ANNUAL REPORT LAPORAN TAHUNAN 2011 A TLAN HOLDINGS

ATLAN HOLDINGS BHD(173250-W )

Correspondence address :16th Floor, Menara Atlan161B, Ja lan Ampang5 0 4 5 0 K u a l a L u m p u r

http ://www.atlan.com.myTel : 6 0 3 2 1 7 9 2 0 0 0Fax : 6 0 3 2 1 7 9 2 3 9 0

ANNUAL REPORTLAPORAN TAHUNAN 2011

ATLAN

HO

LDIN

GS B

HD

| AN

NU

AL R

EP

OR

T | LA

POR

AN

TAH

UN

AN

2011

tabl

e o

f c

on

ten

ts

Corporate Information ..................................................... 2

Corporate Structure .......................................................... 3

Profile of Directors ............................................................ 4

Financial Highlights .......................................................... 7

Chairman Statement ............................................................ 8

Statement on Corporate Governance ................... 14

Additional Compliance Information ..................... 19

Audit Committee Report ................................................. 21

Statement on Internal Control ............................... 25

Corporate Social Responsibility ................................ 27

Financial Statements ......................................................... 29

Analysis of Shareholdings .......................................... 138

List of Properties ............................................................... 141

Notice of Annual General Meeting ....................... 145

Proxy Form

2

ATLAN HOLDINGS BHD (173250-W) I annual report 2011

Corporate Information

BOARD OF DIRECTORS

Dato’ Sri Adam Sani Bin Abdullah ChairmanNon-Executive Director

Lee Sze Siang Executive Director

Ong Bok SiongExecutive Director

Dato’ Woo Hon KongNon-Executive Director

Tengku Abdul Rahman Ibni Sultan HajiAhmad Shah Al-Mustain Billah, DK II, SSAPIndependent Non-Executive Director

Dato’ Shagul Hamid Bin K.R. Williams @ AbdullahIndependent Non-Executive Director

Mohd Sharif Bin Hj YusofIndependent Non-Executive Director

Jeneral (B) Dato’ Sri Abdullah Bin Ahmad @ Dollah Bin AmadIndependent Non-Executive Director

AUDIT COMMITTEE

Mohd Sharif Bin Hj Yusof (Chairman)Dato’ Shagul Hamid Bin K.R. Williams @ AbdullahJeneral (B) Dato’ Sri Abdullah Bin Ahmad @ Dollah Bin Amad

REMUNERATION COMMITTEE

Dato’ Sri Adam Sani Bin Abdullah (Chairman)Jeneral (B) Dato’ Sri Abdullah Bin Ahmad @ Dollah Bin AmadDato’ Shagul Hamid Bin K.R. Williams @ Abdullah

NOMINATION COMMITTEE

Dato’ Sri Adam Sani Bin Abdullah (Chairman)Tengku Abdul Rahman Ibni Sultan Haji Ahmad Shah Al-Mustain Billah, DK II, SSAPDato’ Shagul Hamid Bin K.R. Williams @ Abdullah

COMPANY SECRETARIES

Chua Siew Chuan (MAICSA 0777689)Thum Sook Fun (MAICSA 7025619)

REGISTERED OFFICE

Level 4, Wisma Atlan, 8 Persiaran Kampung Jawa11900 Bayan Lepas, Penang, MalaysiaTel: 604 – 641 3200Fax: 604 – 641 3303

INVESTOR RELATIONS

Ong Bok Siong16th Floor, Menara Atlan, 161B Jalan Ampang50450 Kuala Lumpur, MalaysiaTel: 603 – 2179 2000Fax: 603 – 2179 2390Email: [email protected]

CORRESPONDENCE ADDRESS

16th Floor, Menara Atlan, 161B Jalan Ampang50450 Kuala Lumpur, MalaysiaTel: 603 – 2179 2000Fax: 603 – 2179 2390 Web: http://www.atlan.com.my

SHARE REGISTRAR

Symphony Share Registrars Sdn Bhd (378993-D)Level 6, Symphony HousePusat Dagangan Dana 1Jalan PJU 1A/46, 47301 Petaling JayaSelangor, MalaysiaTel: 603 – 7841 8000Fax: 603 – 7841 8151 / 8152

PRINCIPAL BANKERS

Affin Bank BerhadBank Islam Malaysia BerhadRHB Bank Berhad

AUDITORS

Ernst & YoungLevel 23A, Menara MileniumJalan DamanlelaPusat Bandar Damansara50490 Kuala Lumpur, Malaysia

STOCK EXCHANGE LISTING

Main Market of Bursa Malaysia Securities BerhadStock Name: AtlanStock Code: 7048Stock Sector: Industrial ProductsDate Listing: 15 January 1996

3


Corporate Structureas at 15 June 2011

38.06%Naluri Corporation Berhad

57.67%50%

100%

50%

28%United Filter Sdn. Bhd.

69%

100%

70%

19%

81%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

1%

100%

100%

100%

100%

100%

100%

99%100%

100%

51%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

Principal Assets Pte. Ltd.

100%

100%

100%

100%

100%

Arah Induk Sdn. Bhd.

Seven Wonders Of The World Sdn. Bhd.

Atlan Orient Sdn. Bhd.

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

Darul Metro Sdn. Bhd.

100%

51%

81.15%

100%

Atlan Capital Sdn. Bhd.

MHS Land Sdn. Bhd. Gardenia Success Sdn. Bhd.

UVI Advance Technology Sdn. Bhd.

United Vehicles IndustriesSdn. Bhd.

Kadar Prisma Sdn. Bhd.

Fleet Car Hire & Tours Sdn. Bhd.

Atlan Properties Sdn. Bhd.

Atlan Assets Sdn. Bhd.

Belia Karisma Sdn. Bhd.

United Industries Sdn. Bhd.100%

100%

100%

100%

100%

DFZ Capital Berhad

Selasih Ekslusif Sdn. Bhd.

Winner Prompt Sdn. Bhd.

Emas Kerajang Sdn. Bhd.

Front Top (M) Sdn. Bhd.

Seruntun Maju Sdn. Bhd.

Binamold Sdn. Bhd.

DFZ Asia Sdn. Bhd.

Tenggara Senandung Sdn. Bhd.

Orchard Boulevard Sdn. Bhd.

DFZ Tours & Travel Sdn. Bhd.

Media Zone Sdn. Bhd.

DFZ Duty Free (Langkawi) Sdn. Bhd.

First Influx Sdn. Bhd.

Jelita Duty Free Supplies Sdn. Bhd.

Zon Emporium Sdn. Bhd.

DFZ (M) Sdn. Bhd.

Wealthouse Sdn. Bhd.

Jasa Duty Free Sdn. Bhd.

DFZ Duty Free Supplies Sdn. Bhd.

Melaka Duty Free Sdn. Bhd.

Cergasjaya Sdn. Bhd.

DFZ Emporium Sdn. Bhd.

DFZ Trading Sdn. Bhd.

TRIM Capital Management (M) Sdn. Bhd.

International Aviation Consultants Sdn. Bhd.

Timeless Image Sdn. Bhd.

Blossom Time Sdn. Bhd.

Ocean Pride Sdn. Bhd.

Radiant Ranch Sdn. Bhd.

25% Scandinavian Avionics (Malaysia) Sdn. Bhd.

Zon Hospitality Services Sdn. Bhd.

Tegapasti Sdn. Bhd.

RZ Equities Sdn. Bhd.

100%

100%

100%

%%

%%

%%

%%

%%

%%

%%

%%

%%

5%5%

%%

%%

%%

%%

%%

%%

%%

%%

%%

%%

%%

%%

%%

%%

%%6%6%

%%%

%%

%%%%

%%

%%

%%

%%

%%

%%

%%

%%

%%

%%

%%

%%

%%

%%

%%

%%

%%

%%

%%

%%

%%

%%

1

%%

T

Naluri Properties Sdn. Bhd.

United Industries Holdings Sdn. Bhd.

Trifiniti Networks Sdn. Bhd.

Atlan Management Sdn. Bhd.

Atlan Development Sdn. Bhd.

Duty Free International Limited

Atlan Technology Sdn. Bhd.

Naluri International Limited

United Sanoh Industries Sdn. Bhd.

Danco Marketing Sdn. Bhd.

Freighter Industries (M) Sdn. Bhd.

UEW Plastic Industries Sdn. Bhd.

PT DFZ Indon

Cergasjaya Properties Sdn. Bhd.

Black Forest Golf And Country Club Sdn. Bhd.

Gold Vale Development Sdn. Bhd.

Kelana Megah Sdn. Bhd.

4


DATO’ SRI ADAM SANI BIN ABDULLAHChairmanNon-Executive Director

DATO’ SRI ADAM SANI BIN ABDULLAH, a Malaysian, age 55, was appointed as Chairman of the Company on 16 June 2000.

Dato’ Sri Adam is a self-made entrepreneur. He received his primary education in Malaysia and secondary education in the United Kingdom. He has been involved in plantation, insurance, property investment and property management businesses in Hong Kong, United Kingdom, Singapore and Malaysia for more than 30 years.

Dato’ Sri Adam also serves as Chairman of the Remuneration and Nomination Committees of the Company. He is also the Executive Chairman of Naluri Corporation Berhad and Non-Executive Chairman of Duty Free International Limited (formerly known as Esmart Holdings Limited), a company listed on the Catalist Board of the Singapore Exchange Securities Trading Limited.

Dato’ Sri Adam does not have any family relationship with any director. Mr. Sebastian Paul Lim Chin Foo, a substantial shareholder of the Company, is the son of Dato’ Sri Adam.

Dato’ Sri Adam has no conflict of interests with the Company.

LEE SZE SIANGExecutive Director

LEE SZE SIANG, a Malaysian, age 40, was appointed as Executive Director of the Company on 16 June 2000. He was re-designated to Non-Executive Director on 27 December 2004 and subsequently re-designated as Executive Director of the Company on 8 October 2008.

He holds a professional qualification from the Australian Society of Certified Practicing Accountants. He is also a member of the Malaysian Institute of Accountants. Previously, he was with KPMG, a firm of public accountants.

He is a Director of Naluri Corporation Berhad and Executive Director (Finance and Corporate Services) of Duty Free International Limited (formerly known as Esmart Holdings Limited), a company listed on the Catalist Board of the Singapore Exchange Securities Trading Limited.

Lee Sze Siang does not have any family relationship with any director and/or major shareholder of the Company and has no conflict of interests with the Company.

ONG BOK SIONGExecutive Director

ONG BOK SIONG, a Malaysian, age 52, was appointed as Executive Director of the Company on 26 August 2010.

He holds a Bachelor of Laws degree from the University of London, United Kingdom. He also holds a Bachelor of Science degree in Building Economics and Quantity Surveying (first class honours) from the Heriot-Watt University, Scotland, United Kingdom and Diploma in Building Technology from Tunku Abdul Rahman College.

Ong Bok Siong started his career in the construction and property industry in 1983 and had since been involved in mega construction and property development projects. He was the Chief Executive Officer and Executive Director of Meda Inc. Berhad and Group CEO of Andaman Consolidated Sdn. Bhd. Group before joining DFZ Capital Berhad Group.

Ong Bok Siong does not have any family relationship with any director and/or major shareholder of the Company and has no conflict of interests with the Company.

Profile of Directors

5


Profile of Directors (cont’d)

TENGKU ABDUL RAHMAN IBNI SULTAN HAJI AHMAD SHAH AL-MUSTAIN BILLAH,DK II, SSAPIndependent Non-Executive Director

TENGKU ABDUL RAHMAN IBNI SULTAN HAJI AHMAD SHAH AL-MUSTAIN BILLAH, a Malaysian, age 51, was appointed as an Independent Non-Executive Director of the Company on 9 October 2000.

He was educated at Harrow College, United Kingdom in Business Administration. He was a Director on the Board of Public Bank Berhad, from 1983 to March 2011. He also served as a Director for Public Islamic Bank Berhad and Public Investment Bank Berhad till March 2011.

Tengku Abdul Rahman also serves as a member of the Nomination Committee of the Company.

He does not have any family relationship with any director and/or major shareholder of the Company and has no conflict of interests with the Company.

DATO’ SHAGUL HAMID BIN K.R. WILLIAMS @ ABDULLAHIndependent Non-Executive Director

DATO’ SHAGUL HAMID BIN K.R. WILLIAMS @ ABDULLAH, a Malaysian, age 62, was appointed as an Independent Non-Executive Director of the Company on 30 December 2004.

He holds B.A. (Hons), 2nd Lower, Degree in English Studies, University of Malaya (1973). He joined the Pensions Division of Public Services Departments as Assistant Director in 1973 and was subsequently promoted and has held various positions in the Public Sector. His last held position as a full-time public servant was as Head of Languages Division in the National Institute of Public Administration Kuala Lumpur (INTAN) in 1997. However, he had been back several times in the Public Sector, to hold several contract positions.

Dato’ Shagul serves as a member of the Audit and Nomination Committees of the Company. He does not have any family relationship with any director and/or major shareholder of the Company and has no conflict of interests with the Company.

JENERAL (B) DATO’ SRI ABDULLAH BIN AHMAD @ DOLLAH BIN AMADIndependent Non-Executive Director

JENERAL (B) DATO’ SRI ABDULLAH BIN AHMAD @ DOLLAH BIN AMAD, a Malaysian, age 62, was appointed as an Independent Non-Executive Director of the Company on 26 January 2011.

He is graduated from Royal Air Force Staff College in Bracknell, United Kingdom in 1982. He holds Master Degree in International Relations and Strategic Studies from University of Lancaster, United Kingdom in 1986. He joined the Royal Malaysian Air Force (“RMAF”) in 1968 as a cadet officer and had served the RMAF for 36 years before retiring as the Chief of RMAF in 2004 with last rank as General.

He serves as a member of the Audit and Remuneration Committees of the Company.


6


DATO’ WOO HON KONGNon-Executive Director

DATO’ WOO HON KONG, a Malaysian, age 46, was appointed as Non-Executive Director of the Company on 24 April 2002. He was re-designated to the Executive Director position on 5 July 2002 and subsequently re-designated as Non-Executive Director of the Company on 30 October 2008.

He holds a Bachelor of Laws degree from the University of Canterbury, New Zealand. He started his career in 1988 as a legal assistant and joined a mid size legal firm as a partner in 1989 until 1994. He subsequently oversees the management and financial matters of companies involved in real estate and equities market locally and overseas prior to joining Atlan Group.

Dato’ Woo does not hold directorship in any other public companies in Malaysia. He does not have any family relationship with any director and/or major shareholder of the Company and has no conflict of interests with the Company.

MOHD SHARIF BIN HJ YUSOFIndependent Non-Executive Director

MOHD SHARIF BIN HJ YUSOF, a Malaysian, age 72, was appointed as an Independent Non-Executive Director of the Company on 23 January 2009.

He is a Fellow Member of the Institute of Chartered Accountants, England and Wales, an Associate Member of the Malaysian Institute of Accountants and a Member of the Malaysian Institute of Certified Public Accountants. He has had more than 20 years experience in the government and financial sectors, serving the Selangor State Government, Bumiputra Merchant Bankers Berhad (now known as CIMB Bank Berhad) and thereafter British American Life & General Insurance Co. Bhd. (now known as Manulife Insurance (Malaysia) Berhad) where he held the position of Senior Vice President, Finance/Company Secretary at the time he retired.

He serves as Chairman of the Audit Committee of the Company.

He currently sits on the board of Ireka Corporation Berhad and Axis Reit Managers Berhad.


Profile of Directors (cont’d)

7


Financial HighlightsFi

nanc

ial y

ear

ende

d

28/

02/2

002

28

/02/

2003

29

/02/

2004

28

/02/

2005

28

/02/

2006

28

/02/

2007

29

/02/

2008

28

/02/

2009

28

/02/

2010

28

/02/

2011

Rev

enue

(RM

’000

) 3

4,47

5

36,

576

1

07,2

96

129

,395

1

48,6

55

145

,378

1

10,1

55

650

,062

7

02,2

31

744

,789

Pro

fit/(

loss

) bef

ore

tax

(RM

’000

) (9

17)

2,2

35

12,

034

1

0,10

8

15,

382

(1

17,6

06)

4,6

36

59,

997

1

16,8

41

73,

700

Pro

fit/(

loss

) for

the

year

(RM

’000

) (

891)

1

,658

8

,169

6

,839

1

4,13

9

(116

,888

) 3

,585

4

4,32

2

105

,469

5

0,26

5 P

aid-

up C

apita

l (R

M’0

00)

17,

929

1

7,92

9

129

,585

1

92,3

90

192

,390

1

92,4

34

210

,008

2

35,4

00

253

,650

2

53,6

50

Tota

l Equ

ity (R

M’0

00)

19,

157

2

0,81

5

234

,242

3

23,1

11

324

,254

1

93,9

46

230

,409

3

55,2

39

396

,153

4

11,6

71

Net

Ass

ets

Per

Sha

re (R

M)

1.0

7

1.1

6

1.1

6

1.6

7

1.6

7

1.0

0

1.1

0

1.3

2

1.3

8

1.2

6 Ea

rnin

gs P

er S

hare

- B

asic

(sen

) (4

.97)

4

.62

5

.82

4

.44

7

.32

(6

0.77

) 1

.81

1

9.36

3

9.76

1

2.11

D

ivid

end

per

shar

e (s

en)

–

1.0

0

2.5

0

2.0

0

4.0

0

– –

7.0

0

15.

00

17.

00

Shar

e D

ivid

end

#

# #

1 sh

are

for e

very

exi

stin

g 20

sha

res

Rev

enue

Gro

wth

(RM

’000

)

0

100,

000

200,

000

300,

000

400,

000

500,

000

600,

000

700,

000

800,

000

Sha

reho

lder

s R

etur

nE

arni

ngs

Per

Sha

re-B

asic

(sen

)

(80)

(60)

(40)

(20)02040

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Div

iden

d P

erfo

rman

ceD

ivid

end

per

sha

re (s

en)

0369121518

2002

2003

2004

2005

2006

2007

2008

2009

2010

(120

,000

)

(80,

000)

(40,

000)0

40,0

00

80,0

00

120,

000

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2011

Pro

fita

blit

y Tr

end

Pro

fit/

(loss

) bef

ore

tax

(RM

’000

)

8


Chairman Statement

Bismillahir Rahmanir RahimAssalamu Alaikum wa Rahmatullahi wa Barakatuh

On Behalf of the Board of Directors, it is my great pleasure to present the Annual Report and Financial Statements of Atlan Holdings Bhd. (“Atlan”) for the financial year ended 28 February 2011 (“financial year 2011”).

FINANCIAL PERFORMANCE

During the financial year under review, Atlan and its subsidiaries (“Atlan Group”) achieved revenue of RM744.79 million from its operations. This is 6.06% higher than the revenue recorded for the previous financial year of RM702.23 million. However, Atlan Group achieved a lower profit after taxation of RM50.27 million, as compared to the previous year of RM105.47 million, which was mainly due to one-time cost of acquisition and reorganisation of RM40.50 million for the restructuring of DFZ Capital Berhad (“DFZ”) and Darul Metro Sdn. Bhd. (“DMSB”) into Duty Free International Limited (“DFI”).

CORPORATE DEVELOPMENTS

Financial year 2011 has been an exciting year for Atlan Group marked by many significant corporate developments. Atlan embarked on a corporate exercise that involved DFI (formerly known as Esmart Holdings Limited (“Esmart”)), in a RM670.59 million reverse takeover (“RTO”) which was successfully completed in the final quarter of financial year 2011. With it, the former ailing electronics business of Esmart was disposed off and Atlan’s vibrant subsidiaries, DFZ and DMSB, were injected into DFI.

Following the completion of the RTO exercise and the ensuing mandatory general offer, Atlan now owns 81.15% of DFI which in turn owns 100% of both DFZ and DMSB. DFZ was de-listed from the Official List of Bursa Malaysia Securities Berhad on 17 March 2011. On 19 November 2010, Blossom Time Sdn. Bhd. (“BTSB”) and Radiant Ranch Sdn. Bhd. (“RRSB”), both wholly owned subsidiaries of Atlan entered into two separate conditional sale and purchase agreements (“SPAs”) with Utara Malaya Realty Sdn. Bhd. for the disposal of the following lands for a total cash consideration of RM145 million:

• SixpiecesoffreeholdlandownedbyBTSBmeasuringapproximately43.95acres,locatedatNorth-EastDistrict, Penang for a sale consideration of RM104.4 million; and

• OnepieceoffreeholdlandownedbyRRSB measuring approximately 17.08 acres, located at North-East District Penang for a sale consideration of RM40.6 million.

On 30 May 2011, the abovementioned transactions were completed.

On 17 March 2011, Tegapasti Sdn. Bhd., a wholly owned subsidiary of Atlan, entered into a conditional SPA to dispose off two pieces of freehold land in Batu Ferringhi, Penang to Glass Bay Sdn. Bhd. for a total cash consideration of RM33 million. The proposed disposal is expected to be completed before the end of third quarter of financial year 2012.

9


Chairman Statement (cont’d)

SHARE BUY-BACK AND DISTRIBUTION OF TREASURY SHARES

In the financial year under review, Atlan purchased with internally generated funds, 1,318,600 ordinary shares for a total consideration of RM4.6 million (inclusive of transaction cost).

On 18 June 2010, Atlan distributed 12,000,474 treasury shares costing RM34.99 million as share dividends in respect of the financial year ended 28 February 2011, on the basis of one treasury share for every twenty ordinary shares held on the entitlement date of 27 May 2010. As at 28 February 2011, a total of 1,648,649 shares were still held as treasury shares.

OUTLOOK

The completion of the acquisit ion and reorganisation exercise marks a significant milestone in the history of Atlan Group as it will assist to increase the international profile and stature of the Atlan Group whereby we hope to benefit from strong institutional audience and multi national diversified investors base. Atlan and DFZ via DFI would also be better placed to strategize its duty-free business beyond Malaysia as the Atlan Group is now well-placed to tap internationally into additional product ranges and resources, amongst others.

Atlan expects to deliver improved performance in the coming year. Together with DFI, the other businesses within the Atlan Group are also expected to continue to improve their respective operations. Menara Atlan at Jalan Ampang, Kuala Lumpur enjoys reasonable occupancy despite the increased supply of office space in the locality. United Industries Group managed to secure a number of new contracts capitalising on the better demand in the automotive industry.

ACKNOWLEDGEMENT

We are pleased to have on Board, the Independent Director Jeneral (B) Dato’ Sri Abdullah Bin Ahmad @ Dollah Bin Amad, who has been involved in various businesses after his retirement from the military. Jeneral (B) Dato’ Sri Abdullah replaces General Tan Sri Dato’ Seri Mohd Azumi Bin Mohamed (Rtd) who has now moved on to be the Independent Director of DFI, where he continues to contribute his knowledge and expertise to the Atlan Group.

On behalf of the Board, I would like to express my utmost appreciation to the Government and its officers for constantly providing us invaluable advice and assistance.

I would like to thank all our shareholders, bankers, customers, suppliers, business partners, management and staffs for their continued support.

On my part, I remain your humble and obedient servant and pledge to continue my commitment and diligence to the Atlan Group.

Thank you.Wasallamu Alaikum wa Rahmatullahi wa Barakatuh

Adam Sani Bin AbdullahChairman23 June 2011

10


Penyata Pengerusi

Bismillahir Rahmanir RahimAssalamu Alaikum wa Rahmatullahi wa Barakatuh

Bagi Pihak Lembaga Pengarah, saya dengan sukacitanya membentangkan Laporan Tahunan dan Penyata Kewangan Atlan Holdings Bhd. (“Atlan”) bagi tahun kewangan berakhir 28 Februari 2011 (“tahun kewangan 2011”).

PRESTASI KEWANGAN

Pada tahun kewangan yang dikaji, Atlan beserta anak-anak syarikatnya (“Kumpulan Atlan”) telah mencapai perolehan sejumlah RM744.79 juta, melalui operasi-operasinya. Ini adalah 6.06% lebih tinggi daripada perolehan yang direkodkan untuk tahun kewangan sebelumnya, iaitu sebanyak RM702.23 juta. Walaubagaimanapun, Kumpulan Atlan mencatat keuntungan selepas cukai yang berkurangan iaitu sebanyak RM50.27 juta berbanding dengan tahun sebelumnya iaitu RM105.47 juta, yang sebahagian besarnya disebabkan oleh kos pemerolehan dan penyusunan semula berjumlah RM40.50 juta ke atas penstrukturan DFZ Capital Berhad (“DFZ”) dan Darul Metro Sdn. Bhd. (“DMSB”) ke dalam Duty Free International Limited (“DFI”).

PERKEMBANGAN SYARIKAT

Tahun kewangan 2011 merupakan tahun yang menarik bagi Kumpulan Atlan dengan adanya banyak perkembangan syarikat yang signifikan. Atlan telah memulakan satu procedur syarikat yang melibatkan DFI (dahulunya dikenali sebagai Esmart Holdings Limited (“Esmart”)), dalam satu Pengambilalihan Berbalik (“RTO”) yang berjumlah RM670.59 juta, yang telah berjaya disempurnakan pada suku terakhir tahun kewangan 2011. Dengan ini, perniagaan Esmart yang dulunya berteraskan elektronik, yang menghadapi kemerosotan global, telah dilupuskan, dan digantikan oleh perniagaan- perniagaan maju dari anak-anak syarikat Atlan, iaitu DFZ dan DMSB.

Berikutan dengan sempurnanya procedur RTO ini dan disusuli oleh tawaran am mandatori, Atlan sekarang ini memiliki 81.15% DFI dan DFI memiliki 100% DFZ dan DMSB. Seterusnya DFZ telah dikeluarkan dari Senarai Rasmi Bursa Malaysia Securities Berhad pada 17 Mac 2011.

Pada 19 November 2010, anak-anak syarikat milik penuh Atlan iaitu Blossom Time Sdn. Bhd. (“BTSB”) dan Radiant Ranch Sdn. Bhd. (“RRSB”), telah menandatangani dua perjanjian jual beli bersyarat (“SPA”) dengan Utara Malaya Realty Sdn. Bhd. untuk pelupusan tanah-tanah seperti berikut, dengan imbalan tunai sebanyak RM145 juta:

• EnambidangtanahpeganganbebasyangdimilikiolehBTSBberkeluasansebanyak43.95ekar,yangterletakdi Mukim Timur Laut, Pulau Pinang untuk imbalan tunai sebanyak RM104.4 juta; dan

• SebidangtanahpeganganbebasyangdimilikiolehRRSBberkeluasansebanyak17.08ekar,yangterletakdi Mukim Timur Laut, Pulau Pinang untuk imbalan tunai sebanyak RM40.6 juta.

Urusniaga-urusniaga yang tersebut di atas telah disempurnakan pada 30 Mei 2011.

Pada 17 Mac 2011, Tegapasti Sdn. Bhd., sebuah anak syarikat milik penuh Atlan, telah menandatangani SPA bersyarat untuk melupuskan dua bidang tanah pegangan bebas di Batu Ferringhi, Pulau Pinang kepada Glass Bay Sdn. Bhd., dengan imbalan tunai sebanyak RM33 juta. Cadangan pelupusan tanah dijangka akan disempurnakan pada akhir suku ketiga tahun kewangan 2012.

11


Penyata Pengerusi (samb)

PEMBELIAN BALIK SAHAM DAN PENGAGIHAN SAHAM PERBENDAHARAAN

Pada tahun kewangan yang dikaji, Atlan telah membeli balik 1,318,600 saham bernilai RM4.6 juta (termasuk kos), dibiayai dengan dana dalaman.

Pada 18 Jun 2010, Atlan telah mengagihkan sebanyak 12,000,474 saham perbendaharaan yang berjumlah RM34.99 juta sebagai dividen saham bagi tahun kewangan berakhir 28 Februari 2011, berasaskan satu saham perbendaharaan untuk setiap dua puluh saham biasa yang dipegang pada 27 Mei 2010. Pada 28 Februari 2011, sejumlah 1,648,649 saham masih dipegang sebagai saham perbendaharaan.

TINJAUAN PERNIAGAAN

Penyempurnaan procedur pemerolehan dan penyusunan semula ini merupakan satu peristiwa penting dalam sejarah Kumpulan Atlan kerana ia akan membantu meningkatkan profil antarabangsa dan reputasi Kumpulan di mana kami berharap akan memperolehi manfaat dari institusi pemerhati yang kukuh dan pengkalan pelabur multinasional yang pelbagai. Atlan dan DFZ melalui DFI juga akan mempunyai kedudukan yang kukuh untuk memperluaskan perniagaan bebas cukai Kumpulan ke luar Malaysia kerana Kumpulan Atlan sekarang berada di tempat terbaik, untuk menggunakan berbagai produk tambahan dan sumber di peringkat antarabangsa, di antara lainnya.

Atlan menjangka akan memberikan prestasi yang lebih baik di tahun hadapan. Bersama-sama dengan DFI, perniagaan-perniagaan lain dalam Kumpulan juga diharapkan akan terus mempertingkatkan operasi masing-masing. Menara Atlan di Jalan Ampang mencapai kadar penyewaan ruang pejabat yang membanggakan walaupun ruang pejabat di kawasan sekitarnya bertambah. Kumpulan United Industries berjaya mendapatkan sejumlah kontrak baru dan sedang berkembang dengan permintaan yang lebih baik dalam industri otomotif.

UCAPAN TERIMA KASIH

Kami mengalu-alukan kedatangan Pengarah Bebas, Jeneral (B) Dato’ Sri Abdullah Bin Ahmad @ Dollah Bin Amad, yang telah melibatkan diri dalam pelbagai perniagaan selepas bersara daripada kerjayanya dalam tentera. Jeneral (B) Dato’ Sri Abdullah menggantikan Jeneral (B) Tan Sri Dato’ Seri Mohd Azumi Bin Mohamed yang kini adalah Pengarah Bebas DFI, di mana beliau terus menyumbangkan pengetahuan dan kemahiran kepada Kumpulan.

Bagi pihak Lembaga Pengarah, saya ingin mengucapkan penghargaan kepada pihak Kerajaan dan para pengawainya di atas nasihat yang sangat berharga dan bantuan yang berterusan.

Saya ingin mengucapkan terima kasih kepara para pemegang saham, bank-bank, para pelanggan yang dihargai, para pembekal, rakan kongsi perniagaan, pengurusan dan kakitangan kami di atas sokongan yang berterusan kepada Kumpulan.

Bagi diri saya, saya dengan rendah diri berikrar untuk sedia berkhidmat meneruskan komitmen saya kepada Kumpulan Atlan.

Terima kasih.Wasallamu Alaikum wa Rahmatullahi wa Barakatuh

Adam Sani Bin AbdullahPengerusi23 Jun 2011

12


主席献词

主席报告

我很荣幸地代表董事会，提呈益联控股（“Atlan Holdings Bhd.”）截至2011年2月28日财政年的年度报告和财务报表(2011财政年)。

财务表现

在2011财政年度，益联控股(“益联”)和其附属公司(“益联集团”)从经营业务取得7亿4千479万令吉的收入。这比前一财政年度的7亿223万令吉的收入增加了6.06％。然而，益联集团的课税收后利润却于前一年的1亿547万令吉减低至5千27万令吉，主要是由于本集团耗资了4千50万令吉把DFZ资本有限公司（“DFZ”）和Darul Metro 私人有限公司(“DMSB”)进行重组后注入 Duty Free International Limited (“DFI”)。

企业发展

2011财政年是令人振奋的一年，益联集团有着许多重要的企业发展。益联参与了DFI (前称Esmart控股有限公司 (“Esmart”)) 耗资6亿7千59万令吉的企业倒置收购 (“RTO”) 活动，并在2011财政年第四季度成功完成。拥有了它，前Esmart日渐萎缩的电子产品业务经被注销，而充满活力的益联子公司，既DFZ和DMSB则被注资进入DFI。

继倒置收购活动的完成和随后的全面强制献购，益联现拥有DFI 81.15％的股权，而DFI则拥有DFZ 和 DMSB的100%股权。DFZ 于2011年3月17日已正式从马来西亚证券交易所除牌。

在2010年11月19日，Blossom Time私人有限公司(“BTSB”)和Radiant Ranch私人有限公司 (“RRSB”)，这两家益联的全资附属公司与Utara Malaya Realty私人有限公司(“URSB”) 分别订立两个附条件性的买卖协议，以总值现金代价1亿4千5百万令吉出售以下土地：

• BTSB以1亿4百40万令吉出售其位于槟城东北区约43.95英亩的6块拥有永久业权的土地；

• RRSB以4千60万令吉出售其位于槟城东北区约17.08英亩的1块拥有永久业权的土地。

上述交易于2011年5月30日经已完成。

2011年3月17日，Tegapasti私人有限公司，益联的全资附属公司已与Glass Bay私人有限公司订立附条件性的买卖协议，以总现金3千3百万令吉出售2块位于Batu Ferringhi，槟城的永久业权土地。拟议的土地售卖预计将在2012年的财政年度第三季度之前完成。

股份回购和库存股分布

在2011财政年度，益联以内部资金回购1百31万8千600普通股，总代价为4百60万令吉（含成本费用）。

于2010年6月18日，益联派发1千200万474股的库存股，成本为3千4百99万令吉，以2010年5月27日每持有20股普通股派发1库存股为基础，作为截至2011年2月28日财政年的股息。截至2011年2月28日，益联尚持有1百64万8千649股的库存股。

13


主席献词(继续)

展望

完成倒置收购和重组后，既象征着益联集团迈入了新的历史里程碑，这将可助提升其国际形象和地位，此外我们也希望能受惠于强劲的银行融资体制，时事投资分析与发布和多元化投资者的基础地位。通过DFI，益联和DFZ可以更好地为其跨越马来西亚的免税商品业务策划，因益联集团正处于有利地位以进军国际而获取更多的产品范围和资源。

益联预计明年还会有更好的表现。加上DFI，益联集团中的每个附属公司将继续提升各自的运作。其位于吉隆坡安邦路的益联大楼尽管面对周边地区办公室供应的增加，亦能取得很好的租用率。由于汽车行业的需求增加，United工业集团也争取了许多新的合约。

致谢

我们欢迎独立董事Jeneral(B)Dato’Sri Abdullah Bin Ahmad @ Dollah Bin Amad加入董事会，他从军队退役后一直参于各项商业活动。Jeneral(B)Dato’Sri Abdullah 填补General Tan Sri Dato’ Seri Mohd Azumi Bin Mohamed (退休)留下的空缺，而General Tan Sri Dato’Seri Mohd Azumi Bin Mohamed (退休) 现已转移到 DFI担任独立董事，继续为益联集团贡献。

我谨此代表董事局向政府及其官员所给予我们集团宝贵的咨询和协助，致予最深切的谢意。

我要感谢我们的股东，银行家，客户，供应商，生意伙伴，管理层及员工们所给予的支持。

而我承诺将为益联集团持续付出。

谢谢。

Adam Sani Bin Abdullah主席2011年6月23日

14


The Board of Directors (“Board”) of Atlan Holdings Bhd. recognises the importance of practising high standards of corporate governance throughout the Group as a fundamental part of discharging its responsibilities to protect and enhance shareholders’ value and the financial performance of the Group.

The following statements outline the main corporate governance practices of the Group which were in place throughout the financial year.

STATEMENT OF COMPLIANCE

Board of Directors

An effective Board leads and controls the Company and the Group. The Board has the overall responsibility for Corporate Governance, establishing goals, strategies and direction, reviewing the Group’s performance and critical business issues and ultimately the enhancement of long term shareholders’ value.

Board Responsibility

The responsibilities of the Board of the Company are as follows:-

i) Reviewing and adopting strategic plans for the Company which will enhance the future growth of the Company;ii) Overseeing the conduct of the Company’s businesses to evaluate whether the businesses are being properly

managed;iii) Identifying principal risks of the business and ensuring the implementation of appropriate systems to manage

these risks; andiv) Reviewing the adequacy and integrity of the Company’s internal control systems and management information

systems.

Board Balance

The Board currently has eight members, comprising a Non-Executive Chairman, two Executive Directors, a Non-Executive Director and four Independent Non-Executive Directors.

There is a clear division of responsibility between the Non-Executive Chairman and Executive Directors to ensure there is a balance of power and authority. The Chairman is primarily responsible for orderly conduct and working of the Board whilst the Executive Directors are responsible for the day-to-day business operations and implementation of Board policies and decisions.

All major matters issues are referred to the Board for consideration and approval. The roles and contributions of Independent Directors also provide an element of objectivity and independent judgement to the Board.

The Board composition complies with the requirement of the Malaysian Code on Corporate Governance and paragraph 15.02 of the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”). The Board is satisfied that its present composition fairly reflects the interest of minority shareholders in the Company.

Board Meetings

The Board meets at least four (4) times a year at quarterly intervals. Additional meetings are convened as and when necessary. The Chairman is responsible for setting the agenda for Board meetings in consultation with the Executive Directors. Any Board member may recommend the inclusion of items into the agenda.

Statement on Corporate Governance

15


Statement on Corporate Governance (cont’d)

For the financial year ended 28 February 2011, the Board held nine (9) meetings. The attendance record of each Director during their tenure of office in the financial year then ended is as follows:-

Directors Attendance

1. Dato’ Sri Adam Sani Bin Abdullah 9/92. Dato’ Ong Kim Hoay (retired on 26.8.2010) 3/33. Dato’ Woo Hon Kong 7/94. Lee Sze Siang 9/95. Tengku Abdul Rahman Ibni Sultan Haji Ahmad Shah Al-Mustain Billah, DK II, SSAP 5/96. General Tan Sri Dato’ Seri Mohd Azumi Bin Mohamed (Rtd) (resigned on 7.1.2011) 8/87. Dato’ Shagul Hamid Bin K.R. Williams @ Abdullah 8/98. Mohd Sharif Bin Hj Yusof 8/99. Ong Bok Siong (appointed on 26.8.2010) 4/510. Jeneral (B) Dato’ Sri Abdullah Bin Ahmad @ Dollah Bin Amad (appointed on 26.1.2011) –

Supply of information

All directors have full and timely access to information through the Board papers distributed in a timely manner prior to the Board meetings. The Board papers provide, among others, periodic financial information, annual budget, operational and corporate issues, investment proposals and management proposals that require Board’s approval. Senior management staff may be invited to attend Board meetings to provide the Board detailed explanations and clarifications on certain matters that are tabled by them to the Board.

All directors have access to all information within the Company, services and advice of the Company Secretary and external professional advice at the Company’s expense, if necessary.

Appointment and Re-election of Directors

In accordance with the Articles of Association of the Company, one-third of the directors shall retire from office at every annual general meeting but shall be eligible for re-election. Directors appointed during the year by the Board shall hold office until the next annual general meeting and shall then be eligible for re-election.

A retiring director is eligible for re-election. The election of each director is voted separately. To assist shareholders in their decision, sufficient information such as personal profile, meeting attendance and the shareholdings in the Group of each retiring director are furnished in separate statement accompanying the Notice of the Annual General Meeting.

Directors over seventy (70) years of age are subject to re-appointment annually in accordance with Section 129(6) of the Companies Act, 1965.

Directors’ Training

The Directors are mindful that they should receive appropriate continuous training to further enhance their skills and knowledge. Accordingly, the Company organises trainings at least once every two (2) years for the Board to ensure they are kept up-to-date on relevant developments.

Some of the seminars and briefings attended by the directors during the financial year to broaden their perspectives and to keep abreast with the changes on the guidelines issued by the relevant authorities as well as the latest developments in the market place were as follows:-

• TheNon-ExecutiveDirectorDevelopmentSeries:IsItWorthTheRisk?• BoardEffectiveness:RedefiningTheRoleAndFunctionofAnIndependentDirector• TowardsCorporateGovernanceExcellenceForSustainableSuccess

16


Board Committees

The Board has appointed other Board Committees, which operate within clearly defined terms of reference. Standing committees of the Board include the Audit Committee, the Nomination Committee and Remuneration Committee.

(a) Audit Committee The Audit Committee’s role and functions are set out on pages 21 to 24 of this Annual Report.

(b) Nomination Committee

The Nomination Committee of the Company comprises exclusively non-executive directors, a majority of whom are independent directors. Its composition is as follows:-

Position Name Directorship

Chairman Dato’ Sri Adam Sani Bin Abdullah Chairman / Non-Executive DirectorMember Tengku Abdul Rahman Ibni Sultan Haji Ahmad Independent Non-Executive Director Shah Al-Mustain Billah, DK II, SSAP Member Dato’ Shagul Hamid Bin K.R. Williams @ Abdullah Independent Non-Executive Director

The duties and functions of the Nomination Committee are as follows:-

• IdentifyandrecommendnewnomineesfortheBoardandBoardCommittees;• AssesstheperformanceofthedirectorsoftheCompanyonanon-goingbasis;and• AnnualreviewoftheBoardstructure,sizeandcomposition.

The appointment of new directors is the responsibility of the full Board after consideration of the recommendation by the Nomination Committee.

In making this recommendation, the Committee will consider the required mix of skills and experience and other qualities, including core competencies which directors of the Company should bring to the Board.

(c) Remuneration Committee

The Remuneration Committee, comprising mainly non-executive directors, is made up of the following directors:-


Chairman Dato’ Sri Adam Sani Bin Abdullah Chairman / Non-Executive DirectorMember Dato’ Shagul Hamid Bin K.R. Williams @ Abdullah Independent Non Executive DirectorMember Jeneral (B) Dato’ Sri Abdullah Bin Ahmad @ Independent Non Executive Director Dollah Bin Amad

The Committee is primarily responsible for recommending the policy and framework of directors’ remuneration, including the terms and remuneration of the executive directors, to the Board.

Directors’ Remuneration

The remuneration of directors is determined at levels which enable the Company to attract and retain Directors with the relevant experience and expertise to govern the Group effectively. The Remuneration Committee proposes the remuneration of executive directors to the Board. The remuneration of non-executive directors is determined by the Board.

Directors’ fees payable to non-executive directors are subject to shareholders’ approval at the Annual General Meeting.


17


Directors’ remuneration for services rendered to the Group for financial year ended 28 February 2011 is as follows:-

i. Directors’ Remuneration

In RM’000 Allowances and Fees Salaries Total

Executive Directors - Company – 258 258 - Subsidiaries – 798 798

Non-Executive Directors - Company 72 – 72 - Subsidiaries 54 – 54 Total 126 1,056 1,182

ii. Range of Remuneration

Executive Directors Non-Executive Directors

RM50,000 and below – 7 RM250,001 to RM300,000 1 – RM300,001 to RM350,000 1 – RM450,001 to RM500,000 1 –

SHAREHOLDERS

Communication with Shareholders

The Company continues to recognise the importance of transparency and accountability to its shareholders and investors. The Board always ensures that the shareholders are informed of the financial performance and major corporate activities of the Company. Such information is communicated to shareholders and investors through various disclosures and announcements to Bursa Securities, including the quarterly financial results, annual reports and where appropriate, circulars and press releases.

Apart from the mandatory announcements through the Bursa Securities, the Company also maintains a website www.atlan.com.my to which shareholders and investors can have access to information on the operations and business activities of the Group.

Investor relations activities such as meetings with fund managers and analysts and interviews by the press are held at appropriate time to explain the Group’s strategy, performance and major developments.

Annual General Meeting

The Annual General Meeting is the principal forum for dialogue with shareholders. At such Annual General Meeting, the Board encourages shareholders to participate in the questions and answers session. The members of the Board are available to respond to questions from shareholders.

Any item of special business included in the notice of meeting will be accompanied by a full explanation of the effects of the resolution to facilitate full understanding and evaluation of the issues involved.

Extraordinary General Meeting

Apart from the Annual General Meeting, the Board will convene Extraordinary General Meetings on matters that require shareholders approval. Appropriate notices of meeting as well as circulars will be issued and dispatched to shareholders for their evaluation and consideration.


18


ACCOUNTABILITY AND AUDIT

Financial Reporting

The Board aims to present a balanced, clear and meaningful assessment of the Group’s financial positions and prospects in all their reports to the shareholders and regulatory authorities.

The Audit Committee assists the Board to ensure that all annual and quarterly financial reports are prepared in accordance with the applicable approved accounting standards in Malaysia and the provisions of the Companies Act, 1965.

Statement of Directors’ Responsibility in respect of the Audited Financial Statements

The directors are required by the Companies Act, 1965 to prepare financial statements which give a true and fair view of the state of affairs of the Group and of the Company at the end of each financial year end and of their results and cash flows for the financial year then ended.

In preparing the financial statements, the directors have:-

• Adoptedappropriateaccountingpoliciesandappliedthemconsistently;• Madejudgementsandestimatesthatarereasonable;• Ensuredthatapplicableaccountingstandardshavebeencompliedwith;and• Appliedthegoingconcernbasis.

The directors are responsible for ensuring that the Company and the Group keep proper accounting records, which disclose with reasonable accuracy on the financial position of the Company and of the Group, and which enable them to ensure that the financial statements comply with the provisions of the Companies Act, 1965.

The directors are also responsible for taking reasonable steps to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

Internal Controls

It is responsibility of the Board to maintain sound systems of internal controls to safeguard shareholders investment.

As the systems of internal controls are designed to mitigate rather than eliminate the likelihood of errors or fraud, these systems can only provide a reasonable assurance against material misstatement or loss.

In order to maintain sound systems of internal controls, the Board has established an internal audit function, which is completely independent from all operations to monitor and review the effectiveness of the internal controls within the organisation.

Relationship with external auditors

The Group’s independent external auditors play an important role in enhancing the reliability of the Group’s financial statements and giving assurance of that reliability to the users of these financial statements.

The role of the Audit Committee in relation to the external auditors is described in the Audit Committee Report of this Annual Report. The Group has always maintained a transparent relationship with its auditors in seeking professional advice and ensuring compliance with applicable approved accounting standards in Malaysia.


19


Additional Compliance Information

1. Utilisation of Proceeds

During the financial year ended 28 February 2011, the Company did not raise any funds through any corporate proposal/shareholders’ mandate under Section 132D of the Companies Act, 1965.

2. Share Buy-Back

During the financial year ended 28 February 2011, the Company repurchased 1,318,600 of its issued ordinary shares of RM1.00 each from the open market.

The details of the shares bought back by the Company are as follows:-

No. of shares purchased and retained Purchase Price Per Share as treasury Lowest Highest Average TotalMonth shares Price Price Price* Consideration* RM RM RM RM’000

March 2010 1,119,200 3.36 3.50 3.48 3,890April 2010 92,000 3.35 3.43 3.41 314May 2010 91,600 3.36 3.49 3.43 314November 2010 15,800 3.17 3.20 3.23 51

1,318,600 4,569

* Inclusive of transaction cost

The information on the shares repurchased by the Company amounting to 1,318,600 shares during the financial year is presented under Note 29 to the Financial Statements.

On 18 June 2010, the Company distributed 12,000,474 treasury shares as share dividends on the basis of one treasury share for every existing twenty ordinary shares of RM1 each to shareholders of the Company based on the entitlement date of 27 May 2010 in respect of the financial year ended 28 February 2011.

As at 28 February 2011, the numbers of treasury shares held by the Company are 1,648,649 after taking into account distribution of the abovementioned treasury shares as share dividends.

Other than the above, no treasury shares were resold or cancelled during the financial year.

3. Options or Convertible Securities

No options, warrant or convertible securities were exercised during the financial year.

4. Depository Receipt Programme

The Company did not sponsor any depository receipt programme during the year.

5. Sanctions and/or Penalties

There were no sanctions or penalties imposed on the Company and its subsidiaries, directors or management by the relevant regulatory bodies during the financial year.

20


6. Non-Audit Fees

Non-audit fees paid to external auditors by the Company and by the Group for the financial year ended 28 February 2011 amounted to RM59,000 and RM1,191,000 respectively.

7. Variation in Results

There is no material variance in the profit between the audited results and the unaudited results previously announced.

There was no profit forecast announced during the financial year.

8. Profit Guarantee

During the financial year, there was no profit guarantee given by the Company.

9. Material Contracts Involving Directors’ and Major Shareholders’ Interests

There were no material contracts entered into by the Company and its subsidiaries involving directors’ and major shareholders’ interests, either still subsisting at the end of the financial year or entered into since the previous financial year end.

10. Revaluation Policy

The Group has not adopted a policy of regular revaluation of assets as permitted under the transition provisions.

11. Recurrent related party transactions of a revenue nature

There were no recurrent related party transactions of a revenue nature entered into during the financial year ended 28 February 2011.

Additional Compliance Information (cont’d)

21


Audit Committee Report

The Audit Committee comprises the following members:-


Chairman Mohd Sharif Bin Hj Yusof Independent Non-Executive Director

Member Dato’ Shagul Hamid Bin K.R Williams @ Abdullah Independent Non-Executive Director

Member Jeneral (B) Dato’ Sri Abdullah Bin Ahmad @ Dollah Independent Non-Executive Director Bin Amad (appointed on 26.1.2011)

Member General Tan Sri Dato’ Seri Mohd Azumi Bin Mohamed Independent Non-Executive Director (Rtd) (resigned on 7.1.2011)

ATTENDANCE

The Audit Committee met four (4) times during the financial year ended 28 February 2011. Details of the attendance of the Committee members holding office during the financial year are as follows:-

Members Attendance

Mohd Sharif Bin Hj Yusof 4/4Dato’ Shagul Hamid Bin K.R. Williams @ Abdullah 4/4General Tan Sri Dato’ Seri Mohd Azumi Bin Mohamed (Rtd) (resigned on 7.1.2011) 3/3Jeneral (B) Dato’ Sri Abdullah Bin Ahmad @ Dollah Bin Amad (appointed on 26.1.2011) –

TERMS OF REFERENCE OF THE AUDIT COMMITTEE

1. Primary Purposes

1.1 Assist the Board in discharging its statutory duties and responsibilities relating to accounting and reporting practices of the Company and each of its subsidiaries.

1.2 Evaluate the quality of the audits conducted by the internal and external auditors.

1.3 Provide reasonable assurance that the financial information presented by management is relevant, reliable and timely.

1.4 Oversee compliance with laws and regulation and observance of a proper code of conduct.

1.5 Determine the adequacy of the Company’s control environment.

2. Composition

2.1 The Committee shall be appointed by the Board from amongst their number and shall be no fewer than three (3) non-executive members, the majority of whom shall be independent directors as defined in the Listing Requirements of Bursa Securities.

22


2.2 The members of the Committee must include at least one (1) member of the Audit Committee who:-

(i) is a member of Malaysian Institute of Accountants; or(ii) must have at least 3 years’ working experience and:-

a) passed the examinations specified in Part I of the 1st Schedule of the Accountants Act, 1967; or

b) a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act, 1967; or

(iii) fulfils such other requirements as prescribed or approved by Bursa Securities.

2.3 The Board must ensure that no alternate director is appointed as a member of the Committee.

2.4 The members of the Committee shall elect a Chairman from amongst their number who shall be an independent director.

3. Authority

The Committee shall in accordance with the procedure determined by the Board and at the cost of the Company:-

(i) have authority to investigate any matter within its terms of reference;(ii) have the resources which are required to perform its duties;(iii) have full and unrestricted access to any information pertaining to the Company and its subsidiaries;(iv) have direct communication channels with the external auditors and person(s) carrying out the internal

audit function or activity;(v) be able to obtain independent professional or other advice and to secure the attendance of outsiders

with relevant experience and expertise if it considers necessary; and(vi) be able to convene meeting with the external and internal auditors or both and exclude the directors

and employees, whenever deemed necessary.

Where the Audit Committee is of the view that the matter reported by it to the Board has not been satisfactorily resolved resulting in a breach of the Listing Requirements, the Committee shall promptly report such matter to Bursa Securities.

4. Functions and Duties

The Board must ensure the Committee discharges the following functions, amongst others:-

4.1 To consider the appointment of the external auditors, the audit fee and any questions of resignation or dismissal and whether there is any reason (supported by grounds) to believe that the external auditors are not suitable for re-appointment.

4.2 To review with the external auditors:-

• theirauditplans;• itsevaluationofthesystemsofinternalcontrols;• itsauditreports;• the assistancegivenby the employeesof theCompanyand its subsidiaries to the external

auditors; and• theexternalauditors’managementletterandthemanagement’sresponsethereto.

4.3 To recommend the nomination of a person or persons as the external auditors.

Audit Committee Report (cont’d)

23


4.4 To do the following in relation to the internal audit functions:-

• ensuretheinternalauditfunctionisindependentoftheactivitiesitauditsandtheheadofinternalaudit reports directly to the Audit Committee. The head of internal audit will be responsible for the regular review and/or appraisal of the effectiveness of the risk management, internal control and governance processes within the Company and its subsidiaries;

• reviewtheadequacyof thescope, functionscompetencyandresourcesof the internalauditfunctions and that it has all the necessary authority to carry out its work;

• reviewtheinternalauditprogrammeandtheresultsoftheinternalauditprocessorinvestigationundertaken;

• to consider themajor findings and whether or not appropriate action is taken on therecommendations of the internal audit function and management’s response thereto;

• reviewanyappraisalorassessmentoftheperformanceofmembersoftheinternalauditfunction;• toconsidertheappointmentorresignationofseniorstaffmembersoftheinternalauditfunction,

take cognisance of resignation of internal audit staff members (for in-house internal audit function) or the internal audit service provider (for out-sourced internal audit function) and provide the resigning staff member or the internal audit service provider an opportunity to submit his/her reasons for resigning, if necessary; and

• tosupport,asdeemnecessary,theinternalauditactivities.

4.5 To review the quarterly results and year end financial statements, prior to the approval by the Board of Directors, focusing particularly on:-

• anychangesinorimplementationofmajoraccountingpoliciesandpractices;• significantadjustmentsarisingfromtheauditandanyothersignificantandunusualevents;• compliancewithaccountingstandardsandotherlegalrequirements;and• anyrelatedpartytransactionandconflictofinterestsituationthatmayarisewithintheCompany

or the Group including any transaction, procedure or course of conduct that raises questions of the management’s integrity.

4.6 To consider and examine any other matters as defined by the Board of Directors from time to time.

5. Meetings

5.1 To form a quorum in respect of a meeting of the Committee, the majority of members present must be independent directors.

5.2 The Committee shall meet at least four (4) times a year.

5.3 The external auditors may request a meeting if they consider that one is necessary and the Chairman of the Committee shall convene a meeting of the Committee to consider any matters the external auditors believe should be brought to the attention of the Directors or shareholders.

5.4 The external auditors have the rights to appear and be heard at any meeting of the Committee.

5.5 The Committee may invite any Board member of any member of the senior management or any relevant employee within the Company or the Group whom the Committee thinks fit to attend its meetings to assist in resolving and clarifying matters raised in audit reports.

5.6 The internal auditors shall be in attendance at meetings of the Committee to present and discuss the audit reports of findings and the recommendations relating thereto and to follow up on decisions made at these meetings.


24


6. Secretary

6.1 The Company Secretary shall be the Secretary of Audit Committee.

6.2 The Secretary shall cause minutes to be duly entered in the books for the purpose of all resolutions and proceeding of all meetings of the Audit Committee. Such minutes shall be signed by the Chairman of the meeting at which the proceedings were held or by the Chairman of the next succeeding meeting.

6.3 The Secretary shall circulate the minutes of meeting of the Committee to all members of the Board.

SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE

The activities of the Audit Committee for the financial year are as follows:-

• reviewanddiscuss the re-appointment of the external auditors of theCompanybefore tabling to theshareholders for approval at the Annual General Meeting.

• reviewanddiscusstheexternalauditors’natureandscopeoftheauditplan,systemofinternalcontrolreview,audit report and any significant audit findings encountered;

• reviewanddiscussthebudgetfortheyear;

• reviewthequarterlyandannualfinancialstatementspriortorecommendingthemtotheBoardforapprovaland ensure that it is prepared in accordance with the applicable approved accounting standards and the provisions of the Companies Act, 1965;

• reviewanyrelatedpartytransactionsthatmayarisewithintheGrouportheCompany;

• reviewtheadequacyofthescope,functionsandresourcesoftheinternalauditfunctionandtheinternalauditplan; and

• reviewthescopeoftheinternalauditprogramme,theinternalauditfindings,recommendationsandcorrectiveactions taken.

No options have been granted during the financial year under review. Should the Company decide to allocate any options in future, the allocation shall be verified by the Audit Committee at the end of that financial year.

SUMMARY OF ACTIVITIES OF THE INTERNAL AUDIT FUNCTION

The internal audit function is independent of the auditable areas in the organisation and reports to the Audit Committee. The responsibilities include reviewing the adequacy of the system of internal controls and evaluating the various financial and operational risks faced by the organisation.

The internal audit activities are specified in the annual audit plan, which is submitted to the Audit Committee for approval. Internal audit reports with findings and recommendations are forwarded to the Audit Committee for their review.

For the financial year under review, the total costs incurred by the Group for maintaining the internal audit functions are RM1,155,000.


25


Statement on Internal Control

Preamble

Pursuant to paragraph 15.26(b) of the Bursa Malaysia Securities Berhad’s Listing Requirements, the Board is required to include in its Annual Report a statement on the state of internal control of the Group. In making this statement on Internal Control, it is essential to address the Principles and Best Practices in the Malaysian Code on Corporate Governance, which relate to internal control.

Responsibility

The Board acknowledges its stewardship responsibility for maintaining a sound system of internal control and for reviewing its adequacy and integrity to safeguard shareholders’ investment and the Group’s assets.

However, it should be noted that such system is designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable and not absolute assurance against material misstatement loss and fraud. For the purpose of this statement, the associated company is not dealt with as part of the Group.

Internal Control Systems

The embedded control system is designed to facilitate achievement of the Group’s business objectives. It comprises the underlying control environment, control process, communication and monitoring systems.

The organisational structure has well-defined responsibility, delegation of authority, segregation of duties and information flow. Committees made up predominantly of non-executive directors such as Audit, Nomination and Remuneration Committees provide the essential support to the Board. The Audit Committee convenes regularly to meet their strategic business agenda, thus ensuring that the Board are properly apprised and maintains effective supervision over the entire operations.

Well-documented Group-wide policies, procedures and standards have been established, periodically reviewed and updated in accordance with changes in the operating environment.

In addition, the Group has in place comprehensive budgeting process for all operating units with periodical monitoring of performance so that major variances are followed-up and management action taken.

The functional limits of authority for revenue and capital expenditure for all operating units serve to facilitate the approval process whilst keeping potential exposure in check.

Detailed justification and approval process for major projects and acquisitions are imposed to ensure congruence with Company’s strategic objectives.

The Group’s computerised information systems are streamlined to ensure compliance with hardware and software regulations and guidelines for system integrity, effectiveness and efficiency.

Independent appraisals by internal and external auditors ensure ongoing compliance with policies, procedures, standards and legislations whilst assessing the effectiveness of the Group’s systems of financial, compliance and operational controls.

26


Risk Management

Besides primary ownership over effectiveness of the Group’s internal control system, the Board recognises its responsibility over the principal risks of various aspects of the Group’s business. For long-term viability of the Group, it is crucial to achieve a critical balance between risks incurred and potential returns.

To facilitate risk analysis, key risks and control affecting the Group are identified, prioritized, evaluated and measured for the impact on the Group’s business objectives. The various risk profiles will then be regularly consolidated, reported and presented to the Audit Committee for its review.

Internal Audit Function

An Internal Audit function supports the Audit Committee, and by extension, the Board, by providing reasonable independent assurance on the effectiveness of the Group’s systems of internal control.

In particular, Internal Audit appraises and contributes towards improving the Group’s risk management and control systems and reports to the Audit Committee on a quarterly basis.

The internal audit work plan, which reflects the risk profile of the Group’s major business sectors is routinely reviewed and approved by the Audit Committee. The scope of the Internal Audit function covers the audit of all business units and operations.

Internal Control Issues

Management maintains an ongoing commitment to strengthen the Group’s control environment and processes.

The external auditors have reviewed the Statement on Internal Control as required by paragraph 15.23 of the Listing Requirements of Bursa Malaysia Securities Berhad. Their review was performed in accordance with Recommended Practice Guide 5 issued by the Malaysian Institute of Accountants.

Statement on Internal Control (cont’d)

27


Corporate Social Responsibility

Corporate Social Responsibility (“CSR”) is often perceived or described as one or more of the following: corporate, citizenship, ethical and transparent business values, environmental sustainability or corporate philanthropy. Increasingly, CSR is seen as the combination of all of these and with clear emphasis on the word “responsibility”.

The Board acknowledges the importance of CSR and views CSR as an extension of the Group’s efforts in fostering a strong corporate governance culture. Working towards CSR enables the Group to co-exist with the community and the environment while building a sound business. CSR also enables the Group to be recognised by the community as a responsible corporate citizen that helps to make sustainable growth a reality.

Community

The Group plays its role as socially responsible corporate citizen in the community through various activities held with the aim of caring for wellbeing of the society at large. We continue to support education and welfare in our local communities.

During the year, the Group had contributed donations to various worthy societies and institutions through the non-profit organisation, Yayasan Harmoni, whereby contributions were made to welfare homes for single mothers, orphans and the less fortunate. The Group also contributed to Mount Miriam Cancer Hospital for the treatment and continuing care of patients with cancer. Further in November 2010, the Group had also contributed to the relief efforts for the floods which affected the community in the northern region of the country.

The Group believes that education is a perquisite for harmonious functioning of any society. Accordingly, the Group has contributed through Yayasan Harmoni, to schools for the welfare of less fortune students as well as building funds for school facilities. The Group, also at the beginning of the year set up “Sumbangan Bantuan Persekolahan” which assisted qualified employees, who have school-going children, with expenses for the new school year.

The Zon Johor Bahru had continuously organised many events during the year to promote the 1 Malaysia spirit through the local multiracial festivals celebrations and Merdeka Exhibition; encourage active lifestyle for the community in general, especially school children through events like Taekwon-do competition; creating awareness on health and general well-being through blood donation, cooking demonstration and celebrating World Laughter Day; and many other activities to reach out to the community.

Workplace

The Group is committed in its social responsibilities at the workplace via compliance and respect to Human Rights which includes employment of staff under fair and equitable terms as well as offering equal opportunity for career advancement based on performance. Continuous learning and development programmes were carried out throughout the year to equip the staff with relevant skills, knowledge and experience which would enhance the individual staff’s competency and eventually add value to the Group. Upward mobility of staff is encouraged and staff welfare is closely monitored to avoid any violation of Labour or Human Rights.

In addition, health and safety awareness programs and sports activities were held to encourage employees to lead a health lifestyle. The Group also organised annual dinners and festive celebrations for its employees.

Environment

As an environmentally and socially responsible corporate citizen, the Group undertook several initiatives preserving the environment including upgrading its IT infrastructure on its move to paperless environment, reducing the usage of papers via electronic communication and recycling paper.

28


Marketplace

The Group ensures that its operations are in line with the best practices guidelines set in Malaysian Code on Corporate Governance. All activities are conducted at arms length and do not favour any single party.

Conclusion

The Group will continue to support and encourage all our employees and businesses to find ways to help their communities. The Group’s initiatives in supporting CSR are an ongoing commitment towards creation of a competitive nation, yet a moral, ethical, caring and economically just society.

Corporate Social Responsibility (cont’d)

Fin

anc

ial

Stat

emen

ts

Directors’ Report ................................................................ 30

Statement by Directors .................................................... 34

Statutory Declaration ..................................................... 34

Independent Auditors’ Report .................................... 35

Income Statements .............................................................. 37

Statements of Comprehensive Income .................... 38

Statements of Financial Position ............................. 39

Statements of Changes In Equity ............................... 42

Statements of Cash Flows .............................................. 45

Notes to the Financial Statements .......................... 48

Supplementary Information ........................................ 137

30


Directors’ Report

The directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company for the financial year ended 28 February 2011.

PRINCIPAL ACTIVITIES

The principal activities of the Company are investment holding and the provision of management, financial, technical and other ancillary services.

The principal activities of the subsidiaries are set out in Note 20 to the financial statements.

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

RESULTS

Group Company RM'000 RM'000 Profit net of tax 50,265 504,870 Profit attributable to: Owners of the parent 30,182 504,870 Minority interests 20,083 – 50,265 504,870 There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the financial statements.

In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature other than the cost of acquisition and reorganisation of RM40,496,000 in respect of the Group; and the gain on disposal of subsidiaries of RM553,077,000 and impairment loss on amounts due from subsidiaries of RM95,153,000 in respect of the Company.

DIVIDENDS

The amounts of dividends paid by the Company since 28 February 2010 were as follows:

RM'000

In respect of the financial year ended 28 February 2011:

First interim dividend (single-tier) of 5%, on 240,017,000 ordinary shares, declared on 12 May 2010 and paid on 18 June 2010 12,001

Second interim dividend (single-tier) of 5%, on 252,018,000 ordinary shares, declared on 6 September 2010 and paid on 18 October 2010 12,601

Third interim dividend (tax-exempt) of 2%, on 252,002,000 ordinary shares, declared on 8 December 2010 and paid on 14 January 2011 5,040

29,642

31


Directors’ Report (cont’d)

On 14 March 2011, the Company declared a fourth interim single tier ordinary dividend of 5% in respect of the financial year ended 28 February 2011 amounting to RM12.6 million, which was paid on 13 April 2011. The financial statements for the current financial year do not reflect this interim dividend, but will be accounted for in equity as an appropriation of retained earnings in the financial year ending 29 February 2012.

The directors do not recommend the payment of any final dividend in respect of the financial year ended 28 February 2011.

DIRECTORS

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

Dato' Sri Adam Sani Bin Abdullah Lee Sze Siang Dato' Woo Hon Kong Tengku Abdul Rahman Ibni Sultan Haji Ahmad Shah Al-Mustain Billah, DK II, SSAP Dato' Shagul Hamid Bin K.R. Williams @ Abdullah Mohd Sharif Bin Haji Yusof Ong Bok Siong (appointed on 26 August 2010) Jeneral (B) Dato' Sri Abdullah Bin Ahmad @ Dollah Bin Amad (appointed on 26 January 2011) Dato' Ong Kim Hoay (retired on 26 August 2010) General Tan Sri Dato' Seri Mohd Azumi Bin Mohamed (Rtd) (resigned on 7 January 2011)

DIRECTORS' BENEFITS

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

Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by the directors or the fixed salary of a full-time employee of the Company as shown in Note 7 to the financial statements) by reason of a contract made by the Company 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' INTERESTS

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

Number of ordinary shares of RM1 eachName of director 1.3.2010 Acquired Sold 28.2.2011 Direct Interest:Ordinary shares of the Company Dato' Sri Adam Sani Bin Abdullah 1,600,057 164,004 – 1,764,061 Dato' Woo Hon Kong 10,010,100 1,026,035 – 11,036,135 Deemed Interest: Ordinary shares of the Company Dato' Sri Adam Sani Bin Abdullah 71,220,265 7,300,075 – 78,520,340 Dato' Woo Hon Kong 19,740,875 24,293,938 – 44,034,813

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

32


TREASURY SHARES

During the financial year, the Company repurchased 1,318,600 of its issued ordinary shares from the open market at an average price of RM3.47 per share. The total consideration paid for the repurchase including transaction costs was RM4,569,000. The shares repurchased are being held as treasury shares in accordance with Section 67A of the Companies Act, 1965.

On 12 May 2010, the Company declared share dividends on the basis of one treasury share for every existing twenty ordinary shares of RM1.00 each to the shareholders of the Company, based on the entitlement date of 27 May 2010. Subsequently, on 18 June 2010, 12,000,474 treasury shares were distributed to the shareholders based on 240,017,000 ordinary shares.

As at 28 February 2011, the Company held as treasury shares a total of 1,648,649 of its 253,650,000 issued ordinary shares. Such treasury shares are held at a carrying amount of RM4,811,000 and further relevant details are disclosed in Note 29 to the financial statements.

OTHER STATUTORY INFORMATION

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

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for impairment and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for impairment; and

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

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

(i) the amount written off for bad debts or the amount of the allowance for impairment in the financial statements of the Group and of the Company inadequate to any substantial extent; and

(ii) the values attributed to the current assets in the financial statements of the Group and of the Company misleading.

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

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

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

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

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


33


(f) In the opinion of the directors:

(i) no contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which will or may affect the ability of the Group or of the Company to meet their 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 Group or of the Company for the financial year in which this report is made.

SIGNIFICANT AND SUBSEqUENT EVENTS

Details of significant and subsequent events are disclosed in Note 48 to the financial statements.

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 dated 15 June 2011. LEE SZE SIANG ONG BOK SIONG


34


We, Lee Sze Siang and Ong Bok Siong, being two of the directors of Atlan Holdings Bhd., do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 37 to 136 are drawn up in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 28 February 2011 and of their financial performance and cash flows for the year then ended.

The information set out in Note 49 on page 137 to the financial statements have been prepared in accordance with the Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.

Signed on behalf of the Board in accordance with a resolution of the directors dated 15 June 2011. LEE SZE SIANG ONG BOK SIONG

Statement by Directorspursuant to section 169 (15) of the companies act, 1965

Statutory Declarationpursuant to section 169 (16) of the companies act, 1965

I, Lee Sze Siang, being the director primarily responsible for the financial management of Atlan Holdings Bhd., do solemnly and sincerely declare that the accompanying financial statements set out on pages 37 to 137 are in my opinion 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, 1960.

Subscribed and solemnly declared by the abovenamed Lee Sze Siang at Kuala Lumpurin the Federal Territory on 15 June 2011 LEE SZE SIANG Before me,

AHMAD B. LAYANo: W259Commissioner for Oaths

35


Independent Auditors’ Reportto the members of Atlan Holdings Bhd.

REPORT ON THE FINANCIAL STATEMENTS

We have audited the financial statements of Atlan Holdings Bhd., which comprise the statements of financial position as at 28 February 2011 of the Group and of the Company, and income statement, the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 37 to 136.

Directors’ responsibility for the financial statements The directors of the Company are responsible for the preparation and fair presentation of these financial statements in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia. 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.

Auditors’ responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

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

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

Opinion In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 28 February 2011 and of their financial performance and cash flows for the year then ended.

36


REPORT ON OTHER LEGAL AND REGULATORY REqUIREMENTS In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:

(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

(b) We have considered the financial statements and the auditors’ reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 20 to the financial statements, being financial statements that have been included in the consolidated financial statements.

(c) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statements of the Company are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information and explanations required by us for those purposes.

(d) The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification and did not include any comment required to be made under Section 174(3) of the Act.

OTHER MATTERS

The supplementary information set out in Note 49 on page 137 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad’s Main Market Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

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

ERNST & YOUNG KUA CHOO KAI AF: 0039 No. 2030/03/12(J) Chartered Accountants Char te red Accountan t Kuala Lumpur, Malaysia 15 June 2011

Independent Auditors’ Report (cont’d)

to the members of Atlan Holdings Bhd.

37


Income Statementsfor the financial year ended 28 February 2011

Group Company Note 2011 2010 2011 2010 RM'000 RM'000 RM'000 RM'000 Continuing operations

Revenue 4 744,789 696,161 48,555 46,173 Other income 5 74,614 94,913 581,003 65,433 Raw materials and consumables used (495,885) (506,749) – – Changes in finished goods 3,096 34,903 – – Property development costs (155) (4,134) – – Employee benefits expense 6 (69,085) (64,604) (367) (531)Depreciation (23,391) (22,207) (13) (34)Other operating expenses 8 (138,217) (93,379) (100,682) (13,448)

Operating profit 95,766 134,904 528,496 97,593 Share of results of an associate (28) 19 – – Finance costs 9 (22,038) (20,464) (15,513) (15,388)

Profit before tax 73,700 114,459 512,983 82,205 Income tax expense 10 (23,435) (11,373) (8,113) (5,559)

Profit for the year from continuing operations, net of tax 50,265 103,086 504,870 76,646 Discontinued operation

Profit for the year from discontinued operation, net of tax 11 – 2,383 – –

Profit for the year 50,265 105,469 504,870 76,646 Profit attributable to:

Owners of the parent 30,182 89,703 504,870 76,646 Minority interests 20,083 15,766 – – 50,265 105,469 504,870 76,646 Basic earnings per share attributable to owners of the parent (sen per share) 12 - Continuing operations 12.11 38.70 - Discontinued operation – 1.06

12.11 39.76

The accompanying accounting policies and explanatory notes form an integral part of the financial statements.

38


Statements of Comprehensive Income for the financial year ended 28 February 2011

Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000 Profit for the year 50,265 105,469 504,870 76,646 Foreign currency translation 10 (412) – –

Total comprehensive income for the year 50,275 105,057 504,870 76,646 Total comprehensive income attributable to: Owners of the parent 30,192 89,291 504,870 76,646 Minority interests 20,083 15,766 – – 50,275 105,057 504,870 76,646


39


Statements of Financial Positionas at 28 February 2011

Note 2011 2010 2009 RM'000 RM'000 RM'000 (restated) (restated)

Group

Assets Non-current assets Property, plant and equipment 14 393,661 399,738 393,095 Land held for property development 15 58,086 93,032 85,589 Investment properties 16 53,795 56,327 57,975 Land use rights 17 21,371 21,332 13,730 Biological assets 18 2,617 2,168 1,779 Goodwill 19 28,462 28,462 19,760 Investment in associate 21 437 465 446 Other investments 22 150 162 162 Other receivables 23 253 473 714 Deferred tax assets 24 6,353 6,708 1,133 565,185 608,867 574,383 Current assets Inventories 25 131,173 126,901 99,344 Trade and other receivables 23 52,004 53,478 44,050 Prepayments 4,299 8,000 8,313 Tax recoverable 3,681 4,720 7,841 Marketable securities 26 3,987 3,840 6,082 Cash and bank balances 27 136,805 115,082 165,344 331,949 312,021 330,974 Assets classified as held for sale 28 42,198 – 43,702 374,147 312,021 374,676

Total assets 939,332 920,888 949,059

40


Statements of Financial Position (cont’d)

as at 28 February 2011

Note 2011 2010 2009 RM’000 RM’000 RM’000 (restated) (restated)

Group Equity attributable to owners of the parentShare capital 29 253,650 253,650 235,400 Share premium 29 101,059 136,047 147,715 Treasury shares 29 (4,811) (35,230) (18,064)Currency translation reserve (222) (232) 180 Other reserve 31 (19,944) (7,782) 4,337 Accumulated losses (11,592) (12,282) (67,929) 318,140 334,171 301,639 Minority interests 93,531 61,982 53,600

Total equity 411,671 396,153 355,239

Non-current liabilities Employee benefits 33 2,988 2,674 2,320 Deferred tax liabilities 24 9,150 8,151 18,665 Borrowings 34 242,458 242,618 254,971 254,596 253,443 275,956

Current liabilities Trade and other payables 36 125,537 141,006 93,649 Derivative liabilities 37 8 – – Provisions 38 17,539 46,391 105,425 Employee benefits 33 152 162 257 Dividends payable - 16,619 – Tax payable 3,668 3,433 4,149 Borrowings 34 126,161 63,681 90,305 273,065 271,292 293,785 Liabilities attributable to the disposal group classified as held for sale – – 24,079 273,065 271,292 317,864

Total liabilities 527,661 524,735 593,820 Total equity and liabilities 939,332 920,888 949,059

41


Statements of Financial Position (cont’d)

as at 28 February 2011

Note 2011 2010 RM'000 RM'000

Company

Assets Non-current assetsProperty, plant and equipment 14 14 27 Investment in subsidiaries 20 1,216,637 521,081 Investment in associate 21 437 437 1,217,088 521,545 Current assets Other receivables 23 226,100 481,608 Tax recoverable 2,451 2,158 Marketable securities 26 3,970 3,823 Cash and bank balances 27 6,683 16,460 239,204 504,049

Total assets 1,456,292 1,025,594 Equity attributable to owners of the parent Share capital 29 253,650 253,650 Share premium 29 101,059 136,047 Treasury shares 29 (4,811) (35,230)Retained earnings/(accumulated losses) 32 450,977 (24,251)

Total equity 800,875 330,216 Non-current liability Borrowings 34 210,018 218,023 Current liabilities Other payables 36 433,394 431,734 Provisions 38 4,000 31,635 Dividends payable – 13,831 Tax payable – 151 Borrowings 34 8,005 4 445,399 477,355

Total liabilities 655,417 695,378 Total equity and liabilities 1,456,292 1,025,594


42


l------------------------- Attributable to owners of the parent -------------------------l l------------------- Non-distributable -------------------l Equity attributable to owners of the Currency Equity, parent, Share Share Treasury translation Other Accumulated Minority Note total total capital premium shares reserve reserve losses interests RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

2011 Group Opening balance at 1 March 2010 391,812 329,830 253,650 136,047 (35,230) (232) (7,782) (16,623) 61,982 Prior year adjustment 46 4,341 4,341 – – – – – 4,341 –

Opening balance at 1 March 2010 (restated) 396,153 334,171 253,650 136,047 (35,230) (232) (7,782) (12,282) 61,982 Effects of adopting FRS 139 2.2 150 150 – – – – – 150 –

396,303 334,321 253,650 136,047 (35,230) (232) (7,782) (12,132) 61,982

Total comprehensive income 50,275 30,192 – – – 10 – 30,182 20,083 Transactions with owners Purchase of treasury shares (4,569) (4,569) – – (4,569) – – – – Treasury shares distributed as dividends – – – (34,988) 34,988 – – – – Acquisition of a subsidiary 29,229 18,917 – – – – 18,917 – 10,312 Acquisition of minority interests (26,263) – – – – – – – (26,263)Dilution of equity interest in subsidiaries – (31,079) – – – – (31,079) – 31,079 Issuance of warrants to advisers 30 4,303 – – – – – – – 4,303 Dividends on ordinary shares 13 (29,642) (29,642) – – – – – (29,642) – Dividends paid by a subsidiary (7,965) – – – – – – – (7,965)

Total transactions with owners (34,907) (46,373) – (34,988) 30,419 – (12,162) (29,642) 11,466 Closing balance at 28 February 2011 411,671 318,140 253,650 101,059 (4,811) (222) (19,944) (11,592) 93,531

Statements of Changes in Equityfor the financial year ended 28 February 2011

43


Statements of Changes in Equity (cont’d)

for the financial year ended 28 February 2011

l------------------------- Attributable to owners of the parent -------------------------l l------------------- Non-distributable -------------------l Equity attributable to owners of the Currency Equity, parent, Share Share Treasury translation Other Accumulated Minority Note total total capital premium shares reserve reserve losses interests RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

2010 Group

Opening balance at 1 March 2009 355,239 301,639 235,400 147,715 (18,064) 180 4,337 (67,929) 53,600 Total comprehensive income 105,057 89,291 – – – (412) – 89,703 15,766 Transactions with owners Issue of share - Rights warrants exercised 39,421 39,421 18,250 21,171 – – – – –Purchase of treasury shares (50,005) (50,005) – – (50,005) – – – – Treasury shares distributed as dividends – – – (32,839) 32,839 – – – –Dilution of equity interest in a subsidiary (12,162) (12,119) – – – – (12,119) – (43)Acquisition of a subsidiary (642) – – – – – – – (642)Dividends on ordinary shares 13 (34,056) (34,056) – – – – – (34,056) – Dividends paid by a subsidiary (6,699) – – – – – – – (6,699)

Total transactions with owners (64,143) (56,759) 18,250 (11,668) (17,166) – (12,119) (34,056) (7,384) Closing balance at 28 February 2010 396,153 334,171 253,650 136,047 (35,230) (232) (7,782) (12,282) 61,982

44


l------- Non-distributable --------l (Accumulated losses)/ Equity, Share Share Treasury retained Note total capital premium shares earning RM'000 RM'000 RM'000 RM'000 RM'000

Company 2011 Opening balance at 1 March 2010 330,216 253,650 136,047 (35,230) (24,251)

Total comprehensive income 504,870 – – – 504,870

Transactions with owners Purchase of treasury shares (4,569) – – (4,569) –Treasury shares distributed as dividends – – (34,988) 34,988 –Dividends on ordinary shares 13 (29,642) – – – (29,642)

Total transactions with owners (34,211) – (34,988) 30,419 (29,642)

Closing balance at 28 February 2011 800,875 253,650 101,059 (4,811) 450,977

2010 Opening balance at 1 March 2009 298,210 235,400 147,715 (18,064) (66,841)

Total comprehensive income 76,646 – – – 76,646

Transactions with owners Issue of share - Rights warrants exercised 39,421 18,250 21,171 – –Purchase of treasury shares (50,005) – – (50,005) –Treasury shares distributed as dividends – – (32,839) 32,839 – Dividends on ordinary shares 13 (34,056) – – – (34,056)

Total transactions with owners (44,640) 18,250 (11,668) (17,166) (34,056) Closing balance at 28 February 2010 330,216 253,650 136,047 (35,230) (24,251)

Statements of Changes in Equity (cont’d)



45


Statements of Cash Flowsfor the financial year ended 28 February 2011

Group Company Note 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Operating activities Profit before tax - Continuing operations 73,700 114,459 512,983 82,205 - Discontinued operation 11 – 2,382 – – Adjustments for: Amortisation of land use rights 702 617 – –Amortisation of other investments 12 – – – Bad debts written off 69 – – –Cost of acquisition and reorganisation 40,496 – – – Depreciation 23,391 22,382 13 34 Dividend income (44) – (31,416) (26,676)Employee benefits 419 516 – – Gain on disposal of land use rights (1,530) – – – Gain on disposal of marketable securities – (417) – –Gain on disposal of property, plant and equipment (15,814) (14) – – (Gain)/loss on disposal of subsidiaries – (3,806) (553,077) 380 (Gain)/loss on dissolution of subsidiaries – (365) – 1,083 Impairment loss on receivables 209 239 95,153 – Impairment loss on investment in subsidiaries – – – 5,352 Impairment loss on land held for property development 187 1,187 – –Interest expense 22,038 20,536 15,513 15,388 Interest income (1,794) (1,166) (312) (234)Inventories written down 758 1,353 – – Inventories written off 275 223 – – Loss on disposal of property, plant and equipment – 55 – – Property, plant and equipment written off 161 5,405 – – Reversal of impairment loss on land use rights (767) (315) – –

Balance carried forward 142,468 163,271 38,857 77,532

46



Operating activities (continued) Balance brought forward 142,468 163,271 38,857 77,532 Changes in fair value of marketable securities (237) 373 (237) 746 Reversal of impairment loss on property, plant and equipment (3,333) (5,369) – – Reversal of impairment loss on receivables (103) (553) (38) – Reversal of allowance for slow moving inventories (817) (3,543) – – Reversal of inventories written down (821) (75) – –Reversal of provisions (27,635) (53,170) (27,635) (53,170)Share of results of an associate 28 (19) – – Unrealised (gain)/loss on foreign exchange - net (1,127) (459) 90 (80)Waiver of debts – 1,468 – 1,468

Operating cash flows before changes in working capital 108,423 101,924 11,037 26,496 Changes in working capital Increase in inventories (3,667) (23,333) – – Decrease/(increase) in receivables 5,686 1,565 (64) 574 (Decrease)/increase in payables (22,611) 17,159 2,066 (4,825)

Cash generated from operations 87,831 97,315 13,039 22,245 Tax paid (20,796) (16,090) (703) –Tax refund – 256 – – Employee benefits paid (115) (257) – –

Net cash from operating activities 66,920 81,224 12,336 22,245 Investing activities Acquisition of biological assets (449) (389) – –Acquisition of investment properties (1,069) (47) – –Payment of development costs (7,439) (7,385) – – Acquisition of land held for development – (1,245) – – Acquisition of property, plant and equipment (10,885) (25,564) – –Acquisition of subsidiaries 20(b) 89 (13,561) (14,933) – Increase in investment in subsidiaries – – – (904)

Balance carried forward (19,753) (48,191) (14,933) (904)

Statements of Cash Flows (cont’d)


47


Statements of Cash Flows (cont’d)




Investing activities (continued) Balance brought forward (19,753) (48,191) (14,933) (904)Dividend received 33 – 32,547 12,189 Interest received 1,794 1,166 312 234 Proceeds from disposal of land use rights 1,556 – – –Proceeds from disposal of marketable securities – 2,285 – – Proceeds from disposal of property, plant and equipment 20,003 294 – – Proceeds from disposal of subsidiaries 11, 20(c) – 10,636 24,801 11,477

Net cash from/(used in) investing activities 3,633 (33,810) 42,727 22,996

Financing activities Acquisition of minority interests (26,263) – – –Advances (repayment to)/from subsidiaries – – (1,167) 17,565 Dividends paid to minority interests of a subsidiary (10,753) (3,911) – –Dividend paid to ordinary shareholders of the Company (43,473) (20,225) (43,473) (20,225)Interest paid (22,038) (20,536) (15,627) (19,534)Proceeds from borrowings 106,152 50,000 – – Proceeds from shares issued – 39,421 – 39,421 Repayment of obligations under finance leases (1,052) (527) (4) (14)Repayment of borrowings (47,831) (92,005) – (57,000)Repurchase of shares (4,569) (50,005) (4,569) (50,005)

Net cash used in financing activities (49,827) (97,788) (64,840) (89,792) Net increase/(decrease) in cash and cash equivalents 20,726 (50,374) (9,777) (44,551)Effect of foreign exchange translation 10 (412) – – Cash and cash equivalents at 1 March 2010/2009 112,721 163,507 16,460 61,011

Cash and cash equivalents at 28 February 2011/2010 27 133,457 112,721 6,683 16,460

48


Notes to the Financial Statementsfor the financial year ended 28 February 2011

1. CORPORATE INFORMATION

Atlan Holdings Bhd. (“the Company”) is a public limited liability company incorporated and domiciled in Malaysia, and is listed on the Bursa Malaysia Securities Berhad. The registered office of the Company is located at Level 4, Wisma Atlan, 8 Persiaran Kampung Jawa, 11900 Bayan Lepas, Penang.

The principal activities of the Company are investment holding and the provision of management, financial, technical and other ancillary services.

The principal activities of the subsidiaries are set out in Note 20.

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

The financial statements for the year ended 28 February 2011 were authorised for issue in accordance with a resolution of the directors on 15 June 2011.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation

The financial statements of the Group and of the Company have been prepared in accordance with Financial Reporting Standards ("FRS") and the Companies Act, 1965 in Malaysia. At the beginning of the current financial year, the Group and the Company adopted new and revised FRS which are mandatory for financial periods beginning on or after 1 March 2010 as described fully in Note 2.2.

The financial statements have been prepared on the historical cost basis except as disclosed in the accounting policies below.

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

2.2 Changes in accounting policies

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

On 1 March 2010, the Group and the Company adopted the following applicable new and amended FRS and IC Interpretations mandatory for annual financial periods beginning on or after 1 March 2010.

• FRS7FinancialInstruments:Disclosures • FRS8OperatingSegments• FRS101PresentationofFinancialStatements(Revised)• FRS123BorrowingCosts• FRS139FinancialInstruments:RecognitionandMeasurement• Amendments to FRS1 First-timeAdoption of FinancialReportingStandards andFRS127

Consolidated and Separate Financial Statements: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate

• AmendmentstoFRS2Share-basedPayment–VestingConditionsandCancellations• AmendmentstoFRS117Leases• AmendmentstoFRS132FinancialInstruments:Presentation• AmendmentstoFRS132ClassificationofRightsIssues• AmendmentstoFRS139FinancialInstruments:RecognitionandMeasurement,FRS7Financial

Instruments: Disclosures and IC Interpretation 9 Reassessment of Embedded Derivatives• ImprovementstoFRSissuedin2009• ICInterpretation9ReassessmentofEmbeddedDerivatives• ICInterpretation10InterimFinancialReportingandImpairment

49


Notes to the Financial Statements (cont’d)


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

2.2 Changes in accounting policies (continued)

• ICInterpretation11FRS2–GroupandTreasuryShareTransactions• ICInterpretation13CustomerLoyaltyProgrammes• IC Interpretation 14 FRS 119 – The Limit on aDefinedBenefit Asset,Minimum Funding

Requirements and their Interaction

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

FRS 7 Financial Instruments: Disclosures

Prior to 1 March 2010, information about financial instruments was disclosed in accordance with the requirements of FRS 132 Financial Instruments: Disclosure and Presentation. FRS 7 introduces new disclosures to improve the information about financial instruments. It requires the disclosure of qualitative and quantitative information about exposure to risks arising from financial instruments, including specified minimum disclosures about credit risk, liquidity risk and market risk, including sensitivity analysis to market risk.

The Group and the Company have applied FRS 7 prospectively in accordance with the transitional provisions. Hence, the new disclosures have not been applied to the comparatives. The new disclosures are included throughout the Group’s and the Company’s financial statements for the year ended 28 February 2011.

FRS 8 Operating Segments

FRS 8, which replaces FRS 114 Segment Reporting, specifies how an entity should report information about its operating segments, based on information about the components of the entity that is available to the chief operating decision maker for the purposes of allocating resources to the segments and assessing their performance. The Standard also requires the disclosure of information about the products and services provided by the segments, the geographical areas in which the Group operates, and revenue from the Group’s major customers. The Group concluded that the reportable operating segments determined in accordance with FRS 8 are the same as the business segments previously identified under FRS 114. These revised disclosures, including the related revised comparative information, are shown in Note 45.

FRS 101 Presentation of Financial Statements (Revised)

The revised FRS 101 introduces changes in the presentation and disclosures of financial statements. The revised Standard separates owner and non-owner changes in equity. The statement of changes in equity includes only details of transactions with owners, with all non-owner changes in equity presented as a single line. The Standard also introduces the statement of comprehensive income, with all items of income and expense recognised in profit or loss, together with all other items of recognised income and expense recognised directly in equity, either in one single statement, or in two linked statements. The Group and the Company have elected to present this statement as two linked statements.

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

The revised FRS 101 also requires the Group to make new disclosures to enable users of the financial statements to evaluate the Group’s objectives, policies and processes for managing capital (see Note 44).

The revised FRS 101 was adopted retrospectively by the Group and the Company.

50






Amendments to FRS 117 Leases

Prior to 1 March 2010, leasehold land where title was not expected to pass to the lessee by the end of lease term was treated as an operating lease. The payment made on entering into or acquiring a leasehold land was accounted for as land use rights that were amortised over the lease term in accordance with the pattern of benefits provided.

Upon the adoption of the amendments to FRS 117 in relation to classification of lease of land, the Group reassessed the classification of a leasehold land as a finance lease or an operating lease based on the extend of risks and rewards associated with the land. The Group have determined that some of the leasehold lands of the Group in Malaysia are in substance finance leases and have reclassified their leasehold lands from land use rights to property, plant and equipment.

The reclassification has been made retrospectively and does not affect the profit or loss for the current year ended 28 February 2011 and the preceding year ended 28 February 2010.

The following are effects to the consolidated statement of financial position as at 28 February 2011 arising from the above change in accounting policy:

Group 2011 RM'000

Increase/(decrease) in: Property, plant and equipment 26,481

Land use rights (26,481)

The following comparatives have been restated in the consolidated statement of financial position:

As previously As stated Adjustment Adjustment restated RM'000 RM'000 RM'000 RM'000 (Note 46)

As at 28 February 2010 Property, plant and equipment 368,539 26,858 4,341 399,738 Land use rights 48,190 (26,858) – 21,332

As at 28 February 2009 Property, plant and equipment 374,437 18,658 – 393,095 Land use rights 32,388 (18,658) – 13,730

51






Amendments to FRS 117 Leases (continued)

The following reclassifications were made to the consolidated income statements of prior year to be consistent with current year presentation arising from the above change in accounting policy:

As previously As stated Adjustment restated RM'000 RM'000 RM'000

28 February 2010 Depreciation 21,892 315 22,207 Amortisation of land use rights 919 (315) 604

The above reclassifications do not have any impact on the net profit of prior year.

FRS 139 Financial Instruments: Recognition and Measurement

FRS 139 establishes principles for recognising and measuring financial assets, financial liabilities and some contracts to buy and sell non-financial items. The Group and the Company have adopted FRS 139 prospectively on 1 March 2010 in accordance with the transitional provisions. The effects arising from the adoption of this Standard have been accounted for by adjusting the opening balance of retained earnings as at 1 March 2010. Comparatives are not restated. The details of the changes in accounting policies and the effects arising from the adoption of FRS 139 are discussed below:

• Derivatives

Prior to 1 March 2010, all derivative financial instruments were recognised in the financial statements only upon settlement. These instruments do not qualify for hedge accounting under FRS 139. Hence, upon the adoption of FRS 139, all derivatives held by the Group as at 1 March 2010 are recognised at their fair values totalling RM150,000 and are classified as financial assets at fair value through profit or loss.

• Impairmentoftradereceivables

Prior to 1 March 2010, provision for doubtful debts was recognised when it was considered uncollectible. Upon the adoption of FRS 139, an impairment loss is recognised when there is objective evidence that an impairment loss has been incurred. The amount of the loss is measured as the difference between the receivable’s carrying amount and the present value of the estimated future cash flows discounted at the receivable’s original effective interest rate. As at 1 March 2010, the Group has remeasured the allowance for impairment losses as at that date in accordance with FRS 139 and this Standard did not have any significant impact on the financial position and results of the Group.

• Inter-companyloans

During the current and prior years, the Company granted interest-free loans and advances to its subsidiaries. Prior to 1 March 2010, these loans and advances were recorded at cost in the Company’s financial statements. Upon the adoption of FRS 139, the interest-free loans or advances continue to be recorded initially at cost as the Company takes these loans in a form of short-term advances and payable on demand. Therefore, the effect of discounting is considered as immaterial and the fair value of the loans is equal to the amount of the advances given or received. No adjustments were made to the opening balance of retained earnings as at 1 March 2010.

52






FRS 139 Financial Instruments: Recognition and Measurement (continued)

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

Increase/(decrease) As at As at

28 February 1 March 2011 2010 RM'000 RM'000

Statements of financial position

Group

Derivative assets – 150 Derivative liabilities 8 – Accumulated losses 8 (150)

2.3 Standards issued but not yet effective

The Group has not adopted the following standards and interpretations that have been issued but not yet effective:

Effective for annual periods

beginning on Description or after

FRS 1 First-time Adoption of Financial Reporting Standards 1 July 2010FRS 3 Business Combinations (Revised) 1 July 2010Amendments to FRS 2 Share-based Payment 1 July 2010Amendments to FRS 5 Non-current Assets Held for Sale and Discontinued Operations 1 July 2010Amendments to FRS 127 Consolidated and Separate Financial Statements 1 July 2010Amendments to FRS 138 Intangible Assets 1 July 2010Amendments to IC Interpretation 9 Reassessment of Embedded Derivatives 1 July 2010IC Interpretation 12 Service Concession Arrangements 1 July 2010IC Interpretation 16 Hedges of a Net Investment in a Foreign Operation 1 July 2010IC Interpretation 17 Distributions of Non-cash Assets to Owners 1 July 2010Amendments to FRS 1 Limited Exemption from Comparative FRS 7 Disclosures for First-time Adopters 1 January 2011Amendments to FRS 1 Additional Exemptions for First-time Adopters 1 January 2011Amendments to FRS 2 Group Cash-settled Share-based Payment Transactions 1 January 2011Amendments to FRS 3 Business Combinations 1 January 2011Amendments to FRS 7 Improving Disclosures about Financial Instruments 1 January 2011Amendments to FRS 101 Presentation of Financial Statements 1 January 2011Amendments to FRS 121 The Effects of Changes in Foreign Exchange Rates 1 January 2011Amendments to FRS 128 Investments in Associates 1 January 2011Amendments to FRS 131 Interests in Joint Ventures 1 January 2011Amendments to FRS 132 Financial Instruments: Presentation 1 January 2011Amendments to FRS 139 Financial Instruments: Recognition and Measurement 1 January 2011IC Interpretation 4 Determining Whether an Arrangement contains a Lease 1 January 2011IC Interpretation 13 Amendments to IC Interpretation 13 1 January 2011

53





2.3 Standards issued but not yet effective (continued)

The Group has not adopted the following standards and interpretations that have been issued but not yet effective: (continued)

Effective for annual periods

beginning on Description or after

IC Interpretation 18 Transfers of Assets from Customers 1 January 2011IC Interpretation 14 Prepayments of a Minimum Funding Requirement (Amendments to IC Interpretation 14) 1 July 2011IC Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments 1 July 2011IC Interpretation 15 Agreements for the Construction of Real Estate 1 January 2012Amendments to FRS 124 Related Party Disclosures 1 January 2012

Except for the changes in accounting policies arising from the adoption of the revised FRS 3, the amendments to FRS 127 and IC Interpretation 15, as well as the new disclosures required under the Amendments to FRS 7, the directors expect that the adoption of the other standards and interpretations above will have no material impact on the financial statements in the period of initial application. The nature of the impending changes in accounting policy on adoption of the revised FRS 3, the amendments to FRS 127 and IC Interpretation 15 are described below.

Revised FRS 3 Business Combinations and Amendments to FRS 127 Consolidated and Separate Financial Statements

The revised standards are effective for annual periods beginning on or after 1 July 2010. The revised FRS 3 introduces a number of changes in the accounting for business combinations occurring after 1 July 2010. These changes will impact the amount of goodwill recognised, the reported results in the period that an acquisition occurs, and future reported results. The Amendments to FRS 127 require that a change in the ownership interest of a subsidiary (without loss of control) is accounted for as an equity transaction. Therefore, such transactions will no longer give rise to goodwill, nor will they give rise to a gain or loss.

Furthermore, the amended standard changes the accounting for losses incurred by the subsidiary as well as the loss of control of a subsidiary. Other consequential amendments have been made to FRS 107 Statement of Cash Flows, FRS 112 Income Taxes, FRS 121 The Effects of Changes in Foreign Exchange Rates, FRS 128 Investments in Associates and FRS 131 Interests in Joint Ventures. The changes from revised FRS 3 and Amendments to FRS 127 will affect future acquisitions or loss of control and transactions with minority interests. The standards may be early adopted. However, the Group does not intend to early adopt.

IC Interpretation 15 Agreements for the Construction of Real Estate

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

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

54





2.4 Basis of consolidation

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

All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated in full, except for unrealised losses are not eliminated if there are indications of impairment.

Acquisitions of subsidiaries are accounted for by applying the purchase method. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Adjustments to those fair values relating to previously held interests are treated as a revaluation and recognised in other comprehensive income. The cost of a business combination is measured as the aggregate of the fair values, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity instruments issued, plus any costs directly attributable to the business combination.

Any excess of the cost of business combination over the Group’s share in the net fair value of the acquired subsidiary’s identifiable assets, liabilities and contingent liabilities is recorded as goodwill on the statement of financial position. The accounting policy for goodwill is set out in Note 2.9. Any excess of the Group’s share in the net fair value of the acquired subsidiary’s identifiable assets, liabilities and contingent liabilities over the cost of business combination is recognised as income in profit or loss on the date of acquisition. When the Group acquires a business, embedded derivatives separated from the host contract by the acquiree are reassessed on acquisition unless the business combination results in a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required under the contract.

Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases.

2.5 Transactions with minority interests

Minority interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group and are presented separately in profit or loss of the Group and within equity in the consolidated statements of financial position, separately from parent shareholders’ equity. Transactions with minority interests are accounted for using the entity concept method, whereby, transactions with minority interests are accounted for as transactions with owners. On acquisition of minority interests, the difference between the consideration and book value of the share of the net assets acquired is recognised directly in equity. Gain or loss on disposal to minority interests is recognised directly in equity.

2.6 Foreign currency

(a) Functional and presentation currency

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

55





2.6 Foreign currency (continued)

(b) Foreign currency transactions

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

Exchange differences arising on the settlement of monetary items or on translating monetary items at the reporting date are recognised in profit or loss except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign operations, which are recognised initially in other comprehensive income and accumulated under foreign currency translation reserve in equity. The foreign currency translation reserve is reclassified from equity to profit or loss of the Group on disposal of the foreign operation.

Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or loss for the period except for the differences arising on the translation of non-monetary items in respect of which gains and losses are recognised directly in equity. Exchange differences arising from such non-monetary items are also recognised directly in equity.

(c) Foreign operations

The assets and liabilities of foreign operations are translated into RM at the rate of exchange ruling at the reporting date and income and expenses are translated at exchange rates at the dates of the transactions. The exchange differences arising on the translation are taken directly to other comprehensive income. On disposal of a foreign operation, the cumulative amount recognised in other comprehensive income and accumulated in equity under foreign currency translation reserve relating to that particular foreign operation is recognised in the profit or loss.

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

2.7 Property, plant and equipment

All items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Group and to the Company and the cost of the item can be measured reliably.

Subsequent to recognition, plant and equipment and furniture and fixtures are measured at cost less accumulated depreciation and accumulated impairment losses, if any. When significant parts of property, plant and equipment are required to be replaced in intervals, the Group recognises such parts as individual assets with specific useful lives and depreciation, respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.

56





2.7 Property, plant and equipment (continued)

The Group has availed itself to the transitional provisions when the Malaysian Accounting Standards Board first issued FRS1162004 which allow certain properties to be carried at their 1992 valuation less depreciation. Accordingly, these valuations have not been updated.

Freehold land is stated at cost less accumulated impairment losses, if any. Freehold land has an unlimited useful life and therefore is not depreciated. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets as follows:

Buildings over 29 to 86 yearsLeasehold land over 99 yearsGolf course over 60 yearsMotor vehicles 20%Office equipment, furniture and fittings 5% - 25%Plant and machinery 10% - 33.3%Other assets 5% - 20%

Buildings situated on leased land are amortised over the unexpired term of leases.

Capital work-in-progress is not depreciated as these assets are not yet available for use.

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.

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

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in the profit or loss in the year the asset is derecognised.

2.8 Investment properties

Investment properties are initially measured at cost, including transaction costs. Subsequent to initial recognition, investment properties are carried at cost less accumulated depreciation and impairment losses, if any.

Investment properties are depreciated over the period of the lease of 36.5 to 50 years.

Investment properties are derecognised when either they have been disposed off or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gain or loss on the retirement or disposal of an investment property is recognised in profit or loss in the year of retirement or disposal.

2.9 Goodwill

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

For the purpose of impairment testing, goodwill acquired is allocated, from the acquisition date, to each of the Group’s cash-generating units that are expected to benefit from the synergies of the combination.

57





2.9 Goodwill (continued)

The cash-generating unit to which goodwill has been allocated is tested for impairment annually and whenever there is an indication that the cash-generating unit may be impaired, by comparing the carrying amount of the cash-generating unit, including the allocated goodwill, with the recoverable amount of the cash-generating unit. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised in the profit or loss. Impairment losses recognised for goodwill are not reversed in subsequent periods.

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

2.10 Land use rights

Land use rights are initially measured at cost. Following initial recognition, land use rights are measured at cost less accumulated amortisation and accumulated impairment losses, if any. The land use rights are amortised on a straight-line basis over the respective lease terms of 7 to 44 years.

2.11 Impairment of non-financial assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when an annual impairment assessment for an asset is required, the Group makes an estimate of the asset’s recoverable amount.

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

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

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

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

58





2.12 Subsidiaries

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

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

2.13 Associates

An associate is an entity, not being a subsidiary or a joint venture, in which the Group has significant influence. An associate is equity accounted for from the date the Group obtains significant influence until the date the Group ceases to have significant influence over the associate.

The Group’s investments in associates are accounted for using the equity method. Under the equity method, the investment in associates is measured in the statement of financial position at cost plus post-acquisition changes in the Group’s share of net assets of the associates. Goodwill relating to associates is included in the carrying amount of the investment. Any excess of the Group’s share of the net fair value of the associate’s identifiable assets, liabilities and contingent liabilities over the cost of the investment is excluded from the carrying amount of the investment and is instead included as income in the determination of the Group’s share of the associate’s profit or loss for the period in which the investment is acquired.

When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on the Group’s investment in its associates. The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount in profit or loss.

The most recent available audited financial statements of the associate is used by the Group in applying the equity method. Where the dates of the audited financial statements used are not coterminous with those of the Group, the share of results is arrived at from the last audited financial statements available and management financial statements to the end of the accounting period. Uniform accounting policies are adopted for like transactions and events in similar circumstances.

In the Company’s separate financial statements, investments in associates are stated at cost less impairment losses, if any. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss.

2.14 Financial assets

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

When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs.

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

59





2.14 Financial assets (continued)

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

Financial assets are classified as financial assets at fair value through profit or loss if they are held for trading or are designated as such upon initial recognition. Financial assets held for trading are derivatives (including separated embedded derivatives) or financial assets acquired principally for the purpose of selling in the near term.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in fair value are recognised in profit or loss. Net gains or net losses on financial assets at fair value through profit or loss do not include exchange differences, interest and dividend income. Exchange differences, interest and dividend income on financial assets at fair value through profit or loss are recognised separately in profit or loss as part of other losses or other income.

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

(b) Loans and receivables

Financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables.

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

Loans and receivables are classified as current assets, except for those having maturity dates later than 12 months after the reporting date which are classified as non-current.

(c) Held-to-maturity investments

Financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when the Group has the positive intention and ability to hold the investment to maturity.

Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the held-to-maturity investments are derecognised or impaired, and through the amortisation process.

Held-to-maturity investments are classified as non-current assets, except for those having maturity within 12 months after the reporting date which are classified as current.

(d) Available-for-sale financial assets

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

60





2.14 Financial assets (continued)

(d) Available-for-sale financial assets (continued)

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

Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less impairment loss, if any.

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

A financial asset is derecognised when the contractual right to receive cash flows from the asset has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss.

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

2.15 Impairment of financial assets

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

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

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

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

61





2.15 Impairment of financial assets (continued)

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

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

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

(b) Unquoted equity securities carried at cost

If there is objective evidence (such as significant adverse changes in the business environment where the issuer operates, probability of insolvency or significant financial difficulties of the issuer) that an impairment loss on financial assets carried at cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment losses are not reversed in subsequent periods.

(c) Available-for-sale financial assets

Significant or prolonged decline in fair value below cost, significant financial difficulties of the issuer or obligor, and the disappearance of an active trading market are considerations to determine whether there is objective evidence that investment securities classified as available-for-sale financial assets are impaired.

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

Impairment losses on available-for-sale equity investments are not reversed in profit or loss in the subsequent periods. Increase in fair value, if any, subsequent to impairment loss is recognised in other comprehensive income. For available-for-sale debt investments, impairment losses are subsequently reversed in profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss in profit or loss.

2.16 Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and on hand, demand deposits, and short-term, highly liquid investments that are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value. These also include bank overdrafts that form an integral part of the Group’s cash management.

62





2.17 Land held for property development and property development costs

(i) Land held for property development

Land held for property development consists of land where no development activities have been carried out or where development activities are not expected to be completed within the normal operating cycle. Such land is classified within non-current assets and is stated at cost less accumulated impairment losses, if any.

Land held for property development is reclassified as property development costs at the point when development activities have commenced and where it can be demonstrated that the development activities can be completed within the normal operating cycle.

(ii) Property development costs

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

When the financial outcome of a development activity can be reliably estimated, property development revenue and expenses are recognised in profit or loss by using the stage of completion method. The stage of completion is determined by the proportion that property development costs incurred for work performed to date bear to the estimated total property development costs.

Where the financial outcome of a development activity cannot be reliably estimated, property development revenue is recognised only to the extent of property development costs incurred that is probable will be recoverable, and property development costs on properties sold are recognised as an expense in the period in which they are incurred.

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

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

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

2.18 Inventories

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

Cost of raw materials, finished goods, trading goods, goods in transit and consumables is determined using first in, first out method, and cost of food, beverage and supplies is determined on a weighted average basis. The cost of raw materials comprises costs of purchase. The costs of finished goods and work-in-progress comprise raw materials, direct labour, other direct costs and appropriate proportions of manufacturing overheads based on normal operating capacity.

The cost of completed development properties comprises cost associated with the acquisition of land, direct costs and appropriate proportions of common costs.

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

63





2.19 Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be estimated reliably.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

2.20 Financial liabilities

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

Financial liabilities, within the scope of FRS 139, are recognised in the statements of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument. Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities.

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

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

Financial liabilities held for trading include derivatives entered into by the Group and the Company that do not meet the hedge accounting criteria. Derivative liabilities are initially measured at fair value and subsequently stated at fair value, with any resultant gains or losses recognised in profit or loss. Net gains or losses on derivatives include exchange differences.

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

(b) Other financial liabilities

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

Trade and other payables are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method.

Loans and borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently measured at amortised cost using the effective interest method. Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

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

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

64





2.21 Borrowing costs

Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the acquisition, construction or production of that asset. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sale are in progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their intended use or sale.

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

2.22 Employee benefits

(a) Defined contribution plans

The Group participates in the national pension schemes as defined by the laws of the countries in which it has operations. The Malaysian companies in the Group make contributions to the Employee Provident Fund in Malaysia, while the Singaporean company in the Group makes contributions to the Central Provident Fund scheme in Singapore; both of which are defined contribution pension schemes. Contributions to defined contribution pension schemes are recognised as an expense in the period in which the related service is performed.

(b) Defined benefit plans

The Group operates an unfunded, defined benefit plan for its eligible employees. The Group’s net obligation in respect of defined benefit plan is calculated by estimating the amount of future benefit that employees have earned in return for their services in the current and prior periods and that benefit is discounted to determine the present value. The discount rate is the market yield at the balance sheet date on high quality corporate bonds or government bonds. The calculation is performed by an actuary using the projected unit credit method.

When the benefits of a plan are improved, the portion of the increased benefit relating to past services by employees is recognised as an expense in profit or loss on a straight line basis over the average period until the benefits become vested. To the extent that the benefits vest immediately, the expense is recognised immediately in profit or loss.

In calculating the Group’s obligation in respect of a plan, to the extent that any cumulative unrecognised actuarial gain or loss exceeds ten percent of the present value of the defined benefit obligation, that portion is recognised in profit or loss over the expected average remaining working lives of the employees participating in the plan. Otherwise, the actuarial gain or loss is not recognised.

Where the calculation results in a benefit to the Group, the recognised asset is limited to the net total of any unrecognised actuarial losses and past service costs and the present value of any future refunds from the plan or reductions in future contributions to the plan.

The amount recognised in statements of financial position represents the present value of the defined benefit obligation adjusted for unrecognised actuarial gains and losses and unrecognised past service costs.

65





2.23 Leases

(a) As lessee

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

Leased assets are depreciated over the estimated useful life of the asset. However, if there is no reasonable certainty that the Group and the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life and the lease term.

Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.

(b) As lessor

Leases where the Group retains substantially all the risks and rewards of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same bases as rental income. The accounting policy for rental income is set out in Note 2.25(g).

2.24 Discontinued operation

A component of the Group is classified as a “discontinued operation” when the criteria to be classified as held for sale have been met or it has been disposed off and such a component represents a separate major line of business or geographical area of operations or is part of a single coordinated major line of business or geographical area of operations. A component is deemed to be held for sale if its carrying amounts will be recovered principally through a sale transaction rather than through continuing use.

Upon classification as held for sale, non-current assets and disposal groups are not depreciated and are measured at the lower of carrying amount and fair value less costs to sell. Any differences are recognised in profit or loss.

2.25 Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and to the Company and the revenue can be reliably measured. Revenue is measured at the fair value of consideration received or receivable.

(a) Sale of goods

Revenue from sale of goods is recognised upon the transfer of significant risk and rewards of ownership of the goods to the customer. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.

66





2.25 Revenue (continued)

(b) Dividend income

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

(c) Ferry terminal operations

Revenue from ferry terminal operations is recognised based on the usage of the terminal by the ferry operators.

(d) Sale of high speed diesel

Sale of high speed diesel is recognised upon the transfer of significant risk and rewards of ownership of the goods to the customer.

(e) Rental of hotel rooms and other services

Revenue from rental of hotel rooms, sale of food and beverage and other related income are recognised on an accrual basis.

(f) Interest income

Interest income is recognised using the effective interest method.

(g) Rental, parking and related services

Rental income is accounted for on a straight-line basis over the rental tenancy agreements.

Parking and related services are recognised net of discounts as and when the services are performed.

(h) Sale of food and beverage

Sale of food and beverage are recognised as and when the services are performed.

(i) Sales of properties

Revenue relating to sale of completed development properties is recognised net of discounts upon the transfer of risks and rewards. Revenue from properties under development is accounted for by the stage of completion method as described in Note 2.17(ii).

(j) Income from tour, travel and recreational activities

Income from tour, travel and recreational activities is recognised as and when the services are rendered.

(k) Management fees

Management fees are recognised on an accrual basis.

67





2.26 Income taxes

(a) Current tax

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

Current taxes are recognised in profit or loss except to the extent that the tax relates to items recognised outside profit or loss, either in other comprehensive income or directly in equity.

(b) Deferred tax

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

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

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

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

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

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

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

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

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

68





2.26 Income taxes (continued)

(b) Deferred tax (continued)

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition.

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

(c) Sales tax

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

- Where the sales tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

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

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

2.27 Biological assets

Biological assets comprise oil palm planting expenditure. Expenditure incurred on new planting and the upkeep of trees to maturity is recognised under plantation development expenditure, while replanting expenditure is charged to profit or loss in the year in which the expenditure is incurred. A portion of the direct overheads, which include general and administrative expenses, is similarly recognised under biological assets until such time when the plantation attains maturity. Plantation development expenditure is amortised over 25 years, the expected useful life of oil palm trees. Amortisation commences upon maturity of the new plantings.

2.28 Segment reporting

For management purposes, the Group is organised into operating segments based on their products and services which are independently managed by the respective segment managers responsible for the performance of the respective segments under their charge. The segment managers report directly to the management of the Company who regularly review the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in Note 45, including the factors used to identify the reportable segments and the measurement basis of segment information.

2.29 Share capital and share issuance expenses

An equity instrument is any contract that evidences a residual interest in the assets of the Group and the Company after deducting all of its liabilities. Ordinary shares are equity instruments.

Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction costs. Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared.

69





2.30 Treasury shares

When shares of the Company, that have not been cancelled, recognised as equity are reacquired, the amount of consideration paid is recognised directly in equity. Reacquired shares are classified as treasury shares and presented as a deduction from total equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of treasury shares. When treasury shares are reissued by resale, the difference between the sales consideration and the carrying amount is recognised in equity.

2.31 Contingencies

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

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

3. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES

The preparation of the Group’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future.

3.1 Judgements made in applying accounting policies

In the process of applying the Group’s accounting policies, management has made the following judgements, apart from those involving estimations, which have the most significant effect on the amounts recognised in the financial statements:

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

The Group has developed certain criteria based on FRS 140 in making judgment whether a property qualified as an investment property. Investment property is a property held to earn rentals or for capital appreciation or both.

Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that is held for use in the production or supply of goods or services or for administrative purposes. If these portions could be sold separately (or leased out separately under a finance lease), the Group would account for the portions separately. If the portions could not be sold separately, the property is an investment property only if an insignificant portion is held for use in the production or supply of goods or services or for administrative purposes. Judgement is made on an individual property basis to determine whether ancillary services are so significant that a property does not qualify as investment property.

Short term leasehold building of the Group is being substantially let out to earn rental income. Accordingly, this property is classified as investment property.

(b) Impairment of financial assets

The Group follows the guidance of FRS 139 in determining when a financial asset is considered impaired. This determination requires significant judgement. The Group evaluates, among other factors, the duration and extent to which the fair value of a financial asset is less than its cost; and the financial health of and the near-term business outlook of the issuer of the instrument, including factors such as industry performance, changes in technology and operational and financing cash flows.

70




3. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES (continued)

3.2 Key sources of estimation uncertainty

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

(a) Impairment of goodwill

Goodwill, brands and other indefinite life intangibles are tested for impairment annually and at other times when such indicators exist. This requires an estimation of the value in use of the cash-generating units to which goodwill and brands are allocated.

When value in use calculations are undertaken, management must estimate the expected future cash flows from the asset or cash-generating unit and choose a suitable discount rate in order to calculate the present value of those cash flows. Further details of the carrying value, the key assumptions applied in the impairment assessment of goodwill and brands and sensitivity analysis to changes in the assumptions are given in Note 19. The carrying amount of the Group's goodwill is disclosed in Note 19.

(b) Impairment of receivables

The Group assesses at each reporting date whether there is any objective evidence that a financial asset is impaired. To determine whether there is objective evidence of impairment, the Group considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments.

Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. The carrying amount of the Group’s receivables at the reporting date is disclosed in Note 23.

(c) Property development

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

Significant judgement is required in determining the stage of completion, the extent of the property development costs incurred, the estimated total property development revenue and costs, as well as the recoverability of the property development costs. In making the judgement, the Group evaluates based on past experience and by relying on the work of specialists.

(d) Retirement benefit obligations

The Group has contracted an actuaries to determine the Group’s obligations in respect of the defined benefit plan of the Group. The estimate of the obligations is dependent on the assumptions of the discount rate, future salary increases and price inflation. Any change in these assumptions will affect the estimates.

(e) Provisions

The provisions are determined based on the management’s best estimates after considering the probable outflow of resources embodying economic benefits will be required to settle the obligation.

71




3. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES (continued)

3.2 Key sources of estimation uncertainty (continued) (f) Useful lives of plant and equipment

The cost of plant and equipment is depreciated on a straight-line basis over the plant and equipment’s estimated useful lives. Management estimates the useful lives of these plant and equipment (excludes freehold land, leasehold land, golf course and buildings) to be within 1 to 10 years. The carrying amount of the Group’s plant and equipment at 28 February 2011 was RM35,080,000 (2010: RM45,151,000). Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.

The furniture and fittings of a subsidiary, Selasih Ekslusif Sdn. Bhd., costing RM3,183,000 (2010: RM3,829,000) during the year was depreciated on a straight-line basis over the assets’ estimated useful lives of 10 years. The Group is confident that Selasih Ekslusif Sdn. Bhd. will be able to renew the lease of shop lots for the remaining useful life of its furniture and fittings even though the remaining lease period of the tenancy agreement is 5 years. There would have been an additional depreciation charge of RM163,000 (2010: RM163,000) per annum had the assets been depreciated in accordance with the remaining lease period of 4 years.

(g) Deferred tax assets

Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to the extent that it is probable that taxable profit will be available against which the losses and capital allowances can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies.

The carrying amount of recognised and unrecognised tax losses and capital allowances of the Group is disclosed in Note 24.

4. REVENUE

Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Sale of goods 662,314 608,902 – – Gross dividends - subsidiaries – – 31,372 26,676 - quoted investment in Malaysia – 72 – – - others 44 – 44 – Ferry terminal operations 6,773 7,389 – – Sale of high speed diesel 8,052 10,025 – – Rental of hotel rooms and other

services 25,923 25,097 – – Management fee charged to a

subsidiary – – 300 600 Interest income - subsidiaries – – 16,527 18,663 - fixed deposits 1,794 1,166 312 234 Rental, parking and related services 25,654 23,217 – – Sale of food and beverage 13,037 12,851 – – Sale of properties 165 6,231 – – Tour, travel and recreational activities 1,033 1,211 – – 744,789 696,161 48,555 46,173

72




5. OTHER INCOME

Included in other income are as follows:

Group Company 2011 2010 2011 2010

RM’000 RM’000 RM’000 RM’000

Gain on disposal of land use rights 1,530 – – –Gain on disposal of marketable securities – 417 – –Gain on disposal of property, plant and equipment 15,814 14 – –Gain on disposal of subsidiaries – 3,806 553,077 –Gain on dissolution of subsidiaries – 365 – – Gain on foreign exchange - unrealised 1,217 459 – 80 - realised 5,488 1,309 – –Incentive income 10,964 8,796 – –Rental income - advertisement space 3,551 2,779 – – - property, plant and equipment and land use rights 1,234 2,010 – – - others 200 199 – – Reversal of allowance for slow moving inventories 817 3,543 – – Reversal of impairment loss on land use rights 767 315 – –Changes in fair value of marketable securities 237 – 237 –Reversal of impairment loss on property, plant and equipment 3,333 5,369 – –Reversal of impairment loss on receivables - third parties 103 553 – – - subsidiaries – – 38 –Reversal of inventories written down* 821 75 – – Reversal of provisions (Note 38) 27,635 53,170 27,635 53,170

* The reversal of inventories written down was made when the related inventories were sold above their

carrying amounts.

6. EMPLOYEE BENEFITS EXPENSE


Wages and salaries 57,783 53,510 302 482 Social security contribution 668 482 – – Contribution to defined contribution plan 6,055 5,786 28 49 Increase in liability for defined benefit plan (Note 33(d)) 419 516 – – Other benefits 4,160 4,310 37 –

69,085 64,604 367 531

Included in employee benefits expense of the Group and of the Company are executive directors’ remuneration

amounting to RM1,056,000 (2010: RM1,551,000) and RM258,000 (2010: RM459,000) respectively.

73




7. DIRECTORS’ REMUNERATION

The details of remuneration receivable by directors of the Company during the year are as follows:


Executive:

Salaries and other emoluments 943 1,403 230 410 Defined contribution plan 113 148 28 49 Total executive directors’

remuneration (excluding benefits- in-kind) (Note 6) 1,056 1,551 258 459

Estimated money value of benefits-in-kind 7 – 4 –

Total executive directors’

remuneration (including benefits- in-kind) 1,063 1,551 262 459

Non-Executive:

Other emoluments 18 18 – – Fees 108 72 72 72 Total non-executive directors’

remuneration (excluding benefits- in-kind) 126 90 72 72

Estimated money value of benefits-in-kind 22 – 22 –

Total non-executive directors’

remuneration (including benefits- in-kind) 148 90 94 72

Total directors’ remuneration 1,211 1,641 356 531 The number of directors of the Company whose total remuneration during the financial year fell within the

following bands is analysed below:

Number of directors 2011 2010 Executive directors: RM250,001 - RM300,000 1 – RM300,001 - RM350,000 1 – RM400,001 - RM450,000 – 2 RM450,001 - RM500,000 1 – RM650,001 - RM700,000 – 1 Non-executive directors: Below RM50,000 7 6

74




8. OTHER OPERATING EXPENSES

Included in other operating expenses are as follows:


Amortisation of land use rights 702 604 – – Amortisation of other investments 12 – – –Auditor’s remuneration: - statutory audit 897 761 58 46 Bad debts written off 69 – – –Cost of acquisition and reorganisation* 40,496 – – – Impairment loss on receivables - third parties 209 239 – – - subsidiaries – – 95,153 –Impairment loss on investment in subsidiaries – – – 5,352 Impairment loss on land held for property development 187 1,187 – –Changes in fair value of marketable securities – 373 – 746

Inventories written down 758 1,353 – – Inventories written off 275 223 – – Lease of land 216 216 – – Legal and professional fees 8,970 1,022 2,049 595 Loss on foreign exchange - unrealised 90 – 90 – Loss on disposal of property,

plant and equipment – 55 – – Loss on disposal of subsidiaries – – – 380 Loss on dissolution of subsidiaries – – – 1,083 Management fee charged

by a subsidiary – – 240 540 Property, plant and equipment

written off 161 5,405 – – Rental expense 15,851 15,520 – – Waiver of debts – 1,468 – 1,468

* Cost of acquisition and reorganisation relates to the corporate exercise as detailed in Note 48(d).

9. FINANCE COSTS


Interest expense on: - bankers’ acceptance 390 87 – – - bank overdrafts 386 114 – – - obligations under finance leases 141 69 2 2 - term loans 21,110 20,190 15,511 15,386 - others 11 4 – – Total finance costs 22,038 20,464 15,513 15,388

75




10. INCOME TAX EXPENSE

Major components of income tax expense

The major components of income tax expense for the financial years ended 28 February 2011 and 2010 are as follows:


Taxation on continuing operations 23,435 11,373 8,113 5,559 Taxation on discontinued operation (Note 11) – (1) – – 23,435 11,372 8,113 5,559

Current income tax - Malaysian income tax 21,058 18,251 7,563 5,653 - Under/(over) provision in respect of previous years 1,023 (577) 550 (94)

22,081 17,674 8,113 5,559 Deferred income tax (Note 24) - Origination and reversal of temporary differences 42 (6,073) – – - Under/(over) provision in respect of previous years 1,312 (229) – –

1,354 (6,302) – – Income tax expense recognised in profit or loss 23,435 11,372 8,113 5,559

76




10. INCOME TAX EXPENSE (continued)

Reconciliation between tax expense and accounting profit

The reconciliation between tax expense and the product of accounting profit multiplied by the applicable corporate tax rate for the financial years ended 28 February 2011 and 2010 are as follows:


Profit before tax from continuing operations 73,700 114,459 512,983 82,205 Profit before tax from discontinued operation (Note 11) – 2,382 – –

73,700 116,841 512,983 82,205

Taxation at statutory rate 18,425 29,210 128,246 20,551 Effect of income subject to tax rate of 20% – (25) – –Effect of different tax rates in other country 446 – – –Effect of expenses not deductible for tax purposes 10,553 8,255 24,474 2,365 Effect of income not subject to taxation (12,331) (17,210) (145,152) (17,263)Utilisation of previously unrecognised deferred tax assets (2,832) (2,858) (5) – Deferred tax assets recognised during the year – (5,790) – –Deferred tax assets not recognised during the year 6,839 596 – – Under/(over) provision of deferred tax in previous years 1,312 (229) – –Under/(over) provision of income tax in respect of previous years 1,023 (577) 550 (94)

Income tax expense recognised in profit and loss 23,435 11,372 8,113 5,559

77




11. DISCONTINUED OPERATION

On 10 October 2008, the Company had entered into a conditional share sale agreement (“Agreement”) with Persepsi Gemilang Sdn. Bhd. (“PGSB”) for the disposals of the Company’s entire equity interests in Atlan Engineering Sdn. Bhd. (“AESB”) and Atlan Industries Sendirian Berhad (“AISB”) for a total cash consideration of RM11,477,382 to PGSB. The disposals were completed on 26 March 2009.

(i) The results of the discontinued operation for the prior year ended 28 February 2010 were as follows:

Group 2010 RM’000 Revenue 6,070 Other income 4 Expenses (3,692)

Profit before tax (Note 10) 2,382 Taxation (Note 10) 1

Profit for the year 2,383

(ii) The cash flows attributable to the discontinued operation were as follows:

Group 2010 RM’000 Operating cash flows 3,104 Investing cash flows (249)Financing cash flows (176)

Total cash flows 2,679

(iii) The following had been included in arriving at profit before tax of the discontinued operation: Group 2010

RM’000

Amortisation of land use rights 13 Depreciation 175 Interest expense 72 Employee benefits expense

- staff salaries and related cost 127 - contribution to defined contribution plan 16

78




11. DISCONTINUED OPERATION (continued)

(iv) The effects of the disposals on the financial position of the Group were as follows:

Group 2010

RM’000 Property, plant and equipment 23,413

Land use rights 5,803 Inventories 5,816 Receivables 10,663 Cash and cash equivalents 841 Borrowings (12,059) Deferred tax liabilities (753) Payables (21,706) Tax payable (6) Less: prior year adjustment (Note 46) (4,341) Net assets disposed 7,671

Consideration 11,477 Net assets disposed (7,671) Gain on disposal to the Group 3,806 Cash inflow arising on disposals:

Consideration 11,477 Cash and cash equivalents disposed (841) Net cash inflow 10,636

12. EARNINGS PER SHARE

Basic earnings per share amounts are calculated by dividing profit for the year, net of tax, attributable to owners of the parent by the weighted average number of ordinary shares outstanding during the financial year.

The Company does not have any diluted earnings per share.

The following reflect the profit and share data used in the computation of basic earnings per share for the years ended 28 February:

Group 2011 2010 RM’000 RM’000

Profit from continuing operations 50,265 103,086 Minority interests (20,083) (15,766)

Adjusted profit from continuing operations 30,182 87,320 Profit from discontinued operation – 2,383 Adjusted profit attributable to owners of the parent 30,182 89,703

79




12. EARNINGS PER SHARE (continued)

Group 2011 2010 Number Number of shares of shares ‘000 ‘000 Weighted average number of ordinary shares for basic earnings

per share computation* 249,237 225,655 * The weighted average number of shares takes into account the weighted average effect of changes

in treasury shares transactions during the year.

Group 2011 2010 Sen per Sen per share share Basic earnings per share attributable to owners of the parent

- Continuing operations 12.11 38.70 - Discontinued operation – 1.06

12.11 39.76

(a) Continuing operations

Basic earnings per share amounts are calculated by dividing profit for the year from continuing operations, net of tax, attributable to owners of the parent by the weighted average number of ordinary shares outstanding during the financial year.

(b) Discontinued operation

The basic earnings per share from discontinued operation are calculated by dividing the profit from discontinued operation, net of tax, attributable to owners of the parent by the weighted average number of ordinary shares outstanding during the financial year.

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

13. DIVIDENDS

Group and Company 2011 2010 RM’000 RM’000

Recognised during the financial year:

Dividends on ordinary shares: - First interim single tier (2010: tax exempt) dividend of 5% (2010: 5%) 12,001 11,378

- Second interim single tier (2010: tax exempt) dividend of 5% (2010: 1%) 12,601 2,252 - Third interim tax exempt (2010: tax exempt) dividend of 2% (2010: 3%) 5,040 6,595 - Fourth interim single tier dividend of 6% – 13,831

29,642 34,056

80




13. DIVIDENDS (continued)

On 14 March 2011, the Company declared a fourth interim single tier ordinary dividend of 5% in respect of the financial year ended 28 February 2011 amounting to RM12.6 million, which was paid on 13 April 2011. The financial statements for the current financial year do not reflect this interim dividend, but will be accounted for in equity as an appropriation of retained earnings in the financial year ending 29 February 2012.

For the financial year ended 28 February 2011, the Company declared 12,000,474 (2010: 11,525,377) treasury shares as share dividends on the basis of one treasury share for every existing twenty ordinary shares (2010: one treasury share for every existing twenty ordinary shares) of RM1 each to shareholders of the Company.

14. PROPERTY, PLANT AND EqUIPMENT

Office Capital equipment, Land and Golf work-in- Motor furniture Plant and Other buildings* course progress vehicles and fittings machinery assets Total

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Group At 28 February 2011

Cost At 1 March 2010 471,839 44,648 14,160 8,418 57,945 139,017 2,794 738,821 Effect of adopting FRS 117 30,847 – – – – – – 30,847 Prior year adjustment (Note 46) – – – – – 4,341 – 4,341 At 1 March 2010 (restated) 502,686 44,648 14,160 8,418 57,945 143,358 2,794 774,009 Additions 1,456 – 6,285 1,804 3,588 1,743 73 14,949 Disposals (17,922) – (415) (695) (592) (16,718) – (36,342)Write-offs (189) – – – (426) (289) (12) (916)Acquisition of subsidiaries (Note 20(b)) – – – – 7 – – 7 Reclassification 12,501 – (18,097) – (544) 7,586 (1,446) – Adjustment# (225) – – – – – – (225) At 28 February 2011 498,307 44,648 1,933 9,527 59,978 135,680 1,409 751,482 Accumulated depreciation and impairment losses At 1 March 2010 169,285 19,473 – 7,155 41,501 131,029 1,839 370,282 Effect of adopting FRS 117 3,989 – – – – – – 3,989

At 1 March 2010 (restated) 173,274 19,473 – 7,155 41,501 131,029 1,839 374,271 Depreciation charge for the year 9,049 524 – 695 4,208 5,163 151 19,790 Impairment loss reversed^ (362) (2,971) – – – – – (3,333)Disposals (14,482) – – (678) (566) (16,427) – (32,153)Write-offs (152) – – – (374) (220) (9) (755)Acquisition of subsidiaries (Note 20(b)) – – – – 1 – – 1 Reclassification 21 – – (1) (433) 1,273 (860) –

At 28 February 2011 167,348 17,026 – 7,171 44,337 120,818 1,121 357,821

Analysed as: Accumulated depreciation 60,139 7,375 – 7,171 44,307 119,728 1,121 239,841 Accumulated impairment losses 107,209 9,651 – – 30 1,090 – 117,980 167,348 17,026 – 7,171 44,337 120,818 1,121 357,821

Net carrying amount 330,959 27,622 1,933 2,356 15,641 14,862 288 393,661

81




14. PROPERTY, PLANT AND EqUIPMENT (continued)

Office Capital equipment, Land and Golf work-in- Motor furniture Plant and Other buildings* course progress vehicles and fittings machinery assets Total

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 Group At 28 February 2010

CostAt 1 March 2009 461,474 39,935 33,227 8,409 58,565 125,097 7,120 733,827 Effect of adopting FRS 117 22,332 – – – – – – 22,332

At 1 March 2009 (restated) 483,806 39,935 33,227 8,409 58,565 125,097 7,120 756,159 Additions 11,728 – 4,993 165 2,515 6,168 103 25,672 Disposals (18) – – (149) (263) (3,012) – (3,442)Write-offs (19) – (4,991) (47) (1,411) (89) (1) (6,558)Acquisition of subsidiaries (Note 20(b)) 4,793 – – 233 1,824 63 24 6,937 Reclassification 4,264 4,713 (16,178) (193) (3,285) 15,131 (4,452) – Reclassify to land use rights (Note 17) – – (2,891) – – – – (2,891)Reclassify to investment properties (Note 16) (1,868) – – – – – – (1,868)

At 28 February 2010 502,686 44,648 14,160 8,418 57,945 143,358 2,794 774,009

Accumulated depreciation and impairment lossesAt 1 March 2009 161,535 21,249 2,528 6,646 41,077 122,295 4,060 359,390 Effect of adopting FRS 117 3,674 – – – – – – 3,674

At 1 March 2009 (restated) 165,209 21,249 2,528 6,646 41,077 122,295 4,060 363,064 Depreciation charge for the year 7,675 381 – 670 4,232 5,429 383 18,770 Impairment loss reversed^ (683) (2,157) (2,528) – (1) – – (5,369)Disposals (11) – – (94) (166) (2,836) – (3,107)Write-offs (4) – – (9) (1,064) (75) (1) (1,153)Acquisition of subsidiaries (Note 20(b)) 285 – – 135 1,691 56 25 2,192 Reclassification 929 – – (193) (4,268) 6,160 (2,628) – Reclassify to investment properties (Note 16) (126) – – – – – – (126)

At 28 February 2010 173,274 19,473 – 7,155 41,501 131,029 1,839 374,271 Analysed as: Accumulated depreciation 51,221 6,851 – 7,155 41,471 122,696 1,839 231,233 Accumulated impairment losses 122,053 12,622 – – 30 8,333 – 143,038 173,274 19,473 – 7,155 41,501 131,029 1,839 374,271 Net carrying amount 329,412 25,175 14,160 1,263 16,444 12,329 955 399,738

82





* Land and buildings

Long term leasehold Freehold Buildings land land Total

RM’000 RM’000 RM’000 RM’000 Group At 28 February 2011

Cost At 1 March 2010 387,654 – 84,185 471,839 Effect of adopting FRS 117 384 30,463 – 30,847

At 1 March 2010 (restated) 388,038 30,463 84,185 502,686 Additions 1,456 – – 1,456 Disposals (13,890) – (4,032) (17,922)Write-offs (189) – – (189)Reclassification 12,501 – – 12,501 Adjustment# (225) – – (225) At 28 February 2011 387,691 30,463 80,153 498,307 Accumulated depreciation and impairment losses At 1 March 2010 165,324 – 3,961 169,285 Effect of adopting FRS 117 100 3,889 – 3,989 At 1 March 2010 (restated) 165,424 3,889 3,961 173,274 Depreciation charge for the year 8,678 371 – 9,049 Impairment loss reversed^ (362) – – (362)Disposals (13,890) – (592) (14,482)Write-offs (152) – – (152)Reclassification 21 – – 21

At 28 February 2011 159,719 4,260 3,369 167,348 Analysed as: Accumulated depreciation 58,380 1,759 – 60,139 Accumulated impairment losses 101,339 2,501 3,369 107,209 159,719 4,260 3,369 167,348 Net carrying amount 227,972 26,203 76,784 330,959

83





* Land and buildings

Long term leasehold Freehold Buildings land land Total

RM’000 RM’000 RM’000 RM’000 Group At 28 February 2010

Cost At 1 March 2009 377,289 – 84,185 461,474 Effect of adopting FRS 117 384 21,948 – 22,332 At 1 March 2009 (restated) 377,673 21,948 84,185 483,806 Additions 3,213 8,515 – 11,728 Disposals (18) – – (18)Write-offs (19) – – (19)Acquisition of subsidiaries 4,793 – – 4,793 Reclassification 4,264 – – 4,264 Reclassified to investment properties (1,868) – – (1,868) At 28 February 2010 388,038 30,463 84,185 502,686 Accumulated depreciation and impairment losses At 1 March 2009 157,574 – 3,961 161,535 Effect of adopting FRS 117 96 3,578 – 3,674

At 1 March 2009 (restated) 157,670 3,578 3,961 165,209 Depreciation charge for the year 7,364 311 – 7,675 Impairment loss reversed^ (683) – – (683)Disposals (11) – – (11)Write-offs (4) – – (4)Acquisition of subsidiaries 285 – – 285 Reclassification 929 – – 929 Reclassified to investment properties (126) – – (126) At 28 February 2010 165,424 3,889 3,961 173,274 Analysed as: Accumulated depreciation 49,833 1,388 – 51,221 Accumulated impairment losses 115,591 2,501 3,961 122,053 165,424 3,889 3,961 173,274 Net carrying amount 222,614 26,574 80,224 329,412

84




14. PROPERTY, PLANT AND EqUIPMENT (continued) Office

equipment, furniture Motor and fittings vehicles Total

RM’000 RM’000 RM’000 Company

At 28 February 2011

Cost At 1 March 2010 and 28 February 2011 73 467 540

Accumulated depreciation At 1 March 2010 58 455 513

Depreciation charge for the year 4 9 13 At 28 February 2011 62 464 526 Net carrying amount 11 3 14

At 28 February 2010

Cost

At 1 March 2009 73 875 948 Transfer to a subsidiary – (408) (408) At 28 February 2010 73 467 540 Accumulated depreciation

At 1 March 2009 53 834 887 Transfer to a subsidiary – (408) (408) Depreciation charge for the year 5 29 34 At 28 February 2010 58 455 513

Net carrying amount 15 12 27

# relates to subsequent discounts given by a supplier.

^ reversal of impairment loss has been made to increase the carrying value of the golf course to its estimated recoverable amount based on indicative valuations provided by an independent firm of valuers.

85





(a) During the financial year, the Group acquired property, plant and equipment with an aggregate cost of RM4,064,000 (2010: RM108,000) by means of finance leases. The cashflow on acquisition of property, plant and equipment amounted to RM10,885,000 (2010: RM25,564,000).

The carrying amount of property, plant and equipment held under finance leases as at reporting date are as follows:


Motor vehicles 1,740 948 3 12 Plant and machinery 2,648 – – – 4,388 948 3 12

(b) The net carrying amounts of property, plant and equipment pledged as securities for borrowings (Note 34) are as follows:

Group 2011 2010 RM’000 RM’000

Freehold land 56,385 56,384 Leasehold land 1,671 1,703 Buildings 69,494 73,089

127,550 131,176

(c) Included in the plant and machinery of the Group are staff costs capitalised amounting to RM556,000

(2010: RM327,000).

15. LAND HELD FOR PROPERTY DEVELOPMENT

Development Freehold Leasehold costs land land Total RM’000 RM’000 RM’000 RM’000 Group

At 28 February 2011

Cost At 1 March 2010 39,715 41,530 16,301 97,546 Additions 7,439 – – 7,439 Transfer to assets classified as held for sale (Note 28) (14,795) (27,403) – (42,198) At 28 February 2011 32,359 14,127 16,301 62,787

86




15. LAND HELD FOR PROPERTY DEVELOPMENT (continued)

Development Freehold Leasehold costs land land Total RM’000 RM’000 RM’000 RM’000 Group

At 28 February 2011

Accumulated impairment losses At 1 March 2010 – 3,534 980 4,514

Impairment losses for the year – – 187 187 At 28 February 2011 – 3,534 1,167 4,701

Net carrying amount 32,359 10,593 15,134 58,086

At 28 February 2010

Cost

At 1 March 2009 32,330 40,285 16,301 88,916 Additions 7,385 1,245 – 8,630 At 28 February 2010 39,715 41,530 16,301 97,546

Accumulated impairment losses At 1 March 2009 – 2,534 793 3,327 Impairment losses for the year – 1,000 187 1,187 At 28 February 2010 – 3,534 980 4,514 Net carrying amount 39,715 37,996 15,321 93,032

The freehold land under development with carrying value of RM17,296,000 (2010: Nil) has been pledged as security for borrowings (Note 34).

16. INVESTMENT PROPERTIES

Group 2011 2010 RM’000 RM’000 Cost

At 1 March 2010/2009 126,382 124,467 Additions 1,069 47 Reclassify from property, plant and equipment (Note 14) – 1,868 Write off (255) – At 28 February 2011/2010 127,196 126,382

87




16. INVESTMENT PROPERTIES (continued)

Group 2011 2010 RM’000 RM’000

Accumulated depreciation and impairment losses At 1 March 2010/2009 70,055 66,492

Reclassify from property, plant and equipment (Note 14) – 126 Depreciation charge for the year 3,601 3,437 Write off (255) – At 28 February 2011/2010 73,401 70,055 Net carrying amount 53,795 56,327

Fair value 82,000 70,000

Direct operating expenses arising from investment properties included in income statement 20,161 19,936 The fair value of the investment properties as at 28 February 2011 was based on a valuation by an independent

qualified valuer. Valuation was based on current prices in an active market for certain properties and where appropriate, the investment method reflecting receipt of contractual rentals, expected future market rentals, current market yields, void periods and maintenance requirements and approximate capitalisation rates is used.

Investment properties with net carrying amount of RM53,162,000 (2010: RM55,686,000) is situated on a land owned by a third party with whom the Group has an operating lease arrangement as disclosed in Note 39(b).

Investment properties with a net carrying amount of RM53,162,000 (2010: RM55,686,000) are pledged as securities for borrowings (Note 34).

17. LAND USE RIGHTS

Group 2011 2010 RM’000 RM’000

Cost At 1 March 2010/2009 61,467 44,761

Effect of adopting FRS 117 (30,847) (22,332) At 1 March 2010/2009 (restated) 30,620 22,429 Acquisition of subsidiaries (Note 20(b)) – 5,300 Disposals (48) – Reclassify from property, plant and equipment (Note 14) – 2,891

At 28 February 2011/2010 30,572 30,620

88




17. LAND USE RIGHTS (continued)

Group 2011 2010 RM’000 RM’000

Accumulated amortisation and impairment losses At 1 March 2010/2009 13,277 12,373 Effect of adopting FRS 117 (3,989) (3,674)

At 1 March 2010/2009 (restated) 9,288 8,699 Acquisition of subsidiaries (Note 20(b)) – 300 Amortisation for the year (Note 8) 702 604 Disposals (22) – Reversal of impairment losses (Note 5) (767) (315)

At 28 February 2011/2010 9,201 9,288

Net carrying amount 21,371 21,332

Amount to be amortised: - Not later than 1 year 662 653 - Later than 1 year but not later than 5 years 2,650 2,615 - Later than 5 years 18,059 18,064

21,371 21,332

The net carrying amount of land use rights pledged as securities for borrowings (Note 34) is RM12,251,000 (2010: RM12,541,000).

18. BIOLOGICAL ASSETS

Group 2011 2010 RM’000 RM’000

Cost At 1 March 2010/2009 2,168 1,779 Additions 449 389

At 28 February 2011/2010 2,617 2,168

As at 28 February 2011, the biological assets have not reached maturity, hence, amortisation has not commenced.

89




19. GOODWILL

Group 2011 2010 RM’000 RM’000

CostAt 1 March 2010/2009 28,462 19,760Acquisition of subsidiaries (Note 20(b)) – 8,702

At 28 February 2011/2010 28,462 28,462

Impairment tests for goodwill

Allocation of goodwill

Goodwill has been allocated to the Group’s cash-generating unit (“CGU”) identified according to business segment as follows:

Group 2011 2010 RM’000 RM’000

Trading of duty free goods and non-dutiable merchandise 27,408 27,408Property and hospitality 1,054 1,054

28,462 28,462

Key assumptions used in value-in-use calculations

The recoverable amount of the CGU is determined based on value-in-use calculations using cash flow projections based on financial forecasts with key assumptions approved by management covering a 5-year period with a growth rate of approximately 5%. The forecasted growth rate used to extrapolate cash flow beyond the 5-year period is 1% (2010: 1%).

Key assumptions and management’s approach to determine the values assigned to each key assumption are as follows:

(i) Budgeted gross margin

The basis used to determine the value assigned to the budgeted gross margin is the average gross margin achieved in the year immediately before the budgeted year, increased for expected effiency improvements. The budgeted gross margin for trading of duty free goods and non-dutiable merchandise segment are in the range of 11% to 27% (2010: 10% to 26%) whereas for property and hospitality segment, it is 40% to 69% (2010: 68%).

(ii) Selling price

The selling price used to calculate the cash inflows from operations was determined after taking into consideration price trends of the industries in which the CGUs are exposed to. Value assigned are consistent with the external sources of information.

(iii) Discount rate

The discount rate applied to the cash flow projections of 7.1% (2010: 13.2%) is based on the weighted average cost of capital of the Group.

Sensitivity to changes in assumptions

With regard to the assessment of value-in-use of all CGUs, the management believes that any reasonable change in any of the above key assumptions would not cause the carrying value of the units to materially exceed their recoverable amounts.

90




20. INVESTMENT IN SUBSIDIARIES

Company 2011 2010 RM’000 RM’000

Quoted equity instruments, at cost In Malaysia – 98,329 Outside Malaysia 784,367 –

784,367 98,329Unquoted shares, at cost 437,622 428,104

1,221,989 526,433Less: Accumulated impairment losses (5,352) (5,352)

1,216,637 521,081

Market value of quoted equity instruments: In Malaysia – 674,505 Outside Malaysia 796,564 –

(a) Details of the subsidiaries, which were incorporated in Malaysia (unless otherwise indicated), as at 28 February 2011, are as follows:

Proportion of ownership interestName of Company 2011 2010 Principal activities % %

Arah Induk Sdn. Bhd. 100 100 Dormant

Atlan Properties Sdn. Bhd. 100 100 Investment holding

Atlan Technology Sdn. Bhd. 100 100 Dormant

Atlan Orient Sdn. Bhd. 100 100 Dormant

* Principal Assets Pte. Ltd. 100 100 Dormant (Incorporated in Federal Territory of Labuan)

Seven Wonders of The World 100 100 Dormant Sdn. Bhd.

Naluri Corporation Berhad 58 58 Investment holding

Naluri Properties Sdn. Bhd. 100 100 Property investment, general construction and apartment hotel business

+^ Duty Free International Limited 81 – Investment holding (Incorporated in Singapore) (formerly known as Esmart Holdings Limited) (“DFI”)

91




20. INVESTMENT IN SUBSIDIARIES (continued)

(a) Details of the subsidiaries, which were incorporated in Malaysia (unless otherwise indicated), as at 28 February 2011, are as follows: (continued)


United Industries Holdings 100 100 Investment holding Sdn. Bhd.

MHS Land Sdn. Bhd. 51 51 Investment holding

Zon Hospitality Services Sdn. Bhd. 100 100 Provision of hospitality management and related services

Blossom Time Sdn. Bhd. 100 100 Property development

Timeless Image Sdn. Bhd. 100 100 Investment holding

International Aviation Consultants 100 100 Dormant Sdn. Bhd.

RZ Equities Sdn. Bhd. 100 100 Dormant

Trifiniti Networks Sdn. Bhd. 100 100 Dormant

Atlan Assets Sdn. Bhd. 100 100 Dormant

Atlan Management Sdn. Bhd. 100 100 Providing various administration, advisory, management, planning, functions and assistance to its holding company and related companies

Atlan Development Sdn. Bhd. 100 100 Dormant

Atlan Capital Sdn. Bhd. 100 100 Dormant

Ocean Pride Sdn. Bhd. 100 100 Dormant

Tegapasti Sdn. Bhd. 100 100 Dormant

Belia Karisma Sdn. Bhd. 100 100 Dormant

Radiant Ranch Sdn. Bhd. 100 – Resort development (Note 48(c))

DFZ Capital Berhad (Note 48(d)) – 75 Investment holding

Darul Metro Sdn. Bhd. (Note 48(d)) – 100 Letting out properties

Binamold Sdn. Bhd. (Note 48(b)) – 100 Property investment

Tenggara Senandung Sdn. Bhd. – 100 Operator of ferry terminal, car park (Note 48(b)) and trading of high speed diesel

92







Held through Atlan Properties Sdn. Bhd.Naluri Corporation Berhad 38 38 Investment holding

Held through Belia Karisma Sdn. Bhd. # Naluri International Limited 50 50 Investment holding

(Incorporated in Hong Kong)

Held through Atlan Assets Sdn. Bhd.# Naluri International Limited 50 50 Investment holding

(Incorporated in Hong Kong)

Held through MHS Land Sdn. Bhd.Gardenia Success Sdn. Bhd. 100 100 Dormant

Held through Naluri International LimitedTRIM Capital Management (M) 100 100 Dormant Sdn. Bhd.

Held through DFIDFZ Capital Berhad (“DFZ”) 80 – Investment holding (Note 48(d))

Darul Metro Sdn. Bhd. (Note 48(d)) 81 – Letting out properties

Held through DFZDFZ Trading Sdn. Bhd. 80 75 Investment holding and management services

Orchard Boulevard Sdn. Bhd. 80 75 Investment holding and resort development

Selasih Ekslusif Sdn. Bhd. 80 75 Retailer of duty free merchandise and operation of a supermarket and department store

Winner Prompt Sdn. Bhd. 80 75 Licensed distributor and wholesaler of duty free merchandise

DFZ Asia Sdn. Bhd. 80 75 Investment holding

Emas Kerajang Sdn. Bhd. 80 75 Retailer of duty free and non-dutiable merchandise

Seruntun Maju Sdn. Bhd. 80 75 Retailer of duty free and non-dutiable merchandise

Binamold Sdn. Bhd. (Note 48(b)) 80 – Property investment

Tenggara Senandung Sdn. Bhd. 80 – Operator of ferry terminal, car park (Note 48(b)) and trading of high speed diesel

93







Held through DFZ Trading Sdn. Bhd.DFZ Duty Free Supplies Sdn. Bhd. 80 75 Wholesaler and distributor of duty free and non-dutiable merchandise

Cergasjaya Sdn. Bhd. 80 75 Wholesaler and retailer of duty free and non-dutiable merchandise

Jelita Duty Free Supplies Sdn. Bhd. 80 75 Wholesaler and distributor of duty free and non-dutiable merchandise

Jasa Duty Free Sdn. Bhd. 80 75 Retailer of duty free and non-dutiable merchandise

DFZ (M) Sdn. Bhd. 80 75 Retailer of duty free and non-dutiable merchandise

DFZ Emporium Sdn. Bhd. 80 75 Retailer of duty free and non-dutiable merchandise

DFZ Duty Free (Langkawi) Sdn. Bhd. 80 75 Retailer of duty free and non-dutiable merchandise

Wealthouse Sdn. Bhd. 80 75 Retailer of duty free and non-dutiable merchandise

Melaka Duty Free Sdn. Bhd. 41 38 Retailer of duty free and non-dutiable merchandise

Zon Emporium Sdn. Bhd. 80 75 Retailer of duty free and non-dutiable merchandise

Media Zone Sdn. Bhd. 80 75 Advertising, promotion activities and investment holding

DFZ Tours & Travel Sdn. Bhd. 80 75 Investment holding, tours and travel activities

First Influx Sdn. Bhd. 80 75 Licensed distributor and wholesaler of duty free merchandise

94







Held through Orchard Boulevard Sdn. Bhd.Gold Vale Development Sdn. Bhd. 80 75 Property investment

Radiant Ranch Sdn. Bhd. (Note 48(c)) – 75 Resort development

Black Forest Golf and Country Club 80 75 Golf and country club operator Sdn. Bhd.

Cergasjaya Properties Sdn. Bhd. 80 75 Resort development, properties management and cultivation of oil palm

Kelana Megah Sdn. Bhd. 80 75 Resort development and operating of duty free complex and hotel

Held through Emas Kerajang Sdn. Bhd.Front Top (M) Sdn. Bhd. 80 75 Dormant

Held through DFZ Tours & Travel Sdn. Bhd.Fleet Car Hire & Tours Sdn. Bhd. 80 75 Hire and drive services and tour activities

Held through DFZ Emporium Sdn. Bhd.PT DFZ Indon 79 74 Dormant (Incorporated in Republic of Indonesia)

Held through DFZ Asia Sdn. Bhd.PT DFZ Indon 1 1 Dormant (Incorporated in Republic of Indonesia)

Held through United Industries Holdings Sdn. Bhd.United Industries Sdn. Bhd. 100 100 Manufacturing and marketing of exhaust systems and other automotive components parts

United Sanoh Industries Sdn. Bhd. 70 70 Manufacturing and distribution of brake, fuel and clutch tubings and other automotive component parts

United Vehicles Industries Sdn. Bhd. 100 100 Manufacturing and marketing of fuel tanks, other automotive component parts and wheelbarrows

95







Held through United Industries Sdn. Bhd.UEW Plastic Industries Sdn. Bhd. 100 100 Letting of properties (Dormant)

Freighter Industries (M) Sdn. Bhd. 100 100 Letting of properties (Dormant)

Danco Marketing Sdn. Bhd. 100 100 Selling and distribution of exhaust systems, filters, other automotive replacement parts and wheelbarrows

United Filter Sdn. Bhd. 97 97 Manufacturing and marketing of automotive and industrial filters and filter housing

Held through United Vehicles Industries Sdn. Bhd.Kadar Prisma Sdn. Bhd. 100 100 Property investment (Dormant)

UVI Advance Technology Sdn. Bhd. 100 100 Manufacturing of plastic fuel tanks

* Based on unaudited financial statements+ A corporation listed on Singapore Stock Exchange (“SGX-ST”)^ Audited by member firm of Ernst & Young Global in Singapore# Audited by a firm other than Ernst & Young

(b) Acquisition of subsidiaries

(i) During the year, the Company acquired Radiant Ranch Sdn. Bhd. for a cash consideration of RM14,932,656 from Orchard Boulevard Sdn. Bhd., a wholly owned subsidiary of DFZ (Note 48(c)).

(ii) During the financial year, the Company acquired DFI as part of a reorganisation initiative. The details of the acquisition and reorganisation is provided in Note 48(d).

The acquired subsidiary has contributed the following results to the Group:

RM’000

Revenue 57Loss for the year (7,988)

96





(b) Acquisition of subsidiaries (continued)

(ii) (continued) The identifiable assets and liabilities arising from the acquisition were as follows:

Fair value/ carrying amount RM’000

Property, plant and equipment (Note 14) 6Trade and other receivables 316Cash and cash equivalents 89

411Trade and other payables (7,374)

Net identifiable liabilities (6,963)

Fair value of net liabilities (6,701)Minority interests (262)

(6,963)Deemed cost of acquisition (29,230)

Cost of acquisition and reorganisation (36,193)

Analysis of cost of acquisition and reorganisation charged to income statement

RM’000

Cost of acquisition and reorganisation 36,193Cost of issuance of warrants to external investors 4,303

40,496

Total cash inflow for acquisition is as follows:

RM’000

Cash and cash equivalent in subsidiary acquired 89

There is no cash inflow or outflow for acquisition of DFI, other than the cash and cash equivalents acquired. Refer to Note 48(d) for further details.

(iii) In the prior year, DFZ, a subsidiary of the Company, completed the following acquisitions:

(A) On 5 August 2009, DFZ acquired 100% equity interest in Seruntun Maju Sdn. Bhd. from its shareholders, Damai Baru Sdn. Bhd. (83%) and Maju Dua Sdn. Bhd. (17%) for a total cash consideration of RM13,043,000.

(B) On 15 October 2009, DFZ Trading Sdn. Bhd. acquired 100% of the equity interest in First Influx Sdn. Bhd. for a total cash consideration of RM1,721,000.

97






(iii) (continued)

The cost of acquisition comprised the following:

2010 RM’000

Purchase consideration satisfied by cash 14,700Costs attributable to the acquisition, paid in cash 64

Total cost of acquisition 14,764

The effect of acquisition on the results of the Group was as follows:

Revenue 6,542Profit for the year 573

The identifiable assets and liabilities arising from the acquisitions were as follows:

Fair value Acquiree’s recognised carrying on amount acquisition 2010 2010 RM’000 RM’000

Property, plant and equipment (Note 14) 4,515 4,745Land use rights (Note 17) 4,525 5,000Inventories 2,182 2,182Receivables 1,201 1,201Cash and bank balances 1,203 1,203

13,626 14,331

Payables 4,229 4,229Borrowings 1,086 1,086Tax payable 565 565Deferred tax liabilities (Note 24) 1,540 2,389

7,420 8,269

Group 2010 RM’000

Fair value of net assets 6,062Goodwill on acquisition (Note 19) 8,702

Total cost of acquisition 14,764

98






(iii) (continued)

Total cash outflow for acquisition was as follows:

Group 2010 RM’000

Purchase consideration satisfied by cash 14,700Costs attributable to the acquisition, paid in cash 64

Total cash outflow 14,764Cash and cash equivalents of subsidiaries acquired (1,203)

Net cash outflow 13,561

(c) Disposal of subsidiaries

During the year, the Company disposed all its shares in Tenggara Senandung Sdn. Bhd. for a cash consideration of RM22,000,000 and all its shares in Binamold Sdn. Bhd. (“BMSB”) for a cash consideration of RM2,800,763 (Note 48 (b)).

21. INVESTMENT IN ASSOCIATE


Unquoted shares in Malaysia, at cost 437 437 437 437Shares of post acquisition results – 28 – –

437 465 437 437

Represented by:Share of net assets of associate 437 465 437 437

The share of post acquisition results of the associate is based on the share of results, is arrived at from the last audited financial statements available and management financial statements drawn up to the same reporting date of the Company.

The particulars of the associate, which is incorporated in Malaysia, are as follows:

Proportion of ownership interest

Name of Company 2011 2010 Principal activities % %

Scandinavian Avionics (Malaysia) 25 25 Sale of aviation related electrical Sdn. Bhd. # instruments and the provision of avionics support services

# Audited by a firm other than Ernst & Young

99




21. INVESTMENT IN ASSOCIATE (continued)

The summarised financial information of the associate, not adjusted for the proportion of ownership interest held by the Group, is as follows:

Group 2011 2010 RM’000 RM’000

Assets and liabilitiesTotal assets 2,579 3,210Total liabilities 831 1,350

ResultsRevenue 4,262 5,026(Loss)/profit for the year (112) 76

22. OTHER INVESTMENTS

Group 2011 2010 RM’000 RM’000

Unquoted shares at cost - in Malaysia 21 21 - outside Malaysia 3,688 3,688

3,709 3,709Less: Accumulated impairment losses (3,688) (3,688)

21 21Corporate golf club and vacation club memberships 141 141Less: Accumulated amortisation (12) –

150 162

23. TRADE AND OTHER RECEIVABLES


CurrentTrade receivablesThird parties 39,393 43,564 – –Less: Allowance for impairment (3,151) (7,145) – –

Trade receivables, net 36,242 36,419 – –

Other receivablesDue from subsidiaries – – 437,537 589,009Less: Allowance for impairment – – (211,504) (116,389)

– – 226,033 472,620

100




23. TRADE AND OTHER RECEIVABLES (continued)


Deposits 3,018 5,526 – –Staff loans 198 220 – –Sundry receivables 15,480 22,162 67 8,988

18,696 27,908 67 8,988Less: Allowance for impairment (2,934) (10,849) – –

Other receivables, net 15,762 17,059 67 8,988

Total trade and other receivables, net 52,004 53,478 226,100 481,608

Non-currentOther receivablesStaff loans 253 473 – –

Total trade and other receivables (current and non-current) 52,257 53,951 226,100 481,608Add: Cash and bank balances (Note 27) 136,805 115,082 6,683 16,460

Total loans and receivables 189,062 169,033 232,783 498,068

Trade receivables

Trade receivables are non-interest bearing and are generally on 14 to 120 day (2010: 14 to 120 day) terms. Other credit terms are assessed and approved on a case-by-case basis. Trade receivables are recognised at their original invoice amounts which represent their fair values on initial recognition.

Related party balances

The amount owing from subsidiaries are unsecured and are recoverable on demand. The effective interest is 5.0% (2010: 5.0%) per annum.

Staff loans

Staff loans are unsecured and bear interest at 2.0% (2010: 2.0%) per annum. Non-current amounts have an average maturity of 2.2 years (2010: 3.2 years).

101





Ageing analysis of trade receivables

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

Group 2011 2010 RM’000 RM’000

Neither past due nor impaired 26,863 30,380

1 to 30 days past due not impaired 7,172 4,87331 to 60 days past due not impaired 1,800 45061 to 90 days past due not impaired 109 34691 to 120 days past due not impaired 196 251More than 120 days past due not impaired 102 119

9,379 6,039Impaired 3,151 7,145

39,393 43,564

Trade receivables that are neither past due nor impaired

Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group.

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

Trade receivables that are impaired

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

Group 2011 2010 RM’000 RM’000

Individually impairedTrade receivables - nominal amounts 3,151 7,145Less: Allowance for impairment (3,151) (7,145)

– –

102





Trade receivables that are impaired (continued)

Movement in allowance accounts:

Group 2011 2010 RM’000 RM’000

At 1 March 2010/2009 7,145 7,220Acquisition of subsidiaries – 28Charge for the year 173 239Written off (3,960) (1)Reversal of impairment losses (103) (341)Reclassification to other receivables (104) –

At 28 February 2011/2010 3,151 7,145

Trade receivables that are individually determined to be impaired at the balance sheet date relate to debtors that are in legal dispute or financial difficulties, and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements.

Other receivables that are impaired

Other receivables that are impaired at the reporting date and the movement of the allowance accounts used to record the impairment are as follows:

Company 2011 2010 RM’000 RM’000

Individually impairedDue from subsidiaries - nominal amounts 307,953 426,625Less: Allowance for impairment (211,504) (116,389)

96,449 310,236

Group 2011 2010 RM’000 RM’000

Individually impairedSundry receivables - nominal amounts 2,934 10,849Less: Allowance for impairment (2,934) (10,849)

– –

103





Other receivables that are impaired (continued)

Movement in allowance accounts:


At 1 March 2010/2009 10,849 11,215 116,389 116,389Charge for the year 36 – 95,153 –Reversal of impairment losses – (212) (38) –Written off (8,055) (154) – –Reclassification from trade receivables 104 – – –

At 28 February 2011/2010 2,934 10,849 211,504 116,389

Sundry receivables that are individually determined to be impaired at the balance sheet date relate to debtors that are in legal dispute or financial difficulties, and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements.

24. DEFERRED TAX

Group 2011 2010 RM’000 RM’000

At 1 March 2010/2009 1,443 17,532Acquisition of subsidiaries (Note 20(b)) – 2,389Reversal – (12,176)Recognised in profit or loss (Note 10) 1,354 (6,302)

At 28 February 2011/2010 2,797 1,443

Presented after appropriate offsetting as follows:Deferred tax assets (6,353) (6,708)Deferred tax liabilities 9,150 8,151

2,797 1,443

The components and movements of deferred tax liabilities and assets during the year prior to offsetting are as follows:

Deferred tax liabilities of the Group:

Property, plant and Revaluation equipment surplus Receivables Total RM’000 RM’000 RM’000 RM’000

At 1 March 2010 1,320 7,729 – 9,049Recognised in income statement 1,059 (217) – 842

At 28 February 2011 2,379 7,512 – 9,891

At 1 March 2009 1,162 5,724 12,349 19,235Recognised in income statement 144 (370) (12,349) (12,575)Acquisition of subsidiaries 14 2,375 – 2,389

At 28 February 2010 1,320 7,729 – 9,049

104




24. DEFERRED TAX (continued)

Deferred tax assets of the Group:

Unutilised tax losses and unabsorbed capital allowances Others Total RM’000 RM’000 RM’000

At 1 March 2010 (6,249) (1,357) (7,606)Recognised in income statement 427 85 512

At 28 February 2011 (5,822) (1,272) (7,094)

At 1 March 2009 (604) (1,063) (1,667)Recognised in income statement (5,645) (294) (5,939)

At 28 February 2010 (6,249) (1,357) (7,606)

Deferred tax assets have not been recognised in respect of the following items:


Unabsorbed capital allowances 65,670 38,313 204 224Unutilised tax losses 243,263 251,844 – –Other deferred assets – 2,747 – –

308,933 292,904 204 224

Deferred tax assets have not been recognised in respect of these items as they may not be used to offset taxable profits of other subsidiaries in the Group and they have been risen in subsidiaries that have a recent history of losses.

The deferred tax assets attributable to unutilised tax losses and unabsorbed capital allowances are available for offsetting against future taxable profits subject to no substantial change in shareholdings under the Income Tax Act, 1967 and guidelines issued by the tax authority.

25. INVENTORIES

Group 2011 2010 RM’000 RM’000

CostFood and beverages 692 801Raw materials 9,408 7,176Work in progress 3,122 3,513Trading goods 113,594 110,284Finished goods 1,667 1,441Completed development properties 1,180 1,335Consumables 352 263Goods in transit 1,158 2,088

131,173 126,901

During the year, the amount of inventories recognised as an expense in the income statement was RM492,944,000 (2010: RM475,980,000).

105




26. MARKETABLE SECURITIES

Group 2011 2010 Market value Market value Carrying of quoted Carrying of quoted amount investments amount investments RM’000 RM’000 RM’000 RM’000

Held for trading investmentsEquity instruments - quoted in Malaysia 17 33 17 24 - quoted outside Malaysia 3,970 3,970 3,823 3,823

Total marketable securities 3,987 3,840

Company 2011 2010 Market Value Market Value Carrying of quoted Carrying of quoted Amount investments Amount investments RM’000 RM’000 RM’000 RM’000

Held for trading investmentsEquity instruments - quoted outside Malaysia 3,970 3,970 3,823 3,823

Total marketable securities 3,970 3,823

Changes in fair value

During the financial year, the Group and the Company have recognised changes in fair value amounting to RM237,000 in regards to the equity instruments quoted outside Malaysia as there was an increase in the fair value of these investments. In the previous financial year, the Group and the Company have recognised changes in fair value of RM373,000 and RM746,000 respectively in regards to the equity instruments quoted outside Malaysia as there was a decrease in the fair value of these investments.

27. CASH AND BANK BALANCES


Cash on hand and at banks 44,694 37,792 483 310Deposits with licensed banks 92,111 77,290 6,200 16,150

136,805 115,082 6,683 16,460

Cash at banks earns interest at floating rates based on daily bank deposit rates. Deposits with licensed banks are made for varying periods of between one day and fifteen months depending on the immediate cash requirements of the Group and of the Company, and earn interest at the respective deposit rates. The effective interest rates for the Group and the Company were 1.65% to 2.66% (2010: 1.10% to 3.30%) per annum and 2.20% (2010: 1.10% to 3.30%) per annum, respectively.

Deposits with licensed banks of the Group amounting to RM11,029,000 (2010: RM11,872,000) are pledged to banks for credit facilities granted to certain subsidiaries as disclosed in Note 34.

106




27. CASH AND BANK BALANCES (continued) For the purpose of the statements of cash flow, cash and cash equivalents comprise the following as at the

reporting date:


Cash on hand and at banks 44,694 37,792 483 310Deposits with licensed banks 92,111 77,290 6,200 16,150

136,805 115,082 6,683 16,460Bank overdrafts (Note 34) (3,348) (2,361) – –

Cash and cash equivalents 133,457 112,721 6,683 16,460

28. ASSETS CLASSIFIED AS HELD FOR SALE

On 19 November 2010, Blossom Time Sdn. Bhd. (“BTSB”) and Radiant Ranch Sdn. Bhd. (“RRSB”), both wholly-owned subsidiaries of the Company, have entered into two separate conditional Sale and Purchase Agreements (“SPAs”) with Utara Malaya Realty Sdn. Bhd. (“URSB”) for the proposed disposal of lands for a total cash consideration of RM145 million. Refer to Note 48(f) for details of the transactions. As at 28 February 2011, the proposed disposal has not been completed and the net book value of the lands and its related expenditure was classified as assets held for sale.

Group 2011 2010 RM’000 RM’000

Assets classified as held for sale:Land held for property development (Note 15) 42,198 –

29. SHARE CAPITAL, SHARE PREMIUM AND TREASURY SHARES

Number of ordinary l----------------------------- Amount -----------------------------l share of RM1 each Total Share Share share capital capital capital (Issued and Treasury (Issued and Share and share Treasury fully paid) shares fully paid) premium premium shares ‘000 ‘000 RM’000 RM’000 RM’000 RM’000

Group and CompanyAt 1 March 2009 235,400 6,097 235,400 147,715 383,115 (18,064)Issue of shares - Rights warrants exercised* 18,250 – 18,250 21,171 39,421 –Purchase of treasury shares – 17,759 – – – (50,005)Treasury shares distributed as dividends – (11,525) – (32,839) (32,839) 32,839

At 28 February 2010 and 1 March 2010 253,650 12,331 253,650 136,047 389,697 (35,230)Purchase of treasury shares – 1,318 – – – (4,569)Treasury shares distributed as dividends – (12,000) – (34,988) (34,988) 34,988

At 28 February 2011 253,650 1,649 253,650 101,059 354,709 (4,811)

* The rights warrants have expired on 19 January 2010.

107




29. SHARE CAPITAL, SHARE PREMIUM AND TREASURY SHARES (continued)

Group/Company Number of shares of RM1 each Amount 2011 2010 2011 2010 ‘000 ‘000 RM’000 RM’000

Authorised:Ordinary shares 900,000 900,000 900,000 900,000Preference shares 100,000 100,000 100,000 100,000

1,000,000 1,000,000 1,000,000 1,000,000

Share capital

The holders of ordinary shares (except treasury shares) are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restrictions and rank equally with regard to the Company residual assets.

Treasury shares

Treasury shares relate to ordinary shares of the Company that are held by the Company. The amount consists of the acquisition costs of treasury shares net of the proceeds received on their subsequent sale or issuance.

The Company acquired 1,318,600 (2010: 17,758,600) shares in the Company through purchases on the Bursa Malaysia Securities Berhad during the financial year. The total amount paid to acquire the shares was RM4,569,000 (2010: RM50,005,000) and this was presented as a component within shareholders’ equity.

The directors of the Company are committed to enhancing the value of the Company for its shareholders and believe that the repurchase plan can be applied in the best interests of the Company and its shareholders. The repurchase transactions were financed by internally generated funds. The shares repurchased are being held as treasury shares.

During the financial year, the Company distributed 12,000,474 (2010: 11,525,377) treasury shares, amounting to RM34,988,000 (2010: RM32,839,000), as share dividends on the basis of one treasury share for every existing twenty ordinary shares (2010: one treasury share for every existing twenty ordinary shares) of RM1 each to shareholders of the Company.

30. ISSUANCE OF WARRANTS

Issuance of warrants relates to the fair value at initial recognition of warrants issued by DFI to advisers pursuant to acquisition and reorganisation exercise and mandatory general offer (“MGO”) for DFZ shares. The warrants are exercisable at anytime at SGD0.35 per warrant within five years from date of issuance. As at 28 February 2011, there are 34,873,000 outstanding warrants to minority shareholders (2010: Nil).

31. OTHER RESERVE

Group 2011 2010 RM’000 RM’000

At 1 March 2010/2009 (7,782) 4,337Acquisition of a subsidiary 18,917 –Dilution of equity interest in subsidiaries (31,079) (12,119)

At 28 February 2011/2010 (19,944) (7,782)

Other reserve arises from changes in the Group’s equity interest in subsidiaries (Note 48(d)).

108




32. RETAINED EARNINGS

Prior to the year of assessment 2008, Malaysian companies adopted the full imputation system. In accordance with the Finance Act 2007 which was gazetted on 28 December 2007, companies shall not be entitled to deduct tax on dividends paid, credited or distributed to its shareholders, and such dividends will be exempted from tax in the hands of the shareholders (“single tier system”). However, there is a transitional period of six years, expiring on 31 December 2013, to allow companies to pay franked dividends to their shareholders under limited circumstances. Companies also have an irrevocable option to disregard the 108 balance and opt to pay dividends under the single tier system. The change in the tax legislation also provides for the 108 balance to be locked-in as at 31 December 2007 in accordance with Section 39 of the Finance Act 2007.

The Company has elected for the irrevocable option to disregard the Section 108 balance. The Company may distribute dividends out of its entire retained earnings as at 28 February 2011 under the single tier system.

33. EMPLOYEE BENEFITS

Group 2011 2010 RM’000 RM’000

Present value of unabsorbed obligations 3,140 2,836

Recognised liability for defined benefit obligations 3,140 2,836

Analysed as:Non-current Later than 1 year but not later than 2 years 136 123 Later than 2 years but not later than 5 years 707 518 Later than 5 years 2,145 2,033

2,988 2,674

Current 152 162

3,140 2,836

(a) Liability for defined benefit obligations

The Group’s defined benefit plan is unfunded and it provides retirement benefits for employees upon retirement on the account of medical grounds and for employees upon passed away while under employment. The retirement benefits are only applicable to employees who are in the National Union of Transport Equipment and Allied Industries Workers.

Under the plan, eligible employees are entitled to retirement benefits of one, two, three and four weeks’ of last drawn salary based on the length of service upon the retirement age of 55. Eligible employees also have the option to retire at the age of 50.

(b) Movement in the net liability recognised in the balance sheet:

Group 2011 2010 RM’000 RM’000

At 1 March 2010/2009 2,836 2,577Expense recognised in the income statement 419 516Benefits paid (115) (257)

At 28 February 2011/2010 3,140 2,836

109




33. EMPLOYEE BENEFITS (continued)

(c) Expense recognised in the income statement:

Group 2011 2010 RM’000 RM’000

Current service cost 264 246Interest on obligation 224 196Reversal (148) –Actuarial losses 79 74

419 516

(d) The expense is recognised in the following line item in the income statement:

Group 2011 2010 RM’000 RM’000

Employee benefits expense (Note 6) 419 516

(e) Principal actuarial assumptions used at the balance sheet date (expressed as weighted averages):

Group 2011 2010 % %

Discount rate 6.0 6.0Future salary increases 6.0 6.0Price inflation 3.5 3.5

34. BORROWINGS

Group Company Maturity 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

CurrentSecured:Obligations under finance leases 2012 1,496 355 5 4Bankers’ acceptance 2012 12,645 10,136 – –Bank overdrafts On (Note 27) demand 3,348 2,361 – –Term loans- syndicated term loans 2012 8,000 – 8,000 –- 7.95% per annum fixed rate bank loan 2011 – 508 – –- loan at discount rate 2012 50,000 50,000 – –- loan at coupon rate 2012 24,000 – – –- SGD bank loan at SIBOR + 0.75% per annum 2012 26,381 – – –- 4% per annum fixed rate bank loan 2012 31 59 – –Interest payable 2012 260 262 – –

126,161 63,681 8,005 4

110




34. BORROWINGS (continued)

Group Company Maturity 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Non-currentSecured:Obligations under 2013 - finance leases 2016 2,458 587 18 23Term loans- syndicated term loans 2016 210,000 218,000 210,000 218,000- business financing-i loan 2015 30,000 – – –- loan at coupon rate 2012 – 24,000 – –- 4% per annum fixed rate bank loan 2012 – 31 – –

242,458 242,618 210,018 218,023

Total borrowings 368,619 306,299 218,023 218,027

Total borrowingsObligations under finance leases (Note 35) 3,954 942 23 27Bankers’ acceptance 12,645 10,136 – –Bank overdrafts 3,348 2,361 – –Term loans 348,412 292,598 218,000 218,000

368,359 306,037 218,023 218,027Interest payable 260 262 – –

368,619 306,299 218,023 218,027

Maturity of borrowings (excluding obligations under finance leases)Not later than 1 year 124,665 63,326 8,000 –Later than 1 year and not later than 5 years 240,000 172,031 210,000 148,000Later than 5 years – 70,000 – 70,000

364,665 305,357 218,000 218,000

The borrowings are secured by way of:- fixed charges on certain properties of the Group with a net carrying amount of RM210,259,000 (2010:

RM199,403,000);- deposits with licensed banks amounting to RM11,029,000 (2010: RM11,872,000);- fixed and floating charges over all present and future assets of certain subsidiaries; and- corporate guarantees by the Company and by certain subsidiaries of the Group.

111




34. BORROWINGS (continued)

Obligations under finance leases

These obligations are secured by a charge over the leased assets (Note 35). The average discount rate implicit in the leases of the Group and of the Company is 3.04% (2010: 3.56%) per annum and 4.30% (2010: 4.30%) per annum, respectively.

Bankers’ acceptance

Bankers’ acceptances are denominated in RM with weighted average effective interest rate of 3.59% (2010: 3.04%) per annum.

Bank overdrafts

Bank overdrafts are denominated in RM, bear interest between BLR + 1.0% per annum and BLR + 1.5% per annum.

Syndicated term loans

Syndicated term loans consists of bank facilities from three financial institutions as detailed below:- Term loan facility at BLR + 1% per annum;- Ijarah Facility I at BFR +1% per annum;- Ijarah Facility II at BFR +1% per annum.

The syndicated term loans are secured by certain freehold land, buildings and investment properties of the Group, and assignment of certain tenancy agreement and certain designated accounts.

7.95% per annum fixed rate bank loan

This loan has been fully paid on 30 September 2010 and was secured by a charge over certain land use rights and buildings.

Loan at discount rate

This loan is due in the next financial year and is secured by two designated accounts. The average discount rate for the loan ranged from 4.60% to 5.55% (2010: 5.44% to 5.75%) per annum.

Loan at coupon rate

This loan is fully repayable on 25 January 2012 (2010: 25 January 2012) and is secured by two designated accounts. The average coupon rate for the loan is 7.90% (2010: 7.90%) per annum.

SGD bank loan at SIBOR + 0.75% per annum

This loan is secured by a bank guarantee of SGD12,000,000 and shares of a subsidiary, and repayment of this loan is due on 24 January 2012.

4% per annum fixed rate bank loan

The loan is fully repayable by August 2011 and is secured by certain freehold land of the Group.

Business financing-i loan

The loan is secured by certain freehold lands and three designated accounts. The profit rate is 6-month cost of funds plus 2.0% per annum.

112




35. OBLIGATIONS UNDER FINANCE LEASES


Future minimum lease payments:Not later than 1 year 1,689 400 6 6Later than 1 year and not later than 5 years 2,613 627 21 27

Total future minimum lease payments 4,302 1,027 27 33Less: Future finance charges (348) (85) (4) (6)

Present value of finance lease liabilities (Note 34) 3,954 942 23 27

Analysis of present value of finance lease liabilities:Not later than 1 year 1,496 355 5 4Later than 1 year and not later than 5 years 2,458 587 18 23

3,954 942 23 27Less: Amount due within 12 months (1,496) (355) (5) (4)

Amount due after 12 months 2,458 587 18 23

36. TRADE AND OTHER PAYABLES


Trade payablesThird parties 82,525 99,227 – –Progress billings – 1,616 – –Retention sums – 301 – –

82,525 101,144 – –

Other payablesDue to subsidiaries – – 430,195 430,487Sundry payables 21,750 20,498 3,069 1,127Accruals 18,289 13,461 130 120Deposits payable 2,973 5,694 – –Contribution cost payables – 209 – –

43,012 39,862 433,394 431,734

Total trade and other payables 125,537 141,006 433,394 431,734Add: Borrowings (Note 34) 368,619 306,299 218,023 218,027

Total financial liabilities carried at amortised cost 494,156 447,305 651,417 649,761

113




36. TRADE AND OTHER PAYABLES (continued)

Trade payables

The amounts are non-interest bearing. The credit terms of trade payables normally range from 30 to 120 days (2010: 30 to 120 days).

Related party balances

The amount due to subsidiaries are unsecured, non-interest bearing and are repayable on demand.

Other payables

The amounts are non-interest bearing. Sundry payables are normally settled on an average term of 30 to 120 days (2010: 30 to 120 days).

37. DERIVATIVE LIABILITIES

Contract/ Nominal Amount Assets Liabilities 2011 2011 2011 RM’000 RM’000 RM’000

GroupForward foreign exchange contracts 7,644 – 8

7,644 – 8

The Group uses forward foreign currency contracts to manage some of its transaction exposure. These contracts are not designated as cash flow or fair value hedges and are entered into for periods consistent with currency translation exposure and fair value changes exposure. Such derivatives do not qualify for hedge accounting.

38. PROVISIONS


Provision for litigation 4,000 31,635 4,000 31,635Provision for guarantees 12,992 14,209 – –Provision for liquidated ascertained damages 547 547 – –

17,539 46,391 4,000 31,635

The movement of provision is as follows:

At 1 March 2010/2009 46,391 105,425 31,635 90,325Utilised – (5,520) – (5,520)Adjustment (1,217) (344) – –Reversal (Note 5) (27,635) (53,170) (27,635) (53,170)

At 28 February 2011/2010 17,539 46,391 4,000 31,635

114




38. PROVISIONS (continued)

(a) Provision for litigation

The provision for litigation is in respect of certain on-going litigation cases in the Group and the Company.

(b) Provision for guarantees

These guarantees are denominated in Deutschemark which are equivalent to Euro 3.1 million in respect of the Group for credit facilities granted by a financial institution to an investment company, ACL Advance Cargo Logistic GmbH.

(c) Provision for liquidated ascertained damages

Provision for liquidated ascertained damages is in respect of projects undertaken by a subsidiary. The provision is recognised for expected liquidated ascertained damages claims based on the terms of the applicable sale and purchase agreements.

39. COMMITMENTS

(a) Capital commitments

Group 2011 2010 RM’000 RM’000

Capital expenditure

Approved and contracted for:Property, plant and equipment 1,148 715

Approved but not contracted for:Property, plant and equipment 4,776 6,379

5,924 7,094

(b) Non-cancellable operating lease commitments – as lessee

Future minimum rentals payable under non-cancellable operating leases (excluding land use rights) at the reporting date are as follows:

Group 2011 2010 RM’000 RM’000

Not later than 1 year 305 331Later than 1 year but not later than 5 years 876 975Later than 5 years 4,824 5,040

6,005 6,346

Operating lease commitments represent rentals payable by the Group for use of land and buildings. Included in operating lease commitments are commitments in respect of a non-cancellable operating lease expiring in 2038 for a piece of property in a subsidiary, Naluri Properties Sdn. Bhd. (“NPSB”). NPSB has an option to renew the lease for another 30 years after the expiry of the lease. Should the lease be renewed, the additional lease payments for the renewal period, which is not included in the above would amount to RM7.2 million.

The remaining leases are negotiated for a term of 2 to 10 years.

115




40. CONTINGENT LIABILITIES

Company 2011 2010 RM’000 RM’000

Corporate guarantees for banking facilities to certain subsidiaries 72,500 42,500

41. RELATED PARTY DISCLOSURES

(a) Significant transactions

In addition to the related party information disclosed elsewhere in the financial statements, the following significant transactions between the Company and related parties took place at terms agreed between the parties during the financial year:

Company 2011 2010 RM’000 RM’000

Dividend income from subsidiaries 31,372 26,676Interest income from subsidiaries 16,527 18,663Management fee charged to a subsidiary 300 600Management fee charged by a subsidiary (240) (540)

(b) Compensation of key management personnel

The remuneration of certain directors and other members of key management during the year were as follows:

Group 2011 2010 RM’000 RM’000

Short-term employee benefits 5,015 5,458Defined contribution plan 507 568

5,522 6,026

Included in the remuneration of total key management personnel are:

Group 2011 2010 RM’000 RM’000

Directors’ remuneration 1,063 1,551

116




42. FAIR VALUE OF FINANCIAL INSTRUMENTS

(a) Fair value of financial instruments that are carried at fair value

The following table shows an analysis of the financial instruments carried at fair value by level of fair value hierarchy:

quoted prices in active Significant Significant markets for other un- identical observable observable instruments inputs inputs Total (Level 1) (Level 2) (Level 3) RM’000 RM’000 RM’000 RM’000

GroupAt 28 February 2011Financial liabilities:Derivatives - Forward foreign exchange contracts – (8) – (8)

Fair value hierarchy

The Group classifies fair value measurement using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

- Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities;- Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset

or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and- Level 3 – Inputs for the asset or liability that are not based on observable market data (unobservable

inputs).

Determination of fair value

Derivatives (Note 37): Forward currency contracts are valued using a valuation technique with market observable inputs (Level 2). The most frequently applied valuation techniques include forward pricing models, using present value calculations. The models incorporate various inputs including the credit quality of counterparties, foreign exchange spot and forward rates and interest rate curves.

(b) Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are not reasonable approximation of fair value

2011 2010 Carrying Fair Carrying Fair amount value amount value RM’000 RM’000 RM’000 RM’000

GroupObligations under finance leases (Note 35) 3,954 3,819 942 836

117




42. FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)

(c) Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value

The following are classes of financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value:

Note

Other receivables (non-current) 23Trade and other receivables (current) 23Trade and other payables (current) 36Borrowings (non-current) 34Borrowings (current) 34

The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values, either due to their short-term nature or that they are floating rate instruments that are re-priced to market interest rates on or near the reporting date.

The carrying amounts of the current portion of borrowings are reasonable approximations of fair values due to the insignificant impact of discounting.

The fair values of current borrowings are estimated by discounting expected future cash flows at market incremental lending rate for similar types of lending, borrowing or leasing arrangements at the reporting date.

Amounts due from/(to) related companies, staff loans, finance lease obligations and fixed rate bank loans

The fair values of these financial instruments are estimated by discounting expected future cash flows at market incremental lending rate for similar types of lending, borrowing or leasing arrangements at the reporting date.

Marketable securities

Fair value is determined directly by reference to their published market bid price at the reporting date.

43. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group and the Company are exposed to financial risks arising from their operations and the use of financial instruments. The key financial risks include credit risk, liquidity risk, interest rate risk, foreign currency risk and market price risk.

The Board of Directors reviews and agrees policies and procedures for the management of these risks, which are executed by the Group and the Company. The audit committee provides independent oversight to the effectiveness of the risk management process.

It is, and has been throughout the current and previous financial year, the Group’s policy that no derivatives shall be undertaken except for the use as hedging instruments where appropriate and cost-efficient. The Group and the Company do not apply hedge accounting.

The following sections provide details regarding the Group’s and Company’s exposure to the above-mentioned financial risks and the objectives, policies and processes for the management of these risks.

118




43. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)

(a) Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Group’s credit risk is primarily attributable to trade receivables.

The credit risk of the Group’s other financial assets, which comprise cash and cash equivalents, arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these financial assets.

The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. The Group trades only with recognised and creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant. Since the Group trades only with recognised and creditworthy third parties, there is no requirement for collateral.

The Group 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.

Credit risk concentration profile

The Group determines concentrations of credit risk by monitoring the industry sector profile of its trade receivables on an ongoing basis. The credit risk concentration profile of the Group’s trade receivables at the reporting date are as follows:

Group 2011 2010 RM’000 % of total RM’000 % of total

By industry sectors:Property and hospitality 2,839 8% 3,509 10%Trading of duty free goods and non-dutiable merchandise 9,028 25% 8,230 22%Automotive 24,375 67% 24,680 68%

36,242 100% 36,419 100%

Financial assets that are neither past due nor impaired

Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment record with the Group. Cash and cash equivalents and derivatives that are neither past due nor impaired are placed with or entered into with reputable financial institutions or companies with high credit ratings and no history of default.

Financial assets that are either past due or impaired

Information regarding financial assets that are either past due or impaired is disclosed in Note 23.

(b) Liquidity risk

Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Group manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that refinancing, repayment and funding needs are met. As part of its overall liquidity management, the Group maintains sufficient levels of cash or cash convertible investments to meet its working capital requirements. In addition, the Group strives to maintain available banking facilities at a reasonable level to its overall debt position. As far as possible, the Group raises committed funding from both capital markets and financial institutions and balances its portfolio with some short term funding so as to achieve overall cost effectiveness.

119





(b) Liquidity risk (continued)

Analysis of financial instruments by remaining contractual maturities

The table below summarises the maturity profile of the Group’s and the Company’s liabilities at the reporting date based on contractual undiscounted repayment obligations.

l-------------------------------- 2011 --------------------------------l On demand or within One to Over five one year five years years Total RM’000 RM’000 RM’000 RM’000

Group

Financial liabilities:Trade and other payables 125,537 – – 125,537Borrowings 128,682 310,012 – 438,694Derivatives 8 – – 8

Total undiscounted financial liabilities 254,227 310,012 – 564,239

Company

Financial liabilities:Other payables 433,394 – – 433,394Borrowings 8,614 270,821 – 279,435

Total undiscounted financial liabilities 442,008 270,821 – 712,829

(c) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial instruments will fluctuate because of changes in market interest rates.

The Group’s and the Company’s exposure to interest rate risk arises primarily from interest-bearing borrowings. Borrowings at floating rates expose the Group to cash flow interest rate risk. Borrowings obtained at fixed rates expose the Group to fair value interest rate risk.

The Group manages its interest rate exposure by maintaining a mix of fixed and floating rate borrowings.

Sensitivity analysis for interest rate risk

The table below demonstrates the sensitivity to a reasonably possible change in interest rates with all other variables held constant, of the Group’s profit net of tax (mainly through the impact on interest expense on floating rate loans and borrowings). The assumed movement in the basis points for interest rate sensitivity analysis is based on the currently observable market environment.

120





(c) Interest rate risk (continued)

Sensitivity analysis for interest rate risk (continued)

Increase/ (decrease) Effect on profit in basis points net of tax RM’000

Group28 February 2011

Ringgit Malaysia +10 (225)Singapore Dollar +10 (20)

Ringgit Malaysia -10 225Singapore Dollar -10 20

Company28 February 2011

Ringgit Malaysia +10 (163)

Ringgit Malaysia -10 163

(d) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Group has transactional currency exposures arising from sales or purchases that are denominated in a currency other than the functional currency of the operations to which they relate, primarily United States Dollar (“USD”), Singapore Dollar (“SGD”), Euro Dollar (“EURO”), Thai Baht (“THB”) and Japanese Yen (“JPY”). The foreign currencies in which these transactions are denominated are mainly USD and JPY. Foreign currency exposures in transactional currencies other than functional currencies of the operating entities are kept to an acceptable level.

At balance sheet date, the Group have a balance of short term borrowings of RM26,381,000 which are denominated in SGD.

Sensitivity analysis for foreign currency risk

The following table demonstrates the sensitivity of the Group’s profit net of tax to a reasonably possible change in the USD, SGD, EURO, THB and JPY exchange rates against the respective functional currencies of the Group entities, with all other variables held constant.

121





(d) Foreign currency risk (continued)

Sensitivity analysis for foreign currency risk (continued)

2011 2010 RM’000 RM’000

USD/RM - strengthened 3% (2010: 3%) (755) (1,228) - weakened 3% (2010: 3%) 755 1,228

SGD/RM - strengthened 3% (2010: 3%) (866) (16) - weakened 3% (2010: 3%) 866 16

EURO/RM - strengthened 3% (2010: 3%) (1) (32) - weakened 3% (2010: 3%) 1 32

THB/RM - strengthened 3% (2010: 3%) 2 4 - weakened 3% (2010: 3%) (2) (4)

JPY/RM - strengthened 3% (2010: 3%) (136) (258) - weakened 3% (2010: 3%) 136 258

(e) Market price risk

Market price risk is the risk that the fair value or future cash flows of the Group’s financial instruments will fluctuate because of changes in market prices (other than interest or exchange rates).

The Group does not have exposure to commodity price risk.

44. CAPITAL MANAGEMENT

The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the year under review.

The Group monitors capital using a gearing ratio, which is total external debt divided by total capital.

The Group’s policy is that the gearing ratio shall not be more than 1.5 times.

The Group includes within total external debt, all financial borrowings of the Group. Total external debt due and payable within 12 months consists of bankers’ acceptances, bank overdrafts, interest payable and current portion of obligations under finance leases. Capital includes equity attributable to owners of the parent and minority interests.

122




44. CAPITAL MANAGEMENT (continued)


Borrowings (non-current) 242,458 242,618 210,018 218,023

Borrowings (current excluding term loans, i.e. due and payable within 12 months) 17,749 13,114 5 4

Borrowings (current - term loans) 108,412 50,567 8,000 – Total external debt 368,619 306,299 218,023 218,027

Total equity 411,671 396,153 800,875 330,216

Gearing ratio (times) 0.90 0.77 0.27 0.66

45. SEGMENT INFORMATION

(a) Reporting format

The primary segment reporting format is determined to be business segments as the Group’s risks and rates of return are affected predominantly by differences in the products and services. The activities of the Group are carried out mainly in Malaysia and as such, segmental reporting by geographical locations is not presented. The operating businesses are organised and managed separately according to the nature of the products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets.

(b) Business segments

The Group comprises the following main business segments:

(i) Investment holding; (ii) Property and hospitality; (iii) Trading of duty free goods and non-dutiable merchandise; and (iv) Automotive.

Discontinued operation consists of manufacturing segment (Note 11).

Other business segments mainly consist of provision of corporate services, dormant and inactive company, none of each are of a sufficient size to be reported separately.

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which, in certain respects as explained in the table below, is measured differently from operating profit or loss in the consolidated financial statements. Group financing (including finance costs) and income taxes are managed on a group basis and are not allocated to operating segments.

(c) Allocation basis and transfer pricing

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

The directors are of the opinion that transfer prices between business segments are based on negotiated prices. Segment revenue, expenses and results include transfers between business segments. These transfers are eliminated on consolidation.

123




45. SEGMENT INFORMATION (continued)

Year 2011

Trading of duty free Per

Property goods and consolidated Investment and non-dutiable Manufacturing Adjustments and financial holding hospitality merchandise Automotive Others (Discontinued) eliminations Note statements RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Revenue: External customers 1,230 80,105 521,454 141,957 43 – – 744,789 Inter-segment 61,433 16,597 781 – 8,330 – (87,141) B – Total revenue 62,663 96,702 522,235 141,957 8,373 – (87,141) 744,789

Results: Depreciation 14 12,531 5,015 4,875 956 – – 23,391 Impairment loss of non-financial assets – – – – 187 – – 187 Amortisation of land use rights – 702 – – – – – 702 Share of results of associates – – – – (28) – – (28) Cost of acquisition and reorganisation 40,496 – – – – – – 40,496 Other non-cash expenses – 435 352 685 – – – C 1,472 Segment profit 40,567 7,009 101,708 11,856 1,986 – (89,426) D 73,700

Assets: Investment in associates 437 – – – – – – 437 Additions to non-current assets – 13,712 3,590 6,565 39 – – E 23,906 Segment assets 49,252 398,168 279,829 104,056 97,556 – 10,471 F 939,332

Segment liabilities 36,551 25,623 84,394 31,958 14,317 – 334,818 G 527,661

124





Year 2010

Trading of duty free Per

Property goods and consolidated Investment and non-dutiable Manufacturing Adjustments and financial holding hospitality merchandise Automotive Others (Discontinued) eliminations Note statements RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 Revenue:

External customers 1,045 86,475 489,997 118,614 30 6,070 – A 696,161 Inter-segment 103,544 20,402 18,827 – 9,192 – (151,965) B – Total revenue 104,589 106,877 508,824 118,614 9,222 6,070 (151,965) 696,161

Results: Depreciation 33 12,982 3,124 4,651 1,417 175 – A 22,207 Impairment loss of non-financial assets – – – – 1,187 – – 1,187 Amortisation of land use rights – 604 – – – 13 – A 604 Share of results of associates – – – – 19 – – 19 Other non-cash expenses 1,841 5,606 1,576 38 – – – C 9,061 Segment profit/(loss) 118,485 1,399 118,538 941 (6,638) 2,382 (118,266) D 114,459

Assets: Investment in associates 465 – – – – – – 465 Additions to non-current assets – 27,354 3,994 8,521 169 – – E 40,038 Segment assets 41,012 415,621 269,392 99,804 83,166 – 11,893 F 920,888

Segment liabilities 50,172 28,224 97,442 29,409 15,904 – 303,584 G 524,735

125





A The amounts relating to the manufacturing segment have been excluded to arrive at amounts shown in the consolidated income statements as they are presented separately in the income statement within one line item, “profit from discontinued operation, net of tax”.

B Inter-segment revenues are eliminated on consolidation.

C Other material non-cash expenses consist of the following items as presented in the respective notes to the financial statements:

Note 2011 2010 RM’000 RM’000 Bad debts written off 8 69 –Impairment loss on marketable securities 8 – 373 Impairment loss on receivables 8 209 239 Inventories written down 8 758 1,353 Inventories written off 8 275 223 Property, plant and equipment written off 8 161 5,405 Waiver of debts 8 – 1,468

1,472 9,061

D The following items are deducted from/(added to) segment profit to arrive at “Profit before tax from continuing operations” presented in the consolidated income statement:

2011 2010 RM’000 RM’000 Inter-segment transactions 67,360 97,821 Share of results of an associate 28 (19)Finance costs 22,038 20,464

89,426 118,266

E Additions to non-current assets consist of:

2011 2010 RM’000 RM’000

Property, plant and equipment 14,949 25,672 Land held for property development 7,439 8,630 Investment properties 1,069 47 Land use rights – 5,300 Biological assets 449 389

23,906 40,038

126





F The following items are added to segment assets to arrive at total assets reported in the consolidated statement of financial position:

2011 2010 RM’000 RM’000

Investment in associate 437 465 Deferred tax assets 6,353 6,708 Tax recoverable 3,681 4,720

10,471 11,893

G The following items are added to segment liabilities to arrive at total liabilities reported in the consolidated

statement of financial position:

2011 2010 RM’000 RM’000

Deferred tax liabilities 9,150 8,151 Tax payable 3,668 3,433 Borrowings 322,000 292,000

334,818 303,584 46. PRIOR YEAR ADJUSTMENT

In the financial years ended 28 February 2009 and 2010, certain subsidiaries of the Company purchased equipment amounting to RM2,341,000 and RM2,000,000, respectively from AESB, then a wholly-owned subsidiary of the Company. The abovementioned transactions were eliminated at Group. Following the disposal of the Company’s entire equity interest in AESB in prior year (Note 11), the Group did not adjust the abovementioned elimination entries, thus resulting in an understatement of profits and property, plant and equipment in prior year. Accordingly, in the current year, a prior year adjustment was put through and certain comparative amounts have been restated as per the table below:

As previously As stated Adjustment Adjustment restated RM’000 RM’000 RM’000 RM’000 (Note 2.2)

As at 28 February 2010: Property, plant and equipment 368,539 26,858 4,341 399,738 Accumulated losses (16,623) – 4,341 (12,282)

127




47. MATERIAL LITIGATIONS

(a) Originating Summons by Shahidan Bin Shafie (“Shahidan”) Shahidan, a shareholder of the Company, had commenced legal proceedings at the High Court against

the Company and Atlan Properties Sdn. Bhd. (“APSB”) on 2 April 2004, seeking inter alia that the proposals by the Company relating to the acquisition of shares of Naluri Corporation Berhad (“Naluri”) and the funding structure and bond issuance related thereto, be declared void, and that the Company and APSB be restrained from proceeding with the proposals.

Upon the application by the Company and APSB to strike out the suit, the High Court dismissed the suit with costs on 26 April 2004. Shahidan appealed to the Court of Appeal against the dismissal. The Court of Appeal allowed Shahidan’s appeal and granted leave to Shahidan to amend the Originating Summons. The suit was thereafter remitted back to the High Court to effect the amendments to the Originating Summons and to hear the amended Originating Summons.

The Company and APSB have applied to the High Court to strike out the amended Originating Summons. These applications to strike out came up for hearing on 11 June 2009 and for decision on 31 July 2009. On 31 July 2009, the High Court allowed these applications to strike out, and accordingly, dismissed the suit.

On 13 August 2009, Shahidan filed a notice of appeal to the Court of Appeal against the High Court’s dismissal of the suit. The Court of Appeal has not fixed any date for this appeal.

(b) Writ of Summons and Statement of Claim by Shahidan

Shahidan, a shareholder of Naluri, had commenced legal proceedings at the High Court against the Company and APSB on 26 May 2004, seeking inter alia an order that the Company and APSB jointly and severally make a mandatory take-over offer to all shareholders of Naluri (except Pengurusan Danaharta Nasional Berhad, Danaharta Urus Sdn. Bhd. and Danaharta Managers Sdn. Bhd. (collectively “Danaharta”)) at an offer price of RM1.98 per ordinary share of Naluri, and for damages be assessed.

The Company and APSB had applied to strike out the suit but these applications were dismissed by the Senior Assistant Registrar of the High Court on 8 September 2004. The Company and APSB have appealed to the High Court Judge against the Senior Assistant Registrar’s dismissal of the striking out applications. These appeals against the dismissal of the striking out application were dismissed by the High Court Judge on 11 March 2010 with costs in cause (“Dismissal”). A further appeal against the Dismissal had been filed to the Court of Appeal by APSB on 29 March 2010 and the Company on 8 April 2010, respectively. Shahidan had written to the High Court Judge on 2 September 2010 for an adjournment of the trial fixed on 11 to 13 October 2010. The Court has now fixed 11 August 2011 for case management.

Shahidan had also applied to the High Court via an interlocutory application to adduce further evidence at the hearing of the Company’s and APSB’s aforesaid appeal to the High Court Judge. On 1 October 2009, the High Court allowed this application with costs in the said appeal.

(c) Claim by Tan Sri Dato’ Tajudin Ramli (“TSDTR”)

By way of a Defence and Counterclaim dated 29 June 2006, the Company, APSB and Naluri have been made a party to the legal proceedings commenced by Danaharta against TSDTR in the High Court. DFZ was subsequently made a party to the legal proceedings by way of a Re-Amended Defence and Counterclaim dated 30 October 2008.

128




47. MATERIAL LITIGATIONS (continued)

(c) Claim by Tan Sri Dato’ Tajudin Ramli (“TSDTR”) (continued)

TSDTR is seeking from the Company, APSB, Naluri, DFZ and 8 other defendants, jointly and/or severally, inter alia:

(i) various declarations to declare void the Agreement dated 11 August 2003 between Danaharta and APSB in relation to the sale and purchase of Naluri shares from Danaharta; to declare that these defendants have acted ultra vires their respective powers and/or in bad faith by causing APSB and/or Naluri to enter into the said Agreement dated 11 August 2003 and/or the Naluri Scheme (as referred to in the Counterclaim, which includes the Capital Repayment and Naluri Acquisitions) and therefore all transactions entered into between the relevant parties in relation to the Naluri Scheme be also declared void;

(ii) consequential orders as may be necessary to restore all persons to their position prior to the execution and/or purported completion of the aforesaid transactions or agreements and/or to give effect to any other orders sought by TSDTR;

(iii) an account of all dividends and/or other payments received by APSB in relation to its Naluri shares, and order that APSB forthwith pays the same to TSDTR;

(iv) general damages to be assessed.

Further and/or in the alternative, TSDTR is also seeking from the Company, APSB and 11 other defendants, jointly and/or severally, inter alia, damages to be assessed and orders that they make a mandatory take-over offer to all shareholders of Naluri at an offer price of RM1.98 per ordinary share in accordance with the Securities Commission Act, 1993 and the Malaysian Code on Take-Overs and Mergers (“Takeover Code”) and pay to TSDTR the sum of RM613,103,000 pursuant to the mandatory take-over.

TSDTR is also seeking from DFZ and 26 other defendants to the Counterclaim, jointly and/or severally, inter alia the sum of RM6,246,492,000 (being shares in the 10th defendant to the Counterclaim at RM24 per share); general, aggravated and exemplary damages to be assessed; and damages for conspiracy to be assessed.

Further and in addition, TSDTR is also seeking from all the 38 Defendants to the Counterclaim, jointly and severally, inter alia the sum of RM7,214,909,000; damages for conspiracy to be assessed; various declarations in regards to the invalidity of the vestings made in favour of Danaharta and the acts, deeds and agreements, transfers, conveyances, dealings executed by Danaharta and the then Special Administrators of Naluri pursuant to the said vestings in favour of Danaharta, including the return and restoration of all assets and monies transferred or conveyed; damages, including aggravated and exemplary damages to be assessed; and interest and costs.

The Company, APSB, Naluri and DFZ have applied to strike out the suit, wherein the Court had on 7 December 2009 allowed the striking out application with cost to be paid to the Company and Naluri. TSDTR had on 4 January 2010 filed an appeal against the decision granting the striking out the said application. The Court of Appeal has fixed 11 August 2011 for case management.

TSDTR had also applied to the High Court via an interlocutory application to seek leave to re-amend the Counterclaim. The Senior Assistant Registrar of the High Court allowed this application to re-amend with costs. The Company, APSB and Naluri have appealed to the High Court Judge against the Senior Assistant Registrar’s decision, wherein the Court had on 12 November 2009 allowed the appeal and by reason thereof DFZ is not a party in the Counterclaim.

129





(c) Claim by Tan Sri Dato’ Tajudin Ramli (“TSDTR”) (continued)

TSDTR had also applied to the High Court via an interlocutory application for inter alia a mareva injunction order that Naluri, whether by itself or otherwise, be restrained from completing the Proposed Business Transfer and Proposed Capital Repayment (each as described in the Counterclaim) and/or any other similar proposals. On 14 April 2008, the High Court allowed TSDTR’s application for a mareva injunction order. The Company, APSB and Naluri then appealed to the Court of Appeal against the High Court’s grant of the mareva injunction order and these appeals were allowed by the Court of Appeal on 28 April 2008. TSDTR then applied to the Federal Court for leave to appeal to the Federal Court against the decision of the Court of Appeal, but leave to appeal was refused by the Federal Court on 21 January 2009.

(d) Writ of Summons and Statement of Claim by TSDTR

TSDTR had commenced legal proceedings at the High Court against the Company and Naluri on 16 April 2007, seeking from the Company, Naluri and all other 11 defendants, jointly and/or severally, inter alia:

(i) a declaration that the resolutions purportedly passed at the extraordinary general meeting of Naluri dated 8 March 2007 pursuant to Naluri’s circular to shareholders dated 12 February 2007 are void;

(ii) an order that Naluri and/or the Company be restrained from putting into effect any resolutions purportedly passed at the said extraordinary general meeting and/or completing the proposed disposal of the business and the capital repayment of Naluri or any other similar proposals pursuant to the resolutions;

(iii) general, aggravated and exemplary damages to be assessed, and damages for conspiracy, misrepresentation and breach of statutory duty to be assessed;

(iv) all necessary orders as may be required to give effect to the declarations and orders sought and/or as the Court thinks fit.

TSDTR had also applied to the High Court via an interlocutory application seeking jointly and/or severally against Naluri and 9 other defendants, inter alia that they be restrained from putting into effect any resolutions purportedly passed at the said extraordinary general meeting and/or completing the proposed disposal of the business and the capital repayment of Naluri or any other similar proposals pursuant to the resolutions, pending completion of the trial of the suit.

The Company and Naluri have applied to strike out the suit. These applications to strike out have been granted by the Judge on 28 April 2010. TSDTR had filed an appeal on 17 May 2010 against the decision of the Judge in allowing the striking out application. TSDTR had on 29 July 2010 filed a Notice of Motion to the Court of Appeal to adduce further evidence during the hearing of TSDTR’s appeal against the Judge’s decision in allowing the striking out. The Court has fixed 11 August 2011 for case management.

130





(e) Writ of Summons and Statement of Claim by Adenan Bin Ismail (“Adenan”)

Adenan, a shareholder of Naluri, commenced legal proceedings at the High Court against the Company and APSB on 16 September 2008, following the completion of the corporate exercises by the Company and/or APSB in relation to the Agreement dated 11 August 2003 between Danaharta and APSB for the sale and purchase of Naluri shares from Danaharta. Adenan is seeking against the Company, APSB and 7 other defendants, inter alia:

(i) an order that the Company, APSB and 6 other defendants are persons acting in concert for the purposes of gaining control of Naluri, that the defendants have acquired control of Naluri as at 2 March 2005 or such other date as the Court determines;

(ii) an order that the Company and/or APSB make a take-over offer to all existing shareholders of Naluri to acquire their shares at RM1.98 per share of Naluri and that the Securities Commission directs that the Company and/or APSB effect such take-over offer, and if such take-over is not effected, then the capital repayment and the acquisitions by Naluri as described in the Statement of Claim are rendered void.

The Company’s and APSB’s application to strike out the suit has been allowed by the Court on 20 October 2010. Adenan has filed an appeal against the High Court’s decision. No date has been fixed by the Court of Appeal.

(f) Writ of Summons and Statement of Claim by Adenan

Adenan, a shareholder of Naluri, commenced legal proceedings at the High Court against Naluri, the Company and Darul Metro Sdn. Bhd. (“DMSB”) on 19 September 2008, purportedly for the benefit of Naluri. Adenan is seeking against Naluri, the Company, DMSB and 9 other defendants, inter alia:

(i) various declarations as against the Company and DMSB, to declare that they are jointly and severally liable to account to Naluri for the difference between the actual value of Naluri’s assets as described in the Sale of Business Agreement dated 5 January 2007 between Naluri and DMSB and the sum actually paid by the Company or such other sum as the Court thinks fit, and that they are liable to account to Naluri for all benefits gained or derived from the use of Naluri’s assets as described in the said Sale of Business Agreement;

(ii) various orders as against all defendants (except Naluri), to rescind the said Sale of Business Agreement and the Subscription Agreement dated 5 January 2007 between the Company and DMSB; for loss and damage to be assessed; interest and costs.

The applications by Naluri, the Company and DMSB to strike out the suit have been granted by the Court on 18 May 2010. An appeal had been filed by Adenan on 7 June 2010. The Court of Appeal has fixed 20 June 2011 for trial.

(g) Notice of Arbitration by the Government of the Republic of Maldives

The Government of the Republic of Maldives had served upon Naluri on 16 April 2007 a notice of arbitration, seeking arbitration on the claims and disputes relating to various alleged breaches under a Shareholders’ Agreement dated 1 October 1994 between Naluri and the Government of the Republic of Maldives. The Government of Republic of Maldives is seeking, inter alia, payment of USD69.2 million to settle the liabilities of a joint venture company, Air Maldives Limited; damages; compensation; specific performance; interest, and/or other approvals relief or remedies, whether under or in equity, law, statute or otherwise arising out of or in connection with the dispute. The solicitors acting for Government of the Republic of Maldives had on 15 March 2011 wrote to the Arbitrator informing that the matter has been amicably settled and for the arbitration to be withdrawn.

131





(h) Writ of Summons and Statement of Claim by Malaysian Airline System Berhad and 2 others

Malaysian Airline System Berhad (“MASB”), MAS Golden Holidays Sdn. Bhd. (“MGH”) and MAS Hotels & Boutiques Sdn. Bhd. (“MHB”) had commenced legal proceedings on 26 May 2006 against Naluri and 4 other defendants seeking, inter alia:

(i) various declarations as against Naluri, to declare that Naluri is liable to MASB and/or MGH as a constructive trustee for allegedly assisting in the breach of fiduciary duties and/or obligations by TSDTR and/or knowingly receiving monies paid in breach of TSDTR’s fiduciary duties or obligations, and to declare that Naluri holds on trust for MASB and/or MGH any payment or profit received arising from the said alleged assistance and is liable to pay the same to MASB and/or MGH;

(ii) damages for dishonest assistance and/or knowing receipt, for conspiracy and/or for unlawful interference in the business of MASB and/or MGH.

A Notice to attend pre-trial case management had been filed on 29 September 2010 and the suit had been fixed for case management on 9 November 2010 before the High Court Judge. However, in view of the global settlement in respect of all suits involving TSDTR, the suit is now fixed for mention on 21 June 2011.

(i) Winding-up Petition by Shahidan

Shahidan, a shareholder of Naluri, had commenced winding-up proceedings at the High Court against Naluri on 29 February 2008. Shahidan is seeking inter alia that Naluri be wound up by the Court under the provisions of section 218(1)(f) and section 218(1)(i) of the Companies Act, 1965, and that the Official Receiver be appointed as provisional liquidator of Naluri.

Naluri had applied to the High Court, seeking inter alia:

(i) to strike out the suit, or alternatively, that all proceedings under the suit be stayed;

(ii) to restrain Shahidan and/or its solicitors from giving any notice of the winding-up proceedings to any third party; and pending disposal of this application by Naluri or until further order by the High Court, that the suit and all proceedings therein be stayed; and

(iii) to validate the transfer of all shares of Naluri made since the commencement of the winding-up proceedings.

On 24 April 2008, the High Court allowed with costs Naluri’s application to strike out the suit, and validated all transfers of shares of Naluri made since the commencement of the winding-up proceedings. Shahidan has appealed to the Court of Appeal against the said decisions of the High Court. The Court of Appeal has now fixed the appeal for case management on 11 August 2011.

(j) Arbitration proceedings by Mancon Berhad (“MB”) on behalf of Nilai Barisan Sdn. Bhd. (“NBSB”)

MB, on behalf of NBSB, had commenced arbitration proceedings against Kelana Megah Sdn. Bhd. (“KMSB”) on 24 May 1999 in relation to NBSB’s engagement as a sub-contractor nominated by KMSB for the supply, installation, testing and commissioning of air-conditioning and mechanical ventilation works in the construction of the Johor Bahru Duty Free Complex. The sum claimed by MB is approximately RM2,468,000. KMSB has counter-claimed that it incurred loss/damage in the sum of approximately RM1,909,000 in rectifying defective and/or incomplete works of NBSB.

KMSB’s solicitors informed the Arbitrator on 21 January 2002 that NBSB had been wound up on 8 August 2000. In view that NBSB had been wound up, parties were not able to resume the arbitration proceedings and the same is currently in abeyance.

132





(j) Arbitration proceedings by Mancon Berhad (“MB”) on behalf of Nilai Barisan Sdn. Bhd. (“NBSB”) (continued)

KMSB’s solicitors had issued numerous letters to the Arbitrator to seek the Arbitrator’s instructions on the arbitration proceedings and/or instructions that the arbitration proceedings be closed. To date, KMSB has not received any response from the Arbitrator. KMSB’s solicitors had also written to the liquidator of NBSB to request that the liquidator decides either if NBSB wishes to continue with the arbitration proceedings or to withdraw the claims against KMSB. To date, KMSB has not received any response from the liquidator.

(k) Writ of Summons and Statement of Claim by LH Technology Sdn. Bhd. (“LHT”)

LHT had commenced legal proceedings at the High Court against KMSB on 30 December 1999, claiming a sum of RM1,026,000 in relation to LHT’s engagement as a sub-contractor for the design, supply and installation of curtain walling, frameless glass panel, shopfront, balustrading, aluminium and glazing works in the construction of the Johor Bahru Duty Free Complex.

On 26 June 2000, the Senior Assistant Registrar of the High Court allowed LHT’s application for a summary judgment against KMSB. KMSB appealed to the High Court Judge against the said summary judgment, and this appeal was allowed. LHT then appealed to the Court of Appeal against the decision of the High Court Judge.

On 28 July 2008, LHT’s appeal was dismissed with no order as to costs by the Court of Appeal. KMSB’s solicitor has informed the High Court of the said dismissal of the LHT’s appeal, and requested the High Court to fix a mention date for the suit. The High Court has not fixed any date for this suit.

(l) Writ of Summons and Statement of Claim by Eden Enterprises (M) Berhad (“EEB”)

EEB had commenced legal proceedings at the High Court on 31 January 2004 against DFZ Duty Free (Langkawi) Sdn. Bhd. (“DDFL”) and 2 other defendants in respect of an alleged tort of conspiracy on a long-term lease of twenty-eight (28) years entered into between EEB and DDFL for a duty free outlet and staff living quarters in Langkawi (“premises”).

EEB had also applied to the High Court via an interlocutory application to compel DDFL to quit, vacate and deliver up to EEB the premises. EEB’s application was dismissed by the High Court on 6 December 2005.

EEB then appealed to the Court of Appeal against the said dismissal by the High Court. The Court of Appeal dismissed EEB’s appeal on 27 May 2009.

DDFL had filed an application for an interim injunction to restrain EEB and its subsidiary from exercising self-help to regain vacant possession of the premises and interfering with DDFL’s quiet enjoyment of the same. DDFL also filed another application subsequently for an interim injunction to restrain EEB and its subsidiary from prohibiting and qualifying DDFL’s use of lanes around the premises for access to or egress from the premises.

Consent Order was duly recorded between the parties on 23 November 2010 before the High Court Judge wherein EEB withdraws all claims against DDFL and DDFL withdraws its counterclaim against EEB without any order as to costs (“Consent Order”).

Pursuant to the terms of the Consent Order, the parties had duly appointed their respective valuers to undertake a valuation of the market rate for the premises (excluding the staff living quarters). There is a dispute arising from the Consent Order and parties are taking steps to address the dispute.

133




48. SIGNIFICANT AND SUBSEqUENT EVENTS

(a) On 28 November 2006, Maybank Investment Bank Berhad (“Maybank-IB”) announced that the Board of Directors (“Board”) of the Company had proposed the acquisition of the entire business undertakings of Naluri including all its assets and liabilities and all the holdings in all its subsidiaries and associated companies for a total purchase consideration of approximately RM435.432 million (or equivalent to RM0.75 per ordinary share of RM1.00 each in Naluri) to be satisfied entirely by cash (“Proposed Acquisition”).

The Proposed Acquisition was approved by the shareholders at the Extraordinary General Meeting (“EGM”) on 2 March 2007 and the Ministry of International Trade and Industry (“MITI”) on 28 March 2007. On 3 July 2008, Maybank-IB, on behalf of the Board of the Company, announced that the completion of the Proposed Acquisition had taken place on the said date.

Upon the completion of the Acquisition, Naluri had proceeded, on 3 March 2010, to file a Petition to the High Court to confirm the Proposed Capital Repayment in order to give effect to the Special Resolution of Naluri passed at the EGM held on 8 March 2007, pursuant to Section 64 of the Companies Act 1965 (“Petition”). An application for dispensation of inquiry as to creditors had also been filed on 8 March 2010 (“Application”). The Court had on 19 March 2010 granted order in terms of the Application.

The Court has now fixed the petition for Proposed Capital Repayment for case management on 16 June 2011.

On 18 August 2010, Maybank-IB, on behalf of the Board of the Company announced that Securities Commission (“SC”) had vide its letter dated 17 August 2010, approved the extension of time of one year from 3 August 2010 to 2 August 2011 for Naluri to complete the Proposed Capital Repayment.

(b) On 16 October 2009, Affin Investment Bank Berhad (“Affin Investment”) announced that the Company had entered into a conditional Share Sale Agreement with DFZ to dispose all its shares in Tenggara Senandung Sdn. Bhd. for a cash consideration of RM22,000,000 and all its shares in Binamold Sdn. Bhd. (“BMSB”) for a cash consideration of RM2,800,763 and assumption by DFZ of inter-company debt due and owing by BMSB to the Company amounting to RM5,199,237 as at 31 August 2009. The disposals were fully completed on 7 April 2010.

(c) On 16 October 2009, Affin Investment announced that the Company had entered into a conditional Share Sale Agreement with Orchard Boulevard Sdn. Bhd., a wholly owned subsidiary of DFZ, to acquire of all the shares in Radiant Ranch Sdn. Bhd. (“RRSB”) for a cash consideration of RM14,932,656 and assumption by the Company of inter-company debt due and owing by RRSB to DFZ and/or its group of companies amounting to RM12,067,344 as at 31 August 2009. The acquisition was fully completed on 7 April 2010.

(d) On 28 June 2010, Affin Investment, on behalf of the Board of the Company, announced that the Company had entered into two conditional sale and purchase agreements (“SPAs”) with Esmart Holdings Limited (“Esmart”) for the following:

(i) proposed acquisition by Esmart of 156,861,702 ordinary shares of RM1.00 each in DFZ (“DFZ Shares”) or 74.71% equity interest representing the Company’s entire equity interest therein for a disposal consideration of RM470,585,106 or equivalently RM3.00 per DFZ Share to be satisfied by the issuance of 12,702,123,773 new ordinary shares in Esmart (“Esmart Shares”) at the issue price of SGD0.015765 per Esmart Share and 1,270,212,377 free warrants on the basis of one free warrant for every 10 Esmart Shares (“Proposed Injection of DFZ”); and

(ii) proposed acquisition by Esmart of 1,000,002 ordinary shares of RM1.00 each in DMSB (“Darul Metro Shares”) representing the Company’s entire equity interest therein for a disposal consideration of RM200,000,000 or equivalently RM200.00 per Darul Metro Share to be satisfied by the issuance of 5,398,438,502 new Esmart Shares at the issue price of SGD0.015765 per Esmart Share and 539,843,850 free warrants on the basis of one free warrant for every 10 Esmart Shares (“Proposed Injection of Darul Metro”).

134




48. SIGNIFICANT AND SUBSEqUENT EVENTS (continued)

(d) (continued)

The aggregate consideration of RM670,585,106 which is equivalent to SGD285,355,364 at the agreed exchange rate of RM2.35 to SGD1.00.

The Proposed Injection of DFZ and Proposed Injection of Darul Metro form the basis for the Proposal as the Proposed Injection of DFZ and Proposed Injection of Darul Metro will result in a reverse take-over of Esmart by the Company which will ultimately control DFZ and DMSB via Esmart.

On 1 October 2010, Affin Investment, on behalf of the Board of the Company, announced that Bank Negara Malaysia had, vide its letter dated 23 September 2010, approved for the Company to undertake an investment overseas involving the subscription of Consideration Shares and Consideration Warrants to be issued by Esmart pursuant to the Proposal subject to the Company obtaining the approvals and complying with the conditions imposed by the relevant authorities in Malaysia.

On 15 December 2010, the Company announced that the shareholders of the Company had at the EGM approved the ordinary resolution for the Proposed Injections and Proposed Offer.

On 28 December 2010, Affin Investment, on behalf of the Board of the Company, announced that the two conditional SPAs dated 28 June 2010 entered between the Company and Esmart pursuant to the Reverse Take Over had became unconditional on the said date.

Further, pursuant to the requirements of Part III of the Malaysian Code on Take-Overs and Mergers, 2010 (“Code”), Esmart has an obligation to undertake an unconditional take-over offer (“Offer”) to acquire all the remaining 53,102,127 DFZ Shares that are not already held by Esmart and its parties acting in concert (“PACs”) (“Offer Shares”) representing approximately 25.29% of the issued and paid-up share capital of DFZ. Accordingly, the Company, being a person having an interest in the Offer pursuant to the SPAs, became the ultimate offeror for purposes of the Offer.

In relation to the Offer, on 28 December 2010, Esmart has, through Affin Investment, served a Notice of Mandatory Take-over Offer dated 28 December 2010 (“Notice”) notifying the Board of Directors of DFZ of Esmart’s obligation to extend a mandatory take-over offer for all the remaining ordinary shares of RM1.00 each in DFZ not already owned by Esmart.

On 7 January 2011, Affin Investment announced that the two conditional SPAs entered into between the Company and Esmart on 28 June 2010 pursuant to the Reverse Take Over have been completed (“Completion”). Accordingly, upon Completion, DFZ became a 74.71%-owned subsidiary company of Esmart and DMSB became a wholly-owned subsidiary company of Esmart. The Company, in turn, became the controlling shareholder of Esmart.

The Offer Document in respect of the Offer were despatched to the shareholders of DFZ on 18 January 2011. The first Closing Date for the Offer was on 8 February 2011. On 2 February 2011, Affin Investment announced that the Closing Date for the Offer has been extended to 1 March 2011. Affin Investment also announced that based on the level of acceptances as at 31 January 2011, Esmart held 91.20% of the issued and paid-up share capital of DFZ.

In accordance with the terms of the SPAs and in conjunction with the Completion, Esmart had on 1 February 2011 entered into a sale and purchase agreement with Lee Keow Chin, the former Chief Executive Officer and a former Director of Esmart, for the disposal of all the equity interests held by Esmart in the six Esmart subsidiaries at a consideration of SGD1.00 for each subsidiary, amounting to SGD6.00 in total, for the purpose of the disposal of Esmart’s former electronics business as disclosed in the Circular.

135





(d) (continued)

On 8 February 2011, Affin Investment announced that the Offer has been validly accepted by the holders of not less than nine-tenths in the nominal value of the Offer Shares. Affin Investment also announced that based on the level of acceptances as at 8 February 2011, Esmart held 97.58% of the issued and paid-up share capital of DFZ. As set out in Section 4 of the Offer Document dated 18 January 2011 which sets out the details, terms and conditions of the Offer, Esmart invoked the provisions of Section 222 of the Capital Markets & Services Act, 2007 (“CMSA”) to compulsorily acquire any remaining Offer Shares for which acceptances have not been received if Esmart receives valid acceptances of not less than nine-tenths (9/10) in the nominal value of the Offer Shares.

On 2 March 2011, Affin Investment announced that the Offer has closed on 1 March 2011. Based on the level of acceptances as at 1 March 2011, Esmart held 99.49% of the issued and paid-up share capital of DFZ which amounts to 208,908,845 DFZ Shares.

On 15 March 2011, Affin Investment announced that Bursa Malaysia Securities Berhad (“Bursa Securities”) has vide their letter dated 14 March 2011, informed that pursuant to Paragraph 16.07 (a) of the Main Market Listing Requirements of Bursa Securities, the entire issued and paid-up share capital of DFZ will be removed from the Official List of Bursa Securities with effect from 9.00 a.m. (Malaysian Time) on Thursday, 17 March 2011.

On 1 April 2011, Affin Investment announced that pursuant to the Compulsory Acquisition, the transfer of the remaining DFZ Shares from the dissenting shareholders to Esmart has been effected on the said date and the payment for the remaining DFZ Shares not already held by Esmart and its parties acting in concert has been dispatched. DFZ became a wholly-owned subsidiary of Esmart, upon the completion of the Compulsory Acquisition.

On 24 May 2011, Esmart changed its name to “Duty Free International Limited”.

(e) On 8 September 2010, the Board of DFZ announced that its wholly-owned subsidiary, Cergasjaya Sdn. Bhd. had entered into a Conditional Sale and Purchase Agreement (“SPA”) to dispose the freehold land measuring approximately 2,324,746 square feet to Commerce Trade International Sdn. Bhd. for a total cash consideration of RM8,601,600, subject to and upon the terms in the SPA. The disposal was completed on 11 January 2011.

(f) On 19 November 2010, BTSB and RRSB, both wholly-owned subsidiaries of the Company, entered into two separate conditional SPAs with URSB for the proposed disposal of the following land for a total cash consideration of RM145 million:

(i) Six pieces of freehold land owned by BTSB for a sale consideration of RM104.4 million, measuring approximately 43.95 acres, located at Mukim 17, North-East District of Pulau Pinang, Pulau Pinang; and

(ii) One piece of freehold land owned by RRSB for a sale consideration of RM40.6 million, measuring approximately 17.08 acres, located at Mukim 17, North-East District of Pulau Pinang, Pulau Pinang.

On 23 November 2010, BTSB and RRSB entered into two separate Novation Agreements with Uptrend Housing Development Sdn. Bhd. (“Uptrend”) to novate the rights and obligations of URSB under BTSB SPA and RRSB SPA, respectively to Uptrend, subject to the terms and conditions contained in the Novation Agreements.

On 16 March 2011, the resolution for the above transactions was tabled at the EGM of the Company and was duly approved by the shareholders of the Company. The above transactions were completed on 30 May 2011.

136





(g) On 17 March 2011, Tegapasti Sdn. Bhd. entered into a conditional SPA to dispose two pieces of freehold land in Batu Ferringhi, Penang to Glass Bay Sdn. Bhd. for a total cash consideration of RM33 million, subject to and upon the terms and conditions in the SPA.

(h) On 23 May 2011, the Company entered into a Conditional Shares Sale Agreement with its 51% owned subsidiary, MHS Land Sdn. Bhd., for the proposed acquisition of the entire issued and paid up share capital in Gardenia Success Sdn. Bhd. (“GSSB”) comprising 10,000,000 ordinary shares of RM1.00 each for a total consideration of RM56 million (“Proposed Acquisition”). Upon completion of the Proposed Acquisition, GSSB shall become a wholly-owned subsidiary of the Company.

137


49. SUPPLEMENTARY INFORMATION

The breakdown of the (accumulated losses)/retained profits of the Group and of the Company as at 28 February 2011 into realised and unrealised profits is presented in accordance with the directive issued by Bursa Malaysia Securities Berhad dated 25 March 2010 and prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.

Group Company 2011 2011 RM'000 RM'000 Total (accumulated losses)/retained earnings - realised (43,708) 454,977 - unrealised (33,439) (4,000) Total share of retained profits from associate - realised – – - unrealised – –

(77,147) 450,977 Add: Consolidation adjustments 65,555 –

Total (accumulated losses)/retained profits as per financial statements (11,592) 450,977

Supplementary Informationfor the financial year ended 28 February 2011

138


Analysis of Shareholdingsas at 13 June 2011

Directors’ Direct and Deemed Interests in the Company and/or its subsidiary companies

According to the Register of Directors’ Shareholdings required to be kept under Section 134 of the Companies Act, 1965, the Directors’ interests in the Company and its subsidiaries are as follows:-

Direct Interest Deemed Interest No. of No. ofName Ordinary Shares # % Ordinary Shares # %

Dato’ Sri Adam Sani Bin Abdullah 1,764,061 0.70 78,520,340(1) 31.16Dato’ Woo Hon Kong 11,036,135 4.38 44,034,813(2) 17.47

Notes:-

(a) Dato’ Sri Adam Sani Bin Abdullah and Dato’ Woo Hon Kong are deemed to have an interest in shares of all the subsidiaries by virtue of their interest in shares held in the Company.

(b) Other than disclosed above, none of the other Directors had any interest in shares in the Company or its subsidiaries.

(c) (1) Deemed interested through Distinct Continent Sdn. Bhd. by virtue of Section 6A of the Companies Act, 1965

(2) Deemed interested through Alpretz Capital Sdn. Bhd. by virtue of Section 6A of the Companies Act, 1965# Excludes 1,649,649 ordinary shares held as treasury shares.

List of Substantial Shareholders as at 13 June 2011(As shown in the Register of Substantial Shareholders)

Direct Interest Deemed InterestName of No. of No. ofSubstantial Shareholders Ordinary Shares # % Ordinary Shares # %

Distinct Continent Sdn. Bhd. 78,520,340 31.16 – –Dato’ Sri Adam Sani Bin Abdullah 1,764,061 0.70 78,520,340(1) 31.16Sebastian Paul Lim Chin Foo – – 78,520,340(1) 31.16Alpretz Capital Sdn. Bhd. 44,034,813 17.47 – –Dato’ Woo Hon Kong 11,036,135 4.38 44,034,813(2) 17.47Cipta Nirwana (M) Sdn. Bhd. 15,726,885 6.24 – –Ong Seng Leng – – 15,726,885(3) 6.24Low Boo Peng – – 15,726,885(3) 6.24Seymour Pacific Limited 22,309,638 8.85 – –Dato’ Choo Yeow Ming – – 22,309,638(4) 8.85Dato’ Ong Kar Beau 17,990,043 7.14 – –

Notes:-

(1) Deemed interested through Distinct Continent Sdn. Bhd. by virtue of Section 6A of the Companies Act, 1965 (2) Deemed interested through Alpretz Capital Sdn. Bhd. by virtue of Section 6A of the Companies Act, 1965(3) Deemed interested through Cipta Nirwana (M) Sdn. Bhd. by virtue of Section 6A of the Companies Act, 1965(4) Deemed interested through Seymour Pacific Limited by virtue of Section 6A of the Companies Act, 1965 # Excludes 1,649,649 ordinary shares held as treasury shares.

139


Analysis of Shareholdings (cont’d)

as at 13 June 2011

Class of Shares : Ordinary Shares of RM1.00 each fully paid

Voting Rights : One (1) vote per RM1.00 share

DISTRIBUTION OF SHAREHOLDINGS AS AT 13 JUNE 2011 No. of % of No. of % of IssuedSize of Shareholdings Shareholders Shareholders Shares Share Capital Less than 100 131 10.08 4,919 0.00100 – 1,000 393 30.23 71,358 0.031,001 – 10,000 505 38.85 1,653,959 0.6610,001 – 100,000 185 14.23 5,247,812 2.08100,001 to less than 5% of issued shares 81 6.23 74,231,042 29.465% and above of issued shares 5 0.38 170,791,719 67.77

TOTAL 1,300 100.00 252,000,809# 100.00

# Excludes 1,649,649 ordinary shares held as treasury shares.

THIRTY (30) LARGEST SHAREHOLDERS AS AT 13 JUNE 2011(Extracted from Register of Depository) No. of Name of Shareholders Shares Held # %

1. ABB Nominee (Tempatan) Sdn. Bhd. 56,337,750 22.35 - Pledged Securities Account for Distinct Continent Sdn. Bhd. (Adam Sani) 2. ABB Nominee (Tempatan) Sdn. Bhd. 22,270,500 8.84 - Pledged Securities Account for Alpretz Capital Sdn. Bhd. 3. A. A. Anthony Nominees (Tempatan) Sdn. Bhd. 15,195,418 6.03 - Pledged Securities Account for Distinct Continent Sdn. Bhd. 4. HSBC Nominees (Asing) Sdn. Bhd. 14,519,638 5.76 - AA Noms SG for Seymour Pacific Limited 5. Al Wakalah Nominees (Tempatan) Sdn. Bhd. 11,639,643 4.62 - Pledged Securities Account for Cipta Nirwana (M) Sdn. Bhd. 6. A. A. Anthony Nominees (Tempatan) Sdn. Bhd. 9,372,488 3.72 - Pledged Securities Account for Alpretz Capital Sdn. Bhd. 7. Cartaban Nominees (Asing) Sdn. Bhd. 8,985,000 3.57 - Exempt an for Credit Agricole (Suisse) SA, Singapore Branch (Trust Account) 8. Al Wakalah Nominees (Tempatan) Sdn. Bhd. 8,563,668 3.40 - Pledged Securities Account for Ong Kar Beau

9. Distinct Continent Sdn. Bhd. 6,987,172 2.77

10. Kenanga Nominees (Tempatan) Sdn. Bhd. 6,391,825 2.53 - Pledged Securities Account for Alpretz Capital Sdn. Bhd.

11. Kenanga Nominees (Tempatan) Sdn. Bhd. 6,000,000 2.38 - Pledged Securities Account for Alpretz Capital Sdn. Bhd.

140


Analysis of Shareholdings (cont’d)

as at 13 June 2011

THIRTY (30) LARGEST SHAREHOLDERS AS AT 13 JUNE 2011 (continued)(Extracted from Register of Depository)

No. of Name of Shareholders Shares Held %

12. Lembaga Tabung Angkatan Tentera 5,373,033 2.13

13. Kenanga Nominees (Tempatan) Sdn. Bhd. 4,961,250 1.97 - Pledged Securities Account for Ong Kar Beau 14. Kenanga Nominees (Tempatan) Sdn. Bhd. 4,087,242 1.62 - Pledged Securities Account for Cipta Nirwana (M) Sdn. Bhd. 15. A.A. Anthony Nominees (Tempatan) Sdn. Bhd. 3,752,032 1.49 - Pledged Securities Account for Atlas Sapphire Sdn. Bhd. 16. Kenanga Nominees (Tempatan) Sdn. Bhd. 3,197,250 1.27 - Pledged Securities Account for Woo Hon Kong 17. Mayban Nominees (Tempatan) Sdn. Bhd. 3,031,875 1.20 - Pledged Securities Account for Ng Ai Loo 18. RHB Nominees (Tempatan) Sdn. Bhd. 2,987,775 1.19 - Pledged Securities Account for Woo Hon Kong 19. Mayban Nominees (Tempatan) Sdn. Bhd. 2,944,305 1.17 - Pledged Securities Account for Siow Yoon Keong 20. Citigroup Nominees (Tempatan) Sdn. Bhd. 2,646,000 1.05 - Pledged Securities Account for Woo Hon Kong (473988) 21. Muhammad Adib Bin Khalid 2,429,312 0.96

22. HLB Nominees (Asing) Sdn. Bhd. 2,414,475 0.96 - Southern Dynamic Consultants Limited (CSD SIN/SDCL) 23. CIMSEC Nominees (Asing) Sdn. Bhd. 2,385,204 0.95 - CIMB Bank for Chew Soo Lin (M78022) 24. EB Nominees (Tempatan) Sendirian Berhad 2,205,000 0.87 - Pledged Securities Account for Ong Kar Beau 25. EB Nominees (Tempatan) Sendirian Berhad 2,205,000 0.87 - Pledged Securities Account for Woo Hon Kong 26. Citigroup Nominees (Tempatan) Sdn. Bhd. 1,764,000 0.70 - Pledged Securities Account for Maung Ng We @ Lim Yong Tong 27. Citigroup Nominees (Tempatan) Sdn. Bhd. 1,428,288 0.57 - UBS AG Singapore for Siow Yoon Keong 28. Eng Kim Thoo @ Ng Kim Thoo 1,352,436 0.54

29. Syed Sirajuddin Putra Jamalullail 1,349,241 0.54

30. HSBC Nominees (Asing) Sdn. Bhd. 1,306,375 0.52 - AA Noms SG for Zheng Ling

141


List of Propertiesfor financial year ended 28 February 2011

Net Book Tenure / Age of Value as at 28 Location Description Existing Use Expiry Date Building Approx Areas February 2011 Years Sq Metre RM’mil

1 Lot No. 1, Section 63, Office building, Registered Leasehold Office 18,701.20 91.16 Town of Kuala Lumpur, hotel apartment office, office (60 years – building

Wilayah Persekutuan building and block for rent expiring 2038) (26), Hotel building under and hotel renewable for a apartment construction apartments for further 30 years (15) letting

2 i) Lot PTB 10707 Integrated Shopping i) Leasehold 13 57,354.07 163.76 ii) Lot PTB 20006, Commercial Duty complex, hotel (99 years – PTB 20380, PTB 20438, Free Complex - facilities, expiring 2092)

PTD 146378 and Duty Free Zone carpark, hotel, ii) Leasehold PTD 148062 custom and (60 years – Town of Johor Bahru immigration expiring 2069) and Mukim Plentong, cum office Johor Bahru, complex, jetty Johor Darul Takzim and restaurant and surface car parks

3 Lot PTB 10710, Vacant land Vacant land Leasehold N/A 28,884.44 15.13 Town of Johor Bahru (99 years – and Mukim Plentong, expiring 2092) Johor Bahru, Johor Darul Takzim

4 Lot 1071, Mukim 11, Double storey Rented out Freehold 16 29,234.00 5.53

Seberang Perai Tengah, private bonded Pulau Pinang warehouse Darul Mutiara

5 Lot PT 482 HS(M) Double storey Staff quarters Leasehold 24 297.00 0.12 19/1981, shophouse (99 years -

Mukim Sungai Laka, expiring 2080) Daerah Kubang Pasu,

Kedah Darul Aman 6 Lot 2224 HS(M) A single storey Duty Free Leasehold 23 20,234.00 3.65

1/1987, PT 1443, warehouse shopping (30 years - Bukit Kayu Hitam, annexed to a complex and expiring 2017)

Mukim Sungai Laka, double storey warehouse Daerah Kubang Pasu, shopping complex Kedah Darul Aman and 30 units of single storey lock- up shops and ancillary building

7 Lot 127-142 & 169-174, 22 units single Staff quarters Leasehold 18 3,216.00 0.61 PT 1889-1904 & 1931- storey terrace (99 years -

1936, HS(M) 135/1989 - house expiring 2088) 150/1989 & 177/1989- 182/1989, Bandar Baru Laka Temin, Mukim Sungai Laka, Daerah Kubang Pasu, Kedah Darul Aman

142


List of Properties (cont’d)

for financial year ended 28 February 2011


8 Lot 439, Geran 23052, Vacant land Vacant land Freehold N/A 69,125.00 11.51 Mukim 17,

Daerah Timur Laut, Pulau Pinang Darul Mutiara

9 Lot 475, Seksyen 1, Vacant land Vacant land Freehold N/A 2,346.00 0.31

Bandar Batu Ferringhi, Daerah Timur Laut, Pulau Pinang Darul Mutiara 10 Lot 481, Geran 67421, Vacant land Vacant land Freehold N/A 8,974,00 – Mukim 17, Daerah Timur Laut, Pulau Pinang Darul Mutiara

11 Lot 3688, 3689 & Vacant land, part Rented out Leasehold 13 3,127,220.00 37.82 PT 2209, of which is Golf and partly (60 years - expiring Bukit Kayu Hitam, and Country Club vacant 2053 and 2057)

Mukim Sungai Laka, Daerah Kubang Pasu, Kedah Darul Aman

12 Lot 44 Premises 4 & 1/2 storey Business and Leasehold 26 130.00 0.44 No. 42/1/2&3, shophouse office premises (99 years -

Kompleks Munshi expiring 2084) Abdullah, Jalan Munshi Abdullah, 75100 Melaka Darul Azim

13 Lot 970, 971, 973 & Shopping complex Duty Free Leasehold 16 2,548.00 1.57 1556, Complex (30years -

Mukim Kedawang, expiring 2024) Daerah Langkawi, Kedah Darul Aman

14 Lot 4720, Store Store Leasehold 17 1,003.00 Mukim Titi Tinggi, (60 years - 2 Jalan Baru Sadao, expiring 2054) 02100 Padang Besar, Perlis Darul Sunnah 11.8315 Lot 3548, Warehouse Duty Free Leasehold 19 3,545.00 Mukim Titi Tinggi, annexed Complex and (60 years - 2 Jalan Baru Sadao, to a single storey warehouse expiring 2050) 02100 Padang Besar, shopping complex Perlis Darul Sunnah

16 Lot 2063, Shop Shop Freehold 24 223.00 0.21 Mukim Titi Tinggi,

Padang Besar, 30 Bangunan PKENPs, Jalan Besar, 02100 Padang Besar, Perlis Darul Sunnah

143





17 Shop Lot Nos 47 & 48, Shop Shop Leasehold 21 58.00 0.25 Mukim Titi Tinggi, (99 years -

Padang Besar, expiring 2090) 3D & 4D Kompleks Arked Niaga PKENPs, 02100 Padang Besar, Perlis Darul Sunnah

18 PN 108045, Lot 4858, Duty Free Duty Free Leasehold 21 10,116.00 9.13 Mukim Pengkalan Hulu, Complex Complex (60 years - District of Hulu Perak, expiring 2050) Perak Darul Ridzuan

19 Lot No. 4998 & 5017, Industrial premises Factories, office Freehold 7 - 26 24,154.64 9.04 Mukim Kapar, and ancillary District of Klang, buildings Selangor Darul Ehsan

20 PT 1644, Vacant industrial Vacant land Leasehold N/A 57,085.00 0.94 Town of Hulu Bernam, land (99 years – District of Hulu Selangor, expiring 2096) Selangor Darul Ehsan

21 Lot No. 5080, Industrial premises Warehouse and Freehold 14 12,014.09 6.35 Mukim Kapar, office building District of Klang, Selangor Darul Ehsan

22 Lot No PT 54755 & Industrial premises Factory, office Freehold 8 - 33 48,562.22 21.36 PT 54753 , and

Mukim Kapar, warehouse District of Klang, Selangor Darul Ehsan

23 Lot no PT 6731, Industrial premises Rented out Leasehold 4 43,541.33 2.60 Kawasan Perindustrian (60 years)

Berat Gurun, Mukim Gurun, District of Kuala Muda, Kedah Darul Aman

24 Lot 1204 (HS(M) 492), Vacant land for Vacant land Freehold N/A 188,931.54 16.56 478 (Geran 16796) & development 479 (Geran 16797),

Mukim 17, Daerah Timur Laut, Bandar Batu Ferringhi, Pulau Pinang Darul Mutiara

25 Lot 553 (Geran 41313), Vacant land for Vacant land Freehold N/A 2,784.24 0.02 (held under Geran development

Mukim 114), Mukim 17, Daerah Timur Laut, Pulau Pinang Darul Mutiara

144





26 Lot 752 & 795 HS(D) Double storey Rented out Freehold 10 447.97 0.34 11858, Mukim 17, semi-detached

Bandar Batu Ferringhi, Daerah Timur Laut, Pulau Pinang Darul Mutiara

27 Lot 815 HS(D) 11858, Double storey Rented out Freehold 10 459.03 0.29 Mukim 17, semi-detached

Bandar Batu Ferringhi, Daerah Timur Laut, Pulau Pinang Darul Mutiara

28 Lot 908 & 942, Vacant land Vacant land Freehold N/A 610.00 0.40 (HS(M)141 & HS(M)

175), Mukim 17, Daerah Timur Laut, Bandar Baru Ferringhi, Pulau Pinang Darul Mutiara 29 Lot 303 (Geran 46814) Vacant land for Vacant land Freehold N/A 11,266.63 9.20 & 340 (Geran 46821) development with single Seksyen 1, Mukim 17, storey sales Daerah Timur Laut, office Bandar Batu Ferringhi, Daerah Timur Laut, Pulau Pinang Darul Mutiara 30 Lot PT 5607 & 5608, Vacant land Vacant land Freehold N/A 647,497.00 56.00 Bandar Sri Sendayan, Daerah Seremban, Negeri Sembilan Darul Khusus 31 8 Persiaran Kampung Factory land and Business and Leasehold 14 4,355.00 Jawa, No Hakmilik 6711, building office premises (60 years Lot 9891, Mukim 12, expiring 2054) Daerah Barat Daya, Pulau Pinang Darul Mutiara 4.8032 Pajakan Negeri No 3839, Factory land Business and Leasehold N/A 1,106.00 Lot 11618, Mukim 12, office premises (60 years Daerah Barat Daya, expiring 2058) Pulau Pinang Darul Mutiara

145


Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN THAT the Twenty-Second Annual General Meeting of Atlan Holdings Bhd. will be held at the Meeting Room, Wisma Atlan, 8 Persiaran Kampung Jawa, 11900 Bayan Lepas, Penang on Thursday, 28 July 2011 at 11.30 a.m. for the following purposes:-

AGENDA

AS ORDINARY BUSINESS:

1. To receive the Audited Financial Statements for the financial year ended 28 February 2011 together with the Directors’ and Auditors’ Report thereon.

2. To approve the payment of Directors' fees of RM72,000 for the financial year ended 28 February 2011.

3. To re-elect the following Directors who retire in accordance with Article 78 of the Company’s

Articles of Association and being eligible, have offered themselves for re-election:-

a) Dato’ Sri Adam Sani Bin Abdullah b) Dato’ Shagul Hamid Bin K.R. Williams

4. To re-elect the following Directors who retire in accordance with Article 85 of the Company’s

Articles of Association and being eligible, have offered themselves for re-election:-

a) Ong Bok Siongb) Jeneral (B) Dato’ Sri Abdullah Bin Ahmad @ Dollah Bin Amad

5. To consider and if thought fit, to pass the following resolution pursuant to Section 129(6)

of the Companies Act, 1965 as an ordinary resolution:-

“That En. Mohd Sharif Bin Hj Yusof who is over the age of seventy years and retiring in accordance with Section 129 of the Companies Act, 1965, be and is hereby re-appointed as Director of the Company and to hold office until the conclusion of the next Annual General Meeting of the Company.”

6. To re-appoint Messrs Ernst & Young as Auditors of the Company until the conclusion of the

next Annual General Meeting and to authorise the Directors to fix their remuneration.

AS SPECIAL BUSINESS: 7. To consider and if thought fit, to pass the following resolution as an Ordinary

Resolution:- Ordinary Resolution Authority to issue and allot shares pursuant to Section 132D of the Companies Act,

1965 "THAT, subject to Section 132D of the Companies Act, 1965, the Articles of Association

of the Company and approvals of the relevant governmental or regulatory authorities, the Directors be and are hereby empowered to allot and issue shares in the capital of the Company from time to time upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the issued share capital of the Company for the time being and the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad AND THAT such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.”

8. To transact any other business of which due notice shall have been given in accordance

with the Companies Act, 1965 and the Company’s Articles of Association.

Resolution 1

Resolution 2

Resolution 3Resolution 4

Resolution 5Resolution 6

Resolution 7

Resolution 8

Resolution 9

146


Notice of Annual General Meeting (cont’d)

By Order of the Board,

CHUA SIEW CHUAN (MAICSA 0777689)THUM SOOK FUN (MAICSA 7025619)Company Secretaries

Date: 6 July 2011

Notes:-

1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint more than one (1) proxy to attend and vote in his stead. A proxy may but need not be a member of the Company and a member may appoint any person to be his proxy without limitation and the provisions of Section 149 (1)(a), (b) and (c) of the Companies Act, 1965 shall not apply to the Company.

2. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depository) Act 1991, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

3. Where a member appoints one (1) or more proxies, the appointments shall be invalid unless he or she specifies the proportion of his or her holdings to be represented by each proxy.

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

5. The instrument appointing a proxy must be deposited at the Company's registered office at Level 4, Wisma Atlan, 8 Persiaran Kampung Jawa, 11900 Bayan Lepas, Penang, not less than 48 hours before the time for holding the meeting or any adjournment thereof.

EXPLANATORY NOTE TO SPECIAL BUSINESS

Resolution 9 – Proposed Authority for Issue of Shares

The proposed resolution, if passed, will give the Directors the power to allot and issue shares up to 10% of the issued and paid-up share capital of the Company for the time being for such purposes as the Directors would consider in the best interest of the Company.

As at the date of this Notice, no new shares were issued pursuant to the mandate granted to the Directors at the last Annual General Meeting (“AGM”) held on 26 August 2010 and it will lapse at the conclusion of the Twenty-Second AGM.

The renewal of the above mandate would avoid any delay and cost involved in convening a general meeting to specifically approve such issue of shares. This authority, unless revoked or varied at a general meeting, will expire at the next AGM of the Company. The resolution enables the Directors to take immediate action in the case of a need for corporate exercise or in the event business opportunities arise which involve the issue of new shares, and to avoid delay and cost convening general meeting to approve such issue of shares for the purpose of funding future investment project(s), working capital and/or acquisition(s).

STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING(Pursuant to Paragraph 8.27(2) of the Main Market Listing Requirements of Bursa Securities)

As at date of this notice, there are no individuals who are standing for election as Directors (excluding the above Directors who are standing for re-election) at this forthcoming Annual General Meeting.

I / We, ..........................................................................................................................................................................(full name in block letters)

NRIC No. / Company No. ............................................................................................................................................

of .................................................................................................................................................................................(full address)

being a member of ATLAN HOLDINGS BHD. (173250-W) hereby appoint ..............................................................

of ................................................................................................................................................................................. or failing him, ...............................................................................................................................................................

of .................................................................................................................................................................................

or failing *him/her, the Chairman of the meeting as *my/our proxy to vote for *me/us on *my/our behalf at the Twenty-Second Annual General Meeting of the Company to be held at the Meeting Room, Wisma Atlan, 8 Persiaran Kampung Jawa, 11900 Bayan Lepas, Penang on Thursday, 28 July 2011 at 11.30 a.m. and at any adjournment thereof.

Please indicate your vote by a (X) in the respective box of each resolution. If no specific direction as to voting is given, the proxy will vote or abstain from voting on the resolutions at his/her discretion.

AS ORDINARY BUSINESS : For Against

Resolution 1 To receive the Audited Financial Statements for the financial year ended 28 February 2011 together with the Directors’ and Auditors’ Report thereon.

Resolution 2 To approve the payment of Directors' fees of RM72,000. Resolution 3 To re-elect Dato’ Sri Adam Sani Bin Abdullah as Director of the

Company.

Resolution 4 To re-elect Dato’ Shagul Hamid Bin K.R. Williams @ Abdullah as Director of the Company.

Resolution 5 To re-elect Ong Bok Siong as Director of the Company. Resolution 6 To re-elect Jeneral (B) Dato’ Sri Abdullah Bin Ahmad @ Dollah Bin

Amad as Director of the Company.

Resolution 7 To re-appoint Mohd Sharif Bin Hj Yusof as Director of the Company pursuant to Section 129 of the Companies Act, 1965

Resolution 8 To re-appoint Messrs Ernst & Young as Auditors of the Company. AS SPECIAL BUSINESS :

Resolution 9 To approve the Proposed Authority for Issue of Shares.

* Strike out whichever not applicable

As witness *my/our hand(s) this ............... day of ................................. , 2011.

.......................................................Signature of Shareholder(s)

Notes:-

1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint more than one (1) proxy to attend and vote in his stead. A proxy may but need not be a member of the Company and a member may appoint any person to be his proxy without limitation and the provisions of Section 149 (1)(a), (b) and (c) of the Companies Act, 1965 shall not apply to the Company.

2. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depository) Act 1991, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

3. Where a member appoints one (1) or more proxies, the appointments shall be invalid unless he or she specifies the proportion of his or her holdings to be represented by each proxy.

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

5. The instrument appointing a proxy must be deposited at the Company's registered office at Level 4, Wisma Atlan, 8 Persiaran Kampung Jawa, 11900 Bayan Lepas, Penang, not less than 48 hours before the time for holding the meeting or any adjournment thereof.

6. Any alteration in this form must be initialed.

PROXY FORM

COMMONSEAL

No. of Shares Held

✄

Fold this flap for sealing

Then fold here

1st fold here

THE COMPANY SECRETARIESATLAN HOLDINGS BHD

(Company No.: 173250-W)

Level 4, Wisma Atlan8 Persiaran Kampung Jawa

11900 Bayan LepasPenang, Malaysia

AFFIXPOSTAGE

STAMP

ATLAN HOLDINGS BHD(173250-W )

Correspondence address :16th Floor, Menara Atlan161B, Ja lan Ampang5 0 4 5 0 K u a l a L u m p u r

http ://www.atlan.com.myTel : 6 0 3 2 1 7 9 2 0 0 0Fax : 6 0 3 2 1 7 9 2 3 9 0

ANNUAL REPORTLAPORAN TAHUNAN 2011

ATLAN

HO

LDIN

GS B

HD

| AN

NU

AL R

EP

OR

T | LA

POR

AN

TAH

UN

AN

2011

Documents

ANNUAL REPORT LAPORAN TAHUNAN 2011 A TLAN HOLDINGS