key initiatives making a difference in society faber group berhad l annual report 2010 99 key...

Faber Group Berhad l Annual Report 201098

At Faber, we firmly believe in managing our businesses in a responsible, balanced and ethical manner. These guiding principles ensure that our Corporate Social Responsibility (“CSR”) initiatives will continue to contribute positively to social, economic and environmental development of the communities that we serve.

We recognise that for long term sustainability, our strategic orientation is to look beyond the financial parameters. We are committed to the communities wherever we operate and support various humanitarian, social and educational causes. our CSR programmes are an extension of our corporate culture and we acknowledge our roles and responsibilities towards nation building and the development of a progressive yet compassionate society.

HELPING THoSE IN NEED

As a provider of Hospital Support Services (“HSS”), it is only natural that Faber takes the welfare and well-being of patients to heart. Over the years, we have extended a hand to hospitals within our purview as well as other organisations beyond our sphere of operations. During the year under review, the Group through FMS made a cash contribution of RM20,000.00 to the IJN Foundation for the benefit of patients at the National Heart Institute in Kuala Lumpur.

HELPING REBUILD LIvES

In 2010, Faber continued its commitment to help the underprivileged and victims of natural disasters. In particular, we came to the aid of our colleagues and their families affected by the floods in Kedah and Perlis in December 2010. Faber made a contribution of RM120,000.00 in cash and kind including food and clothing to 114 employees and their family members.

We also donated RM60,000.00 to upgrade the facilities at three mosques in Tambun, Perak. They were Masjid Jamek Chemor and Masjid Al-Amaniah in Kampung Chepor Dalam and Masjid Saidina Abu Bakar Al-Siddiq at PGA Ulu Kinta in Perak.

The Group also contributed RM25,000.00 to the Children’s Ward at Hospital Semporna in Sabah and RM15,000.00 to Rumah Kanak-Kanak Kota Kinabalu in Papar, Sabah where RM5,000.00 was allocated for the renovation of the home’s living room. The Deputy Minister of Health, Malaysia graced the ceremony together with representatives from Faber and the Sabah Welfare Department. We also donated RM16,000.00 to another orphanage, the Pertubuhan Kebajikan & Pendidikan Ilham Tajidid in Ampang, Kuala Lumpur.

As we progress encouragingly along with our commitment to all our stakeholders, we will endeavour to operate in an ethical, moral and socially responsible manner. We will continue our commitment in making significant progress in our CSR programmes in a responsible manner and create a positive impact for the business and for the society.

CHAMPIoNING EDUCATIoN

A key aspect of Faber’s CSR is entrenched in the development of human capital, which is critical to the Vision 2020 goal of a fully developed nation by the end of this decade. As the leading player in Integrated Facilities Management (“IFM”), we are focused on ensuring continuity in the development of skills and knowledge in this discipline.

Faber in collaboration with the Ministry of Higher Education (“MoHE”) offers education and training focused on the two specialised IFM fields, which are Biomedical Engineering Maintenance Services (“BEMS”) and Facilities Engineering Maintenance Services (“FEMS”).

During the year under review, the Group has jointly developed a curriculum with MoHE to offer the first-ever Advanced Diploma in Electronics Engineering (Medical) and Advanced Diploma in Facility Management at the Premier Polytechnic Sultan Salahuddin Abdul Aziz Shah (“PSA”), Shah Alam, Selangor. Under the curriculum, students serve a one-year internship with Faber via the Group’s Work Based Learning (“WBL”) programme where they are exposed to the actual working environment.

For the Advanced Diploma in Electronics Engineering (Medical) programme, 10 students were selected from the first batch to undergo the WBL at six Faber Medi-Serve Sdn Bhd’s (“FMS”) offices in Peninsular Malaysia. This first batch of students will graduate in early 2011. The learning structure for the Diploma in Facilities Management and Maintenance is currently being refined and will be revised to the Advanced Diploma in Facility Management. This programme was previously facilitated by the Community College Education Division together with the Hulu Langat Community College and has now been transferred to the Polytechnic Education Department where it will now be coordinated together with the PSA.

Making a Difference in SocietyKey Initiatives

Faber Group Berhad l Annual Report 2010 99

Key Initiatives

Making a Difference in Society (continued)

7 January 2010 - Faber employees brought cheer to the orphans at Pertubuhan Kebajikan & Pendidikan Ilham Tajidid in Ampang, Selangor.

14 January 2010 - A Welcome Session was held for the fi rst batch of students undergoing the WBL Advanced Diploma in Electronics Engineering (Medical).

25 February 2010 - Signing ceremony for joint collaboration with the Ministry of Higher Education for the WBL Advanced Diploma in Electronics Engineering (Medical) programme.

17 March 2010 Championing education ~ The Chairman of FMS was invited to grace the Convocation Ceremony for students of the Premier Polytechnic Sultan Salahuddin Abdul Aziz Shah, Shah Alam, Selangor.

2 March 2010 - Cash contributions were extended to the children’s ward at Hospital Semporna, Sabah.


Making a Difference in Society (continued)

Key Initiatives

7 June 2010An Appreciation Ceremony was held to acknowledge the joint efforts with the Community College Education Department for the WBL Diploma in Facilities Maintenance and Management Programme.

26 April 2010 Extending our support to heart patients of the IJN Foundation

in Kuala Lumpur.

23 March 2010 The second batch of graduates of Faber’s WBL Diploma in Facilities Maintenance and Management Programme.

24 September 2010 Donations were forwarded to Rumah Kanak-Kanak Kota Kinabalu in Papar, Sabah and the event was graced by the Deputy Minister of Health, Malaysia.

102 Statement on Corporate Governance

119 Statement on Internal Control

124 Audit and Risk Committee Report

132 Statement of Directors’ Responsibility in Respect of Audited Financial Statements

Transparency


Statement on Corporate Governance

The Board of Directors (“the Board”) of Faber Group Berhad (“FGB”) regards Corporate Governance as vitally important to the success of FGB’s businesses and are unreservedly committed to applying the principles as set out in the Malaysian Code on Corporate Governance (“the Code”) necessary to ensure that the following principles of good governance is practiced in all of its business dealings in respect of its shareholders and relevant stakeholders:-

(a) The Board is the focal point of FGB’s Corporate Governance system. It is ultimately accountable and responsible for the performance and affairs of FGB;

(b) All Board members are expected to act in a professional manner, thereby upholding the core values of integrity and enterprise with due regard to their fiduciary duties and responsibilities;

(c) All Board members are responsible to FGB for achieving a high level of good governance; (d) The Terms of Reference of the Board of FGB shall constitute, and form, an integral part of each Director’s duties and

responsibilities; and

(e) Having regard to the responsibilities and obligations, the Board will direct and supervise the Management of the business and affairs of the subsidiaries of FGB (“Faber Group”) to strengthen the performance of the Group.

The Board is pleased to set out below the statement, which outlines the main corporate governance practices of Faber Group.

BOARD OF DIRECTORS

The Board has the ultimate and overall responsibility for corporate governance, strategic direction, financial and organisational matters of Faber Group.

The Board has assumed the following 6 specific responsibilities which facilitate the discharge of the Board’s stewardship responsibilities pursuant to the Best Practices as set out in the Code:-

• Establish,reviewandadoptthestrategicplananddirectionforFaberGroup;

• OverseetheconductofthebusinessofFaberGrouptoevaluatewhetherthebusinessisbeingproperlymanaged;

• Identifyprincipalrisksandensuretheimplementationofappropriatesystemstomanagetheserisks;

• Successionplanning,includingappointing,training,fixingthecompensationofandwhereappropriate,replacingseniormanagement;

• DevelopandimplementaninvestorrelationsprogrammeorCorporateDisclosurepolicyforFaberGroup;and

• ReviewtheadequacyandtheintegrityofFaberGroup’sinternalcontrolsystemsandmanagementinformationsystems,including system for compliance with applicable laws, regulations, rules, directives and guidelines.


Statement on Corporate Governance (continued)

BOARD COMPOSITION AND BALANCE

TheBoardcurrentlyconsistsof10members,5ormore than1/3are IndependentNon-ExecutiveDirectors.FGBcomplieswiththerequirementoftheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad(“BursaSecurities”)forIndependentNon-ExecutiveDirectors tomakeupat least1/3of theBoardmembership, aswell as the requirement foraDirector who is a member of the Malaysian Institute of Accountants to sit on the Audit Committee.

The Board is of the opinion that its current composition and size constitute an effective Board to Faber Group. Furthermore, thestrongrepresentationofhighcaliberIndependentNon-ExecutiveDirectors,providesnecessarybalance.TheroleoftheIndependentNon-ExecutiveDirectorsisimportantinensuringthatthestrategiesproposedbyManagementarefullydiscussedand deliberated, and the interests of the shareholders, employees, customers, suppliers and other stakeholders are taken into consideration.

The Board has maintained its mix of Directors from diverse professional backgrounds with a wide range of experience and expertise in finance and accounting, economics, corporate management and marketing. This provides a collective range of skills, expertise and experience which is vital for the successful direction of Faber Group. A brief profile of each Director is presented on pages 64 to 69 of the Annual Report.

ROLES AND RESPONSIBILITIES OF THE CHAIRMAN AND THE MANAGING DIRECTOR

FGB aims to ensure a balance of power and authority between the Chairman and the Managing Director with a clear division of responsibility between the running of the Board and FGB’s business respectively. The positions of Chairman and the Managing Director are separated and clearly defined.

The roles and responsibilities of the Chairman and the Managing Director are clearly defined and reviewed if there are significant changestoFGB’sstrategy,operations,performanceormanagement.Eachhasclearscopeofdutiesandresponsibilitiesthatensuresamoreequitabledistributionofaccountabilities,thisdistinctionalsoreinforcesthecheckandbalanceproposition.

The Chairman of the Board together with the other Board members, are responsible for setting the policy framework within which Management is to work. His main responsibility is to lead and manage the work of the Board in order to ensure that it operates effectively and fully discharges its legal and regulatory responsibilities. He serves as the main liaison person between theBoardandManagement.TogetherwiththeotherNon-ExecutiveandIndependentDirectors,heleadsthediscussiononthestrategies and policies recommended by Management. He also chairs the meetings of the Board and the shareholders.

The Managing Director is subject to the control of the Board. He is primarily responsible for overseeing the day-to-day management of the business in accordance to the objectives and strategies established by the Board. He is accountable for leading the Management team, implementing the policies/decisions approved by the Board, building a dynamic corporate culturewiththerequisiteskillsandcompetencyandactingastheFaberGroup’sofficialspokesperson.Heisalsoresponsiblefor mapping the medium to longer term strategies including policies and decisions for the Board’s deliberation and approval and making sure that they are carried through their desired outcomes and address any shortcomings identified. He carries the primary responsibility for ensuring management competency including effective succession planning to sustain continuity.

At the onset of each financial year, the Board considers and approves a set of Key Performance Indicators and expectations on thebasisoftheBalancedScorecardfortheManagingDirector,whichisthencascadeddowntoHeadofCompaniesandSeniorManagement of FGB. This serves as a yardstick against which his performance will be measured, evaluated and rewarded.



BOARD MEETINGS

To ensure effectivemanagement of the FaberGroup, theBoard normallymeets quarterly to review financial, operationaland business performances. Additional meetings are also convened on an ad-hoc basis with formal agenda for the Board to deliberateonurgentissuesthatrequireimmediatedecision-making.Theagendatogetherwiththerelevantboardpapersforeach Board meeting are forwarded to the Directors in advance of the Board meeting for their study and evaluate the matters to be discussed.

A total of 7 Board meetings were held during the financial year ended 31 December 2010. The details of the Directors’ attendance are as follows:-

Directors Status of Directorship No. of Meetings Attended

Dato’ Ikmal Hijaz bin Hashim Chairman/IndependentNon-ExecutiveDirector 7/7(Chairman)

Datuk Zainal Abidin bin Alias SeniorIndependentNon-ExecutiveDirector 6/7

Datuk Mohamed Zain bin Mohamed Yusuf IndependentNon-ExecutiveDirector 7/7

Dato’ Mohd Izzaddin bin Idris Non-IndependentNon-ExecutiveDirector 2/2*(Appointed on 5 August 2010)

Dato’ Rosli bin Sharif Non-IndependentNon-ExecutiveDirector 4/5*(Resigned on 5 August 2010)

Oh Kim Sun IndependentNon-ExecutiveDirector 7/7

Elakumari a/p Kantilal Non-IndependentNon-ExecutiveDirector 7/7

Puasa bin Osman IndependentNon-ExecutiveDirector 7/7

Suhaimi bin Halim Non-IndependentNon-ExecutiveDirector 1/1*(Appointed on 1 September 2010)

Annuar Marzuki bin Abdul Aziz Non-IndependentNon-ExecutiveDirector 7/7

Adnan bin Mohammad Managing Director 7/7

Note:* Reflects the number of Board Meetings attended during the time the Director held office.



BOARD EFFECTIVENESS ASSESSMENT

FollowingthelaunchoftheGreenBookonEnhancingBoardEffectivenessbythePutrajayaCommitteeonGLCHighPerformanceon26April2006,theBoardEffectivenessAssessment(“BEA”)fortheBoardofFGBhasbeenconductedannuallysince2007.ThemainpurposeoftheBEAistomaintaincohesivenessoftheBoardofFGBand,atthesametime,servestoimprovetheBoard’s effectiveness.

In2008,theBEAframeworkwasrevisedandenhancedtoincorporateadditionalinformationwhichwouldassisttheFGBBoardin ensuring effective day-to-day Board operations and interaction apart from structuring a high performing Board. In addition, therevisedBEAaimstoassisttheBoardtowardsachievingtheoptimalgovernanceframeworkandtofulfillitsfundamentalroles and responsibilities at best practice levels.

UponcompletionoftheBEAbytheBoardmembers,theresultsarecollatedandadetailedreportwillbepresentedtotheNomination and Remuneration Committee for its assessments, evaluations and thereafter to make appropriate recommendation to the Board. All assessments and evaluations carried out by the Nomination and Remuneration Committee in the discharge of all its functions are properly documented.

RE-APPOINTMENT AND RE-ELECTION OF DIRECTORS

FGB’s Articles of Association provides that 1/3 of the Directors shall retire from office at every Annual General Meeting (“AGM”). The Articles also provide that all Directors shall retire from office once at least in each 3 years. A retiring Director shall be eligible for re-election. Directors who are appointed by the Board during the financial period before an AGM are subject to re-election by the shareholders at the next AGM to be held following their appointments.

PursuanttoSection129(6)oftheCompaniesAct,1965,Directoroforovertheageof70yearsmaybeappointedorre-appointedas a Director of FGB to hold office until the conclusion of the next annual general meeting of FGB.

SUPPLY OF INFORMATION

The Board has full and unrestricted access to all information pertaining to Faber Group’s business and affairs to enable it to discharge its duties effectively. Further, the Board also expects timely information and advice to be furnished on all material information.

AllDirectorshavedirectaccesstotheadviceandservicesoftheCompanySecretary,whosetermsofappointmentpermitherremoval and appointment only by the Board as a whole.

In carrying out its duties and responsibilities, the Directors whether as a full Board or in their individual capacities shall have the following rights:-

(a) haveresourcesrequiredtoperformitsduties;

(b) have full and unrestricted access to any information, records, properties, and personnel of the Company and its subsidiaries. The Board should receive information that is not just historical and financial oriented, but information that goes beyond assessing quantitative performance and looks at other factors, such as customer satisfaction, products and quality, market share, market reaction, environmental performance and so on; and

(c) be able to obtain independent professional or other advice at the Company’s expense.


DIRECTORS’ CONTINUAL PROFESSIONAL DEVELOPMENT

All Directors have and successfully completed the Mandatory Accreditation Programme. During the year, the Directors have attended various seminars and training programmes to gain insights into the latest regulatory and industry developments in relation to the Faber Group’s businesses. The details seminars and training programmes attended by the Directors during the year are as follows:-

Directors Date Description Trainer/Organiser

Dato’ Ikmal Hijaz 6January2010 ForumBursaSecurities– BursaSecurities bin Hashim FRS139Financial Instruments: Recognition & Measurement

5March2010 KhazanahTeaTalk– KhazanahNasionalBerhad Opportunities&Risk (“Khazanah”) Arising From Climate ChangeforMalaysianGLCs

9March2010 SeminarbyMalaysian UEMGroup InstituteofAccountants– NewEraofFinancial Reporting for Developers

1June2010 CompetitionLawandits UEMGroup ImpactonUEM Group of Companies

1-3 July 2010 FGB Directors and FGB Management Retreat

19-24 July 2010 MINDA Flagship Programme: Malaysian Directors Academy Building High Performance (“MINDA”) Directors 2010

20-21September2010 BrandStrategyWorkshop FGB

9-11 November 2010 MINDA Chairman’s Forum MINDA

17-23November2010 MedicalEuropeConference, MesseDüsseldorfGmbH Düsseldorf,Germany

10December2010 UEM2010Directors’ UEMGroup Gathering

Datuk Zainal Abidin 1June2010 CompetitionLawandItsImpact UEMGroup bin Alias onUEMGroupofCompanies



10December2010 UEM2010Directors’Gathering UEMGroup




Datuk Mohamed Zain 13January2010 TowardsBoardroomExcellence MalaysianInstituteofCorporate bin Mohamed Yusuf & Corporate Governance Governance (“MICG”) Best Practices

1June2010 CompetitionLawandItsImpact UEMGroup onUEMGroupofCompanies



27-28September2010 AirportOperations,Airport MalaysiaAirportsTrainingCentre/ TechnicalServices&Airport MalaysiaAirportsConsultancy FireRescueServices ServicesSdnBhd


Dato’ Mohd Izzaddin 1June2010 CompetitionLawandItsImpact UEMGroup bin Idris onUEMGroupofCompanies


4-5October2010 KhazanahMegatrendsForum Khazanah


Oh Kim Sun 25January2010 MalaysianOutlookSeminar CreditSuisseSeminar KualaLumpur

5 February 2010 MINDA Breakfast Talk “Moral MINDA Foundation for Good Governance”

12February2010 RiskManagementWorkshop Proton&Pricewaterhouse- CoopersAdvisoryServices

25 June 2010 Governance, Risk Management Institute of Internal Auditors AndCompliance:WhatAudit Malaysia Committees and Chief Audit ExecutivesShouldKnow

6 & 7 July 2010 2nd Annual Corporate MICG and Federation GovernanceSummit2010 ofPublicListedCompanies Truth,Liesand Corporate Governance

15July2010 MalaysianOutlookSeminar CreditSuisseSeminar






8-10 November 2010 2010 IFA Crossroads Asia-Pacific International Fertilizer Conference in Hanoi, Vietnam Industry Association

Elakumari a/p Kantilal 5-6April2010 PLUSInternationalConference PLUS &Exhibition2010

15April2010 Leadership–EssentialInA MIDF CompetitiveWorld

22 April 2010 Phase 1: Coaching for Khazanah Performance



27 July 2010 Phase 2: Coaching for Khazanah PerformanceExcellence Programme




1December2010 SocialBusinessbyProfessor Khazanah Mohd Yusus

Puasa bin Osman 7April2010 BiomassTechnologyWorkshop SIRIMBerhad

20May2010 LatestUpdatesonSelangor FederationofMalaysian Investment & Industrial Manufacturers Development Plan


26-28 June 2010 Association for the Advancement AAMI of Medical Instrumentation (“AAMI”)Conference&Expo







2-3December2010 SustainableAgriculture Professionalsfor SustainableAgriculture


Suhaimi bin Halim 6July2010 BriefingonFrequentTravelers BIBInsurance/ OpusGroupBerhad



Annuar Marzuki 20-21January2010 MandatoryAccreditation BursaSecurities bin Abdul Aziz Programme (MAP) for Directors

21 January 2010 CPA Talk CPA Australia

10 March 2010 Intercompany Financing Transfer PricewaterhouseCoopers Pricing & Tax Deductibility Implication

30March2010 InvestMalaysia BursaSecurities

20April2010 Introductiontodoingbusiness UEMEnvironmentSdnBhd inMiddleEast

21April2010 FinancialReportingStandards Ernst&Young Training






6October2010 Ernst&YoungProgramme Ernst&Young onLeases

21October2010 TreasuryKnowledgeSeminar UEMGroup

27October2010 KhazanahGlobalLecture Khazanah





Adnan bin Mohammad 5-7April2010 PLUSInternationalExpressways PLUSExpressways/UEMGroup Conference&Exhibition (“PIECE”)Conference

26-29April2010 ISSAIntercleanConference TheWorldCleaningIndustry in Amsterdam Association

7May2010 BusinessExcellenceProgramme FGB


1-3 July 2010 FGB Directors and Management FGB Retreat

17-18September2010 CLSAInvestors’Forum2010, CLSAGroup Hong Kong



17-20November2010 MedicalEuropeConference, MesseDüsseldorfGmbH Düsseldorf,Germany

25-26November2010 DrivingFaberScorecard FGB

BOARD COMMITTEES

The Board has set up the Board Committees, namely, the Audit and Risk Committee; Nomination and Remuneration Committee; and Investment Committee and will periodically review their terms of reference and operating procedures.

The Board has delegated certain specific responsibilities to the Board Committees, which operates with clearly defined terms of reference primarily to assist the Board in the execution of its duties and responsibilities. The minutes of the respective Committee Meetings are submitted to the Board for notation and deliberations by the Board. The Chairman of the various committees will report to the Board the outcome of the Committee Meetings and are incorporated in the minutes of the full Board meeting. Although the Board has granted authority to the Committees to deliberate and decide on certain operational matters, the ultimate responsibility for final decision on all matters lies with the entire Board.

Audit and Risk Committee

The full Audit and Risk Committee report including its membership, composition, roles and responsibilities are laid down on pages 124 to 131 of the Annual Report.

Nomination and Remuneration Committee (“NRC”)

TheNRCcomprisesof3Non-ExecutiveDirectors,amajorityofwhomareIndependent.



The NRC met 5 times during the financial year ended 31 December 2010. The members and the details of their attendance are as follows:-

NRC Members Status of Directorship No. of Meetings Attended

Datuk Mohamed Zain bin Mohamed Yusuf IndependentNon-ExecutiveDirector 5/5(Chairman)



The objectives of the NRC are as follows:-

• ToleadtheprocessforBoardappointmentsandmakerecommendationstotheBoard,candidatesforalldirectorshipsfor the Board of companies within the Faber Group (FGB, operating subsidiary companies and where possible, associate companies)forthepurposeofreasonablyachievingfairandadequateBoardrepresentationbytheshareholdersoftherespective companies.

• Toconsider,inmakingitsrecommendations,candidatesfordirectorshipsproposedbytheManagingDirectorandwithinthe bounds of practicability, by any other senior executive or any director or shareholder and to recommend to the Board candidates for appointment to the Board and/or to fill the Board committees.

• TorecommendtotheBoard,candidatesforkeyseniorpersonneloftheFaberGroup(FGB,operatingsubsidiarycompaniesandwherepossible,associatecompanies)andensurethecandidatessatisfytherelevantrequirementsonskillsandcorecompetencies.

• Toset theremunerationframeworkandtomakerecommendationsto theBoardonallelementsof theremuneration,termsofemployment,rewardstructureandfringebenefitsforExecutiveDirectors,theChiefExecutiveandotherseniormanagementwiththeaimtoattract,retainandmotivateindividualsofrequisitequality.TheremunerationofExecutiveDirectors shall link rewards to corporate and individual performance.

• TocarryoutanyotherpurposeasdirectedandapprovedbytheBoardofFGBfromtimetotime.

The duties and responsibilities of the NRC include the following:-

• Recommend to the Board, candidates for all directorships to be filled by the shareholders or Board. In making therecommendations, the NRC should consider the candidates’

- skills, knowledge, expertise and experience;- professionalism;- background;- integrity; and- inthecaseofcandidatesforthepositionofIndependentNon-ExecutiveDirectors,theNRCshouldalsoevaluatethecandidates’abilitytodischargesuchresponsibilities/functionsasexpectedfromIndependentNon-ExecutiveDirectors.

Furthermore, the NRC should also review and recommend to the Board the fee structure to reflect the skills and

competencies as well as general practice in the market place.

• Regularlyexaminethestructure,sizeandcompositionoftheBoardwithaviewtodeterminethenumberofDirectorsonthe Board in relation to its effectiveness and ensure that at every annual general meeting (“AGM”), one-third (1/3) of the Directors for the time being shall retire from office.



• Assist theManagingDirector to identify and subsequently recommend to theBoard the potential candidates for bothExecutiveandNon-ExecutiveDirectorsandtorecommendtotheBoardthecandidatesforalldirectorshipsfortheBoardofcompanies within the Faber Group (FGB, major operating subsidiary companies and where possible, associate companies).

• Review annually the required mix of skills and experience and other qualities, including core competencies which Non-ExecutiveDirectorsshouldbringtotheBoard.

• AssessannuallytheeffectivenessoftheBoardasawhole,theBoardcommitteesandthecontributionofeachindividualdirector,includingIndependentNon-ExecutiveDirectors,aswellasManagingDirector,basedontheprocessimplementedby the Board. All assessments and evaluations carried out by the NRC in discharging all its functions should be properly andadequatelydocumented.

• Recommendsuitableorientation,educationalandtrainingprogrammestocontinuouslytrainandequipexistingandnewDirectors.

• Review mix of Directors to ensure high standard of Board performance and succession for both Executive and Non-ExecutiveDirectorsintheeventofanydeficiency.

• Recommend the re-election/re-appointmentofDirectorsunder the retirementby rotationprovisionsof theArticlesofAssociation of FGB and the Companies Act, 1965.

• ToreviewthestructureandframeworkofFGB’ssuccessionplanningsoas:-

(i) Toensureadequatecandidatesareemplacedforthedifferentpositionswithintheorganisation;

(ii) To ensure appropriate training and development programmes are in place;

(iii) To motivate staff to improve themselves in order that they can achieve their full potential; and

(iv) To ensure retention of highly skilled and capable staff within the organization.

• TocarryoutallotherfunctionstoaccomplishtheobjectivesforwhichtheNRCwasformed.

Investment Committee (“IC”)

The IC comprises a minimum of 3 Directors of FGB, one of whom shall be from the majority/substantial shareholder of FGB.

The IC met 3 times during the financial year ended 31 December 2010. The members and the details of their attendance are as follows:-

IC Members Status of Directorship No. of Meetings Attended

Dato’ Ikmal Hijaz bin Hashim Chairman/IndependentNon-ExecutiveDirector 3/3(Chairman)



Adnan bin Mohammad Managing Director 3/3



The objectives of the IC are as follows:-

• ToassisttheBoardinevaluatingallinvestmentproposalsincludingacquisitionsanddisposalsofassets,orinvestmentsinto new businesses including venture capital, locally and abroad;

• Toreviewtheviabilityofproposals/projects/investmentsattheInitialProjectAssessmentStageandprovideappropriatedirections to the Management, so as to enable management to proceed or otherwise with the basic investment concept proposal; and

• Toreview,recommendandactonanyotherinvestmentproposalsandmattersrelatedthereto,asmandatedbytheBoard.

The duties and responsibilities of the IC include the following:-

• Todevelop,reviewandrecommendtotheBoardtheinvestmentpoliciesandstrategies.

• To perform the duties that are assigned to it by the Board including, without limitation, the review of all investmentproposals.

• Toreceivequarterlyreportsfromthemanagement,deliberateanddecideonthecompliancewiththeoverallinvestmentpolicies and strategies, and to report the findings to the Board.

• AttheInitialProjectAssessment/prequalification/tenderbidstage:-

(i) ToreviewandgiveapprovalforFGBtoproceedwiththeprequalification/tenderbidsubmissionorproject/investmentinitiation activities, which meet the pre-determined criteria, and for overseas ventures.

(ii) To authorise FGB to enter into any agreements, memorandum of understanding and/or contracts with potential partnersfortheprequalification/tenderstageandapprovesuchtermsinrelationtothesaidagreement,memorandumof understanding and/or contracts. Notwithstanding, any agreement, memorandum of understanding or contracts whichmayincludeequityparticipationofFGBisreservedfordeliberationbytheBoard.

• FollowingtheDetailedAppraisal/Evaluationorifthetenderissuccessful:-

(i) To review and approve on behalf of the Board the investment proposals, if these fall within the approving authority limits delegated to the IC by the Board.

(ii) To review and recommend to the Board for final decision, the investment proposals, which are beyond the authority limits of the IC.

• ToreviewthetermsofreferenceoftheICandrecommendtherelevantchangestotheBoard.

• Investmentmatters relating to wholly owned subsidiaries of FGBwould be referred directly to the IC for review andrecommendation to the respective Board of the wholly owned subsidiaries. The Board of the wholly owned subsidiaries wouldsubsequentlydeliberateandrecommendtheinvestmentmatterstoFGB’sBoardforapproval.

• Investmentmatters relating to non-wholly owned subsidiary companies are submitted to the respectiveBoard of thesubsidiary companies for deliberation and approval. In this respect, the Board of the subsidiary companies will then provide an update to the IC and FGB’s Board in which the IC and FGB’s Board would raise the appropriate observations and/or comments as a measure of check and balance.



DIRECTORS’ REMUNERATION

Directors’ remuneration is determined at levels which enable Faber Group to attract and retain Directors with the relevant experience and expertise needed to manage Faber Group effectively.

The breakdown of the remuneration of the Directors of FGB payable as well as subsidiary companies of FGB where they are a Board member for the financial year ended 31 December 2010, by category are shown below:-

Executive Non-Executive Director Directors Total (RM’000) (RM’000) (RM’000)

Fees* 90 623 713Allowance* 13 89 102Salariesandotheremoluments 489 - 489Bonus 103 - 103EmployeesProvidentFund 87 - 87EstimatedValue - Benefit-in-kind 71 52 123

Total 853 764 1,617

Note:* These fees and allowances are Directors’ fees and meeting allowances payable by the subsidiary companies of FGB. Based on Faber Group’s

policy, Directors’ fees and meeting allowances receivable by employees of FGB from its subsidiary companies have to be paid directly to FGB that employed them.

The number of Directors whose total remuneration during the year fall within the following bands are as follows:-

Range of Directors’ Executive Non-ExecutiveRemuneration Director Directors Total

Below RM50,000 - 3 3

RM50,001–RM100,000 - 4 4

RM100,001–RM150,000 - 3 3

RM700,001–RM750,000 1 - 1

Note: Successive bands of RM50,000 are not shown entirely as they are not represented.

The details of the remuneration of each Director are not disclosed as the Board is of the view that the disclosure of the remuneration bands of the Directors of the Company is sufficient to meet the objective of the Code.



WHISTLE BLOWER POLICY

FGB’sCodeofConduct,whichincorporatesaCodeofEthics,requiresallofficersandemployeestoobservehighstandardsof business and personal ethics in carrying out duties and responsibilities. As employers and representatives of FGB, or any of its subsidiaries, they must practice honesty and integrity in fulfilling their duties and responsibilities, and comply with all applicable laws and regulations.

It is thus the responsibility of all officers and employees to comply with the Code of Conduct and to report violations or suspected violationsthereto.Accordingly,thisWhistleBlowerPolicyhasbeenformulatedwithaviewtoprovideamechanismforofficersand employees of FGB to report instances of unethical behaviour, actual or suspected fraud or dishonesty or violation of FGB’s Code of Conduct or ethics policy.

TheimplementationoftheWhistleBlowerPolicy is inlinewithSection368BoftheCompaniesAct,1965(“theAct”)whereprovisionshavebeenmadetoprotectFGB’sofficerswhomakedisclosuresonbreachornon-observanceofanyrequirementorprovision of the Act or on any serious offence involving fraud and dishonesty.

CORPORATE DISCLOSURE POLICY

FGBiscommittedtoprovidingequalaccesstomaterialinformationinanaccurate,clear,timelyandcompletemannerandtoavoid an individual or selective disclosure to the shareholders, stakeholders, analysts, journalists, the investing public or other personsofFGB’sperformanceandoperationsandinconformitywithanyandallapplicablelegalandregulatoryrequirements.

This Disclosure Policy applies to all directors, management and employees of FGB and its operating subsidiaries. It outlines FGB’s approach toward the determination and dissemination of material information, the circumstances under which the confidentiality of information will be maintained, and restrictions on insider trading. It also provides guidelines in order to achieve consistent disclosure practices across FGB.

RELATIONSHIP WITH SHAREHOLDERS AND INVESTORS

The Board acknowledges the need for shareholders to be informed of all material matters affecting Faber Group. It recognises and practices transparency and accountability to its shareholders and investors through formal channels of communication. In additiontovariousannouncementsmadeduringtheyear,thetimelyreleaseofquarterlyfinancialreportsprovidesshareholderswith an overview of the Faber Group’s performance and operations.

TheAnnualReportcommunicatescomprehensiveandadequatedetailsofthefinancialresultsandactivitiesundertakenbyFaber Group.

AGMsandExtraordinaryGeneralMeetings(“EGMs”)provideameansofcommunicatingwithshareholderswheretheyareatliberty to seek clarification. The Chairman and the Board members of FGB and the Management of Faber Group are prepared toansweranyqueriesandundertaketoprovidesufficientclarificationon issuesandconcernsraisedbytheshareholders.TheExternalAuditorsandindependentadvisorsarealsopresenttoprovidetheirprofessionalandindependentclarifications,ifrequired.ApressconferenceisnormallyheldimmediatelyafterAGMs/EGMstoallowtheDirectorsandtheManagementtomeetmembersofthemediatoprovideinformationandupdatesonFaberGroup,aswellasaddressanyfurtherqueries.

Faber Group also recognises the need for an independent third party assessment. Towards achieving this end, the Management conducts timely dialogues and briefings with the financial analysts, brokers and institutional fund managers and investors on the FGB’s financial results, performance and business development.

This is to ensure that the investing public receives a balanced and complete view of the FGB’s performance and the relevant updates. These briefings enable a direct dialogue to be established on the affairs of the FGB with the investing community.

Presentations are made, as appropriate, to explain the FGB’s strategy, performance and major developments. However, any information that may reasonably expect to have material effect on the price, value or market activity of FGB’s shares will not be disclosed.



A key element of effective communication with shareholders and investors is the prompt and timely dissemination of information. DisclosuresofinformationrequiringimmediatereleaseasspecifiedbyBursaSecuritieshavealwaysbeencompliedwith.FGBhasconsistentlyreleaseditsquarterlyfinancialresultswellinadvancebeforetheBursaSecurities’deadlines.

FGB views the timeliness, accuracy and reliability of information disseminated to the shareholders, stakeholders and investment community as crucial. In this regard and for the purpose of maintaining better control over disclosure, the Managing Director of FGB has been designated as the spokesperson of the Faber Group.

The FGB’s website at www.fabergroup.com.my also provides an avenue for shareholders and members of the public to access information pertaining to the Faber Group. The website is updated regularly. Further to the website, timely announcements are also made to Bursa Securities on corporate proposals, meetings, announcements, financial reporting and all otherannouncementsthatarerequiredpursuanttotheMainMarketListingRequirementsofBursaSecurities.

Primary contact person for Investor Relations Matters:

Puan Juliza JalilSeniorGeneralManagerHead of Corporate Finance and Investor RelationsFaber Group BerhadContact Details: Telephone No: 03-76282897Email:[email protected]

CORPORATE SOCIAL RESPONSIBILITY (“CSR”)

Faber Group is committed to the communities in the environment it operates. It recognises that for long-term sustainability, its strategic orientation will need to look beyond the financial parameters. Hence, Faber Group supports various causes for the needy and community services through cash contributions, benefit-in-kind and employees voluntarism benefiting the public and communities where Faber Group operates.

Duringtheyearunderreview,FaberGrouphasinitiatedseveralCSRinitiatives:-

CollaborationwithMinistryofHigherEducation (“MoHE”) for theGroup’sCSRFlagshipprogramme focusingonEducationandHumanCapitalDevelopmenttodevelopskilledworkforceinBiomedicalEngineeringMaintenanceServices(“BEMS”)andFacilities EngineeringMaintenanceServices (“FEMS”). A joint curriculumwas developed by Faber andMoHE through thePolytechnicsDivisionspecificallywithPremierPolytechnicSultanSalahuddinAbdulAzizShah,ShahAlam(“PSA”)tocreatetheveryfirst“AdvancedDiplomainElectronicsEngineering(Medical)”and“AdvancedDiplomainFacilitiesManagement”.Thejointcurriculuminvolvestudentsparticipationfora1-yearWorkBaseLearning(“WBL”)programmewheretheyareexposedto actual working environment.

Advanced Diploma in Electronics Engineering (Medical)

FaberGroup,insupportoftheGovernmentaspirationtoacquireemployablegraduatesaswellastodevelopMalaysianwiththerightskillsandexpertiseiscontinuingthecollaborationwithMoHEfortheone(1)yearWBLforthe“AdvancedDiplomainElectronicsEngineering(Medical)”relatedtoBEMS.

On 21 January 2010, ten (10) students were selected for the first batch from PSA. The students were attached to six (6) FaberMediServeSdnBhd’soffices,namely, IpohandTaiping (Perak),Penang,SungaiPetani andAlorSetar (Kedah) andKangar(Perlis)withtwo(2)studentsateachlocation.FaberandPSAwillbeexpectingitsfirstbatchofgraduatesfromtheprogramme in 2011.



Advanced Diploma in Facilities Management

Faber Group is currently collaborating with PSA to create and revise the learning structure for the Diploma in FacilitiesManagement and Maintenance, a collaboration which started with the Community College Division and now transferred to the PolytechnicsDivision.Hencetheprogramme,withHuluLangatCommunityCollege,MoHEwillberevisedtoAdvancedDiplomainFacilitiesManagementandwillcollaboratewithPSA.

OtherkeyCSRinitiativesduringtheyearinclude:-

• RM20,000contributiontoIJNFoundationforthepatientsatInstituteJantungNegara,KualaLumpur.

• ContributionofRM60,000toupgradefacilitiesat3mosquesinTambun(Perak).ThemosqueswereMasjidJamekChemor,MasjidAl-Amaniah(KampungCheporDalam)andMasjidSaidinaAbuBakarAl-Siddiq,PGAUluKinta.

• RM25,000anddonationinkindfortheChildren’sWardatHospitalSemporna(Sabah)inconjunctionwithHariRayaAidilfitriCelebration.

• Contribution of RM120,000 in the form of cash and donation in kind comprising food and clothings to 114 regional employees and their families who were affected by the recent flood in December 2010 in Kedah and Perlis.

Faber’scommitmentinCSRinitiativeshasalsogainedrecognitioninthemarketplace.On5March2010,Faberwasafinalistunder the “WorkplaceCategory for companieswithmarket capitalizationbelowRM1billion” for theStarBiz-ICRMalaysiaCorporate Responsibility Awards 2009, jointly organized by the STAR Publications (M) Bhd and the Institute of CorporateResponsibility Malaysia.

ACCOUNTABILITY AND AUDIT

The Board is committed to providing a clear, balanced and comprehensive account on the financial position of Faber Group throughquarterlyandhalfyearlyannouncementsof itsresultsaswellasthroughtheChairman’sreviewandstatementofoperations in FGB’s Annual Report.

DIRECTORS’ RESPONSIBILITY IN RESPECT OF THE PREPARATION OF THE ANNUAL FINANCIAL STATEMENTS

The Directors are required under the provisions of the Companies Act, 1965 to ensure that the financial statements arepreparedinaccordancewiththeFinancialReportingStandardsrequirements.TheBoardisresponsibleforensuringthatthefinancial statements gives a true and fair view of the state of affairs of FGB and the Faber Group at the end of the financial year 31 December 2010 and the profit and loss and cash flow for the period.

In preparing the financial statements, the Directors have applied suitable accounting policies and applied them consistently. The Directors have also ensured that all applicable accounting standards have been followed and prepare the financial statements on a going concern basis.

TheAuditandRiskCommitteeassiststheBoardinoverseeingthefinancialreportingprocessandreviewsthequarterlyresultsandannualaccountsbeforeitisapprovedbytheBoardandreleasedtoBursaSecurities.



STATEMENT ON INTERNAL CONTROL

The Board has overall responsibility for the system of internal control which includes financial controls, operational and compliance controls and risk management to ensure that shareholders’ investments, customers’ interests and FGB Group’s assets are safeguarded.

TheDirectors’StatementonInternalControlsetoutonpages119to123ofthisAnnualReportprovidesanoverviewofthestateof internal controls within the Faber Group.

RELATIONSHIP WITH THE AUDITORS

The Board, through the Audit and Risk Committee maintains a transparent and professional relationship with the Internal and ExternalAuditors.TheAuditandRiskCommitteehasbeenexplicitlyaccordedtheauthoritytocommunicatedirectlywithboththeInternalandExternalAuditors.Currently,MessrsErnst&Youngprovidesindependentandprofessionalexternalauditingservices to the Faber Group.

ThefullreportoftheAuditandRiskCommitteeoutliningitsroleinrelationtotheInternalandExternalAuditorsissetoutonpages 124 to 131 of this Annual Report.

COMPLIANCE WITH BEST PRACTICES OF THE CODE

The Board considers that it has complied with the principles and best practices outlined in the Code.

ThisStatementonCorporateGovernancewasapprovedbytheBoardon17March2011.



Statement on Internal Control

RESPONSIBILITY OF THE BOARD

The Board of Directors (“Board”) is responsible for Faber Group Berhad (“FGB”) and its subsidiary companies’ (“Faber Group”) system of internal control to safeguard stakeholders’ interests and Faber Group’s assets as prescribed by the Malaysian Code on Corporate Governance.

The Board acknowledges that the system of internal controls is designed to help manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable and not absolute assurance against material misstatement, loss and fraud.

The Board has established an on-going process for identifying, evaluating and managing the significant risks faced by Faber Group. This process includes updating the system of internal controls when there are changes to business environment orregulatoryrequirements.TheBoardhasestablishedprocedurestoimplementtherecommendationsofthe‘StatementonInternalControl:GuidanceforDirectorsofPublicListedCompanies’fortheFaberGroup.

INTERNAL CONTROL ENVIRONMENT ELEMENTS

The Board recognises the importance of key internal control environment elements that set the tone of Faber Group. It is the foundation of all other components of internal control, providing the discipline and structure. It influences the control consciousness of the people in Faber Group. In recognising the importance of control environment in the overall governance process, the Board of FGB has instituted the following:-

Board and Board Committees

• Appointmentof5IndependentDirectorswhoaretoensurethatstrategiesproposedarefullydiscussedandevaluated.

• AppointmentofBoardCommittees, includingtheAuditandRiskCommittee (“ARC”) toassist theBoard inoverseeingtheoverallmanagementofprincipalareasofriskandevaluatetheadequacyandeffectivenessoftheRiskManagementand internal control systems.Whilst the Investment Committee; andNomination and Remuneration Committee havebeen delegated with specific responsibilities with terms of reference, these Committees have the authority to examine all matters within their scope of responsibility and report back to the Board with their recommendations for the Board’s decision.

Organisational Structure

• TheorganisationalstructureofFaberGroupisclearanddetailed,definingtherolesandresponsibilitiestothevariousCommitteesoftheBoard,ManagementoftheCorporateOfficeandsubsidiarycompanies.

• Appointment of Managing Director (“MD”)/ Chief Executive Officer (“CEO”) on the Board of the operating subsidiarycompanieswithinFaberGroup.TheMD/CEO’sappointment,rolesandresponsibilities,andauthoritylimitsaresetbytherespective Board.

• Thestructureisreviewedregularlytomonitoritseffectivenessandtoprovidesupporttochangingbusinessrequirements.The organization structure was last revised in 2009 in line with the business expansion efforts of the Group.

Risk Management

Risk Management is regarded as an integral part of management process and iterative process of continual improvement. The key objectives of Faber Group’s risk management are as follows:-

• Optimisereturntoshareholdersandprotecttheinterestsofotherstakeholders.


Statement on Internal Control (continued)

• SafeguardFaberGroup’sassets(property&investment)andmaintainitsreputation.

• ImproveFaberGroup’soperatingperformance.

• FulfillFaberGroup’sstrategicobjectives.

• Ensureappropriateandtimelyresponsestochanges intheenvironmentthataffectFaberGroup’sabilitytoachieve itsobjectives.

• Reducerisksofmaterialmisstatementinofficialannouncementsandfinancialstatements.

• ComplywiththeMalaysianCodeofCorporateGovernance,therelevantlawsandrequirements.

The Risk Management Framework has been revised as of 1 March 2011.

Strategic Planning, Budgetary System and Performance Monitoring

• EstablishmentofaclearFaberGroup’svision,mission,shortandlong-termstrategicandactionplan.

• Adetailedbudgetingprocess is established requiringall keyoperating companies inFaberGroup topreparebudgetsannually, which are discussed and approved by the Board. Effective reporting system on actual performance againstapproved budgets is in place and significant variances are followed up by Management.

• Establishment of performancemonitoring as tool forManagement tomonitor performance andmeasure against thecorporate objectives approved by the Board, covering all key financial, customer, operational, people and organizational indicators.

Discretionary Authority Limits

• Cleardelegationofauthority isdefined in theDiscretionaryAuthorityLimits (“DAL”),whichsets the limit forstrategic,operating and capital decision and expenditure as well as decision authority for each level of Management within Faber Group, and also the Board’s authority.

• TheDALisreviewedfromtimetotimetoensureeffectivenessofstrategicandoperationalexecutionsandapprovedbytheBoard.

Management Systems, Policies and Procedures

• Faber Group established several management systems to improve its management and operational efficiency. ThemanagementsystemshavebeencertifiedtointernationalstandardssuchasISO9001forQualityManagementSystem,ISO14001forEnvironmentalManagementSystem,OHSAS18001forOccupationalSafetyandHealthManagementSystem;ISO13485forMedicalDevicesManagementSystembothat thecorporateofficeandbusinessunits.TheGroup isalsoworking on other management system and expanding the current management systems to other sites for implementation and certification purposes.

• Written Policies and Procedures are established at all levelswithin Faber Group as part of the variousmanagementsystems. These policies and procedures are reviewed regularly and updated when necessary. Briefings or trainings are provided to stakeholders such as employees, contractors and customers.



Code of Ethics and Conduct

• FaberGrouphasaCodeofEthicsandConduct(“Code”)thatsetsoutthepoliciesandguidelinesrelatingtostandardofethics that all employees are expected to adhere to in the course of their work while employed by the Company. It also contains principles and standards of good practice relating to lawful and ethical dealings in the conduct of its business.

• Employeesarerequiredtoupholdthehighestintegrityindischargingtheirdutiesandintheirdealingswithcustomers,employees and regulators in the communities in which the Group operates. This Code is communicated to all employees upon recruitment. Each employee is a given a booklet of the Code and a softcopy version is available in the shared Human Resource electronic portal.

Insurance on Assets

• FaberGrouphaspurchasedinsuranceonallitsassets,includingitshumanresources.Coveragetypicallyincludesdamageto or theft of assets; liability coverage for the legal responsibility to others for bodily injury or property damage; and medical coverage for the cost of treating injuries and illness, rehabilitation and death.

• Insurancecoverageisreviewedregularlytoensurethecomprehensivecoverageinviewofchangingbusinessenvironmentor assets.

Control Self-Assessment (“CSA”)

• The CSA process has been established to create increased appreciation of risks and control towards achieving Faber Group’s business and departmental objectives. This is achieved by empowering the employees to take full ownership and accountability of the respective controls within their area of responsibility.

• MoreCSAsarebeingplannedtobeimplementedatvariouslevelsofoperationaspartofoperationalimprovement.

Business Continuity Management

• Faber Group has identified potential impacts that threaten its organisation and established a framework for buildingresilience and the capability for an effective response which safeguards the interests of its key stake holders, reputation, brand and value creating activities in the event of disaster.

• Theframeworkisinclusiveofdisasterrecovery,businessrecovery,crisismanagement,incidentmanagement,emergencymanagement, contingency planning and business continuity plan.

• The Business Continuity Plan and Computer Disaster Recovery Plan are tested annually to ensure the continuityrequirements within the organisation’s business and services covering processes, facilities, personnel, informationtechnology, suppliers work in concert and appropriate to Faber Group’s vision and objectives.

Human Resources Management

• Faber Group places great importance on its human resourcesmanagement and has established strong policies andprocedures on Human Resource planning, recruitment, employees’ retention and succession planning.

• Formalappraisalsareconductedperiodically,guidedbythePerformanceManagementSystemwherestrategyistranslatedinto operational terms and Key Performance Indicators (KPIs) and is used as a Performance Measurement and Recognition Tool.


• Equalemphasis isalsogivenoneducation,remunerations,employeewelfareandorganizationaldevelopment,traininganddevelopmentincludingleadershipdevelopmenttoenhancethequality,abilityandcompetenciesoftheemployeesof Faber Group.

• TheGrouphas also established leadership development program to develop suitable employees for future leadershiproles as part of its strategic action for succession planning and to ensure business continuity and prepare for business expansion.

• FaberGroupprovidesaconduciveworkingenvironmenttoitsemployeesandencouragesemployeesinvolvementtowardsthebettermentoftheGroup.IntherecentEmployeeSatisfactionSurvey,Fabergarnered81%mark,chartingthehighestoverallscoreintheUEMGroupofCompanies.

Management Information System (“MIS”)

• AvailabilityofacomputerisedMISforamoreefficientandeffectivemanagementandoperationofbudget,financial,humanresource, maintenance, procurement, and corporate, operational as well as employees performance. The system produces report and other analytical tools used for planning, monitoring and continual improvement.

• TheMISisavailableonreal-timebasisandaccessibleviainternetandintranet.

Internal Audit

• Reviews of the internal control system are carried out on a regular basis by UEMGroupManagement Sdn Bhd, theoutsourced party which undertakes the internal audit function of Faber Group since 2009. The reviews are based on the Annual Audit Plan approved by the ARC. The results of such reviews are reported regularly to the ARC. The ARC holds regularmeetings todeliberateonfindingsand recommendations for improvementsbyboth the Internal andExternalAuditors on the state of the internal control system, and report back to the Board.

• Internal controlweaknesses identified during the financial period under review have been or are being addressed byManagement.NoneoftheweaknesseshasresultedinanymateriallossthatwouldrequiredisclosureinFaberGroup’sfinancial statements.

GLC Transformation Program

• Inadditiontoenhancingstakeholders’valuethroughimprovedfinancialandoperationalperformance,FaberGrouphasreligiouslyembracedtheGLCTransformationProgramandguidedbythefollowingcolour-codedbooks:-

o BlueBook–IntensifyingPerformanceManagement o GreenBook–EnhancingBoardEffectiveness o OrangeBook–StrengtheningLeadershipDevelopment o PurpleBook–OptimisingCapitalManagementPractices o RedBook–ProcurementGuidelines&BestPractices o SilverBook–AchievingValueThroughSocialResponsibility o YellowBook–EnhancingOperationalEfficiencyandEffectiveness



REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS

TheExternalAuditors,MessrsErnst&YounghavereviewedandaffirmedthisStatementonInternalControlforinclusionintheannual report of the Company for the financial year ended 31 December 2010.

TheExternalAuditorsconductedthereviewinaccordancewiththe“RecommendedPracticeGuide5:GuidanceforAuditorsontheReviewofDirector’sStatementonInternalControl”(“RPG5”)issuedbytheMalaysiaInstituteofAccountants.ThereviewhasbeenconductedtoassesswhethertheStatementonInternalControlisbothsupportedbythedocumentationpreparedbyorfortheDirectorsandappropriatelyreflectstheprocesstheDirectorshadadoptedinreviewingtheadequacyandintegrityofthe system of internal controls of Faber Group.

RPG5doesnotrequiretheExternalAuditorstoconsiderwhethertheDirectors’StatementonInternalControlcoversallrisksand controls, or to form an opinion on the effectiveness of the Group’s risk and control procedures. The Guide also does not requiretheExternalAuditorstoconsiderwhethertheprocessesdescribedtodealwithmaterialinternalcontrolaspectsofanysignificant matter disclosed in the annual report will, in fact, mitigate the risks identified or remedy the potential problems.

Basedontheirreview,theExternalAuditorshavereportedtotheBoardthatnothinghadcometotheirattentionthatcausedthemtobelievethattheStatementonInternalControlisinconsistentwiththeirunderstandingoftheprocesstheBoardhasadoptedinthereviewoftheadequacyandintegrityofinternalcontrolofFaberGroup.

ThisStatementonInternalControlwasapprovedbytheBoardon17March2011.



Audit and Risk Committee Report

MEMBERSHIP

TheAuditandRiskCommittee(“ARC”)consistsof4membersofwhich3areIndependentNon-ExecutiveDirectorsand1isaNon-IndependentNon-ExecutiveDirector.Themembersduringthefinancialyearended31December2010areasfollows:-

OhKimSun^ Chairman,IndependentNon-ExecutiveDirectorDatukZainalAbidinbinAlias SeniorIndependentNon-ExecutiveDirectorDatukMohamedZainbinMohamedYusuf IndependentNon-ExecutiveDirectorElakumaria/pKantilal* Non-IndependentNon-ExecutiveDirector

^ Member of the Malaysian Institute of Certified Public Accountants* Member of the Malaysian Institute of Accountants

FaberGroupBerhad(“FGB”)hascompliedwithParagraph15.09oftheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad(“BursaSecurities”),whichrequiresallAuditCommitteememberstobeNon-ExecutiveDirectors,withamajority of them being Independent Directors.

MEETINGS

TheARCmetonascheduledbasisatleastonceeveryquarter.MinutesofeachmeetingaredistributedtoeachmemberoftheBoard of Directors (“the Board”). The Chairman of the ARC reports on each meeting to the Board. During the financial year ended 31 December 2010, the ARC papers for the meetings were distributed to the members with sufficient notification.

The ARC met 4 times during the financial year ended 31 December 2010. The members and the details of their attendance are as follows:-

ARC Members Status of Directorship No. of Meetings Attended

Oh Kim Sun IndependentNon-ExecutiveDirector 4/4(Chairman)



Elakumari a/p Kantilal Non-IndependentNon-ExecutiveDirector 4/4

The Managing Director, representative of the internal audit function, Senior Management of subsidiary companies andrepresentativesfromtheExternalAuditorsattendedthesemeetingsuponinvitation.

TheCompanySecretaryshallbetheSecretaryoftheARC.


Audit and Risk Committee Report (continued)

SUMMARY OF ACTIVITIES OF THE ARC

During the financial year ended 31 December 2010, the ARC carried out the following activities in the discharge of its functions and duties:-

A. Financial Results and Corporate Governance

1. Reviewedthequarterlyresultsannouncementsandyear-endfinancialstatements,beforetheapprovalbytheBoard,focusing particularly on:-

• anychangestotheaccountingpoliciesandpractices;

• significantadjustmentsarisingfromtheaudit;

• thegoingconcernassumption;and

• compliancewithfinancialreportingstandardsandotherlegalrequirements.

2. Reviewed recurrent related party transactions of a revenue or trading nature which are necessary for the day-to-day operations in the ordinary course of business of FGB and its subsidiaries (“FGB Group”) to ascertain as to whether they are undertaken on arm’s length basis on normal commercial terms not more favourable to the related parties than those generally available to the public or those extended to unrelated parties and are not detrimental to the minority shareholders.

3. Reviewed the annual report and the audited financial statements of FGB prior to submission to the Board for their considerationandapproval.ThereviewontheannualreportwastoensurecompliancewiththerequirementslistedintheMainMarketListingRequirementsofBursaSecurities,whereas,thereviewontheauditedfinancialstatementswas to ensure that the audited financial statements were drawn up in accordance with the provisions of the Companies Act,1965andapplicableFinancialReportingStandardsinMalaysia.

4. ReviewedtheCirculartoShareholdersinrespectoftheproposedshareholders’mandateforrecurrentrelatedpartytransactions.

5. ReviewedandrecommendedtheStatementonCorporateGovernance,ARCReportandStatementonInternalControl,to the Board for their approval.

6. AttendedtherelevantbriefingandseminarsconductedinternallywithintheUEMGroupandbyexternalpartiesand/orprofessional associations to keep abreast with the latest practice, development and updates pertaining to duties and responsibilities and functions of an ARC.

7. Reviewed the application of corporate governance principles and the FGB Group’s compliance with the best practices setoutundertheMalaysianCodeonCorporateGovernanceforthepurposeofpreparingtheStatementonCorporateGovernanceandStatementonInternalControlpursuanttotheListingRequirementsofBursaSecurities.



B. Internal Audit and Risk Management

1. Reviewedtheannualauditplantoensureadequatescopeandcomprehensivecoverageovertheauditactivitiesofthe Group.

2. Reviewedtheeffectivenessoftheauditprocess,resourcerequirementsfortheyearandassessedtheperformanceof the internal audit function.

3. Reviewed and deliberated on a total of 18 audit reports arising from planned and ad-hoc audit assignments.

4. Monitored the corrective actions on the outstanding audit issues to ensure that all the key risks and control lapses have been addressed.

5. Reviewed the internal audit function’s audit methodology in assessing and rating risks of auditable areas and ensure that all high and critical risk areas are audited annually.

6. Reviewedtheauditperformancereportstomonitortheperformance,progressandadequacyofcoverageoftheinternal audit function.

C. External Audit

1. ReviewedwiththeExternalAuditors:-

• Theirauditplan,auditstrategyandscopeofworkfortheyear.

• The results of the annual audit, their audit report and management letter together with Management’sresponsetothefindingsoftheExternalAuditors.

2. AssessedtheindependenceandobjectivityoftheExternalAuditorsduringtheyearandpriortotheappointmentoftheExternalAuditorsfornon-auditservices.

3. EvaluatedtheperformanceandeffectivenessoftheExternalAuditorsandmaderecommendationstotheBoardontheir appointment and remuneration.

4. HaveaminimumoftwomeetingsannuallywiththeExternalAuditorswithoutthepresenceoftheManagement.

TERMS OF REFERENCE OF THE ARC

A. OBJECTIVES

1. The objective of the ARC is to assist the Board in discharging its responsibilities by reviewing the integrity and adequacyoftheCompany’sanditssubsidiaries’internalcontrolsandmanagementinformationsystems,includingsystems for compliance with applicable laws, regulations, rules, directives and guidelines.

2. TheARCshallreinforcetheindependenceoftheExternalAuditors,assurethattheywillhavefreereinintheauditprocessandprovidealineofcommunicationbetweentheBoardandtheExternalAuditors.

3. The ARC shall enhance the internal audit function by increasing the objectivity and independence of the Internal Auditors and provide a forum for discussion that is independent of theManagement. The quality of the auditsconductedbytheInternalandExternalAuditorsoftheCompanyshallbereviewedbytheARC.



4. The ARC shall encourage high standards of corporate disclosure and transparency. The ARC will endeavour to adopt certain practices aimed at maintaining appropriate standards of corporate responsibility, integrity and accountability to the Company’s shareholders.

B. COMPOSITION

1. The ARC shall be appointed by the Board and shall consist of not less than three (3) members, all of whom shall be Non-ExecutiveDirectors,withamajorityoftheARCmembersbeingIndependentDirectors.NoalternateDirectoris to be appointed as a member of the ARC.

2. At least one (1) member of the ARC:-

(i) Must be a member of the Malaysian Institute of Accountants; or

(ii) If he is not a member of the Malaysian Institute of Accountants, he must have at least 3 years’ working experience and:

(a) He must have passed the examinations specified in Part I of the 1stScheduleoftheAccountantsAct,1967; or

(b) He must be a member of one of the associations of accountants specified in Part II of the 1stScheduleofthe Accountants Act, 1967; or

(iii) FulfilssuchotherrequirementsasprescribedorapprovedbyBursaSecurities.

3. The members of the ARC shall elect a Chairman from among themselves who is an Independent Director.

4. In the event of any vacancy in the ARC resulting in the number of members being reduced to below three (3), the Board shall fill the vacancy within three (3) months.

C. MEETINGS

1. The ARC shall meet at least four (4) times in each financial year although additional meetings may be called at any time, at the discretion of the ARC Chairman.

2. The quorum for eachmeeting shall consist of at least two (2)members, both of whom shall be IndependentDirectors.

3. The secretary of the ARC shall attend each ARC meeting and record the proceedings of the meeting thereat.

4. Thefinancemanagerandtherepresentativeoftheinternalauditfunctionshallnormallyattendmeetings.OtherBoard members and employees may attend meetings upon the invitation of the ARC. However, the ARC shall meet withtheExternalAuditorswithouttheexecutiveBoardmembersandemployeespresentatleasttwiceayear,andwhenever deemed necessary.

D. AUTHORITY

1. The ARC shall, in accordance with a procedure to be determined by the Board and at the expense of the Company:-

(i) Have authority to investigate any matter within its terms of reference;


(ii) Havetheresourceswhicharerequiredtoperformitsduties;

(iii) Have full and unrestricted access to any information pertaining to the Company;

(iv) HavedirectcommunicationchannelswiththeExternalAuditorsandperson(s)carryingouttheinternalauditfunction or activity;

(v) Be able to obtain independent professional or other advice and to invite outsiders with relevant experience to attend the ARC meetings (if necessary) and to brief the ARC thereof; and

(vi) BeabletoconvenemeetingswiththeExternalAuditors,theInternalAuditorsorboth,excludingtheattendanceof other directors and employees of the Company, whenever deemed necessary.

2. WheretheARCisoftheviewthatamatterreportedbyittotheBoardhasnotbeensatisfactorilyresolvedresultinginabreachoftheListingRequirementsofBursaSecurities,theARCshallpromptlyreportsuchmattertoBursaSecurities.

E. DUTIES AND RESPONSIBILITIES

The following are the main duties and responsibilities of the ARC:-

(i) OverseetheCompany’s internalcontrolstructuretoensureoperationaleffectivenessandefficiency,reducetherisk of unreliable financial reporting, protect the Company’s assets from misappropriation and encourage legal and regulatory compliance;

(ii) Assist the Board of Directors in identifying the principal risks in the achievement of the Company’s objectives and ensuring the implementation of appropriate systems to manage these risks;

(iii) Review and recommend the risk management policy, procedures and risk management framework for the approval and acknowledgment of the Board and provide guidance on the overall risk strategy and directives for implementation andensurethattheprinciplesandrequirementsofmanagingriskareconsistentlyadoptedthroughouttheGroup;

(iv) Review periodically the risk management framework and risk profile and to be satisfied that the methodology employed allows the identification, analysis, assessment, monitoring and communication of risks in a regular and timely manner that will allow the Group to minimise losses and maximise opportunities;

(v) Commission, where required, special projects to investigate, develop or report on specific aspects of the riskmanagement processes of the Company;

(vi) Recommend to the Board, for it to put to the shareholders for their approval in general meeting, in relation to the appointment,re-appointmentandremovaloftheExternalAuditorsandtoapprovetheremunerationandtermsofengagementoftheExternalAuditors;

(vii) ReviewandmonitortheExternalAuditors’independenceandobjectivityandtheeffectivenessoftheauditprocess;

(viii) Discuss with the External Auditors before the audit commences, the nature and scope of the audit, ensure co-ordination where more than one (1) audit firm is involved;



(ix) ReviewwiththeExternalAuditors,theirevaluationofthesystemofinternalcontrolsandtheirauditreport;

(x) Review theaudit representation letters,management letter andmanagement’s responsiveness to theExternalAuditors’ findings and recommendations;

(xi) Reviewtheassistanceandco-operationgivenbytheCompany’semployeestotheExternalandInternalAuditors;

(xii) Discuss problems and reservations arising from the interim and final audits, and any matter the auditors may wish to discuss, in the absence of management, where necessary;

(xiii) Reviewthequarterlyfinancialresultsandyear-endfinancialstatements,beforetheapprovalbytheBoard,focusingparticularly on:-

• anychangestotheaccountingpoliciesandpractices;

• significantadjustmentsarisingfromtheaudit;

• thegoingconcernassumption;and

• compliancewithfinancialreportingstandardsandotherlegalrequirements;

(xiv) In relation to the internal audit function:-

• reviewtheadequacyofthescope,functions,competencyandresourcesoftheinternalauditfunction,andthatit has the necessary authority to carry out its work;

• review the internal audit programme, processes, the results of the internal audit programme, processesor investigation undertaken and whether or not appropriate action is taken on the recommendations of the Internal Auditors;

• reviewanyappraisalorassessmentoftheperformanceoftheinternalauditfunction;

• approveanyappointmentorterminationofthepartythatperformstheinternalauditfunction;and

• takecognisanceofresignationsofinternalauditstaffmembersandprovidetheresigningstaffmemberanopportunity to submit his reasons for resigning;

(xv) Monitor the integrity of the financial statements of the Company and any formal announcements relating to the Company’s financial performance, reviewing significant financial reporting judgments contained in them;

(xvi) Review any related party transaction and conflict of interest situation that may arise within the Company or the Groupincludinganytransaction,procedureorcourseofconductthatraisesquestionsofmanagement’sintegrity;and

(xvii) Consider other matters as defined by the Board.



F. ARC REPORT

TheBoardisrequiredtoprepareanARCReportattheendofeachfinancialyeartobeincludedandpublishedintheannual report of the Company. The said report should include the following:-

(i) The composition of the ARC including the name, designation (indicating the Chairman) and directorship of the members (indicating whether the Directors are independent or otherwise);

(ii) The terms of reference of the ARC;

(iii) The number of ARC meetings held during the financial year and details of attendance of each ARC member;

(iv) A summary of the activities carried out by the ARC in the discharge of its functions and duties for that financial year of the Company; and

(v) A summary of the activities of the internal audit function or activity.

G. CHAIRMAN OF THE ARC

The following are the main duties and responsibilities of the ARC Chairman:-

(i) Helps the ARC fulfils the goals it sets by assigning specific tasks to members of the ARC and identifies guidelines for the conduct of the members and ensures that each member is making a significant contribution;

(ii) ConsultswiththeSecretaryoftheARConmattersrelatedtotheirresponsibilities,rulesandregulationsunderthe Terms of Reference to which they are subject to and how those responsibilities should be discharged. The complianceadviceshouldextendtoembracealllawsandregulationsandnotmerelytheroutinefilingrequirementsandotheradministrativerequirementsoftheCompaniesAct,1965;

(iii) Providesareasonabletimefordiscussionatthemeeting.OrganisesandpresentstheagendaforregularorspecialARC meetings based on input from members and ensures that all relevant issues are on the agenda. In addition, the Chairman should encourage debate on the issue before the ARC;

(iv) ProvidesleadershiptotheARCandensuresproperflowof informationtotheARC,reviewingtheadequacyandtiming of documentation;

(v) SecuresgoodcorporategovernanceandensuresthatmemberslookbeyondtheirARCfunctionandaccepttheirfullshare of responsibilities of governance materials in support of Management’s proposals;

(vi) Manages the processes and workings of the ARC and ensures that the ARC discharges its responsibilities in accordance with the Terms of Reference. Appropriate procedures may involve the ARC meeting on a regular basis without the presence of Management;

(vii) EnsuresthateveryARCresolutionisputtoavotetoensurethatitisthewillofthemajoritythatprevails;and

(viii) Engagesonacontinuousbasiswithseniormanagement,suchasthechairman,chiefexecutiveofficer,thefinancedirector, the head of internal audit and the external auditors in order to be kept informed of matters affecting the Company.



H. ARC MEMBERS

EachARCmemberwillbeexpectedto:-

(i) Provide individual external independent opinions to the fact-finding, analysis and decision making process of the ARC, based on their experience and knowledge;

(ii) Consider viewpoints from the other ARC members; make decisions and recommendations for the best interest of the Board collectively; and

(iii) Keep abreast of the latest corporate governance guidelines and best practices in relation to the ARC and the Board as a whole.

INTERNAL AUDIT FUNCTION

TheinternalauditfunctionofFaberGroupwasoutsourcedtoUEMGroupManagementSdnBhdwhichhasadequateresourcesand appropriate standing to undertake its activities independently and objectively to assist the ARC in discharging its duties and responsibilities more effectively. The Head of the Internal Audit reports directly to the ARC. The activities undertaken by UEMGroupManagementSdnBhdareinconformancewiththeInternationalStandardsfortheProfessionalPracticeofInternalAuditing issued by the Institute of Internal Auditors.

It is the responsibility of the internal audit function to provide the ARC with independent and objective reports on the state of internal control of the various operating divisions within the Faber Group, and the extent of compliance of the divisions with the FaberGroup’sestablishedpoliciesandproceduresaswellasrelevantstatutoryrequirements.Duringtheyear,theinternalaudit function carried out 18 audit assignments. Representatives of the internal audit function were invited to and had attended all the ARC meetings during the year.

As at 31 December 2010, the reimbursable costs incurred for the audit function was RM263,734.93.



Statement of Directors’ Responsibility in Respect of Audited Financial Statements

TheDirectorsarerequiredbytheCompaniesAct,1965topreparefinancialstatementsforeachfinancialyear that give a true and fair view of the state of affairs of the Company and the Group as at the end of the financial year, and of their results and cash flows for the financial year then ended.

In preparing the financial statements the Directors have:-

• ConsideredtheprovisionoftheCompaniesAct,1965.

• ConsideredtheapplicationofapplicableFinancialReportingStandards.

• Adoptedandconsistentlyappliedappropriateaccountingpolicies.

• Madejudgmentandestimatesthatareprudentandreasonable.

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

The Directors have general responsibility for taking such steps that are reasonably open to them to safeguard the assets of the Company and the Group and to prevent and detect fraud and other irregularities.

Financial Statements134 Directors’ Report 138 Statement by Directors 138 Statutory Declaration 139 Independent Auditors’ Report 141 Income Statements

142 Statements of Comprehensive Income

143 Statements of Financial Position

144 Statements of Changes in Equity 146 Statements of Cash Flows 148 Notes to the Financial Statements

239 Supplementary Information - Breakdown of Accumulated Losses into Realised and Unrealised


Directors’ Report

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

PRINCIPAL ACTIVITIES

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

The principal activities of the subsidiaries are described in Note 45 to the financial statements.

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

RESULTS

Group Company RM’000 RM’000

Profit net of tax 103,332 44,905

Attributable to:Ownersoftheparent 78,780 44,905Non-controlling interests 24,552 -

103,332 44,905

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

In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature other than the effects arising from thechangesinaccountingpoliciesduetotheadoptionofFRS139FinancialInstruments:RecognitionandMeasurementwhichhas resulted in an increase in the Group’s profit net of tax by RM825,000 as disclosed in Note 2.2 to the financial statements.

DIVIDENDS

TheCompanypaidafirstandfinaldividendinrespectofthefinancialyearended31December2009,of6%less25%taxationonordinary shares, amounting to a dividend payable of RM16,335,045 (4.50 sen net per ordinary share) on 23 June 2010.

AttheforthcomingAnnualGeneralMeeting,afinaldividendinrespectofthefinancialyearended31December2010,of8%less25%taxationonordinaryshares,amountingtoadividendpayableofRM21,780,063(6.00sennetperordinaryshare)willbe proposed for shareholder’s approval. The financial statements for the current financial year do not reflect this proposed dividend.Suchdividend,ifapprovedbytheshareholders,willbeaccountedforinequityasanappropriationofretainedearningsin the financial year ending 31 December 2011.


Directors’ Report (continued)

DIRECTORS

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

Dato’ Ikmal Hijaz bin HashimDatuk Zainal Abidin bin AliasDatuk Mohamed Zain bin Mohamed YusufElakumaria/pKantilalPuasabinOsmanAdnan bin MohammadOhKimSunAnnuar Marzuki bin Abdul AzizDato’ Mohd Izzaddin bin Idris (appointed on 5 August 2010)SuhaimibinHalim (appointedon1September2010)Dato’RoslibinSharif (resignedon5August2010)

DIRECTORS’ BENEFITS

Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the Companywasaparty,wherebythedirectorsmightacquirebenefitsbymeansofacquisitionofsharesin(includingRedeemableSecuredLoanStocks(“RSLS”))ordebenturesoftheCompanyoranyotherbodycorporate.

Sincetheendofthepreviousfinancialyear,nodirectorhasreceivedorbecomeentitledtoreceiveabenefit(otherthanbenefitsincluded in the aggregate amount of emoluments received or due and receivable by the directors as shown in Note 9 to the financial statements or the fixed salary of a full time employee) by reason of a contract made by the Company or a related corporation with any director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest, except as disclosed in Note 40 to the financial statements.

DIRECTORS’ INTERESTS

According to the register of directors’ shareholdings, the interests of directors in office at the end of the financial year in shares in the Group and in the Company and its related corporations during the financial year were as follows:

THE COMPANY

No. of Ordinary Shares of RM1.00 each At 1.1.2010 Acquired Disposed At 31.12.2010

Adnan bin Mohammad 40,000 40,000 (36,000) 44,000

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

ISSUE OF SHARES

The Company did not issue any new shares during the year.



OTHER STATUTORY INFORMATION

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

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision fordoubtfuldebtsandsatisfiedthemselvesthattherewerenoknownbaddebtsandthatadequateprovisionhadbeenmade for doubtful debts; and

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

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

(i) itisnecessarytowriteoffanybaddebtsortheamountoftheprovisionfordoubtfuldebtsinadequatetoanysubstantialextent; and

(ii) the values attributed to the current assets in the financial statements misleading.

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

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

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

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

(ii) any contingent liability in respect of the Group or of the Company which has arisen since the end of the financial year.

(f) In the opinion of the directors:

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

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



SIGNIFICANT EVENTS

SignificanteventsaredisclosedinNote46tothefinancialstatements.

SUBSEqUENT EVENTS

SubsequenteventsaredisclosedinNote47tothefinancialstatements.

AUDITORS

Theauditors,Ernst&Young,haveexpressedtheirwillingnesstocontinueinoffice.

SignedonbehalfoftheBoardinaccordancewitharesolutionofthedirectorsdated17March2011.

Dato’ Ikmal Hijaz bin Hashim Adnan bin Mohammad


Statement by DirectorsPursuant to Section 169(15) of the Companies Act, 1965

We,Dato’IkmalHijazbinHashimandAdnanbinMohammad,beingtwoofthedirectorsofFaberGroupBerhad,doherebystate that, in the opinion of the directors, the accompanying financial statements set out on pages 141 to 239 are drawn up in accordancewiththeprovisionsoftheCompaniesAct,1965andapplicableFinancialReportingStandardsinMalaysiasoastogive a true and fair view of the financial position of the Group and of the Company as at 31 December 2010 and of their financial performance and cash flows for the year then ended.

Theinformationsetout inNote49tothefinancialstatementshavebeenpreparedinaccordancewithGuidanceonSpecialMatterNo. 1,DeterminationofRealisedandUnrealisedProfits orLosses in theContext ofDisclosurePursuant toBursaMalaysiaSecuritiesBerhadListingRequirements,asissuedbytheMalaysianInstituteofAccountant.

SignedonbehalfoftheBoardinaccordancewitharesolutionofthedirectorsdated17March2011.

Dato’ Ikmal Hijaz bin Hashim Adnan bin Mohammad

Statutory DeclarationPursuant to Section 169(16) of the Companies Act, 1965

I, Juliza binti Jalil, being the officer primarily responsible for the financial management of Faber Group Berhad, do solemnly and sincerely declare that the accompanying financial statements set out on pages 141 to 239 are in my opinion correct, and ImakethissolemndeclarationconscientiouslybelievingthesametobetrueandbyvirtueoftheprovisionsoftheStatutoryDeclarations Act, 1960.

Subscribedandsolemnlydeclaredby the abovenamed Juliza binti JalilatKualaLumpurintheFederalTerritoryon 17 March 2011. Juliza binti Jalil

Before me,


Independent Auditors’ Reportto the members of Faber Group Berhad (incorporated in Malaysia)

REPORT ON THE FINANCIAL STATEMENTS

WehaveauditedthefinancialstatementsofFaberGroupBerhad,whichcomprisethestatementoffinancialpositionasat31 December 2010 of the Group and of the Company, and the income statements, statements of comprehensive income, statementsofchangesinequityandstatementsofcashflowsoftheGroupandoftheCompanyfortheyearthenended,andasummary of significant accounting policies and other explanatory notes, as set out on pages 141 to 238.

Directors’ responsibility for the financial statements

The directors of the Company are responsible for the preparation and fair presentation of these financial statements in accordancewithFinancialReportingStandardsandtheCompaniesAct1965inMalaysia.Thisresponsibilityincludes:designing,implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors’ responsibility

Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.WeconductedourauditinaccordancewithapprovedstandardsonauditinginMalaysia.Thosestandardsrequirethatwecomplywithethicalrequirementsandplanand perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

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

Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.

Opinion

Inouropinion,thefinancialstatementshavebeenproperlydrawnupinaccordancewithFinancialReportingStandardsandtheCompanies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2010 and of their financial performance and cash flows for the year then ended.

Emphasis of matter

Withoutqualifyingouropinion,wedrawattentiontoNote46(a)ofthefinancialstatements.TheexistingConcessionAgreementbetweenFaberMedi-ServeSdnBhd(“FMS”),awhollyownedsubsidiaryoftheCompany,andtheMinistryofHealth(“MOH”)willbeexpiringinOctober2011.FMShassubmitteditsLetterofIntenttoMOHtoextendtheConcessionAgreementandiscurrently awaiting the decision of the extension.


Independent Auditors’ Report (continued)

REPORT ON OTHER LEGAL AND REGULATORY REqUIREMENTS

InaccordancewiththerequirementsoftheCompaniesAct1965inMalaysia,wealsoreportthefollowing:

(a) Inouropinion,theaccountingandotherrecordsandtheregistersrequiredbytheActtobekeptbytheCompanyanditssubsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

(b) Wehaveconsideredthefinancialstatementsandtheauditors’reportsofallthesubsidiariesofwhichwehavenotactedasauditors, which are indicated in Note 45 to the financial statements, being financial statements that have been included in the consolidated financial statements.

(c) Wearesatisfiedthatthefinancialstatementsofthesubsidiariesthathavebeenconsolidatedwiththefinancialstatementsof the Company are in form and content appropriate and proper for the purposes of the preparation of the consolidated financialstatementsandwehavereceivedsatisfactoryinformationandexplanationsrequiredbyusforthosepurposes.

(d) Theauditors’ reportson thefinancial statementsof the subsidiarieswerenot subject to anyqualificationanddidnotincludeanycommentrequiredtobemadeunderSection174(3)oftheAct.

OTHER MATTERS

The supplementary information set out in Note 49 on page 239 is disclosed tomeet the requirement of BursaMalaysiaSecuritiesBerhad.Thedirectorsare responsible for thepreparationof thesupplementary information inaccordancewithGuidanceonSpecialMatterNo.1,DeterminationofRealisedandUnrealisedProfitsorLossesintheContextofDisclosurePursuant toBursaMalaysia SecuritiesBerhad ListingRequirements, as issued by theMalaysian Institute of Accountants (“MIAGuidance”) and thedirective ofBursaMalaysiaSecuritiesBerhad. In our opinion, the supplementary information isprepared,inallmaterialrespects,inaccordancewiththeMIAGuidanceandthedirectiveofBursaMalaysiaSecuritiesBerhad.

ThisreportismadesolelytothemembersoftheCompany,asabody,inaccordancewithSection174oftheCompaniesAct,1965inMalaysiaandfornootherpurpose.Wedonotassumeresponsibilitytoanyotherpersonforthecontentofthisreport.

Ernst&Young SeeHueyBengAF: 0039 No. 1495/03/11(J)Chartered Accountants Chartered Accountant

KualaLumpur,Malaysia17 March 2011


Income Statementsfor the year ended 31 December 2010

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

Continuing operationsRevenue 3 888,846 805,282 76,877 60,892Cost of sales 4 (668,812) (560,720) - -

Gross profit 220,034 244,562 76,877 60,892Otherincome 5 9,287 6,865 2,183 3,554Administrative expenses (44,993) (46,172) (16,461) (13,195)Sellingandmarketingexpenses (942) (634) - -Otherexpenses (47,610) (56,654) (2,435) (957)

Operating profit 135,776 147,967 60,164 50,294Finance costs 6 (6,616) (6,724) (6,222) (6,344)

Profit before tax 7 129,160 141,243 53,942 43,950Income tax expense 10 (25,828) (34,829) (9,037) (10,867)

Profit from continuing operations, net of tax 103,332 106,414 44,905 33,083

Discontinued operationLossfromdiscontinuedoperation,netoftax 11 - (306) - -

Profit net of tax 103,332 106,108 44,905 33,083

Profit attributable to:

Ownersoftheparent 78,780 82,681 44,905 33,083Non-controlling interests 24,552 23,427 - -

103,332 106,108 44,905 33,083

Earnings per share attributable to owners of the parent (sen)

Basic, for profit from continuing operations 12 21.7 22.9Basic, for loss from discontinued operation 12 - (0.1)

Basic, for profit for the year 12 21.7 22.8

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


Statements of Comprehensive Incomefor the year ended 31 December 2010

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

Profit net of tax 103,332 106,108 44,905 33,083Foreign currency translation (4,790) (939) - -

Other comprehensive income for the year, net of tax (4,790) (939) - -

Total comprehensive income for the year 98,542 105,169 44,905 33,083

Total comprehensive income attributable to:

Ownersoftheparent 75,219 81,929 44,905 33,083Non-controlling interests 23,323 23,240 - - 98,542 105,169 44,905 33,083



Statements of Financial Positionas at 31 December 2010

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

AssetsNon-current assetsProperty,plantandequipment 14 88,434 92,646 1,195 446Landheldforpropertydevelopment 15(a) 20,247 53,431 - -Prepaid land lease payments 16 3,673 3,760 - -Intangible assets 17 36,515 35,361 67 38Investments in subsidiaries 18 - - 148,032 148,032Otherinvestments 19 272 771 272 272Deferred tax assets 31 5,471 2,936 - -

154,612 188,905 149,566 148,788

Current assetsProperty development costs 15(b) 70,138 38,134 - -Inventories 20 5,302 4,190 - -Trade and other receivables 21 474,637 354,691 24,833 26,727Marketable securities 22 - 20 - -Cashandcashequivalents 23 284,876 304,571 45,632 32,547

834,953 701,606 70,465 59,274

Total assets 989,565 890,511 220,031 208,062

Equity and liabilitiesEquity attributable to owners of the parentSharecapital 32 363,001 363,001 363,001 363,001Sharepremium 32 115,985 115,985 115,985 115,985Otherreserves 33 (4,336) (775) - -Accumulated losses (25,775) (89,045) (422,075) (450,645)

448,875 389,166 56,911 28,341Non-controlling interests 35 67,045 67,186 - -

Total equity 515,920 456,352 56,911 28,341

Non-current liabilitiesRetirement benefit obligations 24 3,959 3,539 - -Provisions 25 643 635 - -Borrowings 26 161,172 177,504 154,145 168,013Deferred tax liabilities 31 795 1,658 - -

166,569 183,336 154,145 168,013

Current liabilitiesRetirement benefit obligations 24 597 597 - -Provisions 25 - 30 - -Borrowings 26 5,963 1,954 - -Trade and other payables 30 293,452 240,424 7,196 10,476Income tax payable 7,064 7,818 1,779 1,232

307,076 250,823 8,975 11,708

Total liabilities 473,645 434,159 163,120 179,721

Total equity and liabilities 989,565 890,511 220,031 208,062



Consolidated Statement of Changes in Equityfor the year ended 31 December 2010

Attributable to owners of the parent Non-distributable reserves

Share Share Other Accumulated Non-controlling Total capital premium reserves losses Total interests equity (Note 32) (Note 32) (Note 33) (Note 35) RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Group

At 1 January 2010 (as previously stated) 363,001 115,985 (775) (89,045) 389,166 67,186 456,352EffectsofadoptingFRS139 - - - 825 825 - 825

At 1 January 2010 (restated) 363,001 115,985 (775) (88,220) 389,991 67,186 457,177

Total comprehensive income - - (3,561) 78,780 75,219 23,323 98,542

Transactions with owners Issue of shares by subsidiary to non-controlling shareholders - - - - - 1,844 1,844 Dividends (Note 13) - - - (16,335) (16,335) - (16,335) Dividend to non-controlling shareholders of subsidiary companies - - - - - (25,308) (25,308)

At 31 December 2010 363,001 115,985 (4,336) (25,775) 448,875 67,045 515,920

At 1 January 2009 363,001 115,985 (302) (160,557) 318,127 59,066 377,193

Total comprehensive income - - (752) 82,681 81,929 23,240 105,169

Transactions with owners Issue of shares by subsidiary to non-controlling shareholders - - - - - 139 139 Conversion of preference shares in a subsidiary - - - - - 1,120 1,120 Dividends (Note 13) - - - (10,890) (10,890) - (10,890) Dividend to non-controlling shareholders of subsidiary companies - - - - - (16,379) (16,379) Transfer to statutory reserve fund - - 279 (279) - - -

At 31 December 2009 363,001 115,985 (775) (89,045) 389,166 67,186 456,352



Statement of Changes in Equityfor the year ended 31 December 2010

Non-distributable reserves

Share Share Accumulated Total capital premium losses equity (Note 32) (Note 32) RM’000 RM’000 RM’000 RM’000

Company

At 1 January 2010 363,001 115,985 (450,645) 28,341

Total comprehensive income - - 44,905 44,905

Transactions with owners Dividends (Note 13) - - (16,335) (16,335)

At 31 December 2010 363,001 115,985 (422,075) 56,911

At 1 January 2009 363,001 115,985 (472,838) 6,148

Total comprehensive income - - 33,083 33,083

Transactions with owners Dividends (Note 13) - - (10,890) (10,890)

At 31 December 2009 363,001 115,985 (450,645) 28,341



Statements of Cash Flows for the year ended 31 December 2010


Cash flows from operating activities

Cash receipts from customers 756,629 633,283 7,603 5,864 Cash payments to suppliers (437,738) (319,493) - - Cash payments to employees and for expenses (248,801) (206,612) (18,651) (9,886)

Cash generated from/(used in) operations 70,090 107,178 (11,048) (4,022) Interest paid (6,678) (6,724) (6,284) (6,344) Taxes paid (23,515) (35,479) (5,683) (11,000) Net cash generated from discontinued operation - 281 - -

Net cash flow generated from/(used in) operating activities (Note 36) 39,897 65,256 (23,015) (21,366)

Cash flows from investing activities

Proceedsfromdisposalofproperty,plantandequipment 50 534 33 - Proceeds from disposal of land held for property development 3,100 - - - Proceedsfromdisposaloffinancialassets-quotedinvestment 20 - - - Interest received 7,519 5,584 1,032 1,458 Dividend received - 34 62,772 53,012 Purchase of land held for property development - (17,837) - - Purchaseofproperty,plantandequipment(Notea) (17,338) (19,623) (1,025) (176) Purchaseofproperty,plantandequipment,representing net cash used in discontinued operation (Note a) - (19) - - Purchase of intangible assets - software (76) (129) (71) (30) Cashandcashequivalentsdisposednetof cash received from disposal of a subsidiary - (609) - - Capitaldistributionfromfinancialassets-unquotedinvestment 785 - - - Net received from/(payment to) related companies balances - - 3,500 (54,832)

Net cash flow (used in)/generated from investing activities (5,940) (32,065) 66,241 (568)


Statements of Cash Flows for the year ended 31 December 2010 (continued)


Cash flows from financing activities

Proceeds from issuance of ordinary shares to non-controlling interests 1,844 - - - RepaymentofBalanceSumowedto JeramBintangSdnBhd(“JBSB”) (7,806) (9,980) (7,806) (9,980) PartialredemptionofRedeemableSecuredLoanStock(“RSLS”) (6,000) - (6,000) - Repayment of hire purchase obligations (119) (243) - - Drawdown of other secured bank loans 2,253 417 - - Dividends paid (16,335) (10,890) (16,335) (10,890) Dividend paid to non-controlling shareholders of subsidiaries (23,131) (16,379) - - Preference dividend paid to non-controlling shareholders of a subsidiary - (1,792) - - Proceedsfromcapitalreductionoffinancialassets-quotedinvestment - 400 - -

Net cash flow used in financing activities (49,294) (38,467) (30,141) (20,870)

Net (decrease)/increase in cash and cash equivalents (15,337) (5,276) 13,085 (42,804)Net foreign exchange difference (4,358) (2,181) - -Cashandcashequivalentsatbeginningofyear 304,571 312,028 32,547 75,351

Cash and cash equivalents at end of year (Note 23) 284,876 304,571 45,632 32,547

a) Plantandequipmentduringtheyearwereacquiredbywayof:

Cash- Continuing operations 17,338 19,623 1,025 176- Discontinued operation - 19 - -

Hire purchase - 170 - -

Additions as disclosed in Note 14 17,338 19,812 1,025 176

(b) Cashandcashequivalents

Cash and bank balances 93,815 60,057 405 320Fixed deposits with licensed banks 139,686 177,949 4,118 4,026Fixed deposits with other financial institutions 51,375 66,565 41,109 28,201

284,876 304,571 45,632 32,547

As disclosed in Note 23 to the financial statements, certain fixed deposits with licensed banks of the Group amounting to RM15,682,000 (2009: RM14,722,000) have been pledged to banks for banking facilities granted to certain subsidiaries and hence are not available for general use.

Deposits with licensed banks of the Company amounting to RM3,000,000 (2009: RM3,000,000) are pledged as securities for a bank borrowing granted to a subsidiary.



Notes to the Financial Statementsfor the year ended 31 December 2010

1. CORPORATE INFORMATION

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main MarketofBursaMalaysiaSecuritiesBerhad.

The registered office of the Company is located at 20th Floor, Menara 2, Faber Towers, Jalan Desa Bahagia, Taman Desa, OffJalanKlangLama,58100KualaLumpur.

The principal activities of the Company are investment holding and provision of management services to its subsidiaries. The principal activities of the subsidiaries are described in Note 45.

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

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 17 March 2011.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation

The financial statements comply with the provisions of the Companies Act, 1965 and applicable Financial Reporting StandardsinMalaysia.Atthebeginningofthecurrentfinancialyear,theGroupandtheCompanyadoptednewandrevisedFRSwhicharemandatoryforfinancialperiodsbeginningonorafter1January2010asdescribedfullyinNote 2.2.

The financial statements of the Group and of the Company have also been prepared on a historical basis except as

disclosed in the accounting policies below.

The financial statements are presented in Ringgit Malaysia (RM) and all values are rounded to the nearest thousand (RM’000) except when otherwise indicated.

2.2 Changes in accounting policies

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

On1January2010,theGroupandtheCompanyadoptedthefollowingnewandamendedFRSandICInterpretationsmandatory for annual financial periods beginning on or after 1 January 2010.

• FRS7:FinancialInstruments:Disclosures• FRS8:OperatingSegments• FRS101:PresentationofFinancialStatements(Revised)• FRS123:BorrowingCosts• FRS139:FinancialInstruments:RecognitionandMeasurement• AmendmentstoFRS1:First-timeAdoptionofFinancialReportingStandardsandFRS127:Consolidatedand

SeparateFinancialStatements:CostofandInvestmentinaSubsidiary,JointlyControlledEntityorAssociate• AmendmentstoFRS2:Share-basedPayment–VestingConditionsandCancellations• AmendmentstoFRS132:FinancialInstruments:Presentation• AmendmentstoFRS139:FinancialInstruments:RecognitionandMeasurement,FRS7FinancialInstruments: DisclosuresandICInterpretation9ReassessmentofEmbeddedDerivatives


Notes to the Financial Statementsfor the year ended 31 December 2010 (continued)

2. SIGNIFICANT ACCOUNTING POLICIES (contd.)

2.2 Changes in accounting policies (contd.)

• ImprovementstoFRSissuedin2009• ICInterpretation9:ReassessmentofEmbeddedDerivatives• ICInterpretation10:InterimFinancialReportingandImpairment• ICInterpretation11:FRS2–GroupandTreasuryShareTransactions• ICInterpretation13:CustomerLoyaltyProgrammes• ICInterpretation14:FRS119–TheLimitonaDefinedBenefitAsset,MinimumFundingRequirementsand

their Interaction

The Group and the Company early adopted the Amendments to FRS 7: Financial Instruments: Disclosure on 1January2010.FRS4InsuranceContractsandTRi-3PresentationofFinancialStatementsofIslamicFinancialInstitutionswillalsobeeffectiveforannualperiodsbeginningonorafter1January2010.TheseFRSare,however,not applicable to the Group or the Company.

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

FRS7:FinancialInstruments:Disclosures

Priorto1January2010,informationaboutfinancialinstrumentswasdisclosedinaccordancewiththerequirementsofFRS132FinancialInstruments:DisclosureandPresentation.FRS7introducesnewdisclosurestoimprovetheinformationaboutfinancialinstruments.Itrequiresthedisclosureofqualitativeandquantitativeinformationaboutexposure to risks arising from financial instruments, including specified minimum disclosures about credit risk, liquidityriskandmarketrisk,includingsensitivityanalysistomarketrisk.

TheGroupandtheCompanyhaveappliedFRS7prospectivelyinaccordancewiththetransitionalprovisions.Hence,the new disclosures have not been applied to the comparatives. The new disclosures are included throughout the Group’s and the Company’s financial statements for the year ended 31 December 2010.

FRS8:OperatingSegments

FRS8,whichreplacesFRS114:SegmentReporting,specifieshowanentityshouldreport informationaboutitsoperating segments, based on information about the components of the entity that is available to the chief operating decision maker for the purposes of allocating resources to the segments and assessing their performance. The Standardalsorequiresthedisclosureofinformationabouttheproductsandservicesprovidedbythesegments,the geographical areas in which the Group operates, and revenue from the Group’s major customers. Following the adoption of the above standard, the Group presents its operating segments based on information provided to the Board of Directors, who are the chief operating decision makers of the Company. Comparative segment information has been represented. The Group has adopted FRS 8 retrospectively. These revised disclosures, including therelated revised comparative information, are shown in Note 44 to the financial statements.





FRS101:PresentationofFinancialStatements(Revised)

TherevisedFRS101introduceschangesinthepresentationanddisclosuresoffinancialstatements.TherevisedStandardseparatesownerandnon-ownerchanges inequity.Thestatementof changes inequity includesonlydetailsoftransactionswithowners,withallnon-ownerchangesinequitypresentedasasingleline.TheStandardalso introduces the statement of comprehensive income, with all items of income and expense recognised in profit orloss,togetherwithallotheritemsofrecognisedincomeandexpenserecogniseddirectlyinequity,eitherinonesingle statement, or in two linked statements. The Group and the Company have elected to present this statement as two linked statements.

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

TherevisedFRS101alsorequirestheGrouptomakenewdisclosurestoenableusersofthefinancialstatementsto evaluate the Group’s objectives, policies and processes for managing capital (see Note 43).

TherevisedFRS101wasadoptedretrospectivelybytheGroupandtheCompany.

FRS139:FinancialInstruments:RecognitionandMeasurement

FRS 139 establishes principles for recognising and measuring financial assets, financial liabilities and somecontractstobuyandsellnon-financialitems.TheGroupandtheCompanyhaveadoptedFRS139prospectivelyon1January2010inaccordancewiththetransitionalprovisions.TheeffectsarisingfromtheadoptionofthisStandardhas been accounted for by adjusting the opening balance of retained earnings as at 1 January 2010. Comparatives are not restated. The details of the changes in accounting policies and the effects arising from the adoption of FRS139arediscussedbelow:

• Equity instruments

Prior to 1 January 2010, the Group classified its investments in equity instruments which were held fornon-tradingpurposesasnon-currentinvestments.Suchinvestmentswerecarriedatcostlessimpairmentlosses.UpontheadoptionofFRS139,theseinvestments,exceptforthosewhosefairvaluecannotbereliablymeasured, are designated at 1 January 2010 as available-for-sale financial assets. As at 1 January 2010, there werenoinvestmentsinequityinstrumentswhosefairvaluecannotbereliablymeasured.

Prior to 1 January 2010, the Group classified its investments in equity instruments which were held fortradingpurposesasmarketablesecurities.Suchinvestmentswerecarriedatthelowerofcostandmarketvalue,determinedonanaggregatebasis.UpontheadoptionofFRS139,theseinvestmentsaredesignatedat 1 January 2010 as available for-sale-financial assets.





FRS139:FinancialInstruments:RecognitionandMeasurement(contd.)

• Impairment of trade receivables

Prior to 1 January 2010, provision for doubtful debts was recognised when it was considered uncollectible. UpontheadoptionofFRS139,an impairment loss isrecognisedwhenthere isobjectiveevidencethatanimpairment loss has been incurred. The amount of the loss is measured as the difference between the receivable’s carrying amount and the present value of the estimated future cash flows discounted at the receivable’s original effective interest rate. As at 1 January 2010, the Group has remeasured the allowance for impairmentlossesasatthatdateinaccordancewithFRS139butnoadjustmentsisrequiredtobemadetothe opening balance of retained earnings as at that date.

• Redeemable preference shares (“RPS”)

PriortotheadoptionofFRS139,theGroup’sRPSwasrecordedattheamountofproceedsreceivednetoftransactioncosts.TheRPSholdersareentitledtonon-cumulativepreferentialdividendsatarateof5%perannum.FollowingtheadoptionofFRS139,thefairvalueofRPSisremeasuredbasedonthemarketrateof interest for an instrument with a similar credit rating at inception. The difference between the carrying amountofRPSoftheGroupandthefairvalueofRM825,000hasbeenadjustedagainsttheopeningbalanceof retained earnings as at 1 January 2010.

• Inter-company loans

During the current and prior years, the Company granted interest-free or low-interest loans and advances to its subsidiaries. Prior to 1 January 2010, these loans and advances were recorded at cost in the Company’s financialstatements.UpontheadoptionofFRS139,theinterest-freeorlow-interestloansoradvancesarerecorded initially at a fair value that is lower than cost. The difference between the fair value and cost of the loanoradvanceisrecognisedasanadditionalinvestmentinthesubsidiary.Subsequenttoinitialrecognition,the loans and advances are measured at amortised cost. As at 1 January 2010, there is no difference between the fair value and cost of the loan or advance that needs to be recognised as an additional investment in the subsidiary.

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

(Decrease)/increase As at As at 31 December 1 January 2010 2010 RM’000 RM’000

Statements of financial position

Group

Redeemable preference share (590) (825)Retained earnings 590 825




FRS139:FinancialInstruments:RecognitionandMeasurement(contd.)

Increase/(decrease) 2010 RM’000

Income statements

Group

Otherexpenses 235Profit before tax (235)Income tax expense (59)Profit for the year from continuing operations (176)Profit for the year (176)

Decrease 2010 Sen per share

Group

Earningspershare Basic (0.05)

2.3 Summary of significant accounting policies

(a) Subsidiaries and basis of consolidation

(i) Subsidiaries

A subsidiary is an entity over which the Group has the power to govern the financial and operating policies so as to obtain benefits from its activities.

In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost less impairment losses.

(ii) Basis of consolidation

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

All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated in full.




2.3 Summary of significant accounting policies (contd.)

(a) Subsidiaries and basis of consolidation (contd.)

(ii) Basis of consolidation (contd.)

Acquisitions of subsidiaries are accounted for by applying the purchasemethod. Identifiable assetsacquired and liabilities and contingent liabilities assumed in a business combination aremeasuredinitiallyattheirfairvaluesattheacquisitiondate.Adjustmentstothosefairvaluesrelatingtopreviouslyheld interests are treated as a revaluation and recognised in other comprehensive income. The cost of a business combination is measured as the aggregate of the fair values, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity instruments issued, plus any costsdirectly attributable to the business combination. Any excess of the cost of business combination over theGroup’sshare in thenet fairvalueof theacquiredsubsidiary’s identifiableassets, liabilitiesandcontingent liabilities is recorded as goodwill on the statement of financial position. The accounting policy for goodwill is set out in Note 2.3(c). Any excess of the Group’s share in the net fair value of the acquiredsubsidiary’sidentifiableassets,liabilitiesandcontingentliabilitiesoverthecostofbusinesscombinationisrecognisedasincomeinprofitorlossonthedateofacquisition.WhentheGroupacquiresabusiness, embeddedderivatives separated from thehost contract by theacquireeare reassessedonacquisitionunlessthebusinesscombinationresults inachangeinthetermsofthecontractthatsignificantlymodifiesthecashflowsthatwouldotherwiseberequiredunderthecontract.

Subsidiariesareconsolidatedfromthedateofacquisition,beingthedateonwhichtheGroupobtainscontrol, and continue to be consolidated until the date that such control ceases.

(b) Transactions with non-controlling interests

Non-controlling interests represent the portion of profit or loss and net assets in subsidiaries not held by the GroupandarepresentedseparatelyinprofitorlossoftheGroupandwithinequityintheconsolidatedstatementsoffinancialposition,separatelyfromparentshareholders’equity.Transactionswithnoncontrollinginterestsare accounted for using the entity concept method, whereby, transactions with non controlling interests are accountedforastransactionswithowners.Onacquisitionofnoncontrollinginterests,thedifferencebetweentheconsiderationandbookvalueoftheshareofthenetassetsacquiredisrecogniseddirectlyinequity.Gainorlossondisposaltononcontrollinginterestsisrecogniseddirectlyinequity.

(c) Intangible assets

(i) Goodwill

Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less accumulated impairment losses.

Forthepurposeofimpairmenttesting,goodwillacquiredisallocated,fromtheacquisitiondate,toeachof the Group’s cash-generating units that are expected to benefit from the synergies of the combination.

The cash-generating unit to which goodwill has been allocated is tested for impairment annually and whenever there is an indication that the cash-generating unit may be impaired, by comparing the carrying amount of the cash-generating unit, including the allocated goodwill, with the recoverable amountofthecash-generatingunit.Wheretherecoverableamountofthecash-generatingunitislessthan the carrying amount, an impairment loss is recognised in the profit or loss. Impairment losses recognisedforgoodwillarenotreversedinsubsequentperiods.

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





(c) Intangible assets (contd.)

(i) Goodwill (contd.)

Goodwill and fair value adjustments arising on the acquisition of foreign operation on or after 1 January 2006 are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated in accordance with the accounting policy set out in Note 2.3(r).

Goodwill and fair value adjustments which arose on acquisitions of foreign operation before 1 January 2006 are deemed to be assets and liabilities of the Company and are recorded in RM at the ratesprevailingatthedateofacquisition.

(ii) Other intangible assets

Intangibleassetsacquiredseparatelyaremeasuredoninitialrecognitionatcost.Thecostofintangibleassetsacquiredinabusinesscombinationistheirfairvaluesasatthedateofacquisition.Followinginitial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. The useful lives of intangible assets are assessed to be either finite or indefinite.

Intangible assets with finite lives are amortised on a straight-line basis over the estimated economic useful lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each financial year end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in profit or loss. Intangible assets with indefinite useful lives are not amortised but tested for impairment annually ormorefrequentlyiftheeventsorchangesincircumstancesindicatethatthecarryingvaluemaybeimpaired either individually or at the cash-generating unit level. The useful life of an intangible asset with an indefinite life is also reviewed annually to determine whether the useful life assessment continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

(iii) Development expenditure

Expenditureincurredonprojectstodesignanddeveloptheoperatingsystemsfortheprovisionofthehospital support services is capitalised and deferred only when the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the project and the ability to measure reliably the expenditure during the development. Development expenditure which does not meet these criteria is expensed when incurred.

Development expenditure, considered to have finite useful lives, are stated at cost less any impairment losses and are amortised using the straight-line basis over the concession period of the hospital support servicesoffifteen(15)years,commencing28October1996.Impairmentisassessedwheneverthereisan indication and the amortisation period and method are also reviewed at least at each reporting date. The remaining amortisation period for development expenditure is one (1) year.





(c) Intangible assets (contd.)

(iv) Software and licences

Softwareandlicencesthatdonotformanintegralpartoftherelatedhardwarehavebeenreclassifiedasintangibleassets.Softwareandlicences,consideredtohavefiniteusefullives,arestatedatcostlessany impairment losses and are amortised using the straight-line basis over the commercial lives of the underlying products between five (5) and fifteen (15) years. Impairment is assessed whenever there is an indication of impairment and amortisation period and method are also reviewed at least at each reporting date.

(v) Customer contracts

Thecustomercontractsrepresenthousekeepingbusinessesacquiredthroughbusinesscombinations.Customer contracts considered to have finite useful lives, are stated at cost less impairment losses and are amortised using the straight-line basis over the commercial lives of 10 years, which meet the contractual legal criteria for identification as intangible assets. The fair value is determined by the amount of future revenue. Impairment is assessed whenever there is an indication of impairment and amortisation period and method are also reviewed at least at each reporting date.

(d) Property, plant and equipment and depreciation

Allitemsofproperty,plantandequipmentareinitiallyrecordedatcost.Thecostofanitemofproperty,plantandequipmentisrecognisedasanassetif,andonlyif,itisprobablethatfutureeconomicbenefitsassociatedwith the item will flow to the Group and the cost of the item can be measured reliably.

Subsequenttorecognition,property,plantandequipmentarestatedatcostlessaccumulateddepreciationand any accumulated impairment losses. All other repairs and maintenance are charged to the income statements during the financial period in which they are incurred.

Freehold land has an unlimited useful life and therefore is not depreciated. Capital work-in-progress is not depreciated as these assets are not available for use. Capital work-in-progress relates to the installation of new machinery.

Depreciationofotherproperty,plantandequipmentisprovidedforonastraight-linebasistowriteoffthecostof each asset to its residual value over the estimated useful life, at the following annual rates:

Buildings 2% Plantandequipment 5%-20% Motorvehicles 20% Furnitureandfittings 10%-20%

Thecarryingvaluesofproperty,plantandequipmentarereviewedforimpairmentwheneventsorchangesincircumstances indicate that the carrying value may not be recoverable.

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

Anitemofproperty,plantandequipmentisderecognisedupondisposalorwhennofutureeconomicbenefitsare expected from its use or disposal. The difference between the net disposal proceeds, if any and the net carrying amount is recognised in profit or loss.





(e) Land held for property development and property development costs

(i) Land held for property development

Landheldforpropertydevelopmentconsistsoflandwherenodevelopmentactivitieshavebeencarriedout or where development activities are not expected to be completed within the normal operating cycle. Suchlandisclassifiedwithinnon-currentassetsandisstatedatcostlessanyaccumulatedimpairmentlosses.

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

(ii) Property development costs

Property development costs comprise all costs that are directly attributable to development activities or that can be allocated on a reasonable basis to such activities.

Whenthefinancialoutcomeofadevelopmentactivitycanbereliablyestimated,propertydevelopmentrevenue and expenses are recognised in the income statements by using the stage of completion method. The stage of completion is determined by the proportion that property development costs incurred for work performed to date bear to the estimated total property development costs.

Wherethefinancialoutcomeofadevelopmentactivitycannotbereliablyestimated,propertydevelopmentrevenue is recognised only to the extent of property development costs incurred that is probable will be recoverable, and property development costs on properties sold are recognised as an expense in the period in which they are incurred.

Any expected loss on a development project, including costs to be incurred over the defects liability period, is recognised as an expense immediately.

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

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

(f) Impairment of non-financial assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any suchindicationexists,orwhenanannualimpairmentassessmentforanassetisrequired,theGroupmakesan estimate of the asset’s recoverable amount.

An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units (“CGU”)).





(f) Impairment of non-financial assets (contd.)

In assessing value in use, the estimated future cash flows expected to be generated by the asset are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value ofmoneyandtherisksspecifictotheasset.Wherethecarryingamountofanassetexceedsitsrecoverableamount, the asset is written down to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to those units or groups of units and then, to reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis.

Impairment losses are recognised in profit or loss except for assets that are previously revalued where the revaluation was taken to other comprehensive income. In this case the impairment is also recognised in other comprehensive income up to the amount of any previous revaluation.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined, netofdepreciation,hadnoimpairmentlossbeenrecognisedpreviously.Suchreversalisrecognisedinprofitor loss unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase.Impairmentlossongoodwillisnotreversedinasubsequentperiod.

(g) Inventories

Inventories are stated at lower of cost and net realisable value.

Consumables are stated at the lower of cost (determined on the weighted average basis) and net realisable value. Cost of inventories comprise cost of purchase of inventories.

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

(h) Financial assets

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

Whenfinancialassetsarerecognisedinitially,theyaremeasuredatfairvalue,plus,inthecaseoffinancialassets not at fair value through profit or loss, directly attributable transaction costs.

The Group and the Company determine the classification of their financial assets at initial recognition, and the categories include financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments and available-for-sale financial assets.





(h) Financial assets (contd.)

(i) Financial assets at fair value through profit or loss

Financial assets are classified as financial assets at fair value through profit or loss if they are held for tradingoraredesignatedassuchuponinitialrecognition.Financialassetsheldfortradingareacquiredprincipally for the purpose of selling in the near term.

Subsequenttoinitialrecognition,financialassetsatfairvaluethroughprofitorlossaremeasuredatfairvalue. Any gains or losses arising from changes in fair value are recognised in profit or loss. Net gains or net losses on financial assets at fair value through profit or loss do not include exchange differences, interestanddividendincome.Exchangedifferences,interestanddividendincomeonfinancialassetsatfair value through profit or loss are recognised separately in profit or loss as part of other losses or other income.

Financial assets at fair value through profit or loss could be presented as current or non-current. Financial assets that is held primarily for trading purposes are presented as current whereas financial assets that is not held primarily for trading purposes are presented as current or non-current based on the settlement date.

The Group and the Company have not designated any financial assets as financial assets at fair value through profit or loss.

(ii) Loans and receivables

Financial assets with fixed or determinable payments that are not quoted in an activemarket areclassified as loans and receivables.

Subsequent to initial recognition, loans and receivables are measured at amortised cost usingthe effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.

Loansandreceivablesareclassifiedascurrentassets,exceptforthosehavingmaturitydateslaterthan12 months after the reporting date which are classified as non-current.

(iii) Held-to-maturity investments

The Group and Company does not have any financial assets classified as held-to-maturity.

(iv) Available-for-sale financial assets

Available-for-salefinancialassetsconsistofnoncurrentunquotedshareheldforsaleandmarketablesecurities. Available-for-sale financial assets are financial assets that are designated as available-for-sale or are not classified in any of the three preceding categories.





(h) Financial assets (contd.)

(iv) Available-for-sale financial assets (contd.)

After initial recognition, available-for-sale financial assets are measured at fair value. Any gains or losses from changes in fair value of the financial assets are recognised in other comprehensive income, except that impairment losses, foreign exchange gains and losses on monetary instruments and interest calculated using the effective interest method are recognised in profit or loss. The cumulative gain or losspreviouslyrecognisedinothercomprehensiveincomeisreclassifiedfromequitytoprofitorlossasa reclassification adjustment when the financial asset is derecognised. Interest income calculated using theeffectiveinterestmethodisrecognisedinprofitorloss.Dividendsonanavailable-for-saleequityinstrument are recognised in profit or loss when the Group and the Company’s right to receive payment is established.

Investmentsinequityinstrumentswhosefairvaluecannotbereliablymeasuredaremeasuredatcostless impairment loss.

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

A financial asset is derecognised when the contractual right to receive cash flows from the asset has expired. Onderecognitionofafinancialassetinitsentirety,thedifferencebetweenthecarryingamountandthesumofthe consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss.

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

(i) Impairment of financial assets

The Group and the Company assess at each reporting date whether there is any objective evidence that a financial asset is impaired.

(i) Trade and other receivables and other financial assets carried at amortised cost

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





(i) Impairment of financial assets (contd.)

(i) Trade and other receivables and other financial assets carried at amortised cost (contd.)

If any such evidence exists, the amount of impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use ofanallowanceaccount.Whenatradereceivablebecomesuncollectible, it iswrittenoffagainsttheallowance account.

Ifinasubsequentperiod,theamountoftheimpairmentlossdecreasesandthedecreasecanberelatedobjectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.

(ii) Available-for-sale financial assets

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

If an available-for-sale financial asset is impaired, an amount comprising the difference between its cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss previouslyrecognisedinprofitorloss,istransferredfromequitytoprofitorloss.

Impairment losses on available-for-sale equity investments are not reversed in profit or loss in thesubsequentperiods.Increaseinfairvalue,ifany,subsequenttoimpairmentlossisrecognisedinothercomprehensiveincome.Foravailable-for-saledebtinvestments,impairmentlossesaresubsequentlyreversed in profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss in profit or loss.

(j) Cash and cash equivalents

For the purposes of the statements of cash flow, cash and cash equivalents include cash on hand, bankbalances, fixed deposits pledged to licensed banks and other financial institutions, bank overdrafts and deposits at call which have an insignificant risk of changes in value.





(k) Share capital and share issuance expenses

Anequity instrument isanycontract thatevidencesaresidual interest in theassetsof theGroupandtheCompanyafterdeductingallofitsliabilities.Ordinarysharesareclassifiedasequityinstruments.

Ordinarysharesarerecordedattheproceedsreceived,netofdirectlyattributableincrementaltransactioncosts.Dividendsonordinarysharesarerecognisedinequityintheperiodinwhichtheyaredeclared.

(l) Financial liabilities

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

Financialliabilities,withinthescopeofFRS139,arerecognisedinthestatementoffinancialpositionwhen,and only when, the Group and the Company become a party to the contractual provisions of the financial instrument. Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities.

(i) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.

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

(ii) Other financial liabilities

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

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

Loans and borrowings are recognised initially at fair value, net of transaction costs incurred, andsubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod.Borrowingsareclassifiedas current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

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





(l) Financial liabilities (contd.)

(ii) Other financial liabilities (contd.)

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

(m) Leases

(i) As lessee

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

Leased assets are depreciated over the estimated useful life of the asset. However, if there is noreasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life and the lease term.

Operatingleasepaymentsarerecognisedasanexpenseinprofitorlossonastraight-linebasisoverthe lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.

(ii) As lessor

LeaseswheretheGroupretainssubstantiallyalltherisksandrewardsofownershipoftheassetareclassified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same bases as rental income. The accounting policy for rental income is set out in Note 2.3(s).

(n) Borrowing costs

Borrowingcostsarecapitalisedaspartofthecostofaqualifyingassetiftheyaredirectlyattributabletotheacquisition,constructionorproductionofthatasset.Capitalisationofborrowingcostscommenceswhentheactivities to prepare the asset for its intended use or sale are in progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their intended use or sale.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred. Borrowing costs consist of interest and other costs that the Group and Company incurred in connection with the borrowing of funds.





(o) Income tax

(i) Current tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.

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

(ii) Deferred tax

Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all temporary differences, except:

- where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

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

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

- where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

- in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

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

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date.





(o) Income tax (contd.)

(ii) Deferred tax (contd.)

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive incomeordirectly inequityanddeferred taxarising fromabusinesscombination isadjustedagainstgoodwillonacquisition.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

(iii) Sales tax

Revenues, expenses and assets are recognised net of the amount of sales tax except:

- Where the sales tax incurred in a purchase of assets or services is not recoverable from thetaxationauthority,inwhichcasethesalestaxisrecognisedaspartofthecostofacquisitionoftheasset or as part of the expense item as applicable; and

- Receivables and payables that are stated with the amount of sales tax included.

The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statements of financial position.

(p) Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past eventanditisprobablethatanoutflowofresourcesembodyingeconomicbenefitswillberequiredtosettlethe obligation, and a reliable estimate of the amount can be made. Provisions are reviewed at each reporting dateandadjustedtoreflectthecurrentbestestimate.Wheretheeffectofthetimevalueofmoneyismaterial,provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to theliability.Wherediscountingisused,theincreaseintheprovisionduetothepassageoftimeisrecognisedas finance cost.

(q) Employee benefits

(i) Short term benefits

Wages,salaries,bonusesandsocialsecuritycontributionsarerecognisedasanexpenseintheyearinwhichtheassociatedservicesarerenderedbyemployees.Shorttermaccumulatingcompensatedabsences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences, and short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.

(ii) Defined contribution plans

Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into separate entities or funds and will have no legal or constructive obligation to pay further contributions if any of the funds do not hold sufficient assets to pay all employee benefits relating toemployeeservicesinthecurrentandprecedingfinancialyears.Suchcontributionsarerecognisedasanexpenseintheincomestatementasincurred.Asrequiredbylaw,companiesinMalaysiamakecontributionstothestatepensionscheme,theEmployeesProvidentFund(“EPF”).





(q) Employee benefits (contd.)

(iii) Defined benefit plan

TheGroupoperatesanunfunded,definedbenefitRetirementBenefitScheme (“theScheme”) for itseligibleemployees.TheGroup’sobligationundertheScheme,calculatedusingtheProjectedUnitCreditMethod, is determined based on actuarial computations by independent actuaries, through which the amount of benefit that employees have earned in return for their service in the current and prior years is estimated. That benefit is discounted in order to determine its present value.

Actuarial gains and losses are recognised as income or expense over the expected average remaining working lives of the participating employees when the cumulative unrecognised actuarial gains or losses fortheSchemeexceed10%ofthehigherofthepresentvalueofthedefinedbenefitobligationandthefair value of plan assets. Past service costs are recognised immediately to the extent that the benefits are already vested, and otherwise are amortised on a straight-line basis over the average period until the amended benefits become vested.

The amount recognised in the statement of financial position represents the present value of the defined benefit obligations adjusted for unrecognised actuarial gains and losses and unrecognised past service costs, and reduced by the fair value of plan assets. Any asset resulting from this calculation is limited to the net total of any unrecognised actuarial losses and past service costs, and the present value of any economic benefits in the form of refunds or reductions in future contributions to the plan.

(r) Foreign currencies

(i) Functional and presentation currency

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

(ii) Foreign currency transactions

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

Exchangedifferencesarisingonthesettlementofmonetaryitemsorontranslatingmonetarytemsatthe reporting date are recognised in profit or loss except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign operations, which are recognised initially in othercomprehensiveincomeandaccumulatedunderforeigncurrencytranslationreserveinequity.TheforeigncurrencytranslationreserveisreclassifiedfromequitytoprofitorlossoftheGroupondisposalof the foreign operation.

Exchangedifferencesarisingonthetranslationofnon-monetaryitemscarriedatfairvalueareincludedin profit or loss for the period except for the differences arising on the translation of non-monetary items inrespectofwhichgainsandlossesarerecogniseddirectlyinequity.Exchangedifferencesarisingfromsuchnon-monetaryitemsarealsorecogniseddirectlyinequity.





(iii) Foreign operations

The assets and liabilities of foreign operations are translated into RM at the rate of exchange ruling at the reporting date and income and expenses are translated at exchange rates at the dates of the transactions. The exchange differences arising on the translation are taken directly to other comprehensive income. Ondisposalofaforeignoperation,thecumulativeamountrecognisedinothercomprehensiveincomeandaccumulatedinequityunderforeigncurrencytranslationreserverelatingtothatparticularforeignoperation is recognised in the profit or loss.

Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated asassets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated at the closing rate at the reporting date.

The principal exchange rates used for every unit of foreign currency ruling at the reporting date used are as follows:

2010 2009 RM RM

UnitedStatesDollars 3.08 3.42UnitedArabEmiratesDirham 0.84 0.93Indian Rupees 0.07 0.07

(s) Revenue recognition

Revenue is recognised when it is probable that the economic benefits associated with the transaction will flow to the Group and the revenue can be measured reliably. The following specific recognition criteria must also be met before revenue is recognised:

(i) Revenue from services rendered

Hospital support services

TheGroupprovideshospitalsupportservicesfortheperiodof15yearscommencing28October1996intheNorthernzoneencompassingthestatesofPerlis,Kedah,PulauPinangandPerak,SabahzoneandSarawakzone,respectively.Theservicesprovidedareclinicalwastemanagement,cleansing,laundryand linen, facilities engineering maintenance and biomedical engineering maintenance.

These services are provided as a fixed-priced contract.

Revenue from fixed-price contracts is generally recognised in the period the services are provided, using a straight-line basis over the term of the contract.

Non-concession services

The Group provides facilities management services which include cleansing, laundry and linen, facilities engineering maintenance and infrastructure facilities to non-concession customers. These services are provided on a time and material basis or as a fixed-priced contract, with contract terms generally ranging from one (1) year to three (3) years.

Revenue from time and material contracts, typically from facilities engineering maintenance and bio-medical engineering maintenance is recognised at the contractual rates as labour hours are delivered and direct expenses incurred.

Revenue from fixed price contracts, typically for the provision of infrastructure facility services, are recognised at contractual rates when the outcome of the claims can be determined with reasonable certainty.





(s) Revenue recognition (cont.)

(ii) Sale of properties

Revenue from sale of property development is accounted for by the percentage of completion method as described in Note 2.3(e).

(iii) Management fees

Management fees for services provided to Group companies are recognised on an accrual basis.

(iv) Rental income

Rental income is recognised on a straight-line basis over the term of the lease.

(v) Interest income

Interest income is recognised on an accrual basis using the effective interest method.

(vi) Dividend income

Dividend income is recognised when the Group’s right to receive payment is established.

(t) Discontinued operation

A component of the Group is classified as a discontinued operation when the criteria to be classified as held for sale have been met or it has been disposed of and such a component represents a separate major line of business or geographical area of operations, is part of a single co-ordinated major line of business or geographicalareaofoperationsorisasubsidiaryacquiredexclusivelywithaviewtoresale.

(u) Affiliated companies

AffiliatedcompaniesrepresentscompanieswithintheUEMGroupBerhad,acorporateshareholderofFaberGroup Berhad.

(v) Segment reporting

For management purposes, the Group is organised into operating segments based on their products and services which are independently managed by the respective segment managers responsible for the performance of the respective segments under their charge. The segment managers report directly to the management of the Company who regularly review the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in Note 44, including the factors used to identify the reportable segments and the measurement basis of segment information.

(w) Contingencies

A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of uncertain future events not wholly within the control of the Group.

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




2.4 Standards, amendments to FRSs and interpretations issued but not yet effective

TheGroupandtheCompanyhasnotadoptedthefollowingnewFRSs,amendmentstoFRSsandInterpretationsthathave been issued but not yet effective:

Effective for financial periods beginning on or after 1 July 2010

FRS1: FirstTimeAdoptionofFinancialReportingStandards FRS3: BusinessCombinations(revised) AmendmentstoFRS127: ConsolidatedandSeparateFinancialStatements AmendmentstoFRS2: Share-basedPayment AmendmentstoFRS5: Non-currentAssetsHeldforSaleandDiscontinuedOperations AmendmentstoFRS138: IntangibleAssets AmendmentstoICInterpretation9: ReassessmentofEmbeddedDerivatives ICInterpretation12: ServiceConcessionArrangements ICInterpretation16: HedgesofaNetInvestmentinaForeignOperation ICInterpretation17: DistributionsofNon-cashAssetstoOwners

Effective for financial periods beginning on or after 1 March 2010

AmendmentstoFRS132: ClassificationofRightsIssues

Effective for financial periods beginning on or after 1 January 2011

AmendmentstoFRS1: LimitedExemptionfromComparativeFRS7Disclosuresfor First-time Adopters

AmendmentstoFRS1: AdditionalExemptionsforFirst-timeAdopters AmendmentstoFRS1: First-timeAdoptionofFinancingReportingStandards [ImprovementstoFRS(2010)] AmendmentstoFRS2: GroupCash-settledShare-basedPaymentTransactions AmendmentstoFRS3: BusinessCombinations[ImprovementstoFRS(2010)] AmendmentstoFRS7: ImprovingDisclosuresaboutFinancialInstruments AmendmentstoFRS7: FinancialInstruments:Disclosures[ImprovementtoFRS(2010)] AmendmentstoFRS101: PresentationofFinancialStatements[ImprovementstoFRS(2010)] AmendmentstoFRS121: TheEffectsofChangesinForeignExchangeRates [ImprovementstoFRS(2010)] AmendmentstoFRS128: InvestmentsinAssociates[ImprovementstoFRS(2010)] AmendmentstoFRS131: InterestsinJointVentures[ImprovementstoFRS(2010)] AmendmentstoFRS132: FinancialInstruments:Presentation[ImprovementstoFRS(2010)] AmendmentstoFRS134: InterimFinancialReporting[ImprovementstoFRS(2010)] AmendmentstoFRS139: FinancialInstruments:RecognitionandMeasurement [ImprovementstoFRS(2010)] ICInterpretation4: DeterminingwhetheranArrangementcontainsaLease AmendmentstoICInterpretation13: CustomerLoyaltyProgramme[ImprovementstoFRS(2010)] IC Interpretation 18: Transfer of Assets from Customers AmendmentstoICInterpretation14: PrepaymentsofaMinimumFundingRequirement ICInterpretation19: ExtinguishingFinancialLiabilitieswithEquityInstruments

Effective for financial periods beginning on or after 1 January 2012

FRS124: RelatedPartyDisclosures ICInterpretation15: AgreementsfortheConstructionofRealEstate




2.4 Standards, amendments to FRSs and interpretations issued but not yet effective (contd.)

ExceptforthechangesinaccountingpoliciesarisingfromtheadoptionoftherevisedFRS3,theamendmentstoFRS127,ICInterpretation12andICInterpretation15,aswellasthenewdisclosuresrequiredundertheAmendmentsto FRS 7, the directors expect that the adoption of the other standards and interpretations abovewill have nomaterial impact on the financial statements in the period of initial application. The nature of the impending changes inaccountingpolicyonadoptionoftherevisedFRS3,theamendmentstoFRS127andICInterpretation12andICInterpretation 15 are described below.

RevisedFRS3:BusinessCombinationsandAmendmentstoFRS127ConsolidatedandSeparateFinancialStatements

Therevisedstandardsareeffectiveforannualperiodsbeginningonorafter1July2010.TherevisedFRS3introducesa number of changes in the accounting for business combinations occurring after 1 July 2010. These changes will impacttheamountofgoodwillrecognised,thereportedresultsintheperiodthatanacquisitionoccurs,andfuturereported results. TheAmendments toFRS127 require that a change in the ownership interest of a subsidiary(withoutlossofcontrol)isaccountedforasanequitytransaction.Therefore,suchtransactionswillnolongergiverise to goodwill, nor will they give rise to a gain or loss. Furthermore, the amended standard changes the accounting forlossesincurredbythesubsidiaryaswellasthelossofcontrolofasubsidiary.OtherconsequentialamendmentshavebeenmadetoFRS107:StatementofCashFlows,FRS112:IncomeTaxes,FRS121:TheEffectsofChangesinForeignExchangeRates,FRS128:InvestmentsinAssociatesandFRS131:InterestsinJointVentures.ThechangesfromrevisedFRS3andAmendmentstoFRS127willaffectfutureacquisitionsorlossofcontrolandtransactionswith non-controlling interests. The standards may be early adopted. However, the Group does not intend to early adopt.

ICInterpretation12:ServiceConcessionArrangements

This Interpretation applies to service concession operators and explains how to account for the obligations undertaken and rights received in service concession arrangements. The adoption of IC Interpretation 12 will likely have impact to the financial statement and the Group is in the process of assessing the extent of the impact. However, the Group is exempted from disclosing the possible impact to the financial statements upon the initial application of this Interpretation.

ICInterpretation15:AgreementsfortheConstructionofRealEstate

This Interpretation clarifies when and how revenue and related expenses from the sale of a real estate unit should be recognised if an agreement between a developer and a buyer is reached before the construction of the real estate is completed. Furthermore, the Interpretation provides guidance on how to determine whether an agreement is withinthescopeofFRS111:ConstructionContractsorFRS118:Revenue.

The Group currently recognises revenue arising from property development projects using the stage of completion method.Upon the adoption of IC Interpretation 15, theGroupmay be required to change its accounting policyto recognise such revenues at completion, or upon or after delivery. The Group is in the process of making an assessment of the impact of this Interpretation.

2.5 Significant accounting judgements and estimates

Thepreparationof theGroup’sfinancial statements requiresmanagement tomake judgements,estimatesandassumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting date. However, uncertainty about these assumptions and estimates could resultinoutcomesthatcouldrequireamaterialadjustmenttothecarryingamountoftheassetorliabilityaffectedin the future.




2.5 Significant accounting judgements and estimates (contd.)

(a) Judgements

In the process of applying the Group’s accounting policies, there were no significant judgements made apart from those involving estimations, which have the most significant effect on the amounts recognised in the financial statements.

(b) Key sources of estimation uncertainty

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

(i) Revenue recognition

Hospital support services

Withintotalconsolidatedrevenuefortheyearended31December2010,managementhasestimatedthat RM44,022,000 (2009: RM23,622,000) is attributable to work performed on instruction from the respective hospitals under the Concession Agreement for the hospital support services. These work done are variations from the original Concession Agreement either for new hospitals, replacement hospitals, additions to existing hospitals and/or extensions of current services in the present hospitals.

TheactualvaluesofthevariationordershavetobeagreedbytheMinistryofHealth(“MOH”)followingapprovalsfromSistemHospitalAwasanTarafSdn.Bhd.(“SIHAT”),theexternalpartycertifyingtheworkdone and the Director of each hospital concerned. As such, there is a significant time lag between the finalcontractfromMOHandthecommencementofworkdonebytheGroup.

ManagementestimatesarebasedontheirpreviousexperiencewithMOHandthefollowingassumptions:

(a) Theratesadoptedforeachoftherequiredservicesarethepre-approvedratesfromMOH;

(b) For cleansing services, management has estimated the total floor areas of the facilities from the floor plans provided for the areas, which have commenced operations;

(c) For facilities engineering maintenance and biomedical engineering maintenance services, management has estimated the respective hospital’s assets values for facilities maintenance; and

(d) The associated costs incurred for the services provided are incurred in the period and charged to the profit and loss account.

Historically,MOHhashonoureditscommitmenttoenterintoaformalagreementforthesevariations.It is therefore appropriate to recognise revenue on these transactions for the current financial year.

(ii) Impairment review of goodwill

The Group determines whether goodwill is impaired at least on an annual basis. This requires anestimationofthe‘valueinuse’ofthecash-generatingunitstowhichthegoodwillisallocated.Estimatingavalueinuseamountrequiresmanagementtomakeanestimateoftheexpectedfuturecashflowsfromthe cash-generating unit and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The carrying amount of goodwill at 31 December 2010 was RM26,982,000 (2009: RM26,982,000). Further details are given in Note 17.




2.5 Significant accounting judgements and estimates (contd.)

(b) Key sources of estimation uncertainty (contd.)

(iii) Depreciation of property, plant and equipment

The cost of property, plant and equipment amounting to RM246,945,000 (2009: RM236,821,000) isdepreciated on a straight-line basis over the assets’ useful lives. Management estimates the useful lives oftheseproperty,plantandequipmenttobewithin5to15years.Thesearecommonlifeexpectanciesapplied,giventhetenureoftheHospitalSupportServicesAgreement.Changesintheexpectedlevelofusage,technologicaldevelopmentsandthenon-renewaloftheHospitalSupportServicesAgreementwould adversely impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.

(iv) Property development

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

Significant judgement is required indetermining thestageof completion, theextentof thepropertydevelopment costs incurred, the estimated total property development revenue and costs, as well as the recoverability of the development projects. In making the judgement, the Group evaluates by relying on past experience and the work of specialists.

(v) Income taxes

Significant estimation is involved in determining the provision for income taxes. There are certaintransactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for expected tax issues based on estimates of whetheradditionaltaxeswillbedue.Wherethefinaltaxoutcomeofthesemattersisdifferentfromtheamounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

(vi) Deferred tax assets

Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significantmanagementjudgementisrequiredtodeterminetheamountofdeferredtaxassetsthatcanbe recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies. The deferred tax assets amounting to RM5,471,000 are mainly related to integrated facilitiesmanagementcompanies,Healthtronics (M)SdnBhdandFaberMedi-ServeSdnBhd,whichmanagement estimates they are probable to generate future levels of taxable profits. Further details are contained in Note 31.



3. REVENUE Group Company 2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000

Saleofproperties 69,071 122,488 - - Servicesrendered: - integrated facilities management 819,775 682,794 - - - management fees - - 5,700 7,880 Gross dividend income: - subsidiaries - - 71,177 53,012

888,846 805,282 76,877 60,892

4. COST OF SALES

Group 2010 2009 RM’000 RM’000

Property development costs (Note 15(b)) 40,258 75,017 Othercostofpropertydevelopment 4,251 10,648 Cost on land disposal (Note 15(a)) 1,957 - Servicesrendered: - integrated facilities management 622,346 475,055

668,812 560,720

5. OTHER INCOME

Included in other income are:


Interest income from loans and receivables 7,519 5,202 1,032 1,345 Bad debts recovered 145 62 - - Gross dividend income from available-for-sale financial assets -equityinstrumentsquotedinMalaysia - 34 - -



6. FINANCE COSTS


Interest expense on: -RSLS(Note28) 6,222 6,344 6,222 6,344 -Loanfromcorporateshareholderofasubsidiary 130 126 - - - Hire purchase 19 30 - - - Bank borrowings 245 224 - -

6,616 6,724 6,222 6,344

7. PROFIT BEFORE TAX

The following amounts have been included at arriving at profit before tax:


Employeebenefitsexpenses(Note8) 172,089 155,781 10,393 6,541 Non-executive directors’ remuneration excluding benefits-in-kind (Note 9) 948 932 534 517 Auditors’ remuneration: - statutory 398 351 70 70 - underprovision in prior year 19 70 - 38 - others 71 30 - - Operatingleases: 4,811 5,049 751 1,087

- minimum lease payments of premises 3,408 3,214 667 977 - minimum lease payments of plant and machineries 1,403 1,835 84 110

Amortisation of: - prepaid land lease payments (Note 16) 87 92 - - - intangible assets (Note 17) 2,360 2,386 42 32 Net unrealised foreign exchange loss 1,465 1,000 1,287 769 Depreciationofproperty,plantandequipment(Note14) 19,963 18,556 221 156 Writebackofimpairmentof property development costs (Note 15(b)) - (297) - - AccretionofRPS 235 - - - Loss/(gain)ondisposalofplantandequipment 19 (305) 22 - Realised foreign exchange loss - 4,785 - - Provisions (Note 25) 12 11 - - Reversal of provision for sinking fund (Note 25) (34) (146) - - Property,plantandequipmentwrittenoff(Note14) 1,384 932 - - Impairment on financial assets: - Trade and other receivables (Note 21) 12,806 17,602 - 552 Reversal of impairment on financial assets: - Trade and other receivables (Note 21) (11,431) (612) - (1,558) - marketable securities (Note 22) - (28) - -




7. PROFIT BEFORE TAX (contd.)


Surplusarisingfromcapitaldistributionoffinancialassets -unquotedinvestmentinMalaysia (286) - - - Amounts due from subsidiaries written off (Note 21) - - 4,602 471 Waiverofamountsduetosubsidiaries - - (6,640) - Bad debts written off - 17 - - Writedownofinventories(Note20) - 269 - -

8. EMPLOYEE BENEFITS EXPENSES


Wagesandsalaries 138,453 121,617 6,040 4,466 Socialsecuritycontributions 1,676 1,454 41 35 Contributions to defined contribution plans 14,946 14,360 840 682 Increase in liability for defined benefit plan (Note 24) 513 518 - - Otherbenefits 16,501 17,832 3,472 1,358

172,089 155,781 10,393 6,541

Included in employee benefits expense of the Group and of the Company are executive directors’ remuneration excluding benefits-in-kind amounting to RM2,469,000 (2009: RM2,442,000) and RM679,000 (2009: RM644,000) respectively as further disclosed in Note 9.

9. DIRECTORS’ REMUNERATION


Directors of the Company

Executive Salariesandotheremoluments 489 489 489 489 Bonus 103 72 103 72 Contributions to defined contribution plan 87 83 87 83 Benefits-in-kind 71 68 71 68

750 712 750 712

Non-Executive Fees 623 601 456 439 Allowances 89 94 78 78 Benefits-in-kind 52 61 52 61

764 756 586 578



9. DIRECTORS’ REMUNERATION (contd.)


Other Directors of Subsidiary Companies

Executive Salariesandotheremoluments 1,149 1,208 - - Bonus 313 271 - - Contributions to defined contribution plan 220 211 - - Allowances 108 108 - - Benefits-in-kind 86 96 - -

1,876 1,894 - -

Non-Executive Fees 213 213 - - Allowances 23 24 - -

236 237 - -

Total 3,626 3,599 1,336 1,290

Total excluding benefits-in-kind 3,417 3,374 1,213 1,161

Analysis excluding benefits-in-kind: Total executive directors’ remuneration excluding benefits-in-kind (Note 8) 2,469 2,442 679 644 Total non-executive directors’ remuneration excluding benefits-in-kind (Note 7) 948 932 534 517 Total directors’ remuneration excluding benefits-in-kind (Note 40) 3,417 3,374 1,213 1,161

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

No. of Directors 2010 2009 Executivedirectors: RM700,001 - RM750,000 1 1

Non-executive directors: Below RM50,000 3 4 RM50,001 - RM100,000 4 4 RM100,001 - RM150,000 3 2


10. INCOME TAX EXPENSE

Major components of income tax expense

Major components of income tax expense for the year ended 31 December 2010 and 2009 are:


Income statements Current income tax: - Malaysian income tax 31,420 35,949 9,045 10,274 - Foreign tax 42 119 - -

31,462 36,068 9,045 10,274

(Over)/underprovisionofincometaxinprioryears: - Malaysian income tax (2,210) 178 (8) 593 - Foreign tax (54) (65) - -

29,198 36,181 9,037 10,867

Deferred tax (Note 31): - Relating to origination and reversal of temporary differences (2,822) (1,369) - - -(Over)/underprovisioninprioryears (548) 17 - -

(3,370) (1,352) - -

Income tax recognised in profit or loss 25,828 34,829 9,037 10,867

DomesticstatutorytaxrateiscalculatedattheMalaysianstatutorytaxrateof25%(2009:25%)oftheestimatedassessableprofit for the year.

Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.



10. INCOME TAX EXPENSE (contd.)

Reconciliation between tax expense and accounting profits

A reconciliation of income tax expense and the product of accounting profit/(loss) multiplied by the applicable corporate tax rate for the years ended 31 December 2010 and 2009 are as follows:

2010 2009 RM’000 RM’000

Group

Profit/(loss) before taxation: Continuing operations 129,160 141,243 Discontinued operation (Note 11) - (306)

129,160 140,937

TaxationatMalaysianstatutorytaxrateof25%(2009:25%) 32,290 35,234 Income not subject to taxation (676) (77) Foreign income not subject to taxation (11,473) (8,380) Non-deductible expenses 8,478 8,020 Different tax rates in other countries (13) (66) Utilisation of previously unrecognised tax losses and capital allowances - (109) Deferred tax assets not recognised during the year - Malaysian subsidiaries 34 77 Deferred tax (over)/under provided in prior years (548) 17 Income tax (over)/under provided in prior years - Malaysian subsidiaries (2,210) 178 - Foreign subsidiaries (54) (65)

Income tax expense recognised in profit or loss 25,828 34,829

Company

Profit before taxation 53,942 43,950

TaxationatMalaysianstatutorytaxrateof25%(2009:25%) 13,486 10,988 Non-deductible expenses 6,566 2,351 Income not subject to taxation - tax exempt dividend (9,280) (3,050) Income not subject to taxation (1,660) - Utilisation of previously unrecognised other temporary differences (67) (15) Income tax (over)/under provided in prior years (8) 593

Income tax expense recognised in profit or loss 9,037 10,867

The above reconciliation is prepared by aggregating separate reconciliations for each national jurisdiction.



11. DISCONTINUED OPERATION

Group 2009 RM’000

Lossfortheyearfromdiscontinuedoperationarisingfrom: - Results of discontinued operation (973) - Gain arising from disposal of discontinued operation 667

(306)

On13July2009,theCompanyandMatangHoldingsBerhad(“MHB”)hadcompletedtheacquisitionofRM210,000paidupshare-capitalcomprisingof210,000ordinarysharesofRM1.00eachinKesanSuciSdnBhd(“KSSB”)fromAdvent(M)SdnBhdforacashconsiderationofRM1.00.Withtheacquisition,theproportionofshareholdingsheldbytheCompanyandMHBinKSSBare637,500ordinarysharesofRM1.00each(63.75%)and362,500ordinarysharesofRM1.00each(36.25%)respectively.

Subsequently,on11December2009theCompanyandMHB(collectivelythe“Vendors”)hadenteredintoaconditionalsharesaleagreementwithSAAFoodNetworkSdnBhd(“Purchaser”)forthedisposaloftheentireissuedandpaid-upsharecapitalofRM1,000,000comprising1,000,000ordinarysharesofRM1.00eachinKSSBatatotalcashconsiderationof RM1.00 only (“the Disposal”).

The Disposal price received by the Company and MHB is RM0.64 sen and RM0.36 sen respectively, in proportion to their respectiveshareholdingsinKSSB.

TheDisposalwascompletedon30December2009andasaresultKSSBceasedtobeasubsidiaryoftheCompany.

An analysis of the result of discontinued operation is as follows:

Group 2009 RM’000

Revenue 9,194 Expenses (10,167) Lossfortheyearfromdiscontinuedoperation (973)

The following amounts have been included in arriving at loss before tax of discontinued operation:

Group 2009 RM’000

Depreciationofproperty,plantandequipment(Note14) 83 Employeebenefitsexpenses 2,895 Operatingleases: - minimum lease payments of buildings 291 -minimumleasepaymentsofequipment 20



11. DISCONTINUED OPERATION (contd.)

The cash flows attributed to the discontinued operation are as follows:

Group 2009 RM’000

Operatingcashflows 281 Investing cash flows (19) Total cash flows 262

The disposal had the following effects on the financial position of the Group as at the end of the previous financial year:

Group Carrying amount as at 11.12.2009 RM’000

Property,plantandequipment(Note14) 288 Inventories 121 Trade and other receivables 2,120 Cash and bank balances 609 Trade and other payables (3,805)

Net assets disposed (667) Total disposal proceed -

Gain on disposal to the Group 667 Cash outflow arising on disposal: Cash consideration - Cashandcashequivalentsofsubsidiarydisposed (609) Net cash outflow of the Group (609)



12. EARNINGS PER SHARE

Basic

Basic earnings per share amounts are calculated by dividing profit/(loss) for the year attributable to owners of the parent by the weighted average number of ordinary shares in issue during the financial year held by the Company.

Group 2010 2009 RM’000 RM’000

Profit from continuing operations attributable to owners of the parent 78,780 82,987 Lossfromdiscontinuedoperationattributable to owners of the parent - (306)

Profit attributable to owners of the parent 78,780 82,681

‘000 ‘000

Weightedaveragenumberofordinarysharesinissue 363,001 363,001

Sen Sen

Basic earning per share for: Profit from continuing operations 21.7 22.9 Lossfromdiscontinuedoperation - (0.1)

Profit net of tax 21.7 22.8

There have been no other transactions involving ordinary shares or potential ordinary share between reporting date and the date of completion of these financial statements.



13. DIVIDENDS

Net Dividends per Amount Ordinary Share 2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000

Recognised during the year:

Final dividend for 2008: 4%less25%taxationon363,001,000ordinaryshares, declared on 25 February 2009 and paid on 24 June 2009 - 10,890 - 3 .00

Final dividend for 2009: 6%less25%taxationon363,001,000ordinaryshares, declared on 25 February 2010 and paid on 23 June 2010 16,335 - 4.50 -

16,335 10,890 4.50 3.00

At the forthcoming Annual General Meeting, a final dividend in respect of the financial year ended 31 December 2010, of 8%less25%taxationon363,001,000ordinaryshares,amountingtoadividendpayableofRM21,780,063(6.00sennetperordinary share) will be proposed for shareholder’s approval. The financial statements for the current financial year do notreflectthisproposeddividend.Suchdividend,ifapprovedbytheshareholders,willbeaccountedforinequityasanappropriation of retained earnings in the financial year ending 31 December 2011.



14. PROPERTY, PLANT AND EqUIPMENT

Plant, equipment, furniture, fittings and Capital motor work-in- Land vehicles progress Total RM’000 RM’000 RM’000 RM’000

Group

At 31 December 2010

Cost At 1 January 2010 - 241,984 2,967 244,951 Additions 1,160 8,958 7,220 17,338 Disposals - (1,807) - (1,807) Transfer - 3,053 (3,053) - Writtenoff - (3,344) (62) (3,406) Exchangedifferences - (160) - (160) At 31 December 2010 1,160 248,684 7,072 256,916 Accumulated depreciation At 1 January 2010 - 152,305 - 152,305 Charge for the year - Continuing operations (Note 7) - 19,963 - 19,963 Disposals - (1,738) - (1,738) Writtenoff - (2,022) - (2,022) Exchangedifferences - (26) - (26) At 31 December 2010 - 168,482 - 168,482

Net carrying amount

At 31 December 2010 1,160 80,202 7,072 88,434



14. PROPERTY, PLANT AND EqUIPMENT (contd.)

Plant, equipment, furniture, fittings and Capital motor work-in- Buildings vehicles progress Total RM’000 RM’000 RM’000 RM’000

Group (contd.)

At 31 December 2009

Cost

At 1 January 2009 48 218,221 12,501 230,770 Additions - 16,053 3,759 19,812 Disposals - (1,838) - (1,838) Transfer - 13,179 (13,179) - Writtenoff (48) (3,188) (114) (3,350) Disposal of a subsidiary company (Note 11) - (458) - (458) Exchangedifferences - 15 - 15

At 31 December 2009 - 241,984 2,967 244,951

Accumulated depreciation At 1 January 2009 48 137,816 - 137,864 Charge for the year - Continuing operations (Note 7) - 18,556 - 18,556 - Discontinued operations (Note 11) - 83 - 83 Disposals - (1,609) - (1,609) Writtenoff (48) (2,370) - (2,418) Disposal of a subsidiary company (Note 11) - (170) - (170) Exchangedifferences - (1) - (1) At 31 December 2009 - 152,305 - 152,305

Net carrying amount At 31 December 2009 - 89,679 2,967 92,646




Plant, equipment, furniture, fittings and motor vehicles RM’000

Company

At 31 December 2010

Cost At 1 January 2010 4,272 Additions 1,025 Disposal (1,710)

At 31 December 2010 3,587

Accumulated depreciation At 1 January 2010 3,826 Charge for the year (Note 7) 221 Disposal (1,655) At 31 December 2010 2,392

Net carrying amount 1,195

At 31 December 2009

Cost At 1 January 2009 4,096 Additions 176 At 31 December 2009 4,272 Accumulated depreciation At 1 January 2009 3,670 Charge for the year (Note 7) 156 At 31 December 2009 3,826

Net carrying amount 446




(a) ThenetcarryingamountofplantandequipmentoftheGroupchargedtoabankforbankingfacilities(Note26(a))are as follows:

Group 2010 2009 RM’000 RM’000

Plantandequipment 75,634 86,681

(b) Property,plantandequipmentoftheGroupandoftheCompanyamountingtoRM53,867,000(2009:RM53,074,000)and RM1,987,000 (2009: RM3,446,000) respectively have been fully depreciated and are still in use.

(c) Netcarryingamountsofplantandequipmentheldunderhirepurchaseareasfollows:

Group 2010 2009 RM’000 RM’000

Equipment 239 726

Details of the terms and conditions of the hire purchase and finance lease arrangements are disclosed in Note 27.

15. LAND HELD FOR PROPERTY DEVELOPMENT AND PROPERTY DEVELOPMENT COSTS

(a) Land held for property development

Leasehold Development land expenditure Total RM’000 RM’000 RM’000

Group

At 31 December 2010

At cost At 1 January 2010 35,950 23,870 59,820 Additions - 259 259 Transfer to property development costs (Note 15(b)) (15,662) (15,824) (31,486) Disposal (958) (999) (1,957)

At 31 December 2010 19,330 7,306 26,636

Accumulated impairment At 1 January 2010/at 31 December 2010 51 6,338 6,389

Carrying amount at 31 December 2010 19,279 968 20,247



15. LAND HELD FOR PROPERTY DEVELOPMENT AND PROPERTY DEVELOPMENT COSTS (contd.)

(a) Land held for property development (contd.) Leasehold Development land expenditure Total RM’000 RM’000 RM’000

Group

At 31 December 2009

At cost At 1 January 2009 17,450 22,683 40,133 Additions 18,500 1,187 19,687 At 31 December 2009 35,950 23,870 59,820 Accumulated impairment At 1 January 2009/at 31 December 2009 51 6,338 6,389

Carrying amount at 31 December 2009 35,899 17,532 53,431

(b) Property development costs


Group

At 31 December 2010

Cumulative property development costs At 1 January 2010 14,423 83,308 97,731 Costs incurred during the year 950 39,826 40,776 Transfer from land held for property development (Note 15(a)) 15,662 15,824 31,486 Reversal of completed projects (8,226) (3,863) (12,089)

At 31 December 2010 22,809 135,095 157,904

Cumulative costs recognised in income statement At 1 January 2010 (9,006) (50,591) (59,597) Recognised during the year (Note 4) - (40,258) (40,258) Reversal of completed projects 8,226 3,863 12,089 At 31 December 2010 (780) (86,986) (87,766)

Property development costs at 31 December 2010 22,029 48,109 70,138



15. LAND HELD FOR PROPERTY DEVELOPMENT AND PROPERTY DEVELOPMENT COSTS (contd.)

(b) Property development costs (contd.)


Group At 31 December 2009

Cumulative property development costs At 1 January 2009 30,200 210,449 240,649 Costs incurred during the year 9,973 51,920 61,893 Reversal of completed projects (25,750) (179,061) (204,811)

At 31 December 2009 14,423 83,308 97,731

Cumulative costs recognised in income statement At 1 January 2009 (28,761) (160,630) (189,391) Recognised during the year (Note 4) (5,995) (69,319) (75,314) Reversal of impairment (Note 7) - 297 297 Reversal of completed projects 25,750 179,061 204,811

At 31 December 2009 (9,006) (50,591) (59,597)

Property development costs at 31 December 2009 5,417 32,717 38,134

16. PREPAID LAND LEASE PAYMENTS

Group 2010 2009 RM’000 RM’000

At 1 January 3,760 3,852 Amortisation during the year (Note 7) (87) (92)

At 31 December 3,673 3,760

Longtermleaseholdland 3,673 3,760

Leasehold landwith an aggregate carrying value of RM2,747,000 (2009: RM2,825,000) are pledged as securities forbanking facilities (Note 26(a)).

Included in prepaid land lease payments are leasehold land with an aggregate carrying value of RM926,000 (2009: RM935,000) which are pledged for bank borrowings of the seller. The seller is presently negotiating with its lenders to discharge the land title.



17. INTANGIBLE ASSETS

Customer Development Goodwill contracts expenditure Software Total RM’000 RM’000 RM’000 RM’000 RM’000

Group

Cost

At 1 January 2009 26,982 6,098 12,153 10,055 55,288 Additions - software - - - 129 129 Exchangedifferences - 213 - - 213

At 31 December 2009 and 1 January 2010 26,982 6,311 12,153 10,184 55,630 Purchase of customer contracts (Note 38 (a)) - 3,764 - - 3,764 Additions - software - - - 76 76 Exchangedifferences - (453) - - (453)

At 31 December 2010 26,982 9,622 12,153 10,260 59,017

Accumulated amortisation At 1 January 2009 - 166 9,788 7,942 17,896 Amortisation during the year (Note 7) - 1,109 819 458 2,386 Exchangedifferences - (13) - - (13)

At 31 December 2009 and 1 January 2010 - 1,262 10,607 8,400 20,269 Amortisation during the year (Note 7) - 999 819 542 2,360 Exchangedifferences - (127) - - (127)

At 31 December 2010 - 2,134 11,426 8,942 22,502

Net carrying amount

At 31 December 2010 26,982 7,488 727 1,318 36,515

At 31 December 2009 26,982 5,049 1,546 1,784 35,361



17. INTANGIBLE ASSETS (contd.)

Software RM’000

Company

Cost

At 1 January 2009 272 Additions 30

At 31 December 2009 302

At 1 January 2010 302 Additions 71


Accumulated amortisation

At 1 January 2009 232 Amortisation during the year (Note 7) 32


At 1 January 2010 264 Amortisation during the year (Note 7) 42


Net carrying amount



Impairment testing of goodwill

Goodwill arising from acquisition of equity interest from non-controlling interests has been allocated to the cash-generatingunitsoftheIntegratedFacilitiesManagement(Concession)Segmentforimpairmenttesting.

Key assumption used in value-in-use calculation

The recoverable amount of a CGU is determined based on value-in-use calculations using cash flow projections based on financial budgets approved by management covering a two-year period to the termination of the concession.



17. INTANGIBLE ASSETS (contd.)

Key assumption used in value-in-use calculation (contd.)

The following describes the key assumptions used for value-in-use calculations:

(i) Budgeted gross margin

The basis used to determine the value assigned to the budgeted gross margins is the average gross margins and average growth rate achieved in the years before the budgeted year, adjusted for market and economic conditions and internal resource efficiency.

(ii) Discount rate

The pre-tax discount rates applied to pre-tax cash flows, used for the Integrated Facilities Management (Concession) Segmentisintherangeof12.19%.

18. INVESTMENTS IN SUBSIDIARIES

Company 2010 2009 RM’000 RM’000

Unquotedsharesatcost: - Malaysian subsidiaries 345,790 345,790 - Foreign subsidiaries 418 418

346,208 346,208 Less:Accumulatedimpairment (198,176) (198,176)

148,032 148,032

Details of the subsidiaries are listed in Note 45.

(i) Acquisitions in 2009

(a) Incorporation of a subsidiary - Faber L.L.C (“FLLC”)

On21December2006,theCompanyhadenteredintoaShareholders’Agreement(‘’SA’’)withHisExcellencyKhalidAliAlBustani(‘’HEKhalid’’)andDr.MohammedEmirMavani(‘’DrEmir’’)inrelationtoincorporationofacompanyintheEmirateofDubaitocarryoutbusinessactivitiesrelatedtofacilitiesmanagement.

In December 2007, the Company completed the incorporation of Faber L.L.C (“FLLC”) in the Emirate ofDubaiunderwhichtheauthorisedsharecapitalandpaidupcapitalofFLLCisDirhams(“Dhs”)600,000.00dividedinto600equitysharesofDhs1,000.00each.TheCompanyheld294equitysharesofDhs1,000.00inFLLCrepresenting49%oftheissuedandpaid-upsharecapitalofFLLC.Theremaining306equitysharesofDhs1,000.00inFLLCrepresenting51%oftheissuedandpaid-upsharecapitalofFLLCwasheldbyHEKhalid.



18. INVESTMENTS IN SUBSIDIARIES (contd.)

(i) Acquisitions in 2009 (contd.)

(a) Incorporation of a subsidiary - Faber L.L.C (“FLLC”) (contd)

On7January2009,theSAbetweentheCompanyandHEKhalidandDrEmirhadbeenterminatedpursuanttoClause10.4oftheSAwhichstatesthattheSAshallterminateintheeventthatFLLCdoesnotprocureanybusinesswithin1yearfollowingtheincorporationofFLLC.Subsequently,theCompanyhadon4February2009entered intoaShareholders’Agreement (“NewSA”)withMr.SaeedAbdullaOmarSaeedAlAmoudi (“Al Amoudi”).

InaccordancewiththeNewSA,theCompanyisentitledto75%profitofFLLCandhas2boardrepresentativesoutof the3boardmembers.Accordingly,FLLC isconsolidatedasasubsidiary in theprioryear.Thesaidsubsidiary had contributed the following results to the Group:

2009 RM’000

Revenue 123,234 Profit for the year 33,013

(ii) Disposals in 2009

(a) Disposal of a subsidiary - Kesan Suci Sdn Bhd (“KSSB”)

Informationrelatingto thedisposalofKSSB issetout inNote11.TheCompanyhadpreviouslymadefullprovisiononimpairmentamountingtoRM510,000withregardstoitscostofinvestmentinKSSB.

19. OTHER INVESTMENTS


Equityinstruments(unquotedsharesinMalaysia) 3,825 4,324 1,200 1,200 Less:Impairment (3,825) (3,825) (1,200) (1,200)

Unquotedshares,net - 499 - - Club memberships 272 272 272 272

272 771 272 272

Included herein is the Company’s 40% equity interest investment in Ekovest-Faber Sdn. Bhd. (“Ekovest- Faber”)amountingtoRM1,200,000(2009:RM1,200,000),whichwaspaidforviasubscriptionofshares.Ekovest-Faberisthejointventure vehicle to apply to the Government of Malaysia to undertake as joint venture partners, the concession for the design, construction, completion and maintenance of an institution known as the National Institute for Natural Products, Vaccines and Biologicals.



20. INVENTORIES

Group 2010 2009 RM’000 RM’000

Cost Consumables 3,564 2,797

Net realisable value Consumables 1,738 1,393

Total 5,302 4,190

Amount of inventories written down recognised as an expense in cost of sales amounted to RM Nil (2009: RM269,000).

21. TRADE AND OTHER RECEIVABLES


Current

Trade receivables Third parties 434,756 276,403 - - Affiliated companies 7,349 7,031 - -

442,105 283,434 - - Less:Allowanceforimpairment: Third parties (22,375) (20,880) - -

Trade receivables, net 419,730 262,554 - -

Other receivables Amounts due from related parties: Subsidiaries - - 16,242 23,560 Affiliated companies 9 1,092 - -

9 1,092 16,242 23,560 Deposits 5,531 5,120 164 206 Tax recoverable 2,252 8,689 154 2,961 Dividend receivables - - 7,937 - Sundryreceivables 10,324 7,678 1,788 1,458

18,116 22,579 26,285 28,185

Less:Allowanceforimpairment: Third parties (2,367) (2,519) (1,083) (1,083) Subsidiaries - - (375) (375) Affiliated company (9) (9) - -

(2,376) (2,528) (1,458) (1,458)

Otherreceivables,net 15,740 20,051 24,827 26,727




21. TRADE AND OTHER RECEIVABLES (contd.)


Other current assets Accrued billings in respect of property development costs 24,615 57,841 - - Prepayments 1,254 1,589 6 - Prepayment - linen 13,298 12,656 - -

Othercurrentassets 39,167 72,086 6 -

Total 474,637 354,691 24,833 26,727

Movements in allowance accounts:


At 1 January 23,408 9,348 1,458 4,566 Charge for the year (Note 7) 12,806 17,602 - 552 Reversal of impairment (Note 7) (11,431) (612) - (1,558) Writtenoff (32) (2,930) - (2,102)

At 31 December 24,751 23,408 1,458 1,458

(a) Trade receivables

Trade receivables are non-interest bearing and are generally on 30 to 90 days (2009: 30 to 90 days) terms. They are recognised at their original invoice amounts which represent their fair values on initial recognition.

Ageing analysis of trade receivables

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

Group 2010 2009 RM’000 RM’000

Neither past due nor impaired 275,154 158,728

1 to 30 days past due not impaired 12,474 24,355 31 to 60 days past due not impaired 38,284 19,114 61 to 90 days past due not impaired 32,759 36,686 91 to 120 days past due not impaired 12,643 6,976 More than 121 days past due not impaired 48,416 16,695

144,576 103,826 Impaired 22,375 20,880

442,105 283,434



(a) Trade receivables (contd.)

Receivables that are neither past due nor impaired

Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment recordswiththeGroup.Morethan68%(2009:66%)oftheGroup’stradereceivablesarosefromcurrentreceivablebalanceswith theMinistry of Health andWestern RegionMunicipality of AbuDhabi and losses have occurredinfrequently.

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

Receivables that are past due but not impaired

The Group has trade receivables amounting to RM144,576,000 (2009: RM103,826,000) that are past due at the reporting date but not impaired.

Trade receivables that are past due but not impaired mainly relate to receivable amounts for the hospital support serviceswiththeMinistryofHealthofMalaysiaandtheLowCostHousingandInfrastructurecontractswiththeWesternRegionMunicipalityofAbuDhabi.

The remaining balances are unsecured in nature.

Receivables that are impaired

The Group’s trade receivables that are impaired at the reporting date and the movement of the allowance accounts used to record the impairment are as follows:

Collectively impaired 2010 2009 RM’000 RM’000

Group

Trade receivables - nominal amounts 22,375 20,880 Less:Allowanceforimpairment (22,375) (20,880)

- -

Trade receivables that are collectively determined to be impaired at the reporting date mainly relate to balances which have been significantly long outstanding. These receivables are not secured by any collateral or credit enhancements.

(b) Other receivables

Amounts due from related parties

Amounts due from all related parties are non-interest bearing and repayable on demand. All related parties receivables are unsecured and are to be settled in cash.

During the financial year, the Company had carried out a recoverability assessment on all amounts due from related parties that resulted in the write off of these related parties debts of RM4,602,000 (2009: RM471,000). These related party balances were non-interest bearing and non trade-related.




(b) Other receivables (contd.)

Amounts due from affiliated companies

Included in theprioryearwereamountsdue fromanaffiliatedcompany,Opus International (M)Berhad.Theseamounts were in respect of office rental at Faber Towers amounting to RM1,083,000. The amounts were interest free and unsecured.

Otherreceivablesthatareimpaired

At the reporting date, the Group and the Company have provided an allowance of RM2,367,000 (2009: RM2,519,000) and RM1,083,000 (2009: RM1,083,000) respectively. These mainly relate to balances due from third parties which have been significantly long outstanding.

(c) Other current assets

PrepaymentforLinen

Asubsidiarycompany,FaberMedi-ServeSdn.Bhd.,isrequiredtoreplenishlinenasandwhenrequiredundertherequirementofconcessioncontractwithMinistryofHealth(“MOH”).Thelinencoverallfabricmaterialsusedintherespectivehospitalsandisthepropertyoftherespectivehospitals.Linenitemsareamortisedovertwoyears,whichis the life span based on the subsidiary’s past experience.

Linen purchased and amortised during the year was RM14,285,000 (2009: RM13,658,000) and RM13,934,000 (2009: RM12,901,000) respectively.

Further details on related party transactions are disclosed in Note 40.

22. MARKETABLE SECURITIES

Group 2010 2009 RM’000 RM’000

quoted shares in Malaysia Marketable securities at cost - 416 Less:Accumulatedimpairment - (396)

Marketable securities, net - 20

Marketvalueofquotedshares - 20

On24September2008,TCParkingSdnBhd(“TCParking”),asubsidiaryoftheCompany,acceptedtheSelectiveCapitalRepaymentexerciseunderSection64oftheCompaniesAct,1965,involvingareductionoftheexistingissuedandpaid-upsharecapitalofMetacorpBerhad.Subsequently,on13March2009,TCParkingreceivedanamountofRM0.50foreachshareheldinMetacorpBerhadandone(1)ordinaryshareofRM1.00eachinMTDACPIEngineeringBerhad(“MTDACPI”)for every twenty (20) Metacorp Berhad shares held. Accordingly TC Parking has been allotted 40,000 shares of RM1.00 each in MTDACPI.

On7October2010,the40,000ordinarysharesweredisposedintheopenmarketforRM20,000.



23. CASH AND CASH EqUIVALENTS


Cash on hand and at banks 93,815 60,057 405 320 Deposits with: - licensed banks 139,686 177,949 4,118 4,026 - other financial institutions 51,375 66,565 41,109 28,201

Cashandcashequivalents 284,876 304,571 45,632 32,547

(a) Included in cash at bank of the Group are the following amounts of :

(i) RM51,566,000(2009:RM35,080,000)heldpursuanttoSection7AoftheHousingDevelopment(ControlandLicensing)Act1966andSection8AoftheHousingDevelopmentAccount(ControlandLicensing)SabahAct,1978 and are restricted from use in other operations;

(ii) Included in prior year was sinking fund account amounting to RM120,000 for the purpose of expenditure incurred on repair and maintenance on properties managed by certain subsidiaries.

(b) Deposits with licensed banks of the Group and of the Company amounting to RM15,682,000 (2009: RM14,722,000) are on lien for bank guarantee facilities granted to certain subsidiaries. As at 31 December 2010, the subsidiaries have utilised guarantee facilities amounting to RM14,755,000 (2009: RM13,476,000).

(c) Deposits with licensed banks of the Company amounting to RM3,000,000 (2009: RM3,000,000) are pledged as securities for bank borrowing granted to a subsidiary.

24. EMPLOYEE BENEFITS

Retirement benefit obligations

Certainsubsidiariesoperateanunfunded,definedbenefitRetirementBenefitScheme (“theScheme”) for itseligibleemployees.UndertheScheme,eligibleemployeesareentitledtoretirementbenefitsonattainmentoftheretirementage of 55, on medical incapacity or on death. The present value of defined benefit obligation was based on the actuarial valuation report by independent actuarist, Mercer Zainal Consulting dated 4 January 2011.

The amount recognised in the statements of financial position is determined as follows:

Group 2010 2009 RM’000 RM’000

Present value of unfunded defined benefit obligations 5,471 4,136 Less:Unrecognisedtransitionliability (915) -

Net liability 4,556 4,136



24. EMPLOYEE BENEFITS (contd.)

Retirement benefit obligations (contd.)

Group 2010 2009 RM’000 RM’000

Analysed as: Current 597 597

Non-current: Laterthan1yearbutnotlaterthan2years 123 84 Laterthan2years 3,836 3,455

3 ,959 3 ,539

4 ,556 4,136

The amount recognised in the income statement is as follows:

Group 2010 2009 RM’000 RM’000

Current service costs 299 314 Interest cost 214 204

Total 513 518

OftheGroup’schargefortheyear,RM513,000(2009:RM518,000)hasbeenincludedinemployeebenefitsexpenses(Note8).

Movements in the net liability in the current year were as follows:

Group 2010 2009 RM’000 RM’000

At 1 January 4,136 3,851 Recognised in income statement (Note 8) 513 518 Contributions paid (93) (233)

At 31 December 4,556 4,136

Principal actuarial assumptions used:

2010 2009 % %

Discount rate 6 .0 5 .5 Expectedrateofsalaryincreases 5 .0 5 .0

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




25. PROVISIONS

Late Sinking delivery fund charges Total RM’000 RM’000 RM’000

Group

At 31 December 2010 At 1 January 2010 105 560 665 Additional provision (Note 7) 12 - 12 Reversal of provision (Note 7) (34) - (34)

At 31 December 2010 83 560 643

Non-current 83 560 643

83 560 643

At 31 December 2009 At 1 January 2009 240 560 800 Additional provision (Note 7) 11 - 11 Reversal of provision (Note 7) (146) - (146)

At 31 December 2009 105 560 665

Current 30 - 30 Non-current 75 560 635

105 560 665

(a) Sinking fund

UndertheprovisionoftheHousingDevelopment(ControlandLicensing)Act1966(Act118)&RegulationsandLand(SubsidiaryTitle)Enactment1972(SabahNo.9of1972),thepurchasersarerequiredtocontributetothesinkingfund upon the dates they take vacant possession and all the funds accumulated into the sinking fund shall be held by the vendor in trust for the purchaser.

(b) Late delivery charges

Provision for late delivery charges is in respect of certain property development projects undertaken by certain subsidiaries. The provision is recognised for expected liquidated damages claims based on the terms of theapplicable sale and purchase agreements.



26. BORROWINGS


Short term borrowings Secured: Hire purchase (Note 27) 90 120 - - Revolving credit - in Malaysia (Note(a)) 2,000 - - - - foreign (Note (c)) 2,087 1,834 - -

4,177 1,954 - -

Unsecured: Loanfromacorporateshareholderofasubsidiary(Note(b)) 1,786 - - -

1,786 - - -

Total short term borrowings 5,963 1,954 - -

Long term borrowings Secured: Hire purchase (Note 27) 120 209 - - RedeemableSecuredLoanStocks(Note28) 154,145 160,207 154,145 160,207 BalanceSumduetoJeramBintangSdnBhd(“JBSB”)(Note29) - 7,806 - 7,806

154,265 168,222 154,145 168,013

Unsecured: RedeemablePreferenceShares(Note34) 6,907 7,496 - - Loanfromacorporateshareholderofasubsidiary(Note(b)) - 1,786 - -

6 ,907 9,282 - -

Total long term borrowings 161,172 177,504 154,145 168,013

Total borrowings Hire purchase (Note 27) 210 329 - - Revolving credit (Note (c)) 4,087 1,834 - - RedeemableSecuredLoanStocks(Note28) 154,145 160,207 154,145 160,207 BalanceSumduetoJeramBintangSdnBhd(“JBSB”)(Note29) - 7,806 - 7,806 RedeemablePreferenceShares(Note34) 6,907 7,496 - - Loanfromacorporateshareholderofasubsidiary(Note(b)) 1,786 1,786 - -

167,135 179,458 154,145 168,013


26. BORROWINGS (contd.)

(a) Syndicated banking facilities (secured)

Theoutstandingbalances for thesecuredSyndicatedBankingFacilitiesofFaberMedi-ServeSdnBhd,awhollyowned subsidiary of the company comprise of overdraft, revolving credit, bank guarantee and combined trade facilities are as follows:

2010 2009 RM’000 RM’000

Revolving credit - in Malaysia 2,000 - Bank guarantees 766 2,332 Bank guarantees issued for Performance Bonds toGovernmentofMalaysia(“GOM”)(Note39) 20,861 24,027

During thecurrentfinancial year,FaberMedi-ServeSdnBhddrewdown itssecuredrevolvingcredit facility foradditionalworkingcapital.Itbearsinterestat4.62%perannum.

The Syndicated Banking Facilities are secured by a Debenture and a Deed of Assignment of Proceeds dated

27 December 1996 by way of the following:

(i) A first fixed charge over all sums paid or may from time to time become due and payable to the subsidiary (“theProceeds”)bytheGOMpursuanttotheConcessionAgreementdated28October1996,allitsuncalledcapital, its present and future goodwill, patents, trademarks, licences and concessions and all its present and futureplant,equipmentandmachinery,motorvehiclesandfurnitureandfittings;and

(ii) A first floating charge over all the present and future lands undertakings and other properties and assets of the subsidiary both movable and immovable, not otherwise charged in (a)(i) above.

(b) Loan from a corporate shareholder of a subsidiary

Theloanfromanon-controllingshareholderofasubsidiarycompany,FreshLinenServices(Sabah)SdnBhdisunsecured,andbearsinterestat1%abovetheBaseLendingRate(“BLR”)perannum.

(c) Revolving credit - foreign

A subsidiary, Faber Sindoori Management Services Private Ltd.’s (“Faber Sindoori”) revolving credit facilityamountingtoRM2,087,000issecuredbyastandbyletterofcredit(“SBLC”),whichissecuredinturnagainsttheCompany’sfixeddeposits asdisclosed inNote 23 (c). It bears interest ranging from9.5% to 10.5%per annum (2009:9.5%to13.5%).




27. HIRE PURCHASE

Group 2010 2009 RM’000 RM’000

Future minimum lease payments: Not later than 1 year 100 139 Laterthan1yearandnotlaterthan2years 74 100 Laterthan2yearsandnotlaterthan5years 53 127

Total future minimum lease payments 227 366 Less:Futurefinancecharges (17) (37)

Present value of finance lease liabilities 210 329

Analysis of present value of finance lease liabilities: Not later than 1 year 90 120 Laterthan1yearandnotlaterthan2years 69 90 Laterthan2yearsandnotlaterthan5years 51 119

210 329 Less:Amountduewithin12months(Note26) (90) (120)

Amount due after 12 months (Note 26) 120 209

TheGrouphashirepurchasecontractsforvariousitemsofequipment(seeNote14).Theseleaseshavetermsofrenewal

but no purchase options and escalation clauses. Renewals are at the option of the specific entity that holds the lease. There are no restrictions placed upon the Group by entering into these leases and no arrangements have been entered into for contingent rental payments.


28. REDEEMABLE SECURED LOAN STOCKS (“RSLS”)

On30September2004,theCompanyissuedRM185,528,000nominalvalueofRSLSofRM1eachaspartialsettlementtoJeramBintangSdnBhd(“JBSB”)pursuanttoitsDebtRestructuringScheme.

TheRSLScompriseRM135,564,000ofRSLSissuedand4%perannumcouponcompoundedannuallyuptomaturity.ThetotalamountofthecouponpaymentisRM49,964,000nominalvaluepayableintheformofRSLSannuallyinarrearsateach anniversary date.

On14September2009,theCompanyhadexecutedaSupplementalTrustDeedandSupplementalRestructuringDeed.

ThefollowingarethesalientrevisiontothetermsoftheRSLS:-

(i) to allow the coupon payments to be in the form of cash payable annually in arrears at each anniversary date from the years2009 to 2012, on suchnominal amount of theRSLS for the timebeingoutstanding. In theevent, forany reason(s) whatsoever, the Company is unable to pay, fully or partially, the coupon payment in cash on the anniversarydate,allofthecouponpaymentdueandpayablebutnotpaidincashshallbecapitalisedintonewRSLS.

(ii) toallowthatintheeventthatthepartialredemptionismadebeforetheanniversarydateoftheRSLS,theaccretedvalueofthe4%couponperannumuptotheproposedearlyredemptiondatewillbeaddedtotheoutstandingRSLSas of the last anniversary date or such early redemption date, whichever is the later, and such early redemption amountswillbeusedfirstlytoreducetheoutstandingcouponandthereaftertheprincipaloutstandingRSLS.Thecoupon payment payable on the next anniversary date would then be adjusted to exclude the earlier coupon payment made.

However, no redemption will be carried out unless it is sufficient to pay the outstanding coupon accrued from the last anniversary date or the date of that last early redemption payment, as the case may be, up to the proposed early redemptiondateand14daysnoticeofsuchintentionisgiventoJBSBandtheUniversalTrustee(Malaysia)Berhad.

OthersalienttermsoftheRSLSareasfollow:

(i) The RSLS shall be redeemed for cash on the maturity date, which is 8 years from the date of issuance of 30September2004,orinpartorinwholeonsuchearlierdate(s)attheoptionoftheCompany.

(ii) TheRSLSbearcouponattherateof4%perannumcompoundedannuallyonsuchnominalamountoftheRSLSforthetimebeingoutstanding.ThecouponpaymentshallbeintheformofcashorRSLS(asthecasemaybe)onsuchnominalamountoftheRSLSforthetimebeingoutstanding.

(iii) TheRSLSaresecuredbyachargeover:

- 30,599,998 issued and paid-up ordinary shares of RM1 each in Faber Medi-Serve Sdn. Bhd. (“FMS”) by FaberHealthcareManagementSdn.Bhd;and

- 2issuedandpaid-upordinarysharesofRM1eachinFMSbytheCompany.

TheSecurityInterestcreatedtosecuretheBalanceSumduetoJBSB,(Note29)shallrankinpriorityandsecurityovertheSecurityInteresttosecuretheRSLS.TheRSLSconstituteunsubordinatedobligationsoftheCompany.

During the financial year ended 31 December 2010, the Company paid RM12,284,000 of which RM6,284,000 was for payment of the 6thyearcoupononRSLSandRM6,000,000wasforthepartialredemptionoftheprincipalamountoutstanding.



29. BALANCE SUM DUE TO JERAM BINTANG SDN. BHD.

On30September2004,followingthecompletionofitsDebtRestructuring,theCompanyacknowledgedtheBalanceSumofRM51,442,000duetoJBSB.

TheBalanceSumisinterestfreeandisrepayableoveraperiodof8yearsfromthedateofcompletionoftherestructuringscheme.TheBalanceSumissecuredasfollows:

i) assignmentofdividendsreceivablefromFaberMedi-ServeSdn.Bhd.(“FMS”)on315,000ordinarysharesheldbyIntensiveQuestSdn.Bhd.(“IQSB”)inFMSamountingtoRM24millionbytheCompany;

(ii) assignment of net profits from the development of Casa Palma land amounting to RM15.330 million by FaberUnionSdn.Bhd.;

(iii) assignment of a share of the Group’s portion of net profits from the joint venture in respect of the development of TamanSriDesalandamountingtoRM3.207millionbyFaberUnionSdn.Bhd.

(iv) assignment of net profits from the development of Faber Grandview land amounting to RM1.810 million by FaberGrandviewDevelopment(Sabah)Sdn.Bhd.;

(v) assignment of net profits from the development of Country View land amounting to RM7.093 million by CountryViewDevelopmentSdn.Bhd.;

(vi) chargeover30,599,998issuedandpaid-upordinarysharesofRM1.00eachinFMSbyFaberHealthcareManagementSdn.Bhd.;and

(vii) chargeover2issuedandpaid-upordinarysharesofRM1.00eachinFMSbytheCompany.

During the year ended 31 December 2010, the Company paid RM7.805 million, as full and final settlement of the Balance SumduetoJBSB.ThepaymentwasmadeinrespectoftheassignmentofdividendsreceivablefromFMSon315,000ordinarysharesheldbyIQSBinFMSbytheCompany.

ThereleaseofchargesovertheBalanceSumsecuritieshasyettobecompletedasatthedateofthefinancialstatements.



30. TRADE AND OTHER PAYABLES


Trade payables Third parties 173,690 133,605 - - Affiliated companies 30,041 39,761 - -

203,731 173,366 - -

Other payables Amounts due to related parties: -Subsidiaries - - - 5,856 - Affiliated companies 39 39 - - - Corporate shareholder of subsidiaries 419 839 - -

458 878 - 5,856 Accruals 61,019 51,346 6,383 3,805 Dividend payable to non-controlling shareholders of a subsidiary 2,177 - - - Refundable deposits 3,255 3,404 - - Sundrypayables 22,812 11,430 813 815

89,721 67,058 7,196 10,476

Total 293,452 240,424 7,196 10,476

(a) Trade payables

Trade payables are non-interest bearing and the normal trade credit terms granted to the Group range from 30 to 90 days (2009: 30 to 90 days).

Included in trade payables at 31 December 2010 are retention sums of RM7,928,000 (2009: RM12,484,000) relating to property development in progress.

(b) Amounts due to related parties

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

During the financial year, certain subsidiaries of the Company had carried out a recoverability assessment on all amounts due from related parties which resulted in the waiver of RM6,640,000 (2009: RM Nil) owed by the Company. These related party balances were non-interest bearing and non trade-related.

Further details on related party transactions are disclosed in Note 40.



31. DEFERRED TAXATION Group 2010 2009 RM’000 RM’000

At 1 January (1,278) 74 Recognised in income statement (Note 10) (3,370) (1,352) Exchangedifferences (28) -

At 31 December (4,676) (1,278)

Presented after appropriate offsetting as follows: Deferred tax assets (5,471) (2,936) Deferred tax liabilities 795 1,658

(4,676) (1,278)

The components and movements of deferred tax liabilities and assets during the financial year prior to offsetting are as follows:

Deferred tax liabilities of the Group: Property, plant and Intangible equipment Linen assets Total RM’000 RM’000 RM’000 RM’000

At 1 January 2010 8,484 3,164 387 12,035 Recognised in the income statement (438) 160 (205) (483) Exchangedifference (28) - - (28)

8,018 3,324 182 11,524

Less:Setoffofdeferredtaxassets (10,729)


At 1 January 2009 6,978 3,058 592 10,628 Recognised in the income statement 1,506 106 (205) 1,407

8,484 3,164 387 12,035

Less:Setoffofdeferredtaxassets (10,377)

At 31 December 2009 1,658



31. DEFERRED TAXATION (contd.)

Deferred tax assets of the Group:

Receivables/ payables Total RM’000 RM’000

At 1 January 2010 (13,313) (13,313) Recognised in the income statement (2,887) (2,887)

(16,200) (16,200)

Less:Setoffofdeferredtaxliabilities 10,729

At 31 December 2010 (5,471)

At 1 January 2009 (10,554) (10,554) Recognised in the income statement (2,759) (2,759)

(13,313) (13,313)

Less:Setoffofdeferredtaxliabilities 10,377

At 31 December 2009 (2,936)

Deferred tax liabilities of the Company:

Accelerated capital allowance RM’000

At 1 January 2009/31 December 2010 45

Deferred tax assets of the Company:

Tax losses and unabsorbed capital allowance RM‘000

At 1 January 2009/31 December 2010 (45)



31. DEFERRED TAXATION (contd.)

Deferred tax assets have not been recognised in respect of the following items:

Malaysian Companies


Unused tax losses 15,558 15,152 - - Unabsorbed capital allowance 46 46 - - Others 2,318 2,589 1,899 2,168

17,922 17,787 1,899 2,168

The unutilised tax losses and unabsorbed capital allowances of the Group amounting to RM15,558,000 (2009: RM15,152,000) and RM46,000 (2009: RM46,000) respectively are available indefinitely for offsetting against future taxable profits of the respective entities within the Group, subject to no substantial change in shareholdings of those entities under the Income Tax Act, 1967 and guidelines issued by the tax authority.

The unabsorbed capital allowances of the Company are available for offsetting against future taxable profits subject to no substantial change in shareholdings under the Income Tax Act, 1967 and guidelines issued by the tax authority.

32. SHARE CAPITAL AND SHARE PREMIUM

Number of ordinary shares of RM1 each Amount 2010 2009 2010 2009 ’000 ’000 RM’000 RM’000

Authorised share capital

At 1 January/31 December 3,000,000 3,000,000 3,000,000 3,000,000

Number of ordinary shares of Amount RM1 each Total Share capital Share capital share capital (Issued and (Issued and Share and share fully paid up) fully paid up) premium premium ‘000 RM’000 RM’000 RM’000

At 1 January 2010 and 31 December 2010 363,001 363,001 115,985 478,986

At 1 January 2009 and 31 December 2009 363,001 363,001 115,985 478,986

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote pershareatmeetingsoftheCompany.AllordinarysharesrankequallywithregardtotheCompany’sresidualassets.



33. OTHER RESERVES

Foreign currency Statutory translation reserve reserve Total RM’000 RM’000 RM’000

Group

At 1 January 2009 - (302) (302) Foreign currency translation - (752) (752) Statutoryreserve 279 - 279

At 31 December 2009 279 (1,054) (775)

At 1 January 2010 279 (1,054) (775) Foreign currency translation - (3,561) (3,561)

At 31 December 2010 279 (4,615) (4,336)

(a) Foreign currency translation reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency. It is also used to record the exchange differences arising from monetary items which form part of the Group’s net investment in foreign operations, where the monetary item is denominated in either the functional currency of the reporting entity or the foreign operation.

(b) Statutory reserve

InaccordancewiththeUnitedArabEmirates(“UAE”)CommercialCompaniesLaw,10%ofprofitforeachyearfromaLimitedLiabilityCompanyincorporatedintheUAEistransferredtoalegalreserveuntilsuchtimeasthereserveequals50%of thepaid-upcapital.FLLChasresolvedtodiscontinuesuchannual transferssince thereserve isequalto50%ofitssharecapital.Thisreserveisnotavailablefordistributionexceptasstipulatedbythelaw.



34. PREFERENCE SHARES

Group Number of shares Amount 2010 2009 2010 2009 ’000 ’000 RM’000 RM’000

Nominal value-issued and fully paid

a) RPS of RM1.00 each At 1 January/31 December (Note 26) 6,907 7,496 6,907 7,496

Redeemable Preference Shares (“RPS”)

A subsidiary,RimbunanMelatiSdn.Bhd.had issued16,659,091Non-votingNon-cumulativeRedeemablePreferenceshares of RM1.00 each to its shareholders. The above amount is attributable to the non-controlling shareholder of thesubsidiary.TheRPShavenovotingrightsandentitledtoafixednon-cumulativepreferentialdividendsatarateof 5%perannum.TheRPShavenofixedtermofredemption.

35. NON-CONTROLLING INTEREST

The non-controlling shareholders’ share of loss in the subsidiary companies is limited to their share of the paid up capital of the subsidiary companies. The balance of the loss will be borne by the Group until such time that the subsidiary companies are able to generate profits. The non-controlling share of the loss for the financial year which is borne by the Group is RM46,000 (2009: RM1,049,000).

36. NET CASH FLOW GENERATED FROM OPERATING ACTIVITIES

Group 2010 2009 RM’000 RM’000


Profit/(loss) before tax from: Continuing operations 129,160 141,243 Discontinued operation (Note 11) - (306) Adjustments for: Depreciationofproperty,plantandequipment - Continuing operations 19,963 18,556 - Discontinued operation (Note 11) - 83 Amortisation of intangible assets 2,360 2,386 Amortisation of prepaid land lease payments 87 92 Property,plantandequipmentwrittenoff 1,384 932 Increase in liability for defined benefit plan (Note 8) 513 518 Bad debts written off - 17 Bad debts recovered (145) (62) Dividend income - (34) Provisions 12 11



36. NET CASH FLOW GENERATED FROM OPERATING ACTIVITIES (contd.)

Group 2010 2009 RM’000 RM’000

Impairment on financial assets: - Trade and other receivables 12,806 17,602 Reversal of impairment on financial assets: - Trade and other receivables (11,431) (612) -Marketablesecurities-quotedinvestmentsinMalaysia - (28) Writebackofimpairmentofpropertydevelopmentcosts - (297) Interest income (7,519) (5,202) Reversal of provision for sinking fund (34) (146) Writedownofinventories - 269 Net unrealised foreign exchange loss 1,465 1,000 Loss/(gain)ondisposalofplantandequipment 19 (305) Interest expense on: -RSLS 6,222 6,344 -Loanfromshareholderofasubsidiary 130 126 - Hire purchase 19 30 - Bank borrowings 245 224 Gain on disposal of a subsidiary company (Note 11) - (667) AccretionofRPS 235 - Surplusarisingfromcapitaldistributionofavailable fo rsalefinancialassets-unquotedinvestmentinMalaysia (286) -

Operating profit before working capital changes balance brought forward 155,205 181,774

(Increase)/decrease in property development costs (32,004) 13,421 Decrease in land held for property development 30,084 - (Increase)/decrease in inventories (1,112) 11,233 Increase in receivables (129,077) (167,621) Decrease in retirement benefit obligations (93) (233) Increase in payables 47,087 68,885

Cash generated from operations 70,090 107,459 Interest paid (6,678) (6,724) Taxes paid (23,515) (35,479)

Net cash flow generated from operating activities 39,897 65,256



36. NET CASH FLOW GENERATED FROM OPERATING ACTIVITIES (contd.)

Company 2010 2009 RM’000 RM’000


Profit before tax from: Continuing operations 53,942 43,950 Adjustments for: Depreciationofproperty,plantandequipment 221 156 Amortisation of intangible assets 42 32 Net unrealised foreign exchange loss 1,287 769 Impairment on financial assets: - Trade and other receivables - 552 Reversal of impairment on financial assets: - Trade and other receivables - (1,558) Interest income (1,032) (1,345) Amounts due from subsidiaries written off 4,602 471 Waiverofamountsduetosubsidiaries (6,640) - Lossondisposalofplantandequipment 22 - Dividend income received from subsidiaries (71,177) (53,012) InterestexpenseonRSLS 6,222 6,344

Operating loss before working capital changes (12,511) (3,641) Increase in receivables (1,113) (1,457) Increase in payables 2,576 1,076

Cash used in operations (11,048) (4,022) Interest paid (6,284) (6,344) Taxes paid (5,683) (11,000)

Net cash flow used in operating activities (23,015) ( 21,366)



37. OPERATING LEASE COMMITMENTS

The Group has entered into non-cancellable operating lease agreements for the use of premises and certain plant and machineries. These leases have an average life of between 3 and 5 years with no renewal or purchase option included in the contracts.

TheGroupalsoleasesvariousplantandmachineryundercancellableoperatingleaseagreements.TheGroupisrequiredto give a six-month notice for the termination of those agreements. The future aggregate minimum lease payments under non-cancellable operating leases contracted for as at the reporting date but not recognised as liabilities and the total of future aggregate minimum sublease receipts expected to be received under non-cancellable subleases, are as follows:


Future minimum rental payments of premises:

Not later than 1 year 1,926 2,196 548 617 Laterthan1yearandnotlaterthan2years 412 1,147 43 - Laterthan2yearsandnotlaterthan5years - 383 - -

2,338 3,726 591 617

Futureminimumrentalpaymentsofequipment:

Not later than 1 year 720 825 59 57 Laterthan1yearandnotlaterthan2years 244 640 59 57 Laterthan2yearsandnotlaterthan5years 194 220 83 57

1,158 1,685 201 171

The operating lease agreements in respect of rental of office space in Faber Towers, being the Group’s primary operating premise, is expiring in 2011. The Group is currently negotiating the renewal of the tenancy agreement.

38. CAPITAL COMMITMENTS

Group 2010 2009 RM’000 RM’000

Capital expenditure Approved and contracted for: Purchaseofproperty,plantandequipment 14,562 4,303 Purchase of customer contract (Note (a)) 1,739 5,929

16,301 10,232

Approved but not contracted for: Purchaseofproperty,plantandequipment 627 339



38. CAPITAL COMMITMENTS (contd.)

(a) Purchase of customer contracts

On26June2007,awhollyownedsubsidiaryoftheCompany,FaberFacilitiesSdnBhd(“FFSB”)enteredintoaJointVentureAgreement(“JVA”)withApolloSindooriHotelsLimited(“ASHL”) inrelationtocollaborationin inter-alia,bio-medical and facility engineering maintenance services, cleansing services, housekeeping services, janitorial services and hospital support services and management information services.

On10March2008,FFSBhadcompletedthesubscriptionofsharesinFaberSindooriandbecamea51%subsidiaryofFFSB.

In the JVA, it has been agreed that ASHL shall transfer its existing business of housekeeping services to FaberSindoorivaluedatRs16,69,00,000(approximatelyRM13,046,000).

Asatreportingdate,theexistingbusinesstransferredtoFaberSindooriamountedtoRs14,13,53,000(approximatelyRM9,622,000). The business of housekeeping services, which has yet to be transferred to Faber Sindoori isRs2,55,47,000 (approximately RM1,739,000), which would have to be transferred within a stipulated timeframe.

39. CONTINGENT LIABILITIES


Secured:

(a) Performance bond extended to Government of Malaysia in respect of security for the due performance oftheHospitalSupportServicesConcessionAgreement dated28October1996(Note26(a)) 20,861 24,027 - -

(b) Performance bond to General Authority for HealthServicesfortheEmirateofAbuDhabi 11,669 10,718 - -

(c) Bank guarantee issued to authorities 3,095 2,124 - -

Unsecured:

(a) Litigation Claim for alleged wrongful termination of employment contract (i) - 2,132 - - Claim for alleged wrongful termination of service agreement (ii) - 7,320 - - Claim for alleged agency commission (iii) - 3,360 3,360 3,360

- 12,812 3,360 3,360

Total 35,625 49,681 3,360 3,360



39. CONTINGENT LIABILITIES (contd.)

(i) PersatuanKebangsaanPekerja-PekerjaHotel,Bar&RestoranSemenanjungMalaysia(“Union”)vs.HotelMerlinKualaLumpur(M)SdnBhd(“HMKL”),FaberGroupBerhad,KualaRemanEstatesBerhad(“KREB”)(CourtofAppeal,AppealSuitNo.W-04-22-04)(KLHCOriginatingMotionR1-25-37-96).

The Union appealed to the Court of Appeal against the High Court’s refusal to grant leave to commence certiorari proceedings against the decision of the Industrial Court in Award No. 88 of 1996, dismissing the claims of the Union.

Theappealwasallowedby theCourtofAppealon28September2000and leavewasgranted.Thematterwasremitted back to High Court to hear the Union’s application for an order of certiorari against the Industrial Court’s decision. The High Court however, dismissed the Union’s application with cost on 9 February 2004, against which decision, theUnion has appealed to theCourt of Appeal underCivil AppealNo.W-04-22-04 on 3March 2004.The matter came up for hearing on 12 February 2008, which was in respect of the Union’s application to file a SupplementaryRecordofAppeal.TheCourtofAppealallowed theUnion tofile theirSupplementaryRecordofAppeal on the abovesaid date. The matter was then fixed for hearing on 22 February 2010 wherein the Court of Appeal dismissed the Union’s appeal and awarded cost to the Company amounting to RM3,000.

TheUnionhadalsofiledanapplicationunderSection33AoftheIndustrialRelationAct,1967undertheIndustrialCaseNo.1/1–198/96byreferringcertainquestionoflawtotheHighCourtinrespectoftheAwardNo.88of1996.This Application was unanimously dismissed by the Industrial Court on 10 August 2007 (Award No. 1684 of 2007) by reasonthattheUnionhadfailedtomeettheconditionssetoutinSection33A(1)(c)and(d)oftheIndustrialAct1967.

(ii) KLHC Civil Suit No. S6-22-215-2008 BNoble Sdn Bhd (“BNoble”) vs Cermin Cahaya Sdn Bhd (“CCSB”) and FaberMedi-Serve(“FMS”).

ThissuitwasfiledbyBNobleagainstbothFMSandCCSBwhereinasealedcopyoftheWritSummonsandStatementof Claim dated 21 February 2008 was served on 17 March 2008.

BNoble’sclaimispremisedonabreachoftheServicesAgreementdated8May2003enteredintobetweenBNobleandFMSandCCSB,whereinitisclaimingforitsentitlementtoanincentivesumamountingtoRM7,320,000.

Messrs.ShookLin&Bokhavesinceenteredappearanceon24March2008onbehalfofbothFMSandCCSBandhave, subsequently been instructed to file a Stay of Proceedings in view of the arbitration clause stipulated inthesaidServicesAgreement.ThesaidApplicationtostay theCourt’sproceedingspendingarbitrationwasfiledby the solicitors on 7April 2008 (Enclosure 6). In the interim, thePlaintiff’s solicitors,Messrs Jal&Lim,filedan application to withdraw as solicitors for the Plaintiff on 9 June 2008 (“the said withdrawal application”). The saidwithdrawalapplicationwasallowedbytheLearnedJudgeon1July2008,andMessrsJal&Limhavesincewithdrawn themselves as solicitors on record for the Plaintiff.

Since then, thePlaintiffhaveappointedMessrsWilsonWong&Tanas theirnewsolicitorson record,andfiledintheirNoticeofchangeofSolicitorson2September2008.Duringthelastmentiondateon3September2008,theLearned JudgefixedEnclosure 6 for furthermention on 19November 2008, for thePlaintiff’s solicitors toobtain instructions from their clients. During the mention date on 19 November 2008, the Plaintiff’s solicitors indicatedtotheLearnedJudgethatthePlaintiffisagreeabletothereliefsprayedforinEnclosure6(i.e.tostaytheproceedingspendingarbitration),subjecttoanagreementbetweenpartiesastotheissueofcosts.TheLearnedJudgefixedEnclosure6forfurthermentiondateon8October2009asrequestedbyPlaintiff’ssolicitorsinordertoobtainfurtherinstructioninregardstotheissueofcost.TheCourtgrantedanOrderthatallCourtproceedingsin KualaLumpurHighCourtCivilSuitNo:S6-22-215-2008bestayedandfixedcostsinthesumofRM4,000tobepaidby the Plaintiff to the Defendants.



39. CONTINGENT LIABILITIES (contd.)

(iii) KLHCNo:D1-22-447-2008PrevindranSathurgasinghe(tradingunderthenameandstyleof“ZerinProperties”)(“the Plaintiff”) vs Faber Group Berhad.

AWritofSummonstogetherwithaStatementofClaimdated7April2008wasservedontheCompany’ssolicitors,Messrs Cheang & Ariff, on 24 April 2008 through the Plaintiff’s solicitors, Messrs Norendra & Yap.

The Plaintiff claims a sum of RM3,359,000 (with interest and costs) as purported professional fees for work donebythePlaintiffinprocuringapurchaserforSheratonHanoiHotel&Towers(“SheratonHanoi”)asalleged. SheratonHanoiwasownedbyFaberHotelsHoldingSdnBhd(“FHHSB”),awhollyownedsubsidiaryoftheCompanythroughFHHSB’spreviouslywhollyownedsubsidiary,FaberLabuanSdn.Bhd.

The Company’s solicitors, Messrs Cheang & Ariff, has entered appearance on its behalf on 29 April 2008. The Company has also served its Defence and filed a Counterclaim against the Plaintiff for breach of the Confidentiality Agreement between the parties. Besides general damages, the Company also seeks exemplary damages for breach of fiduciary duties and actionable abuse of process by the Plaintiff.

On19June2008,thePlaintiffserveditsReplyandDefencetotheCounterclaim.SubsequentlythePlaintiffservedasealedapplicationforsummaryjudgementontheDefendant’sSolicitorson30July2008.ThePlaintiff’sapplicationwasfixedforhearingon10September2008butwasadjournedonthatday.TheLearnedJudgehaddirectedtheparties to submit and close their submissions by 17 December 2008. The application was fixed for decision on 21January2009and thecourtdismissed thePlaintiff’sapplicationunderSummaryJudgement (Order14)withcost. The matter was then fixed for mention on 24 March 2009 for Case Management and thereafter was fixed for further mention on 25 May 2009 for counsels to comply with the courts directions for Case Management. The Court thenfixed18March2010forfurthercasemanagementforpartiestofinaliseBundleofDocuments,StatementsofAgreed Facts and Agreed Main Issues.

On18March2010,theCourtinstructedpartiestoexploreonthepossibilityofout-of-courtsettlementinthismatter.Alternatively, the Judge suggested the parties to proceed the matter for mediation instead of full trial. Parties arerequiredtoattendCourtpersonallyon4May2010 intheeventnosettlementcouldbereachedbythen.On 4 May 2010, parties attended Court in person to inform the Court that there is no out of court settlement and have nointentiontoproceedwithmediation.TheCourtthenfixedforfinalCaseManagementon1September2010andfixedthecasefortrialon13,14and15October2010.ThePartiesclosedtheircaseon14October2010andtheCourtdirectedpartiestofilewrittensubmissionby22October2010.TheHighCourton29October2010delivereditsOraldecisionbydismissingthePlaintiffCasewithcosttotheCompanyastheDefendantandallowedpartlytheirCounterclaim against the Plaintiff.

The Plaintiff through their solicitors has filed a Notice of Discontinuance as was informed by solicitors of the Company on 28th January 2011.



40. RELATED PARTY DISCLOSURES

(a) In addition to the transactions detailed elsewhere in the financial statements, the Group and the Company had the following transactions with related parties during the financial year:


Management fee expense from affiliated companies-UEMGroupManagementSdn.Bhd. 214 214 214 214Property development related work-UEMBuildersBerhad 2,015 3,313 - --UnitedEngineers(Malaysia)Berhad - 1,176 - -- non-controlling shareholder - 229 - -Interest paid/payable to non-controlling shareholder of a subsidiary 130 126 - -Management fees from subsidiaries - - (5,700) (7,880)Rendering of services- Affiliated companies 5,166 6,024 - -- non-controlling shareholder of asubsidiary 163 - - -- Improvement, upgrading, development and maintenance of infrastructure facilities and projects 59,716 39,983 - -Rentals paid to a non-controlling shareholder 180 180 - -Management fees from a substantial shareholder (1,879) (1,885) - -Facilities management fees received from:- corporate shareholder of a subsidiary (15,893) (13,082) - -- affiliated companies (7,873) (9,479) - -Rental paid to a- substantial shareholder 1,991 1,915 619 500- affiliated company 48 477 48 477

(i) The property development related contracts with affiliated companies were made according to the established terms and conditions offered by these related parties to their major customers, except that a longer credit period of up to six months is normally granted.

(ii) The interest expense arose from the loan from a non-controlling shareholder of a subsidiary company, FreshLinenServices(Sabah)SdnBhd.FurtherdetailsaredisclosedinNote26.

(iii) The rendering of services to subsidiaries and related companies were made according to the established terms and conditions offered to the major customers of the Group and the Company, except that a longer credit period of up to six months is normally granted.

Information regarding outstanding balances arising from related party transactions as at 31 December 2010 are disclosed in Notes 21 and 30.



40. RELATED PARTY DISCLOSURES (contd.)

(b) Compensation of key management personnel

The remuneration of directors during the year were as follows:


Short-termemployeebenefits 3,110 3,080 1,126 1,078Contributions to defined contribution plans 307 294 87 83

3,417 3,374 1,213 1,161

Included in total key management personnel are: Group Company 2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000

Directors remuneration (Note 9) 3,417 3,374 1,213 1,161

41. FINANCIAL INSTRUMENTS

Classification of financial instruments

Financial assets and financial liabilities are measured on an ongoing basis either at fair value or at amortised cost. The principal accounting policies in Note 2.2 describe how the classes of financial instruments are measured, and how income and expenses, including fair value gains and losses, are recognised. The following table analyses the financial assets and liabilities in the statements of financial position by the class of financial instrument to which they are assigned, and therefore by the measurement basis:

Available for Loans and sale financial receivables assets Total RM’000 RM’000 RM’000

2010Group

AssetsUnquotedshares,net(Note19) - - -Trade receivables, net (Note 21) 419,730 - 419,730Otherreceivables,net(Note21) 15,740 - 15,740Cashandcashequivalents(Note23) 284,876 - 284,876

Total financial assets 720,346 - 720,346

Total non financial assets 269,219

Total assets 989,565



41. FINANCIAL INSTRUMENTS (contd.)

Classification of financial instruments (contd.) Financial liabilities at amortised cost Total RM’000 RM’000

LiabilitiesTrade and other payables (Note 30) 293,452 293,452Borrowings (Note 26) 167,135 167,135

Total financial liabilities 460,587 460,587

Total non financial liabilities 13,058

Total liabilities 473,645


2009Group

AssetsUnquotedshares,net(Note19) - 499 499Marketable securities, net (Note 22) - 20 20Trade receivables, net (Note 21) 262,554 - 262,554Otherreceivables,net(Note21) 20,051 - 20,051Cashandcashequivalents(Note23) 304,571 - 304,571

Total financial assets 587,176 519 587,695



Financial liabilities at amortised cost Total RM’000 RM’000









2010Company

AssetsUnquotedshares,net(Note19) - - -Otherreceivables,net(Note21) 24,827 - 24,827Cashandcashequivalents(Note23) 45,632 - 45,632










2009Company

AssetsUnquotedshares,net(Note19) - - -Otherreceivables,net(Note21) 26,727 - 26,727Cashandcashequivalents(Note23) 32,547 - 32,547












42. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group and the Company are exposed to financial risks arising from their operations and the use of financial instruments.Thekeyfinancialrisksincludecreditrisk,liquidityrisk,interestraterisk,foreigncurrencyriskandmarketprice risk.

TheGroup’sfinancialriskmanagementpolicyseekstoensurethatadequatefinancialresourcesareavailableforthedevelopment of the Group’s businesses whilst managing its interest rate risks (both fair value and cash flow), foreign currency risk, liquidity risk and credit risk. The Board of Directors reviews and agrees policies and procedures forthe management of these risks. The audit committee provides independent oversight to the effectiveness of the risk management process.

It is, and has been throughout the current and previous financial year, the Group’s policy that no derivatives shall be undertaken except for the use as hedging instruments where appropriate and cost-efficient. The Group and the Company has no hedging instrument as at reporting date.

The following sections provide details regarding the Group’s and Company’s exposure to the above-mentioned financial risks and the objectives, policies and processes for the management of these risks.

(a) Credit risk

The Group’s credit risk is primarily attributable to trade receivables. The Group trades only with recognised and creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis and the Group’s exposure to bad debts is not significant. For transactions that are not denominated in the functional currency of the relevant operating unit, the Group does not offer credit terms without the specific approval of the Head of Credit Control.SincetheGrouptradesonlywithrecognisedandcreditworthythirdparties,thereisnorequirementforcollateral.

The credit risk of the Group’s other financial assets, which comprise cash and cash equivalents, marketablesecurities and non-current investments, arises from default of the counterparty, with a maximumexposureequalto the carrying amount of these financial assets.




42. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (contd.)

(a) Credit risk (contd.)

Exposuretocreditrisk At the reporting date, the Group’s and the Company’s maximum exposure to credit risk is represented by the

carrying amount of each class of financial assets recognised in the statements of financial position.

Credit risk concentration profile The Group determines concentrations of credit risk by monitoring the country sector profile of its trade receivables

on an ongoing basis. The credit risk concentration profile of the Group’s trade receivables at the reporting date are as follows:

2010 2009 RM’000 % of total RM’000 % of total

By country:

Malaysia 272,645 65 145,589 56UnitedArabEmirates 139,962 33 110,546 42India 7,123 2 6,419 2

419,730 100 262,554 100

As at 31 December 2010, the concentration of credit risk in the form of outstanding balances is mainly due to two (2009:two)customersrepresentingapproximately64%(2009:58%)ofthetotalGroup’stradereceivables.

Financial assets that are neither past due nor impaired

Information regarding trade and other receivables that are neither past due nor impaired is disclosed in Note 21. Deposits with banks and other financial institutions that are neither past due nor impaired are placed with or entered into with reputable financial institutions or companies with high credit ratings and no history of default.

Financial assets that are either past due or impaired

Information regarding financial assets that are either past due or impaired is disclosed in Note 21.

(b) Liquidity risk

LiquidityriskistheriskthattheGrouportheCompanywillencounterdifficultyinmeetingfinancialobligationsduetoshortageoffunds.TheGroup’sandtheCompany’sexposuretoliquidityriskarisesprimarilyfrommismatchesofthe maturities of financial assets and liabilities. The Group’s and the Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of stand-by credit facilities.



(b) Liquidity risk (contd.)

The Group manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that refinancing,repaymentandfundingneedsaremet.Aspartofitsoverallliquiditymanagement,theGroupmaintainssufficientlevelsofcashorcashconvertibleinvestmentstomeetitsworkingcapitalrequirements.Inaddition,theGroup strives to maintain available banking facilities at a reasonable level to its overall debt position. As far as possible, the Group raises committed funding from both capital markets and financial institutions and balances its portfolio with some short term funding so as to achieve overall cost effectiveness.

Analysis of financial instruments by remaining contractual maturities

The table below summarises the maturity profile of the Group’s and the Company’s liabilities at the reporting date based on contractual undiscounted repayment obligations.

2010 On demand or within One to one year five years Total RM’000 RM’000 RM’000

GroupFinancial liabilities:Trade and other payables 293,452 - 293,452Loansandborrowings: -RSLS(Note28) - 154,145 154,145 -RPS(Note34) - 6,907 6,907 - Hire Purchase (Note 27) 90 120 210 - Revolving credit: - in Malaysia (Note 26 (a)) 2,000 - 2,000 - foreign (Note 26 (c)) 2,087 - 2,087 -Loanfromacorporateshareholder of a subsidiary (Note 26 (b)) 1,786 - 1,786

Total undiscounted financial liabilities 299,415 161,172 460,587

CompanyFinancial liabilities:Trade and other payables 7,196 - 7,196Loansandborrowings:RSLS(Note28) - 154,145 154,145

Total undiscounted financial liabilities 7,196 154,145 161,341




(c) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Group has transactional currency exposures arising from sales or purchases that are denominated in a currency other than the respective functional currencies of Group entities. The foreign currencies in which these transactions aredenominatedaremainlyArabEmiratesDirham(AEDDirham)andIndianRupees

The Group’s sales and costs are denominated in the respective functional currencies of the Group entities. The Group’s trade receivable and trade payable balances at the reporting date have similar exposures.

TheGroupalsoholdcashandcashequivalentsdenominatedinforeigncurrenciesforworkingcapitalpurposes. Atthereportingdate,suchforeigncurrencybalancesinAEDDirhamandIndiaRupeesamounttoRM15,570,000(2009: RM9,884,000) and RM1,881,000 (2009: RM1,590,000) respectively.

The Group maintains a natural hedge, whenever possible, by borrowing in the currency of the country in which the investments are located or by borrowing in currencies that match the future revenue stream to be generated from its investments.

The net unhedged financial assets and financial liabilities of the Group companies that are not denominated in their functional currencies are as follows:

Functional Currency of Group Companies

India AED Rupees Dirham RM’000 RM’000

At 31 December 2010

Ringgit MalaysiaReceivables 8,906 143,264Payables 9,219 98,281

At 31 December 2009

Ringgit MalaysiaReceivables 7,103 126,885Payables 6,887 79,127

Sensitivityanalysisforforeigncurrencyrisk

The following table demonstrates the sensitivity of the Group’s profit net of tax to a reasonably possible change in theAEDDirhamandIndiaRupeesexchangeratesagainsttherespectivefunctionalcurrenciesoftheGroupentities,with all other variables held constant.

Group 2010 RM’000 Profit net of tax

AED/RM -strengthened10% (5,955) -weakened10% 5,955INR/RM -strengthened7% (110) -weakened7% 110




(d) Interest rate risk

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

As the Group has no significant interest-bearing financial assets, the Group’s income and operating cash flows are substantially independent of changes in market interest rates. The Group’s interest-bearing financial assets are mainly short term in nature and have been mostly placed in fixed deposits or occasionally, in short term commercial papers.

The Group’s interest rate risk arises primarily from interest-bearing borrowings. Borrowings at floating rates expose the Group to cash flow interest rate risk. Borrowings obtained at fixed rates expose the Group to fair value interest rate risk.

The Group’s policy is to manage interest cost using a mix of fixed and floating rate debts.

Sensitivityanalysisforinterestraterisk

No sensitivity analysis being prepared as the loans and borrowings of the Group and Company are accounted at amortised cost. Therefore, a change in interest rates at the end of the reporting period would not affect profit or loss oronequity.

The following tables set out the carrying amounts, theweighted average effective interest rates (WAEIR) as atthe reporting date and the remaining maturities of the Group’s and the Company’s financial instruments that are exposed to interest rate risk:

Note WAEIR Within 1 1-2 2-5 % Year Years Years Total RM’000 RM’000 RM’000 RM’000

At 31 December 2010

Group

Fixed rateRSLS 28 4.00 - (154,145) - (154,145)RPS 34 5.00 - - (6,907) (6,907)Hire purchase liabilities 27 6.98 (90) (69) (51) (210)

Floating rateDeposits with licensed banks and other financial institutions 23 2.20 191,061 - - 191,061Revolving credit: - in Malaysia 26(a) 4.62 (2,000) - - (2,000) - foreign 26(c) 10.50 (2,087) - - (2,087)Loanfromacorporate shareholder of a subsidiary 26 7.30 - (1,786) - (1,786)

Company

Fixed rateRSLS 28 4.00 - (154,145) - (154,145)

Floating rateDeposits with licensed banks and other financial institutions 23 2.20 45,227 - - 45,227




(d) Interest rate risk (contd.)

Note WAEIR Within 1 1-2 2-5 % Year Years Years Total RM’000 RM’000 RM’000 RM’000

At 31 December 2009

Group

Fixed rateRSLS 28 4.00 - - (160,207) (160,207)RPS 34 5.00 - - (7,496) (7,496)Hire purchase liabilities 27 6.98 (120) (90) (119) (329)

Floating rateDeposits with licensed banks and other financial institutions 23 2.20 244,514 - - 244,514Revolving credit: - foreign 26 (c) 10.92 (1,834) - - (1,834)Loanfromacorporate shareholder of a subsidiary 26 6.55 - (1,786) - (1,786)

Company

Fixed rateRSLS 28 4.00 - - (160,207) (160,207)

Floating rateDeposits with licensed banks and other financial institutions 23 2.20 32,277 - - 32,277

Interest on financial instruments subject to floating interest rates is contractually repriced at intervals of less than 6 months except for term loans and floating rate loans which are repriced annually. Interest on financial instruments at fixed rates are fixed until the maturity of the instrument. The other financial instruments of the Group and the Company that are not included in the above tables are not subject to interest rate risks.

(e) Market price risk

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

TheGroupisnotexposedtoequitypriceriskarisingfromitsinvestmentinquotedequityinstruments.

43. CAPITAL MANAGEMENT

The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the years ended 31 December 2010 and 31 December 2009.



44. SEGMENT INFORMATION

(a) Business unit segments

For management purposes, the Group is organised into business units based on their products and services, and has four reportable operating segments as follows:

(i) The property segment is in the business of developing residential and commercial properties.

(ii) The integrated facilities management (Concession) segment is in respect of the Concession Agreement for provision of hospital support services with the Ministry of Health of Malaysia.

(iii) The integrated facilities management (Non-Concession) segment is a provision of hospital support services with other than Ministry of Health of Malaysia and provision of facilities management.

(iv) The other segment is involved in Group-level corporate services and investment holdings.

Exceptasindicatedabove,nooperatingsegmentshavebeenaggregatedtoformtheabovereportableoperatingsegments.

Management monitors the operating results of its business units separately for the purpose of making decisions aboutresourceallocationandperformanceassessment.Segmentperformanceisevaluatedbasedonoperatingprofit or loss which, in certain respects as explained in the table below, is measured differently from operating profit or loss in the consolidated financial statements. Group financing (including finance costs) and income taxes are managed on a group basis and are not allocated to operating segments.

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

(b) Geographical segments TheGroup’sgeographicalsegmentsarebasedonthelocationoftheGroup’sassets.Salestoexternalcustomers

disclosed in geographical segments are based on the geographical location of its customers. The Group’s two business segments operate in three geographical areas:

(i) Malaysia - the operations in this area are principally integrated facilities management, property development and investment holding.

(ii) India-theoperationsinthisareaareprincipallyintegratedfacilitiesmanagementwhichisthroughFaberStarFacilitiesManagementLimitedandFaberSindooriManagementServicesPrivateLimited.

(iii) UnitedArabEmirates - the operation in this area are integrated facilitiesmanagementwhich is through FaberLLC.



44. SEGMENT INFORMATION (contd.)

Continuing Operations Integrated Facilities Management Properties Concession Non-Concession Others Elimination GroupAt 31 December 2010 Notes RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

RevenueExternalsales 69,071 543,243 276,532 - - 888,846Inter-segment sales A - - - 109,313 (109,313) -

Total revenue 69,071 543,243 276,532 109,313 (109,313) 888,846

ResultsSegmentresults 15,419 80,798 56,296 91,305 (108,042) 135,776Finance costs - (179) ( 693) (6,223) 479 (6,616)

Profit/(loss) before taxation 15,419 80,619 55,603 85,082 (107,563) 129,160Income tax expense (4,682) (19,650) (1,393) (16,727) 16,624 ( 25,828)

Profit/(loss) net of tax 10,737 60,969 54,210 68,355 (90,939) 103,332

AssetsSegmentassets B 321,413 405,011 191,598 252,579 (181,036) 989,565

LiabilitiesSegmentliabilities B 70,654 133,551 132,855 165,798 (29,213) 473,645

Other segment informationCapital expenditure C 108 14,795 1,414 1,097 - 17,414Depreciation (Note 7) 175 19,164 404 220 - 19,963Amortisation E 2 1,389 1,013 43 - 2,447Non cash expenses otherthan depreciation, amortisation, impairment losses and interest F 69 4,119 (525) 1,001 - 4,664




Continuing Operations Integrated Facilities Management Discontinued Properties Concession Non-Concession Others Elimination Total operations Group Notes RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 31 December 2009

RevenueExternalsales D 122,488 511,353 171,441 - - 805,282 9,194 814,476Inter-segment sales A - - - 82,312 (82,312) - - -

Total revenue 122,488 511,353 171,441 82,312 (82,312) 805,282 9,194 814,476

ResultsSegmentresults D 28,059 86,731 41,520 73,702 (82,045) 147,967 (306) 147,661Finance costs - (213) (167) (6,344) - (6,724) - (6,724)

Profit/(loss) before taxation 28,059 86,518 41,353 67,358 (82,045) 141,243 (306) 140,937Income tax expense (7,546) (24,071) (2,278) (16,292) 15,358 (34,829) - (34,829)

Profit/(loss) net of tax 20,513 62,447 39,075 51,066 (66,687) 106,414 (306) 106,108

AssetsSegmentassets B 331,979 353,058 148,012 242,199 (184,737) 890,511 - 890,511

LiabilitiesSegmentliabilities B 70,856 101,467 114,379 184,267 (36,810) 434,159 - 434,159

Other segment informationCapital expenditure C, D 256 17,852 1,608 206 - 19,922 19 19,941Depreciation (Note7) D 175 18,026 199 156 - 18,556 83 18,639Amortisation E 12 1,308 1,126 32 - 2,478 - 2,478Non cash expenses other than depreciation, amortisation, impairment losses and interest F (7,512) 18,372 500 (265) 8,931 20,026 - 20,026





Notes Nature of adjustments and eliminations to arrive at amounts reported in the consolidated financial statements

A Inter-segment revenues are eliminated on consolidation.

B The following items are deducted from segment assets to arrive at total assets reported in the consolidated statement of financial position:

2010 2009 RM’000 RM’000

Inter-segment assets (181,036) (184,737)

The following items are deducted from segment liabilities to arrive at total liabilities reported in the consolidated

statement of financial position:

2010 2009 RM’000 RM’000

Inter-segment liabilities (29,213) (36,810)

C Capital expenditure consist of:

2010 2009 RM’000 RM’000

Property,plantandequipment 17,338 19,812 Intangible assets - software 76 129

17,414 19,941

D The amounts relating to the discontinued operation segment have been excluded to arrive at amounts shown in the income statements as they are presented separately in the income statements within one line item, “loss from discontinued operation, net of tax”.

E Amortisationconsistof:

Note 2010 2009 RM’000 RM’000

Prepaid land lease payment Note 7 87 92 Intangible assets Note 7 2 ,360 2,386

2,447 2,478



Notes Nature of adjustments and eliminations to arrive at amounts reported in the consolidated financial statements

F Othermaterialnon-cashexpensesconsistofthefollowingitemsaspresentedintherespectivenotestothefinancial statements:

Note 2010 2009 RM’000 RM’000

Net unrealised foreign exchange loss Note 7 1,465 1,000Writebackofimpairmentofpropertydevelopmentcosts Note7 - (297)AccretionofRPS Note7 235 -Provisions Note 7 12 11Reversal of provision for sinking fund Note 7 (34) (146)Property,plantandequipmentwrittenoff Note7 1,384 932Accrual for legal claims Note 7 - 760Impairment on financial assets: - Trade and other receivables Note 7 12,806 17,602Reversal of impairment on financial assets: - Trade and other receivables Note 7 (11,431) (612) - Marketable securities Note 7 - (28)Surplusarisingfromcapitaldistributionoffinancialassets -unquotedinvestmentinMalaysia Note7 (286) -Bad debts written off Note 7 - 17Writedownofinventories Note7 - 269Increase in liability of defined benefit plan Note 8 513 518

4,664 20,026

Geographical information

Revenue and non-current assets information based on the geographical location of customers and assets respectively are as follows:

Continuing Operations Revenues Non-current assets 2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000

Malaysia 635,980 672,162 138,762 178,353UnitedArabEmirates 223,985 123,234 1,044 745India 28,881 19,080 9,063 6,100

Consolidated 888,846 814,476 148,869 185,198




Geographical information (contd.)

Non-current assets information presented above consist of the followings items as presented in the consolidated statement of financial position:

2010 2009 RM’000 RM’000

Property,plantandequipment 88,434 92,646Landheldforpropertydevelopment 20,247 53,431Prepaid land lease payments 3,673 3,760Intangible assets 36,515 35,361

148,869 185,198

Information about major customers

Revenue from two major customers amounted to RM543,243,000 (2009: RM511,353,000) and RM206,943,000 (2009: RM108,231,000), arising from sales by the integrated facilities management - concession segment and non-concenssion segment respectively.

45. SUBSIDIARIES

Details of subsidiaries are as follows:

Proportion Issued and of ownership paid-up interest and Country of share voting power Name of subsidiaries incorporation capital 2010 2009 Principal activities RM % %

Held by the Company: FaberHotelsHoldingsSdn.Bhd. Malaysia 95,279,551 100 100 Investment holding

Faber Development Malaysia 28,260,006 100 100 Investment holding HoldingsSdn.Bhd.

FaberFacilitiesSdn.Bhd. Malaysia 200,000 100 100 Facilities management and investment holding

Faber Healthcare Malaysia 2 100 100 Investment holding ManagementSdn.Bhd.

TCParkingSdn.Bhd. Malaysia 20,002 100 100 Investment holding



45. SUBSIDIARIES (contd.)


Held by the Company (contd.):

RenownAllianceSdn.Bhd. Malaysia 2 100 100 Investment holding

FaberHaulageSdn.Bhd. Malaysia 610,002 100 100 In members’ liquidation

Merlion Credit Corporation Bhd. Malaysia 6,000,000 100 100 Investment holding

FaberMedi-ServeSdn.Bhd. Malaysia 54,000,010 43 43 Provision of hospital support services

FaberLLC** Emirates 600,000 75 75 Facilities of Dubai Dirhams management services in UnitedArabEmirates

MerlinoEnterprisesSdn.Bhd. Malaysia 450,000 100 100 In members’ liquidation

SateYakiSdn.Bhd. Malaysia 5,000,000 60 60 In members’ liquidation

IntensiveQuestSdn.Bhd. Malaysia 500,000 63 63 In members’ liquidation

Held by Faber Healthcare Management Sdn. Bhd.:

SehatTechnologiesSdn.Bhd. Malaysia 500,000 51 51 Dormant

FaberMedi-ServeSdn.Bhd. Malaysia 54,000,010 57 57 Provision of hospital support services

Held by Faber Medi-Serve Sdn. Bhd.:

CerminCahayaSdn.Bhd. Malaysia 2 100 100 Dormant

Healthtronics(M)Sdn.Bhd. Malaysia 3,000,000 60 60 Provision of biomedical and electronic engineering maintenance services





Held by Faber Medi-Serve Sdn. Bhd. (contd.):

FreshLinenServices(Sarawak) Malaysia 700,000 55 55 Provision of laundry Sdn.Bhd. processingactivities

FreshLinenServices(Sabah) Malaysia 1,000,000 60 60 Provision of laundry Sdn.Bhd. processingactivities

Held by Healthtronics (M) Sdn. Bhd.:

HealthtronicsInc* Philippines Peso130,000 100 100 Dormant

Held by Faber Development Holdings Sdn. Bhd.:

FaberUnionSdn.Bhd. Malaysia 97,000,000 100 100 Property development

RimbunanMelatiSdn.Bhd. Malaysia 5,000,000 55 55 Property development

Faber Grandview Development Malaysia 4,500,000 100 100 Property development (Sabah)Sdn.Bhd.

Faber Heights Management Malaysia 2 100 100 Property development Sdn.Bhd.

CountryViewDevelopmentSdn.Bhd. Malaysia 11,200,000 100 100 Property development MontHillSdn.Bhd. Malaysia 2 100 100 In members’ liquidation

MutiaraUnik(M)Sdn.Bhd. Malaysia 2 100 100 In members’ liquidation

Held by Mutiara Unik (M) Sdn. Bhd.:

JiwaUnikSdn.Bhd. Malaysia 100,000 51 51 Dormant





Held by Faber Facilities Sdn. Bhd.:

Faber Facilities Management Malaysia 1,000,000 100 100 Facilities maintenance Sdn.Bhd.

FaberFacilitiesSolution Malaysia 100,000 100 100 In members’ Sdn.Bhd. liquidation

FaberStarFacilities India Rs1,00,00,000 51 51 Facilities management ManagementLimited** inIndia

FaberSindooriManagement India Rs5,92,450 51 51 Facilities management ServicesPrivateLimited** inIndia

Held by Faber Hotels Holdings Sdn. Bhd.:

MerlinTowerHotelSdn.Bhd. Malaysia 8,000,003 100 100 In members’ liquidation

Fraser’s Hill Merlin Hotel Malaysia 2,000,000 51 51 In members’ Sdn.Bhd. liquidation

Held by Faber Haulage Sdn. Bhd.:

FirstgainHoldingsSdn.Bhd. Malaysia 1,000,000 100 100 In members’ liquidation

HasilLintangSdn.Bhd. Malaysia 50,000 100 100 In members’ liquidationHeld by Renown Alliance Sdn. Bhd.:

BelaireInvestments SouthAfrica Rand100 100 100 Dormant (Proprietary)Ltd*

* AuditedbymemberfirmsofErnst&YoungGlobalintherespectivecountries** AuditedbyfirmsotherthanErnst&Young



46. SIGNIFICANT EVENTS

(a) AsperthetermsoftheConcessionAgreement(“CA”),FMShadon26October2009submittedaLetterofIntenttotheMinistryofHealth(“MOH”)toextendtheCAwhichwillbeexpiringin28October2011.Intheinterim,FMShadattendedaseriesofServiceLevel ImprovementWorkshopsconductedby theMOHbetweenFebruary2010and March 2010 formulating new proposed scopes, standards and performance monitoring for the new Hospital SupportServices(“HSS”)concession.In2010,FMScontinueditscommitmentintheHSSconcessionbycontinuingto invest substantial amounts of capital expenditure and human development so as to improve its service delivery. Subsequently,on30June2010,FMShadsubmittedthefinancialproposaltotheMOHinrelationtotheCAextension.FMS received a letter acknowledging receipt of the notice from Unit Kerjasama Awam Swasta (“UKAS”) on 26October2010.

TheCompanyandFMShastakenallnecessarystepsandactionstoensurethesuccessoftheCAextension.ThedecisionontheCAextensionisstillpendingfromtheMOHasatthedateofthefinancialstatements.

(b) On7October2010,MutiaraUnikSdnBhd(“MUSB”),awholly-ownedsubsidiaryofFaberDevelopmentHoldingsSdnBhd,whichinturnisawholly-ownedsubsidiaryoftheCompanyhadbeenplacedunderMembersVoluntaryLiquidation(“MVL”)pursuanttoSection254(1)(b)oftheCompaniesAct,1965.

Pursuantthereto,MrHengJiKengandMrMichaelJosephMonteiroofMessrsFerrierHodgsonMHSdnBhdof 22-M, Monteiro & Heng Chambers, Jalan Tun Sambanthan 3, 50470 Kuala Lumpur have been appointed asLiquidators.

TheMVLoftheMUSBistorationaliseandstreamlinetheGroup’sstructure.

TheMVLofMUSBhasyettobecompleted.

(c) On4November2010,FaberFacilitiesSdnBhd(“FFSB”),awhollyownedsubsidiaryoftheCompanyhadenteredintoaconditionalSharePurchaseAgreement(“SPA”)withSingaRealEstatesLtd(“SREL”)andFaberStarFacilitiesManagementLtd(“FSFML”).

InaccordancewiththetermsandconditionsoftheSPA,SRELhasagreedwithFFSBtosellthefollowing4,90,000(FourHundredandNinetyThousand)equitysharesofRs.10/- (RupeesTen)each,representing49%of thetotalissued,subscribedandpaid-upequitysharecapitalofFSFML (“SRELShares”)whichareheldbySRELand itsnomineestoFFSBortoanypersonnominatedbyFFSBforapurchasepriceofRs.1,00,00,000/-(RupeesOneCrore)(equivalenttoapproximatelyRM699,000/-):-

NameofShareholder Number of Percentage of SharesHeld Shareholding

SREL 4,89,995 48.9995Mr. Rajat Biswas 1 0.0001Mr.PratapSingh 1 0.0001Mr. Naresh Gupta 1 0.0001Mr. Mohd Nasir 1 0.0001Ms. Reetu Goel 1 0.0001

4,90,000 49



46. SIGNIFICANT EVENTS (contd.)

ThesalienttermsoftheSPAareasfollows:-

(i) theobligationofFFSBtopurchase theSRELShares fromSRELshallcome intoeffectonlyupon internalcorporate approvals of SREL and FFSB, permission of the regulatory authorities in Malaysia (if any)and all governmental/regulatory approvals/permissions, if any, being obtained as may be necessary, for purchase of SREL Shares by FFSB, on the terms and subject to the conditions contained in the SPA (“Conditions Precedent”);

(ii) intheeventtheabove-mentionedConditionsPrecedentarenotfullycompliedwithtothesatisfactionofFFSBwithin60daysfromthedateoftheexecutionoftheSPA,orwithinsuchextendedperiodasmaybeagreedtobyFFSBandSRELinwriting,FSSBshallbeentitled(butnotobligated)toforthwithterminatetheSPAwithoutany liability whatsoever;

(ii) forthwithuponreceiptofallapprovals/permissions,SRELshallnotifyFFSBofthesame,andshallfurnishallinformationanddocumentsasmayberequiredbyFFSBevidencingsuchcompletion.IntheeventFFSBissatisfiedthattheConditionsPrecedenthavebeendulycompleted,itshallsoinformSRELinwriting.FFSBandSRELshallthenproceedtocompletethetransactionofthesaleandpurchaseofSRELShares(“Closing”)inthemannerprovidedintheSPA.ThedateonwhichClosingtakesplaceshallbereferredtoastheClosingDate.

FFSBand/oritsnomineesshallcreditthedesignatedbankaccountofSRELwiththeconsiderationforthepurchaseof theSRELShares.FFSBandSRELshall assistandcooperatewitheachother to completeall corporateandregulatoryformalitiestofullyeffectthetransferoftheSRELShares.

47. SUBSEqUENT EVENTS

(a) On19September2008,thefollowing6dormantwholly-ownedsubsidiaries,theequitiesofwhicharehelddirectlyandindirectlybytheCompany,hadcommencedMVLspursuanttoSection254(1)(b)oftheCompaniesAct,1965:

(i) FaberHaulageSdnBhd;

(ii) FirstgainHoldingsSdnBhd;

(iii) HasilLintangSdnBhd;

(iv) FaberFacilitiesSolutionsSdnBhd;

(v) MerlinTowerHotelSdnBhd;and

(vi) MontHillSdnBhd

Pursuantthereto,MrHengJiKengandMrMichaelJosephMonteiroofMessrsFerrierHodgsonMHSdnBhdof 22-M, Monteiro & Heng Chambers, Jalan Tun Sambanthan 3, 50470 Kuala Lumpur have been appointed asLiquidators.

TheMVLsofthedormantsubsidiariesaretorationaliseandstreamlinetheGroup’sstructure.



47. SUBSEqUENT EVENTS (contd.)

On1March2011,thefollowing3dormantcompaniesheldtheirFinalMeetingtoconcludetheMVL:-

(i) FirstgainHoldingsSdnBhd;

(ii) HasilLintangSdnBhd;

(iii) FaberFacilitiesSolutionsSdnBhd;

The Liquidators have subsequently lodged a Return relating to Final Meeting and the Liquidators’ Account ofReceiptsandPaymentwiththeCompaniesCommissionofMalaysiaandtheOfficialReceiveron2March2011.

TheMVLsofthefollowingdormantsubsidiarieshaveyettobecompleted:-

(i) FaberHaulageSdnBhd;

(ii) MerlinTowerHotelSdnBhd;and

(iii) MontHillSdnBhd

(b) On 12th January 2011, the Company had made an announcement to Bursa Malaysia Securities Berhad(“BursaSecurities”)thatFaberLLC(“FLLC”),asubsidiaryoftheCompany,hadreceivedaletterfromtheDepartmentofMunicipalAffairs,WesternRegionMunicipality(“WRM”),EmirateofAbuDhabidated5January2011givingnoticeof the non-renewal of the following contracts:-

(i) theprovisionsofCivil,MechanicalandElectricalMaintenanceServicesforLowCostHousesatMadinatZayedinWRM,EmirateofAbuDhabi;and

(ii) theprovisionsofCivil,MechanicalandElectricalMaintenanceServicesforLowCostHousesatLiwainWRM,EmirateofAbuDhabi.

TheservicesofFLLCfortheabovecontractsshallbedeemedtoceasewitheffectfrom3April2011.

(c) On12thJanuary2011,theCompanyhadannouncedtoBursaSecuritiesthatFLLChadreceivedaletterfromtheDepartmentofMunicipalAffairs,WRM,EmirateofAbuDhabidated6January2011givingnoticeofthenon-renewalof the contract in relation to improvement, development, upgrading and maintenance of infrastructure facilities and projects at Madinat Zayed - Zone-1.

TheservicesofFLLCfortheabovecontractsshallbedeemedtoceasewitheffectfrom1June2011.

(d) On17March2011, theCompanyhadmadeanannouncement toBursaSecuritieswithregards to the followingproposals:

(i) Proposed capital reduction by way of cancellation of RM0.75 of the existing par value of RM1.00 of each ordinary shareintheCompanypursuanttoSection64oftheCompaniesAct,1965(“Act”)toreducetheaccumulatedlosses in the Company (“Proposed Par Value Reduction”)

(ii) ProposedsharepremiumreductionpursuanttoSection64oftheActtoreducetheaccumulatedlossesintheCompany(“ProposedSharePremiumReduction”);and

(iii) Proposed amendment to the Memorandum of Association of the Company to facilitate the proposed par value reduction (“Proposed Amendment”)

Collectively referred to as the “Proposals”.



47. SUBSEqUENT EVENTS (contd.)

(d) The Proposed Par Value Reduction will involve the cancellation of RM0.75 of the existing par value of RM1.00 of eachordinaryshareintheCompanypursuanttoSection64oftheAct.Basedonthetotalissuedandpaid-upsharecapital of the Company as at 31 December 2010 of RM363.0 million, the credit arising from the reduction of the par valueoftheCompanysharesisaboutRM272.3million,whichwillbeutilisedtoset-offanequivalentamountoftheaccumulated losses of the Company.

TheProposedSharePremiumReductionwillinvolvethereductionoftheentirebalanceofaboutRM116.0millionintheCompany’ssharepremiumaccountpursuanttoSection64oftheAct.Thecreditarisingfromthesaidreductionin share premium of the same amount will be used to set-off the accumulated losses of the Company.

The Proposed Amendment entails the amendment to the Memorandum of Association of the Company to facilitate the Proposed Par Value Reduction as follows:

Memorandum of Association - Clause 5

Existing Proposed

The authorised share capital of the The authorised share capital of the Company is Company is RM3,000,000,000 divided RM750,000,000 divided into 3,000,000,000 into 3,000,000,000 ordinary shares of ordinary shares of RM0.25 each.

RM1.00 each

The Proposals are subject to approvals being obtained from the following:

(i) theshareholdersoftheCompany,atanExtraordinaryGeneralMeetingtobeconvened;

(ii) thesanctionoftheHighCourtofMalayafortheProposedParValueReductionandtheProposedSharePremiumReductionpursuanttoSection64oftheAct;

(iii) the consent of the relevant creditors/lenders of the Company, where applicable; and

(iv) anyotherrelevantauthoritiesand/orparties,whererequired.

The Proposed Par Value Reduction and Proposed Amendment are inter-conditional. The Proposed ParValue Reduction andtheProposedAmendmentarenotinter-conditionalwiththeProposedSharePremiumReduction.

48. AUTHORISATION OF FINANCIAL STATEMENTS FOR ISSUE

The financial statements for the year ended 31 December 2010 were authorised for issue in accordance with a resolution of the directors on 17 March 2011.



49. SUPPLEMENTARY INFORMATION - BREAKDOWN OF ACCUMULATED LOSSES INTO REALISED AND UNREALISED

The breakdown of the accumulated losses of the Group and of the Company as at 31 December 2010 into realised and unrealised profits is presented in accordance with the directive issued by Bursa Malaysia Securities Berhad dated 25March2010andpreparedinaccordancewithGuidanceonSpecialMatterNo.1,DeterminationofRealisedandUnrealisedProfitsorLossesintheContextofDisclosurePursuanttoBursaMalaysiaSecuritiesBerhadListingRequirements,asissued by the Malaysian Institute of Accountants.

Group Company RM’000 RM’000

Total accumulated losses of the Company and its subsidiaries- Realised (239,012) (420,789)- Unrealised (1,130) (1,286)

(240,142) (422,075)Less:Consolidationadjustments 214,367 -

Accumulated losses as per financial statements (25,775) (422,075)



ANALYSIS OF SHAREHOLDINGS AS PER THE RECORD OF DEPOSITORS AS AT 31 MARCH 2011

AuthorisedShareCapital : RM3,000,000,000.00comprising3,000,000,000ordinarysharesofRM1.00each

IssuedandPaid-upShareCapital : RM363,001,053.00comprising363,001,053ordinarysharesofRM1.00each

ClassofShares : OrdinarysharesofRM1.00each

No.ofShareholders : 20,713

Voting Rights : 1 vote per ordinary share

No. of % of No. of % of Size of Holdings Shareholders Shareholders Shares Held Issued Capital

Lessthan100 1,012 4.89 41,890 0.01 101 to 1,000 14,262 68.86 5,355,359 1.48 1,001 to 10,000 4,473 21.60 17,545,694 4.83 10,001 to 100,000 802 3.87 23,809,169 6.56 100,001to18,150,051* 162 0.78 117,746,873 32.44 18,150,052andabove** 2 0.01 198,502,068 54.68

Total 20,713 100.00 363,001,053 100.00

* Less than 5% of issued capital** 5% and above of issued capital

30 LARGEST SHAREHOLDERS AS PER THE RECORD OF DEPOSITORS

No. of % of No. Name of Shareholders Shares Held Issued Capital

1. UEMGroupBerhad 116,272,268 32.03

2. Universal Trustee (Malaysia) Berhad 82,229,800 22.65

3. AmanahRaya Trustees Berhad 10,419,100 2.87 Public Islamic Sector Select Fund

4. UEMGroupBerhad 8,195,657 2.26

5. AmanahRaya Trustees Berhad 6,682,400 1.84 Public Islamic Optimal Growth Fund

6. HDMNominees(Asing)SdnBhd 5,047,800 1.39 DBS Vickers Secs (S) Pte Ltd For Tan Ju Hong

7. AmanahRaya Trustees Berhad 4,506,700 1.24 Public Sector Select Fund

8. AmanahRaya Trustees Berhad 3,663,000 1.01 Public Islamic Balanced Fund

9. HSBCNominees(Asing)SdnBhd 3,569,300 0.98 Exempt An For JPMorgan Chase Bank, National Association (Norges Bk Nlend)

10. AmanahRaya Trustees Berhad 3,437,800 0.95 Public Far-East Property & Resorts Fund

Analysis of Shareholdings


No. of % of No. Name of Shareholders Shares Held Issued Capital

11. CitigroupNominees(Asing)SdnBhd 3,053,955 0.84 Exempt An For OCBC Securities Private Limited (Client A/C-NR)

12. AmanahRaya Trustees Berhad 2,734,700 0.75 Public Smallcap Fund

13. HSBCNominees(Asing)SdnBhd 2,233,100 0.62 Exempt An For Credit Suisse Securities (USA) LLC (PB Client)

14. Universal Trustee (Malaysia) Berhad 2,048,900 0.56 TA Islamic Fund

15. HSBCNominees(Tempatan)SdnBhd 2,036,500 0.56 HSBC (M) Trustee Bhd For OSK-OUB Growth and Income Focus Trust (4892)

16. DB(Malaysia)Nominee(Asing)SdnBhd 1,937,400 0.53 Exempt An For Deutsche Bank AG London (Prime Brokerage)

17. Toh Yew Keong 1,770,000 0.49

18. HSBCNominees(Tempatan)SdnBhd 1,700,000 0.47 HSBC (M) Trustee Bhd For OSK-OUB Small Cap Opportunity Unit Trust (3548)

19. HSBCNominees(Asing)SdnBhd 1,475,000 0.41 Exempt An For Morgan Stanley & Co. International PLC (IPB Client Acct)

20. CartabanNominees(Asing)SdnBhd 1,415,200 0.39 Exempt An For Caceis Bank Luxembourg (Clt Acct-Lux)

21. AmanahRaya Trustees Berhad 1,399,000 0.39 CIMB Islamic Equity Aggressive Fund

22. LimSoonHuat 1,230,900 0.34

23. SyarikatPemasaranSejatiSdnBhd 1,227,951 0.34

24. AmsecNominees(Tempatan)SdnBhd 1,112,700 0.31 AmTrustee Berhad For Pacific Dividend Fund (UT-PM-DIV)

25. UOBMNominees(Tempatan)SdnBhd 1,093,200 0.30 UOB-OSK Asset Management Sdn Bhd For Uni.Asia Life Assurance Berhad (Par Fund)

26. HSBCNominees(Tempatan)SdnBhd 1,080,000 0.30 HSBC (M) Trustee Bhd For OSK-UOB Smart Treasure Fund (4694-002)

27. CitigroupNominees(Asing)SdnBhd 1,042,100 0.29 Exempt An For Merrill Lynch Pierce Fenner & Smith Incorporated (Foreign)

28. CartabanNominees(Asing)SdnBhd 1,030,000 0.28 SSBT Fund IE1B For Van Eck Emerging Markets Fund

29. AmsecNominees(Tempatan)SdnBhd 1,021,800 0.28 AmTrustee Berhad For Pacific Pearl Fund (UT-PM-PPF)

30. CitigroupNominees(Tempatan)SdnBhd 1,000,000 0.28 Employees Provident Fund Board (Amundi)

Total 275,666,231 75.94

Analysis of Shareholdings (continued)


Analysis of Shareholdings (continued)

DIRECTORS’ INTERESTS IN THE COMPANY AND ITS RELATED CORPORATIONS

Direct Interest Indirect Interest Name of Directors No. of Shares % No. of Shares %

Dato’ Ikmal Hijaz bin Hashim - - - -Datuk Zainal Abidin bin Alias - - - -Datuk Mohamed Zain bin Mohamed Yusuf - - - - Dato’ Mohd Izzaddin bin Idris - - - -OhKimSun - - - -Elakumaria/pKantilal - - - -PuasabinOsman - - - -SuhaimibinHalim - - - -Annuar Marzuki bin Abdul Aziz - - - -Adnan bin Mohammad 44,000 0.01 - - Saveasdisclosedabove,noneoftheDirectorshasanydirectorindirectinterest,intheCompanyanditsrelatedcorporations.

SUBSTANTIAL SHAREHOLDERS’ SHAREHOLDINGS Direct Interest Indirect Interest Name of Substantial Shareholders No. of Shares % No. of Shares % UEMGroupBerhad 124,467,925 34.29 - - Khazanah Nasional Berhad# - - 124,467,925 34.29 Universal Trustee (Malaysia) Berhad 82,229,800 22.65 - -

# Deemed interest by virtue of its substantial interest in UEM Group Berhad.


Properties Held by the Group

Last Date of Gross Net Book Revaluation Approx. Built-Up Tenure Approx. Value as at or If None; Description Land Area (Sq. Existing (Expiry Age 31.12.2010 Date ofLocation and Address of Properties Area Meters) Use Date) (Years) (RM’000) Acquisition

INTEGRATED FACILITIES MANAGEMENT DIVISION

FABER MEDI-SERVE SDN BHDLotNo.65, Incinerationplant 5.87 3,332.0 Incinerator Leasehold 15 1,327 03.01.2011Kamunting Industrial with single-storey acres for clinical (7.12.2097)Estate, administration wasteandKamunting, Perak block plus laundry laundry plant

LotNo.37, Laundryplantwith 2.24 2,471.7 Laundry Leasehold 15 946 03.01.2011Kuala Ketil double-storey acres plant (26.3.2056)IndustrialEstate, administration 60yearsMukim of Tawar, block and ancillaryDistrict of Baling, facilitiesKedah

LotNo.131 Incinerationplant 0.51 1,980.7 Incinerator Leasehold 11 474 03.01.2011(CL215359890) withdouble-storey acres forclinical (13.12.2042)&LotNo.132 administrationblock waste(CL215359907), andancillary SEDCOIndustrialEstate, facilities LokKawi,Sabah

Lot10486, Laundryplantwith 1.48 5,987.0 Laundry Freehold - 1,160 17.05.2010Seksyen20,Serendah administration acres plantUluSelangor blockandancillarySelangorDarulEhsan facilities

FRESH LINEN SERVICES (SABAH) SDN BHDLot34-5,Industrial Laundryplantwith 0.96 2,408.0 Laundry Leasehold 4 926 03.01.2011Zone 4 (IZ 4), Kota 2-storey office and acres plant (31.12.2105) Kinabalu Industrial warehousePark, Kota KinabaluSabah

PROPERTY DEVELOPMENT DIVISION

COUNTRY VIEW DEVELOPMENT SDN BHDCL015027237, Vacantlandfor 4.78 - Vacant Leasehold - 476 2006Kota Kinabalu, development of acres land 999 yearsSabah condominiumsknown (2.12.2920) asLuckyHeights

FABER GRANDVIEW DEVELOPMENT (SABAH) SDN BHDTamanGrandview, Vacantlandfor 5.66 - Vacant Leasehold - NIL 2006OffMile1.5, development acres land 999yearsJalan Utara, (4.9.2881)Sandakan,Sabah

FABER UNION SDN BHD LotNo.4064, Vacantlandfor 2.55 - Vacant Freehold - 19,417 2009Persiaran Gurney, development acres land54000KualaLumpur


The information set out below is disclosed in compliance with theMainMarket Listing Requirements of BursaMalaysiaSecuritiesBerhad:-

UTILISATION OF PROCEEDS

There were no proceeds raised by the Company from corporate proposals during the financial year ended 31 December 2010.

SHARE BUY-BACKS

There were no share buy-backs during the financial year ended 31 December 2010.

OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES

No options, warrants or convertible securities were issued by the Company during the financial year ended 31 December 2010.

DEPOSITORY RECEIPT PROGRAMME

The Company did not sponsored any depository receipt programme for the financial year ended 31 December 2010.

SANCTIONS AND/OR PENALTIES

There were no sanctions or penalties imposed on the Company and its subsidiaries, Directors or Management by the relevant regulatory bodies during the financial year ended 31 December 2010.

NON-AUDIT FEES

Thenon-auditfeespaidorpayabletotheExternalAuditorsbytheCompanyanditssubsidiariesforthefinancialyearended 31 December 2010 amounted to RM71,000.

VARIATION IN RESULTS

There was no material variation between the audited results for the financial year ended 31 December 2010 and the unaudited results previously announced by the Company.

There was no profit forecast announced during the financial year.

PROFIT GUARANTEE

There was no profit guarantee given by the Company during the financial year ended 31 December 2010.

MATERIAL CONTRACTS INVOLVING DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS

Other than thosedisclosed in thefinancial statements, therewerenomaterial contracts including contracts to any loansentered into by the Company and/or its subsidiaries involving Directors’ and major shareholders’ interests.

Additional Compliance Information


The shareholders of Faber Group Berhad (“FGB”) had at the 47th Annual General Meeting held on 18 May 2010 granted their approval for FGB and its subsidiary companies (“Faber Group”) to enter into recurrent related party transactions (“RRPT”) of a revenue or trading nature which are necessary for its day-to-day operations and are in the ordinary course of business, on terms not more favourable to the related parties than those generally available to the public and with those related parties as setoutintheCirculartoShareholdersdated26April2010(“theShareholders’Mandate”).

PursuanttoParagraph10.09(1)andPracticeNote12oftheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad,theaggregatevalueofRRPTconductedbyFGBGrouppursuanttotheShareholders’MandatewheretheaggregatevalueisequaltoormorethanRM1millionduringthefinancialyearended31December2010aredisclosedasfollows:-

The RRPT entered into by FGB Group whereby FGB Group received services from the related party are as follows:-

No. FGB or its Related Nature of Nature of Aggregate Value of subsidiaries Party Recurrent Relationship Transactions Transaction (RM)

1. FGB Group Jeram Bintang Rental of office Pursuant to conversion of 1,249,178 SdnBhdandits spaceinFaber RedeemableConvertible subsidiary Towersandrental PreferenceSharesissued companies of ancillary facilities to Jeram Bintang as part of (“Jeram Bintang from Jeram Bintang the settlement under the Group”) Group RestructuringSchemeFGB completedon30September2004. Jeram Bintang had exercised the conversion rights and instructed FGB to allot the shares to Universal Trustee (Malaysia) Berhad (“UTMB”) as custodian pursuant to the security arrangement in relation to Jeram Bintang’s Redeemable SecuredBonds.

UTMBholds22.65%oftheissued and paid-up share capital of FGB.

Recurrent Related Party Transactions



2. FGB Group Projek Provision of Khazanah is the holding company 50,918,781 Penyelenggaraan improvement, ofUEMGbyvirtueofits100% Lebuhraya upgrading, interestinUEMG. Berhad and its development and subsidiary maintenance of Propel is a wholly owned companies infrastructure subsidiaryofUEMBuilders (“Propel Group”) facilities and which in turn is a wholly owned projectsby subsidiaryofUEMG. Propel Group FGBisa34.29%associateofUEMG.

SuhaimibinHalimandAnnuar Marzuki bin Abdul Aziz are Directors of FGB and Propel. SuhaimibinHalimandAnnuar Marzuki bin Abdul Aziz do not haveanyequityinterestinPropel.

3. FGBGroup UEMBuilders Provisionof Khazanahistheholdingcompany 2,015,000 Berhadandits constructionrelated ofUEMGbyvirtueofits100% subsidiary worksbyUEM interestinUEMG. companies(“UEM BuildersGroup BuildersGroup”) UEMBuildersisawhollyowned subsidiaryofUEMG. FGBisa34.29%associateofUEMG.

Dato’ Mohd Izzaddin bin Idris is a Director of FGB and UEMBuilders.

Dato’ Mohd Izzaddin bin Idris doesnothaveanyequityinterest inUEMBuilders.

Recurrent Related Party Transactions (continued)



4. FaberMedi-Serve Pharmaniaga Purchaseof Khazanahistheholdingcompany 1,288,871 SdnBhdandits LogisticsSdnBhd disinfectantrange ofUEMGbyvirtueofits100% subsidiary (“PLSB”) ofproductsfrom interestinUEMG. companies PLSB (“FMSGroup”) PLSBisawhollyowned subsidiary of Pharmaniaga.

Pharmaniagawasa86.81% subsidiaryofUEMG. UEMGhasceasedtobea substantial shareholder of Pharmaniaga on 22 March 2011. FGBisa34.29%associateofUEMG.

OhKimSunisaDirectorof FGB and Pharmaniaga.

OhKimSundoesnothaveany equityinterestinPLSB.

5. FMSGroup SMSKg.Likas Provisionoflinen SMSLikasisamajor 2,236,901 (Sabah)SdnBhd processing,linen shareholderofFreshLinen (“SMSLikas”) transportationand Services(Sabah)SdnBhd manpowersupply (“FLSBH”)holding40%ofthe bySMSLikas equityinterestinFLSBH.

FLSBHisa60%subsidiaryofFMS.

Zohari bin Mahur is a Director of SMSLikasandFLSBH.




1. FGB Group Jeram Bintang Provision of facilities Pursuant to conversion 1,143,357 Group maintenance services of Redeemable Convertible toJeramBintang PreferenceSharesissuedto Group Jeram Bintang as part of the settlement under the Restructuring SchemeFGBcompletedon 30September2004.JeramBintang had exercised the conversion rights and instructed FGB to allot the shares to UTMB as custodian pursuant to the security arrangement in relation to Jeram Bintang’s Redeemable SecuredBonds.

UTMBholds22.65%oftheissued and paid-up share capital of FGB.

2. FGBGroup PLUS Provisionof Khazanahistheholdingcompany 1,269,135 Expressways facilities ofUEMGbyvirtueofits100% Berhadandits maintenance interestinUEMG. subsidiary servicestoPLUS companies ExpresswaysGroup Khazanahisamajorshareholderof (“PLUS PLUSExpresswaysbyvirtueof Expressways its15.53%directinterest Group”) and38.51%indirectinterest inPLUSExpressways heldthroughUEMG.

FGBisa34.29%associateofUEMG. Dato’ Mohd Izzaddin bin Idris is a Director of FGB and PLUSExpressways.

Dato’ Mohd Izzaddin bin Idris doesnothaveanyequityinterest inPLUSExpressways.

The RRPT entered into by Faber Group whereby Faber Group provided services to the related party are as follows:-




3. FGBGroup UEMLand Provisionoffacilities Khazanahistheholdingcompany 2,549,335 HoldingsBerhad maintenanceservices ofUEMGbyvirtueofits100% anditssubsidiary toULHBGroup interestinUEMG. companies (“ULHBGroup”) ULHBisa77.14%subsidiaryofUEMG. FGBisa34.29%associateofUEMG.

Dato’ Ikmal Hijaz bin Hashim, Dato’ Mohd Izzaddin bin Idris and OhKimSunareDirectorsofFGB andULHB.

Dato’ Ikmal Hijaz bin Hashim, Dato’ Mohd Izzaddin bin Idris and OhKimSundonothaveanyequity interestinULHB.

4. FGBGroup OpusGroupBerhad Provisionoffacilities Khazanahistheholdingcompany 1,337,620 anditssubsidiary maintenanceservices ofUEMGbyvirtueofits100% companies toOpusGroup interestinUEMG. (“OpusGroup”) Opusisa96.39%subsidiaryofUEMG. FGBisa34.29%associateofUEMG.

Dato’ Mohd Izzaddin bin Idris and SuhaimibinHalimareDirectorsof FGBandOpus. Dato’ Mohd Izzaddin bin Idris and SuhaimibinHalimdonothaveany equityinterestinOpus.

5. FGBGroup’s AnyRelatedParty Saleofpropertyunits MajorShareholdersand 9,664,800 property who may wish to by FGB Group’s Directors of FGB Group and development purchase properties property development Persons Connected with them. companies developed by FGB companies Group’s property development companies

6. FaberSindoori ApolloHospitals Provisionof Khazanahistheholdingcompany 14,275,754 Management anditssubsidiary housekeeping ofUEMGbyvirtueofits100% ServicesPrivate companies servicestoApollo interestinUEMG. Limited (“Apollo HospitalsGroup Hospitals Group”) ApolloHospitalsisa12.1% associate of Khazanah by virtueofits3.28%direct interestand8.82%indirect interest held through Integrated Healthcare Holdings SdnBhd,whichinturnisa wholly owned subsidiary of Khazanah. FGBisa34.29%associateofUEMG.



Notice of the 48th Annual General Meeting

Ordinary Resolution 11

NOTICE IS HEREBY GIVEN THAT the 48th Annual General Meeting of Faber Group Berhad (“FGB” or “the Company”) will be held at the Ballroom 1, 1st Floor, Sime Darby Convention Centre, 1A, Jalan Bukit Kiara 1, 60000 Kuala Lumpur on Wednesday, 18 May 2011 at10.00 a.m. for the purpose of transacting the following businesses:-AGENDA

AS ORDINARY BUSINESS

1. To receive the Audited Financial Statements of the Company for the financial year ended 31 December 2010 together with the Directors’ and Auditors’ reports therein.

2. To declare a final dividend of 8% less 25% income tax for the financial year ended 31 December 2010.

3. To approve the payment of Directors’ fees of RM456,000.00 for the financial year ended 31 December 2010.

4. To approve the payment of Directors’ fees for the financial year ending 31 December 2011, to be payable on a monthly basis.

5. To re-elect the following Directors who are retiring in accordance with Article 66 of the Company’s Articles of Association and being eligible, offer themselves for re-election:-

• DatukZainalAbidinbinAlias

• Elakumaria/pKantilal

• PuasabinOsman

6. To re-elect the following Directors who are retiring in accordance with Article 70 of the Company’s Articles of Association and being eligible, offer themselves for re-election:-

• Dato’MohdIzzaddinbinIdris

• SuhaimibinHalim

7. To re-appoint Datuk Mohamed Zain bin Mohamed Yusuf who is retiring in accordance with Section129(6)oftheCompaniesAct,1965toholdofficeuntiltheconclusionofthenextAnnualGeneral Meeting of the Company.

8. Tore-appointMessrsErnst&YoungasAuditorsoftheCompanyfortheensuingyearandtoauthorise the Directors to fix their remuneration.

AS SPECIAL BUSINESS

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

9. Authority to Issue and Allot Shares pursuant to Section 132D of the Companies Act, 1965

“THAT subject always to the Companies Act, 1965, the Articles of Association of the Company and the approvals of the relevant government and/or regulatory authorities, the Directors be andareherebyempoweredpursuanttoSection132DoftheCompaniesAct,1965toissueandallot shares in the Company at any time at such price, upon such terms and conditions, for such purposes and to such person(s) whomsoever as the Directors may in their absolute discretion deem fit and expedient in the interest of the Company, provided that the aggregate number of sharesissuedpursuanttothisresolutiondoesnotexceed10%ofthetotalissuedsharecapitalof the Company for the time being AND THAT the Directors be and are also empowered to obtaintheapprovalfromBursaMalaysiaSecuritiesBerhadforthelistingofandquotationforthe additional shares so issued AND THAT such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.”












Notice of the 48th Annual General Meeting (continued)

10. Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions and Proposed New Mandate for Additional Recurrent Related Party Transactions of a Revenue or Trading Nature

“THATsubjecttotheprovisionsoftheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad,approvalbeand isherebygiven to theCompanyand/or itssubsidiaries(“FGB Group”) to enter into recurrent related party transactions of a revenue or trading natureasspecifiedinSection2.3oftheCirculartoShareholdersdated26April2011,whichtransactions are necessary for the day-to-day operations in the ordinary course of business of FGB Group and are on terms not more favourable to the related parties than those generally available to the public and are not detrimental to the minority shareholders of the Company AND THAT such approval shall continue to be in force until:-

(a) the conclusion of the next Annual General Meeting of the Company following this Annual General Meeting at which such mandate is passed at which time it will lapse, unless by a resolution passed at such general meeting whereby the authority is renewed; or

(b) the expiration of the period within which the next Annual General Meeting of the Company afterthatdateisrequiredtobeheldpursuanttoSection143(1)oftheCompaniesAct,1965(“Act”)(butshallnotextendtosuchextensionasmaybeallowedpursuanttoSection143(2)of the Act); or

(c) revoked or varied by resolution passed by the shareholders in a general meeting,

whichever is the earlier,

AND THAT the Directors of the Company be and are hereby authorised to complete and do allsuchactsandthings(includingexecutingallsuchdocumentsasmayberequired)astheymay consider expedient or necessary to give full effect to the transactions contemplated and/or authorised by this resolution.”

11. Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature involving the interest of Jeram Bintang Sdn Bhd and its subsidiary companies (“Jeram Bintang Group”)

“THATsubject to theprovisionsof theMainMarketListingRequirementsofBursaMalaysiaSecurities Berhad, approval be and is hereby given to the Company and/or its subsidiaries(“FGB Group”) to enter into recurrent related party transactions of a revenue or trading nature with JeramBintangGroup as specified inSection 2.3 of theCircular toShareholders dated 26 April 2011, which transactions are necessary for the day-to-day operations in the ordinary course of business of FGB Group and are on terms not more favourable to Jeram Bintang Group than those generally available to the public and are not detrimental to the minority shareholders of the Company AND THAT such approval shall continue to be in force until:-

(a) the conclusion of the next Annual General Meeting of the Company following this Annual General Meeting at which such mandate is passed at which time it will lapse, unless by a resolution passed at such general meeting whereby the authority is renewed; or

(b) the expiration of the period within which the next Annual General Meeting of the Company afterthatdateisrequiredtobeheldpursuanttoSection143(1)oftheCompaniesAct,1965(“Act”)(butshallnotextendtosuchextensionasmaybeallowedpursuanttoSection143(2)of the Act); or

(c) revoked or varied by resolution passed by the shareholders in a general meeting,

whichever is the earlier,

AND THAT the Directors of the Company be and are hereby authorised to complete and do allsuchactsandthings(includingexecutingallsuchdocumentsasmayberequired)astheymay consider expedient or necessary to give full effect to the transactions contemplated and/or authorised by this resolution.”

12. To transact any other business for which due notice shall have been given.





NOTICE OF ENTITLEMENT AND PAYMENT OF FINAL DIVIDEND

NOTICE IS HEREBY GIVEN THAT subject to the approval of shareholders at the 48th Annual General Meeting of the Company, afinaldividendof8%less25%incometaxforthefinancialyearended31December2010willbepaidon23June2011tothe shareholders whose names appear on the Company’s Register of Members and/or Record of Depositors at the close of business on 8 June 2011.

ADepositorshallqualifyforentitlementtothefinaldividendonlyinrespectof:-

(a) shares transferred into the Depositor’s securities account before 4.00 p.m. on 8 June 2011 in respect of transfers.

(b) sharesboughtonBursaMalaysiaSecuritiesBerhadonacumentitlementbasisaccordingtotheRulesofBursaMalaysiaSecuritiesBerhad.

ByOrderOfTheBoard

SURIATI BINTI ASHARI(LS0009029)CompanySecretary

KualaLumpur26 April 2011

NOTES:

1. A member of the Company entitled to attend and vote at the Meeting is entitled to appoint not more than two (2) proxies to attend and vote in his stead. A proxy may but need not be a member of the Company.

2. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint not more than two (2) proxies in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

3. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportion of his shareholding to be represented by each proxy.

4. The instrument appointing a proxy, in case of an individual, shall be signed by the appointer or by his attorney duly authorised in writing and in the case of a corporation shall be given under its Common Seal or signed on its behalf by an attorney or officer of the corporation so authorised.

5. The instrument appointing a proxy must be deposited at the office of the Company’s Share Registrar, Symphony Share Registrars Sdn Bhd (378993-D) at Level 6, Symphony House, Block D13, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time set for holding the Annual General Meeting or any adjournment thereof.



EXPLANATORY NOTES ON SPECIAL BUSINESS:

ORDINARY RESOLUTION 11 – AUTHORITY TO ISSUE AND ALLOT SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965

TheexistinggeneralmandatefortheauthoritytoissueandallotsharespursuanttoSection132DoftheCompaniesAct,1965was approved by the shareholders of the Company at the 47th Annual General Meeting held on 18 May 2010. The Company did not issue any new shares pursuant to this general mandate as at the date of this notice.

TheproposedOrdinaryResolution11isarenewalofthegeneralmandatefortheauthoritytoissueandallotsharespursuanttoSection132DoftheCompaniesAct,1965,TheOrdinaryResolution11,ifpassed,willempowertheDirectorstoallotandissueupto10%oftheissuedandpaidupsharecapitaloftheCompanyforthetimebeingforsuchpurposesastheDirectorsconsider would be in the best interest of the Company. This authority, unless revoked or varied by the Company in a general meeting, will expire at the conclusion of the next Annual General Meeting of the Company.

As this juncture, there is no decision to issue new shares. If there should be a decision to issue new shares after the general mandate is approved by the shareholders at the forthcoming 48th Annual General Meeting, the Company will make an announcement in respect of the purpose and utilisation of proceeds arising from such issue.

The authority will provide flexibility to the Company for any possible fund raising activities, including but not limited to furtherplacingofshares,forpurposeoffundingfutureinvestmentproject(s),workingcapitaland/oracquisitionsaswellasto avoid any delay and cost in convening the general meetings to specifically approve such an issuance of shares.

ORDINARY RESOLUTIONS 12 AND 13 – PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS AND PROPOSED NEW MANDATE FOR ADDITIONAL RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE; AND PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE INVOLVING THE INTEREST OF JERAM BINTANG SDN BHD AND ITS SUBSIDIARY COMPANIES (“JERAM BINTANG GROUP”)

Thedetailson theProposedRenewalofShareholders’Mandate forRecurrentRelatedPartyTransactionsandProposedNew Mandate for Additional Recurrent Related Party Transactions of a Revenue or Trading Nature; and Proposed Renewal ofShareholders’MandateforRecurrentRelatedPartyTransactionsofaRevenueorTradingNatureinvolvingtheinterestofJeramBintangGrouparesetoutintheCirculartoShareholdersdated26April2011,whichisdespatchedtogetherwiththeCompany’s 2010 Annual Report.


Statement Accompanying Notice of the 48th Annual General Meeting(Pursuant to Paragraph 8.27(2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad)

DETAILS OF DIRECTORS WHO ARE STANDING FOR ELECTION

TheDirectorsstandingforelectionareDato’MohdIzzaddinbinIdrisandSuhaimibinHalim.

FurtherdetailsoftheDirectorsstandingforelectionaresetoutintheBoardofDirectors’ProfileandAnalysisofShareholdingssections of the Company’s 2010 Annual Report.

AS ORDINARY BUSINESS: OrdinaryResolution1 Todeclareafinaldividendof8%less25%incometax for thefinancial

year ended 31 December 2010. OrdinaryResolution2 To approve the payment of Directors’ fees of RM456,000.00 for the

financial year ended 31 December 2010. OrdinaryResolution3 To approve the payment of Directors’ fees for the financial year ending

31 December 2011, to be payable on a monthly basis. OrdinaryResolution4 Tore-electDatukZainalAbidinbinAliasasDirectoroftheCompany. OrdinaryResolution5 Tore-electElakumaria/pKantilalasDirectoroftheCompany. OrdinaryResolution6 Tore-electPuasabinOsmanasDirectoroftheCompany. OrdinaryResolution7 Tore-electDato’MohdIzzaddinbinIdrisasDirectoroftheCompany. OrdinaryResolution8 ToelectSuhaimibinHalimasDirectoroftheCompany. OrdinaryResolution9 Tore-appointDatukMohamedZainbinMohamedYusufasDirectorofthe

CompanyinaccordancewithSection129(6)oftheCompaniesAct,1965. OrdinaryResolution10 Tore-appointMessrsErnst&YoungasAuditorsoftheCompanyandto

authorise the Directors to fix their remuneration. AS SPECIAL BUSINESS: OrdinaryResolution11 ToapprovetheAuthority to IssueandAllotSharespursuanttoSection

132D of the Companies Act, 1965. OrdinaryResolution12 ToapprovetheProposedRenewalofShareholders’MandateforRecurrent

Related Party Transactions and Proposed New Mandate for Additional Recurrent Related Party Transactions of a Revenue or Trading Nature.

OrdinaryResolution13 ToapprovetheProposedRenewalofShareholders’MandateforRecurrentRelated Party Transactions of a Revenue or Trading Nature involving the interest of Jeram Bintang Group.

*I/We *NRICNo./CompanyNo. CDSAccountNo. of

beinga*member/membersofFABERGROUPBERHAD(“theCompany”)herebyappoint NRIC No. of orfailing*him/her, NRICNo. of

or failing *him/her, the Chairman of the Meeting as *my/our proxy to vote for *me/us on *my/our behalf at the 48th

Annual General Meeting of the Company to be held at the Ballroom 1, 1st Floor, Sime Darby Convention Centre, 1A,Jalan Bukit Kiara 1, 60000 Kuala Lumpur on Wednesday, 18 May 2011 at 10.00 a.m. or at any adjournment thereof.

Please indicate your vote with an “X” in the respective box of each resolution. If no specific direction as to voting is given, the proxy will vote or abstain from voting on the resolutions at his/her discretion.

Proxy Form NO.OFSHARESHELD

FABER GROUP BERHAD(Incorporated in Malaysia)

(Company No. 5067-M)

(block letters)

(full address)

FOR AGAINST

NOTES:1. A member of the Company entitled to attend and vote at the Meeting is entitled to appoint not more than two (2) proxies to attend and vote in his stead. A proxy may

but need not be a member of the Company.2. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint not more than

two (2) proxies in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.3. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportion of his shareholding to be represented by each proxy.4. The instrument appointing a proxy, in case of an individual, shall be signed by the appointer or by his attorney duly authorised in writing and in the case of a corporation

shall be given under its Common Seal or signed on its behalf by an attorney or officer of the corporation so authorised.5. The instrument appointing a proxy must be deposited at the office of the Company’s Share Registrar, Symphony Share Registrars Sdn Bhd (378993-D) at Level 6,

Symphony House, Block D13, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time set for holding the Annual General Meeting or any adjournment thereof.

COMMONSEAL

* Strike out whichever not applicable

Dated this day of ,2011.

SignatureofShareholder(s)

(full address)

(full address)

The Share Registrar of Faber Group Berhad

c/oSymphonyShareRegistrarsSdnBhd(378993-D)

Level6,SymphonyHouse

Block D13, Pusat Dagangan Dana 1

Jalan PJU 1A/46, 47301 Petaling Jaya

SelangorDarulEhsan

AFFIX STAMP

Group Directory

CONCESSION

FABER MEDI-SERVE SDN BHD10th Floor, Menara 2Faber TowersJalan Desa Bahagia, Taman DesaOff Jalan Kelang Lama58100 Kuala LumpurTel : +60 3 7620 0000Fax : +60 3 7621 5549

REGIONAL OFFICEFMS REGIONAL OFFICE(PERLIS/KEDAH/PENANG)No. 222, Jalan Shahab 4Kompleks Shahab PerdanaJalan Sultanah Sambungan05150 Alor SetarKedah Darul AmanTel : +60 4 734 0910Fax : +60 4 734 0912

FMS REGIONAL OFFICE (SABAH)Lot 6 & 7Lorong Grace Square 2Jalan Pantai Sembulan88100 Kota Kinabalu SabahTel : +60 88 257 592Fax : +60 88 253 584

FMS REGIONAL OFFICE (SARAWAK)6th Floor, Menara GrandLot 42, Section 46Persiaran LuckyJalan Ban Hock93100 Kuching SarawakTel : +60 82 243 006Fax : +60 82 242 875

HEALTHTRONICS (M) SDN BHDSuite (P3-03), BuildingInformation CentreLot 2, Jalan 51A/24346100 Petaling JayaSelangor Darul EhsanTel : +60 3 7625 2525Fax : +60 3 7625 2828

FRESH LINEN SERVICES (SARAWAK) SDN BHDKilang A, Plot 66 & 67Lot 775, Blok 8, MTLDDemak Laut Industrial Park93990 KuchingSarawakTel : +60 82 433 034Fax : +60 82 433 016

FRESH LINEN SERVICES (SABAH) SDN BHDLot 34-5, Kota Kinabalu Industrial Park IZ4Jalan Sapangar88450 Kota KinabaluSabahTel : +60 88 499 180Fax : +60 88 492 499

NON-CONCESSION

FABER FACILITIES SDN BHDLot 113, 1st Floor, Faber TowersJalan Desa Bahagia, Taman DesaOff Jalan Kelang Lama58100 Kuala LumpurTel : +60 3 7628 2888Fax : +60 3 7625 5722

FABER FACILITIESMANAGEMENT SDN BHDLot 115, 1st Floor, Faber TowersJalan Desa Bahagia, Taman DesaOff Jalan Kelang Lama58100 Kuala LumpurTel : +60 3 7628 2888Fax : +60 3 7625 5722

FABER STAR FACILITIESMANAGEMENT LIMITEDA-78, Sector-65, NoidaUttar Pradesh - 201301, IndiaTel : +91 120 426 2200

FABER SINDOORI MANAGEMENTSERVICES PRIVATE LIMITEDParas Plaza, 1st & 2nd FloorNo 20/31, Cathedral Garden LaneNungambakkam, Chennai - 600 034Tamil Nadu, IndiaTel : +91 44 4264 9403/04Fax : +91 44 4264 9405

FABER L.L.C.208 and 209, 2nd Floor,Al Nasriyah Building Banghdad Street, Al QusaisP.O. Box 232283Dubai, United Arab EmiratesTel : +971 4267 4845/258 4561Fax : +971 4267 4855/258 4560

FABER DEVELOPMENTHOLDINGS SDN BHD19th Floor, Menara 2Faber TowersJalan Desa Bahagia, Taman DesaOff Jalan Kelang Lama58100 Kuala LumpurTel : +60 3 7628 2888Fax : +60 3 7628 2809

FABER UNION SDN BHD19th Floor, Menara 2Faber TowersJalan Desa Bahagia, Taman DesaOff Jalan Kelang Lama58100 Kuala LumpurTel : +60 3 7628 2888Fax : +60 3 7628 2809

RIMBUNAN MELATI SDN BHD19th Floor, Menara 2Faber TowersJalan Desa Bahagia, Taman DesaOff Jalan Kelang Lama58100 Kuala LumpurTel : +60 3 7628 2888Fax : +60 3 7628 2809

COUNTRY VIEW DEVELOPMENTSDN BHDMile 31/2, Jalan TuaranLorong Tenejal 1Lucky Heights Condominium88450 Kota KinabaluSabahTel/Fax : +60 88 423 211

REGIONAL OFFICEFABER GRANDVIEW DEVELOPMENT(SABAH) SDN BHDMezzanine FloorLot 8, Block C, Lorong Grandview 3ATaman Grandview Off Sim-Sim Highway90000 SandakanSabahTel/Fax : +60 89 216 220

FABER GROUP BERHAD20th Floor, Menara 2, Faber Towers, Jalan Desa Bahagia, Taman Desa, Off Jalan Kelang Lama, 58100 Kuala Lumpur.Tel : +60 3 7628 2888 Fax : +60 3 7628 2828 www.fabergroup.com.my

INTEGRATED FACILITIES MANAGEMENT DIVISION

CORPORATE OFFICE

PROPERTY DEVELOPMENT DIVISION

20th Floor, Menara 2 Faber Towers Jalan Desa Bahagia Taman Desa Off Jalan Kelang Lama 58100 Kuala Lumpur

Tel : +60 3 7628 2888 Fax : +60 3 7628 2828

www.fabergroup.com.myFABER GROUP BERHADIncorporated in Malaysia(Company No: 5067-M)