annual report 2010 - talam transform berhad sri dato’ (dr) ir chan ah chye @ chan chong yoon...

Talam C

orporation B

erhad | A

nnual Rep

ort 2010

Annual Report 2010

www.talam.com.my

2 CorporateStructure

4 CorporateInformation

5 ProfileofBoardofDirectors

9 FinancialHighlights

10 Chairman’sStatement

12 ReviewofOperations

16 StatementonCorporateGovernance

23 AdditionalComplianceInformation

29 StatementonInternalControl

31 AuditCommitteeReport

35 FinancialStatements

129 ListofProperties

130 StatementonDirectors’Interests

131 AnalysisofShareholdings

134 NoticeofAnnualGeneralMeeting

138 Statement Accompanying Notice ofAnnualGeneralMeeting

ProxyForm

CONTENTS

�

CORPORATE STRUCTURE

Crest Envy Sdn Bhd

1

ANNUALREPORT2010

�

Crest Envy Sdn Bhd

1

�

CORPORATE INFORMATION

BOARDOFDIRECTORS

TsenKengYamChairmanIndependent Non-Executive Director

TanSriDato’(Dr)IrChanAhChye@ChanChongYoonNon-Independent Non- Executive Director

Dato’KamaruddinBinMatDesaIndependent Non-Executive Director

ChuaKimLanExecutive Director

LoyBoonChenExecutive Director

WinstonMahYatKongIndependent Non-Executive Director

NgBeeKenIndependent Non-Executive Director

AUDITCOMMITTEE

TsenKengYamChairman Member of the Malaysian Institute of Accountants

WinstonMahYatKongMember

Dato’KamaruddinBinMatDesaMember

NOMINATIONCOMMITTEE

Dato’KamaruddinBinMatDesaChairman

TanSriDato’(Dr)IrChanAhChye@ChanChongYoonMember

NgBeeKenMember

REMUNERATIONCOMMITTEE

TsenKengYamChairman

WinstonMahYatKongMember

NgBeeKenMember

COMPANYSECRETARY

WongSoonKiong(LS0009395)

PRINCIPALBANKERS

MalayanBankingBerhadEONBankBerhad

REGISTEREDOFFICE

Suite2.05,Level2MenaraMaxisegarJalanPandanIndah4/2PandanIndah55100KualaLumpurTelno. :03-42962000Faxno.:03-42977220Website:www.talam.com.my

SHAREREGISTRAR

SecuritiesServices(Holdings)SdnBhdLevel7,MenaraMileniumJalanDamanlelaPusatBandarDamansaraDamansaraHeights50490KualaLumpurTelno :03-20849000Faxno :03-20949940/03-20950292

AUDITORS

BakerTillyMonteiroHengCharteredAccountants22-1,Monteiro&HengChambersJalanTunSambanthan350470KualaLumpurTelno:03-22748988Faxno:03-22601708

STOCKEXCHANGELISTING

ListedonMainMarketofBursaMalaysiaSecuritiesBerhad

ANNUALREPORT2010

�

PROFILE OF BOARD OF DIRECTORS

TSENKENGYAM

Malaysian,aged60,Chairman/IndependentNon-ExecutiveDirector,joinedtheBoardofTalamCorporationBerhad(“Talam”)on30April2004andbecametheChairmanon22January2009.HeisalsotheChairmanoftheAuditCommittee.HeiscurrentlyaDirectorofRiverviewRubberEstatesBerhadandNarlboroughPlantationsPlc.

HeisaFellowoftheInstituteofCharteredAccountants(EnglandandWales)andamemberofMalaysianInstituteofAccountantsandMalaysianInstituteofCertifiedPublicAccountants.

In 1978, he joined Hanafiah Raslan & Mohamed as a consultant and wassubsequentlypromotedtoSeniorConsultantin1980.HewasaprincipalofHanafiahRaslan&Mohamedfrom1984to1987andwasapartnerofArthurAndersen&Co.formorethan14yearsfrom1988to2003.

HehasnofamilyrelationshipwithanyotherdirectorsormajorshareholdersoftheCompany.ThereisnoconflictofinterestwiththeCompany.Withinthelast10years,hehasnoconvictionsforoffences.

He has attended all the six (6) Board of Directors’ meetings held during the financial year ended 31 January2010.

TANSRIDATO’(DR)IRCHANAHCHYE@CHANCHONGYOON

Malaysian,aged64,Non-IndependentNon-ExecutiveDirector,joinedtheBoardofTalamon6November1990.HewasformerlytheExecutiveChairmanofTalamCorporationBerhad(“Talam”)priortohisre-designationasNon-IndependentNon-ExecutiveDirectoron22January2009.HeisamemberoftheNominationCommittee. He is also currently the Executive Director (President/ChiefExecutive)ofKumpulanEuroplusBerhad.

HegraduatedwithaBachelorsDegreeinCivilEngineeringfromtheUniversityofMalayain1970andisamemberoftheInstitutionofEngineers,Malaysiasince1974andwassubsequentlymadeaFellowin1984.Hehasover38yearsofexperience in thepropertyandconstruction industrysincehestartedhiscareerwithMessrsBinnie&Partners(M)SdnBhdandlaterjoinedPerbadananKemajuan Negeri Selangor in 1971 as a Project Manager handling projectdesigns,managementandpropertydevelopment.TanSriChanwasawardedtheprestigious“PropertyManoftheYear1998”byFederationInternationale

DesProfessionsImmobilieres(“FIABCI”)inrecognitionofhisachievementsinpropertydevelopment.TanSriChanwasconferredtheHonoraryDoctorateofScience(Engineering)bytheUniversityMalayaon11August2003.

TanSriChanisthespouseofPuanSriDatinThongNyokChoo,amajorshareholderofTalam.HehasdirectanddeemedinterestinKumpulanEuroplusBerhad,amajorshareholderofTalam.ThereisnoconflictofinterestwiththeCompanyexcept for those transactionsdisclosed in item9,pages23 to28of theAdditionalComplianceInformationandNote45totheFinancialStatementsofthisAnnualReport.Withinthelast10years,hehasnoconvictionsforoffences.


�

PROFILE OF BOARD OF DIRECTORS (cont’d)

DATO’KAMARUDDINBINMATDESA

Malaysian, aged 59, Independent Non-Executive Director, joined the Boardof Talamon 1 October 2007. He is a member of the AuditCommittee andNominationCommittee.

He holds a Bachelor of Laws (Hons) from International Islamic University,PetalingJaya,Selangor(1993)andcurrentlyanAdvocateandSolicitor,HighCourtofMalaya.

Dato’ Kamaruddin had extensive experience in the Royal Malaysian PoliceForce.Duringhisdistinguishedcareer,heheldpositionssuchasGeneralDuty/Traffic,PlatoonCommander,PoliceFieldForce,Officein-chargeofPoliceSub-District,AreaInspector,StateTrafficChiefSelangor,DeputyOCPD,StaffOfficer(Prosecution) Session Court (Selangor), Staff Officer (Admin) CID Selangor,PoliceSecretary/SpecialOfficertoIGP,Officerin-chargeCriminalInvestigationDepartment,DeputyChiefPoliceOfficerandDeputyDirector,CommercialCrimeInvestigationDepartment.

HeiscurrentlyaPartnerinalawfirmpracticingunderthenameandstyleofFaridzah&Co.



CHUAKIMLAN

Malaysian,aged46,Non-IndependentExecutiveDirector,joinedtheBoardofTalamon1October2007.

MsChuaKimLangraduatedfromCollegeTunkuAbdulRahmaninBuildingTechnology in 1984 and holds a Master of Business Administration fromHonoluluUniversity,Hawaiiin2000.ShewaspreviouslyattachedtoBrisdale(M)SdnBhdfor5yearsfrom1984to1989andTalamfor1yearpriortojoiningEuroplusBerhadasaQuantitySurveyorin1991.ShewastransferredbacktoTalamsubsequenttothemergerexercisein2003andwasformerlytheDeputyPresidentofTalam.

ShehasnofamilyrelationshipwithanyotherdirectorsormajorshareholdersoftheCompany.ThereisnoconflictofinterestwiththeCompany.Withinthelast10years,shehasnoconvictionsforoffences.

Shehasattendedall thesix (6)BoardofDirectors’meetingsheldduring thefinancialyearended31January2010.

ANNUALREPORT2010

�

LOYBOONCHEN

Malaysian,aged58,Non-IndependentExecutiveDirector,joinedtheBoardofTalamon1October2007.Hewasre-designatedasanExecutiveDirectoron22January2009.

MrLoyBoonChenholdsaMasterDegree inBusinessAdministration fromGoldenGateUniversity,SanFrancisco,USAandisaCertifiedPublicAccountant,Malaysia.

MrLoyservedaninternationalaccountingfirmforseven(7)yearspriortojoiningChongKokLin&SonsBerhadin1980asAccountantcumSecretaryforayear.In1981,hejoinedMudajayaConstructionSdnBhdasChiefAccountantbeforebeingappointedGroupFinancialControllerofIJMCorporationBerhadin1994.MrLoywasappointedtheFinancialDirectorofIJMCorporationBerhadfrom1998,andwastheHeadoftheFinance&AccountsDepartmentandChairmanofIJMGroupRiskManagementCommitteeuptilltheendof2006.Thereafter,hewasassignedtobeinchargeofspecialprojects.MrLoywasamemberoftheAccountingStandardsSub-CommitteeoftheFederationofPublicListedCompaniesBerhad(1998-2006).

HeisalsocurrentlyanExecutiveDirectorofKumpulanEuroplusBerhad,amajorshareholderoftheCompanyandanIndependentandNon-ExecutiveDirectorofGuangdongProvincialExpresswayDevelopmentCo.Limited,acompanylistedontheShenzhenStockExchange,China.



WINSTONMAHYATKONG

British,aged56,IndependentNon-ExecutiveDirector,joinedtheBoardofTalamon22January2009.HeisalsomemberoftheRemunerationCommittee.

MrWinstonMahholdsaBachelorofArts(Hons)degreeinBusiness,CorporateFinance & Accounting from Sheffield Hallam University of United Kingdomand also an associate member of the Chartered Institute of ManagementAccountants,UnitedKingdom.

He has held senior executive positions (Chief Executive Officer, RegionalPresident) at Sinar Mas/App, Yeo Hiap Seng Group and Global FMGGCompanies,includingSeagrams,MarsIncandNestle.Duringthatperiod,hehasworkedinUnitedStatesofAmerica,Europe,AsiaPacific(includingChinaandMalaysia)andAfrica.


Hehasattendedfive(5)outofsix(6)BoardofDirectors’meetingheldduringthefinancialyearended31January2010.


�

NGBEEKEN

Mr.NgBeeKen,aMalaysianaged56, joined theBoardofDirectorsof theCompanyon21May,2010asanIndependentNon-ExecutiveDirector.HeisalsoamemberoftheRemunerationCommitteeandtheNominationCommitteeoftheCompany.

Mr.NgholdsaBachelorofLaw(Hons)fromtheUniversityofWales,Cardiff;aMasterofLawsfromKing’sCollege,UniversityofLondon;andaBarrister-at-LawfromLincoln’sInn.HeisalsoanAdvocateandSolicitoroftheHighCourtofMalayasince1987,andpresentlyistheManagingPartnerofthelawfirmofLeeSweeSeng&Cowherehespecialisesincorporatelaw.

Besides,Mr.NgalsoholdsaMasterofScience(CorporateCommunication)fromUniversitiPutraMalaysia,anACEAandisaCertifiedMediatorattheMalaysianMediationCentreasaccreditedbytheMalaysianBar.

Presently he is the Chairman and an Independent Non-Executive Director of Sinotop Holdings Bhd., and anIndependentNon-ExecutiveDirectorofWidetechBhd.Mr.NgisalsothelocalrepresentativeIndependentNon-ExecutiveDirectorofXstrataRecyclingSdn.Bhd.whoseparentcompanyis listedinbothLondonandZurich.Xstrataisoneofthelargestminingcompaniesintheworld.

Mr.NghasnofamilyrelationshipwithanyotherdirectorsormajorshareholdersoftheCompany.HehasneverbeeninapositionofconflictofinterestwiththeCompany.

Mr.Nghasnoconvictionofanyoffenceswhatsoeverinhisentirelife.


ANNUALREPORT2010

�

Restated Restated 2010 2009 2008 2007 2006 RM’000 RM’000 RM’000 RM’000 RM’000

GROUP

TotalAssets 3,227,739 3,037,443 3,106,497 3,260,395 3,270,833

Equityattributabletoshareholders 608,581 390,937 344,460 346,516 338,540Revenue 253,714 301,278 248,349 216,723 599,814Profit/(Loss)beforetax 17,245 60,563 5,821 (6,936) (772,644)Earnings/(Loss)pershare(sen) 0.42 9.39 0.53 1.43 (124.50)

COMPANY

TotalAssets 1,236,660 480,586 497,810 458,911 305,100Equityattributabletoshareholders 553,371 325,037 320,195 343,081 333,407Revenue – – 3,496 1,646 2,199Profit/(Loss)beforetax 24,119 4,287 (23,142) 5,744 (466,782)

FINANCIAL HIGHLIGHTS

(150)

(120)

(90)

(60)

(30)

0

30

0

100

200

300

400

500

600

700

0.42

20102009

9.39

2008

0.53

2007

1.43

2006

(124.50)

3,300

(100)

(200)

(300)

(400)

(500)

(600)

(700)

(800)

(900)

3,250

3,200

3,150

3,100

3,050

3,000

2950

2900

2010

3,227.739

2009

3,037.443

2008

3,106.497

2007

3,260.395

2006

3,270.833

253.714

2010

301.278

2009

248.349

2008

216.723

2007

599.814

2006

17.245

2010

60.563

2009

5.821

2008

(6.936)

2007

(172.644)

2006

200

100

0

10

CHAIRMAN’S STATEMENT

On behalf of the Board of Directors of Talam, I am pleased to present the Annual Report and Audited Financial Statements of the Group and the Company for the financial year ended 31 January 2010.

Thefinancialyearunderreviewhasseenglobalfinancialmarketsandeconomiesworldwidemakinggreateffortstoclimboutofrecessionorpump-primetoensuresufficientGDPgrowthinordernottofallintorecession.For2009,althoughMalaysiaregisteredanegativeGDPgrowthrateof1.7%,inthelastquarterof2009,theGDPgrew4.4%andfurtherimprovedto10.1%inthefirstquarterof2010.WhileAsiahavemademuchprogress,thesamecannotbesaidofEurope,USAandmanypartsoftheworld.

Theperseverance,determinationandintegrityofourBoardmembers,managementteamandemployeesovertheyearhavecertainlybeeninstrumentalinsupportingandsustainingtheGroup.Inviewoftheuncertaineconomicandindustryoutlook,TalamwillcontinuetoworkhardertostrengthenthefinancialfootingoftheGrouptoremainresilientinthisdifficultoperatingenvironmentandbeonthelookoutforanynewopportunitiesthatmaypresentthemselves.

On12March2010and12April2010,theCompanyannouncedthatithadenteredintoprincipalandsupplementaryagreementsrespectivelywithMenteriBesarSelangor(Incorporated)(“MBI”)todisposeofRM676.09millionworthofpropertiesinsettlement,principally,ofRM391.99millionduetoMBIandRM266.26millionduetothelenders.ThisisthelargestamongstseveraldisposalsundertakeninthelastfewyearswithaviewtoreducefurtherthedebtsleveloftheGroup.Itismyferventhopethatyouwillgiveusyourfullsupport,atthenextshareholdersmeetingtobeconvenedsoon,tosanctionthistransaction.

FINANCIALHIGHLIGHTS

Forthefinancialyearended31January2010,theGroupachievedrevenueofRM253.71million,a15.8%drop,ascomparedtorevenueofthepreviousfinancialyearofRM301.28million.TheGroupattainedprofit-after-tax-after-minority-interestofRM9.02million(precedingyearRM59.11million)whichtranslatestoearningspershareof0.42sen,downfrom9.39senintheprecedingyear.TheGroup’sperformancewasaffectedbylowerprogressbillingsfordevelopmentprojectsassomearecomingtothetail-end.DespiteamuchhighergrossprofitofRM108.46million(precedingyearRM27.74million),helpedbyprofitfromsaleofdevelopmentland,thepretaxprofitachievedwasonlyRM17.25million(precedingyearRM60.56million)duetohigherfinancecost,increaseinprovisionfordoubtfuldebts,andimpairmentprovisionforgoodwillandinvestmentproperties.Ontheotherhand,thehigherpretaxprofitachievedintheprecedingyearwasattributabletonon-recurrentitemssuchasreversalofinterestscostpreviouslyaccruedanddebtwaivergrantedbythelenderspursuanttotheimplementationoftheRegularisationPlan.

UponthecompletionoftheRegularisationPlanduringthefinancialyearunderreview,theGrouphasemergedmuchstronger,financially.Theequityattributabletoshareholdersasat31January2010isnowRM608.58million,anincreaseof55.7%againstRM390.94millionfromayearago.Atthesametime,theGroup’snetcurrentliabilitieshasreducedtoRM189.78millionfromRM886.88millionofayearago.

ANNUALREPORT2010

11

FINANCIALHIGHLIGHTS(cont’d)

Iampleasedtoreportthatthegroup’sauditorshaveremovedallpreviousqualificationsforthefinancialstatementsforthefinancialyearended31January2010andBursaMalaysiaSecuritiesBerhadhason10June2010approvedtheCompany’sapplicationtobeupliftedfromPN17classification.

PROSPECTS

Whilst The Government has forecast healthy GDP growth of 6% for 2010, there are many uncertainties anddestabilisingfactors,especiallytheon-goingEurope’sstruggletocontainballooningdebts.InvestorsandpolicymakersaroundtheworldareincreasinglyworriedthatEurope’seffortstocontaindebtlevelwillsapthecontinent’sanaemicgrowth,dentingdemandfromemergingeconomiesandderailingfullglobalrecovery.

TheyearaheadwillundoubtedlybechallengingfortheGroupamidsttheuncertainglobalfinancialandeconomicscenario.TheGrouphasdeliveredseveralthousandhousestopurchasersinthelasttwo(2)years.ThekeyemphasisfortheyearwillbetocompletetheremaininghousessoldandtoenabletheGrouptoreapplyforadvertisingpermitsfromtheMinistryofHousing.TheGroupwillpractiseprudentriskmanagementandbusinessstrategiestomeetthechallengesahead.

ACKNOWLEDGEMENT

OnbehalfoftheBoardofDirectors,IampleasedtowelcomeMrNgBeeKen,whowasappointedon21May2010totheBoard.IwouldalsoliketotakethisopportunitytothankY.A.MTengkuSulaimanShahAl-HajIbniAl-MarhumSultanSalahuddinAbdulAzizShahAl-HajandMrLeeSweeSengwhohasresignedfromtheBoardon28September2009and21May2010respectivelyfortheirinvaluablecontributionstotheGroupandtheBoardduringtheirtenures.

Iwishtoextendmyheartfeltappreciationtoourshareholderswhohavebeensteadfastandtoourvaluedcustomers,business partners, lenders, contractors and creditors for their continuing support. Furthermore, my sincereappreciationtothemanagementandstaffsfortheirdedicationanduntiringcommitmenttotheGroup.Lastbutnotleast,mysinceregratitudetotheSecuritiesCommission,BursaMalaysiaSecuritiesBerhadandalltherelevantauthoritiesfortheircontinuingguidanceandadvice.

CHAIRMAN’S STATEMENT (cont’d)

1�

REVIEW OF OPERATIONS

PropertyInvestmentandDevelopmentPropertyinvestmentanddevelopmentremainthecorebusinessofTalamGroupandhascontributed93.1%ofitsturnoverforthefinancialyearended31January2010.TalamGroupcurrentlyhasatotalbalancelandbankofapproximately5,047acres,mainlyinSelangor,comprisingamixedportfolioofcommercial,residentialandindustrialpropertiesatvariousstrategiclocationsinAmpang,Sepang,Puchong,BukitJalilandRawang.

AnupdateofthehousingdevelopmentprojectscurrentlybeingundertakenandtobeundertakenbytheTalamGroupisasfollows:-

(1) ExistingProjects

a. TamanPuncakJalil

TamanPuncakJalil,atownshipdevelopmentona801-acreleaseholdland,islocatednexttoTechnologyParkalongSungaiBesi,Puchongroad.AdjacentdevelopmentsareLestariPerdanaonthesoutheast,TamanEquineonthesouth,BandarKinraraonthenorthwestandBukitJalilSportsComplexonthenorth.Thedevelopment,whichisundertakenbyMaxisegarSdnBhd,awholly-ownedsubsidiaryofTalam,isanintegratedandself-containedtownshipcomprising8,102unitsofresidentialandcommercialproperties.Thisstrategicallylocatedprojecthasattractedstronginterestfromthepublic.TheGrossDevelopmentValueofTamanPuncakJalil estimated tobeaboutRM2.13billionwithanexpecteddevelopmentperiodoftwelve(12)years.Theprojectwasfirst launchedinJune2001andasat31January2010,theprojecthasrecordedsalesof7,166unitsvaluedatRM1.55billion.

b. UkayPerdana

UkayPerdanaisamixeddevelopmentprojectlocatedat7thmile,offJalanUluKlang,inthevicinityofBukitAntarabangsaandTamanUkay.Itissituatedapproximately14.4kmnorth-eastofKualaLumpurCityCentre,which isabout15minutesdrivenorth-eastofKualaLumpurCityCentreviaelevatedhighway.Theprojectissituatedon345acresofconvertedleaseholdlandwhichisbeingdevelopedbyUkayLandSdnBhd,asubsidiaryofTalam.

Thedevelopmentconsistsof6,200unitsofresidentialandcommercialpropertieswithanexpectedGrossDevelopmentValueofRM870.90million.Asat31January2010,atotalof6,189unitsofpropertiesvaluedatRM854.47millionhavebeensold.

c. LestariPuchong

LestariPuchong isaprojectundertakenbyLestariPuchongSdnBhd,a subsidiaryofTalam.TheproposedsiteislocatedoffJalanAkademiPutra,approximately1.2kilometersfromPersimpanganSerdangExitNo.1123,inthevicinityofSeriKembangan,Selangor.ThesiteiseasilyaccessiblefromKuala Lumpur-Seremban Highway via Jalan Sungai Besi and strategically located to the north ofUniversityPutraMalaysiaresearchcentre.

LestariPuchongisamixeddevelopmentcomprising8,256unitsofresidentialproperties,and327unitsofcommercialproperties.WithanestimatedGrossDevelopmentValueofRM1.10billion,LestariPuchongisexpectedtospanoveradevelopmentperiodoftwelve(12)years.LaunchedinMarch2001,LestariPuchonghasachievedsalesof4,313unitsvaluedatRM720.48millionasat31January2010.

d. KinraraSection�

KinraraSection3isaprojectundertakenbySentosaRestu(M)SdnBhd,asubsidiaryofTalam.Theprojectislocatedon43acresofleaseholdlandintheDaerahofPetaling,oppositeoftheKinraraArmyCamp.Theproposeddevelopmentconsistsof3,296unitsofresidentialandcommercialproperties.Itwasfirstlaunchedin1999withanestimatedGrossDevelopmentValueofRM426.55million.Asat31January2010,KinraraSection3hasachievedsalesofRM422.08millionrepresenting3,239unitssold.

ANNUALREPORT2010

1�

e. JalilHeights

JalilHeightsislocatedona31.4-acreleaseholdlandinMukimofPetaling,PetalingDistrictwithinadevelopmentknownasLestariPerdana. It isearmarkedfor thedevelopmentof284unitsofsemi-detachedhousesundertakenbyAbraDevelopmentSdnBhd,awholly-ownedsubsidiaryofTalam.TheprojectwillgenerateanestimatedGrossDevelopmentValueofRM101.0million.SinceitsfirstlaunchinSeptember2001,JalilHeightshasrecordedsalesofRM95.99million(representing267unitssold)asat31January2010.

f. SaujanaPuchong

SaujanaPuchongisadevelopmentundertakenbyExpandFactorSdnBhd,awholly-ownedsubsidiaryofTalam,onapproximately423acresof99yearsleaseholdlandinthePetalingDistrict.TheprojectsiteislocatedinthegrowthareaofPuchongandiseasilyaccessibleviaLebuhrayaDamansaraPuchongandtheKualaLumpur-SerembanHighwaythroughtheSerdang-PuchongdualcarriagewaythatlinksJalanPuchongtoSerdang.

Theentiredevelopmentcomprises4,933unitsofterracehouses,apartmentsandshoplots,whichuponcompletion,areexpectedtogenerateaGrossDevelopmentValueofRM634.37million.Asat31January2010,theprojecthasrecordedsalesof4,545unitsvaluedatRM606.64million.

g. DanauPutra

DanauPutraisamixeddevelopmentundertakenbyCekapMesraDevelopmentSdnBhd,asubsidiaryofTalam,onapproximately417.34acresof99yearsleaseholdlandintheMukimofDengkil,DistrictofSepang,withintheMultimediaSuperCorridor.

DanauPutraisplannedformixeddevelopmentofmediumlowcostapartments,clusterbungalowsandshop/apartmentswithanestimatedGrossDevelopmentValueofRM630.0million.LaunchedinAugust1998,DanauPutrahasachievedsalesof3,879unitsvaluedatRM361.08millionasat31January2010.

h. PutraPerdana

PutraPerdanaisaprojectundertakenbyKenshineCorporationSdnBhd,asubsidiaryofTalam,andis situatedon600acresof converted leasehold land.Theproject is locatedon the southern sideofPuchong-Kajangtrunkroad,5kmfromBatu14Puchong,withinCyberjayaandadjacent to theMultimediaSuperCorridor,5kmwestofPutrajayaand13kmnorthoftheKualaLumpurInternationalAirport.

WithanexpectedGrossDevelopmentValueofRM1.92billion,PutraPerdanawillconsistofresidentialhouses,apartments,shopoffices,commercialcomplex,exhibitioncenter,themegarden,hotelandserviceapartments.Asat31January2010,theprojecthasrecordedsalesof7,797unitsvaluedatRM831.68million.

i. SaujanaPutra

SaujanaPutraisaprojectundertakenbyGalianJutaSdnBhd,awholly-ownedsubsidiaryofTalammeasuringabout200acresinsize.ItislocatedoppositePutraHieghtsinMukimTanjungDuabelas,KualaLangatDistrict.Withaproposeddevelopmentcomprisinglowtomediumcostapartmentsandmediumcost terracehouses, itwillgenerateanestimatedGrossDevelopmentValueofRM331.90millionoveradevelopmentlifespanofeleven(11)years.LaunchedinMarch2003,SaujanaPutrahasachievedsalesof527unitsvaluedatRM74.6millionasat31January2010.

REVIEW OF OPERATIONS (cont’d)

1�

j. LestariPermai

LestariPermaiissituatedonapproximately76.01acresof99yearsleaseholdlandandlocatedoppositethePutrajayaGate2entranceanditisbeingundertakenbyEuroplusConstructionSdnBhd,asubsidiaryofTalam.TheprojectwillbeaccessibleviaLebuhrayaDamansaraPuchong,Puchong-Serdangbypass,andJalanPuchong.Theproposeddevelopmentcomprises1,004unitsofresidentialhousesand24unitsofdoublestoreyshopand7unitsoflowcostshops.

WithanestimatedGrossDevelopmentValueofRM132.07million,LestariPermaiwas launched in

March2003andhasachievedsalesof566unitsvaluedatRM80.37millionasat31January2010.

k. BukitSentosa

BukitSentosaI&IIIformanintegratedtownshipcoveringapproximately1,898acresoffreeholdlandintheMukimofSerendah,approximately47kmnorthofKualaLumpur.ItiseasilyaccessiblethroughtheNorth-SouthExpresswayandexitatBukitBeruntungInterchange.Thecomprehensivenewtownshipcomprisesamixeddevelopmentofresidential,commercialandindustrialproperties.

BukitSentosaI,whichisbeingdevelopedbyTalamIndustriesSdnBhd,isplannedformixeddevelopmentcomprising9,573unitsofterracehouses,apartmentsandshoplots.LaunchedinSeptember1999,theprojecthasgeneratedtotalsalesofRM713.36millionasat31January2010.

BukitSentosa III,covering1,010acresof freehold land, isdevelopedbyMaxisegarSdnBhd. It is

plannedforamixeddevelopmentof14,790unitsofterracehouses,apartmentsandshoplots,withaGrossDevelopmentValueofRM1.3billion.LaunchedinMarch1997,BukitSentosaIIIhasachievedatotalsalesofRM577.8million(or7,191unitssold)asat31January2010.

l. BandarBukitBeruntung

BandarBukitBeruntung,aconverted5,500acresoffreeholdland,islocatednorth-westofRawang,approximately40kmfromKualaLumpur.ItisundertakenbyEuroplusCorporationSdnBhd,asubsidiaryofTalam.Themegatownshipwhichismarketedasthe“2ndPetalingJaya”hasagolfresort,countryhomes,campus,industrial,commercialandhousingunitswithanexpectedGrossDevelopmentValueofRM3.36billion.Thedevelopmentoftheentiretownshipisexpectedtospananotherten(10)yearstotheyear2020.

Launched in late1991, thisprojecthasachieveda totalsalesvalueofRM1.52billionrepresenting13,398unitsasat31January2010.

(�) FutureProject

ShahAlam�(BerjuntaiBistariLand)

TheproposedShahAlam2originallyinvolved3,000acresoflandbutwillbeleftwithabalanceof736.47acreswhentheSelangorstatesettlementexerciseiscompleted.ThelandislocatedadjacenttotheUniversitiIndustriSelangor(“UNISEL”)campusabout44kmfromthetownsofBatangKaliandKualaSelangor,30kmfromRawangand20kmfromBukitBeruntung.WhilethecurrentaccesstothesiteisbythecoastalroadpassingbyKualaSelangororthetrunkroadfromRawang,ShahAlam2willeventuallybereachedbya10kmproposedroadfromtheBukitBeruntungInterchangeofftheNorth-SouthHighway,tobeconstructedbyMaxisegarSdnBhd.

BerjuntaiBistariistobedevelopedover15yearsandwillcompriseapproximately3,500unitsofresidentialandcommercialpropertieswithanestimatedGrossDevelopmentValueofRM350.00million.

REVIEW OF OPERATIONS

ANNUALREPORT2010

1�

(�) Joint-VentureProjects

a. ��Units�½StoreyTerraceHouseatUkayPerdana

Thisdevelopmentisaventureundertakenby50%-ownedGoodDebutSdnBhd.ThedevelopmentispartofUkayPerdanaprojectandislocatedat7thmileoffJalanUluKlanginthevicinityofBukitAntarabangsa.TheGrossSalesValueisestimatedtobeRM96.55million.Asat31January2010,atotalof141unitsofsalesvalueofRM57.40millionwereachieved.

b. SereniaGarden

SereniaGardenisaresidentialdevelopmentprojectundertakenby50%-ownedSierraUkaySdnBhd.Theprojectmeasures90acresandislocatedinMukimUluKelangadjacenttotheexistingUkayPerdana.TheGrossDevelopmentValueofSierraUkayisestimatedtobeRM615millionandisexpectedtobeimplementedoveraperiodoffive(5)years.LaunchedinOctober2007,theprojecthasachievedsalesof309unitsvaluedatRM109.64millionasat31January2010.

c. SierraSelayang

SierraSelayangisaresidentialdevelopmentprojectundertakenby50%-ownedCekapTropikalSdnBhd.Theprojectmeasures204acresandislocatedatUluGombakForestReserve,MukimofBatu,DistrictofGombak,StateofSelangor.TheGrossDevelopmentValueofSierraSelayangisestimatedtobeRM963.9millionandisexpectedtobeimplementedoveraperiodofeight(8)years.

d. YinHaiComplexinChangchun,JilinProvince,People’sRepublicofChina

YinHaiComplexisaprojectundertakenbyJilinDingtaiEnterpriseDevelopmentCo.Ltd.,awholly-ownedsubsidiaryofLarutLeisureEnterpriseHongKongLtd.,a50%-ownedassociateofTalamGroup.TheproposedYinHaiComplexisa35-storeybuildingcomprising28office-cum-residentiallevels,7shoppingpodiumlevelsand2basementlevels.TheGrossSalesValueofYinHaiComplexisestimatedtobeRMB738million.

OtherBusinesses

TheTalamGroup’sotherbusinesses inhoteland recreationcontributedapproximately6.9%of its turnover infinancialyear2010.

REVIEW OF OPERATIONS (cont’d)

1�

STATEMENT ON CORPORATE GOVERNANCE

TheBoardofDirectors(“Board”)ofTalamCorporationBerhad(“Talam”or“theCompany”)recognizestheimportanceofgoodgovernancetoensurethesuccessoftheCompany’sbusinessandiscommittedtoinstillstandardsofcorporategovernancethroughouttheGrouptoenhanceitsshareholdervalueandfinancialperformance.

ThestatementbelowsetsouthowtheGrouphasappliedthekeyprinciplesoftheMalaysianCodeonCorporateGovernance(Revised2007)[“Code”]andtheextentofitscompliancewiththebestpracticesoftheCode.

(A) DIRECTORS

(i) TheBoard

TheBoardhasoverallresponsibilityforthestrategicdirectionandcontroloftheGroup.

TheBoardmeetsperiodicallyonaquarterlybasiswithadditionalmeetingsbeingconvenedasandwhennecessary.Duringthefinancialyearended31January2010,six(6)BoardMeetingswereheldandtheattendanceofeachDirectorissetoutbelow:-

NumberofBoard meetingsattended/ held(duringthe Directors Directors’tenure)

TsenKengYam(Chairman) 6outof6 Y.A.M.TengkuSulaimanShahAl-HajIbniAl-Marhum 1outof4 SultanSalahuddinAbdulAzizShahAl-Haj (Resignedon28September2009) TanSriDato’(Dr)IrChanAhChye@ChanChongYoon 6outof6 Dato’KamaruddinBinMatDesa 6outof6 ChuaKimLan 6outof6 LoyBoonChen 6outof6 LeeSweeSeng(Resignedon21May2010) 5outof6 WinstonMahYatKong 5outof6 NgBeeKen(appointedon21May2010) 0outof0

(ii) BoardComposition

TheBoardofTalamcurrentlyhasseven(7)memberscomprisingtwo(2)ExecutiveDirectors,four(4)IndependentNon-ExecutiveDirectors(includingtheChairman)andone(1)Non-IndependentNon-ExecutiveDirector.

TherolesoftheChairmanandExecutiveDirectorsaresegregatedtoensurethatthereisabalanceofpowerandauthority.MrTsenKengYamistheChairmanoftheBoardwhileMsChuaKimLanandMrLoyBoonChenareExecutiveDirectors.TheChairmanisresponsiblefortheorderlyconductandworkingoftheBoardandensuresthatallDirectorsreceivesufficientrelevantinformationonfinancialandnon-financialmatterstoenablethemtoparticipateactivelyinBoarddecisionswhilsttheExecutiveDirectorsareresponsiblefortheday-to-daymanagementofthebusinessandimplementationofBoarddecisionsandthedecisionsoftheExecutiveCommittee.

Thefive(5)Non-ExecutiveDirectorsprovidethenecessarybalanceofpowerandauthoritytotheBoardwithamixofindustry-specificknowledgeandbroadbusinessandcommercialexperience.Theyensurethatallproposalsbymanagementarefullydeliberatedandexamined,takingintoaccounttheinterestofshareholdersandstakeholders.

ANNUALREPORT2010

1�

TheBoardalsorecognisestheprivotalroleoftheindependentdirectorsincorporateaccountabilityastheyprovideunbiasedandindependentviews,adviceandjudgement.TheChairman/IndependentNon-ExecutiveDirector,MrTsenKengYam,hasbeenidentifiedastheSeniorIndependentNon-ExecutiveDirectortowhomconcernsrelatingtotheCompanymaybeconveyed.

TheprofileofeachDirectorissetoutonpages5to8ofthisAnnualReport.

(iii) SupplyofInformation

AlltheDirectorsarenotifiedabouttheBoardmeetingsscheduledbytheCompanySecretarybeforethemeetings.TheBoardpaperstogetherwiththeagendaarecirculatedtoalltheDirectorsinsufficienttimepriortotheBoardmeetingstoenabletheDirectorstoreviewandconsidertheagendaitemstobediscussedatthemeetingandwherenecessary,toobtainfurtherexplanationssotheycanfullybriefedbeforethemeeting.TheBoardpapersincludereportsontheGroup’sstrategic,financial,operational,corporatedevelopmentsandregulatorycompliancematters.

Indischargingtheirduties,theDirectorshaveaccesstoall informationwithintheCompanyandtotheadviceandservicesof theCompanySecretary. Ifnecessary, theDirectorsareentitled toseekindependentprofessionaladvicefromexternalconsultantsattheCompany’sexpense.AnysuchrequestispresentedtotheBoardforapproval.

SeniorManagementstaff,aswellasadvisersandprofessionalsappointed toadviseoncorporateproposals, may be invited to attend Board meetings to provide the Board with their views andexplanationsoncertainagendaitemstabledtotheBoard,andtostatetheirclarificationonissuesthatmayberaisedbytheDirectors.

(iv) BoardCommittees

TheBoardhasdelegatedcertainfunctionstotheseveralBoardCommitteeswhichoperateswithintheapprovedTermsofReference.TheseCommitteeshaveauthority,inter-alia,toexamineparticularissuesandreportbacktotheBoardwiththeirrecommendations.Theultimateresponsibilityforthefinaldecisiononallmatters,however,lieswiththeentireBoard.

ThevariousBoardCommitteesinTalamareasfollows:-

1. ExecutiveCommittee

TheExecutiveCommitteewasestablishedon27September2007anditsmembershipconsistsofExecutiveDirectorsandseniormanagementpersonneloftheGroup.TheExecutiveCommitteemeetsregularly,toreviewtheperformanceoftheGroup’soperatingdivisions.Asatthedateofthisstatement,theExecutiveCommitteecomprisesthefollowingmembers:-

Members Designation

MrLoyBoonChen(Chairman) ExecutiveDirector

MsChuaKimLan ExecutiveDirector

MrChewKokHing Consultant

MrTanBakHai SeniorVicePresidentI

MrKangChoongKiat VicePresident

STATEMENT ON CORPORATE GOVERNANCE (cont’d)

1�

ThetermsofreferenceoftheExecutiveCommitteeinclude,amongstothers,thefollowing:-

(i) reviewandapprovethebudgetandcashflowprojectionspreparedbytheGroup’sstrategicbusinessunitsaswellasitsperformance;

(ii) decideonall transactionsandmatters relatingo theGroup’scorebusiness/investmentswithintherestrictedlimitsofauthoritydeterminedbytheBoard;

(iii) decideonallmattersrelatingtobankingfacilitiesasmayberequiredfortheconductoftheGroup’soperations;

(iv) reviewandrecommendnewinvestments/landbankacquisitionsbeforetablingtotheinternalauditcommitteeandrecommendingtotheBoardforapproval;

(v) assisttheBoardinensuringtheeffectivenessoftheGroup’scorebusinessesinaccordancetothecorporateobjective,strategies,policiesandbusinessdirectionapprovedbytheBoard;and

(vi) formulatestrategiesonanon-goingbasisandaddressingissuesarisingfromchangesinbothexternalbusinessenvironmentandinternaloperatingconditionsofthestrategicbusinessunits.

Duringthefinancialyear,seven(7)ExecutiveCommitteemeetingswereheld.

�. AuditCommittee

TheAuditCommitteewasestablishedon24February1994andiscurrentlychairedbyMrTsenKengYam.OthermembersoftheAuditCommitteeareDato’KamaruddinBinMatDesaandMrWinstonMahYatKong.

ThetermsofreferenceandactivitiesoftheAuditCommitteeduringthefinancialyeararesetoutundertheAuditCommitteeReportonpage31to34ofthisAnnualReport.

�. NominationCommittee

On22January2009,theNomination&RemunerationCommitteewasseparatedintotwoseparatecommittees,namely,NominationCommitteeandRemunerationCommitteerespectively.

Asatthedateofthisstatement,theNominationCommitteecomprisesthree(3)Non-ExecutiveDirectorsoutofwhichtwo(2)areIndependentDirectorsandthemembersareasfollows:-

Members Designation

Dato’KamaruddinBinMatDesa IndependentNon-ExecutiveDirector

TanSriDato’(Dr)IrChanAhChye Non-IndependentNon-ExecutiveDirector @ChanChongYoon

NgBeeKen IndependentNon-ExecutiveDirector


ANNUALREPORT2010

1�

ThetermsofreferenceoftheNominationCommitteeinclude,amongstothers,thefollowing:-

(i) recommendtotheBoard,candidatesforalldirectorshipstobefilledbytheshareholdersortheBoard;

(ii) recommendtotheBoard,directorstofilltheseatsonBoardcommittees;

(iii) review the required mix of skills and experience and other qualities, including corecompetencieswhichnon-executivedirectorsshouldbringtotheBoardonanannualbasis;and

(iv) assess the effectiveness of the Board as a whole, the committees of the Board, andcontributionofeachindividualdirector,includingindependentnon-executivedirectors,aswellasthechiefexecutiveofficerinanannualbasis.

TheNominationCommitteeheldameetingduringthefinancialyear.

�. RemunerationCommittee

Asatthedateofthisstatement,theRemunerationCommitteecomprisesthree(3)IndependentNon-ExecutiveDirectorsandthemembersareasfollows:-

Members Designation

TsenKengYam Chairman/ IndependentNon-ExecutiveDirector WinstonMahYatKong IndependentNon-ExecutiveDirector NgBeeKen IndependentNon-ExecutiveDirector

ThetermsofreferenceoftheRemunerationCommitteeinclude,amongstothers,thefollowing:-

(i) recommendtotheBoardtherewardframeworkforallexecutivedirectorsandperformanon-goingreviewofexecutivedirectors’remunerationstructure;

(ii) recommendtotheBoardchangesinremunerationifrequiredorintheeventthepresentstructureandremunerationpolicyaredeemedinappropriate;and

(iii) Theremunerationofthenon-executivedirectorsaretobedeterminedbytheBoardandnottheRemunerationCommittee.

TheRemunerationCommitteeheldameetingduringthefinancialyear.

(v) AppointmenttotheBoard

TheNominationCommitteerecommendstotheBoard,suitablecandidatesforappointmentasDirectorandtofillvacantseatsontheBoardcommitteesafterwhichtheCompanySecretaryensuresthatallappointmentsareproperlymadeandalllegalandregulatorycompliancearemet.However,themaindecisionlieswiththeBoardaftertakingintoconsiderationthenominationbytheNominationCommittee.TheNominationCommitteealsoassessestheeffectivenessoftheBoardandBoardCommittees.

The Board, through the Nomination Committee, review annually the required mix of skills,expertise,attributesandcorecompetenciesofitsDirectorsaswellastheBoardstructure,sizeandcomposition.


�0

(vi) Directors’Training

All the Directors have attended the Mandatory Accreditation Programme prescribed by BursaMalaysiaSecuritiesBerhad(“BursaSecurities”).TheDirectorsarealsoawareoftheirdutytoundergoappropriatetrainingfromtimetotimetoensurethattheybebetterequippedtocarryouttheirdutiesasDirectors.

TheDirectorshaveattendedatleastonetrainingsessioneachontopicssuchasfinancialreporting

standards,corporategovernance,taxationorcorporatesocialresponsibility.

(vii) Re-electionofDirectors

AnyDirectorappointedduringtheyearisrequiredundertheArticlesofAssociationoftheCompany(“Articles”) to retire and seek re-election by shareholders at the following Annual General Meetingimmediatelyaftertheirappointment.TheArticlesalsorequirethatone-thirdoftheDirectorsshallretirefromofficeatleastonceinthreeyearsbutshallbeeligibleforre-election.

TheelectionofeachDirectorisvotedonseparately.Toassistshareholdersintheirdecision,sufficientinformation,suchaspersonalprofile,meetings’attendanceandtheshareholdingsofeachDirectorstandingforre-election,arefurnishedintheAnnualReport.

(B) DIRECTORS’REMUNERATION

ThedetailsoftheDirectors’remunerationduringthefinancialyearended31January2010areasfollows:-

Defined OtherCategory Fees Salaries Contribution Emoluments Total (RM’000) (RM’000) (RM’000) (RM’000) (RM’000)

ExecutiveDirectors – 342 64 22 428Non-ExecutiveDirectors – – – 262 262

ThenumberofDirectorswhosetotalremunerationduringthefinancialyearfallwithinthefollowingbands:- NumberofDirectors Remuneration(RM) Executive Non-Executive Below50,000 – 5 50,001–100,000 – 1 100,001–200,000 1 – 200,001–300,000 1 –

(C) RELATIONSHIPWITHSHAREHOLDERSANDINVESTORS

The Group recognizes the importance of keeping shareholders and investors informed of the Group’sperformanceandmajordevelopments.Suchinformationisdisseminatedviathedistributionofannualreports,relevantcirculars,disclosureofmaterial informationbywayofannouncementsandissuanceofquarterlyfinancialresultsoftheGrouptoBursaSecuritiesandthepublicaswellasthroughpressconferences.

TheAGMistheprincipalforumfordialoguewithshareholderswhereopportunitiesaregiventothemtoraisequestionsandseekclarificationspertainingtotheoperationandfinancialperformanceoftheGroup.MembersoftheBoardaswellastheAuditorsoftheCompanyarepresenttoprovideresponsestoquestionsfromtheshareholdersduringthesemeetings.

Eachitemofthespecialbusinessincludedinthenoticeofthemeetingwillbeaccompaniedbyanexplanatorystatementontheproposedresolution.


ANNUALREPORT2010

�1


(D) ACCOUNTABILITYANDAUDIT

(i) FinancialReporting

TheBoard,inpresentingtheannualauditedfinancialstatements,aimstopresentabalancedandrationalassessmentoftheGroup’spositionandprospects.TheBoardisalsoresponsibleforensuringthatthefinancialstatementspreparedaredrawnupinaccordancewiththeprovisionsoftheCompaniesAct,1065andtheapplicableapprovedaccountingstandardsinMalaysia.

ThequarterlyfinancialresultsandannualauditedstatementswerereviewedbytheAuditCommitteeandapprovedbytheBoardbeforebeingreleasedtoBursaSecurities.ThedetailsoftheCompanyandGroup’sfinancialstatementsforthefinancialyearended31January2010canbefoundfrompages35to125ofthisAnnualReport.

(ii) StatementofDirectors’ResponsibilityinrelationtotheFinancialStatements

TheBoardisrequiredbytheCompaniesAct,1995(“theAct”)topreparethefinancialstatementsforeachfinancialyear,whichgiveatrueandfairviewofthestateofaffairsoftheCompanyandtheGroupandoftheirresultsandcashflowforthatperiod.

As requiredby theAct and theListingRequirementsofBursaSecurities, thefinancial statementshavebeenpreparedinaccordancewiththeapprovedaccountingstandardsinMalaysiaandwiththeprovisionsoftheAct.

Inpreparing thefinancialstatements for thefinancialyearended31January2010, theGrouphasusedappropriateaccountingpolicies,consistentlyappliedandsupportedbyreasonableandprudentjudgementsandestimates.

TheDirectorshaveresponsibilityforensuringthattheCompanyandtheGroupmaintainaccountingrecords,whichdisclose,withreasonableaccuracy,thefinancialpositionoftheCompanyandtheGroupandwhichenablethemtoensurethatthefinancialstatementscomplywiththeAct.TheDirectorshavegeneralresponsibilitiesfortakingsuchstepsasarereasonablyavailabletothemtosafeguardtheassetsoftheGroupandtopreventanddetectfraudandotherirregularities.

(iii) InternalControl

TheBoardacknowledgesthatitisresponsibleformaintainingasoundsystemofinternalcontrolwhichprovidesreasonableassessmentofeffectiveandefficientoperations,internalfinancialcontrols,andcompliancewithlawsandregulationsaswellaswithinternalproceduresandguidelines.

AStatementonInternalControloftheGroupissetoutonpages29and30ofthisAnnualReport.

(iv) RelationshipwiththeExternalAuditors

TheBoard,throughtheAuditCommittee,maintainsacloseandtransparentprofessionalrelationshipwithitsauditorsinseekingprofessionaladviceandensuringcompliancewiththeaccountingstandardsinMalaysia.TheroleoftheAuditCommitteeinrelationtotheexternalauditorsissetoutonpages31to34ofthisAnnualReport.

��

(E) CORPORATESOCIALRESPONSIBILITY(CSR)

Asaresponsiblecorporatecitizen,theGroupwillcontinuouslyensurethatallpertinentactivitiesrelatingtocorporatesocialresponsibilityareconsideredandsupportedinitsoperationsforthewellbeingofstakeholders,communityandenvironment.

OuremployeesaretheheartoftheGroupandthekeytothecompetitivesuccessinthemarketplace.Asapolicy,wedonotdiscriminateagainstanyrace,gender,ageandminorities.Theemployeesarealsoprovidedadequatemedicalbenefitsaswellashospitalisationandpersonalaccidentinsurancecoverage.Webelievethatemployees’involvementisvitaltothesuccessoftheGroup.

Aspartofefforttowardsthepreservationofenvironment,theGroupwouldensuretherearesufficientmeasuresatallconstructionsitestopreventanyadverseimpactontheenvironment.

ThisStatementismadeinaccordancewiththeresolutionapprovedbytheBoardofDirectorson29June2010.


ANNUALREPORT2010

��

ADDITIONAL COMPLIANCE INFORMATIONAs at 31 January 2010

1. UTILISATIONOFPROCEEDS

TheCompanydidnotraisefundsthroughanycorporateproposalduringthefinancialyearended31January2010.

�. SHARESBUY-BACK

Therewerenosharesbuy-backbytheCompanyduringthefinancialyear.

�. IMPOSITIONOFSANCTIONSAND/ORPENALTIES

There were no sanctions and/or penalties imposed on the Company or its subsidiaries, or Directors ormanagementbytherelevantregulatorybodiesduringthefinancialyear.

�. NON-AUDITFEES

Duringthefinancialyear,theCompanydidnotincuranynon-auditfeesforservicesrenderedtotheCompanybytheCompany’sauditors.

�. VARIATIONINRESULTS

Therewerenomaterialvariancesbetweentheauditedresultsforthefinancialyearended31January2010andtheunauditedresultsforthequarterended31January2010oftheGroupexceptthattheGroup’sauditedprofitaftertaxafterminorityinterestis17.3%higherthantheannouncedunauditedfigure.

�. MATERIALCONTRACTS

TherewerenomaterialcontractsenteredintobytheCompanyanditssubsidiariesinvolvingDirectors’andmajorshareholders’interests,whichwerestillsubsistingasattheendofthefinancialyear.

�. MATERIALCONTRACTSRELATINGTOLOANS

TherewerenomaterialcontractsrelatingtoloansenteredintobytheCompanyanditssubsidiariesinvolvingDirectors’andmajorshareholders’interestswhichwerestillsubsistingasattheendofthefinancialyear.

�. OPTIONS,WARRANTSANDCONVERTIBLESECURITIES

Duringthefinancialyear,412,325,0965-YearRedeemableConvertiblePreferenceSharesofRM0.20eachhavebeenconvertedinto412,325,096OrdinarySharesofRM0.20each.

��

�. RECURRENTRELATEDPARTYTRANSACTIONSOFAREVENUEORTRADINGNATURE

Detailsoftherecurrentrelatedpartytransactionsmadeduringthefinancialyearended31January2010pursuanttotheshareholders’mandateobtainedbythecompanyattheAnnualGeneralMeetingheldon23July2009areasfollows:-

Natureoftransactions undertakenbyTalam Amount CorporationBerhad(“TALAM”) Transacting Transacted Interested and/oritssubsidiaries Company (RM’000) RelatedParty

(A) ConstructionContractCosts chargedbyKEBBuildersSdnBhd (“KEBB”) ExpandFactorSdn.Bhd. KEBB 3,490 KEURO&IJM (Notes3and5) EuroplusConstructionSdn.Bhd. KEBB 1,979 KEURO&IJM (Notes3and5) GalianJutaSdn.Bhd. KEBB 1,845 KEURO&IJM (Notes3and5) LestariPuchongSdn.Bhd. KEBB 5,806 KEURO&IJM (Notes3and5) AbraDevelopmentSdn.Bhd. KEBB 1,189 KEURO&IJM (Notes3and5)(B) ConstructionContractCosts chargedbyIJMConstruction Sdn.Bhd.(“IJMC”) EuroplusCorporationSdn.Bhd. IJMC 714 KEURO&IJM (Notes3and5) KenshineCorporationSdn.Bhd. IJMC 8,400 KEURO&IJM (Notes3and5) MaxisegarSdn.Bhd. IJMC 23,607 KEURO&IJM (Notes3and5) SentosaRestuSdn.Bhd. IJMC 20,787 KEURO&IJM (Notes3and5) UkayLandSdn.Bhd. IJMC 17,337 KEURO&IJM (Notes3and5)

ADDITIONAL COMPLIANCE INFORMATIONAs at 31 January 2010 (cont’d)

ANNUALREPORT2010

��

Natureoftransactions undertakenbyTalam Amount CorporationBerhad(“TALAM”) Transacting Transacted Interested and/oritssubsidiaries Company (RM’000) RelatedParty

(C) RentalofOfficePremisesat MenaraMaxisegar, JalanPandanIndah�/�, PandanIndah, ��100KualaLumpur byAbraDevelopmentSdn.Bhd. (“Abra”)

Abra Agrocon(M)Sdn.Bhd. 26 TSDCAC&PSDTNC (Notes1and2) Abra KEBB 698 TSDCAC,PSDTNC

&KEURO (Notes1and3) Abra KonsortiumLPBSdn. 912 TSDCAC,PSDTNC

Bhd. &KEURO (Notes1and3) (D) InterestchargedbyKumpulan EuroplusBerhad(“KEURO”) BukitBeruntungNurseriesSdn.Bhd. KEURO 1 TSDCAC,PSDTNC

&KEURO (Notes1and3)

CekapMesraDevelopmentSdn. KEURO 3 TSDCAC,PSDTNC, Bhd. CheeHengTong& KEURO

EuroplusBerhad KEURO 850 TSDCAC,PSDTNC &KEURO

(Notes1and3)

EuroplusCorporationSdn.Bhd. KEURO 25 TSDCAC,PSDTNC &KEURO

(Notes1and3)

EuroplusConstructionSdn.Bhd. KEURO 58 TSDCAC,PSDTNC &KEURO

(Notes1and3)

ExpandFactorSdn.Bhd. KEURO 18 TSDCAC,PSDTNC &KEURO

(Notes1and3)

GalianJutaSdn.Bhd. KEURO 110 TSDCAC,PSDTNC &KEURO

(Notes1and3)


��

Natureoftransactions undertakenbyTalam Amount CorporationBerhad(“TALAM”) Transacting Transacted Interested

and/oritssubsidiaries Company (RM’000) RelatedParty

(D) InterestchargedbyKumpulan EuroplusBerhad(“KEURO”)(cont’d) IntiJohanSdn.Bhd. KEURO 7 TSDCAC,PSDTNC &KEURO (Notes1and3)

KenshineCorporationSdn.Bhd. KEURO 41 TSDCAC,PSDTNC &KEURO

(Notes1and3)

L.C.B.ManagementSdn.Bhd. KEURO 11 TSDCAC,PSDTNC &KEURO

(Notes1and3)

MaxisegarSdn.Bhd. KEURO 455 TSDCAC,PSDTNC &KEURO

(Notes1and3)

PandanIndahMedicalManagement KEURO 31 TSDCAC,PSDTNC &Sdn.Bhd.KEURO

(Notes1and3)

TALAM KEURO 2,044 TSDCAC,PSDTNC &KEURO

(Notes1and3)

TCBResourcesSdn.Bhd. KEURO 42 TSDCAC,PSDTNC &KEURO

(Notes1and3)

TerangTanahSdn.Bhd. KEURO 13 TSDCAC,PSDTNC &KEURO

(Notes1and3) UkayLandSdn.Bhd. KEURO 1,091 TSDCAC,PSDTNC

&KEURO (Notes1and3) LestariPuchongSdnBhd KEURO 1,564 TSDCAC,PSDTNC

&KEURO (Notes1and3)

(E) InterestchargedbyPengurusan ProjekBersistemSdn.Bhd. (“PPBSB”)

L.C.B.ManagementSdn.Bhd. PPBSB 635 TSDCAC&PSDTNC (Notes1and6) MutualProsperousSdnBhd PPBSB 1,369 TSDCAC&PSDTNC

(Notes1and6)


ANNUALREPORT2010

��


Natureoftransactions undertakenbyTalam Amount CorporationBerhad(“TALAM”) Transacting Transacted Interested

and/oritssubsidiaries Company (RM’000) RelatedParty

(F) InterestchargedbyKeuroLeasing SdnBhd(“KLSB”)

EuroplusCorporationSdnBhd KLSB 1 TSDCAC,PSDTNC

&KEURO (Notes1and3) TALAM KLSB 1,398 TSDCAC,PSDTNC

&KEURO (Notes1and3) IntiJohanSdnBhd KLSB 6 TSDCAC,PSDTNC

&KEURO (Notes1and3) Abra KLSB 2 TSDCAC,PSDTNC

&KEURO (Notes1and3) MaxisegarSdnBhd KLSB 4 TSDCAC,PSDTNC

&KEURO (Notes1and3) (G) InterestchargedbyCekap TropikalSdn.Bhd. MutualProsperousSdn.Bhd. CekapTropikal 708 TSDCAC,PSDTNC, Sdn.Bhd. KEURO&IJM (Notes1,3and5) (H) InterestchargedbyGoodDebut Sdn.Bhd. G.L.DevelopmentSdn.Bhd. GoodDebut 253 TSDCAC,PSDTNC, Sdn.Bhd. KEURO&IJM (Notes1,3and5) (I) InterestchargedbySierraUkay Sdn.Bhd. TerangTanahSdn.Bhd. SierraUkaySdn.Bhd. 484 TSDCAC,PSDTNC, KEURO&IJM (Notes1,3and5)

��


Notes : 1 Tan Sri Dato’ (Dr) Ir Chan Ah Chye @ Chan Chong Yoon (“TSDCAC”) is a Director of TALAM. TSDCAC and

Puan Sri Datin Thong Nyok Choo (“PSDTNC”), the spouse of TSDCAC are the Major Shareholders of Talam. As at 31 January 2010, TSDCAC and PSDTNC have direct and deemed equity interest of 35.27% in TALAM. TSDCAC and PNSTNC are deemed interested in the shares of all subsidiary companies of TALAM to the extent TALAM has an interest.

2 TSDCAC is the brother of Chan Keat Wan, a Director and Major Shareholder of Agrocon (M) Sdn Bhd.

3 TSDCAC and PSDTNC are Directors and Major Sahreholders of Kumpulan Europlus Berhad (“KEURO”) which

owns 60.65% equity interest in TALAM as at 31 January 2010. 4 Mr Chee Heng Tong is a Director of KEURO and Major Shareholder of Cekap Mesra Development Sdn Bhd

5 IJM Corporation Berhad holds 25% equity in KEURO 6 PSDTNC is a Director of Pengurusan Projek Bersistem Sdn Bhd (“PPBSB”). TSDCAC and PSDTNC have

direct and deemed interest in PPBSB. 7 TSDCAC and PSDTNC have direct and indirect equity interest in Venue Venture Sdn Bhd for the past 6

months.

ANNUALREPORT2010

��

STATEMENT ON INTERNAL CONTROL

TheBoardofDirectorsispleasedtoprovidethefollowingstatementwhichoutlinesthekeyelementsoftheinternalcontrolsystemwithintheGroupforthecurrentfinancialyear.

RESPONSIBILITY

TheBoardrecognisesitsresponsibilityfortheGroup’ssystemofinternalcontrolsandforreviewingitsadequacyandintegrity.Thesystemofinternalcontrolsisdesignedtomanage,ratherthaneliminate,theriskoffailuretoachievethebusinessobjectivesoftheGroup.Inpursuingtheseobjectives,internalcontrolscanonlyprovidereasonableandnotabsoluteassuranceagainstmaterialmisstatementorloss.Thesystemofinternalcontrolsincorporates,interalia,riskmanagement,financial,operationalandcompliancecontrolsaswellasthegovernanceprocess.

RISKMANAGEMENTFRAMEWORK

TheBoardhasestablishedanorganisationalstructurewithclearlydefinedlinesofaccountabilityanddelegatedauthority.IthasextendedtheresponsibilitiesoftheAuditCommitteetoincludetheworkofmonitoringallinternalcontrolonitsbehalf,withtheassistanceoftheinternalauditfunction.TheGrouphasputinplaceaRiskManagementCommittee(“RMC”),whichischairedbytheGroup’sExecutiveDirectorandincludesrepresentativesfromallthedivisions.Eachbusinessdivision’sriskmanagementfunctionisledbytherespectiveheadofthedivision.TheRMCistaskedtodevelopandmaintainaneffectiveriskmanagementsystemintheGroup.Itsreviewscovermatterssuchasresponsestosignificantrisksidentified,changestointernalcontrolsystemandoutputfrommonitoringprocesses.ItreportstotheAuditCommittee,whichdedicatesseparatetimefordiscussionofthissubject.

INTERNALAUDITFUNCTION

TheGroup’sInternalAuditDepartmentreportsindependentlytotheAuditCommittee.TheAuditCommitteereviewsandapprovestheinternalauditplan,whichwasdevelopedandbasedonthefinalisedkeyriskprofileoftheGroup,onanannualbasis.TheInternalAuditDepartmentprovidedreportsonkeyfindingsandprogressofareasauditedtotheAuditCommitteeonaquarterlybasis.

All recommendations proposed in improving the internal controls were considered and appropriate correctivemeasureshavebeenimplementedbythemanagementtorectifytheshortcomingsandpreventfurtherrecurrenceofissuesandfindingshighlighted.Alltheinternalcontrolsinstitutedwereapplicableandintact.

OTHERKEYELEMENTSOFINTERNALCONTROLS

OtherkeyelementsoftheGroup’ssystemofinternalcontrolsare:-

• theGroup’sinternalauditfunctionperformsregularreviewsofbusinessprocessestoassesstheeffectivenessofinternalcontrolsandreportsaremaderegularlytotheAuditCommittee.

• operationalorganisationstructurewithdefinedlinesofresponsibilitiesanddelegationofauthority.Aprocessof hierarchical reporting has been established, which provides for a documented and auditable trail ofaccountability.

�0

• managementreports,whicharepresentedbytherespectivedivisionheadtotheBoardeachquarter,providesfinancialinformation,includingkeyperformanceindicatorsandinformationofsignificantchangesinaccountingstandardsandreporting.

• monthlyExecutiveCommitteemeetingsconvenedtodiscusstheGroup’soperationsandperformance.Themeetingsenabletheregularmonitoringofresultsagainstbudget,withsignificantvarianceexplainedandappropriateactiontaken.

• definedlimitsofauthorityforvarioustransactions,includingpurchasingandpayments.

• StandingInstructionsandStandardOperatingProceduresofalldepartmentsareregularlyreviewedand up-datedtoensureeffectivemanagementoftheGroup’soperations.

• MonitoringoffinancialresultsbytheAuditCommitteeandtheBoardeveryquarter.

TheBoardand themanagement continue to takemeasures to strengthen the internal control environment tosafeguardtheshareholders’investmentandtheGroup’sassets.

ThisStatementismadeinaccordancewiththeresolutionapprovedbytheBoardofDirectorson29June2010.

STATEMENT ON INTERNAL CONTROL (cont’d)

ANNUALREPORT2010

�1

COMPOSITIONMembersoftheCommittee Designation

1. TsenKengYam(Chairman) IndependentNon-ExecutiveDirector (MemberoftheMalaysianInstituteof

Accountants)2. Dato’KamaruddinBinMatDesa IndependentNon-ExecutiveDirector

3. WinstonMahYatKong IndependentNon-ExecutiveDirector

TERMSOFREFERENCE

ThefollowingtermsofreferenceoftheAuditCommitteehavebeenadopted.

Constitution

TheAuditCommitteewasestablishedbytheBoardofDirectorson24February,1994.

Membership

TheCommitteeshallbeappointedbytheBoardofDirectorsfromamongsttheirnumbersandshallconsistofnotlessthan3members,ofwhomamajorityshallbeindependentdirectors.AnindependentdirectorshallbeonewhofulfilstherequirementasprovidedintheListingRequirementsofBursaMalaysiaSecuritiesBerhad.

AtleastonememberoftheAuditCommitteemustbeamemberoftheMalaysianInstituteofAccountants,orifheisnotamemberoftheMalaysianInstituteofAccountants,hemusthave:-

(i) atleast3years’workingexperienceandpassedtheexaminationsspecifiedinPart1ofthe1stScheduleoftheAccountantsAct1967;or

(ii) atleast3years’workingexperienceandisamemberofoneoftheassociationsofaccountantsspecifiedinPart11ofthe1stScheduleoftheAccountantsAct1967;or

(iii) adegree/masters/doctorateinaccountingorfinanceandatleast3years’postqualificationexperienceinaccountingorfinance;or

(iv) atleast7years’experiencebeingachieffinancialofficerofacorporation,orhavingthefunctionofbeingprimarilyresponsibleforthemanagementofthefinancialaffairsofacorporation.

ThemembersoftheAuditCommitteeshallelectaChairmanfromamongsttheirnumber,whoshallbeanindependentdirector.IfamemberoftheAuditCommitteeresigns,diesorforanyotherreasonceasestobeamemberwiththeresultthatthenumberofmembersisreducedtobelow3,theBoardofDirectorsshall,within3monthsofthatevent,appointsuchnumberofnewmembersasmayberequiredtomakeuptheminimumnumberof3members.

NoalternatedirectorcanbeappointedasamemberoftheAuditCommittee.

AUDIT COMMITTEE REPORT

��

Authority

TheAuditCommitteeisgrantedtheauthoritytoinvestigateanyactivityofitsCompanyanditssubsidiarieswithinitstermsofreference.Inparticular,theAuditCommitteehastheauthorityto:-

(i) haveresources,whicharerequiredtoperformitsduties;

(ii) havefullandunrestrictedaccesstoanyinformation,includinganyinformationitrequiresfromanyemployee,andallemployeesaredirectedtoco-operatewithanyrequestmadebytheAuditCommittee;

(iii) beabletoobtainindependentprofessionalorotheradvice;and

(iv) havedirectcommunicationchannelswiththeexternalandinternalauditors.

MeetingsandReportingProcedures

TheAuditCommitteewillmeetatleastfour(4)timesayear.Aquorumforameetingshallbetwomembers,bothbeingindependentdirectors.Atleasttwiceayear,theAuditCommitteeshallmeetwiththeexternalauditorswithoutanyexecutivedirectorsbeingpresent.Theexternalauditormayrequestforameeting,iftheyconsidernecessary.

ThedirectorsandemployeeswillattendanyparticularAuditCommitteemeetingonlyattheAuditCommittee’sinvitation,specifictotherelevantmeeting.

TheCompanySecretaryshallbethesecretaryoftheAuditCommittee.Minutesofthemeetingshallbedulyenteredinthebooksprovidedtherefore.TheminuteswillbecirculatedtoallmembersoftheBoardofDirectorsandshallbepresentedattheBoardofDirectors’meeting.

DutiesandFunctions

ThedutiesandfunctionsoftheAuditCommitteeshallbe:-

(i) Toconsidertheappointmentoftheexternalauditor,theauditfeeandanyquestionsoftheresignationordismissaloftheexternalauditorbeforemakingarecommendationtotheBoardofDirectors;

(ii) Todiscusswithexternalauditorsbeforetheauditcommences,theauditplan,thenatureandscopeoftheauditandensureco-ordinationwheremorethanoneauditfirmisinvolved;

(iii) Toreviewthequarterlyresultsandyear-endfinancialstatementspriortotheapprovalbytheBoard,focusingparticularlyon:

(a) Anychangesintheaccountingpoliciesandpractices;

(b) Significantandunusualevents;

(c) Thegoingconcernassumption;

(d) Compliancewithaccountingstandards,stockexchangeandlegalrequirements;

(iv) To reviewany relatedparty transactionandconflictof interest situation thatmayarise in theCompany,includinganytransaction,procedureorcourseofconductthatraisesquestionofmanagementintegrity;

(v) Todiscussproblemsandreservationsarisingfromtheinterimandfinalaudits,andmatterstheauditormaywishtodiscuss(intheabsenceofmanagementwherenecessary);

AUDIT COMMITTEE REPORT (cont’d)

ANNUALREPORT2010

��

(vi) Inrelationtointernalauditfunction:-

(a) toreviewtheadequacyofthescope,functions,competencyandresourcesoftheinternalauditfunctionthatithasthenecessaryauthoritytocarryoutitswork;

(b) toreviewtheinternalauditprogrammeandresultsoftheinternalauditprocessand,wherenecessary,ensurethatappropriateactionsaretakenontherecommendationsoftheinternalauditfunction;

(c) toreviewanyappraisalorassessmentoftheperformanceofmembersoftheinternalauditfunction;

(d) toapproveanyappointmentorterminationofseniorstaffmembersoftheinternalauditfunction;

(e) totakecognizanceofresignationsofinternalauditstaffmembersandprovidetheresigningstaffmemberanopportunitytosubmithisreasonsforresigning;

(vii) Tokeepunderreview,theeffectivenessoftheinternalcontrolsystemandinparticularreviewtheexternalauditor’smanagementletterandmanagement’sresponse;

(viii) Toreviewtheauditreports;

(ix) ToreviewthereportsoftheRiskManagementCommittee;

(x) ToprepareperiodicreportstotheBoardofDirectors,summarisingtheworkperformedinfulfillingtheAuditCommittee’sprimaryresponsibilities;and

(xi) Toconsiderothertopics,asdefinedbytheBoardofDirectors.

ATTENDANCEATAUDITCOMMITTEEMEETINGS

Duringthefinancialyearended31January2010,thereweresix(6)AuditCommitteemeetingsheldandthenumberofmeetingsattendedbyeachAuditCommitteememberareasfollows:

NumberofMeetingsattended AuditCommitteeMember byAuditCommitteeMember

1. TsenKengYam 6outof62. Dato’KamaruddinBinMatDesa 6outof6

3. WinstonMahYatKong 5outof6

TheHeadofFinanceandtheHeadofInternalAuditwouldnormallyattendallAuditCommitteemeetingsattheinvitationoftheAuditCommittee.

SUMMARYOFAUDITCOMMITTEEACTIVITIES

Duringthefinancialyearended31January2010,theAuditCommitteecarriedoutitsdutiesinaccordancewithitstermsofreference,asfollows:-

(a) ReviewedthequarterlyfinancialresultspriortorecommendforconsiderationandapprovalbytheBoardofDirectors;

(b) Reviewedanddiscussedwiththeexternalauditorstheauditplanningmemorandumbeforecommencementoftheyearendaudit;


��

(c) Reviewedanddiscussedwithexternalauditors’findingsduringthecourseoftheiryearendauditandthemanagement’sresponse;

(d) ReviewedannualfinancialstatementsandrecommendforapprovalbytheBoardofDirectors;

(e) Reviewedanddeliberatedtherecurrentrelatedpartytransactions;

(f) Reviewedandapprovedtheinternalauditplan;

(g) Reviewedanddeliberatedtheinternalauditreports;and

(h) ReviewedtheRiskManagementCommittee’sreportsandassessment.

INTERNALAUDITFUNCTION

TheAuditCommitteeissupportedinitsdutiesbytheinternalauditfunction.TheCommitteeisawareofthefactthattheinternalauditfunctionisessentialtoassistinobtainingtheassuranceandconsultingservicesitrequires,regardingtheeffectivenessofthesystemofinternalcontrolintheGroup.

Theprimaryobjectiveoftheinternalauditfunctionistoreviewtheeffectivenessofthesystemofinternalcontrolandthisisperformedwithimpartiality,proficiencyanddueprofessionalcare.TheinternalauditfunctionenablestheAuditCommitteetodischargeitsdutiesbyundertakingindependentregularandsystematicreviewsofthesystemofinternalcontrol,soastoprovidereasonableassurancethatsuchsystemcontinuetooperatesatisfactorilyandeffectively.

However,duetocontinuedreducedbusinessactivitiesinthegroup,theinternalauditactivitieswerealsoscaleddownaccordingly.Totalstaffcostincurredinrespectoftheinternalauditfunctionduringthefinancialyearended31January2010wasRM103,065.

Duringthefinancialyear,thefollowingmaininternalauditactivitieswerecarriedout:-

i. Conductedinternalauditinaccordancewiththeriskbased/driveninternalauditplan.Atotalofthree(3)routineauditsandone(1)followupauditwerecarriedoutduringtheyear;

ii. ReviewedtheinternalcontrolproceduresasstipulatedintheGroup’sStandingInstructionsandStandardofOperatingProcedures.Duringthesameperiod,StandingInstructionsandStandardofOperatingProceduresofthedepartmentswerebeingjointlyreviewedandupdated,andpracticalinternalcontrolprocedureswereincorporated;

iii. Carriedout3specialreviewsasrequestedbymanagementand/orAuditCommittee;

iv. ReviewstherecurrentrelatedpartytransactionsoftheCompanyanditsGroupandmadethenecessaryrecommendation.

Allinternalauditreports,whichweredeliberatedbytheAuditCommitteeandrecommendationsmadetotheBoardand/ortheManagement,wereactedupon.


36 Directors’Report

42 BalanceSheets

44 IncomeStatements

45 ConsolidatedStatement ofChangesinEquity

46 Statementof ChangesinEquity

47 CashFlowStatements 50 Notestothe FinancialStatements

126 StatementbyDirectors

126 StatutoryDeclaration

127 IndependentAuditors’Report

FINANCIALSTATEMENTS

36

ThedirectorsherebysubmittheirreporttogetherwiththeauditedfinancialstatementsoftheGroupandoftheCompanyforthefinancialyearended31January2010.

PRINCIPAL ACTIVITIES

TheprincipalactivitiesoftheCompanyduringthefinancialyearwerethatoftheprovisionofmanagementservices,investmentholdingandpropertydevelopment.

TheprincipalactivitiesofthesubsidiariesoftheCompanyarestatedinNote40tothefinancialstatements.

Therehavebeennosignificantchangesinthenatureoftheseprincipalactivitiesduringthefinancialyear.

RESULTS

Group Company RM’000 RM’000

Profitforthefinancialyear 9,022 27,546

Attributableto: EquityholdersoftheCompany 8,313 27,546 Minorityinterests 709 –

9,022 27,546

DIVIDEND

NodividendwaspaidordeclaredbytheCompanysincetheendofthepreviousfinancialyear.

Thedirectorsdonotrecommendthepaymentofanydividendsinrespectofthefinancialyearended31January2010.

RESERVES AND PROVISIONS

Allmaterial transfers toand fromreservesandprovisionsduring thefinancialyearhavebeendisclosed in thefinancialstatements.

BAD AND DOUBTFUL DEBTS

BeforetheincomestatementsandbalancesheetsoftheGroupandoftheCompanyweremadeout,thedirectorstookreasonablestepstoascertainthatactionhadbeentakeninrelationtothewritingoffofbaddebtsandthemakingofallowancefordoubtfuldebts,andhadsatisfiedthemselvesthatallknownbaddebtshadbeenwrittenoffandadequateallowancehadbeenmadefordoubtfuldebts.

Atthedateofthisreport,thedirectorsarenotawareofanycircumstancesthatwouldrendertheamountwrittenoffforbaddebtsortheamountoftheallowancefordoubtfuldebtsinthefinancialstatementsoftheGroupandoftheCompanyinadequatetoanysubstantialextent.

DIRECTORS’ REPORT

ANNUALREPORT2010

37

CURRENT ASSETS

BeforetheincomestatementsandbalancesheetsoftheGroupandoftheCompanyweremadeout,thedirectorstookreasonablestepstoensurethatanycurrentassets,otherthandebts,whichwereunlikelytoberealisedintheordinarycourseofbusiness,theirvaluesasshownintheaccountingrecordsoftheGroupandoftheCompanyhadbeenwrittendowntoanamountthattheymightbeexpectedtoberealised.

Atthedateofthisreport,thedirectorsarenotawareofanycircumstancesthatwouldrenderthevaluesattributedtothecurrentassetsinthefinancialstatementsoftheGroupandoftheCompanymisleading.

VALUATION METHODS

At the date of this report, the directors are not aware of any circumstances which have arisen which renderadherencetotheexistingmethodofvaluationofassetsorliabilitiesoftheGroupandoftheCompanymisleadingorinappropriate.

CONTINGENT AND OTHER LIABILITIES

Atthedateofthisreport,theredoesnotexist:-

(i) anychargeontheassetsoftheGroupandoftheCompanythathasarisensincetheendofthefinancialyearwhichsecurestheliabilitiesofanyotherperson;or

(ii) anycontingentliabilitiesinrespectoftheGroupandoftheCompanythathavearisensincetheendofthefinancialyear.

Intheopinionofthedirectors,nocontingentliabilitiesorotherliabilitiesoftheGroupandoftheCompanyhavebecomeenforceable,orislikelytobecomeenforceablewithintheperiodoftwelvemonthsaftertheendofthefinancialyearwhich,willormaysubstantiallyaffecttheabilityoftheGroupandoftheCompanytomeettheirobligationsasandwhentheyfalldue.

CHANGE OF CIRCUMSTANCES

Atthedateofthisreport,thedirectorsarenotawareofanycircumstances,nototherwisedealtwithinthisreportorthefinancialstatementsoftheGroupandoftheCompanythatwouldrenderanyamountstatedinthefinancialstatementsmisleading.

ITEMS OF AN UNUSUAL NATURE

TheresultsoftheoperationsoftheGroupandoftheCompanyforthefinancialyearwerenot,intheopinionofthedirectors,substantiallyaffectedbyanyitem,transactionoreventofamaterialandunusualnature.

Noitem,transactionoreventofamaterialandunusualnaturehasarisenintheintervalbetweentheendofthefinancialyearandthedateofthisreportwhichislikelytoaffectsubstantiallytheresultsoftheoperationsoftheGroupandoftheCompanyforthefinancialyearinwhichthisreportismade.

DIRECTORS’ REPORT (cont’d)

38

ISSUE OF SHARES AND DEBENTURES

Duringthefinancialyear,

a) On16February2009,theCompanycompletedthesharesplitinvolvingthesubdivisionofeveryone(1)existingordinaryshareofRM0.60eachintheCompanyintothree(3)ordinarysharesofRM0.20eachintheCompany(“ShareSplit”).AsaresultoftheShareSplit,643,579,444ordinarysharesofRM0.60eachintheCompanyhavebeensubdividedinto1,930,738,332ordinarysharesofRM0.20eachintheCompany.Concurrently,theauthorisedsharecapitaloftheCompanyhadincreasedtoRM2,000,000,000dividedinto8,000,000,000ordinarysharesofRM0.20each,1,500,000,000redeemableconvertiblepreferencesharesofRM0.20eachand1,000,000,000irredeemableconvertiblepreferencesharesofRM0.10each.

b) 458,043,207 redeemable convertible preference shares (“RCPS”) of RM0.20 each were converted into458,043,207newordinarysharesofRM0.20each.The issuedandpaid-upordinarysharecapitalof theCompanywasincreasedfromRM386,147,666toRM477,756,308.

c) PursuanttotheRegularisationPlanasdisclosedinNote39tothefinancialstatements:-

(i) theCompanyhadon24June2009,issuedfour(4)classesofredeemableconvertiblesecuredloanstocks(“RCSLS”)withanaggregateamountofuptoRM356,256,581nominalvalueofRCSLSat100%ofitsnominalvaluecomprising1,781,282,905unitsofRCSLSofRM0.20eachasdetailedbelow:

Class Lenders Amount (RM)

RCSLS–A RHBInvestmentBank 50,328,000RCSLS–B EONBank/EONCAPIslamicBankBerhad 17,922,581RCSLS–C HoldersofMuNIF 171,000,000RCSLS–D HoldersofBaIDsofMaxisegarSdn.Bhd. 117,000,000

356,250,581

AnadditionalRM2,000nominalvalueofRCSLSwillbeissuedforeachofRCSLS-B,RCSLS-CandRCSLS-Dat100%oftheirnominalvaluetoselectedinvestorstofacilitatethelistingoftheRCSLS-B,RCSLS-CandRCSLS-DontheMainMarketofBursaMalaysiaSecuritiesBerhad,suchthattherewillbe100holdersforeachclass,withtheholdersholding100unitsofRCSLSofRM0.20each.TheRM50,328,000nominalvalueofRCSLS-Awillnotbelisted.

EachclassofRCSLShasatenureof5yearsfromthedateofissueandissecuredontheassetsoftheGroup.ThesalientfeaturesoftheRCSLSaredisclosedinNote22tothefinancialstatements.

(ii) the Company had issued RM257,402,000 redeemable convertible preference shares (“RCPS”)comprising1,287,010,000RCPSofRM0.20each.

Thenewordinarysharesissuedduringthefinancialyear,arisingfromtheconversionofRCPS,rankparipassuinallrespectswiththeexistingordinarysharesoftheCompanyexceptthattheholdersthereofshallnotbeentitledtoanydividends,rights,allotmentsand/orotherdistributionswheretheentitlementdateofwhichprecedesthedateofallotmentofthenewordinarysharesoftheCompany.


ANNUALREPORT2010

39

TREASURY SHARES

During the financial year, the Company did not repurchase any of its issued ordinary shares from the openmarket.

Asat31January2010, theCompanyheldas treasurysharesa totalof2,464,240of its2,388,781,539 issuedordinaryshares.SuchtreasurysharesareheldatacarryingamountofRM492,848andfurtherrelevantdetailsaredisclosedinNote19tothefinancialstatements.

TheordinarysharesrepurchasedarebeingheldastreasurysharesinaccordancewithSection67AoftheCompaniesAct,1965.

SHARE OPTION

NooptionsweregrantedtoanypersontotakeupunissuedsharesoftheCompanyduringthefinancialyear.

DIRECTORS

ThenamesofthedirectorsoftheCompanyinofficesincethedateofthelastreportandatthedateofthisreportare:-

TsenKengYamTanSriDato’(Dr.)Ir.ChanAhChye@ChanChongYoonDato’KamaruddinbinMatDesaChuaKimLanLoyBoonChenWinstonMahYatKongNgBeeKen (Appointedon21.5.2010)LeeSweeSeng (Resignedon21.5.2010)Y.A.M.TengkuSulaimanShahAl-HajIbniAl-MarhumSultan SalahuddinAbdulAzizShahAl-Haj (Resignedon28.9.2009)

DIRECTORS’ INTERESTS

Accordingtotheregisterofdirectors’shareholdingskeptbytheCompanyunderSection134oftheCompaniesAct,1965,theinterestsofthosedirectorswhoheldofficeattheendofthefinancialyearinsharesintheCompanyanditsrelatedcorporationduringthefinancialyearended31January2010areasfollows:-

Number of ordinary shares Acquired/ At Converted/ At 1.2.2009 Share split Disposed 31.1.2010

The Company

Par value of ordinary share * RM0.60 RM0.60/ RM0.20 RM0.20 RM0.20

Direct interest

TanSriDato’(Dr.)Ir.ChanAhChye @ChanChongYoon 43,589,864 87,179,728 – 130,769,592ChuaKimLan 74,013 148,026 – 222,039LoyBoonChen 304,300 608,600 – 912,900


40

DIRECTORS’ INTERESTS (cont’d)

Number of ordinary shares Acquired/ At Converted/ At 1.2.2009 Share split Disposed 31.1.2010

Indirect interest

TanSriDato’(Dr.)Ir.ChanAhChye @ChanChongYoon 288,837,181 577,674,376 (154,828,800) 711,682,757#ChuaKimLan 9,375 18,750 – 28,125̂

* ParvaluereducedfromRM0.60toRM0.20duetoShareSplitpursuanttotheRegularisationPlanasdisclosedinNote39tothefinancialstatements.

# Deemedinterestedthroughhisspouse,PuanSriDatinThongNyokChoo,hisdaughter,ChanSiuWeiandbyvirtueofhisinterestinKumpulanEuroplusBerhad,PengurusanProjekBersistemSdn.Bhd.,SzeChoonHoldingsSdn.Bhd.andProsperousInnSdn.Bhd.pursuanttoSection6AoftheCompaniesAct,1965.

^ Deemedinterestedthroughherspouse,ChinCheeMengpursuanttoSection6AoftheCompaniesAct,1965.

TanSriDato’(Dr.)Ir.ChanAhChye@ChanChongYoon,byvirtueofhisinterestinthesharesoftheCompany,isalsodeemedinterestedinthesharesofalltheCompany’ssubsidiariestotheextenttheCompanyhasaninterest.

Otherthanasdisclosedabove,noneoftheotherdirectorsinofficeattheendofthefinancialyearhadanyinterestinsharesintheCompanyanditsrelatedcorporationsduringthefinancialyear.

DIRECTORS’ BENEFITS

Sincetheendofthepreviousfinancialyear,nodirectoroftheCompanyhasreceivedorbecomeentitledtoreceiveabenefit(otherthanbenefitsincludedintheaggregateamountofemolumentsreceivedordueandreceivablebythedirectorsshowninthefinancialstatements)byreasonofacontractmadebytheCompanyorarelatedcorporationwiththedirectororwithafirmofwhichthedirectorisamember,orwithacompanyinwhichthedirectorhasasubstantialfinancialinterest.

NeitherduringnorattheendofthefinancialyearwastheCompanyapartytoanyarrangementwhoseobjectwastoenablethedirectorstoacquirebenefitsbymeansoftheacquisitionofsharesin,ordebenturesof,theCompanyoranyotherbodycorporate.

SIGNIFICANT EVENTS AND EVENTS AFTER THE BALANCE SHEET DATE

SignificanteventsduringthefinancialyearandeventsafterthebalancesheetdatearedisclosedinNotes41and42tothefinancialstatements.


ANNUALREPORT2010

41

AUDITORS

Theauditors,MessrsBakerTillyMonteiroHeng,haveexpressedtheirwillingnesstocontinueinoffice.

OnbehalfoftheBoard,

…………………………………….CHUA KIM LANDirector

……………………………………....LOY BOON CHENDirector

KualaLumpur

Date:31May2010


42

BALANCE SHEETSas at 31 January 2010

Group Company 2010 2009 2010 2009 Note RM’000 RM’000 RM’000 RM’000

Non-current assetsProperty,plantandequipment 5 123,701 128,194 1,255 1,477Landheldforproperty development 6(a) 1,214,598 1,131,204 18,126 18,126Investmentproperties 7 193,403 198,275 – –Prepaidleasepayments 8 9,735 10,431 – –Goodwill 9 26,822 28,408 – –Investmentinsubsidiaries 10 – – 344,801 344,801Investmentinassociates 11 – – – –Interestinjointlycontrolled entities 12 10,962 9,218 – –Amountowingbysubsidiaries 10(a) – – 750,194 –Amountowingbyassociates 11(c) 26,124 26,186 3 84Amountowingbyjointly controlledentities 12(b) 187 183 187 183Sinkingfundsheldbytrustees 13 4,198 8,723 – –Longtermreceivables 16(d) 10,060 – – –

Total non-current assets 1,619,790 1,540,822 1,114,566 364,671

Current assets Propertydevelopmentcosts 6(b) 1,146,333 1,192,159 95,617 95,617Inventories 14 66,539 68,766 5,687 5,687Tradereceivables 15 217,308 92,883 – –Otherreceivables,deposits andprepaidexpenses 16 165,636 125,296 20,578 14,574Cashandbankbalances 17 12,133 17,517 212 37

Total current assets 1,607,949 1,496,621 122,094 115,915

TOTAL ASSETS 3,227,739 3,037,443 1,236,660 480,586

Theaccompanyingnotesformanintegralpartofthesefinancialstatements.

ANNUALREPORT2010

43


EQUITY AND LIABILITIES

Capital and ReservesSharecapital 18 477,757 386,148 477,757 386,148Treasuryshares 19 (493) (493) (493) (493)Reserves 20 131,317 5,282 76,107 (60,618)

Equityattributabletoequity holdersoftheCompany 608,581 390,937 553,371 325,037Minorityinterests 4,235 3,526 – –

Total equity 612,816 394,463 553,371 325,037

Non-current liabilitiesBorrowings 21(A) 218,866 85,858 134,213 –Convertiblesecurities 22 390,186 – 390,186 –Longtermpayables 23 78,009 79,625 – –Amountowingtosubsidiaries 10(a) – – – 1,759Amountowingtojointly controlledentities 12(b) 48,756 46,178 – –Deferredtaxliabilities 24 37,765 4,205 32,966 –Provisionforliabilities 25 43,614 43,614 – –

Total non-current liabilities 817,196 259,480 557,365 1,759

Current liabilitiesProvisionforliabilities 25 11,301 52,698 – –Borrowings 21(B) 312,869 666,573 38,828 76,210Tradepayables 26 457,262 288,626 2,590 2,590Otherpayablesandaccrued expenses 27 823,562 802,306 84,172 74,656Deferredprogressbillings 28 – 391,613 – –Currenttaxliabilities 192,733 181,684 334 334

Total current liabilities 1,797,727 2,383,500 125,924 153,790

Total liabilities 2,614,923 2,642,980 683,289 155,549

TOTAL EQUITY AND LIABILITIES 3,227,739 3,037,443 1,236,660 480,586


BALANCE SHEETS (cont’d)as at 31 January 2010

44

INCOME STATEMENTSfor the financial year ended 31 January 2010


Revenue 29 253,714 301,278 – –Costofsales 30 (145,257) (273,539) – –

Grossprofit 108,457 27,739 – –Otheroperatingincome 46,816 164,210 52,734 32,306Administrativeandother expenses (83,744) (76,944) (3,222) (7,166)Financecosts 31 (56,028) (53,573) (25,393) (20,853)Shareofresultsofjointly controlledentities 12 1,744 (869) – –

Profit before tax 32 17,245 60,563 24,119 4,287Incometax(expense)/credit 35 (8,223) 152 3,427 (10)

Profit for the financial year 9,022 60,715 27,546 4,277

Attributable to: EquityholdersoftheCompany 8,313 59,105 27,546 4,277 Minorityinterests 709 1,610 – –

9,022 60,715 27,546 4,277

Earningspershare attributabletoequityholders oftheCompany: Basic(sen) 36 0.42 9.39

Diluted(sen) 36 0.41 9.39


ANNUALREPORT2010

45

CONSOLIDATED STATEMENT OF CHANGES IN EQUITYfor the financial year ended 31 January 2010

Attributable to Equity Share Share Treasury Convertible Capital Accumulated Holders of Minority Total Capital Premium* Shares Securities Reserve* Losses the Company Interest Equity RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000Group (Note 18) (Note 19) (Note 20) (Note 20) (Note 20)

At 1 February 2008 643,015 124,551 (844) – 37,547 (459,809) 344,460 1,783 346,243Foreigncurrency translation,representing netexpenserecognised directlyinequity – – – – (13,193) – (13,193) – (13,193)Profitforthe financialyear – – – – – 59,105 59,105 1,610 60,715Capitalreduction (257,432) – 351 – – 257,081 – – –Sharepremiumreduction – (124,551) – – – 124,551 – – –Acquisitionofsubsidiaries – – – – – – – 133 133Decreaseinliability componentofICPS 565 – – – – – 565 – 565

At 31 January 2009 386,148 – (493) – 24,354 (19,072) 390,937 3,526 394,463Foreigncurrency translation,representing netexpenserecognised directlyinequity – – – – 8,543 – 8,543 – 8,543Profitforthefinancialyear – – – – – 8,313 8,313 709 9,022Issuedduringthefinancialyear – – – 200,788 – – 200,788 – 200,788Convertedduringthe financialyear 91,609 – – (91,609) – – – – –

At 31 January 2010 477,757 – (493) 109,179 32,897 (10,759) 608,581 4,235 612,816

* nondistributable


46

STATEMENT OF CHANGES IN EQUITYfor the financial year ended 31 January 2010

Share Share Treasury Convertible Accumulated Total Capital Premium* Shares Securities Losses Equity RM’000 RM’000 RM’000 RM’000 RM’000 RM’000Company (Note 18) (Note 19) (Note 20) (Note 20)

At 1 February 2008 643,015 124,551 (844) – (446,527) 320,195

Profitforthe financialyear – – – – 4,277 4,277Capitalreduction (257,432) – 351 – 257,081 –Sharepremiumreduction – (124,551) – – 124,551 –Decreaseinliability componentofICPS 565 – – – – 565

At 31 January 2009 386,148 – (493) – (60,618) 325,037

Profitfortheyear – – – – 27,546 27,546Issuedduringthe financialyear – – – 200,788 – 200,788Convertedduring thefinancialyear 91,609 – – (91,609) – –

At 31 January 2010 477,757 – (493) 109,179 (33,072) 553,371

* nondistributable


ANNUALREPORT2010

47

CASH FLOW STATEMENTSfor the financial year ended 31 January 2010

Group Company 2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000

CASH FLOWS FROM OPERATING ACTIVITIESProfitbeforetax 17,245 60,563 24,119 4,287Adjustmentsfor:- Interestexpenses: -borrowings 36,790 53,573 11,685 20,853 -convertiblesecurities 13,708 – 13,708 – Allowancefordoubtfuldebts 22,676 17,071 – 3,550 Landanddevelopmentcosts writtenoff – 41 – – Provisionforliabilities – 738 – – Depreciation/amortisation: -property,plantandequipment 6,899 7,602 222 226 -investmentproperties 2,577 4,102 – – -prepaidleasepayments 696 695 – – Allowanceforwritedownininventories 1,412 1,617 – – Baddebtswrittenoff 320 409 – – (Gain)/Lossondisposalof: -property,plantandequipment (307) 313 – – -investmentproperties – 233 – – -subsidiaries (774) – – –Impairmentlossongoodwill 1,586 – – –Investmentpropertieswrittenoff 2,295 – – –Writebackofallowancefordoubtfuldebts: -subsidiaries – – – (19,604) -thirdparties (13) (2,465) – –Writebackofaccruedexpenses – (1,385) – –Writebackofprovisionforliquidated andascertaineddamages (2,305) – – – Waiverofdebts: -subsidiaries – – (52,537) (4,265) -thirdparties (12,000) (82,958) – – Waiverofinterest – (62,277) – (7,864) Interestincome (2,034) (1,701) – – Shareofresultsofjointly controlledentities (1,744) 869 – –

Operatingprofit/(loss)before workingcapitalchanges 87,027 (2,960) (2,803) (2,817)


48


CASH FLOWS FROM OPERATING ACTIVITIES (cont’d)

Changesinworkingcapital

Propertydevelopmentcosts (26,325) (6,684) – – Subsidiariesbalances – – 7,170 7,084 Inventories 3,193 4,340 – – Receivables (175,357) 132,095 (6,004) 7,324 Payables 117,993 (52,848) 10,187 905

Cashgeneratedfromoperations 6,531 73,943 8,550 12,496 Interestreceived 2,034 1,701 – – Incometaxespaid (39) (83) – – Interestpaid (433) (5,249) (126) (247) Paymentforliquidatedand ascertaineddamages (767) (1,440) – –

NetCashGeneratedFrom OperatingActivities 7,326 68,872 8,424 12,249

CASH FLOWS FROM INVESTING ACTIVITIES Netchangeinassociatesbalances 62 (169) 81 (27) Proceedsfromdisposalof: -property,plantandequipment 605 410 – – -investmentproperties – 300 – –NetchangeinJointly controlledentitiesbalances 2,574 15,906 (4) 5,691 Additionstolandheldfor propertydevelopment – (8,116) – – Amountpaidtolandvendors – (29,356) – – Purchaseofproperty, plantandequipment (2,704) (2,249) – (4) Investmentinjointlycontrolledentities – (10) – – Netcashoutflowarisingfrom disposalofsubsidiaries(Note10b) (23) – – – Netcashinflowarisingfrom acquisitionofsubsidiaries(Note10c) – 518 – –

NetCash(UsedIn)/Generated FromInvestingActivities 514 (22,766) 77 5,660


CASH FLOW STATEMENTS (cont’d)for the financial year ended 31 January 2010

ANNUALREPORT2010

49


CASH FLOWS FROM FINANCING ACTIVITIESNetrepaymentofborrowings (17,304) (36,535) (5,457) (17,064)NetrepaymentofIslamicdebt securities – (1,207) – –Netwithdrawalofsinkingfunds heldbytrustees 4,525 1,078 – –Housingdevelopmentaccounts pledgedassecurityvalues 2,613 (1,223) – –Bankbalancesreleasedas securityvalues 1,896 1,722 – –Depositswithlicensedbanks pledgedassecurityvalues 167 (157) – –Netrepaymentofhirepurchase financing – (16) – –

NetCashUsedInFinancingActivities (8,103) (36,338) (5,457) (17,064)

NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (263) 9,768 3,044 845EFFECTS OF EXCHANGE DIFFERENCES (8) (13,193) – –CASH AND CASH EQUIVALENTS AT THE BEGINNING OF FINANCIAL YEAR (1,171) 2,254 (4,436) (5,281)

CASH AND CASH EQUIVALENTS AT THE END OF FINANCIAL YEAR (Note 17) (1,442) (1,171) (1,392) (4,436)


CASH FLOW STATEMENTS (cont’d)for the financial year ended 31 January 2010

50

NOTES TO THE FINANCIAL STATEMENTS

1. PRINCIPALACTIVITIESANDGENERALINFORMATION

TheprincipalactivitiesoftheCompanyduringthefinancialyearwerethatoftheprovisionofmanagementservices,investmentholdingandpropertydevelopment.TheprincipalactivitiesofthesubsidiariesoftheCompanyarestatedinNote40.Therehavebeennosignificantchangesinthenatureoftheseprincipalactivitiesduringthefinancialyear.

TheCompanyisapubliclimitedliabilitycompany,incorporatedanddomiciledinMalaysiaandlistedontheMainMarketofBursaMalaysiaSecuritiesBerhad.

TheregisteredofficeandtheprincipalplaceofbusinessoftheCompanyislocatedatSuite2.05,Level2,MenaraMaxisegar,JalanPandanIndah4/2,PandanIndah,55100KualaLumpur.

The financial statements are expressed in Ringgit Malaysia rounded to nearest ’000 unless otherwisespecified.

ThefinancialstatementswereauthorisedforissuebytheBoardofDirectorsinaccordancewitharesolutionofthedirectorson31May2010.

2. BASISOFPREPARATION

Thefinancialstatementsof theGroupandof theCompanyhavebeenprepared inaccordancewith theFinancialReportingStandards(“FRS”)andtheprovisionsoftheCompaniesAct,1965inMalaysia.

ThefinancialstatementsoftheGroupandoftheCompanyhavebeenpreparedunderthehistoricalcostbasis.

ThepreparationoffinancialstatementsinconformitywithFRSrequirestheuseofcertaincriticalaccountingestimatesandassumptions that affect the reportedamountsof assets and liabilities anddisclosuresofcontingentassetsand liabilitiesat thedateof thefinancialstatements,andthereportedamountsof therevenueandexpensesduringthereportedperiod.Italsorequiresthedirectors’bestknowledgeofcurrenteventsandactions,andthereforeactualresultsmaydiffer.

Theareasinvolvingahigherdegreeofjudgementorcomplexity,orareaswhereassumptionsandestimatesaresignificanttothefinancialstatementsaredisclosedinNote4.

2.1 NEwANDREVISEDFRS,AMENDMENTSTOFRSANDICINTERPRETATIONS

(a) Adoption of New and Revised FRSs, Amendments/Improvements to FRSs and ICInterpretations

TherearenonewandrevisedFRSs,amendments/improvementstoFRSsandICInterpretations(“ICInt”)thatareeffectiveandapplicabletothefinancialstatementsoftheGroupandoftheCompanyforthefinancialyearended31January2010.

ANNUALREPORT2010

51

NOTES TO THE FINANCIAL STATEMENTS (cont’d)

2. BASISOFPREPARATION(Cont’d)

2.1 NEwANDREVISEDFRS,AMENDMENTSTOFRSANDICINTERPRETATIONS(CONT’D)

(b) NewandRevisedFRSs,Amendments/ImprovementstoFRSsandICIntthatareissuedbutarenotyeteffectiveandhavenotbeenadoptedearly

TheGroupandtheCompanyhavenotadoptedthefollowingnewandrevisedFRSs,amendments/

improvementstoFRSsandICIntthathavebeenissuedasatthedateofauthorisationofthesefinancialstatementsbutarenotyeteffectivefortheGroupandtheCompany:-

Effectivefor financialperiods beginningon orafter

NewFRSs FRS4 InsuranceContracts 1January2010FRS7 FinancialInstruments:Disclosures 1January2010FRS8 OperatingSegments 1July2009FRS139 FinancialInstruments:RecognitionandMeasurement 1January2010 RevisedFRSsFRS1 First-timeAdoptionofFinancialReportingStandards 1July2010FRS3 BusinessCombinations 1July2010FRS101 PresentationofFinancialStatements 1January2010FRS123 BorrowingCosts 1January2010FRS127 ConsolidatedandSeparateFinancialStatements 1July2010 Amendments/ImprovementstoFRSsFRS1 FirsttimeAdoptionofFinancialReportingStandards 1January2010and 1January2011FRS2 Share-basedPayment 1January2010and 1July2010FRS5 Non-currentAssetsHeldforSaleandDiscontinued 1January2010and Operations 1July2010FRS7 FinancialInstruments:Disclosure 1January2010and 1January2011FRS8 OperatingSegments 1January2010FRS107 StatementofCashFlow 1January2010FRS108 AccountingPolicies,ChangesinAccountingEstimates 1January2010 andErrorsFRS110 EventsAftertheReportingPeriod 1January2010FRS116 Property,PlantandEquipment 1January2010FRS117 Leases 1January2010FRS118 Revenue 1January2010FRS119 EmployeeBenefits 1January2010FRS120 AccountingforGovernmentGrantsandDisclosureof 1January2010 GovernmentAssistanceFRS123 BorrowingCosts 1January2010FRS127 ConsolidatedandSeparateFinancialStatements: 1January2010 CostofanInvestmentinaSubsidiary,JointlyControlled EntityorAssociateFRS127 ConsolidatedandSeparateFinancialStatements 1January2010FRS128 InvestmentinAssociates 1January2010FRS129 FinancialReportinginHyperinflationaryEconomies 1January2010

52


2. BASISOFPREPARATION(Cont’d)

2.1 NEwANDREVISEDFRS,AMENDMENTSTOFRSANDICINTERPRETATIONS(CONT’D)

(b) NewandRevisedFRSs,Amendments/ImprovementstoFRSsandICIntthatareissuedbutarenotyeteffectiveandhavenotbeenadoptedearly(Cont’d)

Effectivefor financialperiods beginningon orafter

Amendments/ImprovementstoFRSsFRS131 InterestsinJointVentures 1January2010FRS132 FinancialInstruments:Presentation 1January2010and 1March2010FRS134 InterimFinancialReporting 1January2010FRS136 ImpairmentofAssets 1January2010FRS138 IntangibleAssets 1January2010and 1July2010FRS139 FinancialInstruments:RecognitionandMeasurement 1January2010FRS140 InvestmentProperty 1January2010 ICInt ICInt9 ReassessmentofEmbeddedDerivatives 1January2010and 1July2010ICInt10 InterimFinancialReportingandImpairment 1January2010ICInt11 FRS2–GroupandTreasuryShareTransactions 1January2010ICInt12 ServiceConcessionArrangements 1July2010ICInt13 CustomerLoyaltyProgrammes 1January2010ICInt14 FRS119–TheLimitonaDefinedBenefitAsset, 1January2010 MinimumFundingRequirementsandtheirInteractionICInt15 AgreementsfortheConstructionofRealEstate 1July2010ICInt16 HedgesofaNetInvestmentinaForeignOperation 1July2010ICInt17 DistributionsofNon-CashAssetsofOwners 1July2010

TheGroupand theCompanyplan toadopt theaboveFRSs,amendments/improvements toFRSsandICIntwhentheybecomeeffectiveintherespectivefinancialperiod.Unlessotherwisedescribedbelow,theadoptionoftheaboveFRSs,amendments/improvementstoFRSsandICIntupontheirinitialapplicationarenotexpectedtohaveanysignificantimpactonthefinancialstatementsoftheGroupandoftheCompany.TheGroupandtheCompanyareexemptedfromdisclosingthepossibleimpactifanytothefinancialstatementsuponapplicationofFRS7andFRS139.

ICInt15AgreementsfortheConstructionofRealEstate

ICInt15establishesthatthedeveloperwillhavetoevaluatewhethercontrol,andsignificantrisksandrewardsoftheownershipofworkinprogress,canbetransferredtothebuyerasconstructionprogressesbeforerevenuecanberecognisedaspercentageofcompletionmethod.With ICInt15,theGroupwillhavetochangeitsaccountingpoliciesfromrecognisingrevenueusingpercentageofcompletionmethodtorecognisedrevenueusingcompletionmethod.TheGroupiscurrentlyassessingtheimpactoftheadoptionofthisInterpretation.

ANNUALREPORT2010

53


3. SIGNIFICANTACCOUNTINGPOLICIES

Unlessotherwisestated,thefollowingaccountingpolicieshavebeenusedconsistentlyindealingwithitemswhichareconsideredmaterialinrelationtothefinancialstatements.Thesepolicieshavebeenconsistentlyappliedtoallthefinancialyearspresented,unlessotherwisestated.

3.1 SUBSIDIARIESANDBASISOFCONSOLIDATION

(i) Subsidiaries

SubsidiariesarethoseentitiesinwhichtheGrouphasthepowertoexercisecontroloverthefinancialandoperatingpoliciessoastoobtainbenefitsfromtheiractivities,generallyaccompanyingashareholdingofmorethanonehalfofthevotingrights.TheexistenceandeffectofpotentialvotingrightsthatarecurrentlyexercisableorconvertibleareconsideredwhenassessingwhethertheGrouphassuchpoweroveranotherentity.

IntheCompany’sseparatefinancialstatements,investmentsinsubsidiariesarestatedatcostslessimpairmentlosses,ifany.ThepolicyfortherecognitionandmeasurementofimpairmentlossesisinaccordancewithNote3.9.Ondisposalofsuchinvestments,thedifferencebetweenthenetdisposalproceedsandtheircarryingamountisincludedintheincomestatement.

IntheGroup’sconsolidatedfinancialstatements,thedifferencebetweenthenetdisposalproceedsandtheGroup’sshareofthesubsidiary’snetassetstogetherwithanyunamortisedgoodwillisreflectedasagainorlossondisposalintheconsolidatedincomestatement.

(ii) BasisofConsolidation

The consolidated financial statements include the financial statements of the Company and itssubsidiariesmadeuptotheendofthefinancialyear.

ThefinancialstatementsoftheCompanyanditssubsidiariesarealldrawnuptothesamereportingdate.

Subsidiariesareconsolidatedusingthepurchasemethodofaccounting.Underthepurchasemethodofaccounting,subsidiariesarefullyconsolidatedfromthedateonwhichcontrolistransferredtotheGroupandarede-consolidatedfromthedatethatcontrolceases.

Thecostofanacquisitionismeasuredasthefairvalueoftheassetsgiven,equityinstrumentsissuedand liabilities incurred or assumed at the date of exchange, plus costs directly attributable to theacquisition.Identifiableassetsacquiredandliabilitiesandcontingentliabilitiesassumedinabusinesscombinationaremeasuredinitiallyattheirfairvaluesatthedateofacquisition,irrespectiveoftheextentofanyminorityinterest.

TheexcessofthecostoftheacquisitionoverthenetfairvalueoftheGroup’sshareoftheidentifiableassets,liabilitiesandcontingentliabilitiesacquiredatthedateofacquisitionrepresentsgoodwill.AnyexcessofthenetfairvalueoftheGroup’sshareoftheidentifiableassets,liabilitiesandcontingentliabilitiesof thesubsidiariesacquiredover thecostofacquisition is recognised immediately in theincomestatement.

54


3. SIGNIFICANTACCOUNTINGPOLICIES(Cont’d)

3.1 SUBSIDIARIESANDBASISOFCONSOLIDATION(CONT’D)

(ii) BasisofConsolidation(Cont’d)

Intra-grouptransactionsandbalances,andresultingunrealisedgainsareeliminatedonconsolidation.Unrealisedlossesresultingfromintra-grouptransactionsarealsoeliminatedonconsolidationtotheextentofthecostoftheassetthatcanberecovered.Theextentofthecoststhatcannotberecoveredistreatedaswritedownsorimpairmentlossesasappropriate.

Minorityinterestrepresentsthatportionoftheprofitorlossandnetassetsofasubsidiaryattributable

toequityintereststhatarenotownedbytheCompany,directlyorindirectlythroughthesubsidiary.Itismeasuredattheminorities’shareofthefairvaluesofthesubsidiary’sidentifiableassetsandliabilitiesattheacquisitiondateandtheminorities’shareofchangesinthesubsidiary’sequitysincethatdate.

Wherelossesapplicabletotheminorityexceedtheminority’sinterestintheequityofasubsidiary,theexcess,andanyfurtherlossesapplicabletotheminority,arechargedagainsttheGroup’sinterestexcepttotheextentthattheminorityhasabindingobligationto,andisableto,makeadditionalinvestmenttocoverthelosses.Ifthesubsidiarysubsequentlyreportsprofits,theGroup’sinterestisallocatedallsuchprofitsuntiltheminority’sshareoflossespreviouslyabsorbedbytheGrouphasbeenrecovered.

3.2 ASSOCIATES

Associatesarethoseentities inwhichtheGrouphassignificant influence,butwhich itdoesnotcontrol,generallyaccompanyingashareholdingofbetween20%and50%ofthevotingrights.Significantinfluenceisthepowertoparticipateinthefinancialandoperatingpolicydecisionsoftheinvesteebutisnotthepowertoexercisecontroloverthosepolicies.

Investments in associates are accounted for in the consolidated financial statements using the equitymethodofaccountingandareinitiallyrecognisedatcost.TheGroup’sinvestmentinassociatesincludesgoodwillidentifiedonacquisition,netofanyaccumulatedimpairmentloss.ThepolicyfortherecognitionandmeasurementofimpairmentlossesisinaccordancewithNote3.9.

ThemostrecentavailableauditedfinancialstatementsoftheassociatesareusedbytheGroupinapplyingtheequitymethod.WherethedatesoftheauditedfinancialstatementsusedarenotcoterminouswiththoseoftheGroup,theshareofresultsisarrivedatfromthelastauditedfinancialstatementsavailableandmanagementfinancialstatementstotheendoftheaccountingperiod.Uniformaccountingpoliciesareadoptedforliketransactionsandeventsinsimilarcircumstances.

Undertheequitymethod,theinvestmentinassociateiscarriedintheconsolidatedbalancesheetatcostadjustedforpostacquisitionchangesintheGroup’sshareofnetassetsoftheassociate.TheGroup’sshareofthenetprofitorlossoftheassociateisrecognisedintheconsolidatedincomestatement.Wheretherehasbeenachangerecogniseddirectlyintheequityoftheassociate,theGrouprecognisesitsshareofsuchchanges.

ANNUALREPORT2010

55



3.2 ASSOCIATES(CONT’D)

Inapplying theequitymethod,unrealisedgainsand losseson transactionsbetween theGroupand theassociateareeliminatedto theextentofGroup’s interest in theassociate,andtheunrealised lossesareeliminatedtotheextentofthecoststhatcanberecovered.

WhentheGroup’sshareoflossesinanassociateequalsorexceedsitsinterestintheassociate,includinganyotherunsecuredreceivables,theGroup’sinterestisreducedtonilandrecognitionoffurtherlossesisdiscontinuedexcept to theextent that theGrouphas incurred legalorconstructiveobligationsormadepaymentsonbehalfoftheassociate.

Aftertheapplicationoftheequitymethod,theGroupdetermineswhetheritisnecessarytorecogniseanyimpairmentlosswithrespecttotheGroup’snetinvestmentintheassociate.TheassociateisequityaccountedforfromthedatetheGroupobtainssignificantinfluenceuntilthedatetheGroupceasestohavesignificantinfluenceovertheassociate.

Goodwillrelatingtoanassociateisinthecarryingamountoftheinvestmentandisnotamortised.AnyexcessoftheGroup’sshareofthenetfairvalueoftheassociate’sidentifiableassets,liabilitiesandcontingentliabilitiesoverthecostoftheinvestmentisexcludedfromthecarryingamountoftheinvestmentandisinsteadincludedasincomeinthedeterminationoftheGroup’sshareoftheassociate’sprofitorlossintheperiodinwhichtheinvestmentisacquired.

Ondisposalofsuchinvestment,thedifferencebetweenthenetdisposalproceedsandthecarryingamountof the investment in an associate is reflected as a gain or loss on disposal in the consolidated incomestatement.

3.3 JOINTLYCONTROLLEDENTITIES

Jointlycontrolledentitiesarecorporations,partnershipsorotherentitiesinwhichtheGrouphascontractuallyagreedtoshareitscontrolwithoneormoreparties,wherestrategicfinancialandoperatingdecisionsrelatingtothejointlycontrolledentityrequiredunanimousconsentoftheparties.

TheGroup’sinterestsinjointlycontrolledentitiesareaccountedforintheconsolidatedfinancialstatementsusingtheequitymethodofaccountingasdescribedinNote3.2basedonthemanagementfinancialstatementsofthejointlycontrolledentities.

3.4 PROPERTY,PLANTANDEQUIPMENT

Property,plantandequipmentarestatedathistoricalcostlessaccumulateddepreciationandimpairmentlosses,ifany.ThepolicyfortherecognitionandmeasurementofimpairmentlossesisinaccordancewithNote3.9.

Costincludesexpenditurethatisdirectlyattributabletotheacquisitionoftheasset.Whensignificantpartsofanitemofproperty,plantandequipmenthavedifferentusefullives,theyareaccountedforasseparateitemsofproperty,plantandequipment.

56



3.4 PROPERTY,PLANTANDEQUIPMENT(CONT’D)

Thecostofreplacingpartofanitemofproperty,plantandequipment is includedintheasset’scarryingamountorrecognisedasaseparateasset,asappropriate,onlywhenitisprobablethatthefutureeconomicbenefitsassociatedwiththepartwillflowtotheGroupanditscostcanbemeasuredreliably.Thecarryingamountofthereplacedpartisderecognised.Allotherrepairsandmaintenancearechargedtotheincomestatementasincurred.

Property,plantandequipmentaredepreciatedonastraightlinebasistowriteoffthecostofeachassettoitsresidualvalueovertheestimatedusefullivesoftheassetsconcerned.Theannualratesusedforthispurposeareasfollows:-

Leaseholdlandandbuildings 2%-2.5% Plantandmachinery,toolsandequipment, crockeryandkitchenware 10%-25% Officeequipment,furnitureandfittings 10%-20% Motorvehicles 20% Renovation 10%-35%

Theresidualvaluesandusefullivesofproperty,plantandequipmentarereviewed,andadjustedifappropriate,ateachbalancesheetdate.Theeffectsofanyrevisionsoftheresidualvaluesandusefullivesareincludedintheincomestatementforthefinancialyearinwhichthechangesarise.

Fullydepreciatedassetsareretainedinthefinancialstatementsuntiltheassetsarenolongerinuse.

Anitemofproperty,plantandequipmentisderecognisedupondisposalorwhennofutureeconomicbenefitsareexpectedfromitsuseordisposal.Anygainorlossarisingonderecognitionoftheassetisincludedintheincomestatementinthefinancialyeartheassetisderecognised.

3.5 INVESTMENTPROPERTIES

Investmentpropertiesareinvestmentinlandandbuildingsthatareheldforlongtermrentalyieldsand/orforcapitalappreciation.

Investmentinfreeholdlandisstatedatcostandisnotdepreciatedasithasanindefinitelife.Otherinvestmentpropertiesarestatedatcostlessaccumulateddepreciationandimpairmentlosses,ifany.ThepolicyfortherecognitionandmeasurementofimpairmentlossesisinaccordancewithNote3.9.

Otherinvestmentpropertiesaredepreciatedonastraightlinebasistowriteoffthecostoftheassetstotheirresidualvaluesovertheirestimatedusefullivesatanannualrateof1%to2.5%.

Ondisposalofaninvestmentproperty,orwhenitispermanentlywithdrawnfromuseandnofutureeconomicbenefitsareexpectedfromitsdisposal,itshallbederecognised(eliminated)fromthebalancesheet.Thedifferencebetweenthenetdisposalproceedsanditscarryingamountischargedorcreditedtotheincomestatementinthefinancialyearoftheretirementordisposal.

ANNUALREPORT2010

57



3.6 PROPERTYDEVELOPMENTACTIVITIES

(i) LandHeldforPropertyDevelopment

Landheldforpropertydevelopmentconsistsofdevelopmentcostsonwhichnosignificantdevelopmentworkhasbeenundertakenorwheredevelopmentactivitiesarenotexpectedtobecompletedwithinthenormaloperatingcycle.Suchlandisclassifiedasnon-currentassetandisstatedatcostlessanyaccumulatedimpairmentlosses,ifany.ThepolicyfortherecognitionandmeasurementofimpairmentlossesisinaccordancewithNote3.9.

Costcomprisesthecostoflandandallrelatedcostsincurredonactivitiesnecessarytopreparethelandforitsintendeduse.

Landheldforpropertydevelopmentistransferredtopropertydevelopmentcostsandincludedundercurrentassetswhendevelopmentactivitieshavecommencedandareexpectedtobecompletedwithinthenormaloperatingcycle.

(ii) PropertyDevelopmentCosts

Propertydevelopmentcostscomprisecostsassociatedwiththeacquisitionoflandandallcoststhataredirectlyattributabletodevelopmentactivitiesorcoststhatcanbeallocatedonareasonablebasistotheseactivities.

Whenthefinancialoutcomeofadevelopmentactivitycanbereliablyestimated,propertydevelopment

revenueandexpensesarerecognisedintheincomestatementbyusingthestageofcompletionmethod.The stage of completion is determined by the proportion of property development costs incurredfortheworkperformeduptothebalancesheetdateovertheestimatedtotalpropertydevelopmentcoststocompletion.Underthismethod,profitsarerecognisedasthepropertydevelopmentactivityprogresses.

Where the financial outcome of a development activity cannot be reliably estimated, propertydevelopmentrevenueisrecognisedonlytotheextentofpropertydevelopmentcostsincurredthatisprobablewillberecoverable,andpropertydevelopmentcostsonpropertiessoldarerecognisedasanexpenseintheperiodinwhichtheyareincurred.

Anyforeseeablelossonadevelopmentproject,includingcoststobeincurredoverthedefectsliabilityperiod,isrecognisedasanexpenseimmediatelyintheincomestatement.

Propertydevelopmentcostsnotrecognisedasanexpenseisrecognisedasanasset,whichismeasuredatthelowerofcostandnetrealisablevalue.Uponthecompletionofdevelopment,theunsoldcompleteddevelopmentpropertiesaretransferredtoinventories.

Theexcessofrevenuerecognisedintheincomestatementoverbillingstopurchasersisclassifiedasaccruedbillingswithintradereceivablesandtheexcessofbillingstopurchasersoverrevenuerecognisedintheincomestatementisclassifiedasprogressbillingswithintradepayables.

58



3.7 GOODwILL

GoodwillrepresentstheexcessofthecostofbusinesscombinationovertheGroup’sshareofthenetfairvalueoftheidentifiableassets,liabilitiesandcontingentliabilitiesatthedateofacquisition.Followingtheinitialrecognition,goodwillisstatedatcostlessimpairmentlosses,ifany.ThepolicyfortherecognitionandmeasurementofimpairmentlossesisinaccordancewithNote3.9.

Goodwillisnotamortisedbutisreviewedforimpairmentinvalue,annuallyormorefrequentlyandiswrittendownwhereitisconsiderednecessary.Impairmentlossesongoodwillarenotreversed.Thecalculationofgainsandlossesonthedisposalofanentityincludesthecarryingamountofgoodwillrelatingtotheentitybeingsold.

Goodwillisallocatedtocash-generatingunitsforthepurposeofimpairmenttesting.Theallocationismadeto thosecash-generatingunitsorgroupsofcash-generatingunits thatareexpected tobenefit from thesynergiesofthebusinesscombinationinwhichthegoodwillarise.

Negativegoodwill represents theexcessof thenet fairvalueof theGroup’sshareof identifiableassets,liabilitiesandcontingentliabilitiesacquiredasatthedateofacquisitionoverthecostofacquisition.Negativegoodwillisrecogniseddirectlyintheincomestatement.

3.8 INVESTMENTS

Investmentsinsubsidiaries,associates,jointlycontrolledentitiesandotherinvestmentsarestatedatcostlessimpairmentlosses,ifany.ThepolicyfortherecognitionandmeasurementofimpairmentlossesisinaccordancewithNote3.9.

Ondisposalofaninvestment,thedifferencebetweenthenetdisposalproceedsanditscarryingamountischargedorcreditedtotheincomestatement.

3.9 IMPAIRMENTOFASSETS

Thecarryingamountofassets,otherthaninventories,deferredtaxassetsandfinancialassets(excludinginvestmentsinsubsidiaries,associatesandjointlycontrolledentities),arereviewedateachbalancesheetdatetodeterminewhetherthereisanyindicationofimpairment.Ifanysuchindicationexists,theasset’srecoverableamountisestimatedtodeterminetheamountofimpairmentloss.

Forthepurposeofimpairmenttestingoftheseassets,therecoverableamountisdeterminedonanindividualassetbasisunlesstheassetdoesnotgeneratecashflowsthatarelargelyindependentofthosefromotherassets.Ifthisisthecase,therecoverableamountisdeterminedforthecash-generatingunit(“CGU”)towhichtheassetbelongsto.

ANNUALREPORT2010

59



3.9 IMPAIRMENTOFASSETS(CONT’D)

Anasset’srecoverableamountisthehigherofanasset’sorCGU’sfairvaluelesscosttosellanditsvalueinuse.Inassessingvalueinuse,theestimatedfuturecashflowsarediscountedtotheirpresentvalueusingapre-taxdiscountratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheasset.Wherethecarryingamountsofanassetexceeditsrecoverableamount,theassetisconsideredimpairedandiswrittendowntoitsrecoverableamount.ImpairmentlossesrecognisedinrespectofaCGUorgroupsofCGUsareallocatedfirsttoreducethecarryingamountofanygoodwillallocatedtothoseunitsorgroupsofunitsandthen,toreducethecarryingamountoftheotherassetsintheunitorgroupsofunitsonapro-ratabasis.

Animpairmentlossisrecognisedintheincomestatementintheperiodinwhichitarises.

Impairmentlossongoodwillisnotreversedinasubsequentperiod.Animpairmentlossforanassetotherthangoodwill isreversedif,andonly if,therehasbeenachangeintheestimatesusedtodeterminetheasset’srecoverableamountsincethelastimpairmentwasrecognised.Thecarryingamountofanassetotherthangoodwillisincreasedtoitsrevisedrecoverableamount,providedthatthisamountdoesnotexceeditscarryingamountthatwouldhavebeendetermined(netofamortisationordepreciation)hadnoimpairmentlossbeenrecognisedfortheassetinprioryears.Areversalofimpairmentlossforanassetotherthangoodwillisrecognisedintheincomestatement.

3.10 INVENTORIES

Inventoriesarestatedatthelowerofcostandnetrealisablevalue.Costisdeterminedusingthefirst-in-first-outbasisforfinishedgoodsandconsumables,andspecificidentificationbasisforcompletedunitsofunsolddevelopedproperties.

Thecostsoffinishedgoodsandconsumablescomprisethepurchasepricepluscostsincurredtobringtheinventoriestotheirpresentlocationsandconditions.Thecostofunsoldpropertiescomprisescostassociatedwith theacquisitionof land,directcostsandanappropriateproportionofallocatedcostsattributable topropertydevelopmentactivities.

Netrealisablevalueistheestimatedsellingpriceintheordinarycourseofbusiness,lessthecostsofcompletionandsellingexpenses.

3.11 RECEIVABLES

Receivablesarecarriedatanticipatedrealisablevalues.Inestimatingtherealisablevalues,anallowanceismadefordoubtfuldebtsbasedonareviewofalloutstandingamountsasatthebalancesheetdate.Baddebtsarewrittenofftotheincomestatementduringthefinancialyearinwhichtheyareidentified.

60



3.12 PAYABLES

Payablesarestatedatthefairvalueoftheconsiderationtobepaid inthefutureforgoodsandservicesreceived.

3.13 OPERATINGLEASES Leasesofassetswhereasignificantportionoftherisksandrewardsofownershipareretainedbythelessor

areclassifiedasoperatingleases.Operatingleasepaymentsarerecognisedasanexpenseonastraightlinebasisoverthetermoftherelevantlease.Theaggregatebenefitofincentivesprovidedbythelessorisrecognisedasareductionofrentalexpenseovertheleasetermonastraightlinebasis.

Inthecaseofaleaseoflandandbuildings,theminimumleasepaymentsortheup-frontpaymentsmadeareallocated,whenevernecessary,betweenthelandandthebuildingselementsinproportiontotherelativefairvaluesforleaseholdinterestsforthelandelementandthebuildingselementoftheleaseattheinceptionofthelease.Theup-frontpaymentsrelatingtothelandelementrepresentsprepaidleasepaymentandareamortisedtotheincomestatementonastraightlinebasisovertheremainingperiodofthelease.

3.14 REDEEMABLECONVERTIBLESECUREDLOANSTOCK(“RCSLS”)

RCSLS are regarded as compound instruments consisting of an equity component and a liabilitycomponent.

Attheissuedate,thefairvalueoftheliabilityportionisdeterminedusingamarketinterestrateforanequivalentfinancialinstrument;thisamountiscarriedasliabilityontheamortisedcostbasisonconversionormaturityoftheinstrument.Theremainderoftheproceedsisallocatedtotheconversionormaturityoftheinstrument.Theremainderoftheproceedsisallocatedtotheconversionoptionwhichisrecognisedandincludedinshareholders’equity;thevalueoftheconversionoptiondoesnotchangeinsubsequentperiods.Attributabletransactioncostsareapportionedanddeducteddirectlyfromtheliabilityandequitycomponentbasedontheircarryingamountsatthedateofissue.

Undertheeffective interestratemethod,theinterestexpenseontheliabilitycomponent iscalculatedbyapplyingtheprevailingmarketinterestforanequivalentfinancialinstrumenttotheinstrumentattheissuedate.ThedifferentbetweenthisamountandtheinterestpaidisaddedtothecarryingamountoftheRCSLS.

3.15 PROVISIONSFORLIABILITIES

ProvisionsforliabilitiesarerecognisedwhentheGrouphasapresentobligationasaresultofapastevent,whenitisprobablethatanoutflowofresourcesembodyingeconomicbenefitswillberequiredtosettletheobligation,andwhenareliableestimateoftheamountcanbemade.Provisionsarereviewedateachbalancesheetdateandadjustedtoreflectthecurrentbestestimate.Wheretheeffectofthetimevalueofmoneyismaterial,provisionsarediscountedusingacurrentpre-taxratethatreflects,whereappropriate,therisksspecifictotheliability.

ANNUALREPORT2010

61



3.16 CONTINGENTLIABILITIES

Acontingentliabilityisapossibleobligationthatarisesfrompasteventandwhoseexistencewillonlybeconfirmedby theoccurrenceofoneormoreuncertain futureeventsnotwhollywithin thecontrolof theGroup.Itcanalsobeapresentobligationarisingfrompasteventsthatisnotrecognisedbecauseitisnotprobablethatoutflowofeconomicresourceswillberequiredortheamountofobligationcannotbemeasuredreliably.

Acontingent liability isnotrecognisedbut isdisclosedinthenotestothefinancialstatements. Whenachangeintheprobabilityofanoutflowoccurssothattheoutflowisprobable,itwillthenberecognisedasaprovision.

3.17 TAXATION

Thetaxexpenseintheincomestatementsrepresentstheaggregateamountofcurrenttaxanddeferredtax.Currenttaxistheexpectedamountofincometaxespayableinrespectofthetaxableprofitfortheyearandismeasuredusingthetaxratesthathavebeenenactedatthebalancesheetdate.

Deferredtaxisprovidedfor,usingtheliabilitymethod,ontemporarydifferencesatthebalancesheetdatebetweenthetaxbasesofassetsandliabilitiesandtheircarryingamountsinthefinancialstatements.Inprinciple,deferredtaxliabilitiesarerecognisedforalltaxabletemporarydifferencesanddeferredtaxassetsarerecognisedforalldeductibletemporarydifferences,unusedtax lossesandunusedtaxcreditstotheextentthatitisprobablethatfuturetaxableprofitwillbeavailableagainstwhichthedeductibletemporarydifferences,unusedtaxlossesandunusedtaxcreditscanbeutilised.Deferredtaxisnotrecognisedifthetemporarydifferencearisesfromgoodwillornegativegoodwillorfromtheinitialrecognitionofanassetorliabilityinatransactionwhichisnotabusinesscombinationandattimeofthetransaction,affectsneitheraccountingprofitnortaxableprofit.

Thecarryingamountofdeferredtaxassets,ifany,isreviewedateachbalancesheetdateandreducedtotheextentthatitisnolongerprobablethatsufficienttaxableprofitwillbeavailabletoallowallorpartoftheassettoberecovered.

Deferredtaxismeasuredatthetaxratesthatareexpectedtoapplyintheperiodwhentheassetisrealisedortheliabilityissettled,basedontaxratesthathavebeenenactedorsubstantivelyenactedatthebalancesheetdate.Deferredtaxisrecognisedintheincomestatement,exceptwhenitarisesfromatransactionwhichisrecogniseddirectlyinequity,inwhichcasethedeferredtaxisalsochargedorcrediteddirectlyinequity,orwhenitarisesfromabusinesscombinationthatisanacquisition,inwhichcasethedeferredtaxisincludedintheresultinggoodwill.

DeferredtaxassetsanddeferredtaxliabilitiesareoffsetwhenthereisalegallyenforceablerighttooffsetcurrenttaxassetsagainstcurrenttaxliabilitiesandwhentheyrelatetoincometaxesleviedbythesametaxationauthorityandtheGroupintendstosettleitscurrenttaxassetsandcurrenttaxliabilitiesonanetbasis.

62



3.18 SHARECAPITAL

(i) OrdinaryShares

Ordinarysharesarerecordedatthenominalvalue.Theconsiderationinexcessofnominalvalueofsharesissued,ifany,isaccountedforassharepremium.Bothordinarysharesandsharepremiumareclassifiedasequity.

Dividendsonordinarysharesarerecognisedasliabilitieswhenproposedordeclaredbeforethebalancesheetdate.Adividendproposedordeclaredafter thebalancesheetdate,butbefore thefinancialstatementsareauthorisedforissue,isnotrecognisedasaliabilityatthebalancesheetdate.

Costs incurreddirectlyattributabletothe issuanceofthesharesareaccountedforasadeductionfromsharepremium,ifany,otherwiseitischargedtotheincomestatement.Equitytransactioncostscompriseonlythoseincrementalexternalcostsdirectlyattributabletotheequitytransactionwhichwouldotherwisehavebeenavoided.

Theconsiderationpaid,includingattributabletransactioncostsonrepurchasedordinarysharesoftheCompanythathavenotbeencancelled,areclassifiedastreasurysharesandpresentedasadeductionfromequity.Sharesrepurchasedareheldastreasurysharesandareaccountedforusingthetreasurystockmethod.Underthetreasurystockmethod,thesharesrepurchasedarenotcancelledbutareheldastreasuryshares.Thetreasurysharesarecarriedatcost.

Wheretreasurysharesaredistributedassharedividends,thecostofthetreasuryshareswillbeappliedinthereductionofthesharepremiumaccountorthedistributablereserves,orboth,whereappropriate.

Wheretreasurysharesarereissuedbyre-saleintheopenmarket,thedifferencebetweenthesalesconsiderationandthecarryingamountofthetreasuryshareswillbeshownasamovementinequity.

(ii) PreferenceShares

Preferencesharesareclassifiedasequityiftheyarenon-redeemableanddividendsarediscretionaryattheoptionoftheissuer.Preferencesharesareclassifiedasliabilitiesiftheyareredeemableonaspecificdateorattheoptionoftheshareholdersanddividendsthereonarerecognisedintheincomestatementasinterestexpense.Preferencesharesthatarecompoundinstrumentsaresplitintoliabilityand equity components. Each component is accounted for separately. Dividends on preferencesharesarerecognisedonanaccrualbasisasaliabilityandarereportedasfinancecostsintheincomestatement.

3.19 EMPLOYEEBENEFITS

(i) ShortTermEmployeeBenefits

Wages,salaries,bonuses,socialsecuritycontributionandnon-monetarybenefitsarerecognisedasanexpenseinthefinancialyearinwhichtheassociatedservicesarerenderedbytheemployees.Shorttermaccumulatingcompensatedabsencessuchaspaidannualleavearerecognisedwhenservicesarerenderedbyemployeesthatincreasetheirentitlementtofuturecompensatedabsences.Shorttermnon-accumulatingcompensatedabsencessuchassickleaveandmaternityleavearerecognisedwhenabsencesoccur.

ANNUALREPORT2010

63



3.19 EMPLOYEEBENEFITS(Cont’d)

(ii) Post-EmploymentBenefits

TheGroupcontributestotheEmployeesProvidentFund,thenationaldefinedcontributionplan.Certainforeignsubsidiariesmakecontributionstotheirrespectivecountries’statutorypensionscheme.Thecontributionsarechargedtotheincomestatementintheperiodtowhichtheyarerelated.Oncethecontributionshavebeenpaid,theGrouphasnofurtherpaymentobligations.

3.20 FOREIGNCURRENCIES

(i) FunctionalandPresentationCurrency

TheindividualfinancialstatementsofeachentityintheGrouparemeasuredusingthecurrencyoftheprimaryeconomicenvironmentinwhichtheentityoperates(“thefunctionalcurrency”).ThefinancialstatementsarepresentedinRinggitMalaysia(“RM”),whichistheCompany’sfunctionalcurrencyandpresentationcurrency.

(ii) TransactionsandBalances

Foreigncurrency transactionsare translated into the functionalcurrencyusing theexchange ratesprevailingat thedatesof the transactions. Foreignexchangegainsand losses resulting from thesettlementofsuchtransactionsandfromthetranslationatyear-endexchangeratesofmonetaryassetsandliabilitiesdenominatedinforeigncurrenciesarerecognisedintheincomestatement.

Non-monetaryitemswhicharemeasuredatfairvaluesdenominatedinforeigncurrenciesaretranslatedattheforeignexchangeraterulingatthedatewhenthefairvalueswasdetermined.

When a gain or loss on a non-monetary item is recognised directly in equity, any corresponding

exchangegainorlossisrecogniseddirectlyinequity.Whenagainorlossonanon-monetaryitemisrecognisedintheincomestatement,anycorrespondingexchangegainorlossisrecognisedintheincomestatement.

The results and financial position of all the group entities (none of which has the currency of ahyperinflationaryeconomy)thathaveafunctionalcurrencydifferentfromthepresentationcurrencyaretranslatedintothepresentationcurrencyasfollows:-

• assetsandliabilitiesforeachbalancesheetpresentedaretranslatedattheclosingrateatthe

dateofthatbalancesheet;

• incomeandexpensesforeachincomestatementaretranslatedataverageexchangerates(unlessthisaverageisnotareasonableapproximationofthecumulativeeffectoftheratesprevailingonthetransactiondates,inwhichcaseincomeandexpensesaretranslatedattherateonthedates);and

• allresultingexchangedifferencesarerecognisedasaseparatecomponentofequity.

Onconsolidation,exchangedifferencesarisingfromthetranslationofthenet investmentinforeignoperationsaretakentoshareholders’equity.Whenaforeignoperationispartiallydisposedoforsold,exchangedifferencesthatwererecordedinequityarerecognisedintheincomestatementaspartofthegainorlossonsale.

64



3.21 BORROwINGCOSTS

(i) Borrowingsareinitiallyrecognisedbasedontheproceedsreceived,netoftransactioncostsincurred.Inthesubsequentperiods,borrowingsarestatedatamortisedcostusingtheeffectiveyieldmethod;anydifferencebetweenproceeds(netoftransactioncosts)andtheredemptionvalueisrecognisedintheincomestatementovertheperiodoftheborrowings.

Interest,dividends,lossesandgainsrelatingtoafinancialinstrument,oracomponentpart,classifiedasaliabilityisreportedwithinfinancecostintheincomestatement.

(ii) Borrowing costs directly attributable to the acquisition and construction of land held for propertydevelopment,investmentpropertiesandotherproperties,arecapitalisedaspartofthecostsofthoseassets,untilsuchtimetheassetsaresubstantiallyreadyfortheirintendeduseorsale.Borrowingcostincurredonassetsunderdevelopmentthattakeasubstantialperiodoftimeforcompletionarecapitalisedintothecarryingvalueoftheassets.Capitalisationofborrowingcostswillbesuspendedwhentheassetsarecompletedorduringtheperiodinwhichdevelopmentandconstructionarestalled.

Theamountofborrowingcostseligible forcapitalisation is theactualborrowingcosts incurredonthatborrowingduringtheperiodlessanyinvestmentincomeonthetemporaryinvestmentoffundsdrawdownfromthatborrowingfacilities.

Allotherborrowingcostsarerecognisedasanexpenseintheincomestatementintheperiodinwhichtheyareincurred.

3.22 FINANCIALINSTRUMENTS

Financial instruments are recognised in the balance sheet when the Group has become a party to thecontractualprovisionsoftheinstruments.Theparticularrecognitionmethodsadoptedaredisclosedintheindividualaccountingpolicystatementsassociatedwitheachitem.

Financialinstrumentsareclassifiedasliabilitiesorequityinaccordancewiththesubstanceofthecontractualarrangement.Interest,dividends,gainsandlossesrelatingtoafinancialinstrumentclassifiedasaliability,arereportedasanexpenseorincome.Distributionstoholdersoffinancialinstrumentsclassifiedasequityarechargeddirectlytoequity.Financial instrumentsareoffsetwhentheGrouphasalegallyenforceablerighttosetofftherecognisedamountsandintendseithertosettleonanetbasis,ortorealisetheassetandsettletheliabilitysimultaneously.

3.23 SEGMENTREPORTING

Segment reporting ispresented forenhancedassessmentsof theGroup’s risksand returns.Abusinesssegmentisagroupofassetsandoperationsengagedinprovidingproductsorservicesthataresubjecttorisksandreturnsthataredifferentfromthoseofotherbusinesssegments.Ageographicalsegmentisengagedinprovidingproductsorserviceswithinaparticulareconomicenvironmentthatissubjecttorisksandreturnsthataredifferentfromthosecomponentsoperatinginothereconomicenvironments.

Segmentrevenue,expense,assetsandliabilitiesarethoseamountsresultingfromtheoperatingactivitiesofasegmentthataredirectlyattributabletothesegmentandtherelevantportionthatcanbeallocatedonareasonablebasistothesegment.

Segmentrevenue,expense,assetsandliabilitiesaredeterminedbeforeintragroupbalancesandintragrouptransactionsareeliminatedaspartoftheconsolidationprocess,excepttotheextentthatsuchintragroupbalancesand transactionsarebetweenoperatingunitswithina single segment. Segment revenueandsegmentexpenseexcludedividendsfromwithintheGroup.

ANNUALREPORT2010

65



3.23 SEGMENTREPORTING(Cont’d)

Allincome,expenses,assetsandliabilitiesaredirectlyallocatedtoeachreportedsegment.Interestincomeandotherincomeandexpenseswhichcannotbeallocatedtorespectivesegmentonareasonablebasisaredisclosedaseitherunallocatedincomeorunallocatedexpenses,whiletherelatedassetsandliabilitiesaredisclosedasunallocatedassetsandunallocatedliabilities.

Theaccountingpoliciesusedinderivingtheindividualsegmentrevenue,segmentresults,segmentassetsandsegmentliabilitiesarethesameasthosedisclosedinthesummaryofsignificantaccountingpolicies.

Transfersbetweensegmentsarepricedattheestimatedfairvalueoftheproductsorservicesasnegotiatedbetweentheoperatingunits.

3.24 CASHANDCASHEQUIVALENTS

Forthepurposeofcashflowstatements,cashandcashequivalentscomprisecashinhand,bankbalances,fixeddeposits,demanddepositsandshorttermhighlyliquidinvestmentswithoriginalmaturitiesofthreemonthsorless,thatarereadilyconvertibletoknownamountsofcashwhicharesubjecttoaninsignificantriskofchangesinvalue,netofbankoverdraftsanddepositspledgedtofinancialinstitutions.

3.25 REVENUERECOGNITION

TheGrouprecognisesrevenuewhentheamountofrevenuecanbereliablymeasured,itisprobablethatfutureeconomicbenefitswillflowtotheentityandspecificcriteriahavebeenmetforeachoftheGroup’sactivitiesasdescribedbelow.Theamountofrevenueisnotconsideredtobereliablymeasurableuntilallcontingenciesrelating to thesalehavebeen resolved. TheGroupbases itsestimatesonhistorical results, taking intoconsiderationthetypeofcustomer,thetypeoftransactionandthespecificsofeacharrangement.

(i) Propertydevelopment

Revenuefromthesaleofpropertydevelopmentprojects isrecognisedprogressivelyastheprojectactivityprogressesandisinrespectofsaleswhentheagreementshavebeenfinalised.Therecognitionofrevenueisbasedonthepercentageofcompletionmethod,netofdiscount,andisconsistentwiththemethodadoptedforprofitrecognition.Provisionforforeseeablelossesismadewhenestimatedfuturerevenuerealisableislowerthanthecarryingamountoftheproject.

Interestincomefromlatepaymentsbyhousebuyersandforfeitureincomearerecognisedonareceiptbasis.

(ii) Salesofinventoriesanddevelopmentland

Revenueisrecognisedwhenthesignificantriskandrewardsofownershiphavebeenpassedtothebuyer. Revenue isnot recognised to theextentwhere therearesignificantuncertainties regardingrecoveryoftheconsiderationdueandassociatedcosts.

66


3. SIGNIFICANTACCOUNTINGPOLICIES(Cont’d)3.25 REVENUERECOGNITION(Cont’d)

(iii) Revenuefromhoteloperationsandotherrecreationalincome Revenueisrecogniseduponservicesrenderedandcustomer’sacceptance,netofservicetaxesand

discounts.

(iv) Dividendincome Dividendincomeisrecognisedwhentherighttoreceivethepaymentisestablished.

(v) Managementfee

Managementfeeisrecognisedonanaccrualbasis,netofservicetaxes.

(vi) Interestincome

Interestincomeotherthaninterestincomefromlatepaymentbyhousebuyersandothertradereceivablesarerecognisedonanaccrualbasisunlesscollectibilityisindoubtinwhichrecognitionwillbeonareceiptbasis.

(vii) Rentalincome

Rentalincomefrominvestmentpropertiesarerecognisedonanaccrualbasis.(viii) Deferredmembershipincome

Deferred membership income represents membership fees from club members. The deferredmembershipincomeisrecognisedevenlyasrevenueintheincomestatementovertheperiodofthemembershiplicenseagreements.

ANNUALREPORT2010

67


4. SIGNIFICANTACCOUNTINGESTIMATESANDJUDGEMENTS

Estimatesandjudgementsarecontinuallyevaluatedbythedirectorsandarebasedonhistoricalexperienceand other factors, including expectations of future events that are believed to be reasonable under thecircumstances.

(a) Criticaljudgementsinapplyingaccountingpolicies IntheprocessofapplyingtheGroup’sandtheCompany’saccountingpolicies,managementisofthe

opinionthattherearenoinstancesofapplicationofjudgementwhichareexpectedtohaveasignificanteffectontheamountsrecognisedinthefinancialstatementsexceptformattersdiscussedbelow:

(i) Contingentliabilities

AsdescribedinNote3.16,acontingentliabilityisnotrecognisedbutisdisclosedinthenotestothefinancialstatementsandwhenachangeintheprobabilityofanoutflowoccurssothattheoutflowisprobable,itwillthenberecognisedasaprovision.NoprovisionforliabilitieshasbeenmadeinthefinancialstatementsoftheGroupandoftheCompanyasthequantumofwhichtheGroupandtheCompanyareliabletomakegoodcannotbepresentlydetermined.

(ii) Capitalisationofborrowingcosts

AsdescribedinNote3.21,itistheGroup’spolicytocapitaliseborrowingcostsdirectlyattributabletotheacquisition,constructionorproductionofqualifyingassets,whichareassetsthatnecessarilytakeasubstantialperiodoftimetogetreadyfortheirintendeduseorsale,aspartofthecostofthoseassets,untilsuchtimeastheassetsaresubstantiallyreadyfortheirintendeduseorsale.Thedirectorsaresatisfiedthatthecapitalisationofborrowingcostsonpropertydevelopmentprojectsrelatemainlytoprojectswhoseactivitiesarecurrentlyinprogresstopreparetheprojectfor its intendedsale. Allotherborrowingcostsarerecognisedasanexpense in the incomestatementintheperiodinwhichtheyareincurred.

(iii) Classificationbetweeninvestmentpropertiesandproperty,plantandequipment

Somepropertiescompriseaportionthatisheldtoearnrentalorforcapitalappreciationandanother portion that is held for use in the production or supply of goods or services or foradministrativepurposes.Ifthisportioncouldbesoldseparately(orleaseoutseparatelyunderafinancelease),theGroupwouldaccountfortheportionsseparately.Iftheportioncouldnotbesoldseparately,thepropertyisaninvestmentpropertyonlyifaninsignificantportionisheldforuseintheproductionorsupplyofgoodsorservicesorforadministrativepurposes.Judgmentismadeonindividualpropertybasistodeterminewhetherancillaryservicesaresosignificantthatapropertydoesnotqualifyasaninvestmentproperties.

(iv) Splitoflandandbuildingelements

TheGroupdeterminesthattheleasepaymentscannotbeallocatedreliablybetweenthelandandbuildingelementsforoneoftheGroup’sproperty.Accordingly,theentireleaseoflandandbuildingsforthesaidpropertyhasbeenclassifiedasafinanceleaseandincludedunderproperty,plantandequipment.

68


4. SIGNIFICANTACCOUNTINGESTIMATESANDJUDGEMENTS(Cont’d)

(a) Criticaljudgementsinapplyingaccountingpolicies(Cont’d)

(v) Classificationofequityandliabilitycomponentonconvertiblesecurities

The Group has recognised the compound instruments consisting of an equity and liabilitycomponent.At the issuedate, the fairvalueof the liabilitycomponent isdeterminedusingaprevailingmarket interest rate. The judgement ismadeon themarket interest rateused forclassificationofequityandliabilitycomponent.

(b) Keysourcesofestimationuncertainty

Thekeyassumptionsconcerningthe futureandotherkeysourcesofestimationuncertaintyat thebalancesheetdate,thathaveasignificantriskofcausingamaterialadjustmenttothecarryingamountsofassetsandliabilitieswithinthenextfinancialyearareasstatedbelow:

(i) Impairmentofgoodwill

TheGroupdetermineswhethergoodwillisimpairedatleastonanannualbasis.Thisrequiresanestimationofthevalue-in-useofthecashgeneratingunits(“CGU”)towhichgoodwillisallocated.Estimatingavalue-in-useamountrequiresmanagementtomakeanestimationoftheexpectedfuturecashflowsfromtheCGUandalsotochooseasuitablediscountrateinordertocalculatethepresentvalueofthosecashflows.

(ii) Usefullivesofproperty,plantandequipmentandinvestmentproperties

TheGroupestimatestheusefullivesofproperty,plantandequipmentandinvestmentpropertiesbasedontheperiodoverwhichtheassetsareexpectedtobeavailableforuse.Theestimatedusefullivesofproperty,plantandequipmentandinvestmentpropertiesarereviewedperiodicallyandareupdatedifexpectationsdifferfrompreviousestimatesduetophysicalwearandtear,technicalorcommercialobsolescenceandlegalorotherlimitsontheuseoftherelevantassets.Inaddition,theestimationoftheusefullivesofproperty,plantandequipmentandinvestmentpropertiesarebasedoninternaltechnicalevaluationandexperiencewithsimilarassets.Itispossible, however, that future results of operations could be materially affected by changesin the estimates brought about by changes in factors mentioned above. The amounts andtimingofrecordedexpensesforanyperiodwouldbeaffectedbychangesinthesefactorsandcircumstances.Areductionintheestimatedusefullivesoftheproperty,plantandequipmentandinvestmentpropertieswouldincreasetherecordedexpensesanddecreasethenon-currentassets.

(iii) Impairment of investment in subsidiaries and recoverability of amount owing bysubsidiaries

TheCompanytests investment insubsidiariesfor impairmentannually inaccordancewith itsaccountingpolicy.Moreregularreviewsareperformedifeventsindicatethatthisisnecessary.Costsofinvestmentsinsubsidiarieswhichhaveceasedoperationswereimpaireduptonetassetsofthesubsidiaries.Theimpairmentmadeoninvestmentinsubsidiariesentailsanallowancefordoubtfuldebtstobemadetotheamountowingbythesesubsidiaries.

ANNUALREPORT2010

69



(b) Keysourcesofestimationuncertainty(Cont’d)

(iii) Impairment of investment in subsidiaries and recoverability of amount owing bysubsidiaries(Cont’d)

Significant judgement is required in the estimation of the present value of future cash flowsgenerated by the subsidiaries, which involve uncertainties and are significantly affected byassumptionsusedandjudgementmaderegardingestimatesoffuturecashflowsanddiscountrates.ChangesinassumptionscouldsignificantlyaffecttheresultsoftheCompany’stestsforimpairmentofinvestmentinsubsidiaries.

(iv) Impairmentofnon-currentassetsandcurrentassets

TheGroupreviewsthecarryingamountofitsnon-currentassetsandcurrentassets,whichincludeproperty,plantandequipment,landheldforpropertydevelopment,propertydevelopmentcostsandinvestmentproperties,todeterminewhetherthereisanindicationthatthoseassetshavesufferedanimpairmentlossinaccordancewithrelevantaccountingpoliciesontherespectivecategoryofnon-currentassets.Independentprofessionalvaluationstodeterminethecarryingamountoftheseassetswillbeprocuredwhentheneedarise.

Asat31January2010,theGroupisoftheviewthatthereisnoindicationofimpairmenttotheseassetsandthereforenoindependentprofessionalvaluationwasprocuredbytheGroupduringthecurrentfinancialyeartodeterminethecarryingamountoftheseassets.

(v) Propertydevelopment

TheGrouprecognisespropertydevelopmentrevenueandexpensesintheincomestatementbyusingthestageofcompletionmethod.Thestageofcompletionisdeterminedbytheproportionthatpropertydevelopmentcostsincurredforworkperformedtodatebeartotheestimatedtotalpropertydevelopmentcosts.

Significant judgement is required in determining the stage of completion, the extent of thepropertydevelopmentcosts incurred, theestimated totalpropertydevelopment revenueandcosts,aswellastherecoverabilityofthedevelopmentprojects.Inmakingthejudgement,theGroupevaluatesbasedonpastexperience.Wheretheactualtotalpropertydevelopmentcostsisdifferentfromtheestimatedtotalpropertydevelopmentcosts,suchdifferencewillimpactthepropertydevelopmentprofit/(loss)recognised.

(vi) Incometaxes

TheGroupissubjecttoincometaxesinnumerousjurisdictions.Significantjudgementisrequiredindeterminingthecapitalallowancesanddeductibilityofcertainexpensesduringtheestimationoftheprovisionforincometaxes.Therearemanytransactionsandcalculationsforwhichtheultimatetaxdeterminationisuncertainduringtheordinarycourseofbusiness.Wherethefinaltaxoutcomeof thesematters isdifferent fromtheamounts thatwere initially recorded,suchdifferenceswillimpacttheincometaxanddeferredincometaxprovisionsintheperiodinwhichsuchdeterminationismade.

70



(b) Keysourcesofestimationuncertainty(Cont’d)

(vii) Deferredtaxassets

Deferredtaxassetsarerecognisedforallunutilisedtaxlossesandunabsorbedcapitalallowancestotheextentthatitisprobablethattaxableprofitwillbeavailableagainstwhichthelossesandcapitalallowancescanbeutilised.Significantmanagementjudgementisrequiredtodeterminetheamountofdeferredtaxassetsthatcanberecognised,baseduponthelikelytimingandleveloffuturetaxableprofitstogetherwithfuturetaxplanningstrategies.

(viii) Allowancefordoubtfuldebts

TheGroupmakesallowancesfordoubtfuldebtsbasedonanassessmentoftherecoverabilityofreceivables.Allowancesareappliedtoreceivableswhereeventsorchangesincircumstancesindicatethatthecarryingamountsmaynotberecoverableaccordingtotheoriginaltermsofreceivables.Significantjudgementisrequiredintheassessmentoftherecoverabilityofreceivableswhere the expectation is different from the original estimate, such difference will impact thecarryingvalueofreceivables.

(ix) Allowanceforwritedownininventories

Reviews are made periodically by management on damaged, obsolete and slow-movinginventories.Thesereviewsrequirejudgementandestimates.Possiblechangesintheseestimatescouldresultinrevisionstothecarryingvalueofinventories.

(x) ProvisionforLiquidatedandAscertainedDamages

Provisionforliquidatedandascertaineddamages(“LAD”)isinrespectofprojectsundertakenbycertainsubsidiariesandisrecognisedforexpectedLADclaimsbasedonthetermsoftheapplicablesaleandpurchaseagreements.SignificantjudgementisrequiredindeterminingtheamountofprovisionforLADtobemade.TheGroupevaluatestheamountofprovisionrequiredbasedonpastexperience,theindustrynormandtheresultsfromcontinuousdialogsheldwithaffectedpurchaserswhoareseekingindulgenceandextensionoftimetocompletetheaffectedprojectsandwaivetheirLADclaim.

ANNUALREPORT2010

71


5. PROPERTY,PLANTANDEQUIPMENT

Plantand Machinery, Toolsand Office Leasehold Equipment, Equipment, Landand Crockeryand Furniture MotorGroup Buildings Kitchenware andFittings Vehicles Total RM’000 RM’000 RM’000 RM’000 RM’000 (Notea)Cost At1February2008 200,099 31,162 17,297 8,529 257,087Additions 1,474 707 68 – 2,249Subsidiariesacquired – 1,646 – – 1,646Disposals (58) (2,942) (160) (286) (3,446)Reclassifiedtoinvestment properties(Note7) (61,105) – – – (61,105)

At31January2009 140,410 30,573 17,205 8,243 196,431Additions 2,140 92 335 137 2,704Disposals – (1,003) (86) (2,802) (3,891)Writeoff – – (54) – (54)

At31January2010 142,550 29,662 17,400 5,578 195,190 AccumulatedDepreciation At1February2008 19,502 23,203 14,929 8,276 65,910Chargeforthe financialyear 3,651 3,124 725 102 7,602Subsidiariesacquired – 1,476 – – 1,476Disposals – (2,419) (126) (178) (2,723)Reclassifiedtoinvestment properties(Note7) (4,028) – – – (4,028) At31January2009 19,125 25,384 15,528 8,200 68,237Chargeforthe financialyear 3,580 2,619 671 29 6,899Disposals – (727) (66) (2,800) (3,593)Writeoff – – (54) – (54) At31January2010 22,705 27,276 16,079 5,429 71,489

NetBookValue At31January2009 121,285 5,189 1,677 43 128,194

At31January2010 119,845 2,386 1,321 149 123,701

72


5. PROPERTY,PLANTANDEQUIPMENT(Cont’d)

Office Leasehold Equipment, Landand FurnitureCompany Buildings andFittings Renovation Total RM’000 RM’000 RM’000 RM’000

Cost

At1February2008 1,107 411 4,850 6,368Additions – – 4 4

At31January2009 and31January2010 1,107 411 4,854 6,372

AccumulatedDepreciation At1February2008 447 411 3,811 4,669Chargeforthefinancialyear 27 – 199 226

At31January2009 474 411 4,010 4,895Chargeforthefinancialyear 27 – 195 222 At31January2010 501 411 4,205 5,117

NetBookValue At31January2009 633 – 844 1,477

At31January2010 606 – 649 1,255

ANNUALREPORT2010

73


5. PROPERTY,PLANTANDEQUIPMENT(Cont’d)

a) Leaseholdlandandbuildingsconsistofthefollowing:

Hoteland OtherLand andGroup Buildings Renovation Total RM’000 RM’000 RM’000

Cost

At1February2008 191,605 8,494 200,099Additions - 1,474 1,474Disposals (58) - (58)Reclassifiedtoinvestmentproperties (61,105) - (61,105) At31January2009 130,442 9,968 140,410Additions - 2,140 2,140 At31January2010 130,442 12,108 142,550

AccumulatedDepreciation

At1February2008 14,826 4,676 19,502Chargeforthefinancialyear 3,008 643 3,651Reclassifiedtoinvestmentproperties (4,028) - (4,028) At31January2009 13,806 5,319 19,125Chargeforthefinancialyear 2,862 718 3,580 At31January2010 16,668 6,037 22,705

NetBookValue

At31January2009 116,636 4,649 121,285

At31January2010 113,774 6,071 119,845

b) Thenetbookvalueofproperty,plantandequipmentchargedtofinancialinstitutionsforborrowings

(Note21)isasfollows:


Leaseholdlandandbuildings 113,517 116,272 606 633

74


6. LANDHELDFORPROPERTYDEVELOPMENTANDPROPERTYDEVELOPMENTCOSTS

(a) LandHeldforPropertyDevelopment


Atcost: Freeholdland 106,240 143,342 17,987 17,987Leaseholdland 308,529 364,169 - -Developmentcosts 860,650 699,582 139 139 1,275,419 1,207,093 18,126 18,126 Accumulatedimpairment losses (68,697) (68,697) - -Transferfrom/(to)property developmentcost 7,876 (7,192) - - Netcarryingvalue 1,214,598 1,131,204 18,126 18,126

(b) PropertyDevelopmentCosts


Atcost: Freeholdland 227,646 276,994 86,576 86,576Leaseholdland 470,103 479,025 – –Developmentcosts 4,367,155 4,506,295 81,550 81,550 5,064,904 5,262,314 168,126 168,126 Costrecognisedin incomestatements (3,868,391) (4,032,474) (72,509) (72,509)Foreseeablelosses (39,836) (44,508) – –Transferfrom/(to) -inventories (2,468) (365) – – -landheldfor propertydevelopment (7,876) 7,192 – – Netcarryingvalue 1,146,333 1,192,159 95,617 95,617

ANNUALREPORT2010

75


6. LANDHELDFORPROPERTYDEVELOPMENTANDPROPERTYDEVELOPMENTCOSTS(Cont’d)

(i) CertainlandheldforpropertydevelopmentandpropertydevelopmentcostsofRM2,355million(2009:RM2,255million)arechargedassecuritiesforbankingfacilitiesoftheGroupasdisclosedinNote21.

(ii) Inthepreviousfinancialyear,certainproceedsfromsalesofdevelopmentpropertiesofasubsidiaryoftheGrouphasbeensoldtoathirdpartyundertheIslamicAssetsBackedSecuritisation(“ASB”)arrangementasdisclosedinNote28.

(iii) Inthepreviousfinancialyear,certainproceedsfromsalesofdevelopmentpropertiesofasubsidiaryhasbeenassignedtoathirdpartyundertheBaiBithamanAjilIslamicDebtSecurities(“BaIDS”)asdisclosedinNote21.

(iv)Certaintitledeedsinrespectofthelandarenotregisteredunderthesubsidiaries’namesasthesetitledeedswillbetransferreddirectlytohousebuyersuponthesaleoftheproperties.

(v) Certainlandheldforpropertydevelopmentoftwosubsidiariesarechargedassecuritiesforbankingfacilitiesgrantedtoacorporateshareholder,KumpulanEuroplusBerhad.

(vi) Included in thedevelopmentcosts for thefinancial year is interestexpensecapitalisedduring thefinancialyearfortheGroupamountingtoapproximatelyRM13.711million(2009:RM3.264million).

7. INVESTMENTPROPERTIES

FreeholdGroup Land Buildings Total RM’000 RM’000 RM’000

Cost

At1February2008 4,900 96,903 101,803Subsidiariesacquired – 71,580 71,580Disposals – (680) (680)Reclassifiedfromproperty,plant andequipment(Note5) – 61,105 61,105

At31January2009 4,900 228,908 233,808Writeoff’ – (2,295) (2,295)

At31January2010 4,900 226,613 231,513

AccumulatedDepreciation At1February2008 – 287 287Subsidiariesacquired – 10,263 10,263Disposals – (147) (147)Chargeforthefinancialyear – 4,102 4,102Reclassifiedfromproperty,plant andequipment(Note5) – 4,028 4,028

At31January2009 – 18,533 18,533Chargeforthefinancialyear – 2,577 2,577 At31January2010 – 21,110 21,110

76


7. INVESTMENTPROPERTIES(Cont’d)

FreeholdGroup Land Buildings Total RM’000 RM’000 RM’000

AccumulatedImpairmentLosses At1February2008/31January2009/ 31January2010 – 17,000 17,000

NetBookValue

At31January2009 4,900 193,375 198,275

At31January2010 4,900 188,503 193,403

InvestmentpropertieswithnetbookvalueofRM193.403million(2009:RM198.275million)arechargedassecuritiesforcreditfacilitiesgrantedtosubsidiariesasdisclosedinNote21.

8. PREPAIDLEASEPAYMENTS Group 2010 2009 RM’000 RM’000

Cost At1Februaryand31January 16,458 16,458 AccumulatedAmortisation At1February (6,027) (5,332) Chargeforthefinancialyear (696) (695) At31January (6,723) (6,027) NetBookValue 9,735 10,431

Prepaidleasepaymentsrefertoleaseholdlandwithunexpiredleaseterm14yearsandarechargedtobanks

forcertaincreditfacilitiesgrantedtosubsidiariesasdisclosedinNote21.

9. GOODwILL

Group 2010 2009 RM’000 RM’000 (restated)

At1February 28,408 –Arisingfromsubsidiariesacquired – 28,408Less:Impairment (1,586) – At31January 26,822 28,408

ANNUALREPORT2010

77


10. INVESTMENTINSUBSIDIARIES

Company 2010 2009 RM’000 RM’000

UnquotedsharesinMalaysiaatcost 502,011 502,011Accumulatedimpairmentlosses (157,210) (157,210) 344,801 344,801

DetailsofsubsidiariesaredisclosedinNote40.

(a) Amountowingby/(to)subsidiaries

Company 2010 2009 RM’000 RM’000

Amountowingbysubsidiaries 1,317,956 551,429Less:Allowancefordoubtfuldebts (272,977) (272,977) 1,044,979 278,452 Amountowingtosubsidiaries (294,785) (280,211) Amountowingby/(to)subsidiaries 750,194 (1,759)

Amountowingby/(to)subsidiaries,whicharosefromnon-tradetransactions,areunsecured,interestfreeandhavenofixedtermsofrepayment.

(b) Duringthefinancialyear,asubsidiary,SeaviewPlantationsSdnBhdhadon14December2009enteredintoaSaleSharesAgreementwithathirdpartytodisposeatotalof2,000,000ordinarysharesofRM1each.,[representing100%equityinterestinPeninsularProperties(M)SdnBhd(“PPMSB”)foratotalconsiderationofRM2,000.Asaresult,PPMSBceasedtobeasubsidiary.

TheeffectsoftheabovementioneddisposalofsubsidiariesonthefinancialresultsoftheGroupforthefinancialyearended31January2010wereasfollows:

2010 Uptothedateofdisposals

RM’000 Revenue –Otheroperatingincome –Administrativeandotherexpenses (10)IncreaseinlossoftheGroup (10)

78


10. INVESTMENTINSUBSIDIARIES(Cont’d)

TheeffectsofdisposalofsubsidiariesonthefinancialpositionoftheGroupasat31January2010areasfollows:-

2010 Group RM’000

Currentassets 1,798Currentliabilities (1,912)Longtermliabilities (658)Netliabilitiesdisposed (772)Gainondisposalofsubsidiaries 774

Proceedsfromdisposal 2Less:cashandcashequivalents (25)

Netcashoutflowarisingfromdisposalofsubsidiaries (23)

(c) On 20 November 2008, the RM76,332,275 5-Year 1% Irredeemable Convertible Unsecured LoanStocks(“ICULS”)issuedtotheCompany’ssubsidiary,EuroplusBerhadbyVenueVentureSdn.Bhd.(“VVSB”)werefullyconvertedinto76,332,275newordinarysharesofRM1.00eachofVVSB.UponconversionoftheICULS,VVSBandits3subsidiariesnamely,BukitKhazanahSdn.Bhd.,PandanLakeClubBerhadandSaujanaUkaySdn.Bhd.(formerlyknownasGemarMegaprimaSdn.Bhd.)becameindirectsubsidiariesoftheCompany.

TheeffectsoftheabovementionedacquisitionsonthefinancialresultsoftheGroupfromthedateofacquisitionto31January2009wereasfollows:

2009 RM’000 Revenue 387Costofsales (177) GrossProfit 210Otheroperatingincome 62Administrativeandotherexpenses (283) (11)Minorityinterest 1 IncreaseinlossattributabletoequityholdersoftheCompany (10)

ANNUALREPORT2010

79


10. INVESTMENTINSUBSIDIARIES(Cont’d)

The effects of these acquisitions on the financial position of the Group as at 31 January 2009 were asfollows:

2009 RM’000Property,plantandequipment 165Landheldforpropertydevelopment 779Investmentproperties 54,605Goodwill 2,338Tradereceivables 7,072Otherreceivables,depositsandprepaidexpenses 4,938Cashandbankbalances 581Borrowings (415)Tradepayables (73)Otherpayablesandaccruedexpenses (14,141)Minorityinterest (31)

Netassets 55,818

Thefairvalueoftheassetsacquiredandliabilitiesassumedfromtheacquisitionofthesubsidiarieswereasfollows:

Atacquisition date RM’000 Netassetsacquired: Property,plantandequipment 170 Landheldforpropertydevelopment 779 Investmentproperties 61,317 Goodwill 28,408 Currenttaxassets 103 Tradereceivables 6,497 Otherreceivables,depositsandprepaidexpenses 75,134 Cashandbankbalances 518 Borrowings (415) Tradepayables (74) Otherpayablesandaccruedexpenses (95,972) Minorityinterest (133)

Totalconsideration 76,332 Purchaseconsiderationsettledviatheconversion oftheinvestmentinICULS (76,332) Less:Cashandcashequivalentsofsubsidiariesacquired (518)

Netcashinflowarisingfromacquisitionofsubsidiaries (518)

80


11. INVESTMENTINASSOCIATES

Group 2010 2009 RM’000 RM’000

Unquotedshares,atcost 10,772 10,772Shareofpost-acquisitionreserves (10,772) (10,772)

- -

(a) Detailsofassociatesareasfollows:

Financial EffectiveEquityInterest PrincipalNameofCompany YearEnd 2010 2009 Activities % %

IncorporatedinMalaysia BeruntungTransportCity SdnBhd 31January 30.60 30.60 Dormant IncorporatedinHongKong LarutLeisureEnterprise 31January 49.99 49.99 Investmentholding (HongKong)Limited*# IncorporatedinThePeople’s RepublicofChina JilinDingtaiEnterprise 31December 49.99 49.99 Propertydevelopment DevelopmentCo.Limited*

IncorporatedinCambodia CambodiaResources 31January 49.00 49.00 Dormant Import-Export CompanyLimited*# Parkgrove(Cambodia) 31January 49.00 49.00 Dormant Pte.Ltd.*# NobleHouseInvestment 31January 49.00 49.00 Dormant (Cambodia)Pte.Ltd.*#

* AuditedbyfirmsofcharteredaccountantsotherthanMessrs.BakerTillyMonteiroHeng.

# Thefinancial statementsandauditor’s reportof theseassociatesarenotavailable.Thesaidinvestmentshavebeenfullywrittendowninpriorfinancialyears.Inviewofthis,theeffectofnotequityaccountingforinvestmentinassociatesisnotmaterialtotheGroup.

ANNUALREPORT2010

81


11. INVESTMENTINASSOCIATES(Cont’d)

(b) Theauditors’reportofLarutLeisureEnterprise(HongKong)Limited(“LLE”),theholdingcompanyofJilinDingtaiEnterpriseDevelopmentCoLimited(“Jilin”)containedthefollowingqualification:-

TheauditorshavenotbeenprovidedwithsufficientevidencetosatisfythemselvesastothefairvalueofpropertydevelopmentcostoftheuncompletedbuildinginthefinancialstatementsofJilinamountingtoRM88,079,112(EquivalenttoRMB151,460,127)asat31January2010.Therearenoothersatisfactoryauditproceduresthatcouldbeadoptedtodeterminewhetherthepropertydevelopmentcostsarefairlystatedinthefinancialstatementsasat31January2010.

Thelastprofessionalvaluationfortheuncompletedbuildingwascarriedon31March2001andthevaluationapproximatedthecarryingbookvaluethen.Sincethebuildingworkdidnotrecommenceuntil2008,whenanewinvestoracquired50%oftheequityinterestinLLE,thebookvalueremainbasicallyunchanged.Thedirectorsareoftheopinionthatthereisnonecessitytocarryoutanothervaluationastheadditiontothepropertydevelopmentcostssubsequentto2008aretheactualcostsincurred.

(c) Amountowingbyassociates,whicharosefromnon-tradetransactions,areunsecured,interestfreeandhavenofixedtermsofrepayment.

(d) Thesummarisedfinancialinformationoftheassociatesisasfollows:

Group 2010 2009 RM’000 RM’000

Assetsandliabilities Non-currentassets 87,552 76,470Currentassets 3,748 25,395

Totalassets 91,300 101,865

Non-currentliabilities 107,910 72,303Currentliabilities 7,149 3,540Totalliabilities 115,059 75,843 Results Expenses,includingfinancecosts (4,684) (2,250)

12. INTERESTINJOINTLYCONTROLLEDENTITIES

Group 2010 2009 RM’000 RM’000

Unquotedshares,atcost 10,510 10,510Shareofpost-acquisitionreserves 452 (1,292)

10,962 9,218

82


12. INTERESTINJOINTLYCONTROLLEDENTITIES(Cont’d)

(a) Detailsofthejointlycontrolledentities,whichareincorporatedinMalaysia,areasfollows:

Financial EffectiveEquityInterest PrincipalNameofCompany YearEnd 2010 2009 Activities % %

AstakaTegasSdn.Bhd.* 31March 50 50 Dormant SierraUkaySdn.Bhd.* 31March 49.99 49.99 Propertydevelopment GoodDebutSdn.Bhd.* 31March 50 50 Propertydevelopment CekapTropikalSdn.Bhd.* 31March 49.99 49.99 Propertydevelopment


(b) Amountowingby/(to)jointlycontrolledentities,whicharosefromnon-tradetransactions,areunsecured,bearinterestattheratesrangingfrom6.55%to7.55%(2009:7.5%to8.5%)perannumandhavenofixedtermsofrepayment.

(c) TheGroup’saggregateshareofthecurrentassets,non-currentassets,currentliabilities,non-currentliabilities,incomeandexpensesofthejointlycontrolledentitiesareasfollows:

Group 2010 2009 RM’000 RM’000

Assetsandliabilities Non-currentassets 10,489 10,309Currentassets 101,431 86,204Totalassets 111,920 96,513

Non-currentliabilities 41,303 59,041Currentliabilities 65,275 32,934

Totalliabilities 106,578 91,975

Results Income/(Expense),includingfinancecosts 1,744 (869)

13. SINKINGFUNDSHELDBYTRUSTEES

The sinking funds are held by trustees for the redemption and/or servicing of the following financingfacilities:

Group 2010 2009 RM’000 RM’000

MurabahahNotesIssuanceFacility(“MuNIF”)(Note21b) 22 611SukukAl-Ijarah(Note21c) 4,176 8,112 4,198 8,723

ANNUALREPORT2010

83


14. INVENTORIES Group Company 2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000

Atcost: Completedpropertiesheldforsale 91,188 91,656 5,831 5,831 Consumablesandothers 1,168 1,515 – – 92,356 93,171 5,831 5,831Less:Allowanceforinventories writedown (25,817) (24,405) (144) (144) 66,539 68,766 5,687 5,687

15. TRADERECEIVABLES

Group 2010 2009 RM’000 RM’000

Tradereceivables 233,020 100,274Less:Allowancefordoubtfuldebts (15,712) (7,391) 217,308 92,883

(a) Includedintradereceivablesareamountsduefromrelatedparties(Note43)asfollows:

Group 2010 2009 RM’000 RM’000

Agrocon(M)Sdn.Bhd. – 5,397RadiantPillarSdn.Bhd. 9,000 6,000KumpulanEuroplusBerhadandits subsidiaries(“KEBGroup”) 5,229 3,147

(b) TheGroup’snormaltradecredittermsrangesfrom14daysto60days.Othercredittermsareassessedandapprovedonacase-by-casebasis.

(c) TheGrouphasnosignificantconcentrationofcreditriskthatmayarisefromexposurestoasingledebtorortogroupsofdebtors.

(d) Inthepreviousfinancialyear,includedintradereceivablesoftheGroupwasamountsduefromcertaincontractorsof theGrouptotalling RM24.445million. Thedirectorswereof theopinionthat thesereceivableswerefullyrecoverable.

84


16. OTHERRECEIVABLES,DEPOSITSANDPREPAIDEXPENSES


Otherreceivables 220,115 181,150 30,736 23,713Less:Allowancefor doubtfuldebts (70,428) (85,396) (10,208) (10,208) 149,687 95,754 20,528 13,505

Less:Amountreceivable afterthenext12months classifiedaslongterm receivables(Noted) (10,060) – – – 139,627 95,754 20,528 13,505

Refundabledeposits 26,510 27,913 1,050 54Less:Allowancefor doubtfuldebts (1,000) (1,000) (1,000) (1,000) 25,510 26,913 50 (946) Prepaidexpenses 185 153 – –Taxrecoverable 314 2,476 – 2,015 165,636 125,296 20,578 14,574

IncludedinotherreceivablesoftheGroupare:

(a) AnamountowingbyathirdpartyofRM23.38million(2009:RM23.409million)pursuanttotheissuanceofSukukAl-Ijarah(“Sukuk”)whichissecuredbythesaidthirdparty’sproperty.

(b) DeferredexpenditureinrespectoftheissuanceofSukukRM0.674million(2009:RM1.441million).

(c) Miscellaneous charges receivables from house purchasers of RM12.53 million (2009 : RM7.896million).

(d) The long term receivables are non trade, unsecured, interest free and have no fixed terms ofrepayment.

(e) Includedinotherreceivablesareamountsduefromrelatedpartiesasfollows:-

Group 2010 2009 RM’000 RM’000

IJMGroup 40 92RadiantPillarSdn.Bhd. 17 17 57 109

ThenatureoftherelationshipwiththeaboverelatedpartiesisdisclosedinNote43.

ANNUALREPORT2010

85


17. CASHANDCASHEQUIVALENTS


Housingdevelopment accounts(“HDA”) 7,497 11,035 – –Cashinhandandbankbalances 4,229 6,095 212 37Depositswithlicensedbanks 407 387 – – Cashandbankbalances 12,133 17,517 212 37Less: Bankoverdrafts(Note21B) (6,078) (6,515) (1,604) (4,473)Balancespledgedassecurity tolicensedbanks(Note21) -HDA (7,497) (10,110) – –-bankbalances – (1,896) – –-depositswithlicensedbanks – (167) – – Cashandcashequivalents (1,442) (1,171) (1,392) (4,436)

Thehousingdevelopmentaccountsof theGrouparemaintainedpursuant toSection7Aof theHousingDevelopment (ControlandLicensing)Act,1966.Theseaccounts,whichconsistofmoniesreceivedfrompurchasers,areforthepaymentofpropertydevelopmentcostsincurredandarerestrictedfromuseinotheroperations.Thesurplusmonies,ifany,willbereleasedtotherespectivesubsidiariesuponthecompletionofthepropertydevelopmentprojectsandafterallpropertydevelopmentexpenditurehavebeenfullysettled.

18. SHARECAPITAL

GroupandCompany NumberofShares Amount 2010 2009 2010 2009 ’000 ’000 RM’000 RM’000

Authorised Ordinary shares

At1February,sharesofRM0.60 (2009:RM1.00)each 939,000 939,000 563,400 939,000CapitalreductionofRM0.40pershare – – – (375,600)Sharesplittothree(3)shares ofRM0.20each 1,878,000 – – –Createdduringthefinancialyear 5,183,000 – 1,036,600 – At31January,sharesof RM0.20(2009:RM0.60)each 8,000,000 939,000 1,600,000 563,400

Redeemable convertible preference shares of RM0.20 each (RCPS)

At1February - - - -Createdduringthefinancialyear 1,500,000 - 300,000 -

At31January 1,500,000 - 300,000 -

86


18. SHARECAPITAL(Cont’d)


Irredeemable convertible preference shares (“ICPS”) of RM0.10 each At1February 600,000 600,000 60,000 60,000Createdduringthefinancialyear 400,000 – 40,000 –

At31January 1,000,000 600,000 100,000 60,000

Redeemable convertible preference shares of RM0.01 each (RCPS) At1February 100,000 100,000 1,000 1,000Cancelledduringthefinancialyear (100,000) – (1,000) –

At31January – 100,000 – 1,000 Total 10,500,000 1,639,000 2,000,000 624,400 Issuedandpaid-up Ordinary shares At1February,sharesofRM0.60 (2009:RM1.00)each 643,580 629,183 386,148 629,183CapitalreductionofRM0.40pershare – – – (257,432)Sharesplittothree(3)shares ofRM0.20each 1,287,159 – – –ConversionofICPS – 14,397 – 14,397ConversionofRCPS 458,043 – 91,609 – At31January,sharesofRM0.20 (2009:RM0.60)each 2,388,782 643,580 477,757 386,148

ICPS of RM0.10 each At1February – 143,963 – 14,397Convertedduringthefinancialyear – (143,963) – (14,397)At31January – – – –

ANNUALREPORT2010

87


18. SHARECAPITAL(Cont’d)


RCPS of RM0.20 each

At1February – – – –Allottedduringthefinancialyear 1,287,010 – 257,402 –Convertedduringthefinancialyear (458,043) – (91,609) –Less:Liabilitycomponent(Note22e) – – (124,145) –At31January 828,967 – 41,648 – 3,217,749 643,580 519,405 386,148

Less:EquitycomponentofRCPS classifiedtoreserve (41,648) –

Total 477,757 386,148

(a) On16February2009,theCompanycompletedthesharesplitinvolvingthesubdivisionofeveryone(1)existingordinaryshareofRM0.60eachintheCompanyintothree(3)ordinarysharesofRM0.20eachintheCompany(“ShareSplit”).AsaresultoftheShareSplit,643,579,444ordinarysharesofRM0.60eachintheCompanyhavebeensubdividedinto1,930,738,332ordinarysharesofRM0.20eachintheCompany.Concurrently,theauthorisedsharecapitaloftheCompanyhadincreasedtoRM2,000,000,000divided into8,000,000,000ordinarysharesofRM0.20each,1,500,000,000redeemableconvertiblepreferencesharesofRM0.20eachand1,000,000,000irredeemableconvertiblepreferencesharesofRM0.10each.

(b) 458,043,207redeemableconvertiblepreferenceshares(“RCPS”)ofRM0.20eachwereconvertedinto458,043,207newordinarysharesofRM0.20each.Theissuedandpaid-upordinarysharecapitaloftheCompanywasincreasedfromRM386,147,666toRM477,756,308.

ThenewordinarysharesissuedduringthefinancialyeararisingfromtheconversionoftheRCPSrankparipassuinallrespectswiththeexistingordinarysharesoftheCompanyexceptthattheholdersthereofshallnotbeentitledtoanydividends,rights,allotmentsand/orotherdistributionswheretheentitlementdateofwhichprecedesthedateofallotmentofthenewordinarysharesoftheCompany.

(c) TheRCPSisclassifiedbetweentheliabilitycomponentandtheequitycomponent,representingthefairvalueoftheconversioncomponent.ThemainfeaturesoftheRCPSaredisclosedinNote22.

19. TREASURYSHARES


Ordinary shares At31January,sharesofRM0.20 (2009:RM0.60)each 2,465 822 493 493

88


20. RESERVES


CapitalReserves: Capitalisationofretained profitsforbonusissueof ordinarysharesbysubsidiaries 6,392 6,392 – – Redemptionofpreference sharestoordinaryshares 4,809 4,809 – – 11,201 11,201 – – Foreignexchangereserve 21,696 13,153 – – Totalcapitalreserves 32,897 24,354 – – Convertiblesecurities 109,179 – 109,179 –Accumulatedlosses (10,759) (19,072) (33,072) (60,618) 131,317 5,282 76,107 (60,618)

21. BORROwINGS


(A) Longtermborrowings

Secured: BaIDS(Notea) 134,213 117,000 134,213 –MuNIF(Noteb) – 171,000 – –SukukAl-Ijarah(Notec) 85,184 87,065 – –Termandbridgingloans(Noted) 129,479 233,256 – 4,512 348,876 608,321 134,213 4,512Less:Amountpayable withinthenext12 months(Note21B)

BaIDS – (117,000) – –MuNIF – (171,000) – –SukukAl-Ijarah (1,207) (1,207) – –Termandbridgingloans (128,803) (233,256) – (4,512) (130,010) (522,463) – (4,512) Amountpayableafterthe next12months

BaIDS 134,213 – 134,213 –SukukAl-Ijarah 83,977 85,858 – –Termandbridgingloans 676 – – – 218,866 85,858 134,213 –

ANNUALREPORT2010

89


21. BORROwINGS(Cont’d)


(B) Shorttermborrowings

Secured:

Revolvingcredits -Relatedparty 2,669 29,761 – –-Financialinstitutions 70,239 83,135 14,004 42,526MuNIF 80,653 – – – 153,561 112,896 14,004 42,526 153,561 112,896 14,004 42,526

Unsecured:

Bankoverdrafts(Note17) 6,078 6,515 1,604 4,473Revolvingcredits -Relatedparty 23,220 24,699 23,220 24,699 29,298 31,214 24,824 29,172 Longtermborrowings payablewithinthenext 12months(Note21A)

BaIDS – 117,000 – –MuNIF – 171,000 – –SukukAl-Ijarah 1,207 1,207 – –Termandbridgingloans 128,803 233,256 – 4,512 130,010 522,463 – 4,512 Total 312,869 666,573 38,828 76,210

(a) Al-BaiBithamanAjilIslamicDebtSecurities(‘BaIDs”)

In the financial year ended31 January2005,MaxisegarSdn.Bhd. (“Maxisegar”), awholly-ownedsubsidiary,issuedRM140.0millionnominalvalueofBaIDS.

TheBaIDSissecuredinter-aliabythefollowing:

(i) Charges over all the operating accounts of Maxisegar (including Housing DevelopmentAccounts);

(ii) AssignmentsofsaleproceedsfromcertaindevelopmentphasesofMaxisegar;

(iii) AchargeovercertaindevelopmentpropertiesofMaxisegar;

(iv) SpecificdebenturecoveringfixedandfloatingchargeonallassetsofMaxisegarrelatedtotheproject;and

(v) AcorporateguaranteefromtheCompany.

90



(a) Al-BaiBithamanAjilIslamicDebtSecurities(‘BaIDs”)(cont’d)

PursuanttotheRegularisationPlanasdisclosedinNote39,on31December2008,theCompanyanditssubsidiaryhadenteredintoaDebtSettlementAgreement(“DebtSettlement”)withtheholdersofBaIDS.EachoftheholdersofBaIDSagreestoacceptasfullandfinalsettlementanddischargetheirrespectiveindebtedness,theexistingfacilities,theguaranteesandanyandallsecuritiesinrespectthereof,viatheissuanceofRM117.0millionnominalvalueofzerocoupon5-yearredeemableconvertiblesecuredloanstocks(“RCSLS”)at100%ofitsnominalvalueonthebasisofRM1.00nominalvalueofRCSLSforeveryRM1.00nominalvalueoftheBaIDSoutstanding.

AsaconsequencetotheaboveDebtSettlement,theholdersofBaIDShavegrantedapartialwaiveroftheoutstandingbalanceoftheBaIDSandalloutstandingprofitsandotherchargesaccruedfromthecut-offdateasat27February2006uptothedateofissuanceoftheRCSLS.

TheRCSLSmentionedabovewereissuedduringthefinancialyeartotheholdersofBaIDSasdisclosedinNote22.

Duringthefinancialyear,theCompanyhadissuedRM134,213,337nominalvalueof10-yearBaIDSat100%ofitsnominalvaluepursuanttoRegularisationPlanasdisclosedinNote39.

TheBaIDsbearsthefollowingprofitratesperannum:

Period Profitrate(perannum)

Year1-3 NotapplicableYear4-5 2%Year6-8 6%Year9 8%Year10 9%

TheBaIDsoftheCompanyconsistofnon-interestbearingprimarynotestogetherwithnon-detachablesecondarynotes.Theredemptionoftheprimarynotesshallbemadeon100%ofitsnominalvalueatmaturitydatewhiletheredemptionofthesecondarynotesshallbemadeonasemiannualbasisthroughoutthetenureoftheBaIDs.

TheBaIDsoftheCompanyissecuredoncertainpropertiesofsubsidiaries.

(b) MuNIF

TheMuNIFoftheGroupissecuredbythefollowing:

(i) MemorandumofChargeovertheoperatingaccounts(includingHousingDevelopmentAccounts)ofcertainsubsidiaries;

(ii) Assignmentofproceedsfromsaleofthedevelopmentpropertiesofcertainsubsidiaries;

(iii) Debenturescreatingafixedandfloatingchargeoverassetsofcertainsubsidiaries;and

(iv) Third party first legal charge on certain subsidiaries’ operating accounts (including HousingDevelopmentAccounts)asreferredtoinNote17.

ANNUALREPORT2010

91



(b) MuNIF(cont’d)

PursuanttotheRegularisationPlanasdisclosedinNote39,on31December2008,theCompanyanditssubsidiaryhadenteredintoaDebtSettlementAgreement(“DebtSettlement”)withtheholdersofMuNIF.EachoftheholdersofMuNIFagreestoacceptasfullandfinalsettlementanddischargeoftheirrespectiveindebtedness,theexistingfacilities,theguaranteesandanyandallsecuritiesinrespectthereof,viatheissuanceofRM171.0millionnominalvalueofzerocoupon5-yearredeemableconvertiblesecuredloanstocks(“RCSLS”)at100%ofitsnominalvalueonthebasisofRM1.00nominalvalueofRCSLSforeveryRM1.00nominalvalueoftheMuNIFoutstanding.

AsaconsequencetotheaboveDebtSettlement,theholdersofMuNIFhavegrantedapartialwaiveroftheoutstandingbalanceoftheMuNIFandalloutstandingprofitsandotherchargesaccruedfromthecut-offdateasat29March2006uptothedateofissuanceoftheRCSLS.

TheRCSLSmentionedabovewereissuedduringthefinancialyeartotheholdersofMuNIFasdisclosed

inNote22.

AnamountofRM21,825(2009:RM611,000)hasbeenmaintainedinthesinkingfundsheldbytrusteesinaccordancewiththeMuNIFgrantedtoasubsidiaryasdisclosedinNote13.Theamountisdepositedtomeettheredemptionofmaturingnotes.

(c) SukukAl-Ijarah

Inthefinancialyearended31January2005,AmpleZoneBerhad(“AmpleZone”),a99.99%ownedsubsidiary,issuedRM150.0millionnominalvalueofSukukAl-Ijarah(“Sukuk”).

TheSukukissecuredinter-aliabythefollowing:

(i) DebentureoverthefixedandfloatingchargeoverallassetsandpropertiesandundertakingsbothpresentandfutureofAmpleZone;and

(ii) Principalchargeonvariousdesignatedaccounts.

On18January2008,theFacilityAgentfortheSukukhasutilisedpartofthesaleproceedsfromthedisposalofaninvestmentpropertytoredeemRM58,020,800facevalueofPrimarySukuk.

AnamountofRM4.176million(2009:RM8.112million)hasbeenmaintainedinthebankaccountheldbytrusteesinaccordancewiththerequirementofSukukgrantedtoAmpleZoneasdisclosedinNote13.Theamountisdepositedfortheprofitservicingrequirement.

TheSukukshallbepayableuponmaturityasfollows:

Group 2010 2009 RM’000 RM’000

Yearending/ended31January

2010 – 1,2072011 1,207 1,2072012 83,977 84,651

85,184 87,065

92



(d) Thetermandbridgingloansaresecuredbythefollowing:

(i) First and third legal charge over the freehold land, leasehold land and buildings of certainsubsidiariesasdisclosedinNotes5,Note6andNote7tothefinancialstatements;

(ii) Subordinationdeedexecutedbyasubsidiary;

(iii) Fixed and floating charge over all the assets, revenue, rights and benefits on the propertydevelopmentpropertiesofcertainsubsidiaries;and

(iv) CorporateguaranteebytheCompany.

(e) TheCompanyhasprovidedcorporateguaranteesforunsecuredbankoverdraftsofitssubsidiary.

ThesecuredrevolvingcreditsoftheGroupandoftheCompanyaresecuredbyfixedandfloatingchargesovercertainassetsoftheGroupandoftheCompanyasdisclosedinNotes5,Note6andNote7.

(f) Therangeofeffectiveinterestratesorpurchaseyieldduringthefinancialyearforborrowingsisasfollows:

Group Company 2009 2008 2009 2008 % % % %

Revolvingcredits 9.00-9.75 6.83-10.50 9.00-9.75 9.00-9.75Bankoverdrafts 7.00-9.00 7.00-9.00 7.00-9.00 8.75-9.00BaIDS – 8.21 – –MuNIF 5.75 5.75 – –Termandbridgingloans 7.75-16.00 6.60-16.00 – 9.00SukukAl-Ijarah 5.20-9.30 5.20-9.30 – –

(g) PursuanttotheRegularisationPlanasdisclosedinNote39,on31December2008,theCompanyanditssubsidiarieshadalsoenteredintoaSettlementAgreementwithtwootherlenders,RHBInvestmentBankBerhad(“RHB”)andEONBankBerhad(“EON”)forthesettlementofdebtstotallingRM75,833,979.Eachof the lendersagrees toacceptas fullandfinalsettlementanddischargeof their respectiveindebtedness,theexistingfacilities,theguaranteesandanyandallsecuritiesinrespectthereof,viatheissuanceoftwoclassesofzerocoupon5-yearredeemableconvertiblesecuredloanstocks(“RCSLS”)ofRM50,328,000andRM17,922,581toRHBandEONrespectively.

AsaconsequencetotheaboveSettlementAgreement,RHBandEONhavegrantedapartialwaiveroftheoutstandingbalanceandalloutstandinginterestsandotherchargesaccruedfromthecut-offdateasat31May2006uptothedateofissuanceoftheRCSLS.

TheRCSLSmentionedabovewereissuedduringthefinancialyeartoRHBandEONasdisclosedinNote22.

ANNUALREPORT2010

93


22. CONVERTIBLESECURITIES

GROUPANDCOMPANY 2010 2009 RM’000 RM’000

Liability components

Secured: -RCSLSA(Notea) 38,950 – -RCSLSB(Noteb) 13,883 – -RCSLSC(Notec) 132,445 – -RCSLSD(Noted) 90,622 –RCPS(Notee) 114,286 – 390,186 –

PursuanttotheRegularisationPlanasdisclosedinNote39,theCompanyissuedfour(4)classesofzerocoupon

redeemableconvertiblesecuredloanstocks(“RCSLS”)withanaggregateamountofuptoRM356,256,581nominalvalueofRCSLSat100%ofitsnominalvaluecomprising1,781,282,905unitsofRCSLSofRM0.20eachasdetailedbelow:

Class Lenders Amount(RM)

RCSLS–A RHBInvestmentBank 50,328,000RCSLS–B EONBank/EONCAPIslamicBankBerhad 17,922,581RCSLS–C HoldersofMuNIF 171,000,000RCSLS–D HoldersofBaIDsofMaxisegarSdn.Bhd. 117,000,000

356,250,581

AnadditionalRM2,000nominalvalueofRCSLSwillbeissuedforeachofRCSLS-B,RCSLS-CandRCSLS-D

at100%oftheirnominalvaluetoselectedinvestorstofacilitatethelistingoftheRCSLS-B,RCSLS-CandRCSLS-DontheMainMarketofBursaMalaysiaSecuritiesBerhad,suchthattherewillbe100holdersforeachclass,withholdersholding100unitsofRCSLSofRM0.20each.TheRM50,328,000nominalvalueofRCSLS-Awillnotbelisted.

EachclassofRCSLShasatenureof5yearsfromthedateof issueandissecuredontheassetsoftheGroup.


Note (a) Redeemable convertible secured loan stock A of RM0.20 each (RCSLS-A) At1February – –Issuedduringthefinancialyear 37,608 –Add: Interestrecognised 1,342 – At31January 38,950 –

94


22. CONVERTIBLESECURITIES(Cont’d)


Note (b) Redeemable convertible secured loan stock B of RM0.20 each (RCSLS-B) At1February – –Issuedduringthefinancialyear 13,394 –Add: Interestrecognised 489 – At31January 13,883 –

Note ( c) Redeemable convertible secured loan stock C of RM0.20 each (RCSLS-C) At1February – –Issuedduringthefinancialyear 127,783 –Add: Interestrecognised 4,662 – At31January 132,445 –

Note (d) Redeemable convertible secured loan stock D of RM0.20 each (RCSLS-D) At1February – –Issuedduringthefinancialyear 87,431 –Add: Interestrecognised 3,191 – At31January 90,622 –

Note (e) Redeemable convertible preference share of RM0.20 each (RCPS ) At1February – –Liabilitycomponent(Note18) 124,145 –Less: Interestrecognised (9,859) – At31January 114,286 –

ANNUALREPORT2010

95



(a) Redeemable Convertible Secured Loan Stock A

TheRCSLS-Awereissuedat100%ofthenominalvalueandbearzerocouponrate.TheRCSLS-AareissuedinregisteredformandindenominationofRM0.20.

TheRCSLS-Ahasamaturityoffive (5)yearsfromthedateof issue.Eachregisteredholderof theRCSLS-AshallhavetherighttoconvertatanytimeduringtheconversionperiodoftheRCSLS-AintofullypaidnewordinarysharesofRM0.20eachintheCompanyattheconversionprice.

Eachnominal valueofRCSLS-Aare convertible into newordinary sharesofRM0.20each in theCompanyataconversionpriceofRM0.20each.

TheRCSLS-AaresecuredagainsttheidentifiedassetsoftheGroup.AsinkingfundaccountwillbecreatedtocaptureproceedsfromthesaleofthechargedassetsandshallbeutilisedtoredeemtheequivalentvalueofRCSLS-A.TheredemptionoftheRCSLS-Ashallbeonsemi-annualbasis.

(b) Redeemable Convertible Secured Loan Stock B

TheRCSLS-Bwereissuedat100%ofthenominalvalueandbearzerocouponrate.TheRCSLS-BareissuedinregisteredformandindenominationofRM0.20.

TheRCSLS-Bhasamaturityoffive(5)yearsfromthedateof issue.EachregisteredholderoftheRCSLS-BshallhavetherighttoconvertatanytimeduringtheconversionperiodoftheRCSLS-BintofullypaidnewordinarysharesofRM0.20eachintheCompanyattheconversionprice.

Eachnominal valueofRCSLS-Bareconvertible into newordinary sharesofRM0.20each in theCompanyataconversionpriceofRM0.20each.

TheRCSLS-BaresecuredagainsttheidentifiedassetsoftheGroup.AsinkingfundaccountwillbecreatedtocaptureproceedsfromthesaleofthechargedassetsandshallbeutilisedtoredeemtheequivalentvalueofRCSLS-B.TheredemptionoftheRCSLS-Bshallbeonannualbasis.

(c) Redeemable Convertible Secured Loan Stock C

TheRCSLS-Cwereissuedat100%ofthenominalvalueandbearzerocouponrate.TheRCSLS-CareissuedinregisteredformandindenominationofRM0.20.

TheRCSLS-Chasamaturityoffive(5)yearsfromthedateof issue.EachregisteredholderoftheRCSLS-CshallhavetherighttoconvertatanytimeduringtheconversionperiodoftheRCSLS-CintofullypaidnewordinarysharesofRM0.20eachintheCompanyattheconversionprice.

Eachnominal valueofRCSLS-Careconvertible into newordinary sharesofRM0.20each in theCompanyataconversionpriceofRM0.20each.

TheRCSLS-CaresecuredagainsttheidentifiedassetsoftheGroup.AsinkingfundaccountwillbecreatedtocaptureproceedsfromthesaleofthechargedassetsandshallbeutilisedtoredeemtheequivalentvalueofRCSLS-C.TheredemptionoftheRCSLS-Cshallbeonannualbasis.

96



(d) Redeemable Convertible Secured Loan Stock D

TheRCSLS-Dwereissuedat100%ofthenominalvalueandbearzerocouponrate.TheRCSLS-DareissuedinregisteredformandindenominationofRM0.20.

TheRCSLS-Dhasamaturityoffive(5)yearsfromthedateof issue.EachregisteredholderoftheRCSLS-DshallhavetherighttoconvertatanytimeduringtheconversionperiodoftheRCSLS-DintofullypaidnewordinarysharesofRM0.20eachintheCompanyattheconversionprice.

Eachnominal valueofRCSLS-Dareconvertible into newordinary sharesofRM0.20each in theCompanyataconversionpriceofRM0.20each.

TheRCSLS-DaresecuredagainsttheidentifiedassetsoftheGroup.AsinkingfundaccountwillbecreatedtocaptureproceedsfromthesaleofthechargedassetsandshallbeutilisedtoredeemtheequivalentvalueofRCSLS-D.TheredemptionoftheRCSLS-Dshallbeonannualbasis.

(e) Redeemable Convertible Preference Shares TheRCPShaveparvalueofRM0.20eachandbearzerodividendrate.

TheRCPShasamaturityoffive(5)yearsfromthedateofissue,subjecthowevertoafurtherextensionofuptomaximumoftwo(2)yearsfromYear5attheoptionoftheCompany.Onmaturity,alloutstandingRCPSwillbeautomaticallyconvertedintonewordinarysharesofRM0.20eachintheCompany.

EachregisteredholderoftheRCPSshallhavetherighttoconvertatanytimeduringtheconversionperiodoftheRCPSintofullypaidnewordinarysharesofRM0.20eachintheCompanyattheconversionprice.

EachRCPSisconvertibleintoonenewordinarysharesofRM0.20eachintheCompanyataconversionpriceofRM0.20each.

TheRCPSshallcarrynorighttovoteatanygeneralmeetingsoftheCompanyexceptwithregardstoanyproposalonthefollowings:-

(i) ToreducethecapitaloftheCompany;(ii) TodisposeofthewholeoftheCompany’sproperty,businessandundertaking;(iii) TowinduptheCompany;and(iv) AnyproposalthataffecttherightsattachedtotheRCPS.

ANNUALREPORT2010

97


23. LONGTERMPAYABLES Group 2010 2009 RM’000 RM’000

Amountpayablefortheacquisitionofland(Notea) 52,352 52,352

Loanfromaminorityshareholderofasubsidiary(Noteb) 11,184 11,890

Amountpayableforacquisitionofbuilding(Notec) 14,398 15,308

Preferenceshareholdersofasubsidiary 75 75

78,009 79,625

(a) TheamountpayablefortheacquisitionoflandispayableinaccordancewiththetermsandconditionsoftheSaleandPurchaseAgreements.Theamountsarenotrepayablewithin12monthsfromtheendofthefinancialyear.

(b) Loanfromaminorityshareholderofasubsidiaryisinterestfree,unsecuredandhasnofixedtermsofrepayment.

(c) Theamountpayablefortheacquisitionofbuildingisinrelationtoanagreemententeredintowithathirdpartyinthe1999financialyearforthesaleoffourfloorsofabuildingownedbyasubsidiary.Theagreementprovidesanoptionforthesubsidiarytore-acquirethosefloorswithintenyearsfromthedateofagreementatthemarketvalueonthedateofexerciseoftheoption.Thedirectorshavetheintentiontoexercisetheoptionandthereforethetransactionwasnotrecognisedasadisposal.

24. DEFERREDTAXLIABILITIES


At1February 4,205 3,959 – –Recognisedintheincome statements(Note35) Currentyear (3,427) (223) (3,427) – prioryears 594 469 – –Convertiblesecurities 36,393 – 36,393 – At31January 37,765 4,205 32,966 –

98


24. DEFERREDTAXLIABILITIES(Cont’d)

Thedeferredtaxliabilitiesareinrespectofthefollowing:


Deferred tax liabilities

Taxeffectson: Temporarydifferencesarisingfrom: Property,plantandequipment 5,898 5,898 – –Others 11,128 10,534 – –Convertiblesecurities 32,966 – 32,966 49,992 16,432 32,966 –

Deferred tax assets

Taxeffectson: Temporarydifferencesarisingfrom: Unusedtaxlosses (7,551) (7,551) – –Unabsorbedcapitalallowances (4,676) (4,676) – – (12,227) (12,227) – – At31January 37,765 4,205 32,966 –

Thedirectorsareoftheopinionthat,twoofitssubsidiaries,whichrecognisedthedeferredtaxassets,willbeabletoproducesufficienttaxableprofittorealisethedeferredtaxassetsbasedontheirprojectionsoftheoperationsofthesesubsidiaries.

Deferredtaxassetshavenotbeenrecognisedinrespectofthefollowingitems:


Unusedtaxlosses 111,902 108,434 – 364Deductible temporarydifferences 1,288 1,125 – 6 113,190 109,559 – 370

Deferredtaxassetshavenotbeenrecognisedinrespectoftheseitemsbecauseitisnotprobablethatfuture

taxableprofitwillbeavailableagainstwhichtheGroupcanutilisethebenefits.

ANNUALREPORT2010

99


25. PROVISIONFORLIABILITIES

Group 2010 2009 RM’000 RM’000

At1February 96,312 97,014Provisionduringthefinancialyear – 738Chargedtoincomestatements (2,305) –Utilisationofprovisionduringthefinancialyear (39,092) (1,440) 54,915 96,312Less:Amountpayableafterthe next12months (43,614) (43,614)

At31January 11,301 52,698

Provisionforliabilitiescomprises:

Group 2010 2009 RM’000 RM’000

Provisionforliquidatedandascertaineddamages 54,915 57,987Provisionforcompensationarisingfromalitigation – 38,325 54,915 96,312

Provisionforliquidatedandascertaineddamagesisinrespectofprojectsundertakenbycertainsubsidiaries.Theprovisionisrecognisedforexpectedliquidateddamagesclaimsbasedonthetermsoftheapplicablesaleandpurchaseagreements.

Inthepreviousfinancialyear,provisionforcompensationarisingfromalitigationisinrespectofalegalsuitfiledbyasubsidiary,MaxisegarSdn.Bhd.againstathirdparty(“LandVendor”)torecoverthedepositandinstalmentspaidtotheLandVendorfortheproposedpurchaseoflandbyMSSBasMSSBcouldnotobtainaloantocompletethesaleandpurchaseagreementduetointerveningevents.JudgementwasdeliveredinfavouroftheLandVendortogetherwithinterestsandcostsamountingtoRM38.325million.

100


26. TRADEPAYABLES


Tradepayables 329,126 196,375 2,590 2,590Progressbillingsinrespectof propertydevelopmentcosts 94,739 61,372 – –Retentionsum 33,397 30,879 – – 457,262 288,626 2,590 2,590

(a) Includedintradepayablesandretentionsumareamountsduetorelatedpartiesasfollows:

Group 2010 2009 RM’000 RM’000

Trade Payables KEBGroup 5,710 4,493IJMGroup 151,882 163,916 157,592 168,409

Retention Sums KEBGroup 1,291 595IJMGroup – 455 1,291 1,050

Total 158,883 169,459


(b) ThenormaltradecredittermsgrantedtotheGrouprangesfrom30daysto90days.

ANNUALREPORT2010

101


27. OTHERPAYABLESANDACCRUEDEXPENSES


Otherpayables 499,455 401,150 78,222 66,229Accruedexpenses 161,307 233,129 5,950 8,427Amountpayablefor acquisitionofland 26,065 31,292 – –Obligationarisingfrom acquisitionofland(Notea) 136,735 136,735 – – Totallandcostpayable 162,800 168,027 – – 823,562 802,306 84,172 74,656

(a) TheobligationarisingfromtheacquisitionoflandisinrespectofobligationsarisingfromtheUniversitiIndustriSelangor (“UNISEL”)project,whereby theSelangorStateGovernmenthadalienated threeparcelsoflandtotheGroupinconsiderationforthedevelopmentofUNISELin2001asfurtherexplainedbelow.

In2001,MaxisegarSdn.Bhd.(“Maxisegar”),awholly-ownedsubsidiary,enteredintoanagreementwiththeStateGovernmentofSelangorforthefinancingandconstructionofthemaincampusofUNISELon572.16acresoflandatBerjuntaiBestari,SelangorDarulEhsanforatotalvalueofRM750million.Inreturn,theStateGovernmentofSelangorhadalienatedthreeparcelsofleaseholdlandtoMaxisegarasfollows:

Acres RM’000 BatangBerjuntai 3,000 345,000TamanPuncakJalil 801 337,500SaujanaDamansara 110 67,500 3,911 750,000

Maxisegarwasunabletomeetitsfinancialobligationtobearthedevelopmentandmaintenancecosts

dueofapproximatelyRM134.0million(“obligationdue”).Maxisegarenteredintoasettlementagreementon29July2005withKumpulanDarulEhsanBerhad(“KDEB”)andPendidikanIndustriYSSdn.Bhd.(“PIYS”)(bothofwhichactedasnomineesofStateGovernmentofSelangor)wherebyMaxisegaragreedtosettletheobligationduebytransferring1,715.9acresofBatangBerjuntailandwhichthepartieshaveagreedshallbevaluedforthepurposeofsettlementatRM80,000peracretoKDEBand/orPIYS.

(b) IncludedinotherpayablesoftheGroupare:

(i) RefundabledepositsofRM9.10million(2009:RM19.284million)receivedfrompurchasersofpropertiesandtenantsofcomplexes;

(ii) Advances from minority shareholders of a subsidiary amounting to RM0.282 million (2009 :RM1.166million),bearinginterestattherateof8%(2009:8%)perannum.Theadvancesareunsecuredandhavenofixedtermsofrepayment;

(iii) RenovationcostspayableforahotelbuildingofapproximatelyRM1.731million(2009:RM1.858million);and

(iv) Amount owing to a corporate shareholder, Kumpulan Europlus Berhad and its subsidiaries,of approximately RM120.447 million (2009 : RM71.105 million) which arose from paymentsmadeonbehalf,bearinginterestattherateof8%(2009:8%)perannumwithnofixedtermsofrepayment.

102


27. OTHERPAYABLESANDACCRUEDEXPENSES(Cont’d)

(c) IncludedinotherpayablesoftheGroupandoftheCompanyareamountspayabletotheIJMGroup,arelatedparty,ofRM17.035million(2009:RM14.240million)andRM7.503million(2009:RM5.0million)respectively.ThenatureoftherelationshipwiththisrelatedpartyisdisclosedinNote43.

(d) IncludedinaccruedexpensesoftheGroupandoftheCompanyare:

(i) AccruedinterestofRM123.893million(2009:RM90.755million)andRM4.482million(2009:RM6.997million)respectively;

(ii) AmountpayabletoauthoritiesinrelationtodevelopmentprojectsofRM58.225million(2009:RM62.557million;and

(iii) ProgressbillingsbilledinadvanceofRM39.275million(2009:RM47.929million).

28. DEFERREDPROGRESSBILLINGS

Group 2010 2009 RM’000 RM’000

Deferredprogressbillings 427,539 427,539 Discountondeferredprogressbillings (35,926) (35,926) Deferredprogressbillings,netofdiscount 391,613 391,613 Less:settledbyconvertiblesecurities (391,613) – – 391,613

(a) DeferredprogressbillingsrelatestoanIslamicAssetsBackedSecuritisation(“ABS”)arrangedbyasubsidiary.TheABSarrangementencompassesthesaleofthesubsidiary’srighttobillundercertainSaleandPurchaseAgreementsofcertainphasesoftwodevelopmentprojectstoaspecialpurposevehicle,AmbangSentosaSdn.Bhd.(“ASSB”),foranetcashpurchaseconsiderationofapproximatelyRM919.231million.

(b) The Group defaulting on its repayment obligations under ABS on its due date on 28 July 2006.Subsequentlyon5October2006,theCompanyandMaxisegarSdn.Bhd.awholly-ownedsubsidiary,hadenteredintoasettlementagreementwithASSBandPBTrusteeServicesBerhad(“Trustee”).ThesettlementagreementencompassestheacceptanceofRM503.8millionasfullandfinalsettlementtowardstheremainingoutstandingBaIDswiththefollowingsalientterms:

(i) cashportionofRM67.8millionandallprofitsaccruingthereonintheEscrowAccountsandthe

BaIDsRedemptionAccountasattheCashPortionPaymentDate;

(ii) securedAl-BaiBithamanAjil IslamicDebtSecuritiesofup toanaggregatevalueofRMl50.0millionSettlementBaIDstobeissuedinoneseriesbytheCompanywithatenureof8yearsandattheissuer’soptiontoextendanother2years;

(iii) RM286.0millionofRedeemableConvertiblePreferenceShares(“RCPS”)atparvalueRM0.20perRCPSwithamaturityperiodof5years;

ThesettlementagreementformspartoftheRegularisationPlanasdisclosedinNote39.

PursuanttotheRegularisationPlan,thisindebtednesswasassumedbytheCompanyandwassettledbytheissuanceofRM134,213,337nominalvalueof100%of10yearBaIDsandRM250,407,000RCPSofparvalueofRM0.20each.

ANNUALREPORT2010

103


29. REVENUE


Propertydevelopmentrevenue 130,319 241,367 – –Rentalincome 15,456 14,508 – –Revenuefromhoteloperations 17,531 19,492 – –Managementfeesandcharges fromthirdparties 3,423 7,456 – –Saleofdevelopmentland 80,466 - – –Salesofinventories 4,151 18,433 – –Others 2,368 22 – – 253,714 301,278 – –

30. COSTOFSALES


Propertydevelopmentcosts 83,453 240,452 – –Costofrental 11,114 9,779 – –Costofforhoteloperations 8,005 8,617 – –Costofdevelopmentland 38,410 – – –Costofinventoriessold 4,225 14,691 – –Others 50 – – – 145,257 273,539 – –

31. FINANCECOSTS


Interestexpenseson: -termandbridgingloans 21,213 16,395 5,771 3,785-bankoverdraft 433 536 126 141-otherborrowings 15,144 31,298 5,788 16,927-convertiblesecurities 13,708 – 13,708 – 50,498 48,229 25,393 20,853ProfitonIslamicdebtsecurities 5,530 5,344 – – 56,028 53,573 25,393 20,853

104


31. FINANCECOSTS(Cont’d)

IncludedininterestexpenseoftheGroupandtheCompanyareamountspaidorpayabletothefollowingrelatedparties:


PengurusanProjekBersistem Sdn.Bhd. 635 2,389 – –KEBGroup 8,064 24,271 3,258 14,675


32. PROFITBEFORETAX


Profitbeforetaxisstatedaftercharging/(crediting):

Staffcosts(Note33) 9,551 11,237 – 5Allowancefordoubtfuldebts -thirdparties(nontrade) 1,972 17,046 – 3,550 -thirdparties(trade) 20,704 – – – -associates – 25 – –Allowanceforobsoleteinventories 2,337 1,655 – –Auditors’remuneration -currentyear 377 414 80 70 -(over)/underaccrualinprioryears (17) 66 – – -otherservices 1 – – –Baddebtswrittenoff-thirdparties 320 409 – –Equipmentrental (31) – – –Depreciation/amortisation: -property,plantandequipment 6,899 7,602 222 226 -investmentproperties 2,577 4,102 – – -prepaidleasepayments 696 695 – –(Gain)/Lossondisposalof: -property,plantandequipment (307) 313 – – -investmentproperties – 233 – –-Subsidiaries(Note10b) (774) – – –Impairmentlossongoodwill 1,586 – – –Investmentpropertieswrittenoff 2,295 – – –Interestincome (2,034) (1,701) – –Landanddevelopmentcostswrittenoff – 41 – –Managementfee 2,382 – – –Rentalincome (1,658) (1,339) – (5)Rentalofoffice/complex – 104 – –(Writeback)/additionofprovisionfor liquidatedandascertaineddamages (2,305) 738 – –

ANNUALREPORT2010

105


32. PROFITBEFORETAX(Cont’d)


Profitbeforetaxisstatedaftercharging/(crediting):

Writebackofallowancefordoubtful debtsnolongerrequired -thirdparties (13) (2,465) – – -subsidiaries – – – (19,604)Writebackofallowancefor obsoleteinventories (925) (38) – –Writebackofexpensesoveraccrued – (1,385) – –Waiverofdebts -thirdparties (12,000) (184) – – -subsidiary – – (52,536) – -borrowings – (7,583) – (4,587) -Islamicdebtsecurities – (32,000) – – -Deferredprogressbillings – (43,513) – –Waiverofinterests/profits -borrowings – (52,483) – (7,864) -Deferredprogressbillings – (9,794) – –

33. STAFFCOSTS


Wagesandsalaries 7,930 9,571 – –Socialsecurity 76 89 – –Definedcontribution 1,135 905 – –Otherstaffrelatedexpenses 410 672 – 5 9,551 11,237 – 5

Includedinthestaffcosts: KeyManagementPersonnel otherthanDirectors: Salariesandotherremuneration 325 529 – – Definedcontribution 55 70 – – Otherstaffrelatedexpenses 10 51 – – 390 650 – – Directors’remuneration(Note34) 804 1,900 690 1416

106


34. DIRECTORS’REMUNERATION


Company: Executive directors: Fees – 58 – 58 Salaries 342 569 342 569 Definedcontribution 64 68 64 68 Otheremoluments 22 311 22 311 428 1,006 428 1,006 Non-executive directors: Fees – 108 – 108 Otheremoluments 262 302 262 302 262 410 262 410 690 1,416 690 1,416 Subsidiaries: Salaries 94 340 – – Definedcontribution 13 41 – – Otheremoluments 7 103 – – 114 484 – – 804 1,900 690 1,416

Benefit-in-kinds 6 41 6 11

ThenumberofdirectorsoftheCompanywhosetotalremunerationduringthefinancialyearfallwithinthefollowingbandsareasfollows:

2010 2009

Executive directors: RM350,001-RM400,000 – 1RM300,001-RM350,000 – 2RM200,001-RM300,000 1 –RM100,001-RM200,000 1 –RM50,000-RM100,000 – – Non-Executivedirectors: RM50,001-RM100,000 1 5BelowRM50,000 5 1 8 9

ANNUALREPORT2010

107


35. INCOMETAXEXPENSE/(CREDIT)


Incometax -currentfinancialyear 10,922 1,192 – –-priorfinancialyears 134 (1,590) – 10Deferredtax -currentfinancialyear (3,427) (223) (3,427) –-priorfinancialyears 594 469 – – 8,223 (152) (3,427) 10

IncometaxiscalculatedattheMalaysianstatutorytaxrateof25%(2009:25%)oftheestimatedassessable

profitforthefinancialyear.

AreconciliationofincometaxexpenseapplicabletoprofitbeforetaxatthestatutoryincometaxratetoincometaxexpenseattheeffectiveincometaxrateoftheGroupandoftheCompanyareasfollows:


Profitbeforetax 17,245 60,563 24,119 4,287

TaxationatMalaysian statutorytaxrateof 25%(2009:25%) 4,311 15,141 6,030 1,072Incomenotsubjecttotax (7,865) (46,431) (13,109) (8,014)Expensesnotdeductible fortaxpurposes 14,680 22,124 3,282 5,974(Reversal)/Originationofdeferred taxassetsnotrecognisedonthe financialstatements (3,631) 10,135 370 968Underprovisionofdeferred taxinpreviousfinancialyears 594 469 – –Under/(Over)provisionofincome taxexpenseinpriorfinancialyear 134 (1,590) – 10 Taxexpense/(credit)forthe financialyear 8,223 (152) (3,427) 10

108


36. EARNINGSPERSHARE

(a) Basic

Basicearningspershare iscalculatedbydividingthe profit for thefinancialyearbytheweightedaveragenumberofordinarysharesinissueduringthefinancialyear,excludingtreasurysharesheldbytheCompany.

Group 2010 2009

Profitforthefinancialyear(RM’000) 8,313 59,105Weightedaveragenumberofshares(’000) 1,975,071 629,367Basicearningspershare(sen) 0.42 9.39

(b) Diluted

For thepurposeofcalculatingdilutedearningspershare, the profit for thefinancialyearand theweightednumberofordinarysharesinissueduringtheyearhavebeenadjustedfortheeffectofdilutivepotentialordinarysharesfromtheconversionofRCPSandRCSLS.Theamountofprofitforthefinancialyearisadjustedbythetaxeffectofinterestexpenserecognisedduringthefinancialyearwhichwouldhavebeensavedontheconversionoftheoutstandingconvertiblesecuritiesintoordinaryshares.Theadjustedweightedaveragenumberofordinarysharesistheweightednumberofsharesissuedduringthefinancialyearplustheweightedaveragenumberofordinaryshareswhichwouldbeissuedontheconversionofallthedilutivepotentialordinarysharesintoordinaryshares.TheRCPSandRCSLSaredeemedtohavebeenconvertedintoordinarysharesatthedateofissue.

Group 2010 2009

Adjustedprofitforthefinancialyear(RM’000) 18,594 59,105

Weightedaveragenumberof ordinarysharesinissue(’000) 1,975,071 629,367 Adjustmentforassumed conversionofRCPSandRCSLS(’000) 2,610,245 –

Adjustedweightedaverage numberofordinaryshares inissueandissuable(’000) 4,585,316 629,367

Dilutedearningspershare(sen) 0.41 9.39

ANNUALREPORT2010

109


37. CONTINGENTLIABILITIES/LOSSES


Unsecured: Guaranteesgiventofinancial institutionfor:- -creditfacilitiesgrantedto subsidiaries – – 220,513 219,779 -creditfacilitesgrantedto jointlycontrolledentities 21,650 21,941 21,650 21,941 Guaranteesgiventononfinancial institutionsfor:- -creditfacilitiesgranted – – – 288,000 subsidiaries -purchaseoflandby subsidiaries – – 201,634 201,634 21,650 21,941 443,797 731,354

Secured: Assetspledgedtofinancial institutionforcreditfacilities grantedtoKEBgroup 136,600 136,520 136,600 136,520 158,250 158,461 580,397 867,874

NoprovisionforthesecontingentliabilitieshavebeenmadeinthefinancialstatementsoftheGroupandof

theCompanyasthequantumoftheshortfallofwhichtheGroupandtheCompanyareliabletomakegoodcannotbepresentlydetermined.

38. COMMITMENTS

On10January2005,AmpleZoneBerhad,a99.99%ownedsubsidiaryoftheCompany,hadenteredinto,inter-alia,anAssetsPurchaseAgreementandaTrustDeedundertheissuanceofSUKUKofRM150.0million.ItisaconditionofthesaidtrustdeedthattheCompanygrantsanoptioninfavourofthesecuritytrusteeforthebenefitoftheSUKUKholders.Pursuanttotheoptionagreement,theCompanyirrevocablyandunconditionallygrantstothesecuritytrusteearighttorequiretheCompanyatanytimeduringtheoptionperiodtopurchasetheassetsattheexercisepriceuponoraftertheoccurrenceofatriggereventoraneventofdefaultoruponorafterfailureofthesellerstohonourtheirsaleundertakingsorpurchaseundertakings.

110


39. REGULARISATIONPLAN

FollowingtheRegularisationPlanundertakenbyGroupinthepreviousfinancialyear,theSecuritiesCommissionhadvideitsletterdated6May2009approvedtheproposedrevisiontotheprincipaltermsandconditionoftheRCSLSandSettlementBaIDS(“ProposedRevision”)andissubjectto,inter-alia,thefollowingconditions:-

(i) All relevant parties to the RCSLS and Settlement BaIDS including, but not limited to, trustee andratingagency,befullyinformedoftheProposedRevisionand,whereapplicable,obtaintheirconsentsthereto;

(ii) RHBInvestmentBankBerhadandtheCompanyhaveundertakenallnecessaryduediligenceinrelationtotheProposedRevision;

(iii) RHBInvestmentBankBerhadandtheCompanytotakethenecessarystepstoensurecompliancewithParagraph4.1(iii)oftheGuidelinesontheMinimumContentsRequirementsforTrustDeeds;

(iv) RHBInvestmentBankBerhadandtheCompanytoobtainallotherregulatoryapprovalsfortheProposedRevision,ifany;and

(v) RHBInvestmentBankBerhadtosubmitawrittenconfirmationoncompliancewiththeaboveuponimplementationoftheProposedRevision.

TheSecuritiesCommissionhadvideitsletterdated13May2009furtherapprovedthefollowing:-

(i) Proposedtransferoftheredeemableconvertiblepreferencesharesandredeemableconvertiblesecuredloanstocks(collectivelyknownas“Securities”)fromKumpulanDarulEhsanBerhadto100holderseachholding100unitsoftheSecuritiesrespectivelytomeetthepublicspreadrequirementofBursaMalaysiaSecuritiesBerhad;and

(ii) Proposedextensionoftimeto29June2009fortheCompanytocompletetheRegularisationPlan.

BursaMalaysiaDepositorySdn.Bhd.hadvideitsletterdated22May2009approvedtheproposedtransferoftheSecuritiestobeissuedpursuanttotheRegularisationPlanfromKumpulanDarulEhsanBerhadto100holderseachholding100unitsoftheSecuritiesrespectivelytomeetthepublicspreadrequirementofBursaMalaysiaSecuritiesBerhadviabulktransfermethod.

40. SUBSIDIARIES

Detailsofsubsidiariesareasfollows:

EffectiveEquityInterestNameofCompany 2010 2009 PrincipalActivities % %IncorporatedinMalaysia AbraDevelopmentSdn.Bhd.^ 100 100 Propertydevelopment andinvestmentholding AlamJohanSdn.Bhd.^ 99.99 99.99 Propertydevelopment

AmpleZoneBerhad*δ 99.99 99.99 Investmentholdingand provisionofasset managementservices

ANNUALREPORT2010

111


40. SUBSIDIARIES(Cont’d)

EffectiveEquityInterestNameofCompany 2010 2009 PrincipalActivities % %IncorporatedinMalaysia

BeautifulPeninsularSdn.Bhd.^ 69.99 69.99 Propertydevelopment BiltradexSdn.Bhd.^ 99.99 99.99 Propertydevelopment andinvestment BukitBeruntungNurseriesSdn. 99.99 99.99 Ceasedoperation Bhd.^ BukitKhazanahSdn.Bhd.*¥ 99.65 99.65 Propertydevelopment andinvestment CapitalAdvanceCorporationSdn. 99.99 99.99 Investmentholding Bhd.^ CekapMesraDevelopmentSdn. 50.01 50.01 Propertydevelopment Bhd.^ ClassicFortuneSdn.Bhd.^ 99.99 99.99 Propertydevelopment DayaKreatifSdn.Bhd.^ 99.99 99.99 Propertydevelopment

EnvyVistaSdn.Bhd.^ 99.99 99.99 Dormant Era-CasaSdn.Bhd.^ 100 100 Investmentholding EuroplusBerhad^ 99.99 99.99 Investmentholding andPropertyDevelopment EuroplusConstructionSdn.Bhd.^ 99.99 99.99 Propertydevelopment EuroplusCorporationSdn.Bhd.^ 99.99 99.99 Propertydevelopment andinvestmentholding ExpandFactorSdn.Bhd.^ 100 100 Propertydevelopment andinvestmentholding GalianJutaSdn.Bhd.^ 100 100 Propertydevelopment GemapantasSdn.Bhd.^ 51 51 Investmentholding G.L.DevelopmentSdn.Bhd.^ 100 100 Propertyinvestment anddevelopment IdealSynergySdn.Bhd.^ 100 100 Propertydevelopment IntiJohanSdn.Bhd.^ 100 100 Propertyinvestment andmanagement IzinSagaSdn.Bhd.^ 99.99 99.99 Dormant

112




JuaraTiasaSdn.Bhd.^ 100 100 Propertyinvestment KenshineCorporationSdn.Bhd.^ 99.99 99.99 Propertydevelopment KolejAmanBhd.^ 58.46 58.46 Ceasedoperation LambangWiraSdn.Bhd.^ 99.99 99.99 Investmentholding LarutLeisureEnterpriseSdn. 99.99 99.99 Investmentholding Bhd.^ LarutManagementServicesSdn. 99.99 99.99 Investmentholding Bhd.^ LarutOverseasVenturesSdn. 99.99 99.99 Investmentholding Bhd.^ L.C.B.ManagementSdn.Bhd.^ 100 100 Provisionof managementservices LestariPuchongSdn.Bhd.^ 99.99 99.99 Propertydevelopment LayatamaSdn.Bhd.^ 100 100 Investmentholding Maxdale(M)Sdn.Bhd.^ 100 100 Investmentholding MaxisegarConstruction 100 100 Propertyinvestment, Sdn.Bhd.^ Management anddevelopment MaxisegarEducationSdn.Bhd.^ 60 60 Investmentholding MaxisegarRealtySdn.Bhd.^ 100 100 Dormant

MaxisegarSdn.Bhd.^ 100 100 Propertydevelopment andinvestmentholding MutualProsperousSdn.Bhd.*¥ 99.99 99.99 Investmentholding NewCourtPropertiesSdn.Bhd.^ 98.04 98.04 Dormant Noblepace(M)Sdn.Bhd.^ 100 100 Investmentholding PandanIndahMedical 100 100 Ceasedoperation ManagementSdn.Bhd.^ PandanLakeClubBerhad*δ 99.65 99.65 Operationofarecreational Club

ANNUALREPORT2010

113




PeninsularProperties(M)Sdn. – 99.99 Propertydevelopment Bhd. PeninsularPropertiesManagement – 99.99 Provisionofproperty Sdn.Bhd. managementservices

PerwiraIndraSaktiManagement 99.99 99.99 Dormant ServicesSdn.Bhd.*¥ P.I.S.PropertiesManagement 99.99 99.99 Dormant Sdn.Bhd.*¥ RegobaseSdn.Bhd.^ 100 100 Investmentholding SeaviewPlantationsSdn.Bhd.^ 99.99 99.99 Propertydevelopment andinvestmentholding SaujanaUkaySdn.Bhd.*¥ 50.82 50.82 Propertydevelopment SentosaRestu(M)Sdn.Bhd.^ 99.99 99.99 Propertydevelopment StarBaseSdn.Bhd.^ 90 90 Propertydevelopment TalamBeverageSdn.Bhd.^ 99.77 99.77 Ceasedoperation TalamGeneralFoodsSdn.Bhd.^ 100 100 Dormant TalamIndustriesSdn.Bhd.^ 100 100 Propertydevelopment andinvestmentholding TalamLeisureDevelopmentSdn. 100 100 Propertydevelopment Bhd.^ andinvestmentholding TalamManagementServicesSdn. 100 100 Dormant Bhd. TalamManufacturingSdn.Bhd.^ 100 100 Investmentholdingand provisionof managementservices TalamMedicalCentreSdn.Bhd.^ 100 100 Dormant TalamPlantationsSdn.Bhd.^ 100 100 Investmentholding TalamPropertiesSdn.Bhd.^ 100 100 Propertydevelopment TalamRefrigerationSdn.Bhd.^ 99.77 99.77 Investmentholding

114




TalamPremiumDevelopment 100 100 Investmentholdingand Sdn.Bhd.^ provisionof managementservices TalamTractorsSdn.Bhd.^ 100 100 Dormant TCBResourcesSdn.Bhd.^ 100 100 Investmentholding,provisionof managementandconsultancy servicesandgeneraltrading TerangTanahSdn.Bhd.^ 99.99 99.99 Propertydevelopment TransLibertySdn.Bhd.^ 99.99 99.99 Propertydevelopment UkayLandSdn.Bhd.^ 99.99 99.99 Propertydevelopment UluYamGolfAndCountryClub 60 60 Dormant Sdn.Bhd.^ UnitedAxisSdn.Bhd.^ 99.99 99.99 Propertydevelopment UntungUtamaSdn.Bhd.*¥ 99.99 99.99 Propertydevelopment VenueVentureSdn.Bhd.*δ 99.65 99.65 Investmentholding, propertyinvestment andmanagement WinaxEngineeringSdn.Bhd.^ 100 100 Investmentholding ZhinmunSdn.Bhd.*¥ 99.99 99.99 Propertydevelopment ZillionDevelopmentSdn.Bhd.^ 100 100 Propertyinvestmentand development IncorporatedinHongKong AgriresourcesInternational(HK) Limited*¥ 64.99 64.99 Dormant LarutConsolidated(HK) 99.99 99.99 Investmentholding Limited#*¥ LarutTalamInternational 99.88 99.88 Dormant ManagementServicesLimited*¥ MalimEnterprise(HK)Limited*¥ 100 100 Investmentholding

ANNUALREPORT2010

115



EffectiveEquityInterestNameofCompany 2010 2009 PrincipalActivities % %IncorporatedinHongKong

NobleHouseInvestments 100 100 Investmentholding Limited*¥ ParkgroveLimited*¥ 100 100 Investmentholding PPBInvestment(HK)Limited*Δ¥ 99.99 99.99 Dormant TalamCorporation(HK) 100 100 Investmentholding Limited*¥ TalamResources(HK)Limited*¥ 100 100 Investmentholding IncorporatedinSingapore

CrystalAcePte.Ltd.*¥ 100 100 Dormant IncorporatedinThePeople’s RepublicofChina JilinProvinceMaxcourtHotel Limited*^ 85 85 Operatingandmanagingahotel


δ Theauditors’reportsofthissubsidiaryisnotavailable.Auditproceduresonconsolidationhavebeenappliedbytheauditorsonthefinancialstatementsofthissubsidiary.

# CertainsharesofthecompaniesareheldintrustbycertaindirectorsforLarutOverseasVenturesSdn.Bhd.

Δ Submittedforderegistrationwiththeauthorities.

¥ The audited financial statements and auditors’ reports of these subsidiaries are not available forconsolidation.Thesesubsidiariesarecurrentlydormantorinactive.

^ Theauditreportsofthesesubsidiariescontainanemphasisofmatterrelatingtotheappropriatenessofthegoingconcernbasisofaccountingusedinthepreparationoftheirfinancialstatements.

116


41. SIGNIFICANTEVENTSDURINGTHEFINANCIALYEAR

(a) On16February2009,the643,579,444ordinarysharesofRM0.60eachintheCompanyweresubdividedinto1,930,738,332ordinarysharesofRM0.20eachintheCompany(“SplitShares”)astheresultofthesharesplitinvolvingthesubdivisionofeveryone(1)existingordinaryshareofRM0.60eachintothree(3)ordinarysharesofRM0.20eachintheCompany.TheSplitShareswerelistedandquotedonBursaMalaysiaSecuritiesBerhadwitheffectfrom17February2009.Concurrently,theauthorisedsharecapitaloftheCompanyhasincreasedtoRM2,000,000,000dividedinto8,000,000,000ordinarysharesofRM0.20each,1,500,000,000redeemableconvertiblepreferencesharesofRM0.20eachand1,000,000,000irredeemableconvertiblepreferencesharesofRM0.10each.

(b) TheSecuritiesCommissionhadvideitsletterdated6May2009approvedtheproposedrevisiontotheprincipaltermsandconditionoftheRCSLSandSettlementBaIDS(“ProposedRevision”)pursuanttotheRegularisationPlan.ThedetailsaredisclosedinNote39.

(c) On26May2009,EuroplusCorporationSdn.Bhd.,a99.99%ownedsubsidiaryoftheCompany,hadenteredintoaSaleandPurchaseAgreementwithTAFirstCreditSdn.Bhd.(“TAFC”)todisposeofapieceofvacantcommerciallandinBukitBeruntungmeasuringapproximately73.61acrestoTAFCatatotalpurchaseconsiderationofRM44.89million.

42. EVENTSAFTERTHEBALANCESHEETDATE

(a) On12March2010,theCompanyenteredintoasettlementagreementwithMenteriBesarSelangor(Incorporated)(“MBI”)todisposeofpropertiesforatotalconsiderationofRM330,461,378tosettleasumofRM228,697,628owingtoMBIandRM101,763,750duetofinancialinstitutionsandsecuredcreditors.On9April2010,theCompanyenteredintoasupplementaryagreementwithMBItodisposeadditionalpropertiesforatotalconsiderationofRM345,632,918tosettleasumofRM150,619,159owingtoMBIandRM164,500,000tofinancialinstitutionandtosecuredcreditors.

TheCompanyagreestoconcludethissettlementarrangementwithin6monthsfromthedateoftheCompany’sshareholders’approvalorredemptionoftheliabilitiesbyMBIwhicheverisearlier.

(b) Asubsidiary,GalianJutaSdnBhd,hadenteredintotwoSaleandPurchaseAgreementswithMalaysianAlliedSciencesAcademySdnBhdtodisposeoftwopiecesoflandmeasuring41.69acresand8.10acresrespectivelyforatotalconsiderationofRM35,407,310.

(c) On30April 2010,theCompanyhasmadeanapplicationtoBursaMalaysiaSecuritiesBerhadforitsapprovaltouplifttheCompanyfromthePN17/2005statusandasattodate,theCompanyisstillawaitingtheapprovalfromBursaMalaysiaSecuritiesBerhad.

ANNUALREPORT2010

117


43. SIGNIFICANTRELATEDPARTYTRANSACTIONS

Duringthefinancialyear,significantrelatedpartytransactionsareasfollows:


Constructioncostspaid/payable: -KEBGroup 8,461 262 – – -IJMGroup 70,846 208,652 – – Rentalincomereceived/ receivable: -Agrocon(M)Sdn.Bhd. (26) (64) – – -KEBGroup (1,610) (2,248) – – Managementfeereceived/ receivable: -VenueVentureSdn.Bhd. – (600) – – -RadiantPillarSdn.Bhd. (3,000) (6,000) – – Interestexpensepaid/payable: -PengurusanProjek BersistemSdn.Bhd. 635 2,389 – – -KEBGroup 8,064 24,271 3,258 14,675 -SierraUkaySdn.Bhd. 484 543 – – -CekapTropikalSdn.Bhd. 708 671 – – -GoodDebutSdn.Bhd. 253 321 – –

Thenatureoftherelationshipwiththerelatedpartiesisasfollows:

RelatedParties NatureofRelationshipPengurusanProjekBersistem PPBSBisacorporateshareholder. Sdn.Bhd.(“PPBSB”) TanSriDato’(Dr.)Ir.ChanAhChye@ChanChongYoon(“TSDCAC”),

a director and substantial shareholder of the Company and hisspouse,PuanSriDatinThongNyokChoo(“PSDTNC”),asubstantialshareholderoftheCompany,havesubstantialfinancialinterestinPPBSB.

Agrocon(M)Sdn.Bhd.(“AMSB”) ThesisterofTSDCAC,adirectorandsubstantialshareholderofthe

Company,hassubstantialfinancialinterestinAMSB. KumpulanEuroplusBerhadand KumpulanEuroplusBerhad(“KEB”)isacorporateshareholder. itssubsidiaries(“KEBGroup”) TSDCAC,adirectorandsubstantialshareholderoftheCompany

andhisspouse,PSDTNC,asubstantialshareholderoftheCompany,havesubstantialfinancialinterestinKEBGroup.

IJMCorporationBerhad(“IJM”) IJMisacorporateshareholderbyvirtueofIJMholding25%inKEB. anditssubsidiaries(“IJMGroup”)RadiantPillarSdn.Bhd.(“RP”) RPisa50%ownedassociateofIJMandKEB.

Thedirectorsareoftheopinionthatallthetransactionsabovehavebeenenteredintointhenormalcourseofbusinessandhavebeenestablishedontermsandconditionsthatarenotmateriallydifferentfromthoseobtainableintransactionswithunrelatedparties.

118


44. FINANCIALINSTRUMENTS

(a) FinancialRiskManagementObjectivesandPolicies

TheoperationsoftheGroupandoftheCompanyaresubjecttoavarietyoffinancialrisks,includingforeigncurrencyrisk,interestraterisk,creditrisk,liquidityriskandcashflowrisk.TheGroupandtheCompanyhave formulateda financial riskmanagement frameworkwhoseprincipal objective is tominimisetheGroup’sandtheCompany’sexposuretorisksand/orcostsassociatedwiththefinancing,investingandoperatingactivitiesoftheGroupandoftheCompany.

(b) ForeignCurrencyRisk

TheGroupoperatesinternationallyandisexposedtoforeigncurrencytransactionsinChineseRenminbiandHongKongDollars.TheGroup’spolicyistominimisetheexposureofoverseasoperatingsubsidiariestotransactionriskbymatchinglocalcurrencyincomewithlocalcurrencycosts.

(c) InterestRateRisk

TheGroup’spolicyistoborrowprincipallyonafloatingratebasisbutretainaproportionoffixedratedebt.Theobjectivesforthemixbetweenfixedandfloatingrateborrowingsaresettoreducetheimpactofanupwardchangeininterestrateswhileenablingbenefitstobeenjoyedifinterestratesfall.

(d) CreditRisk

CreditrisksareminimisedandmonitoredviastrictlylimitingtheGroup’sassociationstobusinesspartnerswithhighcreditworthiness.Tradereceivablesmainlyarisesfromdevelopmentpropertiesprojectsandaresupportedbyend-financiers.

TheGrouphasnosignificantconcentrationofcreditriskthatmayarisefromexposurestoasingledebtorortogroupsofdebtorsotherthanthosedisclosedinNote16.

(e) LiquidityRisk

Since the financial year ended 31 January 2006, the Group and the Company have not met theirobligationsincertainloanrepaymentsandinterestpaymentsandhavebreachedtheborrowingfacilitiesagreementsasdisclosedinNote21.TheGroupandtheCompanyareundertakingadebtrestructuringexerciseasdisclosedinNote39tomitigatetheliquidityrisk.

(f) CashFlowRisk

The Group and the Company review its cash flows position regularly to manage its exposure tofluctuationsinfuturecashflowsassociatedwithitsmonetaryfinancialinstruments.

ANNUALREPORT2010

119


44. FINANCIALINSTRUMENTS(Cont’d)

(g) FairValues

(i) RecognisedFinancialInstruments

Thecarryingamountsofthefinancialassetsandfinancialliabilitiesasatthebalancesheetdateapproximatetheirfairvaluesduetotherelativelyshorttermmaturitiesexceptforthefollowing:

Group Company Carrying Fair Carrying Fair Note Amount Value Amount Value RM’000 RM’000 RM’000 RM’000

At31January2010 FinancialAssets Amountowingby subsidiaries 10(a) – – 750,194 ^Amountowingby associates 11(c) 26,124 ^ 3 ^Longtermreceivables 16(d) 10,060 * – –

FinancialLiabilities Amountowingtojointly controlledentities 12(b) 48,756 ^ – –Longtermpayables: 23 Amountpayablefor acquisitionofland 52,352 ** – –Amountpayablefor acquisitionofbuilding 14,398 ** – –Loanfromaminority shareholderofa subsidiary 11,184 * – –

At31January2009 FinancialAsset Amountowingby associates 11(c) 26,186 ^ 84 ^

At31January2009 FinancialLiabilities Amountowingtojointly controlledentities 12(b) 46,178 ^ – –Amountowingto subsidiaries 10(a) – – 1,759 ^Otherlongtermpayables: 23 Amountpayablefor acquisitionofland 52,352 ** – –Amountpayablefor acquisitionofbuilding 15,308 ** – –Loanfromaminority shareholderofa subsidiary 11,890 * – –

120


44. FINANCIALINSTRUMENTS(Cont’d)

(g) FairValues

(i) RecognisedFinancialInstruments(Continued)

^ Itisnotpracticaltoestimatethefairvaluesofamountsowingby/tosubsidiaries,associatesandjointlycontrolledentitiesdueprincipallytotheinabilitytoestimatethesettlementdatewithoutincurringexcessivecostsastheseamountslackfixedrepaymentterms.However,theCompanydoesnotanticipatethecarryingamountrecordedatthebalancesheetdatetobesignificantlydifferentfromthevaluesthatwouldbeeventuallysettled.

* Itisnotpracticaltoestimatethefairvaluesofloanfromaminorityshareholderofasubsidiaryandlongtermreceivablesdueprincipallytoalackoffixedrepaymenttermenteredintobythepartiesinvolvedandwithoutincurringexcessivecosts.

** Itisnotpracticaltoestimatethefairvaluesofamountpayableforacquisitionoflandandbuildingdueprincipallytoalackoffixedpaymentterms(astermsofpaymentissubjecttothetimingoffulfilmentofcertainconditionsprecedent)enteredintobythepartiesinvolvedandwithoutincurringexcessivecosts.

(ii) UnrecognisedFinancialInstruments

Thenominal/notionalamountandnetfairvalueofcontingentliabilities(asdisclosedinNote37arenotrecognisedinthebalancesheetasat31January2010asitisnotpracticabletomakeareliableestimateduetotheuncertaintiesoftiming,costsandeventualoutcome.

Therewerenootherunrecognisedfinancialinstrumentsasat31January2010thatarerequiredtobedisclosed.

45. SEGMENTALINFORMATION

(i) ReportingFormat

SegmentinformationispresentedinrespectoftheGroup’sbusinesssegments.Theprimaryformat,businesssegments,isbasedupontheindustryoftheunderlyinginvestments.Secondaryinformationisreportedgeographically.

(ii) BusinessSegments

TheGroup’soperationscomprisethefollowingbusinesssegments:

Propertyinvestmentanddevelopment : Investment holdings, development of residential andcommercialproperties.

Hotelandrecreation :Operateandmanagehotelandclubandotherrelated

services.(iii) GeographicalSegments

IndeterminingthegeographicalsegmentsoftheGroup,revenueisbasedonthegeographicallocationsofcustomers.Segmentassetsandcapitalexpenditurearebasedonthegeographicallocationoftheassets.Thecompositionofeachgeographicalsegmentisasfollows:

Malaysia : Investment holding, property development andinvestment, provision of asset management services,operatingarecreationalclub,provisionofmanagementandconsultancyservicesandgeneraltrading.

ThePeople’sRepublicofChina : Investment holding and operating and managing a

hotel.

ANNUALREPORT2010

121


45. SEGMENTALINFORMATION(Cont’d)

(a) Analysisbybusinesssegments

Property investment

and Hoteland development Recreation Total

RM’000 RM’000 RM’000 At 31 January 2010

Revenue Externalsales 236,183 17,531 253,714

Result Segmentresult 21,533 (6,032) 15,501Shareofresultsofjointlycontrolledentities 1,744 – 1,744 Profitbeforetax 17,245Incometaxexpense (8,223)

9,022

Property investment

and Hoteland development Recreation Total

RM’000 RM’000 RM’000

At 31 January 2009

Revenue Externalsales 281,786 19,492 301,278

Result Segmentresult 69,286 (7,854) 61,432Shareofresultsofjointlycontrolledentities (869) – (869) Profitbeforetax 60,563Incometaxcredit 152

60,715

122



(a) Analysisbybusinesssegments(Cont’d)

Property investment Total and Hoteland Before development Recreation Elimination Elimination Consolidated RM’000 RM’000 RM’000 RM’000 RM’000At 31 Janaury 2010

OtherInformation Segmentassets 3,076,959 139,504 3,216,463 – 3,216,463Interestinjointly controlledentities 10,962 – 10,962 – 10,962Unallocatedassets 314

Totalassets 3,227,739

Segmentliabilities 2,281,411 103,014 2,384,425 – 2,384,425Unallocatedliabilities 230,498

Totalliabilities 2,614,923

Capitalexpenditure – 2,704 2,704 – 2,704Depreciationofproperty, plantandequipment 773 6,126 6,899 – 6,899Depreciationof investmentproperties 2,577 – 2,577 – 2,577Amortisationof prepaidleasepayments – 696 696 – 696Non-cashexpensesother thandepreciationand amortisation 26,731 188 26,919 – 26,919

ANNUALREPORT2010

123



(a) Analysisbybusinesssegments(Cont’d)

Property investment Total and Hoteland Before development Recreation Elimination Elimination Consolidated RM’000 RM’000 RM’000 RM’000 RM’000At 31 Janaury 2009

OtherInformation Segmentassets 2,930,506 103,351 3,033,857 (8,108) 3,025,749Interestinjointly controlledentities 9,218 – 9,218 – 9,218Unallocatedassets 2,476

Totalassets 3,037,443

Segmentliabilities 2,367,360 151,646 2,519,006 (61,915) 2,457,091Unallocatedliabilities 185,889

Totalliabilities 2,642,980

Capitalexpenditure 131 2,118 2,249 – 2,249Depreciationofproperty, plantandequipment 839 6,763 7,602 – 7,602Depreciationof investmentproperties 4,102 – 4,102 – 4,102Amortisationof prepaidleasepayments – 695 695 – 695Non-cashexpensesother thandepreciationand amortisation 20,108 352 20,460 – 20,460

124



(b) Analysisbygeographicalsegments

The People’s Republic Malaysia ofChina Total

RM’000 RM’000 RM’000 At31January2010

SalesRevenue 236,183 17,531 253,714CarryingAmountofSegment Assets 3,088,235 139,504 3,227,739AdditionstoProperty,Plantand Equipment – 2,704 2,704 At31January2009

SalesRevenue 281,786 19,492 301,278CarryingAmountofSegment Assets 2,934,092 103,351 3,037,443AdditionstoProperty,Plantand Equipment 131 2,118 2,249

Thedirectorsareoftheopinionthatallinter-segmenttransactionshavebeenenteredintointhenormalcourseofbusinessandhavebeenestablishedontermsandconditionsthatarenotmateriallydifferentfromthatobtainableintransactionswithunrelatedparties.

46. MATERIALLITIGATION VanOordAczMalaysiaSdnBhd(“thePetitioner”)VsEuroplusBerhad(‘EB”)

JudgementwasobtainedbythePetitioneron7January2009foratotalsumofRM5,429,579consistingRM4,054,744beingtheprincipalamountandRM1,374,835beingtheinterestawardedat8%perannum.

ThewindinguppetitionviaKualaLumpurHighCourtagainstEB,a99.99%ownedsubsidiaryoftheCompanybythePetitionerwasservedon23November2009.ThePetitionerhadon1April2010obtainedawindinguporder.

TheCompanyhadfiledanapplicationforanordertostaythewindinguporderandhearinghadbeenfixedon24June2010.ThemanagementiscurrentlynegotiatingwiththePetitioneronthesettlementoftheamountdue,anddonotforeseeanyfurtherlossesexceptforlegalcosts.

ANNUALREPORT2010

125


47. COMPARATIVEFIGURES

Duringthefinancialyear,themanagementperformedareviewoftheGroup’sassetsandliabilitiesarisingfromtheacquisitionofVenueVentureSdn.Bhd.inthepreviousfinancialyear.Inthecourseofthereview,themanagementhasrestatedtheGroup’sbalancesheetbasedonthefairvalueofthenetassetsacquired.

Thefollowingcomparativefigureshavebeenreclassifiedontheabovematter:

As previously As reported Adjustments restated RM’000 RM’000 RM’000Group balance sheet Investmentproperties 191,785 6,490 198,275Goodwill 39,208 (10,800) 28,408Otherreceivables,deposits andprepaidexpenses 124,189 1,107 125,296Otherpayablesandaccruedexpenses 805,472 (3,166) 802,306Minorityinterests 3,563 (37) 3,526

126

STATEMENT BY DIRECTORS

We,CHUAKIMLANandLOYBOONCHEN,beingtwoofthedirectorsofTALAMCORPORATIONBERHAD,doherebystatethatintheopinionofthedirectors,thefinancialstatementsareproperlydrawnupinaccordancewiththeFinancialReportingStandardsandtheprovisionsoftheCompaniesAct,1965inMalaysiasoastogiveatrueandfairviewofthefinancialpositionoftheGroupandoftheCompanyasat31January2010andoftheresultsandcashflowsoftheGroupandoftheCompanyforthefinancialyearendedonthatdate.

OnbehalfoftheBoard,

CHUAKIMLANDirector

LOYBOONCHENDirector

KualaLumpur

Date:31May2010

I,LOYBOONCHEN,beingthedirectorprimarilyresponsibleforthefinancialmanagementofTALAMCORPORATIONBERHAD,dosolemnlyandsincerelydeclarethattothebestofmyknowledgeandbelief,thefinancialstatementsarecorrect,andImakethissolemndeclarationconscientiouslybelievingthesametobetrue,andbyvirtueoftheprovisionsoftheStatutoryDeclarationsAct,1960.

LOYBOONCHEN

SubscribedandsolemnlydeclaredbytheabovenamedatKualaLumpurintheFederalTerritoryon31May2010.

Beforeme,

ZULKIFLAMOHDDAHLIM(W541)CommissionerforOaths

STATUTORY DECLARATION

ANNUALREPORT2010

127

REPORTONTHEFINANCIALSTATEMENTS

WehaveauditedthefinancialstatementsofTALAMCORPORATIONBERHAD,whichcomprisethebalancesheetsasat31January2010oftheGroupandoftheCompany,andtheincomestatements,statementsofchangesinequityandcashflowstatementsoftheGroupandoftheCompanyforthefinancialyearthenended,andasummaryofsignificantaccountingpoliciesandotherexplanatorynotes,assetoutonpages42to125.

Directors’ responsibility for the financial statements

ThedirectorsoftheCompanyareresponsibleforthepreparationandfairpresentationofthesefinancialstatementsinaccordancewiththeFinancialReportingStandardsandtheprovisionsoftheCompaniesAct1965(“theAct”)inMalaysia.Thisresponsibilityincludedesigning,implementingandmaintaininginternalcontrolsrelevanttothepreparationandfairpresentationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror;selectingandapplyingappropriateaccountingpolicies;andmakingaccountingestimatesthatarereasonableinthecircumstances.

Auditors’ responsibility

Itisourresponsibilitytoexpressanopiniononthesefinancialstatementsbasedonouraudit.WeconductedourauditinaccordancewithapprovedstandardsonauditinginMalaysia.Thosestandardsrequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceastowhetherthefinancialstatementsarefreefrommaterialmisstatement.

Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresinthefinancialstatements.Theproceduresselecteddependonourjudgement,includingtheassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror. Inmakingthoseriskassessments,weconsiderinternalcontrolsrelevanttotheCompany’spreparationandfairpresentationofthefinancialstatementsinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheCompany’sinternalcontrols.Anauditalsoincludesevaluatingtheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesmadebythedirectors,aswellasevaluatingtheoverallpresentationofthefinancialstatements.

Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.

Opinion

Inouropinion,thefinancialstatementshavebeenproperlydrawnupinaccordancewiththeFinancialReportingStandardsandtheprovisionsoftheActinMalaysiasoastogiveatrueandfairviewofthefinancialpositionoftheGroupandoftheCompanyasat31January2010andoftheirfinancialperformanceandcashflowsforthefinancialyearendedonthatdate.

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF TALAM CORPORATION BERHAD

(Incorporated in Malaysia)

128

REPORTONOTHERLEGALANDREGULATORYREQUIREMENTS

InaccordancewiththerequirementsoftheActinMalaysia,wealsoreportonthefollowing:

(a) Inouropinion,theaccountingandotherrecordsandtheregistersrequiredbytheActtobekeptbytheCompanyanditssubsidiariesofwhichwehaveactedasauditors,havebeenproperlykeptinaccordancewiththeprovisionsoftheAct;

(b) Otherthanthosesubsidiarieswithoutthefinancialstatementsandauditors’reportsasdisclosedinNote40tothefinancialstatements,wehaveconsideredthefinancialstatementsandtheauditors’reportsoftheremainingsubsidiariesofwhichwehavenotactedasauditors,whichareindicatedinNote40tothefinancialstatements;

(c) OtherthanthosesubsidiarieswithouttheauditedfinancialstatementsasdisclosedinNote40tothefinancialstatements,wearesatisfiedthattheauditedfinancialstatementsoftheremainingsubsidiariesthathavebeenconsolidatedwiththeCompany’sfinancialstatementsareinaformandcontentappropriateandproperforthepurposesofthepreparationofthefinancialstatementsoftheGroupandwehavereceivedsatisfactoryinformationandexplanationsrequiredbyusforthosepurposes;and

(d) Otherthanthosesubsidiarieswithmodifiedopinionsintheauditors’reportsandthosesubsidiarieswithouttheauditors’reportsasdisclosedinNote40tothefinancialstatements,theauditors’reportsonthefinancialstatementsof the remainingsubsidiarieswerenot subject toanyqualificationmaterial in relation to theconsolidatedfinancialstatements,or includedanyadversecommentsmadeunderSection174(3)of theAct.

OTHERMATTERS

ThisreportismadesolelytothemembersoftheCompany,asabody,inaccordancewithSection174oftheActinMalaysiaandfornootherpurpose.Wedonotassumeresponsibilitytoanyotherpersonforthecontentofthisreport.

BakerTillyMonteiroHengNo.AF0117CharteredAccountants

HengJiKengNo.578/05/12(J/PH)Partner

KualaLumpur

Date:31May2010

INDEPENDENT AUDITORS’ REPORT (cont’d)TO THE MEMBERS OF TALAM CORPORATION BERHAD(Incorporated in Malaysia)

ANNUALREPORT2010

129

LIST OF PROPERTIES@ 31 January 2010

NETBOOK VALUE/NET CARRYING @JOINTVENTURE DATEOF APPROXIMATE VALUEASAT +REGISTERED LAND/ DESCRIPTION/ ACQUISITION/ AGEOFTHE 31JANUARY #BENEFICIAL BUILTUP REMAINING PROPOSED JOINTVENTURE/ BUILDING 2010NO. OwNER AREA ACREAGE DEVELOPMENT COMPLETION TENURE EXPIRY (YEARS) RM’000

1 Europlus + 2,566.93 2,259.82 TownshipDevelopment 18/12/1991 Freehold N/A N/A 627,051 Corporation acres BukitBeruntung SdnBhd *911.44 2 Talam + 993.99 472.87 BukitSentosaIII 29/10/1994 Freehold N/A N/A 269,399 Corporation acres Developmentofindustrial, Berhad residentialandcommercial development 3 EuroplusBerhad + 50.71acres 35.00 TownshipDevelopment 14/05/1996 Freehold N/A N/A 226,784 PrimaBeruntung + 717acres 511.02 Residential,Industrialand 18/12/1991 Freehold N/A BukitBeruntungIII 4 Kenshine @ 600acres 184.40 Developmentofresidential 28/09/1995 99years 19/10/2093 N/A 212,238 Corporation andcommercialproperties Leasehold SdnBhd 5 Maxisegar + 3,000acres 1,284.10 BatangBerjuntai 17/01/2001 99years 21/01/2101 N/A 182,559 SdnBhd Leasehold *736.47 6 Maxisegar + 801acres 74.49 TamanPuncakJalil 17/01/2001 99years 02/07/2100 N/A 149,444 SdnBhd Leasehold 7 LestariPuchong + 496.731acres 91.31 Mixdevelopmentof 24/07/2000 99years 12/06/2091 N/A 149,406 SdnBhd residential,commercial Leasehold andcorporatepark. -LestariPuchong

8 JilinProvince + 5,995sqm N/A A4star24storeyhotel 24/12/1999 30years 29/12/2023 10 115,639 MaxcourtHotel 41,584sqm building Leasehold Limited 9 GalianJuta #&@ 200acres 70.91 Proposeddevelopmentof 09/01/2001 99years 05/02/2094 N/A 74,529 SdnBhd residentialandcommercial Leasehold buildings-SaujanaPutra 10 Abra + 0.96acres/ N/A MenaraMaxisegar 22/06/1995 99years 03/04/2094 14 55,660 Development 3,901.4sqM 24-storeycommercial Leasehold SdnBhd complex * AftercompletionofSelangorStateSettlement

130

STATEMENT ON DIRECTORS’ INTERESTSIN THE COMPANY AND RELATED CORPORATIONSas at 29 June 2010

ORDINARYSHARES(BasedonRegisterofDirectors’shareholdingsasat29June2010)

No.ofOrdinarySharesofRM0.20each Direct %*3 Deemed %*3

Interest InterestTheCompany1. TanSriDato’(Dr)IrChan 45,230,592 1.60 678,081,943 *1 24.02 AhChye@ChanChongYoon

2. ChuaKimLan 222,039 0.008 28,125 *2 0.001

3. LoyBoonChen 912,900 0.03 – –

Notes:

*1 Deemed interested through his spouse, PSDTNC, his daughter, Chan Siu Wei and by virtue of his interest in Pengurusan Projek Bersistem Sdn Bhd, Prosperous Inn Sdn Bhd, Sze Choon Holdings Sdn Bhd and Kumpulan Europlus Berhad pursuant to Section 6A of the Companies Act, 1965 (“Act”).

*2 Deemed interested through her spouse, Chin Chee Meng pursuant to Section 6A of the Act.

*3 % shareholding based on voting share capital as at 29 June 2010 of 2,823,204,575.

TanSriDato’(Dr)IrChanAhChye@ChanChongYoon,byvirtueofhisinterestinthesharesoftheCompanyisalsodeemedinterestedinthesharesofalltheCompany’ssubsidiariestotheextenttheCompanyhasaninterest.

Saveasdisclosedabove,noneof theotherDirectorsof theCompanyhaveany interests in thesharesof theCompanyanditsrelatedcorporationsasat29June2010.

ANNUALREPORT2010

131

ANALYSIS OF SHAREHOLDINgSas at 29 June 2010

SHARECAPITAL

Authorisedsharecapital : RM2,000,000,000.00 divided into 8,000,000,000 ordinary shares ofRM0.20each,1,500,000,000redeemableconvertiblepreferencesharesofRM0.20eachand1,000,000,000irredeemableconvertiblepreferencesharesofRM0.10each.

Issuedandpaid-upsharecapital : RM564,640,915dividedinto2,825,840,375ordinarysharesofRM0.20each.

ClassofShares/VotingRights : Thereisonlyoneclassofordinaryshareswithvotingrightsinthepaid-upsharecapitaloftheCompany.Eachshareentitlestheholdertoonevote.

SharesBuyBack : TheCompanyhadpurchased2,635,800ordinarysharesofRM0.20eachandthesharespurchasedwereretainedastreasuryshares.

DISTRIBUTIONOFORDINARYSHAREHOLDINGS(BasedonRecordofDepositorsasat29June2010)

No.of %of No.of %of Ordinary Ordinary Ordinary OrdinarySizeofHoldings Shareholders Shareholders*3 SharesHeld SharesHeld*3

1-99 1,064 4.49 44,661 0.00100-1,00 1,950 8.23 1,278,622 0.051,001-10,000 8,535 36.04 39,926,063 1.4110,001-100,000 9,158 38.67 414,090,418 14.67100,001-141,160,228(*1) 2,970 12.54 1,627,647,375 57.65140,160,229andabove(*2) 3 0.01 740,217,436 26.22

TOTAL 23,680 100.00 2,823,204,575 100.00

NOTES:

*1 Less than 5% of the voting share capital*2 5% and above of the voting share capital *3 Exclusive of Shares Buy Back

THIRTYLARGESTORDINARYSHAREHOLDERS(BasedonRecordofDepositorsasat29June2010)

No.ofOrdinaryName SharesHeld %

1. EBNOMINEES(TEMPATAN)SENDIRIANBERHAD 312,400,000 11.07 PledgedSecuritiesAccountForKumpulanEuroplusBerhad(JTR) 2. CIMSECNOMINEES(TEMPATAN)SDNBHD 231,589,700 8.20 CimbBankforKumpulanEuroplusBerhad(Banking) 3. KUMPULANEUROPLUSBERHAD 196,227,736 6.95

132

THIRTYLARGESTORDINARYSHAREHOLDERS(Cont’d)(BasedonRecordofDepositorsasat29June2010)


4. TASECNOMINEES(TEMPATAN)SDNBHD 60,000,000 2.13 TaFirstCreditSdnBhdforKumpulanEuroplusBerhad 5. M&ANOMINEE(TEMPATAN)SDNBHD 22,094,463 0.78 InsasCredit&LeasingSdnBhdforChanAhChye@ChanChongYoon 6. TASECNOMINEES(TEMPATAN)SDNBHD 20,400,000 0.72 TaFirstCreditSdnBhdforPengurusanProjekBersistemSdnBhd 7. HSBCNOMINEES(ASING)SDNBHD 20,375,000 0.72 ExemptAnforCreditSuisse(SGBR-TST-Asing) 8. TANOMINEES(TEMPATAN)SDNBHD 20,000,000 0.71 PledgedSecuritiesAccountforSuMingKeat 9. HDMNOMINEES(ASING)SDNBHD 18,363,700 0.65 UobKayHianPteLtdforMichaelKohKowTee 10. CITIGROUPNOMINEES(ASING)SDNBHD 17,833,050 0.63 CbnyforDimensionalEmergingMarketsValueFund 11. HSBCNOMINEES(ASING)SDNBHD 16,959,700 0.60 ExemptAnforTheBankofNewYorkMellon(BnymasE&A) 12. CARTABANNOMINEES(TEMPATAN)SDNBHD 14,030,000 0.50 DbsVickers(HongKong)LimitedforChaiYetLee 13. EBNOMINEES(TEMPATAN)SENDIRIANBERHAD 13,018,086 0.46 PledgedSecuritiesAccountforChanAhChye@ChanChongYoon(BB) 14. MINISTEROFFINANCE 12,900,000 0.46 AkaunJaminanPinjamanKerajaanPersekutuan 15. TASECNOMINEES(TEMPATAN)SDNBHD 12,874,167 0.46 TaFirstCreditSdnBhdForKumpulanEuroplusBhd(A/CNo2) 16. RESONSDNBHD 12,584,000 0.45 17. POSMALAYSIABERHAD 11,637,000 0.41 18. ARUNACHALAMA/LRAMIAH 10,000,000 0.35 19. ONGYENGTIAN@ONGWENGTIAN 10,000,000 0.35 20. ONGYOONGNYOCK 10,000,000 0.35 21. PUBLICINVESTNOMINEES(TEMPATAN)SDNBHD 9,500,000 0.34 PledgedSecuritiesAccountforYeapGek@YeapPohChim(C) 22. TANSUANHUAT 9,078,300 0.32 23. LEEKIMPOH 9,000,000 0.32


ANNUALREPORT2010

133

THIRTYLARGESTORDINARYSHAREHOLDERS(Cont’d)(BasedonRecordofDepositorsasat29June2010)


24. HLGNOMINEE(TEMPATAN)SDNBHD 8,900,000 0.32 HongLeongBankBhdforChungChiongBing 25. GENERALTECHNOLOGYSDNBHD 8,783,431 0.31 26. HDMNOMINEES(TEMPATAN)SDNBHD 8,500,000 0.30 UobKayHianPteLtdforTehKeeHong 27. YEETECKCHOON 7,522,400 0.27 28. KUMPULANEUROPLUSBERHAD 6,796,800 0.24 29. RHBNOMINEES(ASING)SDNBHD 6,000,000 0.21 UobKayHianPrivateLimitedforTanPohGeok 30. CITIGROUPNOMINEES(ASING)SDNBHD 5,692,749 0.20 ExemptAnforMerrillLynchPierceFenner&SmithIncorporated(Foreign) 1,123,060,282 39.78

SUBSTANTIALSHAREHOLDERS(BasedonRegisterofSubstantialShareholdersasat29June2010)

No.ofOrdinarySharesofRM0.20each Direct DeemedNameofsubstantialshareholders Interest %*4 Interest %*4

1. TanSriDato’(Dr)IrChanAhChye 45,230,592 1.60 678,081,543 *1 24.02 @ChanChongYoon(“TSDCAC”)2. PuanSriDatinThongNyokChoo 537,145 0.02 834,958,390 *2 29.57 (“PSDTNC”)

3. KumpulanEuroplusBerhad 819,888,403 29.04 – – (“KEURO”)

4. IJMCorporationBerhad(“IJM”) – – 819,888,403*3 29.04

NOTES:

*1 Deemed interested through his spouse, PSDTNC, his daughter, Chan Siu Wei and by virtue of his interest in Pengurusan Projek Bersistem Sdn Bhd, Prosperous Inn Sdn Bhd, Sze Choon Holdings Sdn Bhd and KEURO pursuant to Section 6A of the Companies Act, 1965 (“Act”).

*2 Deemed interest through her spouse, TSDCAC, her daughter, Chan Siu Wei and by virtue of her interest in Pengurusan Projek Bersistem Sdn Bhd, Prosperous Inn Sdn Bhd, Sze Choon Holdings Sdn Bhd and KEURO pursuant to Section 6A of the Act.

*3 Deemed interested by virtue of IJM holding 25% in KEURO.

*4 % shareholding based on voting share capital as at 29 June 2010 of 2,823,204,575.


134

NOTICE OF ANNUAL gENERAL MEETINg

NOTICEISHEREBYGIVENTHATthe85thAnnualGeneralMeetingofTALAMCORPORATIONBERHADwillbeheldatPerdanaBallroom,PandanLakeClub,Lot28,JalanPerdana3/8,PandanPerdana,55300KualaLumpuronThursday,29July2010at11.30a.m.forthefollowingpurposes:-

AGENDA

1. ToreceiveandadopttheAuditedFinancialStatementsoftheCompanyfortheyearended31January2010andtheReportsoftheDirectorsandAuditorsthereon.

2. ToapprovethepaymentofDirectors’feesofRM25,000foreachDirectorfortheyearended31January2010.

3. Tore-electtheDirector,Dato’KamaruddinBinMatDesa,whoisretiringinaccordancewithArticle97oftheArticlesofAssociationoftheCompany.

4. Tore-electtheDirector,LoyBoonChen,whoisretiringinaccordancewithArticle97oftheArticlesofAssociationoftheCompany.

5. Tore-electtheDirector,NgBeeKenwhoisretiringinaccordancewithArticle81oftheArticlesofAssociationoftheCompany.

6. Tore-appointMessrsBakerTillyMonteiroHengasAuditorsandtoauthorisetheDirectorstofixtheirremuneration.

ASSPECIALBUSINESS

7. ToconsiderandifthoughtfittopassthefollowingOrdinaryResolutions:-

7.1 AuthoritytoallotandissuesharespursuanttoSection132DoftheCompaniesAct,1965

“THATpursuanttoSection132DoftheCompaniesAct,1965,theDirectorsbeandareherebyauthorisedtoissuesharesintheCompanyatanytimeuntiltheconclusionofthenextAnnualGeneralMeetinganduponsuchtermsandconditionsandforsuchpurposesastheDirectorsmayintheirabsolutediscretiondeemfit,providedthattheaggregatenumberofsharestobeissueddoesnotexceed10percentoftheissuedsharecapitaloftheCompanyforthetimebeing,subjectalwaystotheapprovalofall therelevantregulatorybodiesbeingobtainedforsuchallotmentsandissues.”

7.2 AuthoritypursuanttoSection132EoftheCompaniesAct,1965

“THATpursuanttoSection132EoftheCompaniesAct,1965,authoritybeandisherebygivenfortheCompanyandeachofitssubsidiariestoenterintoanyarrangement or transaction with any Director of the Company or any personconnectedwithsuchDirectortoacquirefromordisposetosuchDirectororpersonconnectedwithsuchDirectoranynon-cashassetsofrequisitevaluethatislessthan5%ofthetotalnetassetsoftheGroupatthetimeofsuchacquisitionordisposal.

(Resolution 1)

(Resolution 2)

(Resolution 3)

(Resolution 4)

(Resolution 5)

(Resolution 6)

(Resolution 7)

(Resolution 8)

ANNUALREPORT2010

135

ANDTHATsuchauthorityshallcontinuetobeinforceuntil:-

(i) theconclusionofthenextAnnualGeneralMeetingoftheCompany;or

(ii) theexpirationoftheperiodwithinwhichthenextAnnualGeneralMeetingoftheCompanyisrequiredtobetabledpursuanttoSection143(1)oftheCompaniesAct,1965(butshallnotextendtosuchextensionasmaybeallowedpursuanttoSection143(2)oftheCompaniesAct,1965);or

(iii) revokedorvariedbyresolutionpassedbytheshareholders inageneral

meeting;

whicheverisearlier.”

7.3 Proposedrenewalofshareholders’mandateforexistingrecurrentrelatedpartytransactionsandnewshareholders’mandateforadditionalrecurrentrelated party transactions of a revenue or trading nature (“ProposedShareholders’MandateI”)

“THAT,subjectalwaystotheListingRequirementsofBursaMalaysiaSecuritiesBerhad,theCompanyanditssubsidiarycompaniesshallbemandatedtoenterintosuchrecurrenttransactionsofarevenueortradingnaturewhicharenecessaryfortheirday-to-dayoperationsandwiththoserelatedpartiesasspecifiedinSection2.2(1)and(2)oftheCirculartoShareholdersdated6July2010subjectfurthertothefollowing:-

(i) thetransactionsareintheordinarycourseofbusinessoftheCompanyanditssubsidiarycompaniesontermsnotmorefavourabletotherelatedpartiesthanthosegenerallyavailabletothepublicandarenotdetrimentaltotheminorityshareholdersoftheCompany;and

(ii) disclosure will be made in the Annual Report of the aggregate value oftransactionsoftheProposedShareholders’MandateIconductedduringthefinancialyear,includingamongstothers,thefollowinginformation:-

(a) thetypeoftherecurrenttransactionsmade;and

(b) thenamesoftherelatedpartiesinvolvedineachtypeoftherecurrenttransactionsmadeandtheirrelationshipwiththeCompanyand/oritssubsidiaries.

ANDTHATsuchmandateshallcommenceuponpassingofthisresolutionandshallcontinuetobeinforceuntil:-

(i) theconclusionofthenextAnnualGeneralMeeting(“AGM”)oftheCompanyatwhichtimeitwilllapse,unlesstheauthorityisrenewedbyaresolutionpassedatthemeeting;or

(ii) theexpirationoftheperiodwithinwhichthenextAGMoftheCompanyisrequiredtobeheldpursuanttoSection143(1)oftheCompaniesAct,1965(“Act”)(butshallnotextendtosuchextensionasmaybeallowedpursuanttoSection143(2)oftheAct);or

(iii) revokedorvariedbyaresolutionpassedbytheshareholdersatageneral

meetingbeforethenextAGM;

whicheveristheearliest;

NOTICE OF ANNUAL gENERAL MEETINg (cont’d)

(Resolution 9)

136

ANDFURTHERTHATtheDirectorsoftheCompanybeauthorisedtocompleteanddoallsuchactsandthings(includingexecutingallsuchdocumentsasmayberequired)astheymayconsiderexpedientornecessarytogiveeffecttotheProposedShareholders’MandateI.”

7.4 Proposedrenewalofshareholders’mandateforexistingrecurrentrelatedpartytransactionsandnewshareholders’mandateforadditionalrecurrentrelated party transactions of a revenue or trading nature (“ProposedShareholders’MandateII”)

“THAT,subjectalwaystotheListingRequirementsofBursaMalaysiaSecuritiesBerhad,theCompanyanditssubsidiarycompaniesshallbemandatedtoenterintosuchrecurrenttransactionsofarevenueortradingnaturewhicharenecessaryfortheirday-to-dayoperationsandwiththoserelatedpartiesasspecifiedinSection2.2(3)to(14)oftheCirculartoShareholdersdated6July2010subjectfurthertothefollowing:-

(i) thetransactionsareintheordinarycourseofbusinessoftheCompanyanditssubsidiarycompaniesontermsnotmorefavourabletotherelatedpartiesthanthosegenerallyavailabletothepublicandarenotdetrimentaltotheminorityshareholdersoftheCompany;and

(ii) disclosure will be made in the Annual Report of the aggregate value oftransactionsoftheProposedShareholders’MandateIIconductedduringthefinancialyear,includingamongstothers,thefollowinginformation:-

(a) thetypeoftherecurrenttransactionsmade;and

(b) thenamesoftherelatedpartiesinvolvedineachtypeoftherecurrenttransactionsmadeandtheirrelationshipwiththeCompanyand/oritssubsidiaries.

ANDTHATsuchmandateshallcommenceuponpassingofthisresolutionandshallcontinuetobeinforceuntil:-

(i) theconclusionofthenextAnnualGeneralMeeting(“AGM”)oftheCompanyatwhichtimeitwilllapse,unlesstheauthorityisrenewedbyaresolutionpassedatthemeeting;or

(ii) theexpirationoftheperiodwithinwhichthenextAGMoftheCompanyisrequiredtobeheldpursuanttoSection143(1)oftheCompaniesAct,1965(“Act”)(butshallnotextendtosuchextensionasmaybeallowedpursuanttoSection143(2)oftheAct);or

(iii) revokedorvariedbyaresolutionpassedbytheshareholdersatageneral

meetingbeforethenextAGM;

whicheveristheearliest;

ANDFURTHERTHATtheDirectorsoftheCompanybeauthorisedtocompleteanddoallsuchactsandthings(includingexecutingallsuchdocumentsasmayberequired)astheymayconsiderexpedientornecessarytogiveeffecttotheProposedShareholders’MandateII.”

8. Totransactanyordinarybusinesswhichduenoticeshallhavebeengiven.

(Resolution 10)


ANNUALREPORT2010

137


BYORDEROFTHEBOARD

wONGSOONKIONGSecretary

KualaLumpur6July2010

NOTES:

(A) APPOINTMENT OF PROXY

1. A member of the Company entitled to attend and vote at the meeting may appoint one (1) proxy only to attend and vote in his stead. A proxy need not be a member of the Company and the provision of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company.

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

3. All forms of proxy must be deposited at the Registered Office of the Company situated at Suite 2.05, Level 2 Menara Maxisegar, Jalan Pandan Indah 4/2, Pandan Indah, 55100 Kuala Lumpur not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

(B) EXPLANATORY NOTES TO THE SPECIAL BUSINESSES

1. The Ordinary Resolution no. 7 if passed, will give the Directors of the Company the authority to issue shares in the Company up to an amount not exceeding in total 10% of the issued share capital of the Company for such purposes as the Directors consider would be in the interest of the Company. This would avoid any delay and costs involved in convening general meeting to specifically approve such an issue of shares. This authority, unless revoked or varied at a general meeting, will expire at the next Annual General Meeting of the Company.

2. Resolution pursuant to Section 132E of the Companies Act, 1965

Section 132E of the Companies Act, 1965 prohibits a company or its subsidiaries from entering into any arrangement or transaction with its Directors or persons connected with such Directors in respect of the acquisition from or disposal to such Directors or connected persons of any non-cash assets of the requisite value without prior approval of the Company in general meeting. According to the Companies Act, 1965, a non-cash asset is considered to be of the requisite value, if at the time of arrangement or transaction, its value is greater than RM250,000.00 or 10% of the Company’s net assets, whichever is the lesser, subject to a minimum of RM10,000.00.

The proposed Ordinary Resolution no. 8, if passed, will authorise the Company and each of its subsidiaries to enter into any arrangement or transaction with a Director of the Company or with a person connected with such a Director to acquire from or dispose to such a Director or person connected with such a Director any non-cash assets of the requisite value that is less than 5% of the total net assets of the Group at the time of such acquisition or disposal.

3. The detailed information on the Ordinary Resolution nos. 9 and 10 pertaining to the proposed renewal of shareholders’ mandate for existing recurrent related party transactions and new shareholders’ mandate for additional recurrent related party transactions of a revenue or trading nature, is set out in the Circular to Shareholders dated 6 July 2010 which is enclosed together with the Company’s 2010 Annual Report.

138

STATEMENT ACCOMPANYINgNOTICE OF ANNUAL gENERAL MEETINg

DIRECTORS STANDING FOR RE-ELECTION AT THE 85TH ANNUAL GENERAL MEETING OF THECOMPANY

TheDirectorsretiringbyrotationandstandingforre-electionpursuanttoArticle97oftheArticlesofAssociationoftheCompanyareasfollows:-

1. Dato’KamaruddinBinMatDesa

2. LoyBoonChen

TheDirectorretiringbyrotationandstandingforre-electionpursuanttoArticle81oftheArticlesofAssociationoftheCompanyisasfollows:-

1. NgBeeKenTheprofileofeachoftheaboveDirectorsissetoutinthesectionentitled“ProfileofBoardofDirectors”onpages5to8ofthisAnnualReport.

TheinformationrelatingtotheDirectors’shareholdingsintheCompanyanditsrelatedcorporationsaresetoutinthesectionentitled“StatementonDirectors’Interests”onpage130ofthisAnnualReport.

✄

FORMOFPROXY NO.OFSHARESHELD

I/We__________________________________________________________(CompanyNo./NRICNo.__________________________) (Nameinfullandinblockletters)

of______________________________________________________________________________________________________________ (Fulladdress)

beingamember/membersofTALAMCORPORATIONBERHAD(1120-H)herebyappoint_______________________________

____________________________________________________________________________(NRICNo.___________________________) (Nameinfullandinblockletters)

of______________________________________________________________________________________________________________ (Fulladdress)

orfailinghim/her,theChairmanoftheMeetingasmy/ourproxytovoteonmy/ourbehalfatthe85thAnnualGeneralMeetingoftheCompanytobeheldatthePerdanaBallroom,PandanLakeClub,Lot28,JalanPerdana3/8,PandanPerdana,55300KualaLumpuronThursday,29July2010at11.30a.m.andatanyadjournmentthereof,ontheresolutionsreferredtointheNoticeoftheAnnualGeneralMeeting.

My/ourproxyistovoteasindicatedbelow:

NO. RESOLUTIONS FOR AGAINST

AsOrdinaryBusinesses

1 ToreceiveandadopttheAuditedFinancialStatementsoftheCompanyfortheyearended31January2010andtheReportsoftheDirectorsandAuditorsthereon.

2 ToapprovethepaymentofDirectors’feesofRM25,000foreachDirectorfortheyearended31January2010

3 Tore-electtheDirector,Dato’KamaruddinBinMatDesawhoisretiringinaccordancewithArticle97oftheArticlesofAssociationoftheCompany.

4 Tore-electtheDirector,LoyBoonChenwhoisretiringinaccordancewithArticle97oftheArticlesofAssociationoftheCompany.

5 Tore-electtheDirector,NgBeeKenwhoisretiringinaccordancewithArticle81oftheArticlesofAssociationoftheCompany.

6 Tore-appointMessrsBakerTillyMonteiroHengasAuditorsandtoauthorisetheDirectorstofixtheirremuneration.

AsSpecialBusinesses

7 OrdinaryResolution AuthoritytoallotandissuesharespursuanttoSection132DoftheCompaniesAct,1965.

8 OrdinaryResolution AuthoritypursuanttoSection132EoftheCompaniesAct,1965.

9 OrdinaryResolution Proposedrenewalofshareholders’mandateforexistingrecurrentrelatedpartytransactions

andnewshareholders’mandateforadditionalrecurrentrelatedpartytransactionsofarevenueortradingnature(“ProposedShareholders’MandateI”).

10 OrdinaryResolution Proposedrenewalofshareholders’mandateforexistingrecurrentrelatedpartytransactions

andnewshareholders’mandateforadditionalrecurrentrelatedpartytransactionsofarevenueortradingnature(“ProposedShareholders’MandateII”).

(Pleaseindicatewithan“X”intheappropriatespaceshowyouwishyourvotetobecasted.Ifyoudonotindicatehowyouwishyourproxytovoteonanyresolution,theproxyshallvoteashe/shethinksfit,orathis/herdiscretion,abstainsfromvoting).

Signedthis________________dayof__________________________ 2010.

Signature/CommonSealofMember

NOTES:

1. A member of the Company entitled to attend and vote at the meeting may appoint one (1) proxy only to attend and vote in his stead. A proxy need not be a member of the Company and the provision of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company.

2. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in

writing, or if the appointor is a corporation, under its common seal or the hand of its attorney duly authorised.

3. All forms of proxy must be deposited at the Registered Office of the Company situated at Suite 2.05, Level 2 Menara Maxisegar, Jalan Pandan Indah 4/2, Pandan Indah, 55100 Kuala Lumpur not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

TheCompanySecretaryTALAMCORPORATIONBERHAD

Suite2.05,Level2,MenaraMaxisegarJalanPandanIndah4/2

PandahIndah55100KualaLumpur

(1120-H)

Stamp

Please fold here

Please fold here

annual report 2010 - talam transform berhad sri dato’ (dr) ir chan ah chye @ chan chong yoon...

Documents