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Contents

Notice of Annual General Meeting

Statement Accompanying the Notice of Annual General Meeting

Corporate Information

Profile of the Board of Directors

Corporate Statement

Audit Committee Report

Statement of Corporate Governance

Statement of Internal Control

Statement on Directors’ Responsibility

Recurrent Related Party Transactions

Directors’ Report

Statement by Directors

Statutory Declaration

Independent Auditors’ Report

Statements of Comprehensive Income

Statements of Financial Position

Statements of Changes in Equity

Statements of Cash Flows

Notes to the Financial Statements

Supplementary Information

- Breakdown of Accumulated Losses Into Realised and Unrealised

List of Properties

Shareholding Statistics

Proxy Form

Contents

� damansara realty berhad • annual report 2010

Notice Of Annual General MeetingNOTICE IS HEREBY GIVEN THAT the 49th Annual General Meeting of Damansara Realty Berhad will be held at Permata 3, Level B2, The Puteri Pacific Johor Bahru, Jalan Abdullah Ibrahim, 80000 Johor Bahru, Johor on Friday, 24 June 2011 at 11.30 am for the following purposes:-

AS ORDINARY BUSINESSES:-

1. To receive and adopt the Report and the Audited Financial Statements for the financial year ended 31 December 2010 and the Reports of the Directors and Auditors thereon;

2. To re-elect the following Directors who retire in accordance with the Company’s Articles of Association:-

(i) Datuk Yahya bin Ya‘acob (Article 81) (ii) Zainah binti Mustafa (Article 81) (iii) Lukman bin Hj. Abu Bakar (Article 81) (iv) Wan Azman bin Ismail (Article 87)

3. To approve the payment of Directors’ fees in respect of the financial year ended 31 December 2010;

4. To re-appoint Messrs Ernst & Young as Auditors of the Company and to authorise the Directors to fix their remuneration;

5. To transact any other business of which due notice shall have been given;

AS SPECIAL BUSINESS:-

6. To consider and if deemed fit, to pass the following Resolution as Ordinary Resolution:

6.1 Proposed Renewal of Shareholders’ Mandate and New Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature (“Proposed Shareholders’ Mandate”)

“THAT, subject to the provisions of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, approval be and is hereby given to the Company and/or its subsidiary companies to renew the existing mandate and to obtain new mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature from the shareholders of the Company for the Company and/or its subsidiary companies to enter into all arrangements and/or transactions involving the interest of Directors, substantial shareholders or persons connected with Directors and/or substantial shareholders of the Company and/or its subsidiary companies (Related Parties) as outlined in Section 2.2 of the Circular to Shareholders dated 2 June 2011 (“the Circular to Shareholders”), which are necessary for the day-to-day operations of the Company and/or its subsidiary companies, and are within the ordinary course of business of the Company and/or its subsidiary companies (“Proposed Shareholders’ Mandate”), subject further to the following:

(a) the transactions are in the ordinary course of business, on arm’s length basis and are on normal commercial terms which are not more favourable to the related parties than those generally available to the public and not to the detriment of the minority shareholders; and

(b) disclosure is made in the Annual Report of the aggregate value of transactions conducted pursuant to the Proposed Shareholders’ Mandate during the financial year including amongst others, the following information:-

(i) the type of Recurrent Transactions; and (ii) the name of the Related Party involved in each Recurrent Transaction entered into and their relationship with the Company;

Resolution 1

Resolution 2Resolution 3Resolution 4Resolution 5

Resolution 6

Resolution 7

Resolution 8


Notice Of Annual General Meeting (cont’d.) AND THAT such approval shall continue to be in force until:-

(a) the conclusion of the next Annual General Meeting of the Company; or

(b) the expiration of the period within which the next Annual General Meeting of the Company subsequent to the date it is required to be held pursuant to Section 143(1) of the Malaysian Companies Act, 1965 (“the Act”) (but shall not extend to such extensions as may be allowed pursuant to Section 143(2) of the Act); or

(c) revoked or varied by ordinary resolution passed by the shareholders of the Company in a general meeting; whichever is earlier.

AND FURTHER THAT the Directors of the Company be authorised to complete and do all such acts and things (including executing all such documents as may be required) as they may consider expedient or necessary or give effect to the Proposed Shareholders’ Mandate.”

By Order of the BoardDAMANSARA REALTY BERHAD

JAMALLUDIN BIN KALAM (LS 0002710)HASLINDA BINTI MD NOR @ MOHD NOAH (LS 0005697)Secretaries

Venue : JOHOR BAHRUDated : 2 JUNE 2011

EXPLANATORY NOTES ON SPECIAL BUSINESS:-

Resolution 8

The Ordinary Resolution proposed, if passed, is to authorise the Company and/or its subsidiary companies to enter into any recurrent transactions of a revenue or trading nature with Related Parties which are necessary for the day-to-day operations of the Group, subject to the transactions being in the ordinary course of business, on arm’s length basis and are based on normal commercial terms that are not more favorable to the related parties than those generally made available to the public.

Please refer to the Circular to Shareholders dated 2 June 2011 for further information.

Notes:-

1. A member entitled to attend and vote at this meeting is entitled to appoint a proxy and vote instead of him. A proxy may but need not be a member of the Company.

2. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing or if the appointer is a corporation/company either under its common seal or under the hand of its attorney duly authorised.

3. If a member appoints two proxies to attend at the same meeting, the instrument of proxy must specify the proportion of his shareholdings to be represented by each proxy.

4. The instrument appointing a proxy must be deposited at the Registered Office of the Company, at Suite 12B, Level 12, Menara Ansar, 65 Jalan Trus, 80000 Johor Bahru, Johor not less than 48 hours before the time appointed for holding the meeting or at any adjournment thereof.


Statement AccompanyingThe Notice Of Annual General MeetingDirectors who are standing for re-election at the 49th Annual General Meeting are as follows:-

(i) Datuk Yahya bin Ya’acob (Article 81) Resolution 2 (ii) Zainah binti Mustafa (Article 81) Resolution 3 (iii) Lukman bin Hj. Abu Bakar (Article 81) Resolution 4 (iv) Wan Azman bin Ismail (Article 87) Resolution 5

The details of the Directors standing for re-election are on pages 6 to 9.


Corporate InformationBoard of Directors

KAMARUZZAMAN BIN ABU KASSIMNon-Independent Non-Executive Chairman(redesignated from Managing Director to Chairman on 12 January 2011)

TAN SRI DATO’ MUHAMMAD ALI HASHIMNon-Independent Non-Executive Chairman(resigned as Chairman and Director on 12 January 2011)

WAN AZMAN BIN ISMAIL(Executive Director)(appointed on 1 February 2011)

YAHAYA BIN HASSAN(Executive Director)(redesignated to Non-Independent Non-Executive Director on 1 February 2011)

ZAINAH BINTI MUSTAFAIndependent Non-Executive Director

DATO’ MANI USILAPPANIndependent Non-Executive Director

DATUK YAHYA BIN YA’ACOBIndependent Non-Executive Director

LUKMAN BIN HJ. ABU BAKARNon-Independent Non-Executive Director

YUSOF BIN RAHMATNon-Independent Non-Executive Director

Audit Committee

ZAINAH BINTI MUSTAFA (Chairman)

DATO’ MANI USILAPPAN

LUKMAN BIN HJ. ABU BAKAR

Company SecretariesJamalludin bin Kalam (LS 0002710) Haslinda binti Md Nor @ Mohd Noah (LS 0005697)

Registered OfficeSuite 12B, Level 12, Menara Ansar 65 Jalan Trus80000 Johor Bahru, JohorTel : 07-2225044Fax : 07-2223044

Share RegistrarPro Corporate Management Services Sdn Bhd(Company No. 349501-M)Suite 12B, Level 12, Menara Ansar 65 Jalan Trus80000 Johor Bahru, JohorTel : 07-2225044Fax : 07-2223044E-mail : [email protected]

Stock Exchange ListingMain Market of Bursa Malaysia Securities Berhad

AuditorsErnst & Young

Principal BankersCIMB Bank BerhadMalayan Banking Berhad


Kamaruzzaman bin Abu Kassim, aged 47, a Malaysian, is a Non-Independent Non-Executive Director and Chairman of Damansara Realty Berhad (“DBhd”). He was appointed to the Board as Director on 11 December 1995 and later as the Executive Director in August 1999. He was later appointed as Deputy Chairman of DBhd on 2 October 2006. On 16 November 2009, he was appointed as the Chief Executive Officer of DBhd and assumed the post until 31 December 2009. He resigned as Deputy Chairman and was appointed as Managing Director of DBhd on 1 January 2010. On 12 January 2011, he was re-designated from the Managing Director of DBhd to the Chairman of DBhd. He is currently the President and Chief Executive Officer of Johor Corporation (“JCorp”), a post which he held since 1 December 2010.

He graduated with a Bachelor of Commerce majoring in Accountancy from the University of Wollongong, New South Wales, Australia in 1987. He embarked his career as an Audit Assistant with Messrs K.E Chen & Associates in May 1988 and later joined Coopers & Lybrand (currently known as Pricewaterhouse Coopers) in Johor Bahru. In December 1992, he left the firm and joined Perbadanan Kemajuan Ekonomi Negeri Johor (currently known as JCorp) as a Deputy Manager, Corporate Finance Department. He left JCorp in 1999 to join DBhd as the Executive Director until August 2006. On 1 August 2006, he was appointed as the Chief Operating Officer of JCorp and was re-designated to Senior Vice President, International Business and Finance of JCorp on 1 January 2009.

He is currently the Chairman and Director of Kulim (Malaysia) Berhad, KPJ Healthcare Berhad, Sindora Berhad and KFC Holdings (Malaysia) Bhd and QSR Brands Bhd, companies in JCorp Group which are listed on the Main Market of Bursa Malaysia Securities Berhad. He is also a Director of Waqaf An-Nur Corporation Berhad, an Islamic endowment institution that spearheads JCorp Group’s CSR programs, including the unique Corporate Waqaf Concept initiated by JCorp. Besides, he is also the Chairman and Director of several other companies within the JCorp Group.

Other than as disclosed, he does not have any family relationship with any director and/or major shareholder of DBhd. He has no personal interest in any business arrangement involving DBhd. He has not been convicted for any offences. He attended three (3) Board of Directors’ Meetings of the Company in the financial year ended 31 December 2010. He does not own any units of ordinary shares of DBhd.

Profile Of The Board Of Directors

Kamaruzzaman bin Abu KassimChairman

Wan Azman bin Ismail, aged 47, a Malaysian, was appointed as the Executive Director of DBhd on 1 February 2011. He graduated with a BA (Hons) in Accounting and Financial Analysis, University of Newcastle upon Tyne, United Kingdom in 1988.

He was attached to the Corporate Finance Division of Perwira Affin Merchant Bank Berhad from September 1990 to March 1996. He was later employed by the Corporate Finance Division of BSN Merchant Bank Berhad from March 1999 to July 1999.

He was attached to JCorp from September 1999 to December 2000 and later joined DBhd in January 2001.

Other than as disclosed, he does not have any family relationship with any director and/or major shareholder of DBhd. He has no personal interest in any business arrangement involving DBhd. He has not been convicted for any offences. He does not own any units of ordinary shares of DBhd.

Wan Azman bin Ismail Executive Director


Profile Of The Board Of Directors (cont’d.)

Yahaya bin Hassan, aged 53, a Malaysian, was appointed as Managing Director and Director of DBhd on 15 October 2006. On 16 November 2009, he was redesignated as Executive Director and held the postuntil 1 February 2011.

He graduated with a Bachelor of Science majoring in Civil Engineering from the University of Nottingham, United Kingdom in 1980. He subsequently furthered his studies and obtained his Master in Engineering Business Management from the University of Warwick, United Kingdom in 2000. He is a member of the Institute of Engineers, Malaysia and is a registered professional engineer with the Board of Engineers since 1984. He is also the Lead Surveyor of Health Quality Association, Malaysia for engineering and environment services since 2001. He is one of the Principal Interviewers for the Professional Examination with the Board of Engineers, Malaysia since 2003 and a specialist panel to Universiti Teknologi Malaysia’s graduate paper from the Faculty of Bio-Medical Engineering. He is a Committee Member of the Surveyors’ Committee of Malaysian Society for Quality in Health (“MSQH”).

He embarked his career as a Civil Engineer with JCorp in 1980 and was later promoted to Manager of the Technical Department in 1985. He was further promoted to Deputy General Manager of TPM Sdn Bhd in 1990, a subsidiary of JCorp, managing all construction and development projects of JCorp. In 1992, he was promoted to General Manager of TPM Sdn Bhd. In 1995, he was appointed as General Manager of TPM Technopark Sdn Bhd, a subsidiary of JCorp. In 1997, he joined KPJ Healthcare Berhad as the Chief Operating Officer until 2002.

In 2003, he was appointed as the Managing Director of Healthcare Technical Services Sdn Bhd (“HTS”), a subsidiary of KPJ Healthcare Berhad (currently a subsidiary of DBhd) and assumes the position todate. HTS specializes in design and planning of hospitals, manages the construction and development of the hospitals in KPJ Healthcare Berhad.

He is also the Chairman and Director of several other companies within the JCorp Group.

Other than as disclosed, he does not have any family relationship with any director and/or major shareholder of DBhd. He has no personal interest in any business arrangement involving DBhd. He has not been convicted for any offences and he attended all three (3) Board of Directors’ Meetings of the Company in the financial year ended 31 December 2010. He does not own any units of ordinary shares of DBhd.

Zainah binti Mustafa, aged 56, a Malaysian, is an Independent Non-Executive Director of DBhd and the Chairman of the Audit Committee. She was appointed to the Board as a Director on 17 April 2003.

She started her carreer as an Assistant Senior Auditor in Perbadanan Nasional Berhad in 1977 after graduating from Institut Teknologi Mara (presently UiTM). She is a fellow of the Association of Chartered Certified Accountants (ACCA) United Kingdom in 1976. She joined JCorp in October 1978 and rose through the ranks to the Group Chief Financial Officer before retiring on 31 October 2002.

She is currently a Director and an Audit Committee Member of KPJ Healthcare Berhad, a company within JCorp Group, listed on the Main Market of Bursa Malaysia Securities Berhad. She also sits on the Board of several other companies within the JCorp Group.

Other than as disclosed, she does not have any family relationship with any director and/or major shareholder of DBhd. She has no personal interest in any business arrangement involving DBhd. She has not been convicted for any offences. She attended all three (3) Board of Directors’ Meetings of the Company in the financial year ended 31 December 2010. She does not own any units of ordinary shares of DBhd.

Yahaya bin HassanDirector

Zainah binti MustafaDirector



Dato’ Mani Usilappan, aged 61, a Malaysian, is an Independent Non-Executive Director of DBhd and was appointed to the Board on 15 November 2006. He is also a member of the Audit Committee of DBhd.

He passed the Final Examination of the Royal Institution of Chartered Surveyors with Distinction in 1976. He obtained Masters in Property Development from Southbank University London in 1992.

He served nine (9) years as Deputy Director General and subsequently retired as Director General of the Valuation and Property Services Department, Ministry of Finance, Government of Malaysia in 2006.

His directorships in other companies include, among others, Sentul Raya Development Sdn Bhd, Admiral Cove Development Sdn Bhd and Admiral Cove Resort Sdn Bhd. He is also an Independent Member Non-Executive Director, an Audit Committee Member and the Chairman of the Risk Management Committee of Keretapi Tanah Melayu Berhad, a public company.

He is also an Independent Member of the Investment Committee of AmanahRaya REIT, an Independent Director of KTMB Sentral Sdn Bhd and the Chairman of KTMB (Car Parking) Sdn Bhd. He is also an Independent and Non-Executive Director of Damansara REIT Managers Sdn Bhd (Al-`Aqar KPJ REIT).

Other than as disclosed, he does not have any family relationship with any director and/or major shareholder of DBhd. He has no personal interest in any business arrangement involving DBhd. He has not been convicted for any offences. He attended all three (3) Board of Directors’ Meetings of the Company in the financial year ended 31 December 2010. He currently owns 31,680 units of ordinary shares of DBhd.

Dato’ Mani UsilappanDirector

Datuk Yahya bin Ya’acob, aged 67, a Malaysian, is an Independent Non-Executive Director of DBhd and was appointed to the Board on 6 August 2002. He graduated with a Bachelor of Arts (Honours) degree and Diploma in Public Administration from University of Malaya in 1967 and 1970 respectively and holds a Master’s Degree in Business Management from the Asian Institute of Management in 1976.

He held the position of Secretary General, Ministry of Works for five (5) years before his retirement in 1999. His other postings include Secretary General of the Ministry of Information (1991-1994), Secretary of Contracts Division (Treasury), Ministry of Finance (1991-1998), Deputy Director of the Implementation & Coordination Unit, Prime Minister’s Department (1986-1988) and Deputy Secretary of the Federal Treasury (Finance Division) (1976-1986).

His directorships in other public companies include, amongst others, as Non-Independent Non-Executive Director of Emas Kiara Industries Berhad, LBI Capital Berhad, UDA Holdings Berhad, IJM Corporation Berhad and Pelaburan Johor Berhad. He is currently the Chairman of Touch ‘n’ Go Sdn Bhd, Zabima Engineering & Construction Sdn Bhd and Selia Ekuiti Sdn Bhd.

Other than as disclosed, he does not have any family relationship with any director and/or major shareholder of DBhd. He has no personal interest in any business arrangement involving DBhd. He has not been convicted for any offences. He attended two (2) out of three (3) Board of Directors’ Meetings of the Company in the financial year ended 31 December 2010. He does not own any units of ordinary shares of DBhd.

Datuk Yahya bin Ya’acobDirector



Lukman bin Hj. Abu Bakar, aged 51, a Malaysian, is a Non-Independent Non-Executive Director of DBhd and also a member of the Audit Committee. He was appointed to the Board as a Director on 2 October 2006. He graduated with a Bachelor of Urban and Regional Planning from the University of Technology Malaysia in 1982 before joining JCorp as a Town Planning Officer in the same year. He also holds a Post Graduate Diploma (Housing, Building and Planning) from the Institute for Housing Studies, Rotterdam, Holland in 1985.

He has held various positions in subsidiary companies within the JCorp Group. He was a Deputy Manager of JCorp in 1989. He was then appointed as a Manager in 1992 and Deputy Secretary of Pasir Gudang Local Authority (now known as Pasir Gudang Municipal Council).

He was appointed as the Deputy General Manager of Sindora Berhad on 1 September 1993 and promoted to General Manager in 1995. He became the Secretary of Pasir Gudang Local Authority on 1 April 2004.

On 1 January 2006, he was promoted to Senior General Manager of JCorp cum the Secretary of Pasir Gudang Local Authority and held the posts until 1 July 2008. He was appointed as the President of Pasir Gudang Municipal Council on 1 July 2008 and held the post until 31 August 2009.

He is currently the Chief Executive Officer, Property Division of JCorp and the Managing Director of Johor Land Berhad.

He is also the Chairman of Syarikat Pengangkutan Maju Berhad, Tenaga Utama (Johor) Bhd and a Director of Waqaf An-Nur Corporation Berhad. He also sits as Chairman and Director of various companies within the JCorp Group.


Yusof bin Rahmat, aged 54, a Malaysian, is a Non-Independent Non-Executive Director of DBhd. He was appointed to the Board as a Director on 1 January 2010. He graduated with a Bachelor of Engineering (Honours) in Civil and Structural Engineering from University of Sheffield, United Kingdom in 1980 before joining JCorp in the same year.

He has held various positions in subsidiary companies within the JCorp Group. In January 1997, he was appointed as the Chief Executive of the Project Development Division, JCorp. He is currently the Managing Director of TPM Technopark Sdn Bhd, a wholly-owned subsidiary of JCorp since January 2002.


Yusof bin RahmatDirector

Lukman bin Hj. Abu BakarDirector

Corporate Statement

��damansara realty berhad • annual report 2010

Corporate Statement

The Board Of Directors Is Pleased To PresentThe 49th Annual Report And The

Audited Financial Statements Of Damansara Realty Berhad(“DBhd” Or “The Company”) And Its Subsidiaries

(“DBhd Group” Or “The Group”) For The Financial Year Ended 31 December 2010

Financial Performance

For the year ended 31 December 2010, the Group’s total revenue improved by 132% to RM63.1 million from RM27.2 million in 2009. The Group’s turnover comprises revenue contributed by property development activities of RM55 million (87%), construction activities of RM2.1 million (3.3%) and healthcare services of RM5.9 million (9.3%).

Despite improvement in the total revenue, the Group recorded a loss after tax of RM8.8 million compared to a profit after tax of RM1.2 million in FY2009. The substantial loss was mainly attributed to the RM10.1 million provisions for doubtful debts, liquidated ascertained damages and impairment losses.

During the FY2010, the Group implemented measures with an objective of improving its financial conditions. Throughout the year, the Group managed to reduce approximately RM4.1 million of its liabilities. With a comprehensive strategy, it is envisaged that by mid 2011, DBhd Group will be able to repay entirely its bank borrowings of about RM22.7 million.

Operation Overview

Property Development Division

Property development activities in Taman Damansara Aliff (“TDA”) contributed a total of RM24.6 million in revenue primarily from land sale activities (RM18.8 million in revenue) while progress billing of Aliff Puteri (Sub-Phase 1) in TDA contributed RM5.8 million. The Aliff Puteri houses were completed and handed over to the purchasers in September 2010.

Bandar Damansara Kuantan (“BDK”) development activities have become dormant for the past few years due to softer demand for the Kuantan property market. Nevertheless, during the year under review, BDK recorded a total revenue of RM30.4 million from sales of land and vacant shop office lots.

Construction Division

In FY2010, Construction Division contributed a total of RM2.1 million in revenue from the construction contract for the development of low-cost houses in Sri Gading for Syarikat Perumahan Negara Berhad.

�� damansara realty berhad • annual report 2010

Corporate Statement (cont’d.)Healthcare Division

Healthcare related services contributed a total of RM6 million in revenue to the Group with a bulk of revenue coming from our 70% subsidiary, namely Healthcare Technical Services Sdn Bhd (“HTS”). HTS is primarily involved in providing full services within the hospital development sector from healthcare technical services, hospital and medical planning and design to project management and maintenance.

During FY2010, HTS has successfully managed the completion of the new Tawakkal Specialist Hospital, Jalan Pahang Barat which commenced operations on 28 July 2010. In addition, HTS was appointed as the Maintenance Manager for 17 Al-Aqar KPJ REIT Hospitals. HTS is entrusted to manage the upgrading, refurbishment, renovation of the KPJ REIT Hospitals as well as assist in preparing and planning the annual maintenance program.

Currently, there are 22 projects for KPJ Healthcare Berhad which are still under construction, consisting of the following:

i. development of new hospitals worth RM397.10 million in project value, ii. expansion of existing hospitals worth RM210.15 million in project value, and iii. hospital renovation works with project cost of RM71.63 million.


Corporate Statement (cont’d.)One of the substantial projects under HTS’ portfolio is the development of Sabah Medical Centre worth RM117.5 million. The building consists of 11 levels of a patients’ block, a Physician Consulting Block and a multi-storey car park block. The overall project is expected to be completed by June 2012.

HTS was also appointed as the Construction Manager for the development of Bandar Baru Klang Specialist Hospital. To date, the work has achieved 90% completion.


Corporate Statement (cont’d.)Other Divisions

During FY2010, the Group has won its long due legal case with a third party, which resulted the Group being awarded two levels of office floors at Menara Safuan. The office floors have an estimated market value of RM4.9 million.

Prospects

After the downturn in 2009, the Malaysian economy experienced a strong resumption of growth in 2010 with an expansion of 7.2%. Growth was driven mainly by robust domestic demand, with strong expansion in private sector activities. Meanwhile, the public sector continued to support the domestic economy through the implementation of programmes on the country’s infrastructure and the public sector delivery system. External demand rebounded strongly in the first half of the year, underpinned by strong regional demand and to some extent, the low base effect. However, it subsequently moderated in the second half-year in tandem with the slowdown in global trade and the diminishing base effect.

The 2011 growth is likely to improve during the course of the year with better growth performance in the second half of the year. The growth momentum will be underpinned by strong domestic demand, emanating primarily from private sector activity supported by the implementation of key initiatives announced by the Government under the Economic Transformation Programme (ETP). Based on abovesaid scenario, Bank Negara Malaysia (“BNM”) predicted that Malaysia GDP growth to moderate within potential level of 5% to 6% in 2010. (Source: BNM’s 2010 Annual Report).

The Group recognises that high borrowings have negatively affected the Group’s performance in the past few years. Accordingly, one of the key objectives of the Group is to substantially reduce its borrowings. Over the past five years, total borrowings had fallen from RM49.5 million in 2006 to RM25.7 million in 2010. It is anticipated that by mid 2011, the entire RM22.7 million borrowings of the Group will be fully repaid. In addition, the Group has also implemented an austerity drive programme which had resulted in a reduction of the Group’s annual staff related expenses and administrative costs from RM12.9 million in 2008 to RM9.3 million in 2010.

Accordingly, the Group has successfully implemented its rehabilitation as the Group’s financial conditions have improved considerably. The Group is now embarking on its next phase which is the improvement of the existing businesses as well as the introduction of new business.

With regard to the Group’s healthcare division, the Management foresees that the division will contribute a higher profitability to the Group in 2011. The Group is currently working closely with KPJ Healthcare Berhad in evaluating and planning for new hospital projects. It is envisaged that upon receiving approval from the relevant authorities, HTS shall add a total of 15 hospital projects with a total project value of RM430 million in its project management portfolio.

Acknowledgement

The Board of Directors would like to express their utmost gratitude and appreciation to our shareholders, customers, financiers, business associates and relevant authorities for their continuous support.

Our heartfelt appreciation to the Management team and staff for their unwavering loyalty, commitment, professionalism and valuable dedication to the Group throughout the challenging period during the last few years. It is our hope that they would continue to work as one towards the Group’s success, as we move forward.

We would like to take this opportunity to express our sincere gratitude to Tan Sri Dato’ Muhammad Ali Hashim for his services and contributions as the Chairman of the Group over the years.

The Board would like to congratulate Encik Kamaruzzaman bin Abu Kassim on his appointment as the Chairman on 12 January 2011 and look forward to his guidance to bring the Group to greater heights.

The Board would also like to welcome its latest member, Encik Wan Azman bin Ismail as well as our new Chief Financial Officer, Encik Abdul Hamid bin Abd Rahman on 1 February 2011.

Thank you.

15damansara realty berhad • annual report 2010 15damansara realty berhad • annual report 2010


Audit Committee ReportComposition of MembersThe Audit Committee currently comprises the following three (3) Directors: -

Chairman1. Zainah binti Mustafa - Independent Non-Executive Director

Members2. Dato’ Mani Usilappan - Independent Non-Executive Director 3. Lukman bin Hj. Abu Bakar – Non-Independent Non-Executive Director

MeetingsThe Audit Committee met five (5) times during the year under review. The Directors holding executive positions, the Head of Internal Audit, the Head of Accounts, the Head of Credit Control, representatives of the Company’s External Auditors and members of the Management are normally invited to the meetings.

The attendance of each Committee Member during the financial year ended 31 December 2010 were as follows:-

Zainah binti Mustafa

Dato’ Mani Usilappan

Lukman bin Hj. Abu Bakar

27 Jan 18 May 17 August 15 November

Yes

Yes

O�cialDuty

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

O�cialDuty

1 March(Special)Members

Terms of Reference

ObjectivesThe objectives of the Audit Committee are:

1. To assist the Board in discharging its responsibilities relating to the Group and the Company’s management of principal risks, internal controls, corporate governance, financial reporting and compliance of statutory and legal requirements.

2. To provide, by way of regular meetings, a line of communication between the Board of Directors, Senior Management and External Auditors.

3. To provide emphasis on the internal audit functions by increasing the objectivity and independence of the Internal Auditors and provide a forum for discussion that is independent of the Management.

4. To review the quality of the audits conducted by the Internal and External Auditors of the Company.

AuthoritiesThe Audit Committee is authorised by the Board of Directors:

1. To investigate any matter within its terms of reference.

2. To have full, free and unrestricted access to any information, records, properties and personnel of the Company and any other companies within the Group.

3. To have direct communication channels with the External Auditors and person(s) carrying out the internal audit functions or activities.

4. To obtain independent professional or other advice.

5. To convene meetings with the External Auditors, without the presence of the executive members, whenever deemed necessary.


Audit Committee Report (cont’d.)Duties and Responsibilities 1. To review with the Management and recommend acceptance or otherwise of major accounting policies, principles and practices especially on management accounting, financial reporting, risk management and business practices.

2. To review the Group’s quarterly and year-end financial statements before submission to the Board.

3. To consider the appointment of the External Auditors, the terms of reference of their appointment, the audit fee and any proposal of their resignation as auditors.

4. To review with the External Auditors, the nature and scope of their audit plan and their audit reports.

5. To review the External Auditor’s management letter and discuss any matter that the External Auditors may wish to raise in the absence of Management, where necessary.

6. To review the internal audit charter and the yearly audit plan to ensure that the internal audit functions are adequately resourced to undertake its functions and have appropriate standing in the Group.

7. To review the internal audit functions and the result of the internal audit programmes or investigations undertaken and whether or not Management has taken appropriate actions on the recommendations made by the Internal Auditors.

8. To review any related party transactions and conflict of interest situation that may arise within the Company or Group including any transactions, procedures or courses of conduct that raise questions of Management’s integrity.

9. To review inspection and examination reports issued by any regulatory authority and to ensure prompt and appropriate actions are taken in respect of any findings.

10. To receive reports and deliberate on the implementation of the risk-control process and the progress of risk management activities undertaken by the Group.

11. To perform any other functions as authorised by the Board.

Activities of the Audit CommitteeThe following activities were performed by the Audit Committee during the financial year under review:

1. Reviewed and approved the annual internal audit plan for the year 2010.

2. Reviewed and deliberated on the audit findings and issues highlighted by the internal audit functions.

3. Reviewed the External Auditors’ management letter.

4. Reviewed and appraised the adequacy and effectiveness of Management’s response and control in resolving the audit issues highlighted by the External Auditors.

5. Reviewed the audit findings and risk analysis on each internal audit assignment and emphasized on follow-up audits to ensure that appropriate corrective actions are taken and internal audit’s recommendations are implemented.

6. Reviewed the quarterly financial results and made recommendations for the Board’s approval prior to submission to the authorities.

7. Reviewed Risk-Control reports prepared and summarized by the respective risk owners and assessed the adequacy and effectiveness of actions taken to mitigate the underlying risks.


Audit Committee Report (cont’d.)Internal Audit FunctionsThe Internal Audit Department ultimately reports to the Audit Committee. It has carried out its internal audit functions for the Group independently with impartiality, proficiency and due professional care.

The core function of an Internal Audit Department is to perform an independent appraisal of the Group’s activities as a service to the Management. The internal audit functions play an important role in helping Management to establish and maintain the best possible internal control environment within the Group. The sound internal control environment would ensure the Group’s compliance with legal and regulatory requirements, safeguarding of assets, adequacy of records, prevention of early detection of frauds, material errors and irregularities and efficiency of operation.

The Internal Audit Department had ensured that: • The internal audit plans and programmes were appropriately developed to commensurate with the Group’s activities and appropriate focus and resources were allocated; • The internal audit plans and programmes were continuously reviewed and where necessary were adjusted accordingly to reflect any significant changes in the Group’s business environment, structure, activities, risk exposures or systems; and • The activities of internal audit are consistent with the long term goals of the Group and are in line with its internal controls, policies and procedures.

The scope of internal audit covers the audits of all of the Group’s operational units, including its subsidiary companies based on the approved 2010’s audit plan. In addition, the internal audit also conducts special audits at the Management’s request. During the year, numerous audit activities, investigations and follow-ups were undertaken throughout the Group.

The audit reports are presented to the Audit Committee for further deliberations. An audit report generally presents the purpose, scope and results of the audit, including findings, conclusions and recommendations. Internal audit findings in 2010 continued to reflect a strong internal control system as potential weaknesses in system and risks under reviewed areas are eliminated or reduced within manageable levels. Internal audit reports provide a formal means of communicating audit results and recommended actions to the Management and Audit Committee. Audit reports provide the basis for the Audit Committee to highlight significant weaknesses and the Management’s proposed remedial measures to the Board. The Internal Auditors’ recommendations are for reducing risks, strengthening internal controls and correcting errors. There were no major unresolved audit issues outstanding at the end of the year.

The cost incurred during the financial year ended 31 December 2010 for the Internal Audit functions for the Group level was approximately RM44,200 including cost of co-sourcing internal audit activities approximately RM24,000.

Statement on Employees’ Share Option Scheme (ESOS)The Company did not offer any Share Option Scheme to its employees in the year under review.


Statement of Corporate GovernanceThe Board of DBhd is pleased to report to the shareholders in particular and other stakeholders in general on the manner the Company has applied the Principles as set out in Part 1 of the Malaysian Code on Corporate Governance (“the Code”) as well as the extent of compliance with the Best Practices as set out in Part 2 of the Code. This disclosure is made pursuant to Paragraph 15.25 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.

Board of Directors

Composition, Size and Board BalanceThe Board is made up of eight (8) members, comprising a Non-Independent Non-Executive Chairman, three (3) Independent Non-Executive Directors and three (3) Non-Independent Non-Executive Directors and an Executive Director. The Executive Director has the principal responsibility of reporting, clarifying and communicating matters to the Board. This is in compliance with Paragraph 15.02 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, that requires at least one-third of the Board to comprise Independent Directors. In the opinion of the Board, the number of members is sufficient and well balanced for the Company to carry out its duties effectively, whilst providing greater assurance that no individual or small group of individuals can dominate the Board’s decision making.

There is a clear distinction of responsibilities between the Chairman and the Executive Director to ensure a balance of power and authority. The Board is led by the Chairman, Kamaruzzaman bin Abu Kassim, while his post of Managing Director is relinquished. Currently, the post of Executive Director is held by Wan Azman bin Ismail. All members of the Board contribute significantly in the areas of formulation of strategic direction and policies, performance monitoring and allocation of resources and enhancement of controls and governance.

The Executive Director has the principal responsibility of reporting, clarifying and communicating matters to the Board. The Board has also appointed Zainah binti Mustafa as the Senior Independent Non-Executive Director, to whom concerns may be conveyed.

The presence of Independent Directors is essential as to provide an unbiased and independent views, advice and judgment to safeguard the interest of stakeholders.

Directorship in Other CompaniesNone of the Directors holds more than 10 directorships in public listed companies and more than 15 in non-listed companies, thus ensuring sufficient commitment and resources from Directors to ensure effective input during Board meetings.

Supply of InformationThe Board has unrestricted access to timely and accurate information on various aspects of the Company’s operations and performance. All Board reports are normally issued in sufficient time to all Directors to enable the Directors to review the reports prior to the Board meeting and understand the issues to be discussed. In addition, the Board has unrestricted access to the advice and services of Company Secretaries and where necessary, in the furtherance of their duties, obtain independent professional advice with the Company paying the related costs.

The BoardThe Board has delegated certain specific responsibilities to two (2) committees which operate within clearly defined terms of references, with the main objective to assist the Board in discharging its duties and responsibilities.

The Board on 21 March 2011 resolved to establish its own Nomination and Remuneration Committee (NRC). With the establishment of the Company’s NRC, the functions and responsibilities of the Company’s NRC previously vested with JCorp Group NRC are now dissolved. The Board is of the view that the composition of the NRC meets the objectives and principles of the corporate governance.

In line with the principles and best practices of Corporate Governance, the Nomination Committee should consist of exclusively of Non-Executive Directors, majority of whom are independent whilst the Remuneration Committee consists of wholly or mainly Non-Executive Directors.

�0 damansara realty berhad • annual report 2010

Statement of Corporate Governance (cont’d.)The terms of reference of the NRC are as follows: -

1. Purpose

The NRC is established primarily to:-

A. Nomination

(i) Identify and recommend candidates for Board directorship;

(ii) Recommend directors to fill the seats on Board Committee;

(iii) Evaluate the effectiveness of the Board and Board Committee (including the size and composition) and contributions of each individual director;

(iv) Ensure an appropriate framework and plan for Board succession.

B. Remuneration

(i) Provide assistance to the Board in determining the remuneration of Executive Directors, Senior Management and Chief Executive Officer. In fulfilling these responsibilities, the NRC is to ensure that Executive Directors and applicable Senior Management of the Company:

• are fairly rewarded for their individual contribution to overall performance;

• are compensated reasonably in light of the Company’s objectives; and

• are compensated similar to other companies.

(ii) Establish the Managing Director’s / Chief Executive Officer’s goals and objectives; and

(iii) Review the Managing Director’s / Chief Executive Officer’s performance against the goals and objectives set.

2. Membership

The NRC shall consist of the following members:-

(i) Kamaruzzaman bin Abu Kassim Chairman

(ii) Zainah binti Mustafa Independent Non-Executive Director

(iii) Dato’ Mani Usilappan Independent Non-Executive Director

The appointment of a NRC member terminates when the member ceases to be a director of the Company.

The NRC shall have no executive powers.

In the event of equality of votes, the Chairperson of the NRC shall have a casting vote. In the absence of the Chairperson of the NRC, the members present shall elect one of them to chair the meeting.


Statement of Corporate Governance (cont’d.)3. Meetings

The NRC shall meet at least once a year. Additional meetings shall be scheduled as considered necessary by the NRC or Chairperson. The NRC may establish procedures from time to time to govern its meeting, keeping of minutes and its administration.

The NRC shall have access to such information and advice, both from within the Group and externally, as it deems necessary or appropriate in accordance with the procedures determined by the Company. The NRC may request other directors, members of management, counsels and consultants as applicable to participate in NRC meetings, as necessary, to carry out the NRC’s responsibilities. Non-NRC directors and members of Management in attendance may be required by the Chairperson to leave the meeting of the NRC when so requested.

The Secretary of the NRC shall be the Company Secretary.

NRC meeting agenda shall be the responsibility of the NRC Chairperson with input from the NRC members. The Chairperson may also request Management to participate in this process. The agenda of each meeting including supporting information shall be circulated at least seven (7) days before each meeting to the NRC members and all those who are required to attend the meeting.

The NRC shall cause the minutes to be duly entered in the books provided for the purpose of all resolutions and proceedings of all meetings of the NRC. Such minutes shall be signed by the Chairperson of the meeting at which the proceedings were held or by the Chairperson of the next succeeding meeting, and if so signed, shall be the conclusive evidence without any further proof of the facts thereon stated.

The NRC, through its Chairperson, shall report to the Board at the next Board of Directors’ meeting after each NRC meeting. When presenting any recommendation to the Board, the NRC shall provide such background and supporting information as may be necessary for the Board to make an informed decision. The NRC shall provide such information to the Board as necessary to assist the Board in making a disclosure in the Annual Report of the Company in accordance with the Best Practices of the Code Part 2 AAIX.

The Chairperson of the NRC shall be available to answer questions about the NRC’s work at the Annual General Meeting of the Company.

4. Scope of Activities

The duties of the NRC shall include the following:

A. Nomination

(i) To determine the criteria for Board membership, including qualities, experience, skills, education and other factors that will best qualify a nominee to serve on the Board;

(ii) To review annually and recommend to the Board with regard to the structure, size, balance and composition of the Board and Committees including the required mix of skills and experience, core competencies which Non-Executive Directors should bring to the Board and other qualities to function effectively and efficiently;

(iii) To consider, evaluate and propose to the Board any new board appointments, whether of executive or non-executive position. In making a recommendation to the Board on the candidate for directorship, the NRC shall have regard to:

• Size, composition, mix of skills, experience, competencies and other qualities of the existing Board, level of commitment, resources and time that the recommended candidate can contribute to the existing Board; and

• Best Practices of the Code Part 2 AAIII which stipulate that Non-Executive Directors should be persons of calibre, credibility and have the necessary skill and experience to bring an independent judgement to bear on issues considered by the Board and that Independent Non-Executive Directors should make up at least one-third of the membership of the Board.


Statement of Corporate Governance (cont’d.) (iv) To propose to the Board the responsibilities of Non-Executive Directors, including membership and Chairpersonship of Board Committees.

(v) To evaluate and recommend the appointment of Senior Executive positions, including that of the Managing Director or Chief Executive and their duties and the continuation (or not) of their service.

(vi) To establish and implement processes for assessing the effectiveness of the Board as a whole, the Committees of the Board and for assessing the contribution of each director.

(vii) To evaluate on an annual basis:

a. The effectiveness of each director’s ability to contribute to the effectiveness of the Board and the relevant Board Committees and to provide the necessary feedback to the directors in respect of their performances;

b. The effectiveness of the Committees of the Board; and

c. The effectiveness of the Board as a whole.

(viii) To recommend to the Board:

a. Whether directors who are retiring by rotation should be put forward for re-election; and

b. Termination of membership of individual director in accordance with policy, for cause of other appropriate reasons.

(ix) To establish appropriate plans for succession at Board level, and if appropriate, at senior management level.

(x) To provide for adequate training and orientation of new directors with respect to the business, structure and management of the Group as well as the expectations of the Board with regard to their contribution to the Board and Company.

(xi) To consider other matters as referred to the NRC by the Board.

B. Remuneration

(i) To establish and recommend the remuneration structure and policy for directors and key executives, if applicable and to review for changes to the policy as necessary.

(ii) To ensure that a strong link is maintained between the level of remuneration and individual performance against agreed targets, the performance-related elements of remuneration setting forming a significant proportion of the total remuneration package of executive directors.

(iii) To review and recommend the entire individual remuneration packages for each of the Executive Director and, as appropriate, other senior executives, including: the terms of employment or contract of employment/service; any benefit, pension or incentive scheme entitlement; any other bonuses, fees and expenses; and any compensation payable on the termination of the service contract.

(iv) To review with the Managing Director/Chief Executive Officer, his/her goals and objectives and to assess his/her performance against these objectives as well as contribution to the corporate strategy.

(v) To review the performance standards for key executives to be used in implementing the Group’s compensation programs where appropriate.

(vi) To consider and approve compensation commitments/severance payments for Executive Directors and key executives, where appropriate, in the event of early termination of the employment/service contract.

(vii) To consider other matters as referred to the NRC by the Board.


Statement of Corporate Governance (cont’d.)The Company has also established a Tender Committee at Board level comprising Independent Non-Executive, Non-Independent Non-Executive and Executive Directors. The functions of the said Tender Committee are to evaluate, deliberate and approve the recommendations made by the Management prior to awarding of major contracts and tenders to the potential contractors.

The Company has also established an Audit Committee comprising both Independent Non-Executive Directors and the Non-Independent Non-Executive Directors. The functions of the said Audit Committee are to ensure compliance with Paragraph 15, Part C of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the independence of the External Auditors, the integrity of Management and the adequacy of disclosures to Shareholders. The Audit Committee acts to assist the Board of Directors in fulfilling its fiduciary responsibilities by ensuring that the results of internal and external audit findings are fully considered and properly resolved.

Board Responsibilities As prescribed by the Malaysian Code of Corporate Governance, the Board assumes six (6) principals stewardship responsibilities:

1. Reviewing, monitoring and where appropriate, approving fundamental financial and business strategies and major corporate actions. 2. Overseeing the conduct of the Company’s business to evaluate whether the business is properly managed. 3. Establishing the Group’s Enterprise-Wide Risk Management (EWRM) framework. 4. Formulating a succession plan for the Executive Director and Senior Executives. 5. Establishing an investor relations programme. 6. Ensuring processes are in place for maintaining the integrity of the Company, integrity of the financial statements, compliance with law and ethics, relationships with customers and suppliers, and relationship with stakeholders.

At the same time, the Board also ensures the sustenance of a dynamic and robust corporate climate focused on strong ethical values. This emphasizes active participations and dialogues on a structured basis involving key personnel at all levels, as well as ensuring accessibility to information and transparency on all executive actions. The corporate climate is also continuously nourished by value-centered programmes for team-building and active subscription to core values.

Tender Board CommitteeThe members of the Tender Board Committee are as follows:

ChairmanZainah binti Mustafa (Independent Non-Executive Director)

MembersLukman bin Hj. Abu Bakar (Non-Independent Non-Executive Director)Wan Azman bin Ismail (Executive Director - appointed on 1 February 2011) Yahaya bin Hassan (Non-Independent Non-Executive Director - resigned on 1 February 2011) Yusof bin Rahmat (Non-Independent Non-Executive Director - appointed on 1 January 2010)

Board MeetingFor the financial year ended 31 December 2010, there were three (3) meetings held as and when required. Certain schedule of matters such as acquisition and disposal of assets of the Company or subsidiaries that are material, investment in capital projects and level of authority are specifically reserved to the Board for decision.


Statement of Corporate Governance (cont’d.)A total of three (3) Board of Directors’ Meetings were held during the financial year ended 31 December 2010. Details of attendance of Directors at the Board Meetings are as follows:

Tan Sri Dato’ Muhammad Ali Hashim (resigned)

Kamaruzzaman bin Abu Kassim (1)

Zainah binti Mustafa

Yahaya bin Hassan (2)

Datuk Yahya bin Ya'acob

Lukman bin Hj. Abu Bakar

Dato’ Mani Usilappan

Yusof bin Rahmat

Wan Azman bin Ismail (appointed) (3)

Non-Executive Independent Attendance

12 January 2011

-

-

-

-

-

-

-

1 February 2011

No

No

Yes

No

Yes

No

Yes

No

-

3/3 (100%)

3/3 (100%)

3/3 (100%)

3/3 (100%)

2/3 (67%)

3/3 (100%)

3/3 (100%)

3/3 (100%)

See Note 3

Yes

Yes

Yes

No

Yes

Yes

Yes

Yes

-

New Appointment /ResignationDirectors

Note:

1. Redesignation of Kamaruzzaman bin Abu Kassim from Managing Director to the Chairman of the Company with effect from 12 January 2011.

2. Redesignation of Yahaya bin Hassan from Executive Director to Director of the Company with effect from 1 February 2011.

3. Wan Azman bin Ismail was appointed as Executive Director of the Company with effect from 1 February 2011 and he attended the meetings during the financial year ended 31 December 2010 representing the Management of the Company.

Appointment and Re-election of DirectorsBefore the establishment of the Company’s own NRC, the Board delegated to the JCorp Group NRC the responsibility in proposing respective new nominees for the Board and assessing the Directors on an on going basis. The actual decision as to who shall be nominated should be the responsibility of the full Board after considering the recommendations of JCorp Group NRC.

Paragraph 7.26 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad requires all Directors to submit for re-election once at least in each three (3) years. In accordance with the Company’s Articles of Association, at least one third of the remaining Directors are required to submit themselves for re-election by rotation at each Annual General Meeting (AGM). The retiring Directors who are standing for re-election at the forthcoming AGM are as follows:

Re-election in accordance with Article 81 of the Company‘s Articles of Association:

• Datuk Yahya bin Ya’acob • Zainah binti Mustafa • Lukman bin Hj. Abu Bakar

Re-election in accordance with Article 87 of the Company’s Articles of Association:

• Wan Azman bin Ismail


Statement of Corporate Governance (cont’d.)Directors’ TrainingIn compliance with the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, all members of the Board have completed the Mandatory Accreditation Programme (MAP) conducted by Bursatra Training Sdn Bhd.

The Board encourages its Directors to attend talks, seminars, workshops and conferences to update and enhance their skills and knowledge to enable them to carry out their roles effectively as Directors in discharging their responsibilities towards corporate governance, operational and regulatory issues. The Board took note of the amendments to the Listing Requirements, which stated that the Board of Directors of listed companies will assume the onus of determining or overseeing the training needs of their directors.

Directors’ RemunerationFor the financial year ended 31 December 2010, the JCorp Group NRC was responsible for making recommendations on the framework, policy and procedures in reviewing and determining the specific remuneration package of the Directors in DBhd.

The Company’s remuneration scheme for the Executive Director commensurates with performance, seniority, experience and scope of responsibility and is benchmarked to market/industry standards. For Non-Executive Directors, the level of remuneration reflects the level of responsibilities undertaken by them.

All Directors except for the Executive Director are paid meeting allowances for each Board and Committee meeting they attended. Directors’ fees are subject to approval by the shareholders.

Details of the remuneration paid/payable to each Director for the financial year ended 31 December 2010 are as below:-

Non-Executive DirectorsTan Sri Dato’ Muhammad Ali HashimLukman bin Hj. Abu BakarYusof bin Rahmat

Independent DirectorsDatuk Yahya bin Ya’acobZainah binti MustafaDato’ Mani Usilappan

Executive DirectorsKamaruzzaman bin Abu KassimYahaya bin Hassan

---

---

-270,960

BasicSalary(RM)

36,00030,00030,000

30,00030,00030,000

36,0005,000

Directors’Fees(RM)

1,5001,9501,200

8002,7002,450

1,200-

MeetingAllowance

(RM)

---

---

40,00030,000

Allowance(RM)

---

---

-69,500

Bonuses(RM)

---

---

39,50012,000

Bene�tsIn-kind

(RM)

---

---

-132,120

37,50031,95031,200

30,80032,70032,450

116,700519,580

GratuityPayment

(RM)Total(RM)

Directors

Investor Relations and Communication with ShareholdersThe Group recognizes the importance of establishing a direct line of communication with shareholders, investors and other stakeholders through timely dissemination of relevant information. Dissemination of information includes the distribution of annual reports and relevant circulars to shareholders, issuance of press releases, announcing the quarterly financial results and performance of the Group to Bursa Malaysia Securities Berhad and the public as well as holding press conferences.

A website: http://www.dbhd.com.my is maintained to create greater awareness of the Group activities, performances and other relevant information among the stakeholders and general public.

Corporate Social ResponsibilityThe Group’s Corporate Social Responsibility (CSR) Policy is ultimately to ensure the accountability of the Group to all of its stakeholders in all its operations and activities. The aim would be to achieve sustainable development not only in economic parameters but also in social and environmental parameters.


Statement of Corporate Governance (cont’d.)CommunityThe Group believes in a strong sense of community responsibility and has accordingly contributed by means of donations to NGOs and victims of natural disaster.

Health & SafetyThe Group is committed to the best practices of health and safety as an integral part of its business activities. The Group complies with all relevant health and safety legislation and statutory provisions. During 2010, there were no work related fatalities suffered by the Group.

EnvironmentThe Group is committed to ensure that its activities will not have a significant negative impact on the environment. It will also support the international commitment towards sustainable development.

EmployeesThe Group recognizes the need for a comprehensive training regime for its employees. Accordingly, the Group has spent RM 84,148 on training in 2010.

Annual General Meeting (AGM)The AGM is the principal forum for dialogue with shareholders. Notice of the AGM and Annual Reports are sent out at least 21 days before the date of the meeting. The Chairman and the Board encourage shareholders to attend and participate in the AGM held annually. The shareholders are given the opportunity to seek clarification by making use of the Question and Answer session during the AGM on any matters pertaining to the business and financial performance of the Company.

Accountability and Audit

Financial ReportingPursuant to Paragraph 15.26(a) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, all the Company Directors are collectively responsible in ensuring that the financial statements and the quarterly results are drawn up in accordance with the approved accounting standards adopted by the Financial Reporting Standard (FRS), the provisions of the Companies Act, 1965, and the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.

It is the responsibility of the Directors to ensure that the financial reporting of the Group present a true and fair view of the state of affairs of the Company and its subsidiary companies as of the end of the financial year together with the financial results and cash flows for the year ended.

The Directors have applied the appropriate and relevant accounting policies on a consistent basis and made judgments and estimates that are reasonable and fair in preparing the financial statements of the Company and of the subsidiaries. The financial statements are also prepared on the going concern basis and the Directors have assured that proper accounting records are kept so as to enable the preparation of the financial statements with reasonable accuracy.

Internal ControlThe Board acknowledges its full responsibility to ensure a sound system of internal control covering the financial, operational and compliance aspects of the business. The Statement of Internal Control that provides an overview of the state of internal control is set on page 28 to 30.

Relationship with AuditorsThe Board, via Audit Committee, maintained a formal and transparent professional relationship with the External Auditors, Ernst & Young, in seeking professional advice and ensuring compliance with the applicable accounting standards and statutory requirements.

Other Information

Material Contracts Involving Directors and Substantial ShareholdersExcept as otherwise disclosed in the report, there were no material contracts involving Directors and substantial shareholders entered by the Company for the financial year ended 31 December 2010.


Sanctions and/or Penalties ImposedThere were no substantial sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or Management by the relevant regulatory bodies.

Utilisation of ProceedsThere were no proceeds raised by the Company from any corporate proposals during the financial year ended 31 December 2010.

Share BuybackThe Company has not been authorized by shareholders to purchase its own shares and has not purchased any of its own shares during the financial year ended 31 December 2010. As such, there are no shares being retained as treasury shares by the Company.

Options, Warrants or Convertible SecuritiesDuring the financial year ended 31 December 2010, the Company has not issued any options to any parties to take up unissued shares in the Company. The Company has not issued any warrants or convertibles to any parties during the financial year ended 31 December 2010.

American Depository Receipt (ADR) and Global Depository Receipt (GDR) ProgrammeDuring the financial year ended 31 December 2010, the Company did not sponsor any ADR or GDR programme.

Non-Audit FeesNon-audit fees totaling RM83,963 were paid to the External Auditors during the financial year ended 31 December 2010, for the provision of corporate tax advisory and planning.

Profit ForecastNo profit forecast was issued by the Company during the financial year ended 31 December 2010.

Profit GuaranteesThere were no profit guarantees given by the Company during the financial year ended 31 December 2010.

Variation in ResultsThere was no material variation between the audited results for the financial year ended 31 December 2010 and the unaudited results previously released by the Company.

Compliance to the CodeThe Board is of the opinion that DBhd Group had complied with the principles and best practices of Corporate Governance throughout the financial year ended 31 December 2010.

Signed on behalf of the Board of Directors in accordance with the resolution dated 1 March 2011.

Statement of Corporate Governance (cont’d.)

Wan Azman bin IsmailExecutive Director



Statement on Internal ControlIntroductionParagraph 15.26(b) of Main Market Listing Requirements of Bursa Malaysia Securities Berhad requires Directors of listed companies to include a statement in the annual report on the state of the Group’s internal control. The Malaysian Code on Corporate Governance amongst others requires the Board to identify the Group’s critical business risks and implement a system to manage these risks as well as to review the adequacy and the integrity of the Group’s internal control system to safeguard shareholder’s investment and the Group’s assets. Set out below is the Board’s Internal Control Statement, which has been prepared in accordance with the Guidance.

Directors’ ResponsibilityThe Board acknowledges its responsibility in instituting a system of internal controls that covers all aspects of the business including strategic, commercial, operational and financial areas. It recognizes that reviewing the Group’s system of internal control is a concerted and continuing process, designed to manage rather than eliminate the risk of failure to achieve business objectives. Accordingly, the system effected by the Company’s Board and Management, can only provide reasonable but not absolute assurance with regard to the achievement of the Group’s objectives.

Risk Management FrameworkThe Board believes that internal control is a process, effected by the Company’s Directors, Management and other personnel, designed to provide reasonable assurance regarding the achievement of the following objectives:-

• Effectiveness and efficiency of operations; • Reliability of financial reporting; • Compliance with applicable laws and regulations; and • Safeguarding of the Group’s assets.

The purpose of the internal control system is to control and manage risks. In order to properly manage risks, the Board recognizes the fact that an appropriate and sound system of internal control should be in place. The Board has adopted the Committee of Sponsoring Organisations of the Treadway Commission’s (COSO) Internal Control – Intergrated Framework which comprises the following five (5) fundamental components that include Control Environment, Risk Assessment, Control Activity, Information and Communication and Monitoring:

1. Control Environment The Board and the management set the tone of the organization and influence the control consciousness within all levels of employee. The Group is committed in ensuring that adequate control environment is maintained. Among the measures taken are as follows:-

o The Group has formulated the Risk Management Policy to guide the personnel in identifying, assessing, managing and reporting the risks; o The Group had also established and distributed to all level of personnel the Internal Policy and Procedures on Property Development, Project Management, Tendering as well as Construction Management. The said policies and procedures, amongst others, define the authority, responsibility and accountability of the relevant personnel within the Group business functions. Changes in strategic plans, objectives and goals are immediately disseminated and communicated to the employees;

o In line with the existence of Human Resource Policies and Procedures in place, the Group had also adopted and practised the Ethical Code of Conduct which further provides guidance to all employees in their day-to-day conduct of the business transactions. Added to that, all employees are requested to make a formal disclosure as to whether they are engaged in that activities that may have any conflict with the Company’s interests.


Statement on Internal Control (cont’d.) 2. Risk Assessment The Board is aware that every organization faces a variety of risks from external and internal sources that must be assessed. A precondition to risk assessment is the establishment of objectives, linked at different levels and internally consistent. Risk assessment is the identification and analysis of relevant risks affecting the achievement of the objectives, forming a basis for determining how the risks should be managed.

In order to ensure that the Board is satisfied that the key business risks have been identified and are being addressed, a structured Risk-Control process has been established.

Risk issued is updated and reviewed by Management and Internal Auditor. All risk-control reports from the respective risk owners / operating units are compiled and assessed quarterly. Results are presented to the Audit Committee for notification and endorsement from time to time.

3. Control Activities Control activities help to ensure that necessary actions are taken to address risks that may hinder the achievement of the organization’s objectives. Control activities occur throughout the organization, at all levels and in all functions. Internal controls are enforced through policy manuals, jobs description and functions, operating procedures, delegation, authorisation, etc. Appropriate control activities had been designed and put in place on all aspects of business operating functions.

Among the key control activities currently undertaken by the Group are:-

• Regular review of comprehensive information/reports provided by the Management to the Board covering financial and operational performance and key business indicators;

• Regular Management meetings to obtain feedbacks on the progress of activities undertaken by the operating/business units in order to rectify any shortcomings or problems affecting implementation plan;

• Visits to operating/business units by members of the Board and senior management;

• Regular internal audit visits to the Sales Offices to review and appraise the systems of internal controls in place to ensure that these controls are effective and working as intended;

• Regular reconciliations, for example inter-company balances’ and banks’ reconciliations, to ensure that all transactions are accounted for;

• Efforts to safeguard the Company’s assets through adequate insurance coverage over the Group’s major assets against fire peril;

• Segregation of duties and physical security of assets e.g. limit access to assets, systems and records; establish clear control of assets and custodial responsibility; and

• Risk-Control reports together with action plans prepared by the risk owners and submitted to the Risk Management Coordinator for monitoring purposes. The Risk Management Coordinator shall ensure that all action plans are being implemented.


Statement on Internal Control (cont’d.) 4. Information and Communication Process The Group has a well defined clear line of communication within the Group’s organisational structure. The structure ensures the Board receives timely, relevant and reliable reports on business activities progress and related information for decision-making.

Periodic reports are compiled containing operational, financial, compliance-related information and information on external events and activities for business decision-making and external reporting.

The Group has effective communication channels, through reports, briefing, meetings, discussions, internal memorandum and website, to communicate and diseminate relevant and important information on a timely basis. 5. Continuous Monitoring Process on the Adequacy and Integrity of the System of Internal Control The Board recognizes the fact that internal control systems need to be continuously monitored, a process that assesses the quality of the system’s performance over time. This is accomplished through ongoing monitoring activities, separate evaluations or a combination of both. Ongoing monitoring occurs in the course of operations through regular internal audit reviews on internal control system and management and supervisory activities of the business functions.

The Management provides regular and comprehensive information/reports to the Board covering financial performance and key business indicators. The Group’s Internal Audit Division has been in existence and is independent of the activities it audits.

The Head of Internal Audit reports functionally to the Audit Committee and administratively to the Executive Director. The internal audit function performs regular reviews of business processes to assess the effectiveness of the internal controls.

The internal audit function also conducts its audit visit to key business units of the Group on a planned basis and issues audit report on its findings and recommendations for the review of the Audit Committee.

The Audit Committee conducts a review on the results of the internal audit programme or investigation undertaken and determines whether or not Management has taken the appropriate actions on the recommendations made by the internal auditors.

Signed on behalf of the Board of Directors in accordance with their resolution dated 1 March 2011.

Zainah binti MustafaDirector



Statement on Directors’ ResponsibilityPursuant to Paragraph 15.26(a) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad

The Directors consider that, in preparing the financial statements of the Group and of the Company for the financial year ended 31 December 2010, the Group and the Company have used appropriate accounting policies, consistently applied and supported by reasonable and prudent of judgments and estimates. The Directors also consider that all applicable approved accounting standards in Malaysia have been followed and confirm that the financial statements have been prepared on a going process basis.

The Directors are responsible for ensuring that the Company and its subsidiaries keep accounting records which disclose with reasonable accuracy at any time the financial position of the Group and the Company 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 such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

Signed on behalf of the Board of Directors in accordance with the resolution dated 28 March 2011.




(A)

(B)

(C)

(D)

(E)

(F)

(G)

DBhd and/orsubsidiaries







JCorp Group

JCorp

JCorp Group

JCorp Group

Damansara Assets Sdn. Bhd.

JCorp Group

JCorp Group

1,069

309

1,479

9,422

416

4,937

149

Rental of o�ce space to DBhd Group and other related operational expenses

Miscellaneous services rendered by JCorp to DBhd Group

Sale of houses, shops, shop o�ces and other types of development on land registered in the name of JCorp Group for which DBhd has acquired from JCorp Group the rights to develop the said land. The entire proceeds of the sale accrue to DBhd Group

Acquisition or disposal of land or land-based property by DBhd or its subsidiaries

Legal services provided by DBhd

Provide consultancy services for hospital planning, commissioning, construction and operation as well as facility management.

Insurance services provided between DBhd and JCorp Group.

JCorp is a major shareholder of DBhd, by virtue of Section 6A of the Act

JCorp is a major shareholder of DBhd, by virtue of Section 6A of the Act

JCorp is a major shareholder of DBhd by virtue of Section 6A of the Act


A subsidiary of JCorp. JCorp is a major shareholder of DBhd by virtue of Section 6A of the Act



Aggregate Value of

Transaction During theFinancial

Year(RM’000)

Relationship ofTransacting Party

Nature ofTransaction

TransactingParty

Company

Recurrent Related Party TransactionsDetail of the Recurrent Transactions

Details of the Recurrent Related Party Transactions during the financial year ended 31 December 2010:-

34

37

37

38

40

41

43

45

46

107

108

109

Directors’ Report

Statement by Directors

Statutory Declaration

Independent Auditors’ Report

Statements of Comprehensive Income


Statements of Changes in Equity

Statements of Cash Flows

Notes to the Financial Statements

Supplementary Information

- Breakdown of Accumulated Losses Into Realised and Unrealised

List of Properties

Shareholding Statistics

Proxy Form

Financial Statements


Directors’ ReportThe directors hereby present their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2010.

Principal Activities

The principal activities of the Company are investment holding, construction and project management.

The principal activities of the subsidiaries are described in Note 18 to the financial statements.

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

Results

Loss net of tax

(Loss)/pro�t attributable to:Owners of the parentMinority interests

(30,477)

(30,477)-

(30,477)

(8,822)

(9,085)263

(8,822)

CompanyRM’000

GroupRM’000

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

In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature other than the effects arising from the changes in accounting policies due to the adoption of FRS 139 Financial Instruments: Recognition and Measurement which has resulted in an increase in the Group’s and the Company’s loss net of tax by RM800,000 and RM21,550,000 respectively as disclosed in Note 2.2 to the financial statements.

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:

Kamaruzzaman bin Abu KassimYahaya bin HassanDatuk Yahya bin Ya’acobZainah binti MustafaDato’ Mani UsilappanLukman bin Hj. Abu BakarYusof bin RahmatWan Azman bin Ismail (Appointed on 1 February 2011)Tan Sri Dato’ Muhammad Ali Hashim (Resigned on 12 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 11 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 the director is a member, or with a company in which the director has a substantial financial interest, except as disclosed in Note 34 to the financial statements.


Directors’ Interests

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

Direct Interest in the Company:Tan Sri Dato’ Muhammad Ali HashimDato’ Mani Usilappan

Interest in Related Companies:- Kulim (Malaysia) Berhad Tan Sri Dato’ Muhammad Ali Hashim Direct Indirect

6,40031,680

445,00022,400

--

--

31.12.2010Sold

--

--

6,40031,680

445,00022,400

Acquired1.1.2010Name of DirectorNumber of ordinary shares of RM0.50 each

Interest in Related Companies:- Sindora Berhad Tan Sri Dato’ Muhammad Ali Hashim Direct 215,877-

31.12.2010Sold

-215,877

Acquired1.1.2010Name of DirectorNumber of ordinary shares of RM1.00 each

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 corporations during the financial year.

Other Statutory Information

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

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

(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 provision for doubtful debts 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.

Directors’ Report (cont’d.)


Directors’ Report (cont’d.)Other Statutory Information (cont’d.)

(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.

(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 Events

Details of significant events are disclosed in Note 41 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 28 March 2011.

Kamaruzzaman bin Abu Kassim Wan Azman bin Ismail


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

We, Kamaruzzaman bin Abu Kassim and Wan Azman bin Ismail, being two of the directors of Damansara Realty Berhad, do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 40 to 106 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 31 December 2010 and of their financial performance and cash flows for the year then ended.

The information set out in Note 43 to the financial statements has been prepared in accordance with the Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to the Listing Requirements of Bursa Malaysia Securities Berhad, as issued by the Malaysian Institute of Accountants.

Signed on behalf of the Board in accordance with a resolution of the directors dated 28 March 2011.

Kamaruzzaman bin Abu Kassim Wan Azman bin Ismail

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

I, Abdul Hamid bin Abd Rahman, being the officer primarily responsible for the financial management of Damansara Realty Berhad, do solemnly and sincerely declare that the accompanying financial statements set out on pages 40 to 106are 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.

Abdul Hamid bin Abd RahmanSubscribed and solemnly declared by the abovenamed Abdul Hamid bin Abd Rahman at Kuala Lumpur in the Federal Territory on 28 March 2011.

Before me, PESU

RUHJAYA SUM

PAH

MA L A Y S I A

No: W 432RAMALINGAMS.PILLAY PPN.

Lot. 1, Bazaar 4,Level 1, Block-G (Selatan),Pusat Bandar Damansara,50490 - KUALA LUMPUR


Independent Auditors’ Reportto the Members of Damansara Realty Berhad (Incorporated in Malaysia)

Report on the Financial Statements

We have audited the financial statements of Damansara Realty Berhad, which comprise the statements of financial position as at 31 December 2010 of the Group and of the Company, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 40 to 106.

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 31 December 2010 and of their financial performance and cash flows for the year then ended.

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 18 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.


Independent Auditors’ Reportto the Members of Damansara Realty Berhad (cont’d.) (Incorporated in Malaysia)

Other Matters

The supplementary information set out in Note 43 on page 107 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 the Listing Requirements of Bursa Malaysia Securities Berhad, 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 Abraham Verghese a/l T.V.Abraham AF: 0039 No. 1664/10/12(J) Chartered Accountants Chartered Accountant

Kuala Lumpur, Malaysia 28 March 2011


Statements of Comprehensive IncomeDamansara Realty Berhad(Incorporated in Malaysia)

Statements of Comprehensive IncomeFor the Financial Year Ended 31 December 2010

Continuing Operations

RevenueCost of SalesGross pro�tOther items of income: Interest income Dividend income from investment Other incomeOther items of expense: Depreciation Finance costs Employee bene�t expense Other expenses(Loss)/pro�t before tax from continuing operationsIncome tax expense(Loss)/pro�t from continuing operations, net of tax

Discontinued OperationPro�t from discontinued operation, net of tax(Loss)/pro�t net of taxTotal comprehensive income for the year

(Loss)/pro�t attributable to:Owners of the parentMinority interests

Basic (loss)/earnings per share attributable to owners of the parent (sen per share)

For the yearContinuing operationsDiscontinued operation

2009RM’000

2010RM’000

2009RM’000

2010RM’000

63,103(55,706)

7,397

231-

5,939

(549)(1,880)(2,404)

(16,982)(8,248)

(574)(8,822)

-(8,822)(8,822)

(9,085)263

(8,822)

2,113(1,539)

574

4440

4,263

(164)(267)(235)

(34,719)(30,464)

(13)(30,477)

-(30,477)(30,477)

(30,477)-

(30,477)

27,181(23,796)

3,385

51-

12,148

(623)(3,093)(2,898)(7,914)1,056(333)723

4611,1841,184

764420

1,184

141414

(3.63)(3.63)

-

0.130.050.08

1,427(1,141)

286

940

8,216

(237)(562)(437)

(4,213)3,102

(12)3,090

-3,0903,090

3,090-

3,090

Note

4

567

810

912

13

CompanyGroup

20092010NoteGroup

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


Assets

Non-current AssetsProperty, plant and equipmentLand held for property developmentInvestment propertiesInvestment in subsidiariesInvestment in associatesDeferred tax assetsOther investmentsGoodwill on consolidation

Current AssetsDevelopment propertyInventoriesTrade and other receivablesOther current assetsOther investmentsCash and bank balances

Total Assets

2009RM’000

2010RM’000

2009RM’000

2010RM’000

2,82537,386

3,585--

370148631

44,945

171,3401,702

66,09015,769

2,7006,194

263,795

308,740

527-

3,58513,968

--

148-

18,228

--

78,9208,6972,700

31090,627

108,855

3,14766,219

---

618195

1,22971,408

183,9191,414

45,2089,3642,7007,704

250,309

321,717

714--

15,701--

195-

16,610

--

108,8738,6872,7001,859

122,119

138,729

Note

1522161819202117

222623242127

CompanyGroup

Statements of Financial PositionDamansara Realty Berhad(Incorporated in Malaysia)

Statements of Financial PositionAs at 31 December 2010


Statements of Financial Position (cont’d.)

Equity and Liabilities

Current LiabilitiesProvisionsLoans and borrowingsTrade and other payablesOther current liabilities

Net Current Assets

Non-current LiabilitiesDe�ered tax liabilitiesLoans and borrowingsTrade and other payables

Total LiabilitiesNet AssetsEquity Attributable to Owners of the ParentShare capitalShare premiumAccumulated lossesCapital reserve

Minority InterestsTotal Equity

Total Equity and Liabilities

2009RM’000

2010RM’000

2009RM’000

2010RM’000

3125,503

172,545-

198,07965,716

-296

4,0804,376

202,455106,285

125,070156

(20,755)72

104,5431,742

106,285

308,740

1,98129,163

174,917308

206,36943,940

-225

-225

206,594115,123

125,070156

(11,670)72

113,6281,495

115,123

321,717

-708

35,361-

36,06954,558

-20

-20

36,08972,766

125,070156

(52,460)-

72,766-

72,766

108,855

-2,229

33,226-

35,45586,664

-31

-31

35,486103,243

125,070156

(21,983)-

103,243-

103,243

138,729

Note

28293031

202930

3232

33

CompanyGroup

Damansara Realty Berhad(Incorporated in Malaysia)

Statements of Financial PositionAs at 31 December 2010 (cont’d.)



2010

Gro

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2009

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RM’0

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esRM

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RM’0

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RM’0

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115,

123

(8,8

22)

(16)

106,

285

113,

955

1,18

4 -(1

6)(1

6)

115,

123

113,

628

(9,0

85) -

104,

543

112,

864

764 - - -

113,

628

125,

070 - -

125,

070

781,

689 -

(656

,619

) -(6

56,6

19)

125,

070

156 - -

156

156 - - - -

156

72

- -

72 72

- - - -

72

(11,

670)

(9,0

85) -

(20,

755)

(669

,053

)

764

656,

619 -

656,

619

(11,

670)

1,49

5

263

(16)

1,74

2

1,09

1

420 -

(16)

(16)

1,49

5

32

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Statements of Changes in EquityD

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Stat

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�� damansara realty berhad • annual report 2010D

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Statements of Changes in Equity (cont’d.)

2010

Com

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Ope

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bal

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at 1

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2010

Tota

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com

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010

2009

Com

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2009

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103,

243

(30,

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72,7

66

100,

153

3,09

0 -

103,

243

125,

070 -

125,

070

781,

689 -

(656

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)

125,

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156 -

156

156 - -

156

(21,

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(30,

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(52,

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(681

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3,09

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656,

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(21,

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Statements of Cash FlowsDamansara Realty Berhad(Incorporated in Malaysia)

Statements of Cash FlowsFor the Financial Year Ended 31 December 2010

Operating Activities

Receipts from customersPayments to suppliers and employeesCash generated/(used in) operationsInterest paidIncome taxes paidNet cash �ows from/(used in) operating activities

Investing Activities

Purchase of property, plant and equipmentProceeds from disposal of property, plant and equipmentNet cash in�ow on disposal of a subsidiaryProceeds from disposal of other investmentsDividend receivedDividend paid to minority shareholdersAdvances from subsidiariesInterest receivedNet cash �ows from/(used in) investing activities

Financing Activities

Repayment of borrowingsRepayment of obligations under �nance leasesNet cash �ows used in �nancing activities

Net Decrease in Cash and Cash Equivalents

Cash and Cash Equivalents at 1 January

Cash and Cash Equivalents at 31 December

2009RM’000

2010RM’000

2009RM’000

2010RM’000

26,205(22,255)

3,950(1,880)

(320)1,750

(73)252

-133

-(16)

-231527

(2,113)(203)

(2,316)

(39)

6,233

6,194

37,148(23,179)13,969(3,091)

(550)10,328

(584)81

6,848--

(16)-

516,380

(19,308)(134)

(19,442)

(2,734)

8,967

6,233

2,101(2,245)

(144)(159)

(31)(334)

-100

-133

40--

44317

(18)(43)(61)

(78)

388

310

5,062(2,874)2,188(504)(135)

1,549

-49

--

40-

2,0229

2,120

(4,670)(53)

(4,723)

(1,054)

1,442

388

Note

15

13

27

CompanyGroup



Notes to the Financial StatementsNotes to the Financial StatementsFor the Financial Year Ended 31 December 2010

1. Corporate Information

Damansara Realty Berhad (“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 Suite 12B, Level 12, Menara Ansar, 65 Jalan Trus, 80000 Johor Bahru, Johor.

The immediate and ultimate holding corporation is Johor Corporation (“JCorp”), a body corporate established under the Johor Corporation Enactment (No. 4 of 1968) (as amended by Enactment No. 5 of 1995).

The principal activities of the Company are investment holding, construction and project management. The principal activities of the subsidiaries are described in Note 18.

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

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

• FRS 7 Financial Instruments: Disclosures • FRS 8 Operating Segments • FRS 101 Presentation of Financial Statements (Revised) • FRS 123 Borrowing Costs • FRS 139 Financial Instruments: Recognition and Measurement • Amendments to FRS 1 First-time Adoption of Financial Reporting Standards and FRS 127 Consolidated and Separate Financial Statements: Cost of and Investment in a Subsidiary, Jointly Controlled Entity or Associate • Amendments to FRS 2 Share-based Payment – Vesting Conditions and Cancellations • Amendments to FRS 132 Financial Instruments: Presentation • Amendments to FRS 139 Financial Instruments: Recognition and Measurement, FRS 7 Financial Instruments: Disclosures and IC Interpretation 9 Reassessment of Embedded Derivatives • Improvements to FRS issued in 2009 • IC Interpretation 9 Reassessment of Embedded Derivatives • IC Interpretation 10 Interim Financial Reporting and Impairment • IC Interpretation 11 FRS 2 – Group and Treasury Share Transactions • IC Interpretation 13 Customer Loyalty Programmes • IC Interpretation 14 FRS 119 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction


Notes to the Financial Statements (cont’d.)2. Summary of Significant Accounting Policies (cont’d.)

2.2 Changes in Accounting Policies (cont’d.)

FRS 4 Insurance Contracts and TR i-3 Presentation of Financial Statements of Islamic Financial Institutions will also be effective for annual periods beginning on or after 1 January 2010. These FRS are, however, not applicable to the Group or the Company.

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

FRS 7 Financial Instruments: Disclosures

Prior to 1 January 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 31 December 2010.

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. The Group has adopted FRS 8 retrospectively. These revised disclosures, including the related revised comparative information, are shown in Note 40.

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 one single statement.

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 39).

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




FRS 139 Financial Instruments: Recognition and Measurement

FRS 139 establishes principles for recognising and measuring financial assets, financial liabilities and some contracts to buy and sell non-financial items. The Group has adopted FRS 139 prospectively on 1 January 2010 in accordance with the transitional provisions. The effects arising from the adoption of this Standard has been accounted for by adjusting the opening balance of retained earnings as at 1 January 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:

• Equity Instruments

Prior to 1 January 2010, the Group classified its investments in equity instruments which were held for non-trading purposes as non-current investments. Such investments were carried at cost less impairment losses. Upon the adoption of FRS 139, these investments, except for those whose fair value cannot be reliably measured, are designated at 1 January 2010 as available-for-sale financial assets and accordingly are stated at their fair values as at that date amounting to RM51,000. The difference between the carrying amount and fair value is immaterial. Investments in equity instruments whose fair value cannot be reliably measured amounting to RM144,000 at 1 January 2010 continued to be carried at cost less impairment losses.

• Impairment of Trade and Other Receivables

Prior to 1 January 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 January 2010, the Company has remeasured the allowance for impairment losses as at that date in accordance with FRS 139 and the difference is immaterial.

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


GroupOther current assets- amount due from customers for contractAccumulated losses

CompanyAccumulated lossesTrade and other receivables- amount due from subsidiaries

As at1 January 2010

RM’000

As at31 December 2010

RM’000

(800)800

21,550

(21,550)

--

-

-

Increase / (Decrease)

Statements of Comprehensive IncomeOther expensesLoss before tax from continuing operationsLoss from continuing operations, net of taxLoss net of tax

Company2010

RM’000

Group2010

RM’000

800800800800

21,55021,55021,55021,550


Basic loss per share

GroupIncrease / (Decrease)

2010Sen Per Share

0.32




FRS 139 Financial Instruments: Recognition and Measurement (cont’d.)


GroupOther current assets- amount due from customers for contractAccumulated losses

CompanyAccumulated lossesTrade and other receivables- amount due from subsidiaries

As at1 January 2010

RM’000

As at31 December 2010

RM’000

(800)800

21,550

(21,550)

--

-

-


Statements of Comprehensive IncomeOther expensesLoss before tax from continuing operationsLoss from continuing operations, net of taxLoss net of tax

Company2010

RM’000

Group2010

RM’000

800800800800

21,55021,55021,55021,550


Basic loss per share

GroupIncrease / (Decrease)

2010Sen Per Share

0.32

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:

FRS 1 First-time Adoption of Financial Reporting StandardsFRS 3 Business Combinations (Revised)Amendments to FRS 2 Share-based PaymentAmendments to FRS 5 Non-current Assets Held for Sale and Discontinued OperationsAmendments to FRS 127 Consolidated and Separate Financial StatementsAmendments to FRS 138 Intangible AssetsAmendments to IC Interpretation 9 Reassessment of Embedded DerivativesIC Interpretation 12 Service Concession ArrangementsIC Interpretation 16 Hedges of a Net Investment in a Foreign OperationIC Interpretation 17 Distributions of Non-cash Assets to OwnersAmendments to FRS 132: Classi�cation of Rights IssuesAmendments to FRS 1: Limited Exemption from Comparative FRS 7 Disclosures for First-time AdoptersAmendments to FRS 7: Improving Disclosures about Financial InstrumentsIC Interpretation 15 Agreements for the Construction of Real Estate

E�ective forAnnual Periods

Beginning On or AfterDescription

1 July 20101 July 20101 July 20101 July 20101 July 20101 July 20101 July 20101 July 20101 July 20101 July 2010

1 March 2010

1 January 20111 January 20111 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.



2.3 Standards Issued but Not Yet Effective (cont’d.)

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.

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 resulting from intra-group transactions are eliminated in full except for unrealised losses for which indication of impairment exist.

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.



2.4 Basis of Consolidation (cont’d.)

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

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.

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 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. 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.

Depreciation is computed on a straight-line basis over the estimated useful lives of the assets as follows:

Buildings 10 years Plant and machinery 5 to 10 years Site infrastructure and renovations 10 to 14 years Office equipment, furniture and fittings 5 to 20 years Motor vehicles 5 years Medical equipment 10 years

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 recorded at cost, including transaction costs. Subsequent to recognition, investment properties are measured at cost less accumulated depreciation and accumulated impairment losses.

Depreciation is computed on a straight-line basis over the estimated useful lives of the investment properties at 50 years. The carrying values of investment properties 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.

Investment properties are derecognised when either they have been disposed of 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.

Transfers are made to or from investment property only when there is a change in use. For a transfer from owner-occupied property to investment property, the property is accounted for in accordance with the accounting policy for property, plant and equipment set out in Note 2.7 up to the date of change in use.

2.9 Intangible Assets

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.

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

2.10 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”)).



2.10 Impairment of Non-Financial Assets (cont’d.)

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.

2.11 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.

2.12 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.



2.12 Associates (cont’d.)

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

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

2.13 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.

(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.



2.13 Financial Assets (cont’d.)

(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.

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 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.

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.



2.14 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.

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.



2.15 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.

2.16 Construction Contracts

Where the outcome of a construction contract can be reliably estimated, contract revenue and contract costs are recognised as revenue and expenses respectively by using the stage of completion method. The stage of completion is measured by reference to the proportion of contract costs incurred for work performed to date to the estimated total contract costs.

Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that are likely to be recoverable. Contract costs are recognised as expense in the period in which they are incurred.

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.

Contract revenue comprises the initial amount of revenue agreed in the contract and variations in contract work, claims and incentive payments to the extent that it is probable that they will result in revenue and they are capable of being reliably measured.

When the total of costs incurred on construction contracts plus recognised profits (less recognised losses) exceeds progress billings, the balance is classified as amount due from customers on contracts. When progress billings exceed costs incurred plus, recognised profits (less recognised losses), the balance is classified as amount due to customers on contracts.

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 any accumulated impairment losses.

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.



2.17 Land Held for Property Development and Property Development Costs (cont’d.)

(ii) Property Development Costs (cont’d.)

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. The cost of raw materials comprises costs of purchase. The cost of unsold 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.

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 statement 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.



2.20 Financial Liabilities (cont’d.)

(a) Financial Liabilities at Fair Value Through Profit or Loss (cont’d.)

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.

2.21 Financial Guarantee Contracts

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due.

Financial guarantee contracts are recognised initially as a liability at fair value, net of transaction costs. Subsequent to initial recognition, financial guarantee contracts are recognised as income in profit or loss over the period of the guarantee. If the debtor fails to make payment relating to financial guarantee contract when it is due and the Group, as the issuer, is required to reimburse the holder for the associated loss, the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the reporting date and the amount initially recognised less cumulative amortisation.

2.22 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.



2.23 Employee Benefits

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, a defined contribution pension scheme. Contributions to defined contribution pension schemes are recognised as an expense in the period in which the related service is performed.

2.24 Leases

(a) As Lessee

Finance leases, which transfer to the Group substantially all the risks and rewards incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Any initial direct costs are also 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 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 2.26(d).

2.25 Discontinued Operation

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

2.26 Revenue

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

(a) Sale of Land

Revenue from sale of land is recognised when the terms and conditions stipulated in the respective signed sales and purchase agreements have been duly completed.



2.26 Revenue (cont’d.)

(b) Sale of Properties

Revenue from sale of properties is accounted for by the stage of completion method as described in Note 2.17(ii).

Revenue from sale of completed property units is recognised upon the transfer of risk and rewards.

(c) Construction Contracts

Revenue from construction contracts is accounted for by the stage of completion method as described in Note 2.16.

(d) Rental Income

Rental income is accounted for on a straight-line basis over the lease terms. The aggregate costs of incentives provided to lessees are recognised as a reduction of rental income over the lease term on a straight-line basis.

(e) Management Fees

Management fees are recognised when services are rendered.

(f) Insurance Agency Commissions

Insurance agency commissions received or receivable which do not require the agent to render further service are recognised as revenue by the agent on the effective commencement or renewal dates of the related policies.

(g) Interest Income

Interest income is recognised using the effective interest method.

(h) Project Management

Project management is recognised on services rendered based on the progress of work during pre and post contract for each project.

(i) Maintenance Services, Hospital Planning and Commissioning

Maintenance services, hospital planning and commissioning fees represent fixed monthly charges on services performed as stated in the agreement. This is recognised based on services rendered in accordance with the relevant agreement.

(j) Manpower Services

Manpower services represent the staff costs incurred (salaries, allowances, travelling and all other expenses incurred by Company’s seconded staff). This is recognised based on service rendered in accordance with the relevant agreement.

(k) Healthcare Services

Revenue from healthcare services is recognised when the services are rendered.



2.27 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.

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.



2.27 Income Taxes (cont’d.)

(b) Deferred Tax (cont’d.)

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.

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 40, 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.

2.30 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.

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

There are no critical judgements made by management in the process of applying the Group’s accounting that may have significant effect on the amounts recognised in the financial statements.


Notes to the Financial Statements (cont’d.)3. Significant Accounting Judgements and Estimates (cont’d.)

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 Receivables

The Group and the Company assess 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 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.

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 and Company’s receivables at the reporting date is disclosed in Note 23. If the present value of estimated future cashflows varies by 10% from management’s estimates, the Group’s and the Company’s allowance for impairment will vary by RM1.48 million and RM5.94 million (2009: RM1.48 million and nil) respectively.

(b) Impairment of Goodwill

Goodwill is 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 is 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 sensitivity analysis to changes in the assumptions are given in Note 17.

(c) Property Development

The Group recognises property development revenue and expenses in the statement of comprehensive income 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.

The carrying amounts of assets and liabilities of the Group arising from property development activities are disclosed in Note 22. A 10% difference in the estimated total property development revenue or costs would result in approximately 4% (2009: 7%) variance in the Group’s revenue and 4% (2009: 7%) variance in the Group’s cost of sales.

(d) Project Management Services

The Group uses the percentage of completion method in accounting for its fixed price contracts to deliver project management services. Use of the percentage of completion method requires the Group to estimate the services performed to date as proportion of the date of the total services to be performed.


Notes to the Financial Statements (cont’d.)3. Significant Accounting Judgements and Estimates (cont’d.)

3.2 Key Sources of EstimatIon Uncertainty (cont’d.)

(d) Project Management Services (cont’d.)

When the proportion of services performed to total services to be performed for the Group differs by less than 10% from management’s estimates, the impact will not be material to the financial statements. Accordingly, the Group has recognised revenue on this transaction with a corresponding provision for estimated returns.

(e) Deferred Tax Assets

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

Assumptions about generation of future taxable profits depend on management’s estimates of future cash flows. These depends on estimates of future production and sales volume, operating costs, capital expenditure, dividends and other capital management transactions. Judgement is also required about application of income tax legislation. These judgements and assumptions are subject to risks and uncertainty, hence there is a possibility that changes in circumstances will alter expectations, which may impact the amount of deferred tax assets recognised in the statements of financial position and the amount of unrecognised tax losses and unrecognised temporary differences.

The carrying value of deferred tax assets of the Group at 31 December 2010 was RM370,000 (2009: RM618,000) and recognised tax losses at 31 December 2010 was RM1,416,000 (2009: RM400,000) and the unrecognised tax losses at 31 December 2010 was RM66,736,000 (2009: RM57,029,000).

4. Revenue

Sale of landProperty developmentConstruction contractsInsurance agency commissionsProject management feesMaintenance services feesHospital commissioningManpower services feeHealthcare servicesConstruction management feeOthers

2009RM’000

2010RM’000

2009RM’000

2010RM’000

48,9696,0292,113

952,914

890210

1,24731

56342

63,103

12,8837,720

774368

2,779806113

1,085221432

-27,181

--

2,113--------

2,113

--

1,427--------

1,427

CompanyGroup

Interest income from loans and receivables

2009RM’000

2010RM’000

2009RM’000

2010RM’000

231 51 44 9

CompanyGroup

5. Interest Income


Notes to the Financial Statements (cont’d.)

Net gain on sale of investmentNet gain on disposal of subsidiaryNet gain on disposal of plant and equipmentRental income from:- investment properties- land held for property development- othersLegal settlement (Note 16)Reversal of allowance for impairment of trade and other receivables (Note 23)Bad debt recoveredReversal of provision for liquidated ascertained damagesManagement fee on legal casesTender revenueOthers

2009RM’000

2010RM’000

2009RM’000

2010RM’000

86-

208

245630

342,080

1,6142829

416126443

5,939

-8,412

119

-741184

1,623

---

54066

46312,148

86-

77

245---

3,333--

416-

1064,263

-7,518

87

--

16-

---

540-

558,216

CompanyGroup

Interest expense on:- Revolving credits- Term loans- Hire purchase- Overdrafts- Others- Advance from a subsidiaryTotal �nance costs

2009RM’000

2010RM’000

2009RM’000

2010RM’000

1231,701

2333

--

1,880

3662,513

25131

58-

3,093

123-3

33-

108267

366-7

131-

58562

CompanyGroup

Dividend income from subsidiaries

2009RM’000

2010RM’000

40 40

Company

7. Other Income

8. Finance Costs

6. Dividend Income

Net gain on sale of investmentNet gain on disposal of subsidiaryNet gain on disposal of plant and equipmentRental income from:- investment properties- land held for property development- othersLegal settlement (Note 16)Reversal of allowance for impairment of trade and other receivables (Note 23)Bad debt recoveredReversal of provision for liquidated ascertained damagesManagement fee on legal casesTender revenueOthers

2009RM’000

2010RM’000

2009RM’000

2010RM’000

86-

208

245630

342,080

1,6142829

416126443

5,939

-8,412

119

-741184

1,623

---

54066

46312,148

86-

77

245---

3,333--

416-

1064,263

-7,518

87

--

16-

---

540-

558,216

CompanyGroup

Interest expense on:- Revolving credits- Term loans- Hire purchase- Overdrafts- Others- Advance from a subsidiaryTotal �nance costs

2009RM’000

2010RM’000

2009RM’000

2010RM’000

1231,701

2333

--

1,880

3662,513

25131

58-

3,093

123-3

33-

108267

366-7

131-

58562

CompanyGroup

Dividend income from subsidiaries

2009RM’000

2010RM’000

40 40

Company


Notes to the Financial Statements (cont’d.)9. (Loss)/Profit Before Tax from Continuing Operations

The following items have been included in arriving at (loss)/profit before tax from continuing operations:

Auditors’ remuneration:- Statutory audits - Continuing Current year Overprovision in prior year - Discontinuing- Other servicesO�ce rentComputer rentalEquipment rental - Continuing - DiscontinuingManagement feesEmployee bene�ts expense (Note 10) - Continuing - DiscontinuingNon-executive directors’ remuneration (Note11)Direct operating expenses arising from investment propertiesImpairment loss on �nancial assets: - subsidiaries - related companies - trade receivables (Note 23 (a)) - other receivablesProvision for liquidated ascertained damages to house buyers (Note 28)Expenses incurred on proposed restructuring schemeWaiver of liquidated ascertained damages receivable from contractorsImpairment loss on goodwill on consolidation (Note 17)Impairment loss on amount due from customers for contractLegal feesImpairment loss on investment in subsidiaries

136137

(1)-

621,081

171515

--

2,4042,404

-197

19

-(36)

5,707114

1,305806821

5982,401

967-

137138

(1)2157

1,52218371225

-5,7212,8982,823

288-

--

133117

1,244468

-

500---

5050

--9

485-33-

42235235

-197

19

23,108-

5,70774

-806

-

-1,601

2241,733

5050

--

11485

----

88437437

-205

-

1,720-

79-

-468

-

---

100

Group2009

RM’000

Company2009

RM’0002010

RM’0002010

RM’000


Notes to the Financial Statements (cont’d.)10. Employee Benefits Expense

Continuing Operations:Wages and salariesBonusSocial security contributionsContributions to de�ned contribution planProvision for annual leave (Note 28)Other bene�ts

Less: Employees’ bene�ts expenses included in cost of sales

Discontinuing Operation:Wages and salariesBonusSocial security contributionsContributions to de�ned contribution planOther bene�tsEmployees’ bene�ts expenses included in cost of sales

3,887646

15445

2832

5,827(3,423)2,404

------

4,495274

24507

-368

5,668(2,770)2,898

1,619366

39241558

2,823

234----1

235-

235

------

369--

10-

58437

-437

------

Group2009

RM’000

Company2009

RM’0002010

RM’0002010

RM’000

Included in employee benefits expense of the Group and the Company are executive directors’ remuneration amounting to RM628,000 (2009: RM204,000) and RM105,000 (2009: RM174,000) respectively.

11. Directors’ Remuneration

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

Executive: Salaries and other emoluments Fees Bonus - current year’s provision - under provision in prior year De�ned contribution plan Termination bene�ts Total executive directors’ remuneration (excluding bene�ts-in-kind) (Note 10) Estimated money value of bene�ts-in-kind Total executive directors’ remuneration (including bene�ts-in-kind)

Non-Executive: Fees (Note 9) Estimated money value of bene�ts-in-kindTotal non-executive directors’ remuneration (including bene�ts-in-kind)Total directors’ remuneration

3805

205041

132

62852

680

197-

197877

195-

--9-

2041

205

28856

344549

39-

---

66

10552

157

197-

197354

165-

--9-

1741

175

20556

261436

Group2009

RM’000

Company2009

RM’0002010

RM’0002010

RM’000



Executive Directors:RM100,001 - RM150,000RM200,001 - RM250,000RM500,001 - RM550,000

Non-Executive Directors:Below RM50,000RM150,001 - RM200,000

20092010

1-1

6-

-1-

61

Number of Directors

12. Income Tax Expense

Major components of income tax expense

The major components of income tax expense for the years ended 31 December 2010 and 2009 are:

Statement of Comprehensive Income:Current income tax - continuing operations: - Malaysian income tax - (Over)/under provision in respect of previous years

Deferred income tax- continuing operations (Note 20): - Origination and reversal of temporary di�erences - (Over)/under provision in respect of previous years

Income tax attributable to continuing operationsIncome tax attributable to discontinued operation (Note 13)Income tax expense recognised in pro�t or loss

360(34)326

18860

248

574-

574

41218

430

(97)-

(97)

333-

333

-1313

---

13-

13

-1212

---

12-

12

Group2009

RM’000

Company2009

RM’0002010

RM’0002010

RM’000

11. Directors’ Remuneration (cont’d.)

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


Notes to the Financial Statements (cont’d.)12. Income Tax Expense (cont’d.)

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 years ended 31 December 2010 and 2009 are as follows:

(Loss)/pro�t before tax from continuing operationsPro�t before tax from discontinued operationAccounting pro�t before taxTax at Malaysian statutory tax rate of 25% (2009: 25%)Adjustments: Non-deductible expenses Income not subject to taxation Bene�ts from previously unrecognised tax losses Deferred tax assets not recognised Deferred tax assets previously recognised now derecognised Realisation of deferred tax assets previously recognised (Over)/under provision of deferred tax in respect of previous years (Over)/under provision of income tax in respect of previous yearsIncome tax expense recognised in pro�t or loss

(8,248)-

(8,248)(2,062)

966(992)

(57)2,695

-(2)

60

(34)574

1,056632

1,688422

707(2,398)

(215)1,553

269-

-

166504

(30,464)-

(30,464)(7,616)

6,262(465)

-1,819

--

-

1313

3,102-

3,102776

885(1,880)

-219

--

-

1212

Group2009

RM’000

Company2009

RM’0002010

RM’0002010

RM’000

Domestic income tax is calculated at the Malaysian statutory tax rate of 25% (2009: 25%) of the estimated assessable profit for the year.

Tax savings during the financial year arising from:

Utilisation of previously unrecognised tax losses

2009RM’000

2010RM’000

57 215

Group

13. Discontinued Operation and Disposal Group Classified as Held for Sale

On 22 April 2008, the Company entered into a conditional sale of shares agreement with Kumpulan Penambang (Johor) Sdn Bhd (“Kumpulan Penambang”) for the disposal of 99.99% of the equity interest in Tanjung Tuan Hotel Sdn Bhd (“TTH”) comprising 36,000,000 of ordinary shares (“TTH Shares”) to Kumpulan Penambang for a consideration of RM37.6 million. The disposal is consistent with the Group’s long-term strategy to enable the Company to divest its non-core hotel business and focus primarily on its mainstream property development activities which generate better returns.

The disposal of the subsidiary was completed on 20 October 2009.


Notes to the Financial Statements (cont’d.)13. Discontinued Operation and Disposal Group Classified as Held for Sale (cont’d.)

The disposal had the following effects on the financial position of the Group at the reporting date:

Total proceedsCost of investment in subsidiaryAccumulated impairment lossesGain on disposal of subsidiary

37,600(36,000)

5,9187,518

Property, plant and equipmentInventoriesTrade and other receivablesCash and bank balancesDeferred tax liabilitiesTrade and other payablesNet assets disposedTotal disposal proceedsGain on disposal to the Group

Disposal proceeds settled by:CashContra with amount due to a related company

Cash in�ow arising on disposal:Cash considerationCash and cash equivalents of subsidiary disposedNet cash in�ow on disposal

2009RM’000

30,701144736752

(572)(2,573)29,18837,600

8,412

7,60030,00037,600

7,600(752)

6,848

2009RM’000

Company

The disposal of subsidiary had the following effect on the financial results of the Company:

RevenueExpensesPro�t from operationsOther incomePro�t before tax from discontinued operationTaxation: - Related to loss from ordinary activities of the discontinued operation: Current income tax Under provision in respect of previous years

Pro�t from discontinued operation, net of tax

2009RM’000

7,618(7,022)

59636

632

(23)(148)(171)461

Group

OperatingInvestingNet cash out�ows

2009RM’000

151(762)(611)

Group

Statement of comprehensive income disclosures

The results of TTH for the year ended 31 December is as follow:


Notes to the Financial Statements (cont’d.)13. Discontinued Operation and Disposal Group Classified as Held for Sale (cont’d.)

Statement of cash flows disclosures

The cash flows attributable to TTH are as follows:

RevenueExpensesPro�t from operationsOther incomePro�t before tax from discontinued operationTaxation: - Related to loss from ordinary activities of the discontinued operation: Current income tax Under provision in respect of previous years

Pro�t from discontinued operation, net of tax

2009RM’000

7,618(7,022)

59636

632

(23)(148)(171)461

Group

OperatingInvestingNet cash out�ows

2009RM’000

151(762)(611)

Group

14. Earnings/Loss 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 dilutive potential ordinary shares into ordinary shares for years ended 31 December 2010 and 2009.

The following reflect the profit and share data used in the computation of basic earnings per share for the years ended 31 December:

2009RM’000

2010RM’000

(9,085)

(9,085)-

(9,085)

303

764461

303

Group

(Loss)/pro�t net of tax attributable to owners of the parent used in the computation of basic earnings per share

(Loss)/pro�t net of tax attributable to owners of the parentLess: Pro�t from discontinued operation, net of tax, attributable to owners of the parent(Loss)/pro�t net of tax from continuing operations attributable to owner of the parent used in the computation of basic earnings per share

Weighted average number of ordinary shares for basic earnings per share computation

Number ofShares

‘000

Number ofShares

‘000

250,140 560,210

(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 earning 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 for basic earnings per share computation. These profit and share data are presented above.



2010

Gro

up

Cost

At 1

Janu

ary

2010

Ad

ditio

ns

Recl

assi

�cat

ions

D

ispo

sals

At 3

1 D

ecem

ber 2

010

Acc

umul

ated

Dep

reci

atio

n

At 1

Janu

ary

2010

D

epre

ciat

ion

char

ge fo

r the

yea

r

Recl

assi

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ions

D

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sals

At 3

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Net

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00

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ical

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itur

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Site

Infr

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sRM

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Plan

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Build

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RM’0

00

851 - -

(65)

786

669 17-

(65)

621

165

1,01

5 8(8

16) -

207

886 11

(713

) -18

4 23

2,36

6 -25

6 (9)

2,61

3

492

245

222 (6

)95

3

1,66

0

554 21

1,23

8(1

13)

1,70

0

466 94 717

(82)

1,19

5

505

172 -

(172

) - -

22-

(22) - - -

2,03

1 40 43 (90)

2,02

4

1,83

810

5(8

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0)1,

771

253

1,79

420

2(4

03)

(992

)60

1

1,26

3 77 24(9

82)

382

219

8,78

327

114

6(1

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)7,

931

5,63

654

914

6(1

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)5,

106

2,82

5

15.

Prop

erty

, Pla

nt a

nd E

quip

men

t


Notes to the Financial Statements (cont’d.)15

. Pr

oper

ty, P

lant

and

Equ

ipm

ent (

cont

’d.)

2009

Gro

up

Cost

At 1

Janu

ary

2009

Ad

ditio

ns

Dis

posa

ls

Writ

e-o�

sA

t 31

Dec

embe

r 200

9

Acc

umul

ated

Dep

reci

atio

n

At 1

Janu

ary

2009

D

epre

ciat

ion

char

ge fo

r the

yea

r

Dis

posa

ls

Writ

e-o�

sA

t 31

Dec

embe

r 200

9

Net

Car

ryin

g A

mou

nt

Tota

lRM

’000

Mot

orVe

hicl

esRM

’000

O�

ceEq

uipm

ent

RM’0

00

Med

ical

Equi

pmen

tRM

’000

Furn

itur

ean

dFi

ttin

gsRM

’000

Site

Infr

astr

uctu

rean

dRe

nova

tion

sRM

’000

Plan

t and

Mac

hine

ryRM

’000

Build

ings

RM’0

00 851 - - -

851

638 31- -

669

182

1,02

7 -(1

2) -1,

015

873 13- -

886

129

1,86

250

7 (3) -

2,36

6

262

230 - -

492

1,87

4

941 16

(403

) -55

4

402 72 (8

) -46

6 88

172 - - -

172 5 17- -

22 150

1,97

9 61- (9)

2,03

1

1,69

315

5 (1)

(9)

1,83

8

193

1,79

4 - - -1,

794

1,56

110

5(4

03) -

1,26

3

531

8,62

658

4(4

18)

(9)

8,78

3

5,43

462

3(4

12)

(9)

5,63

6

3,14

7



. Pr

oper

ty, P

lant

and

Equ

ipm

ent (

cont

’d.)

2010

Com

pany

Cost

At 1

Janu

ary

2010

D

ispo

sals

At 3

1 D

ecem

ber 2

010

Acc

umul

ated

Dep

reci

atio

n

At 1

Janu

ary

2010

D

epre

ciat

ion

char

ge fo

r the

yea

r

Dis

posa

lsA

t 31

Dec

embe

r 201

0

Net

Car

ryin

g A

mou

nt

Tota

lRM

’000

Mot

orVe

hicl

esRM

’000

Reno

vati

ons

RM’0

00

O�

ceEq

uipm

ent

RM’0

00

Furn

itur

ean

dFi

ttin

gsRM

’000

Com

pute

rsRM

’000

Build

ings

RM’0

00 180 -

180 12 3 -

15 165

680 -

680

626 44-

670 10

1,04

7(9

2)95

5

752 50 (71)

731

224

509 (3

)50

6

421 23 (4

)44

0 66

337 (9

)32

8

271 22 (7

)28

6 42

790

(587

)20

3

747 22

(586

)18

3 20

3,54

3(6

91)

2,85

2

2,82

916

4(6

68)

2,32

5

527



. Pr

oper

ty, P

lant

and

Equ

ipm

ent (

cont

’d.)

2009

Com

pany

Cost

At 1

Janu

ary

2009

D

ispo

sals

At 3

1 D

ecem

ber 2

009

Acc

umul

ated

Dep

reci

atio

n

At 1

Janu

ary

2009

D

epre

ciat

ion

char

ge fo

r the

yea

r

Dis

posa

lsA

t 31

Dec

embe

r 200

9

Net

Car

ryin

g A

mou

nt

Tota

lRM

’000

Mot

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Reno

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ean

dFi

ttin

gsRM

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Com

pute

rsRM

’000

Build

ings

RM’0

00 180 -

180 8 4 -

12 168

680 -

680

550 76-

626 54

1,05

9(1

2)1,

047

707 53 (8

)75

2

295

512 (3

)50

9

397 25 (1

)42

1 88

337 -

337

238 33-

271 66

1,10

7(3

17)

790

1,01

8 46(3

17)

747 43

3,87

5(3

32)

3,54

3

2,91

823

7(3

26)

2,82

9

714


Notes to the Financial Statements (cont’d.)15. Property, Plant and Equipment (cont’d.)

Title to the building of the Company is presently registered in the name of the developer.

Included in property, plant and equipment of the Group and of the Company are fully depreciated property, plant and equipment amounting to RM2,460,000 (2009: RM2,471,000) and RM1,023,000 (2009: RM1,042,000) respectively.

Assets held under finance lease

During the financial year, the Group acquired motor vehicles with an aggregate cost of RM198,000 (2009: nil) by means of finance leases. The cash outflow on acquisition of property, plant and equipment amounted to RM73,000 (2009: RM584,000).

The net carrying amount of motor vehicles of the Group and of the Company held under finance lease at the reporting date were RM181,000 (2009: RM47,000) and nil (2009: RM47,000) respectively.

Leased assets are pledged as security for the related finance lease liabilities (Note 29).

16. Investment Properties

CostAt 1 January Acquired through legal settlementAt 31 December

Fair Value

2009RM’000

2010RM’000

-3,5853,585

4,900

---

-

Group / Company

Fair value of investment properties has been determined by the management based on comparable recent market transactions with reference to estimated market rental values and equivalent yields.

On 29 June 1985, the Group entered into sale and purchase agreements to acquired 2 floors of Menara Safuan from Menara Safuan Sdn. Bhd. (“Developer”). Partial of the purchase consideration amounted to RM1,614,000 was paid but later fully impaired (Note 23 (b)) due to disputes with the Developer. During the year, the Group won the legal case where the legal judgment is in the favour of the Group with respect to the ownership of the investment properties. Legal settlement, being the difference between the purchase price and the partial payment less legal expenses, amounted to RM2,080,000 was recognised as other income (Note 7).

Title to the investment properties of the Company is presently registered in the name of the Developer.

17. Goodwill on Consolidation

Group

CostAt 1 January and 31 December

Accumulated ImpairmentAt 1 January Impairment loss (Note9)At 31 December

Net Carrying Amount

2009RM’000

2010RM’000

1,729

500598

1,098

631

1,729

-500500

1,229

Goodwill

2009RM’000

2010RM’000

631 1,229

2009RM’000

2010RM’000

ConstructionContract Segment

HealthcareServices Segment Total

523 1,121

2009RM’000

2010RM’000

108 108


Notes to the Financial Statements (cont’d.)Group

CostAt 1 January and 31 December

Accumulated ImpairmentAt 1 January Impairment loss (Note9)At 31 December

Net Carrying Amount

2009RM’000

2010RM’000

1,729

500598

1,098

631

1,729

-500500

1,229

Goodwill

2009RM’000

2010RM’000

631 1,229

2009RM’000

2010RM’000

ConstructionContract Segment

HealthcareServices Segment Total

523 1,121

2009RM’000

2010RM’000

108 108

17. Goodwill on Consolidation (cont’d.)

Impairment testing of goodwill

Goodwill arising from business combinations has been allocated to two individual cash-generating units (“CGU”) for impairment testing as follows:

- Construction contracts segment - Healthcare services segment

The carrying amounts of goodwill allocated to each CGU are as follows:

The recoverable amounts of the CGUs have been determined based on value in use calculations using cash flow projections from financial budgets approved by management covering a five-year period. The pre-tax discount rate applied to the cash flow projections and the forecasted growth rates used to extrapolate cash flows beyond the five-year period are as follows:

Growth ratesPre-tax discount rates

1.0%8.0%

1.0%8.0%

5.0%7.0%

5.0%7.0%

ConstructionContracts Segment

2009

HealthcareServices Segment

20092010 2010

The calculations of value in use for the CGUs are most sensitive to the following assumptions:

Budgeted gross margins – Gross margins are based on average values achieved in the three years preceding the start of the budget period. These are increased over the budget period for anticipated efficiency improvements.

Growth rates – The forecasted growth rates are based on published industry research and do not exceed the long-term average growth rate for the industries relevant to the CGUs.

Pre-tax discount rates – Discount rates reflect the current market assessment of the risks specific to each CGU. This is the benchmark used by management to assess operating performance and to evaluate future investment proposals.

Market share assumptions - These assumptions are important because, as well as using industry data for growth rates (as noted above), management assesses how the CGU’s position, relative to its competitors, might change over the budget period.

Impairment loss recognised

During the financial year, an impairment loss was recognised to write-down the carrying amount of goodwill attributable to the healthcare services segment as a healthcare centre was closed during the year. The impairment loss of RM598,000 (2009: RM500,000) has been recognised in the statement of comprehensive income under the line item “other expenses”.


Notes to the Financial Statements (cont’d.)18. Investment in Subsidiaries

Unquoted shares, at cost in MalaysiaImpairment losses

2009RM’000

2010RM’000

42,530(28,562)13,968

42,530(26,829)15,701

Company

20092010

Damansara RealtyManagement ServicesSdn. Bhd.

Damansara Realty (Pahang) Sdn. Bhd. (” DRPSB”)

JOLS ConstructionSdn. Bhd.

Tebing Aur Sdn. Bhd.

Armada TijaarahSdn. Bhd.

Beta Series Sdn. Bhd.

Kesang LeasingSdn. Bhd.

Kesang IndustriesSdn. Bhd.

Damansara Forest Products (Malaysia) Sdn. Bhd.

Kesang Properties Sdn. Bhd.

Damansara Realty Management (Timber Operations) Sdn. Bhd.

Damansara Realty (Selangor) Sdn. Bhd.

Management services to holding and related companies and general insurance business

Property holding and development

Construction, refurbishment, inspection and sanitisation service (inactive)

Contract Management and Construction

Sand extraction and trading (inactive)

Management Services (inactive)

Lease, hire purchase and loan �nancing (inactive)

Investment holding (inactive)

Quarrying (inactive)

Property development (inactive) and investment holding

Timber operations and its related activities (inactive)

Property development and construction works (inactive)

Principal ActivitiesName

i) Held by the Company and Incorporated in Malaysia:

100

60

100

100

100

100

100

100

100

100

100

100

100

60

100

100

100

100

100

100

100

100

100

100

Proportion (%) ofOwnership Interest


Notes to the Financial Statements (cont’d.)18. Investment in Subsidiaries (cont’d.)

20092010

Kesang KastoryEnterprise Sdn. Bhd.

Kesang Trading Sdn. Bhd.

KesangPharmaceuticals Sdn. Bhd.

Chendering Motel Sdn. Bhd. #

Kesang Associates Sdn. Bhd. #

Kesang Land Sdn. Bhd. #

Kesang Resort & Hotels Sdn. Bhd. #

Syarikat Timor Jaya Plantation Sdn. Bhd. #

Healthcare Technical Services Sdn. Bhd.

DHealthcare Centre Sdn. Bhd.

Insan Kualiti Sdn. Bhd.

Importation and distribution of food stu�s (inactive)

Property development and trading of o�ce equipment (inactive)

Manufacturing, wholeselling and trading of pharmaceutical products (inactive)

Inactive (under members’ voluntary liquidation)

Investment holding (under members’ voluntary liquidation)


Investment holding (under members’ voluntary liquidation)


Project management and engineering maintenance services

Healthcare service provider

To carry on the business of general merchants, traders, dealers, suppliers, factors, brokers, commission and general agents etc (general traders)


95

100

100

100

100

100

100

100

70

51

100

95

100

100

100

100

100

100

100

70

51

100

**

**

**

**

**

**

**

**


i) Held by the Company and Incorporated in Malaysia (cont’d.):



20092010

Damansara Realty (Johor) Sdn. Bhd. (”DRJSB”)

Damansara Realty (Terengganu) Sdn. Bhd.

DRP Construction Sdn. Bhd.

Istiwa Sdn. Bhd.

Kesang Construction & Engineering Sdn. Bhd.

Kesang Equipment Hire Sdn. Bhd.

Kesang Quarry Sdn. Bhd.

Pedas Quarry Sdn. Bhd.

Damansara Forest Products (PNG) Ltd.

Damansara-Batai (PNG) Ltd.

Damansara-Pai (PNG) Ltd.

Damansara-Siau (PNG) Ltd.

Property development

Property development

Property development, construction and investment (inactive)

Property development and advertising

The business of general contracting (inactive)

Buying, selling and renting of machinery (inactive)



Timber operations (under members’ voluntary liquidation)


Development of oil palm plantation (under members’ voluntary liquidation)



100

100

100

100

100

100

70

55

100

85

85

85

100

100

100

100

100

100

70

55

100

85

85

85

**

**

**

**

**#


ii) Held Through Subsidiaries and Incorporated in Malaysia:

iii) Held by the Company and Incorporated in Papua New Guinea

Audited by a �rm other than Ernst & YoungThese subsidiaries were liquidated during the year



Acquisition of Subsidiary

On 29 October 2009, the Company acquired 100% equity interest in Insan Kualiti Sdn. Bhd., a company incorporated in Malaysia and is principally involved in the business of general merchants, traders, dealers, suppliers, factors, brokers, commission and general agents etc (general traders).

The fair values of the identifiable assets and liabilities of Insan Kualiti Sdn. Bhd. as at the date of acquisition were:

Cash and cash equivalents, representing fair value of net identi�able assetsGoodwill on acquisitionCost of business combinantion, settled in cash

2009RM

2-2

Total cost of the business combination, settled in cashLess: Cash and cash equivalents of subsidiary acquiredNet cash out�ow on acquisition

2009RM

2(2)

-

The effect of the acquisition on cash flows is as follows:

There were no acquisitions subsequent to financial year ended 31 December 2010.

19. Investment in Associates

Unquoted shares, at costLess: Accumulated impairment losses

4,286(4,286)

-

4,286(4,286)

-

4,286(4,286)

-

4,286(4,286)

-

Group2009

RM’000

Company2009

RM’0002010

RM’0002010

RM’000

20092010Name

40

40

36

40

40

36

Kesang Mining Corporation Philippines (”KMCP”)

Kesang Processing and Management Corporation (”KPMC”)

Pembinaan Nazri Sdn. Bhd. ^

* KPMC holds 60% (2009: 60%) of the equity interest in KMCP^ This associate was liquidated during the year

Gold Mining (inactive)

Gold mining and provision of management services to KMCP (inactive)

Construction (under members’ voluntary liquidation)

Principal Activities

Philippines

Philippines

Malaysia

Country of Incorporation

*


Details of the associates held by the Company are as follows:



. D

efer

red

Tax

D

efer

red

inco

me

tax

as a

t 31

Dec

embe

r rel

ates

to th

e fo

llow

ing:

Gro

up

Def

erre

d Ta

x Li

abili

ties

:

Prop

erty

, pla

nt a

nd e

quip

men

t

Def

erre

d Ta

x A

sset

s:

Unu

tilis

ed ta

x lo

sses

Una

bsor

bed

capi

tal a

llow

ance

sO

ther

s

Com

pany

Def

erre

d Ta

x Li

abili

ties

:

Prop

erty

, pla

nt a

nd e

quip

men

t

Def

erre

d Ta

x A

sset

s:

Unu

tilis

ed ta

x lo

sses

As

at31

Dec

embe

r 201

0RM

’000

Reco

gnis

edin

Pro

�tor

Los

sRM

’000

Reco

gnis

edin

Pro

�tor

Los

sRM

’000

As

at1

Janu

ary

2009

RM’0

00

As

at31

Dec

embe

r 200

9RM

’000

156

(380

)(5

)(2

92)

(677

)(5

21)

112

(112

) -

(44)

280 1

(334

)(5

3)(9

7)

(50) 50-

112

(100

)(4

)(6

26)

(730

)(6

18)

62 (62) -

(17)

(254

) -51

926

524

8

(23) 23-

95

(354

)(4

)(1

07)

(465

)(3

70)

39 (39) -


Notes to the Financial Statements (cont’d.)20. Deferred Tax (cont’d.)

Unused tax lossesUnabsorbed capital allowancesOthers

2009RM’000

2010RM’000

2009RM’000

2010RM’000

66,7361,1191,014

68,869

57,0291,100

19558,324

8,845--

8,845

1,568--

1,568

CompanyGroup

Presented After Appropriate O�setting as Follows:Deferred tax assets

2009RM’000

2010RM’000

(370) (618)

Group

Deferred tax assets have not been recognised in respect of the following items:

Unrecognised tax losses

At the reporting date, the Group has tax losses that are available for offset against future taxable profits of the companies in which the losses arose, for which no deferred tax asset is recognised due to uncertainty of recoverability. The availability of unused tax losses for offsetting against future taxable profits of the respective subsidiaries are subject to no substantial changes in shareholdings of those subsidiaries under the Income Tax Act, 1967 and guidelines issued by the tax authority.

21. Other Investments

CurrentShort-term investmentLess: Accumulated impairment losses

Non-CurrentAvailable-for-sale �nancial assets:- equity instruments (quoted in Malaysia)- equity instruments (unquoted), at costLess: Accumulated impairment losses

2009RM’000

2010RM’000

6,880(4,180)2,700

51897

(800)97

148

6,880(4,180)2,700

51944

(800)144195

Group / Company

Short term investment was due and receivable together with a guaranteed profit of RM800,000 on or before 26 June 2007. It was secured by 12 units condominium of the investee and assignment of the proceeds receivable from the sale of properties developed by the investee. The Group, in 2007, released 4 units of condominium as security to the investee to enable the investee to obtain banking facility to finance the completion of the development project.

On 19 September 2007, the investee sought an extension of 8 months to comply with its obligations and terms under the Joint Venture Agreement on the basis that the first block of 50 units had been completed but there was a delay in getting the Certificate of Fitness for occupation attributable to a consequent delay of inspection by the Authorities.

The Directors carried out a review of the recoverable amount of its other investment in current year and no further impairment is required.

The carrying amount of the investment of RM2.7 million will be realised by way of contra arrangement with the properties of the investee valued at approximately RM3.6 million. The contra is expected to be effected in the next 12 months pending the developer executing the novation agreement upon settlement of outstanding management fees by the Company.


Notes to the Financial Statements (cont’d.)22. Land Held for Property Development and Property Development Costs

(a) Land Held for Property Development

Freehold LandCost and Carrying AmountAt 1 JanuaryDisposed during the yearAt 31 December

2009RM’000

2010RM’000

66,219(28,833)37,386

66,387(168)

66,219

Group

Freehold land of the Group is pledged to a financial institution for banking facilities granted to a subsidiary, DRPSB (Note 29).

(b) Property Development Costs

Group

At 31 December 2010Cumulative Property Development CostsAt 1 January 2010Costs incurred during the yearWrite-o� of development costsReversal of completed projectsUnsold units transferred to inventoriesAt 31 December 2010

Cumulative Costs Recognised in Pro�t or LossAt 1 January 2010Recognised during the yearReversal of completed projectsAt 31 December 2010

Property Development Costs at 31 December 2010

At 31 December 2009Cumulative Property Development CostsAt 1 January 2009Costs incurred during the yearReversal of completed projectsUnsold units transferred to inventoriesAt 31 December 2009

Cumulative Costs Recognised in Pro�t or LossAt 1 January 2009Recognised during the yearReversal of completed projectsAt 31 December 2009

Property Development Costs at 31 December 2009

3,756----

3,756

----

3,756

6,295-

(2,539)-

3,756

-(2,539)2,539

-

3,756

128,950--

(15,702)(53)

113,195

(2,722)(12,980)15,702

-

113,195

73,16860,000(4,218)

-128,950

(1,531)(5,409)4,218

(2,722)

126,228

62,7569,163

(67)(17,233)

(230)54,389

(8,821)(8,412)17,233

-

54,389

62,9918,289

(7,406)(1,118)62,756

(4,399)(11,828)

7,406(8,821)

53,935

195,4629,163

(67)(32,935)

(283)171,340

(11,543)(21,392)32,935

-

171,340

142,45468,289

(14,163)(1,118)

195,462

(5,930)(19,776)14,163

(11,543)

183,919

DevelopmentTotal

RM’000Rights

RM’000

FreeholdLand

RM’000Costs

RM’000

The development rights are pursuant to the consideration to be paid to Johor City Development Sdn. Bhd. (“JCDSB”) for the appointment of DRJSB as the developer of Taman Damansara Aliff Land.


Notes to the Financial Statements (cont’d.)23. Trade and Other Receivables

CurrentTrade Receivables Amount due from related companies Third parties Less: Allowance for impairment third partiesTrade receivables, net

Other Receivables Income tax recoverable Amounts due from subsidiaries Amounts due from associates Amounts due from past related companies Amounts due from past subsidiary Amounts due from related companies Deposits Others

Less: Allowance for impairment Amounts due from subsidiaries Amounts due from associates Amounts due from past related companies Amounts due from past subsidiary Amounts due from related companies Others

Other receivables, net

Total trade and other receivablesAdd: Cash and bank balances (Note 27)Total loans and receivables

7,73778,503

(27,369)58,871

609-

7,6057,6641,2614,5841,0583,283

26,064

-(7,605)(7,664)(1,261)

(17)(2,298)

(18,845)7,219

66,0906,194

72,284

7,09849,655

(21,662)35,091

615-

7,6059,2781,2614,6721,0136,054

30,498

-(7,605)(9,278)(1,261)

(53)(2,184)

(20,381)10,117

45,2087,704

52,912

-9,531

(8,207)1,324

424169,677

7,6055

1,261617

51650

180,290

(93,185)(7,605)

(5)(1,261)

(17)(621)

(102,694)77,596

78,920310

79,230

-9,531

(2,500)7,031

406174,039

7,6055

1,261610

39722

184,687

(73,410)(7,605)

(5)(1,261)

(17)(547)

(82,845)101,842

108,8731,859

110,732

Group2009

RM’000

Company2009

RM’0002010

RM’0002010

RM’000

(a) Trade Receivables

Trade receivables are non-interest bearing and are generally ranges from 14 to 30 day (2009: 14 to 30 day) terms. They are recognised at their original invoice amounts which represent their fair values on initial recognition.

Ageing analysis of trade receivables

The ageing analysis of the Group’s and Company’s trade receivables are as follows:

Neither past due nor impaired1 to 30 days past due not impaired31 to 60 days past due not impaired61 to 90 days past due not impaired91 to 120 days past due not impairedMore than 121 days past due not impaired

Impaired

51,91979-

1,9325,0046,952

27,36986,240

22,0932,004

348282

1110,35312,99821,66256,753

-----

1,3241,3248,2079,531

--

337258

-6,4367,0312,5009,531

Group2009

RM’000

Company2009

RM’0002010

RM’0002010

RM’000


Notes to the Financial Statements (cont’d.)23. Trade and Other Receivables (cont’d.)

(a) Trade Receivables (cont’d.)

Receivables that are neither past due nor impaired

99% (2009: 92%) of trade receivables of the Group that are neither past due nor impaired are due from land purchasers, of which RM14,836,000 and RM29,847,000 (2009: RM14,836,000 and nil) are due from Pasdec Corporation Sdn. Bhd. (“Pasdec”) and Nu-Edge Realty Sdn. Bhd. respectively, which sale proceeds are identified for repayment of the syndicated term loan as disclosed in Note 29.

Amount due from Pasdec is estimated by management to be receivable in June 2011 upon issuance of the individual land title to Pasdec. If the amount is received after 12 months in 2012 or 2013, trade receivables of the Group will be impaired by RM1.10 million and RM2.12 million respectively.

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

Receivables that are past due but not impaired

The Group and Company have trade receivables amounting to RM6,952,000 and RM1,324,000 (2009: RM12,736,000 and RM7,031,000) respectively that are past due at the reporting date but not impaired.

Although these receivables have exceeded the credit terms granted to them, the directors are reasonably confident that all debts can be recovered within the next 12 months.

Included in trade receivables of the Group is RM2,861,000 (2009: RM2,861,000) due from a debtor, which the debt is being disputed and currently under legal action. The Directors are reasonably confident that the debts can be recovered as a Mareva Injunction has been obtained over the assets of the debtors, pending full trial of the case. Accordingly, no provision has been made in respect of this debt.

Included in trade receivables of the Group and of the Company is RM1,322,000 (2009: RM1,322,000) due from Syarikat Perumahan Negara Berhad (“SPNB”). This amount together with RM6,325,000 (2009: RM6,325,000) included within other current assets (Note 24) are estimated by management to be receivable in June 2011 upon SPNB accepting the proposed mutual termination and proposed joint venture with JCorp. If the amount is received after 12 months in 2012 or 2013, trade receivables and other current assets of the Group and of the Company will be impaired by RM501,000 and RM1.19 million respectively.

Receivables that are impaired

The Group’s and Company’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:

Individually ImpairedTrade receivables - nominal amountsLess: Allowance for impairment

27,369(27,369)

-

21,662(21,662)

-

8,207(8,207)

-

2,500(2,500)

-

Group2009

RM’000

Company2009

RM’0002010

RM’0002010

RM’000


Notes to the Financial Statements (cont’d.)23. Trade and Other Receivables (cont’d.)

(a) Trade Receivables (cont’d.)

Receivables that are impaired (cont’d.)

Movement in allowance accounts:

At 1 January Charge for the year (Note 9)At 31 December

21,6625,707

27,369

21,529133

21,662

2,5005,7078,207

2,42179

2,500

Group2009

RM’000

Company2009

RM’0002010

RM’0002010

RM’000

Included in the trade receivables that are impaired are amounts totaling RM12,884,000 (2009: RM12,884,000) owing by companies within the Safuan Group, which are disputed and are currently under legal action. Full provision has been made against these receivables.

Trade receivables that are individually determined to be impaired at the reporting date relate to debtors that are in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements.

(b) Other Receivables

Amounts due from related companies represent amounts due from subsidiaries of JCorp. These amounts are unsecured, non-interest bearing and are repayable on demand. JCorp is the immediate and ultimate holding corporation of the Company.

Other receivables that are impaired

Amounts due from subsidiaries are unsecured, non-interest bearing and are repayable on demand. At the reporting date, debts due from subsidiaries in net liabilities position amounted to RM152,910,000 (2009: RM154,816,000) of which provision for impairment of RM93,185,000 (2009: RM73,410,000) had been made.

Amounts due from past related companies are owing by companies within the Safuan Group, which are in dispute and under legal action. Full provision had been made against these receivables in prior years.

24. Other Current Assets

Prepayment for �tting out worksPrepaymentsAmount due from customers for contract (Note 25)

Less: Allowance for impairment Prepayment for �tting out works Prepayments Amounts due from customers for contract

Total other current assets

2,7001,348

17,78421,832

(2,700)(962)

(2,401)(6,063)15,769

2,7001,8508,476

13,026

(2,700)(962)

-(3,662)9,364

2,700307

10,03913,046

(2,700)(48)

(1,601)(4,349)8,697

2,700809

7,92611,435

(2,700)(48)

-(2,748)8,687

Group2009

RM’000

Company2009

RM’0002010

RM’0002010

RM’000

Construction contract costs incurred to dateAttributable pro�ts

Less: Progress billings

Presented as:Gross amount due from customers for contract work (Note 24)Gross amount due to customers for contract work (Note 31)

93,31310,048

103, 361 (85,577)17,784

17,784-

17,784

83,9979,748

93,745(85,577)

8,168

8,476(308)

8,168

31,4336,575

38,008(27,969)10,039

10,039-

10,039

29,8946,001

35,895(27,969)

7,926

7,926-

7,926

Group2009

RM’000

Company2009

RM’0002010

RM’0002010

RM’000

Included in amount due from customers for contract of the Group and of the Company is RM6,325,000 (2009: RM6,325,000) due from SPNB as disclosed in Note 23(a).



Hire of plant and machineryRental expense for building

--

195

2009RM’000

Group2010

RM’000

CostDeveloped properties held for salePharmaceutical products

1,68418

1,702

1,39321

1,414

2009RM’000

Group2010

RM’000

Cash at banks and on handShort term deposits with: Licensed banks Other �nancial institutionsCash and bank balances

5,879

315-

6,194

4,469

1,9401,2957,704

121

189-

310

25

1,834-

1,859

Group2009

RM’000

Company2009

RM’0002010

RM’0002010

RM’000

Prepayment for �tting out worksPrepaymentsAmount due from customers for contract (Note 25)

Less: Allowance for impairment Prepayment for �tting out works Prepayments Amounts due from customers for contract

Total other current assets

2,7001,348

17,78421,832

(2,700)(962)

(2,401)(6,063)15,769

2,7001,8508,476

13,026

(2,700)(962)

-(3,662)9,364

2,700307

10,03913,046

(2,700)(48)

(1,601)(4,349)8,697

2,700809

7,92611,435

(2,700)(48)

-(2,748)8,687

Group2009

RM’000

Company2009

RM’0002010

RM’0002010

RM’000

Construction contract costs incurred to dateAttributable pro�ts

Less: Progress billings

Presented as:Gross amount due from customers for contract work (Note 24)Gross amount due to customers for contract work (Note 31)

93,31310,048

103, 361 (85,577)17,784

17,784-

17,784

83,9979,748

93,745(85,577)

8,168

8,476(308)

8,168

31,4336,575

38,008(27,969)10,039

10,039-

10,039

29,8946,001

35,895(27,969)

7,926

7,926-

7,926

Group2009

RM’000

Company2009

RM’0002010

RM’0002010

RM’000

26. Inventories

During the year, the amount of inventories recognised as an expense in cost of sales of the Group was RM281,000 (2009: RM89,000).

27. Cash and Bank Balances

Other financial institutions are licensed discount houses in Malaysia.

Included in cash at banks of the Group are amounts of RM3,038,000 (2009: RM1,264,000) held pursuant to Section 7A of the Housing Development (Control and Licensing) Act, 1965 and are restricted from use in other operations.

Included in cash at banks of a subsidiary are amounts totalling RM100,257 (2009: RM532,866) assigned as security for the syndicated term loan as disclosed in Note 29.

Included in deposits with licensed banks of the Group and the Company are deposits amounting to RM315,000 (2009: RM1,940,000) and nil (2009: RM500,000) respectively which are pledged as security for overdraft facilities and bank guarantees granted in favour of authorities in connection with property development and construction contracts activities.

25. Gross Amount Due from/(to) Customers for Contract Work-in-Progress

The costs incurred to date on construction contracts include the following charges made during the financial year:


Notes to the Financial Statements (cont’d.)27. Cash and Bank Balances (cont’d.)

Short-term deposits are made for varying periods of between one day and one year depending on the immediate cash requirements of the Group and the Company, and earn interests at the respective short-term deposit fixed rates. The weighted average effective interest rates at the reporting date for the Group and the Company are as below:

Licensed banksOther �nancial institutions

2.39%-

3.36%3.30%

2.75%-

2.42%-

Group2009

%

Company2009

%2010

%2010

%

Licensed banksOther �nancial institutions

178-

25430

89-

127-

Group2009Days

Company2009Days

2010Days

2010Days

Cash and short term depositsBank overdrafts (Note 29)Cash and cash equivalents

6,194-

6,194

7,704(1,471)6,233

310-

310

1,859(1,471)

388

Group2009

RM’000

Company2009

RM’0002010

RM’0002010

RM’000

The weighted average maturities of deposits at the reporting date were as follows:

For the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise the following at the reporting date:

28. Provisions

Group

At 1 January 2010 Arose during the year (Note 9, 10) Utilised Unused amounts reversed (Note 7)At 31 December 2010

At 31 December 2010Current


1,9461,305

(3,222)(29)

-

-

1,946

352

(6)-

31

31

35

1,9811,307

(3,228)(29)31

31

1,981

TotalRM’000

LiquidatedAscertained

DamagesRM’000

UnutilisedLeave

RM’000

CurrentSecured:Syndicated term loan at BLR + 2.0% p.aBank overdrafts at BLR + 2.0% p.aObligations under �nance leases (Note 35(b))

Unsecured:7.0% p.a �xed rate revolving creditsAdvances from a minority shareholder of a subsidiary

Non-currentSecured:Obligations under �nance leases (Note 35(b))Total loans and borrowings

22,731-

7622,807

696

2,0002,696

25,503

29625,799

24,8261,471

15226,449

714

2,0002,714

29,163

22529,388

--

1212

696

-696708

20728

-1,471

441,515

714

-714

2,229

312,260

Group2009

RM’000

Company2009

RM’0002010

RM’000

2011On demand

2011

On demand

On demand

2012-2019

Maturity2010

RM’000



Group

At 1 January 2010 Arose during the year (Note 9, 10) Utilised Unused amounts reversed (Note 7)At 31 December 2010



1,9461,305

(3,222)(29)

-

-

1,946

352

(6)-

31

31

35

1,9811,307

(3,228)(29)31

31

1,981

TotalRM’000

LiquidatedAscertained

DamagesRM’000

UnutilisedLeave

RM’000

CurrentSecured:Syndicated term loan at BLR + 2.0% p.aBank overdrafts at BLR + 2.0% p.aObligations under �nance leases (Note 35(b))

Unsecured:7.0% p.a �xed rate revolving creditsAdvances from a minority shareholder of a subsidiary

Non-currentSecured:Obligations under �nance leases (Note 35(b))Total loans and borrowings

22,731-

7622,807

696

2,0002,696

25,503

29625,799

24,8261,471

15226,449

714

2,0002,714

29,163

22529,388

--

1212

696

-696708

20728

-1,471

441,515

714

-714

2,229

312,260

Group2009

RM’000

Company2009

RM’0002010

RM’000

2011On demand

2011

On demand

On demand

2012-2019

Maturity2010

RM’000

29. Loans and Borrowings

The remaining maturities of the loans and borrowings as at 31 December 2010 are as follows:

On demand or within one yearMore than 1 year and less than 2 yearsMore than 2 years and less than 5 years5 years and more

25,50379

14968

25,799

29,16385

140-

29,388

70812

8-

728

2,2291120

-2,260

Group2009

RM’000

Company2009

RM’0002010

RM’0002010

RM’000

Syndicated term loan at BLR + 2.0% p.a.

The syndicated term loan is repayable by way of redemption of individual land titles and the balance by way of a lump sum payment on 31 December 2007. On 6 January 2007, the Group obtained extension of another 5 years for the repayment of the Syndicated term loan as shown below:

Payments on or Before

31 December 2005 31 December 2006 31 December 2007 31 December 2008 31 December 2009 31 December 2010

Any sale proceeds received arising from land sale including land sale to Pasdec Corporation Sdn. Bhd. shall be used to reduce the term loan facility accordingly.

The above syndicated term loan is secured by way of:

(a) first and second legal charge over the 2,050 acres of land in Kuantan, Pahang Darul Makmur;

(b) first and second fixed and floating charge over all the assets and undertaking of the subsidiary;

(c) assignment of all project accounts in respect of Phase 1 and Phase 2 of the Bandar Damansara Kuantan project (“the Project”);

RM’000

1,0002,0002,000

13,00013,000

Remaining balance


Notes to the Financial Statements (cont’d.)29. Loans and Borrowings (cont’d.)

Syndicated term loan at BLR + 2.0% p.a. (cont’d.)

(d) assignment of all credit balances remaining in the Housing Development Accounts upon closure of such accounts in respect of Phase 1 and Phase 2 of the Project;

(e) an irrecoverable undertaking from the Company to meet any cash deficit to ensure completion of Phase 1 and Phase 2 of the Project;

(f ) Corporate Guarantee from the Company; and

(g) Letter of Undertaking from the Company to inject a total of RM14.8 million into a subsidiary to part-finance the development of Phase 1 and 2 of the Project.

On 13 August 2010, the lenders have agreed to extend the validity period of the redemption statements in respect of the principal repayment of RM9,033,968 past due on 30 September 2010 to 31 May 2011. At a meeting held between the Group and the lenders on 9 November 2010, followed with a letter from the lenders dated 19 January 2011, the lenders have agreed to defer the principal repayment to 31 May 2011 or upon receipt of the sale proceeds from the land sale to Nu-Edge Realty Sdn. Bhd. or upon receipt of the balance sale proceeds from the land sale to Pasdec Corporation Sdn. Bhd. or any other land sale to third parties, whichever earlier.

There were no additional terms and securities required by the bankers for the purpose other than payment of a deferment fee of 0.25% on the amount deferred and continuous monthly servicing of interest.

Bank overdrafts at BLR + 2.0% p.a.

Overdraft - restrictedOverdraft - general line

2009RM’000

2010RM’000

---

514957

1,471

Group / Company

The restricted overdraft is obtained to finance expenses/costs incurred for the Sri Gading project. The general line overdraft is for general working capital requirement. The overdrafts are secured by way of:

(a) fixed deposit of RM500,000 of the Company;

(b) sinking fund collection for 8% in the form of fixed deposit of every contract proceed received from the Sri Gading project; and

(c) letter of comfort from JCorp.

The overdraft facilities were cancelled during the financial year.

7% p.a. fixed rate revolving credits

In prior year, the Company obtained an extension on the balance of the revolving credits due payable on 30 September 2009 to 30 June 2010 by way of monthly instalment of RM70,000 from September 2009 to May 2010, and the balance of the settlement amount by 30 June 2010.

The Company has defaulted on the payment for principal and interest of revolving credit carried at RM696,000 at the reporting date. The Company experienced a shortage of fund due to mismatch of cashflow from the receivables. The principal payable of RM648,000 and interest payable of RM48,000 which has been overdue as at December 2010 remained unpaid as at the date when these financial statements were approved by directors.


Notes to the Financial Statements (cont’d.)29. Loans and Borrowings (cont’d.)

Advances from a minority shareholder of a subsidiary

The advances from a minority shareholder of a subsidiary, Uniphoenix Corporation Bhd. (in liquidation) are unsecured, non-interest bearing and are repayable on demand.

Obligations under finance leases

These obligations are secured by a charge over the leased assets (Note 15). The average discount rate implicit in the lease is 3.4% (2009: 3.5%) p.a.

30. Trade and Other Payables

CurrentTrade Payables Amount due to JCDSB Third parties

Other Payables Amounts due to subsidiaries Amounts due to companies within Safuan Group Amounts due to related companies: - Damansara Assets Sdn. Bhd. - Bukit Damansara Development Sdn. Bhd. - Kumpulan Penambang (Johor) Sdn. Bhd. - JSEDC Properties Sdn. Bhd. - Harta Consult Sendirian Bhd. - Pro Corporate Management Services Sdn. Bhd. - Puteri Hotels Sdn. Bhd. - Johor Foods Sdn. Bhd. Deposits received Accruals: - Interest - Others Liquidated ascertained damages payable to purchasers of development properties Others

Non-currentTrade Payables Third partiesTotal trade and other payablesAdd: Loans and borrowings (Note 29)Total �nancial liabilities carried at amortised cost

121,20015,481

136,681

-6,445

2,0966,376

51,656

231,061

16534

1,126

364,254

1,84410,39235,864

172,545

4,080176,625

25,799202,424

121,20019,398

140,598

-6,445

2,0725,811

51,621

23825

9-

2,407

414,431

-10,62934,319

174,917

-174,917

29,388204,305

-5,9515,951

15,5976,110

293,764

5151

-892

16--

-305

-2,541

29,41035,361

-35,361

72836,089

-5,9695,969

14,2646,110

293,679

5151

-723

9--

-144

-2,143

27,25733,226

-33,226

2,26035,486

Group2009

RM’000

Company2009

RM’0002010

RM’0002010

RM’000


Notes to the Financial Statements (cont’d.)30. Trade and Other Payables (cont’d.)

(a) Trade Payables

These amounts are non-interest bearing. Trade payables are normally settled on 30 to 90-day (2009: 30 to 90-day) terms. Non-current trade payables are repayable after 12 months on installment basis.

Amount due to JCDSB is part of the total consideration of RM180 million for JCorp and JCDSB agreeing to appoint a subsidiary of the Company as the developer for Taman Damansara Aliff.

(b) Other Payables

These amounts are non-interest bearing. Other payables are normally settled on an average term of three months (2009: average term of three months).

(c) Amounts Due to Related Companies

These represents amounts due to subsidiaries of JCorp. These amounts are unsecured, non-interest bearing and are repayable on demand.

(d) Amounts Due to Subsidiaries

These amounts are unsecured, repayable on demand and non-interest bearing except for an amount of RM1,816,620 (2009: RM1,708,956) which bears interest at the effective average rate of 6.3% (2009: 3.5%) per annum.

31. Other Current Liabilities

Gross amount due to customers for contract work (Note 25) - 308 - -

Group2009

RM’000

Company2009

RM’0002010

RM’0002010

RM’000



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Notes to the Financial Statements (cont’d.)32. Share Capital and Share Premium (cont’d.)

On 3 August 2009, the Company reduced its existing issued and paid-up capital of 781,689,857 ordinary shares of RM1 each by the cancellation of RM0.84 of the par value and consolidated these shares via the consolidation of 500 ordinary shares of RM0.16 each into 160 ordinary shares of RM0.50 each.

The holders of ordinary 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.

33. Capital Reserve

This represents reserve arising from bonus issues by a subsidiary.

34. Related Party Transactions

(a) Sale and Purchase of Goods and Services

In addition to the related party information disclosed elsewhere in the financial statements, the following significant transactions between the Group and related parties took place at terms agreed between the parties during the financial year:

Related Companies:Share registration fees paid/payableManagement fees paid/payableManagement fees received/receivableDiscount given for management fees charged in prior yearsO�ce rent paid/payableSale of propertiesDevelopment rights payable (Note i)Project management servicesMaintenance servicesManpower servicesDisposal of a subsidiaryPayment on behalfMedical expenses paid/payableTransportation fees paid/payableHospital planning and commissioning feeConstruction management fee received/receivable

Subsidiaries:Advances receivedAdvances givenRepayment of advances givenPayment on behalf of subsidiariesPayment on behalf by subsidiariesReceipt on behalf of subsidiariesReceipt on behalf by subsidiariesDividend receivedManagement fees paid/payableManpower servicesConstruction contract fee paid/payableInterest on advances paid/payablePurchase of investment propertiesInsurance charged

126183416

911,069

10,901-

2,044926

1,194-

1,079248

97210563

--------------

87575663

651,5199,203

60,0001,610

8621,005

37,6002,461

451697

1,122

--------------

126-

416-

485-----------

3,8878

1,9472,810

745-

30404222

1,539108

3,58525

87-

590-

485-----

37,600-----

784260

-6,9416,828

1166

408868

1,14158

--

Group2009

RM’000

Company2009

RM’0002010

RM’0002010

RM’000


Notes to the Financial Statements (cont’d.)34. Related Party Transactions (cont’d.)

(a) Sale and Purchase of Goods and Services (cont’d.)

Related companies:

These are subsidiaries and associates of JCorp.

(i) The amount relates to acquisition of development rights by a subsidiary of the Company.

(b) Compensation of Key Management Personnel

Salaries and other emolumentsDe�ned contribution plan

83594

929

53950

589

39-

39

1659

174

Group2009

RM’000

Company2009

RM’0002010

RM’0002010

RM’000

Not later than 1 yearLater than 1 year but not later than 5 years

61103164

1,15561

1,216

2009RM’000

Group2010

RM’000

Salaries and other emolumentsDe�ned contribution plan

83594

929

53950

589

39-

39

1659

174

Group2009

RM’000

Company2009

RM’0002010

RM’0002010

RM’000

Not later than 1 yearLater than 1 year but not later than 5 years

61103164

1,15561

1,216

2009RM’000

Group2010

RM’000

35. Commitments

(a) Operating Lease Commitments – As Lessee

The Group has entered into commercial leases on office buildings. These leases have an average tenure of three years with no renewal option or contingent rent provision included in the contract. There are no restrictions placed upon the Group by entering into these leases.

Minimum lease payments recognised in profit or loss for the financial year ended 31 December 2010 amounted to RM1,081,000. Future minimum rentals payable under non-cancellable operating leases at the reporting date are as follows:

Future minimum rentals payable under non-cancellable operating leases at the reporting date are as follows:

(b) Finance Lease Commitments

The Group has finance leases for certain motor vehicles (Note 15). These leases do not have terms of renewal, but have purchase options at nominal values at the end of the lease term.



Minimum Lease Payments:

Not later than 1 yearLater than 1 year but not later than 2 yearsLater than 2 years but not later than 5 yearsLater than 5 yearsTotal minimum lease paymentsLess: Amounts representing �nance chargesPresent value of minimum lease payments

Present Value of Payments:

Not later than 1 yearLater than 1 year but not later than 2 yearsLater than 2 years but not later than 5 yearsLater than 5 yearsPresent value of minimum lease paymentsLess: Amount due within 12 months (Note 29)Amount due after 12 months (Note 29)

9796

17475

442(70)372

7679

14968

372(76)296

161102147

-410(33)377

15285

140-

377(152)225

1313

9-

35(3)32

1212

8-

32(12)20

471321

-81(6)75

441120

-75

(44)31

Group2009

RM’000

Company2009

RM’0002010

RM’0002010

RM’000

35. Commitments (cont’d.)

(b) Finance Lease Commitments (cont’d.)

Future minimum lease payments under finance leases together with the present value of the net minimum lease payments are as follows:

36. Contingent Liabilities

Guarantee (secured)

The Company is contingently liable to the extent of RM22,731,000 (2009: RM24,826,000) in respect of a corporate guarantee provided for a syndicated term loan facility extended to a subsidiary, DRPSB, as mentioned in Note 29.

37. Fair Value of Financial Instruments

A. 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

2010Financial Liabilities:Trade payables (non-current)Loans and borrowings (non-current) - Obligations under �nance leases

2009FinancialLoans and borrowings (non-current) - Obligations under �nance leases

4,080

296

225

4,015

302

206

-

20

31

-

19

28

GroupFair

ValueRM’000

CompanyFair

ValueRM’000

CarryingAmountRM’000

CarryingAmountRM’000Note

30

29

29


Notes to the Financial Statements (cont’d.)37. Fair Value of Financial Instruments (cont’d.)

B. Determination of Fair Value

Financial instruments 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 investments (current) 21 Trade and other receivables (current) 23 Trade and other payables (current) 30 Loans and borrowings (current) 29

The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values, either due to their short-term nature.

The carrying amounts of the current portion of loans and borrowings are reasonable approximations of fair values due to the insignificant impact of discounting.

The fair values of current loans and 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.

Trade payables and finance lease obligations

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.

38. 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 and interest rate risk.

The Board of Directors reviews and agrees policies and procedures for the management of these risks. The audit committee provides independent oversight to the effectiveness of the risk management process.

It is, and has been throughout the current and previous financial year, the Group’s policy that no derivatives shall be undertaken.

The following sections provide details regarding the Group’s and Company’s exposure to the above-mentioned financial risks and the objectives, policies and processes for the management of these risks.

(a) Credit Risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Group’s and the Company’s exposure to credit risk arises primarily from trade and other receivables. For other financial assets (including cash and bank balances), the Group and the Company minimise credit risk by dealing exclusively with high credit rating counterparties.

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.


Notes to the Financial Statements (cont’d.)38. Financial Risk Management Objectives and Policies (cont’d.)

(a) Credit Risk (cont’d.)

Exposure to credit risk

At the reporting date, the Group’s and the Company’s maximum exposure to credit risk is represented by:

- The carrying amount of each class of financial assets recognised in the statements of financial position

- A nominal amount of RM22,731,000 (2009: RM24,826,000) relating to a corporate guarantee provided by the Company to a bank on a subsidiary’s bank loan

Information regarding credit enhancements for trade and other receivables is disclosed in Note 23.

Credit risk concentration profile

The Group determines concentrations of credit risk by monitoring the business segment of its trade receivables on an ongoing basis. The credit risk concentration profile of the Group’s and the Company’s trade receivables at the reporting date are as follows:

By Business Segments:

Property developmentConstructionProject managementOthers

54,0034,189

474205

58,871

92%7%1%0%

100%

23,9389,897

487769

35,091

68%28%

1%2%

100%

2010Group

% of Total2009

% of TotalRM’000 RM’000

At the reporting date, 91% (2009: 59%) of the Group’s trade receivables were due from 6 (2009: 5) customers of the property development segment for sale of land.

The concentration of credit risk of these land purchasers is mitigated by the terms of the sale and purchase agreements in which the land titles will only be transferred to the purchasers upon full settlement of the whole amounts due as well as the right of the Group in seeking specific performance for the purchasers to complete the sale.

Financial assets that are neither past due nor impaired

Information regarding trade and other receivables that are neither past due nor impaired is disclosed in Note 23. Deposits with banks and other financial institutions that are neither past due nor impaired are placed with or entered into with reputable financial institutions.

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’s and the Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Group’s and the Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of stand-by credit facilities.

�0�damansara realty berhad • annual report 2010

Notes to the Financial Statements (cont’d.)38. Financial Risk Management Objectives and Policies (cont’d.)

(b) Liquidity Risk (cont’d.)

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.

Group

Financial Liabilities:Trade and other payablesLoans and borrowingsTotal undiscounted �nancial liabilities

Company

Financial Liabilities:Trade and other payables, excluding �nancial guarantees *Loans and borrowingsTotal undiscounted �nancial liabilities

172,54525,503

198,048

35,361708

36,069

4,080228

4,308

-2020

-6868

---

176,62525,799

202,424

35,361728

36,089

|---------------------------------2010---------------------------------|

TotalRM’000

One toFive Years

RM’000

On Demand orWithin One year

RM’000

Over FiveYears

RM’000

* At the reporting date, the counterparty to the financial guarantees does not have a right to demand cash as the default has not occurred. Accordingly, financial guarantees under the scope of FRS 139 are not included in the above maturity profile analysis.

(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 their loans and borrowings. At the reporting date, approximately 4% (2009: 4%) of the Group’s borrowings are at fixed rate of interest.

Sensitivity analysis for interest rate risk

At the reporting date, if interest rates had been 10 basis points lower/higher, with all other variables held constant, the Group’s loss net of tax would have been RM21,000 lower/higher, arising mainly as a result of lower/ higher interest expense on floating rate loans and borrowings. The assumed movement in basis points for interest rate sensitivity analysis is based on the currently observable market environment.

39. 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. No changes were made in the objectives, policies or processes during the years ended 31 December 2010 and 31 December 2009.

�0� damansara realty berhad • annual report 2010

Notes to the Financial Statements (cont’d.)39. Capital Management (cont’d.)

The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group’s policy is to keep the gearing ratio below 70%. The Group includes within net debt, loans and borrowings, trade and other payables, less cash and bank balances. Capital includes equity attributable to the owners of the parent.

Loans and borrowingsTrade and other payablesLess: Cash and bank balancesNet debt

Equity attributable to the owners of the parent, representing total capital

Capital and Net Debt

Gearing Ratio

2009RM’000

2010RM’000

2009RM’000

2010RM’000

25,799176,625

(6,194)196,230

104,543

300,773

65%

29,388174,917

(7,704)196,601

113,628

310,229

63%

72835,361

(310)35,779

72,766

108,545

33%

2,26033,226(1,859)33,627

103,243

136,870

25%

Note

293027

CompanyGroup

40. Segment Information

For management purposes, the Group is organised into business units based on their products and services, and has three reportable operating segments as follows:

i. Property development - the development of residential and commercial properties.

ii. Construction contracts - construction of sewage treatment plant, residential and commercial properties.

iii. Healthcare services - provision of healthcare related project management, engineering maintenance and manpower services.

iv. Hotel operations - operation and management of hotel, sale of food and beverage and provision of related services.

Except as indicated above, no operating segments have been aggregated to form the above reportable operating segments.

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.

Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third parties.



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1,99

41,

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206,

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2,99

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3,85

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7,61

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368

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1,90

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5,43

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A B A A C D E F G


Notes to the Financial Statements (cont’d.)40. Segment Information (cont’d.)

A The amounts relating to the hotel operation segment have been excluded to arrive at amounts shown in the consolidated statement of comprehensive income as they are presented separately in the statement of comprehensive income 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:

Impairment loss on �nancial assets:- trade receivablesother receivablesProvision for liquidated ascertained damages to house buyersWaiver of liquidated ascertained damages receivable from contractorsImpairment loss on goodwill on consolidationImpairment loss on amount due from customers for contract

999

999

5,707114

1,305

821598

2,40110,946

133117

1,244

-500

-1,994

2009RM’000Note

2010RM’000

Impairment loss on amounts due from subsidiariesSegment results of discontinued operationGain on disposal of a subsidiaryDividend income from a subsidiaryPro�t from inter-segment salesReversal of impairment loss on amounts due from subsidiariesImpairment loss on investment in subsidiariesImpairment loss on goodwill on consolidation

23,108--

(40)-

(3,333)1,737(598)

20,874

1,720(263)894(40)(21)

-100

(500)1,890

2009RM’000

2010RM’000

D The following items are added to/(deducted from) segment profit to arrive at “Loss/(profit) before tax from continuing operations” presented in the consolidated statement of comprehensive income:

E Additions to non-current assets consist of:

Investment propertiesProperty, plant and equipment

3,585271

3,856

-584584

2009RM’000

2010RM’000

Inter-segment liabilities (230,726) (225,937)

2009RM’000

2010RM’000

Deferred tax assestsGoodwill on consolidationInter-segment assets

(271)631

(158,772)(158,412)

(271)1,229

(174,608)(173,650)

2009RM’000

2010RM’000

F The following items are added to/(deducted from) segment assets to arrive at total assets reported in the consolidated statement of financial position:



Investment propertiesProperty, plant and equipment

3,585271

3,856

-584584

2009RM’000

2010RM’000

Inter-segment liabilities (230,726) (225,937)

2009RM’000

2010RM’000

Deferred tax assestsGoodwill on consolidationInter-segment assets

(271)631

(158,772)(158,412)

(271)1,229

(174,608)(173,650)

2009RM’000

2010RM’000

40. Segment Information (cont’d.)

G The following items are added to/(deducted from) segment liabilities to arrive at total liabilities reported in the consolidated statement of financial position:

Information about a major customer

Revenue from one major customer amount to RM30,149,000 (2009: RM6,532,000), arising from sales by the property development segment.

41. Significant Events

Proposed Group Restructuring Scheme

(a) On 6 November 2009, Damansara Realty Berhad (“DBhd”) proposed to undertake the following proposals:

(i) the proposed share exchange involving the exchange of 250,140,754 ordinary shares of RM0.50 each in DBhd (“DBhd Shares”) representing the entire issued and paid-up share capital of DBhd with the issuance of 150,084,452 new ordinary shares of RM0.50 each in Insan Kualiti Sdn Bhd (“IKSB”)(“IKSB Shares”), currently a wholly-owned subsidiary of DBhd at an issue price of RM0.80 per new IKSB Share and a total cash payment amounting to RM80,045,041 to the existing shareholders of DBhd on the basis of 0.60 new IKSB Share and payment of approximately RM0.32 in exchange for every one (1) DBhd share held;

(ii) the proposed acquisitions by IKSB of the following companies from JCorp group of companies:

- 100% of the equity interest in Tanjung Langsat Port Sdn Bhd comprising 97,000,000 ordinary shares of RM1.00 each for an indicative purchase consideration of approximately RM249.05 million; and

- 100% of the equity interest in TPM Technopark Sdn Bhd comprising 20,048,000 ordinary shares of RM1.00 each for an indicative purchase consideration of approximately RM54.80 million.

The total consideration of approximately RM303.85 million is to be satisfied by the issuance of 229,727,770 new IKSB Shares at an issue price of RM0.80 per IKSB Share and the remaining RM120.07 million to be set off against the amount due from JCorp for proposal (iii);

(iii) the proposed disposal of 250,140,754 ordinary shares of DBhd representing the entire issued and paid-up share capital of DBhd by IKSB to JCorp for a consideration of RM200,112,603 to be satisfied by cash of approximately RM80.05 million and the remaining RM120.07 million to be set off against amount due to JCorp for proposal (ii); and

(iv) the proposed transfer of the listing status of DBhd on the Main Market of Bursa Malaysia Securities Berhad to IKSB.

(b) IKSB on 6 November 2009 entered into a conditional share purchase agreement for proposal (ii) and a conditional share sale agreement for proposal (iii) with JCorp.

(c) On 6 May 2010, DBhd announced that the date of fulfillment for the proposed acquisitions and the proposed disposal was extended to 6 November 2010.

(d) Further to the announcement on 6 May 2010, DBhd on 14 July 2010 announced the deferment of the scheme, pending resolution of issues between DBhd and JCorp pertaining to the proposed acquired companies. The said scheme is in progress and an approppriate announcement will be made upon resolution of the said issues.


Notes to the Financial Statements (cont’d.)41. Significant Events (cont’d.)

Conditional take-offer from JCorp and Johor Logistics Sdn. Bhd.

(a) On 30 April 2010, DBhd received a Notice of Conditional Take-Offer (“Notice”) from JCorp and Johor Logistics Sdn. Bhd. (“JLSB”) (collectively known as the “Joint Offerors”) to acquire all the remaining ordinary shares of RM0.50 each in DBhd (“DBhd Shares”) not already owned by the Joint Offers (“Offer Shares”) at an offer price of RM0.80 per Offer Share to be satisfied wholly in cash (“Offer”). The Offer was approved by Securities Commission on 14 May 2010.

(b) The Offer is conditional upon the Joint Offerors having received valid acceptances by 5 p.m. on 3 June 2010 (“Closing Date”) or such other extended or revised Closing Date as may be decided by the Joint Offerors which would result in the Joint Offerors and their parties acting in concert holding in aggregate, together with such DBhd Shares that are already acquired, held or entitled to be acquired more than 50% of the voting shares of DBhd.

(c) On 7 June 2010, the Joint Offerors extended the Closing Date of the Offer to 17 June 2010.

(d) “The Offer was completed on 17 June 2010 with the Joint Offerors holding 53.79% of DBhd shares.

42. Authorisation of Financial Statements for Issue

The financial statements for the year ended 31 December 2010 were authorised for issue in accordance with a resolution of the directors on 28 March 2011.


Notes to the Financial Statements (cont’d.)43. Supplementary Information - Breakdown of Accumulated Losses Into Realised and Unrealised

The breakdown of the accumulated losses of the Group and of the Company as at 31 December 2010 into realised and unrealised profits/(losses) 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 Listing Requirements of Bursa Malaysia Securities Berhad, as issued by the Malaysian Institute of Accountants.

Total accumulated losses of the Company and its subsidiaries- Realised- Unrealised

Less: Consolidation adjustmentsAccumulated losses as per �nancial statements

(152,248)370

(151,878)131,123(20,755)

(52,460)-

(52,460)-

(52,460)

CompanyRM’000

GroupRM’000


List of Properties Held by the Group as at �� December �0�0

The above properties are valued at cost. These properties will be revalued at recoverable amount if there is any significant impairment.

Lot No. 7, 8 and 823,Mukim of Sungai Karang, Kuantan,Pahang.

Lot No. 6, 11 and 1026,Mukim of Beserah,Kuantan, Pahang.

Levels 14 and 15,Menara Safuan,Kuala Lumpur.

Lot 60233 GRN 74590Mukim and District of Petaling Selangor

Date OfValuation

Net BookValue

RM’000Age Of

BuildingDescriptionAreaTenureTitle / LocationParticulars

Freehold

n/a

Freehold

n/a

15 years

13 years

37,386

3,585

165

31 March 2010

-

-

Remaining777 acres

10,244 sq. ft

1,300 sq. ft

Vacant landand oil palm

plantation

O�ce Building

Shop O�ce


Shareholding StatisticsDAMANSARA REALTY BERHAD (4030-D)Shareholding Statistics as at 25 April 2011

Authorised Share Capital : RM1,000,000,000Issued & Fully Paid-Up Capital : 250,140,754 Ordinary Shares of RM0.50 each fully paid = RM125,070,377Class of Shares : Ordinary Share of RM0.50 each

Voting Right of ShareholdersEvery member of the Company present in person or by proxy shall have one vote on a show of hand and in the case of a poll shall have one vote for every share of which he/she is the holder.

Breakdown of Shareholdings

Top Thirty Securities Account Holders(Without aggregating the securities from different securities accounts belonging to the same depositor)

Less than 100100 - 1,0001,001 - 10,00010,001 - 100,000100,001 to less than 5% of Issued Capital5% and above of Issued CapitalTOTAL

%No. of

SharesNo. of

ShareholdersSize ofShareholdings

26,40715,168,83243,043,13131,107,49231,374,892

129,420,000250,140,754

0.016.06

17.2112.4412.5451.74

100.00

%

1.5560.8434.63

2.850.120.01

100.00

68326,82215,270

1,25753

344,088

123456789101112131415

%No. of

Shares

Johor CorporationOSK Noms (T) Sdn Bhd - A/C Johor CorporationOSK Noms (T) Sdn Bhd - A/C Johor Logistics Sdn BhdAmanahRaya Trustees Berhad - A/C Dana JohorJohor CorporationKulim (Malaysia) BerhadMohamad Mazril bin MusaTeo Boon Huang AndySindora BerhadLim Bee SanTay Hock TiamHDM Noms (A) Sdn Bhd - A/C UOB Kay Hian Pte Ltd for Tan Seng HockLeung Kit ManLim Seng CheeSeah Chin Leng

Name

68,634,38747,948,20212,837,411

4,600,0003,800,3523,200,0002,000,0001,918,5281,760,0001,241,600

860,225828,992731,168719,400552,000

27.4419.17

5.131.841.521.280.800.770.700.500.340.330.290.290.22

��0 damansara realty berhad • annual report 2010

Shareholding Statistics (cont’d.)Top Thirty Securities Account Holders (cont’d.)(Without aggregating the securities from different securities accounts belonging to the same depositor)

161718192021222324252627282930

Tunku Mahmud bin Tunku YahyaPublic Noms (T) Sdn Bhd - A/C Tay Lay Yong (E-SJA)Tay Lay HongTay Lay ThohSoon Ah SengJohor CorporationJohor Capital Holdings Sdn BhdBimSec Noms (T) Sdn Bhd - A/C Mohd Johar bin IsmailPublic Noms (T) Sdn Bhd - A/C Cheah Sie Peng (E-PPG)Mohd Zaideen bin Yuso�Lee Chai EngCimSec Noms (T) Sdn Bhd - A/C CIMB Bank for Ang Poh Eng (M66001)Toh Boon HengTan Kok SingYow Yan Seong

Name

500,040446,229430,229430,229372,800368,000320,000311,400300,000284,800283,900268,800260,000256,000245,400

0.200.180.170.170.150.150.130.120.120.110.110.110.100.100.10

%No. of

Shares

Substantial Shareholders

1 Johor Corporation - 3 a/cs -”- Group OSK Noms (T) Sdn Bhd - A/C Johor Corporation OSK Noms (T) Sdn Bhd - A/C Johor Logistics Sdn Bhd Kulim (Malaysia) Berhad Sindora Berhad Johor Capital Holdings Sdn Bhd

Name

72,802,739

66,065,613

47,948,20212,837,411

3,200,0001,760,000

320,000

29.10

26.41

%No. of

Shares

Analysis of Shareholders

Malaysian - Bumiputra - OthersForeignersTOTAL

%No. of

SharesNo. of

Shareholders

172,981,53470,308,428

6,850,792250,140,754

69.1528.11

2.74100.00

%

44.9753.95

1.08100.00

19,82623,787

47544,088

*I/We …..……………………………………………………………………………………….……………………….......................(BLOCK LETTERS)

of …..…...………………………………………………………………………………………………………….….….....................

…………..…………………………………………………………………………………………………..............................................

being *a member/members of DAMANSARA REALTY BERHAD hereby appoint the *Chairman of the Meeting or

…………..…………………………………………………………………………………………………..............................................

of …………..………………………..…………….………………………………………..……………………………….................

…………..…………………………………………………………………………………………………..............................................

as *my/our Proxy to vote for *me/us and on *my/our behalf at the 49th Annual General Meeting of the

Company to be held on Friday, 24 June 2011 at 11.30 am or at any adjournment thereof.

Should you desire to direct your Proxy how to vote on the Resolutions set out in the Notice of Meeting and as summarised

below, please indicate with an “X” in the appropriate space. If no specific direction as to voting is given, the Proxy will vote or

abstain at his/her discretion.

Signed this ……………… day of…………………….. 2011

………………………………..... Signature of Member(s)

Notes: -1. A member entitled to attend and vote at this meeting is entitled to appoint a proxy and vote instead of him. A proxy may but need not be a member of the Company.2. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing or if the appointer is a corporation/company either under its common seal or under the hand of its attorney duly authorised.3. If a member appoints two proxies to attend at the same meeting, the instrument of proxy must specify the proportion of his shareholdings to be represented by each proxy.4. The instrument appointing a proxy must be deposited at the Registered Office of the Company, at Suite 12B, Level 12, Menara Ansar, 65 Jalan Trus, 80000 Johor Bahru, Johor not less than 48 hours before the time appointed for holding the meeting or at any adjournment thereof.

RESOLUTION

1. To receive and adopt the Report and the Audited Financial Statements

8. Proposed Renewal of Shareholders’ Mandate and New Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature

7. To re-appoint Messrs Ernst & Young as Auditors of the Company and to authorise the Directors to �x their remuneration

6. To approve the payment of Directors’ Fees

5. To re-elect Wan Azman bin Ismail (Article 87)

4. To re-elect Lukman bin Hj. Abu Bakar (Article 81)

3. To re-elect Zainah binti Mustafa (Article 81)

2. To re-elect Datuk Yahya bin Ya’acob (Article 81)

Number of Shares

FOR AGAINST

Proxy Form

Documents

damansara realty berhad • annual report 2010 damansara realty berhad • annual report 2010 01 02 04 05 06 10 16 19