SHL Annual Report 2011.pdf

SHL Consolidated Bhd. (293565-W)6th Floor, Wisma Sin Heap Lee346, Jalan Tun Razak50400 Kuala LumpurTel : 603-2163 7788 Fax : 603-2163 1391

www.shlcb.com.my

ANNUALREPORT2011

SHL CONSOLIDATED BHD.(293565-W)

As a responsible property developer,

SHL Consolidated Bhd. is committed

towards ensuring a conducive and

refreshing lifestyle for the betterment of

society, whether at home, work or play.

Clearly, the highly sought-after

properties that we have built and are

continuing to build bear testament to

our capability in creating the right

work-life balance.

contents

notice of annual general meeting/notice of dividend payment

statement accompanyingnotice of annual general meeting

corporate information

board of directors’ profile

corporate structure

group financial highlights

statement on corporate governance

audit committee report

statement on internal control

chairman’s statement

corporate social responsibility

financial statements

analysis of shareholdings

list of properties

proxy form

2

5

7

8

11

13

14

20

23

26

28

29

98

100

2 SHL CONSOLIDATED BHD. (293565-W)

notice ofannual general meeting

NOTICE IS HEREBY GIVEN that the 17th Annual General Meeting of SHL ConsolidatedBhd. (the Company) will be held at Ballroom 1, Level 1, Corus Hotel Kuala Lumpur, JalanAmpang, 50450 Kuala Lumpur, on Thursday, 8 September 2011 at 11.30 a.m. for thepurpose of transacting the following businesses:

AS ORDINARY BUSINESS

1. To receive the Audited Financial Statements for the financial year ended 31 March 2011 together with the Reportsof the Directors and the Auditors thereon. Please refer to Note 2

2. To declare a First and Final Dividend of 7% less tax in respect of the financial year ended 31 March 2011.Resolution 1

3. To approve the payment of Directors’ fees for the financial year ended 31 March 2011. Resolution 2

4. To re-elect Y.A.M. Tengku Abdul Samad Shah Ibni Almarhum Sultan Salahuddin Abdul Aziz Shah retiring inaccordance with Article 88 of the Company’s Articles of Association. Resolution 3

5. To re-appoint Chin Yu Tow @ Cheng Yu Thou who retire pursuant to Section 129 of the Companies Act, 1965, to holdoffice until the conclusion of the next Annual General Meeting of the Company. Resolution 4

6. To re-appoint Messrs Khoo Wong & Chan as Auditors of the Company until the conclusion of the next AnnualGeneral Meeting and to authorise the Directors to fix their remuneration. Resolution 5

AS SPECIAL BUSINESS

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

7. Ordinary Resolution – Proposed Shareholders’ Mandate for recurrent related party transactions of a revenue ortrading nature (Proposed Shareholders’ Mandate)

“THAT subject always to Bursa Malaysia Securities Berhad’s Main Market Listing Requirements, approval be and ishereby given to the Company and its subsidiaries (SHL Group) to enter into recurrent related party transactionsof a revenue or trading nature with those related parties as set out in Sections 2.2 and 2.3 of the Circular toShareholders dated 15 August 2011, which are necessary for the SHL Group’s day-to-day operations subjectfurther to the following:

(i) the transactions are in the ordinary course of business and on normal commercial terms which are not morefavourable to the related parties than those generally available to the public and are not to the detrimentof the minority shareholders of the Company; and

(ii) disclosure is made in the annual report a breakdown of the aggregate value of the recurrent transactionsconducted pursuant to the Proposed Shareholders’ Mandate during the financial year, where:

(a) the consideration, value of the assets, capital outlay or costs of the recurrent transactions is RM1 millionor more; or

(b) the percentage ratios of such recurrent transactions is 1% or more,

whichever is the higher.

Annual Report 2011 3

And amongst others, based on the following information:

• the type of the recurrent transactions made; and

• the names of the related parties involved in each type of the recurrent transactions made and theirrelationship with the Company.

AND THAT the authority conferred by the Proposed Shareholders’ Mandate shall continue to be in force until:

(i) the conclusion of the next Annual General Meeting (AGM) of the Company following this AGM at which theProposed Shareholders’ Mandate is approved, at which time it will lapse, unless by a resolution passed atthe general meeting, the mandate is again renewed;

(ii) the expiration of the period within the next AGM of the Company after that date is required to be heldpursuant to Section 143(1) of the Companies Act, 1965 (Act) (but must not extend to such extension as maybe allowed pursuant to Section 143(2) of the Act); or

(iii) revoked or varied by resolution passed by the shareholders in a general meeting,

whichever is earlier;

AND THAT the Directors of the Company be and are hereby authorised to complete and do all such acts andthings as they may consider expedient or necessary to give effect to the Proposed Shareholders’ Mandate.”

Resolution 6

8. Ordinary Resolution – Authority to Directors to issue shares

“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby empowered toissue shares in the Company, at any time and upon such terms and conditions and for such purposes as theDirectors may, in their absolute discretion deem fit, provided that the aggregate number of shares issuedpursuant to this resolution in any one financial year does not exceed ten (10) per cent of the issued capital ofthe Company for the time being and that the Directors be and are also empowered to obtain approval for thelisting of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad and that suchauthority shall continue in force until the conclusion of the next Annual General Meeting of the Company”.

Resolution 7

9. Ordinary Resolution – Proposed Share Buy-Back by the Company of up to 10% of its own Issued and Paid-UpShare Capital (“Proposed Share Buy-Back”)

“THAT subject to the Companies Act, 1965 (“Act”), provisions of the Memorandum and Articles of Association ofthe Company, the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the Company be andis hereby authorised to purchase such number of ordinary shares of RM1.00 each (“the Shares”) in the Companyas may be determined by the Directors of the Company from time to time through Bursa Malaysia SecuritiesBerhad (“Bursa Securities”) upon such terms and conditions as the Directors may deem fit and expedient in theinterest of the Company provided that:

(i) The maximum aggregate number of ordinary shares which may be purchased by the Company shall notexceed ten per centum (10%) of the issued and paid-up share capital of the Company at any point in time;

(ii) The maximum fund to be allocated by the Company for the purpose of purchasing its shares shall notexceed the retained profits and share premium account of the Company;

(iii) The authority conferred by this resolution shall commence upon the passing of this resolution and shallcontinue to be in force until:

(a) the conclusion of the next AGM of the Company following this AGM at which the Proposed ShareBuy-Back is passed, at which time it will lapse, unless the authority is renewed by a resolution passed atthe next AGM, either unconditionally or subject to conditions; or


(b) the expiration of the period within which the next AGM after that date is required by the Act to be held;or

(c) revoked or varied by ordinary resolution passed by the shareholders of the Company in a generalmeeting;

whichever occurs first;

(iv) Upon completion of the purchase(s) of the Shares by the Company, the Shares shall be dealt with in thefollowing manner:

(a) cancel the Shares so purchased;

(b) retain the Shares so purchased as Treasury Shares;

(c) distribute the Treasury Shares as dividend to shareholders;

(d) resell the Treasury Shares on Bursa Securities in accordance with the relevant rules of Bursa Securities;and

(e) any combination of the above.

AND THAT the Directors of the Company be and are hereby authorised to take all such steps and do all acts andenter in all agreements, arrangements and guarantees with any party or parties for and on behalf of theCompany as are necessary to implement, finalise and to give full effect to the aforesaid purchase with fullpowers to assent to any conditions, modifications, revaluations, variations and/or amendments in any manner asmay be required by any relevant authorities from time to time or otherwise as they deem fit in the best interestsof the Company.” Resolution 8

10. To transact any other ordinary business of which due notice shall have been given.

NOTICE OF DIVIDEND PAYMENT

NOTICE IS ALSO HEREBY GIVEN that the First and Final Dividend of 7% less tax in respect of the financial year ended31 March 2011, if approved, will be paid on 30 September 2011 to depositors registered in the Record of Depositors ofthe Company on 15 September 2011.

A Depositor shall qualify for entitlement to the dividend only in respect of:

(a) Shares transferred into the Depositor’s Securities Account before 4.00 p.m. on 15 September 2011 in respect oftransfers; and

(b) Shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of BursaMalaysia Securities Berhad.

By Order of the Board

WINNIE CHOK KWEE WAH (MACS 00550)LIM CHEW SUAN (MAICSA 7008940)Secretaries

Kuala Lumpur15 August 2011

notice of annual general meeting (cont’d)


NOTE 1:

A member entitled to attend and vote at the Annual General Meeting is entitled to appoint not more than two (2) proxies to attend and vote in hisstead. A proxy need not be a member of the Company and the provision of Section 149(1)(b) of the Companies Act, 1965 shall not apply to theCompany. The instrument appointing a proxy must be deposited at the Registered Office of the Company at 6th Floor, Wisma Sin Heap Lee, 346, JalanTun Razak, 50400 Kuala Lumpur not less than forty-eight (48) hours before the time set for the Annual General Meeting. Where the Proxy Form isexecuted by a corporation, it must be either under its Common Seal or under the hand of an attorney duly authorized.

NOTE 2:

To receive the Audited Financial Statements for the financial year ended 31 March 2011 together with the Reports of the Directors and the Auditorsthereon.

This item is meant for discussion only as the provision of Section 169(1) of the Companies Act, 1965 does not require shareholders’ approval for theAudited Financial Statements. Henceforth, this item is not put forward for voting.

NOTE 3:

Resolution pertaining to the Proposed Shareholders’ Mandate for recurrent related party transactions of a revenue or trading nature.

The Ordinary Resolution 6 proposed under item 7 is to seek shareholders’ mandate for the recurrent related party transactions. The proposedshareholders’ mandate will enable the SHL Group to enter into recurrent transactions of a revenue or trading nature which are necessary for the SHLGroup’s day-to-day operations, subject to the transactions being in the ordinary course of business and on normal commercial terms which are notmore favourable to the related parties than those generally available to the public and are not to the detriment of the minority shareholders of theCompany. Further information on the Proposed Shareholders’ Mandate is set out in Part A of the Circular to Shareholders dated 15 August 2011, whichis despatched together with this Annual Report 2011.

NOTE 4:

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

• The Ordinary Resolution 7 proposed under item 8 is to seek a fresh general mandate which will empower the Directors to issue shares in theCompany up to an amount not exceeding in total ten (10) per cent of the issued capital of the Company for such purposes as the Directorsconsider would be in the best interest of the Company in order to avoid any delay and cost involved in convening a general meeting toapprove such issue of shares. This authority, unless revoked or varied by the Company at a General Meeting, will expire at the conclusion of thenext Annual General Meeting of the Company.

• This general mandate will provide flexibility to the Company for any possible fund raising activities, including but not limited to further placing ofshares, for purpose of funding future investment project(s), working capital and/or acquisitions.

• The Company has not issued any shares pursuant to Section 132D of the Companies Act, 1965 under the previous general mandate which hasbeen obtained on 2 September 2010 and which will lapse at the conclusion of the 17th AGM to be held on 8 September 2011.

NOTE 5:

Resolution pertaining to the Proposed Share Buy-Back.

The Ordinary Resolution 8 proposed under item 9 is to seek a shareholders’ approval to empower the Directors to purchase the Company’s shares upto ten percent (10%) of the issued and paid-up share capital of the Company by utilising the funds allocated which shall not exceed the total retainedprofits and share premium account of the Company. Further information on the Proposed Share Buy-Back is set out in Part B of the Circular toShareholders dated 15 August 2011, which is despatched together with this Annual Report 2011.

statement accompanyingnotice of annual general meetingDirectors who are standing for re-election at this AGM:

1. Director who is standing for re-election pursuant to Article 88 of the Company’s Articles of Association is Y.A.M.Tengku Abdul Samad Shah Ibni Almarhum Sultan Salahuddin Abdul Aziz Shah.

2. Director who is standing for re-election pursuant to Section 129 of the Companies Act, 1965 is Chin Yu Tow @Cheng Yu Thou .

The details of the two (2) Directors who are standing for re-election are set out in the Directors’ Profiles on pages 8and 10 of this Annual Report. The details of their interest in the securities of the Company are set out in the Analysis ofShareholdings on page 98 of this Annual Report.

All our residentialproperties arebuilt with the aimof fostering ahealthier andquality lifestyle. L I V E


corporateinformation

BOARD OF DIRECTORS

Non-Executive Chairman

Y.A.M. Tengku Abdul Samad ShahIbni Almarhum Sultan SalahuddinAbdul Aziz Shah

Executive Directors

Dato’ Yap Teiong ChoonDato’ Ir. Yap Chong Lee

Non-Independent Non-ExecutiveDirectors

Wong Tiek Fong

Wong Yew Mei(alternate director to Wong Tiek Fong)

Senior Independent Non-ExecutiveDirector

Chin Yu Tow @ Cheng Yu Thou

Independent Non-Executive Director

Souren Norendra

AUDIT COMMITTEE

Chairman


Members

Wong Tiek Fong

Souren Norendra

REMUNERATION COMMITTEE

Chairman


Members

Dato’ Yap Teiong Choon

Souren Norendra

NOMINATION COMMITTEE

Chairman


Member

Souren Norendra

SECRETARIES

Winnie Chok Kwee Wah (MACS 00550)

Lim Chew Suan (MAICSA 7008940)

REGISTERED OFFICE

6th Floor, Wisma Sin Heap Lee346, Jalan Tun Razak50400 Kuala LumpurTel : 603-2163 7788Fax : 603-2163 1391Email : [email protected] : www.shlcb.com.my

SHARE REGISTRAR

Bina Management (M) Sdn. Bhd.Lot 10, The Highway CentreJalan 51/205, 46050 Petaling JayaSelangor Darul EhsanTel : 603-7784 3922Fax : 603-7784 1988

AUDITORS

Khoo Wong & ChanChartered Accountants8.06-8.08, 8th FloorPlaza First Nationwide161, Jalan Tun H. S. Lee50000 Kuala Lumpur

PRINCIPAL BANKERS

Hong Leong Bank BerhadUnited Overseas Bank (Malaysia) BhdMalayan Banking BerhadCIMB Bank BerhadOCBC Bank (Malaysia) BerhadBangkok Bank BerhadEON Bank Berhad

STOCK EXCHANGE LISTING

Main Market ofBursa Malaysia Securities Berhad


board of directors’profile

y.a.m. tengkuabdul samad shah

ibni almarhumsultan salahuddin

abdul aziz shah(Age 58, Malaysian)

Chairman(Non-Independent

Non-Executive Director)

Tengku Abdul Samad Shah was appointed to the Board on 1 March 1995. He had hisearly education in Victoria Institution, Kuala Lumpur and attended the WolaroiCollege NSW, Australia from 1970 to 1972.

He is currently the Chairman of the Company and a Director of several subsidiariesof the Company. He does not have any directorships in other public companies.

Tengku Abdul Samad Shah attended all Board Meetings held during the financialyear ended 31 March 2011. He has never been convicted of any offence within thepast ten (10) years. He has no family relationship with any Director and/or majorshareholder of the Company nor has he any conflict of interest with the Company.

dato’ yapteiong choon

(Age 58, Malaysian)Executive Director/Member of

Remuneration Committee(Non-Independent Executive

Director)

Dato’ Yap was appointed to the Board on 1 March 1995. He had his early educationin Victoria Institution, Kuala Lumpur. He obtained a Bachelor of Commerce withdouble majors in Economics and Accounting in 1976 and a Master in Commercewith Honours majoring in Advance Accounting from the University of Canterbury,New Zealand in 1977. He is a Chartered Accountant by profession and is a memberof the Malaysian Institute of Accountants, the New Zealand Society of Accountants,a Fellow of the Institute of Certified Public Accountants of Singapore and theAustralian Society of Certified Practicing Accountants.

He started his career with Messrs Hanafiah, Raslan and Mohamad in 1977 andsubsequently left the accounting profession in 1982 and has since been managingthe Sin Heap Lee Group of Companies. He is presently an Executive Director and aDirector of several subsidiaries of the Company. He is also an Executive Director ofAmplefield Limited, a Singapore public-listed company involved in engineeringprocess out-sourcing operations.

Dato’ Yap attended five (5) out of six (6) Board Meetings held during the financialyear ended 31 March 2011. He is the brother of Dato’ Ir. Yap Chong Lee, anExecutive Director of the Company. He has never been convicted of any offencewithin the past ten (10) years nor has he any conflict of interest with the Company.


dato’ ir. yapchong lee(Age 57, Malaysian)Executive Director

(Non-Independent ExecutiveDirector)

Dato’ Ir. Yap was appointed to the Board on 1 March 1995. He obtained a Bachelorof Technology majoring in Civil and Structural Engineering from Bradford University,England in 1978, a Master of Science majoring in Construction Management fromBirmingham University, England in 1979 and a Postgraduate Certified Diploma inAccounting and Finance, England in 1979. He is a Fellow of both the Institution ofEngineers, Malaysia and the Association of Consulting Engineers, Malaysia.

His working career began in 1979, with a consulting engineering firm, Sepakat SetiaPerunding (Sendirian) Berhad and was subsequently appointed as a Director of thefirm in 1990. He has been involved in the management of Sin Heap Lee Group ofCompanies since May 1982. He is presently an Executive Director and a Director ofseveral subsidiaries of the Company. He does not have any directorships in otherpublic companies.

Dato’ Ir. Yap attended five (5) out of six (6) Board Meetings held during the financialyear ended 31 March 2011. He is the brother of Dato’ Yap Teiong Choon, anExecutive Director of the Company. He has never been convicted of any offencewithin the past ten (10) years nor has he any conflict of interest with the Company.

chin yu tow @cheng yu thou

(Age 70, Malaysian)Chairman of Audit

Committee/Chairman ofNomination Committee/Chairman of

Remuneration Committee(Senior Independent

Non-Executive Director)

Mr Chin was appointed to the Board on 1 March 1995. He obtained a Diploma inArchitecture from the Birmingham School of Architecture, Birmingham, England in1964. He is a senior member of Pertubuhan Arkitek Malaysia and registered withLembaga Arkitek Malaysia.

He started his career in 1964 as a lecturer in the Department of Architecture,Technical College, Kuala Lumpur. Subsequently, he was appointed as an architectfor Shell Malaysia Berhad, responsible for projects in Malaysia, Singapore and Bruneifrom 1966 to 1971. In 1971, he started his own practice, Messrs Arkitek Rakanan andhas since been involved in a wide range of development projects from industrialand housing to commercial buildings. He does not have any directorships in otherpublic companies.

Mr Chin attended all Board Meetings held during the financial year ended 31 March2011. He has never been convicted of any offence within the past ten (10) years. Hehas no family relationship with any Director and/or major shareholder of theCompany nor has he any conflict of interest with the Company.

board of directors’profile


wong tiek fong(Age 49, Malaysian)Member of Audit

Committee/Member of RiskManagement Committee

(Non-IndependentNon-Executive Director)

Mr Wong was appointed to the Board on 1 April 2004. He obtained a Diploma inCommerce (Financial Accounting) from Tunku Abdul Rahman College, KualaLumpur in 1985. He is a Chartered Accountant by profession and a member of theMalaysian Institute of Accountants, the Chartered Tax Institute of Malaysia and afellow of the Association of Chartered Certified Accountants, United Kingdom.

His career began in 1985 with a firm of Chartered Accountants, Messrs Khoo Wong &Chan as an Audit Senior where he gained wide experience in corporate auditingand taxation of diverse industries. Prior to joining SHL Group in May 1989 as aFinancial Accountant responsible for the financial accounting and management ofSHL Group, he was attached to a firm of Chartered Accountants, KPMG as an AuditSenior. Subsequently, he was promoted as the Financial Controller of SHL Group inMay 1995. Presently, he is the Group Financial Controller of SHL Group and a Directorof several subsidiaries of the Company. He does not have any directorships in otherpublic companies.

Mr Wong attended all Board Meetings held during the financial year ended 31 March2011. He has never been convicted of any offence within the past ten (10) years.He has no family relationship with any Director and/or major shareholder of theCompany nor has he any conflict of interest with the Company.

souren norendra(Age 41, Malaysian)

Member of NominationCommittee/Member of Audit

Committee/Member ofRemuneration Committee

(IndependentNon-Executive Director)

Mr Souren Norendra was appointed to the Board on 24 February 2010. Hecompleted his secondary education at the Methodist Boys School, Kuala Lumpurand then proceeded to England where he read law and attained his LLB (Hon) fromthe University of Hull in 1992. He obtained his Certificate of Legal Practice (CLP) fromUniversity Malaya and was called to the Malaysian Bar in 1995.

Souren has been practicing as an advocate and solicitor in the firm of MessrsNorendra & Yap since being called to the Bar and is now a Partner of the firm. Hisareas of specialty are in corporate and conveyancing law.

Souren attended all Board Meetings held during the financial year ended 31 March2011. He has never been convicted of any offence within the past ten (10) years. Hehas no family relationship with any Director and/or major shareholder of theCompany nor has he any conflict of interest with the Company.

wong yew mei(Age 53, Malaysian)

Member ofRisk Management Committee

(Non-IndependentNon-Executive Director)

Ms Wong was appointed as an alternate director to Mr Wong Tiek Fong on 2 April2004. She obtained a Diploma in Technology (Building) from Tunku Abdul RahmanCollege, Kuala Lumpur in 1982 and a Master degree in Business Administration,University of East Asia, Macau in 1988.

In 1982, she joined Messrs Hashim & Lim, a quantity surveying consulting firm in KualaLumpur in which she was exposed to all aspects of quantity surveying works onresidential, hotels and high-rise buildings. In October 1986, she joined SHL Group asan Estimator and was involved in feasibility studies and estimates for the SHL Group’sproperty development and construction projects. She was promoted as the BudgetController for SHL Group in December 1988 and appointed as a Director of severalsubsidiaries of the Company in 1999. She does not have any directorships in otherpublic companies.

Ms Wong attended all Board Meetings held during the financial year ended 31 March2011. She has never been convicted of any offence within the past ten (10) years.She has no family relationship with any Director and/or major shareholder of theCompany nor has she any conflict of interest with the Company.


corporatestructure

INVESTMENTAND SERVICES

CONSTRUCTION

SUPPLY ANDLOGISTICS

DEVELOPMENT

100% Integrated ManagementCorporation Sdn. Bhd.

100% SHL Corporate ServicesSdn. Bhd.

100% SHL Realty Sdn. Bhd.

100% SHL Ventures Sdn. Bhd.(has been struck off the registerpursuant to Section 308 of theCompanies Act, 1965)

60% Goodstock Land Sdn. Bhd.

100% Sin Heap Lee ConstructionSdn. Bhd.

100% SHL Infra Sdn. Bhd.

100% Soil-Mech Drillers Sdn. Bhd.

100% Sin Heap Lee CompanySdn. Berhad

100% Sin Heap Lee BrickworksSdn. Bhd.

100% Kajang Granite QuarrySdn. Bhd.

100% Senick Sdn. Bhd.

100% Mercantile Corporation (M)Sdn. Bhd. (under the process ofMembers’ Voluntary Winding Uppursuant to Section 254(1) of theCompanies Act, 1965)

100% H.S.C. Sdn. Berhad(under the process of Members’Voluntary Winding Up pursuant toSection 254(1) of the CompaniesAct, 1965)

100% Ho Sin & Son EnterpriseSdn. Bhd.

100% Goodstock (Tawau)Sdn. Bhd.

100% Sin Heap Lee DevelopmentSdn. Bhd.

100% Mayang Kiara Sdn. Bhd.

100% Sukma Pesona Sdn. Bhd.

100% Wilayah Builders Sdn. Bhd.

100% SHL-M Sdn. Bhd.

100% Sungai Long GolfResort Berhad

30% OPT VenturesSdn. Bhd.

The strategiclocation of ourcommercialproperties makethem the perfectbusiness address. W O R K


groupfinancial highlights

‘07 ‘08 ‘11‘10‘09

280

240

200

160

120

80

40

0

Revenue(RM Million)

‘07 ‘08 ‘11‘10‘09

70

60

50

40

30

20

10

0

Profit Before Taxation(RM Million)

‘07 ‘08 ‘11‘10‘09

28

24

20

16

12

8

4

0

25.1

4

9.04 10

.65

6.91

11.30

Earnings Per Share(Sen)

‘07 ‘08 ‘11‘10‘09

560

480

400

320

240

160

80

0

506.

6

517.

8

533.

4

456.

1

548.1

Shareholders’ Equity(RM Million)

191.

0

264.

6

249.

5

155.

1

190.2

67.5

30.8 34

.5

18.1

37.5

IN RM MILLION 2007 2008 2009 2010 2011

Revenue 155.1 191.0 264.6 249.5 190.2

Profit Before Taxation 18.1 67.5 30.8 34.5 37.5

Earnings Per Share (sen) 6.91 25.14 9.04 10.65 11.30

Shareholders' Equity 456.1 506.6 517.8 533.4 548.1


statement oncorporate governance

THE BOARD REMAINS FULLYCOMMITTED TO ACHIEVEAND MAINTAIN HIGHSTANDARDS OFCORPORATE GOVERNANCETHROUGHOUT THE GROUPAS A FUNDAMENTAL PARTOF DISCHARGING ITSRESPONSIBILITIES TOPROTECT AND ENHANCESHAREHOLDERS’ VALUEAND FINANCIALPERFORMANCE. THE BOARDCONFIRMED THAT THECORPORATE GOVERNANCEADOPTED BY THECOMPANY IS IN LINE WITHTHE PRINCIPLES SET OUT INPART I AND COMPLIED WITHTHE BEST PRACTICES SET OUTIN PART II OF THEMALAYSIAN CODE OFCORPORATE GOVERNANCE(REVISED 2007).

The Board is pleased to provide thefollowing statement outlining themain Corporate Governancepractices of the Group and themanner in which they have beenapplied throughout the twelvemonths ended 31 March 2011.

BOARD OF DIRECTORS

Composition of the Board

The Board of Directors comprises six(6) members which includes two (2)Executive Directors, two (2) Non-independent Non-ExecutiveDirectors (including the Chairman)and two (2) Independent Non-Executive Directors. This is incompliance with Bursa MalaysiaSecurities Berhad ListingRequirements, which is to have atleast one third of the Boardconsisting of Independent Directors.All Directors are from diverseprofessional backgrounds with wideexperience and exposure in businessenvironment coupled with theirdiversified background and skill. Thiswill maintain the balance to ensurethat the Board is able to providestrong and effective leadership andexercise control of the Group. A briefprofile of each Director is set out inthe Directors’ Profile.

The functions of the Chairman andthe Executive Directors areseparately and clearly defined. TheChairman is responsible for runningthe Board and ensures that allDirectors receive sufficient relevantinformation on financial and non-financial matters to enable them toparticipate actively in the Boarddecisions. The Executive Directorsare responsible for the day-to-daymanagement of the business as wellas the implementation of Board’spolicies and decisions.

The Non-Independent Non-Executive Directors are to providethe Company unbiased andindependent view and judgement,after taking into consideration theinterest of the shareholders,

employees, suppliers and customers.The presence of Independent Non-Executive Directors of the calibrenecessary to carry sufficient weightin all decisions made by the Boardensures that there is proper checkand balance in the Board. Althoughall Directors have an equalresponsibility for the Group’s businessand affairs, the role of IndependentNon-Executive Directors isparticularly important in ensuringthat the strategies proposed by theExecutive Directors are fullydiscussed and examined, with dueregard to risk management.

Mr Chin Yu Tow @ Cheng Yu Thouhas been appointed by the Board asthe Senior Independent Non-Executive Director of the Board towhom any concerns may beconveyed.

Duties and Responsibilities of theBoard

The SHL Group recognises theimportance of having an effectiveand dynamic Board to lead andcontrol the Group in enhancing notonly long term shareholders’ valuebut ensuring that other stakeholders’interest are also taken intoconsideration.

The Board is primarily responsible forthe Group’s overall strategic plansfor business performance,overseeing the proper conduct ofbusiness, risk management, investorrelations programmes, successionplanning, internal control andmanagement information system.The Board has also reserved certainkey matters for its decision andapproval such as major capitalexpenditure, acquisition anddisposal of business or equity,borrowings, corporate restructuringexercise, annual and interim results.


All Directors have access to theadvice and services of theCompany Secretary in ensuring theeffective functioning of the Board,management representatives and, ifdeemed necessary, otherindependent professionals at theexpense of the Company in thedischarge of their duties.

statement on corporate governance

The Board has delegated certain responsibilities to the Board Committees, namely the Audit Committee, theNomination Committee and the Remuneration Committee, all of which have terms of reference to govern theirresponsibilities. The Board Committees will deliberate on and examine issues within their terms of reference and reportto the Board.

Board Meetings

The Board meets at least five (5) times a year, with additional meetings convened when necessary to review mattersthat require the Board’s urgent attention and decision. During the financial year ended 31 March 2011, the Boardmet on six (6) occasions, where a formal agenda are forwarded to all Directors at least two (2) weeks before themeetings.

All issues raised and discussed and decisions made at the Board Meetings are minuted, and are circulated to allDirectors for their perusal prior to the confirmation of such minutes at the following Board Meetings.

All Board Meetings during the financial year ended 31 March 2011 were held at the Conference Room, 18th Floor,Wisma Sin Heap Lee, 346 Jalan Tun Razak, 50400 Kuala Lumpur. All directors have complied with the minimum 50%attendance requirement in respect of the Board Meetings as stipulated by Bursa Malaysia Securities Berhad’s MainMarket Listing Requirements.

The Directors’ attendance for the six (6) Board Meetings held during the financial year ended 31 March 2011 was asfollows:

Date of Meeting No. ofMeetings

Director 20.4.11 26.5.11 15.7.11 24.8.11 29.11.10 22.2.11 Attended

Y.A.M. Tengku Abdul Samad Shah � � � � � � 6/6Ibni Almarhum Sultan SalahuddinAbdul Aziz Shah

Dato’ Yap Teiong Choon – � � � � � 5/6

Dato’ Ir. Yap Chong Lee – � � � � � 5/6

Chin Yu Tow @ Cheng Yu Thou � � � � � � 6/6

Wong Tiek Fong � � � � � � 6/6

Wong Yew Mei � � � � � � 6/6

Souren Norendra � � � � � � 6/6

Supply of Information

The Board recognises that thedecision making process is highlydependent on the quality ofinformation furnished. As such, theBoard has unrestricted access to anyinformation pertaining to theCompany. Updates on operational,financial, corporate issues andstrategic matters as well as currentdevelopment of the Group whichrequire the Board members’attention are disseminated withoutdelay.

Appointment to the Board

Nomination Committee

The Nomination Committeecomprises two (2) Independent Non-Executive Directors, as follows:

1. Chin Yu Tow @ Cheng Yu Thou– Chairman

2. Souren Norendra


Duties and responsibilities of theNomination Committee include:

a. to identify and recommend tothe Board, suitable candidatesfor directorship of theCompany;

b. to recommend to the Board,directors to fill the seats on theBoard Committees;

c. to evaluate the effectiveness ofthe Board as a whole, the BoardCommittee and assessing thecontribution of each individualdirector; and

d. to ensure an appropriateframework and succession plansfor members of the Board.

Meeting of the NominationCommittee is held as and whenrequired. The NominationCommittee is satisfied that the size ofthe Board is optimum and all themembers are suitably qualified tohold their position as Directors of theCompany in view of their respectiveprofessional qualifications andexperience.

Directors’ Training

The Directors have participated andcontinue to undergo the relevanttraining programmes to furtherenhance their skill and knowledge aswell as the latest statutory and/orregulatory requirements indischarging their fiduciary duties tothe Company.

Conferences, seminars and trainingprogrammes attended by theDirectors during the financial yearended 31 March 2011 are as follows:

• Practical Application of FRS 139Financial Instruments :Recognition & Measurement;and

• The Seven IR Areas EveryManagers Must Be Aware AboutWhen Managing Staffing Issues.

Reasons for some of the Directorswho are not able to participate inthe continuing educationprogramme are as follows:

• Very active involvement in theGroup corporate andoperational matters; and

• Unable to identify any relevantcourses that provide specificproperty developmentmethodologies, business modelsand delivery systems pertainingto property developmentindustry.

Re-Election

In accordance with the Company’sArticles of Association, all Directorswho are appointed by the Board aresubject to re-election byshareholders at the next ordinarymeeting after their appointment. TheArticles of Association also providethat nearest to one-third (1/3) of theDirectors shall subject to retirementby rotation and be eligible forre-election at each Annual GeneralMeeting. The Directors to retire shallbe the Directors who have beenlongest in office since their lastelection, and the directors shall besubject to retirement at least once inevery three (3) years.

Directors over seventy (70) years ofage are required to submitthemselves for re-appointmentannually in accordance with Section129 of the Companies Act, 1965.

DIRECTORS’ REMUNERATION

Remuneration Committee

The Remuneration Committeeconsists of two (2) Independent Non-Executive Directors and one (1) Non-Independent Executive Director, asfollows:

1. Chin Yu Tow @ Cheng Yu Thou– Chairman

2. Dato’ Yap Teiong Choon3. Souren Norendra

Duties and responsibilities of theRemuneration Committee include:

a. to recommend theremuneration framework forNon-Executive Directors;

b. to recommend theremuneration package ofExecutive Directors; and

c. to ensure individual directorsabstain from making decisions inrespect of their individualremuneration.

During the financial year ended31 March 2011, the RemunerationCommittee held only one meetingon 26 May 2010, to discuss andreview the Executive and Non-Executive Directors’ Remuneration,whereupon recommendations aresubmitted to the Board for approval.The attendance of Members at theRemuneration Committee Meeting isreflected as follows:

Name ofmembers Attendance

Chin Yu Tow @ 1/1Cheng Yu Thou

Dato’ Yap 1/1Teiong Choon

Souren Norendra 1/1


The Group Financial Controller attended the Remuneration Committee Meeting by invitation.

The Board as a whole determines the remuneration of Non-Executive Directors, and each individual Director abstainsfrom the Board’s decision on his own remuneration. All the Directors are paid annual Directors’ fees and travelingallowance for Board Meetings that they have attended. The Directors’ fees are approved at the AGM, by theshareholders.

The details of Directors’ remuneration paid and payable to the Directors of the Company for the financial yearended 31 March 2011, by category and in successive bands of RM50,000/- are as follows:

Non-Executive DirectorsExecutiveDirectors Independent Non-Independent TotalRM RM RM RM

Fees 40,000 40,000 40,000 120,000

Salaries 1,049,600 – 463,680 1,513,280

Bonuses 197,550 – 52,396 249,946

EPF 150,138 – 49,482 199,620

Benefits in kind & Allowances 34,000 10,000 15,000 59,000

TOTAL 1,471,288 50,000 620,558 2,141,846

Number of Directors

Independent Non-IndependentRange of remuneration Executive Non-Executive Non-Executive

Below RM50,000 – 2 –

RM100,001 to RM150,000 – – 1

RM200,001 to RM250,000 – – 1

RM250,001 to RM300,000 – – 1

RM700,001 to RM750,000 2 – –


SHAREHOLDERS

Dialogue between the Companyand Investors

The Company recognises theimportance of being accountableto its investors and as such hasmaintained an active andconstructive communication policyto enable the Board andManagement to communicateeffectively with its shareholders,stakeholders and the publicgenerally.

The timely release of quarterlyfinancial results of the Group and theissue of the Company’s AnnualReports provide regular informationon the state of affairs of the Group.These, together with theannouncement to Bursa MalaysiaSecurities Berhad, circulars toshareholders and, whereappropriate, ad-hoc pressstatements and interviews are theprincipal channels for disseminationof information to its shareholders,stakeholders and the publicgenerally.

In addition, the Company hasestablished a web site atwww.shlcb.com.my, whichshareholders can access forinformation.

General Meeting

The Company’s General Meetingsare the principal avenue for theshareholders to meet and discuss theCompany’s affairs with the Directors.Shareholders are encouraged toattend and participate at thesemeetings. Shareholders who areunable to attend are allowed toappoint proxies. Members of theBoard and the external auditors ofthe Company are present to answerqueries raised at these meetings aswell as to discuss with shareholders,invited attendees and members ofthe press.

Any queries or concerns regardingthe Group may be conveyed to theChairman of the Audit Committee orthe Company Secretary at theregistered office of the Company.

ACCOUNTABILITY AND AUDIT

Audit Committee

The Audit Committee of the Boardcomprises two (2) Independent Non-Executive Directors and one (1) Non-Independent Non-ExecutiveDirector. The composition andfunctions of the Audit Committeeare set out in the Audit CommitteeReport.

Financial Reporting

In presenting the annual reports andaudited financial statements andquarterly announcement toshareholders, the Board aims toprovide and present an accurate,balanced and meaningfulassessment of the Group’s financialperformance and prospects. TheBoard is assisted by the AuditCommittee to oversee the Group’sfinancial reporting processes andthe quality of its financial reporting.

Directors’ Responsibility Statement inrespect of the preparation of theaudited Financial Statements

The Directors are responsible forensuring that the financialstatements of the Group give a trueand fair view of the state of affairs ofthe Group and of the Company asat the end of the financial year andthe financial performance and cashflows of the Group and of theCompany for the financial year thenended. In preparing the financialstatements, the Directors haveensured that applicable approvedaccounting standards in Malaysiaand the provisions of the CompaniesAct, 1965 have been applied.

In preparing the financialstatements, the Directors haveselected and applied consistentlysuitable accounting policies andmade reasonable and prudentjudgements and estimates.

State of Internal Control

The Statement on Internal Controlfurnished on page 23 to page 24 ofthe Annual Report provides anoverview on the state of internalcontrols within the SHL Group.

Relationship with the Auditors

Key features underlying therelationship of the Audit Committeewith the external auditors areincluded in the Audit Committee’sterms of references as set out in theAudit Committee Report. The SHLGroup has always maintained atransparent relationship with itsauditors in seeking professionaladvice and ensuring compliancewith the appropriate accountingstandards.

COMPLIANCE WITH THE CODE

The Board of Directors has takenmeasures to ensure that SHL Groupfully complies with all the bestpractices of corporate governanceas identified in the Code throughoutthe financial year ended 31 March2011.

STATEMENT OF CORPORATEGOVERNANCE

The disclosure of this Statement onCorporate Governance has beenapproved by the Board during theBoard Meeting held on 15 July 2011.


ADDITIONAL COMPLIANCEINFORMATION

1. Utilisation of Proceeds

There were no proceeds raisedby the Company from anycorporate exercise during thefinancial year.

2. Share Buy-backs

The Company has not madeany proposal for share buy-backduring the financial year.

3. Options, Warrants or ConvertibleSecurities

The Company has not issuedany options, warrants orconvertible securities during thefinancial year.

4. American Depository Receipt(“ADR”) or Global DepositoryReceipt (“GDR”)

The Company has notsponsored any ADR or GDRprogramme during the financialyear.

5. Sanction and Penalty

During the financial year, nosanction or penalty has beenimposed by any regulatorybodies on the Company and itssubsidiaries, Directors ormanagement of the Company.

6. Non-audit Fees Payable toExternal Auditors

No non-audit fees have beenpaid to the external auditorsduring the financial year.

7. Financial Forecast

No profit forecast was issued bythe Company during thefinancial year.

8. Profit Guarantee

There was no profit guaranteefor the financial year.

9. Material Contracts InvolvingDirectors’/SubstantialShareholders’ Interests

Besides the related partytransactions covered under theShareholders’ Mandate dulygranted by shareholders at thelast Annual General Meeting,the Company had on 20 April2010 entered into a Sale andPurchase Agreement with Dato’Yap Teiong Choon and Dato’ Ir.Yap Chong Lee (both areDirectors and SubstantialShareholders of SHL) topurchase Nine HundredThousand (900,000) ordinaryshares of RM1.00 each in theissued and paid-up capital ofGoodstock Land Sdn Bhd(“GSL”) representing 60% of thetotal share capital of GSL for atotal cash consideration ofRM25,563,000/-. The saidAcquisition was completedon 20 May 2010.

10. Revaluation Policy

The Group adopts the policy torevalue land and/or buildingsheld as property, plant andequipment at least once inevery 5 years or at such shorterperiod as may be considered tobe appropriate based on theadvice of external professionalvaluers and appraisers and/orDirectors’ valuation.

Any surplus or deficit arising fromthe revaluation exercise is to bedealt with in the revaluationreserve, except that a deficit ischarged to the incomestatement to the extent that it isin excess of any surplus held inthe former relating to previousrevaluation of the same asset.On disposal of revalued assets,amounts in revaluation reserverelating to those assets aretransferred to retained profits.

Investment properties are statedat fair value and any gains orlosses arising from changes infair values are included in theincome statement in the periodin which they arise.


audit committee report

MEMBERSHIP

The present members of theCommittee comprise:

Chairman

Chin Yu Tow @ Cheng Yu ThouSenior Independent Non-ExecutiveDirector

Members

Wong Tiek FongNon-Independent Non-ExecutiveDirector

Souren NorendraIndependent Non-Executive Director

ESTABLISHMENT

The Audit Committee wasestablished on 26 March 1996 to actas a Committee of the Board ofDirectors.

TERMS OF REFERENCE OF THEAUDIT COMMITTEE

Objectives

The primary objectives of the AuditCommittee are:

• to assist the Board in thedischarge of its responsibilitiesby reviewing the adequacy andintegrity of the Company’s andthe Group’s internal controlsystems, risk assessment andmanagement informationsystems for compliance withapplicable laws, regulations,rules, directives and guidelines;

• to reinforce the independenceof the external auditors andthereby help ensure that theywill have free rein in the auditprocess and to provide, by wayof regular meetings, a line ofcommunication between theBoard and the external auditors;

• to provide emphasis on theinternal audit function byincreasing the objectivity andindependence of the internalauditors and provide a forum fordiscussion that is independentof management; and

• to review related partytransactions entered into by theCompany and the Group toensure that such transactionsare undertaken on the Group’snormal commercial terms andthat the internal controlprocedures with regards to suchtransactions are sufficient.

Composition

The Board shall elect and appointCommittee members from amongsttheir numbers, comprising no fewerthan three (3) Directors, all the auditcommittee members must be non-executive directors, with majority ofthem being independent directors.

The Board shall at all times ensurethat at least one (1) member of theCommittee shall be:

• a member of the MalaysianInstitute of Accountants (MIA);or

• if he or she is not a member ofMIA, he must have at least three(3) years of working experienceand:

– he or she must have passedthe examinations specifiedin Part I of the 1st Scheduleof the Accountants Act,1967; or

– he or she must be amember of the associationsof accountants specified inPart II of the 1st schedule ofthe Accountants Act, 1967.

• fulfils such other requirements asprescribed or approved by theExchange.

If a member of the Committeeresigns, dies or for any reason ceasesto be a member with the result that

the number of members is reducedto below three (3), the Board shallwithin three (3) months of the eventappoint such number of newmembers as may be required to fillthe vacancy.

The Chairman of the Committeeshall be an independent non-executive Director. No alternateDirector of the Board shall beappointed as a member of theCommittee.

The Board shall review the terms ofoffice of each of its members atleast once (1) every three (3) years.

Quorum and Committee’sProcedures

Meetings shall be conducted atleast four (4) times annually, or morefrequently as circumstances dictate.

In order to form a quorum for themeeting, the majority of themembers present must beindependent non-executiveDirectors. In the absence of theChairman, the members presentshall elect a Chairman for themeeting from amongst the memberspresent.

The Company Secretary shall beappointed Secretary of theCommittee (the Secretary). TheSecretary, in conjunction with theChairman, shall draw up an agenda,which shall be circulated togetherwith the relevant supporting papers,at least one (1) week prior to eachmeeting to the members of theCommittee. The minutes of themeetings shall be circulated tomembers of the Board.

The Committee may, as and whendeemed necessary, invite otherBoard members and seniormanagement members to attendthe meetings.

The Chairman shall submit an annualreport to the Board summarising theCommittee’s activities during theyear and the related significantresults and findings.


The Committee shall meet at leastonce every year with the Head ofInternal Audit and external auditorsin separate sessions to discuss anymatters with the Committee withoutthe presence of any executivemember of the Board.

The Committee shall regulate themanner of proceedings of itsmeetings, having regard to normalconventions on such matter.

Authority

The Committee is authorised to seekany information it requires fromemployees, who are required tocooperate with any request madeby the Committee.

The Committee shall have full andunlimited access to any informationpertaining to the Group.

The Committee shall have directcommunication channels with theinternal and external auditors andwith senior management of theGroup and shall be able to convenemeetings with the external auditorswhenever deemed necessary.

The Committee shall have theresources that are required toperform its duties. The Committeecan obtain, at the expense of theCompany, external legal or otherindependent professional advice itconsiders necessary.

Responsibilities and Duties

In fulfilling its primary objectives, theCommittee shall undertake thefollowing responsibilities and duties:

a) to consider the appointment ofthe external auditors, the auditfee and any questions ofresignation or dismissal;

b) to discuss with the externalauditors before the auditcommences, the nature andscope of the audit, and ensureco-ordination where more thanone audit firm is involved;

c) to review the quarterly andannual financial statement ofthe Group, focusing particularlyon:

• any changes in accountingpolicies and practices;

• significant accountingadjustments arising from theaudit;

• the going concernassumption; and

• compliance withaccounting standards andother legal requirements.

d) to discuss problems andreservations arising from theinterim and final audits, and anymatter the auditors may wish todiscuss (in the absence ofmanagement wherenecessary);

e) to review the external auditors’management letter andmanagement’s response;

f) in relation to the internal auditfunction:

• review the adequacy ofthe scope, functions,competency and resourcesof the internal auditfunction, and that it has thenecessary authority to carryout its work;

• review the internal auditprogram and results of theinternal audit process andwhere necessary ensurethat appropriate action istaken on therecommendations of theinternal audit function;

• review any appraisal orassessment of theperformance of membersof the internal auditfunction;

• approve any appointmentor termination of senior staffmembers of the internalaudit function; and

• inform itself of resignationsof internal audit staffmembers and provide theresigning staff member anopportunity to submit hisreasons for resigning.

g) to consider any related partytransactions that may arisewithin the Company or Group.

h) to consider the major findings ofinternal investigations andmanagement’s response.

i) to consider other topics asdefined by the Board.

j) to review procedures in placeto ensure that the Group is incompliance with theCompanies Act, 1965, ListingRequirements of Bursa MalaysiaSecurities Berhad and otherlegislative and reportingrequirements.

MEETINGS

During the year ended 31 March2011, the Audit Committee held itsmeetings on 20 April 2010, 26 May2010, 15 July 2010, 24 August 2010,29 November 2010 and 22 February2011, a total of 6 meetings. Themeeting attendance of theCommittee members were asfollows:

MeetingsName of attended bymembers members

Chin Yu Tow @ 6/6Cheng Yu Thou

Wong Tiek Fong 6/6

Souren Norendra 6/6

The meetings were appropriatelyconvened with agendas and Boardpapers distributed to members withsufficient notification.

The Secretary was present in all themeetings. Representatives of theexternal auditors and the Head ofInternal Audit also attended themeetings upon invitation.


SUMMARY OF ACTIVITIES DURINGTHE FINANCIAL YEAR

The main activities undertaken bythe Committee were as follows:

• Reviewed the external auditors’scope of work and audit plansfor the year. Prior to the audit,representatives from theexternal auditors presented theiraudit strategy and plan.

• Reviewed with the externalauditors the results of the audit,the audit report and themanagement letter, includingmanagement’s response.

• Consideration andrecommendation to the Boardfor approval of the audit feespayable to the external auditorsas disclosed in Note 6 to thefinancial statements.

• Reviewed the independenceand objectivity of the externalauditors and the servicesprovided, including non-auditservices.

• Reviewed the internal auditdepartment’s resourcesrequirements, programmes andplans for the financial yearunder review and the annualassessment of the internal auditdepartment’s performance.

• Reviewed the internal auditreports, which highlighted theaudit issues, recommendationsand management’s response.Discussed with managementactions taken to improve thesystem of internal control basedon improvement opportunitiesidentified in the internal auditreports.

• Recommended to the Boardimprovement opportunities ininternal control, procedures andrisk management.

• Met with the external auditorsand internal auditors at leasttwice a year without thepresence of any executiveBoard member.

• Reviewed the annual reportand the audited financialstatements of the Companyprior to submission to the Boardfor their consideration andapproval. The review was toensure that the auditedfinancial statements weredrawn up in accordance withthe provisions of the CompaniesAct, 1965 and the applicableapproved accountingstandards approved by theMalaysian AccountingStandards Board (MASB).

• Reviewed the Company’scompliance in particular thequarterly and annual financialstatements with the ListingRequirements of Bursa MalaysiaSecurities Berhad, MASB andother relevant legal andregulatory requirements.

• Reviewed pertinent issues of theGroup which had a significantimpact on the results of theGroup which includedenhancement and furtherdevelopment in existingproducts and services offered,cost rationalisation measures,reorganisation of business unitsand human resourcedevelopment.

• Reviewed the quarterly financialstatements beforerecommending the same forthe Board’s approval. Thereview and discussions wereconducted with the GroupFinancial Controller.

• Reviewed on a quarterly basisthe related party transactionsentered into by the Group.

• Reviewed the extent of theGroup’s compliance with theprovisions set out under theMalaysian Code on CorporateGovernance for the purpose ofpreparing the CorporateGovernance Statement andStatement on Internal Controlpursuant to the ListingRequirements of Bursa MalaysiaSecurities Berhad.Recommended to the Boardaction plans to address theidentified gaps between theGroup’s existing corporategovernance practices and theprescribed corporategovernance principles and bestpractices under the Code.

STATEMENT ON EMPLOYEES’SHARE OPTION SCHEME (ESOS) BYTHE COMMITTEE

There is no new ESOS established forthe employees during the yearended 31 March 2011.

INTERNAL AUDIT FUNCTION

The internal audit department isindependent of the activities oroperations of other operating units.The principal role of the departmentis to undertake independent regularand systematic reviews of thesystems of internal control within theGroup so as to provide reasonableassurance that such systemscontinue to operate satisfactorilyand effectively. It is the responsibilityof the internal audit department toprovide the Audit Committee withindependent and objective reportson the state of internal control of thevarious operating units within theGroup and the extent ofcompliance of these units with theGroup’s established policies andprocedures as well as relevantstatutory requirements.

Further details of the activities of theinternal audit department are setout in the Statement on InternalControl on page 23 to page 24.


INTRODUCTION

THE MALAYSIAN CODE ONCORPORATE GOVERNANCEREQUIRES LISTEDCOMPANIES TO MAINTAIN ASOUND SYSTEM OFINTERNAL CONTROL TOSAFEGUARDSHAREHOLDERS’INVESTMENTS AND THEGROUP’S ASSETS. THELISTING REQUIREMENTS OFBURSA MALAYSIA SECURITIESBERHAD REQUIREDIRECTORS OF LISTEDCOMPANIES TO INCLUDE ASTATEMENT IN THEIR ANNUALREPORTS ON THE STATE OFINTERNAL CONTROLS OFTHE LISTED ISSUER AS AGROUP. BURSA MALAYSIASECURITIES BERHAD’SSTATEMENT ON INTERNALCONTROL: GUIDANCE FORDIRECTORS OF PUBLICLISTED COMPANIES(GUIDANCE) PROVIDESGUIDANCE FORCOMPLIANCE WITH THESEREQUIREMENTS. SET OUTBELOW IS THE BOARD OFDIRECTORS’ INTERNALCONTROL STATEMENT,WHICH HAS BEEN PREPAREDIN ACCORDANCE WITH THEGUIDANCE.

BOARD RESPONSIBILITY

The Directors acknowledge theirultimate responsibility for the Group’ssystem of internal controls, which isdesigned to identify and managethe risks faced by its business units inpursuit of its objectives but thepurview does not cover itsassociated company as itsdevelopment activity has yet tocommence. The system of internalcontrols covers risk management,operational, organisational, financialand compliance controls tosafeguard the Group’s assets andshareholders’ investments.

The system is designed to managerather than eliminate the risk offailure to achieve businessobjectives, and can only providereasonable and not absoluteassurance against materialmisstatement or loss.

ENTERPRISE RISK MANAGEMENTFRAMEWORK

The Board has established anongoing process for identifying,evaluating and managing significantrisks faced by the Group. This processhas been in place throughout theyear and up to the date of approvalof the annual report and financialstatements. The Board fully supportsthe contents of the Internal ControlGuidance and through the AuditCommittee, continually reviews theadequacy and effectiveness of therisk management process within thevarious operating business units.

The Group Management isresponsible for the management ofrisk, developing, operating andmonitoring the system of internalcontrol and providing assurance tothe Board that it has done so inaccordance with the policiesadopted by the Board.

The formalisation of the enterpriserisk management frameworkinvolved the following initiatives:

• A formal risk policy andguidelines have beenestablished and communicatedto all employees throughout theGroup.

• A risk management structurewhich outlines the lines ofreporting and responsibility atthe Board, Audit Committee,Group Risk ManagementCommittee and managementlevels have been established.The risk management structureenhances risk oversight andmonitoring process.

• Chief Risk Officers have beenappointed to continuously carryout their responsibilities toidentify, assess and prioritise therisks faced by the Group basedon the likelihood of occurrenceand magnitude of impact andalso to assist management inidentifying procedures or stepsto be taken to manage orcontrol these risks.

• The Group Management’simplementation of a group-wide risk assessment processidentifies the key risks facingeach business, the potentialimpact and likelihood of thoserisks occurring, the controleffectiveness and the actionplans being taken to managethose risks to the desired level.The risk profile for the Group andindividual business units isproduced by an automated riskmanagement system, andtogether with the risk registers,are reported through the GroupRisk Management Committeeto the Audit Committee on ahalf yearly basis. The Chairman

statement on internal control


of the Audit Committee reportsthe significant risks and controlissues to the Board for itsconsideration.

• Ongoing risk managementeducation and training isprovided at management andstaff levels.

The Board is satisfied that there is anongoing process of identifying,evaluating and managing significantrisks that may affect theachievement of the Group’sbusiness objectives. The system ofinternal control will continue to bereviewed and updated in line withchanges in the operatingenvironment.

INTERNAL AUDIT FUNCTION

The Group has an Internal AuditDepartment (Internal Audit) whichprovides assurance to the Board onthe effectiveness and adequacy ofits risk management, system ofinternal controls and governanceframeworks.

Internal Audit function focuses onareas of priority as identified by riskanalysis and in accordance with anannual plan approved each year bythe Audit Committee. Internal Auditindependently reviews the riskidentification procedures andcontrol processes implemented bythe Group Management, and reportto the Audit Committee on a regularbasis. Internal Audit also undertakesa review of the Company’scompliance with principles and bestpractices of the Code. The resultsand any corrective action whichmay be necessary are reported tothe Audit Committee. The Audit

Committee reviews the riskmonitoring and complianceprocedures and presents its findingsto the Board on a regular basis.

During the financial year, the costinvolved in performing in-houseinternal audit function isapproximately RM126,000.

KEY ELEMENTS OF THE GROUP’SINTERNAL CONTROL SYSTEM

The internal controls are designed togive reasonable assurance withrespect to:

• the reliability of financialinformation used within thebusiness or for publication;

• the maintenance of properaccounting records;

• safeguarding of assets againstunauthorised use or disposition;

• the business being operatedefficiently and effectively;

• compliance with statutory lawsand regulations.

The Group’s internal control andmonitoring procedures include:

• clearly laid down system andprocedures, both financial andoperational, includingmaintenance of good financialcontrols and the production ofaccurate and timely financialmanagement information.

• detailed budgeting andreporting of financial results,financial positions and cashflows, with regular review by themanagement of variances frombudgets.

• regular internal audit visits tomonitor compliance withprocedures and assess theintegrity of financial informationprovided.

• Standard Operating Policiesand Procedures aresystematically documented,revised and made available toguide staff in their day-to-daywork.

• Senior Management meet on aregular basis with managers ofbusiness units to consider theGroup’s operational, businessdevelopment, financialperformance and risk relatedmatters.

• There are regular Board andManagement meetings toassess, review and monitorperformances and controls in allfacets of operations.

Indulge in a roundof golf on a worldclass golf coursethat is second tonone, from tee togreen. P L A Y

ON BEHALF OF THE BOARD

OF DIRECTORS OF

SHL CONSOLIDATED BHD.,

I AM PLEASED TO PRESENT

THE ANNUAL REPORT AND

THE AUDITED FINANCIAL

STATEMENTS FOR THE

FINANCIAL YEAR ENDED

31 MARCH 2011.

OVERVIEW

The Malaysianeconomyrebounded in2010, recordingan expansion of7.2% following thedownturn in 2009.Growth was drivenmainly by robust domesticdemand; and primarily by privatesector activity.

Under the preceding year’schallenging economic environment,the Government has announcedseveral measures to facilitateeconomic growth. The “My FirstHome Scheme” has beenintroduced to assist young adultswho have a lower income to owntheir first home with a financingmargin of 100%. The houses underthis scheme are priced fromRM100,000 to RM220,000 per unit,and to qualify, buyers must have amonthly salary of not more thanRM3,000.

With the implementation of thestrategies and measures by theMalaysian Government, theconstruction sector grew by 5.2% in2010. Growth was underpinned bythe non-residential sub-sector,reflecting the construction ofcommercial properties and theupgrading and repair of publicbuildings. Construction activity in theresidential sub-sector declined, as

fewer units of new residentialproperties were

launched.Meanwhile, house

prices increasedalmost twice thesize of theaverageincrease of3.4% during

2000-2009.

Against this outlookand barring

unforeseencircumstances, the Group will

continue to focus on our corecompetencies and sustain themomentum of our current efforts.

FINANCIAL PERFORMANCE

For the financial year under review,the Group’s revenue decrease toRM190.2 million, 24% lower than therevenue of RM249.5 million recordedin the previous financial year.However, the Group achieved aprofit before taxation of RM37.5million for the financial year underreview compared to RM34.5 millionrecorded in the financial year ended31 March 2010, an increase of 9%.

As a result of the net profit achievedfor the financial year under review,the Group’s net assets haveincreased from RM533.4 million toRM548.1 million.

OPERATIONS REVIEW

Continue from the precedingfinancial year, the Group haverecorded high take-up rates for itsresidential and commercial unitsdeveloped in Alam Budiman, ShahAlam, Bandar Sungai Long, Cherasand Taman Universiti Indah, SeriKembangan.

During the financial year underreview, the Group has registered asales value of RM112.4 million for itsprojects in Alam Budiman, ShahAlam, Bandar Sungai Long, Cherasand Taman Universiti Indah, SeriKembangan.

The Group will progressively continueto undertake property developmentprojects at the following twogeographical fronts and will launchmore residential and commercialunits in the ensuing financial years.

Bandar Sungai Long, CherasOver 450 units of mixeddevelopment comprising doublestorey terrace houses, semi-detached houses, bungalows andaffordable homes.

Alam Budiman, Shah AlamMore than 500 units of affordablehomes.


chairman’sstatement


The Group is gearing itself to ventureinto new property developmentfronts in Kajang and Sungai Choh,both projects located in Selangor.

On 20 April 2010, SHL ConsolidatedBhd. has announced that it hasentered into a sale and purchaseagreement with Dato’ Yap TeiongChoon and Dato’ Ir. Yap Chong Leeto purchase Nine Hundred Thousand(900,000) ordinary shares of RM1.00each in the issued and paid-upcapital of Goodstock Land Sdn. Bhd.(“GSL”) representing 60% of the totalshare capital of GSL for a total cashconsideration of RM25.56 milliononly. The aforesaid acquisition iscompleted on 11 May 2010 resultingin GSL becoming a subsidiary of SHLConsolidated Bhd. The acquisition ofthe above investment will enhancethe Group’s revenue stream andprofitability.

DIVIDEND

Subject to the approval byshareholders at the forthcomingAnnual General Meeting, the Boardof Directors is pleased torecommend a first and final dividendof 7 sen per share less 25% tax inrespect of the financial year ended31 March 2011.

PROSPECTS

The Malaysian economy is projectedto grow at 5% to 6% in 2011,underpinned by strong domesticdemand. Further progress on on-going infrastructure projects andnew projects due for implementationunder the Economic TransformationProgramme will provide the impetusfor the construction sector.

With the recovering economy andcertainly the residential propertymarket, the Group’s on-going andnew projects will contributesignificantly to our future earningsgrowth.

Under these positive economiccircumstances and with the strongfoundation that the Group has builtover the years, the Group will strivefor continuous growth andprofitability. The Group is alsoexploring potential acquisitions toenhance its shareholders’ value, withthe focus to elevate the Group togreater heights. With this aim, theGroup’s prospects for the year 2012are expected to remain positive.

ACKNOWLEDGEMENT ANDAPPRECIATION

On behalf of the Board of Directors,I would like to take this opportunityto express my appreciation to themanagement and staff for theirloyal, undivided commitment anddedication extended during theyear and look forward to theirvaluable contribution to the Groupin the future.

I also wish to thank our valuedshareholders, customers, bankers,suppliers, business associates andgovernment agencies for theircontinued support to the Group.

Y.A.M. Tengku Abdul Samad ShahIbni Almarhum Sultan SalahuddinAbdul Aziz ShahChairman

Kuala Lumpur15 July 2011

corporate socialresponsibility

AS PART OF OURCOMMITMENT TO BE ARESPONSIBLE CORPORATECITIZEN, THE GROUPCONTINUES TO PLACEGREAT EMPHASIS ONCORPORATE SOCIALRESPONSIBILITY ANDEMBARKED ON ITS MISSIONBY FOCUSING ON THREEPRIMARY AREAS, NAMELYWORKPLACE,ENVIRONMENT ANDCOMMUNITY.

WORKPLACE

We believe that employees are acrucial asset and major contributorto our success. The Group sponsorsemployees to attend externalseminars, occupational safety andhealth training as well asmanagement and financial skillupgrading programmes tostrengthen their competencies, skillsand knowledge with the aim toembed the high standard requiredto enhance work quality andachieve optimal job performance.

Health and safety is given thehighest priority within the Group’soperations. Benefits extended to all

employees include accident anddisability insurance, maternity/paternity leave and medicalcoverage for employees’ non-working spouses. At constructionsites, all employees, contractors andsub-contractors are required tocomply with good safety practicesand be properly attired with safetydevices.

To encourage unity and teamworkamong all employees, sportsactivities and trips were organised toencourage employees to mingleand interact with one another tofoster goodwill and build closerworking relationships.

ENVIRONMENT

As a responsible property developer,the Group is committed to preservethe environment and minimise anyharmful environmental impact byconforming to the regulations set bythe Department of Environment.Before starting any major propertydevelopment projects, the Groupengages independent consultantsto conduct environment impactassessments in accordance with theEnvironment Quality Act.

In order to conserve energy andprevent global warming, the Grouphas introduced ways of cuttingelectricity consumption by turningoff light and air conditioners duringlunch break and to reduce waste,the Group encourages the use ofrecycled papers.

COMMUNITY

The Group contributed in cash andin kind to underprivileged anddisable groups. A community hall isbuilt for the residents of AlamBudiman in Shah Alam.

1. Community Hall at Alam Budiman,Shah Alam.

2&3. Staff Dinner.

4. Trip to Bali, Indonesia.


1

2

4

3

financialstatements

directors’ report

statement by directors

statutory declaration

independent auditors’ report

statements of comprehensive income

statements of financial position

statements of changes in equity

statements of cash flows

notes to the financial statements

30

34

34

35

37

38

40

42

44


Your Directors have pleasure in submitting the Directors’ report and the audited financial statements of the Groupand of the Company for the year ended 31 March 2011.

PRINCIPAL ACTIVITIES

SHL Consolidated Bhd. is an investment holding company and it provides strategic, financial and corporateplanning services. SHL Consolidated Bhd. and its subsidiaries are an integrated commercial and residentialproperty development group which are also involved in granite quarrying and manufacturing of aggregates,general building construction, earthworks, infrastructure works, renting out of plant and machineries, the ownershipand operation of a golf resort, the manufacture of clay bricks, supply of finished brickworks of wall and other brickstructures, the provision of soil and concrete laboratory testing services, the provision of professional constructionmanagement and geo-technical services, the marketing and distribution of building materials, rental of propertiesand money lending business.

There has been no significant change in the nature of these principal activities during the financial year.

FINANCIAL RESULTS

Group CompanyRM'000 RM'000

Profit before taxation 37,485 52,276Malaysian taxation (9,647) (2,863)

Profit for the year 27,838 49,413Other comprehensive income, net of tax – –

Total comprehensive income for the year 27,838 49,413

Total comprehensive income for the year attributable to:• owners of the parent 27,370 49,413• minority interests 468 –

27,838 49,413

In the opinion of the Directors, the results of the operations of the Group and of the Company during the financialyear were not substantially affected by any item, transaction or event of a material and unusual nature, otherthan those disclosed in the financial statements.

DIVIDENDS

The amounts of dividends paid and proposed since the end of the previous financial year were as follows:-

RM'000Dividends paid:Final dividend of 7 Sen gross per share less tax in respect of financial year ended 2010 12,712

Dividend proposed:Final dividend of 7 Sen gross per share less tax in respect of financial year ended 2011 12,712

directors’reportfor the year ended 31 March 2011


MOVEMENTS OF RESERVES AND PROVISIONS

There were no material transfers to or from reserves and provisions during the financial year.

SHARE CAPITAL

There were no changes in the authorised, issued and paid-up capital of the Company during the financial year.

SHARE OPTIONS

There were no share options granted during the financial year or unissued shares under option at the end of thefinancial year, in respect of shares in the Company.

DIRECTORS

The Directors in office since the date of the last report are:-

Y.A.M. Tengku Abdul Samad Shah Ibni Almarhum Sultan Salahuddin Abdul Aziz ShahDato’ Yap Teiong ChoonDato’ Ir. Yap Chong LeeChin Yu Tow @ Cheng Yu ThouWong Tiek FongWong Yew Mei (Alternate Director to Wong Tiek Fong)Souren Norendra

DIRECTORS’ INTERESTS

According to the Register of Directors’ Shareholdings, particulars of interests in the shares in the Company and itsrelated corporations during the financial year of those Directors holding office at the end of the financial year areas follows:-

Ordinary shares of RM1/- each1 April 31 March

Company 2010 Addition Disposal 2011

Direct

Y.A.M. Tengku Abdul Samad Shah Ibni AlmarhumSultan Salahuddin Abdul Aziz Shah 100,000 – – 100,000

Dato’ Yap Teiong Choon 5,283,869 – – 5,283,869Dato’ Ir. Yap Chong Lee 3,131,819 92,500 – 3,224,319Chin Yu Tow @ Cheng Yu Thou 35,500 – – 35,500Wong Tiek Fong 73,800 – – 73,800Wong Yew Mei (Alternate Directorto Wong Tiek Fong) 236,150 – – 236,150

Souren Norendra 12,500 – 12,500 –

Indirect

Y.A.M. Tengku Abdul Samad Shah Ibni AlmarhumSultan Salahuddin Abdul Aziz Shah 15,677,287 5,545,150 – 21,222,437

Dato’ Yap Teiong Choon 58,421,884 2,728,197 3,490,237 57,659,844Dato’ Ir. Yap Chong Lee 84,105,782 2,824,398 4,813,537 82,116,643


DIRECTORS’ INTERESTS (CONT’D)

By virtue of their interests in the Company, the following Directors are also deemed to be interested in the sharesof all the subsidiaries to the extent of the shares held by the Company, and there were no changes in theseinterests.

Y.A.M. Tengku Abdul Samad Shah Ibni Almarhum Sultan Salahuddin Abdul Aziz ShahDato’ Yap Teiong ChoonDato’ Ir. Yap Chong Lee

DIRECTORS’ BENEFITS

Since the end of the previous financial year, no Director of the Company has received or become entitled toreceive any benefit (other than a benefit included in the aggregate amount of emoluments received or due andreceivable by Directors shown in the financial statements, or the fixed salary of a full-time employee of theCompany) by reason of a contract made by the Company or a related corporation with the Director or with afirm of which the Director is a member, or with a company in which the Director has a substantial financialinterest, other than those disclosed in the financial statements.

Neither during nor at the end of the financial year, was the Company a party to any arrangements whose objectis to enable the Directors to acquire benefits by means of the acquisition of shares in or debentures of theCompany or any other body corporate.

OTHER STATUTORY INFORMATION

Before the statements of comprehensive income and statements of financial position of the Group and of theCompany were made out, the Directors took reasonable steps:

(a) to ascertain the action taken in relation to the writing off of bad debts and the making of provision fordoubtful debts and had satisfied themselves that there were no known bad debts and that adequateprovision had been made for doubtful debts; and

(b) to ensure that any current assets which were unlikely to realise their book values in the ordinary course ofbusiness had been written down to their expected realisable values.

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

(a) which would render it necessary to write off any bad debts or the amount of the provision for doubtful debtsinadequate to any substantial extent or the values attributed to current assets of the Group and of theCompany misleading; and

(b) which have arisen which render adherence to the existing method of valuation of assets or liabilities of theGroup and of the Company misleading or inappropriate.

In the interval between the end of the financial year and the date of this report:

(a) no item, transaction or event of a material and unusual nature has arisen which, in the opinion of theDirectors, would substantially affect the results of the operations of the Group and of the Company for thecurrent financial year; and

(b) no charge has arisen on the assets of the Group and of the Company which secures the liability of any otherperson nor has any contingent liability arisen in the Group and in the Company.


OTHER STATUTORY INFORMATION (CONT’D)

No contingent or other liability of the Group and of the Company has become enforceable or is likely to becomeenforceable within the period of twelve months after the end of the financial year which, in the opinion of theDirectors, will or may substantially affect the ability of the Group and of the Company to meet their obligationswhen they fall due.

At the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this reportor the financial statements which would render any amount stated in the financial statements misleading.

ULTIMATE HOLDING COMPANY

The Company is not a subsidiary of another corporation at the end of the financial year.

AUDITORS

Messrs. Khoo Wong & Chan have indicated their willingness to continue in office.

On behalf of the Board,

Dato’ Yap Teiong Choon Dato’ Ir. Yap Chong Lee

Kuala Lumpur,14 July 2011


We, Dato’ Yap Teiong Choon and Dato’ Ir. Yap Chong Lee being the Directors of SHL Consolidated Bhd. do herebystate on behalf of the Board of Directors that in our opinion, the financial statements set out on pages 37 to 97are drawn up in accordance with Financial Reporting Standards in Malaysia so as to give a true and fair view ofthe financial position of the Group and of the Company as at 31 March 2011 and of their financial performance,changes in equity and cash flows for the year ended on that date.

The information set out in Note 39 to the financial statements have been prepared in accordance with theGuidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context ofDisclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements as issued by the Malaysian Institute ofAccountants.

On behalf of the Board,

Dato’ Yap Teiong Choon Dato’ Ir. Yap Chong Lee


statutory declaration

I, Wong Tiek Fong I/C No. 620620-06-5161, being the Director primarily responsible for the accounting records andfinancial management of SHL Consolidated Bhd. do solemnly and sincerely declare that the financial statementsset out on pages 37 to 97 are to the best of my knowledge and belief, correct and I make this solemndeclaration conscientiously believing the same to be true, and by virtue of the provisions of the StatutoryDeclarations Act, 1960.

Subscribed and solemnly declared by }Wong Tiek Fong I/C No. 620620-06-5161 }at Kuala Lumpur in the Federal Territory }on 14 July 2011. } Wong Tiek Fong

Before me,

Mohan A.S. Maniam (W521)Commissioner for Oaths

statement by directors


REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of SHL Consolidated Bhd., which comprise thestatements of financial position as at 31 March 2011 of the Group and of the Company, and the statements ofcomprehensive income, statements of changes in equity and statements of cash flows of the Group and of theCompany for the year then ended, and a summary of significant accounting policies and other explanatorynotes, as set out on pages 37 to 97.

Directors’ Responsibility for the Financial Statements

The Directors of the Company are responsible for the preparation and fair presentation of these financialstatements in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia, and forsuch internal control as the Directors of the Company determine is necessary to enable the preparation offinancial 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 ouraudit in accordance with approved Standards on Auditing in Malaysia. Those standards require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financialstatements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements. The procedures selected depend on our judgment, including the assessment of risks ofmaterial misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,we consider internal control relevant to the Company’s preparation and fair presentation of the financialstatements in order to design audit procedures that are appropriate in the circumstances, but not for the purposeof expressing an opinion on the effectiveness of the Company’s internal control. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of accounting estimatesmade by 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 ouraudit opinion.

Opinion

In our opinion, the financial statements have been properly drawn up in accordance with Financial ReportingStandards and the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position ofthe Group and of the Company as at 31 March 2011 and of their financial performance, changes in equity andcash flows for the year then ended.

independent auditors’ reportto the members of SHL Consolidated Bhd.


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 theCompany and its subsidiaries have been properly kept in accordance with the provisions of the said Act.

(b) We are satisfied that the financial statements of the subsidiaries that have been consolidated with theCompany’s financial statements are in form and content appropriate and proper for the purposes of thepreparation of the financial statements of the Group and we have received satisfactory information andexplanations required by us for those purposes.

(c) Our audit reports on the financials statements of the subsidiaries did not contain any qualification or anyadverse comment made under Section 174(3) of the Act.

OTHER REPORTING RESPONSIBILITIES

The supplementary information set out in Note 39 is disclosed to meet the requirement of Bursa Malaysia SecuritiesBerhad. The Directors are responsible for the preparation of the supplementary information in accordance withGuidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context ofDisclosure Pursuant to Bursa Securities Berhad Listing Requirements, as issued by the Malaysian Institute ofAccountants (MIA Guidance) and the directive of Bursa Malaysia Securities Berhad. In our opinion, thesupplementary information is prepared, in all material respects, in accordance with the MIA Guidance and thedirective of Bursa Malaysia Securities Berhad.

OTHER MATTERS

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

Khoo Wong & Chan Chan Kee HwaChartered Accountants Partner(AF: 0736) 1367/6/13(J/PH)

Chartered Accountant



Group CompanyNote 2011 2010 2011 2010

RM'000 RM'000 RM'000 RM'000

Revenue 5 190,167 249,548 79,937 13,432Cost of sales (142,443) (196,892) – –

Gross profit 47,724 52,656 79,937 13,432Other operating income 5,759 6,931 – –Distribution costs (2,434) (2,853) – –Administration expenses (8,283) (11,601) (626) (612)Impairment losses on:• investment in subsidiaries – – (27,035) –• intangible assets (5,115) (10,231) – –

(5,115) (10,231) (27,035) –

Profit from operations 37,651 34,902 52,276 12,820Finance costs (158) (417) – –Loss from associate (8) (9) – –

Profit before taxation 6 37,485 34,476 52,276 12,820Taxation 7 (9,647) (8,684) (2,863) (1,749)

Profit for the year 27,838 25,792 49,413 11,071Other comprehensive income, net of tax:• deficit on revaluation of landand buildings – (438) – –

• deferred tax income relating to deficiton revaluation of land and buildings – 1,124 – –

– 686 – –

Total comprehensive income for the year 27,838 26,478 49,413 11,071

Profit for the year attributable to:• owners of the parent 27,370 25,792 49,413 11,071• minority interests 468 – – –

27,838 25,792 49,413 11,071

Total comprehensive income for the yearattributable to:

• owners of the parent 27,370 26,478 49,413 11,071• minority interests 468 – – –

27,838 26,478 49,413 11,071

Sen SenEarnings per share 8Basic and fully diluted 11.30 10.65

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

statements of comprehensive incomefor the year ended 31 March 2011



RM'000 RM'000 RM'000 RM'000

ASSETSNon-current assetsProperty, plant and equipment 9 219,618 220,574 – –Prepaid lease payments 10 1,014 1,042 – –Investment in subsidiaries 11 – – 420,187 421,659Investment in associate 12 1,249 1,257 – –Investment properties 13 66,702 16,147 – –Land held for property development 14 3,246 4,446 – –Intangible assets 15 – 5,115 – –Investments 16 31 124 – –Trust account 1,334 1,247 – –Deferred tax assets 17 2,238 2,784 – –

295,432 252,736 420,187 421,659

Current assetsPrepaid lease payments 10 28 28 – –Amounts due from subsidiaries 18 – – 103,602 76,672Property development costs 19 107,092 158,678 – –Inventories 20 13,030 36,860 – –Trade receivables 21 35,385 47,415 – –Other receivables 22 7,914 7,494 73 20Current tax assets 1,983 2,910 279 314Cash and deposits 23 174,779 116,733 927 5,606

340,211 370,118 104,881 82,612

635,643 622,854 525,068 504,271


statements of financial positionas at 31 March 2011



RM'000 RM'000 RM'000 RM'000

EQUITY AND LIABILITIESEquity attributable to equity holders

of the CompanyShare capital 24 242,124 242,124 242,124 242,124Reserves 25 305,948 291,290 181,488 144,787

548,072 533,414 423,612 386,911Minority interests 17,654 – – –

TOTAL EQUITY 565,726 533,414 423,612 386,911

Non-current liabilitiesDeferred tax liabilities 17 13,327 12,300 – –Finance lease liabilities 26 1,290 1,546 – –Club establishment fund 27 16,278 17,109 – –

30,895 30,955 – –

Current liabilitiesAmounts due to subsidiaries 18 – – 101,437 117,334Trade payables 28 31,784 48,470 – –Other payables 29 5,278 5,458 19 26Current tax liabilities 1,081 3,776 – –Finance lease liabilities 26 879 781 – –

39,022 58,485 101,456 117,360

TOTAL LIABILITIES 69,917 89,440 101,456 117,360

TOTAL EQUITY AND LIABILITIES 635,643 622,854 525,068 504,271


statements of financial positionas at 31 March 2011 (cont’d)


Totalattributableto equity

Group Note Share Share *Other Retained holders of Minority Total2011 capital premium reserves profits the Company interests equity

RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

At 1 April 2010 242,124 1,225 (68,679) 358,744 533,414 – 533,414Total comprehensive incomefor the year – – – 27,370 27,370 468 27,838

Transaction with owners:• dividends 30 – – – (12,712) (12,712) – (12,712)• minority interests arisingfrom business combinations – – – – – 17,186 17,186

At 31 March 2011 242,124 1,225 (68,679) 373,402 548,072 17,654 565,726

2010

At 1 April 2009 242,124 1,225 (69,365) 343,848 517,832 – 517,832Total comprehensive incomefor the year – – 686 25,792 26,478 – 26,478

Transaction with owners:• dividends 30 – – – (10,896) (10,896) – (10,896)

At 31 March 2010 242,124 1,225 (68,679) 358,744 533,414 – 533,414

* Analysis of other reserves:

Non-distributableRevaluation Capital Merger

Group surplus reserves deficit Total2011 RM'000 RM'000 RM'000 RM'000

At 1 April 2010 50,745 11,040 (130,464) (68,679)Total comprehensive income for the year – – – –

At 31 March 2011 50,745 11,040 (130,464) (68,679)

2010

At 1 April 2009 50,059 11,040 (130,464) (69,365)Total comprehensive income for the year 686 – – 686

At 31 March 2010 50,745 11,040 (130,464) (68,679)


statements of changes in equityfor the year ended 31 March 2011


Company Note Share Share *Other Retained Total2011 capital premium reserves profits equity

RM'000 RM'000 RM'000 RM'000 RM'000

At 1 April 2010 242,124 1,225 27,738 115,824 386,911Total comprehensive incomefor the year – – – 49,413 49,413

Transaction with owners:• dividends 30 – – – (12,712) (12,712)

At 31 March 2011 242,124 1,225 27,738 152,525 423,612

2010

At 1 April 2009 242,124 1,225 27,738 115,649 386,736Total comprehensive incomefor the year – – – 11,071 11,071

Transaction with owners:• dividends 30 – – – (10,896) (10,896)

At 31 March 2010 242,124 1,225 27,738 115,824 386,911

*Analysis of other reserves:Merger Capital

Company reserve reserve Total2011 RM'000 RM'000 RM'000

At 1 April 2010 and 31 March 2011 4,377 23,361 27,738

2010

At 1 April 2009 and 31 March 2010 4,377 23,361 27,738


statements of changes in equityfor the year ended 31 March 2011 (cont’d)



RM'000 RM'000 RM'000 RM'000Cash flows from operating activitiesProfit before taxation 37,485 34,476 52,276 12,820

Adjustments for:Depreciation and amortisation 2,410 2,204 – –Gain on disposal of property, plantand equipment (236) (297) – –

Derecognition of property, plantand equipment 7 69 – –

Impairment losses on subsidiaries – – 27,035 –(Gain)/loss on disposal of investmentproperties 80 (2,540) – –

Fair value adjustments oninvestment properties – (1,677) – –

Impairment loss on intangible assets 5,115 10,231 – –Gain on disposal of investments (3) – – –Interest expenses 187 562 – –Interest income (4,188) (1,509) (82) (6)Dividend income – – (79,855) (13,426)Negative goodwill (217) – – –Loss from associate 8 9 – –

Operating profit/(loss) beforeworking capital changes 40,648 41,528 (626) (612)

(Increase)/decrease in inventories andproperty development costs 31 76,629 110,571 – –

(Increase)/decrease in receivables 15,219 14,771 (26,983) (3,501)Increase/(decrease) in payables (23,581) (2,408) (15,904) (2,861)

Cash generated from/(absorbed by)operations 108,915 164,462 (43,513) (6,974)

Tax paid (12,095) (9,125) (2,933) (1,852)Tax refunded 248 252 105 –Interest paid (75) (1,447) – –

Net cash from/(used in) operating activities 96,993 154,142 (46,341) (8,826)


statements of cash flowsfor the year ended 31 March 2011



RM'000 RM'000 RM'000 RM'000

Cash flows from investing activitiesClaim received from trust account (87) 9 – –Purchase of:• property, plant and equipment 32 (625) (1,653) – –• investment in subsidiaries – – (25,563) –• investment properties (7,635) (7,772) – –• land held for property development (5) (55) – –Net cash flow on acquisition of subsidiaries 11.1 (22,599) – – –Proceeds from disposal of:• property, plant and equipment 311 311 – –• investment properties 2,000 40,735 – –• investments 96 – – –Interest received 4,188 1,509 82 6Dividends received – – 79,855 24,756

Net cash from/(used in) investing activities (24,356) 33,084 54,374 24,762

Cash flows from financing activitiesRepayment of club members' deposits (831) (991) – –Repayments of term loans – (19,115) – –Payment of finance lease liabilities (928) (769) – –Net changes in other borrowings – (66,198) – –Interest paid (120) (378) – –Dividends paid to shareholdersof the Company (12,712) (10,896) (12,712) (10,896)

Net cash from/(used in) financing activities (14,591) (98,347) (12,712) (10,896)

Net increase/(decrease) in cashand cash equivalents 58,046 88,879 (4,679) 5,040

Cash and cash equivalents at 1 April 116,733 27,854 5,606 566

Cash and cash equivalents at 31 March 174,779 116,733 927 5,606

Analysis of cash and cash equivalentsCash and deposits 174,779 116,733 927 5,606


statements of cash flowsfor the year ended 31 March 2011 (cont’d)


These notes form an integral part of and should be read in conjunction with the accompanying financialstatements.

1. GENERAL INFORMATION

1.1 Principal activities

The Company is an investment holding company and it provides strategic, financial and corporateplanning services.

The Group is an integrated commercial and residential property developer and is also involved in granitequarrying and manufacturing of aggregates, general building construction, earthworks, infrastructureworks, renting out of plant and machineries, the ownership and operation of a golf resort, themanufacture of clay bricks, supply of finished brickworks of wall and other brick structures, the provision ofsoil and concrete laboratory testing services, the provision of professional construction management andgeo-technical services, the marketing and distribution of building materials, rental of properties andmoney lending business.

1.2 Legal form and domicile

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

1.3 Registered office and principal place of business

The addresses of the registered office and principal place of business are as follows:-

Registered office6th Floor, Wisma Sin Heap Lee,346 Jalan Tun Razak,50400 Kuala Lumpur.

Principal place of business16th Floor, Wisma Sin Heap Lee,346 Jalan Tun Razak,50400 Kuala Lumpur.

1.4 Authorisation for issue

The financial statements were authorised for issue by the Directors on 14 July 2011.

2. FINANCIAL RISK MANAGEMENT POLICIES

The Group and the Company's financial risk management policies seek to ensure that adequate financialresources are available for the development of the Group and of the Company's businesses whilst managingtheir risks. The Group and the Company operate within clearly defined guidelines that are approved by theBoard and the Group and the Company's policies are to forbid speculative transactions.

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

2.1 Foreign currency risk

The Group and the Company are exposed to foreign currency risk as a result of their normal tradingactivities, where the currency denomination differs from the local currency, Ringgit Malaysia (RM). TheGroup and the Company’s policies are to keep their foreign currency risk exposure to an acceptablelevel.

notes to the financial statements31 March 2011


2. FINANCIAL RISK MANAGEMENT POLICIES (CONT’D)

2.2 Interest rate risk

The Group and the Company place surplus funds in the form of short-term deposits with reputablefinancial institutions to earn interest income based on prevailing market rates. The Group and theCompany manage their interest rate risk by placing such funds for the maturity periods of 12 months orless.

The Group and the Company's policies are to borrow principally on the floating rate basis but to retain aproportion of fixed rate debt. The objectives for the mix between floating and fixed rate borrowings areset to reduce the impact of an upward change in interest rates while enabling benefits to be enjoyed ifinterest rates fall.

2.3 Market risk

The Group and the Company’s principal exposure to market risk arises mainly from the changes in equityprices. The Group and the Company manage the risk of unfavourable changes by cautious review ofthe investments before investing and continuous monitoring of their performance and risk profiles.

2.4 Credit risk

The credit risk is controlled by the application of credit approvals, limits and monitoring procedures. This isdone through reference to published credit ratings by prime financial institutions. In the absence ofpublished ratings, an internal credit review is conducted if the credit risk is material.

2.5 Liquidity and cash flow risks

The Group and the Company seek to achieve a balance between certainty of funding even in difficulttimes for the markets or the Group and the Company and a flexible, cost-effective borrowing structure.This is to ensure that at the minimum, all projected net borrowing needs are covered by committedfacilities. Also, the objective for debt maturity is to ensure that the amount of debt maturing in any oneyear is within the Group and the Company's means to repay and refinance.

3. BASIS OF PREPARATION

3.1 Statement of compliance

The financial statements comply with Financial Reporting Standards (FRSs) and the provisions of theCompanies Act 1965 in Malaysia. These financial statements also comply with the applicable disclosureprovisions of the Listing Requirements of the Bursa Malaysia Securities Berhad.

3.2 Basis of measurement

The financial statements of the Group and of the Company have been prepared under the historicalcost basis, unless otherwise indicated in the following significant accounting policies.

3.3 Functional and presentation currency

The financial statements are presented in Ringgit Malaysia (RM), which is the Group and the Company’sfunctional currency. All financial information presented in RM had been rounded to the nearest thousand.


3. BASIS OF PREPARATION (CONT’D)

3.4 Use of estimates and judgements

The preparation of financial statements requires management to make judgements, estimates andassumptions that affect the application of policies and reported amounts of assets, liabilities, income andexpenses. The estimates and associated assumptions are based on historical experience and variousother factors that are believed to be reasonable under the circumstances, the results of which form thebasis of making judgements about carrying amounts of assets and liabilities that are rarely apparent fromother sources.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accountingestimates are recognised in the period in which the estimate is revised, if revision affects only that period,or in the period of the revision and future periods, if the revision affects both current and future periods.

Estimates and judgements

The following are the estimates and judgements made by management in the process of applying theGroup and the Company’s accounting policies that have the most significant effect on the amountsrecognised in the financial statements.

(a) Estimated useful lives of property, plant and equipment

The Group reviews annually the estimated useful lives of property, plant and equipment based onfactors such as business plan and strategies, expected level of usage and future technologicaldevelopments. Future results of operations could be materially affected by changes in theseestimates brought about by changes in the factors mentioned. A reduction in the estimated usefullives of property, plant and equipment increase recorded depreciation and decrease property, plantand equipment or vice versa.

(b) Classification between investment properties and property, plant and equipment

The Group has developed certain criteria based on FRS 140 in making judgement whether aproperty qualifies as an investment property. Investment property is a property held for earningrentals or capital appreciation or both. Judgement is made on an individual property basis todetermine whether the property qualifies as an investment property.

(c) Fair value of investment properties

Fair value of investment properties is determined by the Directors by comparing their current valuewith recent sale of similar properties in the vicinity with appropriate adjustments made to differencesin location, floor area and other relevant factors before arriving at the fair value of the investmentproperties. The determination of appropriate adjustments to the recent sale value involves a degreeof judgement before arriving at the respective investment property’s fair value.

(d) Impairment of intangible assets

The Group tests intangible assets for impairment annually in accordance with its accounting policy.More regular reviews are performed if events indicate that this is necessary.

This requires an estimation of the value in use of the cash-generating units (“CGU”) to whichintangible assets are allocated. Estimating the value in use requires the Group to make an estimateof the expected future cash flows from the CGU and also to choose a suitable discount rate in orderto calculate the present value of those cash flows.


3. BASIS OF PREPARATION (CONT’D)

3.4 Use of estimates and judgements (cont’d)

Estimates and judgements (cont’d)

(e) Property development and construction contracts

The Group recognises property development and contract revenue and costs in profit or loss byusing the percentage of completion method. The percentage of completion is determined byreference to surveys of work performed.

Significant judgement is required in determining the percentage of completion, the extent ofproperty development and contract costs incurred, the estimated total property development andcontract revenue and costs, as well as the recoverability of the development and contract projects.In making the judgement, the Group evaluates by relying on past experience and the work ofspecialists.

(f) Legal proceedings

The Group reviews outstanding legal proceedings to assess the need for provisions in the financialstatements by considering the following factors:

• Nature of the litigation, claim or assessment;• Legal processes and potential level of damages in the jurisdiction where the litigation, claim or

assessment has been brought;• Progress of the legal proceedings;• Opinions or views of legal counsel and other advisers;• Experience of similar cases; and• Decision as to how the Group will respond to the litigation, claim or assessment.

Application of accounting principles to legal proceedings is inherently difficult, given the complexnature of the facts and law involved as it requires the Group to make determinations about variousfactual and legal matters beyond its control.

The Group recognises provision in the statement of financial position for pending litigation when:

• An unfavourable outcome is probable; and• A reliable estimate of the amount can be made.

In instances where the above criteria remain unmet, a contingent liability may be disclosed in notesto the financial statements.

4. SIGNIFICANT ACCOUNTING POLICIES

4.1 New and revised Financial Reporting Standards (FRSs), Amendments to FRSs, Improvements to FRSs and ICInterpretation (“Standards and IC Interpretation”) that are effective for current financial year

The following Standards and IC Interpretation are applicable to the Group and the Company, which areeffective for the Group and the Company’s financial year beginning on 1 April 2010:-

New and Revised FRSs, and IC Interpretation

FRS 7 Financial Instruments: DisclosuresFRS 8 Operating SegmentsFRS 101 Presentation of Financial Statements (Revised)FRS 123 Borrowing Costs (Revised)FRS 139 Financial Instruments : Recognition and MeasurementIC Interpretation 10 Interim Financial Reporting and Impairment


4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.1 New and revised Financial Reporting Standards (FRSs), Amendments to FRSs, Improvements to FRSs and ICInterpretation (“Standards and IC Interpretation”) that are effective for current financial year (cont’d)

Amendments to FRSs and Improvements to FRSs

FRS 1 First-time Adoption of Financial Reporting StandardsFRS 127 Consolidated and Separate Financial Statements : Cost of an

Investment in a Subsidiary, Jointly Controlled Entity or AssociateImprovements to FRSs (2009)

• FRS 7: Financial Instruments: Disclosures

This standard requires disclosures in financial statements that enable users to evaluate the significance offinancial instruments for the entity’s financial position and performance, and the nature and extent of risksarising from financial instruments to which an entity is exposed and how these risks are managed. Thisstandard requires both qualitative disclosures describing management’s objective, policies and processesfor managing those risks, and quantitative disclosures providing information about the extent to which anentity is exposed to risk, based on information provided internally to the entity’s key managementpersonnel.

The application of FRS 7 resulted in a more robust and extensive disclosures on financial instruments andthe related risks. The Group and the Company have adopted FRS 7 prospectively on 1 April 2010 inaccordance with the transitional provisions, and accordingly, no comparative information has beenpresented.

Other than the additional disclosures in Notes 21, 34.1 and 34.4 to the financial statements, theapplication of this standard has no impact on the financial result of the Group and the Company.

• FRS 8: Operating Segments

FRS 8 replaces FRS 1142004 Segment Reporting requires the identification of operating segments based oninternal reports that are reviewed by the Group’s chief operating decision maker in order to allocateresources to the segments and to assess their performance. The standard also requires the disclosure ofinformation about the products and services provided by the segments, the geographical areas in whichthe Group operates, and revenue from major customers.

The Group has adopted FRS 8 retrospectively. Other than the restatement disclosed in Note 40 to thefinancial statements, the Group concludes that the reportable operating segments determined inaccordance with FRS 8 are same as the business segments previously identified under FRS 1142004.

• FRS 101: Presentation of Financial Statements (Revised)

This standard sets the overall requirements for the presentation of financial statements, guidelines for theirstructure and the minimum requirements for their content. The standard separates owner and non-ownerchanges in equity, whereby the statement of changes in equity will include only details of transactionswith owners, and all non-owner changes in equity presented separately. In addition, the standardintroduces the statement of comprehensive income, which presents income and expense itemsrecognised in profit and loss, together with all other items of recognised income and expense, either inone single statement, or in two linked statements. The Group and the Company have elected to presentthis statement as one single statement.

In addition, a statement of financial position is required at the beginning of the earliest comparativeperiod following a change in accounting policy, the correction of an error or the classification of items inthe financial statements.

This standard also requires the Group and the Company to make new disclosures to enable users of thefinancial statements to evaluate the Group and the Company’s objectives, policies and processes formanaging capital.



4.1 New and revised Financial Reporting Standards (FRSs), Amendments to FRSs, Improvements to FRSs and ICInterpretation (“Standards and IC Interpretation”) that are effective for current financial year (con’d)

• FRS 101: Presentation of Financial Statements (Revised) (cont’d)

Comparative information has been re-presented so that it conforms with the current year’s presentation.In addition, other than the additional disclosures in Note 33 to the financial statements, the application ofthis standard has insignificant impact on the financial result of the Group and the Company as thechanges introduced are presentational in nature.

• FRS 123 : Borrowing Costs (Revised)

This standard replaces FRS 1232004 and requires an entity to capitalise borrowing costs directly attributableto the acquisition, construction or production of a qualifying asset (one that takes a substantial period oftime to get ready for use or sale) as part of the cost of that asset. In addition, this standard removes theoption of immediately expensing those borrowing costs.

The application of this standard has no impact on the financial position or results of the Group and theCompany as the Group and the Company’s current policy of borrowing costs aligns with therequirements of the standard.

• FRS 139: Financial Instruments: Recognition and Measurement

This standard establishes the principles for the recognition, derecognition and measurement of anentity’s financial instruments and for hedge accounting.

The application of FRS 139 has resulted in the following changes to the accounting policies related torecognition and measurement of financial instruments:

Available-for-sale financial assets

Prior to 1 April 2010, available-for-sale financial assets such as other investments were stated at cost lessaccumulated impairment losses.

FRS 139 requires the Group and the Company to measure available-for-sale financial assets at:

• fair value initially. Subsequent to initial measurement, any unrealised gains or losses are required tobe recognised directly in other comprehensive income until the investment is derecognised orimpaired; or

• cost if it is impracticable to estimate the fair values of the investment in unquoted equity instrumentbecause of the lack of quoted market prices and inability to estimate its fair value.

Loans and receivables

Prior to 1 April 2010, loans and receivables are stated at cost less an allowance for any uncollectibleamounts.

FRS 139 requires the Group and the Company to measure loans and receivables initially at fair value.Subsequent to initial measurement, loans and receivables are measured at amortised cost using theeffective interest rate method. Gains and losses are recognised in profit or loss when the loans andreceivables are derecognised, impaired or through the amortisation process.

Impairment of financial assets

Prior to 1 April 2010, trade and other receivables are carried at cost less an allowance for anyuncollectible amounts. An estimate for doubtful debts is made when collection of the full amount is nolonger probable. Bad debts are written off as incurred.




• FRS 123 : Borrowing Costs (Revised) (cont’d)

Impairment of financial assets (cont’d)

FRS 139 requires the Group and the Company to assess, at each reporting date, whether there is anyobjective evidence that a financial asset or a group of financial assets are impaired. Impairment loss ismeasured as the difference between the receivables’ carrying amount and the present value ofestimated future cash flows discounted at the receivables’ original effective interest rate.

Financial liabilities

Prior to 1 April 2010, payables are stated at cost.

FRS 139 requires the Group and the Company to measure payables initially at fair value. Subsequent toinitial measurement, payables are measured at amortised cost using effective interest rate method.Gains and losses are recognised in profit or loss when the payables are derecognised, and through theamortisation process.

Financial guarantee contracts

Prior to 1 April 2010, financial guarantees given to banks for credit facilities granted to subsidiaries wereaccounted for and disclosed as contingent liabilities in the financial statements.

FRS 139 requires the Group and the Company to measure unexpired financial guarantees issued initiallyat fair values plus transaction costs. Subsequent to initial measurement, financial guarantees areamortised to profit or loss. When settlement of a financial guarantee probable, an estimate of theobligation is made.

There is no recognition of unexpired financial guarantees issued if the:-

• utilisation of the credit facilities by the subsidiaries is minimal; and/or• probability of the subsidiaries defaulting on the credit lines is remote.

All unexpired financial guarantees issued are disclosed as contingent liabilities in Note 35 to the financialstatements as the Directors regard the fair value of financial guarantees is expected to be insignificantbasing on the aforesaid criteria.

The Group and the Company have adopted FRS 139 prospectively on 1 April 2010 in accordance withthe transitional provisions, and accordingly, no comparative information has been presented.

The application of FRS 139 has insignificant impact on the financial results of the Group and theCompany other than the new accounting policies as disclosed in Notes 4.6, 4.10, 4.15, 4.22 and 4.24 tothe financial statements.

• IC Interpretation 10 : Interim Financial Reporting and Impairment

IC Interpretation 10 prohibits the reversal of an impairment loss recognised in a previous interim period inrespect of goodwill or an investment in either an equity instrument classified as available-for-sale or afinancial asset carried at cost.




• IC Interpretation 10 : Interim Financial Reporting and Impairment (cont’d)

The Group and the Company have adopted IC Interpretation 10 prospectively on 1 April 2010. Theapplication of this Interpretation has no impact on the financial position or results on the Group and theCompany as the current impairment policy of the Group and the Company aligns with the requirementsof the Interpretation.

• 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, JointlyControlled Entity or Associate

The amendments allow first time adopters to use a deemed cost of either fair value or the carryingamount under previous accounting practice to measure the initial cost of investment in subsidiaries, jointlycontrolled entities and associates in the separate financial statements.

The amendments also remove the definition of cost method from FRS 127 and require investors to presentdividends as income in the separate financial statements. Distinction between pre- and post-acquisitionprofits is no longer required.

The Group and the Company have adopted these amendments prospectively on 1 April 2010 inaccordance with the transitional provisions, and accordingly, no comparative information has beenpresented.

The application of these amendments has no impact on the financial result of the Group. The impact onthe financial result of the Company upon application of these amendments is disclosed in Note 11 to thefinancial statements.

• Improvements to FRSs (2009)

These improvements contain various amendments that result in accounting changes for recognition,measurement, presentation and disclosure purposes.

There is insignificant impact on the Group and the Company’s financial statements upon initialapplication of these improvements to FRSs.

4.2 New and revised FRSs, Amendments to FRSs, Improvements to FRSs, IC Interpretation and Amendments toIC Interpretation (“Standards and Interpretation”) that are yet to be effective for current financial year

No early adoption is made by the Group and the Company on the following Standards andInterpretation that are expected to have application to the Group and the Company’s operations.These Standards and IC Interpretation have been issued by the MASB, but yet to be effective:-

Effective forfinancial periodsbeginning on or

New and Revised FRSs and IC Interpretation after

FRS 3 Business Combinations (Revised) 1 July 2010FRS 124 Related Party Disclosures 1 January 2012FRS 127 Consolidated and Separate Financial Statements

(Revised) 1 July 2010IC Interpretation 15 Agreements for the Construction of Real Estate 1 July 2010



4.2 New and revised FRSs, Amendments to FRSs, Improvements to FRSs, IC Interpretation and Amendments toIC Interpretation (“Standards and Interpretation”) that are yet to be effective for current financial year(cont’d)

Effective forfinancial periodsbeginning on or

Amendments to FRSs, Amendments to IC Interpretation and Improvements to FRSs after

FRS 7 Financial Instruments: Disclosures 1 January 2011IC Interpretation 15 Agreements for the Construction of Real Estate 1 January 2012Improvements to FRSs (2009) 1 July 2010Improvements to FRSs (2010) 1 January 2011

• FRS 3 : Business Combinations (Revised)

This standard introduces a number of changes in the accounting for business combinations occurringafter 1 July 2010. These include changes that affect the valuation of non-controlling interest, theaccounting for transaction costs, the initial recognition and subsequent measurement of a contingentconsideration and business combinations achieved in stages. These changes will impact the amount ofgoodwill recognised, the reported results in the period that an acquisition occurs and future reportedresults.

The Group and the Company will adopt this standard prospectively. The standard is expected to haveimpact on the Group and the Company’s financial statements upon its initial application in respect of:-

• future acquisition of subsidiary; and• future acquisition of a business arising from a transaction or other event that meets the definition of a

business combination.

• FRS 124 : Related Party Disclosures

This standard simplifies the definition of related party, clarifies its intended meaning and eliminatesinconsistencies from the definition. It includes a partial exemption from disclosures for government-relatedentities and requires disclosure of related party transactions between government-related entities only ifthe transactions are individually or collectively significant.

This standard is expected to have insignificant impact on the Group and the Company’s financialstatements upon its initial application.

• FRS 127: Consolidated and Separate Financial Statements (Revised)

This standard requires that a change in the ownership interest of a subsidiary (without loss of control) isaccounted for as a transaction with owners in their capacity as owners and to be recorded in equity.Therefore, such transaction will no longer give rise to goodwill, nor will it give rise to a gain or loss.Furthermore, the amended standard changes the accounting for losses incurred by the subsidiary as wellas loss of control of a subsidiary.

The Group and the Company will adopt this standard prospectively. The standard is expected to haveimpact on the Group and the Company’s financial statements upon its initial application in respect of:-

• loss of control of subsidiary; and• transactions with non-controlling interests.



4.2 New and revised FRSs, Amendments to FRSs, Improvements to FRSs, IC Interpretation and Amendments toIC Interpretation (“Standards and Interpretation”) that are yet to be effective for current financial year(cont’d)

• IC Interpretation 15 : Agreements for the Construction of Real Estate andAmendments to IC Interpretation 15 : Agreements for the Construction of Real Estate

This Interpretation clarifies when and how revenue and related expenses from the sale of a real estateunit should be recognised if an agreement between a developer and a buyer is reached before theconstruction of the real estate is completed. Furthermore, the Interpretation provides guidance on howto determine whether an agreement is within the scope of FRS 111 Construction Contracts or FRS 118Revenue.

The amendments of this interpretation merely defer the effective date and consequential amendments ofthis interpretation from 1 July 2010 to 1 January 2012.

The Group will adopt this standard retrospectively. The standard is expected to have impact on theGroup’s financial statements upon its initial application. Currently, the Group recognises revenue arisingfrom property development projects using the percentage of completion method. Upon the adoption ofthis interpretation, the Group may be required to change its accounting policy to recognise suchrevenues at completion, or upon or after delivery. The Group is in the process of making an assessmentof the impact of this interpretation.

• Amendments to FRS 7 : Financial Instruments: Disclosures

The amendments require enhanced disclosures about fair value measurement and liquidity risk. Inparticular, the amendment requires disclosure of fair value measurements by level of a fair valuemeasurement hierarchy.

The amendments are expected to have insignificant impact on the Group and the Company’s financialstatements upon their initial application.

• Improvements to FRSs (2009 and 2010)

These improvements contain various amendments that result in accounting changes for recognition,measurement, presentation and disclosure purposes.

These improvements are expected to have insignificant impact on the Group and the Company’sfinancial statements upon their initial application.

4.3 Group financial statements

(i) Subsidiaries

Subsidiaries are those entities controlled by the Company. Control exists when the Company has thepower, directly or indirectly, to govern the financial and operating policies of an entity so as toobtain benefits from its activities. The financial statements of subsidiaries are included in the Groupfinancial statements from the date that control commences until the date that control ceases.Subsidiaries are consolidated using the purchase method of accounting, except for certainsubsidiaries which are consolidated using the merger method.

Under the purchase method of accounting, the cost of an acquisition is measured as the fair valueof the assets given, equity instruments issued and liabilities incurred or assumed at the date ofexchange, plus costs directly attributable to the acquisition. Identifiable assets acquired andliabilities and contingent liabilities assumed in a business combination are measured initially at theirfair values at the acquisition date, irrespective of the extent of any minority interest. The excess ofthe cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquiredis recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of thesubsidiary acquired, the difference is disclosed as negative goodwill.



4.3 Group financial statements (cont’d)

(i) Subsidiaries (cont’d)

The interest of minority shareholders is measured at the minority’s proportion of the fair values of theassets and liabilities recognised.

Under the merger method of accounting, the results of the subsidiaries are included in the Groupfinancial statements for the whole of the current and comparative periods as if these subsidiaries hadbeen combined throughout these periods. On consolidation, the difference between the carryingamount of the investment over the nominal value of the shares acquired is recognised throughreserves.

On derecognition or disposal of a subsidiary, the difference between net disposal proceeds, if any,and the Group’s share of the subsidiary’s net identifiable assets as of the date of disposal isrecognised in profit or loss.

(ii) Associates

Associates are those entities in which the Group exercises significant influence. Significant influence isthe power to participate in the financial and operating policy decisions of the associates but has nocontrol over those policies. Associates are included in the Group financial statements by the equitymethod of accounting.

Under the equity method, the investment in associates is measured in the Group statement offinancial position at cost plus post-acquisition changes in the Group’s share of net assets of theassociates. Goodwill relating to associates is included in the carrying amount of the investment. Anyexcess of the Group’s share of net fair value of the associate’s identifiable assets, liabilities andcontingent liabilities over the cost of the investment is excluded from the carrying amount of theinvestment and is instead included as income in the determination of the Group’s share of theassociate’s profit or loss for the period in which the investment is acquired.

When the Group’s share of losses in an associate equals or exceeds its interest in the associate, theGroup discontinues to recognise further losses, unless it has incurred obligations or made paymentson behalf of the associate.

After application of the equity method, the Group determines whether it is necessary to recognisean additional impairment loss on the Group’s investment in its associates. The Group determines ateach reporting date whether there is any objective evidence that the investment in the associate isimpaired. If this is the case, the Group calculates the amount of impairment as the differencebetween the recoverable amount of the associate and its carrying value and recognises the amountin profit or loss.

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

(iii) Balances and transactions eliminated on consolidation

Intragroup balances are eliminated in preparing the Group financial statements except those withassociates which are not eliminated on the basis of equity accounting.

Intragroup transactions and any unrealised gains arising from intragroup transactions are eliminated;unrealised losses are also eliminated unless there is evidence of impairment of the intragrouptransacted assets. Unrealised gains arising from transactions with associates are eliminated to theextent of the Group’s interest in these entities, against the investment in associates. Unrealised lossesare eliminated in the same way as unrealised gains, but to the extent that there is no evidence ofimpairment of the intragroup transacted assets.



4.4 Revenue recognition

(i) Investment income

Dividend income from investments is recognised in profit or loss when the right to receive isestablished.

(ii) Income from property development and construction contracts

The Group recognises property development and construction contracts revenues using thepercentage of completion method as described in Notes 4.19 and 4.20 respectively.

(iii) Interest income and rental income

Interest income and rental income are recognised on an accrual basis.

(iv) Income from sales of goods and services

Sales of goods are recognised when a Group entity has delivered products to the customer; thecustomer has accepted the products and collectibility of the related receivables is reasonablyassured.

Sales of services are recognised in the accounting period in which the services are rendered, byreference to completion of the specific transaction assessed on the basis of the actual serviceprovided as a proportion of the total services to be provided.

4.5 Employee benefits

(i) Short-term benefits

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

(ii) Defined contribution plans

As required by law, the Group and the Company make contributions to the state pension scheme,the Employees Provident Fund (“EPF”). Such contributions are recognised as an expense in profit orloss as incurred.

4.6 Borrowings and borrowing costs

Borrowings are initially recognised at the fair value of the consideration received less directly attributabletransaction costs. After initial recognition, borrowings are subsequently measured at amortised cost usingthe effective interest method. Gains and losses are recognised in profit or loss when the liabilities arederecognised as well as through the amortisation process.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,which are assets that necessarily take a substantial period of time to get ready for their intended use orsale are capitalised as part of the cost of those assets, until such time the assets are substantially readyfor their intended use or sale.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.



4.7 Income taxes

Income tax expense represents the sum of the current tax and deferred tax.

The current tax is the amount of income taxes payable in respect of the taxable profit for a period.Taxable profit differs from net profit as reported in profit or loss because it excludes items of income orexpense that are taxable or deductible in other periods and it further excludes items that are nevertaxable or deductible. The Group and the Company’s liabilities for current tax are calculated using taxrates that have been enacted or substantively enacted by the reporting date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carryingamount of assets and liabilities in the financial statements and the corresponding tax basis used in thecomputation of taxable profit, and is accounted for using the liability method. Deferred tax liabilities aregenerally recognised for all taxable temporary differences and deferred tax assets are recognised to theextent that it is probable that taxable profits will be available against which deductible temporarydifferences can be utilised. No deferred tax assets and liabilities are recognised if the temporarydifference arises from the initial recognition of other assets and liabilities in a transaction that affectsneither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to theextent that it is no longer probable that sufficient taxable profit will be available to allow all or part of theasset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability issettled or the asset realised. Deferred tax is recognised in profit or loss, except when it relates to itemsrecognised directly in equity, in which case the deferred tax is also recognised in equity.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxationauthority and the Group and the Company intend to settle their current tax assets and liabilities on a netbasis.

4.8 Financial instruments

Financial instruments are recognised in the statements of financial position when the Group and theCompany become a party to the contractual provisions of the instruments.

Financial instruments carried on the statements of financial position include investments, cash anddeposits, receivables (excluding prepaid operating expenses), payables, borrowings and share capital.The particular recognition methods adopted are disclosed in the individual accounting policy statementsassociated with each item.

Financial instruments are presented as liabilities or equity in accordance with the substance of thecontractual arrangement. Interest, dividends, gains and losses relating to a financial instrument presentedas liability are reported as expense or income. Distributions to holders of financial instruments presentedas equity are recognised directly in equity. Financial instruments are offset when the Group and theCompany have legally enforceable right to set off the recognised amounts and intends either to settleon a net basis, or to realise the asset and settle the liability simultaneously.

4.9 Impairment of non-financial assets

The carrying amounts of assets, except assets presented as construction contracts, property developmentcosts, inventories, deferred tax assets and financial assets, are reviewed for impairment when there is anindication that the assets might be impaired. For goodwill and intangible assets with indefinite useful life,the recoverable amount is estimated at each reporting date.



4.9 Impairment of non-financial assets (cont’d)

Impairment is measured by comparing the carrying amounts of the assets with their recoverableamounts. The recoverable amount is the higher of an asset's net selling price and its value in use, whichis measured by reference to discounted future cash flows. Recoverable amounts are estimated forindividual assets, or if it is impossible, for the cash-generating unit (CGU). For the purpose of impairmenttesting, assets are grouped together into the smallest group of assets that generates cash inflows fromcontinuing use that are largely independent of the cash inflows of other assets or groups of assets (the“cash-generating unit”). The goodwill acquired in a business combination, for the purpose of impairmenttesting, is allocated to cash-generating units that are expected to benefit from the synergies of thecombination.

An impairment loss is recognised in profit or loss immediately, unless the asset is carried at revaluedamount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent ofpreviously recognised revaluation surplus for the same asset.

Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carryingamount of any goodwill allocated to the units and then to reduce the carrying amount of the otherassets in the unit (group of units) on a pro rata basis.

In respect of goodwill, no reversal is made for impairment loss previously recognised. In respect of otherassets, subsequent increase in the recoverable amount of an asset is treated as reversal of the previousimpairment loss. It is recognised to the extent of the carrying amount of the asset that would havedetermined (net of amortisation and depreciation) had no impairment loss been recognised. Thereversal is recognised in profit or loss immediately, unless the asset is carried at revalued amount. Areversal of an impairment loss on a revalued asset is recognised directly to revaluation surplus. However,to the extent that an impairment loss on the same revalued asset was previously recognised as anexpense in profit or loss, a reversal of that impairment loss is recognised as income in profit or loss.

4.10 Impairment of financial assets

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

(i) Available-for-sale financial assets

Significant or prolonged decline in fair value below cost, significant financial difficulties of the issuer orobligor, and the disappearance of an active trading market are considerations to determinewhether there is objective evidence that investments classified as available-for-sale financial assetsare impaired.

If an available-for-sale financial asset is impaired, an amount comprising the difference between itscost (net of any principal payment and amortisation) and its current fair value, less any impairmentloss previously recognised in profit or loss, is transferred from equity to profit or loss.

No reversal of impairment losses in profit or loss on available-for-sale equity instruments is made in thesubsequent periods. Increase in fair value, if any, subsequent to impairment loss is recognised inother comprehensive income.

(ii) Unquoted equity securities carried at cost

If there is objective evidence (such as significant adverse changes in the business environment wherethe issuer operates, probability of insolvency or significant financial difficulties of the issuer) that animpairment loss on financial assets carried at cost has been incurred, the amount of the loss ismeasured as the difference between the asset’s carrying amount and the present value ofestimated future cash flows discounted at the current market rate of return for a similar financialasset.

No reversal is made for such impairment losses in subsequent periods.



4.10 Impairment of financial assets (cont’d)

(iii) 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 hasbeen incurred, the Group and the Company consider factors such as the probability of insolvency orsignificant 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 to beunimpaired individually are subsequently assessed for impairment on a collective basis based onsimilar risk characteristics. Objective evidence of impairment for a portfolio of receivables couldinclude the Group and the Company’s past experience of collecting payments, an increase in thenumber of delayed payments in the portfolio past the average credit period and observablechanges 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 betweenthe asset’s carrying amount and the present value of estimated future cash flows discounted at thefinancial asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financialassets with the exception of trade receivables, where the carrying amount is reduced through theuse of an allowance account. When a trade receivable becomes uncollectible, it is written offagainst the allowance account.

If in a subsequent period, the amount of the impairment loss decreases and the decrease can berelated objectively to an event occurring after the impairment was recognised, the previouslyrecognised impairment loss is reversed to the extent that the carrying amount of the asset does notexceed its amortised cost at the reversal date. The amount of the reversal is recognised in profit orloss.

4.11 Revaluations

The Group adopts the policy to revalue land and/or buildings held as property, plant and equipment atleast once in every 5 years or at such shorter period as may be considered to be appropriate based onthe advice of external professional valuers and appraisers and/or Directors’ valuation. Any surplus ordeficit arising from the revaluation exercise is to be recognised in the Revaluation Surplus Reserve, exceptthat a deficit is recognised in profit or loss to the extent that it is in excess of any surplus held in theformer relating to previous revaluation of that same asset. On disposal of revalued assets, amounts inrevaluation reserve relating to those assets are transferred to retained profits.

4.12 Foreign currencies

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

Foreign currency transactions are translated into the functional currency using the exchange ratesprevailing at the dates of the transactions. At the reporting date, non-monetary items are translated atreporting date using historical rates or rates prevailing when the fair value of the assets was determined.Monetary items are translated at the closing rate.

Foreign exchange gains and losses resulting from the settlement of such transactions and from thetranslation of monetary assets and liabilities at closing rate are recognised in profit or loss. Foreigncurrency translation differences for non-monetary items such as investment properties held at fair valuethrough profit or loss, are recognised in profit or loss as part of the fair value gain or loss. Foreigncurrency translation differences for non-monetary items such as property, plant and equipment atvaluation are recognised directly in equity or profit or loss, where appropriate, as part of the revaluationsurpluses or deficits.



4.12 Foreign currencies (cont’d)

The exchange rate used for the main foreign currency in the Group and in the Company is as follows:-

Period end rate2011 2010RM RM

United States (US$1) 3.02 3.27

4.13 Property, plant and equipment

Property, plant and equipment are measured at cost and valuation less accumulated depreciation andimpairment losses.

Depreciation is recognised in profit or loss on a straight line basis over the estimated useful lives of itemsof property, plant and equipment, except those leased under finance lease, where applicable. If there isno reasonable certainty that the ownership will be transferred to the Group by the end of the lease term,an item of property, plant and equipment is depreciated over the shorter of its useful life and the leaseterm.

No depreciation is recognised for golf course and club house.

Plant and machinery directly related to production is depreciated on a unit of production methodwhereby the rate used is based on the production during the period bear to the total estimatedproduction to be obtained from the relevant asset.

The principal annual rates adopted are as follows:-

Buildings – 2%Plant & machinery – 5% to 20%Motor vehicles – 20%Furniture, fittings & equipment – 10% to 20%

On derecognition or disposal of an item of property, plant and equipment, the difference between netdisposal proceeds, if any, and its carrying amount is recognised in profit or loss.

Expenditure incurred to replace a component of an item of property, plant and equipment that isrecognised separately, including major inspection and overhaul expenditure, is capitalised. Othersubsequent expenditure is capitalised only when it increases the future economic benefits embodied inthe item of property, plant and equipment. All other expenditure is recognised in profit or loss as anexpense as incurred.

4.14 Investments

Investments in subsidiaries and associates are measured at cost less accumulated impairment losses.

On derecognition or disposal of an investment, the difference between net disposal proceeds, if any,and its carrying amount is recognised in profit or loss.



4.15 Available-for-sale financial assets

Available-for-sale financial assets comprise investments in equity instruments that are designated asavailable-for-sale.

Available-for-sale financial assets are initially recognised at their fair values plus directly attributabletransaction costs. After initial recognition, available-for-sale financial assets are measured at fair valuesand are subject to review for impairment. Any gains or losses from changes in fair values of the financialassets are recognised in other comprehensive income, except that impairment losses, foreign exchangegains and losses on monetary instruments and, gains and losses of hedged items attributable to hedgerisks of fair value hedges are recognised in profit or loss. The cumulative gain or loss previouslyrecognised in other comprehensive income is reclassified from equity to profit or loss as a reclassificationadjustment when the financial asset is derecognised. Interest income calculated using the effectiveinterest method is recognised in profit or loss. Dividends on an available-for-sale equity instrument arerecognised in profit or loss when the Company’s right to receive payment is established.

Investments in equity instruments that have no quoted market price in an active market and whose fairvalues are unable to be reliably measured are measured at cost less accumulated impairment losses.

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

Available-for-sale financial assets are derecognised when the contractual right to receive cash flows fromthe assets have expired. On derecognition of an available-for-sale financial asset in its entirety, thedifference between the carrying amount and the sum of the consideration received and any cumulativegain or loss that had been recognised in other comprehensive income is recognised in profit or loss.

4.16 Investment properties

Investment properties are measured initially at cost, including transaction costs. The carrying amountincludes the cost of replacing part of an existing investment property at the time that cost is incurred ifthe recognition criteria are met; and excludes the costs of day-to-day servicing of an investmentproperty. Subsequent to initial recognition, investment properties are measured at fair value, whichreflects market conditions at the reporting date. Gains or losses arising from changes in the fair values ofinvestment properties are recognised in profit or loss in the period which they arise.

Investment property is derecognised when either it has been disposed of or when investment property ispermanently withdrawn from use and no future economic benefit is expected from its disposal. Any gainor loss on the disposal or retirement of an investment property is recognised in profit or loss in the periodof disposal or retirement.

Transfers are made to investment property when, and only when, there is a change in use, evidenced byending of owner-occupation, commencement of an operating lease to another party or ending ofconstruction or development. Transfers are made from investment property when, and only when, thereis a change in use, evidenced by commencement of owner-occupation or commencement ofdevelopment with a view to sale.

For a transfer from investment property to owner-occupied property or inventories, the deemed cost ofproperty for subsequent accounting is its fair value at the date of change in use. If the propertyoccupied by the Group and by the Company as an owner-occupied property becomes an investmentproperty, the Group and the Company account for such property in accordance with the policy statedunder property, plant and equipment up to the date of change in use. For a transfer from inventories toinvestment property, any difference between the fair value of the property at that date and its previouscarrying amount is recognised in profit or loss. When the Group and the Company complete theconstruction or development of a self-constructed investment property, any difference between the fairvalue of the property at that date and its previous carrying amount is recognised in profit or loss.



4.17 Intangible assets

Intangible assets are measured at cost less accumulated amortisation and impairment losses.

(i) Goodwill

Goodwill and negative goodwill represent the difference between the acquisition cost and the fairvalue of the identifiable net assets of subsidiaries acquired attributable to the Group’s ownershipinterest in these subsidiaries.

Goodwill is measured at cost less accumulated impairment losses.

Negative goodwill is recognised immediately in profit or loss in which it arises.

(ii) Research and development

Research expenditure is recognised as an expense as incurred. Costs incurred on developmentprojects relating to the design and testing of new or improved products are recognised as intangibleassets to the extent that such expenditure is expected to generate future economic benefits. Otherdevelopment expenditures are recognised as an expense as incurred. Development costs previouslyrecognised as an expense are not recognised as an asset in a subsequent period.

Development costs that have been capitalised are amortised from the commencement of thecommercial production of the product on a straight line basis over the period of their expectedbenefit of 25 years.

4.18 Exploration cost

Exploration cost is recognised as an expense as incurred. When a decision is taken that a quarryproperty is economically feasible and should be developed for commercial production, all furtherdirectly attributable exploration cost is recognised as tangible assets to the extent that such expenditure isexpected to generate future economic benefits. Exploration cost is derecognised to profit or loss when:

• it is determined that further exploration activities will yield no commercial quantities of reserves, or• no further exploration drilling is planned; or• the right to explore in the specific area has expired or is surrendered.

Capitalised exploration cost is measured at cost less accumulated impairment losses.

4.19 Property development activities

(i) Property development revenue

The Group recognises property development revenue using the percentage of completion method,determined primarily by reference to surveys of work performed. Where property developmentoutcome is unable to be reliably determined, property development revenue is recognised only tothe extent of the recoverable costs. Revenue recognition commences when legal binding sale andpurchase agreement is signed on property units.

Additional revenue due to variation in development work is recognised if it is probable that thecustomer will approve the variation and the amount can be reliably measured.



4.19 Property development activities (cont’d)

(ii) Land held for property development

Land held for property development is measured at cost less accumulated impairment losses. Costsassociated with the acquisition of land include the purchase price of the land, professional fees,stamp duties, commissions, conversion fees and other relevant levies.

Such asset is transferred to property development costs when development activities havecommenced and when it can be demonstrated that the development activities can be completedwithin the normal operating cycle.

(iii) Property development costs

Property development costs are measured at lower of cost and net realisable value. Propertydevelopment costs comprise all costs that are directly attributable to development activities or thatcan be allocated on a reasonable basis to such activities including borrowing costs.

The property development costs on property units sold are recognised as an expense in the period inwhich they are incurred to match the attributable revenue recognised. If estimates of costs tocomplete property development (including costs to be incurred over the defects liability period)indicate loss, the expected loss is recognised as an expense immediately in the period in which theyare identified.

Net realisable value is the estimated selling price in the ordinary course of business less theestimated costs of completion inclusive of expected loss and selling expenses.

Property development costs expected to be incurred on property development are based onestimates of total property development costs at completion. These estimates are reviewed andrevised periodically throughout the lives of the property development and adjustments to costsresulting from such revisions are recorded in the accounting period in which the revisions are made.

(iv) Accrued and progress billings

The excess of revenue recognised in profit or loss over the billings to purchasers is presented as anasset as accrued billings.

The excess of billings to purchasers over revenue recognised in profit or loss is presented as a liabilityas progress billings.

(v) Completed property units

Completed property units remain unsold are transferred to inventories.

The accounting policy in respect of inventories is set out in Note 4.21.

(vi) Transfer of land

Where a land presented as property, plant and equipment is measured at valuation, such land istransferred to land held for property development and/or property development costs at its carryingamount as surrogate cost.



4.20 Construction contracts

(i) Contract revenue

The Group recognises contract revenue using the percentage of completion method, determinedprimarily by reference to surveys of work performed.

A prudent estimate of the profit attributable to work performed is recognised once the outcome ofthe contract work can be assessed with reasonable certainty. Where contract work outcome isunable to be reliably determined, revenue is recognised to the extent of the recoverable costs butno profit is recognised. In all cases, anticipated losses are recognised in full.

Profits expected to be realised on contract work are based on estimates of total revenues and costat completion. These estimates are reviewed and revised periodically throughout the lives of thecontract works and adjustments to profits resulting from such revisions are recorded in theaccounting period in which the revisions are made. If estimates of costs to complete contract workindicate losses, recognition is made for the full losses anticipated in the period in which they areidentified.

Claim for additional contract revenue is recognised if it is probable that the claim will result inadditional revenue and the amount can be reliably estimated.

(ii) Amount due from/to contract customers

Construction contract measured at costs plus attributable profits less anticipated losses and progressbillings is presented as an asset as amount due from customers for contract works.

The excess of progress billings over costs plus attributable profits less anticipated losses is presented asa liability as amount due to customers for contract works.

Costs consist of direct materials, direct labour, direct overhead, sub-contract charges andattributable expenses.

4.21 Inventories

Inventories are measured at the lower of cost and net realisable value. Cost is determined on thefollowing bases:-

Category Basis

Completed property units Specific identification or relative sale valueRaw materials, goods for resaleand spare parts FIFO (first-in-first-out)

Work in progress and finished goods Weighted average

Cost of completed property units comprises direct cost of construction and proportionate land anddevelopment costs.

Cost comprises materials, direct labour cost and an appropriate proportion of production overheads.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimatedcosts of completion and selling expenses.



4.22 Receivables and payables

Receivables are initially recognised at fair value and subsequently measured at amortised cost using theeffective interest method less impairment loss. Gains and losses are recognised in profit or loss when thereceivables are derecognised or impaired, as well as through the amortisation process.

If there is objective evidence that an impairment loss on receivables carried at amortised cost has beenincurred, the amount of the loss is measured as the difference between the asset’s carrying amount andthe present value of estimated future cash flows (excluding future credit losses that have not beenincurred) discounted at the financial asset’s original effective interest rate (i.e. the effective interest ratecomputed at initial recognition). The carrying amount of the asset is reduced through the use of anallowance account. The amount of the loss is recognised in profit or loss.

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

Payables are initially recognised at fair value and subsequently measured at amortised cost using theeffective interest method.

Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as throughthe amortisation process.

4.23 Leases

(i) Finance leases

Leases in which the Group assumes substantially all the risks and rewards of ownership are presentedas finance leases. An item of property, plant and equipment leased by way of finance lease ismeasured at an amount equal to the lower of its fair value and the present value of the minimumlease payments at the inception of the lease.

In calculating the present value of the minimum lease payments, the discount rate is the interest rateimplicit in the lease, if this is practicable to determine; otherwise, the incremental borrowing rate ofthe Group is used.

(ii) Operating leases

Leases under which all the risks and benefits of ownership are retained by the lessor are presentedas operating leases. Payments made under operating leases are recognised in profit or loss on astraight line basis over the lease term.

Leasehold land held for own use is presented as an operating lease and the up-front paymentrepresents prepaid lease payments. These up-front payments are expensed to profit or loss to matchthe inflow of benefits accrued.

Leasehold buildings held for own use remain presented in property, plant and equipment as they arefinance leases, where substantially all the risks and rewards incidental to their ownership is transferredto the Group and to the Company. The leasehold buildings are depreciated on a straight line basisover their lease terms.



4.24 Financial guarantee contracts

The Group and the Company have issued corporate guarantee to banks for borrowings of its subsidiaries.These guarantees are financial guarantees as they require the Group and the Company to reimburse thebanks if the subsidiaries fail to make principal or interest payments when due in accordance with theterms of their borrowings.

Financial guarantees are initially recognised at their fair values plus transaction costs in the statements offinancial position. Subsequent to initial measurement, financial guarantees are amortised to profit or lossover the period of the subsidiaries’ borrowings, unless it is probable that the Group and the Company willreimburse the bank for an amount higher than the unamortised amount. In this case, an estimate of theobligation is made and recognised as a provision in the statements of financial position.

4.25 Provisions

Provisions are recognised in the statements of financial position when the Group and the Company havea present legal or constructive obligation as a result of past events, when it is probable that an outflowof resources will be required to settle the obligation and when a reliable estimate of the amount can bemade.

4.26 Share capital

Ordinary shares are presented as equity. Dividends on ordinary shares are recognised in equity in theperiod in which they are declared.

4.27 Statements of cash flows

The Group and the Company report the cash flow from operating activities using indirect method.

Cash and cash equivalents consist of bank balances, deposits repayable on demand and highly liquidinvestments that are readily convertible to known amounts of cash and subject to insignificant risk ofchanges in value, against which the bank overdrafts are deducted.

5. REVENUE

Group Company2011 2010 2011 2010

RM'000 RM'000 RM'000 RM'000

Property development 180,598 240,228 – –Sales of goods 1,242 1,958 – –Services rendered 6,499 5,405 – –Dividend income – – 79,855 13,426Others 1,828 1,957 82 6

190,167 249,548 79,937 13,432

Revenue of the Group represents sales of goods and services derived from the principal activities, net ofdiscounts, allowances, sales and service taxes.

Revenue of the Company represents dividend and interest income.


6. PROFIT BEFORE TAXATION

This is arrived at:-

Group Company2011 2010 2011 2010

RM'000 RM'000 RM'000 RM'000

After charging all expenses including:Directors' fee 128 180 128 180Auditors' remuneration:-Audit fees:• current year 109 104 15 15• adjustments for prior years (104) 12 (6) –Other professional fees 32 47 2 1

Staff costs:Directors' emoluments:• salaries and bonus 1,796 1,700 – –• defined contribution plans 204 200 – –• others 112 118 9 12

2,112 2,018 9 12Other employees' emoluments and benefits:• salaries and bonus 9,880 9,894 – –• defined contribution plans 1,071 1,100 – –• others 954 911 – –

11,905 11,905 – –Hire of plant and equipment – 605 – –Rent of land and buildings 546 1,397 160 160Interest expenses:• finance lease 137 105 – –• others 50 457 – –

187 562 – –Depreciation 2,382 2,176 – –Amortisation of prepaid lease payments 28 28 – –Allowance for impairment on receivables 59 – – –Bad debts written off 71 – – 54Property development expenses:• property development costs 115,087 166,415 – –• inventories 29,391 24,953 – –• adjustment for prior years' expenses 230 – – –

144,708 191,368 – –Direct operating expenses of investmentproperties which generated rental income 877 168 – –

Direct operating expenses of investmentproperties which generated no rentalincome 303 239 – –

Derecognition of property, plan andequipment 7 69 – –

Loss on disposal of investment properties 80 – – –


6. PROFIT BEFORE TAXATION (CONT’D)

Group Company2011 2010 2011 2010

RM'000 RM'000 RM'000 RM'000

And crediting all income including:Gross dividends from subsidiaries – – 79,855 13,426Rent of land and buildingsfrom investment properties 1,586 1,360 – –

Interest income 4,188 1,509 82 6Gain on disposal of:• property, plant and equipment 236 297 – –• investment properties – 2,540 – –• investments 3 – – –Fair value adjustments on investment properties – 1,677 – –Negative goodwill 217 – – –

7. TAXATION

Group Company2011 2010 2011 2010

RM'000 RM'000 RM'000 RM'000

Malaysian:Current tax expense:• current year 10,139 10,990 2,863 1,749• adjustments for prior years 20 59 – –

10,159 11,049 2,863 1,749Deferred tax expense/(income):Origination and reversal oftemporary differences:• current year (514) (3,064) – –• adjustments for prior years 2 699 – –

(512) (2,365) – –

9,647 8,684 2,863 1,749


7. TAXATION (CONT’D)

The tax reconciliation is as follows:-

Group Company2011 2010 2011 2010

RM'000 RM'000 RM'000 RM'000

Taxation based on Malaysian applicationstatutory tax rate of 25% 9,371 8,619 13,069 3,205

Disallowable expenses for tax purposes 685 813 6,824 48Non-taxable income for tax purposes (179) (1,153) (17,030) (1,504)Taxes for prior years 22 758 – –Effect of controlled transfer assets (52) – – –Unrecognised deferred tax assets – 135 – –Benefit from previously unrecogniseddeferred tax assets (227) (483) – –

Others 27 (5) – –

Taxation recognised in profit or loss 9,647 8,684 2,863 1,749

Benefit from previously unrecognised deferred tax assets on the following deductible temporary differences isused to reduce tax expenses as follows:-

Group2011 2010

RM'000 RM'000

Current tax expense:Unabsorbed capital allowances 204 –Unutilised tax losses 23 483

227 483

8. EARNINGS PER SHARE

The calculation of basic earnings per share of the Group is based on the net profit attributable to ordinaryshareholders amounting to approximately RM27,370,000/- (2010: RM25,792,000/-) and the number of ordinaryshares outstanding during the financial year of RM242,124,000/- (2010: RM242,124,000/-).

Diluted earnings per share

Fully diluted earnings per share is the same as basic earnings per share as it is considered that there are nodilutive potential ordinary shares.


9. PROPERTY, PLANT AND EQUIPMENT

Furniture,*Land & Plant & Motor fittings &

Group buildings machinery vehicles equipment Total2011 RM'000 RM'000 RM'000 RM'000 RM'000

Cost/valuation:At 1 April 2010 163,607 88,027 8,193 10,998 270,825Additions – 93 1,160 142 1,395In respect of subsidiaryacquired – – – 169 169

Disposals – (4,911) (1,253) (10) (6,174)Derecognition – (9,774) (845) (6,020) (16,639)

At 31 March 2011 163,607 73,435 7,255 5,279 249,576

Accumulated depreciation:At 1 April 2010 – 33,970 6,317 9,964 50,251Charge for the year 200 1,218 678 286 2,382In respect of subsidiaryacquired – – – 56 56

Disposals – (4,911) (1,182) (6) (6,099)Derecognition – (9,775) (845) (6,012) (16,632)

At 31 March 2011 200 20,502 4,968 4,288 29,958

Net carrying amount:At 31 March 2011 163,407 52,933 2,287 991 219,618

2010

Cost/valuation:At 1 April 2009 164,722 86,966 8,460 11,444 271,592Additions 930 1,285 746 270 3,231Revaluation deficit (438) – – – (438)Disposals – (190) (1,013) – (1,203)Derecognition – (34) – (716) (750)Elimination arising fromrevaluation (1,607) – – – (1,607)

At 31 March 2010 163,607 88,027 8,193 10,998 270,825

Accumulated depreciation:At 1 April 2009 1,285 33,203 6,673 10,391 51,552Charge for the year 322 977 657 220 2,176Disposals – (176) (1,013) – (1,189)Derecognition – (34) – (647) (681)Elimination arising fromrevaluation (1,607) – – – (1,607)

At 31 March 2010 – 33,970 6,317 9,964 50,251

Net carrying amount:At 31 March 2010 163,607 54,057 1,876 1,034 220,574


9. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

*Analysis of land & buildings:

Freehold land & buildings

2011 2010Group RM'000 RM'000

Cost/valuation:At 1 April 163,607 164,722Additions – 930Revaluation deficit – (438)Elimination arising from revaluation – (1,607)

At 31 March 163,607 163,607

Accumulated depreciation:At 1 April – 1,285Charge for the year 200 322Elimination arising from revaluation – (1,607)

At 31 March 200 –

Net carrying amount:At 31 March 163,407 163,607

Analysis of valuation of land & buildings:

Group2011 2010

RM'000 RM'000

Freehold land and buildings:• at cost 53 53• at 2010 valuation 163,554 163,554

163,607 163,607

If the freehold land and buildings had not been revalued, they would have been included at the followingamounts:-

Group2011 2010

RM'000 RM'000

Freehold land and buildings:At cost 26,818 26,818Accumulated depreciation 2,591 2,425

Net carrying amount 24,227 24,393

The Group’s freehold land and buildings were revalued by an independent professional valuer using openmarket value basis on 31 March 2010.


9. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

The net carrying amounts of assets leased under finance lease arrangements are as follows:-

Group2011 2010

RM'000 RM'000

Plant & machinery 799 1,326Motor vehicles 2,287 1,791

3,086 3,117

10. PREPAID LEASE PAYMENTS

Long Shortleasehold leasehold

Group land land Total2011 RM'000 RM'000 RM'000

Net carrying amount:At 1 April 2010 762 308 1,070Amortisation for the year (10) (18) (28)

At 31 March 2011 752 290 1,042

Analysed between:Current 10 18 28Non-current 742 272 1,014

752 290 1,042

2010

Net carrying amount:At 1 April 2009 772 326 1,098Amortisation for the year (10) (18) (28)

At 31 March 2010 762 308 1,070

Analysed between:Current 10 18 28Non-current 752 290 1,042

762 308 1,070


11. INVESTMENT IN SUBSIDIARIES

Company2011 2010

RM'000 RM'000

Unquoted sharesAt cost:At 1 April 426,642 437,972Pre-acquisition dividend – (11,330)Addition 25,563 –

At 31 March 452,205 426,642

Accumulated impairment losses:At 1 April 4,983 4,983Charge for the year 27,035 –

At 31 March 32,018 4,983

Net carrying amount:At 31 March 420,187 421,659

Details of the subsidiaries, all of which are incorporated in Malaysia, are as follows:-

Issued EffectiveName of company equity capital holding Principal activities

RM 2011 2010% %

§ Sin Heap Lee Development 90,000,000 100 100 Property developmentSdn. Bhd.

§ Sin Heap Lee Construction 90,000,000 100 100 Building construction works, earthworksSdn. Bhd. and infrastructure works, renting out

of plant and machineries,construction management servicesand money lending business

§ Integrated Management 1,000,000 100 100 Provision of professional managementCorporation Sdn. Bhd. services in commercial and industrial

studies and planning, constructionmanagement and financial services

§ Sin Heap Lee Company 3,900,000 100 100 Rental of properties, marketing agentSdn. Berhad. of bricks and building materials

§ Sin Heap Lee Brickworks 30,000,000 100 100 Manufacturing of clay-bricks, supplySdn. Bhd. of finished brickworks of wall and

other brick structures

SHL Ventures Sdn. Bhd. 2 – 100 Investment holding

SHL Realty Sdn. Bhd. 3,000,000 100 100 Property investment


11. INVESTMENT IN SUBSIDIARIES (CONT’D)

Issued EffectiveName of company equity capital holding Principal activities

RM 2011 2010% %

SHL Corporate Services 3,000,000 100 100 Providing strategic, financial andSdn. Bhd. corporate planning services

Goodstock (Tawau) Sdn. Bhd. 2,000,002 100 100 Property development

Wilayah Builders Sdn. Bhd. 9,000,000 100 100 Property development

Ho Sin & Son Enterprise Sdn. Bhd. 1,000,000 100 100 Property development

Mayang Kiara Sdn. Bhd. 50,000 100 100 Property development

H.S.C. Sdn. Berhad 1,000,000 100 100 Property development

Sukma Pesona Sdn. Bhd. 500,000 100 100 Property development

SHL Infra Sdn. Bhd. 4,000,000 100 100 Earthworks and infrastructure works,renting out of plant and machineriesand sales of premix

Kajang Granite Quarry Sdn. Bhd. 5,000,000 100 100 Granite quarrying and manufacturingof aggregates

Mercantile Corporation 872,400 100 100 Manufacturing of aluminium framed(M) Sdn. Bhd. doors and windows, contracting for

renovation and installation works

Soil-Mech Drillers Sdn. Bhd. 250,000 100 100 Provision of soil investigation servicesand property maintenance services

Senick Sdn. Bhd. 5 100 100 Granite quarrying and manufacturingof aggregates

Goodstock Land Sdn. Bhd. 1,500,000 60 – Letting of properties

Subsidiary of Sin Heap LeeDevelopment Sdn. Bhd.

SHL-M Sdn. Bhd. 45,000,000 100 100 Property development

Subsidiary of SHL-M Sdn. Bhd.

* Sungai Long Golf Resort 5,000,000 100 100 Golf resort operatorBerhad

Notes:

§ Subsidiaries which are consolidated using merger method of accounting.* A wholly-owned subsidiary of SHL-M Sdn. Bhd.



During the financial year, the Company conducted an impairment review on the investment of subsidiaries,which had resulted in the recognition of impairment losses on certain subsidiaries totalling RM27,035,000/-(2010: inapplicable).

The impairment losses were determined with reference to the fair value less cost to sell basing on the bestinformation available to reflect the amount that the Company could obtain from the disposal of subsidiariesin an arm’s length transaction between knowledgeable willing parties.

11.1 Acquisition of a subsidiary

In May 2010, the Group acquired a new subsidiary, Goodstock Land Sdn. Bhd., a company incorporatedin Malaysia, for a cash consideration of RM25,563,000/-.

The details of assets acquired, liabilities assumed and cash flows arising from the acquisition are asfollows:-

Group2011

RM'000

Property, plant and equipment 113Investment properties 45,000Receivables 3,609Current tax assets 80Cash and deposits 2,964Payables (715)Borrowings (6,000)Deferred tax liabilities (2,085)Minority interests (17,186)

Share of net assets acquired 25,780Negative goodwill (217)

Total purchase consideration 25,563Less: Cash and deposits (2,964)

Net cash flow on acquisition 22,599

The fair values of the subsidiary identifiable assets and liabilities approximated their carrying amounts.Accordingly, no fair value adjustments were made to account for the acquisition.

The effects of the acquisition on the financial position at the end of the year are as follows:-

Group2011

RM'000

Property, plant and equipment 102Investment properties 45,000Receivables 233Current tax assets 217Cash and deposits 1,498Payables (823)Deferred tax liabilities (2,092)Minority interests (17,654)

Increase in Group's net assets 26,481



11.1 Acquisition of a subsidiary (cont’d)

The effects of the acquisition on the financial results during the year are as follows:-

Group2011

RM'000

Revenue 2,306Cost of sales (577)

Gross profit 1,729Other operating income 40Administration expenses (286)

Profit from operations 1,483Finance costs (20)

Profit before taxation 1,463Taxation (294)

Profit for the year 1,169Minority interests (468)

Increase in Group's profit 701

11.2 Derecognition of a subsidiary

In March 2011, the Group derecognised its subsidiary, SHL Ventures Sdn. Bhd. as the subsidiary had beenstruck off pursuant to Section 308(1) of the Companies Act 1965. The derecognition has insignificantimpact on the financial results, financial position and cash flows to the Group.

Mercantile Corporation (M) Sdn. Bhd. and H.S.C. Sdn. Berhad are in the process of Members’ VoluntaryWinding Up pursuant to Section 254 of the Companies Act 1965.

12. INVESTMENT IN ASSOCIATE

Group2011 2010

RM'000 RM'000

Unquoted shares, at cost 1,305 1,305Share of post-acquisition loss (56) (48)

1,249 1,257

Share of net assets 1,249 1,257

There is no goodwill or negative goodwill in the associate’s own financial statements and on the acquisition ofthe Group’s interest in the associate.


12. INVESTMENT IN ASSOCIATE (CONT’D)

Details of associate are as follows:-

Name of company Effective holding Principal activities(Incorporated in Malaysia) 2011 2010

% %

OPT Ventures Sdn. Bhd. 30 30 Property development

The following amounts represent the Group’s share of assets, liabilities and expenses of the associate:

Group2011 2010

RM'000 RM'000

Assets 12,289 11,901Liabilities (11,040) (10,644)

Net tangible assets 1,249 1,257

Revenue – –Expenses (8) (9)

Loss for the year (8) (9)

13. INVESTMENT PROPERTIES

Group2011 2010

RM'000 RM'000

At 1 April 16,147 44,893Addition from subsequent expenditure 7,635 7,772In respect of subsidiary acquired 45,000 –Disposal (2,080) (38,195)Fair value adjustments – 1,677

At 31 March 66,702 16,147

The fair values of the investment properties were based on valuation performed by an independentprofessional valuer on 31 March 2010 using open market value basis.

The fair values of the investment properties approximate the gross carrying amounts.


14. LAND HELD FOR PROPERTY DEVELOPMENT

Land DevelopmentGroup costs costs Total2011 RM'000 RM'000 RM'000

At cost:At 1 April 2010 4,419 27 4,446Additions 4 1 5Transfer to property development costs (1,205) – (1,205)

At 31 March 2011 3,218 28 3,246

2010

At cost:At 1 April 2009 34,353 10,407 44,760Additions 35 20 55Transfer to property development costs (30,353) (10,016) (40,369)Reclassification 384 (384) –

At 31 March 2010 4,419 27 4,446

15. INTANGIBLE ASSETS

DevelopmentGroup Goodwill costs Total2011 RM'000 RM'000 RM'000

Cost:At 1 April 2010 8,166 23,630 31,796Derecognition (21) (23,630) (23,651)

At 31 March 2011 8,145 – 8,145

Accumulated amortisation and impairment losses:At 1 April 2010 8,166 18,515 26,681Impairment loss for the year – 5,115 5,115Derecognition (21) (23,630) (23,651)

At 31 March 2011 8,145 – 8,145

Net carrying amount:At 31 March 2011 – – –


15. INTANGIBLE ASSETS (CONT’D)

DevelopmentGroup Goodwill costs Total2010 RM'000 RM'000 RM'000

Cost:At 1 April 2009 and 31 March 2010 8,166 23,630 31,796

Accumulated amortisation and impairment losses:At 1 April 2009 8,166 8,284 16,450Impairment loss for the year – 10,231 10,231

At 31 March 2010 8,166 18,515 26,681

Net carrying amount:At 31 March 2010 – 5,115 5,115

16. INVESTMENTS

Group2011 2010

RM'000 RM'000

Unquoted in Malaysia, at cost:Shares 7 7Club membership 24 117

31 124

17. DEFERRED TAX ASSETS AND LIABILITIES

Deferred tax assets and liabilities shown in the statement of financial position after appropriate offsetting areas follows:-

Group2011 2010

RM'000 RM'000

Deferred tax assets (2,238) (2,784)Deferred tax liabilities 13,327 12,300

11,089 9,516

The deferred tax assets and liabilities are offset as:-

• the Group and the Company have a legally enforceable right to set off current tax assets againstcurrent tax liabilities; and

• they relate to taxes levied by the same authority on the Group and on the Company.

Deferred tax assets of the Group are recognised when the realisation of the related tax benefits through thefuture taxable profits is probable based on recent history of results of the Group.


17. DEFERRED TAX ASSETS AND LIABILITIES (CONT’D)

The movements and components of deferred tax assets and liabilities before appropriate offsetting are asfollows:-

Revaluation Unabsorbed Land heldProperty, surplus on Unabsorbed industrial Property forplant and Development land and Unutilised capital building Investment development property

Group equipment costs buildings tax losses allowances allowances properties costs development Total2011 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

At 1 April 2010 13,946 1,172 5,510 (50) (8,279) – (1,040) (980) (763) 9,516Amount recognisedin profit or loss (35) (1,172) (27) – 177 – – 545 – (512)

In respect ofsubsidiary acquired 6 – – – – – 2,079 – – 2,085

At 31 March 2011 13,917 – 5,483 (50) (8,102) – 1,039 (435) (763) 11,089

2010

At 1 April 2009 13,849 3,455 6,705 (599) (8,333) (3,206) 3,145 (1,248) (763) 13,005Amount recognisedin profit or loss 97 (2,283) (71) 549 54 3,206 (4,185) 268 – (2,365)

Amount recognisedin equity – – (1,124) – – – – – – (1,124)

At 31 March 2010 13,946 1,172 5,510 (50) (8,279) – (1,040) (980) (763) 9,516

Unrecognised deductible temporary differences

The amounts of deductible temporary differences for which no deferred tax assets have been recognised inthe statement of financial position are as follows:-

Group2011 2010

RM'000 RM'000

Unabsorbed capital allowances 7,372 8,103Unutilised tax losses 5,381 5,545

12,753 13,648

The above deductible temporary differences have no expiry date. No deferred tax assets have beenrecognised in respect of these deductible temporary differences because it is improbable that future profit willbe available against which the Group can utilise the benefits therefrom.

Subject to confirmation by Inland Revenue Board, the Group has unabsorbed reinvestment allowancescarried forward amounting to approximately RM21,094,000/- (2010: RM21,094,000/-). The estimated potentialtax benefit of the unabsorbed reinvestment allowances for which no credit has been taken in the net incomeof the current or prior years is RM5,273,000/- (2010: RM5,273,500/-). Such benefit will only be obtained if theGroup derives future assessable income of a nature and of amounts sufficient for them to be utilised.


18. AMOUNTS DUE FROM/(TO) SUBSIDIARIES

The unsecured outstanding amounts are non-interest-bearing and repayable on demand.

19. PROPERTY DEVELOPMENT COSTS

Land DevelopmentGroup costs costs Total2011 RM'000 RM'000 RM'000

At cost:At 1 April 2010 127,558 422,623 550,181Additions 2,634 61,290 63,924Transfer 8,789 (8,789) –Transfer from land held for property development 1,205 – 1,205Reversal – (1,628) (1,628)Derecognition on completion of projects (2,694) (24,589) (27,283)

At 31 March 2011 137,492 448,907 586,399

Cost recognised in profit or loss:At 1 April 2010 52,342 339,161 391,503Charge for the year 12,484 102,603 115,087Derecognition on completion of projects (2,694) (24,589) (27,283)

At 31 March 2011 62,132 417,175 479,307

Net carrying amount:At 31 March 2011 75,360 31,732 107,092

2010

At cost:At 1 April 2009 97,205 327,341 424,546Additions – 85,266 85,266Transfer from land held for property development 30,353 10,016 40,369

At 31 March 2010 127,558 422,623 550,181

Cost recognised in profit or loss:At 1 April 2009 29,891 195,197 225,088Charge for the year 22,451 143,964 166,415

At 31 March 2010 52,342 339,161 391,503

Net carrying amount:At 31 March 2010 75,216 83,462 158,678

Included in the property development costs are:-

Group2011 2010

RM'000 RM'000

Interest expenses capitalised 8 1,263


20. INVENTORIES

Group2011 2010

RM'000 RM'000

At cost:Completed property units 2,037 33,843Raw materials 100 66Goods for resale 221 192Work in progress 123 9Finished goods 6,864 1,367Spare parts 1,090 1,203

10,435 36,680At net realisable value:Completed property units 2,595 180

13,030 36,860

21. TRADE RECEIVABLES

Group2011 2010

RM'000 RM'000

Amount due from associate 9,052 9,052Trade debtors 22,977 31,490

32,029 40,542Less: Allowance for impairment (169) (135)

31,860 40,407Amount due from customers for contract works 3,525 7,008

35,385 47,415

Trade receivables are non-interest-bearing and are generally on 14 to 90-day (2010: 14 to 90-day) terms. Theyare recognised at their original invoice amounts which represent their fair values on initial recognition.

The amount due from customers for contract works are as follows:-

Group2011 2010

RM'000 RM'000

Cost 3,525 5,373Attributable losses – –

Amount due from customers for contract works 3,525 5,373

Analysed as:-Amount due from customers for contract works 3,525 7,008Amount due to customers for contract works (Note 28) – (1,635)

3,525 5,373


21. TRADE RECEIVABLES (CONT’D)

Ageing analysis of trade receivables

The ageing analysis of trade receivables is as follows:-

Group2011

RM'000

Neither past due nor impaired 21,353

Past due unimpaired:• 1 to 30 days past due 191• over 30 days past due 10,316

10,507Impaired 169

32,029

Receivables that are neither past due nor impaired

Trade receivables that are neither past due nor impaired are creditworthy debtors with good paymentrecords with the Group.

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

Receivables that are past due unimpaired

Trade receivables that are past due unimpaired relate to customers that have good track record with theGroup. Based on past experiences and no adverse information to date, the Directors of the Group are ofthe opinion that no allowance for impairment is necessary in respect of these balances as there has been nosignificant change in the credit quality and the balances are still considered fully collectible.

Receivables that are impaired

These receivables are impaired individually at the reporting date. The movements of the allowanceaccounts used to record the impairment are as follows:-

Group2011

RM'000Movements in allowance accounts:At 1 April 135Charge for the year 59Derecognition (25)

At 31 March 169

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 payments.

These receivables are unsecured by any collateral or credit enhancements.


22. OTHER RECEIVABLES

Group Company2011 2010 2011 2010

RM'000 RM'000 RM'000 RM'000

Advances 421 329 – –Deposits 4,993 4,293 53 –Other debtors 1,497 1,827 – –

6,911 6,449 53 –Prepayments 1,003 1,045 20 20

7,914 7,494 73 20

The unsecured advances are non-interest-bearing and repayable on demand.

23. CASH AND DEPOSITS

Group Company2011 2010 2011 2010

RM'000 RM'000 RM'000 RM'000

Deposits with licensed banks 109,188 78,501 886 204

Cash and bank balances:• housing development accounts 47,356 13,520 – –• others 18,235 24,712 41 5,402

65,591 38,232 41 5,402

174,779 116,733 927 5,606

Housing Development Accounts are held and maintained pursuant to Section 7A of the HousingDevelopment Act, 1966. These accounts are restricted from use in other operations.

24. SHARE CAPITAL

Number of ordinaryshares of RM1/- each Amount Amount2011 2010 2011 2010'000 '000 RM'000 RM'000

Authorised 1,000,000 1,000,000 1,000,000 1,000,000

Issued and fully paid 242,124 242,124 242,124 242,124


25. RESERVES

Group Company2011 2010 2011 2010

RM'000 RM'000 RM'000 RM'000

Non-distributable:Share premium 1,225 1,225 1,225 1,225Revaluation surplus 50,745 50,745 – –Merger reserve – – 4,377 4,377Capital reserves 11,040 11,040 23,361 23,361Merger deficit (130,464) (130,464) – –

(67,454) (67,454) 28,963 28,963Distributable:Retained profits 373,402 358,744 152,525 115,824

305,948 291,290 181,488 144,787

25.1 Share premium

Share premium represents premium on shares issued by the Company.

25.2 Revaluation surplus

The revaluation surplus represents the surpluses arising from the revaluation of land and buildings of thesubsidiaries net of related tax effects, if any.

25.3 Merger reserve

The premium on the shares issued by the Company was credited to merger reserve where relief isavailable under Section 60 of the Companies Act 1965. On consolidation, the merger reserve is dealtwith as merger adjustment by elimination.

25.4 Capital reserves

Capital reserves of the Company represent gains arising from the disposal of investments in subsidiaries onGroup restructuring.

Capital reserve of the Group represents share premium of the subsidiaries and reserve capitalised by asubsidiary for bonus issue of shares.

25.5 Merger deficit

Merger deficit represents the difference between the nominal value of shares issued by SHL ConsolidatedBhd. to effect the merger and the nominal value of the shares acquired from the merged entities and isarrived at as follows:-

RM'000

Nominal value of 176,263,799 ordinary shares of RM1/- eachissued by SHL Consolidated Bhd. 176,264

Nominal value of 45,800,000 ordinary shares of RM1/- each acquired (45,800)

Merger deficit 130,464


26. FINANCE LEASE LIABILITIES

Group2011 2010

RM'000 RM'000

Minimum lease payments:• 1 year or less 996 900• 5 years or less but over 1 year 1,465 1,749

2,461 2,649Future finance charge on finance leases (292) (322)

Present value of finance lease liabilities 2,169 2,327

Present value of finance lease liabilities:• 1 year or less 879 781• 5 years or less but over 1 year 1,290 1,546

2,169 2,327

The repayment periods of the finance lease liabilities range from 2 to 7 years (2010: 2 to 7 years) at theinception of the leases. Interest is levied at rates ranging from 3.00% to 6.97% (2010: 3.05% to 6.98%) perannum. The finance lease liabilities are effectively secured as the rights to the leased assets revert to thelessor in the event of default.

27. CLUB ESTABLISHMENT FUND

Club establishment fund represents refundable deposits due to the members of the golf resort.

28. TRADE PAYABLES

Group2011 2010

RM'000 RM'000

Amount due to customers for contract works (note 21) – 1,635Trade creditors 31,784 46,835

31,784 48,470

Trade payables are non-interest-bearing and are normally on 30 to 75-day (2010: 14 to 75-day) terms.

29. OTHER PAYABLES

Group Company2011 2010 2011 2010

RM'000 RM'000 RM'000 RM'000

Accrued expenses 1,719 1,596 17 17Others 3,559 3,862 2 9

5,278 5,458 19 26


30. DIVIDENDS

Group Company2011 2010 2011 2010

RM'000 RM'000 RM'000 RM'000

Paid and payable:In respect of financial year ended 31 March 2010:• final dividend of 7 Sen grossper share less tax 12,712 – 12,712 –

In respect of financial year ended 31 March 2009:• final dividend of 6 Sen grossper share less tax – 10,896 – 10,896

Proposed:In respect of financial year ended 31 March 2011:• final dividend of 7 Sen grossper share less tax 12,712 – 12,712 –

In respect of financial year ended 31 March 2010:• final dividend of 7 Sen grossper share less tax – 12,712 – 12,712

No recognition is made on the dividend proposed until it has been approved at the Annual General Meeting.The amount will be recognised as an appropriation of retained profits in the year in which it is approved.

31. ANALYSIS OF MOVEMENT OF INVENTORIES AND PROPERTY DEVELOPMENT COSTS

Group2011 2010

RM'000 RM'000

Net movement (76,629) (110,571)Interest capitalised 8 1,263Transfer from land held for property development 1,205 40,369

(75,416) (68,939)

32. ANALYSIS OF ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT

Group2011 2010

RM'000 RM'000

Cash payment 625 1,653Finance lease arrangement 770 1,578

1,395 3,231


33. CAPITAL MANAGEMENT

The primary objective of the management of the Group and the Company’s capital structure is to maintainan efficient mix of debt and equity in order to achieve a low cost of capital, while taking into account thedesirability of retaining financial flexibility to pursue business opportunities and adequate access to liquidity tomitigate the effect of unforeseen events on cash flows.

The Directors regularly review the Group and the Company’s capital structure and make adjustments toreflect economic conditions, business strategies and future commitments.

The Group and the Company monitor capital using a gearing ratio, which is total debt divided by totalcapital.

The Group and the Company are in no breach of any gearing covenants during the financial years ended31 March 2011 and 31 March 2010. In the same period, no significant changes were made in theobjectives, policies and processes relating to the management of the Group and the Company’s capitalstructure.

Group Company2011 2010 2011 2010

RM'000 RM'000 RM'000 RM'000

Finance lease liabilities 2,169 2,327 – –

Total debts 2,169 2,327 – –

Share capital 242,124 242,124 242,124 242,124Reserves 305,948 291,290 181,488 144,787

Total capital 548,072 533,414 423,612 386,911

Gearing ratio (times) 0.004 0.004 – –

34. FINANCIAL INSTRUMENTS

34.1 Liquidity and interest rate risk

The table below analyses the maturity periods and effective weighted average interest rates of thefinancial instruments that are exposed to interest rate risks. The amounts disclosed are the contractualundiscounted cash flows.

EffectiveMore interest rate

Within One to than during theGroup one year five years five years Total year2011 RM’000 RM’000 RM’000 RM’000 %

Financial assets:Cash and deposits 174,779 – – 174,779 2.00 – 3.20

Financial liabilities:Finance lease liabilities 879 1,290 – 2,169 3.00 – 6.97


The carrying amounts of these financial instrumentsapproximate fair values due to the relatively short-termmaturity of these instruments.

34. FINANCIAL INSTRUMENTS (CONT’D)

34.1 Liquidity and interest rate risk (cont’d)

EffectiveMore interest rate

Within One to than during theGroup one year five years five years Total year2010 RM’000 RM’000 RM’000 RM’000 %

Financial assets:Cash and deposits 116,733 – – 116,733 1.80 – 2.35

Financial liabilities:Finance lease liabilities 781 1,546 – 2,327 3.05 – 6.98

Sensitivity analysis for interest rate risk

Except interest from short-term deposits and finance lease interest, the Group and the Company have nosignificant interest-bearing financial instruments. The Group and the Company’s income are significantlyindependent of changes in market interest rate.

The Group and the Company monitor and maintain a level of cash and cash equivalents deemedadequate by management to finance the Group and the Company’s operations and mitigate theeffects of fluctuations in cash flows.

34.2 Credit risk

The maximum credit risk associated with recognised financial assets is the carrying amount shown in thestatements of financial position.

Credit risk, or the risk of counterparty default, is controlled by the application of credit approvals, settingof counterparty limits and monitoring procedures. Credit risk is minimised given the Group and theCompany’s policies of selecting only counterparties with high credit worthiness.

The Group has no significant concentrations of credit risk with any single counterparty.

34.3 Fair values of financial instruments

The fair values of the financial instruments at the reporting date approximate their carrying amountsunless it is impracticable to determine these values with sufficient reliability.

The following methods and assumptions are used to estimate the fair value of each class of financialinstruments:

Financial instruments Fair value determination

• Trade and other receivables• Cash and deposits• Trade and other payables• Amounts due from/(to) subsidiaries


The carrying amounts of short-term finance lease liabilitiesapproximate fair values because of the short period tomaturity of these instruments.

The fair values of long-term finance lease liabilities areestimated based on the current rates available forfinance lease liabilities with the same maturity profile.The carrying amount of the long-term finance leaseliabilities are reasonable approximations of fair valuesdue to the insignificant impact of discounting.

The carrying amounts of these financial instrumentsapproximate fair values, which represent the estimatedamounts of the Group would receive or refund tomembers upon termination of investment contract.


34.3 Fair values of financial instruments (cont’d)

Financial instruments Fair value determination

• Finance lease liabilities

• Trust account• Club establishment fund

34.4 Financial instruments by category

The table below provides an analysis of financial instruments categorised as follows:-

Financialliabilities at Total

Available- Loans and amortised carryingGroup Note for-sale receivables cost amount2011 RM'000 RM'000 RM'000 RM'000

Financial assets:• investments 16 31 – – 31• trust account – 1,334 – 1,334• trade receivables 21 – 31,860 – 31,860• other receivables 22 – 6,911 – 6,911• cash and deposits 23 – 174,779 – 174,779

31 214,884 – 214,915

Financial liabilities:• finance lease liabilities 26 – – 2,169 2,169• club establishment fund 27 – – 16,278 16,278• trade payables 28 – – 31,784 31,784• other payables 29 – – 5,278 5,278

– – 55,509 55,509



34.4 Financial instruments by category (cont’d)

Financialliabilities at Total

Available- Loans and amortised carryingCompany Note for-sale receivables cost amount2011 RM'000 RM'000 RM'000 RM'000

Financial assets:• amounts due from subsidiaries 18 – 103,602 – 103,602• other receivables 22 – 53 – 53• cash and deposits 23 – 927 – 927

– 104,582 – 104,582

Financial liabilities:• amounts due to subsidiaries 18 – – 101,437 101,437• other payables 29 – – 19 19

– – 101,456 101,456

35. CONTINGENT LIABILITIES

Company2011 2010

RM'000 RM'000

Unsecured:Corporate guarantees given to banks for creditfacilities granted to subsidiaries 2,755 2,287

36. SEGMENT REPORTING

Management has determined the operating segments based on reports reviewed by the Board of Directorsand the working group that makes strategic decisions.

Segment information is presented in respect of Group’s business. No segment reporting by geographicalsegments has been provided as the Group is primarily involved in business operations in Malaysia. Inter-segment pricing is determined according to the normal course of business and has been established underthe terms that are no less favourable than those arranged with external customers. Segment revenue, results,assets and liabilities include items directly attributable to a segment as well as those that can be allocated ona reasonable basis.


36. SEGMENT REPORTING (CONT’D)

Investmentand Property

Group services development Construction Trading Manufacturing Quarrying Eliminations Consolidated2011 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

RevenueRevenue fromexternal customers 6,295 180,598 – 1,085 402 1,787 – 190,167

Inter segment revenue 12,036 1,110 55,700 16,390 3,073 – (88,309) –

Total revenue 18,331 181,708 55,700 17,475 3,475 1,787 (88,309) 190,167

ResultsSegment results 28,872 31,234 2,640 (164) (4,519) 1,565 – 59,628Unallocated income 1,413Unallocated expenses (27,578)

Operating profit 33,463Interest income 4,188Finance costs (158)Loss from associate (8)Taxation (9,647)

Profit after taxation 27,838Minority interests (468)

Profit for the year 27,370

AssetsSegment assets 125,276 284,879 30,026 4,868 80,819 18,233 (23,220) 520,881Investment in associate 1,249Unallocated assets 113,513

Total assets 635,643

LiabilitiesSegment liabilities 2,113 33,828 17,931 3,510 889 525 (21,753) 37,043Unallocated liabilities 32,874

Total liabilities 69,917

OthersCapital expenditure 8,185 511 339 – – – – 9,035

Non-cash expenses:• depreciation andamortisation 824 490 154 – 925 17 – 2,410

• derecognition ofproperty, plantand equipment 5 1 – – 1 – – 7

• impairment loss onintangible assets – – – -– 5,115 – – 5,115


36. SEGMENT REPORTING (CONT’D)

Investmentand Property

Group services development Construction Trading Manufacturing Quarrying Eliminations Consolidated2010 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

RevenueRevenue fromexternal customers 7,200 240,228 – 695 119 1,306 – 249,548

Inter segment revenue 9,286 – 90,146 29,611 6,638 – (135,681) –

Total revenue 16,486 240,228 90,146 30,306 6,757 1,306 (135,681) 249,548

ResultsSegment results (494) 37,886 1,881 (535) (9,912) 921 (1,694) 28,053Unallocated income 5,948Unallocated expenses (608)

Operating profit 33,393Interest income 1,509Finance costs (417)Loss from associate (9)Taxation (8,684)

Profit for the year 25,792

AssetsSegment assets 75,821 346,767 45,026 13,782 84,300 18,024 (51,864) 531,856Investment in associate – 1,257 – – – – – 1,257Unallocated assets 89,741

Total assets 622,854

LiabilitiesSegment liabilities 1,173 72,379 29,337 7,949 551 535 (58,022) 53,902Unallocated liabilities 35,538

Total liabilities 89,440

OthersCapital expenditure 9,443 85 599 – – 931 – 11,058

Non-cash expenses:• depreciation andamortisation 757 585 511 – 333 18 – 2,204

• derecognition ofproperty, plantand equipment 26 43 – – – – – 69

• impairment loss onintangible assets – – – – 10,231 – – 10,231


37. RELATED PARTY DISCLOSURES

Identity of related parties

The Company has related party relationship with its subsidiaries pursuant to the Companies Act 1965.

The relationships between the Group and the related parties, except subsidiaries, are as follows:-

Period ofbusiness

Related parties Relationship relationship

Taipan Star Sdn. Bhd. A company in which Directors of the Company, 17 yearsY.A.M. Tengku Abdul Samad Shah Ibni AlmarhumSultan Salahuddin Abdul Aziz Shah, Dato’ Yap TeiongChoon and Dato’ Ir. Yap Chong Lee havean interest.

Glen Waverley Sdn. Bhd. A company in which Directors of the Company, 28 yearsY.A.M. Tengku Abdul Samad Shah Ibni AlmarhumSultan Salahuddin Abdul Aziz Shah, Dato’ Yap TeiongChoon and Dato’ Ir. Yap Chong Lee havean interest.

Unique Mix Sdn. Bhd. A company in which Directors of the Company, 13 yearsDato’ Yap Teiong Choon and Dato’ Ir. Yap Chong Leehave an interest.

Goodstock Land Sdn. Bhd. A company in which Directors of the Company, 28 yearsDato’ Yap Teiong Choon and Dato’ Ir. Yap Chong Leehave an interest. In May 2010, it becomes a subsidiaryof SHL Consolidated Bhd.

Sin Heap Lee Land Sdn. Bhd. A company in which Directors of the Company, 22 yearsDato’ Yap Teiong Choon and Dato’ Ir. Yap Chong Leehave an interest.

Marusin Sdn. Bhd. A company in which Directors of the Company, 26 yearsDato’ Yap Teiong Choon and Dato’ Ir. Yap Chong Leehave an interest.

SHL Professional Services .A company in which Directors of the Company, 13 yearsSdn. Bhd Dato’ Yap Teiong Choon and Dato’ Ir. Yap Chong Lee

have an interest.

Sin Heap Lee Mix Sdn. Bhd. A company in which Directors of the Company, 28 yearsDato’ Yap Teiong Choon and Dato’ Ir. Yap Chong Leehave an interest.

Sin Heap Lee Property A company in which Directors of the Company, 17 yearsServices Sdn. Bhd. Dato’ Yap Teiong Choon and Dato’ Ir. Yap Chong Lee

have an interest.


37. RELATED PARTY DISCLOSURES (CONT’D)

Period ofbusiness

Related parties Relationship relationship

Sin Yan Properties Sdn. Bhd. A company in which Directors of the Company, 25 yearsDato’ Yap Teiong Choon and Dato’ Ir. Yap Chong Leehave an interest.

Integrated Perunding Sdn. Bhd. A company in which a Director of the Company, 28 yearsDato’ Ir. Yap Chong Lee has an interest.

Sepakat Setia Perunding A company in which a Director of the Company, 28 years(Sendirian) Bhd. Dato’ Ir. Yap Chong Lee has an interest.

37.1 Related party transactions

During the year, the Group and the Company undertook a number of transactions with certain relatedparties. The more significant transactions are described below:-

Transactions with subsidiaries:Group Company

2011 2010 2011 2010RM'000 RM'000 RM'000 RM'000

Dividend income:Kajang Granite Quarry Sdn. Bhd. – – 16,267 –SHL Realty Sdn. Bhd. – – 7,500 –Sin Heap Lee Company Sdn. Bhd. – – 32,969 –Ho Sin & Son Enterprise Sdn. Bhd. – – 4,932 –Goodstock (Tawau) Sdn. Bhd. – – 195 –Wilayah Builders Sdn. Bhd. – – 411 –SHL Infra Sdn. Bhd. – – 2,000 –Mayang Kiara Sdn. Bhd. – – 6,400 –Sukma Pesona Sdn. Bhd. – – 9,181 –H.S.C. Sdn. Berhad – – – 11,330Sin Heap Lee Development Sdn. Bhd. – – – 13,000SHL Ventures Sdn. Bhd. – – – 426

– – 79,855 24,756

Rental of premises:Goodstock Land Sdn. Bhd. – – 146 –

Transactions with non-related corporations in which the Directors of the Company have significantinfluence in the financial and operating policy decisions:

Group Company2011 2010 2011 2010

RM'000 RM'000 RM'000 RM'000Expenses:Engineering consultancy servicesIntegrated Perunding Sdn. Bhd. 980 3,654 – –

Procurement of building materialsUnique Mix Sdn. Bhd. 2,094 6,997 – –


37. RELATED PARTY DISCLOSURES (CONT’D)

37.2 Related party balances

Group Company2011 2010 2011 2010

RM'000 RM'000 RM'000 RM'000Trade receivables:Taipan Star Sdn. Bhd. – 851 – –

Trade payables:Unique Mix Sdn. Bhd. 321 1,235 – –Integrated Perunding Sdn. Bhd. – 244 – –

Amounts due from subsidiaries:Sin Heap Lee Development Sdn. Bhd. – – 98,795 59,045Sin Heap Lee Brickworks Sdn. Bhd. – – 3,592 7,592SHL Corporate Services Sdn. Bhd. – – 1,215 1,216SHL Realty Sdn. Bhd. – – – 6,319SHL-M Sdn. Bhd. – – – 2,500

– – 103,602 76,672

Amounts due to subsidiaries:Sin Heap Lee Construction Sdn. Bhd. – – 100,244 100,244Goodstock (Tawau) Sdn. Bhd. – – – 300Mercantile Corporation (M) Sdn. Bhd. – – 188 193Goodstock Land Sdn. Bhd. – – 13 –Sin Heap Lee Company Sdn. Berhad – – – 8,789Kajang Granite Quarry Sdn. Bhd. – – – 4,373H.S.C. Sdn. Berhad – – 992 1,000Sukma Pesona Sdn. Bhd. – – – 935Integrated ManagementCorporation Sdn. Bhd. – – – 600

Wilayah Builders Sdn. Bhd. – – – 500SHL Infra Sdn. Bhd. – – – 400

– – 101,437 117,334

37.3 Directors’ remunerations

The aggregate amounts of remunerations received by the Directors of the Company during the financialyear were as follows:-

Group Company2011 2010 2011 2010

RM'000 RM'000 RM'000 RM'000

Non-executive Directors 62 140 88 140Executive Directors 40 40 40 40

Total Directors' fees 102 180 128 180

Non-executive Directors 603 592 9 9Executive Directors 1,509 1,426 – 3

Total Directors' other emoluments 2,112 2,018 9 12

Total Directors' remunerations 2,214 2,198 137 192


38. MATERIAL LITIGATIONS

Apart from the below, the Group never engaged in any material litigation, claims or arbitration either asplaintiff or defendant, and the Directors are unaware of any proceedings, pending or threatened against theGroup or of any facts likely to give rise to any proceedings which might materially or adversely affect theposition or business of the Group.

On 12 April 2004, an indirect subsidiary of the Group, SHL-M Sdn. Bhd. has instituted legal proceedings againstthe Director of Lands and Mines Selangor (State Authority) relating to the revision of quit rent rate. Bothparties have different interpretations on the quit rent rate. SHL-M Sdn. Bhd. is seeking from the State Authoritythe following:-

• declaring the invalidity of quit rent totalling RM583,680/- per year which the State Authority has imposedretrospectively to 1 January 1994; and

• recovering the sum of RM190,024/- per year from 1 January 1994 to 31 December 2007 on the groundsthat the quit rent payable should be RM69,141/- per year only.

On 10 February 2011, the case was decided in favour of SHL-M Sdn. Bhd., the Court declared that quit rentpayable was as follows:-

Amount Totalper annum amount

Year RM'000 RM'000

1994 – 2004 69 7612005 – 2007 76 2272008 – 2010 76 228

1,216

The Court further ordered the State Authority to refund the excess sum of RM3,190,148/- with interest at therate of 8.00% per annum.

However, the State Authority has since lodged an appeal on 14 March 2011 against the decision vide Courtof Appeal CA No. B-01-196-2011.

SHL-M Sdn. Bhd. has on 21 June 2011 filed the following Affidavits at the Shah Alam High Court:-

(i) an Affidavit objecting the State Authority’s Appeal against the Court Order dated 10 February 2011 onthe grounds that it was filed out of time.

(ii) an Affidavit objecting the State Authority’s Application for Stay of Execution of the Court Order dated 10February 2011.

39. DISCLOSURE OF REALISED AND UNREALISED PROFITS

On 25 March 2010, Bursa Malaysia Securities Berhad (Bursa Malaysia) issued a directive to all listed issuerspursuant to Paragraphs 2.06 and 2.23 of Bursa Malaysia Main Market Listing Requirements. The directiverequires all listed issuers to disclose the breakdown of the retained profits as at the end of the reportingperiod, into realised and unrealised profits or losses.


39. DISCLOSURE OF REALISED AND UNREALISED PROFITS (CONT’D)

The breakdown of the retained profits of the Group and the Company as at 31 March 2011, into realised andunrealised profits, pursuant to Bursa Malaysia Securities Berhad’s Directive Ref: LD26/10 dated 20 December2010 is tabulated below:-

2011Group CompanyRM'000 RM'000

Total retained profits of the Company and subsidiaries:• realised 376,784 152,525• unrealised 22,972 –

399,756 152,525

Total shares of retained profits from associate:• realised (56) –• unrealised – –

(56) –Less: Consolidated adjustment (26,298) –

Total retained profits 373,402 152,525

The determination of realised and unrealised profits is compiled based on Guidance of Special Matter No. 1,Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure pursuant to BursaMalaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants on 20December 2010.

The disclosure of realised and unrealised profits above is solely for complying with the disclosure requirementsstipulated in the directive of Bursa Malaysia and should be applied for this purpose only.

40. COMPARATIVE INFORMATION

The following significant items of comparative information have been restated as a result of the adoption ofFRS 8, Operating Segments:-

GroupAs previously

As restated reportedRM'000 RM'000

Notes to the financial statements:Segment reporting (Note 36):Capital expenditure:• investment and services 9,443 1,671• property development 85 30• construction 599 599• quarrying 931 931

11,058 3,231


analysis of shareholdingsas at 30 June 2011

SHARE CAPITAL

Authorised Share Capital – RM1,000,000,000.00Issued and Fully Paid-up Capital – RM242,123,725.00Class of Shares – Ordinary Shares of RM1.00 EachVoting Right – One Vote Per Ordinary ShareNo. of Shareholders – 2,819

DISTRIBUTION OF SHAREHOLDINGS

No. of No. ofSize of Shareholdings Shareholders % Shares %

Less than 100 329 11.67 15,794 0.01100 – 1,000 213 7.55 142,334 0.061,001 – 10,000 1,977 70.13 5,285,993 2.1810,001 – 100,000 235 8.34 6,283,450 2.60100,001 and below 5% 60 2.13 90,673,535 37.455% and above 5 0.18 139,722,619 57.70

TOTAL 2,819 100.00 242,123,725 100.00

SUBSTANTIAL SHAREHOLDERS

NRIC No./ Direct Holdings Indirect HoldingsName of Substantial Shareholders Registration No. No. of Shares % No. of Shares %

1 Y.A.M. Tengku Abdul Samad Shah 530927-10-5667 100,000 0.04 21,222,437 8.77Ibni Almarhum Sultan SalahuddinAbdul Aziz Shah

2 Dato' Yap Teiong Choon 530218-10-5955 5,283,869 2.18 57,659,844 23.813 Dato' Ir. Yap Chong Lee 540921-10-5761 3,224,319 1.33 82,160,443 33.934 Yap Teiong Choon Holdings Sdn Bhd 67870-U 3,411,944 1.41 54,247,900 22.415 Yap Chong Lee Holdings Sdn Bhd 146380-A 11,184,188 4.62 70,976,255 29.316 HSBC Nominees (Tempatan) Sdn Bhd 258854-D 51,519,703 21.28 – –

– BNP Paribas Wealth ManagementSingapore Branch for Sin Heap LeeHoldings Sdn Bhd

7 Sin Heap Lee Capital Sdn Bhd 73421-H 43,976,500 18.16 – –8 Taipan Equity Sdn Bhd 292562-W 21,222,437 8.77 – –9 Unikburan Sdn Bhd 336994-X 16,611,716 6.86 – –10 Citigroup Nominees (Asing) Sdn. Bhd. 263875-D 15,447,000 6.38 – –

– Nomura Securities Co Ltd forMarubeni Corporation

11 Lembaga Tabung Haji ACT5351995 12,167,700 5.03 – –

DIRECTORS' SHAREHOLDINGS

Direct Holdings Indirect HoldingsName of Directors NRIC No. No. of Shares % No. of Shares %

1 Y.A.M. Tengku Abdul Samad Shah 530927-10-5667 100,000 0.04 21,222,437 8.77Ibni Almarhum Sultan SalahuddinAbdul Aziz Shah

2 Dato' Yap Teiong Choon 530218-10-5955 5,283,869 2.18 57,659,884 23.813 Dato' Ir. Yap Chong Lee 540921-10-5761 3,224,319 1.33 82,160,443 33.934 Chin Yu Tow @ Cheng Yu Thou 410216-01-5415 35,500 0.01 – –5 Wong Tiek Fong 620620-06-5161 73,800 0.03 – –6 Wong Yew Mei 580319-07-5586 236,150 0.10 – –7 Souren Norendra 701228-10-5119 – – – –


LIST OF THE THIRTY (30) LARGEST SHAREHOLDERSAS AT 30 JUNE 2011

NRIC No./ HoldingsNames Registration No. No. of Shares %

1 HSBC NOMINEES (TEMPATAN) SDN BHD 258854-D 51,519,703 21.28BNP Paribas Wealth Management Singapore Branchfor Sin Heap Lee Holdings Sdn Bhd

2 SIN HEAP LEE CAPITAL SDN BHD 73421-H 43,976,500 18.16

3 UNIKBURAN SDN BHD 336994-X 16,611,716 6.86

4 CITIGROUP NOMINEES (ASING) SDN BHD 263875-D 15,447,000 6.38Nomura Securites Co Ltd for Marubeni Corporation

5 LEMBAGA TABUNG HAJI ACT5351995 12,167,700 5.03

6 TAIPAN EQUITY SDN BHD 292562-W 11,605,837 4.79

7 KOPERASI PERMODALAN FELDA MALAYSIA BERHAD 39 11,525,800 4.76

8 TAIPAN EQUITY SDN BHD 292562-W 9,616,600 3.97

9 YAP SIN YAN & SONS SDN BERHAD 4555-W 8,403,939 3.47

10 YAP CHONG LEE HOLDINGS SDN BHD 146380-A 5,950,538 2.46

11 YAP CHONG LEE HOLDINGS SDN BHD 146380-A 5,233,650 2.16

12 YAP TEIONG CHOON HOLDINGS SDN BHD 67870-U 3,411,944 1.41

13 DATO' YAP TEIONG CHOON 530218-10-5955 2,929,900 1.21

14 YTC GLOBAL SDN BHD 49941-A 2,728,197 1.13

15 DATO' IR. YAP CHONG LEE 540921-10-5761 2,451,819 1.01

16 ENVIMATIC SDN BHD 251931-X 2,286,750 0.94

17 TRENTOTTO SDN BHD 372002-P 2,125,000 0.88

18 DATO' YAP TEIONG CHOON 530218-10-5955 2,060,219 0.85

19 DATIN PHAN FOO BEAM 530301-08-6986 2,000,000 0.83

20 STEENSTED ENTERPRISE SDN BHD 118559-D 1,984,100 0.82

21 CITIGROUP NOMINEES (TEMPATAN) SDN BHD 267011-M 1,852,000 0.76Exempt An For Prudential Fund Management Berhad

22 MAYBAN SECURITIES NOMINEES (TEMPATAN) SDN BHD 284597-P 1,169,500 0.48Pledged Securities Account for Ng Peck Chin

23 CITIGROUP NOMINEES (ASING) SDN BHD 263875-D 1,008,700 0.42CBNY For Dimensional Emerging Markets Value Fund

24 CHUAH CHIN HENG 541009-02-5557 871,350 0.36

25 DATO' IR. YAP CHONG LEE 540921-10-5761 772,500 0.32

26 ENVIMATIC SDN BHD 251931-X 613,392 0.25

27 CITIGROUP NOMINEES (ASING) SDN BHD 263875-D 439,400 0.18CBNY for Dimensional Funds II Plc

28 WONG SAM KOW @ WONG YOKE FAI 420823-10-5059 412,500 0.17

29 NG CHOONG LEONG 420308-07-5035 387,750 0.16

30 YAP HONG ENG 351206-10-5014 375,000 0.15

list of propertiesas at 31 March 2011


Tenure/ Net Date ofAge of Land Book Acquisition/

Description Building Area Value Date ofLocation &/or Usage (Years) (Acres) RM’000 Revaluation

Selangor Darul Ehsan

P.T. 20727, 20728 & Lot 27871 Golf Course, Club Houses, Freehold 160.14 126,100 31-3-2010Mukim of Cheras Driving Range and 18District of Hulu Langat Maintenance Building

P.T. 21147, Mukim of Cheras Medical Centre Freehold 0.52 17,640 31-3-2010District of Hulu Langat 1

P.T. 21062, Mukim of Cheras Food Court Freehold 0.46 2,027 31-3-2010District of Hulu Langat 1

2½ Miles, Sungai Pelek Land and factory building Freehold 10.09 15,078 31-3-201043900 Sepang 14 & 21

Lot 64, 207, 208, 730, 1731 Clay reserve land Freehold 30.90 5,158 31-3-20101732, 1737 & P.T. 63/2Mukim and District of Sepang

Lot 1465, 1467, 1468 & 1471 Clay reserve land 99 years 7.34 751 31-3-2010P.T. 720 & 721 lease expiringMukim and District of Sepang in 2083/

2084/2087

Lot 7990, Mukim of Semenyih Quarry land Freehold 70.57 16,140 31-3-2010District of Hulu Langat

P.T. 10503, Mukim of Semenyih Quarry land 30 years 10.79 292 1-12-1997District of Hulu Langat lease expiring

in 2027

Lot 1117, Mukim of Semenyih Agriculture land Freehold 3.54 931 23-6-2009District of Hulu Langat

Lot 1476, 2116, 3489 Land held for future Freehold 13.54 1,654 24-9-199220720-20726 housing development 7-5-1990Mukim of Cheras 19-12-1989District of Hulu Langat 10-5-2004

P.T. 21023, 21226, 21911 Land held for future Freehold 7.48 1,686 31-3-200039753 & 39754 development 19-12-1989Mukim of CherasDistrict of Hulu Langat

Lot 4137 Land held for future 99 years 3.65 1 15-1-1991Mukim of Cheras housing development lease expiringDistrict of Hulu Langat in 2067

Lot 7989, Mukim of Semenyih Land held for future Freehold 106.65 24,924 31-3-2000District of Hulu Langat development

Lot 1340, Mukim of Semenyih Agriculture land held Freehold 8.42 1,800 31-3-2010District of Hulu Langat for future development

P.T. 405, 412, 413, 1586, 2053 Land held for future Freehold 10.69 1 4-4-19792302, 2305, 2349-2357, 2403 housing development 18-12-1986& 2404, Mukim of Rawang 31-3-1987District of Gombak


Tenure/ Net Date ofAge of Land Book Acquisition/

Description Building Area Value Date ofLocation &/or Usage (Years) (Acres) RM’000 Revaluation

Selangor Darul Ehsan (cont’d)

P.T. 368-369, 392-395 Land held for future Freehold 2.61 67 31-3-19941674 & 34019-34040 housing developmentMukim and District of Petaling

P.T. 1-491 Land held for future 99 years 87.90 8,124 10-2-1999Mukim of Batang Kali development lease expiringDistrict of Hulu Selangor in 2089

P.T. 3496 Land held for future Freehold 57.90 13,570 21-8-2009Mukim of Serendah developmentDistrict of Ulu Selangor

P.T. 20729 & 20962 Ongoing development Freehold 5.23 20,921 31-3-2000Mukim of Cheras of housing schemeDistrict of Hulu Langat

Lot 2872-2876 Ongoing development Freehold 30.11 12,805 6-4-2004& 1495/1-1495/4 of housing schemeMukim of CherasDistrict of Hulu Langat

P.T. 27902 & 27903 Ongoing development 99 years 9.62 12,100 2-2-1999Mukim of Cheras of housing scheme lease expiringDistrict of Hulu Langat in 2092

P.T. 46464-46499 Ongoing development 99 years 2.85 1,821 16-3-1999Mukim of Cheras of housing scheme lease expiringDistrict of Hulu Langat in 2095/2096

P.T. 2124-2192 & 1673 Ongoing development Freehold 1.63 2,801 31-3-1994Mukim and District of Petaling of housing scheme

Lot 2, 3 & 4 Section U10 Ongoing development 99 years 19.07 7,793 19-2-2003Mukim Bukit Rajah of housing scheme lease expiringDistrict of Petaling in 2102

Wilayah Persekutuan

10B, Antah Tower Condominium unit Freehold 0.03 235 31-3-2010Jalan 3/57C, Off Jalan Kuching 2751200 Kuala Lumpur

Lot 251, Section 43 Commercial building Freehold 0.23 45,000 7-4-2010Wilayah Persekutuan 17Kuala Lumpur

Negeri Sembilan

Lot 493, 497, 499, 502, 503 Agriculture land held Freehold 101.49 2,473 31-3-2000504, 505, 506, 507, 510, 580 for future development697, 698 & 699Mukim of Parit TinggiDistrict of Kuala Pilah

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proxy form

I/We

NRIC No./Passport No./Company No. of

being a member of SHL CONSOLIDATED BHD. hereby appointNRIC No./Passport No. of

and/or

NRIC No./Passport No. of

or failing him/her the Chairman of the Meeting as my/our proxy to vote on my/our behalf at the 17th AnnualGeneral Meeting of the Company to be held on Thursday, 8 September 2011 at 11.30 a.m. and at anyadjournment thereof, and to vote as indicated below:

Resolutions For Against

Resolution 1 To approve the First and Final Dividend

Resolution 2 To approve the payment of Directors’ fees

Resolution 3 To re-elect Y.A.M. Tengku Abdul Samad Shah Ibni AlmarhumSultan Salahuddin Abdul Aziz Shah as Director of the Company

Resolution 4 To re-appoint Chin Yu Tow @ Cheng Yu Thou as Directorof the Company

Resolution 5 To re-appoint Messrs Khoo Wong & Chan as Auditorsof the Company and authorise the Directors to fixtheir remuneration

Resolution 6 To approve the proposed Shareholders’ Mandate forSHL Group to enter into recurrent related party transactionsof a revenue or trading nature

Resolution 7 To approve the ordinary resolution pursuant to Section 132Dof the Companies Act, 1965

Resolution 8 To approve the proposed Share Buy-Back by the Companyof up to 10% of its own Issued and Paid-Up Share Capital

Please indicate with ‘X’ where appropriate against each resolution how you wish your votes to be cast. In theabsence of specific directions, the proxy may vote or abstain from voting on the resolutions as he/she may thinkfit.

Number of Shares Held

Signature(s)/Common Seal of the Corporation

Tel :

Dated :

NOTES:1 A proxy need not be a member of the Company and the provision of Section 149(1)(b) of the Companies Act, 1965 shallnot apply to the Company.

2. A member shall be entitled to appoint not more than two (2) proxies to attend and vote at the same Annual GeneralMeeting. Where a member appoints two proxies, the appointments shall be invalid unless he specifies the proportions ofhis holdings to be represented by each proxy.

3. For corporate members, this proxy form must be executed under the common seal of the corporation or under the handof its attorney.

4. Unless voting instructions are indicated in the spaces provided above, the proxy may vote as he/she thinks fit.5. For this proxy to be valid, it must be lodged at the Registered Office of the Company at 6th Floor, Wisma Sin Heap Lee, 346,Jalan Tun Razak, 50400 Kuala Lumpur, not less than 48 hours before the time appointed for holding the Annual GeneralMeeting or at any adjournment thereof.

SHL CONSOLIDATED BHD.(Company No: 293565-W)(Incorporated in Malaysia)

Proxy No. of Shares %

First Proxy

Second Proxy

Where a member appoints 2 proxies (refer toNote No. 2), please specify the proportions ofthe member’s holdings to be represented byeach proxy.

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SHL Consolidated Bhd. (293565-W)6th Floor, Wisma Sin Heap Lee346, Jalan Tun Razak50400 Kuala Lumpur

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SHL Annual Report 2011.pdf

Documents

Transcript of SHL Annual Report 2011.pdf