AmARA DTP 1-6 · Berhad, Paramount Corporation Berhad, Sapura Industrial Berhad, Kesas Holdings Berhad, Metrod (M) Berhad and Syarikat Permodalan & Perusahaan Selangor Berhad

CONTENTS

FINANCIAL HIGHLIGHTS> FUND PERFORMANCE

> 2008/09 ACHIEVEMENT AT A GLANCE

SALIENT FEATURES

BOARD OF DIRECTORS PROFILE

CHAIRMAN’S STATEMENT

MANAGEMENT TEAM

AmFIRST STRUCTURE

CORPORATE GOVERNANCE

PROPERTY PORTFOLIO

PORTFOLIO REVIEW

PROPERTY MARKET REPORT

FINANCIAL STATEMENTS> REPORT BY THE DIRECTORS

OF THE MANAGER

> STATEMENT BY THE DIRECTORS

OF THE MANAGER

> STATUTORY DECLARATION

> TRUSTEE’S REPORT

> INDEPENDENT AUDITORS’ REPORT

> BALANCE SHEET

> INCOME STATEMENT

> STATEMENT OF CHANGES IN

NET ASSET VALUE

> CASH FLOW STATEMENT

> NOTES TO THE FINANCIAL STATEMENTS

ANALYSIS OF UNITHOLDERS

CORPORATE DIRECTORY

2

6

7

10

12

14

15

18

31

35

40

66

68

2AmFIRST Annual Report 2009AmFIRST Annual Report 2009

Financial HighlightsFUND PERFORMANCE

Summary of portfolio composition of the Trust since the listing date on 21 December 2006 are as follow:-

2009 2008 2007

Investment properties (%) 97.37 98.11 96.96

Cash and others (%) 2.63 1.89 3.04

100.00 100.00 100.00

The abovementioned percentages are based on the total market value of investment properties plus cash.

Summary of performance of the Trust since the listing date on 21 December 2006 are as follow:-

BALANCE SHEET as at 31 March 2009 2008 20071

Assets Under Management (AUM) (RM’000) 980,000 835,990 486,459

Total Asset Value (RM’000) 1,022,747 876,714 515,450

Total Net Asset Value (NAV) (RM’000) 568,415 426,873 426,872

Units in Circulation (Units) (000) 429,001 429,001 429,001

Total Borrowings (RM’000) 402,000 395,606 65,500

Gearing Ratio (%) 39.31 45.12 12.71

Net Asset Value per unit (RM)

- As at 31 March 1.32 1.00 1.00

- Lowest NAV during the year 1.00 1.00 1.00

- Highest NAV during the year 1.32 1.00 1.00

Market Price per unit (RM) as at 31 March 0.85 0.87 0.89

Highest Traded Price for the year (RM) 0.95 1.00 1.00

Lowest Traded Price for the year (RM) 0.74 0.83 0.86

INCOME STATEMENT for the financial year/period ended 31 March 2009 2008 20071

Total Gross Income (RM’000) 93,081 57,853 13,891

Total Property Expenses (RM’000) 31,788 17,209 3,822

Net Rental Income (RM’000) 61,293 40,644 10,069

Interest/Other Income (RM’000) 284 416 72

Changes in fair value of investment properties (RM’000) 141,534 - -

Total Income (RM’000) 203,111 41,060 10,141

Total Non-Property Expenses (RM’000) 24,040 9,747 1,792

Total Net Income (RM’000) 179,071 31,313 8,349

Consisting of :

- Realized income after taxation 37,537 31,313 8,349

- Unrealized income after taxation 141,534 - -

Earnings per unit (EPU) (sen) 41.74 7.30 7.032

- Realized 8.75 7.30 7.032

- Unrealized 32.99 - -

Distribution per unit (DPU) (sen) 8.75 7.30 7.032

- Interim 4.27 3.62 -

- Final 4.48 3.68 7.032

AmFIRST Annual Report 2009

3AmFIRST Annual Report 2009

INCOME STATEMENT for the financial year/period ended 31 March (cont’d) 2009 2008 20071

Distribution yield (based on closing market price) (%) 10.29 8.39 7.892

DPU Growth (%) 19.86 3.84 -

EPU yield (based on closing market price) (%) - Realized 10.29 8.39 7.892

Management Expense Ratio (MER) (%) 3 1.56 0.88 0.77

Portfolio Turnover Ratio (PTR) (%) - 0.80 0.31

TOTAL RETURN

Total return (%) 7.88 6.05 (3.54)

- Capital Growth (2.30) (2.25) (11.00)

- Income Distribution 10.18 8.30 7.46

AVERAGE ANNUAL RETURN %

One year 7.88

Since listing date (21 December 2006) 3.46

AUM has increased from RM835,990,441 as at 31 March 2008 to RM980,000,000 as at 31 March 2009.

The calculation of MER is based on total fees of AmFIRST incurred, including the Manager’s fees, Trustee’s fees, audit fees, tax agent’s

fees and administrative expenses, to the average net asset value during the financial year.

The calculation of PTR is based on the average of total acquisition and total disposal of investments in AmFIRST for the financial year

calculated on a weekly basis.

Total return is based on the actual gross income distribution and net change in average market price at the beginning and end of the

financial year, over the average market price of AmFIRST for the respective financial years.

Average Annual Return is computed based on total return per unit for the period averaged over number of years.

Past performance is not necessarily indicative of future performance, unit prices and investment returns may fluctuate.

Notes:-

1. AmFIRST was listed on 21 December 2006. Thus, the Income Statement was related to a period from 21 December 2006 to

31 March 2007.

2. Annualized for the period from 21 December 2006 to 31 March 2007.

3. Based on total fees including the Manager’s fees, Trustee’s fees, audit fees, tax agent’s fees and administrative expenses, to the

average net asset value during the financial year.

FUND PERFORMANCEFinancial Highlights (Cont’d)


Financial Highlights (Cont’d)FUND PERFORMANCE

Note: Performance FY 2009 vs FY 2008.

Total Revenue

61%

Income After Taxation (Realized)

20%

Earnings Per Unit (Realized)

20%

Distribution Per Unit

20%

Total Asset Value

17%

Net Asset Value

33%

Gearing

13%



NET PROPERTY INCOME

70

60

50

40

30

20

10

02007 2008 2009

10.07

40.64

61.29

RM Million

DPU

100

90

80

70

60

50

40

30

20

10

0

TOTAL REVENUE

2007 2008 2009

13.89

57.85

93.08

RM Million

10

9

8

7

6

5

4

3

2

1

02007 2008 2009

1.95

7.30

8.75

Sen

Financial Highlights (Cont’d)2008 - 09 ACHIEVEMENT AT A GLANCE

AMFIRST versus KLCI

20%

15%

10%

5%

0%

-5%

-10%

-15%

-20%

-25%

-30%

-35%

-40%

%

OPR 12-MonthFD Rate

MGS 10-Year Return

AmFIRSTYield

KLProperty

IndexKLCIIndex

SavingsDeposit

-35.22%

-30.22%

1.50% 2.00% 2.50%3.98%

10.29%

COMPARABLE RETURNS

UNIT PRICE versus VOLUME

0

0.2

0.4

0.6

0.8

1

1.2

1/4/2008 1/5/2008 1/6/2008 1/7/2008 1/8/2008 1/9/2008 1/10/2008 1/11/2008 1/12/2008 1/1/2009 1/2/2009 1/3/2009

AmFirst KLCI

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

0

100000

200000

300000

400000

500000

600000

Unit Price Volume

1/4/2008 1/5/2008 1/6/2008 1/7/2008 1/8/2008 1/9/2008 1/10/2008 1/11/2008 1/12/2008 1/1/2009 1/2/2009 1/3/2009

Source: Bloomberg (as at 14/5/09)


Salient Features

ITEM BRIEF DESCRIPTION

Name of Fund AmFIRST

Category of Fund Real Estate

Type of Fund Income and growth

Investment Objective The key objective for AmFIRST is to own and invest in real estate whether directly or indirectly through

the ownership of single-purpose companies whose principal assets comprise real estate and real

estate-related assets.

Investment Strategies The principal strategies are as follows:-

• invest in income-producing real estate and real estate-related assets directly and/or indirectly

through the ownership of single-purpose companies whose principal assets comprise real

estate;

• active asset management;

• improve rental rates while maintaining high occupancy rates;

• attract new tenants and explore expansion needs of existing tenants;

• raise the profile and visibility of the portfolio of properties through proactive marketing,

advertising and promotional efforts;

• develop close tenant-landlord relationships to optimise tenant retention;

• monitor and minimise property expenses;

• enhance the overall portfolio through the acquisition of properties that meet the Manager’s

investment criteria; and

• employ an appropriate conservative capital structure with debt and equity financing policies.

Authorized Investments Invest in real estates, single-purpose companies, real estate-related assets, non-real estate related

assets and liquid assets;

At least 50% of AmFIRST’s total assets must be invested in real estate and/or single-purpose

companies at all times; and

Investment in non-real estate-related assets and/or liquid assets must not exceed 25% of AmFIRST’s

total assets.

Borrowing Limit Up to 50% of the total asset value of AmFIRST at the time the borrowings are incurred.

Investors’ Profile AmFIRST may appeal to investors with a long term investment horizon seeking sustainable distribution

of income and long term capital growth

Approved Fund Size 429,001,000 Units

Distribution Policy Distributions will be paid on a semi-annual basis (or such other intervals as the Manager shall determine)

within two (2) months after AmFIRST book closure date. The Manager shall distribute all or such lower

percentage as determined by the Manager in its absolute discretion of the distributable income of

AmFIRST.

Barring any unforeseen circumstances, it is the intention of the Manager to distribute 100% of the

distributable income of AmFIRST for the financial period ended 31 March 2007 and the 3 financial

years ending 31 March 2008 to 31 March 2010. Thereafter, the Manager intends to distribute at least

90% of the distributable income for each year or such other intervals as determined by the Manager at

their discretion.

Revaluation Policy The properties will be revalued at least once every three (3) years from the date of last valuation.


Board of Directors Profile

Dato’ Azlan Hashim, a Malaysian, aged 67, joined the Board of Am ARA REIT Managers Sdn Bhd on 24 August 2006. Dato’Azlan is a Fellow of the Institute of Chartered Accountants (Ireland), Economic Development Institute (World Bank, Washington) and Institute of Bankers Malaysia.

Dato’ Azlan, a qualified Chartered Accountant, served with the Malayan Railways from 1966 to 1971, and was its Chief Accountant for two years. In 1972, he became a partner of a public accounting firm, Azman Wong Salleh & Co. and was a Senior Partner of the firm prior to joining the board of AMDB Berhad in 1982.

He is the Deputy Chairman of AMMB Holdings Berhad and Chairman of AmInternational (L) Limited and PT AmCapital Indonesia. He is currently the Non-Executive Director of AmFraser Securities Pte Ltd & AmFraser International Pte Ltd. He also sits on the Boards of Kumpulan Perangsang Selangor Berhad, Kumpulan Hartanah Selangor Berhad, Global Carriers Berhad, Paramount Corporation Berhad, Sapura Industrial Berhad, Kesas Holdings Berhad, Metrod (M) Berhad and Syarikat Permodalan & Perusahaan Selangor Berhad. He is also Executive Chairman of Global Carriers Berhad.

Y.Bhg. Dato’ Azlan HashimNon-Independent Non-Executive Chairman



Non-Independent Non-Executive Director

Mr. Cheah Tek Kuang

Mr. Cheah Tek Kuang, a Malaysian, aged 62, was appointed to the Board of Am ARA REIT Managers Sdn Bhd on 24 August 2006. He is currently the Group Managing Director (“Group MD”) of AMMB Holdings Berhad and a member of Group Information Technology Committee.

He joined AmInvestment Bank Berhad (“AmInvestment Bank”) in 1978 and held various senior positions before being promoted to Managing Director in 1994. He became the Group MD of AmInvestment Bank from January 2002 to December 2004 before assuming the office of Group MD in AMMB Holdings Berhad. He remains a Non-Independent Non-Executive Director of AmInvestment Bank.

His directorships in other public companies includes Bursa Malaysia Berhad and Cagamas Berhad. He is an Investment Panel Member of Employees Provident Fund Board and a Member of the Kumpulan Wang Persaraan. He also currently serves as a Council Member of the Association of Banks in Malaysia and is the Alternate Chairman of the Malaysian Investment Banking Association.

Mr. Cheah has a Bachelor of Economics (Honours) degree from the University of Malaya and is a Fellow of the Institute of Bankers Malaysia.

Board of Directors Profile (Cont’d)

Dato’ Teo Chiang Quan, a Malaysian aged 59, was appointed to the Board of Am ARA REIT Managers Sdn Bhd on 24 August 2006. Dato’ Teo joined Paramount Corporation Berhad (“PCB”) as a Director on 19 January 1977. He started to play an active role in the management of PCB when he first served as Chief Executive of the Group’s insurance division from 1981 to 1991.

Under his stewardship, the insurance division grew from a company with a single branch to a respectable and well-capitalized insurance company with 11 branches. He was also instrumental in ensuring the successful merger of the Group’s insurance operations with Jerneh Insurance Bhd (JIB).

Dato’ Teo assumed the position of Group Managing Director and Group Chief Executive Officer of PCB from 1989 to 2008, when he relinquished the post to assume the position of Executive Deputy Chairman.

Dato’ Teo has participated in the Harvard Business School Owner/President Program, OPM 33, a three week per year Executive Education Program from 2002 to 2004. He also completed the “HEC/Oxford University Executive Program” in October 2006. He holds a Honorary Doctorate from Middlesex University, United Kingdom.

Dato’ Teo Chiang QuanIndependent Non-Executive Director

Tuan Haji Mohd Salleh Akram, a Malaysian, aged 60, was appointed to the Board of Am ARA REIT Managers Sdn Bhd on 24 August 2006. He is a Member of the Royal Institution of Chartered Surveyors United Kingdom since 1974. He had, in 1973 obtained the Diploma in Land Use Control from the North-East London Polytechnic (now part of East London University) and is a Fellow of The Royal Institution of Chartered Surveyors, United Kingdom as well as a Fellow of the Institution of Surveyors, Malaysia. He is also a Registered Valuer & Estate Agent with the Board of Valuers, Appraisers & Estate Agents, Malaysia as well as a Life Member of the Institute of Directors, Malaysia.

As a professional graduate and Federal scholar, he served as a Valuation Officer in the Valuation Division, Federal Treasury, Ministry of Finance from April 1974 and saw postings in Selangor, Penang and Johor. He became the Kelantan State Director of Valuation in 1975 until 1977 followed by a stint as the Deputy Regional Director of Valuation Selangor Region.

In April 1980, he left the Treasury to join a chartered valuation firm and later became one of the founder directors upon its incorporation as a private limited professional company. On 1 July 1988, he commenced AKRAM & Co., a chartered surveying firm providing professional services in valuation of properties including plant and machinery, real estate agency, property management and property consultancy.

Tuan Haji Mohd Salleh AkramIndependent Non-Executive Director



Mr. Michael Lim Poh Kok, a Singaporean, aged 52, was appointed to the Board of Am ARA REIT Managers Sdn. Bhd.on 29 June 2007. Mr. Lim holds the position of Director, Risk Management, in Singapore-listed ARA Asset Management Limited (“ARA”). He is also a director of ARA Strategic Capital I Pte Ltd., the manager of the ARA Asian Asset Income Fund.

Prior to joining ARA, from 2000 to 2006, Mr. Lim was a senior credit controller with the Oversea-Chinese Banking Corporation (“OCBC”). As a senior credit controller, he was a risk-partner to the bank’s real estate lending units. He also held the position of real estate specialist credit signer of OCBC with industry-specialist approving authority for the bank’s domestic and international real estate loans.

Mr. Lim was the head of the recruitment marketing and scholarship unit in the Ministry of Education from 1998 to 2000, and managed his own property agency and consultancy company from 1997 to 1998. Mr. Lim began his career in the banking and finance sector in 1981.

Mr. Lim holds a Bachelor of Business Administration (Honours) from the National University of Singapore.

Board of Directors Profile (Cont’d)

Mr. Lim Hwee Chiang, a Singaporean, aged 52, was appointed to the Board of Am ARA REIT Managers Sdn Bhd on 24 August 2006. Mr. Lim is the Group Chief Executive Officer and an Executive Director of Singapore-listed ARA Asset Management Limited, ARA Asset Management (Singapore) Limited - the manager of Singapore-listed Fortune REIT, ARA Trust Management (Suntec) Limited - the manager of Singapore-listed Suntec REIT and ARA Asset Management (Prosperity) Limited, the manager of Hong Kong-listed Prosperity REIT. In addition, Mr. Lim is an Independent Director and Member of the Audit Committee of Teckwah Industrial Corporation Limited. He is also the Vice President of the Hong Kong-Singapore Business Association and a Board Member of the Asian Public Real Estate Association as well as the Valuation Review Board of the Ministry of Finance, Singapore.

Mr. Lim has over 28 years of experience in real estate. From 1997 to 2002, prior to founding ARA, Mr. Lim was an Executive Director of GRA (Singapore) Private Limited, a wholly-owned subsidiary of Prudential (US) Real Estate Investors. From 1996 to 1997, he founded and was the Managing Director of The Land Managers (S) Pte. Ltd., a Singapore-based property and consulting firm specializing in feasibility studies, marketing and leasing management in Singapore, Hong Kong and China. Mr. Lim was the General Manager of the Singapore Labour Foundation Management Services Pte. Ltd. from 1991 to 1995, and was with DBS Land Limited (now part of CapitaLand Limited) from 1981 to 1990.

Mr. Lim holds a Bachelor of Engineering (First Class Honours) in Mechanical Engineering, a Master of Science in Industrial Engineering, as well as a Diploma in Business Administration, each from the National University of Singapore.

Mr. Lim Hwee ChiangNon-Independent Non-Executive Director

Mr. Michael Lim Poh Kok

Ms. Pushpa Rajadurai, a Malaysian aged 51, was appointed to the Board of Am ARA REIT Managers Sdn Bhd on 24 August 2006. Ms. Pushpa joined AmInvestment Bank in May 1989 and has more than 20 years experience in corporate finance and financial consultancy related work.

She is currently the Managing Director, Relationship Banking and Regional Business of AmBank Group. She is responsible for corporate and institutional banking, group corporate strategy and group regional business.

She was the Executive Director of AmInvestment Bank Berhad since 1 January 2005. Prior to that, she was the Director/Head of Corporate Finance involved in both the equity and equity-linked business of the investment bank.

She is a Fellow of the Chartered Association of Certified Accountants and a Member of the Malaysian Institute of Accountants. Prior to joining AmInvestment Bank Berhad, she was attached with PricewaterhouseCoopers.

She is presently on the Boards of AmInvestment Bank Berhad, Malaysian Ventures Management Incorporated Sdn Bhd, AmCapital (B) Sdn Bhd, AmInternational (L) Ltd, PT AmCapital Indonesia, AmPrivate Equity Sdn Bhd and AmTrustee Berhad. She also holds the position of chairperson for the Corporate Finance Committee of the Malaysian Investment Banking Association. She is actively involved in the capital market development in the industry and work extensively with all the regulatory bodies in the country at consultative forums.

Ms. Pushpa RajaduraiAlternate Director to Mr. Cheah Tek Kuang

Alternate Director to Mr. Lim Hwee Chiang

Dear Unitholders,

On behalf of the Board of Directors of Am ARA REIT Managers Sdn Bhd, the Manager of AmFIRST Real Estate Investment Trust (“AmFIRST” or “the Trust”), I have the pleasure of presenting to you the Annual Report and Audited Financial Statements of AmFIRST for the Financial Year Ended 31 March 2009.


Chairman’s Statement

OVERVIEW

Despite the current global economic and financial slowdown, we are pleased to inform Unitholders that AmFIRST performed creditably and registered another year of solid results for the financial year 2009. Both distributable income and distribution per unit (“DPU”) grew substantially and outperformed our earnings forecast.

This is underpinned by the fundamentals of our portfolio and our proactive tenant relations strategy, which have not only enabled us to increase rental income, but also diversify our tenant mix at AmFIRST’s maiden retail mall at The Summit Subang USJ.

Listed with four initial properties namely Bangunan AmBank Group, Menara AmBank, AmBank Group Leadership Centre and Menara Merais, located within the Kuala Lumpur Golden Triangle and Petaling Jaya, our portfolio has grown to include two other properties namely Kelana Brem Towers and The Summit Subang USJ, located within a good catchment area in Kelana Jaya and Subang Jaya respectively. Our assets under management (“AUM”) have grown from the initial RM486 million to RM980 million as at 31 March 2009, through a combination of acquisitions and revaluation gains during the year under review.

OPERATIONS REVIEW

AmFIRST’s portfolio of six properties is well diversified, comprising office, retail, car parks and hotel. This spreads the sectoral risks as well as the geographical coverage across the various property sectors. During the year under review, all six properties enjoyed good and stable occupancy levels, especially the three office buildings within the Kuala Lumpur Golden Triangle area, which saw an average occupancy level above 90%.

During the year, we continued to be active in our asset enhancement strategy. Various upgrading and refurbishment works were undertaken at AmBank Group Leadership Centre, Menara AmBank and The Summit Subang USJ, to enhance the quality of the assets. This had helped us to maintain and attract quality tenants.

Meanwhile, the refurbishment and upgrading works on The Summit Subang USJ is an on-going exercise and it is our aim to transform the property into a preferred shopping destination in the area.

FINANCIAL PERFORMANCE

For the year under review, both gross revenue and distributable income exceeded those of financial year ended 31 March 2008 by 60.89% and 19.86%, respectively. The substantial growth in gross revenue and distributable income was largely due to improved rental income contribution from Kelana Brem Towers and The Summit Subang USJ. Additional revenue and earnings came from new lettings as well as from the positive rental reversion from tenancy renewals during the year under review. On a portfolio basis, tenancy renewals saw a positive reversion of 10.59%.

AmFIRST has employed prudent capital management and active interest rate management strategies. The reduction in Overnight Policy Rate (“OPR”) by 150 basis point to 2.0% has benefited and will continue to benefit AmFIRST by reducing its borrowing cost. As at 31 March 2009, AmFIRST’s gearing stood at 39.31% with the cost of borrowings remaining within the forecast average cost of debt of not more than 4.27% per annum.

As at 31 March 2009, AmFIRST recognized a revaluation gains of RM142 million for its six properties and this is a testimony of the quality assets in its portfolio.



DISTRIBUTION TO UNITHOLDERS

On 8 May 2009, the Board of Directors of Am ARA REIT Managers Sdn Bhd declared a final income distribution per unit (“DPU”) of 4.48 sen payable from the distributable income for the period 1 October 2008 to 31 March 2009. The final income distribution will be paid on 29 May 2009.

The final income distribution, coupled with the interim income distribution of 4.27 sen per unit, paid on 28 November 2008, represents a total DPU of 8.75 sen per unit for the financial year 2009, which has exceeded the financial year 2008 DPU of 7.30 sen by 19.86%.

The total DPU of 8.75 sen represents distribution yield of 10.29%, based on AmFIRST’s closing price of RM0.85 per unit on 31 March 2009, the last trading day of the financial year.

To promote a vibrant and competitive REITs industry locally and regionally, the Government, during the financial year under review, had unveiled in the 2009 Budget that REIT’s final withholding tax on foreign institutional investors be reduced from 20% to 10% and on individuals, from 15% to 10% from 1 January 2009 to 31 December 2011. As such, both our foreign institutional as well as individual investors will benefit and be taxed based on the lower tax regime.

Total Income Distribution of 18 sen per unit and 32% increase in NAV

AmFIRST is pleased to advise Unitholders that from 21 December 2006 till 31 March 2009, we have declared income distribution totaling 18 sen per unit, an 18% return (based on IPO price of RM1.00 per unit) over a period of 27 months. In addition, the Net Asset Value per unit has risen to RM1.32. We have demonstrated to all our Unitholders again we can steadily achieve attractive yield and grow their investment.

OUTLOOK

On Economy

Looking ahead, year 2009 will be a challenging period for all sectors - with the economy projected to grow between -1% to 1% as compared with 4.6% in 2008, in tandem with the slowdown in the global economy.

However, the economy is expected to see a lift in the second half of the year, supported by the two economic stimulus packages being laid out by the government, though the anticipated recovery would also be dependent on the prospects of the global economy and the outcome of the measures introduced by countries affected by the downturn.

The present low Overnight Policy Rate of 2.0% to stimulate growth announced by Bank Negara will provide some breathing space for companies in managing their debts. The much-awaited Financial Guarantee Institution, to be launched by the Government in mid-May will help companies with lower ratings to have access to funds through the bond market. The reactivation of Corporate Debt Restructuring Committee, which is said to be a pre-emptive measure, will provide companies affected by the turmoil, a platform to workout feasible debt restructuring schemes without having to resort to legal proceedings.

In addition, the inherent strength of the Malaysian economy - as reflected in the strong financial sector and comparatively lower debt level among the people, businesses and the Government, would enable the economy to withstand the impact of the external challenges and be able to recover quickly when the global economic and financial situation stabilizes.

On REITs and Property Market

Global financial woes and slowing domestic economic growth had affected market sentiment adversely in the last quarter of 2008 but office market fundamentals remained strong. Lower vacancy rates prompted asking rentals in prime buildings to rise to an average of RM7.10 psf or by about 9.2%.

This robust sentiment however, will not spill over to 2009, as prospective tenants will resist paying premium rents and will be reluctant to commit to new space, preferring to ride out the economic crisis.

Despite the fact that half of the new space coming onto the market this year is already pre-let, there will probably be a moderate “leasing war” led by less well-located buildings to the detriment of better quality properties. Landlords currently quoting RM6.80 to RM7.50 psf for new buildings will take a pragmatic view when there are opportunities to secure major tenancies. Looking ahead, REITs are expected to focus on cost saving and income protection by retaining tenants in 2009.

It is too early to say with any certainty where yields and capital values will settle this year. However, capital values for commercial real estate appears to have peaked in 2008 with investment yields expected to trend north and easing investment activity the most likely scenario going forward.

There were no major new office space last year, only a fraction of about one million sq. ft. was added. Another 1.5 million sq. ft. will come on stream this year, including The Icon along Jalan Tun Razak, which offers 500,000 sq. ft. of lettable area.

Meanwhile, demand for retail space in new developments was weak as retailers opted to open new outlets in existing well-established retail centres. Other retailers, particularly hypermarkets, local brands and smaller retailers were still looking to expand this year. Newly opened major shopping malls such KL Pavilion, Gardens and Sunway Pyramid 2 have gradually filled-up by tenants who had signed leases in 2007. The city registered a retail vacancy rate of 8.80%, as compared with the suburbs which registered only 3.70%.

Three new retail centres in the suburbs, namely AEON AU2, Giant and Tropicana Mall added a total of 984,000 sq. ft. of new space to the market in the fourth quarter of 2008. The new supply has yet to have any significant impact on the performance of the existing retail centres. A number of planned retail developments were cancelled or delayed during the review period resulting in a 20% contraction in upcoming supply in 2009 and 2010.

On AmFIRST

AmFIRST will continue to focus on its core strategy of pro-active asset management of its existing property portfolio to maximize earnings for our Unitholders. Pro-active asset management and prudent capital management will continue to be our key priorities for the next financial year.

APPRECIATION

As AmFIRST moves into another financial year and strives to deliver stable earnings growth, on behalf of the Board of Directors, I would like to thank our Unitholders, tenants, regulatory bodies, analysts, fund managers, bankers, advisers, consultants and our staff for your continuing support to AmFIRST. I also wish to express my earnest gratitude to my fellow Directors for their wisdom and contribution.

During the financial year under review, the Manager witnessed the departure of Acting Chief Executive Officer, Mr. Anthony Ooi Kwee Yang, who retired in August 2008. On behalf of the Board of Directors, I wish to thank him for all his contributions and effort in growing AmFIRST’s assets from the initial four properties to six.

In addition, I would like to welcome Mr. Lim Yoon Peng as the new Chief Executive Officer of Am ARA REIT Managers Sdn Bhd. He brings with him a wealth of experience in the property and M-REIT industry.

Sincerely

Dato’ Azlan HashimChairman

Chairman’s Statement (Cont’d)

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1. MR. LIM YOON PENG Chief Executive Officer

Mr. Lim Yoon Peng was appointed as Chief Executive Officer of Am ARA REIT Managers Sdn Bhd (“Am ARA REIT”) on 15 August 2008. Prior to joining Am ARA REIT, he was the Chief Financial Officer of Axis-REIT Managers Berhad, responsible for the finance and risk management functions including business and investment strategies, regulatory compliance, acquisition analysis as well as capital management.

Mr. Lim or fondly known as YP in Malaysian REIT’s industry, has over 30 years of extensive financial management and accounting experience and has held senior positions in various multinational companies from UK, Australia and Malaysia. He spent four years as the Financial Controller cum Company Secretary of Victoria Investments & Properties Pty Ltd, a group of companies involved in property investment and development in Melbourne, Australia.

Management Team

Being one of the pioneers in Malaysian REITs industry, Mr. Lim was invited as speaker on a number of regional and international REITs conferences. He has also conducted a REIT workshop for a local financial institution and was the sole representative from the M-REIT industry to make a joint presentation to the Minister in the Prime Minister’s Department to seek a reduction in the withholding tax on REIT’s income distribution, which was adopted in the 2009 Budget. He has also contributed a series of articles on the development of Malaysian REITs in several accountancy and other trade journals.

Mr. Lim is a Fellow Member of The Chartered Association of Certified Accountants, UK and a Member of the Malaysian Institute of Accountants and Fellow Member of CPA Australia. In September 2007, he was featured by ACCA Malaysia as one of the 50 Malaysian CFOs holding strategic position in a leading industry in Malaysia.

Family Relationship with any Director and/or substantial Unitholders.

Mr. Lim has no relationship with any Directors or substantial Unitholders.

Conflict of Interest

No conflict of interest has arisen during the financial year under review.

Conviction of Offences

Mr. Lim has not been convicted of offences within the past 10 years.



2. PANNEER SELVAM NARAYANAN Head of Finance

Panneer was appointed as Head of Finance of Am ARA REIT

Managers Sdn Bhd (“Am ARA REIT”) in April 2007. Prior to that, he

was the Finance Manager responsible for financial matters relating

to AmFIRST namely the review of financial and management

reporting, capital management, treasury and risk management.

He is also the designated Compliance Officer for statutory and

regulatory matters. He was also involved in the reconstitution of

AmFIRST Property Trust and was instrumental in the listing of

AmFIRST.

Prior to joining Am ARA REIT, he was the Accounts Manager of

AmProperty Trust Management Berhad, the Manager of AmFIRST

Property Trust and was responsible for the financial matters of

the Trust. During his tenure with the Trust, he had been involved

in various discussions with the Ministry of Finance and Inland

Revenue Board, with regards to taxation and accounting issues of

the REIT industry.

He has worked with several subsidiaries of public listed companies

for more than five years in the area of finance and accounting.

Panneer holds a Bachelor of Commerce (Hons) degree in

Accounting from University of Tasmania, Australia. He is also a

Member of National Institute of Accountants (Australia), a Member

of International Federation of Accountants.

3. ZUHAIRY MD. ISA Head of Asset Management

Zuhairy was appointed as the Head of Asset Management of Am

ARA REIT Managers Sdn Bhd (“Am ARA REIT”) on 15 April 2008.

He is responsible for overseeing the management, leasing and

the implementation of organic growth strategies to enhance the

performance of AmFIRST property portfolio.

He has more than 14 years of related working experience prior to

joining Am ARA REIT. His last position was Assistant Vice President

II with MIDF Property Bhd, heading the Leasing and Marketing

Department for Klang Valley Region. He was also responsible in

handling the land and development matters throughout Malaysia as

well as in Indonesia. He also served as Director for the subsidiaries

involved in logistics in Malaysia and property development in

Indonesia.

He graduated from the University of Newcastle Upon-Tyne, United

Kingdom with Postgraduate Diploma and Bachelor of Arts (Hons)

degree, both in Town Planning where he also had a stint as a

Trainee Planner with the South Tyneside Metropolitan Borough

Council, United Kingdom.

4. CARRIE CHUA MOOI CHU Tenancy Manager

Carrie Chua Mooi Chu was appointed as Tenancy Manager of

Am ARA REIT Managers Sdn Bhd (“Am ARA REIT”) on 3 October

2008. Her main responsibility is the marketing and leasing of space

in the AmFIRST’s portfolio as well as overseeing the Tenant Care

Program. She also oversees tenancy related matters, including

supervising and monitoring the appointed Property Managers.

Prior to joining Am ARA REIT, she was the Complex Manager of

The Summit Subang USJ. She was responsible for the planning

and implementation of creative and effective leasing strategies to

ensure greater leasing of promotion space, better retail mix and

effective shopping programs to enhance revenue. Her duty also

includes ensuring timely collection to achieve target.

She has more than 10 years of experience ranging from Sales and

Marketing, managing retail mall, establishing good rapport and

networking with tenants from all trades. Carrie holds an LCCI in

Business Accounting and Diploma in Secretarial from Systematic

College and has worked in several public listed companies, mainly

in marketing division.

5. ZETY FAZILAH BAHARUDDIN Investor Relations Manager

Zety was appointed as Investor Relations Manager of Am ARA

REIT Managers Sdn Bhd (“Am ARA REIT”) on 15 May 2007.

She is responsible for coordinating, communicating and liaising

with unitholders, potential unitholders, fund managers, analysts

and media to create value on AmFIRST and providing customer

service.

Prior to joining Am ARA REIT, she was a Corporate Communications

Manager of Telekom Malaysia Berhad, Malaysian Business (TM

Net). Prior to this, she was with Perbadanan Nasional Berhad (PNS),

an agency under the Ministry of Entrepreneur and Cooperative

Development (MECD), responsible in promoting franchise business

in Malaysia and marketing local brands that deemed fit for franchise

overseas.

Zety started her career as Journalist with The Business Times, a

wholly-owned subsidiary of The New Straits Times Press (M) Berhad

in 1996, covering the oil and gas, property, plantations and energy

sector, before joining Petronas Dagangan Berhad as Assistant

Manager at the Group Brand Communications Department.

She graduated from the University of Wollongong, New South

Wales, Australia with Master of Arts (Hons) in International Relations,

majoring in Politics and Diplomacy. She also holds a Bachelor of

Arts degree in Journalism from Universiti Teknologi MARA (formerly

known as Institut Teknologi MARA).

Management Team (Cont’d)

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AmFIRST Structure



Am ARA REIT Managers Sdn Bhd (“Am ARA REIT”) as the Manager of AmFIRST Real Estate Investment Trust (“AmFIRST”), recognizes that

an effective corporate governance culture is essential to protect the best interest of the Unitholders, as well as critical to the performance

of the Manager and consequently, the success of AmFIRST.

As a result, the Manager has adopted a good corporate governance framework that is designed to meet the best practice principles. In

particular, the Manager has an obligation to act honestly, with due care and diligence, and in the best interests of the Unitholders.

The following sections describe the Manager’s main Corporate Governance Practices and Policies which are guided by measures

recommended in the Guidelines on Real Estate Investment Trust issued by the Securities Commission (“SC REIT Guidelines”), the

Malaysian Code on Corporate Governance (“Code”) and the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Malaysia”)

(“Bursa Listing Requirements”).

THE MANAGER OF AMFIRST

Am ARA REIT Managers Sdn Bhd, as the Manager of AmFIRST

has general powers of management over the assets of AmFIRST.

Its main responsibility is to manage the assets and liabilities of

AmFIRST for the benefit of its Unitholders with a view to providing

long-term and sustainable distribution of income to its Unitholders

and to achieve long-term growth in the net asset value per unit, so

as to provide competitive investment return to its Unitholders.

The primary role of the Manager is to set the strategic directions of

AmFIRST and make recommendations to Mayban Trustees Berhad

(“Trustee”), as Trustee of AmFIRST on the acquisition or divestment

of assets of AmFIRST in accordance with its stated investment

strategy. The research, analysis and evaluation required for this

purpose is co-ordinated and carried out by the Manager. The

Manager is also responsible for the risk management of AmFIRST.

Other functions and responsibilities of the Manager are as follows:

• Investment Strategy – formulate and implement AmFIRST’s

investment strategy, including determining the location,

sub-sector, market risk, type and other characteristic of

AmFIRST’s property portfolio.

• Acquisition and Divestment – make recommendations

to and co-ordinate with the Trustee and implement the

acquisition of new assets and divestment of AmFIRST’s

existing investments.

• Asset Management – supervise and oversee the

management of AmFIRST’s properties including preparing

property plans on an annual basis for review by the Directors

of the Manager which may contain proposals and forecasts

on net income, capital expenditure, sales and valuations,

explanation of major variances to previous forecasts, written

commentary on key issues and underlying assumptions

on rental rates, occupancy costs and any other relevant

assumptions. The purpose of these plans is to explain the

performance of AmFIRST’s assets.

• Financing – formulate plans for equity and debt financing

for AmFIRST’s funding requirements.

• Accounting Records – keep books and prepare or cause to

be prepared accounts and annual reports, including annual

budgets for AmFIRST.

• Supervisory Services – supervise day-to-day administrative

service as AmFIRST’s representative, including

administrative services relating to meetings of Unitholders

when such meetings are convened.

• Investor Relations – Co-ordinate, communicate and liaise

with Unitholders / Investors.

• Compliance Management – supervise all regulatory filings

on behalf of AmFIRST, and ensure that AmFIRST is in

compliance with the applicable provisions of the Securities

Commission Act, the SC REIT Guidelines, Bursa Listing

Requirements, the Trust Deed, and all relevant contracts.

The Manager endeavors to carry on and conduct AmFIRST’s

business in a proper and efficient manner and to conduct all

transactions with, or on behalf of AmFIRST, on arms length basis.

The Manager also manages and supervises the service providers

including the property managers Rahim & Co. Chartered

Surveyors, ReGroup, Jones Lang Wootton and DTZ Nawawi Tie

Leung (“property manager”), who perform day-to-day property

management functions for AmFIRST’s properties pursuant to the

property management agreement signed for each property.

AmFIRST constituted as a trust, is externally managed by the

Manager and accordingly, it has no personnel of its own. The

Manager appoints experienced and well-qualified management

personnel to handle the day-to-day operations of AmFIRST. All

employees of the Manager are not remunerated by AmFIRST. Am

ARA REIT is appointed as the manager of AmFIRST in accordance

with the terms of the Trust Deed dated 28 September 2006, which

outlines the circumstances under which the Manager can be

retired.

Corporate Governance


DIRECTORS OF THE MANAGER

The Board

The Manager is led and managed by an experienced Board of

Directors (“Board”) with a wide and varied range of expertise. This

broad spectrum of skills and experience gives added strength to

the leadership, thus ensuring the Manager is under the guidance of

an accountable and competent Board. The Directors recognize the

key role they play in charting the strategic direction, development

and control of the Manager and have adopted the primary

responsibilities as listed in the REIT Guidelines as well as the roles

and duties set out in the REIT Guidelines, which facilitate the

discharge of the Directors’ stewardship responsibilities.

Board Balance

The Board has five (5) members comprising of three (3) Non-

Independent Non-Executive Director and two (2) Independent

Non-Executive Director. More than 1/3 of Directors are considered

independent which complies with paragraph 15.02 of Bursa Listing

Requirements, which requires at least one-third of the Board

members to be Independent Directors. The profile of the members

of the Board are provided in pages 7 to 9 of the Annual Report.

The Chief Executive Officer is responsible for the day-to-day

operations and he works with the Board to determine the overall

business, investment and operational strategies for AmFIRST and

ensures that they are implemented as planned and in accordance

with the Trust Deed, Securities Commission Act and Guidelines.

In addition, the Chief Executive Officer is also responsible for the

overall planning in respect of the future strategic development and

growth of AmFIRST.

The Board focuses mainly on strategy, financial performance and

critical business issues, including:-

• The strategic business plans

• Key financial performance indicators

• Principal risks and their management

• Succession planning for senior management

• Investors and Unitholders relations programs

• Systems of internal control

Board Meetings

Board meetings are scheduled at least four (4) times per annum

to review the operations of AmFIRST and to approve the annual

financial statements of AmFIRST. Additional meetings are held as

and when urgent issues and important decisions need to be taken

between the scheduled meetings.

The Board met four (4) times during the financial year ended 31

March 2009. The number of meetings attended by each Director

is as follow:

Directors Designation Attendance

Dato’ Azlan Hashim Non-Independent

Non-Executive Chairman 4

Cheah Tek Kuang Non-Independent

Non-Executive Director 3

Dato’ Teo Chiang Quan Independent


Tuan Haji Salleh Akram Independent


Lim Hwee Chiang Non-Independent


Access to and Supply of Information and Advice

All Board members are supplied with information on a timely

manner. The Agenda together with the full set of Board papers

containing information relevant to the Board meetings are circulated

to the Directors prior to the Board meetings. There is sufficient time

for the Directors to review and seek clarification where necessary

prior to meeting being held and this process enables the Directors

to make better and informed decisions.

All Directors have access to the advice and services of the Company

Secretary and have the right to seek independent professional

advice when necessary in discharging their duties, making

acquisition decisions and complying with relevant legislations and

regulations.

Appointment to the Board

The Board as a whole will serve as the Nominating Committee.

All new nominations received are assessed and approved by the

entire Board in line with its policy of ensuring nominees are persons

of sufficient caliber and experience. The process of assessing the

Directors is an on-going responsibility of the entire Board.

ACCOUNTABILITY AND AUDIT

Financial Reporting

The Board is responsible for ensuring that financial statements

are drawn up in accordance with the provisions of the Act, and

applicable approved accounting standards in Malaysia. The

Directors are satisfied that in preparing the financial statements of

AmFIRST for the financial year ended 31 March 2009, AmFIRST has

applied consistently, suitable accounting policies and supported by

reasonable and prudent judgments and estimates.

Corporate Governance (Cont’d)



Internal Control

The Board is responsible for maintaining a system of internal

control that covers financial and operational controls and risk

management. The system provides reasonable but not absolute

assurance against material misstatement of management and

financial information or against financial losses and fraud.

Relationship with Auditors

The Board maintains a transparent relationship throughout their

association with the external auditors. The appointment of external

auditors, who may be nominated by the Manager, is approved by

the Trustee. The auditors appointed must be independent of the

Manager and Trustee. The remuneration of the auditors is approved

by the Trustee.

RELATED PARTY TRANSACTIONS AND CONFLICT OF INTEREST

The Manager will establish procedures that will ensure that related party

transactions and conflicts of interest are undertaken in full compliance

with the SC REIT Guidelines, the Trust Deed and the Bursa Listing

Requirements.

The Board will consider AmFIRST’s best interest in relation to decision

affecting it when they vote as a member of the Board. In addition, the

Directors and Chief Executive Officer of the Manager are expected to

act with honesty and integrity at all times.

RISK ASSESSMENT AND MANAGEMENT OF BUSINESS RISK

The Manager operates within overall guidelines and specific

parameters set by the Board. Each transaction is comprehensively

analyzed to understand the risk involved. Responsibility for

managing risk lies initially with the business unit concerned, working

within the overall strategy outlined by the Board.

The Board reviews the risk to the assets of AmFIRST, and act

upon any comments of the auditors. In assessing business risk,

the Board considers the economic environment and the property

industry risk.

COMMUNICATION WITH UNITHOLDERS

The Board acknowledges the importance of regular communication

with Unitholders and investors to ensure that they are well informed

of the activities and performance of AmFIRST. The communication

channels are via AmFIRST website, annual reports, quarterly

financial reports and the various disclosures and announcements

released on Bursa Malaysia Securities Berhad’s website.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility (“CSR”) is part of the organization way of succeeding in business, and is, in essence, a set of transparent and ethical actions to give back, nurture and aid in the progress of the various environments in which the corporation operates. This is to contribute to the partners, customers and sources without which the organization would not be able to succeed and prosper.

As part of our responsibility to the market place, AmFIRST’s business transactions, deals and relationships with all its groups of customers, suppliers and partners are executed with the highest concern for transparency and ethical conduct, guided by high corporate governance standards. At the workplace, we encouraged staff to be environmentally friendly and adopt cost saving measures.

OTHER INFORMATION

Family Relationship with any Director and/or substantial Unitholders

None of the Directors of the Manager has any family relationship with any other Directors or major Unitholders, except for Dato’ Azlan Hashim, who is a brother of Tan Sri Dato’ Azman Hashim, a substantial Unitholder of AmFIRST.

Conflict of Interest

Save for the Directors’ interests in AmFIRST (as disclosed under Director’s interests in the Manager’s Report) and the transactions with companies related to the Manager (as disclosed in the notes to the financial statements), no conflict of interest has arisen during the financial year under review.

Convictions for Offences

None of the Directors has been convicted for offences within the past 10 years.

Material Contracts

There were no material contracts entered by the Trust that involved the Directors of the Manager or substantial Unitholders of the Trust during the financial year under review.

Directors’ Training

All the Directors have attended the prescribed “Mandatory Accreditation Program for Directors of Public Listed Companies” and “Continuing Education Program” (CEP) to enable them to discharge their duties and responsibilities effectively. In addition, all Directors are encouraged to attend briefings and seminars to keep abreast with the latest developments in the industry.

During the year the Directors have attended “Strategic Project Management”, “Warrant Buffett & Investment” and “Operational Risk Management Awareness” trainings, and “Leadership Profiling and Coaching” conference.

Corporate Governance (Cont’d)


Property Portfolio

BANGUNAN AmBANK GROUP (“BAG”)Bangunan AmBank Group is located within the prime commercial centre of the Kuala Lumpur Golden Triangle, which is predominantly characterized by modern high-rise office buildings, international class hotels, exclusive shopping complexes and luxury condominiums/service apartments. The 26-storey office building is situated at Jalan Raja Chulan and it is easily accessible from all parts of Kuala Lumpur.

AmBank % Total %

FYE Group (sq. ft.) (sq. ft.)

2010 43,678 83.14 52,538 14.59

2011 72,372 95.16 76,053 21.11

2012 195,612 84.47 231,575 64.30

TOTAL 311,662 360,166 100.00



Property Portfolio (Cont’d)

BANGUNAN AMBANK GROUP

Location : Bangunan AmBank Group

No. 55, Jalan Raja Chulan

50200 Kuala Lumpur

Land Title : Title No. Pajakan Negeri 4512

Lot No. 1200, Section 57

Town and District of Kuala Lumpur

Wilayah Persekutuan

Tenure : Leasehold 99 years expiring on

3 June 2084 (unexpired term of

approximately 75 years)

Limitation on Title : Nil

Encumbrances : Nil

Year of Completion : 1987

Age : 23 years

Net Lettable Area : 360,166 sq ft

Car Park : 477

Number of Tenants : 7

Purchase Price : RM180.15m

Market Value1 : RM226.00m

Date of Valuation : 27 February 2009

Occupancy Rate2 : 100.00%

Gross Revenue : RM21.28m

Net Property Income : RM15.36m

Capital Expenditure : Nil

TENANT MIX

CATEGORY SQ. FT. %

Banking & Financial Institution 311,662 86.53

Advocates & Solicitors 43,407 12.05

Health 780 0.22

Services & Others 4,317 1.20

Major Tenants

1. AmBank Group2. Shook Lin & Bok3. Syed Alwi, Ng & Co

Notes:1. Valued by CH Williams Talhar & Wong Sdn Bhd2. As at 31 March 2009

LEASE RENEWAL PROFILE

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AmBANK GROUP LEADERSHIP CENTRE (“AGLC”)AmBank Group Leadership Centre is 13-storey office building located at Lorong P. Ramlee within the prime business district of Kuala Lumpur Golden Triangle. It is situated within a short walking distance to one of Kuala Lumpur’s famous tourist attraction, the KL Tower. The surrounding is developed with multi storey office towers, shopping complexes, hotels and high-rise high-end condominiums. It is easily accessible via Jalan Raja Chulan or Jalan Sultan Ismail and Jalan P. Ramlee.




TENANT MIXAMBANK GROUP LEADERSHIP CENTRE

Location : AmBank Group Leadership Centre

Lorong P. Ramlee 50250

Kuala Lumpur

Land Title : Title No. Geran 6312



Wilayah Persekutuan

Tenure : Freehold


Encumbrances : Nil


Age : 19 years


Car Park : 57








Capital Expenditure : RM0.60m

CATEGORY SQ. FT. %


Florist 200 0.38

Major Tenants

1. AmBank Group2. BZ Bees Florist

AmBank % Total %


2010 42,577 100.00 42,577 79.88

2011 10,524 98.14 10,724 20.12

2012 - - - -

TOTAL 53,101 53,301 100.00


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MENARA MERAIS (“MERAIS”)Menara Merais is a landmark building in Petaling Jaya, as it is the only high rise building in the area. It is located at Jalan 19/3, Section 19 Petaling Jaya, next to the Rothmans roundabout. Its immediate locality mainly purpose-built factories, warehouses and prominent showroom premises such as UMW Toyota, British American Tobacco, Ssangyong and Citroen. Over the past few years, the traditional industrial area of Petaling Jaya has been experiencing a shift from accommodating industrial based premises to limited commercial, office and service-based premises. Today, Menara Merais is surrounded by integrated commercial development such as Jaya 33, 32 Square and Jaya One. This 22-storey building is easily accessible from Kuala Lumpur, Subang Jaya, Shah Alam and Klang via the Federal Highway. It is also accessible from Kuala Lumpur via Jalan Duta, Jalan Semantan in Damansara and the Sprint Highway.

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TENANT MIXMENARA MERAIS

Location : Menara Merais

No. 1, Jalan 19/3

46300 Petaling Jaya

Selangor Darul Ehsan

Land Title : HSM 9104

PT No 29649

Mukim of Sungai Buloh

District of Petaling

State of Selangor Darul Ehsan

Tenure : Freehold


Encumbrances : Lien Holder’s Caveat


Age : 15 years


Car Park : 324









CATEGORY SQ. FT. %

Health 45,110 43.78

Telecommunication / IT /

Electronic / Electrical 30,058 29.17

Utilities 7,671 7.45

Construction & Real Estate 7,671 7.45


Major Tenants

1. KAO (M) Sdn Bhd2. Alliance Teamwork Marketing Sdn Bhd3. AGFA Film (Asean) Sdn Bhd

FYE Total (sq. ft.) %

2010 88,451 87.05

2011 10,966 10.79

2012 2,188 2.16

TOTAL 101,605 100.00





MENARA AmBANK (“MAB”)Menara AmBank is located along Jalan Yap Kwan Seng and within the heart of the Kuala Lumpur Golden Triangle. It is situated about 0.5km from the Kuala Lumpur City Centre (KLCC) and is easily accessible from city centre via Jalan Ampang and Jalan Yap Kwan Seng. Alternatively, it is accessible via Jalan Tun Razak. The nearest light rail transit station, Putra-KLCC Station is located within walking distance from the building. This 46-storey prominent office building (one of the top three winners in the 2007 Building Illumination and Decorative Competition) is surrounded by high-rise purpose built office building, prime retail complexes, luxurious high-rise condominiums and service apartments as well as international hotels.



CATEGORY SQ. FT. %


Oil & Gas 37,260 8.65

Telecommunication / IT /

Electronic / Electrical 26,836 6.23

Food & Beverages 12,569 2.92

Construction & Real Estate 4,415 1.02

Health 2,349 0.55

Surveillance & Security 1,931 0.45

Service & Others 19,784 4.59

Major Tenants

1. AmBank Group2. Germanischer Lloyd (M) Sdn Bhd3. Acer Sales & Services Sdn Bhd



TENANT MIX

AmBank % Total %


2010 310,539 94.84 329,898 76.15

2011 2,650 21.97 12,061 2.78

2012 12,441 13.63 91,273 21.07

TOTAL 325,630 433,232 100.00


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MENARA AMBANK

Location : Menara AmBank

No. 8, Jalan Yap Kwan Seng

50450 Kuala Lumpur

Land Title : Title No. Geran 52468



Wilayah Persekutuan

Tenure : Freehold


Encumbrances : Nil


Age : 12 years


Car Park : 776








Capital Expenditure : RM1.87m



KELANA BREM TOWERS (“KBT”)Kelana Brem Towers is located within SS7, Kelana Jaya and it is easily accessible from Kuala Lumpur city centre via the North Klang Valley Expressway (NKVE), Lebuhraya Damansara-Puchong (LDP) and Federal Highway. The office building comprises of two 16-storey purpose-built office towers sitting atop a 5-storey podium block and one level basement car park. Other prominent properties located in the close proximity include the Kelana Jaya Recreational Park Kelana Jaya Centre Court Sports Complex, Kelana Jaya Commercial Centre and prominent residential area.




TENANT MIX

Major Tenants

1. Lembaga Hasil Dalam Negeri2. LG Electronics (M) Sdn Bhd3. Kimberly-Clark Trading (M) Sdn Bhd4. Swisslog Malaysia Sdn Bhd5. Superkad Services Sdn Bhd


2010 105,820 37.25

2011 150,781 53.08

2012 27,472 9.67

TOTAL 284,073 100.00

CATEGORY SQ. FT. %

Government Agencies 83,294 29.32Telecommunication / IT/ Electronic / Electrical 81,765 28.78Trading 39,611 13.94Construction & Real Estate 21,456 7.55Transportation & Freight 11,805 4.16Health & Personal Care 11,400 4.01Education 11,171 3.93Investment 6,171 2.17Advocates & Solicitors 1,000 0.35Services & Others 16,400 5.77

Notes:1. Valued by Rahim & Co Chartered Surveyors Sdn Bhd2. As at 31 March 2009


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KELANA BREM TOWER

Location : Kelana Brem Towers

Jalan SS 7/15 (Jalan Stadium)

47301 Kelana Jaya

Selangor Darul Ehsan

Land Title : HSM 8547

Lot No. PT 5135

Mukim of Damansara

District of Petaling

State of Selangor Darul Ehsan

Tenure : Leasehold 99 Years expiring on

19 February 2094 (unexpiring term of

approximately 85 years)




Age : 8 years


Car Park : 645











THE SUMMIT SUBANG USJ (“The SUMMIT”)The Summit Subang USJ is located within one of the commercial hubs of UEP Subang Jaya and one of the major townships in the Klang Valley. The Summit Subang USJ is an integrated commercial complex, which comprises of a 13-storey office tower and a 17-storey hotel tower, both located atop a 6-storey retail podium. The retail mall is currently undergoing enhancement works, to transform it into a “Preferred Shopping Mall” in the locality. Located about 35 km from Kuala Lumpur city centre, it is accessible via the Federal Highway or the New Pantai Expressway, which will eventually intersect with Persiaran Kewajipan. Alternatively, it is also accessible from the Lebuh Raya Shah Alam via the Kewajipan Interchange. Lebuhraya Shah Alam forms part of the Kuala Lumpur Middle Ring Road II and is connected to three major highways namely the North-South Expressway, Puchong-Damansara Expressway and North-South Expressway Central Link.




THE SUMMIT SUBANG USJ

Location : The Summit Subang USJ Persiaran Kewajipan, USJ 1 47600 UEP Subang Jaya Selangor Darul Ehsan

Land Title : Geran 43528 Lot 14, Pekan Subang Jaya District of Petaling State of Selangor Darul Ehsan

Tenure : Freehold




Age : 11 years

Net Lettable Area : Office - 102,294 sq ft Retail - 521,895 sq ft Hotel - 286,599 sq ft

Car Park : 2,125

Number of Tenants : Office - 21 Retail - 95




Occupancy Rate2 : Office - 69.93% Retail - 84.27% Hotel - 75.58%




Notes:1. Valued by Rahim & Co Chartered Surveyors Sdn Bhd2. As at 31 March 2009

THE SUMMIT HOTEL

Average Room Rate RM148.58

No. of Rooms 332

Occupancy Rate 75.58%

Gross Hotel Income RM22.59m

Net Rental Received by AmFIRST RM7.00m

* As at 31 December 2008** As at 31 March 2009

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**

*

**


OFFICE

CATEGORY SQ. FT. %

Construction 17,314 24.20

Health / Personal Care / Beauty 6,449 9.01

Logistics 11,429 15.98

Telecommunication & IT 6,233 8.71


CATEGORY SQ. FT. %

Anchor (Supermarket &

Departmental Store) 95,359 22.17

Food & Beverages 50,228 11.68

Fashion & Accessories 27,723 6.44

Hobbies / Jewellery /

Specialty Shops 23,158 5.38

Electrical & Telecommunication 15,240 3.54

Health / Personal Care / Beauty 5,887 1.37

Leisure & Entertainment/

Sports & Fitness 120,275 27.96

Education & Auditorium 76,115 17.69

Home Improvement 7,238 1.68


Major Tenants

1. EcoFirst Consolidated Berhad

2. Meda Inc. Berhad

3. UPS SCS Services (Malaysia) Sdn Bhd

Major Tenants

1. Point B!

2. Ampang Superbowl

3. Cold Storage

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THE SUMMIT SUBANG USJ - RETAIL

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2010 33,969 48.70

2011 18,107 25.96

2012 17,678 25.34

TOTAL 69,754 100.00


2010 207,469 48.53

2011 150,541 35.21

2012 69,526 16.26

TOTAL 427,536 100.00



Portfolio Review

PROPERTY REVIEW

Acquisition of yield accretive properties has been the focus of AmFIRST’s strategy to build up the portfolio of the Trust. The acquisition of The Summit was completed on 31 March 2008 and its full year performance was recognized over the last twelve months. It contributed RM 34.14 million in terms of gross revenue and RM 23.00 million in terms of net property income. Similarly, we are also able to account for the full year’s performance for KBT, since this acquisition was completed on 21 June 2007. KBT’s gross revenue and net property income contribution for the financial year ended 31 March 2009 were RM 9.43 million and RM 6.06 million respectively.

AmFIRST remains one of the larger office space REITs in Malaysia and is well positioned to capitalize on rising rental rates and capital values. The total assets under management of AmFIRST as at 31 March 2009 stood at RM 980 million, an increase of 17% over the previous year.

DIVERSIFICATION AND GROWTH

AmFIRST now owns a well diversified portfolio of properties in the following sectors:-

• Office• Retail• Hotel

This diversification enables AmFIRST to mitigate any income streams volatility and to reach out to other property sectors for investment opportunities to support its growth. The main focus, however, is in the commercial office sector in the Klang Valley.

In evaluating future acquisitions, AmFIRST will continue to focus on the yield accretion, location, tenant strength, lease structure, enhancement possibilities, valuation, occupancy and capital

appreciation potential.

SUMMARY OF INVESTMENT PORTFOLIO

Book values

Enhancements Total based on Net

Acquisition Acquisition up till Investment Fair Value latest Gross Property Property

Name Date Cost 31/03/2009 outlay Adjustments valuation Rental Expenses Income

(RM’000) (RM’000) (RM’000) (RM’000) (RM’000) (RM’000) (RM’000) (RM’000)

MAB 21/12/06 230,170 1,873 232,043 59,957 292,000 21,784 8,184 13,600

BAG 21/12/06 180,152 0 180,152 45,848 226,000 21,284 5,925 15,359

AGLC 21/12/06 19,056 596 19,652 348 20,000 1,924 967 957

Merais 21/12/06 57,081 0 57,081 4,919 62,000 4,517 2,204 2,313

KBT 21/06/07 86,051 0 86,051 18,949 105,000 9,430 3,372 6,058

The Summit 31/03/08 263,487 0 263,487 11,513 275,000 34,142 11,136 23,006

835,997 2,469 838,466 141,534 980,000 93,081 31,788 61,293

PORTFOLIO GROWTH

As at 31 March 2009, the total investment properties of AmFIRST was RM 980 million This represented an increase of 17% over the

previous year.

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Portfolio Review (Cont’d)

GROWTH OF SPACE UNDER MANAGEMENT

TOP TEN TENANTS AS AT 31 MARCH 2009

Nos. Names Location Total Revenue

%

1. AmBank Group BAG/MAB/AGLC 38.23

2. Lembaga Hasil Dalam Negeri KBT 2.94

3. Shook Lin & Bok BAG 2.00

4. Germanischer Llyod GLM Sdn Bhd MAB 1.49

5. LG Electronics (M) Sdn Bhd KBT 1.02

6. Kimberly-Clark Trading (M) Sdn Bhd KBT 1.01

7. Ampang Superbowl The Summit 0.90

8. Golden Screen Cinema Sdn Bhd The Summit 0.88

9. MBF Cards (M) Sdn Bhd MAB 0.70

10. Acer Sales And Services Sdn Bhd MAB 0.68

49.85

PORTFOLIO DIVERSIFICATION (BY NLA)

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TOP TEN TENANTS AS AT 31 MARCH 2009

PROACTIVE ASSET MANAGEMENT

Organic growth and enhancements

The Asset Management team is constantly exploring ways to

enhance value of the Trust’s assets and revenue through:-

• Revenue enhancements via tenant profiling and retention,

including early renewals, effective car park management and

proactive lease management;

• Exploring and increasing tenantable areas – effective space

utilization hence increasing net lettable area;

• Upgrading and refurbishment;

• Effective operating expense management to ensure best

possible service contract rates and service level to benefit

tenants

For the past financial year we have undertaken the following

enhancements and this is an on-going commitment of the Trust:-

Menara AmBank

During the financial year we have completed the retrofitting to Level 11

at a cost of RM 1.70 million and in due course created a tenantable

floor space of about 16,446 sq. ft. (from 16,946 sq. ft. which was

rented out as storage space due to its ‘unfinished’ raw state by the

previous owner). In addition, RM 168,000 was spent to upgrade the

toilets and its facilities at four levels in the building.

AmBank Group Leadership Centre

The two lifts at AGLC were upgraded for a total cost of RM 220,000

and have since improved its operation to the tenants’ comfort.

Menara Merais

The upgrading works will commence at end May 2009 and

expected to cost around RM 6.70 million. Target completion period

is six months and we are confident that this upgrading will enhance

Menara Merais iconic status, as a preferred office building.

The Summit Subang USJ

We have embarked on the repositioning study of the mall and expected

to be completed by end June 2009. The objective of the study is to

formulate the repositioning strategy to be implemented to make The

Summit Subang USJ as a “Preferred Shopping Destination’. This will

entail both physical enhancements and retail mix.


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OCCUPANCY RATES RENT REVERSION (BY REVENUE)

PROSPECTS

At the beginning of 2009, the Malaysian economy was predicted to contract in excess of 1% for the current year and any recovery was expected to be gradual and likely take off in the latter half of 2009. We could expect some difficult times as a result of higher unemployment, lower disposable income, downsizing and falling corporate earnings due to revenue contraction. At the time of this reporting, there are some signs of improvement in the global credit markets and we have seen some positive movement in equity prices in the stock market - supported by the sprinkling of positive economic news and improved sentiments. Our banking and financial sectors have also remained fairly intact from the fallout of the sub-prime crisis. This, together with the reduction of interest rates and increased fiscal spending to revive the Malaysian economy, has bolstered the likelihood of our economy bottoming-out towards the year-end and starting to recover early next year.

In terms of the property outlook for the office sector, the short term outlook for the KL City Centre office market is that it will remain fundamentally stable. The prime office rentals and capital values within the Golden Triangle area are expected to remain stable for the next twelve months barring any further worsening of economic conditions. As for the retail sector, the market will continue to be impacted by poor consumer sentiments and contraction in spending. Retail sales are forecasted to grow at a modest 3% for 2009 as compared to 7% for 2008. Neighborhood retail malls are more resilient and they tend to target non-discretionary customers. Rental rates are mixed with some registering a modest increase whilst others are under stress due to downsizing or holding back of expansion plans.

Regarding the outlook for AmFIRST, we are confident that it will continue to improve its performance and deliver steady growth in earnings based on the following contributory factors:

a) continuing proactive management of our assets – striving to maximize rental income from positive rental reversions as well as from asset upgrading works aimed at increasing occupancy levels (including upgrading of our Menara Merais where we expect upgrading works to complete in late 2009 / early 2010).

b) contribution from our yield-accretive acquisition of 36,000 sq. ft. of strata office space at Menara Summit, which we expect to complete before end June 2009.

c) efficient debt management - which has minimized, and will continue to minimize, our interest expense. The bulk of AmFIRST’s borrowings was negotiated on floating cost of fund basis and the continuing low interest rate environment has benefited AmFIRST. The reduction in the Overnight Policy Rate announced by Bank Negara between the last quarter of 2008 and the first quarter of 2009 also helped. Management is continually engaging its bankers in active discussion on economic trends and potential impact on interest rates. Management is currently exploring the feasibility of locking in a portion of the borrowings at fixed rates to take advantage of the low interest rate level.

d) cost containment initiatives.

In terms of new acquisitions, as with all M-REITs, given the current high REIT distribution yield, we would need to focus on high income-yielding assets with strong capital appreciation opportunities in view of the prevailing yield gap between physical asset yield and equity yield. However, if the capital market conditions continue to improve (as they seemed to have started to, at the time of this reporting), the yield gap should narrow and there will be good opportunity to look at equity-raising to fund yield-accretive acquisitions and/or pare down borrowings.

BAG

99.44 10095.80 94.37 92.21 92.21

68.02 64.80

100 98.90

84.27

69.93

MAB AGLC MM KBT SUMMIT-retail

SUMMIT-office

2008 2009

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%

BAG

20.58

8.90 8.52

17.23

20 19.05

15.49

6.39

16.16

5.50 5.62

18.35

MAB AGLC MM KBT SUMMIT-retail

SUMMIT-office

25

20

15

10

5

0

% 2008 2009




Property Market ReportFor the Financial Year Ended 31 March 2009

INVESTMENTInvestment market continued to lose momentum amid worsening market condition

The investment market turned for the worse in Q1 2009 as global

sentiments fell in the light of continuing gloomy news on the

financial and economic fronts. Most institutional funds stayed by

the sidelines as the market struggled to find a new price level in

the midst of high volatility in the capital market.

Although Bank Negara continued to ease monetary policy, new

funding is not likely to be easily available or cheap. Since Q3 2008,

the Overnight Policy Rate has eased from 3.5% to 2% p.a. However,

banks are increasingly jittery on their property sector exposures in the

light of potential increase in non-performing loans. On the brighter

side, there is no news of borrowers having refinancing issues that

could lead to distressed sales on the horizon.

The market has been relatively slow with few and no major

transactions. While the number of deals remained the same as in

Q4 2008, total investment value for the quarter was only RM113

million compared to RM466 million in the previous quarter.

There were two mid-sized office transactions in the quarter with

relatively high prices and low yields. Both were purchased by

Government Linked Companies - Perbandanan Nasional Bhd

bought Wisma Glomac 3, while EXIM Bank purchased Menara

Bank Industri. The transaction prices ranged from RM469 psf to

RM639 psf, and did not seem to be affected by current realities

with prices. The net yields are 5.0% and 5.3% respectively.

The retail sector continued to see some investment activities as

the sale of basic household necessities is believed to still have

room for growth in business. The market saw Aeon Co (M) Bhd,

the Japanese operator of Jusco Stores, entering into a Sale and

Purchase agreement for a piece of land together with a proposed

retail centre on a completed basis at Bandar Sri Permaisuri for

RM107.2 million. This acquisition represented the continued

aggressive expansion of Jusco in Malaysia, in its attempt to

accelerate its retail business to compete with the hypermarkets.

The REITs are relatively inactive in the acquisition market as their

shares have been battered down with the general share market,

in line with other equities. With generally below par values, their

dividend yields are relatively attractive making it hard to acquire

properties with higher yields.

On the sale side, there are not many sellers also. Thus the market

could enter into a quandary with a lack of market markers on

when it reaches its bottom.

With price declines and yields becoming more attractive in the

major regional financial centres, offshore funds are finding these

cities more attractive and are thus bypassing the Malaysian market

for the time being. While there are some opportunity funds that are

actively scouting the Malaysian market for distressed assets, to

date there has been no fire sale that meets their expectations.

With prices in Kuala Lumpur showing no sign of a major decline,

potential buyers, especially foreigners, are happy to stay sidelined

until better opportunities arise. This is expected to be in the second

half of the year as the recession bites harder. The market is likely

to consolidate slowly in the next two years with new supply and

economic factors being the key drivers of values and activities,

with the new Najib Administration in place and with no signs of a

political consolidation.

Major Investment Sales in 1Q 2009

Building Purchaser Price Price (RM mil) (RM / sq ft)

Wisma Perbadanan Nasional 50 469Glomac 3 Berhad

Menara EXIM Bank 63 639Bank Industri

Source: DTZ Research, May 2009

Investment Sales Outlook

Q1 2009 12 months Outlook

Sales Volume


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OFFICE MARKETUpcoming supply will exert pressure on rentals in the midst of slowing demand

With the global economic recession affecting every corner of the

world, demand for office space has softened with slow leasing

enquiries for office space in the first quarter of 2009. Potential

business tenants, especially the multi-national companies

(MNCs), have turned cautious on business expansion while some

have decided to downsize. Most of the recent transactions were

attributed to renewals or relocation from city centre to areas such

as Petaling Jaya, Damansara Heights and Putrajaya.

Prime office space continued to experience declining rents for the

second consecutive quarter, which eased 2.85% QOQ to RM6.14

per sq ft per month.

The office market is expected to experience continued pressure

on rental rates due to the large stock of incoming supply of new

office buildings during the year. Approximately 4.13 mil sq ft is

expected to be completed in 2009. With another 6.55 mil sq ft of

new supply hitting the market in 2010 and 2011, developers are

more likely to defer their planned projects.

Despite slower demand and increasing supply, the occupancy

level is still holding up well. Grade A space in the city centre

remained resilient at an average occupancy of 95%, compared to

90% in Q4 2008. This is mainly attributed to Kuala Lumpur’s tight

supply of prime space, coupled with the fact that Kuala Lumpur

has benefited from strong, broad-based demand from a wide

spectrum of growth sectors such as oil & gas, Islamic finance and

other domestic-driven activities.

There is currently no discernible pattern or evidence of tenants

vacating city centre market, despite expectations of cost-

conscious tenants relocating to cheaper locations. These are

likely to be those which do not need to be in the city centre and

can be lcoated in decentralized or suburban alternatives with

good transport accessibility. The city centre has a solid base of

companies that still choose to remain in the core area. However,

existing tenants will have more bargaining power for lower rents,

while new tenants would have more alternatives to choose from.

Despite the great uncertainty over the economic performance,

there is still a demand for office space as business is anticipated

to continue and tenants will still require space to operate their

business. However, newly completed buildings in the next two

years will have great challenges in filling up the space, while

owners of existing buildings will have to come up with good

packages at competitive rates to maintain their existing tenants.

Generally, it is anticipated that new leases will see smaller space

being committed and at lower rates.

Property Market Report (Cont’d)For the Financial Year Ended 31 March 2009

Notable Lease Deals during Q1 2009

Tenant Building Type NLA (RM / sq ft)

WorleyParsons Wisma Denmark Relocation 100,000

TMI Quill 7 @ KL Sentral New Lease 50,000


Office Sales Outlook


Average Monthly Gross Rents



Notes:GT = Golden TriangleCCA = Centralized Commercial Area


Proposed should be potential?

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RETAILWeak consumer sentiments and employment

The retail market continued to be hit by poor consumer sentiments. The Consumer Sentiment Index is now at a historical low of 71.4 points as at Q4 2008. After fairly strong sales in both January and February, turnover dropped dramatically after the lunar new year celebrations. Fashion retailers have since been resorting to sales and promotions to prop up turnover. Households are spooked by the poor employment prospects and are tightening their purse-strings. Overall, growth in consumption spending is expected to decline to 5% for 2009, from 14% in 2008. The Malaysia Retailers Association has forecasted retail sales to grow at a modest 3% for the year compared to 7% for 2008.

Although new supply is tapering off in the coming years, it is still substantial in absolute total. However, construction on some projects may not start or their completions may be delayed by a year or so. For example, the completion of SSTwo, a neighbourhood mall in Petaling Jaya, is expected to be delayed to end next year, from the original completion date of end 2009. The completion of Four Seasons, next to Kuala Lumpur City Centre (KLCC) and with a mid-sized retail component, has also been delayed with construction work stopped for the last few months.

Average occupancy remains high with no major attrition rate reported to date amongst retailers. Nevertheless, if the current tough trading conditions remain, the market can expect to see some closure of outlets, especially those located in the more secondary locations with no strong population catchment. Suria KLCC, the most premier of the malls, has reported that rental growth this year is expected to be in the 5% single digit level, compared to previous years when growths were in the double digits.

With the tough trading environment, retailers are very reluctant to expand and this makes it challenging for new centres coming on stream to fill up, especially where there is no pre-committed anchor tenants. To survive, retailers are changing their merchandise mix to cater to more price/value conscious consumers. Some fashion retailers have also been affected by weak principals due to adverse overseas conditions, leading to a loss of licenses, or a cutback in their expansions.

Currently, rental level remains stable with selective rental concessions provided by landlords. However, a decline of 5-10% by the end of 2009, over Q4 2008 level is expected as the economic recovery is unlikely to happen until early next year when global economic prospects brighten up. Even rents in the prime retail centres will not be immuned.

The recent announcement by the government on liberalization of foreign investment regulations of the service sector, of which the retail sector is a subcomponent, will facilitate the growth of new foreign retailers that have previously been turned off by the local equity requirements. This will spur another round of growth in the industry. The industry certainly looks forward to that day, as the country aspires to compete with its regional peers such as Bangkok and Singapore as a shopping haven.

Upcoming Retail Centre 2009

Project NLA (sq. ft.) Location

Wangsa Walk 273,243 Wangsa Maju



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Retail Market Outlook






RESIDENTIALHigh end condominiums beginning a period of price correction

Sales activities were slow in the quarter, with no new launches and poor sales take-up for projects launched earlier. Generally, potential buyers are defering purchases of properties as they believe prices have reached the peak and are anticipating lower prices. In the secondary market of completed units and sold units that are still under construction, foreign investors who are badly affected by the economic downturn in their home countries will have weak holding power and are under pressure to sell these properties and pull funds back home.

With developers postponing or shelving the launching of new projects, there have been no launches of condominium projects in Kuala Lumpur’s inner city. The long-awaited Four Season project is reported to be launched only in the later part of the year. However, the weak market condition will dampen takeup.

The high end residential market, especially the condominium sub-sector, is most affected by the global economic slowdown. Prices of high end condominiums are going through a correction period, with an anticipated drop of 15% to 20% in some projects by end 2009. Already, there is an average of about 7% drop in capital value in some condominiums in Kuala Lumpur during Q1 2009.

The rental market is becoming more competitive. Average gross rent of condominiums in KLCC area has dropped by some 5% QOQ, to about RM3.83 per sq ft per month. With an impending supply of some 2,190 units by 2009, rents are expected to drop further. Hence, it will be a tenant’s market, with plenty of new units to choose from at bargain rates. As a result, rental yields are also expected to decline further as the newly completed units compete for the limited expatriate population.

In response to the slow take-up, developers are offerin innovative and aggressive packages to attract buyers. During this challenging market condition, many developers are coming up with incentives and schemes such as waiver of stamp duties, legal fees, interest payment during construction period as part of their strategies to make their developments saleable. Some developers even came up with 5/95 home loan packages where a buyer is required to pay only 5% of purchase price as down payment upon signing of sales and purchase agreement, with no progressive payment required until the unit is completed.

On a positive note, the recent improvements to Malaysia My Second Home (MM2H) programme may bring favourable news to the high-end residential market segment. Among the new announcements, effective 9 January 2009, foreign citizens may apply to participate in MM2H programme directly. Besides that, Qualified MM2H participants aged 50 and above with specialised skills and expertise that are required in the critical sectors of the economy are allowed to work for not more than 20 hours per week. MM2H participants are also now allowed to invest and actively participate in business, subject to existing Government policies, regulations and guidelines which are in force for the relevant sectors. All these changes are anticipated to attract investors from overseas, especially the high net worth and skilled individuals. These moves are expected to help create demand for investment properties especially in the higher end market in urban areas.

Residential Market Outlook




Upcoming Condominiums in KLCC Area in 2009

Project Units

Idaman Residences 248

The Oval 140

The Avare 78

Hampshire Residences 388

One KL 94

Pavilion Residences 368

The Troika 229

Ampersand 71

Hampshire Place 186

Binjai on the Park 171

Fraser Residences KL 217

Total: 2,190



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STOCK

Business Space (office)

Refers to purpose-built office or mixeduse

premises with net lettable areas of 50,000

sq ft or more. It excludes buildings

developed and solely used by Federal and

State Government or government-related

organisations. The stock is defined into two

distinct categories as follows:

Prime – buildings are those with advanced

“Building Automation System”, high level of

computerised M&E and ‘state-of-the-art’

telecommunication.

Secondary – buildings are those with

average/basic office accommodation.

Retail

Stock includes purpose-built shopping

complexes with net lettable areas of 50,000

sq ft or more. The stock is defined into two

distinct categories as follows:

Prime – complexes with good layout,

design, management, maintenance, image,

facilities, internal finishes and tenant mix,

and high-level computerised M&E.

Secondary – complexes that provide

average/basic retail space.

NEW SUPPLY

Refers to the supply of new properties

confirmed, i.e., projects with planning

approval and there are definite plans to

proceed with the development or under

construction at the time of reporting. The

year for new supply refers to the year in

which the projects/units are expected

to receive Certificate of Fitness for

occupation.

ABSORPTION

Refers to the total number of net take up

of accommodation or units in new projects

being leased or sold. Resale of units is

excluded.

RENTS

Average gross rents are computed based

on a basket of properties, inclusive of

service charges. Office – typical net floor

size adopted are between 2,000 sq ft and

5,000 sq ft.

Retail - only rents of prime speciality retail

shops, e.g. those with good frontage or

pedestrian footage, are included in the

publication.

MARKET PRICES

Market prices are reported on per sq ft (psf)

basis on net floor areas. The office and

retail market are reflective of en bloc sales

evidence (referring to the sale) of entire land

and building.

AREA TAXONOMY

Study Area

Klang Valley & Environs (KVE) is located

centrally within the State of Selangor. KV

itself accommodates the Kuala Lumpur

City (KLC) and the State’s District of

Petaling, Klang, Gombak and Hulu Langat.

Its environs would include surrounding

growth areas such as Cyberjaya, Putrajaya

City and the Sepang localities. The KVE

property market is divided into two distinct

geographical areas: KLC and other areas

in KVE (OKVE).

Business Space (office)

The office market in KLC is sub-divided into

three sub-markets: Central Commercial

Area (CCA), Golden Triangle (GT) and

Decentralised Areas (DA). DA will comprise

areas fringing the city centre. The office

market within OKV is sub-divided into six

sub-markets – Petaling Jaya (PJ, Subang

Jaya (SJ), Shah Alam (SA), Klang, Puchong

and Ampang.

Retail

Retail complexes within the city and main

town centres are referred to as “urban

areas”. Those located within commercial

areas of residential estates in KV, other

than city or town centres, are defined as

“suburban”.

EXPLANATORY NOTES


Report by the Directors of The ManagerFor the Financial Year Ended 31 March 2009

The Directors of Am ARA REIT Managers Sdn Bhd, the Manager of AmFIRST Real Estate Investment Trust (“AmFIRST” or the “Trust”),

have pleasure in presenting their report to the Unitholders of the Trust together with the audited financial statements of the Trust for the

financial year ended 31 March 2009.

THE TRUST, THE MANAGER AND THEIR PRINCIPAL ACTIVITIES

The Trust was constituted pursuant to the execution of a Trust Deed dated 28 September 2006 (as amended by the Supplemented,

Revised and Restated Trust Deed dated 15 December 2006) by the Manager, Am ARA REIT Managers Sdn Bhd (“Am ARA REIT”) and the

Trustees, Mayban Trustees Berhad. The principal activity of the Trust is to own and invest in a portfolio of commercial properties in major

growth areas of Malaysia, primarily in the Klang Valley.

The Manager, incorporated in Malaysia, is a wholly-owned subsidiary of Am ARA REIT Holdings Sdn Bhd. Am ARA REIT Holdings Sdn

Bhd is 70% owned by AmInvestment Group Berhad (“AIGB”) and 30% owned by ARA Asset Management (Malaysia) Limited. AIGB is

a wholly-owned subsidiary of AMMB Holdings Berhad while ARA Asset Management (Malaysia) Limited is ultimately wholly-owned by

Singapore-listed, ARA Asset Management Limited, an affiliate of the Cheung Kong Group based in Hong Kong.

MANAGER’S INVESTMENT OBJECTIVES AND STRATEGIES

Am ARA REIT is a professional manager. The Manager’s investment objectives are to deliver regular and stable distributions to Unitholders

and to achieve long-term growth in the net asset value per unit through proactive management of the Trust’s portfolio of assets and

acquisition of yield accretive properties.

The Manager intends to achieve AmFIRST’s investment objectives through three key strategies:-

(i) Operating Strategy

Am ARA REIT operating strategy is to continue to enhance the performance of the existing properties by increasing yields and

returns through retaining existing tenants, reducing vacancy levels, adding and/or optimising office space at the properties and

minimising interruptions in rental income and operational costs. Am ARA REIT expects to apply the following key operating and

management principles in order to continue to manage the properties efficiently, to increase the yields of the properties and to

maximise growth:-

• Improve rental rates;

• Establish close relationships with tenants to optimise tenant retention;

• Diversify tenant base;

• Review tenant mix and re-configure existing space;

• Maintain the quality of the properties;

• Maximise the performance of each property;

• Improve operating efficiencies and economies of scale; and

• Raise the profile of the properties.

(ii) Acquisition Strategy

The Manager intends to pursue an acquisition strategy for AmFIRST to increase net property income and the potential for asset

growth based on the following criteria:

• Yield-accretive;

• Healthy tenant mix and occupancy level;

• Good location;

• Value adding opportunities; and

• Good building and facilities specifications.



Report by the Directors of The Manager (Cont’d)For the Financial Year Ended 31 March 2009

MANAGER’S INVESTMENT OBJECTIVES AND STRATEGIES (CONT’D)

(ii) Acquisition Strategy (cont’d)

The Manager expects to benefit from the network of the sponsor and its joint-venture partner, ARA Asset Management (Malaysia) Limited, which is part of the ARA Group. ARA Group is a leading real estate fund management house in Asia. It has a strong presence in the region, with investments in many parts of Asia. ARA Group possesses expertise in identifying opportunities in the development of the Asian real estate industry, and is dedicated to the real estate fund management business. Its key staff have been involved with many corporate restructurings in Asia involving real estate assets. Their experience and network will provide an edge to the Manager in its efforts to grow AmFIRST.

AmFIRST intends to hold the properties on a long-term basis. In the future where the Manager considers that any property has reached a stage that offers only limited scope for growth, it may consider selling the property and using the proceeds for alternative investments in properties that meet the Manager’s investment criteria.

(iii) Capital Management Strategy

The Manager’s strategy for the management of AmFIRST’s capital structure involves adopting and maintaining an appropriate debt-equity structure with gearing level to be maintained within the prescribed limits and utilising an active interest rate management policy to manage the risks associated with interest rate fluctuations. The Manager believes that this strategy will:-

• Optimise Unitholders’ returns; • Maintain operating flexibility when considering capital expenditure requirements; and • Enable AmFIRST to maintain financing flexibility in the funding of future acquisitions.

AmFIRST has in total RM402,000,000 secured facility comprising of RM147,000,000 Term Loan (of which RM57,000,000 is pegged against a fixed rate of 5% per annum and RM90,000,000 based on variable rates) representing 36.6% and RM255,000,000 Revolving Credit (“RC”) facility representing 63.4% of the total secured facility.

The variable rates for the Term Loan and RC range between 2.75% to 4.35% per annum during the financial year ended 31 March 2009.

INVESTMENT POLICIES AND COMPLIANCE WITH REIT GUIDELINES

(i) Permitted Investments and Restrictions

AmFIRST is allowed to invest in real estate, single-purpose companies whose principal assets comprise real estate, real estate-related or non real estate-related assets, liquid assets, asset-backed securities, listed or unlisted debt securities, and any other investment which is permissible under the REIT Guidelines or otherwise permitted by the SC.

AmFIRST will not extend loans and any other credit facilities to any party, enter into forward purchases or sales in any currency or any foreign-exchange contracts unless these instruments are in compliance with the Exchange Control Act 1953. The Trust will also not be involved in property development, except in the case where the development is made with a view of purchasing the real estate upon completion and having met the criteria stipulated under the REIT Guidelines.

(ii) Portfolio Composition

AmFIRST’s investments may be allocated in the following manner, as prescribed by the REIT Guidelines:

(a) invest in real estates, single-purpose companies, real estate-related assets, non-real estate related assets and liquid assets;

(b) at least 50% of AmFIRST’s total assets must be invested in real estate and/or single-purpose companies at all times; and

(c) investment in non-real estate-related assets and/or liquid assets must not exceed 25% of AmFIRST’s total assets.

(iii) Diversification

AmFIRST will seek to diversify its real estate portfolio by property type and location. AmFIRST will focus on investing in real estate

which are primarily used for commercial and retail purposes.



MANAGER’S INVESTMENT OBJECTIVES AND STRATEGIES (CONT’D)

(iv) Gearing

AmFIRST is able to leverage on borrowings to make permitted investments which will enhance the returns to Unitholders. Under the REIT Guidelines, AmFIRST is permitted to procure borrowings of up to 50%, or any other percentage as stipulated by the REIT Guidelines from time to time, of its total asset value.

As at 31 March 2009, AmFIRST has a gearing ratio of 39.31% (45.12% as at 31 March 2008) and borrowings stood at RM402,000,000. There is capacity for an additional RM219,250,000 debt financing before reaching the 50% threshold under the SC’s Guidelines on REITs.

The Manager will be utilizing additional credit facilities and the issuance of any new Units to further pursue its acquisitions.

REVIEW OF PERFORMANCE As at As at 31 March 2009 31 March 2008

Net asset value (RM’000) 568,415 426,873Units in circulation (units) (000) 429,001 429,001Net asset value per Unit (RM) 1.32 1.00

Market price per unit at close of financial year (RM) 0.85 0.87Highest traded price per Unit during the financial year (RM) 0.95 1.00Lowest traded price per Unit during the financial year (RM) 0.74 0.83

Comparison of results for 31 March 2009 Actual Prospectus(RM’000)

Gross income 93,365 52,871 Property expenses (31,788) (15,036)Change in the fair value of investment properties 141,534 - Non-property expenses (24,040) (6,129)

Income before taxation, of which: 179,071 31,706

- realized 37,537 31,706 - unrealized 141,534 -

Income after taxation 179,071 31,706 Income available for distribution - realized 37,537 31,706 Realized earnings per Unit (sen) 8.75 7.39 Distribution per Unit (sen) 8.75 7.39 Distribution yield (%) - based on IPO price (RM1.00) 8.75 7.39 - based on closing price as at 31 March 2009 (RM0.85) 10.29 8.69

The realized income before and after tax have exceeded by 18.4% from the forecast published in the intial public offering prospectus dated 9 November 2006.

DISTRIBUTION OF INCOME

In respect of the current financial year ended 31 March 2009, the total income available for distribution was RM37,536,765, translated to 8.75 sen per unit.

During the financial year, AmFIRST made an interim income distribution of 4.268 sen per unit totalling to RM18,309,752 for the six months period ended 30 September 2008, which was paid on 28 November 2008.



DISTRIBUTION OF INCOME (CONT’D)

A proposed final income distribution in respect of the six months period from 1 October 2008 till 31 March 2009 amounting to 4.48 sen

per unit, totalling to RM19,219,245, was recommended by the Manager and approved by the Trustees. This final income distribution shall

be paid on 29 May 2009 to all Unitholders.

This is in line with the objective of AmFIRST to deliver regular and stable distributions to Unitholders.

The effect of the income distribution in terms of NAV per unit as at 31 March 2009 is as follows:

Before After

Distribution Distribution

RM RM

Net asset value per unit 1.37 1.32

INVESTMENTS OF THE TRUST

AmFIRST’s composition of investments as at 31 March 2009 is as follows:

% of

RM Million Investment

At fair value

Menara AmBank 292.0 29.00%

Bangunan AmBank Group 226.0 22.50%

Menara Merais 62.0 6.20%

AmBank Group Leadership Centre 20.0 2.00%

Kelana Brem Towers 105.0 10.40%

The Summit Subang USJ 275.0 27.30%

980.0 97.40%

Deposits with financial institutions 26.5 2.60%

1,006.5 100.00%

The asset values of investment properties has increased by RM144.0 million in the current financial year mainly due to increase in fair

values on the revaluation of six (6) investment properties.

BREAKDOWN OF UNIT HOLDINGSAS AT 31 MARCH 2009

Number of Number

Unitholders of Units

5,000 and below 10,268 13,524,162

5,001 to 10,000 838 6,986,807

10,001 to 50,000 886 20,772,179

50,001 to 500,000 338 46,754,976

500,001 and above 40 340,962,876

12,370 429,001,000



DIRECTORS OF THE MANAGER

The names of the Directors of the Manager who served on the Board at the date of this report are:

Dato’ Azlan bin Hashim (Chairman)Cheah Tek KuangDato’ Teo Chiang QuanTuan Haji Mohd Salleh bin AkramLim Hwee ChiangPushpa Rajadurai (Alternate Director to Cheah Tek Kuang)Lim Poh Kok Michael (Alternate Director to Lim Hwee Chiang)

In accordance with Article 64 of the Manager’s Article of Association, Dato’ Teo Chiang Quan and Lim Hwee Chiang retire at the forthcoming annual general meeting and being eligible, offer themselves for re-election.

DIRECTORS’ BENEFITS

Neither at the end of the financial year, nor at any time during the financial year, did there subsist any arrangement to which the Manager or the Trust was a party, whereby the Directors might acquire benefits by means of acquisition of shares in or debentures of the Manager or any other body corporate or of the acquisition of units of the Trust.

Since the end of the previous financial year, no Director of the Manager has received or become entitled to receive a benefit (other than benefits which accrue from the fee paid to the Manager or from transactions made with companies related to the Manager as shown in the notes to the financial statements of the Trust) by reason of a contract made by the Manager or the Trust or a related corporation with any Director or with a firm of which he is a member, or with a company in which he has a substantial financial interest.

DIRECTORS’ INTEREST

The interest in the Trust of the Directors of the Manager in office at the end of the financial year ended 31 March 2009 are as follows:

Number of units in the Trust As at As at 01.04.2008 Bought Sold 31.03.2009

Dato’ Azlan bin Hashim 80,000 - - 80,000

Cheah Tek Kuang 1,000 - - 1,000

Other than as stated above, none of the other Directors of the Manager in office at the end of the financial year had any interest in the Trust during the financial year.

MANAGER’S FEES AND COMMISSION

Pursuant to the Trust Deed, the Manager’s fees consist of a base fee (excluding any taxes payable) of up to 0.5% per annum of the total asset value (for the period from 21 December 2006 to 31 March 2007 and the next 3 financial years ending 31 March 2010, the base fee shall be fixed at 0.3% per annum) and a performance fee (excluding any taxes payable) of 3% per annum of the net property income, but before deduction of property management fees.

In addition, the Manager will also be entitled to an acquisition fee of 1% of the acquisition price of any real estate or single-purpose company whose principal assets comprise real estate for any acquisition by AmFIRST and a divestment fee of 0.5% of the sale price of any real estate or single-purpose company whose principal assets comprise real estate, sold or divested by AmFIRST (pro-rated if applicable to the proportion of the interest in real estate or single-purpose company purchased or sold).

During the financial year, the Manager did not receive any soft commission (i.e. goods and services) from its broker, by virtue of transactions

conducted by AmFIRST.




OTHER STATUTORY INFORMATION

(a) Before the income statement and balance sheet of the Trust were made out, the Manager took reasonable steps:-

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

doubtful debts and satisfied themselves that there were no known bad debts and that adequate provision had been made

for doubtful debts; and

(ii) to ensure that any current assets which were unlikely to realize their value as shown in the accounting records in the

ordinary course of business had been written down to their estimated realizable values.

(b) At the date of this report, the Manager is not aware of any circumstances not otherwise dealt with in this report or financial

statements of the Trust which would render:

(i) the amount written off for bad debts or the amount of the provision for doubtful debts made in the financial statements of

the Trust inadequate to any material extent; and

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

(c) At the date of this report, the Manager is not aware of any circumstances which have arisen which would render adherence to the

existing method of valuation of assets or liabilities of the Trust misleading or inappropriate.

(d) At the date of this report, the Manager is not aware of any circumstances not otherwise dealt with in this report or the financial

statements of the Trust which would render any amount stated in the financial statements misleading.

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

(i) any charge on the assets of the Trust which has arisen since the end of the financial year which secures the liabilities of

any other person; or

(ii) any contingent liability of the Trust which has arisen since the end of the financial year.

(f) In the opinion of the Directors of the Manager:

(i) no contingent or other liability of the Trust has become enforceable or is likely to become enforceable within the period of

twelve months after the end of the financial year which will or may affect the ability of the Trust to meet its obligations when

they fall due; and

(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial

year and the date of this report which is likely to affect substantially the results of the operations of the Trust for the financial

year in which this report is made.

SIGNIFICANT EVENT

During the financial year, a revaluation exercise was carried out for all six properties of AmFIRST. Bangunan AmBank Group, AmBank

Group Leadership Centre, Menara AmBank, Menara Merais and Kelana Brem Towers were revalued to comply with Clause 10.03 of the

Securities Commission’s REIT Guidelines. Whilst the revaluation exercise on The Summit was to determine the current market value of the

property to reflect the fair value at the balance sheet date.

The total revaluation surplus derived from the said revaluation exercise was RM141,534,127 or 16.9% increase in value. The revalued

amount was incorporated into the financial statements as at 31 March 2009 and consequently, the net asset value increased from RM1.00

to RM1.32 per unit.



AUDITORS

The auditors, Ernst & Young, have expressed their willingness to continue in office.

Signed on behalf of the Board in accordance with a resolution of the Directors of the Manager.

Dato’ Azlan bin Hashim Tuan Haji Mohd Salleh bin Akram

Kuala Lumpur, Malaysia

Date : 22 May 2009




Statement by the Directors of The Manager

Statutory Declaration

We, Dato’ Azlan bin Hashim and Tuan Haji Mohd Salleh bin Akram, being two of the Directors of the Manager, do hereby state that, in the

opinion of the Directors of the Manager, the financial statements of AmFIRST Real Estate Investment Trust (the “Trust”) as set out on pages

50 to 65 are drawn up in accordance with applicable Financial Reporting Standards in Malaysia, applicable provisions of the Trust Deed

and the Securities Commission’s Guidelines on Real Estate Investment Trusts so as to give a true and fair view of the financial position of

the Trust as at 31 March 2009 and of the results and the cash flows of the Trust for the financial year then ended.

Signed on behalf of the Board in accordance with a resolution of the Directors of the Manager.

Dato’ Azlan bin Hashim Tuan Haji Mohd Salleh bin Akram


Date : 22 May 2009

I, Lim Yoon Peng, being the officer primarily responsible for the financial management of AmFIRST Real Estate Investment Trust, do

solemnly and sincerely declare that the financial statements set out on pages 50 to 65 are, to the best of my knowledge and belief,

correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory

Declarations Act l960.

Subscribed and solemnly declared by

the abovenamed Lim Yoon Peng

at Kuala Lumpur in Wilayah Persekutuan

on 22 May 2009 Lim Yoon Peng

Before me:

Commissioner for Oaths


Trustee’s ReportTo the Unitholders of AmFIRST Real Estate Investment Trust

We have acted as Trustee of AmFIRST Real Estate Investment Trust (the “Trust”) for the financial year ended 31 March 2009. To the best of

our knowledge, Am ARA REIT Managers Sdn. Bhd. has managed the Trust in accordance with the roles and responsibilities and limitation

imposed on the management company under the Trust Deed, the Securities Commission’s Guidelines on Real Estate Investment Trusts,

the Capital Markets and Services Act 2007 and other applicable laws during the financial year ended 31 March 2009.

We are of the opinion that the recommended final income distribution of 4.48 sen per unit for the six months period ended 31 March 2009

is in line with and is reflective of the objectives of the Trust.

For Mayban Trustees Berhad

Tracy Hazel Siguji

Head, Unit Trust & REIT


Date : 22 May 2009



Independent Auditors’ ReportTo the Unitholders of AmFIRST Real Estate Investment Trust

Report on the financial Statements

We have audited the financial statements of AmFIRST Real Estate Investment Trust, which comprise the balance sheet as at 31 March

2009, and the income statement, statement of changes in net asset value and cash flow statement for the financial year ended, and a

summary of significant accounting policies and other explanatory notes, as set out on pages 50 to 65.

Manager’s and Trustee’s responsibility for the financial statements

The Manager of the Trust is responsible for the preparation and fair presentation of these financial statements in accordance with Financial

Reporting Standards in Malaysia and the Securities Commission’s Guidelines on Real Estate Investment Trusts. This responsibility includes:

designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are

free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making

accounting estimates that are reasonable in the circumstances. The Trustee is responsible for ensuring that the Manager maintains proper

accounting and other records as are necessary to enable fair presentation of these financial statements.

Auditors’ responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with

approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the

audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The

procedures selected depend on our judgment, including the assessment of risks of material misstatement of the financial statements,

whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair

presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the

purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness

of the accounting policies used and the reasonableness of accounting estimates made by the Directors of the Manager, as well as

evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards in Malaysia and

the Securities Commission’s Guidelines on Real Estate Investment Trusts so as to give a true and fair view of the financial position of the

Trust as at 31 March 2009 and of its financial performance, the changes in net asset value and the cash flows of the Trust for the financial

year then ended.

Other matters

This report is made solely to the Unitholders of the Trust, as a body, and for no other purpose. We do not assume responsibility to any

other person for the content of this report.

Ernst & Young Lim Saw Keng

AF: 0039 No. 2215/10/09(J)

Chartered Accountants Chartered Accountant


Date : 22 May 2009


Balance Sheet As at 31 March 2009

Note 2009 2008

RM RM

ASSETS

INVESTMENTS

Investment properties 3 980,000,000 835,990,441

Deposits with financial institutions 4 26,501,246 16,136,756

1,006,501,246 852,127,197

OTHER ASSETS

Receivables 5 8,875,059 5,689,073

Cash and bank balances 7,370,657 18,898,191

16,245,716 24,587,264

TOTAL ASSETS 1,022,746,962 876,714,461

LIABILITIES

Provision for income distribution 6 19,220,105 15,769,250

Payables 7 16,393,171 25,727,284

Rental deposits 8 16,718,346 12,738,549

Borrowings 9 402,000,000 395,605,972

TOTAL LIABILITIES 454,331,622 449,841,055

NET ASSET VALUE 10 568,415,340 426,873,406

NUMBER OF UNITS IN CIRCULATION 429,001,000 429,001,000

NET ASSET VALUE PER UNIT

- before proposed final distribution 1.37 1.03

- after proposed final distribution 1.32 1.00

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



For the Financial Year Ended 31 March 2009

2009 2008

Note RM RM

Gross revenue 12 93,080,961 57,853,430Property expenses 13 (31,788,215) (17,209,000)

Net rental income 61,292,746 40,644,430Interest income 284,003 396,594Other income - 19,304Change in the fair value of investment properties 141,534,127 -

203,110,876 41,060,328

Administrative expensesManager’s fee 14 4,445,254 2,998,315Trustee’s fee 15 176,292 174,998Valuation fee 283,000 37,000Auditors’ remuneration 15,000 15,000Tax agent’s fees 12,000 12,000Others 1,947,968 599,315Interest expense 17,160,470 5,911,085

24,039,984 9,747,713

Income before taxation 16 179,070,892 31,312,615Taxation 17 - -

Income for the financial year 179,070,892 31,312,615

Net income for the financial year is made up as follows:- - Realized 37,536,765 31,312,615 - Unrealized 141,534,127 -

179,070,892 31,312,615

Earnings per unit (sen) 18 - after managers’ fees 41.74 7.30 - before managers’ fees 42.78 8.00

Net income distribution 19Interim income distribution of 4.268 sen per unit paid on 28 November 2008 (2008 : 3.623 sen paid on 30 November 2007) 18,309,752 15,543,692Proposed final income distribution of 4.480 sen per unit payable on 29 May 2009 (2008 : Final income distribution of 3.676 sen per unit paid on 30 May 2008) 19,219,245 15,768,923

37,528,997 31,312,615

Income distribution per unit * - Interim 4.27 3.62 - Final 4.48 3.68

8.75 7.30

* Withholding tax will be deducted for distributions made to the following types of Unitholders

2009 2008

Resident individual 10% 15% Non-resident individual 10% 15%Resident institutional investors 10% 15%Non-resident institutional investors 10% 20%Non-resident companies 25% 26%


Income Statement


Distributable

Unitholders’ Undistributed Income Unitholders’

Capital Realized Unrealized Fund

RM RM RM RM

As at 1 April 2008, as previously stated 426,873,733 15,768,923 - 442,642,656

Effects of prior year restatement (Note 26) (327) (15,768,923) - (15,769,250)

As at 1 April 2008, as restated 426,873,406 - - 426,873,406

Net income for the financial year 37,536,765 141,534,127 179,070,892

Distribution to Unitholders (37,528,958) - (37,528,958)

As at 31 March 2009 426,873,406 7,807 141,534,127 568,415,340

As at 1 April 2007, as previously stated 426,872,412 8,348,692 - 435,221,104

Effects of prior year restatement (Note 26) - (8,348,692) - (8,348,692)

As at 1 April 2007, as restated 426,872,412 - - 426,872,412

Listing expenses 1,321 - - 1,321

Net income for the financial year - 31,312,615 - 31,312,615

Distribution to Unitholders - (15,543,692) - (15,543,692)

426,873,733 15,768,923 - 442,642,656

Restatement -provision for

income distribution (327) (15,768,923) - (15,769,250)

As at 31 March 2008 (restated) 426,873,406 - - 426,873,406


Statement of Changes in Net Asset ValueFor the Financial Year Ended 31 March 2009



For the Financial Year Ended 31 March 2009Cash Flow Statement

2009 2008

RM RM

CASH FLOW FROM OPERATING ACTIVITIES

Income before taxation 179,070,892 31,312,615

Adjustments for:

Allowance for doubtful debts 1,289,595 153,945

Interest income from placements with financial institutions (284,003) (396,594)

Interest expense 17,160,470 5,911,085

Change in fair value of investment properties (141,534,127) -

Operating profit before working capital changes 55,702,827 36,981,051

Changes in working capital

(Increase)/Decrease in receivables (4,475,581) 6,718,962

(Decrease)/Increase in payables (9,750,480) 20,808,341

Increase in rental deposits 3,979,797 2,700,858

Net cash generated from operating activities 45,456,563 67,209,212

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of investment properties (2,475,433) (349,531,475)

Interest income 284,003 396,594

Net cash used in investing activities (2,191,430) (349,134,881)

CASH FLOW FROM FINANCING ACTIVITIES

Interest paid (16,743,529) (5,681,994)

Distribution paid to Unitholders (34,078,675) (23,892,384)

Drawdowns of borrowings 6,394,027 330,105,972

Net cash (used in)/generated from financing activities (44,428,177) 300,531,594

Net (decrease)/increase in cash and cash equivalents (1,163,044) 18,605,925

Cash and cash equivalents as at the beginning of the financial year 35,034,947 16,429,022

Cash and cash equivalents as at the end of the financial year 33,871,903 35,034,947

CASH AND CASH EQUIVALENTS

Cash and cash equivalents included in the cash flow statement

comprise the following balance sheet amounts:-

Cash and bank balances 7,370,657 18,898,191

Deposits with financial institutions 26,501,246 16,136,756

33,871,903 35,034,947



1. GENERAL INFORMATION

The Trust was constituted pursuant to the execution of a Trust Deed dated 28 September 2006 (as amended by the Supplemented,

Revised and Restated Trust Deed dated 15 December 2006) by the Manager, Am ARA REIT Managers Sdn Bhd (“Am ARA REIT”)

and the Trustees, Mayban Trustees Berhad. The principal activity of the Trust is to own and invest in a portfolio of commercial

properties in major growth areas of Malaysia, primarily in the Klang Valley.

The Manager, incorporated in Malaysia, is a wholly-owned subsidiary of Am ARA REIT Holdings Sdn Bhd. Am ARA REIT Holdings

Sdn Bhd is 70% owned by AmInvestment Group Berhad (“AIGB”) and 30% owned by ARA Asset Management (Malaysia) Limited.

AIGB is a wholly-owned subsidiary of AMMB Holdings Berhad while ARA Asset Management (Malaysia) Limited is ultimately

wholly-owned by Singapore-listed, ARA Asset Management Limited, an affiliate of the Cheung Kong Group based in Hong

Kong.

AmFIRST was listed on the Main Board of Bursa Malaysia Securities Berhad on 21 December 2006.

The key objectives for AmFIRST is to own and invest in real estate whether directly or indirectly through the ownership of single-

purpose companies whose principal assets comprise real estate and real estate-related assets.

The registered office of the Manager is located at 22nd Floor, Bangunan AmBank Group, No. 55, Jalan Raja Chulan, 50200 Kuala

Lumpur.

The financial statements were authorized for issue by the Board of Directors of the Manager in accordance with a resolution of

the Directors.

2. SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of accounting

The financial statements have been prepared under the historical cost convention and comply with applicable Financial

Reporting Standards in Malaysia, applicable provisions of the Trust Deed and the Companies’ Act 1965 and the Securities

Commission’s Guidelines on Real Estate Investment Trusts.

The accounting policies are consistent with those adopted in the previous audited financial statements except for the

adoption of the followings:-

The new and revised FRSs that are applicable to the Trust with effect from the financial period beginning on or after 1 April

2008:

FRS 107 : Cash Flow Statements

FRS 112 : Income Taxes

FRS 118 : Revenue

FRS 119 : Employee Benefits

FRS 134 : Interim Financial Reporting

FRS 137 : Provisions, Contingent Liabilities and Contingent Assets

Amendment to FRS 121 : The Effects of Changes in Foreign Exchange Rates – Net Investment in a Foreign Operation

IC Interpretation 8 : Scope of FRS 2 Share-based Payments

The adoption of the above did not result in significant changes in accounting policies of the Trust.

Notes to the Financial StatementsAs at 31 March 2009



2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

(a) Basis of accounting (cont’d)

Standards and IC Interpretations to existing standards that are not relevant or material for the Trust’s operations:

FRS 111 : Construction Contracts

FRS 120 : Accounting for Government Grants and Disclosure of Government Assistance

IC Interpretation 1 : Changes in Existing Decommissioning, Restoration and Similar Liabilities

IC Interpretation 2 : Members’ Shares in Co-operative Entities and Similar Instruments

IC Interpretation 5 : Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds

IC Interpretation 6 : Liabilities arising from Participating In a Specific Market – Waste Electrical and Electronic Equipment

IC Interpretation 7 : Applying the Restatement Approach to FRS 129 Financial Accounting in Hyperinflationary Economies

The Trust has not early adopted the following FRSs, amendments to FRS and IC Interpretations, issued by MASB as of

the balance sheet date:

FRS 4 : Insurance Contracts

FRS 7 : Financial Instruments : Disclosure

FRS 8 : Operating Segments

FRS 139 : Financial Instruments : Recognition and Measurement

IC Interpretation 9 : Reassessment of Embedded Derivatives

IC Interpretation 10 : Interim Financial Reporting and Impairment

All the new FRSs and IC intepretations are effective from 1 January 2010 with the exception of FRS 8, which is effective

from 1 July 2009.

The impact of applying the above FRSs, amendments to accounting standards and IC interpretations on these financial

statements upon first adoption of these standards as required by paragraph 30(b) of FRS 108: Accounting Policies,

Changes in Accounting Estimates and Errors are not disclosed as FRS 4 and 8, and IC Interpretations 9 and 10 do not

have any significant financial impact on the financial statements to the Trust. The Trust is also exempted from disclosing

the possible impact, if any, to the financial statements upon the initial application of FRS 7 and FRS 139.

(b) Investment properties

Investment properties are properties held to earn rental income or for capital appreciation or both rather than for use in the

production or supply of goods and services or for administrative purpose, or sale in the ordinary course of business.

Investment properties are measured initially at cost, including transaction costs. The carrying amount includes the cost of

replacing part of an existing investment properties at the time the cost is incurred if the recognition criteria are met; and

excludes the costs of day-to-day servicing of an investment property.

Investment properties are stated at fair value which reflects market condition at the balance sheet date. The fair value is

arrived at by reference to market evidence of transaction prices or price which the properties could be exchanged between

knowledgeable, willing parties in an arm length transaction. Gains and losses arising from changes in the fair values of

investment properties are included in the income statement in the year in which they arise.

Investment properties are derecognized upon disposal or when they are permanently withdrawn from use and no future

economic benefits are expected from their disposal. On disposal, the difference between the net disposal proceeds and

the carrying amount is recognized in the income statement.

(c) Trade and other receivables

Trade and other receivables are carried at anticipated realisable values. Known bad debts are written off and specific

provisions are made for any debts considered to be doubtful of collection.

Notes to the Financial Statements (Cont’d)As at 31 March 2009



(d) Cash and cash equivalents

Cash and cash equivalents consist of cash at bank and deposits with licenced financial institutions.

(e) Trade and other payables

Trade and other payables are stated at cost which is the fair value of the consideration to be paid in the future for goods

and services received.

(f) Provisions

A provision is recognized when it is probable that an outflow of resources embodying economic benefit will be required

to settle a present obligation (legal or constructive) as a result of a past event and a reliable estimate can be made of the

amount.

(g) Borrowings

Interest bearing borrowings are recorded at the amount of borrowings received.

(h) Income tax

Income tax on the profit or loss for the year comprises current and deferred tax. Current tax is the expected amount of

income tax payable in respect of the taxable profit for the year and is measured using the tax rates that have been enacted

at the balance sheet date.

Deferred tax is provided for, using the liability method, on temporary differences at the balance sheet date between the

tax bases of assets and liabilities and their carrying amounts in the financial statements. In principle, deferred tax liabilities

are recognized for all taxable temporary differences and deferred tax assets are recognized for all deductible temporary

differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profit will be available

against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Deferred tax

is not recognized if the temporary difference arises from the initial recognition of an asset or liability in a transaction which

is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realized or the liability

is settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax

is recognized in the income statement, except when it arises from a transaction which is recognized directly in equity, in

which case the deferred tax is also charged or credited directly in equity.

(i) Impairment of assets

At each balance sheet date, the Manager reviews the carrying amounts of its assets to determine whether there is any

indication of impairment. If any such indication exists, impairment is measured by comparing the carrying values of the

assets with their recoverable amounts. Recoverable amount is the higher of net selling price and value in use, which is

measured by reference to discounted future cash flows.

An impairment loss is charged to the income statement immediately, unless the asset is carried at revalued amount. Any

impairment loss of a revalued asset is treated as a revaluation decrease to the extent of any available previously recognized

revaluation surplus for the same asset. Reversal of impairment losses recognized in prior years is recorded when there is

an indication that the impairment losses recognized for the asset no longer exist or have decreased.





(i) Impairment of assets (cont’d)

The reversal is recognized to the extent of the carrying amount of the asset that would have been determined (net

of amortisation and depreciation) had no impairment loss been recognized. The reversal is recognized in the income

statement immediately, unless the asset is carried at revalued amount. A reversal of an impairment loss on a revalued asset

is credited directly to revaluation surplus. However, to the extent that an impairment loss on the same revalued asset was

previously recognized as an expense in the income statement, a reversal of that impairment loss is recognized as income

in the income statement.

(j) Revenue

Rental income and interest income are recognized on an accrual basis.

(k) Expenses

(i) Property expenses

Property expenses consist of property management fees, quit rent, assessment and other outgoings in relation to

investment properties.

(ii) Interest expense

Interest expense is recognized in the income statement in the period which they are incurred.

(iii) Listing expenses

Listing expenses represent expenses incurred for the listing of AmFIRST on the Main Board of Bursa Malaysia

Securities Berhad. The expenses are deducted directly against the Unitholders’ capital.

(iv) Manager’s and Trustee’s fees

The Manager’s and Trustee’s fees are recognized on an accrual basis.

3. INVESTMENT PROPERTIES

Acquisition % of

Description of Tenure Existing Cost Valuation Valuation to

Property of Land Location Use RM RM Net Asset Value

(i) Menara AmBank* Freehold Kuala Lumpur Office 232,042,687 292,000,000 51.4

(ii) Bangunan AmBank Leasehold Kuala Lumpur Office 180,152,206 226,000,000 39.8

Group *@

(iii) Menara Merais* Freehold Petaling Jaya Office 57,080,705 62,000,000 10.9

(iv) AmBank Group

Leadership Centre* Freehold Kuala Lumpur Office 19,652,236 20,000,000 3.5

(v) Kelana Brem Tower ^ # Leasehold Kelana Jaya Office 86,050,991 105,000,000 18.5

(vi) The Summit Subang Freehold Subang Jaya Mixed 263,487,048 275,000,000 48.4

USJ ** Commercial

Complex

838,465,873 980,000,000



3. INVESTMENT PROPERTIES (CONT’D)

* The properties were revalued on 27 February 2009 by C H Williams Talhar & Wong Sdn. Bhd., an independent professional

valuer using comparison and investment method.

@ The leasehold land is expiring on 3 June 2084.

^ The property was revalued on 5 February 2009 by Rahim & Co. Chartered Surveyors Sdn Bhd, an independent professional

valuer using comparison and investment method.

# The leasehold land is expiring on 19 February 2094.

** The property was revalued on 10 February 2009 by Rahim & Co. Chartered Surveyors Sdn Bhd, an independent

professional valuer using comparison and investment method.

4. DEPOSITS WITH FINANCIAL INSTITUTIONS

2009 2008

RM RM

Placements maturing within three months placed with a licensed bank 25,437,789 15,107,530

Placements maturing more than three months placed with a licensed bank 1,063,457 1,029,226

26,501,246 16,136,756

The deposits have been placed with a financial institution related to the Manager of the Trust.

5. RECEIVABLES

2009 2008

RM RM

Trade receivables 6,832,010 4,291,188

Other receivables, deposits and prepayments 3,332,644 1,551,830

10,164,654 5,843,018

Less : Allowance for doubtful debts (1,289,595) (153,945)

8,875,059 5,689,073

Included in trade receivables are rental outstanding from companies related to the Manager amounting to RM1,151,899 (2008:

RM901,563) and are subject to normal trade terms.

The Trust’s primary exposure to credit risk arises through its trade receivables. The Trust seeks to maintain strict control over its

outstanding receivables and has a credit control department to minimise credit risk. Overdue balances are reviewed regularly

by senior management. In view of the aforementioned and the fact that the Trust’s trade receivables relate to a large number of

diversified tenants, there is no significant concentration of credit risk. Trade receivables are non-interest bearing.




6. PROVISION FOR INCOME DISTRIBUTION 2009 2008 RM RM

At beginning of financial year 15,769,250 8,348,692Provision during the financial year 37,528,997 31,312,615 Underprovision in prior financial year 533 327 Payment made during the financial year (34,078,675) (23,892,384)

At end of the financial year 19,220,105 15,769,250

7. PAYABLES 2009 2008 RM RM

Trade payables 4,584,395 4,950,767

Other payables and accrued expenses 11,808,776 20,776,517

16,393,171 25,727,284

Included in other payables and accrued expenses are amount owing to the Manager and Trustee of RM2,254,823 (2008: RM1,551,356) and RM88,784 (2008: RM94,823) respectively and retention sum in relation to the acquisition of The Summit Subang USJ of RM6,838,760 (2008: RM18,417,594) which are unsecured, interest free and repayable upon fulfillment of conditions stipulated in Sales and Purchase Agreement.

8. RENTAL DEPOSITS 2009 2008 RM RM

Payable within 12 months 5,868,447 7,143,138Payable after 12 months 10,849,899 5,595,411

16,718,346 12,738,549

Included in the above are rental deposits received from companies related to the Manager amounting to:

2009 2008 RM RM

Payable within 12 months 4,065,101 3,679,897Payable after 12 months 3,826,875 3,982,338

7,891,976 7,662,235

9. BORROWINGS 2009 2008 RM RM

Secured :Term loans 147,000,000 147,000,000Revolving credit facilities 255,000,000 248,605,972

402,000,000 395,605,972

Term loan for the acquisition of Menara Merais is secured by way of lien holder’s caveat over Menara Merais for a tenure of 3 years with fixed interest of 5.00% per annum. Term loans for the acquisition of The Summit Subang USJ are secured by way of lien holder’s caveat and for a tenure of between 3 years to 4 years with interest between 2.75% to 4.32% (2008: 4.28 % to 4.35%) per annum.

Revolving credit facilities are secured for the acquisition of Kelana Brem Towers and The Summit Subang USJ. The facilities bear interest rate ranging from 2.75% to 4.32% (2008: 4.28% to 4.35%) per annum.



10. NET ASSET VALUE

Net asset value attributable to Unitholders is represented by:

2009 2008

RM RM

Unitholders’ capital 426,873,406 426,873,406

Undistributed income 7,807 -

Undistributed unrealized income 141,534,127 -

568,415,340 426,873,406

Unitholders’ capital comprised:

2009 2008

RM RM

Authorized, at beginning and end of year: 429,001,000 429,001,000

Issued and fully paid:

At the beginning of the financial year 426,873,406 426,872,412

Adjustment to listing expenses - 1,321

Restatement - provision for income distribution - (327)

At end of the year 426,873,406 426,873,406

As at 31 March 2009, the Manager did not hold any units in the Trust (2008: Nil). However, the parties related to the Manager who

hold units in the Trust are as follows:

%

No. of units of total units

Unitholdings of companies related to the Manager

AmEquities Sdn. Bhd. 80,000,000 18.65

Jadeline Capital Sdn. Bhd. 53,700,000 12.52

AmBank (M) Berhad 25,344,486 5.91

AMG Insurance Berhad on behalf of General Fund 19,949,700 4.65

AmLife Insurance Berhad on behalf of Life Non Par Fund 12,577,500 2.93

AmLife Insurance Berhad on behalf of Life Fund 8,086,400 1.88

AmLife Insurance Berhad on behalf of Shareholders Fund 995,600 0.23

11. ESTABLISHMENT AND ISSUE EXPENSES

Included in establishment and listing expenses, which have been deducted directly against Unitholders’ funds in prior years, are:

RM

Brokerages and commissions 474,438

Professional fees 378,660

Miscellaneous expenses 1,274,496

2,127,594




12. GROSS REVENUE

2009 2008

RM RM

Gross rental income 86,816,375 55,031,749

Carpark income 6,203,982 2,752,530

Other income 60,604 69,151

93,080,961 57,853,430

13. PROPERTY EXPENSES

Included in property expenses are the following:

2009 2008

RM RM

Property management fee* 2,177,695 1,738,276

Land assessment 4,642,309 3,987,459

Quit rent 148,804 94,718

* The property management fee is based on a scale fee as prescribed under the Valuers, Appraisers and Estate Agents Act, 1981

with permissable discount.

14. MANAGER’S FEE

Pursuant to the Trust Deed, the Manager’s fee consists of a base fee up to 0.50% per annum of the total asset value of the Trust

(excluding any taxes payable) and a performance fee of 3.00% per annum of net property income (excluding any taxes payable),

accruing monthly but before deduction of property management fee. However, the Manager’s fee, for the period from 1 April 2008

to 31 March 2009 consists of a base fee of only 0.30% per annum.

15. TRUSTEE’S FEE

Pursuant to the Trust Deed, the Trustee is entitled to receive a fee up to 0.10% per annum of the net asset value. The Trustee’s fee

for the period from 1 April 2008 to 31 March 2009, is calculated based on 0.03% per annum of the net asset value.

16. INCOME BEFORE TAXATION

Income before taxation is arrived at after charging:

2009 2008

RM RM

Allowance for doubtful debts 1,289,595 153,945

Audit fee 15,000 15,000

Interest expenses on revolving credit facilities and term loans 17,160,470 5,911,085

And crediting:


Change in fair value of investment properties 141,534,127 -



17. TAXATION

2009 2008

RM RM

Current tax expense - -

Reconciliation of effective tax expense

Income before taxation 179,070,892 31,312,615

Income tax using Malaysian tax rate of 25% (For YA 2008 : 26%) 44,767,723 8,141,280

Non-deductible expenses 56,836 60,670

Effect of income exempted from tax (44,824,559) (8,201,950)

Tax expense - -

18. EARNINGS PER UNIT

(a) The earnings after manager’s fee is computed based on net income for the financial year and on the number of units in

issue of 429,001,000.

(b) The earnings before manager’s fee is computed based on net income for the financial year and on the number of units in

issue of 429,001,000.

19. INCOME DISTRIBUTION

In respect of the current financial year ended 31 March 2009, the Manager proposes a final income distribution of 4.48 sen per unit,

totalling RM19,219,245, which is line with the objectives of AmFIRST to deliver regular and stable distributions to Unitholders.

2009 2008

RM RM

Distribution to Unitholders is from the following sources:-

Net rental income 61,284,978 40,644,430


Other income - 19,304

Less: Administrative expenses (24,039,984) (9,747,713)

37,528,997 31,312,615

Gross distribution per unit (sen) 8.75 7.30

Net distribution per unit (sen) 8.75 7.30




20. PORTFOLIO TURNOVER RATIO

2009 2008

Portfolio Turnover Ratio (“PTR”) (Times) - 0.80

The calculation of PTR is based on the average of total acquisition and total disposal of investments in AmFIRST for the financial

year calculated to the average net asset value during the financial year.

21. MANAGEMENT EXPENSE RATIO

2009 2008

Management Expense Ratio (“MER”) (%) 1.56 0.88

The calculation of MER is based on total fees of AmFIRST incurred, including the Manager’s fees, Trustee’s fees, audit fees,

tax agent’s fees and administrative expenses, to the average net asset value during the financial year. Comparison of MER of

AmFIRST with other real estate investment trusts which use different basis of calculation may not be an accurate comparison.

22. CAPITAL COMMITMENT

There were no capital commitments as at the end of the financial year.

23. TRANSACTIONS WITH COMPANIES RELATED TO THE MANAGER

2009 2008

RM RM

Rental earned from AMMB Holdings Berhad and its subsidiaries

and associates (“AmBank Group”) 35,604,773 34,741,963

Interest earned from AmBank Berhad 284,003 396,594

The above transactions have been entered into in the normal course of business and have been established under terms and

conditions that are no less favourable than those arranged with independent third parties.

Also included in the financial statements are the following balances with companies related to the Manager:

2009 2008

RM RM

Cash and bank balances, and deposits placed with AmBank (M) Berhad 33,871,903 33,189,825

Rentals deposits received from the AmBank Group 7,891,976 7,662,235

1% acquisition fees for The Summit Subang USJ payable to the Manager - 2,600,000



24. FINANCIAL INSTRUMENTS

AmFIRST operates within clearly defined guidelines as set out in the Securities Commission’s Guidelines for Real Estate Investment

Trusts (“the Guidelines”). These Guidelines have been formulated with the objective of providing a regulatory framework that would

protect the interests of the investing public. AmFIRST’s risk management policies, which ensure compliance with the spirit of the

Guidelines, are set out below. It is not the Trust’s policy to engage in speculative transactions.

(a) Interest rate risk

AmFIRST’s exposure to changes in interest rates relate primarily to interest-earning financial assets and interest bearing

financial liabilities. Interest rate risk is managed by the Manager on an ongoing basis with the primary objective of limiting

the extent to which interest expense could be affected by adverse movements in interest rate.

(b) Credit risk

At balance sheet date, there were no significant concentration of credit risk. The maximum exposure to credit risk is

represented by the carrying amount of financial asset.

The Trust does not have any significant exposure to any individual customer or counterparty nor does it have any major

concentration of credit risk related to any financial assets.

(c) Liquidity risk

The Trust manages its liquidity risk by maintaining a portion of its resources in deposits and balances with financial

institutions to meet estimated commitments arising from financial liabilities.

(d) Effective interest rates and repricing analysis

In respect of interest-earning financial assets and interest bearing liabilities, the following table indicates their effective

interest rates at the balance sheet date and the periods in which they mature.

In respect of interest-earning Effective Within

financial assets and interest bearing interest rate Total 1 year > 1 - 5 years

liabilities, the following table % RM RM RM

Financial assets

Deposits with licensed bank 1.90 - 3.50 26,501,246 26,501,246 -

Financial liabilities

Term loans 2.75 - 5.00 147,000,000 147,000,000 -

Revolving credit facilities 2.75 - 4.32 255,000,000 255,000,000 -

In respect of cash and cash equivalents, receivables and payables, the carrying amounts approximate fair value due to

relatively short term nature of these financial instruments.




25. SIGNIFICANT EVENT

During the financial year, a revaluation exercise was carried out for all six properties of AmFIRST. Bangunan AmBank Group,

AmBank Group Leadership Centre, Menara AmBank, Menara Merais and Kelana Brem Towers were valued to comply with Clause

10.03 of the Securities Commission’s REIT Guidelines. Whilst the revaluation exercise on The Summit was to determine the current

market value of the property to reflect the fair value at the balance sheet date.

The total revaluation surplus derived from the said revaluation exercise was RM141,534,127 or 16.9% increase in value. The

revalued amount was incorporated into the financial statements as at 31 March 2009 and consequently, the net asset value

increased from RM1.00 to RM1.32 per unit.

26. PRIOR YEAR ADJUSTMENT AND RESTATEMENT OF COMPARATIVES

In the previous financial years, the proposed final income distribution in respect of each financial year were only reflected in

Unitholders’ funds as an appropriation of unditributed income only when it had been approved by the Directors of the Manager

and the Trustee after the financial year end.

In the current financial year, the Manager has obtained the Trustee’s approval for the proposed final income distribution prior to

the financial year end and accordingly, the proposed final income distribution in respect of the financial year ended 31 March 2009

had been reflected in Unitholders’ funds as of that date. Correspondingly, management is of the opinion that the proposed final

income distribution for the previous financial years should be reflected in Unitholders’ funds in the year in which they relate to for

better comparison purposes as well as to be consistent with the industry’s practice. Accordingly, certain comparatives have been

restated, as follows:

As previously As

stated Restatement restated

RM RM RM

Effects on the Balance Sheet as at 31 March 2008:

Provision for income distribution - 15,769,250 15,769,250

Total liabilities 434,071,805 15,769,250 449,841,055

Net asset value 442,642,656 (15,769,250) 426,873,406

Effects on the Statement of Changes in Net Asset Value:

Undistributed income as at 31 March 2007 8,348,692 (8,348,692) -

Undistributed income as at 31 March 2008 15,769,250 (15,769,250) -



THIRTY (30) LARGEST UNITHOLDERS AS AT 31 MARCH 2009

Nos. Names Unitholdings %

1. AMSEC NOMINEES (TEMPATAN) SDN BHD* 80,000,000 18.65

AMEQUITIES SDN BHD

2. AMMB NOMINEES (TEMPATAN) SDN BHD* 53,700,000 12.52

AMBANK (M) BERHAD FOR JADELINE CAPITAL SDN BHD (BK JCSB)

3. PUBLIC NOMINEES (TEMPATAN) SDN BHD* 33,563,526 7.82

PLEDGED SECURITIES ACCOUNT FOR RCE SYNERGY SDN BHD (KLC)

4. AM NOMINEES (TEMPATAN) SDN BHD* 25,344,486 5.91

AMBANK (M) BERHAD

5. CIMB GROUP NOMINEES (TEMPATAN) SDN BHD* 23,279,696 5.43

PLEDGED SECURITIES ACCOUNT FOR AMCORPGROUP BHD (49234 JTRK-RC2)

6. CITIGROUP NOMINEES (TEMPATAN) SDN BHD 20,344,072 4.74

EXEMPT AN FOR AMERICAN INTERNATIONAL ASSURANCE BERHAD

7. AMSEC NOMINEES (TEMPATAN) SDN BHD 19,949,700 4.65

AMG INSURANCE BERHAD (FM-AMAB-GF)


AMLIFE INSURANCE BERHAD (FM-AMAB-LNP)

9. VALUECAP SDN BHD 12,544,796 2.92

10. AMANAH RAYA BERHAD 10,225,880 2.38

KUMPULAN WANG BERSAMA


AMLIFE INSURANCE BERHAD (FM-AMAB-LF)

12. ECML NOMINEES (TEMPATAN) SDN BHD 6,050,000 1.41

FULCRUM ASSET MANAGEMENT SDN BHD FOR FIXED INCOME FUND (001)

13. HSBC NOMINEES (ASING) SDN BHD 5,829,000 1.36

EXEMPT AN FOR THE HONGKONG AND SHANGHAI

BANKING CORPORATION LIMITED (HBFS-I CLT ACCT)

14. CIMB NOMINEES (TEMPATAN) SDN BHD 4,968,920 1.16

CIMB INVESTMENT BANK BERHAD (ETP)

15. MAYBAN NOMINEES (TEMPATAN) SDN BHD 1,880,000 0.44

MAYBAN TRUSTEES BERHAD FOR MAAKL VALUE FUND (950290)

16. AMANAHRAYA NOMINEES (TEMPATAN) SDN BHD 1,750,000 0.41

PUBLIC FAR-EAST PROPERTY & RESORTS FUND

17. CITIGROUP NOMINEES (TEMPATAN) SDN BHD 1,366,800 0.32

EXEMPT AN FOR PRUDENTIAL FUND MANAGEMENT BERHAD

18. LIM KEW SENG 1,365,800 0.32

19. TEOH GUAN KOK & CO. SDN BHD 1,203,800 0.28

Analysis of UnitholdersAs at 31 March 2009



Analysis of Unitholders (Cont’d)As at 31 March 2009

THIRTY (30) LARGEST UNITHOLDERS AS AT 31 MARCH 2009 (CONT’D)

Nos. Names Unitholdings %

20. DETIK JALUR SDN BHD 1,200,000 0.28

21. GOH BENG BENG 1,133,000 0.26

22. CITIGROUP NOMINEES (ASING) SDN BHD UBS AG 1,111,500 0.26

23. HSBC NOMINEES (TEMPATAN) SDN BHD 1,050,000 0.24

HSBC (M) TRUSTEE BHD FOR MAAKL DIVIDEND FUND (5311-401)

24. TAN BOK HOOI 1,032,000 0.24

25. HSBC NOMINEES (TEMPATAN) SDN BHD 1,015,000 0.24

HSBC (M) TRUSTEE BHD FOR MAAKL PROGRESS FUND (4082)

26. YAP AH NGAH @ YAP NEO NYA 1,000,000 0.23

27. AMSEC NOMINEES (TEMPATAN) SDN BHD 995,600 0.23

AMLIFE INSURANCE BERHAD (FM-AMAB-SH)

28. NEO CHOO EE & COMPANY SDN BHD 800,000 0.19

29. MAYBAN NOMINEES (TEMPATAN) SDN BHD 764,000 0.18

PLEDGED SECURITIES ACCOUNT FOR LEE CHONG GEE

30. CHOW SOI WAH 727,000 0.17

TOTAL 334,858,476 78.05

* Substantial Unitholders (5% and above).

DISTRIBUTION SCHEDULE OF UNITS AS AT 31 MARCH 2009

Size of Unitholdings No. of Unitholders No. of Units %

Less than 100 493 104,342 0.03

100 to 1,000 6,463 4,273,529 0.99

1001 to 10,000 4,151 16,213,098 3.78

10,001 to 100,000 1,058 33,710,456 7.86

100,001 to less than 5% of issued units 200 158,811,867 37.02

5% and above of issued units 5 215,887,708 50.32

Total 12,370 429,001,000 100.00


MANAGER

Am ARA REIT Managers Sdn Bhd (730964-X)

Registered Address:

22nd Floor, Bangunan AmBank Group

No. 55, Jalan Raja Chulan, 50200 Kuala Lumpur

Tel: 03-2036 2633 Fax: 03-2031 6453

Business Address:

16th Floor, Bangunan AmBank Group


Tel: 03-2026 9102 Fax: 03-2732 0644

Website: www.amfirstreit.com.my

BOARD OF DIRECTORS OF THE MANAGER

Dato’ Azlan Hashim

Non-Independent Non-Executive Chairman

Cheah Tek Kuang


Dato’ Teo Chiang QuanIndependent Non-Executive Director

Tuan Haji Salleh AkramIndependent Non-Executive Director

Lim Hwee Chiang


Pushpa RajaduraiAlternate Director to Cheah Tek Kuang

Michael Lim Poh KokAlternate Director to Lim Hwee Chiang

COMPANY SECRETARY OF THE MANAGER

Toh Li Ang (MAICSA No. 7024717)

TRUSTEE

Mayban Trustees Bhd (5004-P)

34th Floor, Menara Maybank

100, Jalan Tun Perak, 50050 Kuala Lumpur

Tel: 03-2074 7389 Fax: 03-2070 9387

PROPERTY MANAGERS

Jones Lang Wootton

Rahim & Co. Chartered Surveyors Sdn Bhd

DTZ Nawawi Tie Leung

ReGroup

AUDITORS

Ernst & Young

Public Accountants

Level 23A, Menara Milenium, Jalan Damanlela

Pusat Bandar Damansara, 50490 Kuala Lumpur

Tel: 03-7495 8000 Fax: 03-2095 5332

TAX ADVISER

PricewaterhouseCoopers Taxation Services Sdn Bhd

Level 10, 1 Sentral, Jalan Travers

Kuala Lumpur Sentral

P.O.Box 10192, 50706 Kuala Lumpur

Tel: 03-2173 1188 Fax: 03-2173 1288

BANKERS

AmBank (M) Berhad

Level 18, Menara Dion, Jalan Sultan Ismail

50250 Kuala Lumpur

Tel: 03-2026 3939 Fax: 03-2026 6855

Bangkok Bank Berhad

105, Jalan Tun H.S. Lee

50000 Kuala Lumpur

Tel: 03-2173 7200 Fax: 03-2173 7300

SOLICITORS

Shook Lin & Bok

Syed Alwi, Ng & Co

Tay & Partners

UNIT REGISTRAR

Symphony Share Registrars Sdn Bhd

Level 26, Menara Multi-Purpose, Capital Square,

No 8 Jalan Munshi Abdullah , 50100 Kuala Lumpur

Tel: 03-2721 2222 Fax: 03-2721 2531

BURSA MALAYSIA STOCK NAME AND CODE

AmFIRST / 5120

FOR ENQUIRIES, PLEASE CONTACT

Am ARA REIT Managers Sdn Bhd (730964-X)

16th Floor, Bangunan AmBank Group


Tel: 03-2026 9102 Fax: 03-2732 0644

Website: www.amfirstreit.com.my

Corporate Directory

Documents

AmARA DTP 1-6 · Berhad, Paramount Corporation Berhad, Sapura Industrial Berhad, Kesas Holdings Berhad, Metrod (M) Berhad and Syarikat Permodalan & Perusahaan Selangor Berhad