MKH Annual Report

Annual Report
2011
Contents
1 4 5 6
Notice of Annual General Meeting Statement Accompanying Notice of Annual General Meeting Corporate Information Chairmans Statement and Operational Review
29 Directors Report 34 Statement by Directors 34 Statutory Declaration 35 Independent Auditors Report to the Members 37 Statements of Comprehensive Income 39 Statements of Financial Position 41 Consolidated Statement of Changes in Equity 43 Statement of Changes in Equity 44 Statements of Cash Flow 48 Notes to the Financial Statements 134 List of Properties 141 Analysis of Shareholdings 144 Directors Shareholdings
Form of Proxy
11 5 Years Group Financial Highlights 12 Directors Profile 14 Statement on Corporate Governance 20 Corporate Social Responsibility 22 Audit Committee Report 24 Statement on Internal Control 26 Directors Responsibility Statement 27 Additional Compliance Information
MKH Berhad (50948-T)

Annual Report 2011
Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN THAT the Thirty-Second Annual General Meeting (32nd AGM) of MKH Berhad (formerly known as Metro Kajang Holdings Berhad) will be held at Ballroom, First Floor, Prescott Metro Inn, Jalan Semenyih, 43000 Kajang, Selangor Darul Ehsan on Friday, 2 March 2012 at 10.00 a.m. to transact the following businesses:
Ordinary Business:
1. To receive the Audited Financial Statements for the financial year ended 30 September 2011 together with the Directors and Auditors reports thereon. To approve Directors fees amounting to RM120,000-00 for the financial year ended 30 September 2011. To approve a Final Dividend of 5.0 sen less 25% Malaysian Income Tax per ordinary share of RM1.00 each for the financial year ended 30 September 2011. To re-elect the following Directors who retire by rotation pursuant to Article 110(1) of the Companys Articles of Association and being eligible, have offered themselves for re-election:(i) (ii) (iii) 5. Mr. Chen Ying @ Chin Ying Mr. Chen Fook Wah Encik Jeffrey Bin Bosra (Ordinary Resolution 3) (Ordinary Resolution 4) (Ordinary Resolution 5) (Please refer to Explanatory Note A)
2.
(Ordinary Resolution 1)
3.
4.
To re-elect Ms. Mah Swee Buoy, who retires by rotation pursuant to Article 117 of the Companys Articles of Association and being eligible, has offered herself for re-election. To re-appoint Haji Mohamed Bin Ismail, who retires pursuant to Section 129(2) of the Companies Act, 1965. To re-appoint Messrs Moore Stephens AC as the Companys Auditors and to authorise the Directors to fix their remuneration.
6.
7.
SPECIAL BUSINESS:
To consider and if thought fit, to pass the following ordinary resolutions: 8. Ordinary Resolution Authority To Issue Shares Pursuant To Section 132D Of The Companies Act, 1965. THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby empowered to issue shares of the Company at any time until the conclusion of the next Annual General Meeting of the Company upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit, provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10 per centum of the issued share capital of the Company for the time being and that the Directors are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad.

Annual Report 2011
Notice of Annual General Meeting (continued)

9. Ordinary Resolution Proposed Renewal Of Authority For The Company To Purchase Its Own Shares (Proposed Renewal Of Share Buy-Back) THAT subject to Section 67A of the Companies Act, 1965, provisions of the Memorandum and Articles of Association of the Company, the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (Bursa Securities) and any other relevant authorities, the Directors of the Company be and are hereby authorised to exercise the power of the Company to purchase such amount of ordinary shares in the Company from time to time through Bursa Securities subject further to the following: (i) the aggregate number of shares purchased does not exceed 10% of the total issued and paid-up share capital of the Company (Purchased Shares) at the point of purchase; the maximum funds to be allocated by the Company for the purpose of purchasing the Purchased Shares shall not exceed the total retained profits and share premium account of the Company at the time of the purchase(s); and the authority conferred by this resolution will commence immediately upon passing of this resolution and will continue to be in force until: (a) the conclusion of the next Annual General Meeting (AGM) of the Company unless the authority is renewed subject to conditions; or (b) the expiration of the period within which the next AGM after that date is required by law to be held; or (c) it is revoked or varied by ordinary resolution passed by the shareholders of the Company in general meeting; whichever occurs first, (iv) upon the completion of the purchase(s) of the Purchased Shares, the Directors of the Company be and are hereby authorised to deal with the Purchased Shares in the following manner:(a) to cancel the Purchased Shares so purchased; or (b) to retain the Purchased Shares so purchased as treasury shares for distribution as dividend to the shareholders and/or resell on the market of Bursa Securities; or (c) to retain part of the Purchased Shares so purchased as treasury shares and cancel the remainder; or (d) to deal in such other manner as the Bursa Securities and such other relevant authorities may allow from time to time.
(ii)
(iii)
AND THAT the Directors of the Company be and are hereby authorised to take all such steps as are necessary to implement, finalize and give full effect to the Proposed Renewal of Share Buy-Back with full power to assent to any conditions, modifications, variations and/or amendments (if any) as may be imposed by the relevant authorities and with fullest power to do all such acts and things thereafter as the Directors may deem fit and expedient in the best interest of the Company. ANY OTHER BUSINESS: 10. To transact any other business of the Company of which due notice shall have been given in accordance with the Companys Articles of Association and the Companies Act, 1965.

Annual Report 2011

NOTICE OF DIVIDEND ENTITLEMENT NOTICE IS HEREBY GIVEN THAT a Final Dividend of 5.0 sen less 25% Malaysian Income Tax per ordinary share of RM1.00 each in respect of the financial year ended 30 September 2011, if approved by the members, will be paid on 26 March 2012 to Depositors registered in the Record of Depositors at the close of business on 16 March 2012. A Depositor shall qualify for entitlement only in respect of: a) Shares transferred to the Depositors Securities Account before 4.00 p.m. on 16 March 2012 in respect of ordinary transfers; and Shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of Bursa Malaysia Securities Berhad.
b)
By Order of the Board,
TAN WAN SAN (MIA 10195) Group Company Secretary Kajang, Selangor Darul Ehsan 9 February 2012 NOTES: 1. A member entitled to attend and vote at the meeting is entitled to attend and vote in person or by proxy or by attorney or by duly authorised representative. A proxy or attorney or duly authorised representative may but need not be a member of the Company. The power of attorney or an office copy or a notarially certified copy thereof or the instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing. If the appointor is a corporation, it must be executed under its common seal or in the manner authorised by its constitution. If the Form of Proxy is returned without any indication as to how the proxy shall vote, the proxy will vote or abstain as he thinks fit. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportion of his holdings to be represented by each proxy. The instrument appointing a proxy together with the power of attorney (if any) under which it is signed or an office copy or a notarially certified copy thereof must be deposited at the Registered Office, Suite 1, 5th Floor, Wisma MKH, Jalan Semenyih, 43000 Kajang, Selangor Darul Ehsan at least 48 hours before the time appointed for holding the meeting or any adjournment thereof. Explanatory Note A This Agenda item is meant for discussion only as the provision of Section 169(1) of the Companies Act, 1965 does not require a formal approval of the shareholders for the audited financial statements. As such, this item is not put forward for voting. 6. Explanatory Statement Pertaining to Ordinary Business Ordinary Resolution 7 The proposed Ordinary Resolution 7 under item 6 is in accordance with Section 129(6) of the Companies Act, 1965 which requires that a separate resolution be passed to re-appoint Haji Mohamed Bin Ismail who is over 70 years of age as Director of the Company and to hold office until the conclusion of the next Annual General Meeting of the Company. This resolution must be passed by a majority of not less than three-fourth of such Members of the Company as being entitled to vote in person or where proxies are allowed, by proxy at the Annual General Meeting of the Company.
2.
3.
4.
5.

Annual Report 2011

7. Explanatory Statement Pertaining to Special Business Ordinary Resolution 9 The proposed Ordinary Resolution 9, if passed, will give the Directors authority to issue and allot new shares of the Company at any time and upon such terms and conditions and for such purposes as the Directors may in their absolute discretion consider to be in the best interest of the Company, without having to convene a general meeting, provided that the aggregate number of shares issued pursuant thereto does not exceed 10% of the issued and paid-up share capital of the Company for the time being. This authority, unless revoked or varied by the Company in a general meeting, will expire at the next Annual General Meeting (AGM) of the Company. The general mandate sought to grant authority to Directors to allot and issue of shares is a renewal of the mandate that was approved by the shareholders at the 31st AGM held on 29 March 2011. The renewal of the general mandate is to provide flexibility to the Company to issue new shares without the need to convene a separate general meeting to obtain shareholders approval so as to avoid incurring additional cost and time. The purpose of this general mandate is for possible future bonus issue and/or fund raising exercises including but not limited to further placement of shares for the purpose of funding current and/or future investment projects, working capital and/or acquisitions. Up to the date of this Notice, the Company did not issue any shares pursuant to the mandate granted to the Directors at the 31st AGM which will lapse at the conclusion of the 32nd AGM to be held on 2 March 2012. Ordinary Resolution 10 The proposed Ordinary Resolution 10, if passed, will give authority to the Directors of the Company to exercise the power of the Company to purchase up to 10% of the issued and paid-up share capital of the Company for the time being. This authority, unless revoked or varied at a general meeting, will expire at the conclusion of the next AGM of the Company or the expiration of the period within which the next AGM is required by law to be held, whichever is the earlier. The detailed information on the Proposed Renewal of Share Buy-Back is set out in the Statement to Shareholders dated 9 February 2012 which is dispatched together with the Annual Report 2011.
Statement Accompanying
Notice of Annual General Meeting
1. as Metro Kajang Holdings Berhad) are as follows:i) ii) iii) iv) v) 2. Mr. Chen Ying @ Chin Ying (Ordinary Resolution 3) Mr. Chen Fook Wah (Ordinary Resolution 4) Encik Jeffrey Bin Bosra (Ordinary Resolution 5) Ms. Mah Swee Buoy (Ordinary Resolution 6) Haji Mohamed Bin Ismail (Ordinary Resolution 7) Directors who are standing for re-election or re-appointment at the 32nd AGM of MKH Berhad (formerly known
The profiles of the Directors who are standing for re-election/re-appointment are set out on pages 12 and 13 of the Annual Report.
3.
The information relating to the shareholding of the above directors in the Company and its related corporation are set out on page 144 of this Annual Report.

Annual Report 2011
Corporate Information
Directors
Y. Bhg. Dato Chen Kooi Chiew @ Cheng Ngi Chong Executive Chairman Y. Bhg. Datuk Chen Lok Loi Managing Director Chen Fook Wah Deputy Managing Director Chen Ying @ Chin Ying Executive Director Mah Swee Buoy (Appointed w.e.f. 05.05.11) Executive Director Haji Othman Bin Sonoh Independent Non-Executive Director Mohammed Chudi Bin Haji Ghazali Senior Independent Non-Executive Director Haji Mohamed Bin Ismail Independent Non-Executive Director Jeffrey Bin Bosra Independent Non-Executive Director
Internal Auditors
KPMG Business Advisory Sdn Bhd Level 10, KPMG Tower 8, First Avenue Bandar Utama, 47800 Petaling Jaya Selangor Darul Ehsan Tel No: (603) 7721 3388 Fax No: (603) 7721 3399
Principal Bankers
Affin Bank Berhad Alliance Bank Malaysia Berhad AmBank (M) Berhad Hong Leong Bank Berhad Malayan Banking Berhad OCBC Bank (Malaysia) Berhad RHB Bank Berhad RHB Bank (L) Ltd United Overseas Bank (Malaysia) Berhad
Registrar
Tricor Investor Services Sdn. Bhd. Level 17, The Gardens North Tower Mid Valley City Lingkaran Syed Putra 59200 Kuala Lumpur Tel No : (603) 2264 3883 Fax No: (603) 2282 1886
Chief Operating Officer

Mah Swee Buoy
Group Company Secretary

Tan Wan San (MIA 10195)
Registered Office
Suite 1, 5th Floor Wisma MKH Jalan Semenyih 43000 Kajang Selangor Darul Ehsan Tel No : (603) 8737 8228 Fax No: (603) 8736 5436
External Auditors
Moore Stephens AC A-37-1, Level 37 Menara UOA Bangsar No. 5, Jalan Bangsar Utama 1 59000 Kuala Lumpur Tel No : (603) 2302 1888 Fax No: (603) 2302 1999
Stock Exchange Listing

Main Market of Bursa Malaysia Securities Berhad Stock Code : MKH Stock No : 6114
Website
www.mkhberhad.com

Annual Report 2011
Chairmans Statement
and Operational Review
On behalf of the Board of MKH Berhad (formerly known as Metro Kajang Holdings Berhad) (the Company or the Group), it gives me great pleasure to present the Annual Report and Audited Financial Statements of the Group and of the Company for the financial year ended 30 September 2011.
OVERVIEW
Despite the challenging global environment, the Malaysian economy registered a higher Gross Domestic Product (GDP) growth of 5.8% in the third quarter of 2011 (2Q11: 4.3%, 1Q11: 5.2%), due to stronger domestic demand. The robust domestic demand was driven by an expansion in both household and business spending and as well as higher public sector expenditure through the implementation of Economic Transformation Programme (ETP). The Malaysian economy is projected to be on track to achieve the 5.0% to 5.5% official growth target for 2011. The monetary policy by Bank Negara remained supportive of the economic activities although its Overnight Policy Rate has been raised from 2.75% to 3.0% following a 25 basis points increase in May 2011. Overall, the market demand for affordable properties and well planned high end developments located in Klang Valley remained strong. The on going ETP projects such as the Greater Kuala Lumpur plan and the proposed Klang Valley Mass Rapid Transit (MRT) with its first phase covering Kajang Sungai Buloh route have a positive effect on the property market in the Klang Valley.
FINANCIAL REVIEW
Despite the challenging operating environment, the Groups operating revenue recorded an increase of 18.3% to RM342.02 million compared to RM289.22 million in the preceding year attributed mainly to the higher sales contribution from the property and construction and trading divisions. The Group registered a higher profit before tax of RM47.19 million for the financial year ended 30 September 2011 as compared to preceding year of RM41.88 million which was mainly attributable to higher profit contribution from the associated company and higher percentage of profit recognition of on-going and new projects from the property development and construction division. The Groups profit after tax increased by 21.8% to RM37.69 million compared to RM30.94 million in the preceding year. The Group has locked-in unbilled sales value of RM370.0 million as at 30 September 2011, of which the sales revenue and profits will be recognized progressively as their development percentage of completion progresses. The Net Assets per share was RM2.77 for the financial year under review. The Groups gearing ratio increased from 35% to 52% for the financial year ended 30 September 2011 mainly due to funding of the Groups oil palm plantation in East Kalimantan, Indonesia. The Group posted an uninterrupted profit track record since commencing business more than twenty-three years ago. This achievement can be attributed to the concerted effort by the Board to continuously enhance value for its shareholders. The property development and construction division remains the major contributor to the Groups operating revenue and profit.
Kajang 2

Annual Report 2011
Chairmans Statement and Operational Review (continued)
PROPERTY DEVELOPMENT AND CONSTRUCTION

For the purpose of segmental reporting, the construction division has been combined with the property development division to form a reportable segment as a major part of the constructions revenue is derived from internal development projects. The Groups property development and construction division posted a higher profit before tax of RM31.42 million as compared to profit before tax of RM16.42 million in the preceding year. The Groups Hill Park 1 development is ahead of schedule with the handing over vacant possession of its development units to its customers in December 2011 as compared to the statutory development schedule in January 2012.
Pelangi Semenyih 2
The Groups high-end projects comprising mainly of semi-detached and bungalows at Sentosa Heights in Kajang and Areca Residence in Kepong recorded good sales with over 50% and 70% take-up rate as at to-date since its launching in July and November 2010 respectively. Pelangi Semenyih 2, an integrated township project launched in September 2010 is set to continue to perform well with over 85% of the units launched taken as at to-date. Saville @ Melawati, a serviced apartment project within the proximity of Taman Melawati in Kuala Lumpur, comprising 408 units service apartment and 24 strata units shop-office recorded very encouraging take-up rate of 83% since its launching in November 2010. Kajang 2, another major integrated township project recorded good sales with over 65% take-up rate as at to-date since its launching in December 2010.
Sentosa Heights
Hill Park 2, newly launched medium-end project comprising mainly of semi-detached and terrace houses totaling 311 units in Kajang, experienced a very strong demand and good take-up rate of 76% since its launching in January 2011. The Board is confident that its property development and construction division will achieve satisfactory results for the financial year ending 30 September 2012.
HOTEL AND PROPERTY INVESTMENT

The Groups hotel and property investment division comprises of two shopping complexes, a 3-star hotel cum office block and four parcels of commercial land leased to two hypermarkets and two leading fast food restaurants located in Kajang and Semenyih, and 4 units stratified office lots with 125 bays of car park. The Group has out-sourced the management of the hotel since year 2003 to a professional hotel management company to enable the Groups management to focus on its core business. The five storey shopping complex known as Plaza Metro Kajang, which is strategically located in the heart of Kajang town, continues to enjoy excellent occupancy rate of over 99% (2010 : 99%). The Metro Point Complex which started its business operation since June 2007 recorded an occupancy rate of 94% (2010 : 92%).

Annual Report 2011
This division recorded a lower profit before tax of RM20.34 million as compared to profit before tax of RM22.31 million in the preceding year mainly due to higher interest expenses. This division is expected to achieve satisfactory results for the financial year ending 30 September 2012.
LIVESTOCK FARMING, FOOD PROCESSING AND RETAIL

This divisions operating revenue increased by 7.9% to RM35.99 million compared to RM33.36 million in preceding year. However, profit before tax was lower by 15.5% to RM4.31 million compared to RM5.10 million in preceding year mainly due to lower profit contribution from the farming division as a result of an increase in cost of production of livestock. The Company has on 29 December 2011 entered into a Sale and Purchase Agreement (SPA) with Charoen Pokphand Foods (Malaysia) Sdn Bhd for the disposal of this division for a total cash consideration of RM64.0 million and the SPA was completed on 16 January 2012. The disposal is in line with the Groups direction to focus on its core business namely in property development, property investment, construction and oil palm plantation.
Plaza Metro Kajang
MANUFACTURING
For the financial year under review, the furniture manufacturing subsidiary company in China, Vast Furniture Manufacturing (Kunshan) Co. Ltd. recorded a lower profit before tax of RM0.54 million as compared to profit before tax of RM1.64 million in the preceding year, mainly due to an increase in the cost of production arising from the increase in raw material prices and labour costs. This division is expected to achieve satisfactory results for the financial year ending 30 September 2012.
TRADING
The trading division is mainly involved in the trading of building materials and fixtures for the Groups property development projects. This division recorded a higher profit before tax of RM3.45 million as compared to profit before tax of RM1.02 million in the preceding year mainly due to increase in sales of building materials to the Groups subcontractors. This division is expected to achieve satisfactory results for the financial year ending 30 September 2012.

Annual Report 2011

OIL PALM PLANTATION DIVISION
The Group has in January 2008 acquired approximately 15,942.60 hectares (39,395 acres) of land in East Kalimantan, Indonesia for the development of oil palm plantation. The planting is progressing well and as at to-date, the Group has planted approximately 98% out of plantable area of 15,200 hectares with oil palm trees. The construction of the Crude Palm Oil (CPO) mill with a capacity to process 60 metric tonnes of fresh fruit bunch (FFB) per hour has been completed. The oil palm plantation division is expected to contribute positively to the Groups earnings over the years when harvesting activities peak.
DIVIDEND
The Board of Directors has proposed a Final Dividend of 5.0 sen less 25% tax per ordinary share of RM1-00 each for the financial year ended 30 September 2011. The Board do not recommended any further dividend for the financial year ended 30 September 2011. (2010 : First Interim Dividend of 5.0 sen less 25% tax per ordinary share of RM1-00 each).
PROSPECTS
The Malaysian economy is expected to moderate due to the debt crisis in Europe. Nevertheless, the Malaysian economy is expected to be resilient due to the supportive Government policies and the implementation of projects such as the Tenth Malaysia Plan, ongoing ETP and 1Malaysia Housing Programme amongst others. Private consumption is expected to remain healthy with the implementation of mega infrastructure projects such as MRT and the ETP which will generate significant multiplier effects in the economy. In addition, our countrys fundamentals remain sound, backed by large international reserves and a well capitalised and well managed banking system. The Property and Construction Division is expected to expand further with the maiden launch of Pelangi Seri Alam mixed residential and commercial development in Puncak Alam, Shah Alam coupled with the on-going three township projects namely Kajang 2, Hillpark Homes and Pelangi Semenyih 2 in Kajang and Semenyih area and Melawati Serviced Apartments project, which is located in Desa Melawati, Kuala Lumpur. The key risks to the Group is the moderation to the economy arising from the debt crisis in Europe. However, the risk is mitigated as a portion of the Groups property development comprise of affordable properties which will continue to enjoy good demand.
10

Annual Report 2011
Moving forward, the Group will continue to focus on strengthening its position as a developer of choice through innovative, modern lifestyle and quality home-themed development. The Group is committed in ensuring quality products and has adopted the Quality Assessment System in Construction (QLASSIC) by the Construction Industry Development Board (CIDB) Malaysia, for its projects. The Groups construction division has also obtained the ISO 9001:2000. The Group will leverage on the good demand for affordable residential units and selected exclusive lifestyle themed residential and commercial development at prime locations to ensure continuous growth in sales and earnings. Your Board is confident that affordable homes and selected exclusive residential and commercial development at prime locations in the south of Klang Valley such as Kajang, Semenyih and Cyberjaya will continue to be in demand in 2012. In addition, the Group will continue to focus on the oil palm plantation sector which has a very good prospect and will enable the Group to have a steady source of income. The Board is confident that the Group will achieve satisfactory results for the financial year ending 30 September 2012.
ACKNOWLEDGEMENT
On behalf of the Board of Directors, I would like to extend our sincere appreciation and thanks to our shareholders, valued customers, bankers, business associates and the relevant authorities for their continued confidence and support in us. I would also like to extend our heartfelt thanks to the management team and staff for all their hard work during the past year, as well as for their unwavering dedication, loyalty and commitment which has made the success of the Group possible. Thank you. DATO CHEN KOOI CHIEW @ CHENG NGI CHONG Executive Chairman
11

Annual Report 2011
5 Years Group Financial Highlights

Operating Revenue (RM000)
2011 2010 2009 2008 2007 100,000 200,000
Profit Before Taxation (RM000)

2011 2010
342,016
289,217 370,159 345,954 307,791
300,000 400,000
47 ,190
41,883 57,744 70,996 78,391
20,000 40,000 60,000 80,000
2009 2008 2007
Profit Attributable to Shareholders of the Company (RM000)

2011 2010 2009 2008 2007 20,000 40,000
Shareholders Equity (RM000)

2011 2010
38,015
30,578 41,656 51,587 60,820
60,000 80,000
733,804
671,157 650,818 618,185 539,661
200,000 400,000 600,000 800,000
2009 2008 2007
*2011
RM'000
2010
RM'000 289,217 41,883 30,935 30,578
2009
RM'000 370,159 57,744 42,731 41,656
2008
RM'000 345,954 70,996 51,437 51,587
2007
RM'000 307,791 78,391 60,820 60,820
Income Statement
Revenue Profit Before Taxation Profit After Taxation Profit Attributable to Shareholders of the Company 342,016 47 ,190 37 ,688 38,015
Balance Sheet
Issued and Paid up Capital Shareholders' Equity 264,585 733,804 240,532 671,157 229,078 650,818 229,078 618,185 199,420 539,661
Ratios
Dividend per share (sen) @ ^Net Earnings per share (sen) ^ Net Assets per share (RM) Debt/Equity ratio (%) Return on Shareholders' Equity (%) 14.37 2.77 52 5 5.00 11.56 2.54 35 5 5.00 15.74 2.46 25 6 5.00 19.50 2.34 28 8 5.00 22.99 2.04 35 11
* Represents continuing operations and discontinued operations of the Group. @ Attributable to the equity holders of the Company. ^ The preceding years net earnings per share and net assets per share have been restated to effect the Bonus Issues made in March 2010 and March 2011. The above information should be read in conjunction with the Group's audited financial statements for the financial year ended 30 September 2011.
12

Annual Report 2011
Directors Profile
Dato Chen Kooi Chiew @ Cheng Ngi Chong
Executive Chairman Dato Chen Kooi Chiew @ Cheng Ngi Chong, aged 68, a Malaysian, was appointed to the Board on 27 September 1979 and holding the present position as Executive Chairman since 30 October 2006. He is also a member of the Executive Committee. He has been involved in business for about 51 years of which 33 years were in property development and construction industries and 19 years were in plantation sector. He is the brother of Datuk Chen Lok Loi, Mr. Chen Ying @ Chin Ying and Mr. Chen Fook Wah. He has no conflict of interest with the Company by virtue of his interest in certain privately owned companies, which are no longer involved in property development business. Dato Chen Kooi Chiew attended all the five Board Meetings held during the financial year ended 30 September 2011.
Datuk Chen Lok Loi

Managing Director Datuk Chen Lok Loi, aged 59, a Malaysian, holds a Bachelor Degree in Marketing from Monash University, Australia. He was appointed to the Board on 31 July 1984 and holding the present position as Managing Director since 19 January 2005. He is also a member of the Executive Committee. He has more than 30 years of experience in property development and construction related businesses. He is a Patron, Past President of the Real Estate and Housing Developers Association of Malaysia (REHDA) and Chairman of the Board of Trustees of REHDA. He is currently the Deputy Chairman for Construction and Property Committee in the Associated Chinese Chambers of Commerce and Industry of Malaysia and a member of the Advisory Board of the Construction Labour Exchange Berhad. He is also the Honorary Treasurer of the Malaysia Crime Prevention Foundation, the President of ASEAN Association for Planning and Housing Malaysia, the President of the Race Walkers Association of Malaysia, Deputy President of Eastern Regional Organization for Planning and Housing Malaysia (EAROPH). Datuk Chen Lok Loi is the brother of Dato Chen Kooi Chiew @ Cheng Ngi Chong, Mr. Chen Ying @ Chin Ying and Mr. Chen Fook Wah. He has no conflict of interest with the Company by virtue of his interest in certain privately owned companies, which are no longer involved in property development business. Datuk Chen Lok Loi attended all the five Board Meetings held during the financial year ended 30 September 2011.
Mr. Chen Fook Wah

Deputy Managing Director Mr. Chen Fook Wah, aged 55, a Malaysian, completed his Master in Business Administration from University of Wales. He was appointed to the Board on 25 November 1999 and holding the present position as Deputy Managing Director since 19 January 2005. He is currently a member of the Executive Committee. He was admitted to the Board of Valuers and Real Estate Agent of Malaysia in 1986. Prior to joining the Group, he was with Guthrie Trading Sdn Bhd from 1973 to 1974 and Hilton Realty from 1975 to 1978. He is the brother of Dato Chen Kooi Chiew @ Cheng Ngi Chong, Datuk Chen Lok Loi and Mr. Chen Ying @ Chin Ying. He has no conflict of interest with the Company by virtue of his interest in certain privately owned companies, which are no longer involved in property development business. Mr. Chen Fook Wah attended all the five Board Meetings held during the financial year ended 30 September 2011.
Mr. Chen Ying @ Chin Ying

Executive Director Mr. Chen Ying @ Chin Ying, aged 65, a Malaysian, holds a Bachelor Degree in Engineering (Mechanical) from University of Western Australia. He was appointed to the Board on 7 March 2005. He is currently a member of the Executive Committee and is managing the Groups furniture manufacturing subsidiary in China. Prior to joining the Group, he was with UMW Holdings Berhad for 5 years as Project Engineer and subsequently promoted to Project Manager. He later joined Scotts & English Sdn Bhd for about 6 years as Service/Workshop Manager and Head of Industrial Sales and Marketing Division. He is the brother of Dato Chen Kooi Chiew @ Cheng Ngi Chong, Datuk Chen Lok Loi and Mr. Chen Fook Wah. He has no conflict of interest with the Company by virtue of his interest in certain privately owned companies, which are no longer involved in property development business. Mr. Chen Ying @ Chin Ying attended all the five Board Meetings held during the financial year ended 30 September 2011.
13

Annual Report 2011
Directors Profile (continued)
Ms. Mah Swee Buoy

Executive Director/Chief Operating Officer Ms. Mah Swee Buoy, aged 50, a Malaysian, was appointed to the Board on 5 May 2011. She started her professional career with Somura Development Sdn Bhd in July 1985. She later joined MKH Berhad in January 1988 as an Accountant. She was promoted to Chief Accountant in 1994 and subsequently promoted to General Manager (Corporate Finance) in 2003. On 19th January 2005, she was appointed as the Chief Operating Officer of MKH Berhad and held the position until today. She does not have any family relationship with any other Directors and/or major shareholders of the Company and has no conflict of interest with the Company. Ms. Mah Swee Buoy attended all the two Board Meetings held since the date of her appointment up to the financial year ended 30 September 2011.
Haji Othman Bin Sonoh

Independent Non-Executive Director Haji Othman Bin Sonoh, aged 69, a Malaysian, was appointed to the Board on 24 October 1996. He was appointed as a member of the Audit Committee on 12 February 2004. He was a civil servant from 1968 to 1993 in various departments including a position in the Ministry of Finance. He is involved in the supply of telecommunication equipment since 1996. He does not have any family relationship with any other Directors and/or major shareholders of the Company and has no conflict of interest with the Company. Haji Othman Bin Sonoh attended all the five Board Meetings held during the financial year ended 30 September 2011.
Encik Mohammed Chudi Bin Haji Ghazali

Senior Independent Non-Executive Director Encik Mohammed Chudi Bin Haji Ghazali, aged 68, a Malaysian, was appointed to the Board on 19 March 2003. He is also a member of the Audit Committee. He was attached to Standard Chartered Bank Malaysia Berhad for 36 years and was a Senior Manager prior to his retirement in 1999. He has attended banking courses conducted at National Westminister Bank Staff College, Oxford and Manchester University Business School. He is currently a Board member of Koperasi Serbaguna Anak-Anak Selangor Berhad. He does not have any family relationship with any other Directors and/or major shareholders of the Company and has no conflict of interest with the Company. Encik Mohammed Chudi attended all the five Board Meetings held during the financial year ended 30 September 2011.
Haji Mohamed Bin Ismail

Independent Non-Executive Director Haji Mohamed Bin Ismail, aged 71, a Malaysian, was appointed to the Board on 18 March 2004. He was the State Director of Lembaga Pertubuhan Peladang from 1978 to 1989. He later became the Director General of Lembaga Tembakau Negara (LTN) from 1990 to 2000 and was the Chairman of LTN from 2001 to 2002. He does not have any family relationship with any other Directors and/or major shareholders of the Company and has no conflict of interest with the Company. Haji Mohamed Bin Ismail attended all the five Board Meetings held during the financial year ended 30 September 2011.
Encik Jeffrey Bin Bosra

Independent Non-Executive Director Encik Jeffrey Bin Bosra, aged 43, a Malaysian, was appointed to the Board on 1 August 2008. He is also the Chairman of the Audit Committee. He is currently a member of The Malaysian Institute of Certified Public Accountants (MICPA) and The Malaysian Institute of Accountants (MIA). He started his professional career with Arthur Andersen & Co. focusing on external audits and business advisory works. He later joined an established commercial group as the Finance Manager from 1996 to 2000. He then joined Ernst & Young as the Senior Manager specializing in corporate governance, risk management, internal audits, special investigation and turnaround management related service. Encik Jeffrey Bin Bosra left Ernst & Young in 2004 and started his own audit firm. He does not have any family relationship with any other Directors and/or major shareholders of the Company and has no conflict of interest with the Company. Encik Jeffrey Bin Bosra attended all the five Board Meetings held during the financial year ended 30 September 2011.
14

Annual Report 2011
Statement on Corporate Governance

The Board of MKH Berhad (formerly known as Metro Kajang Holdings Berhad) is pleased to report to stockholders on the manner the Company has applied the Principles, and the extent of compliance with the Best Practices of good governance as set out in Part 1 and Part 2 respectively of the Malaysian Code on Corporate Governance (Revised 2007) (the Code) pursuant to Paragraph 15.25 of the Bursa Malaysia Securities Berhad Main Market Listing Requirements (Listing Requirements) to safeguard the interest of shareholders and other stakeholders. Any areas where the Company has not complied with the Code are explained in this report.
THE BOARD OF DIRECTORS 1. Composition, Duties and Responsibilities

During the year in review, the Board, led by an experienced Executive Chairman, Dato Chen Kooi Chiew was made up of nine (9) members comprising five (5) executive directors and four (4) other non-executive directors whom are independent directors. The composition of the Board was well balanced, representing both the major and minority shareholders interests and complied with:(a) (b) the Listing Requirements where at least two (2) directors or one-third (1/3) of the Board, whichever is higher, must comprise of independent directors; and the Best Practices where one-third (1/3) of the Board should comprise of independent non-executive directors. The Board having reviewed its size and composition is satisfied that its current size and composition is well balanced, with diverse professional background, skills, expertise and knowledge in discharging its responsibilities for the proper functioning of the Board and fairly reflects the investment in the Company by shareholders apart from the largest shareholder. The roles of the Executive Chairman and Managing Director are distinct and separate to ensure a balance of power and authority. The Executive Chairmans primary role is to lead and manage the Board. The Managing Director is responsible for the development and implementation of strategy, and overseeing and managing the day-to-day operations of the Group. The Executive Directors take on the primary responsibility of managing the Groups business and resources, led by the Executive Chairman, Dato Chen Kooi Chiew and the Managing Director, Datuk Chen Lok Loi. As part of its commitment, the Board supports the highest standards of corporate governance and the development of best practices for the Company. The independent non-executive directors as defined under Paragraph 1.01 of the Listing Requirements are independent from management and are free from any business or other relationships that could materially interfere with the exercise of their independent judgement. Independent non-executive directors are required to voice their reservations of any board decisions in areas such as policies and strategies which could be detrimental to the interest of the minority shareholders. The Board has identified and appointed Encik Mohammed Chudi Bin Haji Ghazali as the Senior Independent Non-Executive Director to whom concerns of shareholders, management and others may be conveyed. The Independent Directors led by Encik Mohammed Chudi Bin Haji Ghazali provide a broader view, independent and balanced assessment of proposals from the Executive Directors. The Board is assisted by a management team relevant to the Groups business operations.
15

Annual Report 2011
Statement on Corporate Governance (continued)

1. Composition, Duties and Responsibilities (continued)
The Board takes full responsibility for the overall performance of the Company and the Group. This includes the following 6 specific areas: reviewing and adopting strategic plans for the Group. overseeing the conduct of the Groups businesses to evaluate whether the businesses are being properly managed. identifying principal risks and ensuring the implementation of appropriate systems to manage these risks. succession planning, including the implementation of appropriate systems for appointing, training, fixing the compensation of and where appropriate, replacing senior management. developing and implementing an investor relations programme for the Company, as it is important that the Company is able to communicate effectively with its shareholders. reviewing the adequacy and the integrity of the Groups internal control systems and management systems; including systems for compliance with applicable laws, regulations, rules, directives and guidelines.
2.
Board Meeting and Supply of Information

The Board meets at least 4 times a year and has a formal schedule of matters reserved to it. Additional meetings are held on an ad-hoc basis to deliberate on matters requiring its immediate attention. The Board is supplied with full and timely information to enable it to discharge its responsibilities. During these meetings, the Board reviews the Groups financial performance, business operations, reports of the various board committees and results are deliberated and considered. Management and performance of the Group and any other strategic issues that affect or may affect the Groups businesses are also deliberated. During the financial year, the Board met 5 times; whereat it deliberated and considered a variety of matters affecting the Companys operations including the Groups financial results, business plan and direction of the Group. Directors have access to all information within the Company and to the advice and services of a competent Company Secretary who is qualified under the Companies Act, 1965 and is responsible for ensuring that Board meeting procedures are followed and that applicable rules and regulations are complied with. The Directors may seek independent professional advice, at the Companys expense, if required in furtherance of their duties. The Board recognises that the Chairman is entitled to the strong and positive support of the Company Secretary in ensuring the effective functioning of the Board.
3.
Retirement by Rotation and Re-Election of Directors

In accordance with the Companys Articles of Association, all Directors who are appointed by the Board are subjected to re-election by the shareholders in the next Annual General Meeting subsequent to their appointment. At least one third of the Directors are required to retire from office by rotation annually and subject to re-election at each Annual General Meeting. All Directors shall retire from office at least once in three (3) years but shall be eligible for re-election. Any person appointed by the Board either to fill a casual vacancy or as an addition to the existing directors, shall hold office until the conclusion of the next Annual General Meeting and shall then be eligible for re-election. Pursuant to Section 129(2) of the Companies Act, 1965, directors who are or over the age of seventy (70) years shall retire at every Annual General Meeting and may offer themselves for re-appointment to hold office until the conclusion of the next Annual General Meeting.
16

Annual Report 2011
4.
Directors Training
In order to keep abreast with the latest regulatory development, all Directors are required to attend the Mandatory Accreditation Programme (MAP). All the directors have successfully completed the MAP conducted by Bursatra Sdn Bhd. The Board has taken on the responsibility in evaluating and determining the specific and continuous training needs of the Directors on a regular basis. The Directors have attended courses/seminars and in house training from time to time to enhance their skills and knowledge and to keep abreast with the relevant changes in laws, regulations and business environment in order to discharge their duties more effectively. The training programmes, seminars and conferences attended by the Directors during the financial year are as follows: Risks Management a) Half day Governance Program Assessing the Risk and Control Environment organised by Bursa Malaysia Securities Berhad; and b) Government Financial Assistance - Enabling Business Expansion & Growth organised by Malaysian Institute of Accountants. Regulatory and Compliance In house briefing on the following changes:a) Malaysian Code On Take-Overs And Mergers 2010; b) Amendments to Bursa Malaysia Securities Berhad Main Market Listing Requirements in relation to privatization of listed corporations via disposal of assets; c) New Reporting in the Accounting Policies: FRS 8 Operating Segments FRS 101 Presentation of Financial Statements; Amendment to FRS 117 Leases; and FRS 139 Financial Instruments, Recognition and Measurement.
5.
Directors Remuneration
The Directors remuneration is linked to experience, scope of responsibilities, service seniority, performance and published market survey information. (i) Aggregate remuneration of Directors categorised into appropriate components: Remuneration (in RM) Fees Other emoluments Estimated monetary value of benefits-in-kind Total Executive 7,839,280 137,446 7,976,726 Non-Executive 120,000 106,480 5,300 231,780
17

Annual Report 2011
5.
Directors Remuneration (continued)

(ii) Breakdown of Directors remuneration for the year ended 30 September 2011, by category and in each successive band of RM50,000-00 are as follows: No. of Directors Range of Remuneration (RM) 1 50,001 200,001 250,001 650,001 50,000 100,000 250,000 300,000 700,000 Executive 1 1 1 1 1 1 6 Non-Executive 2 2 4
1,200,001 1,250,000 2,600,001 2,650,000 3,000,001 3,050,000 Total
6.
Board Committees
To assist the Board to discharge its role and functions effectively, the Board has delegated certain responsibilities to the various Board Committees. The terms of reference, functions and authorities delegated to the Board Committees are as follows: -
6.1 The Executive Committee

The Executive Committee which meets at least once a month to examine strategic matters, policies and business risks which may affect the Group such as any new investment proposed to be undertaken by the Group and reviews the performance of each of the Groups business divisions.
6.2 The Audit Committee

The Audit Committees composition complies with the Listing Requirements. The key functions and responsibilities of the Audit Committee, its activities during the financial year, details of attendance of each member and the number of meetings held are set out on pages 22 to 23 of this Annual Report.
6.3 Risk Management Committee

The Risk Management Committee whose current members comprised of three (3) members from the Senior Management assists the Audit Committee and the Board in discharging its risk management and control responsibilities. In fulfilling the primary objectives, the Risk Management Committee has been tasked to identify and communicate the existing and potential critical risk areas faced by the Group and the management action plans to mitigate such risks by working with the internal auditors in providing periodic reports and updates to the Audit Committee.
18

Annual Report 2011
7.
Accountability and Audit 7.1 Financial Reporting: Statement of Directors Responsibilities in respect of the Audited Financial Statements
The Board aims to provide and present a balanced and meaningful assessment of the Companys financial performance and prospects at the end of the financial year, primarily through the financial statements; the Chairmans Statement and Operations review in the Annual Report. In preparing the above financial statements the Directors have:
adopted suitable accounting policies and then apply them consistently; m ade judgements and estimates that are prudent and reasonable; ensured applicable approved accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and prepared the financial statements on the going concern basis.
7.2
Internal Audit Function (a) The Internal Audit Function and Its Role
To assist the Audit Committee in monitoring and ensuring that an appropriate system of internal control is in place, the Company outsourced its internal audit function to KPMG Business Advisory Sdn Bhd, an independent professional firm. The internal audit function reported directly to the Audit Committee. The principal role of the internal audit function is to undertake, on a prioritized approach, an independent and systematic assessment of the Groups system of internal controls as established by Management so as to provide reasonable assurance that such system continues to operate satisfactorily and effectively as intended in addressing business risks faced by the Group. The internal audit report issued to the Audit Committee highlighted the areas for improvements as observed, pertinent recommendations thereof and action plans as committed by the auditee to address the issues that were brought up.
(b)
Internal Audit Carried Out During the Year

During the financial year, the internal auditors conducted its work based on an annual audit plan which was approved by the Audit Committee. The main activities carried out during the financial year under review by the Internal Audit function are set out below: (i) Conduct of Internal Audit The internal audit function adopted a risk-based approach in identifying the areas to be covered. During the financial year, the internal auditors focused on the Investment Properties Division and Trading Business Division, including the risks inherent in these divisions. Issues relating to control deficiencies or areas for improvements, including relevant recommendations to address the issues noted, were highlighted in an internal audit report furnished to the Audit Committee; and (ii) Follow-up Audit Report The internal auditors also performed a follow-up on the status of Management-agreed action plans on recommendations which were either partially or yet to be implemented on issues raised in previous internal audit reports.
(c)
Remuneration of Internal Auditors

The cost incurred on internal audit function for the financial year ended 30 September 2011 amounted to RM74,000 (2010: RM50,000).
19

Annual Report 2011
7 .3
External Audit
The Companys independent External Auditors fill an essential role for the shareholders by enhancing the reliability of the Companys financial statements and giving assurance of that reliability to users of these financial statements.
The External Auditors will communicate to the Audit Committee and the Board when they become aware of any significant weaknesses in the Companys system of internal control, including fraud, during the course of their audit.
8.
Relations with Shareholders, Investors and Media

The annual report and the quarterly announcements are the primary modes of communication to report on the Groups business activities and financial performance. The Annual General Meeting (AGM) is the principal forum for dialogue with individual stockholders. At the Companys AGM, stockholders have direct access to the Board and are given the opportunity to ask questions during the AGM. The stockholders are encouraged to ask questions both about the resolutions being proposed or about the Companys operations in general. The Chairman of the Board also addresses the stockholders on the review of the Companys operations for the financial year and outline the prospects of the Company for the new financial year. Additionally, immediately after the AGM, the Board also meets members of the press. The Companys website www.mkhberhad.com provides easy access to the latest corporate information on the Group. In addition, the Company has also appointed an Investor Relations firm to carry out the Groups Investor Relations programme and met up with the financial analysts on quarterly basis.
9.
Compliance Statement
The Group has complied throughout the year ended 30 September 2011 with all the best practices of corporate governance set out in Part 1 and Part 2 of the Code other than those set out below. The reasons for such noncompliances are as follows: (i) Nomination Committee Establishment of a Nomination Committee has not been effected as its functions are carried out by the Board. The Board will be provided with the relevant particulars of the new director candidate beforehand for consideration and deliberation on the suitability of the new candidate taking into account the required mix of skills, expertise and experience. (ii) Remuneration Committee Establishment of a Remuneration Committee has not been effected as the Directors remuneration scheme is linked to experience, scope of responsibilities, service seniority and published market survey information.
20

Annual Report 2011
Corporate Social Responsibility

The Group is committed towards good corporate social responsibility practices especially the areas on the workplace, the community, the environment and the marketplace to deliver sustainable value to the society at large.
The Workplace
We strongly believe that human capital is the most important value to an organization. To ensure a safe and healthy working condition for our employees and support workers, the Group has adopted the Malaysian Standard on the Occupational Safety and Health Management System. In additional, necessary preventive actions and risk mitigation measures such as fire drills, site safety briefing/training, fire and flood mitigation surveys have been conducted from time to time. As part of the human capital development, the Group has conducted various in-house training programme focusing on quality leadership, productivity and job related training to equip the employees with the required skills and knowledge with high commitment. The Group also provides study loan to its employees for the betterment of the staff welfare. During the financial year, in-house sports activities, yoga, aerobic, line dance classes and team building were carried out for health betterment and further enhance the working relationship and team spirit amongst the employees.
The Community
As a caring and responsible corporate citizen, the Group has contributed funds to various under-privileged children, old folks, schools and charitable activities during the financial year under review. Over the years, the Group has offered internship programmes and graduate placement programmes for the wellness of the communities. During the financial year, the Group has participated in community activities as follows: Sponsorship for New Era College Environment-Care Se3D Green Campaign 2010. Sponsorship for SMK Tinggi Kajang on Form Six Graduation Book 2010. Sponsorship for Majlis Jaksa Pendamai Negeri Melaka. Sponsorship for REHDA Malaysia New Building. Sponsor hampers for BACATHON SK Bandar Rinching. Sponsor souvenir sets for Persatuan Penduduk Taman Pelangi Semenyih Fasa 6 & 7 Selangor on Badminton Competition Muhibbah. Sponsor hampers and stationery sets for Bowling Competition for Kawasan Rukun Tetangga, Fasa 3, Taman Pelangi Semenyih. Sponsorship for SKC Education Fund for St. Katherines Church, Kajang. Sponsorship for Taiwan Buddhist Tzu-Chi Foundation Malaysia on Recycle Campaign. Sponsorship for UKM Bengkel Seni Bina Ke-23 at UTM Skudai, Johor. Sponsorship for SK Bandar Rinching for 2011/12 School Activity Expenses. Sponsorship for Program Sabutan Bulan Kemerdekaan dan Kempen Kibar Jalur Gemilang, SK Bandar Rinching, Semenyih. Sponsorship for Jamuan Hari Raya Aidilfitri, IPD Kajang. Organised MKH Blood Donation at Metro Point Complex, Kajang.
21

Annual Report 2011
Corporate Social Responsibility (continued)
The Environment
The Group recognizes the importance of environmental conservation. For example, waste and construction debris were disposed at approved dumpsites. We have implemented the recycling of water at the factory belonging to the Groups subsidiary. During the financial year, the Group has also implemented the recycling of used papers and promoting good practices on energy saving.
The Marketplace
The Group is committed to continuously enhance value for its shareholders and this can be evidenced through the Groups uninterrupted profit track record since commencing business over twenty years ago. It is our aim to provide high quality products and services to our customers. During the financial year under review, customer surveys were conducted to gauge the level of customers satisfaction and also to obtain constructive feedbacks. The Group is committed in ensuring quality products and has adopted Quality Assessment System in Construction (QLASSIC) by the Construction Industry Development Board (CIDB) Malaysia, for its projects. The Groups construction division has also obtained the ISO 9001:2000.
22

Annual Report 2011
Audit Committee Report

1. Role of Audit Committee
The Audit Committee assists, supports and implements the Boards responsibility to oversee the Groups operations in the following manner: provides a means for review of the Groups processes for producing financial data, its internal controls and independence of the Groups External and Internal Auditors. reinforces the independence of the Groups External Auditors. reinforces the objectivity of the Groups Internal Auditors.
2.
Key Functions and Responsibilities

The key functions and responsibilities of the Audit Committee are as follows: (a) to review the quarterly and year-end financial statements focusing on compliance with accounting standard; (b) to discuss matters arising from the interim and final audits, and any matters that the External Auditors may wish to discuss (in the absence of Management); (c) to review the adequacy of the scope of internal audit programme and results of the internal audit process and where necessary ensure that appropriate actions are taken on the recommendations of the internal audit findings. (d) to recommend to the Board the appointment of the External Auditors and Internal Auditors and the audit fee thereof; (e) (f) (g) (h) to review any related party transactions that may arise within the Company or Group; to review the major findings of internal audit investigations and managements response; to review any External Auditors Letter to management (if any) and managements response; and to review the adequacy of the scope of internal audit programme and results of the internal audit process and where necessary ensure that appropriate actions are taken on the recommendations of the internal audit function.
23

Annual Report 2011
Audit Committee Report (continued)
3.
Membership and Meetings of the Committee

The Audit Committee comprises the following members:Chairman En. Jeffrey Bin Bosra (Independent Non-Executive Director Chairman)
Member En. Mohammed Chudi Bin Haji Ghazali (Senior Independent Non-Executive Director)
Member Haji Othman Bin Sonoh (Independent Non-Executive Director)
During its tenure, the Audit Committee met four (4) times during the financial year, details as follows: Name of Audit Committee En. Jeffrey Bin Bosra En. Mohammed Chudi Bin Haji Ghazali Haji Othman Bin Sonoh Attendance of Meetings 4/4 4/4 4/4
The meetings were structured through the use of agendas and relevant board papers which were distributed to the Audit Committee prior to such meetings. The Chief Operating Officer and the Group Financial Controller were also present in these meetings. Representatives from the external and/or the internal auditors also attended the meetings upon invitation where matters relating to the external and internal audit were discussed.
4.
Activities Undertaken By The Audit Committee

During the financial year, the activities of the Audit Committee were as follows:-
Reviewed the financial statements and unaudited quarterly financial results and announcements of the results before recommending for the Board of Directors approval; Reviewed the scope of the audit plan from the Internal Auditors and External Auditors; Reviewed the audit reports and recommendation to improve internal control and managements response thereto; and Reviewed and recommended to the Board the appointment of the External Auditors.
INTERNAL AUDIT FUNCTION

The Group has outsourced its internal audit function with the appointment of the professional accounting firm, KPMG Business Advisory Sdn Bhd since 30 April 2001.
24

Annual Report 2011
Statement on Internal Control

The Malaysian Code on Corporate Governance (the Code) sets out as a principle that the Board of a company listed on the Bursa Malaysia Securities Berhad (Bursa Securities) should maintain a sound system of internal control to safeguard shareholders investment and the Groups assets. The Board is committed to maintain a sound system on internal control for the Group and is pleased to provide the following statement in accordance with paragraph 15.26(b) of Bursa Securities Main Market Listing Requirements and as guided by the Bursa Securities Statement on Internal Control : Guidance for Directors of Public Listed Companies (the Guidance).
Boards Responsibilities
The Board acknowledges its responsibilities for maintaining sound internal control systems to safeguard shareholders interest and the Groups assets. The Boards responsibilities include: identifying principal risks and ensuring the implementation of appropriate internal control systems to manage these risks; and reviewing the adequacy and the integrity of the Groups internal control systems and management information systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines.
However, due to the limitations inherent in any system of internal control, it should be noted that such system is designed to manage rather than to eliminate the risk of failure to achieve the Groups business objectives. Such system can only provide reasonable and not absolute assurance against material misstatement or loss. The system of internal control of the Group covers, inter-alia, risk management, financial, operational and compliance controls. Accompanying the maintenance of an appropriate system of internal control, is an on-going process to identify, evaluate, monitor and manage principal risks faced by the Group and this process is regularly reviewed by the Board and accords with the Guidance. The process is undertaken by the Audit Committee which reports its findings to the Board. Whilst the Audit Committee has delegated the implementation of the system of internal controls within an established framework to the management, it is assisted by an internal audit function which provides an independent assessment and the relevant assurance on the effectiveness, adequacy and integrity of the system of internal control based on findings from internal audit reviews carried out during the year.
Risk Management Framework

The Board with the assistance of the Audit Committee, the Risk Management Committee and the Internal Auditors, Messrs KPMG Business Advisory Sdn Bhd, continuously review existing risks and identify new risks that the Group faces and management action plans to manage the risks. To further enhance the risk management process within the culture of the Group, review of existing risks and identification of new risks is also conducted periodically with involvement of selected management and staff. In additions, nominated key management in each business unit have prepared action plans or/and exit plans to address key risks and control issues highlighted by the Internal Auditors. During the financial year ended 30 September 2011, the Risk Management Committee has: (a) Reviewed management action plans presented by the nominated key management of certain business units of the Group; Reviewed the Groups quarterly financial and non-financial performances measured against the approved Budget; Reported its findings on major issues relating to risks and risk management to the Audit Committee on quarterly basis which then reports to the Board; and Reviewed new property development projects and business investment in the subsidiaries and/or associates.
(b)
(c)
(d)
25

Annual Report 2011
Statement on Internal Control (continued)

Internal Audit Function
During the financial year, the Audit Committee continued to engage the services of an external professional firm, Messrs KPMG Business Advisory Sdn Bhd, distinct from the external auditors, to provide independent internal audit services to the Group, who reports independently to the Audit Committee. The internal audit function provides the Audit Committee with periodic reports, based on the audits conducted, highlighting observations, recommendations and management action plans to improve the system of internal control. The key role of the internal audit function is to assess managements adherence to established policies and procedures as well as to act as an independent sounding board to the Audit Committee concerning areas of weaknesses or deficiencies in the risk management, governance and control processes for appropriate remedial measures to be carried out by the management. Risk Management Committee also assists the Board and the Audit Committee to identify critical risks that the Group faces and proposes management action plans to manage the risks on an ongoing basis. The Committee will present the Groups risk profile and control measures to the Audit Committee.
Other Risks and Control Process

Apart from risk management and internal audit, the Board has put in place an organizational structure with formally defined lines of responsibility and delegation of authority. A process of hierarchical reporting has been established which provides for a documented and auditable trail of accountability. The Executive Committee, comprising Executive Directors and certain key management staff, reviewed the monthly financial information which includes actual results compare against budget, explanation on significant variances and management actions taken, where necessary. In addition, the Audit Committee and the Board reviewed the quarterly financial results. Where areas of improvement in the internal control system are identified, the Board considered the recommendations made by the Audit Committee and the Risk Management Committee.
Review by the External Auditors

As required by paragraph 15.23 of Bursa Securities Main Market Listing Requirements, the external auditors have reviewed this Statement on Internal Control. Their review was performed in accordance with Recommended Practice Guide (RPG) 5 issued by the Malaysian Institute of Accountants. Based on their review, the external auditors have reported to the Board that nothing has come to their attention that causes them to believe that this statement is inconsistent with their understanding of the process adopted by the Board in reviewing the adequacy and integrity of the system of internal control of the Group. RPG 5 does not require the external auditors to consider whether this Statement covers all risks and controls, or to form an opinion on the effectiveness of the Groups risk and control procedures.
Boards Conclusion
Based on the processes set out above, the Board is of the view that an appropriate system of internal control in operation during the year in review was reasonably adequate and sufficient to safeguard the assets of the Group and interest of shareholders. No significant control failures or weaknesses that would result in material losses and require disclosure in the Groups Annual Report were identified during the review.
26

Annual Report 2011
Directors Responsibility Statement

The Board of Directors is required under Paragraph 15.26(a) of the Main Market Listing Requirements to issue a statement explaining their responsibility in the preparation of the annual audited financial statements. The Directors are required by the Companies Act, 1965 to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Group and of the Company as at the end of the financial year and the results of the operations, changes in equity and cash flows of the Group and of the Company for the financial year. In preparing those financial statements, the Directors are required to: use appropriate accounting policies and consistently apply them; make judgements and estimates that are reasonable and prudent; state whether applicable approved accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and prepared financial statements on the going concern basis as the Directors have a reasonable expectation, having made enquiries, that the Group and the Company have adequate resources to continue in operational existence for the foreseeable future. The Directors are responsible for keeping proper accounting records, which disclose with reasonable accuracy at any time the financial position of the Group and of the Company and to enable them to ensure that the financial statements comply with the Companies Act, 1965.
27

Annual Report 2011
Additional Compliance Information

In compliance with Part A of Appendix 9C of the Listing Requirements, the following are additional information in respect of the financial year ended 30 September 2011 to be disclosed in this Annual Report:-
1.
Utilisation of Proceeds Raised from Corporate Proposals

There were no proceeds raised from any corporate proposals during the financial year under review.
2.
Share Buy-back
The Company did not purchase any of its own shares during the financial year under review.
3.
Options or Convertible Securities

The Company did not issue any options and convertible securities during the financial year under review.
4.
American Depository Receipt (ADR) or Global Depository Receipt (GDR) Programme

The Company did not sponsor any ADR or GDR programme during the financial year under review.
5.
Imposition of Sanctions and/or Penalties

There were no public sanctions and/or penalties imposed on the Company and its subsidiaries, directors or management by the relevant regulatory bodies during the financial year under review except as disclosed in Note 29(d) and 33(b) of the Notes to the Financial Statements.
6.
Non-audit Fees
The amount of non-audit fees paid by the Company and its subsidiaries to the external auditors and their affiliated company/firm for the financial year 2011 was RM12,800.
7 .
Variation in Results
There was no material variance between the results for the financial year and the unaudited results previously announced.
8.
Profit Guarantee
The Company did not give any profit guarantee during the financial year under review.
9.
Material Contracts Involving Directors and Major Shareholders Interest

There are no material contracts entered into by the Company and its subsidiaries which involved Directors and major shareholders interests either still subsisting at the end of the financial year under review or entered into since the end of the previous financial year.
28

Annual Report 2011
Additional Compliance Information (continued)

10. Family Relationship of Directors and/or Major Shareholders
There is no family relationship among the Directors and/or major shareholders except that:Dato Chen Kooi Chiew @ Cheng Ngi Chong; Datuk Chen Lok Loi; Mr. Chen Ying @ Chin Ying; and Mr. Chen Fook Wah Brothers Relationship
11.
Conflict of Interest
None of the Directors of the Company have any conflict of interest with the Company.
12. Conviction for Offences

None of the Directors have been convicted of any offences within the past 10 years other than traffic offences, if any.
29

Annual Report 2011
Directors Report
The Directors have pleasure in presenting their report to the members together with the audited financial statements of the Group and of the Company for the financial year ended 30 September 2011.
CHANGE OF NAME
On 1 April 2011, the Company changed its name from Metro Kajang Holdings Berhad to MKH Berhad.
PRINCIPAL ACTIVITIES
The principal activities of the Company are investment holding and providing building and other management services. The principal activities of the subsidiaries are stated in Note 15 to the financial statements. There have been no significant changes in the nature of these activities during the financial year.
RESULTS
Group RM Profit for the year: From continuing operations From discontinued operations Attributable to: Owners of the parent Non-controlling interests 34,802,212 2,885,934 37,688,146 38,015,235 (327,089) 37,688,146 Company RM 59,132,148 59,132,148 59,132,148 59,132,148
DIVIDEND
Since the end of the previous financial year, the Company paid a first interim dividend of 5.0 sen less 25% tax per ordinary share of RM1/- each amounting to RM9,019,962 in respect of the financial year ended 30 September 2010 as reported in the directors report of that year on 28 October 2010. The Directors recommended a final dividend of 5.0 sen less 25% tax per ordinary share of RM1/- each amounting to RM9,921,947 for the current financial year ended 30 September 2011, subject to shareholders approval at the forthcoming Annual General Meeting to be held at a date to be determined later.
ISSUE OF SHARES
During the financial year, the following issue of shares was made by the Company: Class Ordinary share of RM1/- each Number 24,053,204 Term of Issue Non-cash Purpose of Issue Bonus Issue of 1 new ordinary share for every 10 existing ordinary shares via capitalisation of share premium and retained earnings
There were no other changes in the authorised, issued and paid up capital of the Company during the financial year.
30

Annual Report 2011
Directors Report (continued)

DIRECTORS
The names of the Directors of the Company in office since the date of the last report and on the date of this report are as follows: DATO CHEN KOOI CHIEW @ CHENG NGI CHONG DATUK CHEN LOK LOI CHEN FOOK WAH CHEN YING @ CHIN YING HAJI OTHMAN BIN SONOH MOHAMMED CHUDI BIN HAJI GHAZALI MOHAMED BIN ISMAIL JEFFREY BIN BOSRA MAH SWEE BUOY (Appointed on 5 May 2011)
DIRECTORS INTERESTS
The holdings and deemed holdings in the ordinary shares of the Company and of its related corporations (other than wholly-owned subsidiaries) of those who were Directors at financial year end as recorded in the Register of Directors Shareholdings are as follows: (a) Shareholdings in the Company Number of Ordinary Shares of RM1/- Each Bought Bonus Issue Sold
At 1 October 2010 Direct interest: Dato Chen Kooi Chiew @ Cheng Ngi Chong Datuk Chen Lok Loi Chen Fook Wah Haji Othman Bin Sonoh Mohammed Chudi Bin Haji Ghazali Mah Swee Buoy Deemed interest: Dato Chen Kooi Chiew @ Cheng Ngi Chong Datuk Chen Lok Loi Chen Fook Wah Chen Ying @ Chin Ying
At 30 September 2011
1,404,901 3,752,701 539,004 15,400 10,500 78,049
1,250,000 184,940
140,490 500,270 70,700 1,540 1,050 7,804
(1,000,000) (16,940)
545,391 5,502,971 794,644 11,550 85,853
* ** ** *
108,356,354 103,602,611 103,602,611 104,264,811
1,070,000
10,836,168 10,360,794 10,360,794 10,427,014
120,262,522 113,963,405 113,963,405 114,691,825
31

Annual Report 2011

DIRECTORS INTERESTS (continued)
(b) Shareholdings in the Subsidiary - Srijang Kemajuan Sdn. Bhd. Number of Ordinary Shares of RM1/- Each At At 1 October 30 September 2010 Bought Sold 2011 Direct interest: Dato Chen Kooi Chiew @ Cheng Ngi Chong Chen Ying @ Chin Ying ^ * **
1 1
1 1
Transfer of shares to nominee company. Shares held through corporations in which directors have substantial financial interest and through nominee companies. Shares held through a corporation in which directors have substantial financial interest.
By virtue of their interests in the shares of the Company, the above-mentioned Directors are also deemed interested in the shares of the subsidiaries during the financial year to the extent the Company has an interest.
DIRECTORS BENEFITS
Since the end of the previous financial year, no Director of the Company has received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors as shown in the financial statements or the fixed salary of a full time employee of the Company) by reason of a contract made by the Company or a related corporation with the 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. During and at the end of the financial year, no arrangements subsisted to which the Company is a party, being arrangements with the object or objects of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.
RESERVES AND PROVISIONS

All material transfers to or from reserves and provisions during the financial year are shown in the financial statements.
STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS

Before the statements of comprehensive income and statements of financial position were made out, the Directors took reasonable steps: (i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts; and
32

Annual Report 2011

STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS (continued)
(ii) to ensure that any current assets, other than debts, which were unlikely to realise in the ordinary course of business including their values as shown in the accounting records of the Group and of the Company had been written down to an amount which they might be expected so to realise. At the date of this report, the Directors are not aware of any circumstances: (i) which would render the amounts written off for bad debts or the amount of the provision for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent; or (ii) which would render the values attributed to current assets in the financial statements of the Group and of the Company misleading; or (iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate. 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 liability of any other person; or (ii) any contingent liability of the Group or of the Company which has arisen since the end of the financial year.
At the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements which would render any amount stated in the financial statements misleading. In the opinion of the Directors: (i) no contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which will or may affect the ability of the Group or of the Company to meet their obligations when they fall due; and (ii) there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report is made.
SIGNIFICANT EVENTS
Details of significant events during the financial year are disclosed in Note 37 to the financial statements.
SUBSEQUENT EVENT
Details of subsequent event are disclosed in Note 38 to the financial statements.
33

Annual Report 2011

AUDITORS
The auditors, Messrs. Moore Stephens AC, have expressed their willingness to continue in office.
Signed on behalf of the Board in accordance with a resolution of the Directors dated 10 January 2012.
DATO CHEN KOOI CHIEW @ CHENG NGI CHONG
DATUK CHEN LOK LOI
34

Annual Report 2011
Statement by Directors
Pursuant to Section 169(15) of the Companies Act 1965

We, Dato Chen Kooi Chiew @ Cheng Ngi Chong and Datuk Chen Lok Loi, being two of the Directors of the Company, do hereby state that in the opinion of the Directors, the accompanying financial statements as set out on pages 37 to 133, are drawn up in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 30 September 2011 and of their financial performance and cash flows for the year then ended. The supplemental information set out in Note 44 to the financial statements has been prepared in accordance with the Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (MIA Guidance) and presented based on the format as prescribed by Bursa Malaysia Securities Berhad. Signed on behalf of the Board in accordance with a resolution of the Directors dated 10 January 2012.
DATO CHEN KOOI CHIEW @ CHENG NGI CHONG
DATUK CHEN LOK LOI
Statutory Declaration
provisions of the Statutory Declarations Act 1960.
Pursuant to Section 169(16) of the Companies Act 1965

I, Mah Swee Buoy, being the Director primarily responsible for the financial management of MKH BERHAD, do solemnly and sincerely declare that the financial statements as set out on pages 37 to 133 are to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the
Subscribed and solemnly declared by the above named at Kuala Lumpur in the Federal Territory on 10 January 2012 MAH SWEE BUOY
Before me
TENGKU FARIDDUDIN BIN TENGKU SULAIMAN (W 533) Commissioner for Oaths
35

Annual Report 2011
Independent Auditors Report to the Members

Report on the Financial Statements
of MKH Berhad (Formerly Known As Metro Kajang Holdings Berhad) (Incorporated in Malaysia)
We have audited the financial statements of MKH Berhad, which comprise the statements of financial position as at 30 September 2011 of the Group and of the Company, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 37 to 133. Directors Responsibility for the Financial Statements The directors of the Company are responsible for the preparation of financial statements that give a true and fair view in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entitys preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 30 September 2011 and of their financial performance and cash flows for the year then ended.
36

Annual Report 2011
Independent Auditors Report (continued)
Report on Other Legal and Regulatory Requirements

In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following: (a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act. (b) We have considered the financial statements and the auditors reports of all the subsidiaries of which we have not acted as auditors, except for the unaudited financial statements of a subsidiary and we have considered its unaudited financial statements thereon, which are indicated in Note 15 to the financial statements. (c) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Companys financial statements are in form and content appropriate and proper for the purpose of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes. (d) The auditors reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act.
Other Reporting Responsibilities

The supplementary information set out in Note 44 to the financial statements is disclosed to meet the requirement of Bursa Malaysia Securities Berhad (Bursa Malaysia) and is not part of the financial statements. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants ("MIA Guidance") and the directive of Bursa Malaysia. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia.
Other Matters
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.
MOORE STEPHENS AC (AF. 001826) Chartered Accountants
LEE KONG WENG 2967/07/13(J) Chartered Accountant
Kuala Lumpur 10 January 2012
37

Annual Report 2011
Statements of Comprehensive Income

for the year ended 30 September 2011
Group Note Continuing operations Revenue Cost of sales Gross profit Other income Sales and marketing expenses Administrative expenses Other expenses Profit from operations Finance costs Share of profits of an associate Profit before tax from continuing operations Tax expense Profit for the year from continuing operations Discontinued operations Profit for the year from discontinued operations Profit for the year Other comprehensive income Foreign currency translation differences Revaluation surplus on land and buildings Income tax relating to components of other comprehensive income Other comprehensive income for the year Total comprehensive income for the year 62,167 ,193 30,276,220 59,132,148 102,026,744 7 (2,726,098) 24,479,047 (3,541,459) (658,947) (4,125) 12,375 16,599,375 11,818,304 16,500 10,605,770 (8,935,792) 8 2,885,934 37 ,688,146 3,610,613 30,935,167 59,132,148 102,014,369 34,802,212 27,324,554 59,132,148 102,014,369 5 7 42,880,542 (8,078,330) 36,786,193 (9,461,639) 80,231,351 (21,099,203) 130,333,022 (28,318,653) 3 4 306,022,133 (213,415,014) 92,607 ,119 15,420,990 (17 ,614,851) (36,184,061) (10,558,107) 43,671,090 (16,211,122) 15,420,574 255,860,656 (185,543,605) 70,317,051 17,434,110 (7,398,013) (31,619,157) (4,965,155) 43,768,836 (10,407,368) 3,424,725 94,099,650 94,099,650 1,222,019 (9,975,235) (1,846,402) 83,500,032 (3,268,681) 140,630,454 140,630,454 980,922 (10,107,630) (153,542) 131,350,204 (1,017,182) 2011 RM 2010 RM (restated) 2011 RM Company 2010 RM
38

Annual Report 2011
Statements of Comprehensive Income (continued)

Group Note Profit attributable to: Owners of the parent Non-controlling interests 38,015,235 (327 ,089) 37 ,688,146 Total comprehensive income attributable to:Owners of the parent Non-controlling interests 62,468,591 (301,398) 62,167 ,193 Basic earnings per share (sen) From continuing operations From discontinued operations From continuing and discontinued operations 14.37 11.56 9 13.28 1.09 10.19 1.37 29,936,656 339,564 30,276,220 30,578,141 357,026 30,935,167 59,132,148 59,132,148 102,014,369 102,014,369 2011 RM 2010 RM (restated) 2011 RM Company 2010 RM
The accompanying notes form an integral part of the financial statements.
39

Annual Report 2011
Statements of Financial Position

As At 30 September 2011
Group Note Assets Property, plant and equipment Intangible assets Biological assets Prepaid lease payments Investment properties Investment in subsidiaries Investment in an associate Other investment Land held for property development Deferred tax assets Receivables, deposits and prepayments Total non-current assets Property development costs Inventories Amount due from customers on contracts Accrued billings in respect of property development costs Receivables, deposits and prepayments Current tax assets Cash and cash equivalents 2011 RM 2010 RM (restated) As at 1.10.2009 RM (restated) Company 2011 RM 2010 RM
10 11 12 13 14 15 16 17 18 19 20
124,079,271 6,107 ,777 176,509,868 30,470,484 216,081,400 38,277 ,108 263,474,043 12,975,075 12,197 ,001 880,172,027
118,537,945 7,377,777 106,895,886 30,774,465 206,933,400 25,121,364 88,000 249,301,264 9,588,756 7,197,367 761,816,224
103,032,421 7,383,938 60,758,638 32,128,323 183,803,575 53,327,547 158,000 204,533,735 8,901,481 165,621 654,193,279
635,592 514,587 ,241 754,575 515,977 ,408
653,475 370,367,239 754,575 88,072,586 459,847,875
21 22 23
114,894,979 11,742,097 1,650,172
79,258,234 16,393,071 1,576,042
65,057,235 17,629,975 3,345,766
29,564,095 20 24 92,614,255 1,751,429 62,868,100 315,085,127
17,925,894 73,347,105 2,204,100 89,800,826 280,505,272
38,623,826 89,555,045 2,379,855 70,169,923 286,761,625
57 ,969,777 189,454 1,628,536 59,787 ,767
1,263,948 65,663 15,409,909 16,739,520
Non-current assets classified as held for sale Assets of disposal group classified as held for sale
25
251,175
14,303,492
83,788,365 83,788,365
251,175 280,756,447
14,303,492 301,065,117 955,258,396
34,800,000 34,800,000 94,587 ,767 610,565,175
16,739,520 476,587,395
Total current assets Total assets
398,873,492
1,279,045,519 1,042,572,671
40

Annual Report 2011
Statements of Financial Position (continued)

Group Note Equity Share capital Reserves Reserves of disposal group classified as held for sale Equity attributable to owners of the parent Non-controlling interest Total equity Liabilities Deferred tax liabilities Deferred income Provisions Payables and accruals Loans and borrowings Total non-current liabilities 2011 RM 2010 RM (restated) 240,532,047 430,625,492 Company 2011 RM 2010 RM
As at 1.10.2009 RM (restated) 229,078,140 421,739,478
26 27
264,585,251 448,648,090
264,585,251 220,494,384
240,532,047 185,415,440
20,570,586 733,803,927 153,605 733,957 ,532
671,157,539 455,003 671,612,542
650,817,618 1,538,666 652,356,284
485,079,635 485,079,635
425,947,487 425,947,487
19 28 29 30 31
41,028,472 1,153,393 9,964,025 243,297 ,830 295,443,720
46,111,369 3,008,974 390,876 167,384,293 216,895,512
41,919,809 2,000,000 148,799 106,787,454 150,856,062
39,089,750 39,089,750
22,393,075 22,393,075
Provisions Amount due to customers on contracts Progress billings in respect of property development costs Payables and accruals Loans and borrowings Dividend payables Current tax liabilities
29 23
8,755,245
7,868,282 1,212,207
10,334,034 36,346
3,074,400
3,074,400
30 31
8,040,536 73,708,561 133,204,289 3,207 ,634 226,916,265
2,473,852 66,064,283 66,123,736 9,019,962 1,302,295 154,064,617 154,064,617 370,960,129
2,864,468 69,505,134 57,525,304 8,590,438 3,190,326 152,046,050 152,046,050 302,902,112 955,258,396
65,890,345 17 ,431,045 86,395,790 86,395,790 125,485,540 610,565,175
835,946 15,316,525 9,019,962 28,246,833 28,246,833 50,639,908 476,587,395
Liabilities of disposal group classified as held for sale 8 Total current liabilities Total liabilities Total equity and liabilities Net assets per share (RM) 9
22,728,002 249,644,267 545,087 ,987
1,279,045,519 1,042,572,671 2.77 2.54
Non-distributable
Distributable
41
Annual Report 2011
Note 5,322,385 8,522,279 404,323,119 650,817,618 1,538,666
Share Capital RM Total RM 652,356,284
Share Premium RM
Translation Reserve RM
Revaluation Reserve RM
Revaluation Reserve of Disposal Group Classified as Held for Sale RM Retained Earnings RM Noncontrolling Interests RM Total Equity RM
At 1 October 2009
229,078,140
3,571,695
Total comprehensive income for the year (8,918,330) 8,276,845 30,578,141 29,936,656
339,564
30,276,220
Transactions with owners
(1,423,227)
(1,423,227)
Acquisition of noncontrolling interest Effect of acquisition of non-controlling interest Issuance of shares pursuant to - Bonus issue Dividend (576,773) (7,882,212) (9,019,962)
(576,773)
(576,773)
32
11,453,907
(3,571,695)
(9,019,962)
(9,019,962)
Total transactions (3,595,945) 16,799,124 (17,478,947) 417,422,313 (9,596,735) (1,423,227) 671,157,539 455,003 (11,019,962) 671,612,542
with owners
11,453,907
(3,571,695)
Consolidated Statement of Changes in Equity
240,532,047
Non-distributable
Distributable
42
Annual Report 2011
Note
Share Capital RM Total RM
Share Premium RM
Translation Reserve RM
Revaluation Reserve RM
Revaluation Reserve of Disposal Group Classified as Held for Sale RM Retained Earnings RM Noncontrolling Interests RM Total Equity RM
At 1 October 2010 (3,595,945) 16,799,124 417,600,110 671,335,336 177,797 177,797 (3,595,945) 16,799,124 417,422,313 671,157,539 (517,623) (517,623) 455,003 455,003 (3,595,945) 17,316,747 417,422,313 671,675,162 455,003 672,130,165 (517,623) 671,612,542 177,797 671,790,339
As previously stated Effect of adopting
240,532,047
Amendments to FRS 117
As restated Effect of adopting
240,532,047
FRS 139
240,532,047
Total comprehensive income for the year 10,580,079 13,873,277 38,015,235
62,468,591
(301,398)
62,167,193
Transactions with owners
Consolidated Statement of Changes in Equity (continued)
Issuance of shares pursuant to - Bonus issue Reserve attributable to disposal group classified as held for sale (20,570,586) 20,570,586
24,053,204
(24,053,204)
Total transactions 6,984,134 (20,570,586) 10,101,815 20,570,586 20,570,586 (24,053,204) 431,562,141 733,803,927 153,605 733,957 ,532
with owners
24,053,204
264,585,251
43

Annual Report 2011
Statement of Changes in Equity

Nondistributable Share Capital RM 229,078,140 Share Premium RM 3,571,695 Revaluation Reserve RM Distributable Retained Earnings RM 100,290,870 Total Equity RM 332,940,705
Note At 1 October 2009 Total comprehensive income for the year Transaction with owners Issuance of shares pursuant to - Bonus issue
12,375
102,014,369
102,026,744
11,453,907
(3,571,695)
(7,882,212)
Dividend
32
11,453,907
(3,571,695)
12,375
(9,019,962) (16,902,174) 185,403,065
(9,019,962) (9,019,962) 425,947,487
At 30 September 2010 Total comprehensive income for the year Transaction with owners Issuance of shares pursuant to - Bonus issue
240,532,047
59,132,148
59,132,148
24,053,204 24,053,204
12,375
(24,053,204) (24,053,204) 220,482,009
485,079,635
264,585,251
44

Annual Report 2011
Statements of Cash Flow

Group Note Cash flows from operating activities Profit before tax from: - continuing operations - discontinued operations 42,880,542 4,309,382 796,374 36,888 (9,160,000) 5,667 ,143 90,267 720,984 16,003,189 23,416 (40,507) 997 ,271 53,020 723,747 1,074,794 1,175 (6,000) (397 ,547) (246,920) (65,600) (1,736,824) (239,942) (15,420,574) 46,064,278 36,786,193 5,096,892 802,575 192,352 (8,339,000) 4,872,551 6,161 323,312 10,035,959 33,082 186,716 (327,660) 287,800 34,927 264,690 (3,076,051) (205,597) (46,999) (6,359) (3,992,734) (717,873) (250,000) (545,934) (3,424,725) 37,990,278 80,231,351 21,222 (83,856,000) 85,765 3,193,351 1,479,325 1 (1,182,280) (27 ,265) 130,333,022 81,000 17,027 (130,798,234) 913,045 (376,997) 1 (20,873) (83,427) 64,564 2011 RM 2010 RM 2011 RM Company 2010 RM
Adjustments for: Amortisation of prepaid lease payments Bad debts written off Changes in fair value of investment properties Depreciation of property, plant and equipment Dividend income Impairment loss on: - goodwill on acquisition - land held for property development - receivables Interest expense Inventories written off Landowner's share of (loss)/profit Net loss /(gain) on foreign exchange - unrealised Property, plant and equipment written off Provision for foreseeable loss Provision for retirement benefit obligations Provision for tax penalty Loss on disposal of non-current assets held for sale Gain on disposal of investment property Gain on disposal of land held for property development Gain on transfer from inventories to investment properties Gain on transfer from property, plant and equipment to investment properties Gain on disposal of property, plant and equipment Gain on disposal of other investment Gain on disposal of non-current assets held for sale Interest income Reversal of provision for rectification works Reversal of impairment loss on receivables Share of profits of an associate Operating profit/(loss) before changes in working capital carried down
45

Annual Report 2011
Statements of Cash Flow (continued)

Group Note Operating profit/(loss) before changes in working capital brought down Change in property development costs Change in inventories Change in amount due from/(to) customers on contracts Change in receivables, deposits and prepayments Change in payables and accruals Cash generated from/(used in) operations Interest received Interest paid Tax paid Tax refunded Net (used in)/cash from operating activities Cash flows from investing activities Acquisition of subsidiaries Acquisition of investment properties Acquisition of shares in subsidiaries from minority shareholders Acquisition of property, plant and equipment Additions to biological assets Additions to land held for property development Additional subscription of shares in subsidiaries Advances to subsidiaries Dividends received Proceeds from disposal of investment properties Proceeds from disposal of non-current assets classified as held for sale Proceeds from disposal of property, plant and equipment Proceeds from disposal of other investment Proceeds from disposal of land held for property development Net cash (used in)/from investing activities carried down (61,471,343) (57 ,761,478) (40,320,015) 2,264,830 18,000 250,000 530,518 153,600 1,303,848 (8,261,000) (2,000,000) (17,364,409) (50,770,607) (70,241,297) 31,630,908 4,500,000 18,296,226 84,917 76,359 (2,020,002) (3,340) (142,691,183) 62,927 ,000 (2,000,000) (45,261) (52,031) (93,937,669) 102,779,875 2011 RM 46,064,278 (9,947 ,566) (2,444,187) (1,286,337) (37 ,788,117) 28,753,229 23,351,300 868,714 (16,580,318) (13,553,673) 1,131,446 (4,782,531) 2010 RM 37,990,278 4,612,032 4,691,383 2,910,658 29,905,096 (5,906,275) 74,203,172 717,873 (10,995,825) (13,258,477) 585,416 51,252,159 2011 RM (27 ,265) (3,027 ,825) 189,035 (2,866,055) 1,182,280 (3,193,351) (293,994) (5,171,120) Company 2010 RM 64,564 3,394,920 544,671 4,004,155 20,873 (913,045) (226,162) 2,885,821
(155,032,040)
(94,048,903)
(81,787 ,525)
6,744,914
46

Annual Report 2011
Group Note Net cash (used in)/from investing activities brought down Cash flows from financing actvities Net drawdown of short term bank borrowings Drawdown of bridging loan Drawdown of revolving credits Drawdown of term loans Repayment of term loans Repayments of bridging loan Payments of finance lease Proceeds from government grant Advances from/(repayments to) subsidiaries Dividend paid Net cash from financing activities Net (decrease)/increase in cash and cash equivalents Effect of exchange rate fluctuations Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year Cash and cash equivalents 42,300,000 5,900,000 50,200,000 64,077 ,626 (26,582,518) (7 ,848,610) (669,195) 1,741,026 (9,019,962) 120,098,367 12,090,806 5,500,000 67,377,795 (10,713,926) (4,000,000) (829,811) 1,008,974 (8,590,438) 61,843,400 2011 RM (155,032,040) 2010 RM (94,048,903) 2011 RM
Company 2010 RM 6,744,914
(81,787 ,525)
2,000,000 15,294,075 64,865,364 (9,019,962) 73,139,477
5,316,525 22,393,075 (13,508,914) (8,590,438) 5,610,248
(39,716,204) (320,405) 85,635,492 45,598,883
19,046,656 893,840 65,694,996 85,635,492
(13,819,168) 15,409,909 1,590,741
15,240,983 376,997 (208,071) 15,409,909
Cash and cash equivalents included in the statements of cash flows comprise the following amounts: Group Note Continuing operations Deposits with licensed financial banks Cash and bank balances Cash held under housing development accounts Cash held under sinking fund account Cash held under trust fund account Fixed income funds - redeemable at call - redeemable upon 1 day notice - redeemable upon 7 days notice Balance carried down 2011 RM 2010 RM 2011 RM Company 2010 RM
24 24 24 24 24 24
7 ,722,869 26,005,604 27 ,352,502 3,020 174 1,145,015 582,767 56,149 62,868,100
18,442,123 44,113,473 25,311,193 2,860 20 179,328 862,300 889,529 89,800,826
1,628,536 1,628,536
11,295,995 4,113,914 15,409,909
47

Annual Report 2011
Group Note Balance brought down Bank overdrafts 31 2011 RM 62,868,100 (19,826,210) 43,041,890 Discontinued operations Cash and bank balances Bank overdrafts 2010 RM 89,800,826 (4,165,334) 85,635,492 2011 RM
Company 2010 RM 15,409,909 15,409,909
1,628,536 (37 ,795) 1,590,741
3,769,509 (1,212,516) 2,556,993 45,598,883
85,635,492
1,590,741
15,409,909
Acquisition of property, plant and equipment During the year, the Group and the Company acquired property, plant and equipment with aggregate costs of RM65,040,260 (2010: RM17,444,409) and RM3,340 (2010: RM45,261) respectively, which were satisfied as follows: Group 2011 RM Finance lease arrangements Cash payments 3,568,917 61,471,343 65,040,260 2010 RM 80,000 17,364,409 17,444,409 2011 RM 3,340 3,340 Company 2010 RM 45,261 45,261
48

Annual Report 2011
Notes to the Financial Statements

30 September 2011
CORPORATE INFORMATION AND PRINCIPAL ACTIVITIES
MKH Berhad is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of the Bursa Malaysia Securities Berhad. The addresses of its registered office and principal place of business are as follows: Registered office: Suite 1, 5th Floor, Wisma MKH, Jalan Semenyih, 43000 Kajang, Selangor Darul Ehsan. Principal place of business: 5th Floor, Wisma MKH, Jalan Semenyih, 43000 Kajang, Selangor Darul Ehsan.
The Company is principally engaged in investment holding and providing building and other management services while the principal activities of the subsidiaries are stated in Note 15. There have been no significant changes in the nature of these activities during the year. The financial statements were authorised for issue in accordance with a resolution passed at the Board of Directors meeting held on 10 January 2012.
1.
BASIS OF PREPARATION (a) Statement of compliance

The financial statements of the Group and of the Company have been prepared in accordance with the Financial Reporting Standards (FRSs) issued by the Malaysian Accounting Standards Board (MASB) and complied with the provisions of the Companies Act, 1965. New and revised FRSs, Amendments to FRSs, Issues Committee (IC) Interpretations and Technical Releases (TRs) adopted At 1 October 2010, the Group and the Company adopted the following new and revised FRSs, Amendments to FRSs, IC Interpretations and TRs: FRS 1 First-time Adoption of Financial Reporting Standards FRS 3 Business Combinations (Revised) FRS 4 Insurance Contracts FRS 7 Financial Instruments : Disclosures FRS 101 Presentation of Financial Statements (Revised) FRS 123 Borrowing Costs FRS 139 Financial Instruments: Recognition and Measurement FRS 127 Consolidated and Separate Financial Statements (Revised) Amendments to FRS 1 First-time Adoption of Financial Reporting Standards and FRS 127 Consolidated and Separate Financial Statements: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate Amendments to FRS 2 Share-based Payment: Vesting Conditions and Cancellations Amendments to FRS 2 Share-based Payment Amendments to FRS 5 Non-current Assets Held for Sale and Discontinued Operations Amendments to FRS 132 Financial Instruments: Presentation Amendments to FRS 138 Intangible Assets
49

Annual Report 2011
Notes to the Financial Statements 30 September 2011 (continued)

1. BASIS OF PREPARATION (continued) (a) Statement of compliance (continued)
New and revised FRSs, Amendments to FRSs, Issues Committee (IC) Interpretations and Technical Releases (TRs) adopted (continued) Amendments to FRS 139 Financial Instruments: Recognition and Measurement, FRS 7 Financial Instruments: Disclosures and IC Interpretation 9 Reassessment of Embedded Derivatives Amendments to FRSs contained in the document entitled Improvements to FRSs (2009) IC Interpretation 9 Reassessment of Embedded Derivatives IC Interpretation 10 Interim Financial Reporting and Impairment IC Interpretation 11 FRS 2 Group and Treasury Share Transactions IC Interpretation 12 Service Concession Arrangements IC Interpretation 13 Customer Loyalty Programmes IC Interpretation 14 FRS 119 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction IC Interpretation 16 Hedges of a Net Investment in a Foreign Operation IC Interpretation 17 Distributions of Non-cash Assets to Owners Amendments to IC Interpretation 9: Reassessment of Embedded Derivatives TR 3 Guidance on Disclosures of Transition to IFRSs TR i-3 Presentation of Financial Statements of Islamic Financial Institutions The adoption of the above FRSs, Amendments to FRSs, IC Interpretations and TRs does not have any effect on the financial statements of the Group and of the Company except for those discussed below. FRS 7 Financial Instruments: Disclosures Prior to 1 October 2010, information about financial instruments was disclosed in accordance with the requirements of FRS 132 Financial Instruments: Disclosure and Presentation. FRS 7 introduces new disclosures to improve the information about financial instruments. It requires the disclosure of qualitative and quantitative information about exposure to risks arising from financial instruments, including specified minimum disclosures about credit risk, liquidity risk and market risk, including sensitivity analysis to market risk. The Group and the Company have applied FRS 7 prospectively in accordance with the transitional provisions. Hence, the new disclosures have not been applied to the comparatives. The new disclosures are included throughout the Groups and the Companys financial statements for the year ended 30 September 2011. FRS 3, Business Combinations (Revised) and FRS 127, Consolidated and Separate Financial Statements The revised FRS 3 introduces a number of significant changes to the accounting for business combinations with greater use of fair value. These changes include recognising all acquisition-related costs as expense, measuring any pre-existing interest at fair value and allowing measurement of non-controlling interest (previously known as minority interest) at either fair value or at its proportionate share of the acquirees net identifiable assets. The revised FRS 127 requires accounting for changes in ownership interests by the Group in a subsidiary, while maintaining control, to be recognised as an equity transaction. When the Group loses control of a subsidiary, any interest retained in the former subsidiary will be measured at fair value with the gain or loss recognised in profit or loss. The revised standard also requires all losses attributable to the non-controlling interests to be absorbed by minority shareholders instead of by the parent even if the losses exceed the non-controlling interests in the subsidiarys equity. The Group has applied the changes of revised FRS 3 and FRS 127 prospectively. There is no financial impact on the financial statements of the Group for the current financial year other than changes in accounting policies.
50

Annual Report 2011

FRS 101 Presentation of Financial Statements (Revised) The revised FRS 101 requires owner and non-owner changes in equity to be presented separately. The statement of changes of equity will include only details of transactions with owners, with all non-owner changes in equity presented as a single line item. In addition, the revised standard introduces the statement of comprehensive income. It presents all items of income and expense recognised in profit or loss, together with all other items of recognised income and expense, either in one single statement, or in two link statements. The Company has elected to present this statement as one single statement. New terminologies will replace balance sheet with statement of financial position and cash flow statement with statement of cash flows. The revised FRS 101 also requires the Group to make new disclosures to enable users of the financial statements to evaluate the Companys objectives, policies and processes for managing capital. In addition, a statement of financial position is required at the beginning of the earliest comparative period following a change in accounting policy, the correction of an error or the classification of items in the financial statements. The revised FRS 101 was adopted retrospectively by the Group and the Company. FRS 139 Financial Instruments: Recognition and Measurement FRS 139 establishes principles for recognising and measuring financial assets, financial liabilities and some contracts to buy and sell non-financial items. The Group and the Company have adopted FRS 139 prospectively on 1 October 2010 in accordance with the transitional provisions. The effects arising from the adoption of this Standard has been accounted for by adjusting the opening balance of retained earnings as at 1 October 2010. Comparatives are not restated. The details of the changes in accounting policies and the effects arising from the adoption of FRS 139 are discussed below. (i) Receivables, deposits and prepayments - deposits paid Prior to 1 October 2010, included in deposits paid of the Group is a deposit amounting to RM4,000,000 relating to performance deposit placed with a third party for a development project which is expected to be refunded upon completion of the project. Upon adoption of FRS 139, the deposit is stated at fair value on initial recognition and subsequently measured at amortised cost using effective interest method. The remaining unamortised amount of RM953,926 has been recognised as adjustments to the opening balance of retained earnings as at 1 October 2010. Receivables, deposits and prepayments loan receivables Prior to 1 October 2010, the Company recognised interest earned on housing loans and term loans on monthly rest basis. When an amount became non-performing, interest was suspended until it is realised on a cash basis. Upon the adoption of FRS 139 are now recognised initially at their fair values, which are estimated by discounting the expected cash flows using the current market interest rate of a loan with similar risk and tenure. Finance income and costs are recognised in profit or loss using the effective interest method. Upon adoption of FRS 139, once a loan has been written down to impairment loss, interest income is recognised based on the interest rate used to discount the future cash flows for the purpose of measuring impairment loss. There is no financial impact on the financial statements of the Group other than the change in accounting policies.
(ii)
51

Annual Report 2011

(iii) Payables and accruals subcontractor retention sum Prior to 1 October 2010, included in trade payables of the Group are retention sums amounting to RM11,963,513 relating to retention monies payable to third parties for property development projects which are expected to be paid upon receiving the certificate of making good defects from projects consultants. Upon adoption of FRS 139, the retention sums, which are non-interest bearings are stated at fair value on initial recognition and subsequently measured at amortised cost using effective interest method. The remaining unamortized amount of RM1,191,023 has been recognised as an adjustments to the opening balance of retained earnings as at 1 October 2010. The following are effects arising from the adoption of FRS 139: Increase/(Decrease) As at As at 30.9.2011 1.10.2010 RM RM Statement of financial position Group Deferred tax assets Receivables, deposits and prepayments Payables and accruals Retained earnings (349,200) (783,346) (2,180,039) 1,047 ,493 (59,300) (953,926) (1,191,023) 177,797 Increase/ (Decrease) 2011 RM Statement of comprehensive income Group Other income Interest expenses Profit before tax Tax expense Profit for the year Total comprehensive income for the year
2,263,889 1,104,293 1,159,596 289,900 869,696 869,696
Amendments to FRS 1 First-time Adoption of Financial Reporting Standards and FRS 127 Consolidated and Separate Financial Statements: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate The amendment to FRS 127 removes the definition of cost method currently set out in FRS 127 and therefore, making the distinction between pre- and post-acquisition profit no longer required. Instead, an entity is required to recognise all dividends from subsidiaries, jointly-controlled entities or associates in its separate financial statements. The Group has applied the amendment prospectively. There is no financial impact on the financial statements of the Group for the current financial year other than changes in accounting policies.
52

Annual Report 2011

Amendments to FRS 117 Leases , Prior to 1 October 2010, for all leases of land and buildings, if title is not expected to pass to the lessee by end of the lease term, the lessee normally does not receive substantially all of the risks and rewards incidental to ownership. Hence, all leasehold land held for own use was classified by the Group as operating lease. The amendments to FRS 117 require an entity with existing leases of land and buildings to reassess the classification of land as finance or operating lease based on the general principle of FRS 117. The Group has reassessed and determined that the long term leasehold land of the Group is in substance a finance lease and has reclassified the leasehold land to property, plant and equipment. The Group has adopted the amendments to FRS 117 retrospectively. The effects on the comparative figures arising from the above change in accounting policy are as follows: Group RM At 1 October 2009 Statement of financial position Increase in property, plant and equipment Decrease in prepaid lease payments At 30 September 2010 Statement of financial position Increase in property, plant and equipment Decrease in prepaid lease payments Decrease in revaluation reserve Decrease in deferred tax liabilities
15,166,187 15,166,187
14,300,000 14,990,163 517,623 172,540
Amendments to FRS 140, Investment Property The amendments require investment properties under construction which were previously accounted as property, plant and equipment to be reclassified as investment properties and measured at fair value with changes in fair value being recognised in the profit or loss when fair value can be determined reliably. However, where the fair value is not reliably determinable, the investment properties under construction are measured at cost until the earlier of the construction completion date or the date that the fair value can be reliably determinable. The Group will apply the amendment prospectively and therefore there will not have any financial impact on the financial statements of the Group for the current financial year other than changes in accounting policies. MFRS Framework, new and revised FRSs, Amendments to FRSs, IC Interpretations and TR issued but not yet effective On 19 November 2011, MASB issued a new MASB approved accounting framework, the Malaysian Financial Reporting Standards (MFRS Framework) in conjunction with the MASBs plan to converge with International Financial Reporting Standards (IFRS) in 2012. The MFRS Framework comprises Standards as issued by the International Accounting Standards Board (IASB) that are effective on 1 January 2012 and new/revised Standards that will be effective after 1 January 2012. The MFRS Framework is to be applied by all Entities Other Than Private Entities for annual financial periods beginning on or after 1 January 2012, with the exception of entities that are within the scope of MFRS 141 Agriculture and IC Interpretation 15 Agreements for Construction of Real Estate, including its parent, significant investor and venturer (herein referred as Transitioning Entities). The adoption of the MFRS Framework by Transitioning Entities is deferred by another year and hence, will be mandatory only for annual financial period beginning on or after 1 January 2013.
53

Annual Report 2011

MFRS Framework, new and revised FRSs, Amendments to FRSs, IC Interpretations and TR issued but not yet effective (continued) The Group, which is a transitioning entity, elected to continue preparing its financial statements in accordance with the FRS framework for annual financial periods beginning before 1 January 2013. As such, the Company will present its first financial statements in accordance with the MFRS framework for the financial year beginning on 1 October 2013. The Group is currently in the process of determining the impact arising from the initial application of MFRS Framework. At the date of authorisation of these financial statements, MASB has issued the following new and revised FRSs, Amendments to FRSs, IC Interpretations and TR that are not yet effective and have not been early adopted in preparing these financial statements: For financial periods beginning on or after FRS 9 Financial Instruments (IFRS 9 issued by IASB in 1 January 2013 November 2009) FRS 9 Financial Instruments (IFRS 9 issued by IASB in 1 January 2013 October 2010) FRS 10 Consolidated Financial Statements 1 January 2013 FRS 11 Joint Arrangements 1 January 2013 FRS 12 Disclosure of Interests in Other Entities 1 January 2013 FRS 13 Fair value Measurement 1 January 2013 FRS 119 Employee Benefits (as amended in November 2011) 1 January 2013 FRS 124 Related Party Disclosures (Revised) 1 January 2012 FRS 127 Separate Financial Statements (as amended in November 2011) 1 January 2013 FRS 128 Investments in Associates and Joint Venture ( as amended 1 January 2013 in November 2011) Limited Exemption from Comparative FRS 7 Disclosures for First-time Adopters 1 January 2011 (Amendment to FRS 1) Improving Disclosures about Financial Instruments (Amendment to FRS 7) 1 January 2011 Additional Exemptions for First-time Adopters (Amendment to FRS 1) 1 January 2011 Group Cash-settled Share-based Payment Transactions (Amendments to FRS 2) 1 January 2011 Amendments to FRSs contained in the document entitled Improvements to 1 January 2011 FRSs (2010) Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters 1 January 2013 (Amendments to FRS 1) Disclosures - Transfers of Financial Assets (Amendments to FRS 7) 1 January 2013 Presentation of Items of Other Comprehensive Income (Amendments to FRS 101) 1 January 2013 Deferred tax: Recovery of Underlying Assets (Amendments to FRS 112) 1 January 2013 IC Interpretation 4 Determining whether an Arrangement contains a Lease 1 January 2011 IC Interpretation 18 Transfers of Assets from Customers 1 January 2011 IC Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments 1 July 2011 IC Interpretation 20 Stripping Costs in the Production Phase of a Surface Mine 1 January 2013 Prepayments of a Minimum Funding Requirement (Amendments to IC Interpretation 14) TR i-4 Shariah Compliant Sale Contracts 1 July 2011 1 January 2011
The adoption of the above FRSs, Amendments to FRSs, IC Interpretations and TR is not expected to have any significant impact on the financial statements of the Group and of the Company upon their initial application, except for the following except for those discussed below:
54

Annual Report 2011

Deferred tax: Recovery of Underlying Assets (Amendments to FRS 112) Amendments to FRS 112 provide a limited exception for measuring deferred tax liabilities and deferred tax assets when investment property is measured using the fair value model. The amendments introduce a rebuttable presumption that the investment property is recovered entirely through sale. However, this presumption is rebutted if the investment property is depreciable and is held within a business model whose objective is to consume substantially all of the economic benefits embodied in the investment property over time, rather than through sale. The Group has not evaluated the full extant of the impact that the amendments will have on its financial statements.
(b)
Basis of measurement
The financial statements have been prepared on the historical cost convention except for those as disclosed in the accounting policy notes.
(c)
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 Companys functional currency. All financial information presented in RM has been rounded to the nearest RM, unless otherwise stated.
(d)
Significant accounting estimates and judgements

The preparation of the financial statements requires management to make judgement, estimates and assumptions that effect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. Significant areas of estimation, uncertainty and critical judgements in applying accounting principles that have significant effect on the amount recognised in the financial statements are described in the following notes: (i) Revenue and cost of sales recognition (Note 3 and 4) the Company recognises property development revenue and cost of sales by reference to the stage of completion of the development activity at the reporting date. The stage of completion is determined based on the proportion of development costs incurred for work performed to-date bears to the estimated total property development costs. Significant judgement is required in the estimation of total property development costs. Where the actual total property development costs is different from the estimated total property development costs, such difference will impact the property development profits/(loss) recognised. Tax expense (Note 7) - significant judgement is required in determining the capital allowances and deductibility of certain expenses when estimating the provision for taxation. There were transactions during the ordinary course of business for which the ultimate tax determination of whether additional taxes will be due is uncertain. The Group recognises liabilities for tax based on estimates of assessment of the tax liability due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current tax and deferred tax in the periods in which the outcome is known. (iii) Useful life of property, plant and equipment (Note 10) the cost of property, plant and equipment is depreciated on a straight line basis over the assets useful lives. Management estimates the useful lives of these property, plant and equipments to be within 5 to 50 years based on past experience with similar assets. Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets resulting in revision of future depreciation charges.
(ii)
55

Annual Report 2011

1. BASIS OF PREPARATION (continued) (d) Significant accounting estimates and judgements (continued)
(iv) Impairment of intangible assets (Note 11) significant judgement is used in the estimation of the present value of future cash flows generated by the cash-generating units which involve uncertainties and are based on assumptions used and judgement made regarding estimates of future cash flows and discount rate. Fair value of investment properties (Note 14) the measurement of the fair value for investment properties performed by management is based on independent professional valuations with reference to current prices in an active market for similar properties in the same location and condition and subject to similar lease and other contracts. Deferred tax assets (Note 19) deferred tax assets are recognised for deductible temporary differences in respect of expenses, unutilised tax losses, unabsorbed industrial building allowances and unabsorbed capital allowances based on the projected future profits of the subsidiaries to the extent that is probable that taxable profit will be available against which the temporary differences can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based on the future financial performance of the Group.
(v)
(vi)
(vii) Impairment loss on receivables (Note 20) the Group assesses at each reporting date whether there is any objective evidence that a receivable is impaired. Allowances are applied where events or changes in circumstances indicate that the balances may not be collectable. To determine whether there is objective evidence of impairment, the Group considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. Where the expectation is different from the original estimate, such difference will impact the carrying amount of receivables at the reporting date. (viii) Inventories (Note 22) the saleability of inventories are reviewed by management on a periodic basis. This review involves comparison of the carrying value of the inventory items with the respective net realisable value. The purpose is to ascertain whether a write down to net realisable value is required to be made. (ix) Construction contracts (Note 23) significant judgement is used in determining the stage of completion, the extent of the contract costs incurred, the estimated total contract revenue (for contracts other than fixed price contracts) and costs, as well as the recoverability of the contracts. Total contract revenue also includes an estimation of the works that are recoverable from the customers. In making judgements, the Group evaluates based on past experience and work of specialists. Contingent liabilities on under payment of input Value Added Tax (Note 33) the Group determined the expected outcome of the contingencies which will result in an outflow of resources based on consultation of internal and external experts. According to such basis, the Group evaluated if a provision needs to be recognised in the financial statements. Provision of retirement benefit obligations (Note 29) the provision is determined using actuarial valuation prepared by an independent actuary. The actuarial valuation involved making assumptions about discount rate, future salary increase, mortality rates, resignation rate and normal retirement age. As such, this estimated provision amount is subject to significant uncertainty.
(x)
(xi)
(xii) Provision for tax penalty (Note 29) the Group recognised a provision for tax penalty in respect of the year 2009 using similar basis as in the decision letters of the local tax authority for a subsidiarys tax under payment of input Value Added Tax for the year 2008.
56

Annual Report 2011

2. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently to all periods presented in these financial statements, and have been applied consistently by the Group, unless otherwise stated.
(a)
Basis of consolidation
(i) Subsidiaries Subsidiaries are entities, including unincorporated entities, controlled by the Group. Control exists when the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the existence and effect of potential voting rights that are currently exercisable are taken into account. Investments in subsidiaries are stated in the Companys statement of financial position at cost less impairment losses, unless the investment is classified as held for sale (or included in a disposal group that is classified as held for sale). Acquisition related costs are recognised as expenses in the period in which the costs are incurred. The financial statements of subsidiaries acquired or disposed off during the financial year are included in the consolidated financial statements based on the purchase method from the effective date of acquisition or up to the effective date of disposal respectively. The assets, liabilities and contingent liabilities assumed of the acquired subsidiary are measured at their fair values at the date of acquisition and these values are reflected in the consolidated statement of financial positions. The Group elects for each individual business combination, whether non-controlling interests in the acquisition is recognised on the acquisition date at fair value, or at the non-controlling interests proportionate share of the acquiree net identifiable assets. Any excess of the cost of the acquisition over the Groups interest in the net fair value of the identifiable assets, liabilities and contingent liabilities assumed represents goodwill. Any excess of the Groups interest in the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition is recognised immediately in profit or loss. (ii) Associates Associates are entities, including unincorporated entities, in which the Group has significant influence, but not in control, over the financial and operating policies. Associates are accounted for in the consolidated financial statements using the equity method unless it is classified as held for sale (or included in a disposal group that is classified as held for sale). The consolidated financial statements include the Groups share of the income and expenses of the associates, after adjustments to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases. When the Groups share of losses exceeds its interest in an associate, the carrying amount of that interest (including any long-term investment) is reduced to nil and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee. Should the associate subsequently report profits, the Group will only resume to recognise its share of profits after its share of profits equals to the share of losses previously not recognised. Where the audited financial statements of the associates are not co-terminous with those of the Group, the share of results is based on a limited review on the financial statements performed by auditors of the associate made up to the financial year end of the Group. Investments in associates are stated in the Companys statement of financial position at cost less impairment losses, unless the investment is classified as held for sale (or included in a disposal group that is classified as held for sale).
57

Annual Report 2011

2. SIGNIFICANT ACCOUNTING POLICIES (continued) (a) Basis of consolidation (continued)
(iii) Non-controlling interests Non-controlling interests are the portion of the net assets of subsidiaries attributable to equity interests that are not owned by the Company, whether directly or indirectly through subsidiaries, and are presented in the consolidated statement of financial positions and statement of changes in equity, separately from equity attributable to the equity shareholders of the Company. Non-controlling interests presented on the face of the consolidated statement of comprehensive income as an allocation of the total profit or loss and total comprehensive income for the year between non-controlling interests and the equity shareholders of the Company. All losses attributable to the non-controlling interests are allocated to the minority shareholders even if the losses exceed the non-controlling interests in the subsidiarys equity. (iv) Changes in group composition The Group treats changes in the group composition that do not result in a loss of control as equity transaction between the Group and the minority shareholders. Any difference between the Groups shares of net assets before and after the change, and any consideration received or paid, is recognised directly in equity and attributed to owners of the Company. Transactions eliminated on consolidation Intra-group balances and unrealised gains and losses arising from intra-group transactions are eliminated in full. Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent the Group has interests. Unrealised losses are eliminated in the same way as unrealised gains but only to the extent that there is no evidence of impairment.
(v)
(b)
Foreign currency
(i) Foreign currency transactions Transactions in currencies other than the Group entities functional currency (foreign currencies) are translated into the Group entities functional currency at the rates of exchange ruling at the time of the transaction date. Monetary items denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. Non-monetary items denominated in foreign currencies are not retranslated at the reporting date except for those that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on retranslation of monetary items are recognised in profit or loss except for exchange differences arising on monetary items that form part of the Groups net investment in foreign operation. These are initially taken directly to the foreign currency translation reserve within equity until the disposal of the foreign operations, at which time they are recognised in profit or loss. Exchange differences arising on monetary items that form part of the Companys net investment in foreign operations are recognised in profit or loss in the Companys separate financial statements or the individual financial statements of the foreign operation, as appropriate. Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or loss for the period except for the differences arising on the translation of non-monetary items in respect of which gains and losses are recognised directly in equity. Exchange differences arising from such non-monetary items are also recognised directly in equity. (ii) Operations denominated in functional currencies other than Ringgit Malaysia The results and financial position of foreign operations that have a functional currency different from the presentation currency (RM) of the consolidated financial statements are translated into RM as follows:
58

Annual Report 2011

2. SIGNIFICANT ACCOUNTING POLICIES (continued) (b) Foreign currency (continued)
(ii) Operations denominated in functional currencies other than Ringgit Malaysia (continued) (i) Assets and liabilities for each reporting date presented are translated at the closing rate prevailing at the reporting date; (ii) Income and expenses are translated at average exchange rates for the year, which approximates the exchange rates at the dates of the transactions; and (iii) All resulting exchange differences are taken to other comprehensive income. Goodwill and fair value adjustments arising on the acquisition of foreign operations 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 at the closing rate at the reporting date. Goodwill and fair value adjustments which arose on the acquisition of foreign subsidiaries before 1 January 2006 are deemed to be assets and liabilities of the parent company and are recorded in RM at the rate prevailing at the date of acquisition. Upon disposal of a foreign subsidiary company, the cumulative amount of translation differences at the date of disposal of the subsidiary company is taken to the consolidated statement of comprehensive income.
(c)
Revenue recognition
(i) Development properties Revenue from development properties sold is recognised on the percentage of completion method when the outcome of the property development projects can be reliably estimated. The stage of completion is measured by the proportion that development costs incurred for work performed to-date bear to the estimated total development costs for units sold. Where foreseeable losses on development properties are anticipated, full allowance of those losses is made in the financial statements. Revenue from the sale of completed development properties and land held for development are measured at fair value of the consideration received or receivable net of trade discounts and rebates. Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of properties can be estimated reliably, and there is no continuing management involvement with the properties. (ii) Construction contracts Revenue from construction contracts is recognised on the percentage of completion method when the outcome of the construction contracts can be reliably estimated. The stage of completion is measured by reference to the certified work done to-date or by the proportion that contract costs incurred for work performed to-date bear to the estimated total construction costs. Where foreseeable losses on construction contracts are anticipated, full allowance of those losses is made in the financial statements. Investment properties Revenue from sale of investment properties is measured at fair value of the consideration received or receivable. Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the properties.
(iii)
59

Annual Report 2011

2. SIGNIFICANT ACCOUNTING POLICIES (continued) (c) Revenue recognition (continued)
(iv) Goods sold Revenue from sales of goods is measured at fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. Revenue is recognised upon delivery of goods when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods. Services Revenue from services is recognised as and when services are rendered. Entrance and subscription fees Entrance and subscription fees received from club members are recognised on an accrual basis. When members account become inactive, subscription fee is suspended until it is realised on a cash basis. Members accounts are deemed to be inactive where subscriptions are in arrears for more than 6 months.
(v)
(vi)
(vii) Rental income Rental income is recognised on an accrual basis. (viii) Interest income Interest income from deposits with licensed banks and contract revenue under deferred payment term is recognised on an accrual basis using the effective interest method. Interest income from hire purchase financing, housing loan and term loan are recognised on an accrual basis as follows: (i) interest earned on hire purchase financing is recognised using the sum-of-digits method so as to produce a constant periodic rate of interest on the balance for each period. Unearned interest is deducted in arriving at the net balance of the hire purchase debts; (ii) interest earned on housing loan and term loan is calculated on a monthly rest basis. (ix) Dividend income Dividend income is recognised when the right to receive payment is established.
(d)
Employee benefits
(i) Short term employee benefits Short-term employee benefit obligation in respect of salaries, annual bonuses, paid annual leave and sick leave are measured on an undiscounted basis and are expensed as the related service is provided. A provision is recognised for the amount expected to be paid under short term cash bonus or profitsharing plans, if any, if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. The Groups contributions to the Employees Provident Fund or other defined contributable plans are charged to profit or loss in the year to which they relate. Once the contributions have been paid, the Group has no further payment obligations.
60

Annual Report 2011

2. SIGNIFICANT ACCOUNTING POLICIES (continued) (d) Employee benefits (continued)
(ii) Defined benefit plans A subsidiary of the Company operates an unfunded defined benefit scheme. The subsidiarys net obligation under the scheme is determined by estimating the amount of benefit that employees have earned in return for their service in the current and prior periods and that benefit is discounted to determine the present value of the liability. The subsidiarys obligation is calculated using the projected unit credit method. 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. (iii) Retirement gratuity scheme The Company established a retirement gratuity scheme in 2005 for certain Executive Directors of the Company. The amount of retirement gratuity payable is determined by the Board of Directors in relation to the past services rendered and it does not account for the directors services to be rendered in later years up to retirement. The retirement gratuity is calculated based on the last drawn monthly salaries of the eligible directors and contribution to Employees Provident Fund for three years. The retirement gratuity payable is vested upon the directors reaching retirement age and is classified as current liabilities.
(e)
Borrowing costs
All borrowing costs are recognised in profit or loss using the effective interest method, in the period in which they are incurred except to the extent that they are capitalised as being directly attributable to the acquisition, construction or production of an asset which necessarily takes a substantial period of time to be prepared for its intended use or sale. The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure for the asset is being incurred and activities that are necessary to prepare the asset for its intended use or sale are in progress. Capitalisation of borrowing costs is suspended or ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are interrupted or completed.
(f)
Leases - The Group as lessee

(i) Finance leases Leases of property, plant and equipment where the Group and the Company assume substantially all the benefits and risks of ownership are classified as finance leases. Finance leases are capitalised at the inception of the lease at the lower of the fair value of the leased property and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a periodic constant rate of interest on the remaining balance. The corresponding rental obligations, net of finance charges, are included in borrowings. The interest element of the finance charge is charged to the profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. (ii) Operating leases Operating lease payments are recognised as an expense on a straight-line basis over the term of the relevant lease. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on the straight-line basis.
61

Annual Report 2011

2. SIGNIFICANT ACCOUNTING POLICIES (continued) (g) Leases - The Group as lessor
(i) Finance leases Leases where the Group transfers substantially all the risks and rewards of ownership of the asset are classified as finance leases. initial direct costs are included in the initial measurement of the finance lease receivable and reduce the amount of income recognised over the lease term. The interest earned on hire purchase or finance lease financing is recognised using the sum-of-digits method so as to produce a constant periodic rate of interest on the balance for each period. Unearned interest is deducted in arriving at the net balance of the hire purchase or finance lease debts.
(h)
Tax expense
Tax expense represents the aggregate amount of current and deferred tax. Current tax is the expected amount payable in respect of taxable income for the year and any adjustments recognised in the year of current tax of prior years. When an item is recognised outside profit or loss, the related tax effect is recognised either in other comprehensive income or directly in equity. Deferred tax is recognised, using the liability method, on all temporary differences between the tax base of assets and liabilities and their carrying amounts in the financial statements. Deferred tax is not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition of an asset or liability in a transaction, which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit. Deferred tax is measured at the tax rates that are expected to apply in the period in which the assets are realised or the liabilities are settled. Deferred tax assets are recognised only to the extent that there are sufficient taxable temporary differences relating to the same taxation authority to offset or when it is probable that future taxable income will be available against which the assets can be utilised.
(i)
Property, plant and equipment

(i) Recognition and measurement All items of property, plant and equipment are initially recorded at cost. Subsequent to recognition, property, plant and equipment except for freehold land and buildings are stated at cost less accumulated depreciation and impairment loss, if any. Freehold land is stated at valuation, which is the fair value at the date of valuation, less impairment loss, if any. Buildings are stated at valuation, which is the fair value at the date of the valuation, less accumulated depreciation and impairment loss, if any. The Group revalues its property comprising land and building every five years from the last date of valuation and at shorter intervals whenever the fair value of the said assets is expected to differ substantially from its carrying amounts. Surplus arising from revaluation are transferred to revaluation reserve. Any deficits are offset against the unutilised previously recognised revaluation surplus to the extent of a previous increase for the same property and the balance is thereafter recognised in profit or loss. Upon disposal or retirement of an asset, any unutilised revaluation reserve relating to the particular asset is transferred to retained earnings. Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.
62

Annual Report 2011

2. SIGNIFICANT ACCOUNTING POLICIES (continued) (i) Property, plant and equipment (continued)
(i) Recognition and measurement (continued) When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. The difference between the net disposal proceeds, if any, and the net carrying amount is recognised in profit or loss. (ii) Reclassification to investment properties When the use of a property changes from owner-occupied to investment property, it is remeasured to fair value and reclassified as investment property. Any gain arising from remeasurement is recognised in equity. Any loss arising from remeasurement is recognised in profit or loss. The fair value of property, plant and equipment recognised in a business combination is based on market value. The market value is the estimate amount for which a property could be exchanged on the date of valuation between a willing seller and a willing buyer in an arms length transaction. The market value of items of plant and equipment, fixtures and fittings is based on the quoted market prices for similar items. (iii) Subsequent costs The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of an item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The cost of the day-to-day servicing of the property, plant and equipment are recognised in profit or loss as incurred. Depreciation Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Freehold land is not depreciated. Property, plant and equipment under construction are not depreciated until these assets are ready for their intended use. The principal annual rates for the current and comparative years are as follows: Long term leasehold land Buildings Motor vehicles Plant and machinery Furniture, fittings and equipment Plantation infrastructure Over 78 to 99 years 2% to 12.5% 20% 10% to 20% 10% to 20% 12.5%
(iv)
The initial cost of operating equipment comprising of linen, crockery and related items are treated as base inventories and depreciated over a period of 5 years. Subsequent replacements are written off in the profit or loss as and when incurred. The depreciable amount is determined after deducting the residual value. Depreciation methods, useful lives and residual values are reassessed at the reporting date. Fully depreciated property, plant and equipment are retained in the financial statements until they are no longer in use and no further charge for depreciation is made in respect of these property, plant and equipment.
63

Annual Report 2011

2. SIGNIFICANT ACCOUNTING POLICIES (continued) (j) Intangible assets
(i) Goodwill Goodwill arises on the acquisition of subsidiaries. The goodwill represents the excess of the cost of the acquisition over the Groups interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree. Goodwill is measured at cost and is not amortised but tested for impairment at least annually or more frequently when there is objective evidence of impairment. Goodwill is allocated to cash generating units and is tested annually for impairment or more frequently if events or changes in circumstances indicate that it might be impaired. In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment. The entire carrying amount of the investment is tested for impairment when there is objective evidence of impairment. (ii) Other intangible assets Other intangible assets acquired by the Group are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair values as at the date of acquisition. Following initial 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 useful lives and assessed for impairment whenever there is an indication that the intangible assets 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 reporting date. Intangible assets with indefinite useful lives are not amortised but tested for impairment annually or more frequently if the events or changes in circumstances indicate that the carrying value may be impaired either individually or at the cash generating unit level.
(k)
Biological assets
This represents plantation development expenditure consisting of cost incurred on land clearing and planting and upkeep of oil palm trees to maturity which are initially recognised at cost and amortised on a straightline basis over the crops production cycle or the remaining period of the lease, whichever is shorter.
(l)
Investment properties
Investment properties are properties which are owned or held to earn rental income or for capital appreciation or for both. These include land held for a currently undetermined future use. Properties that are occupied by the companies within the Group are accounted for as owners occupied rather than as investment properties. All investment properties are measured initially and subsequently at fair value with any change therein recognised in profit or loss. When an item of inventory or land held for property development is transferred to investment property following a change in its use, any difference arising at the date of transfer between the carrying amount of the item immediately prior to the transfer and its fair value is recognised in profit or loss.
64

Annual Report 2011

2. SIGNIFICANT ACCOUNTING POLICIES (continued) (l) Investment properties (continued)
An external, independent valuer, having appropriate professional qualifications and experience, values the Groups investment property portfolio. The fair values are based on market values, being the estimated amount for which a property could be exchanged on the date of valuation between a willing buyer and a willing seller in an arms length transaction after proper marketing wherein the parties had acted knowledgeably, prudently and without compulsion or direct comparison method, being comparison of transactions and asking prices of similar properties in the locality and adjusting for location, terrain, size, present market trends and other differences. Investment property under construction is classified as investment property. Where the fair value of the investment property under construction is not reliably determinable, the investment property under construction is measured at cost until either its fair value becomes reliably determinable or construction is complete, whichever is earlier.
(m) Land held for property development

Land held for property development which consists of land is carried at cost less accumulated impairment losses, if any, and classified as non-current assets where no development activities have been carried out or where development activities are not expected to be completed within the normal operating cycle. Land held for property development is reclassified as property development costs at the point when development activities have commenced and where it can be demonstrated that the development activities can be completed within the normal operating cycle.
(n)
Impairment of non-financial assets

The carrying amounts of non-financial assets other than deferred tax assets and inventories are reviewed at each reporting date to determine whether there is any indication of impairment. If such an indication exists, the assets recoverable amount is estimated. The recoverable amount is the higher of fair value less cost to sell and the value in use, which is measured by reference to discounted future cash flows and is determined on an individual asset basis, unless the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, recoverable amount is determined for the cash-generating unit to which the asset belongs to. An impairment loss is recognised whenever the carrying amount of an item of assets exceeds its recoverable amount. An impairment loss is recognised as an expense in profit or loss. Any subsequent increase in recoverable amount of an asset, other than goodwill, due to a reversal of impairment loss is restricted to the carrying amount that would have been determined (net of accumulated depreciation, where applicable) had no impairment loss been recognised in prior years. The reversal of impairment loss is recognised in profit or loss.
(o)
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. Costs consist of land, construction costs and other development costs including related overheads and capitalised borrowing costs. When the financial outcome of a development activity can be reliably estimated, property development revenue and costs are recognised in profit or loss by reference to the stage of completion of development activities at the reporting date. When the financial outcome of a development activity cannot be reliably estimated, property development revenue is recognised only to the extent of 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.
65

Annual Report 2011

2. SIGNIFICANT ACCOUNTING POLICIES (continued) (o) Property development costs (continued)
Any expected loss on a development project, including costs to be incurred over the defect 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. Accrued billings within receivables represent the excess of revenue recognised in profit or loss over billings to purchasers. Progress billings within payables represent the excess of billings to purchasers over revenue recognised in profit or loss.
(p)
Inventories
Inventories are valued at the lower of cost and net realisable value. The cost of inventories is based on the specific identification, first-in first-out and weighted average principles, and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. In the case of workin-progress and finished goods cost includes raw materials, direct labour and an appropriate production overheads based on normal operating capacity. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. The fair value of inventory acquired in a business combination is determined based on its estimated selling price in the ordinary course of business less the estimated costs of completion and sale, and a reasonable profit margin based on the effort required to complete and sell the inventory. Cost of completed development properties is determined on specific identification basis and includes land, construction and appropriate development overheads.
(q)
Construction contracts
Construction contracts are measured at contract cost plus profit recognised to date less progress billing and recognised losses. Contract cost includes all expenditure related directly to specific projects and an allocation of fixed and variable overheads incurred in the Groups contract activities based on normal operating capacity. When the cost incurred on construction contract plus profit recognised to date less recognised losses exceeds progress billings, the balance is classified as amounts due from customers on contracts. When progress billings exceed cost incurred plus recognised profits to date less recognised losses, the balance is classified as amounts due to customers on contracts.
(r)
Non-current assets classified as held for sale

Non-current assets (or disposal groups comprising assets and liabilities) that are expected to be recovered primarily through sale rather than through continuing use are classified as held for sale. Immediately before classification as held for sale, the assets (or components of a disposal group) are remeasured in accordance with the Groups accounting policies. Thereafter, generally the assets (or disposal group) are measured at the lower of their carrying amount and fair value less cost to sell.
(s)
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. When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs.
66

Annual Report 2011

2. SIGNIFICANT ACCOUNTING POLICIES (continued) (s) Financial assets (continued)
The Group and the Company determine the classification of their financial assets at initial recognition, and have categorised financial assets in financial assets at fair value through profit or loss (FVTPL), loans and receivables and available-for-sale financial assets. (i) Financial assets at FVTPL Financial assets are classified as financial assets at FVTPL if they are held for trading or are designated as such upon initial recognition. Financial assets held for trading are derivatives (including separated embedded derivatives) or financial assets acquired principally for the purpose of selling in the near term. Subsequent to initial recognition, financial assets at FVTPL are measured at fair value. 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 FVTPL do not include exchange differences, interest and dividend income. Exchange differences, interest and dividend income on financial assets at FVTPL are recognised separately in profit or loss as part of other losses or other income. Financial assets at FVTPL could be presented as current or non-current. Financial assets that are held primarily for trading purposes are presented as current whereas financial assets that are not held primarily for trading purposes are presented as current or non-current based on the settlement date. The Company classified its quoted fixed income fund which is held for trading as financial assets at FVTPL. (ii) Loans and receivables Financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process. Loans and receivables are classified as current assets, except for those having maturity dates later than 12 months after the reporting date which are classified as non-current. The Group and the Company classified the following financial assets as loans and receivables: - cash and cash equivalents, except for bank overdraft; and - trade and other receivables, including amount due from subsidiaries. (iii) Available-for-sale financial assets Available-for-sale are financial assets that are designated as available for sale or are not classified in financial assets at FVTPL, held-to-maturity investments and loans and receivables. 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 asset are recognised in other comprehensive income, except that impairment losses, foreign exchange gains and losses on monetary instruments and interest calculated using the effective interest method are recognised in profit or loss. The cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment when the financial asset is derecognised. Interest income calculated using the effective interest method is recognised in profit or loss. Dividends on an available-for-sale equity instrument are recognised in profit or loss when the Groups and the Companys right to receive payment is established.
67

Annual Report 2011

2. SIGNIFICANT ACCOUNTING POLICIES (continued) (s) Financial assets (continued)
(iii) Available-for-sale financial assets (continued) Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less impairment loss. Available-for-sale financial assets are classified as non-current assets unless they are expected to be realised within 12 months after the reporting date. A financial asset is derecognised where the contractual right to receive cash flows from the asset has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss. Regular way purchases or sales are purchases and sales of financial asset that require delivery of asset within the period generally established by regulation or connection in the market place concerned. All regular way purchases and sales of financial assets are recognised or derecognised on the trade date i.e. the date that the Company commit to purchase or sell asset. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument, or where appropriate, a shorter period to the net carrying amount on initial recognition.
(t)
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 are subsequently assessed for impairment on a collective basis based on similar risk characteristics. Objective evidence of impairment for a portfolio of receivables could include the Groups and the Companys past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period and observable changes in national or local economic conditions that correlate with default on receivables. If any such evidence exists, the amount of impairment loss is measured as the difference between the assets carrying amount and the present value of estimated future cash flows discounted at the financial assets original effective interest rate. The impairment loss is recognised in profit or loss. The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable becomes uncollectible, it is written off against the allowance account. If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.
68

Annual Report 2011

2. SIGNIFICANT ACCOUNTING POLICIES (continued) (t) Impairment of financial assets (continued)
(ii) Available-for-sale Financial Assets Significant or prolonged decline in fair value below cost, significant financial difficulties of the issuer or obligor, and the disappearance of an active trading market are considerations to determine whether there is objective evidence that investment securities classified as available-for-sale financial assets are impaired. If an available-for-sale financial asset is impaired, an amount comprising the difference between its cost (net of any principal payment and amortisation) and its current value, less any impairment loss previously recognised in profit or loss, is transferred from equity to profit or loss. Impairment losses on available-for-sale equity investments are not reversed in profit or loss in the subsequent periods. Increase in fair value, if any, subsequent to impairment loss is recognised in other comprehensive income. For available-for-sale debt investments, impairment losses are subsequently reversed in profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss in profit or loss.
(u)
Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and on hand, demand deposits, and short-term highly liquid investments which are subject to an insignificant risk of changes in value. For the purposes of the statements of cash flows, cash and cash equivalents are presented net of bank overdrafts.
(v)
Share capital
An equity instrument is any contract that evidences a residual interest in the assets of the Group and the Company after deducting all of its liabilities. Ordinary shares are equity instruments. Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction costs. Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared.
(w) Financial liabilities

Financial liabilities are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability. Financial liabilities, within the scope of FRS 139, are recognised in the statements of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument. Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities. (i) Other financial liabilities The Groups and the Companys other financial liabilities include trade payables, other payables, deposits received and loans and borrowings. Trade and other payables and deposits received are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method. Loans and borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently measured at amortised cost using the effective interest method. Loans and borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.
69

Annual Report 2011

2. SIGNIFICANT ACCOUNTING POLICIES (continued) (w) Financial liabilities (continued)
(i) Other financial liabilities (continued) For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process. A financial liability is derecognised when the obligation under the liability is extinguished. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.
(x)
Financial guarantee contracts

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due. Financial guarantee contracts are recognised initially as a liability at fair value, net of transaction costs. Subsequent to initial recognition, financial guarantee contracts are recognised as income in profit or loss over the period of the guarantee. If the debtor fails to make payment relating to financial guarantee contract when it is due and the Group and the Company, as the issuer, is required to reimburse the holder for the associated loss, the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the reporting date and the amount initially recognised less cumulative amortisation.
(y)
Governments grants
Government grants relating to the purchase of assets are treated as deferred income and are credited to profit or loss on the straight line basis over the expected lives of the related assets.
(z)
Provisions
A provision is recognised if, as a result of a past event, the Group has present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.
(aa) Contingencies
A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of uncertain future event(s) not wholly within the control of the Group. Contingent liabilities or assets are not recognised in the statements of financial positions.
(ab) Segment reporting

For management purposes, the Group is organised into operating segments based on their products and services which are independently managed by their 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 disclosed in Note 36, including the factors used to identify the reportable segments and the measurement basis of segment information.
70

Annual Report 2011

3. REVENUE
2011 RM Attributable revenue from sales of uncompleted development properties and sales of completed development properties Attributable revenue from construction contracts Dividend income Interest income from money lending Management fees Rental income Rental income from investment properties Revenue from hotel operations Sales of goods and livestock Sales of investment properties Sales of land held for property development Sales of non-current assets classified as held for sale Services rendered Group 2010 RM (restated) 2011 RM Company 2010 RM
201,545,152 2,806,569 24,288 262,975 23,783,803 4,779,897 69,704,536 18,000 1,303,848 250,000 1,543,065 306,022,133
162,713,148 2,756,770 76,739 319,555 22,307,358 4,371,334 38,195,288 4,500,000 19,214,656 1,405,808 255,860,656
83,856,000 10,112,000 131,650 94,099,650
130,798,234 9,686,000 146,220 140,630,454
Group revenue excludes intra-group transactions.
4.
COST OF SALES
2011 RM Attributable property development costs and cost of completed development properties sold Attributable construction contract costs Cost of investment properties disposed (Note 14) Cost of land held for property development Cost of infrastructure and earthwork improvement on disposal of non-current assets held for sale Cost of non-current assets classified as held for sale (Note 25) Direct operating expenses from investment properties - Did not generate rental income - Generated rental income Cost of goods sold Cost of services Provision for foreseeable loss on construction contract Group 2010 RM (restated) 2011 RM Company 2010 RM
135,809,116 2,039,444 12,000 906,301
118,458,056 3,177,144 4,500,000
251,175
918,430 14,303,492
7 ,380,380 62,906,864 4,109,734 213,415,014
13,994 7,901,707 32,736,686 3,499,169 34,927 185,543,605
71

Annual Report 2011

5. PROFIT BEFORE TAx FROM CONTINUING OPERATIONS
2011 RM Profit before tax is arrived at after charging: Amortisation of prepaid lease payments Auditors remuneration - Audit services - Other services by auditors of the Company Bad debts written off Depreciation of property, plant and equipment Loss on disposal of non-current assets held for sale Interest expense Impairment loss on: - land held for property development - goodwill on acquisition - receivables Landowners share of profit Net loss on foreign exchange - realised - unrealised Personnel expenses (including key management personnel) - Contributions to Employees Provident Fund - Provision for retirement benefit obligations - Wages, salaries and others Property, plant and equipment written off Provision for foreseeable loss Provision for tax penalty Rental of motor vehicles, equipment and machinery Rental of premises and after crediting: Changes in fair value of investment properties Dividend income (gross) Gain on disposal of investment properties Gain on disposal of land held for property development Gain on changes in fair value of fixed income fund Gain on disposal of non-current assets held for sale Gain on disposal of property, plant and equipment Gain on disposal of other investment Gain on transfer from property, plant and equipment to investment properties Gain on transfer from inventories to investment properties Interest income Landowners share of loss Group 2010 RM (restated) 802,575 197,025 12,800 179,992 2,793,219 9,949,125 6,161 140,762 186,716 2011 RM Company 2010 RM
796,374 206,222 12,800 36,888 2,875,406 1,175 15,880,614 90,267 704,159 190,890 997 ,772
42,000 9,800 21,222 3,193,351 85,765 1,479,325
36,000 9,800 81,000 17,027 913,045
2,884,144 723,747 23,398,020 14,520 1,074,794 85,992 601,450
2,965,066 264,690 21,309,847 74,445 34,927 27,785 427,984
1,245,168 7 ,164,938 1 261,694
1,240,197 6,985,621 1 261,694
9,160,000 6,000 397 ,547 16,234 191,064 65,600 1,724,898 40,507
8,339,000 3,992,734 46,999 6,359 205,597 3,076,051 708,273
83,856,000 1,182,280
130,798,234 20,873
72

Annual Report 2011

5. PROFIT BEFORE TAx FROM CONTINUING OPERATIONS (continued)
2011 RM Net gain on foreign exchange - realised - unrealised Rental income Reversal of impairment loss on receivables Reversal of provision for rectification works Group 2010 RM (restated) 845,916 327,660 22,880,624 528,465 250,000 2011 RM Company 2010 RM
24,123,584 239,942
39,739
499,353 376,997 83,427
6.
DIRECTORS REMUNERATION
2011 RM Group 2010 RM 7,788,734 149,695 7,938,429 80,000 105,480 5,300 190,780 2011 RM Company 2010 RM
Directors of the Company Executive Directors - Other emoluments - Estimated monetary value of benefits-in-kind
7 ,839,280 137 ,446 7 ,976,726
6,945,590 6,945,590 120,000 12,000 132,000
6,914,084 6,914,084 80,000 11,000 91,000
Non-Executive Directors - Fees - Other emoluments - Estimated monetary value of benefits-in-kind
120,000 106,480 5,300 231,780
Directors of subsidiaries Executive Directors - Other emoluments - Estimated monetary value of benefits-in-kind
1,279,643 8,800 1,288,443 9,496,949
1,157,924 8,800 1,166,724 9,295,933
7 ,077 ,590
7,005,084
The number of directors of the Company for the financial year which fall within the following bands are as follows: Number of Directors 2011 2010 1 1 1 1 1 1 1
Executive Directors RM1 - RM200,000 RM200,001 - RM250,000 RM250,001 - RM300,000 RM300,001 - RM500,000 RM500,001 - RM600,000 RM600,001 - RM650,000 RM650,001 - RM700,000 RM700,001 - RM1,150,000 RM1,150,001 - RM1,200,000 RM1,200,001 - RM1,250,000 RM1,250,001 - RM2,600,000
73

Annual Report 2011

6. DIRECTORS REMUNERATION (continued)
Executive Directors RM2,600,001 - RM2,650,000 RM2,650,001 - RM3,000,000 RM3,000,001 - RM3,050,000 The Executive Directors are as follows: 2011/2010 - Dato Chen Kooi Chiew @ Cheng Ngi Chong - Datuk Chen Lok Loi - Chen Fook Wah - Chen Ying @ Chin Ying - Mah Swee Buoy (Appointed on 5 May 2011) - Seow Wei Tang (Resigned on 6 January 2011) Number of Directors 2011 2010 Non-Executive Directors RM1 - RM50,000 RM50,001 - RM100,000 The Non-Executive Directors are as follows: 2011/2010 - Haji Othman Bin Sonoh - Mohammed Chudi Bin Haji Ghazali - Haji Mohamed Bin Ismail - Jeffrey Bin Bosra 2 2 2 2 Number of Directors 2011 2010 1 1 1 1
7 .
TAx ExPENSE ExPENSE

2011 RM Continuing operations: Current tax expense Malaysian - current year Malaysian - prior year Overseas - current year Deferred tax expense Origination and reversal of temporary differences (Over)/Under provision in prior year Tax expense attributable to continuing operations Tax expense attributable to discontinued operations (Note 8) Total tax expense recognised in profit or loss Group 2010 RM (restated) 2011 RM Company 2010 RM
14,420,160 313,788 105,888 14,839,836
10,395,991 148,056 416,038 10,960,085
20,846,400 252,803 21,099,203
28,081,300 231,853 28,313,153
(5,069,458) (268,600) (5,338,058) 8,078,330 1,423,448 9,501,778
(39,767) 27,600 (12,167) 9,461,639 1,486,279 10,947,918
21,099,203 21,099,203
4,800 700 5,500 28,318,653 28,318,653
74

Annual Report 2011

7. TAx ExPENSE (continued)
Group 2011 RM Deferred tax related to other comprehensive income - Surplus on revaluation of land and buildings Reconciliation of effective tax expense 2011 RM Profit before tax from continuing operations Profit before tax from discontinued operations Accounting profit before tax Tax calculated using Malaysian tax rate of 25% Effect of different tax rate in - The Peoples Republic of China Share of results of an associate Non-taxable income Non-deductible expenses Deferred tax assets not recognised during the year Utilisation of deferred tax assets not recognised in prior years Recognition of previously unrecognised deferred tax assets Reversal of deferred tax assets Reversal of deferred tax liabilities Under/(Over) provision in prior years - Current tax expense - Deferred tax expense Tax expense Group 2010 RM 2011 RM Company 2010 RM 2010 RM 2011 RM Company 2010 RM
2,726,098
3,541,459
4,125
42,880,542 4,309,382 47 ,189,924
36,786,193 5,096,892 41,883,085
80,231,351 80,231,351
130,333,022 130,333,022
11,797 ,500 (3,855,100) (920,000) 3,490,290 745,200 (360,900) (1,609,900) 185,900 (16,400) 313,788 (268,600) 9,501,778
10,471,000 5,042 (856,200) (305,200) 1,405,520 1,668,200 (1,014,100) 316,000 (918,000) 148,056 27,600 10,947,918
20,057 ,800 (44,900) 833,500 252,803 21,099,203
32,583,300 (4,906,600) 409,400 231,853 700 28,318,653
The Group has estimated unutilised tax losses of RM22,481,400 (2010: RM17,753,000), and unabsorbed capital allowances of RM92,400 (2010: RM1,215,200) carried forward, available for set-off against future taxable profits. During the year, the Group utilised its brought forward unutilised tax losses and unabsorbed capital allowance to set off against its chargeable income resulting in a tax saving of approximately RM286,600 (2010: RM260,375).
8.
DISCONTINUED OPERATIONS AND DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE

During the year, the Company was in negotiation with a third party to dispose of its wholly-owned subsidiary, Makin Jernih Sdn. Bhd. (MJSB) which is classified as the farming, food processing and retail segment. The decision to sell the segment is in line with the Groups objective of disposing its non-core business and focus on its core business in property development, property investment, construction and oil palm plantation. The Company has on 29 December 2011 entered into a Sale and Purchase Agreement with the third party for the said disposal as mentioned in Note 38.
75

Annual Report 2011

8. DISCONTINUED OPERATIONS AND DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE (continued)
As at 30 September 2011, the assets and liabilities related to MJSB and its subsidiaries (MJSB Group) have been presented in the consolidated statement of financial position as Assets of disposal group classified as held for sale and Liabilities of disposal group classified as held for sale. The results of MJSB Group are presented separately on the consolidated statement of comprehensive income as Profit for the year from discontinued operation. The comparative consolidated statement of comprehensive income has also been re-presented to show the discontinued operation separately from continuing operations. Statements of financial position disclosures The major classes of assets and liabilities of MJSB Group classified as held for sale and the related revaluation reserve as at 30 September 2011 are as follows: Group RM Assets: Property, plant and equipment Intangible asset Inventories Receivables, deposits and prepayments Cash and cash equivalents Assets of disposal group classified as held for sale Liabilities: Loans and borrowings Payables and accruals Deferred income Deferred tax liabilities Current tax liabilities Liabilities of disposal group classified as held for sale Net assets of disposal group classified as held for sale Reserve of disposal group classified as held for sale: Revaluation reserve 70,397,727 1,270,000 7,071,745 1,279,384 3,769,509 83,788,365
4,825,522 5,516,042 4,750,000 7,576,840 59,598 22,728,002 61,060,363
20,570,586
The assets of disposal group classified as held for sale on the Companys statement of financial position as at 30 September 2011 is as follows: Company RM Asset: Investment in subsidiaries 34,800,000
76

Annual Report 2011

Included in loans and borrowings are: Group RM 1,691,934 1,500,754 1,212,516 420,318 4,825,522 Finance lease liabilities bear effective interest at rates ranging from 3.37% to 8.15% (2010: 5.56% to 8.33%) per annum. The term loan of RM1,681,363 is part of the total term loan of RM4,000,000 and is repayable by 20 quarterly principal instalments of RM200,000 each commencing on 1 April 2012. The revolving credit of RM1,500,000 is part of the total revolving credit of RM2,000,000 and is repayable on demand. The term loan and revolving credit are secured and supported by: (i) (ii) (iii) first legal charge over part of the freehold land of a subsidiary; corporate guarantee of the holding company; and negative pledge.
Secured term loan Secured revolving credit Unsecured bank overdrafts Finance lease liabilities
The term loan, revolving credit and bank overdraft bear interest at rates of 7.6% (2010: Nil), 6.6% (2010: Nil) and 7.85% (2010: Nil) respectively per annum. The unsecured bank overdraft bears effective interest at a rate of 7.85% (2010: Nil) per annum and is supported by corporate guarantee of the holding company. Statement of profit or loss disclosure The results of MJSB Group for the years ended 30 September are as follows: Group 2011 RM 35,993,759 (24,073,656) 11,920,103 224,563 (862,481) (6,512,272) (307 ,182) 4,462,731 (153,349) 4,309,382 (1,423,448) 2,885,934 2010 RM 33,356,031 (20,564,206) 12,791,825 288,013 (855,387) (6,297,310) (728,341) 5,198,800 (101,908) 5,096,892 (1,486,279) 3,610,613
Revenue Cost of sales Gross profit Other income Sales and marketing expenses Administrative expenses Other expenses Profit from operations Finance cost Profit before tax Tax expense Profit for the year, net of tax
77

Annual Report 2011

Included in profit before tax from discontinued operations are: Group 2011 RM Auditors remuneration - audit services - other services Bad debts written off Depreciation of property, plant and equipment Impairment loss on: - receivables Interest expense Inventories written off Personnel expenses (including key management personnel) ^ - Contributions to Employees Provident Fund - Wages, salaries and others Property, plant and equipment written off Rental of office equipment Rental of machinery and equipment Rental of factory Rental of motor vehicles Rental of premises Loss on disposal of property, plant and equipment Realised loss on foreign exchange Bad debts recovered Interest income Gain on disposal of property, plant and equipment Net gain on foreign exchange - realised - unrealised Rental income Reversal of impairment loss on receivables ^ 27 ,100 1,500 2,791,737 16,825 122,575 23,416 591,378 7 ,973,011 38,500 5,335 6,303 24,000 7 ,711 577 ,840 (11,926) (55,856) (8,323) (501) (6,000) 2010 RM 23,100 500 12,360 2,079,332 182,550 86,834 33,082 519,367 7,120,052 213,355 900 19,490 26,544 450,025 2,025 53,175 (600) (9,600) (4,000) (17,469)
Included in personnel expenses are other emoluments of directors of a subsidiary amounting to RM24,000 (2010: RM20,000).
Statement of cash flows disclosure The cash flows attributable to MJSB Group are as follows: Group 2011 RM Operating Investing Financing Net cash (outflow)/inflow 6,081,385 (11,602,809) 3,585,684 (1,935,740) 2010 RM 4,602,841 (4,506,172) (82,207) 14,462
78

Annual Report 2011

9. EARNINGS AND NET ASSETS PER SHARE
Basic earnings per share The basic earnings per share is calculated by dividing the Group profit attributable to shareholders by the weighted average number of ordinary shares of RM1/- each in issue during the year. The previous years basic earnings per share has been restated based on the weighted average number of shares of RM264,585,251 ordinary shares in issue during the year after taking into consideration the bonus issue of 24,053,204 ordinary shares of RM1/- each. Basic earnings per share are calculated based on the following information: Group 2011 RM Profit attributable to shareholders: From continuing operations From discontinued operation 35,129,301 2,885,934 38,015,235 Weighted average number of ordinary shares in issue during the year Diluted earnings per share As at the year end, the Company has no potential ordinary shares which are dilutive in nature. Accordingly, diluted earnings per share has not been presented. Net assets per share The net assets per share is calculated by dividing the total equity attributable to shareholders by the number of ordinary shares in issue as at the reporting date. The previous years net assets per share has been restated based on the number of ordinary shares in issue as at the reporting date after taking into consideration the bonus issue of 24,053,204 ordinary shares of RM1/- each. 264,585,251 264,585,251 26,967,528 3,610,613 30,578,141 2010 RM
10. PROPERTY, PLANT AND EQUIPMENT
79
Annual Report 2011
Freehold Land RM Buildings RM Total RM
Long term Leasehold Land RM Plantation Infrastructure RM Under Construction RM
Motor Vehicles, Plant & Machinery RM Furniture, Fittings & Equipment RM
Group 2011 Cost/Valuation At 1 October 2010 (previously stated) Effect of adopting Amendments to FRS 117 14,300,000 14,300,000 8,795,962 (95,962) (17,400,000) 5,600,000 40,132,843 22,214,614 804,642 660,151 (903,991) (22,950,000) (13,339,856) (2,536,319) 52,381 11,314,870 428,767 8,866,054 59,146,035 1,794,318 131,156 2,110,683 25,293,713 10,063,837 (1,366,968) (22,590) 926,327 11,532,886 2,757,797 (322,603) (175,890) 6,618 5,834,380 2,602,907 8,105,603 47,894,814 (18,000) (1,064,101) (11,503,415) 995,669 44,410,570 59,146,035 25,293,713 11,532,886 5,834,380 8,105,603
15,317,000
125,229,617 14,300,000 139,529,617 65,113,673 (1,689,571) (216,480) 16,599,645 (999,953) (79,129,590) 2,941,610 142,148,951
At 1 October 2010 (restated) 15,317,000 Additions # Disposals Written off Reclassification Adjustment on revaluation 5,693,000 Elimination of accumulated depreciation on revaluation Reclassify as held for sale (11,400,000) Effect of movements in exchange rates
9,610,000
10. PROPERTY, PLANT AND EQUIPMENT (continued)
80
Annual Report 2011
Group 2011 Accumulated Depreciation At 1 October 2010 (previously stated) Effect of adopting Amendments to FRS 117 71,111 1,323,873 9,126,722 5,902,722 31,338 234,426 28,474 (95,692) (903,991) (7,826,957) (904,906) 64,206 1,645,252 166,803 157,716 2,038,810 14,280,275 3,696,947 (1,246,987) (10,982) 5,803,448 1,287,170 (158,986) (152,478) 750,233 830,813 157,716 14,280,275 5,803,448 750,233 20,991,672 20,991,672 8,020,543 (1,405,973) (163,460) (999,683) (8,731,863) 358,444 18,069,680
At 1 October 2010 (restated) Charge for the year * Disposals Written off Elimination of accumulated depreciation on revaluation Reclassify as held for sale Effect of movements in exchange rates
Net Carrying Amount 5,528,889 38,808,970 13,087 ,892 5,412,148 7 ,220,802 44,410,570 124,079,271
9,610,000
81
Annual Report 2011
Group 2010 Cost/Valuation At 1 October 2009 (previously stated) Effect of adopting Amendments to FRS 117 15,870,072 15,870,072 (690,163) (879,909) 14,300,000 59,146,035 25,293,713 (963,880) (539,788) (4,840,345) (51,760) 11,532,886 1,746,756 9,717,093 (260,844) (210,464) 246,987 (80,030) (409,355) 14,701 53,275,693 210,718 24,385,465 1,672,357 10,067,547 1,991,783 2,185,676 3,986,394 5,075,091 9,583,157 53,275,693 24,385,465 10,067,547 2,185,676 5,075,091
13,810,000
108,799,472 15,870,072 124,669,544 17,444,409 (4,294,403) (340,874) (619,819)
13,810,000
1,507,000
(337,690) 5,834,380
(4,294,403) (2,008,444) (249,798) 8,105,603
10,533,930 (5,720,254) (2,142,916) 139,529,617
At 1 October 2009 (restated) Additions Transfer to investment properties (Note 14) Disposals Written off Reclassification Adjustment on revaluation Elimination of accumulated depreciation on revaluation Effect of movements in exchange rates
15,317,000
82
Annual Report 2011
Group Accumulated Depreciation At 1 October 2009 (previously stated) Effect of adopting Amendments to FRS 117 157,716 14,280,275 5,803,448 (92,896) (307,890) (33,984) (879,909) (4,840,345) (43,646) 750,233 703,885 176,024 3,844,971 1,245,986 11,779,480 3,118,446 (255,155) (54,606) 5,081,113 1,081,533 (47,801) (277,413) 227,674 566,205 703,885 3,844,971 11,779,480 5,081,113 227,674 20,933,238 703,885 21,637,123 6,188,194 (302,956) (332,019) (5,720,254) (478,416) 20,991,672
At 1 October 2009 (restated) Charge for the year * Disposals Written off Elimination of accumulated depreciation on revaluation Effect of movements in exchange rates
Net Carrying Amount 14,300,000 58,988,319 11,013,438 5,729,438 5,084,147 8,105,603 118,537,945
15,317,000
Included in the property, plant and equipment under construction is interest capitalised during the year amounting to RM73,413 (2010: RM nil).
Included in depreciation charge for the year is an amount of RM2,353,400 (2010: RM1,315,643) capitalised in biological assets.
83
The freehold and leasehold land and buildings stated at valuation were revalued by the Directors in September 2010 based on independent professional
Annual Report 2011
valuation on the market value basis using the cost method of valuation or direct comparison method.
Group
Freehold Land RM Buildings RM
Long term Leasehold Land RM Plantation Infrastructure RM Under Construction RM Total RM
2011 Analysis of Cost and Valuation At valuation - 2010 9,610,000 At cost 5,600,000 5,600,000 40,132,843 22,214,614 11,314,870 8,866,054 40,132,843 22,214,614 11,314,870 8,866,054
44,410,570 44,410,570
55,342,843 86,806,108 142,148,951
9,610,000
Net Carrying Amount 5,528,889 5,528,889 38,808,970 13,087 ,892 5,412,148 38,808,970 13,087,892 5,412,148 7,220,802 7 ,220,802 44,410,570 44,410,570 53,947,859 70,131,412 124,079,271
At valuation - 2010 At cost
9,610,000
9,610,000
2010 Analysis of Cost and Valuation 14,300,000 14,300,000 59,146,035 59,146,035 25,293,713 25,293,713 11,532,886 11,532,886 5,834,380 5,834,380 8,105,603 8,105,603 88,763,035 50,766,582 139,529,617
15,317,000
15,317,000
Net Carrying Amount 14,300,000 14,300,000 58,988,319 58,988,319 11,013,438 11,013,438 5,729,438 5,729,438 5,084,147 5,084,147 8,105,603 8,105,603 88,605,319 29,932,626 118,537,945
15,317,000
15,317,000
84

Annual Report 2011

The net carrying amount of revalued assets had they been carried at cost would have been as follows: 2011 RM Freehold land Long term leasehold land Buildings Group 2010 RM 2011 RM Company 2010 RM
666,424 1,045,209 26,286,227 27 ,997 ,860
6,166,424 1,475,727 41,720,411 49,362,562
110,000 455,558 565,558
110,000 448,500 558,500
Included in the above property, plant and equipment are: (a) Motor vehicles, plant and machinery are analysed as follows: Motor Vehicles RM 2011 Cost Accumulated depreciation Net carrying amount 2010 Cost Accumulated depreciation Net carrying amount (b) 9,937,150 (5,308,994) 4,628,156 Plant & Machinery RM 12,277,464 (3,817,728) 8,459,736 Total RM 22,214,614 (9,126,722) 13,087 ,892
8,002,960 (5,272,094) 2,730,866
17,290,753 (9,008,181) 8,282,572
25,293,713 (14,280,275) 11,013,438
Property, plant and equipment pledged as security for bank guarantee and credit facilities granted to certain subsidiaries as mentioned in Note 31 as follows: Group 2011 RM Cost/Valuation Buildings Long term leasehold land Motor vehicles, plant and machinery Furniture, fittings and equipment Under construction Net Carrying Amount Buildings Long term leasehold land Motor vehicles, plant and machinery Furniture, fittings and equipment Under construction 24,260,870 24,260,870 47,719,073 14,300,000 3,950,570 220,145 3,227,778 69,417,566 24,800,000 24,800,000 2010 RM 47,719,073 14,300,000 10,029,773 548,394 3,227,778 75,825,018
85

Annual Report 2011

(c) Motor vehicles under finance lease arrangements as follows: Group 2011 RM Cost Net Carrying Amount (d) Property, plant and equipment under construction These are in respect of construction of buildings, plant and machinery. (e) The long term leasehold land of the Group has an unexpired lease period of more than 50 years. Freehold Land RM 110,000 110,000 110,000 Furniture, Fittings & Equipment RM 93,979 3,340 (800) 96,519 15,504 11,780 (799) 26,485 70,034 6,049,238 3,473,920 2010 RM 3,451,083 1,285,304
Company 2011 Cost/Valuation At 1 October 2010 Additions Written off At 30 September 2011 Accumulated Depreciation At 1 October 2010 Charge for the year Written off At 30 September 2011 Net Carrying Amount At 30 September 2011 2010 Cost/Valuation At 1 October 2009 Additions Written off Adjustment on revaluation Elimination of accumulated depreciation on revaluation At 30 September 2010 Accumulated Depreciation At 1 October 2009 Charge for the year Written off Elimination of accumulated depreciation on revaluation At 30 September 2010 Net Carrying Amount At 30 September 2010
Buildings RM 465,000 465,000 9,442 9,442 455,558
Total RM 668,979 3,340 (800) 671,519 15,504 21,222 (799) 35,927 635,592
110,000 110,000 110,000
460,000 16,500 (11,500) 465,000 2,300 9,200 (11,500) 465,000
52,718 45,261 (4,000) 93,979 11,676 7,827 (3,999) 15,504 78,475
622,718 45,261 (4,000) 16,500 (11,500) 668,979 13,976 17,027 (3,999) (11,500) 15,504 653,475
86

Annual Report 2011

11. INTANGIBLE ASSETS
Group 2011 RM (i) Goodwill on acquisition At cost: Goodwill on acquisition Less: Accumulated impairment losses 2010 RM
6,212,005 (104,228) 6,107 ,777
6,212,005 (104,228) 6,107,777
(ii)
Other intangible asset At cost: In respect of a license to operate a livestock farm
6,107 ,777
1,270,000 7,377,777
Impairment test for intangible assets Goodwill on acquisition is allocated to the Groups cash-generating units (CGUs), business segments as follows: Group 2011 RM Plantation Property development Services Investment holding 6,077 ,777 31,698 98,067 4,463 6,212,005 2010 RM 6,077,777 31,698 98,067 4,463 6,212,005
The license to operate a livestock farm is assessed as having an indefinite useful life as the license is renewable at minimal cost and the management does not foresee any factors that suggest the non-renewal of the license. The Group intends to continue renewing the license indefinitely. The license to operate a livestock farm is allocated to the farming segment. Goodwill and the license are tested for impairment on an annual basis by comparing the carrying amount with the recoverable amount of each CGU. The recoverable amount of CGU is determined based on value-in-use calculations using cash flow projections from the financial budgets and projections approved by management. Key assumptions used in the value-in-use calculations based on a twenty-year cash flow projections in respect of impairment test for goodwill on plantation segment are: (i) (ii) (iii) (iv) (v) discount rate of 11.5% (2010: 13%) which is pre-tax and reflected specific risks of the plantation segment in Indonesia; oil palm trees with an average life of 25 (2010: 25) years with the first three years as immature and remaining years as mature; Crude Palm Oil (CPO) average selling price of RM2,500 (2010: RM2,500) per metric tonne; Average CPO extraction rate of 20% (2010: 20%); and Average annual oil palm yield per hectare of 7 to 24 (2009: 6 to 24) metric tonnes.
In the previous year, key assumptions used in the value-in-use calculations based on a one-year cash flow forecast in respect of impairment test for the license are:
87

Annual Report 2011

11. INTANGIBLE ASSETS (continued)
(i) (ii) (iii) discount rate of 10% which is pre-tax and reflected the specific risk of farming operation; budgeted gross profit based on past performance and managements expectation of the market development; and sales growth rate of 3% per annum.
In assessing the value-in-use, management does not foresee any possible changes in the above key assumptions that would cause the carrying amounts of the intangible assets to materially exceed its recoverable amounts.
12. BIOLOGICAL ASSETS

Group 2011 RM At cost: At 1 October 2010/2009 Additions Effect of movements in exchange rate At 30 September 106,895,886 61,184,377 8,429,605 176,509,868 60,758,638 52,514,343 (6,377,095) 106,895,886 2010 RM
Biological assets represent the plantation development expenditure for oil palm in Indonesia. Expenses capitalised during the year include the following: Group 2011 RM 2,353,400 1,069,499 4,179,852 2010 RM 1,315,643 428,093 2,690,422
Depreciation Interest expense Personnel expenses - Wages, salaries and others
The biological assets have been pledged as security for credit facilities granted to a subsidiary and the Company as mentioned in Note 31.
13. PREPAID LEASE PAYMENTS

Group 2011 RM At 1 October 2010/2009 (previously stated) Effect of adopting Amendments to FRS 117 At 1 October 2010/2009 (restated) Amortisation for the year Effect of movements in exchange rate At 30 September 45,764,628 (14,990,163) 30,774,465 (796,374) 492,393 30,470,484 2010 RM (restated) 47,294,510 (15,166,187) 32,128,323 (802,575) (551,283) 30,774,465
The above is short term leasehold land with an unexpired lease period of less than 50 years. The short term leasehold land of RM27,124,524 (2010 : RM27,589,274) is pledged as security for credit facilities granted to the Group as disclosed in Note 31.
88

Annual Report 2011

14. INVESTMENT PROPERTIES
Group 2011 RM At fair value: At 1 October 2010/2009 Additions Transfer from property, plant and equipment Disposals (Note 4) Reclassify as non-current assets held for sale (Note 25) Transfer from inventories Changes in fair value At 30 September Included in the above are: Freehold Land and Buildings Freehold land - at fair value Buildings - at fair value 206,933,400 (12,000) 9,160,000 216,081,400 2010 RM 183,803,575 8,261,000 4,500,000 (4,500,000) (251,175) 6,781,000 8,339,000 206,933,400
20,460,000 12,569,000 33,029,000
17,350,000 12,581,000 29,931,000
Leasehold Land and Buildings Leasehold land - at fair value - unexpired lease period of more than 50 years Buildings - at fair value
47 ,030,000 136,022,400 183,052,400 216,081,400
41,330,000 135,672,400 177,002,400 206,933,400
Included in the above are leasehold land and buildings amounting to RM172,500,000 (2010: RM167,500,000) pledged for credit facilities granted to subsidiaries as mentioned in Note 31.
15. INVESTMENT IN SUBSIDIARIES

Company 2011 RM At cost: Unquoted shares Ordinary shares Redeemable convertible preference shares (RCPS) Less: Accumulated impairment loss 2010 RM
359,687 ,240 155,000,000 (99,999) 514,587 ,241
370,467,238 (99,999) 370,367,239
89

Annual Report 2011

15. INVESTMENT IN SUBSIDIARIE (continued)
Details of the subsidiaries are as follows:
Name of subsidiary
+ Aliran Perkasa Sdn. Bhd. Cekap Corporation Berhad Dapat Jaya Builder Sdn. Bhd.
Country of incorporation
Malaysia Malaysia Malaysia
Principal activities
Property development Property development and operating a recreational club Building and civil works contracting and project management services Investment holding Property development Ceased operation Property development Property development Investment holding An agent for the Malaysia My Second Home Programme Building and civil works contracting Property development Property development Property development Investment holding Building and civil works contracting and project and building management services Money lending, hire purchase and leasing finance
Effective equity interest 2011 2010 100% 100% 100% 100%

100% 100%
Detik Merdu Sdn. Bhd. + Everland Asia Development Sdn. Bhd. Fresh Partners Malaysia Sdn. Bhd. Gabung Wajib Sdn. Bhd. Gerak Teguh Sdn. Bhd. GK Resort Berhad Global Retreat (MM2H) Sdn. Bhd.
Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia
100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Intelek Kekal (M) Sdn. Bhd. Malaysia Intra Tegas (M) Sdn. Bhd. Malaysia + Kajang Resources Corporation Malaysia Sdn. Bhd. Kumpulan Indah Bersatu Sdn. Bhd. Malaysia *+ Makin Jernih Sdn. Bhd. Malaysia Metro Kajang Construction Sdn. Malaysia Bhd. MKH Credit Corporation Sdn. Malaysia Bhd. (formerly known as Metro Kajang Credit Corporation Sdn. Bhd.) MKH Management Sdn. Bhd. Malaysia (formerly known as Metro Kajang Management Sdn. Bhd.) Metro Kajang Trading Sdn. Bhd. Malaysia ^+ Metro Kajang (Oversea) Sdn. Bhd. Metro K.L. City Sdn. Bhd. Metro Nusantara Sdn. Bhd. + Metro Tiara (M) Sdn. Bhd. Metro Kajang Development Sdn. Bhd. Pelangi Semenyih Sdn. Bhd. Perkasa Bernas (M) Sdn. Bhd. + MKH Resources Sdn. Bhd. (formerly known as Rumus Mewah Sdn. Bhd.) + Serba Sentosa Sdn. Bhd. Serentak Maju Corporation Sdn. Bhd. Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia
100%
100%
Management, secretarial services and insurance agency Trading of building materials and household related products Investment holding Property development Dormant Property investment Ceased operation Property development Property development Property development
100%
100%
100% 100% 100% 100% 100% 100% 100% 100% 100%
100% 100% 100% 100% 100% 100% 100% 100%
Malaysia Malaysia
Property development Property development
100% 100%
100%
90

Annual Report 2011

Name of subsidiary
Srijang Indah Sdn. Bhd.
Malaysia
Property investment and management and investment holding Property development and property investment Property development Property development Trading and marketing
Effective equity interest 2011 2010 100% 100%
Srijang Kemajuan Sdn. Bhd. Stand Allied Corporation Sdn. Bhd. Sumber Lengkap Sdn. Bhd. Vast Marketing & Services Sdn. Bhd.
Malaysia Malaysia Malaysia Malaysia
99.99% 100% 100% 100%
99.99% 100% 100%
Subsidiaries of Cekap Corporation Berhad Intra Tegas (M) Sdn. Bhd. Malaysia Serentak Maju Corporation Sdn. Malaysia Bhd. Sumber Lengkap Sdn. Bhd. Malaysia Subsidiaries of Detik Merdu Sdn. Bhd. @ PT Khaleda Agroprima Malindo Republic of Indonesia PT Nusantara Makmur Jaya Republic of Indonesia Subsidiary of Gabung Wajib Sdn. Bhd. Amona Metro Development Sdn. Malaysia Bhd. Subsidiary of GK Resort Berhad PNSB-GK Resort Sdn. Bhd. Malaysia
Property development Property development Property development
100% 100% 100%
Oil palm plantation Dormant
94.99% 100%
94.99%
Property development
60%
60%
70%
70%
Subsidiary of Kumpulan Indah Bersatu Sdn. Bhd. Palga Sdn. Bhd. Malaysia Investment holding Subsidiaries of Makin Jernih Sdn. Bhd. AA Meat Shop Sdn. Bhd. Malaysia # Chau Yang Farming Sdn. Bhd. Tip Top Meat Sdn. Bhd. Fresh Partners Malaysia Sdn. Bhd. Malaysia Malaysia Malaysia
100%
100%
Trading of food and meat related products Livestock farming and oil palm cultivation Food processing and trading Ceased operation
100% 100% 100%
100% 100% 100% 100%
Subsidiary of Metro Kajang (Oversea) Sdn. Bhd. # Vast Furniture Manufacturing The Peoples Furniture manufacturing (Kunshan) Co. Ltd. Republic of China Subsidiary of Metro Kajang Trading Sdn. Bhd. Intelek Murni (M) Sdn. Bhd. Malaysia
100%
100%
Ceased operation
100%
100%
91

Annual Report 2011

Name of subsidiary
Subsidiary of Palga Sdn. Bhd. Hiliran Juara Sdn. Bhd. Malaysia Property development 100% 100%
Effective equity interest 2011 2010
Subsidiaries of Srijang Indah Sdn. Bhd. Laju Jaya Sdn. Bhd. Malaysia Maha Usaha Sdn. Bhd. Metro K.L. City Sdn. Bhd. # @ * ^ Malaysia Malaysia
Hotel business and property investment Property investment and management Property investment
100% 100%
100% 100% 100%
Subsidiaries audited by firms of auditors other than member firms of Moore Stephens International Limited and Moore Stephens AC. Subsidiary audited by independent member firm of Moore Stephens International Limited. Unaudited and was consolidated using management financial statements. The Company fully subscribed for a total of 22,000,000 (+2010: 227,097,869) new ordinary shares of RM1/each in the respective subsidiaries via settlement of debts due from the subsidiaries to the Company. During the year, the Company fully subscribed for 1,550,000 new redeemable convertible preference shares of RM1/- at a premium of RM99 each in a subsidiary via settlement of debts due from the subsidiary to the Company. The Company acquired the respective subsidiaries for a total cash consideration of RM2,020,002 (2010: RM nil). Classified as discontinued operations during the year as disclosed in Note 8.
The salient features of the Redeemable Convertible Preference Shares (RCPS) are as follows: (a) Dividends (i) The holder has the right to be paid, out of such profits of the subsidiary available for distribution determined by the Directors at their discretion to be distributed in respect of each financial year or other accounting period of the subsidiary, a dividend at a rate as the Board of Directors shall determine from time to time. Voting rights The RCPS carry rights to vote at any general meeting of the subsidiary if: (i) any resolution is proposed for the winding up of the subsidiary, in which case the holder of the RCPS may only then vote at such general meeting on the election of a chairman, any motion for adjournment and the resolution for winding up; or (ii) (iii) (iv) the meeting is convened for the purpose of considering the reduction of the capital of the subsidiary; or the meeting is relating to any dividend or part thereof unpaid on any RCPS; or the proposition which is submitted to the meeting proposes to abrogate or vary or otherwise directly affects the special rights and privileges attaching to the RCPS; in which event the holder of the RCPS shall have such number of votes for each RCPS registered in his name equivalent to the number of ordinary shares, which solely for the purpose of calculating the number of votes of the holder of the RCPS is entitled to, one RCPS held by the holder of RCPS shall be deemed to be equivalent to one of ordinary share of the subsidiary. The holder of the RCPS shall further be entitled to speak, demand a poll, to move resolutions and participate in the meeting of the shareholders of RCPS of the subsidiary.
(b)
92

Annual Report 2011

(c) Redemption (i) Subject to the provision of Section 61 of the Companies Act,1965, the subsidiary shall have the right to redeem all or any of the RCPS at RM100 only per RCPS (being the par value of RM1 and premium of RM99 per RCPS) at anytime after the date of issuance of RCPS; and (ii) (d) no RCPS redeemed by the subsidiary shall be capable of reissue.
Conversion The subsidiary is entitled, at any time during the period commencing on the date of issuance of RCPS to convert all or any of the RCPS registered in the name of each holder of the RCPS. Each RCPS is convertible into 100 ordinary shares of RM1 each in the share capital of the subsidiary. Capital The holder has the right on winding up or other return of capital (other than on the redemption of the RCPS) to receive, in priority to the holders of any other class of shares in the capital of the subsidiary.
(e)
16. INVESTMENT IN AN ASSOCIATE

Group 2011 RM At cost: Unquoted shares 5% Non-Cumulative Redeemable Preference Shares of RM1/- each Share of post-acquisition reserves 2,250,000 7 ,496,591 28,530,517 38,277 ,108 2010 RM 2,250,000 7,496,591 15,374,773 25,121,364
The salient features of the 5% Non-Cumulative Redeemable Preference Shares (NCRPS) are as follows: (i) The NCRPS holders have the right to a fixed non-cumulative preferential dividend at a rate of 5% per annum on its nominal value; The NCRPS do not carry any rights to participate in the profits or surplus assets of the associate; The NCRPS holders do not carry any right to vote at any general meeting of the associate except on resolutions of reduction and return of capital, winding up of the associate, for sanctioning the disposal of the whole of the associate property, business and undertaking and for the consideration of any matter which directly affects the NCRPS holders rights; and The NCRPS may at the option of the associate be converted into ordinary shares or redeemable at par.
(ii) (iii)
(iv)
The details of the associate, incorporated in Malaysia, are as follows: Name of associate Principal activity Effective equity interest 2011 2010 45% 45% Financial year end 31 December
*# Rimbunan Melati Sdn. Bhd. * #
Interest held through Dapat Jaya Builder Sdn. Bhd.. Associate audited by a firm of auditors other than Moore Stephens AC.
93

Annual Report 2011

The summarised financial information of the associate is as follows: Group 2011 RM Total assets Total liabilities Revenue Profit for the year 109,145,315 24,085,071 90,081,312 34,267 ,942 2010 RM 85,254,879 29,429,624 40,639,806 7,610,499
17.
OTHER INVESTMENT
Group 2011 RM At cost: Transferable club membership Less: Allowance for diminution in value 172,800 (84,800) 88,000 2010 RM
18. LAND HELD FOR PROPERTY DEVELOPMENT

Group 2011 RM At cost: Freehold land and land equivalent At 1 October 2010/2009 Additions Reclassify to development costs Transfer to property development costs (Note 21) Disposal At 30 September Leasehold land and land equivalent At 1 October 2010/2009 Additions Transfer to property development costs (Note 21) Reclassify to development costs At 30 September Balance carried down 2010 RM
177 ,702,636 21,660,366 (18,037 ,391) (833,633) 180,491,978
141,305,854 50,897,838 (265,375) (14,235,681) 177,702,636
45,285,056 10,600 45,295,656 225,787 ,634
53,639,967 1,339,559 (9,535,959) (158,511) 45,285,056 222,987,692
94

Annual Report 2011

18. LAND HELD FOR PROPERTY DEVELOPMENT (continued)
Group 2011 RM Balance brought down Development costs At 1 October 2010/2009 Additions Disposal Reclassify from freehold land and land equivalent Reclassify from leasehold land and land equivalent Transfer to property development costs (Note 21) At 30 September Total land and land equivalent and development costs Less: Accumulated impairment loss At 1 October 2010/2009 Additions Disposal At 30 September (6,539,529) (90,267) 1,443,548 (5,186,248) 263,474,043 Included in land held for property development are: (i) titles of freehold land and land equivalent amounting to RM81,833,093 (2010: RM78,317,789) which have been deposited with a financial institution for term loan facility granted to subsidiaries as mentioned in Note 31; (ii) freehold land and land equivalent amounting to RM74,719,376 (2010: RM60,606,669) which have been pledged for term loan facility granted to certain subsidiaries as mentioned in Note 31. (6,539,529) (6,539,529) 249,301,264 225,787 ,634 32,853,101 18,649,049 (1,516,216) (7 ,113,277) 42,872,657 268,660,291 2010 RM 222,987,692 16,127,443 18,003,900 265,375 158,511 (1,702,128) 32,853,101 255,840,793
19. DEFERRED TAx ASSETS AND LIABILITIES

2011 RM Deferred tax assets At 1 October 2010/2009 Effect of adopting FRS 139 Recognised in profit or loss Recognised in other comprehensive income At 30 September Group 2010 RM (restated) 8,901,481 8,901,481 768,900 (81,625) 9,588,756 2011 RM Company 2010 RM
9,588,756 (59,300) 9,529,456 3,445,619 12,975,075
754,575 754,575 754,575
764,200 764,200 (5,500) (4,125) 754,575
95

Annual Report 2011

19. DEFERRED TAx ASSETS AND LIABILITIES (continued)
2011 RM Deferred tax liabilities At 1 October 2010/2009 As previously stated Effect of adopting Amendments to FRS As restated Recognised in profit or loss Recognised in other comprehensive income Reclassify as held for sale Effect of movements in exchange rate At 30 September Group 2010 RM (restated) 2011 RM Company 2010 RM
(46,283,909) 117 172,540 (46,111,369) 333,540 (2,726,098) 7 ,576,840 (101,385) (41,028,472)
(41,919,809) (41,919,809) (756,734) (3,541,459) 106,633 (46,111,369)
Deferred tax assets and liabilities are attributable to the following: 2011 RM Deferred tax assets Differences between the carrying amount of property, plant and equipment and its tax base Deductible temporary differences in respect of expenses Deficit arising from revaluation of building Fair value adjustment in respect of contract revenue Fair value adjustment in respect of long term deposits Fair value adjustment in respect of long term retention sum Impairment loss on land held for property development Surplus arising from revaluation of buildings Unutilised tax losses Unabsorbed capital allowances Unrealised profits on intercompany construction contract Unrealised profits on intercompany sale of properties Group 2010 RM (restated) 2011 RM Company 2010 RM
(357 ,900) 9,347 ,500 357 ,000 195,800 (545,000) 202,300 (4,125) 1,414,400 11,700 1,257 ,400 1,096,000 12,975,075
(287,450) 6,729,050 185,800 191,700 202,300 (4,125) 1,650,100 8,600 387,500 525,281 9,588,756
(9,900) 768,600 (4,125) 754,575
(9,900) 768,600 (4,125) 754,575
96

Annual Report 2011

19. DEFERRED TAx ASSETS AND LIABILITIES (continued)
2011 RM Deferred tax liabilities Differences between the carrying amount of property, plant and equipment and its tax base Differences between the carrying amount of biological assets and its tax base Capital allowances claimed on certain assets recognised as part of investment properties Surplus arising from revaluation of land and buildings Deductible temporary differences in respect of expenses Unutilised tax losses Unabsorbed capital allowances Fair value adjustment in respect of investment properties Fair value adjustment in respect of subsidiaries acquired Group 2010 RM (restated) 2011 RM Company 2010 RM
(2,079,810)
(3,808,630)
(4,287 ,425)
(1,929,526)
(2,524,600) (3,691,300) 648,633 3,092,643 (19,727 ,913) (12,458,700) (41,028,472)
(2,524,600) (4,910,160) 322,274 133,100 (18,648,389) (14,745,438) (46,111,369)
The deferred tax assets and liabilities are not available for set-off as they arise from different taxable entities within the Group. Unrecognised deferred tax assets Deferred tax assets have not been recognised in respect of the following temporary differences: 2011 RM Impairment loss on land held for property development Unutilised tax losses Unabsorbed capital allowances Other deductible temporary differences Group 2010 RM 2011 RM Company 2010 RM
4,376,900 4,452,900 45,700 2,366,200 11,241,700
5,730,100 11,152,400 648,300 1,571,900 19,102,700
Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the subsidiaries can utilise the benefits therefrom.
97

Annual Report 2011

20. RECEIVABLES, DEPOSITS AND PREPAYMENTS
Note Non-current Trade Trade receivable Finance lease receivables 2011 RM Group 2010 RM 2011 RM Company 2010 RM
(a) (b)
9,463,119 9,463,119
7,171,227 26,140 7,197,367 7,197,367
88,250,586 (178,000) 88,072,586 88,072,586
Non-trade Amount due from subsidiaries (c) Less : Allowance for impairment loss Other receivable (d)
2,733,882 12,197 ,001
Current Trade Trade receivables (e) Less : Allowance for impairment loss Finance lease receivables Loan receivables (b) (f)
56,678,201 (962,369) 55,715,832 26,912 25,739 55,768,483
40,704,045 (1,052,783) 39,651,262 91,969 447,750 40,190,981 13,830,926 (1,444,560) 12,386,366 19,674,475 1,095,283 73,347,105
4,055,670 4,055,670 4,055,670 53,941,769 (178,000) 53,763,769 200,255 (96,725) 103,530 46,808 57 ,969,777
1,100,545 1,100,545 1,100,545 127,555 (10,960) 116,595 46,808 1,263,948
Non-trade Amount due from subsidiaries (g) Less: Allowance for impairment loss
Other receivables (h) Less : Allowance for impairment loss Deposits Prepayments (i)
11,963,652 (1,600,315) 10,363,337 24,558,197 1,924,238 92,614,255
(a)
The trade receivable represents net present value of progress billings in respect of a construction contract under deferred payment term. The discount rate used is 6.18% (2010: 6.18%) per annum. The maturity profile of trade receivable is as follows: Group 2011 RM 9,463,119 9,463,119 2010 RM 3,964,420 3,206,807 7,171,227
Receivable after 1 year but not later than 2 years Receivable after 2 years but not later than 3 years
The above receivable is neither pass due nor impaired as the debtor is a creditworthy customer. This amount has not been renegotiated during the year.
98

Annual Report 2011

20. RECEIVABLES, DEPOSITS AND PREPAYMENTS (continued)
(b) Finance lease receivables 2011 RM Current assets Receivable within 1 year Gross investment in finance lease receivables Less: Unearned finance income Present value of minimum lease payment receivables Less: Allowance for impairment loss At 1 October 2010/2009 Charge for the year Reversal of impairment loss At 30 September 1,144,177 (90,099) 1,054,078 (965,016) (66,844) 4,694 (1,027 ,166) 26,912 Non-current assets Receivable after 1 year but not later than 5 years Gross investment in finance lease receivables Less: Unearned finance income Present value of minimum lease payment receivables 26,912 The finance lease receivables bear effective interest at rate of 8.15% (2010: 8.15%) per annum. The maturity profile of finance lease receivables is as follows: Group 2011 RM Fixed rate instrument Receivable within 1 year Receivable after 1 year but not later than 2 years 26,912 26,912 (c) 2010 RM 91,969 26,140 118,109 26,976 (836) 26,140 118,109 1,149,137 (92,152) 1,056,985 (965,016) (965,016) 91,969 Group 2010 RM
In the previous year, these amounts were non-trade in nature, unsecured, interest free, expected to be settled in cash and were not expected to be settled within one year.
(d)
This is in respect of an amount due from Plasma Farmers Cooperative in Indonesia as mentioned in Note 20(h)(iii).
(e)
Trade receivables (i) Credit term of trade receivables The Groups and the Companys normal trade credit term ranges from 7 to 90 days (2010: 7 to 90 days).
99

Annual Report 2011

(e) Trade receivables (continued) (ii) The ageing analysis of the Groups and of the Companys trade receivables is as follows: Group 2011 RM Neither past due nor impaired 1 to 30 days past due not impaired 31 to 60 days past due not impaired 61 to 90 days past due not impaired More than 90 days past due Impaired 24,827 ,316 9,003,046 10,167 ,372 5,397 ,692 6,320,406 30,888,516 962,369 56,678,201 Company 2010 RM 4,055,670 4,055,670
Receivables that are neither past due nor impaired Trade receivables that are neither past due nor impaired comprise property purchasers mostly are with end financing facilities from reputable end-financiers whilst the other debtors are creditworthy customers with good payment records and mostly are regular customers that have been transacting with the Group. None of the Groups trade receivables that are neither past due nor impaired have been renegotiated during the year. Receivables that are past due but not impaired Trade receivables of the Group amounting to RM30,888,516 which are past due but not impaired because there have been no significant changes in credit quality of the debtors and the amounts are still considered recoverable. The Group does not hold any collateral or other credit enhancements over these balances. Receivables that are impaired The movement of allowance accounts used to record the impairment is as follows: Group 2011 RM At beginning of the year Charge for the year Reversal during the year Reclassified as held for sale At end of the year 1,052,783 100,477 (8,341) (182,550) 962,369 Company 2010 RM
Trade receivables that are individually determined to be impaired at the reporting date relate to debtors that are in significant financial difficulties and have defaulted on payment. These receivables are not secured by any collateral or credit enhancements.
100

Annual Report 2011

(e) Trade receivables (continued) (iii) Included in trade receivables of the Group are: (a) (b) (c) retention sums amounting to RM4,331,355 (2010: RM12,275,783) held by stakeholders; an amount of RM38,580 (2010: RM2,779,873) due from a joint venture partner in respect of previous land held for joint development; and amounts of RM116,300 (2010: RM4,048) due from key management personnel of the Group in respect of purchase of development properties of the Group.
(iv) (f)
Trade receivables of the Company are in respect of amounts due from subsidiaries.
Loan receivables Group 2011 RM Housing loan Term loan (business) Other loan Gross outstanding Less: Allowance for impairment loss At 1 October 2010/2009 - As previously stated - Effect of adopting FRS139 - As restated Charge for the year Reversal during the year At 30 September 198,807 221,007 9,520 429,334 2010 RM 221,817 220,402 10,720 452,939
(5,189) (242,979) (248,168) (371,379) 215,952 (403,595) 25,739
(5,189) (5,189) (5,189) 447,750
The maturity profile of loan receivables, net of allowance for impairment loss, is as follows: Housing Loan RM Term Loan RM 21,408 Other Loan RM 4,331
2011 Fixed rate instruments Receivable within 1 year 2010 Fixed rate instruments Receivable within 1 year
Total RM 25,739
221,817
220,402
5,531
447,750
The loan receivables bear effective interest at rates ranging from 7.30% to 12.00% (2010: 5.00% to 11.50%) per annum. (g) The amounts are non-trade in nature, unsecured, interest free, expected to be settled in cash and is repayable on demand.
101

Annual Report 2011

(h) Included in other receivables of the Group are: (i) an amount of RM3,597,708 (2010: RM7,502,642) being indirect taxes paid in advance to tax authorities by a foreign subsidiary; amounts of RM 4,362,088 (2010: RM494,888) being advances paid to a third parties to source for plantation land in Indonesia; and an amount of RM nil (2010: RM2,965,201) being advances to a contractor, in which a minority shareholder of a foreign subsidiary has substantial equity interest, for the development of plantation under the Plasma Programme. In accordance with existing Indonesian Government policy, a subsidiary assumes the responsibilities to develop plantation for small land holders (known as Plasma Farmers) in addition to its own plantation. The subsidiary is also required to train and supervise the Plasma Farmers and purchase the fresh fruit bunches from the farmers at prices determined by the Government. The amount is unsecured, interest free and expected to be settled within one year in cash. Pursuant to a Novation Agreement signed with Plasma Farmers Cooperative (the Cooperative), the advance of approximately Rp 7.5 billion were assumed by the cooperative.
(ii)
(iii)
The movement of allowance accounts used to record the impairment of other receivables is as follows: Group 2011 RM At beginning of the year Charge for the year Reversal during the year Translation differences At end of the year 1,444,560 165,459 (10,955) 1,251 1,600,315 Company 2010 RM 10,960 85,765 96,725
The impaired other receivables at the reporting date are in significant financial difficulties. (i) Included in deposits of the Company are amounts of RM21,808 (2010: RM21,808) being deposits paid to a subsidiary. Included in deposits of the Group are: (i) amounts of RM9,054,210 (2010: RM6,049,705) being downpayment for acquisition of development land by subsidiaries; an amount of RM3,216,654 (2010: RM4,000,000) being performance deposit placed for a development project which shall be refundable upon completion of projects and expiry of defects liability period; amounts of RM1,636,668 (2010: RM1,270,627) paid to suppliers for purchase of inventories and machineries; an amount of RM1,106,238 (2010: RM1,106,238) paid for acquisition of land in Indonesia.; and an amount of RM2,650,000 (2010: RM nil) being joint venture deposit placed for a joint development project.
(ii)
(iii)
(iv) (v)
102

Annual Report 2011

21. PROPERTY DEVELOPMENT COSTS
Group 2011 RM At cost: Freehold land and land equivalent At 1 October 2010/2009 Additions Reversal of incidental cost Transfer from land held for property development (Note 18) Transfer to inventories Adjustment on completion of projects At 30 September Leasehold land and land equivalents At 1 October 2010/2009 Additions Transfer from land held for property development (Note 18) Transfer to inventories Adjustment on completion of projects At 30 September Development costs At 1 October 2010/2009 Additions Transfer from land held for property development (Note 18) Transfer to inventories Adjustment on completion of projects At 30 September Total land and land equivalents and development costs Less: Costs recognised as an expense in profit or loss At 1 October 2010/2009 Additions Adjustment on completion of projects At 30 September 91,121,585 143,897 ,113 (73,644,868) 161,373,830 114,894,979 Included in the above are: (i) (ii) interest on borrowing capitalised for the year amounting to RM538,510 (2010: RM531,773); freehold land and land equivalent amounting to RM11,945,293 (2010: RM8,033,101) which have been pledged for term loan facility granted to a subsidiary as mentioned in Note 31; titles of freehold land and land equivalent amounting to RM40,105,472 (2010: RM13,712,438) which have been deposited with a financial institution for term loan and revolving credit facilities granted to certain subsidiaries as mentioned in Note 31; 221,123,163 126,051,815 (256,053,393) 91,121,585 79,258,234 106,567 ,628 154,302,200 7 ,113,277 (67 ,355,427) 200,627 ,678 276,268,809 232,321,935 109,555,143 1,702,128 (6,252,563) (230,759,015) 106,567,628 170,379,819 12,712,401 12,712,401 12,584,050 212,257 9,535,959 (304,361) (9,315,504) 12,712,401 51,099,790 80,990 18,037 ,391 (6,289,441) 62,928,730 41,274,413 12,561,133 (52,616) 14,235,681 (939,947) (15,978,874) 51,099,790 2010 RM
(iii)
103

Annual Report 2011

21. PROPERTY DEVELOPMENT COSTS (continued)
(iv) titles of freehold land and land equivalent amounting to RM12,777,583 (2010: RM12,777,583) which have been on lien holders caveat by a financial institution for term loan facility granted to a subsidiary as mentioned in Note 31; and titles of leasehold land and land equivalents amounting to RM12,712,401 (2010: RM nil) which have been deposited with a financial institution for bridging loan facility granted to a subsidiary as mentioned in Note 31.
(v)
22. INVENTORIES
Group 2011 RM At cost: Raw materials Animal feeds Work-in-progress Finished goods Food and beverage Consumables Fertilizers Livestocks Completed development properties At net realisable value: Trading inventories Building materials Completed development properties 104,070 42,000 146,070 11,742,097 41,308 785,202 42,000 868,510 16,393,071 735,353 751,743 735,821 19,970 6,844,575 2,508,565 11,596,027 418,557 473,990 193,555 1,065,796 1,211,780 2,277,431 3,855,096 6,028,356 15,524,561 2010 RM
23. AMOUNT DUE FROM/(TO) CUSTOMERS ON CONTRACTS

Group 2011 RM Aggregate costs incurred to-date Add: Attributable profits Less: Provision for foreseeable loss Less: Progress billings 1,650,172 1,650,172 Amount due from customers on contracts Amount due to customers on contracts 1,650,172 1,650,172 2010 RM 8,418,397 40,312 (34,927) (8,059,947) 363,835 1,576,042 (1,212,207) 363,835
104

Annual Report 2011

24. CASH AND CASH EQUIVALENTS
2011 RM Deposits with licensed financial banks Cash and bank balances Cash held under housing development accounts Cash held under sinking fund account Cash held under trust fund account Fixed income funds - redeemable at call - redeemable upon 1 day notice - redeemable upon 7 days notice Group 2010 RM 2011 RM Company 2010 RM
7 ,722,869 26,005,604 27 ,352,502 3,020 174 1,145,015 582,767 56,149 62,868,100
18,442,123 44,113,473 25,311,193 2,860 20 179,328 862,300 889,529 89,800,826
1,628,536 1,628,536
11,295,995 4,113,914 15,409,909
Included in deposits with licensed financial institutions of the Group are: (i) (ii) deposits held under sinking fund account amounting to RM4,241 (2010: RM32,129); and deposits of RM444,174 (2010: RM442,083) pledged for bank guarantee facilities granted to a subsidiary.
The deposits bear effective interest at rates ranging from 1.80% to 3.25% (2010: 0.25% to 2.75%) per annum with maturity period ranging from 1 day to 365 days (2010: 1 day to 60 days). Cash and cash equivalents held by the Group which are not freely available for use are as follows: (i) cash held under housing development accounts maintained pursuant to Section 7A of the Housing Development (Control and Licensing) Act 1966; deposits amounting to RM444,174 (2010: RM442,083) pledged for bank guarantee facilities granted to a subsidiary; deposits amounting to RM4,241 (2010: RM32,129) and cash held under sinking fund and trust accounts which are held for the recreational club; cash and bank balances of RM246,426 (2010: RM393,468) being a grant from the Government of Malaysia as mentioned in Note 28; and cash and bank balances of RM562,109 (2010 : RM30,248) pledged as restricted fund held as security for the credit facilities as mentioned in Note 31.
(ii)
(iii)
(iv)
(v)
25. NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE

Investment properties and land held for property development that are expected to be recovered primarily through sale rather than through continuing use are classified as held for sale. The Group has entered into agreements to dispose off investment properties and land held for property development.
105

Annual Report 2011

25. NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE (continued)
Group 2011 RM At lower of carrying amount and fair value less cost to sell: At 1 October 2010/2009 Reclassify from investment properties (Note 14) Disposals (Note 4) At 30 September Included in the above are: Leasehold shopoffice 251,175 (251,175) 14,303,492 251,175 (14,303,492) 251,175 2010 RM
251,175 251,175
26. SHARE CAPITAL

Group/Company Number of shares Amount 2011 2010 2011 RM RM RM Authorised: Ordinary shares of RM1/- each Issued and fully paid: Ordinary shares of RM1/- each At 1 October 2010/2009 Issuance of shares pursuant to: - Bonus issue At 30 September 500,000,000 500,000,000 500,000,000
2010 RM
500,000,000
240,532,047
229,078,140
240,532,047
229,078,140
24,053,204 264,585,251
11,453,907 240,532,047
24,053,204 264,585,251
11,453,907 240,532,047
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All ordinary shares rank equally with regard to the Companys residual assets.
27.
RESERVES
2011 RM Non-distributable Translation reserve Revaluation reserve Distributable Retained earnings Group 2010 RM 2011 RM Company 2010 RM 12,375 12,375 185,403,065 185,415,440
6,984,134 10,101,815 17 ,085,949 431,562,141 448,648,090
(3,595,945) 16,799,124 13,203,179 417,422,313 430,625,492
12,375 12,375 220,482,009 220,494,384
Translation reserve The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations as well as from the translation of liabilities that hedge the Companys net investment in a foreign subsidiary.
106

Annual Report 2011

27. RESERVES (continued)
Revaluation reserve The revaluation reserve relates to the revaluation of property, plant and equipment. Retained earnings Section 108 tax credit With effect from year of assessment 2008, a single tier company income tax system (single tier system) was introduced. The Company did not elect for the irrevocable option to disregard the Section 108 tax credit. Accordingly, the Section 108 tax credit as at 30 September 2011 will be available to the Company until such time the credit is fully utilised or upon expiry of the six years transitional period on 31 December 2013, whichever is earlier. The Company has sufficient Section 108 tax credit of approximately RM20,381,400 (2010: RM23,388,000) and tax exempt income of approximately RM2,328,000 (2010: RM2,328,000) to frank future dividends of approximately RM63,472,200 (2010: RM72,492,000). If the balance of retained earnings of approximately RM157,009,800 (2010: RM112,911,000) were to be distributed as dividends, the Company may distribute such dividends under the single tier system.
28. DEFERRED INCOME

This is part of a grant totalling RM5,000,000 from the Government of Malaysia (the Government) as financial assistance under the Techno Fund grant to develop and up-scale a new technology biogas plant to treat slaughter house waste and utilisation of biogas for energy saving (the Project). The total approved grant may be adjusted by the Government and the Government has the absolute discretion for any review of the grant or the aggregate amount to be paid to a subsidiary. The duration of the Project shall be for a period of 24 months commencing from 15 September 2008 until 14 September 2010. The duration of the project has been extended to 30 April 2011. The certificate of practical completion of the biogas plant was received in April 2011. However, the operation of the plant has not commenced due to some rectification works on the plant before full commissioning of the plant. As at 30 September 2011, the amount of RM4,750,000 was reclassified as held for sale (Note 8).
29. PROVISIONS
Retirement Benefit Obligations RM 390,876 723,747 38,770 1,153,393 Retirement Gratuity RM 7,660,800 7 ,660,800 Rectification Works RM 207,482 (207,482) Tax Penalty RM 1,074,794 19,651 1,094,445
Group 2011 At 1 October 2010 Provision made during the year Incurred during the year Effect of movements in exchange rate At 30 September 2011
Total RM 8,259,158 1,798,541 (207,482) 58,421 9,908,638
107

Annual Report 2011

29. PROVISIONS (continued)
Retirement Benefit Obligations RM 148,799 264,690 (22,613) 390,876 Retirement Gratuity RM 7,660,800 7,660,800 Rectification Works RM 2,673,234 (2,215,752) (250,000) 207,482 Tax Penalty RM
Group 2010 At 1 October 2009 Provision made during the year Incurred during the year Reversal of unused amounts Effect of movements in exchange rate At 30 September 2010
Total RM 10,482,833 264,690 (2,215,752) (250,000) (22,613) 8,259,158
The above provisions are classified as follows: Retirement Benefit Obligations RM 1,153,393 1,153,393 2010 Non-current Current
Group 2011 Non-current Current
Retirement Gratuity RM 7,660,800 7 ,660,800
Rectification Works RM
Tax Penalty RM 1,094,445 1,094,445
Total RM 1,153,393 8,755,245 9,908,638
390,876 390,876
7,660,800 7,660,800
207,482 207,482
390,876 7,868,282 8,259,158
Company 2011 Current At 1 October 2010/ 30 September 2011 2010 Current At 1 October 2009/ 30 September 2010 (a) Retirement benefit obligations
3,074,400
3,074,400
3,074,400
3,074,400
A subsidiary of the Company in Indonesia operates an unfunded defined benefit scheme, as required under the Labour Law of the Republic of Indonesia.
108

Annual Report 2011

29. PROVISIONS (continued)
(a) Retirement benefit obligations (continued) The expenses recognised in profit or loss are as follows: Group 2011 RM Current service costs Interest on obligation Adjustment due to actuary calculation 648,475 62,818 12,454 723,747 2010 RM 243,770 19,804 1,116 264,690
The defined benefit obligation expenses were determined based on actuarial valuations prepared by an independent actuary using the projected unit credit method. Principal assumptions at reporting date are as follows: Group 2011 RM Discount rate Future salary increase Mortality rate Resignation rate Normal retirement age (b) Retirement gratuity Provision for retirement gratuity are for certain eligible directors. The details of the retirement gratuity scheme is disclosed in Note 2(d)(iii). (c) Rectification works This is in respect of rectification works on completed property development projects. (d) Tax penalty Provision for tax penalty relates to penalty in respect of value-added tax of the subsidiary. PT Khaleda Agroproma Malindo (PTKAM), a subsidiary of the Company. In May 2011, PTKAM received tax assessment letters from the local tax office for under payment of input Value Added Tax (VAT) for the period from January to September 2009 amounting to approximately IDR 6.3 billion and penalty of approximately IDR 6.3 billion, totalling approximately IDR 12.6 billion (equivalent to approximately RM4.6 million). Based on the tax audit, the subsidiary was denied the input VAT credit in relation to its planting activities on the ground that the subsidiary engages in the production and sale of Fresh Fruit Bunches (FFB). The subsidiary disagrees with the assessment as the subsidiary has not generated any sale of FFB and has submitted an objection letter dated 11 July 2011. The subsidiary has made a provision amounting to approximately IDR 3.0 billion (equivalent to RM1,094,445) using similar basis as in the decision letters of the local tax authority for the subsidiarys tax under payment of input VAT for the year 2008. 7 .8% 10% 100% TMI2 4% 58 - 60 2010 RM 8.5% 10% 100% TMI2 1% 58 - 60
109

Annual Report 2011

30. PAYABLES AND ACCRUALS
2011 RM Group 2010 RM 2011 RM Company 2010 RM
Note Non-current Retention sum payable after one year Current Trade Trade payables Retention sum payable within one year Non-trade Amount due to subsidiaries Amount due to landowner Other payables Deposits received Accruals
9,964,025
(a)
43,918,711 15,222,070
35,107,453 11,963,513
(b) (c) (d) (e)
2,213,438 8,649,498 3,704,844 73,708,561
1,763,259 5,325,858 8,898,210 3,005,990 66,064,283
65,215,578 59,541 615,226 65,890,345
350,214 485,732 835,946
(a)
The normal trade credit term granted to the Group ranges from 7 to 90 days (2010: 7 to 90 days) unless as specified in agreements. The amounts are non-trade in nature, unsecured, bears interest at a rate of 5.6% (2010: nil) per annum, expected to be settled in cash and are repayable on demand. In the previous year, the amount due to landowner was related to a third party landowners share of a subsidiary profit. This was in accordance with an agreement entered into with the landowner whereby the subsidiary undertakes to develop the land belonging to the landowner and in consideration of which the landowner was entitled to a minimum guaranteed sum of RM8 million or 50% of the net profit from the development project, whichever is higher. Included in other payables of the Group is an amount of RM nil (2010: RM315,652) owing to suppliers in respect of construction of property, plant and equipment and investment properties. Included in deposits received of the Group are: (i) (ii) rental, utilities and other deposits received of RM7,399,546 (2010: RM7,259,805) from tenants; and down payments of RM nil (2010: RM150,500) from purchasers of investment properties which have been reclassified as noncurrent assets held for sale.
(b)
(c)
(d)
(e)
110

Annual Report 2011

31. LOANS AND BORROWINGS
2011 RM Non-current Term loans - secured - RM - United States Dollar Bridging loan - secured Revolving credits - secured Finance lease liabilities Group 2010 RM 2011 RM Company 2010 RM
104,070,304 78,215,344 3,051,390 55,425,000 2,535,792 243,297 ,830
115,935,000 44,377,795 1,000,000 5,500,000 571,498 167,384,293
39,089,750 39,089,750
22,393,075 22,393,075
Current Term loans - secured Bridging loan - secured Revolving credits - secured - RM - United States Dollar - unsecured - RM Bank overdrafts - secured - unsecured Finance lease liabilities
16,288,198
4,211,132 4,000,000
58,329,612 4,788,695 33,000,000 16,030,785 3,795,425 971,574 133,204,289 376,502,119
25,000,000 4,590,806 23,700,000 1,565,634 2,599,700 456,464 66,123,736 233,508,029
2,393,250 15,000,000 37 ,795 17 ,431,045 56,520,795
2,316,525 13,000,000 15,316,525 37,709,600
The maturity profile of loans and borrowings of the Group is as follows: Carrying amount RM Within 1 year RM 1-2 years RM 2-3 years RM 3-4 years RM 4-5 years RM
Group 2011 Fixed rate instrument Finance lease liabilities
More than 5 years RM
3,507,366
971,583
1,026,478
1,010,938
303,979
194,388
111

Annual Report 2011

31. LOANS AND BORROWINGS (continued)
Carrying amount RM Within 1 year RM 1-2 years RM 2-3 years RM 3-4 years RM 4-5 years RM
Group 2011 Floating rate instruments Term loans - secured - RM 120,358,502 - United States Dollar 78,215,344 Bridging loan - secured 3,051,390 Revolving credits - secured - RM 113,754,612 - United States Dollar 4,788,695 - unsecured - RM 33,000,000 Bank overdrafts - secured 16,030,785 - unsecured 3,795,425
More than 5 years RM
16,288,198
15,673,956 3,051,390
19,743,956
25,853,956
25,322,956 17,789,825
17,475,480 60,425,519
58,329,612 4,788,695 33,000,000 16,030,785 3,795,425
4,600,000 23,325,346 24,351,824
10,100,000 29,843,956 30,854,894
10,600,000 36,453,956 36,757,935
9,100,000 52,212,781 52,407,169
21,025,000 98,925,999 98,925,999
372,994,753 132,232,715 376,502,119 2010 Fixed rate instrument Finance lease liabilities 133,204,298
1,027,962
456,464
285,347
185,550
88,264
12,337
Floating rate instruments Term loans - secured - RM 120,146,132 - United States Dollar 44,377,795 Bridging loan - secured 5,000,000 Revolving credit - secured - RM 30,500,000 - United States Dollar 4,590,806 - unsecured - RM 23,700,000 Bank overdrafts - secured 1,565,634 - unsecured 2,599,700 232,480,067 233,508,029
4,211,132 4,000,000
16,460,000 1,000,000
19,260,000
22,265,000
24,300,000 3,596,132
33,650,000 40,781,663
25,000,000 4,590,806 23,700,000 1,565,634 2,599,700 65,667,272 66,123,736
17,460,000 17,745,347
1,100,000 20,360,000 20,545,550
1,100,000 23,365,000 23,453,264
1,100,000 28,996,132 29,008,469
2,200,000 76,631,663 76,631,663
112

Annual Report 2011

The maturity profile of loans and borrowings of the Company is as follows: Carrying amount RM Within 1 year RM More than 5 years RM
Company 2011 Floating rate instruments Revolving credits - unsecured - RM 15,000,000 - secured - United States Dollar 2,393,250 Term loan - secured - United States Dollar 39,089,750 Bank overdraft - unsecured 37,795 56,520,795
1-2 years RM
2-3 years RM
3-4 years RM
4-5 years RM
15,000,000
2,393,250
37,795 17,431,045
8,894,913 8,894,913
30,194,837 30,194,837
2010 Floating rate instruments Revolving credit - unsecured - RM 13,000,000 - secured - United States Dollar 2,316,525 Term loan - secured - United States Dollar 22,393,075
13,000,000
2,316,525
1,814,611 1,814,611
20,578,464 20,578,464
37,709,600 15,316,525 Finance lease liabilities Finance lease liabilities are payable as follows: Future minimum lease payments RM 2011 Less than one year Between one and five years 1,043,707 2,639,585 3,683,292
Finance charges RM 2011 72,133 103,793 175,926
Present value of minimum lease payments RM 2011 971,574 2,535,792 3,507 ,366
Future minimum lease payments RM 2010 499,202 607,821 1,107,023
Finance charges RM 2010 42,738 36,323 79,061
Present value of minimum lease payments RM 2010 456,464 571,498 1,027,962
113

Annual Report 2011

The finance lease liabilities bear effective interest at rates ranging from 3.80% to 16% (2010: 3.80% to 8.33%) per annum. The term loans, bridging loan and revolving credits bear effective interest at rates ranging from 2.80% to 8.00% (2010: 3.10% to 7.55%) per annum. The bank overdrafts bear effective interest at rates from 6.80% to 8.10% (2010: 7.05% to 7.55%) per annum. Unsecured bank overdrafts are supported by corporate guarantee of the Company. Term loan I of RM11,496,132 in the previous year was repayable by 32 quarterly principal instalments of RM500,000 each commencing October 2008 and was secured and supported as follows: (a) (b) (c) legal charge over the leasehold land and building of a subsidiary; specific debenture by way of fixed and floating charge over the leasehold land and building of a subsidiary; and corporate guarantee of the Company.
Term loan II of RM7,475,000 (2010: RM8,775,000) is repayable by 40 quarterly principal instalments of RM325,000 over 10 years commencing from the third month from the day of first drawdown and is secured and supported as follows: (a) (b) (c) (d) legal charge over the leasehold land and building of a subsidiary; corporate guarantee of the Company; deposit of titles of the freehold land held for property development of a subsidiary; and debenture by way of fixed and floating charge over the freehold land held for property development and leasehold land and building of subsidiaries.
Term loan III of RM49,875,000 (2010: RM49,875,000) is repayable by 24 quarterly principal instalments of RM2,375,000 over 8 1/2 years commencing from the first day of the 34th month following the date of the first drawdown or payment by way of redemption, whichever is earlier. Revolving credits I of RM40,200,000 (2010: RM nil) are reduced by semi-annually with first reduction commencing June 2013. The term loan and revolving credits are secured and supported as follows: (a) (b) (c) (d) (e) legal charge over the leasehold land and building of a subsidiary; corporate guarantee of the Company; deposit of titles of the land held for property development of a subsidiary; general debenture over a subsidiary; and debenture by way of fixed and floating charge over the land held for property development and leasehold land and building of subsidiaries.
Term loan IV RM5,000,000 in the previous year was repayable by 11 quarterly principal instalments of RM415,000 each commencing July 2011 or by way of redemption of the development units at the fixed redemption sum or redemption rate, whichever is earlier and was secured and supported as follows: (a) an all monies facility agreement stamped to the amount of facility advanced; (b) corporate guarantee of the Company; and (c) lienholders caveat over the freehold land held for property development of a subsidiary. Term loan V of RM13,439,000 (2010: RM22,000,000) is repayable by 20 quarterly principal instalments commencing September 2010 or by way of redemption of the development units at the fixed redemption sum or redemption rate, whichever is earlier. In the previous year, the instalment commencement date was extended to July 2011 and is secured and supported as follows:
114

Annual Report 2011

(a) (b) (c) facility agreement; legal charge over the freehold land held for property development of a subsidiary; and corporate guarantee of the Company.
Term loan VI of RM23,000,000 (2010: RM23,000,000) is repayable by 20 quarterly principal instalments commencing June 2013 or by way of redemption of the development units at the fixed redemption sum or redemption rate to be determined by the financial institution, whichever is earlier and is secured and supported as follows: (a) (b) (c) facility agreement; legal charge over the freehold land held for property development of a subsidiary; and corporate guarantee of the Company.
Term loan VII of RM39,125,594 (2010: RM21,984,720) is repayable in 16 quarterly principal instalments commencing 5 years from the day of first drawdown. Revolving credit II of RM2,395,445 (2010: RM2,274,281) is repayable on demand. The term loan and revolving credit are secured and supported as follows: (a) (b) (c) (d) (e) (f) (g) (h) facility agreement and security sharing agreement; legal charge over the oil palm plantation land of a subsidiary in Indonesia; deed of fiduciary by way of fixed and floating charge over the oil palm plantation in Indonesia; charge over a designated bank account of a subsidiary in Indonesia; corporate guarantee of the Company; pledged of shares of a subsidiary; assignment over all applicable insurance policies; and negative pledge over a subsidiarys assets.
Term loan VIII of RM11,700,000 (2010: RM nil) is repayable by 10 quarterly principal instalments commencing August 2014 and is secured and supported as follows: (a) (b) legal charge over the freehold land held for property development of a subsidiary; and corporate guarantee of the Company.
Term loan Ix of RM3,825,260 (2010: RM nil) is repayable by 96 monthly instalments of RM51,163 each commencing December 2010 and is secured and supported as follows: (a) (b) (c) first party deed of assignment and upon issuance of titles, the security shall be by way of charge over the freehold buildings of a subsidiary; first party open monies deed of assignment; and corporate guarantee of the Company.
Term loan x of RM11,044,242 (2010: RM nil) is repayable by 27 quarterly principal instalments of RM390,000 each and final principal instalment of RM470,000 commencing October 2011. Revolving credit III RM23,054,612 (2010: RM nil) is repayable on demand. The term loan and revolving credit are secured and supported as follows: (a) (b) (c) (d) (e) (f) (g) (h) facility agreement; legal charge over the leasehold land and building of a subsidiary; legal assignment over debt service account as mentioned in Note 25; general legal assignment over all tenancy and rent agreements; specific debenture on fixed and floating charge over the leasehold land and building of a subsidiary; deed of subordinate in respect of shareholders advances and loans to the subsidiary; legal assignment of all of the subsidiarys present and future rights, title and benefits in and under such insurance policies procure in respect of the charged; and corporate guarantee of the Company.
115

Annual Report 2011

Bridging loan I of RM5,000,000 in the previous year was repayable by five (5) quarterly principal instalments or by way of redemption of the development on the subsidiarys freehold land held for property development at the fixed redemption sum or redemption rate, whichever is earlier and was secured and supported as follows: (a) (b) (c) deposit of land titles of a subsidiarys freehold land held for property development; negative pledge on fixed and floating assets of a subsidiary; and corporate guarantee of the Company.
Bridging loan II of RM3,051,390 (2010: RM nil) is part of the total bridging loan of RM16,000,000 granted to a subsidiary and is repayable by ten (10) quarterly principal instalments commencing December 2012 or by way of redemption of the development on the subsidiarys leasehold land at the fixed redemption sum or redemption rate, whichever is earlier and is secured and supported as follows: (a) (b) (c) deposit of land titles of a subsidiarys leasehold land held for property development; negative pledge; and corporate guarantee of the Company.
Secured revolving credit IV of RM15,000,000 (2010: RM15,000,000) and Secured bank overdraft of RM7,009,837 (2010: RM1,565,634) are repayable on demand and are secured and supported as follows: (a) (b) legal charge over the leasehold land and building of a subsidiary; and corporate guarantee of the Company.
Secured revolving credit V of RM nil (2010: RM10,000,000) which is repayable on demand and is supported as follows: (a) (b) deposit of the title of the leasehold land held for property development of a subsidiary; and corporate guarantee of the Company.
Secured revolving credit VI of RM5,500,000 (2010: RM5,500,000) which is repayable after 2 years by 20 quarterly instalments of RM275,000 commencing on 25 August 2012 and is secured and supported as follows: (a) (b) legal charge over the leasehold land and building of a subsidiary; and corporate guarantee of the Company.
Secured revolving credit VII of RM20,000,000 (2010: RM nil) is repayable on demand. Secured bank overdraft of RM9,020,948 (2010: RM nil) is repayable on demand. The revolving credit and bank overdraft are secured and supported as follows: (a) (b) legal charge over the leasehold land held for property development of a subsidiary; and corporate guarantee of the Company.
Secured revolving credit VIII of RM10,000,000 (2010: RM nil) is repayable by eight (8) quarterly principal instalments commencing May 2013 and is secured and supported as follows: (a) (b) (c) (d) facility agreement; deposit part of land titles of the freehold land held for property development of a subsidiary; negative pledged on fixed and floating assets of a subsidiary; and corporate guarantee of the Company.
116

Annual Report 2011

Unsecured revolving credits of RM18,000,000 (2010: RM10,700,000) which is repayable on demand and is supported by corporate guarantee of the Company. Term loan of RM39,089,750 (2010: RM22,393,075) of the Group and of the Company is repayable in 16 quarterly principal instalments commencing 5 years from the day of first drawdown. Revolving credit Ix of RM2,393,250 (2010: RM2,316,525) is repayable on demand. The term loan and revolving credit are secured and supported as follows: (a) (b) (c) (d) (e) (f) facility agreement and security sharing agreement; legal charge over the oil palm plantation land of a subsidiary in Indonesia; deed of fiduciary by way of fixed and floating charge over the oil palm plantation in Indonesia; charge over a designated bank account of a subsidiary in Indonesia; pledged of shares of a subsidiary; and assignment over all applicable insurance policies.
32. DIVIDEND
Total Amount RM 2011 - Nil 2010 First interim dividend of 5.0 sen less 25% tax per ordinary share in respect of financial year ended 30 September 2010 9,019,962 28 October 2010
Date of payment
The Directors have recommended a final dividend of 5.0 sen less 25% tax per ordinary share of RM1/- each amounting to RM9,921,947, subject to shareholders approval at the forthcoming Annual General Meeting. The financial statements for the current financial year do not reflect the final dividend. The final dividend will be accounted for in equity as an appropriation of retained earnings in the financial year ending 30 September 2012.
33. CONTINGENT LIABILITIES - UNSECURED

Company 2011 RM (a) Corporate guarantees given by the Company to financial institutions and creditors for banking and credit facilities granted to the subsidiaries - outstanding as at year end 328,865,450 199,260,607 2010 RM
The financial guarantees have not been recognised since the fair value on initial recognition was immaterial as the financial guarantees provided by the Company did not contribute towards credit enhancement of the subsidiaries borrowings in view of the security pledged by the subsidiaries and it was not probable that the counterparties to financial guarantee contracts will claim under the contracts.
117

Annual Report 2011

33. CONTINGENT LIABILITIES - UNSECURED (continued)
(b) PT Khaleda Agroprima Malindo, a subsidiary of the Company, had in September 2010 received tax assessment letters from the local tax office for under payment of input Value Added Tax (VAT) for the period from January 2008 to December 2008 amounting to approximately IDR 6.4 billion and a penalty of IDR 6.4 billion, totally approximately IDR 12.6 billion (equivalent to RM4.6 million). Based on the tax audit, the subsidiary was denied the input VAT credit in relation to its planting activities on the ground that the subsidiary engages in the production and sale of Fresh Fruit Bunches (FFB). The subsidiary disagrees with the aforementioned assessment as the subsidiary has not generated any sale of FFB and that the intended activity of the subsidiary is that of production and sale of crude palm oil. Accordingly, the subsidiary had filed an objection and had not made any provision in the financial statements as of 30 September 2010.. Based on the decision letters from the local tax authority dated 6 June 2011, the subsidiarys under payment for input VAT for the year 2008 amounted to approximately IDR3.9 billion (equivalent to approximately RM1.4 million). The subsidiary has fully paid the amount on 5 July 2011.
34. CAPITAL COMMITMENTS

Group 2011 RM Approved and contracted for: - Property, plant and equipment Approved but not contracted for: - Property, plant and equipment - Biological assets 17 ,450,000 17 ,450,000 12,654,689 12,654,689 12,743,782 45,744,866 2010 RM
35. RELATED PARTY DISCLOSURES

(a) Identity of related parties For the purposes of these financial statements, parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decision, or vice versa, or where the Group and the party are subject to common control or common significant influence. Related parties may be individuals or other entities. The Group has a related party relationship with its subsidiaries, associate and key management personnel.
118

Annual Report 2011

35. RELATED PARTY DISCLOSURES (continued)
(b) Key management personnel compensation The key management personnel compensation is as follows: 2011 RM Group 2010 RM 80,000 6,701,516 154,995 6,936,511 1,192,698 8,129,209 2011 RM Company 2010 RM
Directors of the Company - Fees - Remuneration Estimated monetary value of benefits-in-kind Total short-term employee benefits - Post-employment benefits
120,000 6,730,839 142,746 6,993,585 1,214,921 8,208,506
120,000 5,891,839 6,011,839 1,065,751 7 ,077 ,590
80,000 5,878,516 5,958,516 1,046,568 7,005,084
Other key management personnel - Remuneration - Short term employee benefits - Post-employment benefits
5,411,873 15,574 601,181 6,028,628 14,237 ,134
5,201,665 10,438 603,289 5,815,392 13,944,601
777 ,890 147 ,957 925,847 8,003,437
905,092 172,146 1,077,238 8,082,322
Other key management personnel comprises persons other than the Directors of Company, having authority and responsibility for planning, directing and controlling the activities of the Company, either directly or indirectly. (c) Related party transactions and balances of the Company Company Received or receivable from subsidiaries Gross dividend Interest income Management fees Paid or payable to subsidiaries Car parking fees Interest expense Rental of premises Secondment fees Other transactions Subscription of shares in subsidiaries via settlement of debts due from subsidiaries to the Company Bad debts written off in respect of an amount due from a subsidiary Reversal of impairment loss on receivables in respect of an amount due from a subsidiary 177 ,000,000 227,097,869 81,000 (81,000) 5,400 1,244,121 261,694 71,633 5,400 261,694 72,814 2011 RM (83,856,000) (1,155,374) (10,112,000) 2010 RM (130,798,234) (9,686,000)
Information on outstanding balances with related parties of the Company are disclosed in Notes 20 and 30.
119

Annual Report 2011

35. RELATED PARTY DISCLOSURES (continued)
(d) Related party transactions and balances of the Group Group 2011 RM Received or receivable from key management personnel Progress billings to certain key management personnel of the Group 970,100 636,530 2010 RM
Information on outstanding balances with related parties of the Group are disclosed in Note 20.
36. SEGMENT INFORMATION

For management purposes, the Group is organised into business segments based on their products and services. The Groups chief operation decision maker reviews the information of each business segment on at least monthly basis for the purposes of resource allocation and assessment of segment performance. Therefore, the Groups reportable segments under FRS 8 are as follows: (i) (ii) (iii) (iv) (v) (vi) (vii) Property development and construction Hotel and property investment Farming, food processing and retail Trading Manufacturing Plantation Investment holding proper ty development, building and civil works contracting. hotel business and property investment and management. livestock farming, food processing and retail. trading in building materials and household related products and general trading. furniture manufacturing. oil palm cultivation. Investment holding and management services.
Non-reportable segments comprise recreational club operation, money lending and provision of insurance broking services. Segment revenue and result The accounting policies of the reportable segments are the same as the Groups accounting policies described in Note 2. Segment result represents profit before tax of the segment. Inter-segment transactions are entered in the ordinary course of business based on terms mutually agreed upon by the parties concerned. Segment assets Segment assets are measured based on all assets (including goodwill) of the segment, excluding investment in an associate, deferred tax assets, current tax assets and other investment. Segment liabilities Segment liabilities are measured based on all liabilities, excluding current tax liabilities, interest bearing loans and borrowings and deferred tax liabilities.
36. SEGMENT INFORMATION (continued)
120
Annual Report 2011
Segment revenue and result
Property development Hotel & & property construction investment Trading RM RM RM RM RM RM RM RM Manufacturing Plantation RM
Farming, food processing Non & retail Investment reportable (Discontinued Eliholding segments Operation) minations Consolidated
RM
2011 Revenue Total external revenue Inter-segment revenue 58,821,383 158,837 58,980,220 10,883,153 11,404,518 980,178 11,272,868 (11,431,705) 10,883,153 131,650 980,178 35,993,759
203,417,094
31,788,675
342,015,892
Total segment revenue
203,417 ,094
31,788,675
35,993,759 (11,431,705) 342,015,892
Results Operating result Interest expense Interest income Share of profits of an associate 3,476,765 (26,466) 3,450,299 393,300 3,843,599 430,384 (5,975,073) (4,226,519) 536,272 (8,698,043) (105,888) 2,722,970 (4,056,316) (170,203) (115,291) (150,867) (266,158) 445,288 90,984 (8,701,601) (40,032) 43,590 (441,537) (4,799,786) 1,185,007 (48,518) (93,113) 26,340
25,565,962 (12,679,446) 3,114,478
22,436,193 (2,223,904) 129,764
4,420,031 (1,116,868) 46,035,715 (122,575) 3,982,133 (16,003,189) 11,926 (2,865,265) 1,736,824 4,309,382 (1,423,448) 2,885,934 15,420,574 47,189,924 (9,501,778) 37 ,688,146
15,420,574
Segment result Tax expense
31,421,568 (6,693,721)
20,342,053 (4,073,921)
Profit /(Loss) for the year
24,727,847
16,268,132
121
Annual Report 2011
Segment revenue and result (continued)
Property development Hotel & & property construction investment Trading RM 22,572 562,806 769,861 21,222 6,339 2,791,737 8,147 6,463,517 RM RM RM RM RM RM Manufacturing Plantation RM 36,888 RM
957,313
(9,160,000)
(9,160,000)
56,689 42,920 85,765 438,223
6,970
47,856 16,605
246,920 720,984
51,362
(346,854)
1,479,325
(134,699)
(501)
997,271
2011 RM Other segment information Bad debts written off 28,741 Depreciation and amortisation 1,331,667 Changes in fair value of investment properties (Gain)/Loss on disposal of property, plant and equipment 135,405 Impairment loss on receivables 86,109 Net (gain)/loss on foreign exchange - unrealised Reversal of impairment loss on receivables (19,296) Provision for tax penalty 1,074,794 (220,646)
(239,942) 1,074,794
122
Annual Report 2011
Property development Hotel & & property construction investment Trading RM RM RM RM RM RM RM RM Manufacturing Plantation RM
2010 Revenue 26,183,304 82,874 26,266,178 12,011,984 9,832,220 806,926 9,686,000 (17,944,197) 12,011,984 146,220 806,926 33,356,031
RM
Total external
289,216,687
revenue Inter-segment revenue
179,663,975
37,048,247
8,175,323
Total segment revenue
187,839,298
37,048,247
33,356,031 (17,944,197) 289,216,687
Results Operating result Interest expense Interest income Share of profits of an associate 1,016,117 (28) 1,016,089 (211,068) 805,021 1,228,032 (4,302,945) (789,544) 1,644,070 (4,479,846) (416,038) 176,901 (489,216) (300,328) 362,029 (106,712) 255,317 1,592,415 51,655 (4,507,303) (404) 27,861 402,955 (913,044) 20,873 285,290 76,739
20,090,887 (7,512,613) 419,027
23,721,959 (1,523,036) 112,118
5,174,126 (86,834) 9,600 5,096,892 (1,486,279) 3,610,613
47,776,446 (10,035,959) 717,873 3,424,725 41,883,085 (10,947,918) 30,935,167
3,424,725
Segment result Tax expense
16,422,026 (3,280,456)
22,311,041 (5,323,938)
Profit /(Loss) for the year
13,141,570
16,987,103
123
Annual Report 2011
Property development Hotel & & property construction investment Trading RM 21,492 574,161 761,501 17,027 6,176 2,079,332 840 12,360 RM RM RM RM RM RM Manufacturing Plantation RM 192,352 5,675,126 RM
176,160
833,728
(8,339,000)
(8,339,000)
(5,750)
2,025
(3,992,734) (46,999)
(205,597)
38,929
182,550
(3,076,051) 323,312
66,181
(473)
(327,187)
(327,660)
2010 RM Other segment information Bad debts written off 2,992 Depreciation and amortisation 1,381,709 Changes in fair value of investment properties Gain on disposal of non-current assets held for sale (3,992,734) (Gain)/Loss on disposal of property (43,274) Gain on transfer from property, plant and equipment to investment properties (205,597) Gain on transfer from inventories to investment properties (3,076,051) Impairment loss on receivables 35,652 Net gain on foreign exchange - unrealised Reversal of impairment loss on receivables (38,050) Reversal of provision for rectification works (250,000) (2,427) (5,126) (17,469)
(482,862)
(545,934) (250,000)
124
Annual Report 2011
Property development Hotel & & property construction investment Trading RM 20,319,030 23,100 20,342,130 23,465,645 296,642,580 5,179,292 17,884,330 83,788,365 2,154 100 754,575 193,295 28,850 23,463,491 296,642,480 4,231,422 17,855,480 83,788,365 RM RM RM RM RM RM RM 1,226,041,907 38,277,108 12,975,075 1,751,429 1,279,045,519 Manufacturing Plantation RM
2011
RM
Assets
Segment assets 526,182,644 253,558,995 Investment in an associate 38,277,108 Deferred tax assets 12,197,400 Current tax assets 1,398,093 128,937 Other investment
Total assets
578,055,245
253,687 ,932
9,003,539 663,094 10,041,440 3,151,047 61,512,912 1,025,000 5,461,005 60,294,228 43,366,133 56,520,795 2,700 1,180,690
9,685,575 355,865
2,126,047
12,685,774
3,773,433
1,177,990
10,266,042 59,598 4,825,522 7,576,840 22,728,002
111,887,802 3,267,232 381,327,641 48,605,312 545,087 ,987
Liabilities Segment liabilities 63,169,402 Current tax liabilities 2,188,675 Interest bearing liabilities 225,199,873 Deferred tax liabilities 4,870,900
51,415,318
29,668,867
Total liabilities
295,428,850
90,750,818
Other segment information Additons to non-current assets other than financial instruments and deferred tax assets 42,452,571 18,504
1,878,119
47,228 107,308,852
3,340
3,000
11,985,139
(575,000) 163,121,753
125
Annual Report 2011
Property development Hotel & & property construction investment Trading RM 11,609,912 147,200 335,957 12,093,069 21,832,932 175,160,448 17,284,183 15,158,670 58,255,591 754,575 65,829 185,800 25,000 21,832,932 175,160,448 16,463,779 14,947,870 58,255,591 RM RM RM RM RM RM Manufacturing Plantation Non Investment reportable holding segments RM
Farming, Assets food classified as processing Held for & retail Sale Consolidated
2010 RM RM Assets Segment assets 455,016,066 252,032,678 Investment in an associate 25,121,364 Deferred tax assets 8,501,181 Current tax assets 1,689,208 88,106 Other investment 88,000
251,175 1,005,570,451 25,121,364 9,588,756 2,204,100 88,000 251,175 1,042,572,671
Total assets
490,415,819 252,120,784
8,620,493 710,200 100 4,304,926 3,418,413 33,432,610 1,025,000 6,523,682 24,259,001 37,709,600 50,291,269
4,304,826
2,334,463 58,950
2,649,927
12,581,669
1,225,088 18,834 2,900 1,246,822
5,435,337 322,625 1,106,104 5,285,943 12,150,009
90,038,436 1,302,295 233,508,029 46,111,369 370,960,129
Liabilities Segment liabilities 52,886,633 Current tax liabilities 191,686 Interest bearing liabilities 144,662,192 Deferred tax liabilities 4,779,300
25,771,132
28,494,444
Total liabilities
202,519,811
63,596,269
Other segment information Additons to non-current assets other than financial instruments and deferred tax assets 72,281,332 4,594 62,556
8,251,628
61,114,341
45,261
2,758
4,264,679
146,027,149
126

Annual Report 2011

Geographical information Revenue and non-current assets information is presented based on the segments country of domicile. Revenue from external customers based on the location of its customers has not been disclosed as revenue earned outside Malaysia is insignificant. Non-current assets do not include financial instruments and deferred tax assets. Revenue 2011 RM Malaysia The Peoples Republic of China Republic of Indonesia 331,132,739 10,883,153 342,015,892 Major customer information There is no single customer with revenue equal or more than 10% of the Group revenue. 2010 RM 277,204,703 12,011,984 289,216,687 Non-current assets 2011 2010 RM RM 601,286,310 12,440,679 274,663,581 888,390,570 551,310,855 12,033,201 156,476,681 719,820,737
37.
SIGNIFICANT EVENTS
a) On 17 December 2010, the subsidiaries of the Company, Detik Merdu Sdn. Bhd. (DMSB) and Metro Kajang (Oversea) Sdn. Bhd. (MKOSB) incorporated a new subsidiary, PT Nusantara Makmur Jaya (PTNMJ) under the Laws of the Republic of Indonesia. PTNMJ will have an issued and paid-up share capital of IDR3,576 million (equivalent to USD400,000) divided into 400,000 shares of IDR8,940 (equivalent to USD1.00) each. DMSB and MKOSB will be holding 99.75% and 0.25% of the paid-up share capital of PTNMJ respectively. As a result, PTNMJ became an indirect wholly-owned subsidiary of the Company. b) SJL Utama Pte. Ltd. (SJL), an indirect wholly-owned subsidiary of the Company, which has ceased its business operation on 1 July 2009, had earlier applied to Labuan Financial Services Authority (LFSA) for it to be struck off from the register. On 22 November 2011, SJL has received the notice from LFSA that SJL has been struck off from the register of LFSA with effect from 15 November 2011 pursuant to Section 151(4) of the Labuan Companies Act, 1990 and hence, SJL ceased to be the subsidiary of the Company.
38. SUBSEQUENT EVENT

On 29 December 2011, the Company entered into a Sale and Purchase Agreement (the SPA) with Charoen Pokphand Foods (Malaysia) Sdn Bhd for the Proposed Disposal of the entire issued and paid-up share capital of Makin Jernih Sdn. Bhd. (MJSB) comprising 33,000,000 ordinary shares of RM1/- each together with its subsidiaries, Chau Yang Farming Sdn. Bhd., Tip Top Meat Sdn. Bhd. and AA Meat Shop Sdn. Bhd. for a total cash consideration of RM64.0 million.
127

Annual Report 2011

39. OPERATING LEASE ARRANGEMENTS THE GROUP AS LESSOR
The Group have entered into property leases on its investment properties with non-cancellable lease terms of 30 years. The lease contracts contain fixed upward revision of the rental charges over the lease period. Future minimum rental receivables under non-cancellable operating leases at reporting date but not recognised as receivables, are as follows: Group 2011 RM 1,820,257 7 ,544,556 50,140,598 59,505,411 2010 RM 1,798,692 7,437,600 52,100,466 61,336,758
Not later than 1 year Later than 1 year but not later than 5 years Later than 5 years
40. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Groups financial risk management policy seeks to ensure that adequate financial resources are available for the development of the Groups businesses whilst managing its risks. The Group operates within clearly defined guidelines that are approved by the Board and the Groups policy is not to engage in speculative transactions. The main risks and corresponding management policies arising from the Groups normal course of business are as follows: (i) Credit risk Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Groups and the Companys exposure to credit risk primarily arises from its receivables. For other financial assets, the Group minimises credit risk by dealing with high credit rating counterparties. The maximum risk associated with recognised financial assets is the carrying amounts as presented in the statements of financial position and corporate guarantee provided by the Company to banks on subsidiaries credit facilities. The Group has a credit policy in place and the exposure to credit risk is managed through the application of credit approvals, credit limits and monitoring procedures. The Group determines concentrations of credit risk by monitoring the country of its trade receivables on an ongoing basis. The credit risk concentration profile of the Groups net trade related receivables at the reporting date are as follows: Group 2011 RM By country: Malaysia The Republic of Peoples Republic of China 64,677 ,892 553,710 65,231,602
% of total 99.15 0.85 100.00
The Group does not have any significant exposure to any individual customer at the reporting date.
128

Annual Report 2011

40. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(i) Credit risk (continued) Financial guarantee The Company provides unsecured financial guarantees to banks in respect of banking facilities granted to subsidiaries. The Company monitors on an ongoing basis the repayments made by the subsidiaries and their financial performance. The maximum exposure to credit risk amounts to RM328,865,450 (2010 : RM199,260,607) representing the outstanding credit facilities of the subsidiaries guaranteed by the Company at the reporting date. At the reporting date, there was no indication that the subsidiaries would default on its repayment. (ii) Liquidity risk Liquidity risk is the risk that the Group will encounter difficulty in meeting financial obligations when they fall due. The Groups exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Groups objective is to maintain a balance between continuity of funding and flexibility through use of stand-by credit facilities. The Group actively manages its operating cash flows and the availability of funding so as to ensure that all repayment and funding needs are met. As part of its overall prudent liquidity management, the Group maintains sufficient levels of cash or cash convertible investments to meet its working capital requirements. In addition, the Group strives to maintain available banking facilities of a reasonable level to its overall debt position. As far as possible, the Group raises committed funding from both capital markets and financial institutions so as to achieve overall cost effectiveness. Analysis of financial instruments by remaining contractual maturities The table below summarises the maturity profile of the Groups and of the Companys financial liabilities at the reporting date based on contractual undiscounted repayment of obligations. Total Carrying amount RM On demand Contractual cash flows RM
or within 1 year RM
1 to 2 years RM
2 to 5 years RM
Over 5 years RM
Group 2011 Financial liabilities: Payables and accruals 83,672,586 83,672,586 73,708,561 Loans and borrowings 376,502,119 429,357,878 146,396,508 460,174,705 513,030,464 220,105,069
9,546,806 38,249,331 47 ,796,137
417,219 174,002,159 174,419,378
70,709,880 70,709,880
129

Annual Report 2011

(ii) Liquidity risk (continued) Total Carrying amount RM Company 2011 Financial liabilities: Payables and accruals 65,890,345 Loans and borrowings 56,520,795 On demand Contractual cash flows RM
or within 1 year RM
1 to 2 years RM
2 to 5 years RM
Over 5 years RM
65,890,345 63,045,229
65,890,345 18,506,005 84,396,350
2,219,429 2,219,429
21,611,629 21,611,629
20,708,166 20,708,166
122,411,140 128,935,574 (iii) 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 is exposed to foreign currency risk when the currency denomination differs from its functional currency. The Group has transactional currency exposures arising from sales or purchases that are denominated in a currency other than the respective functional currencies of the Group entities, primarily Ringgit Malaysia (RM), Indonesian Rupiah (IDR) and Chinese Renminbi (RMB). The foreign currency in which these transactions are denominated is mainly USD. Foreign currency exposure in transactions and currencies other than functional currencies of the operating entities are kept to an acceptable level. The Group also holds cash and bank balances denominated in USD, Hong Kong Dollar (HKD) and SGD for working capital purposes. The Group is also exposed to currency translation risk arising from its net investments in foreign operations. The Groups net investment in The Peoples Republic of China and Republic of Indonesia are not hedged as currency positions in RMB and IDR are considered to be long-term in nature.
130

Annual Report 2011

(iii) Foreign currency risk (continued) Financial assets and liabilities denominated in USD, HKD and SGD are as follows: 2011 RM United States Dollar Cash and bank balances Trade receivables Revolving credit Term loans Hong Kong Dollar Cash and cash equivalents Singapore Dollar Cash and cash equivalents Group 2010 RM 2011 RM Company 2010 RM
1,513,528 553,710 4,788,695 78,215,344 85,071,276
5,473,002 982,329 4,590,806 44,377,795 55,423,933 2,601
580,945 2,393,250 39,089,750 42,063,945
3,652,232 2,316,525 22,393,075 28,361,832
261
Sensitivity analysis for foreign currency risk The following table demonstrates the sensitivity of the Groups profit for the year to a reasonably possible change in the USD exchange rate against RM, with all other variables held constant. Group 2011 RM Profit for the year 1,581,300 1,581,300 29,000 29,000 1,579,900 1,579,900 Company 2011 RM Profit for the year 1,577,400 1,577,400
USD/RM - strengthened 5% - weakened 5% USD/RMB - strengthened 5% - weakened 5% USD/IDR - strengthened 5% - weakened 5% (iv) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of the Groups financial instruments will fluctuate because of changes in market interest rates. The Groups exposure to interest rate risk relates to interest bearing financial assets and financial liabilities. Interest bearing financial assets include finance lease receivables, loan receivables and deposits with licensed banks. Deposits are placed for better yield returns than cash at banks and to satisfy conditions for bank guarantee. The Groups interest bearing financial liabilities comprise finance lease, bank overdrafts, revolving credits, bridging loan and term loans.
131

Annual Report 2011

(iv) Interest rate risk (continued) The fixed deposits placed with licensed banks at fixed rate exposes the Group to fair value interest rate risk. The bank overdrafts, revolving credits, bridging loan and term loans totalling RM372,994,753 at floating rate expose the Group to cash flow interest rate risk whilst finance lease of RM3,507,366 at fixed rate expose the Group to fair value interest rate risk. The Group manages its interest rate exposure by maintaining a prudent mix of fixed and floating rate borrowings. The Group also actively reviews its debts portfolio to ensure favourable rates are obtained, taking into account the investment holding period and nature of assets. Sensitivity analysis for interest rate risk As at the reporting date, a change of 50 basis points in interest rates, with all other variables held constant, would decrease/increase the total equity and profit after tax by approximately RM1,398,700 , arising mainly as a result of higher/lower interest expense on floating rate loans and borrowings.
41
FAIR VALUE OF FINANCIAL INSTRUMENTS

The methods and assumptions used to estimate the fair value of the following classes of financial assets and liabilities are as follows: (i) Cash and cash equivalents, trade and other receivables and payables and finance lease receivables The carrying amounts approximate fair values due to the relatively short term maturities of these financial assets and liabilities. (ii) Long term trade receivable, loan receivables and finance lease receivables The fair values of long term trade receivable, loan receivables and finance lease receivables are estimated using expected future cash flows of contractual instalment payments discounted at current prevailing rates offered for similar types of credit or lending arrangements. (iii) Borrowings The carrying amounts of bank overdrafts, short term revolving credits, bridging loan and short term loans approximate fair values due to the relatively short term maturities of these financial liabilities. The carrying amounts of long term floating rate revolving credits and loans approximate their fair values as the loans will be re-priced to market interest rate on or near reporting date. The fair value of finance lease is estimated using discounted cash flow analysis, based on current lending rates for similar types of lending arrangements.
132

Annual Report 2011

41 FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)
The carrying amounts of financial assets and liabilities recognised in the financial statements approximate their fair values except as follows: Group Carrying Amount RM 2011 Financial assets Long term trade receivable Long term other receivables Company Carrying Fair Amount Value RM RM
Fair Value RM
9,463,119 2,733,882 12,197 ,001
9,174,338 309,859 9,484,197
Financial liabilities Finance lease liabilities 2010 Financial assets Finance lease receivables Financial liabilities Finance lease liabilities
3,507 ,366
3,514,092
118,109
118,147
1,027,962
1,001,802
42. CAPITAL MANAGEMENT

The primary objective of the Groups capital management is to ensure that it maintains a strong credit rating and healthy capital ratio in order to sustain future development of the businesses so that it can continue to maximise returns for shareholders and benefits for other stakeholders. The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders, issue new shares, obtain new borrowings or repay existing borrowings. No changes were made in the objectives, policies and processes during the years ended 30 September 2011 and 30 September 2010. The debt-to-equity ratio is calculated as total debts divided by total capital of the Group. Total debts comprise interest bearing loans and borrowings whilst total capital is the total equity attributable to owners of the parent. The Groups policy is to keep the debt-to-equity ratio not exceeding 70%. The debt-to-equity ratio as at 30 September 2011 and 2010, which are within the Groups objectives of capital management are as follows: Group 2011 Loans and borrowings (RM) Total equity attributable to owners of the parent (RM) Debt-to-equity ratio (%) The Group is not subject to any externally imposed capital requirements. 376,502,119 733,803,927 51% 2010 233,508,029 671,157,539 35%
133

Annual Report 2011

43. COMPARATIVE FIGURES
The following comparative figures have been reclassified due to effect of adopting the Amendments to FRS117: As Reclassified RM Statement of financial position Property, plant and equipment Prepaid lease payments Revaluation reserve Deferred tax liabilities 118,537,945 30,774,465 16,799,124 46,111,369 104,237,945 45,764,628 17,316,747 46,283,909 As Previousl Classified RM
44. SUPPLEMENTARY INFORMATION ON THE DISCLOSURE OF REALISED AND UNREALISED PROFIT OR LOSS.
The following analysis of realised and unrealised retained earnings of the Group and of the Company at 30 September 2011 is presented in accordance with the directive issued by Bursa Malaysia Securities Berhad (Bursa Malaysia) dated 25 March 2010 and prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants. The retained earnings of the Group and of the Company as at 30 September 2011 and 30 September 2010 is analysed as follows: 2011 RM Total retained earnings of the Company and its subsidiaries: - realised - unrealised Group 2010 RM 2011 RM Company 2010 RM
474,829,768 69,928,099 544,757 ,867
479,484,061 54,547,962 534,032,023
221,202,633 (720,624) 220,482,009
184,267,368 1,135,697 185,403,065
Total share of retained earnings from an associate: - realised - unrealised
28,530,517 573,288,384 (141,726,243) 431,562,141
15,374,773 549,406,796 (131,984,483) 417,422,313
220,482,009 220,482,009
185,403,065 185,403,065
Less: Consolidation adjustments Total retained earnings
The disclosure of realised and unrealised profits above is solely for complying with the disclosure requirements stipulated in the directive of Bursa Malaysia and should not be applied for any other purpose.
134

Annual Report 2011
List of Properties
as at 30 September 2011
Description and Existing Use Land Area (acres) Carrying Amount RM000 *Date of Revaluation/ Date of Acquisition
Location
Tenure
ALIRAN PERKASA SDN. BHD.

Lot 42195, Mukim Kajang, Daerah Ulu Langat, Selangor Lot 42182, Seksyen 10, Bandar Kajang, Daerah Ulu Langat, Selangor Lot 19390, Mukim Semenyih, Daerah Ulu Langat, Selangor Lot 1996, Mukim Semenyih, Daerah Ulu Langat, Selangor Part of Lot 25310 (Previously Lot 2322), Mukim Semenyih, Daerah Ulu Langat, Selangor Lot 25301, Mukim Semenyih, Daerah Ulu Langat, Selangor Lot 1990, Mukim Semenyih, Daerah Ulu Langat, Selangor Agricultural title. Existing use: Vacant land Land approved for development, Existing use: Rubber trees Vacant residential land 3.088 Freehold 1,345 01.04.2004
1.495
Freehold
660
07.02.2005
1.960
Freehold
990
30.08.2005
Agricultural title. Existing use: Vacant land Agricultural title. Existing use: Vacant land
113.460
Freehold
36,606
22.03.2010
5.797
Freehold
2,022
01.07.2010
Agricultural title. Existing use: Oil palm/rubber trees Agricultural title. Existing use: Oil palm/rubber trees
6.588
Freehold
1,992
01.08.2011
12.906
Freehold
3,899
01.08.2011
CEKAP CORPORATION BERHAD

PT 25624, Taman Bukit Mewah, Kajang, Selangor 3-storey clubhouse, car park and swimming pool, all known as Mewah Club (built-up area of 39,478 sq. ft.) (Building age: 17 years) Vacant residential land 4.840 Freehold 12,538 *29.09.2010
Lot 15694, Mukim Semenyih, Daerah Ulu Langat, Selangor Lot 15683, Mukim Semenyih, Daerah Ulu Langat, Selangor Lot 15703, Mukim Semenyih, Daerah Ulu Langat, Selangor
3.105
Freehold 1,667 30.04.1999
Vacant residential land
3.184
Freehold
Partly vacant residential land
2.088
Freehold
478
30.04.1999
135

Annual Report 2011
List of Properties As At 30 September 2011 (continued)
Location
Description and Existing Use
Land Area (acres)
Tenure
Carrying Amount RM000
*Date of Revaluation/ Date of Acquisition
CHAU YANG FARMING SDN. BHD. #

Lot 36251, 43180, 43177, 26781, 34212, 19208, 19043, 43179, 34213, 19163, 21738, 18920, 19844, 20968, 15407, 22261, 18921, 25157, 21739, 18922, 26785, 22260 and part of Lot 5591, 16148, 16418, PT 4996 (Previously 15248), all in Mukim Belanja, Daerah Kinta, Perak Lot 5437, Mukim Belanja, Daerah Perak Tengah, Perak Lot 44742, Mukim Belanja, Daerah Kinta, Perak Land presently held under agricultural title, Existing use: oil palm cultivation 3.850 Leasehold expiring in year 2106 Land presently held under agricultural title, Existing use: Factory and office buildings, workers quarter, livestock farming and oil palm cultivation. (Building age: 20 years) 224.26 (nett area) Freehold 19,850 *29.09.2011
GERAK TEGUH SDN. BHD.

All of the parcels of land held by this subsidiary are located at Mukim Semenyih, Daerah Ulu Langat, Selangor and form part of the mixed development project of Taman Pelangi Semenyih PT 26791 PT 26792 PT 26793 Vacant residential land Vacant commercial land Existing use: 1-storey clubhouse, car park and swimming pool (built-up area of 17,797 sq. ft., Building age: 3 years) and part of the land is vacant Existing use: lease out for commercial building 16.140 0.500 2.530 Freehold Freehold Freehold 1,429 139 513 08.10.2001 08.10.2001 08.10.2001
PT 26794
2.200
Freehold
4,800
29.09.2011 (Investment Properties stated at fair value) 29.09.2011 (Investment Properties stated at fair value)
PT 26795
Existing use: lease out for commercial building
6.900
Freehold
10,500
136

Annual Report 2011
Location
Land Area (acres)
Tenure
HILIRAN JUARA SDN. BHD.

PT 417 to 427 (11 lots), Pekan Baru Sungai Besi, Daerah Petaling, Selangor Land approved for residential and commercial development Existing use: Vacant land 11.980 Leasehold expiring in year 2100 18,887 14.01.2005
KAJANG RESOURCES CORPORATION SDN. BHD.

All of the parcels of land held by this subsidiary are located at Batu 18, Jalan Semenyih, Mukim Semenyih, Daerah Ulu Langat, Selangor PT 21725 PT Nos. 50 and 51 Vacant commercial land Residential land Existing use: Oil palm plantation 3.606 9.660 Freehold Leasehold expiring in year 2089 Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold 1,883 2,800 1991 1991
PT Nos. 131 and 132 Lot 27977 Lot No. 2028 Lot Nos. 2118 and 2119 Lot No. 2217 Lot 2231 PT10952 PT10953 Lot 2227 Lot 2822 Lot 2823
Vacant residential land Agricultural title Existing use: Vacant land Agricultural title Existing use: Rubber plantation Agricultural title Existing use: Vacant land Agricultural title Existing use: Vacant land Agricultural title Existing use: Vacant land Agricultural title Existing use: Vacant land Agricultural title Existing use: Vacant land Agricultural title Existing use: Vacant land Agricultural title Existing use: Vacant land Agricultural title Existing use: Vacant land
1.570 9.219 9.369 10.380 7.394 7.387 3.296 3.296 7.006 5.669 5.672
248 1,819 860 1,206 2,149 3,332 1,726 1,484 4,576 3,426 3,427
19.08.1997 26.05.1994 29.02.1996 11.08.1995 19.08.1997 23.04.2010 06.08.2010 04.08.2010 14.01.2011 13.01.2011 13.01.2011
137

Annual Report 2011
Location
Land Area (acres)
Tenure
KAJANG RESOURCES CORPORATION SDN. BHD. (continued)

Lot 2824 Agricultural title Existing use: Vacant land 5.666 Freehold 3,424 13.01.2011
LAJU JAYA SDN. BHD.

PT Nos. 19379 to 19391 (13 lots) Jalan Semenyih, Kajang, Selangor Wisma MKH. A 6-storey hotel cum office building with built-up area of 171,935 sq.ft. Existing use: 100% tenanted (Building age: 17 years) 0.585 Leasehold expiring in 2089 29,790 *29.09.2010
MAHA USAHA SDN. BHD.

PT No. 19482, Bandar Kajang, Daerah Ulu Langat, Selangor Commercial complex with built-up area of approximately 600,000 sq. ft. Existing use: 99% tenanted (Building age: 15 years) 2.330 Leasehold expiring in 2089 123,000 29.09.2011 (Investment Properties stated at fair value)
METRO TIARA (M) SDN. BHD.

Unit 1-1, Tingkat 1, Dataran Pelangi Utama, Pelangi Utama, Jalan Masjid, PJU6A, Petaling Jaya, Selangor 1 unit of stratified office lot within a block of 6-storey shop offices with 58 bays of car park. (Building age: 3.5 years) 2,971 sq. ft (net lettable area) Leasehold expiring in year 2101 2,380 29.09.2011 (Investment Properties stated at fair value)
PELANGI SEMENYIH SDN. BHD.

Part of Lot 967, Mukim Beranang, Daerah Ulu Langat, Selangor Land approved for mix development. Existing use: Vacant and partly oil palm plantation 43.740 Freehold 35,202 27.03.2009
PT. KHALEDA AGROPRIMA MALINDO

East Kalimantan, Indonesia Oil palm plantation 39,395 Leasehold of 35 years expiring in year 2042 with an option to renew for a further period of 25 years @ 203,634 18.01.2008
138

Annual Report 2011
Location
Land Area (acres)
Tenure
SERBA SENTOSA SDN. BHD.

Lot 462, Seksyen 7, Bandar Kajang, Daerah Ulu Langat, Selangor Existing use: leased to Srijang Indah Sdn. Bhd. for a singlestorey temporary Food Court (Built-up area: approximately 10,000 sq. ft.) Land approved for residential development. Existing use: partly occupied Existing use: lease out for commercial building 1.650 Leasehold expiring in year 2096 5,125 25.07.1995
Lot 463, Seksyen 7, Bandar Kajang, Daerah Ulu Langat, Selangor Lot 456, Seksyen 7, Bandar Kajang, Daerah Ulu Langat, Selangor
1.670
Leasehold expiring in year 2096 Leasehold expiring in year 2096
2,219
25.07.1995
1.047
8,000
29.09.2011 (Investment Properties stated at fair value) 25.07.1995
PT 35799, Bandar Kajang, Daerah Ulu Langat, Selangor Lot 42275, Seksyen 9, Bandar Kajang, Daerah Ulu Langat, Selangor PT 56159, Bandar Kajang, Daerah Ulu Langat, Selangor PT 69670, Bandar Kajang, Daerah Ulu Langat, Selangor Lot 41078 and 41086 Seksyen 10, Bandar Kajang, Daerah Ulu Langat, Selangor
Land approved for commercial development. Existing use: office Land approved for commercial development. Existing use: building Land approved for commercial development. Existing use: vacant land Vacant commercial land
1.210
Leasehold expiring in year 2096 Leasehold expiring in year 2096 Leasehold expiring in year 2103 Leasehold expiring in year 2107 Freehold
3,020
1.857
4,609
25.07.1995
3.720
9,229
25.07.1995
1.194
3,715
25.07.1995
Vacant residential land
1.011
953
05.08.2004
SRIJANG INDAH SDN. BHD.

Lot 501, Seksyen 7, Bandar Kajang, Daerah Ulu Langat, Selangor 4-storey commercial complex with built-up area of approximately 358,707 sq. ft. Existing use: 92% tenanted (Building age: 4.5 years) 1.5-storey hypermarket building (built-up area of 67,089 sq. ft.) (Building age: 8 years) 1.720 Leasehold expiring in year 2102 49,500 29.09.2011 (Investment Properties stated at fair value) 29.09.2011 (Investment Properties stated at fair value)
PT No. 54017, Bandar Baru Bangi, Daerah Ulu Langat, Selangor
1.770
Freehold
10,750
139

Annual Report 2011
Location
Land Area (acres)
Tenure
SRIJANG INDAH SDN. BHD. (continued)

Unit G-1, G-2 & G-3, Idaman KL 128 (Saville Residence), 128, Jalan Klang Lama, Kuala Lumpur Lot 462, Seksyen 7, Bandar Kajang, Daerah Ulu Langat, Selangor 3 units of stratified office lot within a block of 30-storey serviced apartment with 69 bays of car park. (Building age: 1 year) Temporary lease the land from Serba Sentosa Sdn. Bhd. and constructed a single storey Food Court with built-up area approximately 10,000 sq. ft. (Building age: 8 years) 11,077 sq. ft (total net lettable area) 1.650 Freehold 6,979 29.09.2011 (Investment Properties stated at fair value) 29.09.2011 (Investment Properties stated at fair value)
Leasehold expiring in year 2096
172
SRIJANG KEMAJUAN SDN. BHD.

Part of Lot 660, 661, 662 and 663, Seksyen 10, Bandar Kajang, Part of Lot 246, 300, 1028, 1029, 1070 and 1127, Mukim Kajang, all in Daerah Hulu Langat, Selangor Lot 656, Seksyen 14, Bandar Kajang, Daerah Hulu Langat, Selangor. Lot 2148, Mukim Kajang, Daerah Hulu Langat, Selangor Geran 94270, Lot 38631 and Geran 94269, Lot 38636, Bandar Kajang, Daerah Hulu Langat, Selangor Lot 13638, Mukim Kajang, Daerah Hulu Langat, Selangor Land approved for mixed development. Existing use: Vacant land 146.53 Freehold 05.05.2008
Agricultural title. Existing use : Vacant land Agricultural title. Existing use : Vacant land Agricultural title. Existing use: Vacant land
2.068
Freehold
93,241
05.05.2008
0.569
Freehold
05.05.2008
4.028
Freehold
05.05.2008
Agricultural title, Existing use: Vacant land
3.356
Freehold
3,680
04.01.2011
TIP TOP MEAT SDN. BHD. #

PT No. 17840, Mukim Serendah, Daerah Ulu Selangor, Selangor Office and factory building (Building age: 8 years) 50.000 Leasehold expiring in year 2101 31,900 * 29.09.2011
140

Annual Report 2011
Location
Land Area (acres)
Tenure
VAST FURNITURE MANUFACTURING (KUNSHAN) CO. LTD.

Lot 1120101015 & Lot 1120101009, 588 Airport Road, Shipu Town, Kunshan City, Jiangsu Province, Republic of China Office, factory buildings & partial vacant land (Building age: 11 years), New factory building (Building age: 6 years) 10.000 Leasehold of 50 years expiring in 2049 12,190 * 20.09.2010
MKH BERHAD (formerly known as Metro Kajang Holdings Berhad)

Lot 2 and Lot 8, Jalan Bukit Mewah 66, 43000 Kajang, Selangor Darul Ehsan. Two units of 2-Storey Shop Office (built up area: 8,802 sq. ft.) (Building age: 13 years) 4,401 sq. ft. (total net lettable area) Freehold 566 * 29.09.2010
Note : @ # comprise of prepaid lease payment and biological assets. Pursuant to the Sale and Purchase Agreement (SPA) dated 29 December 2011, MKH Berhad has entered into an agreement to dispose its entire investment in Makin Jernih Sdn Bhd together with its subsidiaries, Chau Yang Farming Sdn Bhd, Tip Top Meat Sdn Bhd and AA Meat Shop Sdn Bhd to Charoen Pokphand Foods (Malaysia) Sdn Bhd for a total consideration of RM64.0 million only. The SPA was completed on 16 January 2012.
141

Annual Report 2011
Analysis of Shareholdings
As At 13 January 2012
SHARE CAPITAL
Authorised Share Capital Issued and Fully Paid-up Type of Shares Voting Rights No. of Shareholders : : : : : RM500,000,000 RM264,585,251 Ordinary shares of RM1.00 each One vote per shareholder on a show of hands One vote per ordinary share on a poll 3,930 In the meeting of shareholders
ANALYSIS OF SHAREHOLDINGS
Size of Shareholdings 1 99 100 1,000 1,001 10,000 10,001 100,000 100,001 13,229,261 13,229,262 and above Total No. of Holders 487 189 2,239 868 143 4 3,930 Total Holdings 18,715 87,592 8,740,792 24,122,214 102,865,646 128,750,292 264,585,251 % 0.007 0.033 3.304 9.117 38.878 48.661 100.00
SUBSTANTIAL SHAREHOLDERS
Direct Interest 66,716,205 545,391 5,502,971 800,644 1,190,151 No. of Shares Held Indirect % Interest 25.215 0.206 2.080 0.303 0.450 47,247,200 * 23,916,126 * 120,285,122 ** 113,963,405 ^ 113,963,405 ^ 113,963,405 ^ 114,691,825 ^^ 113,963,405 ^
Name of Shareholder 1 2 3 4 5 6 7 8 Chen Choy & Sons Realty Sdn. Bhd. (CCSR) Public Bank Group Officers Retirement Benefits Fund Dato Chen Kooi Chiew @ Cheng Ngi Chong Datuk Chen Lok Loi Mr. Chen Fook Wah Mr. Chan Hon Fu Mr. Chen Ying @ Chin Ying Dr. Chin Kuan Haok @ Chen Koh Fook
% 17.857 9.039 45.462 43.072 43.072 43.072 43.348 43.072
Notes : * ** ^ ^^ Deemed interest through shares held in nominee companies. Deemed interest through shares held in CCSR, Lotus Way Sdn Bhd and shares held through nominee companies. Deemed interest through shares held in CCSR. Deemed interest through shares held in CCSR and in a nominee company.
142

Annual Report 2011
Analysis of Shareholdings (continued)

TOP 30 SHAREHOLDERS OF MKH BERHAD (FORMERLY KNOWN AS METRO KAJANG HOLDINGS BERHAD)
(Without aggregating securities from different securities account belonging to the same person) Names 1 2 Chen Choy & Sons Realty Sdn Bhd EB Nominees (Tempatan) Sdn Bhd Qualifier: Pledged Securities Account for Chen Choy & Sons Realty Sdn Bhd 3 RHB Capital Nominees (Tempatan) Sdn Bhd Qualifier: Pledged Securities Account for Chen Choy & Sons Realty Sdn Bhd 4 Kenanga Nominees (Tempatan) Sdn Bhd Qualifier: Public Bank Group Officers Retirement Benefits Fund 5 Public Invest Nominees (Tempatan) Sdn Bhd Qualifier: Public Bank Group Officers Retirement Benefits Fund 6 7 8 Datuk Chen Lok Loi Cipta Wajib Sdn Bhd Public Nominees (Tempatan) Sdn Bhd Qualifier: Pledged Securities Account for Rekapacific Berhad 9 JF Apex Nominees (Tempatan) Sdn Bhd Qualifier: Pledge Securities Account for Teo Siew Lai 10 JF Apex Nominees (Tempatan) Sdn Bhd Qualifier: Pledge Securities Account for Teo Kwee Hock 11 EB Nominees (Tempatan) Sdn Bhd Qualifier: Pledged Securities Account for Dato Chen Kooi Chiew @ Cheng Ngi Chong 12 DB (Malaysia) Nominee (Asing) Sdn Bhd Qualifier: Exempt An For British and Malayan Trustees Limited 13 Public Nominees (Tempatan) Sdn Bhd Qualifier: Pledged Securities Account for Halim Securities Sdn Bhd 14 Public Nominees (Tempatan) Sdn Bhd Qualifier: Pledged Securities Account for Alor Setar Securities Sdn Bhd 3,368,750 1.273 3,368,750 1.273 3,500,030 1.323 3,754,290 1.419 4,136,530 1.563 4,503,245 1.702 5,502,971 4,806,873 4,716,250 2.080 1.817 1.782 9,129,239 3.450 14,786,887 5.589 20,428,100 7.721 Shareholdings 66,716,205 26,819,100 % 25.215 10.136
143

Annual Report 2011
Analysis of Shareholdings (continued)

TOP 30 SHAREHOLDERS OF MKH BERHAD (FORMERLY KNOWN AS METRO KAJANG HOLDINGS BERHAD) (continued)
Names 15 16 Lotus Way Sdn Bhd Amanahraya Trustees Bhd Qualifier: Public Smallcap Fund 17 18 19 Tan Sou Yee Chai Nyok Lan @ Choy Pah Khin EB Nominees (Tempatan) Sdn Bhd Qualifier: Pledged Securities Account for Selestar Realty Sdn Bhd 20 HSBC Nominees (Asing) Sdn Bhd Qualifier: Exempt An for Credit Suisse 21 22 Chan Hon Fu PM Nominees (Tempatan) Sdn Bhd Qualifier: PCB Asset Management Sdn Bhd for Mui Continental Insurance Berhad 23 24 Liew Yam Fee EB Nominees (Tempatan) Sdn Bhd Qualifier: Pledged Securities Account for Cau Vong Holdings Sdn Bhd 25 26 Key Development Sdn Bhd Malaysia Nominees (Tempatan) Sdn Bhd Qualifier: Pledged Securities Account for Premier Vantage Sdn Bhd 27 28 29 Tan Saw San @ Tan So San Hans Peter Holst JF Apex Nominees (Tempatan) Sdn Bhd Qualifier: Low Siew Lian 30 Aspire Bonus Sdn Bhd 848,300 0.321 880,200 880,000 852,060 0.333 0.333 0.322 944,790 897,050 0.357 0.339 1,050,000 1,000,000 0.397 0.378 1,190,151 1,100,000 0.450 0.416 1,332,450 0.504 1,902,450 1,856,252 1,347,500 0.719 0.701 0.509 Shareholdings 2,128,527 2,063,753 % 0.805 0.780
TOTAL
195,810,703
74.007
144

Annual Report 2011
Directors Shareholdings
As At 13 January 2012
MKH BERHAD (FORMERLY KNOWN AS METRO KAJANG HOLDINGS BERHAD)
No. of Ordinary Shares of RM1.00 each Deemed % Interest % 0.206 2.080 0.303 0.032 0.004 120,285,122 * 113,963,405 ^ 113,963,405 ^ 114,691,825 ^^ 45.462 43.072 43.072 43.348
Director Dato Chen Kooi Chiew @ Cheng Ngi Chong Datuk Chen Lok Loi Mr. Chen Fook Wah Mr. Chen Ying @ Chin Ying Ms. Mah Swee Buoy # En. Mohammed Chudi Bin Haji Ghazali Notes :* ^ ^^ #
Direct Interest 545,391 5,502,971 800,644 85,853 11,550
Deemed interest through shares held in Chen Choy & Sons Realty Sdn Bhd (CCSR), Lotus Way Sdn Bhd and shares held through nominee companies. Deemed interest through shares held in CCSR. Deemed interest through shares held in CCSR and shares held through a nominee company. Appointed on 5 May 2011.
RELATED COMPANY - Srijang Kemajuan Sdn. Bhd.
Director Dato Chen Kooi Chiew @ Cheng Ngi Chong Mr. Chen Ying @ Chin Ying
Direct Interest 1 1
No. of Ordinary Shares of RM1.00 each Deemed % Interest % 0.0003 0.0003
Company No. 50948-T
Form of Proxy
I/We______________________________________________________________________________________________________ of______________________________________________________________________________________________________ being a Member of MKH Berhad (formerly known as Metro Kajang Holdings Berhad) hereby appoint _________________________________________________________________________________________________________ of______________________________________________________________________________________________________ or failing him, the Chairman of the meeting as my/our proxy to vote for me/us on my/our behalf at the Thirty-Second Annual General Meeting (32nd AGM) of the Company to be held at Ballroom, First Floor, Prescott Metro Inn, Jalan Semenyih, 43000 Kajang, Selangor Darul Ehsan on Friday, 2 March 2012 at 10.00 a.m. and at any adjournment thereof. The proxy is to vote on the Resolution set out in the Notice of Meeting with X in the appropriate spaces. If no specific direction as to voting is given, the proxy will vote or abstain from voting at his discretion. FOR ORDINARY RESOLUTION 1 ORDINARY RESOLUTION 2 ORDINARY RESOLUTION 3 ORDINARY RESOLUTION 4 ORDINARY RESOLUTION 5 ORDINARY RESOLUTION 6 ORDINARY RESOLUTION 7 ORDINARY RESOLUTION 8 ORDINARY RESOLUTION 9 ORDINARY RESOLUTION 10 Number of Shares Held AGAINST
__________________________________ Signature/Common Seal of Member
Signed this________day of _______________2012
Notes: 1. A member entitled to attend and vote at the meeting is entitled to attend and vote in person or by proxy or by attorney or by duly authorised representative. A proxy or attorney or duly authorised representative may but need not be a member of the Company. 2. The power of attorney or an office copy or a notarially certified copy thereof or the instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing. If the appointor is a corporation, it must be executed under its common seal or in the manner authorised by its constitution. If the Form of Proxy is returned without any indication as to how the proxy shall vote, the proxy will vote or abstain as he thinks fit. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportion of his holdings to be represented by each proxy. The instrument appointing a proxy together with the power of attorney (if any) under which it is signed or an office copy or a notarially certified copy thereof must be deposited at the Registered Office, Suite 1, 5th Floor, Wisma MKH, Jalan Semenyih, 43000 Kajang, Selangor Darul Ehsan at least 48 hours before the time appointed for holding the meeting or any adjournment thereof.
3.
4.
Please Fold Along This Line
Stamp
The Company Secretary

Suite 1, 5th Floor Wisma MKH Jalan Semenyih 43000 Kajang Selangor Darul Ehsan Malaysia
(formerly known as Metro Kajang Holdings Berhad)
Please Fold Along This Line

MKH Annual Report

Uploaded by

Copyright:

Available Formats

MKH Annual Report

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

MKH Annual Report

Uploaded by

Copyright:

Available Formats

Annual Report

MKH Berhad (50948-T)

Notice of Annual General Meeting

MKH Berhad (50948-T)

Notice of Annual General Meeting (continued)

(Ordinary Resolution 10)

MKH Berhad (50948-T)

Notice of Annual General Meeting (continued)

By Order of the Board,

MKH Berhad (50948-T)

Notice of Annual General Meeting (continued)

MKH Berhad (50948-T)

Chief Operating Officer

Group Company Secretary

Stock Exchange Listing

MKH Berhad (50948-T)

MKH Berhad (50948-T)

Chairmans Statement and Operational Review (continued)

PROPERTY DEVELOPMENT AND CONSTRUCTION

HOTEL AND PROPERTY INVESTMENT

MKH Berhad (50948-T)

Chairmans Statement and Operational Review (continued)

LIVESTOCK FARMING, FOOD PROCESSING AND RETAIL

MKH Berhad (50948-T)

Chairmans Statement and Operational Review (continued)

MKH Berhad (50948-T)

Chairmans Statement and Operational Review (continued)

MKH Berhad (50948-T)

5 Years Group Financial Highlights

Profit Before Taxation (RM000)

2009 2008 2007

Profit Attributable to Shareholders of the Company (RM000)

Shareholders Equity (RM000)

2009 2008 2007

MKH Berhad (50948-T)

Datuk Chen Lok Loi

Mr. Chen Fook Wah

Mr. Chen Ying @ Chin Ying

MKH Berhad (50948-T)

Directors Profile (continued)

Ms. Mah Swee Buoy

Haji Othman Bin Sonoh

Encik Mohammed Chudi Bin Haji Ghazali

Haji Mohamed Bin Ismail

Encik Jeffrey Bin Bosra

MKH Berhad (50948-T)

Statement on Corporate Governance

THE BOARD OF DIRECTORS 1. Composition, Duties and Responsibilities

MKH Berhad (50948-T)

Statement on Corporate Governance (continued)

Board Meeting and Supply of Information

Retirement by Rotation and Re-Election of Directors

MKH Berhad (50948-T)

Statement on Corporate Governance (continued)

MKH Berhad (50948-T)

Statement on Corporate Governance (continued)

Directors Remuneration (continued)

1,200,001 1,250,000 2,600,001 2,650,000 3,000,001 3,050,000 Total

6.1 The Executive Committee