in the period that an acquisition occurs, and future reported results. The Amendments to FRS 127 require that a change in the ownership interest of a subsidiary (without loss of control) is accounted for as an equity transaction. Therefore, such transactions will no longer give rise to goodwill, nor will they give rise to a gain or loss. Furthermore, the amended standard changes the accounting for losses incurred by the subsidiary as well as the loss of control of a subsidiary. Other consequential amendments have been made to FRS 107 Statement of Cash Flows, FRS 112 Income Taxes, FRS 121 The Effects of Changes in Foreign Exchange Rates, FRS 128 Investments in Associates and FRS 131 Interests in Joint Ventures. The changes from revised FRS 3 and Amendments to FRS 127 will affect future acquisitions or loss of control and transactions with minority interests. The standards may be early adopted. However, the Group does not intend to early adopt.

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2. Summary of significant accounting policies (cont’d.) 2.3 Standards issued but not yet effective (cont’d.)

IC Interpretation 15 Agreements for the Construction of Real Estate This Interpretation clarifies when and how revenue and related expenses from the sale of a real estate unit should be

recognised if an agreement between a developer and a buyer is reached before the construction of the real estate is completed. Furthermore, the Interpretation provides guidance on how to determine whether an agreement is within the scope of FRS 111 Construction Contracts or FRS 118 Revenue.

The Group currently recognises revenue arising from property development projects using the stage of completion

method. Upon the adoption of IC Interpretation 15, the Group may be required to change its accounting policy to recognise such revenues at completion, or upon or after delivery. The Group is in the process of making an assessment of the impact of this Interpretation.

2.4 Basis of consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparation of the consolidated financial statements are prepared for the same reporting date as of the Company. Consistent accounting policies are applied to like transactions and events in similar circumstances.

All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions

are eliminated in full. Acquisition of subsidiaries are accounted for by applying the purchase method. Identifiable assets acquired and

liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Adjustments to those fair values relating to previously held interests are treated as a revaluation and recognised in other comprehensive income. The cost of a business combination is measured as the aggregate of the fair values, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity instruments issued, plus any costs directly attributable to the business combination.

Any excess of the cost of business combination over the Group’s share in the net fair value of the acquired subsidiary’s

identifiable assets, liabilities and contingent liabilities is recorded as goodwill on the statement of financial position. The accounting policy for goodwill is set out in Note 2.9(a). Any excess of the Group’s share in the net fair value of the acquired subsidiary’s identifiable assets, liabilities and contingent liabilities over the cost of business combination is recognised as income in profit or loss on the date of acquisition. When the Group acquires a business, embedded derivatives separated from the host contract by the acquiree are reassessed on acquisition unless the business combination results in a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required under the contract.

Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases.

Business combinations involving entities under common control are accounted for by applying the pooling of interest

method. The assets and liabilities of the combining entities are reflected at their carrying amounts reported in the consolidated financial statements of the controlling holding company. Any difference between the consideration paid and the share capital of the “acquired” entity is reflected within equity as merger reserve. The statement of comprehensive income reflects the results of the combining entities for the full year, irrespective of when the combination takes place. Comparatives are presented as if the entities have always been combined since the date the entities had come under common control.

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2.5 Transactions with minority interests

Minority interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group and are presented separately in profit or loss of the Group and within equity in the consolidated statements of financial position, separately from parent shareholders’ equity. Transactions with minority interests are accounted for using the entity concept method, whereby, transactions with minority interests are accounted for as transactions with owners. On acquisition of minority interests, the difference between the consideration and book value of the share of the net assets acquired is recognised directly in equity. Gain or loss on disposal to minority interests is recognised directly in equity.

2.6 Foreign currency

a) Functional and presentation currency

The individual financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in Ringgit Malaysia (“RM”), which is also the Company’s functional currency.

b) Foreign currency transactions

Transactions in foreign currencies are measured in the respective functional currencies of the Company and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary items denominated in foreign currencies that are measured at historical cost are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items denominated in foreign currencies measured at fair value are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at the

reporting date are recognised in profit or loss except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign operations, which are recognised initially in other comprehensive income and accumulated under foreign currency translation reserve in equity. The foreign currency translation reserve is reclassified from equity to profit or loss of the Group on disposal of the foreign operation.

Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit

or loss for the period except for the differences arising on the translation of non-monetary items in respect of which gains and losses are recognised directly in equity. Exchange differences arising from such non-monetary items are also recognised directly in equity.

2.7 Property, plant and equipment

All items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

Subsequent to recognition, property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. When significant parts of property, plant and equipment are required to be replaced in intervals, the Group recognises such parts as individual assets with specific useful lives and depreciation, respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.

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2. Summary of significant accounting policies (cont’d.) 2.7 Property, plant and equipment (cont’d.)

Construction work-in-progress is not depreciated. Depreciation of other property, plant and equipment is computed on a straight-line basis over the estimated useful lives of the assets as follows:

Leasehold land Remaining lease period Buildings 2% Plant and machinery 10% - 20% Motor vehicles 10% - 20% Office equipment 10% - 20% Office renovation 8% - 10% Furniture and fittings 10% - 20% Signboard 10%

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumtances indicate that the carrying value may not be recoverable.

The residual value, useful life and depreciation method are reviewed at each financial year-end, and adjusted

prospectively, if appropriate. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are

expected from its use or disposal. Any gain or loss on derecognition of the asset is included in the profit or loss in the year the asset is derecognised.

2.8 Investment properties Investment properties are initially measured at cost, including transaction costs. Investment properties are measure

using cost model. Thus, subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and less accumulated impairment.

The depreciation policy for investment properties is in accordance with that for depreciable property, plant and

equipment as described in Note 2.7. Investment properties are derecognised when either they have been disposed of or when the investment property

is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gain or loss on the retirement or disposal of an investment property is recognised in profit or loss in the year of retirement or disposal.

2.9 Intangible assets Goodwill Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less accumulated

impairment losses. For the purpose of impairment testing, goodwill acquired is allocated, from the acquisition date, to each of the

Group’s cash-generating units that are expected to benefit from the synergies of the combination.

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2.9 Intangible assets (cont’d.)

Goodwill (cont’d.)

The cash-generating unit to which goodwill has been allocated is tested for impairment annually and whenever there is an indication that the cash-generating unit may be impaired, by comparing the carrying amount of the cash-generating unit, including the allocated goodwill, with the recoverable amount of the cash-generating unit. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised in the profit or loss. Impairment losses recognised for goodwill are not reversed in subsequent periods.

Where goodwill forms part of a cash-generating unit and part of the operation within that cash-generating unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative fair values of the operations disposed of and the portion of the cash-generating unit retained.

2.10 Impairment of non-financial assets The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such

indication exists, or when an annual impairment assessment for an asset is required, the Group makes an estimate of the asset’s recoverable amount.

An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. For the

purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units (“CGU”)).

In assessing value in use, the estimated future cash flows expected to be generated by the asset are discounted to

their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to those units or groups of units and then, to reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis.

Impairment losses are recognised in profit or loss except for assets that are previously revalued where the revaluation

was taken to other comprehensive income. In this case the impairment is also recognised in other comprehensive income up to the amount of any previous revaluation.

An assessment is made at each reporting date as to whether there is any indication that previously recognised

impairment losses may no longer exist or may have decreased. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in profit or loss unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase. Impairment loss on goodwill is not reversed in a subsequent period.

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2.11 Subsidiaries A subsidiary is an entity over which the Group has the power to govern the financial and operating policies so as to

obtain benefits from its activities. In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost less impairment

losses.

2.12 Associates An associate is an entity, not being a subsidiary or a joint venture, in which the Group has significant influence. An

associate is equity accounted for from the date the Group obtains significant influence until the date the Group ceases to have significant influence over the associate.

The Group’s investments in associates are accounted for using the equity method. Under the equity method, the

investment in associates is measured in the statement of financial position at cost plus post-acquisition changes in the Group’s share of net assets of the associates. Goodwill relating to associates is included in the carrying amount of the investment. Any excess of the Group’s share of the net fair value of the associate’s identifiable assets, liabilities and contingent liabilities over the cost of the investment is excluded from the carrying amount of the investment and is instead included as income in the determination of the Group’s share of the associate’s profit or loss for the period in which the investment is acquired.

When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group does not

recognise further losses, unless it has incurred obligations or made payments on behalf of the associate. After application of the equity method, the Group determines whether it is necessary to recognise an additional

impairment loss on the Group’s investment in its associates. The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount in profit or loss.

The financial statements of the associates are prepared as of the same reporting date as the Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.

In the Company’s separate financial statements, investments in associates are stated at cost less impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss.

2.13 Land held for property development and property development costs a) Land held for property development

Land held for property development consists of land where no development activities have been carried out or where development activities are not expected to be completed within the normal operating cycle. Such land is classified within non-current assets and is stated at cost less any accumulated impairment losses.

Land held for property development is reclassified as property development costs at the point when development

activities have commenced and where it can be demonstrated that the development activities can be completed within the normal operating cycle.

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2.13 Land held for property development and property development costs (cont’d.)

b) Property development costs Property development costs comprise all costs that are directly attributable to development activities or that

can be allocated on a reasonable basis to such activities. When the financial outcome of a development activity can be reliably estimated, property development revenue

and expenses are recognised in profit anf loss by using the stage of completion method. The stage of completion is determined by the proportion that property development costs incurred for work performed to date to date bear to the estimated total property development costs.

Where the financial outcome of a development activity cannot be reliably estimated, property development revenue is recognised only to the extent of property development costs incurred that is probable will be recoverable, and property development costs on properties sold are recognised as an expense in the period in which they are incurred.

Any expected loss on a development project, including costs to be incurred over the defects liability period, is

recognised as an expense immediately.

Property development costs not recognised as an expense are recognised as an asset, which is measured at the lower of cost and net realisable value

The excess of revenue recognised in the income statement over billings to purchasers is classified as accrued billings within trade receivables and the excess of billings to purchasers over revenue recognised in the income statement is classified as progress billings within trade payables.

2.14 Construction contracts

Where the outcome of a construction contract can be reliably estimated, contract revenue and contract costs are recognised as revenue and expenses respectively by using the stage of completion method. The stage of completion is measured by reference to the proportion of contract costs incurred for work performed to date to the estimated total contract costs.

Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the

extent of contract costs incurred that are likely to be recoverable. Contract costs are recognised as expense in the period in which they are incurred.

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an

expense immediately. Contract revenue comprises the initial amount of revenue agreed in the contract and variations in contract work,

claims and incentive payments to the extent that it is probable that they will result in revenue and they are capable of being reliably measured.

When the total of costs incurred on construction contracts plus recognised profits (less recognised losses) exceeds

progress billings, the balance is classified as amount due from customers on contracts. When progress billings exceed costs incurred plus, recognised profits (less recognised losses), the balance is classified as amount due to customers on contracts.

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2.15 Financial assets

Financial assets are recognised in the statements of financial position when, and only when, the Group and the Company becomes a party to the contractual provisions of the financial instrument.

When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not

at fair value through profit or loss, directly attributable transaction costs. The Group and the Company determine the classification of their financial assets at initial recognition, and the

categories include financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments and available-for-sale financial assets.

The Group and the Company classified their financial assets as available-for-sale and loans and receivables.

a) Available-for-sale financial assets

Available-for-sale financial assets are measured at fair value. Any gains or losses from changes in fair value of the financial assets are recognised in other comprehensive income, except that impairment losses, foreign exchange gains and losses on monetary instruments and interest calculated using the effective interest method are recognised in profit or loss. The cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment when the financial asset is derecognised. Interest income calculated using the effective interest method is recognised in profit or loss. Dividends on an available-for-sale equity instrument are recognised in profit or loss when the Group’s right to receive payment is established.

Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less

impairment loss.

Available-for-sale financial assets are classified as non-current assets unless they are expected to be realised within 12 months after the reporting date.

b) Loans and receivables Financial assets with fixed or determinable payments that are not quoted in an active market are classified as

loans and receivables. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective

interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.

Loans and receivables are classified as current assets, except for those having maturity dates later than 12

months after the reporting date which are classified as non-current.

A financial asset is derecognised where the contractual right to receive cash flows from the asset has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss.

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2.15 Financial assets (cont’d.)

Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace concerned. All regular way purchases and sales of financial assets are recognised or derecognised on the trade date i.e., the date that the Group and the Company commit to purchase or sell the asset.

2.16 Impairment of financial assets The Group and the Company assess at each reporting date whether there is any objective evidence that a financial

asset is impaired. a) Trade and other receivables and other financial assets carried at amortised cost

To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Group and the Company consider factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis based on similar risk characteristics. Objective evidence of impairment for a portfolio of receivables could include the Group’s and the Company’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period and observable changes in national or local economic conditions that correlate with default on receivables.

If any such evidence exists, the amount of impairment loss is measured as the difference between the asset’s

carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets

with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable becomes uncollectible, it is written off against the allowance account.

If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.

b) Available-for-sale financial assets Significant or prolonged decline in fair value below cost, significant financial difficulties of the issuer or obligor,

and the disappearance of an active trading market are considerations to determine whether there is objective evidence that investment securities classified as available-for-sale financial assets are impaired.

If an available-for-sale financial asset is impaired, an amount comprising the difference between its cost (net

of any principal payment and amortisation) and its current fair value, less any impairment loss previously recognised in profit or loss, is transferred from equity to profit or loss.

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2.16 Impairment of financial assets (cont’d.)

b) Available-for-sale financial assets (cont’d.)

Impairment losses on available-for-sale equity investments are not reversed in profit or loss in the subsequent periods. Increase in fair value, if any, subsequent to impairment loss is recognised in other comprehensive income. For available-for-sale debt investments, impairment losses are subsequently reversed in profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss in profit or loss.

2.17 Cash and cash equivalents

For the purposes of the cash flow statements, cash and cash equivalents include cash in hand and at bank and deposits at call which have an insignificant risk of changes in value, net of outstanding bank overdrafts.

2.18 Inventories Inventories are stated at the lower of cost and net realisable value. Costs incurred in bringing the inventories to their

present location and condition are accounted for as follows:

- Raw materials: purchase costs on a first-in first-out basis. - Finished goods and work-in-progress: costs of raw materials, direct labour, other direct costs and appropriate

proportions of production overheads. The cost of unsold properties comprises cost associated with the purchase of land, direct costs and appropriate

proportions of common costs. Net realisable value is the estimated selling price in the ordinary course of business less estimated costs of completion

and the estimated costs necessary to make the sale.

2.19 Provisions Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event,

it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be estimated reliably.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer

probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

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2.20 Financial liabilities

Financial liabilities are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability.

Financial liabilities, within the scope of FRS 139, are recognised in the statement of financial position when, and only

when, the Group and the Company become a party to the contractual provisions of the financial instrument. Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities.

a) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial

liabilities designated upon initial recognition as at fair value through profit or loss. The Group and the Company have not designated any financial liabilities as at fair value through profit or

loss.

b) Other financial liabilities

The Group’s and the Company’s other financial liabilities include trade payables, other payables and borrowing.

Trade and other payables are recognised initially at fair value plus directly attributable transaction costs and

subsequently measured at amortised cost using the effective interest method. Borrowing is recognised initially at fair value, net of transaction costs incurred, and subsequently measured at

amortised cost using the effective interest method. Borrowing is classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities are derecognised,

and through the amortisation process.

A financial liability is derecognised when the obligation under the liability is extinguished. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

2.21 Borrowing costs

Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the acquisition, construction or production of that asset. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sale are in progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their intended use or sale.

All other borrowing costs are recognised in profit or loss in the period they are incurred. Borrowing costs consist of

interest and other costs that the Group incurred in connection with the borrowing of funds.

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2.22 Employee benefits

a) Short term benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which the associated services are rendered by employees. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences, and short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.

b) Defined contribution plans

The Group participates in the national pension schemes as defined by the laws of the countries in which it has operations. The companies in the Group make contributions to the Employee Provident Fund in Malaysia, a defined contribution pension scheme. Contributions to defined contribution pension schemes are recognised as an expense in the period in which the related service is performed.

2.23 Leases

Finance leases, which transfer to the Company substantially all the risks and rewards incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Any initial direct costs are also added to the amount capitalised. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to profit or loss. Contingent rents, if any, are charged as expenses in the periods in which they are incurred.

Leased assets are depreciated over the estimated useful life of the asset. However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life and the lease term.

Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.

2.24 Revenue Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the

revenue can be reliably measured. Revenue is measured at the fair value of consideration received or receivable.

a) Sale of properties Revenue from sale of properties is accounted for by the stage of completion method as described in Note

2.13(b).

b) Construction contracts

Revenue from construction contracts is accounted for by the stage of completion method as described in Note 2.14.

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2. Summary of significant accounting policies (cont’d.) 2.24 Revenue

c) Sale of goods Revenue is recognised net of sales taxes and upon transfer of significant risk and rewards of ownership to the

buyer. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.

d) Revenue from services Revenue from services is recognised net of service taxes and discounts as and when the services are

performed. e) Dividend income

Dividend income is recognised when the right to receive payment is established. f) Rental income

Rental income from investment property is recognised on a straight-line basis over the term of the lease. g) Interest income

Interest income is recognised using the effective interest method. h) Management fees Management fees are recognised when services are rendered.

2.25 Income taxes

a) Current tax Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the

taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.

Current taxes are recognised in profit or loss except to the extent that the tax relates to items recognised

outside profit or loss, either in other comprehensive income or directly in equity.

b) Deferred tax Deferred tax is provided using the liability method on temporary differences at the reporting date between the

tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

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2.25 Income taxes (cont’d.)

b) Deferred tax (cont’d.) Deferred tax liabilities are recognised for all temporary differences, except:

- where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in

a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

- in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised except: - where the deferred tax asset relating to the deductible temporary difference arises from the initial

recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

- in respect of deductible temporary differences associated with investments in subsidiaries, associates

and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax assets to be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when

the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred

tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current

tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

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2.26 Segment reporting

For management purposes, the Group is organised into operating segments based on their products and services which are independently managed by the respective segment managers responsible for the performance of the respective segments under their charge. The segment managers report directly to the management of the Company who regularly review the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in Note 37, including the factors used to identify the reportable segments and the measurement basis of segment information.

2.27 Share capital and share issuance expenses

An equity instrument is any contract that evidences a residual interest in the assets of the Group and the Company after deducting all of its liabilities. Ordinary shares are equity instruments.

Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction costs.

Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared.

2.28 Contingencies

A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence will

be confirmed only by the occurrence or non-occurrence of uncertain future event(s) not wholly within the control of the Group.

Contingent liabilities and assets are not recognised in the statements of financial position of the Group.

3. Significant accounting judgements and estimates The preparation of the Group’s financial statements requires management to make judgements, estimates and assumptions

that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future.

3.1 Judgements made in applying accounting policies

In the process of applying the Group’s accounting policies, management has made the following judgements, apart

from those involving estimations, which have the most significant effect on the amounts recognised in the financial statements:

(a) Impairment of available-for-sale investments

The Group reviews its debt securities classified as available-for-sale investments at each reporting date to

assess whether they are impaired. The Group also records impairment charges on available-for-sale equity investments when there has been a significant or prolonged decline in the fair value below their cost.

The determination of what is “significant” or “prolonged” requires judgement. In making this judgement, the

Group evaluates, among other factors, historical share price movements and the duration and extent to which the fair value of an investment is less than its cost.

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3. Significant accounting judgements and estimates (cont’d.) 3.2 Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(a) Impairment of loans and receivables

The Group assesses at each reporting date whether there is any objective evidence that a financial asset is

impaired. To determine whether there is objective evidence of impairment, the Group considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments.

Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated

based on historical loss experience for assets with similar credit risk characteristics. The carrying amount of the Group’s loans and receivables at the reporting date is disclosed in Note 19. If the present value of estimated future cash flows varies by 10% from management’s estimates, the Group’s allowance for impairment will increase or decrease by approximately RM564,000 (2009: RM472,000).

(b) Property development

The Group recognises property development revenue and expenses in the statement of comprehensive income by using the stage of completion method. The stage of completion is determined by the proportion that property development costs incurred for work performed to date bear to the estimated total property development costs.

Significant judgement is required in determining the stage of completion, the extent of the property development costs incurred, the estimated total property development revenue and costs, as well as the recoverability of the property development costs. In making the judgement, the Group evaluates based on past experience and by relying on the work of specialists.

The carrying amounts of assets and liabilities of the Group arising from property development activities are disclosed in Note 13. A 10% difference in the estimated total property development revenue or costs would result in approximately 8% (2009: 9%) variance in the Group’s revenue and 4% (2009: 5%) variance in the Group’s cost of sales.

(c) Impairment of goodwill Goodwill is tested for impairment annually and at other times when such indicators exist. This requires an

estimation of the value in use of the cash-generating units to which goodwill is allocated. When value in use calculations are undertaken, management must estimate the expected future cash flows

from the asset or cash-generating unit and choose a suitable discount rate in order to calculate the present value of those cash flows. Further details of the carrying value, the key assumptions applied in the impairment assessment of goodwill and sensitivity analysis to changes in the assumptions are given in Note 15.

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3. Significant accounting judgements and estimates (cont’d.) 3.2 Key sources of estimation uncertainty (cont’d.)

(d) Deferred tax assets

Deferred tax assets are recognised for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based on the likely timing and level of future taxable profits together with future tax planning strategies.

Assumptions about generation of future taxable profits depend on management’s estimates of future cash flows. These depends on estimates of future production and sales volume, operating costs, capital expenditure, dividends and other capital management transactions. Judgement is also required about application of income tax legislation. These judgements and assumptions are subject to risks and uncertainty, hence there is a possibility that changes in circumstances will alter expectations, which may impact the amount of deferred tax assets recognised in the statements of financial position and the amount of unrecognised tax losses and unrecognised temporary differences.

4. Revenue Group Company 2010 2009 2010 2009 RM RM RM RM Sale of properties 66,386,039 88,344,690 - - Construction contracts 9,239,994 1,224,000 - - Sale of goods 2,921,711 6,091,135 - - Management fees 800,294 926,747 12,028,056 745,920 Rental income 2,566,153 2,772,268 - - Dividend income 3,229,161 3,821,822 - 5,920,326 85,143,352 103,180,662 12,028,056 6,666,246

5. Cost of sales Group 2010 2009 RM RM Property development costs (Note 13(b)) 25,612,177 39,937,356 Additional costs for completed project 4,482,264 17,569 Cost of land held for property development sold (Note 13(a)) 8,021,639 19,903,672 Cost of inventories sold 14,368,350 18,629,704 Cost of services rendered 1,360,700 792,694 Cost of construction contracts 6,580,282 2,467,664 Sand mining operations - 207,748 60,425,412 81,956,407

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6. Finance costs Group Company 2010 2009 2010 2009 RM RM RM RM Interest expense on: Hire purchase 37,208 56,378 14,592 5,458 Term loans 213,566 363,083 - - Overdrafts 1,650,473 1,848,703 - - Revolving credits 158,883 117,021 - - Rainbow Exchangeable Bonds 3,783,171 4,469,452 3,783,171 4,469,452 Other interests 270,702 166,529 1,658,026 - 6,114,003 7,021,166 5,455,789 4,474,910 7. Profit/(loss) before tax The following items have been included in arriving at profit/(loss) before tax: Group Company 2010 2009 2010 2009 RM RM RM RM Employee benefits expense (Note 8) 10,253,565 11,637,077 7,017,173 860,716 Non-executive directors’ remuneration (Note 9) 727,150 573,400 652,450 532,450 Auditors’ remuneration: - Current year 160,000 153,000 15,000 10,000 - Underprovision in prior year - 10,000 - - Impairment loss on financial assets: - Trade receivables 1,424,214 2,095,989 - - - Other receivables 424,478 24,758 107,379 247,711 Property, plant and equipment written off - 2,263,101 - - Office rental 506,432 500,313 444,179 - Rental - others 14,535 - - - Provision for impairment losses in inventories 191,912 - - - Rental income (102,050) (21,900) - - Dividend income (3,233,376) (3,822,731) - - Property development costs written off - 191,328 - - Depreciation of property, plant and equipment (Note 12) 1,249,622 1,225,295 45,911 32,028 Depreciation of investment properties (Note 14) 171,783 171,783 - - Impairment of property development costs (Note 13(b)) 241,244 3,538,636 - - Impairment of intangible asset - 15,016 - - Provision for impairment losses in investments in subsidiaries - - - 2,250,000 Provision for impairment losses in investments in marketable securities - 11 - - Interest income (385,773) (710,776) (19,593,163) (2,889,339)

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7. Profit/(loss) before tax (cont’d.)

Group Company 2010 2009 2010 2009 RM RM RM RM Reversal of provision for reclamation costs - (557,076) - - Reversal of provision for impairment losses in investments in subsidiaries - - - (862,215) Reversal of provision for impairment losses in inventories (143,033) (89,665) - - Reversal of provision for impairment losses in investments in marketable securities - (88,193) - (27,396) Reversal of allowance for doubtful debts - Trade receivables (432,202) (2,400) - - - Other receivables - (90,134) - - Bad debts written off - 108,663 - - Gain on disposal of property, plant and equipment (2,873,662) (29,285) - 22,048 Gain on disposal of investments (3,190,544) (896,176) - (84,243)

8. Employee benefits expense Group Company 2010 2009 2010 2009 RM RM RM RM

Wages and salaries 7,592,447 8,076,454 4,429,750 704,251 Social security contributions 94,304 100,202 52,467 1,085 Short-term accumulating compensated absences (63,412) 632,671 734,570 - Contributions to defined contribution plan 927,004 981,326 571,740 49,908 Pension costs - defined benefit plan (Note 24) 636,918 809,963 371,535 - Other staff related expenses 1,066,304 1,036,461 857,111 105,472 10,253,565 11,637,077 7,017,173 860,716

Included in employee benefits expense of the Group are executive directors’ remuneration amounting to RM430,260 (2009: RM431,560) as further disclosed in Note 9.

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9. Directors’ remuneration Group Company 2010 2009 2010 2009 RM RM RM RM Executive directors’ remuneration (Note 8): Salaries and other emoluments 430,260 431,560 - - Non-executive directors’ remuneration (Note 7): Fees 501,000 351,000 501,000 351,000 Other emoluments 226,150 222,400 151,450 181,450 727,150 573,400 652,450 532,450 Total directors’ remuneration 1,157,410 1,004,960 652,450 532,450

The number of directors of the Company whose total remuneration during the financial year fell within the following bands is analysed below:

Number of Directors 2010 2009

Non-executive directors: Up to RM50,000 - 2 RM50,001 – RM100,000 7 7 RM100,001 – RM150,000 1 -

10. Income tax expense

Major components of income tax expense

The major components of income tax expense for the years ended 31 December 2010 and 2009 are: Group Company 2010 2009 2010 2009 RM RM RM RM

Statement of comprehensive income: Current income tax: Malaysian income tax 2,892,384 2,334,488 2,710,816 - Underprovision/(overprovision) in prior year 41,455 (254,376) 126,910 - 2,933,839 2,080,112 2,837,726 -

Deferred income tax (Note 32): Relating to originating and reversal of temporary differences (741,613) (713,408) (276,527) - Underprovision/(overprovision) in prior year 158,427 (1,025,157) - -

(583,186) (1,738,565) (276,527) - Total income tax expense 2,350,653 341,547 2,561,199 -

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10. Income tax expense (cont’d.)

Reconciliation between tax expense and accounting profit The reconciliation between tax expense and the product of accounting profit multiplied by the applicable corporate tax rate

for the years ended 31 December 2010 and 2009 are as follows: 2010 2009 RM RM

Group Profit/(loss) before taxation 6,826,749 (8,364,709)

Taxation at Malaysian statutory tax rate of 25% (2009: 25%) 1,706,687 (2,091,177) Utilisation of Group relief (2,070,165) (823,558) Effect of income not subject to tax (3,566,573) (2,278,215) Effect of expenses not deductible for tax purposes 5,197,551 4,355,868 Effect of utilisation of previously unrecognised tax losses and unabsorbed capital allowances (1,881,780) (426,366) Deferred tax assets not recognised in respect of current year’s tax losses and unabsorbed capital allowances 2,765,051 2,884,528 Under/(over) provision of deferred tax in prior year 158,427 (1,025,157) Under/(over) provision of income tax in prior year 41,455 (254,376 Tax expense for the year 2,350,653 341,547 Company

Profit before taxation 16,498,221 346,974 Taxation at Malaysian statutory tax rate of 25% 4,124,555 86,744 Utilisation of Group relief (2,070,165) - Effect of income not subject to tax - (1,480,082) Effect of expenses not deductible for tax purposes 382,231 1,567,552 Effect of utilisation of previously unrecognised tax losses (2,332) (174,214) Underprovision of income tax in prior year 126,910 - Tax expense for the year 2,561,199 - Income tax is calculated at the Malaysian statutory tax rate of 25% (2009: 25%) of the estimated assessable profit for the

year. Tax savings during the financial year arising from: Group Company 2010 2009 2010 2009 RM RM RM RM Utilisation of previously unrecognised tax losses and unabsorbed capital allowances 1,881,780 426,366 2,332 174,214

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11. Earnings/(loss) per share

(a) Basic

Basic earnings/(loss) per share amounts are calculated by dividing profit/(loss) for the year, net of tax, attributable to owners of the parent by the weighted average number of ordinary shares outstanding during the financial year.

Group 2010 2009 Profit/(loss) attributable to ordinary equity holders of the Company (RM) 1,043,766 (4,419,244) Weighted average number of ordinary shares in issue (units) 205,978,000 205,978,000 Basic earnings/(loss) per share (sen) 0.51 (2.15)

(b) Diluted No diluted earnings per share were presented as there were no potential dilutive ordinary shares outstanding as at 31

December 2010.

12. Property, plant and equipment Construction Leasehold work-in- Plant and Other land Buildings progress machinery assets* Total RM RM RM RM RM RM Group Cost: At 1 January 2009 As previously stated - 13,922,406 2,237,500 4,363,715 8,664,829 29,188,450 Effects of adopting the amendments to FRS 117 112,784 - - - - 112,784

As restated 112,784 13,922,406 2,237,500 4,363,715 8,664,829 29,301,234 Reclassification - - - 1,309,796 (1,309,796) - Additions - 16,309 - 8,960 278,442 303,711 Disposals - - - (401,000) (159,940) (560,940) Written off - - (2,237,500) - (35,171) (2,272,671) At 31 December 2009 and 1 January 2010 112,784 13,938,715 - 5,281,471 7,438,364 26,771,334 Additions - - - - 361,473 361,473 Disposals - (3,697,140) - (228,000) (1,092,509) (5,017,649) At 31 December 2010 112,784 10,241,575 - 5,053,471 6,707,328 22,115,158

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12. Property, plant and equipment (cont’d.)

Construction Leasehold work-in- Plant and Other land Buildings progress machinery assets* Total RM RM RM RM RM RM Group (cont’d.) Accumulated depreciation: At 1 January 2009 As previously stated - 953,343 - 1,874,686 5,188,970 8,016,999 Effects of adopting the amendments to FRS 117 31,096 - - - - 31,096 As restated 31,096 953,343 - 1,874,686 5,188,970 8,048,095 Reclassification - - - 1,017,288 (1,017,288) - Charge for the year (Note 7) 2,210 278,623 - 338,671 605,791 1,225,295 Disposals - - - (400,997) (59,245) (460,242) Written off - - - - (9,570) (9,570) At 31 December 2009 and 1 January 2010 33,306 1,231,966 - 2,829,648 4,708,658 8,803,578 Disposals - (178,086) - (205,761) (677,422) (1,061,269) Charge for the year (Note 7) 2,210 228,943 - 338,414 680,055 1,249,622 At 31 December 2010 35,516 1,282,823 - 2,962,301 4,711,291 8,991,931 Net carrying amount: At 31 December 2009 79,478 12,706,749 - 2,451,823 2,729,706 17,967,756 At 31 December 2010 77,268 8,958,752 - 2,091,170 1,996,037 13,123,227

*Other assets consist of office renovation, furniture and fittings, office equipment, motor vehicles and signboard.

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12. Property, plant and equipment (cont’d.) Office Motor equipment vehicles Total RM RM RM Company Cost: At 1 January 2009 8,300 442,540 450,840 Disposal - (157,051) (157,051) At 31 December 2009 and 1 January 2010 8,300 285,489 293,789 Addition - 183,000 183,000 At 31 December 2010 8,300 468,489 476,789 Accumulated depreciation: At 1 January 2009 5,122 74,847 79,969 Charge for the year (Note 7) 1,660 30,368 32,028 Disposal - (58,776) (58,776) At 31 December 2009 and 1 January 2010 6,782 46,439 53,221 Charge for the year (Note 7) 1,517 44,394 45,911 At 31 December 2010 8,299 90,833 99,132 Net carrying amount: At 31 December 2009 1,518 239,050 240,568 At 31 December 2010 1 377,656 377,657 During the financial year, the Group and the Company acquired property, plant and equipment at aggregate costs of

RM361,473 (2009: RM303,711) and RM183,000 (2009: RM Nil) of which RM183,000 (2009: RM78,926) and RM183,000 (2009: RM Nil) respectively were acquired by means of hire purchase. Net carrying amounts of property, plant and equipment held under hire purchase arrangements are as follows:

Group Company 2010 2009 2010 2009 RM RM RM RM Motor vehicles 739,004 718,091 389,368 239,050 Plant and machinery 337,317 392,017 - - 1,076,321 1,110,108 389,368 239,050

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13. Land held for property development and property development costs (a) Land held for property development Freehold Leasehold land land Total RM RM RM Group At 31 December 2010 Cost At 1 January 2010 44,538,641 108,993,950 153,532,591 Additions 5,314,534 6,393,562 11,708,096 Disposals (Note 5) (7,882,039) (139,600) (8,021,639) Reclassification 10,857,692 (10,857,692) - Transfer from property development costs (Note 13(b)) 1,631,557 4,573,176 6,204,733 Transfer to property development costs (Note 13(b)) (350,000) (410,807) (760,807) At 31 December 2010 54,110,385 108,552,589 162,662,974 Accumulated impairment losses At 1 January/31 December (382,000) (20,116,367) (20,498,367) Carrying amount at 31 December 2010 53,728,385 88,436,222 142,164,607 At 31 December 2009 Cost At 1 January 2009 60,785,451 103,432,545 164,217,996 Additions 4,864 3,760 8,624 Disposals (Note 5) (16,060,102) (3,843,570) (19,903,672) Transfer from property development costs (Note 13(b)) 2,321,555 9,401,215 11,722,770 Transfer to property development costs (Note 13(b)) (2,513,127) - (2,513,127) At 31 December 2009 44,538,641 108,993,950 153,532,591 Accumulated impairment losses At 1 January/31 December (382,000) (20,116,367) (20,498,367) Carrying amount at 31 December 2009 44,156,641 88,877,583 133,034,224

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13. Land held for property development and property development costs (cont’d.) (b) Property development costs Freehold Leasehold Development land land costs Total RM RM RM RM Group At 31 December 2010 Cumulative property development costs At 1 January 2010 25,607,036 11,567,324 261,726,167 298,900,527 Costs incurred during the year 2,139,562 1,391,220 25,714,913 29,245,695 Transfer from land held for property development (Note 13(a)) 350,000 410,807 - 760,807 Transfer to land held for property development (Note 13(a)) (1,631,557) (4,573,176) - (6,204,733) Unsold units transferred to inventories (102,422) (2,714,725) (2,817,147) Disposal - - (20,284,212) (20,284,212) Reversal of completed projects (347,135) (657,300) (19,369,813) (20,374,248) At 31 December 2010 26,015,484 8,138,875 245,072,330 279,226,689 Accumulated impairment losses At 1 January 2010 - - (3,538,636) (3,538,636) Impairment loss for the year (Note 7) - (92,342) (148,902) (241,244) At 31 December 2010 - (92,342) (3,687,538) (3,779,880)

Cumulative costs recognised in income statement At 1 January 2010 (2,906,674) (233,952) (134,521,328) (137,661,954) Recognised during the year (Note 5) (97,939) (657,300) (24,856,938) (25,612,177) Reversal of completed projects 347,135 657,300 19,369,813 20,374,248 At 31 December 2010 (2,657,478) (233,952) (140,008,453) (142,899,883) Property development costs at 31 December 2010 23,358,006 7,812,581 101,376,339 132,546,926

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13. Land held for property development and property development costs (cont’d.) (b) Property development costs (cont’d.) Freehold Leasehold Development land land costs Total RM RM RM RM Group (cont’d.) At 31 December 2009 Cumulative property development costs At 1 January 2009 23,517,850 34,700,490 240,074,391 298,292,731 Costs incurred during the year 2,346,235 9,401,215 59,525,170 71,272,620 Transfer from land held for property development (Note 13(a) 2,513,127 - - 2,513,127 Reclassification (218,068) - 218,068 - Disposal - (278,542) (709,050) (987,592) Written off - - (191,328) (191,328) Transfer to land held for property development (Note 13(a)) (2,321,555) (9,401,215) - (11,722,770) Unsold units transferred to inventories (53,205) (20,886,443) (3,687,023) (24,626,671) Reversal of completed projects (177,348) (1,968,181) (33,504,061) (35,649,590) At 31 December 2009 25,607,036 11,567,324 261,726,167 298,900,527 Accumulated impairment losses At 1 January 2009 - - - - Impairment loss for the year (Note 7) - - (3,538,636) (3,538,636) At 31 December 2009 - - (3,538,636) (3,538,636) Cumulative costs recognised in income statement At 1 January 2009 (3,004,923) (139,573) (130,229,692) (133,374,188) Recognised during the year (Note 5) (79,099) (2,062,560) (37,795,697) (39,937,356) Reversal of completed projects 177,348 1,968,181 33,504,061 35,649,590 At 31 December 2009 (2,906,674) (233,952) (134,521,328) (137,661,954) Property development costs at 31 December 2009 22,700,362 11,333,372 123,666,203 157,699,937

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13. Land held for property development and property development costs (cont’d.) The freehold land and leasehold land of certain subsidiaries with a carrying value of RM27,033,882 (2009: RM18,039,451)

have been charged as security for short term borrowings.

The title of leasehold land held for development of a subsidiary with a carrying value of RM33,747,037 (2009: RM43,241,592) is still pending transfer to the subsidiary’s name from the ultimate holding corporation, Perbadanan Kemajuan Negeri Pahang.

The title of freehold land held for development of a subsidiary with a carrying value of RM32,309,074 (2009: RM37,345,110) is still pending transfer to the subsidiary’s name from the vendor.

14. Investment properties Group 2010 2009 RM RM Buildings Cost At 1 January/31 December 8,640,694 8,640,694 Accumulated depreciation At 1 January 1,296,157 1,124,374 Charge for the year (Note 7) 171,783 171,783 At 31 December 1,467,940 1,296,157 Net carrying amount At 31 December 7,172,754 7,344,537 Part of the leasehold building of a subsidiary with carrying value amounting to RM142,081 (2009: RM147,309) is pledged

to financial institutions for credit facilities granted to the subsidiary as detailed in Note 25.

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15. Intangible asset Group 2010 2009 RM RM Goodwill Cost: At 1 January/31 December 4,577,645 4,577,645 Accumulated amortisation and impairment: At 1 January 3,769,403 3,754,387 Impairment loss (Note 7) - 15,016 At 31 December 3,769,403 3,769,403 Net carrying amount: At 31 December 808,242 808,242 (a) Impairment loss on goodwill recognised

Goodwill of the Group arises from acquisition of certain subsidiaries within the Group. The management has carried out an impairment test on the goodwill as some of the subsidiaries have been making losses and ceased operations. The impairment test led to the recognition of an impairment loss on goodwill of RM Nil (2009: RM15,016) as disclosed in Note 7 to the financial statements.

(b) Key assumptions used in value-in-use calculations

The recoverable amount of the goodwill, for purpose of the impairment testing, is determined based on value-in-use calculations using cash flow projections. The key assumptions used for value-in-use calculations are gross margin of 25% (2009: 25%) and discount rate of 7.80% (2009: 7.80%).

16. Investments in subsidiaries Company 2010 2009 RM RM Unquoted shares at cost 99,443,569 81,824,753 Less: Accumulated impairment losses (31,880,472) (31,880,472)

67,563,097 49,944,281

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16. Investments in subsidiaries (cont’d.) Details of the subsidiaries are as follows: Country of Proportion of Name incorporation Principal activities ownership 2010 2009 % % Pasdec Corporation Sdn. Bhd. Malaysia Property development and 100 100 project management

Kuantan Tembeling Resort Sdn. Bhd. Malaysia Property development and 100 100 project management

Pasdec Land Sdn. Bhd. Malaysia Property development 100 100 Pasdec Bina Sdn. Bhd.# Malaysia Building and civil construction 100 100 Kimdec Corporation Sdn. Bhd. Malaysia Property development 100 51 Kuantan Bricks Sdn. Bhd.*# Malaysia Manufacturing and supply 100 100 of bricks Sumbangan Sakti Sdn. Bhd.# Malaysia Property development 100 100 Pasdec Mega Sdn. Bhd. Malaysia Property development 100 100 Pasdec Pintas Sdn. Bhd.# Malaysia Dormant 70 70 Pasdec Putra Sdn. Bhd.** Malaysia Property development 100 100 Mutiara Pasdec Sdn. Bhd.# Malaysia Investment holding 100 100 Pahang Aircraft Industries Malaysia Dormant 100 100 Sdn. Bhd.***# Pasdec Trading Sdn. Bhd.*** Malaysia Trading of building materials 100 100 and provision of insurance services Bentong Aquarium & Sanctuary Park Sdn. Bhd.# Malaysia Dormant 70 70 During the year, the Company has incorporated the following subsidiary: Pasdec Engineering Sdn. Bhd. Malaysia Value engineering and 100 - consultancy services

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16. Investments in subsidiaries (cont’d.)

* Subsidiary of Pasdec Bina Sdn. Bhd.. ** Subsidiary of Pasdec Corporation Sdn. Bhd.. *** “Subsidiary of Mutiara Pasdec Sdn. Bhd..

# The auditors’ report of this company refers to the going concern assumption and that the subsidiary is dependent upon the financial support from the holding company. The report is not qualified.

Acquisition of minority interests On 31 December 2010, the Company acquired 9,800,000 ordinary shares representing 49% equity interest in Kimdec

Corporation Sdn. Bhd. (“Kimdec”) from the minority shareholder of Kimdec for a total consideration of RM17,618,814. As a result of this acquisition, Kimdec became a wholly-owned subsidiary of the Company. On the date of acquisition, the carrying value of the additional interest acquired was RM7,720,543. The difference between the consideration and the fair value of the interest acquired of RM9,898,271 is reflected in equity as premium paid on acquisition of minority interests.

17. Investments in associates Group 2010 2009 RM RM In Malaysia: Unquoted shares, at cost 1,270,000 1,270,000 Share of post-acquisition reserves 2,000,077 2,067,926 3,270,077 3,337,926 Less: Accumulated impairment losses (70,000) (70,000) 3,200,077 3,267,926 Represented by: Share of net assets 3,200,077 3,267,926

Country of Principal Proportion of Proportion of Names incorporation activities ownership interest voting power 2010 2009 2010 2009 % % % % Prima Prai Sdn. Bhd. Malaysia Property development 20 20 20 20 Genting View Resort Malaysia Ceased 40 40 40 40 Development Sdn. Bhd. operations Pasdec Cempaka Sdn. Bhd. Malaysia Dormant 40 40 40 40

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17. Investments in associates (cont’d)

The financial statements of the above associates are coterminous with those of the Group, except for Prima Prai Sdn. Bhd. and Genting View Resort Development Sdn. Bhd. which have financial years end on 31 March and 30 June respectively. For the purpose of applying the equity method of accounting, the management accounts of Prima Prai Sdn. Bhd. and Genting View Resort Development Sdn. Bhd. for the period ended 31 December 2010 have been used.

18. Inventories Group 2010 2009 RM RM

Cost Properties held for sale 22,539,752 24,649,831 Land - 25,098 Finished goods 434,437 202,249 Diesel and lubricant 55,354 68,142 23,029,543 24,945,320

Less: Allowance for impairment Properties held for sale (135,268) (190,833) Finished goods (104,444) - (239,712) (190,833) 22,789,831 24,754,487

19. Trade and other receivables Group Company 2010 2009 2010 2009 RM RM RM RM

Current Trade receivables 36,338,791 39,166,233 - - Construction contracts: Retention sum receivable (Note 21) 652,200 132,500 - - Progress billings receivable 22,804,979 30,825,884 - -

59,795,970 70,124,617 - - Less: Allowance for impairment (5,642,183) (4,725,637) - - 54,153,787 65,398,980 - -

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19. Trade and other receivables (cont’d.) Group Company 2010 2009 2010 2009 RM RM RM RM

Other receivables Amount due from related parties: Subsidiaries - - 209,940,084 220,241,003 Holding corporation 25,400,818 25,343,553 24,987,568 24,204,068 Related companies 24,574,088 22,377,565 5,322,623 4,022,499 49,974,906 47,721,118 240,250,275 248,467,570 Deposits 1,352,312 1,216,576 - - Tax recoverable 2,640,389 2,913,674 - - Sundry receivables 5,807,311 7,673,800 221,282 257,344 59,774,918 59,525,168 240,471,557 248,724,914 Less: Allowance for impairment Third parties (2,067,345) (3,313,458) (66,640) (61,962) Subsidiaries - - (391,562) (296,401) Holding corporation (15,776,164) (15,776,164) (15,776,164) (15,776,164) Related companies (11,679,232) (11,656,696) (4,022,499) (4,014,959)

(29,522,741) (30,746,318) (20,256,865) (20,149,486)

30,252,177 28,778,850 220,214,692 228,575,428 Total trade and other receivables (current and non-current) 84,405,964 94,177,830 220,214,692 228,575,428 Add: Cash and bank balances (Note 23) 22,538,481 19,109,073 5,953,496 4,563,132 Total loans and receivables 106,944,445 113,286,903 226,168,188 233,138,560

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19. Trade and other receivables (cont’d.) (a) Trade receivables

Trade receivables are non-interest bearing and are generally on 30 to 120 day (2009: 30 to 120 day) terms. They are recognised at their original invoice amounts which represent their fair values on initial recognition.

Ageing analysis of trade receivables The ageing analysis of the Group’s trade receivables is as follows:

Group 2010 2009 RM RM Neither past due nor impaired 44,778,718 57,250,878 1 to 30 days past due not impaired 330,692 1,475,103 31 to 60 days past due not impaired 437,163 131,868 61 to 90 days past due not impaired 3,713,202 504,531 91to 120 days past due not impaired 4,893,060 6,036,600 More than 121 days past due not impaired 952 - 9,375,069 8,148,102 Impaired 5,642,183 4,725,637 59,795,970 70,124,617

Receivables that are neither past due nor impaired Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records with

the Group. None of the Group’s trade receivables that are neither past due nor impaired have been renegotiated during the

financial year. Receivables that are past due but not impaired The Group has trade receivables amounting to RM9,375,069 (2009: RM8,148,102) that are past due at the reporting

date but not impaired. Trade receivables that were past due but not impaired relate to customers that have a good track record with the

Group. Based on past experience and no adverse information to date, the directors of the Group are of the opinion that no provision for impairment is necessary in respect of these balances as there has not been a significant change in the credit quality and the balances are still considered fully recoverable.

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19. Trade and other receivables (cont’d.) Trade receivables that are impaired The Group’s trade receivables that are impaired at the reporting date and the movement of the allowance accounts

used to record the impairment are as follows: Individually impaired 2010 2009 RM RM Group Trade receivables - nominal amounts 5,642,183 4,725,637 Less: Allowance for impairment (5,642,183) (4,725,637) - -

Movement in allowance accounts: Group 2010 2009 RM RM At 1 January 4,725,637 2,632,048 Charge for the year (Note 7) 1,424,214 2,095,989 Reversal (432,202) (2,400) Written off (75,466) - At 31 December 5,642,183 4,725,637

(b) Other receivables

Amounts due from subsidiaries amounting to RM74,390,386 (2009: RM60,480,863) bear interest of 6% (2009: 6%) per annum and are repayable on demand. The remaining amounts due from subsidiaries bear interest at 8.3% (2009: Nil) per annum. The amounts are unsecured and are to be settled in cash.

The amounts due from holding corporation and related companies are non-interest bearing and repayable on demand. These amounts are unsecured and are to be settled in cash.

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19. Trade and other receivables (cont’d.) (b) Other receivables (cont’d.)

Other receivables that are impaired The Group’s and Company’s other receivables that are impaired at the reporting date and the movement of the

allowance accounts used to record the impairment are as follows:

Individually impaired Group Company 2010 2009 2010 2009 RM RM RM RM Other receivables - nominal amounts 50,328,877 50,857,029 33,523,730 32,607,430 Less: Allowance for impairment (29,522,741) (30,746,318) (20,256,865) (20,149,486) 20,806,136 20,110,711 13,266,865 12,457,944

Movement in allowance accounts: Group Company 2010 2009 2010 2009 RM RM RM RM At 1 January 30,746,318 30,811,694 20,149,486 19,901,775 Charge for the year (Note 7) 424,478 24,758 107,379 247,711 Reversal - (90,134) - - Written off (1,648,055) - - - At 31 December 29,522,741 30,746,318 20,256,865 20,149,486

20. Other current assets Group Company 2010 2009 2010 2009 RM RM RM RM

Prepayments 390,063 266,647 185,008 103,297 Due from customers on contract (Note 21) 162,254 - - - 552,317 266,647 185,008 103,297

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21. Gross amount due from/(to) customers Group 2010 2009 RM RM Construction contract costs incurred todate 20,738,473 14,521,240 Attributable profits 1,993,651 (1,304,602) 22,732,124 13,216,638 Less : Progress billings (22,569,870) (13,485,679)

162,254 (269,041)

Presented as: Gross amount due from customers for contract work (Note 20) 162,254 - Gross amount to customers for contract work (Note 29) - (269,041) 162,254 (269,041)

Retention sum on contracts, included within trade receivables (Note 19) 652,200 132,500

22. Marketable securities Group 2010 2009 RM RM Market value Market value Carrying of quoted Carrying of quoted amount investments amount * investments Non-current Available-for-sale financial assets Carrying amount: Shares quoted in Malaysia 85,658,305 85,658,305 42,439,444 100,743,064 Unit trusts quoted in Malaysia 477,742 477,742 441,304 441,304 86,136,047 86,136,047 42,880,748 101,184,368

* Prior to 1 January 2010, the current investments were carried at lower of cost and market value, determined on aggregate basis. The non-current investments are stated at costs less impairment.

Investments pledged as security The Group’s investments in quoted shares with a carrying amount of RM44,697,322 (2009: RM23,965,841) are pledged to

financial institutions for issuance of RM150 million Rainbow Exchangeable Bonds (“REBs”) (Note 27). The Group’s investments in quoted shares with carrying amount of RM40,785,658 (2009: RM18,389,423) are pledged to

banks for certain facilities granted to a related company.

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23. Cash and cash equivalents Group Company 2010 2009 2010 2009 RM RM RM RM Cash in hand and at banks 11,924,373 8,688,076 1,545,309 145,099 Deposits with licensed banks 10,614,108 10,420,997 4,408,187 4,418,033 Cash and bank balances 22,538,481 19,109,073 5,953,496 4,563,132 Included in cash at banks of the Group is an amount of RM9,185,855 (2009: RM5,001,106) held pursuant to Section 7A of

the Housing Development (Control and Licensing) Act 1966 and therefore restricted from use in other operations. Deposits with licensed banks of the Group amounting to RM6,710,030 (2009: RM5,726,426) are pledged to banks for credit

facilities granted to certain subsidiaries. Deposits with licensed banks earn interest at the respective deposit rates. The weighted average effective interest rate as

at 31 December 2010 for the Group and the Company were 3.1% (2009: 2.4%) and 3% (2009: 2.0%) respectively. For the purpose of the consolidated statement of cash flow, cash and cash equivalents comprise the following at the

reporting date: Group Company 2010 2009 2010 2009 RM RM RM RM Cash and bank balances 22,538,481 19,109,073 5,953,496 4,563,132 Bank overdrafts (Note 25) (18,859,796) (21,459,982) - - Cash and cash equivalents 3,678,685 (2,350,909) 5,953,496 4,563,132

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24. Retirement benefit obligations The Group operates an unfunded, defined benefit Retirement Benefit Scheme (“the Scheme”) for its eligible employees.

Under the Scheme, eligible employees are entitled to retirement benefits with 7.5% of final salary multiplied by plan service with maximum of 300 months payable on attainment of the early retirement age of 40 upon completion of 10 or more years of plan service or retirement age of 56.

(i) Balance sheet

The amounts recognised in the balance sheet are determined as follows: Group Company 2010 2009 2010 2009 RM RM RM RM Present value of funded defined benefit obligations 4,240,642 3,771,686 371,535 - Unrecognised actuarial losses 568,330) (563,437) - - Net liability 3,672,312 3,208,249 371,535 - Analysed as: Current 671,153 128,064 371,535 - Non-current: Later than 1 year but not later than 2 years 564,712 459,170 - - Later than 2 years but not later than 5 years 2,436,447 2,621,015 - - 3,001,159 3,080,185 - -

3,672,312 3,208,249 371,535 -

The movement in the present value of the defined benefit obligations over the year is as follows: Group Company 2010 2009 2010 2009 RM RM RM RM At 1 January 3,208,249 2,642,236 - - Current service cost 337,484 329,641 196,865 - Interest cost 259,536 234,480 151,396 - Amortisation of actuarial loss 39,898 245,842 23,274 - Benefits paid (172,855) (243,950) - -

At 31 December 3,672,312 3,208,249 371,535 -

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24. Retirement benefit obligations (cont’d.) (ii) Income statement The amounts recognised in the income statement are as follows: Group Company 2010 2009 2010 2009 RM RM RM RM Current service cost 337,484 329,641 196,865 - Interest cost 259,536 234,480 151,396 - Amortisation of actuarial loss 39,898 245,842 23,274 - Total, included in employee benefits expense (Note 8) 636,918 809,963 371,535 -

All of the Group’s contribution to defined benefit plan has been included in administrative expenses.

(iii) Actuarial assumptions

The principal assumptions used for the purposes of the actuarial valuations were as follows: 2010 2009 % % Discount rate 6.5 7.0 Expected rate of salary increases 5.0 5.0

Actuarial valuation for the Scheme is conducted by an independent actuary at regular intervals. The last valuation performed for the Scheme was on 1 September 2010.

Assumptions regarding future mortality are based on published statistics and mortality tables.

(iv) Historical information

The history of experience adjustments is as follows:

Group Company 2010 2009 2010 2009 RM RM RM RM Present value of defined benefit obligations 3,672,312 3,208,249 371,535 -

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25. Loans and borrowings Group Company 2010 2009 2010 2009 RM RM RM RM Current Secured: Bank overdrafts 18,123,864 20,544,019 - - Revolving credits 2,000,000 10,500,000 - - Term loans 12,077,362 1,914,207 - - Hire purchase liabilities (Note 26) 177,421 277,004 - - 32,378,647 33,235,230 - -

Unsecured: Bank overdrafts 735,932 915,963 - - Hire purchase liabilities (Note 26) 64,273 106,256 64,275 51,137 800,205 1,022,219 64,275 51,137 33,178,852 34,257,449 64,275 51,137 Non-current Secured: Term loans 9,581,191 14,170,449 - - Rainbow Exchangeable Bonds (Note 27) 46,346,445 51,542,857 46,346,445 51,542,857 Hire purchase liabilities (Note 26) 115,371 167,400 - - 56,043,007 65,880,706 46,346,445 51,542,857 Unsecured: Hire purchase liabilities (Note 26) 203,036 206,365 203,035 118,551 56,246,043 66,087,071 46,549,480 51,661,408 Total loans and borrowings 89,424,895 100,344,520 46,613,755 51,712,545

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25. Loans and borrowings (cont’d.) The remaining maturities of the loans and borrowings as at 31 December 2010 are as follows: Group Company 2010 2009 2010 2009 RM RM RM RM On demand or within one year 33,178,852 34,257,449 64,275 51,137 More than 1 year and less than 2 years 1,135,321 2,857,485 74,651 55,354 More than 2 years and less than 5 years 50,894,471 55,429,630 46,398,877 63,197 5 years or more 4,216,251 7,799,956 75,952 51,542,857 89,424,895 100,344,520 46,613,755 51,712,545 Bank overdrafts and bankers’ acceptances The bank overdrafts and bankers’ acceptances of the Group are secured against the land registered under the name of the

holding corporation, first legal charge over long term leasehold land and building of certain subsidiaries, fixed and floating charges over certain assets of subsidiaries, joint and several guarantee by the directors of a corporate shareholder of a subsidiary and corporate guarantee by a subsidiary and the Company. The weighted average effective interest as at 31 December 2010 for the Group was 8.03% (2009: 7.39%).

Revolving credits The secured revolving credits of the Group are for a period of six months and are secured against fixed legal charge over

certain freehold land of a subsidiary, proportionate corporate guarantee by the Company of up to 51% and joint and several guarantee by the directors of a corporate shareholder. The weighted average effective interest as at 31 December 2010 for the Group was 6.13% (2009: 5.91%).

Term loans The term loans are secured by the following: (a) First legal charge over the freehold land and leasehold land of certain subsidiaries; (b) Fixed and floating charges over certain assets of subsidiaries; (c) Joint and several guarantee by the directors of a corporate shareholder of the respective subsidiary; and (d) Corporate guarantee by a subsidiary and the Company. Term loans bear interest at respective term loans rates. The weighted average effective interest as at 31 December 2010

for the Group was 7.72% (2009: 7.05%). The repayment of the Group’s term loans are ranging from 2 years to 8 years. Rainbow Exchangeable Bonds The Rainbow Exchangeable Bonds of the Group and of the Company are secured against part of the marketable securities

as disclosed in Note 22. The bonds bear interest at 5.25% (2009: 5.25%).

Hire purchase The secured hire purchase liabilities of the Group are secured against corporate guarantee by a subsidiary company. The

weighted average effective interest as at 31 December 2010 for the Group and the Company were 3.47% (2009: 3.27%) and 2.60% (2009: 2.60%) respectively.

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26. Hire purchase payables Group Company 2010 2009 2010 2009 RM RM RM RM Minimum lease payments: Not later than 1 year 267,527 419,093 76,645 57,850 Later than 1 year and not later than 5 years 165,136 366,518 136,471 124,600 Later than 5 years 199,735 40,197 96,834 - 632,398 825,808 309,950 182,450 Less: Future finance charges (72,297) (68,783) (42,640) (12,762) Present value of lease liabilities 560,101 757,025 267,310 169,688 Analysed as: Due within 12 months (Note 25) Secured 177,421 277,004 - - Unsecured 64,273 106,256 64,275 51,137 241,694 383,260 64,275 51,137 Due after 12 months (Note 25) Secured 115,371 167,400 - - Unsecured 203,036 206,365 203,035 118,551 318,407 373,765 203,035 118,551 560,101 757,025 267,310 169,688

27. Rainbow exchangeable bonds On 15 November 2006, the Company issued RM150 million Rainbow Exchangeable Bonds (“REBs”) at 100% of its nominal

value comprising two series as follows: (i) Series 1 - up to RM15 million REBs or such other amount exchangeable into 4,792,333 or such other appropriate

number of ordinary shares in Road Builder (M) Holdings Berhad (“RBH”) (“Exchange Shares”); and (ii) Series 2 - up to RM135 million REBs or such other amount exchangeable into 40,785,500 or such other appropriate

number of ordinary shares in YTL Cement Berhad (“Exchange Shares”). The salient features of REBs issued by the Company are as follows: (a) The tenures of the Series 1 and 2 are 5 and 7 years respectively.

(b) The REBs carry an interest or coupon rate of five percent per annum for both series and payable semi-annually in arrears from the date of issue of the REBs, with the last coupon payment to be made on the respective maturity dates.

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27. Rainbow exchangeable bonds (cont’d.)

(c) Each REB entitles the REBs holders to exchange for one Exchange Share at the Exchange Price which is indicatively set at a premium of 10% to 30% from five-day Weighted Average Market Price of the relevant Exchange Shares prior to the price fixing date or at par, whichever is higher at any time after the Securities Commission’s approval, for the relevant series at any time during the Exchange Period.

(d) The REBs are secured by the following:

(i) A Put-Option written by the Put-Option Writer to acquire the Exchange Shares at an agreed Option Price, upon the terms and conditions contained in the Put-Option agreements;

(ii) Deposit/ pledge of the Exchange Shares with the Security Trustee, for the benefit of the REBs holders; (iii) Assignment/ charge of an Escrow Account, a Disbursement Account (“DA”), and Debt Service Reserve Account

(“DSRA”), in favour of the Security Trustee for the REBs holders; and (iv) Assignment of the proceeds under an irrevocable Standby Line from a financial institution (“Liquidity Reserve

Provider”) equivalent to one (1) coupon payment payable during the tenor of the REBs, in favour of the Security Trustee for the REBs Holders; or

If no Standby Line is established, an assignment/ charge of a Liquidity Reserve Account (“LRA”), into which an

amount equivalent to one (1) coupon payment payable during the tenor of the REBs shall be deposited. (e) The Option Price with regards to Series 1 and 2 are as follows:

Series 1: the outstanding amounts, owing or payable by the Company to the REBs holders under the relevant Transaction Documents, as at the date of the put option notice as referred to in the Put-Option agreements;

Series 2: the outstanding amounts, owing or payable by the Company to the REBs holders under the relevant Transaction Documents, as at the date of the put option notice less the amount of:-

- any standby facilities procured by the Company; and - any cash deposits by the Company into the DSRA.

(f) The REBs shall be redeemed by the Issuer on the respective maturity dates at approximately 122% to 140% of the Issue Price of the relevant Series save and except for the following circumstances:-

(i) The REBs are exchangeable at any time by the REBs holders into the Exchange Shares, during the tenors of the REBs;

(ii) The REBs may be redeemed by the Issuer after the expiry of three (3) years from the issue date of the REBs and subject to the market price of the relevant Exchange Shares as traded on Bursa Malaysia Securities Berhad being at least 130% of the Exchange Price of the relevant Exchange Shares;

(iii) The Issuer may, at any time, purchase the REBs at any price in the open market or by private treaty; (iv) The REBs shall be cancelled and cannot be reissued if the REBs have been exchanged into the Exchange

Shares by the REBs holders, redeemed by the Issuer after year 3 and/or purchased by the Issuer in the open market.

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27. Rainbow exchangeable bonds (cont’d.)

The REBs are accounted for in the balance sheets of the Group and of the Company as follows:

Group and Company 2010 2009 RM RM Nominal value - issued and fully paid At 1 January 44,000,000 46,000,000 Issued and fully paid Exchanged into Exchange Shares (7,000,000) (2,000,000) At 31 December 37,000,000 44,000,000 Redemption premium At 31 December 9,346,445 7,542,857 Total included within long term borrowings (Note 25) 46,346,445 51,542,857 28. Trade and other payables Group Company 2010 2009 2010 2009 RM RM RM RM Current Trade payables Third parties 23,336,342 27,154,696 - - Other payables Amounts due to related parties: Due to a corporate shareholder of subsidiary companies 1,071,250 5,932,079 - - Due to a subsidiary company - - - 2,466,954 Due to other related companies 12,840 95,047 - - Due to holding corporation 4,940,589 3,660,873 1,302,786 -

6,024,679 9,687,999 1,302,786 2,466,954 Other payables 3,051,886 6,354,293 - - Accruals 3,731,428 3,926,497 1,563,087 1,128,738 Coupon on bonds 231,250 278,242 231,250 278,242 13,039,243 20,247,031 3,097,123 3,873,934 Total trade and other payables 36,375,585 47,401,727 3,097,123 3,873,934 Add: Loans and borrowings (Note 25) 89,424,895 100,344,520 46,613,755 51,712,545 Total financial liabilities carried at amortised cost 125,800,480 147,746,247 49,710,878 55,586,479

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28. Trade and other payables (cont’d)

(a) Trade payables Trade payables are non-interest bearing and the normal trade credit term granted to the Group ranges from 30 to 90

days.

(b) Amounts due to related companies

The amounts due to related parties are non-interest bearing and are repayable on demand. These amounts are unsecured and are to be settled in cash.

29. Other current liability

Group 2010 2009 RM RM Gross amount due to customers for contract work (Note 21) - 269,041

30. Share capital

Number of ordinary shares of RM1 each Amount 2010 2009 2010 2009 RM RM Authorised 1 January/31 December 500,000,000 500,000,000 500,000,000 500,000,000 Issued and fully paid 1 January/31 December 205,978,000 205,978,000 205,978,000 205,978,000 The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote

per share at general meetings of the Company. All ordinary shares rank equally with regard to the Company’s residual assets

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31. Other reserves Premium paid on Fair value acquisition adjustment of minority Note reserve interest Total RM RM RM Group At 1 January/31 December 2009 - - - At 1 January 2010 - - - Effects of adopting FRS 139 58,303,620 - 58,303,620 58,303,620 - 58,303,620 Other comprehensive income: Available-for-sale financial assets: Loss on fair value changes (8,039,922) - (8,039,922) Transfer to profit or loss upon disposal 7 (3,190,544) - (3,190,544) (11,230,466) - (11,230,466) Transactions with owners Premium paid on acquisition of minority interest 16 - (9,898,271) (9,898,271) At 31 December 2010 47,073,154 (9,898,271) 37,174,883 a) Fair value adjustment reserve

Fair value adjustment reserve represents the cummulative fair value changes of available-for-sale financial assets until they are disposed of or impaired.

32. Deferred tax Deferred income tax as at 31 December relates to the following: Group As at 1 Recognised As at 31 Recognised As at 31 January in profit December in profit December 2009 or loss 2009 or loss 2010 RM RM RM RM RM Deferred tax liabilities: Property, plant and equipment 315,924 (252,979) 62,945 403,980 466,925

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32. Deferred tax (cont’d.) Group (cont’d.) As at 1 Recognised As at 31 Recognised As at 31 January in profit December in profit December 2009 or loss 2009 or loss 2010 RM RM RM RM RM

Deferred tax assets: Provision and others - (283,631) (283,631) (35,182) (318,813) Retirement benefit obligation - (802,062) (802,062) 6,724 (795,338) Unutilised tax lossess and unabsorbed capital allowances - (399,893) (399,893) (958,708) (1,358,601)

- (1,485,586) (1,485,586) (987,166) (2,472,752)

315,924 (1,738,565) (1,422,641) (583,186) (2,005,827)

Company Deferred tax assets: Provision and others - - - (183,643) (183,643) Retirement benefit obligation - - - (92,884) (92,884) - - - (276,527) (276,527)

Group Company 2010 2009 2010 2009 RM RM RM RM Presented after appropriate off setting as follows: Deferred tax assets (2,472,752) (1,485,586) (276,527) - Deferred tax liabilities 466,925 62,945 - - (2,005,827) (1,422,641) (276,527) -

Deferred tax assets have not been recognised in respect of the following items: Group Company 2010 2009 2010 2009 RM RM RM RM Unrecognised tax losses 20,707,571 25,842,121 - - Unabsorbed capital allowances 1,403,594 1,458,303 - 9,324 Provisions and others 627,076 172,160 - - 22,738,241 27,472,584 - 9,324

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32. Deferred tax (cont’d.) Unrecognised tax losses At the reporting date, the Group has tax losses of approximately RM20,708,000 (2009: RM25,842,000) that are available for

offset against future taxable profits of the companies in which the losses arose, for which no deferred tax asset is recognised due to uncertainty of its recoverability. The availability of unused tax losses for offsetting against future taxable profits of the respective subsidiaries in Malaysia are subject to no substantial changes in shareholdings of those subsidiaries under the Income Tax Act, 1967 and guidelines issued by the tax authority.

33. Related party transactions (a) Sale and purchase of goods and services

In addition to the related party information disclosed elsewhere in the financial statements, the following significant transactions between the Group and related parties took place at terms agreed between the parties during the financial year:

Group Company 2010 2009 2010 2009 RM RM RM RM Holding corporation - office rental and service charge 506,432 500,313 - - Subsidiaries - interest income - - (19,467,216) (2,418,452) - management fee income - - (12,028,056) (745,920) - gross dividend income - - - (5,920,326)

(b) Compensation of key management personnel

The remuneration of directors and other members of key management during the year was as follows: Group Company 2010 2009 2010 2009 RM RM RM RM Short term employee benefits 1,798,141 1,525,257 1,294,941 532,450 Post-employment benefits - Defined contribution plan 92,184 132,852 86,424 26,904 - Defined benefit plan - 775 - - 1,890,325 1,658,884 1,381,365 559,354

Included in the total key management personnel are: Group Company 2010 2009 2010 2009 RM RM RM RM

Directors’ remuneration 1,157,410 1,004,960 652,450 532,450

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34. Fair value of financial instruments

A. Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are not reasonable approximation of fair value

Group Company Carrying Fair Carrying Fair Note amount value amount value RM RM RM RM

2010 Financial liabilities: Loans and borrowings (non-current) - Term loans 25 9,581,191 7,968,890 - - - Rainbow Exchangeable Bonds 27 46,346,445 41,220,330 46,346,445 41,220,330 - Hire purchase liabilities 26 318,407 292,744 203,035 185,595 2009 Financial liabilities: Loans and borrowings (non-current) - Term loans 25 14,170,449 12,518,402 - - - Rainbow Exchangeable Bonds 27 51,542,857 43,832,251 51,542,857 43,832,251 - Hire purchase liabilities 26 373,765 291,493 118,551 80,992

B. Determination of fair value

Financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value

The following are classes of financial instruments that are not carried at fair value and whose carrying amounts are

reasonable approximation of fair value: Note Trade and other receivables 19 Trade and other payables 28 Loans and borrowings (current) 25

The carrying amounts of these financial assets and liabilities are reasonable approximations of fair values due to their short term nature.

The carrying amounts of current loans and borrowings are reasonable approximations of fair values due to the

insignificant impact of discounting.

The fair values of current loans and borrowings are estimated by discounting expected future cash flows at market incremental lending rate for similar types of lending, borrowing or leasing arrangements at the reporting date.

Amounts due from/to subsidiaries

The fair values of these financial instruments are estimated by charging expected future cash flows at market incremental lending rate for similar types of lending or borrowing at the reporting date.

Quoted equity instruments

Fair value is determined directly by reference to their published market bid price at the reporting date.

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34. Financial risk management objectives and policies The Group and the Company are exposed to financial risks arising from their operations and the use of financial instruments.

The key financial risks include credit risk, liquidity risk, interest rate risk, and market price risk. The Board of Directors reviews and agrees policies and procedures for the management of these risks, which are executed

by the Chief Executive Officer, Senior Vice President Corporate Resources and Senior Vice President Property. The audit committee provides independent oversight to the effectiveness of the risk management process.

It is, and has been throughout the current and previous financial year, the Group’s policy that no derivatives shall be

undertaken except for the use as hedging instruments where appropriate and cost-efficient. The Group and the Company do not apply hedge accounting.

The following sections provide details regarding the Group’s and Company’s exposure to the above-mentioned financial

risks and the objectives, policies and processes for the management of these risks. (a) Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Group’s credit risk is primarily attributable to trade receivables. The Group trades only with recognised and creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis and the Group’s exposure to bad debts is not significant. The Group does not offer credit terms without the specific approval of the Senior Vice President Corporate Resources. Since the Group trades only with recognised and creditworthy third parties, there is no requirement for collateral.

The credit risk of the Group’s other financial assets, which comprise cash and cash equivalents, marketable securities

and non-current investments, arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these financial assets.

Exposure to credit risk At the reporting date, the Group does not have any significant exposure to any individual customer or counterparty

nor does it have any major concentration of credit risk related to any financial assets other than amount due from holding corporation of RM25,400,818 (2009: RM25,343,553).

Credit risk concentration profile

The Group determines concentrations of credit risk by monitoring industry sector profile of its trade receivables on an ongoing basis. The credit risk concentration profile of the Group’s at the reporting date are as follows:

Group 2010 2009 RM % of total RM % of total

By industry sectors: Property development 49,698,047 91.8% 58,863,480 90.0% Construction 499,558 0.9% 229,879 0.4% Trading 734,787 1.4% 1,739,383 2.7% Others 3,221,395 5.9% 4,566,238 7.0%

54,153,787 100.0% 65,398,980 100.0%

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34. Financial risk management objectives and policies (cont’d.) (a) Credit risk (cont’d.)

At the reporting date, approximately 27% (2009: 21%) of the Group’s trade and other receivables were due from related parties while almost all of the Company’s receivables were balances with related parties.

Financial assets that are neither past due nor impaired Information regarding trade receivables that are neither past due nor impaired is disclosed in Note 19. Deposits with

banks and other financial institutions and investment securities that are neither past due nor impaired are placed with or entered into with reputable financial institutions or companies with high credit ratings and no history of default.

Financial assets that are either past due or impaired Information regarding financial assets that are either past due or impaired is disclosed in Note 19.

(b) Liquidity risk

Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations due to

shortage of funds. The Group manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that refinancing, repayment and funding needs are met. As part of its overall liquidity management, the Group maintains sufficient levels of cash or cash convertible investments to meet its working capital requirements. In addition, the Group strives to maintain available banking facilities at a reasonable level to its overall debt position. As far as possible, the Group raises committed funding from both capital markets and financial institutions and balances its portfolio with some short term funding so as to achieve overall cost effectiveness.

At the reporting date, approximately 37% (2009: 34%) of the Group’s loans and borrowings (Note 25) will mature

in less than one year based on the carrying amount reflected in the financial statements. 0.1% (2009: 0.1%) of the Company’s loans and borrowings will mature in less than one year at the reporting date.

Analysis of financial instruments by remaining contractual maturities The table below summarises the maturity profile of the Group’s and the Company’s liabilities at the reporting date

based on contractual undiscounted repayment obligations.

2010 On demand or within One to Over five one year five years years Total RM RM RM RM

Group

Financial liabilities: Trade and other payables 36,375,585 - - 36,375,585 Loans and borrowings 33,178,852 52,029,792 4,216,251 89,424,895 Total undiscounted financial liabilities 69,554,437 52,029,792 4,216,251 125,800,480

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34. Financial risk management objectives and policies (cont’d.) (b) Liquidity risk (cont’d.) 2010 On demand or within One to Over five one year five years years Total RM RM RM RM Company Financial liabilities: Other payables 3,097,123 - - 3,097,123 Loans and borrowings 64,275 46,473,528 75,952 46,613,755 Total undiscounted financial liabilities 3,161,398 46,473,528 75,952 49,710,878 (c) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial instruments will fluctuate because of changes in market interest rates.

The Group’s and the Company’s exposure to interest rate risk arises primarily from their loans and borrowings,

loans at floating rates given to related parties and investments in debt securities classified as available-for-sale. The Company’s loans at floating rate given to subsidiaries form a natural hedge for its non-current floating rate bank loan.

The Group manages its interest rate exposure by maintaining a mixed of fixed and floating rate borrowings to achieve

the overall cost effectiveness. (d) Market price risk

Market price risk is the risk that the fair value or future cash flows of the Group’s financial instruments will fluctuate because of changes in market prices (other than interest or exchange rates).

The Group is exposed to equity price risk arising from its investment in quoted equity instruments. The quoted equity

instruments in Malaysia are listed on the Bursa Malaysia. These instruments are classified as held for trading or available-for-sale financial assets. The Group does not have exposure to commodity price risk.

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35. Capital management The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy

capital ratios in order to support its business and maximise shareholder value. The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To

maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the years ended 31 December 2010 and 31 December 2009.

The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group

includes within net debt, loans and borrowings, trade and other payables, less cash and bank balances. Capital includes equity attributable to the owners of the parent less the fair value adjustment reserve.

Group Company Note 2010 2009 2010 2009 RM RM RM RM Loans and borrowings 25 89,424,895 100,344,520 46,613,755 51,712,545 Trade and other payables 28 36,375,585 47,401,727 3,097,123 3,873,934 Less: - Cash and bank balances 23 (22,538,481) (19,109,073) (5,953,496) 4,563,132) Net debt 103,261,999 128,637,174 43,757,382 51,023,347 Equity attributable to the owners of the parent 384,198,120 345,979,471 240,889,688 226,952,666 Less: Fair value adjustment reserve 31 (47,073,154) - - -

Total capital 337,124,966 345,979,471 240,889,688 226,952,666

Capital and net debt 440,386,965 474,616,645 284,647,070 277,976,013

Gearing ratio 23% 27% 15% 18%

36. Retained earnings/accumulated losses Prior to the year of assessment 2008, Malaysian companies adopted the full imputation system. In accordance with

the Finance Act 2007 which was gazetted on 28 December 2007, companies shall not be entitled to deduct tax on dividends paid, credited or distributed to its shareholders, and such dividends will be exempted from tax in the hands of the shareholders (“single tier system”). However, there is a transitional period of six years, expiring on 31 December 2013, to allow companies to pay franked dividends to their shareholders under limited circumstances. Companies also have an irrevocable option to disregard the 108 balance and opt to pay dividends under the single tier system. The change in the tax legislation also provides for the 108 balance to be locked-in as at 31 December 2007 in accordance with Section 39 of the Finance Act 2007.

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36. Retained earnings/accumulated losses (cont’d) The Company did not elect for the irrevocable option to disregard the 108 balance. Accordingly, during the transitional

period, the Company may utilise the credit in the 108 balance as at 31 December 2010 and 2009 to distribute cash dividend payments to ordinary shareholdings as defined under the Finance Act 2007. As at 31 December 2010, the Company has sufficient credit in the 108 balance to pay franked dividends amounting to RM5,731,985 out of its current year profit. The Company may distribute such dividends under the single tier system.

37. Segment information For management purposes, the Group is organised into business units based on their products and services, and has five

reportable operating segments as follows:

I. Investment holding - provision of management services; II. Property development - the development of residential and commercial properties; III. Trading - in building materials; IV. Construction - construction of residential and commercial properties. V. Others - manufacturing and sales of bricks and value engineering and consultancy services. Except as indicated above, no operating segments have been aggregated to form the above reportable operating

segments. Management monitors the operating results of its business units separately for the purpose of making decisions about

resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which, in certain respects as explained in the table below, is measured differently from operating profit or loss in the consolidated financial statements. Group financing (including finance costs) and income taxes are managed on a group basis and are not allocated to operating segments.

Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third

parties.

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37. Segment information Investment Property

Holding Development Trading Construction Others Total Elimination Note Consolidated

RM RM RM RM RM RM RM RM

31 December 2010

Revenue

- Sales to external

customers - 70,862,264 1,598,394 8,864,132 3,818,562 85,143,352 - 85,143,352

- Inter-segment

sales 12,028,056 26,296,735 558,718 7,176,567 655,522 46,715,598 (46,715,598) A -

Total revenue 12,028,056 97,158,999 2,157,112 16,040,699 4,474,084 131,858,950 (46,715,598) 85,143,352

Results

Depreciation and

amortisation 45,911 750,976 20,536 21,781 582,201 1,421,405 - 1,421,405

Share of result of

associates - (67,849) - - - (67,849) - (67,849)

Other non-cash

expenses 478,917 (3,789,697) 525,420 1,861,336 327,888 (596,136) 3,371,869 B 2,775,733

Profit/(loss)

before tax 16,498,221 5,431,945 1,597,511 (1,618,165) (1,208,280) 20,701,232 (13,874,483) C 6,826,749

Assets

Investment in

associates - 1,200,000 - - - 1,200,000 2,000,077 3,200,077

Addition to

non-current

asset 183,000 11,847,884 - 11,050 27,635 12,069,569 - D 12,069,569

Segment

assets 294,570,476 526,175,818 6,816,589 4,782,748 21,816,080 854,161,711 (336,717,411) E 517,444,300

Segment liabilities 53,680,789 298,521,047 3,020,050 10,736,625 19,415,628 385,374,139 (252,127,959) F 133,246,180

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37. Segment information (cont’d) Investment Property

Holding Development Trading Construction Others Total Elimination Note Consolidated

RM RM RM RM RM RM RM RM

31 December 2009

Revenue

- Sales to external

customers - 89,783,564 3,014,405 1,224,000 9,158,693 103,180,662 - 103,180,662

- Inter-segment

sales 6,666,246 - 1,358,821 8,416,361 448,766 16,890,194 (16,890,194) A -

Total revenue 6,666,246 89,783,564 4,373,226 9,640,361 9,607,459 120,070,856 (16,890,194) 103,180,662

Results

Depreciation and

amortisation 32,028 657,508 71,210 21,230 615,102 1,397,078 - 1,397,078

Share of result of

associates - (109,962) - - - (109,962) - (109,962)

Other non-cash

expenses 2,470,315 8,617,084 853,151 2,873,180 20,333 14,834,063 (9,099,651) B 5,734,412

Profit/(loss)

before tax 346,974 (2,654,733) (976,522) (5,058,321) (2,413,946) (10,756,548) 2,391,839 C (8,364,709)

Assets

Investment in

associates - 1,200,000 - - - 1,200,000 2,067,926 3,267,926

Addition to

non-current asset - 166,663 2,499 8,443 134,730 312,335 - D 312,335

Segment

assets 283,426,705 500,337,237 5,704,903 5,847,015 23,061,305 818,377,165 (315,643,117) E 502,734,048

Liabilities

Segment liabilities 56,474,040 325,793,126 3,369,171 10,182,727 19,194,266 415,013,330 (262,546,966) F 152,466,364

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37. Segment information (cont’d.) A Inter-segment revenues are eliminated on consolidation.

B Other material non-cash expenses consist of the following items as presented in the respective notes to the financial statements:

Note 2010 2009 RM RM Impairment of financial assets 7 1,848,692 2,120,747 Reversal of impairment losses 7 (143,033) (177,858) Reversal of provision for reclamation costs 7 - (557,076) Impairment of property development cost 7 241,244 3,538,636 Provisions for impairment of inventories 7 191,912 - Increase in liability for defined benefit plan 8 636,918 809,963 2,775,733 5,734,412

C The following items are added to/(deducted from) segment profit to arrive at “Profit before tax from continuing operations” presented in the consolidated statement of comprehensive income:

2010 2009 RM RM Share of results of associates (67,849) (109,962) Profit from inter-segment sales (23,577,897) (8,108,874) Finance income (23,862,790) (3,045,501) Finance costs 23,862,790 3,045,501 Unallocated corporate expenses 9,771,263 10,610,675 (13,874,483) 2,391,839

D Additions to non-current assets consist of: 2010 2009 RM RM Property, plant and equipment 361,473 303,711 Land held for property development 11,708,096 8,624 12,069,569 312,335

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37. Segment information (cont’d.)

E The following items are added to/(deducted from) segment assets to arrive at total assets reported in the consolidated statement of financial position:

2010 2009 RM RM Investment in associates 2,000,077 2,067,926 Investment in subsidiaries (87,695,002) (70,076,186) Inter-segment assets (251,022,486) (247,634,857) (336,717,411) (315,643,117

F The following item is deducted from segment liabilities to arrive at total liabilities reported in the consolidated

statement of financial position: 2010 2009 RM RM Inter-segment liabilities (252,127,959) (262,546,966)

Geographical information

No segment reporting by geographical area is prepared as the Group’s activities are carried out in Malaysia.

38. Significant events

(a) During the year, RM7 million nominal amount of Rainbow Exchangeable Bonds (“REBs”) under Series 2 were redeemed. To date, the entire RM15 million nominal amount of REBs under Series 1 and RM98 million from RM135 million nominal amount of REBs under Series 2 have been redeemed.

(b) On 31 December 2010, the Company acquired 9,800,000 ordinary shares of RM1.00 each representing 49%

equity interest in Kimdec Corporation Sdn. Bhd. (“Kimdec”) from the minority shareholder of Kimdec for a total consideration of RM17,618,814. As a result of this acquisition, Kimdec has become a wholly-owned subsidiary of the Company.

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39 Events occurring after the reporting date (a) On 1 April 2011, a wholly owned subsidiary, Mutiara Pasdec Sdn. Bhd. has entered into a Sale and Purchase of Share

Agreement to acquire 100% equity interest representing 10,000,000 ordinary shares of RM1.00 each in Pahang Off-Shore Sdn. Bhd. for a total consideration of RM8,855,000.

(b) On 11 April 2011, a wholly owned subsidiary, Pasdec Bina Sdn. Bhd. has entered into a Sale and Purchase of

Share Agreement to dispose its entire equity interest in Kuantan Bricks Sdn. Bhd. for a total consideration of RM2,200,000.

40. Dividends At the forthcoming Annual General Meeting, a final tax exempt (single-tier) dividend in respect of the financial year ended

31 December 2010, of 2% on 205,978,000 ordinary shares, amounting to a dividend payable of RM4,119,560 (2 sen per ordinary share) will be proposed for shareholders’ approval. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in equity as an appropriation of retained earnings in the financial year ending 31 December 2011.

41. Comparatives Certain comparative amount as at 31 December 2009 have been reclassified and restated to conform with current year’s

presentation. 42. Supplementary information – breakdown of retained profits into realised and unrealised The breakdown of the retained profits of the Group and of the Company as at 31 December 2010 into realised and

unrealised profits is presented in accordance with the directive issued by Bursa Malaysia Securities Berhad dated 25 March 2010 and prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.

Group Company 2010 2010 RM RM

Total retained profits/(accumulated losses) of the Company and its subsidiaries - Realised 59,110,323 (10,880,589) - Unrealised 2,814,069 276,527 61,924,392 (10,604,062)

Total share of retained profits from associates - Realised 1,954,329 - - Unrealised - - 63,878,721 (10,604,062)

Less: Consolidation adjustments 34,158,519 - Retained profits/(accumulated losses) as per financial statements 98,037,240 (10,604,062)

PROXY FORM

ORDINARY RESOLUTION FOR AGAINST

1. To receive the audited financial statements and reports for the year ended 31 December 2010

2. Payment of final dividend

3. Re-election of Dato’ Haji Lias bin Mohd Noor (Article 83)

4. Re-election of Dato’ Haji Mohamad Nor bin Ali (Article 83)

5. Re-appointment of Dato’ Mohamed Amin bin Haji Daud (Section 129)

6. Payment of Directors’ Fees

7. Re-appointment of Messrs. Hanafiah Raslan & Mohamad as Auditors

(Please indicate with an “X” in the appropriate spaces provided above as to how you wish your vote to be cast. If you do not do so, the proxy will vote or abstain from voting at his discretion.)

Signed this day of , 2011

Signature of Member/Common Seal

Notes:-

1. A member entitled to attend and vote at the meeting may appoint not more than two proxies to attend and vote in his stead, but such appointment shall be invalid unless he specifies the proportions of his holdings for each proxy. A proxy may, but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company.

2. A member of the Company who is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991 may appoint at least one proxy but not more than two proxies in respect of each securities account.

3. The instrument appointing a proxy must be signed by the appointer or his attorney duly authorised in writing or if the appointer is a corporation either under common seal or under the hand of an attorney or an officer duly authorised.

4. The instrument appointing a proxy must be deposited at the Registered Office of the Company at 14th Floor, Menara Teruntum, Jalan Mahkota, 25000 Kuantan, Pahang Darul Makmur, not less than forty-eight (48) hours before the time appointed for holding the meeting or any adjournment thereof.

CDS Account No. No. of shares held

Full Name (in Block) NRIC/Passport No. Proportion of Shareholdings

No. of Shares %

Address

and/or (delete as appropriate)

Full Name (in Block) NRIC/Passport No. Proportion of Shareholdings

No. of Shares %

Address

I/We of (Full name in block, NRIC No./Company No. and telephone number)

being a member/members of PASDEC HOLDINGS BERHAD hereby appoint

or failing him/her the Chairman of the meeting as my/our proxy to vote for me/us and on my/our behalf at the Fifteenth (15th) Annual General Meeting of the Company to be held at Meranti 1, Hyatt Regency Kuantan Resort, Telok Chempedak, 25050 Kuantan, Pahang Darul Makmur on Tuesday, 21 June 2011 at 10:30 a.m. or any adjournment thereof, and to vote as indicated below:-

STAMP

The Company SecretaryPASDEC HOLDINGS BERHAD14th Floor, Menara TeruntumJalan Mahkota, 25000 KuantanPahang Darul Makmur

Then fold here

1st fold here

Fold this flap for sealing

VIS

ION

MIS

SIO

N

To be a progressive andexcellent organization

To be an esteemed organisation in property development and to invest in other business which could contribute the best return to the

investors, customers and employees through an ef�cient and responsible

management

PASDEC HOLDINGS BERHAD (367122-D)Tingkat 14, Menara Teruntum, Jalan Mahkota, 25000 Kuantan,

Pahang Darul Makmur.Telephone: 09-5133888 Facsimile: 09-5145988

Website : www.pasdec.com.my

PASDEC CORPORATION SDN. BHD.

(55031-P)

Tingkat 14, Menara Teruntum,

Jalan Mahkota,

25000 Kuantan, Pahang Darul Makmur.

Telephone : 09-5133888

Facsimile : 09-5145988

PASDEC LAND SDN. BHD.

(210031-A)


Jalan Mahkota, 25000 Kuantan, Pahang

Darul Makmur.



PASDEC PUTRA SDN. BHD.

(13735-M)

Bandar Putra, Kuantan II,

Lot 28735, Tanjung Lumpur,



Facsimile : 019-9953385

KUANTAN TEMBELING RESORT SDN.

BHD. (226274-V)


Jalan Mahkota,




PASDEC BINA SDN. BHD.

(9248-H)


Jalan Mahkota, 25000 Kuantan, Pahang

Darul Makmur.



PASDEC TRADING SDN. BHD.

(777804-K)

Lot 106, Tingkat 1, Block B, Medan

Warisan, Lorong Sri Teruntum 1,

Tanah Putih, 25100 Kuantan,

Pahang Darul Makmur.

Telephone : 09-5136137/5135773


PAHANG OFF-SHORE SDN. BHD.

(102524-D)


Jalan Mahkota,

25000 Kuantan,




KIMDEC CORPORATION SDN. BHD.

(342895-U)


Jalan Mahkota,

25000 Kuantan,




PASDEC MEGA SDN. BHD.

(368024-K)


Jalan Mahkota,




MUTIARA PASDEC SDN. BHD.

(411529-T)


Jalan Mahkota, 25000 Kuantan,




PAHANG AIRCRAFT INDUSTRIES

SDN. BHD. (551633-W)

Tingkat 14, Menara Teruntum, Jalan

Mahkota, 25000 Kuantan, Pahang Darul

Makmur.



SUMBANGAN SAKTI SDN. BHD.

(426838-T)






PASDEC PINTAS SDN. BHD.

(358830-P)






PASDEC ENGINEERING SDN. BHD.

(879347-V)






BENTONG AQUARIUM & SANCTU-

ARY PARK SDN. BHD. (709060-M)






PASDEC CEMPAKA SDN. BHD.

(672766-A)

Lot 13-01A, Level 12 (East Wing)

Berjaya Times Square, No. 1,

Jalan Imbi, 55100 Kuala Lumpur

Telephone : 03-21491999

Facsimile : 03-21431685

GENTING VIEW RESORT DEVELOP-

MENT SDN. BHD. (76079-K)

KM10, 69000 Genting Highlands,


Telephone : 03-61002255

Facsimile : 03-61001236

PRIMA PRAI SDN. BHD.

(277791-V)

Suite 12-3, 12th Floor,

Wisma UOA-2, 21 Jalan Pinang,

50450 Kuala Lumpur.

Telephone : 03-21644800

Facsimile : 03-21649723

CORPORATE DIRECTORY

14th Floor, Menara TeruntumJalan Mahkota, 25000 Kuantan

Pahang Darul MakmurTelephone/Telefon : 09-5133888Facsimile/Faksimili : 09-5145988

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B U I L D I N G T H E F U T U R E

CORPORATE | HUMAN RESOURCE EVENTS 2010 detached houses at Bandar Putra, Tanjung Lumpur, Kuantan....

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Transcript of CORPORATE | HUMAN RESOURCE EVENTS 2010 detached houses at Bandar Putra, Tanjung Lumpur, Kuantan....