KUANTAN HI-TECH PARK - malaysiastock.biz KUANTAN HI-TECH PARK Proposed 1,873 acres of Hi-Tech...

AstrAl AsiA BerhAd

67 & 69, Jalan SBC 1Taman Sri Batu Caves68100 Batu CavesSelangor Darul Ehsan

Tel No : 03-6185 7307Fax No : 03-6185 6799

Astral A

sia Berhad C

o. No. 374600-X

Annual R

eport 2010

Light Industries392 acres

Hi-Tech Industries1,481 acres

KuHTPKUANTAN HI-TECH PARKProposed 1,873 acres of Hi-Tech Development within The East Coast Economic Region


ANNUAL REPORT 2010

(Co. No. 374600-X)

Corporate InformationBoard of Directors’ ProfileChairman’s StatementAudit CommitteeCorporate GovernanceAdditional Compliance InformationStatement on Internal ControlDirectors’ ReportStatement by DirectorsStatutory DeclarationReport of the AuditorsStatements of Financial PositionStatements of Comprehensive IncomeStatements of Changes in EquityStatements of Cash FlowsNotes to the Financial StatementsAnalysis of ShareholdingsGroup’s PropertiesNotice of Annual General MeetingStatement AccompanyingNotice of Annual General MeetingProxy Form Enclosed

CONTENTS

0203050710151719232324262829313375777880

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ANNUAL REPORT 2010

COrpOraTE INfOrmaTION

BOard Of dIrECTOrS

Tan Sri dato’ Hj Husein Bin ahmad Independent Non-Executive Chairman

dato’ Lim Kang poh Deputy Executive Chairman

Tuan Haji md. adanan Bin abdul manap Deputy Chief Executive Officer

Y.H. dato’ md adnan Bin Sulaiman Executive Director

Y.H. dato’amihamzah Bin ahmad Independent Non-Executive Director

mr Tan En Chong Independent Non-Executive Director

aUdIT COmmITTEE

Y.H. Dato’ Amihamzah Bin Ahmad Chairman/Independent Non-Executive DirectorTan Sri Dato’ Hj Husein Bin AhmadIndependent Non-Executive DirectorMr. Tan En Chong Independent Non-Executive Director

COmpaNY SECrETarIES

Mr Hoon Hui Kit (MIA 6180)Ms Chin Poh Li (MAICSA 7045084)

rEgISTErEd OffICE aNd prINCIpaL pLaCE Of BUSINESS

No. 67 & 69, Jalan SBC 1Taman Sri Batu Caves68100 Batu CavesSelangor Darul EhsanTel No : 603-6185 7307Fax No : 603-6185 6799Website: www.astralasia.com

rEgISTrar

Sectrars Services Sdn BhdNo. 28-1, Jalan Tun Sambanthan 3Brickfields, 50470 Kuala LumpurTel No : 603-2274 6133Fax No : 603-2274 1016

aUdITOrS

SJ Grant Thornton(Member of Grant Thornton International)Chartered AccountantsLevel 11, Sheraton Imperial CourtJalan Sultan Ismail, 50250 Kuala LumpurTel No : 603-2692 4022Fax No : 603-2691 5229

prINCIpaL BaNKErS

Malayan Banking BerhadPublic Bank BerhadCIMB Bank BerhadRHB Bank BerhadEON Bank BerhadBank Muamalat Malaysia Berhad

SOLICITOrS

TG Lee & AssociatesRobyn ChoiMah-Kamariyah & Philip KohMahindar & Co.

STOCK ExCHaNgE LISTINg

Bursa Malaysia Securities BerhadMain MarketStock Code: 7054

ANNUAL REPORT 2010

3

aSTraL aSIa BErHad (Co. No. 374600-X)

dIrECTOrS’ prOfILE

Tan Sri dato’ Hj Husein Bin ahmadIndependent Non-Executive Chairman

Aged 76, was appointed to the Board on 27 October 1997. He started his career as a teacher in 1951. He was appointed as Chairman of Syarikat Kenderaaan Melayu Kelantan in 1975. He served as Deputy Chief Minister of Kelantan for 5 years between 1978-1982. He was appointed as a Senator in 1985 before being appointed as Deputy Minister of Housing and Local Development in 1988. Between 1982-1995, he was the Head of Information, UMNO. He had been the Chairman Lembaga Pertanian Kemubu Negeri Kelantan (KADA) between 1990 and 2003. He is currently the Independent Non-Executive Chairman of Tasja Sdn Bhd and Husa Networks Sdn Bhd (Radio Manis fm). He has been re-designated as Independent Non-Executive Chairman since 2 December 2010.

Tan Sri Dato’ Hj Husein Bin Ahmad is a director of Utusan Melayu (Malaysia) Berhad.

Tan Sri Dato’ Hj Husein Bin Ahmad attended all the four Board meetings held in the financial year ended 31 December 2010.

dato’ Lim Kang pohDeputy Executive Chairman

Aged 54, was appointed as Managing Director of Astral Asia Berhad on 27 October 1997 and he has been re-designated as Deputy Executive Chairman effective 1 December 2003. He is one of the founder members of Tasja Sdn Bhd and was appointed to the Board on 8 December 1995. Dato’ Lim started his career in the construction industry in 1976. He has been appointed as Managing Director of Syarikat Ladang LKPP Sendirian Berhad since April 2005. He is director of several other private limited companies. His experience in the construction and plantation industries has strengthened the management of the Group.

Dato’ Lim Kang Poh is a director of PLS Plantations Berhad. Dato’ Lim Kang Poh attended all the four Board meetings held in the financial year ended 31 December 2010.

Tuan Haji md adanan Bin abdul manapDeputy Chief Executive Officer

Aged 68, was appointed to the Board of Astral Asia Berhad on 3 November 1997 and has been re-designated as Executive Director effective September 2002. He is currently the Deputy Chief Executive Officer of the Company. He started his career as an Officer in the Accountant General office in 1970. In 1974, he was transferred to the Ministry of International Trade and Industry and was subsequently promoted to Higher Executive Officer in the Public Services Department in 1976. In 1984, he was transferred to the Ministry of Finance and served as Senior Executive officer. In 1993 he joined the Ministry of Public Enterprise and retired optionally from service in 1996.

Tuan Haji Md Adanan Bin Abdul Manap attended all the four Board meetings in the financial year ended 31 December 2010.

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ANNUAL REPORT 2010

DIRECTORS’ PROFILE (cont’d)

Y.H. dato’ md adnan Bin SulaimanExecutive Director

Aged 62, is the Executive Director of the Company and was appointed to the Board on 3 November 1997. He graduated with a Bachelor of Science (Agriculture) from University Malaya in 1974 and obtained a Masters of Science from University of Wisconsin, USA in 1980. He started his career as an Agriculture Officer with the Jabatan Pertanian Negeri Perak in 1974. He worked in various agriculture departments between 1975-1983 before joining Jabatan Pertanian Pahang as Assistant Director in 1983. In 1991, he joined Lembaga Kemajuan Perusahaan Pertanian Negeri Pahang Group (“LKPP”) and assumed the post of Deputy General Manager before becoming General Manager of LKPP in 1996. Y.H. Dato’ Md Adnan is the representative from LKPP, a substantial shareholder of the Company.

Y.H. Dato’ Md Adnan Bin Sulaiman is also director of Kurnia Setia Berhad and Far East Holdings Berhad.

Y.H. Dato’ Md Adnan Bin Sulaiman attended three out of the four Board meetings in the financial year ended 31 December 2010.

Y.H. dato’ amihamzah Bin ahmadIndependent Non-Executive Director

Aged 61, was appointed to the Board of Astral Asia Berhad on 3 November 1997. He served as Chairman of Audit Committee and Nomination Committee and is a member of Remuneration Committee. He holds a Degree in Social Science from University of Malaya. He joined the Public Service from 1973 to 1995 and served various Ministries such as Ministry of Land and Mine, Ministry of Agriculture and Ministry of Public Entrepreneur. In 1996, he was elected as Member of Parliament for the Lipis Parliament Constituency and served until March 2004. He has extensive knowledge and expertise in both the land & mines and agriculture sectors, obtained though years of hand on experience. Currently, he is also the Chairman of Board of Trustees of Amanah Ikhtiar Malaysia.

Y.H. Dato’ Amihamzah Bin Ahmad attended all the four Board meetings held in the financial year ended 31 December 2010.

mr Tan En ChongIndependent Non-Executive Director

Aged 61, was appointed to the Board on 1 July 2001. He serves as the Chairman of Remuneration Committee and also a member of Audit Committee and Nomination Committee. He graduated with a Bachelor of Science (Hons) from Royal Holloway College, University of London. He is a Fellow of the Association of Chartered Certified Accountants and a member of the Malaysian Institute of Accountants.

Upon graduation, he joined CHUBB Fire Security (UK) as Financial Assistant in 1976. He had served in various positions in construction, manufacturing, trading and property development companies. Since 1992, he has been the Director of Skim Daya Properties Sdn Bhd and TM Industrial Plastic Sdn Bhd.

Mr. Tan En Chong is also an Independent Non-Executive Director of TSR Capital Berhad.

Mr. Tan En Chong attended all the four Board meetings held in the financial year ended 31 December 2010.

None of the Directors have• anyfamilyrelationshipwithanyDirectorand/ormajorshareholderoftheCompany• anyconflictofinterestwiththeCompany• anyconvictionforoffenceswithinthepast10yearsotherthantrafficoffences.

AlloftheDirectorsareMalaysian.

5


CHaIrmaN’S STaTEmENT

Operating results

For the financial year under review, the Group recorded a 21.2% reduction in revenue from RM45.2 million in the previous financial year to RM35.6 million, a decrease of RM9.6 million. The decrease in the Group’s total revenue was mainly due to lower contribution from the construction division. At the operations level, the Group recorded a profit after tax of RM9.3 million for the financial year 2010 compared with a loss after tax of RM2.7 million in the previous financial year.

dividend

A first and final dividend of 2.0 sen per ordinary share less tax for the 2009 financial year had been paid to the shareholders in July 2010. The Board of Directors does not recommend any final dividend payment in respect of the current financial year.

plantation division

The plantation division’s revenue increased from RM28.6 million in the previous financial year to RM32.6 million in the current financial year. The Group recorded a lower fresh fruits bunches (‘FFB’) production of 51,860 m/t, representing a decrease of 10.7 % compared to the total production of 58,048 m/t in 2009. The plantation division’s pre-tax profit had increased 38%, that is, from RM13.7 million in the 2009 financial year to RM18.9 million in the current financial year. This was mainly due to higher crude palm oil prices in the year under review. Crude palm oil realised at an average price of RM2,717 per m/t compared to RM2,250 per m/t in the previous financial year.

During the year under review, Ladang Bukit Kuin (2), with a new planted area of 191 hectares, came into maturity and contributed a maiden harvest of 2,020 m/t of FFB. I am also pleased to report that as at the date of this report, approximately 194 hectares of Ladang Bukit Kuin have been replanted.

Construction division

For the financial year under review, the construction division’s revenue decreased 81.9 % to RM3.0 million compared to RM16.6 million recorded in the 2009 financial year. The construction division’s loss before tax of RM3.4 million for the financial year under review was mainly due to the administration and other costs to oversee the remaining tail end contract works.

On behalf of the Board of Directors of Astral Asia Berhad, I am pleased to present the Annual Report and Audited Financial Statements of Astral Asia Berhad and its subsidiaries (‘the Group’) for the financial year ended 31 December 2010.

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ANNUAL REPORT 2010

ChAirMAn’sstAteMent (cont’d)

Corporate developments

Public Investment Bank Berhad, on behalf of the Company, had on 9 February 2011 announced that Syarikat Ladang LKPP Sendirian Berhad had entered into a Joint Venture Agreement with Tasja Development Sdn Bhd to jointly develop approximately 1,481 acres of Ladang Bukit Kuin land into a mixed property development. This property development would tentatively comprise a commercial centre, an industrial centre, a mixed residential designs, public amenities and infrastructure (“Development Project”). The Development Project will also incorporate a High-Tech Park tentatively named as “the Kuantan Hi-Tech Park” (“KuHTP”).

KuHTP will be supported by surrounding infrastructures including the East Coast Highway, the Kuantan Port and the Sultan Haji Ahmad Shah Airport and is located within the East Coast Economic Region Special Economic Zone (“ECER SEZ”), which is an approximately 25 km wide and 140 km long area stretching along the East Coast of Peninsular Malaysia and covering the districts of Kuantan, Pekan, Kemaman and part of Terengganu.

At this juncture, the Group has received the conditional approval for the Master Plan of KuHTP from the Local Council of Kuantan and is now focusing on a detailed development plan of KuHTP.

The successful implementation of the KuHTP project would greatly enhance the land value of the Bukit Kuin Land and is expected to yield good return to the Group in the long term.

prospects

The Board of Directors and I are of the view that with the current favorable crude palm oil prices, the Group is expected to maintain satisfactory performance in the 2011 financial year.

acknowledgements

On behalf of the Board of Directors, I would like to express my deep appreciation to the management and staffs, business associates and the shareholders for their utmost commitment, contribution and support to the Group.

Tan Sri dato’ Hj Husein Bin ahmadChairman

Kuala Lumpur19 May 2011

ANNUAL REPORT 2010ANNUAL REPORT 2010

7


aUdIT COmmITTEE rEpOrT

prESENT mEmBErS Of THE aUdIT COmmITTEE arE aS fOLLOWS:-

Y.H. Dato’ Amihamzah Bin Ahmad(Chairman)Independent Non-Executive Director

Mr. Tan En Chong(Member)Independent Non-Executive Director

Tan Sri Dato’ Hj Husein Bin Ahmad(Member)Independent Non-Executive Director

The Audit Committee was formed on 12 February 1998.

TErmS Of rEfErENCE

1. Objectives

The principal objective of the Audit Committee (“Committee”) is to assist the Board of Directors in discharging its duties and responsibilities in the area of corporate disclosure and transparency, public accountability of the Company and its subsidiaries. The Committee also endeavours to adopt practices aimed at maintaining appropriate standards of corporate responsibility and integrity to the Company’s shareholders.

2. Composition

The Committee comprises of three (3) members, all of whom are Non-Executive and Independent Directors. One (1) member of the Committee is a member of the Malaysian Institute of Accountants. The Chairman of the Committee is an Independent Director appointed by the Board.

3. duties and responsibilities

3.1 The duties and responsibilities :

a) review the quarterly and year-end financial statements of the Group before submission to the Board;b) review with the external auditors, their evaluation of the system of internal controls, their management letter

on internal control recommendations and the management’s response;c) review the adequacy, scope, functions, competency and resources of the internal audit function and that it

has necessary authority to carry out its work;d) to discuss the nature, scope and timing of the external audit plan; ande) to review related party transactions and conflict of interest situation that may arise.

3.2 To review any letter of resignation from the external auditors of the Company and recommend the nomination of a person or persons as the external auditors and their remuneration.

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ANNUAL REPORT 2010

AUDitCOMMitteerePOrt(cont’d)

4. authority

The Committee is authorised by the Board to:

a) investigate any activity within the scope of the Committee’s duties;b) obtain any information it requires from any employee(s);c) obtain outside legal or independent professional advice; d) convene meeting with the external auditors, the internal auditors or both, excluding the attendance of other

directors and employees of the Company whenever deemed necessary; ande) make recommendations for improvements of operating performance and management control.

5. retirement and resignation

In the event of any vacancy in the Audit Committee resulting in non-compliance with the minimum requisite number of members, the said vacancy must be filled within 3 months.

6. meetings

a) The quorum for a meeting of the Audit Committee shall be two (2).

b) The Secretary to the Audit Committee shall be the Company Secretary or any other person appointed by the Committee.

c) During the financial year ended 31 December 2010, the Audit Committee held a total of five (5) meetings:-

Name No. of meetings attended

Y.H. Dato’ Amihamzah Bin Ahmad 5/5Mr Tan En Chong 5/5Tan Sri Dato’ Hj. Husein Bin Ahmad 5/5

7. Summary of activities of the audit Committee

During the period the Audit Committee carried out the following duties:-

a) reviewed the quarterly unaudited consolidated result before recommending them to the Board for their approval and announcement;

b) reviewed the internal audit plan and internal audit reports and considered the major finding of internal auditors and management’s response;

c) reviewed and discuss the internal audit function, its authorities and scope of works and the internal audit report;d) reviewed the results of the audit, the audit report and the management letter, including management’s response;e) evaluated the audit proposals for the Group; f) reviewed related party transactions of the Group; andg) evaluated the performance of the external auditors and recommended to the Board for re-appointment, if

applicable.

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AUDitCOMMitteerePOrt(cont’d)

8. Internal audit function

The internal audit function of the Group is presently outsourced to a firm of Chartered Accountants to provide the Board and the Committee with assurance on the adequacy and effectiveness of the system of internal control of the Group. The internal auditors focus their review on significant and high risk areas of the Group’s businesses. The internal audit function reports directly to the Committee.

During the financial year under review, the outsourced internal audit conducted the review on the following areas:

a) Reviewed the reliability and integrity of the Group’s financial statements;b) Reviewed the systems established to ensure compliance with adopted policies, procedures, laws and regulations;c) Reviewed the means of safeguarding the Group’s assets and verified existence of such assets;d) Appraised the deployment of the Group’s resources in an economic and efficient manner; ande) Reviewed the Group’s operations and programs to ascertain results were consistent with the Group’s established

objectives and goals.

Based on the results of the internal audit carried out, the internal auditor had presented to the Committee their observations, recommendations and follow-up actions to be taken by the Group.

For the financial year ended 31 December 2010, the total costs incurred for the IA function are RM18,000.00.

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ANNUAL REPORT 2010

COrpOraTE gOVErNaNCE

The Board of Directors supports the objective of the Malaysian Code on Corporate Governance (“the Code”) and also acknowledges its role in protect and enhance shareholders’ value. The Directors believe that good corporate governance results in quantifiable long-term success and creation of long-term shareholders’ value.

Set out below is the description of how the Company has applied the Principles of Corporate Governance as set out in the Code throughout the financial year ended 31 December 2010.

SECTION a – THE BOard Of dIrECTOrS

Composition of the Board

An experienced and effective Board consisting of members with a wide range of skill and experience from financial and business background leads and controls the Group.

The directors bring depth and diverse expertise to the leadership of the Group’s plantation and construction businesses.

The Board continues to give close consideration to its size, composition and spread of experience and expertise. No individual or group of individuals dominates the Board’s decision making processes and the number of independent directors reflects fairly the investment of the minority shareholders. This is to ensure that issues of strategy, performance and resources are fully discussed and examined to take into account long-term interest of stakeholders of the Company.

The Board comprises the Independent Non-Executive Chairman, Deputy Executive Chairman, Deputy Chief Executive Officer, one Executive Director and two Independent Non-Executive Directors. The Company complied with the Listing Requirements of Bursa Malaysia where at least one third of the Board is Independent Non-Executive Directors.

Board responsibilities

The responsibilities of the Board of Directors of the Company are as follows:-

• Reviewing and adopting a strategic plan for the Company which will enhance the future growth and profitability of the Company;

• Overseeing the conduct of the Company’s business and to evaluate whether the business is being properly managed;• Identifying principal risks of the business and ensure implementation of appropriate systems to manage these risks;

and• Reviewing adequacy and integrity of the Company’s internal control systems and management information systems,

including systems for compliance with applicable laws, regulations, rules, directives and guidelines.

Board Balance

The roles of the Deputy Executive Chairman and Deputy Chief Executive Officer are separate with clearly defined responsibilities to ensure the balance of power and authority. The Deputy Chairman is primarily responsible for the orderly conduct and working of the Board whilst the Deputy Chief Executive Officer is responsible for the overall operations of the business and the implementation of Board strategy and policy.

All the Independent Non-Executive Directors are independent of management and are free from any business or other relationship that could materially interfere with the exercise of their independent judgment. They have the calibre to ensure that the strategies proposed by the management are fully deliberated and examined in the long-term interest of the Group, as well as shareholders, employees and customers.

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CORPORATE GOVERNANCE (cont’d)

Board meetings and Supply of Information to the Board

During the financial year ended 31 December 2010, four (4) meetings of the Board were held. Details of attendance are provided on page 80 of this Annual Report.

The Deputy Chief Executive Officer of the Company undertakes the responsibility to ensure that the agenda and full set of Board papers (including qualitative information of the Company) for consideration are distributed well before each meeting of the Board to ensure that the Directors have sufficient time to study them and be properly prepared for discussion and decision making. Minutes of Board meetings are maintained.

All directors of the Company whether in full Board or in their individual capacity, have access to all information within the Company and they could seek independent professional advice where necessary to discharge their duties.

The Directors have access to the advice and services of the Company Secretary who is responsible for ensuring the Board meeting procedures are followed and that applicable rules and regulations are complied with.

appointment and re-election of directors

In accordance with the Company’s Articles of Association, at least one third of the Directors shall retire from the office every year provided always that all Directors shall retire from office at least once in every three years but shall be eligible for re-election.

All directors who are appointed by the Board are subject to re-election by shareholders at the following Annual General Meeting after their appointment.

Nomination Committee

The Nomination Committee was established on 2 January 2002. The Nomination Committee is responsible for proposing new nominees for the Board and assessing the performance of directors on an on-going basis. The actual decision as to who shall be appointed is the responsibility of the full Board after considering the recommendations of the Nomination Committee.

The Nomination Committee reviews the performance of members of the Board and assesses the effectiveness of the Board as a whole and the contribution of each individual director. The Nomination Committee will also review the required mix of skills and experience and other core competencies, which non-executive directors should bring to the Board.

The Nomination Committee comprises:

Chairman : Y.H. Dato’ Amihamzah Bin AhmadMembers : Tan Sri Dato’ Hj Husein Bin Ahmad Mr Tan En Chong

directors Training

All directors of the company have attended the Mandatory Accreditation Programme (MAP) conducted by the Research Institute of Investment Analysts Malaysia and have fulfilled all required points under the Continuous Education Programme (“CEP”).

Pursuant to Paragraph 15.08 of the Listing Requirements of Bursa Malaysia Securities Berhad, the Directors had attended a seminar on Brief Update on 2011 Tax Budget, Corporate Governance Guide and Internal Audit Roles on 15 December 2010. Directors are encouraged to attend appropriate continuous training to keep abreast with new business development and changes in regulatory requirements.

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ANNUAL REPORT 2010


SECTION B – dIrECTOrS’ rEmUNEraTION

remuneration policy and procedures

The Code states that remuneration for Directors should be determined so as to ensure that the Company attracts and retains the Directors needed to manage the Company successfully. In Astral Asia Berhad, the remuneration for Executive Directors is structured so as to link reward to corporate and individual performance. In the case of Non-Executive Directors, the quantum of remuneration reflects the level of experience and responsibilities undertaken by them during the period under review.

The aggregate Directors’ remuneration paid or payable or otherwise made available to all Directors of the Company during the financial year are as shown as below:-

Salary and Other BenefitsCategory fees Emoluments In Kind

Executive Directors 128,000 629,300 -Non-Executive Directors 102,000 10,200 -

The number of Directors of the Company whose total remuneration fall within the following bands :

Executive directorsremuneration Number

Below RM50,000 2RM50,001 - RM100,000 -RM450,001 - RM500,000 1

Non Executive directorsremuneration Number

Less than RM50,000 2RM50,001 - RM100,000 1

The remuneration of the Directors of the Company includes the remuneration and fees paid by subsidiaries of the Company.

remuneration Committee

The Remuneration Committee was established on 2 January 2002. The Remuneration Committee reviews the performance of the Executive Directors and furnishes recommendations to the Board on specific adjustments in remuneration, including reward payments commensurate with the respective contributions of the Executive Directors for the year. In the case of Non-Executive Directors, the Board as a whole will determine the remuneration package. The level of remuneration reflects the level of experience and responsibilities undertaken and the individuals concerned are abstained from discussion and decision making.

The Remuneration Committee comprises:

Chairman : Mr Tan En ChongMembers : Tan Sri Dato’ Hj Husein Bin Ahmad Y.H. Dato’ Amihamzah Bin Ahmad

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SECTION C – SHarEHOLdErS

dialogue with investors and shareholders

The Company recognises the importance of keeping the shareholders and investors informed of the Group’s business and corporate developments. Such information is disseminated via the Company’s annual report, circular to the shareholders and the announcements made from time to time. Shareholders may obtain the Company’s latest announcements via the Bursa Malaysia website.

All shareholders including private investors have an opportunity to participate in discussion with the Board on matters relating to the Company’s operation and performance at the Company’s annual general meeting. It is the principal forum for dialogue with shareholders. The management will take note of the shareholders’ suggestions and comments for consideration.

SECTION d – aCCOUNTaBILITY aNd aUdIT

directors’ responsibility Statements

The Directors are required by the Companies Act 1965 to prepare financial statements for each financial year which give a true and fair view of the state of affair of the Company and the Group as at the end of the financial year and of the results of the Company and the Group for the year ended.

The Directors consider that in preparing the financial statements, the Group has used appropriate accounting policies, consistently applied and supported by reasonable prudent judgments and estimates, and that all applicable standards have been followed.

The Directors have responsibility for ensuring that the Company and the Group keep accounting records which disclose with reasonable accuracy the financial position of the Company and the Group and which enable them to ensure that the financial statements comply with the Companies Act, 1965.

The Directors have general responsibility for taking reasonable steps to safeguard the assets of the Company and the Group as well as to detect and prevent frauds and irregularities, if any.

financial reporting

The Directors are responsible for the preparation of the annual audited accounts and the Board ensures that the accounts and other financial reports of the Company are prepared in accordance with Approved Accounting Standards and present a balanced and comprehensive assessment of the Company’s position and prospects, to all the shareholders.

The Company’s Annual Report and quarterly announcements of results give an updated financial performance of the Company periodically.

audit Committee

The Audit Committee comprises three Independent Non-Executive Directors. The composition and Terms of Reference of the Audit Committee are also provided in this report.

The Audit Committee has explicit authority from the Board to investigate any matter and is given full responsibility within its term of reference and necessary resources which it needs to do so and has full access to information of the Group. The Audit Committee also meets once a year with the external auditors and the internal auditors without the presence of the Executive Board members.

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ANNUAL REPORT 2010


Internal Control

The Directors recognise their responsibility for the maintenance of a sound system of internal control, covering not only financial controls but also compliance controls including risk assessment framework and control activities covering information and communication, and reviewing its effectiveness. As with any such system, controls can only provide reasonable but not absolute assurance against material misstatements or loss. The Group is continuously looking into the adequacy and integrity of its system of internal controls.

Internal audit

The Directors have out-sourced the internal audit function to a firm of Chartered Accountants, which is independent and audit work will be conducted with impartiality proficiency and due professional care.

relationship with external auditors

The Board ensures that there is transparent arrangement for the achievement of objectives and maintenance of professional relationship with external auditors.

15


OTHEr INfOrmaTION rEQUIrEd BY THE LISTINg rEQUIrEmENTS Of BUrSa maLaYSIa

Utilisation of proceeds

No proceeds were raised by the Company from any corporate exercise during the financial year.

Share Buybacks

During the financial year, there were no share buybacks by the Company.

Options, Warrants or Convertible Securities

The Company did not issue any options, warrants or convertible securities during the financial year.

depository receipt programme

During the financial year, the Company did not sponsor any Depository Receipt Programme.

Imposition of Sanctions/penalties

There were no sanctions and/or penalties imposed on the Company or its subsidiaries, Directors or management by the relevant regulatory bodies during the financial year.

Non audit fees

Non-audit fees paid to the external auditors for the financial year amounted to RM5,000.00.

VariationinResultsforProfitEstimate,ForecastorProjection

The Company did not make any release on the profit estimate, forecast or projections for the financial year. The variance between the audited results (net profit after taxation) and the unaudited results announced to Bursa Malaysia is less than 10%.

ProfitGuarantee

During the year, there were no profit guarantees given by the Company.

material Contracts

Save as disclosed below, there were no material contracts entered into by the Company and/or its subsidiaries involving directors and major shareholders’ interest during the financial year:-

1. Deed of Revocation dated 8 September 2010 made between Lembaga Kemajuan Perusahaan Pertanian Negeri Pahang (“LKPP”) and Syarikat Ladang LKPP Sendirian Berhad, a 65% owned subsidiary of the Company (“SLLKPP”) in respect of the revocation of a sale and purchase agreement dated 5 December 2008 made between the parties for the purchase of a parcel of land under PN 1877, Lot No. 35696, Mukim of Kuala Kuantan, District of Kuantan, Pahang; and

2. Sale and purchase agreement dated 8 September 2010 made between LKPP and SLLKPP in respect of the acquisition

of a piece of leasehold land measuring in area of approximately 1,481.17 acres, Mukim of Kuala Kuantan, District of Kuantan, Pahang.

addITIONaL COmpLIaNCE INfOrmaTION

16

ANNUAL REPORT 2010

Contract relating to Loans

There were no contracts relating to loans entered into by the Company in respect of the abovementioned item.

revaluation of Landed properties

The Company adopts a revaluation policy to revalue the Company’s land, building and plantation at least once in every 5 years. The Group’s landed properties were last revalued during the financial year ended 31 December 2006.

related parties Transactions

There were no related parties’ transactions during the financial year under review except as disclosed in No. 31 to the Financial Statements.

Corporate Social responsibility

The Company did not carry out specific activities in relation to Corporate Social Responsibility but generally, the Company endorsed only those actions and projects that would benefit the society at large.

ADDitiOnAlCOMPliAnCeinfOrMAtiOn (cont’d)

17


STaTEmENT ON INTErNaL CONTrOL

INTrOdUCTION

The Malaysian Code on Corporate Governance requires listed companies to maintain a sound system of internal control to safeguard shareholders’ investments and the Group’s assets. Set out below is the Board of Director’s Statement on Internal Control (“Statement”) as a Group for the year ended 31 December 2010 in compliance with paragraph 15.26(b) of the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Malaysia”), and in accordance with the Statement of Internal Control:Guidance for Directors of Public Companies issued by Bursa Malaysia.

THE BOard’S rESpONSIBILITY

The Board of Directors (“the Board”) recognises the importance of maintaining sound internal control systems and risk management practices to ensure good corporate governance. The Board affirms its overall responsibility for reviewing the adequacy and integrity of the Group’s system of internal control. It should be noted, however, that such systems are designed to manage rather than eliminate the risk of failure to achieve business objectives. It follows, therefore, that the system of internal control can only provide reasonable but not absolute assurance against material misstatement or loss to the Group.

THE grOUp’S SYSTEm Of INTErNaL CONTrOL

The Board is aware that a sound system of internal control should be capable of managing the principal risks of the Group and be embedded in the operations of the Group. To ensure that this is possible, the Group has a formalised reporting structure comprising the Deputy Executive Chairman (DEC), Executive Directors and management, which ensures communication of the Group’s business objectives, operational and financial issues or risks through management meetings at various levels. In addition, the Board is of the opinion that it has experienced executive directors and qualified managers with relevant industry experience to run and manage the operations and businesses of the Group.

There are ad-hoc and scheduled meetings both at management and operational levels to deliberate and resolve business, financial and operational matters.

In addition, the current system of internal control in the Group has within it, the following key elements:

• An organisation structure which defines the reporting lines up to the Board level.

• Documented policies and procedures for all significant processes for its active subsidiaries.

• The Board reviews and adopts the financial results on a quarterly basis, in conjunction with the quarterly announcement of results of the Group to Bursa Malaysia.

• The internal audit function that performs an independent assessment of the system of internal control and to provide independent review of the risk management areas as well as to identify controls to mitigate these risks.

The Audit Committee (‘AC’) is tasked by the Board with the duty of reviewing and monitoring the effectiveness of the Group’s system of internal control.

18

ANNUAL REPORT 2010

stAteMentOninternAlCOntrOl(cont’d)

INTErNaL aUdIT fUNCTION

The AC has appointed a firm of Chartered Accountants to provide internal audit services on an outsourced basis.

The internal audit function provides the AC with reports, wherein it highlights observations and recommends to the Management action plans necessary to be taken to improve the system of internal control.

THE BOard’S COmmITmENT

The Board is of the view that the internal control system that has been in place throughout the Group is adequate to safeguard shareholders’ investment and the Group’s assets. The Board, however, recognises that the Group operates in a dynamic business environment in which the internal control system must be responsive in order to be able to support its business objectives. To this end, the Board remains committed towards maintaining a sound system of internal control and therefore recognises that the system must continuously develop to support the growth and dynamics of the Group. As such, the Board, in striving for continuous improvement, will put in place appropriate action plans, when necessary, to further enhance the Group’s system of internal control.

The Board of directorsastral asia Berhad19 May 2011

19


dIrECTOrS’ rEpOrT

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

prINCIpaL aCTIVITIES

The Company is principally engaged in investment holding. The principal activities of its subsidiary companies and associated company are disclosed in Note 7 and 8 to the Financial Statements.

There have been no significant changes in the nature of activities of the Company, its subsidiary companies and associated company during the financial year.

fINaNCIaL rESULTS

group Company rm rm Profit/(Loss) for the financial year 9,234,970 (5,596,655)

Attributable to:- Owners of the parent 4,379,054 Minority interest 4,855,916 9,234,970

DIVIDEND

The amount of dividend declared by the Company since the end of the previous financial year was as follows:-

rm

In respect of the financial year ended 31 December 2009:- First and final dividend of 2.0 sen per ordinary share less 25% income tax paid on 8 July 2010 1,799,955

The Directors do not recommend the payment of any dividend in respect of current financial year.

rESErVES aNd prOVISIONS

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

20

ANNUAL REPORT 2010

dIrECTOrS Of THE COmpaNY The Directors in office since the date of the last report are as follows:-

Tan Sri Dato’ Hj Husein Bin Ahmad (Independent Non-Executive Chairman)Dato’ Lim Kang Poh (Deputy Executive Chairman)Tuan Haji Md Adanan Bin Abdul Manap (Deputy Chief Executive Officer)Y.H. Dato’ Md Adnan Bin Sulaiman (Executive Director)Y.H. Dato’ Amihamzah Bin Ahmad (Independent Non-Executive Director) Mr. Tan En Chong (Independent Non-Executive Director)

Dato’ Lim Kang Poh and Y.H. Md Adnan Bin Sulaiman will retire by rotation in accordance with Article 76 of the Company’s Articles of Association at the forthcoming Annual General Meeting and being eligible offer themselves for re-election.

Tan Sri Dato’ Hj Husein Bin Ahmad will retire in accordance with Section 129(6) of the Companies Act, 1965 at the forthcoming Annual General Meeting and being eligible offers himself for re-appointment.

dIrECTOrS’ INTErESTS

According to the Register of Directors’ Shareholdings, the beneficial interests of those who were Directors at the end of the financial year in the shares of the Company and its related corporations are as follows:- Number of ordinary shares of rm1 each at at 1.1.2010 Bought Sold 31.12.2010 Dato’ Lim Kang Poh 32,564,469 - - 32,564,469Tan Sri Dato’ Husein Bin Ahmad 510,000 - - 510,000Y.H. Dato’ Md Adnan Bin Sulaiman 20,000 25,000 - 45,000

By virtue of his interest in shares in the Company, Dato’ Lim Kang Poh is also deemed to have interest in the shares of all the subsidiary companies to the extent that the Company has an interest under Section 6A of the Companies Act, 1965.

No other Directors at end of the financial year held any interest in the shares of the Company and its related corporations during the financial year.

dIrECTOrS’ BENEfITS

During and at the end of the financial year, no arrangements subsisted to which the Company is a party, with the object or objects of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in the Company or any other body corporate.

Since the end of the previous financial year, no Director has received or become entitled to receive any benefit (other than as disclosed in Note 24 to the Financial Statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which he is a member, or with a company in which he has a substantial financial interest.

DIRECTORS’ REPORT (cont’d)

21


rEmUNEraTION COmmITTEE

The members of the Remuneration Committee are:-

Mr. Tan En Chong (Chairman)Tan Sri Dato’ Hj Husein Bin AhmadY.H. Dato’ Amihamzah Bin Ahmad

The Remuneration Committee reviews the performance of the Executive Directors and furnishes recommendations to the Board of Directors on specific adjustments in remuneration, including reward payments commensurate with the respective contributions of the Executive Directors for the financial year. In the case of Non-Executive Directors, the Board of Directors as a whole will determine the remuneration package. The level of remuneration reflects the level of experience and responsibilities undertaken and the individuals concerned are abstained from discussion and decision making.

aUdIT COmmITTEE

The members of the Audit Committee are:-

Y.H. Dato’ Amihamzah Bin Ahmad (Chairman/Independent Non-Executive Director)Tan Sri Dato’ Hj Husein Bin Ahmad (Independent Non-Executive Director)Mr. Tan En Chong (Independent Non-Executive Director)

The functions of the Audit Committee are to review accounting policies, internal controls, financial results and annual financial statements of the Group and of the Company on behalf of the Board of Directors.

In performing its functions, the Committee reviewed the overall scope of external audit. It met with the Group’s auditors to discuss the results of their examinations and their evaluation of the system of internal controls of the Group and of the Company. The Committee also reviewed the assistance given by the officers of the Group and of the Company to the auditors.

The Committee reviewed the financial statements of the Company and the consolidated financial statements of the Group as well as of the auditors’ report thereon.

ISSUE Of SHarES aNd dEBENTUrES

There were no shares or debentures issued during the financial year.

OTHEr STaTUTOrY INfOrmaTION 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:-

(a) to ascertain that 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 there were no bad debts to be written off and that adequate provision had been made for doubtful debts; and

(b) to ensure that any current assets which were unlikely to be realised in the ordinary course of business including their values as shown in the accounting records of the Group and of the Company have been written down to an amount which they might be expected so to realise.


22

ANNUAL REPORT 2010

OTHEr STaTUTOrY INfOrmaTION (CONT’d)

At the date of this report, the Directors are not aware of any circumstances:-

(a) which would render it necessary to write off any 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; or

(b) which would render the values attributed to current assets in the financial statements of the Group and of the Company misleading; or

(c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate; or

(d) not otherwise dealt with in this report or the financial statements which would render any amount stated in the financial statements misleading.

At the date of this report, there does not exist:-

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

(b) any contingent liability of the Group and of the Company which has arisen since the end of the financial year.

In the opinion of the Directors:-

(a) 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, in the opinion of the Directors, will or may affect the ability of the Group and of the Company to meet their obligations as and when they fall due.

(b) the results of 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; and

(c) there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely to affect substantially the results of operations of the Group and of the Company for the current financial year in which this report is made.

aUdITOrS

The Auditors, Messrs SJ Grant Thornton have expressed their willingness to continue in office.

Signed in accordance with a resolution of the Board of Directors,

.................................................................................... )TaN SrI daTO’ HJ HUSEIN BIN aHmad ) ) ) ) DIRECTORS ) ).................................................................................... )TUaN HaJI md adaNaN BIN aBdUL maNap )

Kuala Lumpur28 April 2011


23


In the opinion of the Directors, the financial statements set out on pages 26 to 73 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 their financial performance and cash flows of the Group and of the Company for the financial year then ended.

Signed in accordance with a resolution of the Board of directors,

........................................................................... .....................................................................TaN SrI daTO’ HJ HUSEIN BIN aHmad TUaN HaJI md adaNaN BIN aBdUL maNap Kuala Lumpur28 April 2011

I, Hoon Hui Kit, being the Officer primarily responsible for the financial management of Astral Asia Berhad, do solemnly and sincerely declare that to the best of my knowledge and belief, the financial statements set out on pages 26 to 73 are 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 at Kuala Lumpur in )the Federal Territory this day of )28 April 2011 ) …............................................................................... HOON HUI KIT

Before me:

Commissioner for OathsS. arULSamYNo. W490

STaTEmENT BY dIrECTOrS

STaTUTOrY dECLaraTION

24

ANNUAL REPORT 2010

report on the financial Statements

We have audited the financial statements of Astral Asia Berhad, which comprise the statements of financial position of the Group and of the Company as at 31 December 2010, the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory notes as enumerated in Notes 1 to 34 and set out on pages 26 to 73.

Directors’ Responsibility for the Financial Statements

The Directors of the Company are responsible for the preparation of the financial statements that give a true and fair view in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia, and for such internal control as the Directors determine is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

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

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

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

Opinion

In our opinion, the financial statements have been properly drawn up in accordance with 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 financial year then ended.

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 subsidiary companies have been properly kept in accordance with the provisions of the Act.

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

(c) The auditors’ reports on the financial statements of the subsidiary companies did not contain any qualification or any adverse comment made under Section 174 (3) of the Act.

INdEpENdENT aUdITOrS’ rEpOrT TO THEmEmBErS Of aSTraL aSIa BErHad

25


Other reporting responsibilities

The supplementary information set out in Note 35 on page 74 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The Directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

Other matters

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

SJ GRANT THORNTON NG CHEE HOONG(NO. AF: 0737) CHARTERED ACCOUNTANTCHARTERED ACCOUNTANTS (NO: 2278/10/12(J)) Kuala Lumpur 28 April 2011

INDEPENDENT AuDITORS’ REPORT TO ThEMeMbersOfAstrAlAsiAberhAD (cont’d)

26

ANNUAL REPORT 2010

STaTEmENTS Of fINaNCIaL pOSITION aS aT 31 dECEmBEr 2010

group Company restated restated Note 31.12.2010 31.12.2009 1.1.2009 31.12.2010 31.12.2009 rm rm rm rm rm

aSSET Non-current assets Property, plant and equipment 4 90,843,130 92,223,418 93,338,302 - - Biological assets 5 88,741,341 88,741,341 88,167,786 - - Investment properties 6 1,830,000 1,830,000 1,830,000 - - Investment in subsidiary companies 7 - - - 18,458,120 18,458,120 Investment in associated company 8 1,514,103 1,551,118 1,593,735 - - Total non-current assets 182,928,574 184,345,877 184,929,823 18,458,120 18,458,120 Current assets Inventories 9 964,309 170,676 1,630,552 - - Amount due from customers on contracts 10 3,093,524 3,817,250 7,255,899 - - Trade receivables 11 4,424,033 7,666,191 12,272,345 - - Other receivables 12 942,265 417,618 2,296,538 1,000 1,000 Amount due from subsidiary companies 13 - - - 12,379,994 22,641,364 Tax recoverable 163,148 154,603 149,629 149,776 149,629 Fixed deposits with licensed financial institutions 14 17,201,134 12,674,388 16,949,988 - - Cash and bank balances 6,515,571 6,176,529 2,081,428 2,932,923 48,191 Total current assets 33,303,984 31,077,255 42,636,379 15,463,693 22,840,184 Total assets 216,232,558 215,423,132 227,566,202 33,921,813 41,298,304 EQUITY aNd LIaBILITIES EQUITY Equity attributable to owners of the parent: Share capital 15 119,997,000 119,997,000 119,997,000 119,997,000 119,997,000 Share premium 1,333,300 1,333,300 1,333,300 1,333,300 1,333,300 Revaluation reserve 16 57,775,497 57,775,497 57,775,497 - - Accumulated losses (61,974,926) (64,554,025) (55,428,762) (88,062,628) (80,666,018) 117,130,871 114,551,772 123,677,035 33,267,672 40,664,282 Minority interest 50,493,394 48,787,478 48,650,032 - - Total equity 167,624,265 163,339,250 172,327,067 33,267,672 40,664,282 LIaBILITIES Non-current liabilities Finance lease payables 17 341,666 317,516 285,607 - - Deferred taxation 18 31,887,492 31,719,492 30,565,492 - - Total non-current liabilities 32,229,158 32,037,008 30,851,099 - -

The accompanying notes form an integral part of the financial statements.

27


stAteMentsOffinAnCiAlPOsitiOn(cont’d)AsAt31DeCeMber2010

group Company restated restated Note 31.12.2010 31.12.2009 1.1.2009 31.12.2010 31.12.2009 rm rm rm rm rm

Current liabilities Amount due to customers on contracts 10 108,567 85,200 233,263 - - Trade payables 19 7,937,801 10,624,231 14,451,472 - - Other payables 20 5,185,010 6,847,611 7,105,844 639,737 617,237 Amount due to associated company 8 565,195 565,195 565,195 - - Bank overdraft 21 - - 530,814 - - Dividend payable 14,404 16,785 13,850 14,404 16,785 Finance lease payables 17 429,216 306,352 288,762 - - Tax payable 2,138,942 1,601,500 1,198,836 - - Total current liabilities 16,379,135 20,046,874 24,388,036 654,141 634,022 Total liabilities 48,608,293 52,083,882 55,239,135 654,141 634,022 Total equity and liabilities 216,232,558 215,423,132 227,566,202 33,921,813 41,298,304


28

ANNUAL REPORT 2010

STaTEmENTS Of COmprEHENSIVE INCOmE fOr THE fINaNCIaL YEar ENdEd 31 dECEmBEr 2010

group Company 2010 2009 2010 2009 Note rm rm rm rm

Revenue 22 35,613,843 45,184,035 5,850,000 5,850,000 Cost of sales 23 (17,970,489) (42,552,910) - - Gross profit 17,643,354 2,631,125 5,850,000 5,850,000 Other income 894,112 4,193,906 393,919 587 Administration expenses (4,013,699) (3,765,044) (286,905) (265,346) Other expenses (79,219) (639,018) (11,553,669) (31,800) Finance costs (29,069) (114,922) - - Share of loss in associated company (37,015) (42,617) - - Profit/(Loss) before tax 24 14,378,464 2,263,430 (5,596,655) 5,553,441 Tax expense 25 (5,143,494) (4,951,325) - (342) Profit/(Loss) for the financial year 9,234,970 (2,687,895) (5,596,655) 5,553,099 Total comprehensive income/(loss) for the financial year 9,234,970 (2,687,895) (5,596,655) 5,553,099 Profit/(Loss)attributableto:- Owners of the parent 4,379,054 (5,975,341) Minority interest 4,855,916 3,287,446 9,234,970 (2,687,895) Basic earnings/(loss) per share attributable to owners of the parent (sen) 26 3.65 (4.98)


29


STaTEmENTS Of CHaNgES IN EQUITYfOr THE fINaNCIaL YEar ENdEd 31 dECEmBEr 2010


attributable to owners of the parent Non-distributable Share Share revaluation accumulated minority Total capital premium reserve losses Total interest equitygroup rm rm rm rm rm rm rm

Balance at 1 January 2009 119,997,000 1,333,300 57,775,497 (55,428,762) 123,677,035 48,650,032 172,327,067 Transactions with owners:- Dividend (Note 27) - - - (3,149,922) (3,149,922) - (3,149,922) Dividend paid to minority interest - - - - - (1,050,000) (1,050,000) Dividend payable to minority interest - - - - - (2,100,000) (2,100,000)

Total transactions with owners - - - (3,149,922) (3,149,922) (3,150,000) (6,299,922) Total comprehensive (loss)/income for the financial year - - - (5,975,341) (5,975,341) 3,287,446 (2,687,895) Balance at 31 December 2009 119,997,000 1,333,300 57,775,497 (64,554,025) 114,551,772 48,787,478 163,339,250 Transactions with owners:- Dividend (Note 27) - - - (1,799,955) (1,799,955) - (1,799,955) Dividend paid to minority interest - - - - - (3,150,000) (3,150,000)

Total transactions with owners - - - (1,799,955) (1,799,955) (3,150,000) (4,949,955) Total comprehensive income for the financial year - - - 4,379,054 4,379,054 4,855,916 9,234,970 Balance at 31 December 2010 119,997,000 1,333,300 57,775,497 (61,974,926) 117,130,871 50,493,394 167,624,265

30

ANNUAL REPORT 2010

stAteMentsOfChAnGesineQUitYfOrthefinAnCiAlYeArenDeD31DeCeMber2010(cont’d)

Share Share accumulated capital premium* losses Total equity rm rm rm rm

Company Balance at 1 January 2009 119,997,000 1,333,300 (83,069,195) 38,261,105 Transaction with owners:- Dividend (Note 27) - - (3,149,922) (3,149,922) Total comprehensive income for the financial year - - 5,553,099 5,553,099 Balance at 31 December 2009 119,997,000 1,333,300 (80,666,018) 40,664,282 Transaction with owners:- Dividend (Note 27) - - (1,799,955) (1,799,955) Total comprehensive loss for the financial year - - (5,596,655) (5,596,655) Balance at 31 December 2010 119,997,000 1,333,300 (88,062,628) 33,267,672 * Non-distributable


31


STaTEmENTS Of CaSH fLOWSfOr THE fINaNCIaL YEar ENdEd 31 dECEmBEr 2010


CaSH fLOWS frOm OpEraTINg aCTIVITIES Profit/(loss) before tax 14,378,464 2,263,430 (5,596,655) 5,553,441 adjustments for:- Bad debts written off - 597,498 - - Depreciation 1,885,876 2,053,518 - 390 Property, plant and equipment written off 139,462 9,633 - - Dividend income - - (5,850,000) (5,850,000) Gain on disposal of property, plant and equipment - (139,199) - - Interest expense 29,069 52,206 - - Interest income (338,782) (325,510) (425) (587) Allowance for impairment loss - current 36,980 1,861 11,553,669 31,800 - reversal (32,047) (228,424) (393,494) - Share of loss in associated company 37,015 42,617 - - Operating profit/(loss) before working capital changes 16,136,037 4,327,630 (286,905) (264,956) Changes in working capital:- Inventories (793,633) 1,459,876 - - Receivables 2,712,578 5,528,902 - 5,000 Payables (4,349,031) (3,657,737) 22,500 33,251 Customers on contracts 747,093 3,290,586 - - Subsidiary companies - - (4,798,952) (2,185,801) Cash generated from/(used in) operations 14,453,044 10,949,257 (5,063,357) (2,412,506) Tax refund 3,817 - - - Tax paid (4,450,414) (3,399,635) - (342) Net cash from/(used in) operating activities 10,006,447 7,549,622 (5,063,357) (2,412,848) CaSH fLOWS frOm INVESTINg aCTIVITIES Dividend received - - 9,750,000 5,557,500 Interest received 338,782 325,510 425 587 Proceeds from disposal of property, plant and equipment - 141,000 - - Purchase of property, plant and equipment A (120,650) (540,068) - - Purchase of biological assets - (573,555) - - Net cash from/(used in) investing activities 218,132 (647,113) 9,750,425 5,558,087


32

ANNUAL REPORT 2010

stAteMentsOfCAshflOWsfOrthefinAnCiAlYeArenDeD31DeCeMber2010(cont’d)


CaSH fLOWS frOm fINaNCINg aCTIVITIES Dividend paid (1,802,336) (3,146,987) (1,802,336) (3,146,987) Dividend paid to minority shareholder (3,150,000) (2,992,500) - - Interest paid (29,069) (52,206) - - Repayment of finance lease payables (377,386) (360,501) - - Net cash used in financing activities (5,358,791) (6,552,194) (1,802,336) (3,146,987) CaSH aNd CaSH EQUIVaLENTS Net increase/(decrease) 4,865,788 350,315 2,884,732 (1,748) Brought forward 18,850,917 18,500,602 48,191 49,939 Carried forward B 23,716,705 18,850,917 2,932,923 48,191

NOTES TO THE STaTEmENTS Of CaSH fLOWS a. pUrCHaSE Of prOpErTY, pLaNT aNd EQUIpmENT grOUp

The Group acquired property, plant and equipment with aggregate costs of RM645,050 (2009: RM950,068) of which RM524,400 (2009: RM410,000) was acquired by means of finance lease. Cash payments of RM120,650 (2009: RM540,068) were made to purchase the property, plant and equipment.

B. CaSH aNd CaSH EQUIVaLENTS

Cash and cash equivalents included in the statements of cash flows comprise the following amounts:-

group Company 2010 2009 2010 2009 rm rm rm rm

Cash and bank balances 6,515,571 6,176,529 2,932,923 48,191 Fixed deposits with licensed financial institutions 17,201,134 12,674,388 - - 23,716,705 18,850,917 2,932,923 48,191

As disclosed in Note 14 to the Financial Statements, certain fixed deposits totalling RM5,650,425 (2009: RM5,650,425) have been pledged to financial institutions for guarantee facilities granted to subsidiary companies and hence, are not available for general use.


33


NOTES TO THE fINaNCIaL STaTEmENTS31 dECEmBEr 2010

1. gENEraL INfOrmaTION

The Company is principally engaged in investment holding. The principal activities of its subsidiary companies and associated company are disclosed in Note 7 and 8 to the Financial Statements.

There have been no significant changes in the nature of activities of the Company, its subsidiary companies and associated company during the financial year.

The Company is a public limited liability company, incorporated and domiciled in Malaysia and listed on the Main Market of Bursa Malaysia Securities Berhad.

The registered office and principal place of business of the Company is located at No. 67 & 69, Jalan SBC 1, Taman Sri Batu Caves, 68100 Batu Caves, Selangor Darul Ehsan.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the Directors on 28 April 2011.

2. BaSIS Of prEparaTION

(a) Statement of compliance

The financial statements of the Group and of the Company have been prepared in accordance with Financial Reporting Standards issued by the Malaysian Accounting Standards Board (“MASB”) and the Companies Act, 1965 in Malaysia.

(b) Basis of measurement

The financial statements of the Group and of the Company are prepared under the historical cost convention, unless otherwise indicated in the summary of significant accounting policies.

(c) functional and presentation currency

The financial statements are presented in Ringgit Malaysia (RM) which is the Company’s functional currency.

(d) adoption of new or revised financial reporting Standards (“frSs”)

(i) The following FRSs and IC Interpretations have been adopted by the Group and the Company effective for the financial periods beginning on or after 1 January 2010:-

(1) Amendments to FRS 1 - First-time Adoption of Financial Reporting Standards (2) Amendments to FRS 2 - Share-based Payment(3) FRS 4 - Insurance Contracts(4) Amendments to FRS 5 - Non-current Assets Held for Sale and Discontinued Operations(5) FRS 7 - Financial Instruments: Disclosures(6) Amendments to FRS 7 - Financial Instruments: Disclosures(7) FRS 8 - Operating Segments(8) Amendment to FRS 8 - Operating Segments(9) FRS 101 - Presentation of Financial Statements (Revised)(10) Amendment to FRS 107 - Statement of Cash Flows(11) Amendment to FRS 108 - Accounting Policies, Changes in Accounting Estimates and Errors(12) Amendment to FRS 110 - Events After the Reporting Period(13) Amendment to FRS 116 - Property, Plant and Equipment(14) Amendment to FRS 117 - Leases(15) Amendment to FRS 118 - Revenue(16) Amendment to FRS 119 - Employee Benefits

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ANNUAL REPORT 2010

nOtestOthefinAnCiAlstAteMents(cont’d)31DeCeMber2010

2. BaSIS Of prEparaTION (CONT’d)

(d) Adoption of new or revised Financial Reporting Standards (“FRSs”) (cont’d)

(i) The following FRSs and IC Interpretations have been adopted by the Group and the Company effective for the financial periods beginning on or after 1 January 2010 (cont’d):-

(17) Amendment to FRS 120 - Accounting for Government Grants and Disclosure of Government Assistance(18) FRS 123 - Borrowing Costs (Revised)(19) Amendment to FRS 123 - Borrowing Costs(20) Amendment to FRS 127 - Consolidated and Separate Financial Statements (Revised)(21) Amendment to FRS 128 - Investment in Associates(22) Amendment to FRS 129 - Financial Reporting in Hyperinflationary Economies(23) Amendment to FRS 131 - Interest in Joint Ventures(24) Amendments to FRS 132 - Financial Instruments: Presentation(25) Amendment to FRS 134 - Interim Financial Reporting(26) Amendment to FRS 136 - Impairment of Assets(27) Amendment to FRS 138 - Intangible Assets(28) FRS 139 - Financial Instruments: Recognition and Measurement(29) Amendment to FRS 139 - Financial Instruments: Recognition and Measurement(30) Amendment to FRS 140 - Investment Property(31) IC Interpretation 9 - Reassessment of Embedded Derivatives(32) IC Interpretation 10 - Interim Financial Reporting and Impairment(33) IC Interpretation 11 - FRS 2 - Group and Treasury Share Transactions(34) IC Interpretation 13 - Customer Loyalty Programmes(35) IC Interpretation 14 - FRS 119 - The Limit on a Defined Benefit Asset, Minimum Funding

Requirements and their Interaction

FRS 1, 2, 4, 5, 120, 123, 129, 131, 138, IC Interpretation 9, 10, 11, 13 and 14 are not applicable to the Group’s operations.

FRS 1, 2, 4, 5, 8, 116, 117, 120, 123, 127, 128, 129, 131, 134, 138, 140, IC Interpretation 9, 10, 11, 13 and 14 are not applicable to the Company’s operations.

Adoption of the above relevant FRSs has no significant impact on the financial statements of the Group and the Company except for the following:-

FRS 7 - Financial Instruments: Disclosures

FRS 7 and the consequential Amendment to FRS 101 - Presentation of Financial Statements require disclosure of information about the significance of financial instruments for the Group’s and the Company’s financial position and performance, the nature and extent of risks arising from financial instruments and the objectives, policies and processes for managing capital.

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 financial year ended 31 December 2010.

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FRS 8 - Operating Segments

FRS 8, which replaces FRS 1142004 - Segment Reporting, requires identification of operating segments based on internal reports that are regularly reviewed by the Group’s chief operating decision maker in order to allocate resources to the segments and to assess their performance. Prior to 1 January 2010, the Group identifies two sets of segments (business and geographical) using a risks and rewards approach, with the Group’s system of internal financial reporting to key management personnel serving only as the starting point for the identification of such segments.

The Group concluded that the reportable operating segments determined in accordance with FRS 8 are the same as the business segments previously identified under FRS 114. The Group has adopted FRS 8 retrospectively. These revised disclosures, including the related revised comparative information are shown in Note 34 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 expenses recognised directly in equity, either in one single statement, on in two linked statements. The Group and the Company have elected to present this statement as one single statement.

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 and the Company to make new disclosures to enable users of the financial statements to evaluate the Group’s and the Company’s objectives, policies and processes for managing capital.

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 effect arising from the adoption this standard has been accounted for by adjusting the opening balance of retained earnings as at 1 January 2010. Comparative are not restated.

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ANNUAL REPORT 2010





Amendment to FRS 117 - Leases

The Amendment to FRS 117 clarified that leases of land and buildings are classified as operating or finance leases in the same way as leases of other assets. The amendment also clarified 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 land element as a finance lease in such circumstances would be consistent with economic position of the lessee. Therefore, adoption of Amendment to FRS 117 has resulted in reclassification of certain unexpired land leases to finance leases. The Group has applied the change in accounting policy retrospectively and certain comparatives have been restated.

The following are effects to the statements of financial position as at 31 December 2010 arising from the above change in accounting policy:-

group and Company rm Increase/(Decrease) Property, plant and equipment 85,027,068Prepaid land lease payments (85,027,068)

group and Company as previously Increase/ as reported (decrease) restated rm rm rm

31 December 2009 Property, plant and equipment 6,172,812 86,050,606 92,223,418Prepaid land lease payments 86,050,606 (86,050,606) - 1 January 2009 Property, plant and equipment 6,264,158 87,074,144 93,338,302Prepaid land lease payments 87,074,144 (87,074,144) -

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(ii) The following FRSs and IC Interpretations are not yet effective and have not been early adopted by the Group and the Company:-

(1) FRS 1 - First-time Adoption of Financial Reporting Standards (Revised)(2) Amendments to FRS 1 (@) - Limited Exemption from Comparative FRS 7 Disclosures for First-time Adopters - Additional Exemption for First-time Adopters - Accounting policy changes in the year of adoption, revaluation basis as deemed cost and use of deemed cost for operations subject to rate regulation(3) Amendments to FRS 2 - Share-based Payment(4) Amendments to FRS 2 (@) - Group Cash - settled Share-based Payment Transactions(5) FRS 3 - Business Combinations (Revised)(6) Amendments to FRS 3 (@) - Business Combinations(7) Amendments to FRS 5 - Non-current Assets Held for Sale and Discontinued Operations(8) Amendments to FRS 7 (@) - Improving Disclosures about Financial Instruments - Clarification of disclosures and transition requirements for contingent consideration from a business combination that occurred before the effective date of the revised FRS(9) Amendment to FRS101(@) - Presentation of Financial Statements(10) Amendment to FRS 121 (@) - The Effects of Changes in Foreign Exchange Rates(11) FRS 124 (#) - Related Party Disclosures (Revised)(12) FRS 127 - Consolidated and Separate Financial Statements (Revised)(13) Amendment to FRS 128 (@) - Investment in Associates(14) Amendments to FRS 131 (@) - Interests in Joint Ventures(15) Amendments to FRS 132 (^) - Financial Instruments: Presentation(16) Amendments to FRS 132 (@) - Transition requirements for contingent consideration from a business combination that occurred before the effective date of the revised FRS(17) Amendments to FRS 134 (@) - Interim Financial Reporting(18) Amendments to FRS 138 - Intangible Assets(19) Amendment to FRS 139 (@) - Financial Instruments: Recognition and Measurement(20) IC Interpretation 4 (@) - Determining Whether An Arrangement Contains a Lease(21) Amendments to IC - Reassessment of Embedded Derivatives Interpretation 9 (22) IC Interpretation 12 - Service Concession Arrangements(23) Amendments to - Customer Loyalty Programmes IC Interpretation 13 (@) (24) Amendments to - Prepayments of a Minimum Funding Requirement IC Interpretation 14 (*)(25) IC Interpretation 15 (#) - Agreements for the Construction of Real Estate(26) IC Interpretation 16 - Hedges of Net Investment in a Foreign Operation(27) IC Interpretation 17 - Distribution of Non-cash Assets to Owners(28) IC Interpretation 18 (@) - Transfers of Assets from Customers(29) IC Interpretation 19 (*) - Extinguishing Financial Liabilities with Equity Instruments

During the financial year, MASB approved and issued IC Interpretation 18 and requires the interpretation to be applied prospectively to all transfers of assets from customers received on or after 1 January 2011.

All the above FRSs and IC Interpretations will be effective for accounting period beginning on or after 1 July 2010, other than those marked with (^), (@) and (#) which will be applicable to accounting period beginning on or after 1 March 2010, 1 January 2011, 1 July 2011 and 1 January 2012 respectively.

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ANNUAL REPORT 2010




(ii) The following FRSs and IC Interpretations are not yet effective and have not been early adopted by the Group and the Company (cont’d):-

The existing FRS 1, 3, 124 and 127 will be withdrawn upon the adoption of the new requirements. IC Interpretation 15 will replace FRS 2012004-Property Development Activities. IC Interpretation 8 and 11 will be withdrawn upon the application of Amendments to FRS 2 Group Cash-settled Share-based Payment Transactions.

FRS 1, 2, 5, 121, 131, 138, IC Interpretation 4, 9, 12, 13, 14, 15, 16, 17, 18 and 19 are not applicable to the Group’s operations.

FRS 1, 2, 5, 121, 127, 128, 131, 134, 138, IC Interpretation 4, 9, 12, 13, 14, 15, 16, 18, and 19 are not applicable to the Company’s operation.

The Directors anticipate that the adoption of these new or revised FRSs and IC Interpretation will have no material impact on the financial statements of the Group and the Company in the period of initial application except for the following:-

FRS 3 - Business Combination (Revised)

The revised standard continues to apply the acquisition method to business combinations, with some significant changes. All payments to purchase a business are to be recorded at fair value at the acquisition date, with contingent payments classified as debt subsequently re-measured through the statement of comprehensive income. There is a choice to measure the non-controlling interest in the acquiree at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets. All acquisition-related costs should be expensed.

FRS 124 - Related Party Disclosures (Revised)

The revised standard modifies the definition of a related party and simplifies disclosures for government-related entities. The disclosure exemptions introduced in the standard do not affect the Group and the Company because the Group and the Company are not a government-related entity. However, disclosures regarding related party transactions and balances in this financial statements may be affected when the revised standard is applied in future accounting periods because some counterparties that did not previously meet the definition of a related party may come within the scope of the Standard.

FRS 127 - Consolidated and Separate Financial Statements (Revised)

The revised standard requires the effects of all transactions with non-controlling interests to be recorded in equity if there is no change in control and these transactions will no longer result in goodwill or gains and losses. The standard also specifies the accounting when control is lost. Any remaining interest in the entity is remeasured to fair value, and a gain or loss is recognised in profit or loss. Losses are required to allocate to non-controlling interests, even if it results in the non-controlling interest to be in a deficit position.

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(ii) The following FRSs and IC Interpretations are not yet effective and have not been early adopted by the Group and the Company (cont’d):-

The Directors anticipate that the adoption of these new or revised FRSs and IC Interpretation will have no material impact on the financial statements of the Group and the Company in the period of initial application except for the following (cont’d):-

IC Interpretations 17 - Distributions of Non-cash Assets to Owners

This interpretation provides guidance on accounting for arrangements whereby an entity distributes non-cash assets to shareholders either as a distribution of reserves or as dividends. The Company should measure the dividend payable at the fair value of the assets to be distributed when the dividend is appropriately authorised and is no longer at the discretion of the Company. On settlement of the dividend, the difference between the dividend paid and the carrying amount of the assets distributed is recognised in profit or loss. If the dividend remains unpaid at the end of the financial year end, the dividend payable carrying amount is reviewed with any changes recognised in equity.

(e) Significant accounting estimates and judgements

Estimates, assumptions concerning the future and judgements are made in the preparation of the financial statements. They affect the application of the Group’s and the Company’s accounting policies and reported amounts of assets, liabilities, income and expenses, and disclosures made. Estimates and underlying assumptions are assessed on an on-going basis and are based on experience and relevant factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual result may differ from these estimates.

(i) Key sources of estimation uncertainty

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

Income tax/deferred tax liabilities

The Group and the Company are exposed to income taxes. Significant judgement is involved in determining the Group’s and the Company’s provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group and the Company recognise tax liabilities based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such difference will impact the income tax and deferred tax provisions in the period in which such determination is made.

deferred tax assets

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

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ANNUAL REPORT 2010



(e) Significant accounting estimates and judgements (cont’d)

(i) Key sources of estimation uncertainty (cont’d)

depreciation of property, plant and equipment

Property, plant and equipment are depreciated in a straight-line basis over their useful life. Significant judgment is involved in estimating the useful life of these assets. Changes in the expected level of usage and technological developments could impact the economic useful life and the residual values of these assets, therefore future depreciation charges could be revised.

Impairment of property, plant and equipment, biological assets, investment properties, investment in subsidiary companies and investment in associate company

The Group and the Company carries out the impairment test based on a variety of estimation including the value-in-use of the cash-generating units to which the property, plant and equipment, biological assets, investment properties, investment in subsidiary companies and investment in associate company are allocated. Estimating the value-in-use requires the Group and the Company to make an estimate of the expected future cash flows from the cash-generating units and also to choose a suitable discount rate in order to calculate the present value of those cash flows.

Impairment of loans and receivables

The Group and the Company 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 and the Company considers factors such as the probability of insolvency or significant financial difficulties of the receivables 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.

(ii) Critical judgement made in applying accounting policies

The following is the judgement made by management in the process of applying the Group’s accounting policies that have the most significant effect on the amounts recognised in the financial statements.

Classificationbetweeninvestmentpropertiesandowner-occupiedproperties The Group determines whether a property qualifies as an investment property, and has developed criteria in making that judgement. Investment property is a property held to earn rentals or for capital appreciation or both. Therefore, the Group considers whether a property generates cash flows largely independently of the other assets held by the Group.

Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that is held for use in the production or supply of goods or services or for administrative purposes. If these portions could be sold separately (or leased out separately under a finance lease), the Group accounts for the portions separately. If the portions could not be sold separately, the property is an investment property only if an insignificant portion is held for use in the production or supply of goods or services or for administrative purposes.

Judgement is made on an individual property basis to determine whether ancillary services are so significant that a property does not qualify as an investment property.

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(e) Significant accounting estimates and judgements (cont’d)

(ii) Critical judgement made in applying accounting policies (cont’d)

Construction contract

Construction contract accounting requires reliable estimation of the costs to complete the contract and reliable estimate of the stage of contract completion. Using experience gained on each contract and taking into account of the expectation of the time and materials required to complete the contract, management uses budgeting tools to estimate the profitability of the contract at any time.

Construction contract accounting requires that variation, claims and incentive payments only be recognised as contract revenue to the extent that it is probable that they will be accepted by the customer. As the approval process often takes some time, a judgement is required to be made of its probability and revenue recognised accordingly.

3. SIgNIfICaNT aCCOUNTINg pOLICIES

(a) Basis of consolidation

The Group’s financial statements consolidate the audited financial statements of the Company and all of its subsidiary companies, which have been prepared in accordance with the Group’s accounting policies.

All intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated; unrealised losses are also eliminated on consolidation unless cost cannot be recovered.

The financial statements of the Company and its subsidiary companies are all drawn up to the same reporting date.

Acquisition of subsidiary companies is accounted for using the acquisition method. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest.

Any excess of the cost of the business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities represents goodwill.

Any excess of the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of business combination is recognised as income on the date of acquisition.

Minority interest represents the portion of profit or loss and net assets in subsidiary companies not held by the Group. It is measured at the minority’s share of the fair value of the subsidiary companies’ identifiable assets and liabilities at the acquisition date and the minority’s share of changes in the subsidiary companies’ equity since then.

Subsidiary companies are consolidated from the date on which control is transferred to the Group and are no longer consolidated from the date that control ceases.

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ANNUAL REPORT 2010


3. SIgNIfICaNT aCCOUNTINg pOLICIES (CONT’d)

(a) Basis of consolidation (cont’d)

The gain or loss on disposal of a subsidiary company is the difference between net disposal proceeds and the Group’s share of its net assets together with any unamortised or unimpaired balance of goodwill on acquisition and exchange differences.

(b) property, plant and equipment

Property, plant and equipment are stated at cost or valuation less accumulated depreciation and any accumulated impairment losses. Depreciation is provided on the straight line method in order to write off the cost of each asset over its estimated useful lives. No depreciation is provided on freehold land and work-in-progress.

Revaluation is made at least once in every five years by an independent valuer on an open market value basis. Any revaluation increase is credited to equity as a revaluation surplus, except to the extent that it reverses a revaluation decrease for the same asset previously recognised as an expense, in which case, the increase is recognised in the profit or loss to the extent of the decrease previously recognised. A revaluation decrease is first offset against an increase on unutilised revaluation surplus previously recognised in respect of the same asset and is thereafter recognised as an expense. Upon the disposal of revalued assets, the attributable revaluation surplus remaining in the revaluation reserve is transferred to retained earnings.

The annual depreciation rates used are as follows:- Leasehold land Over the lease term from 59 to 99 years Buildings 2% - 15%Plant and machinery 10% - 20%Furniture, fittings and office equipment 10% - 33%Motor vehicles 20%

Restoration cost relating to an item of property, plant and equipment is capitalised only if such expenditure is expected to increase the future benefits from the existing property, plant and equipment beyond its previously assessed standard of performance.

Property, plant and equipment are written down to recoverable amount if, in the opinion of the Directors, it is less than their carrying value. Recoverable amount is the net selling price of the property, plant and equipment i.e. the amount obtainable from the sale of an asset in an arm’s length transaction between knowledgeable, willing parties, less the costs of disposal.

The residual values, useful life and depreciation method are reviewed at each financial year end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment.

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 arising on derecognition of the asset is included in the profit or loss in the financial year the asset is derecognised.

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(c) Subsidiary companies

A subsidiary company is a company in which the Company or the Group either directly or indirectly owns a power to govern its financial and operating policies so as to obtain benefits from its activities.

Investment in subsidiary companies is stated at cost. Where an indication of impairment exists, the carrying amount of the subsidiary companies is assessed and written down immediately to their recoverable amount.

(d) associated companies

An associated company is a company in which the Company or the Group has a long term equity interest of between 20 to 50 percent and where it exercises significant influence over its financial and operating policies through management participation but not to exert control over those policies.

Investment in associated company is accounted for in the consolidated financial statements using equity accounting which involves recognising in the profit or loss the Group’s share of the results of associated company based on the audited financial statements of the associated company. The Group’s investment in associated companies are carried in the statement of financial position at an amount that reflects its share of the net assets of the associated company. Equity accounting is discontinued when the carrying amount of the investment in an associated company reaches zero, unless the Group has incurred obligations or guaranteed obligations in respect of the associated company.

Investment in associated company is stated at cost. Where an indication of impairment exists, the carrying amount of the associated company is assessed and written down immediately to their recoverable amount.

(e) Inventories

Inventories are stated at the lower of cost and net realisable value after adequate allowance has been made for deteriorated, obsolete and slow moving inventories.

Cost is determined on a first-in-first-out method. The costs of material and stores comprise costs of purchase.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

(f) Investments properties

Investment properties consist of shoplots held for capital appreciation or rental purpose and not occupied or only an insignificant portion is occupied for use or in the operations of the Group.

Investment properties are stated at fair value, which reflects market conditions at the reporting date by external valuers. Changes in the fair values of investments properties are included in the profit or loss in the financial year in which they arise.

Investment properties are derecognised when either they are disposed of or when they are permanently withdrawn from use and no future economic benefit is expected from the disposal. Any gain or loss on the retirement or disposal of an investment property is recognised in the profit or loss in the year of retirement or disposal.

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ANNUAL REPORT 2010



(g) financial assets

Financial assets are recognised when the Group and the Company becomes a party to the contractual provisions of the financial instruments. Financial assets are measured initially at fair value plus transactions costs, except for financial assets carried at fair value through profit or loss, which are measured initially at fair value.

For the purpose of subsequent measurement, financial assets other than those designated and effective as hedging instruments are classified into the following categories upon initial recognition:-

(a) Loans and receivables;(b) Financial assets at fair value through profit or loss;(c) Held to maturity investments; and (d) Available-for-sale financial assets.

The category determines subsequent measurement and whether any resulting income and expense is recognised in profit or loss or in other comprehensive income.

All financial assets except for those at fair value through profit or loss are subject to review for impairment at least at each reporting date. Financial assets are impaired when there is any objective evidence that a financial asset or a group of financial assets is impaired. Different criteria to determine impairment are applied for each category of financial assets.

A financial asset is derecognised where the contractual right to receive cash flows from the asset has expired or when the financial assets and all substantial risks and rewards are transferred.

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 Company commits to purchase or sell the asset.

At the reporting date, the Group and the Company carried only loans and receivables on its statement of financial position.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial recognition these are measured at amortised cost using the effective interest method, less provision for impairment. Discounting is omitted where the effect of discounting is immaterial. Gains or 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 assets.

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(h) financial liabilities

Financial liabilities are recognised when the Group and the Company becomes a party to the contractual provision of the financial instruments. Financial liabilities are measured initially at fair value plus transaction costs, except for financial liabilities carried at fair value through profit or loss, which are measured initially at fair value.

After the initial recognition, financial liability is classified as financial liability at fair value through profit or loss or other financial liabilities measure at amortised cost using the effective interest method.

A financial liability is derecognised when the obligation under the liability is extinguished, discharged, cancelled or expired, or through amortisation process. 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 amount is recognised in profit or loss.

Otherfinancialliabilities

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

Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Borrowings are classified as current liabilities unless the Group and the Company have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

(i) assets acquired under lease arrangements

finance leases

Lease of property, plant and equipment acquired under finance lease arrangements which transferred substantially all the risks and rewards of ownership to the Group are capitalised. The depreciation policy on these assets is similar to that of the Group’s property, plant and equipment depreciation policy.

Outstanding obligation due under finance lease arrangements after deducting finance expenses are included as liabilities in the financial statements. Finance charges on finance lease arrangements are allocated to profit or loss over the period of the respective agreements.

Operating leases

Lease payments for operating leases, where substantially all the risk and benefits remain with the lessor, are charged as expenses in the year in which they incurred.

(j) Construction contracts

Construction contracts are contract specifically negotiated for the construction of an asset or a combination of assets that are closely interrelated or interdependent in terms of their design, technology and function or their ultimate purpose or use.

When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs are recognised over the period of contract as revenue and expenses respectively by reference to the percentage of completion of the contract activity at the reporting date.

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ANNUAL REPORT 2010



(j) Construction contracts (cont’d)

The Group uses the percentage of completion method to determine the appropriate amount of revenue and costs to be recognised in a period of the contract by reference to the survey of work performed for each contract.

When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised only to the extent of contract costs incurred that is probably recoverable and contract costs are recognised as expenses in the year in which they are incurred.

Irrespective whether the outcome of a construction contract can be estimated reliably, when it is probable that contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.

The aggregate of the costs incurred and the profit/loss recognised on each contract is compared against the progress billings up to the financial year end. Where costs incurred and recognised profits (less recognised losses) exceed progress billings, the balance is shown as amounts due from customers on contracts under current assets. Where progress billings exceed costs incurred plus recognised profits (less recognised losses), the balance is shown as amounts due to customers on contracts under current liabilities.

(k) Income tax

Current tax

Current tax expense is the expected amount of income taxes payable in respect of the taxable profit for the financial year and is measured using the tax rates that have been enacted by the reporting date. Current tax for current and prior periods is recognised as liability (or asset) for the extend that it is unpaid (or refundable).

deferred tax

Deferred tax liabilities and assets are provided for under the liability method at the current tax rate in respect of all temporary differences at the reporting date between the carrying amount of an asset or liability in the statement of financial position and its tax base including unutilised tax losses and unabsorbed capital allowances.

Deferred tax assets are recognised only to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilised. The carrying amount of a deferred tax asset is reviewed at each reporting date. If it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or that entire deferred tax asset to be utilised, the carrying amount of the deferred tax asset will be reduced accordingly. When it becomes probable that sufficient taxable profit will be available, such reductions will be reversed to the extent of the taxable profit.

Current and deferred tax are recognised as expenses in the profit or loss, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also charged or credited directly in equity.

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted by the reporting date.

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(l) Biological assets

Biological assets comprise plantation development expenditure incurred in respect of newly planted areas up to the time of commercial harvesting. This new planting expenditure is capitalised and is not amortised. Replanting expenditure incurred on planted areas is charged to the profit or loss in the year in which the expenditure incurred.

The biological assets stated at valuation will be revalued at regular intervals of at least once in every five years. Where market conditions indicate that the carrying values of the revalued assets differ materially from the market values, the Directors will consider revaluation in those intervening years.

Revaluation is made by an independent valuer on an open market value basis. Any revaluation increase is credited to equity as a revaluation surplus, except to the extent that it reverses a revaluation decrease for the same asset previously recognised as an expense, in which case, the increase is recognised in the profit or loss to the extent of the decrease previously recognised. A revaluation decrease is first offset against an increase on unutilised revaluation surplus previously recognised in respect of the same asset and is thereafter recognised as an expense. Upon the disposal of revalued assets, the attributable revaluation surplus remaining in the revaluation reserve is transferred to retained earnings.

(m) Impairmentoffinancialassets

The Group assess at each reporting date whether there is any objective evidence that a financial assets is impaired.

Tradeandotherreceivablesandotherfinancialassetscarriedatamortisedcost

To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Group considers factors such as the probability of insolvency or significant financial difficulties of the receivables 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 or receivables could include the Group’s past experience or 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 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.

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(n) Impairmentofnon-financialassets

At each reporting date, the Group and the Company reviews the carrying amounts of its non-financial assets to determine whether there is any indication of impairment by comparing its carrying amount with its recoverable amount. Recoverable amount is the higher of an asset’s fair value less cost 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 identified cash flow (cash generating units).

In assessing value-in-use, the estimated future cash flows 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.

An impairment loss is recognised as an expense in the profit or loss immediately.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses for an asset may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset recoverable amount since the last impairment loss was recognised. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss.

(o) revenue recognition

Revenue from sale of goods is recognised as income upon delivery of goods and customers’ acceptance, net of discount and sales return.

Revenue from construction contracts are accounted for under the percentage of completion method. The stage of completion is measured by reference to the survey work performed for each contract. Any anticipated loss will be recognised in full.

Interest income is recognised on a time proportion basis that reflects the effective yield on the assets.

Dividend income is included in the profit or loss when the shareholder’s right to receive has been established.

(p) Employeebenefits

Shorttermemployeebenefits

Wages, salaries, bonuses and social security contributions are recognised as expenses in the financial year, in which the associated services are rendered by employees of the Group. 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 occurred.

Definedcontributionplan

Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into separate entities of funds and will have no legal or constructive obligation to pay further contribution if any of the funds do not hold sufficient assets to pay all employee benefits relating to employee services in the current and preceding financial years.

Such contributions are recongised as expenses in the profit or loss as incurred. As required by law, the Group made such contributions to Employees Provident Fund.

49




(q) dividends

Dividends on ordinary shares are accounted for in shareholders’ equity as an appropriation of retained earnings in the year in which they are declared.

(r) Cash and cash equivalents

Cash and cash equivalents comprise cash in hand, bank balances, fixed deposits pledged with licensed financial institutions and short term demand deposits which are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value.

(s) Contingent liabilities

A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. It can also be a present obligation arising from past events that is not recognised because it is not probable that outflow of economic resources will be required or the amount of obligation cannot be measured reliably. A contingent liability is not recognised but is disclosed in the notes to the financial statements. When a change in the probability of an outflow occurs and such outflow is probable and can be measured reliably, they will then be recognised as a provision.

(t) Equity instruments

Ordinary shares are recorded at the nominal value and proceeds in excess of the nominal value of shares issued, if any, are accounted for as share premium. Both ordinary shares and share premium are classified as equity. Dividends on ordinary shares unpaid are recognised as liabilities when declared.

The transaction costs of an equity transaction which comprise only those incremental external costs directly attributable to the equity transaction are accounted for as a deduction from equity, net of tax, from the proceeds.

(u) Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified to makes strategic decisions.

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ANNUAL REPORT 2010


4. prOpErTY, pLaNT aNd EQUIpmENT

furniture, Leasehold Freehold Plantand Motor fittingsand Work-in-group land land Buildings machinery vehicles equipment progress Total rm rm rm rm rm rm rm rm

Cost or valuation Balance as at 1 January 2009; as previously reported - cost - 65,000 2,209,858 8,455,545 7,198,156 2,768,238 392,262 21,089,059 - valuation - - 3,276,000 - - - - 3,276,000 - 65,000 5,485,858 8,455,545 7,198,156 2,768,238 392,262 24,365,059 Effect of adopting Amendment to FRS 117 89,092,680 - - - - - - 89,092,680 Balance as at 1 January 2009, restated 89,092,680 65,000 5,485,858 8,455,545 7,198,156 2,768,238 392,262 113,457,739Addition - - - 50,513 503,851 100,504 295,200 950,068 Transfer from/(to) - - 548,000 - - - (548,000) - Disposal - - - - (606,312) (3,600) - (609,912)Written off - - - - (22,500) (45,772) - (68,272) Balance as at 31 December 2009, restated 89,092,680 65,000 6,033,858 8,506,058 7,073,195 2,819,370 139,462 113,729,623Addition - - 8,674 10,680 589,033 36,663 - 645,050 Written off - - - - - - (139,462) (139,462) Balance as at 31 December 2010 89,092,680 65,000 6,042,532 8,516,738 7,662,228 2,856,033 - 114,235,211 representing: - Cost 1,400,550 65,000 2,766,532 8,516,738 7,662,228 2,856,033 - 23,267,081 - Valuation 87,692,130 - 3,276,000 - - - - 90,968,130 89,092,680 65,000 6,042,532 8,516,738 7,662,228 2,856,033 - 114,235,211

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4. prOpErTY, pLaNT aNd EQUIpmENT (CONT’d)

furniture, Leasehold Freehold Plantand Motor fittingsand Work-in-group land land Buildings machinery vehicles equipment progress Total rm rm rm rm rm rm rm rm

accumulated depreciation Balance as at 1 January 2009; as previously reported - - 1,795,252 8,319,630 5,729,364 2,256,655 - 18,100,901

Effect of adopting Amendment to FRS 117 2,018,536 - - - - - - 2,018,536

Balance as at 1 January 2009, restated 2,018,536 - 1,795,252 8,319,630 5,729,364 2,256,655 - 20,119,437 Charge for the financial year 1,023,538 - 222,034 43,015 613,029 151,902 - 2,053,518 Disposal - - - - (606,311) (1,800) - (608,111)Written off - - - - (22,499) (36,140) - (58,639) - Balance as at 31 December 2009, restated 3,042,074 - 2,017,286 8,362,645 5,713,583 2,370,617 - 21,506,205 Charge for the financial year 1,023,538 - 254,408 17,189 463,174 127,567 - 1,885,876 Balance as at 31 December 2010 4,065,612 - 2,271,694 8,379,834 6,176,757 2,498,184 - 23,392,081 Net carrying amount 31 December 2010 85,027,068 65,000 3,770,838 136,904 1,485,471 357,849 - 90,843,130 31 December 2009 86,050,606 65,000 4,016,572 143,413 1,359,612 448,753 139,462 92,223,418

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ANNUAL REPORT 2010


4. prOpErTY, pLaNT aNd EQUIpmENT (CONT’d)

CompanyOfficeequipment Total rm

Cost Balance as at 1 January 2009/31 December 2009 and 2010 5,330 accumulated depreciation Balance as at 1 January 2009 4,940Charge for the financial year 390 Balance as at 31 December 2009 and 2010 5,330 Net carrying amount 31 December 2009 and 2010 -

(a) Leasehold land and buildings of the Group were revalued in the financial year 2006 by VPC Alliance (East Coast) Sdn. Bhd., a registered valuer. The comparison method was adopted in arriving at the market value of the leasehold land and buildings.

(b) Had the buildings been stated at historical cost less accumulated depreciation, the net carrying amount would have been RM2,002,092 (2009: RM2,183,397).

(c) The net carrying amount of property, plant and equipment of the Group which are acquired under finance lease arrangements amounted to RM1,002,856 (2009: RM819,327).

(d) Leasehold land with a net carrying amount of RM55,659,604 (2009: RM56,332,903) is registered in the name of a shareholder of a subsidiary company, Lembaga Kemajuan Perusahaan Pertanian Negeri Pahang.

(e) Had the leasehold land been stated at historical cost less accumulated amortisation, the net carrying amount would have been RM31,071,602 (2009: RM31,433,834).

(f) Leasehold land with a net carrying amount of RM48,440,450 (2009: RM49,026,461) were pledged to financial institutions for bank overdraft facility granted to a subsidiary company.

5. BIOLOgICaL aSSETS

group 2010 2009Cost or valuation rm rm Brought forward 88,741,341 88,167,786Additions - 573,555 Carried forward 88,741,341 88,741,341 Representing:- At cost 2,542,683 2,542,683 At valuation 86,198,658 86,198,658 88,741,341 88,741,341

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5. BIOLOgICaL aSSETS (CONT’d)

The biological assets were revalued in the financial year 2006 by VPC Alliance (East Coast) Sdn. Bhd., a registered valuer using comparison method in arriving at the market value.

Had the biological assets been stated at historical cost, the net carrying amount would have been RM28,788,428 (2009: RM28,788,428).

The biological assets with an amount of RM66,490,458 (2009: RM66,490,458) were pledged as a security for bank overdrafts facility granted to a subsidiary company.

6. INVESTmENTS prOpErTIES

Investment properties are stated at fair value, which have been determined based on valuation performed by VPC Alliance (East Coast) Sdn. Bhd., a registered valuer using comparison method on 18 February 2011.

The comparison method entails critical analysis of recent evidence of values of comparable properties in the neighbourhood and making adjustments for any differences noted.

There is no direct operating expense incurred and no income generated on the above investment properties.

7. INVESTmENT IN SUBSIdIarY COmpaNIES

Company 2010 2009 rm rm Unquoted shares, at cost 39,203,774 39,203,774Less: Allowance for impairment loss (20,745,654) (20,745,654) 18,458,120 18,458,120

The particulars of the subsidiary companies are as follows:-

place of Effective Name of company incorporation interest principal activities 2010 2009 % % 1. Tasja Sdn. Bhd. Malaysia 100 100 Civil engineering and building construction 2. TAA Piling and Malaysia 100 100 Dormant Geotechnical Sdn. Bhd. 3. PTJ Concrete Products Malaysia 100 100 Dormant Sdn. Bhd.

4. Astral Plantation Sdn. Bhd. Malaysia 100 100 Dormant 5. Tasja Development Sdn Bhd Malaysia 100 100 Property development

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ANNUAL REPORT 2010


7. INVESTmENT IN SUBSIdIarY COmpaNIES (CONT’d)

The particulars of the subsidiary companies are as follows (cont’d):-

place of Effective Name of company incorporation interest principal activities 2010 2009 % %

6. Woodland Water Sdn. Bhd. Malaysia 100 100 Dormant

7. AAB International Sdn. Bhd. Malaysia 100 100 Dormant 8. Syarikat Ladang LKPP Malaysia 65 65 Operations of oil palm estates and Sendirian Berhad provision of estates management Subsidiary company of Syarikat Ladang LKpp Sendirian Berhad:- 9. SLKPP Management Sdn. Bhd. Malaysia 100 100 Ceased operations (formerly known as LKPP Building Products Sdn. Bhd.

All subsidiary companies are audited by SJ Grant Thornton.

8. INVESTmENT IN aSSOCIaTEd COmpaNY

group 2010 2009 rm rm Unquoted shares, at cost 2,450,000 2,450,000Share of post-acquisition loss (935,897) (898,882) 1,514,103 1,551,118

Represented by:- Share of net assets 1,537,029 1,574,044 Negative goodwill on acquisition (22,926) (22,926) 1,514,103 1,551,118

The particulars of the associated company are as follows:-

place of Effective Name of company incorporation interest principal activities 2010 2009 % %

Johor Concrete Products Malaysia 49 49 Dormant Sdn. Bhd. (436690 - T) *

* Associated company not audited by SJ Grant Thornton

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8. INVESTmENT IN aSSOCIaTEd COmpaNY (CONT’d)

The summarised financial information of the associated company is as follows:-

group 2010 2009 rm rm Current assets 803,117 769,426 Non-current assets 3,615,015 3,689,078 Total assets 4,418,132 4,458,504 Current liabilities 1,281,338 1,246,169 Other income 5,694 5,594 Loss for the financial year (75,540) (86,973)

The amount due to associated company is unsecured, bears no interest and repayable on demand.

9. INVENTOrIES

group 2010 2009 rm rm At cost:- Materials and stores 964,309 170,676

10. amOUNT dUE frOm/(TO) CUSTOmErS ON CONTraCTS

group 2010 2009 rm rm Costs incurred on contracts to date 106,859,899 188,798,976Attributable profits less foreseeable losses (3,622,963) (21,894,861) 103,236,936 166,904,115Progress billings (100,251,979) (163,172,065) 2,984,957 3,732,050 Amount due from customers on contracts 3,093,524 3,817,250Amount due to customers on contracts (108,567) (85,200) 2,984,957 3,732,050

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ANNUAL REPORT 2010


11. TradE rECEIVaBLES

group 2010 2009 rm rm Trade receivables 4,185,634 6,755,557Less: Allowance for impairment loss (885,837) (888,837) 3,299,797 5,866,720Retention sums on contracts 1,124,236 1,799,471 4,424,033 7,666,191

The movement in allowance for impairment loss is as follows:-

group 2010 2009 rm rm Brought forward 888,837 888,837Reversal of impairment loss (3,000) - Carried forward 885,837 888,837

The normal credit terms granted by the Group to the trade receivables range from 30 days to 60 (2009: 30 to 60) days.

12. OTHEr rECEIVaBLES

group Company 2010 2009 2010 2009 rm rm rm rm Non-trade receivables 791,265 765,288 5,303 5,303Deposits 608,078 675,768 1,000 1,000Prepayments 31,898 300 - -Amount due from a corporate shareholder 846,766 304,071 - - 2,278,007 1,745,427 6,303 6,303Less: Allowance for impairment loss (1,335,742) (1,327,809) (5,303) (5,303) 942,265 417,618 1,000 1,000

The movement in allowance for impairment loss of other receivables is as follows:-

group Company 2010 2009 2010 2009 rm rm rm rm Brought forward 1,327,809 1,554,372 5,303 5,303Allowance for impairment loss 36,980 1,861 - -Reversal of impairment loss (29,047) (228,424) - -

Carried forward 1,335,742 1,327,809 5,303 5,303

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12. OTHEr rECEIVaBLES (CONT’d)

The corporate shareholder refers to Lembaga Kemajuan Perusahaan Pertanian Negeri Pahang, who is a shareholder of the Company and a minority shareholder of a subsidiary company, Syarikat Ladang LKPP Sendirian Berhad. The amount due from is unsecured, bears no interest and repayable on demand.

13. amOUNT dUE frOm SUBSIdIarY COmpaNIES

Company 2010 2009 rm rm Amount due from subsidiary companies 107,094,963 106,196,158Less: Allowance for impairment loss (94,714,969) (83,554,794) 12,379,994 22,641,364

The movement in allowance for impairment loss is as follows:-

Company 2010 2009 rm rm Brought forward 83,554,794 83,522,994Impairment loss recognised 11,553,669 31,800Reversal of impairment loss (393,494) - Carried forward 94,714,969 83,554,794

The amount due from subsidiary companies is unsecured, bears no interest and repayable on demand.

Included in the amount due from subsidiary companies is an amount of RMNil (2009: RM3,900,000) which represents dividend receivable from a subsidiary company.

14. fIxEd dEpOSITS WITH LICENSEd fINaNCIaL INSTITUTIONS

group

The fixed deposits with licensed financial institutions amounted to RM5,650,425 (2009: RM5,650,425) are pledged for the guarantee facilities granted to subsidiary companies.

The interest rates of fixed deposits with licensed financial institutions range from 1.75% to 4.00% (2009: 1.75% to 4.00 %) per annum.

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ANNUAL REPORT 2010


15. SHarE CapITaL

group and Company 2010 2009 rm rm Authorised:- 150,000,000 ordinary shares of RM1 each 150,000,000 150,000,000 Issued and fully paid:- 119,997,000 ordinary shares of RM1 each 119,997,000 119,997,000

16. rEVaLUaTION rESErVE

The revaluation reserve was in respect of the revaluation surplus of building, leasehold land and certain biological assets and is not available for distribution as dividends.

17. fINaNCE LEaSE paYaBLES

group 2010 2009 rm rm Minimum lease payments - not later than 1 year 659,471 426,214 - later than 1 year but not later than 5 years 166,493 225,062 825,964 651,276Less : Future finance charges on finance lease (55,082) (27,408) Present value of finance lease payables 770,882 623,868 Present value of finance lease payables - not later than 1 year 429,216 306,352 - later than 1 year but not later than 5 years 341,666 317,516 770,882 623,868

The finance lease payables bear interest at rates ranging from 2.30% to 7.64% (2009: 2.30% to 7.64%) per annum.

18. dEfErrEd TaxaTION

deferred tax liabilities

group 2010 2009 rm rm Brought forward 31,719,492 30,565,492Recognised in profit or loss (Note 25) 168,000 1,154,000 Carried forward 31,887,492 31,719,492

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18. dEfErrEd TaxaTION (CONT’d)

deferred tax liabilities (cont’d)

The balance in deferred tax liabilities is made up of tax effect on temporary differences arising from the following items:-

group 2010 2009 rm rm Carrying amount of qualifying property, plant and equipment in excess of their tax base 6,597,792 6,429,792Revaluation of property, plant and equipment and biological assets 25,289,700 25,289,700 31,887,492 31,719,492

deferred tax assets

Deferred tax assets have not been recognised in respect of the following items due to uncertainty of its recoverability:-

group 2010 2009 rm rm Unabsorbed capital allowances 1,883,000 1,045,000Unutilised tax losses 81,369,000 79,276,000 83,252,000 80,321,000

The potential deferred tax assets of the Group has not been recognised in respect of these items as they may not be used to offset taxable profit of the subsidiary companies as it is not probable that taxable profits will be available against which the deductible temporary differences can be utilised.

19. TradE paYaBLES

group

Included in trade payables is retention sums on contracts amounted to RM3,899,724 (2009: RM5,620,212).

The normal credit terms granted by the trade payables range from 30 to 60 (2009: 30 to 60) days.

20. OTHEr paYaBLES

group Company 2010 2009 2010 2009 rm rm rm rm Non-trade payables 1,006,659 776,502 54,500 -Accrual of expenses 3,888,851 3,803,879 - 32,000Deposit received 289,500 167,230 - -Amount due to a corporate shareholder - - 585,237 585,237Dividend payable - 2,100,000 - -

5,185,010 6,847,611 639,737 617,237

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ANNUAL REPORT 2010


20. OTHEr paYaBLES (CONT’d)

The amount due to a corporate shareholder is unsecured, bears no interest and repayable on demand.

Dividend payable represents the amount payable to a minority shareholder of a subsidiary company.

21. BaNK OVErdrafT

Secured

In the previous financial years, the bank overdraft bears interest at rate of 1.75% above Bank’s Base Lending Rate and was secured by the following:-

(i) two units of intermediate 4½ storey shophouses of a subsidiary company; and

(ii) corporate guarantee by the Company and a subsidiary company.

22. rEVENUE

group Company 2010 2009 2010 2009 rm rm rm rm Gross dividends from subsidiary company - - 5,850,000 5,850,000Revenue from operations of oil palm estates 32,656,536 28,631,440 - -Contract revenue from civil engineering and building works 2,957,307 16,552,595 - - 35,613,843 45,184,035 5,850,000 5,850,000

23. COST Of SaLES

group 2010 2009 rm rm Cost of oil palm produce 11,381,356 12,518,428Construction contract costs 6,589,133 30,034,482 17,970,489 42,552,910

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24. prOfIT BEfOrE Tax

Profit before tax has been determined:-

group Company 2010 2009 2010 2009 rm rm rm rm after charging:- Allowance for impairment loss 36,980 1,861 11,553,669 31,800Auditors’ remuneration - auditors of the Company 76,200 68,500 18,000 16,000 - others 5,000 5,000 5,000 5,000Bad debts written off - 597,498 - -Depreciation 1,885,876 2,053,518 - 390Director’s remuneration - fee 380,000 195,000 132,000 132,000 - other emoluments 687,347 636,050 - -Interest expense - finance lease 29,013 41,832 - - - bank overdraft 56 10,374 - -Lease rental 394,521 394,521 - -Property, plant and equipment written off 139,462 9,633 - -Rental of building - 14,155 - -Share of loss in associated company 37,015 42,617 - - and crediting:- Reversal of impairment loss (32,047) (228,424) (393,494) -Gain on disposal of property, plant and equipment - (139,199) - -Interest income (338,782) (325,510) (425) (587)Rental income (73,520) (86,560) - -Dividend income - - (5,850,000) (5,850,000)

The details of remuneration receivables by Directors of the Group and of the Company during the financial year are as follows: -

group Company 2010 2009 2010 2009 rm rm rm rm Executive Salaries and other emoluments 610,547 496,100 - - Defined contribution plan 46,800 64,950 - - Bonus 30,000 75,000 - - Fees 338,000 153,000 90,000 90,000 1,025,347 789,050 90,000 90,000Non-executive Fees 42,000 42,000 42,000 42,000 1,067,347 831,050 132,000 132,000

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ANNUAL REPORT 2010


25. Tax ExpENSE

group Company 2010 2009 2010 2009 rm rm rm rm Current year’s provision 5,038,494 4,020,000 - -(Over)/Underprovision in prior years (63,000) (222,675) - 342Deferred taxation recognised in profit or loss (Note 18) 168,000 1,154,000 - -

5,143,494 4,951,325 - 342

Malaysian income tax is calculated at the statutory rate of 25% of the estimated assessable profits for the financial year.

There is no provision for tax for the Company as the Company has no chargeable income.

A reconciliation of income tax expense applicable to profit/(loss) before tax at the statutory tax rate to income tax expenses at the effective tax rate of the Group and of the Company are as follows:-

group Company 2010 2009 2010 2009 rm rm rm rm Profit/(Loss) before tax 14,378,464 2,263,430 (5,596,655) 5,553,441 Taxation at Malaysian statutory tax rate of 25% 3,594,616 565,858 (1,399,164) 1,388,360Tax effects in respect of:- Deferred tax assets not recognised in current year 732,750 3,038,000 - -Expenses not deductible for tax purposes 797,085 738,076 2,861,664 74,140Income not subject to tax - - (1,462,500) (1,462,500)(Over)/Underprovision in prior years (63,000) (222,675) - 342Deferred tax liability under recognised in prior years - 785,999 - -Losses of subsidiary companies not allowable for group relief 82,043 46,067 - - Tax expense at effective tax rate 5,143,494 4,951,325 - 342

The Group’s unutilised tax losses and unabsorbed capital allowances which can be carried forward to offset against future taxable profit amounted to approximately RM81,369,000 (2009: RM79,276,000) and RM1,883,000 (2009: RM1,045,000) respectively.

However, the above amount is subject to the approval of the Inland Revenue Board of Malaysia.

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26. EarNINgS/(LOSS) pEr SHarE

The basic earnings/(loss) per share has been calculated based on the profit/(loss) attributable to owners of the parent and the weighted average number of shares in issue during the financial year.

group 2010 2009 rm rm Profit/(Loss) attributable to owners of the parent 4,379,054 (5,975,341) Weighted average number of ordinary shares in issue 119,997,000 119,997,000

There is no fully diluted effect to the earnings/(loss) per share.

27. dIVIdENd

group and Company 2010 2009 rm rm First and final dividend in respect of financial year ended 31 December 2009 of 1,799,955 - 2.0 sen per ordinary share less 25% income tax First and final dividend in respect of financial year ended 31 December 2008 of - 3,149,922 3.5 sen per ordinary share less 25% income tax 1,799,955 3,149,922

28. EmpLOYEE BENEfITS ExpENSE

group Company 2010 2009 2010 2009 rm rm rm rm Staff costs 4,350,620 4,141,092 132,000 132,000

The following are included in the employee benefits expense:-

group Company 2010 2009 2010 2009 rm rm rm rm (i) Directors’ emoluments (other than fees) 687,347 636,050 - -(ii) Defined contribution plan 332,825 338,105 - -

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ANNUAL REPORT 2010


29. CapITaL COmmITmENT

Capital expenditure in respect of the following are not provided for in the financial statements:-

group 2010 2009 rm rm Approved and contracted for:- Acquisition of long leasehold land 3,824,530 4,837,500

30. CONTINgENT LIaBILITIES

Secured

(a) Bank guarantee

Company 2010 2009 rm rm

Guarantees given to financial institutions for banking facilities granted to a subsidiary company - 1,933,100

Unsecured

(b) Claims by third parties via court cases

The outstanding contingent liabilities of the Group are as follows:-

(i) In March 2002, Tasja Sdn. Bhd. (“Tasja”) appointed Maju Egatt (M) Sdn. Bhd. (“Maju”) as a sub-contractor for a low cost housing project. Maju alleged that Tasja had instructed Maju to carry out repairs and replace missing items (“rectification works”) caused by a flood at the project site in December 2001. Maju is now claiming from Tasja the cost of the rectification works amounting to RM2,289,260 inclusive of interest from December 2003 until full and final settlement. Tasja contends that Maju’s claims are baseless and without merits.

Tasja deny owing to Maju any money and filed an application to amend the Statement of Defence and

counterclaim of RM268,398 with interest at the rate of 8% per annum from 30 December 2003 until full and final settlement together with damages and losses. The Court has granted Tasja an application to amend the Statement of Defence and counterclaim with costs.

On 17 August 2010, Maju informed the Court that it is in the midst of voluntary winding up. On 28 January 2011, the Court struck out Maju’s claim against Tasja.

(ii) In Kuantan High Court, Rahmad bin Hamzah (conducting business under the name of Sun Agriculture) (“Rahmad”) filed a claim against Syarikat Ladang LKPP Sendirian Berhad. (“SLLKPP”) for breach of contract for the sum of RM550,000 as damages and RM150,000 as specified damages together with an interest at the rate of 8% per annum from 18 March 2003 until full and final settlement and costs. Rahmad alleged that SLLKPP had breached the terms and conditions of a contract dated 1 July 1999. Under the contract, Rahmad was responsible to supply foreign workers to SLLKPP estate.

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30. CONTINgENT LIaBILITIES (CON’T)

Unsecured (cont’d)

(b) Claims by third parties via court cases (cont’d)

The outstanding contingent liabilities of the Group are as follow (cont’d):-

(ii) (cont’d)

SLLKPP denied Rahmad’s claims and was of the view that it was Rahmad who had breached the terms and conditions of the contract. SLLKPP filed counterclaim against Rahmad for the sum of RM734,462.38.

On 29 March 2011, the Court delivered its decision whereby it was held that SLLKPP was the party in breach of contract and allowed Rahmad’s claim for liquidated damages as per the agreement in the sum of RM150,000 with interest rate of 8% per annum from the date of the writ to the date of realisation and costs to be taxed or otherwise agreed. The counterclaim was also dismissed with costs to be taxed or agreed.

The Directors are of the opinion that no provision for the judgement sums is required notwithstanding that the appeal has yet to be submitted and heard in the Court of Appeal. After evaluating the facts of the case, the Directors are of the view that the Company has a strong ground to succeed in the appeal.

(iii) In Kuantan High Court, Behn Meyer & Co. (M) Sdn. Bhd. (“Behn Meyer”) filed a claim against SLLKPP on the breach of contract for the supply of fertilizers for the sum of RM611,893.80 and RM15,000 for refund of deposits together with interest and costs. SLLKPP denied and counterclaimed that Behn Meyer had caused losses and damages for the delayed delivery of the fertilizers and is liable for the penalty of RM644,280.50 with interest at 8% per annum from the date due to the date of payment together with costs. On 10 December 2010, Kuantan High Court has dismissed Behn Meyer’s claim with cost of RM10,000 and SLLKPP’s courterclaim with costs of RM3,000. Behn Meyer had filed an appeal to the Court of Appeal.

The Directors of the Company are of the opinion that the Company has strong defence to Behn Meyer’s claims.

(iv) In Kuantan High Court, Mohd Mopti bin Yassin (“Mopti”) filed a claim against SLLKPP being damages for alleged loss of 298 cows that went estranged into Lembaga Kemajuan Perusahaan Pertanian Negeri Pahang, LKPP Corporation Berhad and SLLKPP land for the sum of RM350,000.

Mopti’s claim has been dismissed by the Court with the costs of RM5,000 awarded to SLLKPP.

Mopti had filed Notice of Appeal and currently pending Grounds of Judgement and Notes of Proceeding from the High Court.

The Directors of the Company are of the opinion that the Company has strong defence to Mopti’s claims.

66

ANNUAL REPORT 2010


31. rELaTEd parTY dISCLOSUrES

(a) Significant related party transactions during the financial year are as follows:-

Company 2010 2009 rm rm

Dividend received from subsidiary company 5,850,000 5,850,000

group 2010 2009 rm rm

Lease rental paid to corporate shareholder 394,521 394,521

Profit sharing from corporate shareholder 1,090,007 597,967

The Directors are of the opinion that the abovementioned transactions were carried out on a negotiated basis.

(b) The Group and the Company have no other members of key management personnel apart from the Board of Directors.

(c) The outstanding balances arising from related party transactions as at reporting date are disclosed in Note 8, 12, 13 and 20 to the Financial Statements.

32. fINaNCIaL INSTrUmENTS

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. Financial risk management policy is established to ensure that adequate resources are available for the development of the Group’s and the Company’s business whilst managing its credit risk, liquidity risk and interest rate risk. The Group and the Company operates within clearly defined policies and procedures that are approved by the Board of Directors to ensure the effectiveness of the risk management process.

The main areas of financial risks faced by the Group and the Company and the policy in respect of the major areas of treasury activity are set out as follows:-

(a) Credit risk

Credit risk is the risk of a financial loss to the Group and the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations.

The Group’s and the Company’s exposure to credit risk arises primarily from receivables. It is the Group’s and the Company’s policy to enter into financial instrument with a diversity of creditworthy counterparties. The Group and the Company do not expect to incur material credit losses of its financial assets or other financial instruments.

The Group’s and the Company’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. The Group and the Company provide services only to recognised and creditworthy third parties. It is the Group’s and the Company’s policy that all customers who wish to trade on credit terms are subject to credit verifications procedures.

67



32. fINaNCIaL INSTrUmENTS (CONT’d)

risk management objectives and policies (cont’d)

The main areas of financial risks faced by the Group and the Company and the policy in respect of the major areas of treasury activity are set out as follows (cont’d):-

(a) Credit risk (cont’d)

Following are the areas where the Group and Company are exposed to credit risk:-

(i) receivables

As at end of the reporting period, the maximum exposure to credit risk arising from receivables is limited to the carrying amounts in the statement of financial position.

With a credit policy in place to ensure the credit risk is monitored on an ongoing basis, management has taken reasonable steps to ensure that receivables that are neither past due nor impaired are stated at their realisable values. The Group use ageing analysis to monitor the credit quality of the receivables. Any receivables having significant balances past due more than credit terms granted are deemed to have higher credit risk, and are monitored individually.

The ageing analysis of trade receivables of the Group is as follows:-

Individually gross impaired Net rm rm rm

2010 Not past due 1,656,800 - 1,656,800Past due for 1-30 days 73,834 - 73,834Past due for 31-60 days - - -Past due for 61-90 days - - -Past due for 91-120 days - - -Past due for more than 121 days 3,579,236 (885,837) 2,693,399

5,309,870 (885,837) 4,424,033

The net carrying amount of trade receivables is considered a reasonable approximate of fair values. The maximum exposure to credit risk is the carrying value of each class of receivables mentioned above. Trade receivables that are individually determined to be impaired at the reporting date relate to receivables that are in significant difficulties and have defaulted in payments. These receivables are not secured by any collateral or credit enhancements.

Trade receivables that are neither past due nor impaired are creditworthy receivables 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.

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ANNUAL REPORT 2010





(a) Credit risk (cont’d)

Following are the areas where the Group and Company are exposed to credit risk (cont’d):-

(i) receivables (cont’d)

As at 31 December 2010, trade receivables of RM2,767,233 were past due but not impaired. These relate to a number of independent customers for whom there is no recent history of default.

In respect of trade receivables, the Group is not exposed to any significant credit risk exposure to any single counterparty other than 79% (2009: 61%) of trade receivables consist of amount due from one (2009: two) customer. Trade receivables consist of a large number of customers in various backgrounds. Based on historical information about customer default rates, management considers the credit quality of trade receivables that are not past due or impaired to be good.

(ii) Intercompany balances

The maximum exposure to credit risk is represented by their carrying amounts in the statement of financial position.

The Company provides unsecured advances to subsidiary companies and monitors their results regularly.

As at the end of the reporting period, there was no indication that the advances to the subsidiary companies are not recoverable.

(b) Liquidity risk

Liquidity risk refers to the inability of the Group and the Company to meet its obligations as they fall due. The Group’s and Company’s exposure to liquidity risk arises particularly from payables and borrowings and it maintains a level of cash and cash equivalents and bank credit facilities deemed adequate by management to ensure it has sufficient liquidity to meet its obligations when they fall due.

69






(b) Liquidity risk (cont’d)

The following are areas of the Group and the Company exposure to liquidity risk:-

Less than 1 year 2 to 5 yearsgroup rm rm

2010 Finance lease payables 429,216 341,666Trade payables 7,937,801 -Other payables 5,185,010 - Total 13,552,027 341,666

Less than 1 year 2 to 5 yearsCompany rm rm

2010 Other payables 639,737 -

(c) Interest rate risk

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

The interest rate profile of the Group’s significant interest-bearing financial instruments, based on carrying amounts as at the end of the reporting period were as follows:-

rm

2010fixed rate instrument Financial asset Fixed deposits with licensed financial institutions 17,201,134 Financial liability Finance lease payables 770,882 The Group and the Company do not account for any fixed rate financial assets and liabilities at fair value through profit or loss. Therefore, a change in interest rates at the end of the reporting period would not affect profit or loss.

Fairvalueoffinancialinstruments The carrying amounts of short term receivables and payables, cash and cash equivalents approximate their fair value due to the relatively short term nature of these financial instruments and insignificant impact of discounting.

70

ANNUAL REPORT 2010


33. CapITaL maNagEmENT

The primary objective of the Group’s and the Company’s capital management is to ensure that it maintains a strong credit rating and financially prudent capital ratios in order to support its current business as well as future expansion so as to maximise shareholder value.

The Group and the Company manages its capital structure and make adjustments to it, in light of changes in economic conditions including the interest rate movements. To maintain and adjust the capital structure, the Group and the Company may adjust dividend payment to shareholders, return capital to shareholders or issue new shares.

The Group’s debt-to-equity ratio as at the reporting period under review is as follows:-

group 2010 2009 rm rm Borrowings 770,882 623,868 Total equity 167,624,265 163,339,250 Debt-to-equity ratio 0.005:1 0.004:1

There were no changes in the Group’s and the Company’s approach to capital management during the financial year.

Under the requirement of Bursa Malaysia Practice Note No. 17/2005, the Company is required to maintain a consolidated shareholders’ equity equal to or not less than the 25% of the issued and paid-up capital. The Company has complied with this requirement.

34. OpEraTINg SEgmENTS

(a) Business segments

Management currently identifies the Group’s operating segment into the following:-

Business segments Business activities Investment Investment holding Construction Civil engineering and building construction Plantation Operations of oil palm estates and provision of estates management

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.

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

71



34. OpEraTINg SEgmENTS (CONT’d)

(a) Business segment (cont’d)

Investment Construction plantation Others Eliminations Total2010 Note rm rm rm rm rm rm

revenue External revenue - 2,957,307 32,656,536 - - 35,613,843Revenue Intersegment revenue (i) 5,850,000 - - - (5,850,000) -

Total revenue 5,850,000 2,957,307 32,656,536 - (5,850,000) 35,613,843 results Interest income 425 333,632 4,725 - - 338,782 Finance cost - (11,945) (17,124) - - (29,069) Depreciation - (383,692) (1,500,333) (1,851) - (1,885,876) Share of results of associated company - (37,015) - - - (37,015) Tax expense - (138,494) (5,005,000) - - (5,143,494) Other non-cash expenses (ii) (11,160,175) 47,393 150,719 (1,110,437) 12,216,895 (144,395) Segment (loss)/profit (5,600,576) (4,226,576) 14,101,685 (1,118,397) 6,078,834 9,234,970 assets Investment in associated company - 1,509,209 - - 4,894 1,514,103 Additions to non-current assets (iii ) - 3,833 641,217 - - 645,050 Segment assets 33,921,815 25,888,417 187,335,034 78,594 (30,991,302) 216,232,558 Liabilities Segment liabilities 661,383 154,879,423 45,937,122 58,857 (152,928,492) 48,608,293

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ANNUAL REPORT 2010




Investment Construction plantation Others Eliminations Total2009 Note rm rm rm rm rm rm

revenue External revenue - 16,552,595 28,631,440 - - 45,184,035 Intersegment revenue (i) 5,850,000 - - - (5,850,000) -

Total revenue 5,850,000 16,552,595 28,631,440 - (5,850,000) 45,184,035 results Interest income 587 323,756 1,167 - - 325,510 Finance cost - (27,067) (25,139) - - (52,206) Depreciation (390) (465,297) (1,584,220) (3,611) - (2,053,518) Share of results of associated company - (42,617) - - - (42,617) Tax expense (342) (616,918) (4,334,065) - - (4,951,325) Other non-cash expenses (ii) (31,800) 27,844 (325,084) (1,031) 88,702 (241,369) Segment profit/(loss) 5,551,712 (11,769,310) 9,305,293 (14,292) (5,761,298) (2,687,895) assets Investment in associated company - 1,546,224 - - 4,894 1,551,118 Additions to non-current assets (iii) - 509,760 440,308 - 950,068 Segment assets 41,298,306 32,876,512 185,457,251 1,888,360 (46,097,297) 215,423,132 Liabilities Segment liabilities 637,643 157,640,942 49,161,024 750,226 (156,105,953) 52,083,882

73





(i) Inter-segment revenue are eliminated on consolidation.

(ii) Other non-cash (expenses)/income consist of the following items as presented in the notes to the financial statements:-

2010 2009 rm rm

Allowance for impairment loss (36,980) (1,861)Bad debts written off - (597,498)Reversal of impairment loss 32,047 228,424Property, plant and equipment written off (139,462) (9,633)Gain on disposal of property, plant and equipment - 139,199 (144,395) (241,369)

(iii) Additions to non-current assets consist of:-

2010 2009 rm rm

Property, plant and equipment 645,050 950,068

(b) Geographical segment

No geographical segmental information being presented as the Group principally operates within Malaysia.

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ANNUAL REPORT 2010


35. dISCLOSUrES Of rEaLISEd aNd UNrEaLISEd prOfITS/LOSSES

With the purpose of improving transparency, Bursa Malaysia Securities Berhad has on 25 March 2010, and subsequently on 20 December 2010, issued directives which require all listed corporations to disclose the breakdown of retained earnings or accumulated losses into realised and unrealised on group and company basis in the annual audited financial statements.

The breakdown of accumulated losses as at the reporting date which has been prepared by the Directors in accordance with the directives from Bursa Malaysia Securities Berhad stated above and the 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 are as follows:-

group Company 2010 2010 rm rm Total accumulated losses of the Company and its subsidiary companies

- Realised (185,585,060) (88,062,628)- Unrealised (30,417,959) - (216,003,019) (88,062,628) Total accumulated losses from the associated company - Realised (935,897) - (216,938,916) (88,062,628) Consolidation adjustments 154,963,990 - Total Group accumulated losses as per consolidated financial statements (61,974,926) (88,062,628) The above disclosures were approved by the Board of Directors in accordance with a resolution of the Directors dated 28 April 2011.

\

75


analysis of shareholdings as at 30 april 2011

SHarE CapITaL

Authorized capital : RM150,000.000Issued and fully paid-up : RM119,997,000Class of shares : Ordinary shares of RM1.00 eachVoting rights : One vote per ordinary share

aNaLYSIS BY SIZE Of SHarEHOLdINgS

No. of No. ofSize of Shareholdings shareholder % shareholdings % Less than 100 63 4.96 4,064 0.00100 – 1,000 194 15.27 150,502 0.131001 - 10,000 848 66.72 3,800,047 3.1710,001 – 100,000 143 11.25 3,895,699 3.24100,001 – less than 5% of issued shares 20 1.57 36,766,800 30.645% and above issued shares 3 0.23 75,379,888 62.82 Total 1,271 100.00 119,997,000 100.00

SUBSTaNTIaL SHarEHOLdErS

direct Indirect Name of Shareholders shareholdings % shareholding % 1. Dato’ Lim Kang Poh 32,564,469 27.14 - -2. Lembaga Kamajuaan Perusahaan Pertanian Negeri Pahang 32,294,999 26.91 432,700 0.363. Agur Tegap Sdn Bhd 10,520,420 8.77 - -

dIrECTOrS SHarEHOLdINgS

direct Indirect Name of Shareholders shareholdings % shareholding % 1. Tan Sri Dato’ Hj Husein Bin Ahmad 510,000 0.43 - -2. Dato’ Lim Kang Poh 32,564,469 27.14 - -3. Dato’ Md Adnan Bin Sulaiman 45,000 0.04 - -

76

ANNUAL REPORT 2010

AnAlYsisOfshArehOlDinGsAsAt30APril2011(COnt’D)

THIrTY (30) LargEST SHarEHOLdErS

No. of No. Name of shareholders shareholdings %

1. Dato’ Lim Kang Poh 32,564,469 27.142. Lembaga Kemajuan Perusahaan Pertanian Negeri Pahang 32,294,999 26.913 Agur Tegap Sdn Bhd 10,520,420 8.774. Terusan Al-Maju Sdn Bhd 5,895,000 4.915. Kencang Kuasa Sdn Bhd 4,994,400 4.166. Joehainor Bin Burhan 4,526,500 3.777. Wong Chooi Fah 4,053,000 3.388. Wong Chooi Lin 3,883,600 3.24 9. Ngai Sok Tien 3,595,700 3.0010. Lim Hai 2,935,500 2.4411. Rahaimi Bin Abdul Rahman 1,596,500 1.3312. Yap Kong Wooi 1,153,100 0.9613. Lee Hun Kheng 1,045,300 0.8714. Lim Kang Swee 900,000 0.7515. Tan Sri Dato’ Husein Bin Ahmad 510,000 0.4316. TA Nominees (Tempatan) Sdn Bhd Pledged Securities Account for LKPP Corporation Sdn Bhd 432,700 0.3617. Chan Ling Lee 338,500 0.2818. Tiong Sheue Yng 250,000 0.2119. Loh Lai Kim 171,900 0.1420. Phung Tze Thiam @ John Phung 142,300 0.1221. Chin Kim Yong 127,500 0.1122. Ang Ah Bah 109,500 0.0923. Mohd Saini Bin Kariman 105,800 0.0924. AIBB Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Chew Hun Seng 100,000 0.0825. Inter-Pacific Equity Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Ung Yak Nguang 99,000 0.0826. AllianceGroup Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Koh Choon Lai 87,000 0.0727. Affin Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Tan Lee Keen 85,000 0.0728. CIMSEC Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Yeo Bee Bee (Kuching) 80,000 0.0729. Wong Ooi Pean 80,000 0.0730. Lim Ah Ya 79,000 0.06 TOTAL 112,756,688 93.96

77


grOUp’S prOpErTIESaS aT 31 dECEmBEr 2010

address /Location description/ Existing

Land area Built Up area

Tenure age of Building

Net Book Value rm

Year revalued/ acquired

1.P.N. 1877 Lot 35696 Mukim of Kuala Kuantan District of Kuantan Pahang

Oil palm estate

1,874acres

- Leasehold expiring in year 2090

36,212,000

2006

2.HS (D) 28295 PT 86317 Mukim of Kuala Kuantan District of Kuantan Pahang

Oil palm estate

560acres


3,840,290 2007

3.HS(D) 853 PT 631 HS(D) 854 PT 632 HS(D) 406 PT 608 Mukim of Kertau HS(D) 609 PT 5616 HS(D) 852 PT 6566 Mukim of Luit HS(D) 610 PT 11316 HS(D) 611 PT 11317 HS(D) 612 PT 11318 HS(D) 849 PT 21456 HS(D) 850 PT 21457 HS(D) 851 PT 21458 Mukim of Chenor District of Maran, Pahang

Oil palm estate

7,504 acres - Leasehold expiring between

years 2094 and 2101

132,379,363 2006

4.HS (D) 19959 PT 22427 HS (D) 19960 PT 22428 Mukim of Batu, District of Gombak, Selangor

Two units of 4 1/2 storey shop office

278square metres

1151square metres

Freehold 13 Years 1,833,920 2006

5.HSM 61911 (PT 85592) to HSM 61961 (PT 85642), Mukim of Kuala Kuantan District of Kuantan Pahang

51 Units Vacant Shoplot

6,976square metres

- Leasehold year 2104

Vacant 1,830,000 2006

6.B28, Lorong Tun Ismial 11 Jalan Tun Ismail 1 25000 Kuantan

3-storey Corner Shop

Office

184 square metres

954square metres

Freehold 7 Years 1,104,000

2006

7.HS (D) 2820 PT 6156 HS (D) 2821 PT 6157 HS (D) 2854 PT 6190 HS (D) 2855 PT 6191 HS (D) 2856 PT 6192 HS (D) 3096 PT 6422 HS (D) 3088 PT 6430 Mukim Bernam Timur Daereh Batang Padang Perak

Bungalow lots

8,924square metres


Vacant 287,768

2006

78

ANNUAL REPORT 2010

NOTICE Of aNNUaL gENEraL mEETINg

NOTICE IS HEREBY GIVEN THAT the 15th Annual General Meeting of Astral Asia Berhad (“AAB” or “the Company”) will be held at Templer 8, First Floor, No. 1, Templer Park Resort, 48000 Rawang, Selangor Darul Ehsan on Monday, 20th June 2011 at 11.00 a.m for the following purposes:

AGENDA

1. To receive and adopt the Report of the Directors and the Audited Financial Statements for the year ended 31 December 2010 together with the Report of the Auditors thereon.

2. To approve the payment of Directors’ Fees for the financial year ended 31 December 2010. 3. To re-elect the following Directors who are retiring by rotation in accordance with the Article 76 of

the Company’s Article of Association and being eligible offer themselves for re-election :-

i) Dato’ Lim Kang Poh; andii) Y.H. Dato' Md Adnan Bin Sulaiman.

4. To re-elect Tan Sri Dato’ Hj Husein Bin Ahmad who is retiring pursuant to Section 129(6) of the Companies Act 1965 upon attaining the age of seventy.

5. To re-appoint Messrs. SJ Grant Thornton as auditors of the Company and to authorise the Directors to fix their remuneration.

aS SpECIaL BUSINESS:

To consider and if thought fit, to pass the following resolutions:

6. Ordinary resolution

authority To Issue Shares pursuant To Section 132d Of The Companies act, 1965 “THaT subject always to the Companies Act, 1965, the Articles of Association of the Company

and the approvals of the relevant governmental and/or regulatory authorities, the Directors be and are hereby empowered, pursuant to Section 132D of the Companies Act, 1965, to issue shares in the Company from time to time and upon such terms and conditions and for such purposes as the Directors may deem fit provided that the aggregate number of shares issued pursuant to this resolution does not exceed ten per centum (10%) of the total issued capital of the Company and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company.”

7. To transact any other business for which due notice shall have been given in accordance with the

Company’s Articles of Association and the Companies Act, 1965.

BY OrdEr Of THE BOard,

HOON HUI KIT (MIA 6180)CHIN POH LI (MAICSA 7045084)Company Secretaries

Selangor Darul Ehsan19 May 2011

(Resolution 1)

(Resolution 2)

(Resolution 3)(Resolution 4)

(Resolution 5)

(Resolution 6)

(Resolution 7)

79


Notes:

1. Section 149(1)(b) of the Act shall not apply to the Company, a proxy may but need not be a member of the Company.

2. This instrument duly completed must be deposited at the registered office of the Company at No. 67 & 69, Jalan SBC 1, Taman Sri Batu Caves, 68100 Batu Caves, Selangor Darul Ehsan not less than forty eight (48) hours before the time fixed for holding the meeting.

3. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing or if such appointor is a corporation, under its common seal or the hand of its attorney.

4. A member shall not be entitled to appoint more than three (3) proxies to attend and vote at the same meeting and where a member appoints more than one (1) proxy, the appointment shall be invalid unless the member specifies the proportion of his shareholding to be represented by each proxy. Each proxy appointed, shall represent a minimum of 1,000 shares.

ExpLaNaTOrY NOTES ON SpECIaL BUSINESS

The Resolution proposed under Agenda 6Resolution Pursuant to Section 132 of the Companies Act, 1965.The Ordinary Resolution proposed under Agenda 6, if passed, will give the Directors of the Company, from the date of the forthcoming Annual General Meeting, the authority to issue and allot ordinary shares from the unissued capital of the Company being for such purposes as the Directors consider would be in the interest of the Company. This authority will, unless revoked or varied by the Company in a General Meeting, expire at the next Annual General Meeting of the Company.

This is a renewal of the general mandate for the issue of new ordinary shares in the Company which was approved at the last AGM of the Company on 29 June 2010. The Company did not issue any new shares after the previous mandate was obtained at the last AGM.

The general mandate will provide flexibility to the Company for allotment of shares for any possible fund raising activities, including but not limited to further placing of shares, for the purpose of funding future investment project(s) working capital and/or acquisitions and would enable the Company to avoid delay and cost of convening further general meetings to approve the issue of shares for such purposes.

At this juncture, there is no decision to issue any new shares. Should there be a decision to issue new shares after the general mandate has been obtained, the Company will make an announcement in respect of the purpose and/or utilisation of proceeds arising from such issue.

nOtiCeOfAnnUAlGenerAlMeetinG(cont’d)

80

ANNUAL REPORT 2010

STaTEmENT aCCOmpaNYINg NOTICE Of aNNUaL gENEraL mEETINg

1. Directors who are standing for re-election at the 15th Annual General Meeting are Dato’ Lim Kang Poh and Y.H. Dato’ Md Adnan Bin Sulaiman.

The profiles of the Directors are set out on pages 3 and 4 of this annual report and their interest in the securities of the Company are as shown in the Analysis of shareholdings on page 75 of the annual report.

2. Board meetings held during the financial year ended 31 December 2010.

A total of four Board meetings were held during the financial year ended 31 December 2010 are as follow:

date of meetings24 February 2010

28 April 201024 August 2010

4 November 2010

3. Details of attendance at Board Meetings held in the financial year ended 31 December 2010 are as follows:

Name of director No. of meetings attended

Tan Sri Dato’ Hj Husein Bin Ahmad 4/4 Dato’ Lim Kang Poh 4/4 Y.H. Dato’ Md Adnan Bin Sulaiman 3/4 Y.H. Dato’ Amihamzah Bin Ahmad 4/4 Tuan Haji Md Adanan Bin Abdul Manap 4/4 Mr Tan En Chong 4/4

prOxY fOrm

I/We, ______________________________________________________________________________________________________

NRIC No/Passport No/Company No ____________________________________________________________________________

CDS Account No/Name of beneficial owner _____________________________________________________________________

of _________________________________________________________________________________________________________

___________________________________________________________________________________________________________

being a member(s) of aSTraL aSIa BErHad hereby appoint(s) ____________________________________________________

____________________________________________________________________________________________________________

NRIC No/Passport No/Company No ____________________________________________________________________________

of _________________________________________________________________________________________________________

___________________________________________________________________________________________________________or the Chairman of the meeting as my/our proxy to vote for me/us and on my/our behalf at the 15th Annual General Meeting of the Company to be held on Monday, 20th June 2011 at 11.00 a.m. at Templer 8, First Floor, No. 1 Templer Park Resort, 48000 Rawang, Selangor Darul Ehsan and at every adjournment thereof.

My/Our proxy is to vote either on a show of hands or on a poll as indicated below with an “X”:

resolution No. rESOLUTIONS fOr agaINST

Resolution 1 Adoption of Directors’ Report, Audited Accounts and the Auditors’ Report for the financial year ended 31 December 2010.

Resolution 2 Approval of Directors’ Fees.

Resolution 3 Re-election of Dato’ Lim Kang Poh.

Resolution 4 Re-election of Y.H. Dato’ Md Adnan Bin Sulaiman.

Resolution 5 Re-appointment of Tan Sri Dato’ Hj. Husein Bin Ahmad.

Resolution 6 Re-appointment of Auditors – Messrs. SJ Grant Thornton.

Resolution 7 Ordinary Resolution:Approval pursuant to Section 132D of the Companies Act 1965.

Dated this _______ day of ____________________ 2011

________________________Signature of Shareholder(s)

Notes:1. Section 149(1)(b) of the Act shall not apply to the Company, a proxy may but need not be a member of the Company.2. This instrument duly completed must be deposited at the registered office of the Company at No. 67 & 69, Jalan SBC 1, Taman Sri Batu

Caves, 68100 Batu Caves, Selangor Darul Ehsan not less than forty eight (48) hours before the time fixed for holding the meeting.3. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing or if such

appointor is a corporation, under its common seal or the hand of its attorney.4. A member shall not be entitled to appoint more than three (3) proxies to attend and vote at the same meeting and where a member

appoints more than one (1) proxy, the appointment shall be invalid unless the member specifies the proportion of his shareholding to be represented by each proxy. Each proxy appointed, shall represent a minimum of 1,000 shares.

Number of shares held

AFFIXstAMP

fold here

fold here

The Company Secretary

astral asia Berhad67 & 69, Jalan SBC 1Taman Sri Batu Caves

68100 Batu CavesSelangor Darul Ehsan

AstrAl AsiA BerhAd

67 & 69, Jalan SBC 1Taman Sri Batu Caves68100 Batu CavesSelangor Darul Ehsan

Tel No : 03-6185 7307Fax No : 03-6185 6799

Astral A

sia Berhad C

o. No. 374600-X

Annual R

eport 2010

Light Industries392 acres

Hi-Tech Industries1,481 acres



ANNUAL REPORT 2010

(Co. No. 374600-X)

KUANTAN HI-TECH PARK - malaysiastock.biz KUANTAN HI-TECH PARK Proposed 1,873 acres of Hi-Tech...

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