ANNUAL REPORT 2011asb.listedcompany.com/misc/ar2011.pdf · 100% Alam Samudera Corporation Sdn Bhd...

A D VA N C E S Y N E R G Y B E R H A D

A N N U A L R E P O R T 2 0 1 1

OUR VISION

To be premier global corporation.

OUR MISSION

To attain success as a socially responsible global corporation which excel in every undertaking.

OUR STRATEGY

We seek synergistic partnerships and alliances to achieve our mission.

WE ENSURE

• Entrepreneurshipexcellenceinallourpursuits.

• Sustainablegrowththroughidentificationandsatisfactionofcustomers’needs.

• Productivepartnershipswithbusinessassociates,suppliers,employeesandgovernments.

• Fairnessinallbusinessdealingswithpartners,customersandsuppliers.

OUR VALUES

• To Our Shareholders Weensureafairreturnsothatourshareholderswillvaluetheirinvestment.

• To Our Customers We value our customers by providing them with high quality products and services at competitive prices.

• To Our EmployeesWe care for our people by creating a conducivework environment, nurturing them to their fullest potential andrecognising their contribution.

• To Our Community Wehonouroursocialobligationsandcontributetotheeconomicandsocialwellbeingofeverycommunityinwhich

we operate.

Corporate Vision and Mission

Logo Rationale

Thislogo,circularinshape,comprisessymbolswhichrepresentthefire,water,andearthelementsinconstantinteraction.TheinteractionoftheseelementsreleasesfreeflowingenergywhichproducestheTREE,asymbolofalllifeonearth.Situatedatthecentreofthelogo,theTREErepresentsthefocusofthecompanygoalwhichisthecreationofwealthbenefitingshareholdersandsocietyatlarge.Thelogoholistically,symbolisessynergisticenergyinmotion.

1advance synergy berhad (1225-D)

annual report 2011

Group Corporate Structure as at 4 May 2012 2

Notice of Annual General Meeting 4

Board of Directors & Corporate Information 8

Management Information 12

Statement on Corporate Governance 13

Additional Compliance Information 18

Audit Committee Report 19

Statement on Internal Control 23

Corporate Social Responsibility 25

Chairman’s Statement 27

Financial Statements

• Directors’Report 32

• StatementsofFinancialPosition 37

• StatementsofComprehensiveIncome 39

• StatementsofChangesinEquity 41

• StatementsofCashFlows 44

• NotestotheFinancialStatements 48

• SupplemantaryInformationonthe 146 DisclosureofRealisedandUnrealisedProfitsorLosses

• StatementbyDirectors 147

• StatutoryDeclaration 148

• IndependentAuditors’ReporttotheMembersofAdvanceSynergyBerhad 149

Statement on Directors’ Interests 151

Statistics on Shareholdings 152

StatisticsonICULSHoldings 154

ListofProperties 156

ProxyForm Enclosed

Contents


annual report 2011

Group Corporate Structure as at 4 May 2012

Advance Synergy Berhad (1225-D)

HOTELS & RESORTSINVESTMENT

HOLDING

INFORMATION &COMMUNICATIONS

TECHNOLOGY

PROPERTYDEVELOPMENT

TRAVEL & TOURS OTHER DIVISIONS

OTHERSCARD &

PAYMENTSERVICES

TRADITIONALCHINESE

MEDICINE

COACHBUILDING

MANUFACTURING,MARKETING &DISTRIBUTION

100% Advance Synergy Capital Sdn Bhd ("ASC")

100% AESBI Power Systems Sdn Bhd

100% ASC Credit Sdn Bhd

100% ASC Equities Sdn Bhd

100% Triton Engineering Sdn Bhd

100% Triton Express Sdn Bhd

100% Triton-K Sdn Bhd

100% Triton Khidmat Sdn Bhd

20% Kumpulan Powernet Berhad

20% SIBB Berhad

100% Synergy Petroleum Incorporated

100% Advance synergy Realty Sdn Bhd

100% Sadong Development Sdn Bhd

95% Hotel Golden Dragon Sdn Bhd

100% Simpang Tiga Realty Sdn Bhd

61% Quality Bus & Coach (M) Sdn Bhd (Subsidiary of ASC)

50% Quality Bus & Coach Pty Ltd

100% Calmford Incorporated

100% Advansa Pty Ltd

100% Advansa Sdn Bhd

100% Home Cinema Studio Pty Ltd

100% Excellent Display Sdn Bhd

80% Dama TCM Sdn Bhd

100% Advance Synergy Timber Sdn Bhd

100% Ausborn Sawmill Sdn Bhd

100% Bornion Sawmill Sdn Bhd

100% Excellent Arch Sdn Bhd

100% Advance Synergy Furniture Sdn Bhd (In Liquidation)

81% Acrylic Synergy Sdn Bhd (Subsidiary of NMC)

100% Strategic Research & Consultancy Sdn Bhd

100% Synergy Gold Incorporated

100% Nagapura Management Corporation Sdn Bhd ("NMC")

100% Xgo Technik Sdn Bhd

70% Syarikat Fit and Weld Engineering (M) Sdn Bhd (In Liquidation)

100% Alangka-Suka Hotels & Resorts Sdn Bhd

100% Alor Setar Holiday Villa Sdn Bhd

100% Antara Holiday Villas Sdn Bhd

100% Asbina Hotel & Property Sdn Bhd

100% Asbina Hotel & Property (Cambodia) Pte Ltd

100% Cherating Holiday Villa Berhad

100% Holiday Villa Subang Sdn Bhd

100% Holiday Villa Travel & Tours Sdn Bhd

100% Langkawi Holiday Villa Sdn Bhd

30% M OOD Perfumes Sdn Bhd

100% Mayor Hotels Sdn Bhd

100% Super Leisure Sdn Bhd

49% Smile Integrated Solution Sdn Bhd

100% Alangka-Suka International Limited

100% Holiday Villa Makkah Limited

100% Interwell Management Limited

100% Larkswood Assets Limited

100% Asbina Shenzhen Limited

90% Grand Holiday Villa Khartoum Co. Ltd

90% P.T. Diwnagkara Holiday Villa Bali

100% Alangka-Suka Paris SAS

100% Holiday Villa Lafayette Paris SAS

100% Grand Hotel Sudan Limited

100% Holiday Villas International Limited

100% Holiday Villa (UK) Ltd

95% Holiday Villa China International Limited

100% Changshu Holiday Villa Hotel Management Co. Ltd

90% Holiday Villa Middle East Limited

100% Legenda de Malaisie SAS

40% Holiday Villa Hotels & Resorts Sdn Bhd

40% Holiday Villa Kuala Lumpur Sdn Bhd

100% Advance Synergy Properties Sdn Bhd

100% Best Alpha Investments Limited

100% Execellent Result Investments Limited

100% Synergy Realty Incorporated

100% Builderworks Pty Ltd

100% Worldwide Matrix Sdn Bhd

58.30% Unified Communications Holdings Limited

100% Mobilization Sdn Bhd

100% Unified Assets Sdn Bhd

100% Unified Communications Pte LId

100% AttrixTech Sdn Bhd

100% Unified Communications (Private) Limited

100% Unified Communications (VAS) Sdn Bhd

89% Unified (Thailand) Ltd

50% Unified Telecom Private Limited

100% Unified Communications Sdn Bhd

100% Ahead Mobile Sdn Bhd

100% Unified Communications (Tech) Pte Ltd (formerly known as Attrix Technology Pte Ltd)

100% Unified Communications (OSS) Sdn Bhd

51% GlobeOSS Sdn Bhd

100% GlobeOSS Pte LId

100% Unified Communications (OHQ) Sdn Bhd

10%

100% Alam Samudera Corporation Sdn Bhd

100% Synergy Tours (Borneo) Sdn Bhd

100% Diversified Gain Sdn Bhd

100% Orient Escape Travel Sdn Bhd

100% Synergy Tours Sdn Bhd

50% Le Indie Viaggi S.R.L

100% Marketing and Event Management Integrated Sdn Bhd

100% Motorsports Adventure Sdn Bhd

100% Orient Escape Travel (Penang) Sdn Bhd

51% iSynergy Sdn Bhd *

100% Cosmoscourt.com (Malaysia) Sdn Bhd

100% Datakey Sdn Bhd

100% Rewardstreet.com (Malaysia) Sdn Bhd

51% Synergy Cards Sdn Bhd * *


annual report 2011

*29%oftheequityinterestofthecompanyisheldbyASC.

**41%oftheequityinterestofthecompanyisheldbyASC.

Advance Synergy Berhad (1225-D)

HOTELS & RESORTSINVESTMENT

HOLDING

INFORMATION &COMMUNICATIONS

TECHNOLOGY

PROPERTYDEVELOPMENT

TRAVEL & TOURS OTHER DIVISIONS

OTHERSCARD &

PAYMENTSERVICES

TRADITIONALCHINESE

MEDICINE

COACHBUILDING

MANUFACTURING,MARKETING &DISTRIBUTION

100% Advance Synergy Capital Sdn Bhd ("ASC")

100% AESBI Power Systems Sdn Bhd

100% ASC Credit Sdn Bhd

100% ASC Equities Sdn Bhd

100% Triton Engineering Sdn Bhd

100% Triton Express Sdn Bhd

100% Triton-K Sdn Bhd

100% Triton Khidmat Sdn Bhd

20% Kumpulan Powernet Berhad

20% SIBB Berhad

100% Synergy Petroleum Incorporated

100% Advance synergy Realty Sdn Bhd

100% Sadong Development Sdn Bhd

95% Hotel Golden Dragon Sdn Bhd

100% Simpang Tiga Realty Sdn Bhd

61% Quality Bus & Coach (M) Sdn Bhd (Subsidiary of ASC)

50% Quality Bus & Coach Pty Ltd

100% Calmford Incorporated

100% Advansa Pty Ltd

100% Advansa Sdn Bhd

100% Home Cinema Studio Pty Ltd

100% Excellent Display Sdn Bhd

80% Dama TCM Sdn Bhd

100% Advance Synergy Timber Sdn Bhd

100% Ausborn Sawmill Sdn Bhd

100% Bornion Sawmill Sdn Bhd

100% Excellent Arch Sdn Bhd

100% Advance Synergy Furniture Sdn Bhd (In Liquidation)

81% Acrylic Synergy Sdn Bhd (Subsidiary of NMC)

100% Strategic Research & Consultancy Sdn Bhd

100% Synergy Gold Incorporated

100% Nagapura Management Corporation Sdn Bhd ("NMC")

100% Xgo Technik Sdn Bhd

70% Syarikat Fit and Weld Engineering (M) Sdn Bhd (In Liquidation)

100% Alangka-Suka Hotels & Resorts Sdn Bhd

100% Alor Setar Holiday Villa Sdn Bhd

100% Antara Holiday Villas Sdn Bhd

100% Asbina Hotel & Property Sdn Bhd

100% Asbina Hotel & Property (Cambodia) Pte Ltd

100% Cherating Holiday Villa Berhad

100% Holiday Villa Subang Sdn Bhd

100% Holiday Villa Travel & Tours Sdn Bhd

100% Langkawi Holiday Villa Sdn Bhd

30% M OOD Perfumes Sdn Bhd

100% Mayor Hotels Sdn Bhd

100% Super Leisure Sdn Bhd

49% Smile Integrated Solution Sdn Bhd

100% Alangka-Suka International Limited

100% Holiday Villa Makkah Limited

100% Interwell Management Limited

100% Larkswood Assets Limited

100% Asbina Shenzhen Limited

90% Grand Holiday Villa Khartoum Co. Ltd

90% P.T. Diwnagkara Holiday Villa Bali

100% Alangka-Suka Paris SAS

100% Holiday Villa Lafayette Paris SAS

100% Grand Hotel Sudan Limited

100% Holiday Villas International Limited

100% Holiday Villa (UK) Ltd

95% Holiday Villa China International Limited

100% Changshu Holiday Villa Hotel Management Co. Ltd

90% Holiday Villa Middle East Limited

100% Legenda de Malaisie SAS

40% Holiday Villa Hotels & Resorts Sdn Bhd

40% Holiday Villa Kuala Lumpur Sdn Bhd

100% Advance Synergy Properties Sdn Bhd

100% Best Alpha Investments Limited

100% Execellent Result Investments Limited

100% Synergy Realty Incorporated

100% Builderworks Pty Ltd

100% Worldwide Matrix Sdn Bhd

58.30% Unified Communications Holdings Limited

100% Mobilization Sdn Bhd

100% Unified Assets Sdn Bhd

100% Unified Communications Pte LId

100% AttrixTech Sdn Bhd

100% Unified Communications (Private) Limited

100% Unified Communications (VAS) Sdn Bhd

89% Unified (Thailand) Ltd

50% Unified Telecom Private Limited

100% Unified Communications Sdn Bhd

100% Ahead Mobile Sdn Bhd

100% Unified Communications (Tech) Pte Ltd (formerly known as Attrix Technology Pte Ltd)

100% Unified Communications (OSS) Sdn Bhd

51% GlobeOSS Sdn Bhd

100% GlobeOSS Pte LId

100% Unified Communications (OHQ) Sdn Bhd

10%

100% Alam Samudera Corporation Sdn Bhd

100% Synergy Tours (Borneo) Sdn Bhd

100% Diversified Gain Sdn Bhd

100% Orient Escape Travel Sdn Bhd

100% Synergy Tours Sdn Bhd

50% Le Indie Viaggi S.R.L

100% Marketing and Event Management Integrated Sdn Bhd

100% Motorsports Adventure Sdn Bhd

100% Orient Escape Travel (Penang) Sdn Bhd

51% iSynergy Sdn Bhd *

100% Cosmoscourt.com (Malaysia) Sdn Bhd

100% Datakey Sdn Bhd

100% Rewardstreet.com (Malaysia) Sdn Bhd

51% Synergy Cards Sdn Bhd * *


annual report 2011

NOTICE IS HEREBY GIVEN that the Eighty-Eighth ANNUAL GENERAL MEETING (“AGM”) of Advance Synergy BerhadwillbeheldattheAuditorium,Level4,ThePodium,WismaSynergy,No.72,PesiaranJubliPerak,Seksyen22,40000ShahAlam,SelangorDarulEhsanonTuesday,26June2012at10.30a.m.forthefollowingpurposes:

1. Toreceiveandadopttheauditedfinancialstatementsforthefinancialyearended31December2011andtheDirectors’andAuditors’reportsthereon.

Resolution 1

2. Todeclareafirstandfinalgrossdividendof0.50senperordinaryshareless25%incometaxinrespectofthefinancialyearended31December2011.

Resolution 2

3. ToapproveDirectors’feesforthefinancialyearended31December2011. Resolution 3

4. Tore-electthefollowingDirectors:

4.1 Dato’AbdulMuradBinKhalid Resolution 4

4.2ChimWaiKhuan Resolution 5

5. Tore-appointMessrsBakerTillyMonteiroHengasauditorsoftheCompanyandtoauthorisetheDirectorstofixtheirremuneration.

Resolution 6

6. As special business, to consider and, if thought fit, passwith orwithoutmodifications thefollowingresolutions:

Ordinary Resolution - Authority to allot and issue shares

“THAT subject always to the Companies Act, 1965 (“the Act”), Articles of Association oftheCompanyand/orapprovalsof therelevantauthorities, theDirectorsbeandareherebyauthorisedandempoweredpursuanttoSection132DoftheActtoallotandissuenewsharesintheCompany,fromtimetotimeanduponsuchtermsandconditions,forsuchpurposesandtosuchpersonorpersonswhomsoeverastheDirectorsmay,intheirabsolutediscretiondeemfit,provided that theaggregatenumberofshares issuedpursuant to this resolutiondoesnotexceed10%oftheissuedandpaid-upsharecapitaloftheCompanyforthetimebeingANDTHATtheDirectorsbeandareherebyempoweredtoobtaintheapprovalforthelisting of and quotation for the additional shares so issued on BursaMalaysia SecuritiesBerhad AND THAT such authority shall continue in force until the conclusion of the nextAnnualGeneralMeetingoftheCompany.”

Resolution 7

Special Resolution - Proposed Amendments to the Articles of Association

“THATtheproposedamendmentstotheArticlesofAssociationoftheCompanyascontainedin Appendix I of the Annual Report 2011 (“Proposed Amendments”) be and are herebyapproved and adoptedAND THAT theDirectors be and are hereby authorised to take allsuchstepsastheyshalldeemnecessaryandexpedienttoeffectandcompletetheProposedAmendments.”

Resolution 8

7. Totransactanyotherordinarybusinessofwhichduenoticeshallhavebeengiven.

Notice of Annual General Meeting


annual report 2011

NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT

NOTICE IS ALSO HEREBY GIVENthatsubjecttotheapprovaloftheshareholdersattheEighty-EighthAGM,afirstandfinalgrossdividendof0.50senperordinaryshareless25%incometaxinrespectofthefinancialyearended31December2011willbepaidon8August2012totheshareholderswhosenamesappearintheRecordofDepositorson12July2012.

Adepositorshallqualifyforentitlementonlyinrespectof:

a. SharestransferredtotheDepositor’sSecuritiesAccountbefore4.00p.m.on12July2012inrespectoftransfer;and

b. SharesboughtontheBursaMalaysiaSecuritiesBerhadonacumentitlementbasisaccordingtotheRulesofBursaMalaysiaSecuritiesBerhad.

BYORDEROFTHEBOARD

HO TSAE FENGSecretary

SelangorDarulEhsan4June2012

Notes:

1. Inrespectofdepositedsecurities,onlymemberswhosenamesappearintheRecordofDepositorson18June2012(GeneralMeetingRecordofDepositors)shallbeentitledtoattend,speakandvoteatthisEighty-EighthAGM.

2. AmemberoftheCompanyentitledtoattendandvoteatthegeneralmeetingisentitledtoappointatleastone(1)proxybutnotmorethantwo(2)proxiestoattendandvoteinhis/herstead.AproxyneednotbeamemberoftheCompany.

3. Amember of theCompanywho is an authorised nominee as defined under theSecurities Industry (CentralDepositories)Act,1991mayappointatleastone(1)proxybutnotmorethantwo(2)proxiesinrespectofeachsecuritiesaccountitholdswithsharesoftheCompanystandingtothecreditofthesaidsecuritiesaccount.

4. Theinstrumentappointingaproxyinthecaseofanindividualshallbesignedbytheappointerorhis/herattorneydulyauthorisedinwritingandinthecaseofacorporation,theinstrumentappointingaproxymustbeunderitscommonsealorunderthehandofanofficerorattorneydulyauthorised.

5. Theinstrumentappointingaproxyandthepowerofattorneyorotherauthority,ifany,underwhichitissigned(oranotariallycertifiedcopyofsuchpowerorauthority)shallbedepositedattheRegisteredOfficeoftheCompanyatLevel3,EastWing,WismaSynergy,No.72,PesiaranJubliPerak,Seksyen22,40000ShahAlam,SelangorDarulEhsannotlessthan48hoursbeforethetimeappointedforholdingthemeetingoranyotheradjournmentthereof.

EXPLANATORY NOTE ON ORDINARY BUSINESS

DetailsoftheDirectorsstandingforre-electionunderResolution4andResolution5arestatedinDirectors’profileonpages9to11of thisAnnualReport.Theirsecuritiesholdings in theCompanyarestatedonpage151of thisAnnualReport.


annual report 2011

EXPLANATORY NOTES ON SPECIAL BUSINESS

Resolution 7 - Authority to allot and issue shares

TheCompanyhad,attheEighty-SeventhAGMheldon29June2011,obtaineditsshareholders’approvalforthegeneralmandateforissuanceofsharespursuanttoSection132DoftheAct.TheCompanydidnotissueanynewsharespursuanttothismandateobtainedasatthedateofthisnotice.TheOrdinaryResolutionpursuanttoSection132Dof theAct isa renewalof thegeneralmandate for issuanceofsharesby theCompany.This resolution, ifpassed,willempowertheDirectors,fromthedateoftheEighty-EighthAGMuntilthenextAGMtoallotandissuenewsharesoftheCompanyuptoanamountnotexceedingintotal10%oftheissuedandpaid-upsharecapitaloftheCompanyforthetimebeingandforsuchpurposesastheDirectorsconsiderwouldbeinthebestinterestsoftheCompany.Thiswouldavoidanydelayandcostinvolvedinconveningageneralmeetingtospecificallyapprovetheaforesaid.Thisauthority, unless revokedor variedat ageneralmeeting,will expireat thenextAGMof theCompany.

Atthisjuncture,thereisnodecisiontoissuenewshares.Ifthereshouldbeadecisiontoissuenewsharesafterthegeneralmandateisobtained,theCompanywillmakeanannouncementinrespectofthepurposeandutilisationofproceedsarisingfromsuchissue.

Resolution 8 - Proposed Amendments to the Articles of Association

TheSpecialResolutionproposedunderResolution8 is to amend theCompany’sArticlesofAssociation tobein linewith the recentamendments to theMainMarketListingRequirements (“ListingRequirements”)ofBursaMalaysiaSecuritiesBerhad (“BursaSecurities”)mainly in relation to the appointment ofmultipleproxiesby anexemptauthorisednomineeandqualificationofproxy.

ThedetailsoftheProposedAmendmentsaresetoutinAppendixIonpage7ofthisAnnualReport.


annual report 2011

APPENDIX I

Special Resolution - Proposed Amendments to the Articles of Association

THATtheArticlesofAssociationoftheCompanybeamendedinthefollowingmanner:

Proposed Amendments to the Articles of Association

Articles Existing Articles Amended Articles

2* Interpretation Interpretation

Words Meanings Words Meanings

- - Exempt Authorised Nominee An authorised nominee defined under the Depositories Act which is exempted with the provisions of subsection 25A(1) of the Depositories Act.

- - Share Issuance Scheme Means a scheme involving a new issuance of shares to the employees.

4(3) No Director shall participate in any share scheme for employees unless the Members in general meeting have approved of the specific allotment to be made to suchDirector and unless the Director holds officeinandexecutivecapacityPROVIDEDALWAYSTHATaDirectornotholdingofficeinanexecutivecapacitymaysoparticipatein an issue of shares pursuant to a public issueorapublicoffer.

No Director shall participate in any Share Issuance Scheme share scheme for employeesunlesstheMembersingeneralmeetinghaveapprovedofthespecificallotmenttobemadetosuchDirectorandunlesstheDirectorholdsofficeinandexecutivecapacityPROVIDEDALWAYSTHATaDirectornotholdingofficeinanexecutivecapacitymaysoparticipateinanissueofsharespursuanttoapublicissueorapublicoffer.

42(1) Every sharewhich shall be forfeited shallthereupon become the property of the Company and may be either cancelled or soldorreallottedorotherwisedisposedof,eithertothepersonwhowasbeforesuchforfeiture the holder thereof or entitled thereto or to any person upon such terms and in such manner as the Directors deem fit.Atanytimebeforeasaleordisposition,the forfeiture may be cancelled on such termsastheDirectorsdeemfit.

EverysharewhichshallbeforfeitedshallthereuponbecomethepropertyoftheCompanyandmaybeeithercancelledorsoldorreallottedorotherwisedisposedof, either to the person who was before such forfeiture the holder thereof orentitled thereto or to any person upon such terms and in such manner as the Directorsdeemfit.Atanytimebeforeasaleordisposition,theforfeituremaybecancelledonsuchtermsastheDirectorsdeemfit.Any residue after the sale of the forfeited shares shall be remitted back to the previous holder (his executors, administrators or assignees or as he directs), net of unpaid calls on the forfeited share, accrued interest and expenses.

75(1) Votes may be given either personallyor by proxy. A proxy or attorney or aduly authorised representative need not be a Member of the Company and the provisions of Section 149(1)(b) of the Act shallnotapplytotheCompany.

Votesmaybegiveneitherpersonallyorbyproxy.A member of the Company entitled to attend and vote at a meeting of the Company, or at a meeting of any class of members of the Company, shall be entitled to appoint any person as his proxy to attend and vote instead of the member at the meeting. There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend and vote at a meeting of the Company shall have the same rights as the member to speak at the meeting. Aproxyorattorneyor a duly authorised representative need not be a Member of the Company and theprovisionsofSection149(1)(b)oftheActshallnotapplytotheCompany.

75(2) WhereaMemberisanauthorisednomineeasdefinedundertheCentralDepositoriesAct, itmay appoint at least one (1) proxybut not more than two (2) proxies inrespect of each securities account it holdswithordinarysharesoftheCompanystanding to the credit of the said securities account.

Where a Member is an authorised nominee as defined under the CentralDepositoriesAct, itmay appoint at least one (1) proxybut notmore than two(2)proxiesinrespectofeachsecuritiesaccountitholdswithordinarysharesof the Company standing to the credit of the said securities account.Where a Member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

Note:* theabovechangedwordsorexpressionsshallbeadoptedforusethroughouttheArticlesofAssociationandtheformerexpressionswhereverusedshallbeamendedtoreflectthenewwordsorexpressionsaccordinglywherevernecessarythroughoutthedocument,whichprecisechangesarenothighlighted.


annual report 2011

BOARD OF DIRECTORS : Dato’AhmadSebiBakar (ExecutiveChairman)

LeeSuNie (ExecutiveDirector/ChiefExecutiveOfficer)

Dato’AbdulMuradBinKhalid (IndependentNon-ExecutiveDirector)

DatinMasriKhawBintiAbdullah (Non-IndependentNon-ExecutiveDirector)

ChimWaiKhuan (IndependentNon-ExecutiveDirector)

YongTeckMing (IndependentNon-ExecutiveDirector)

SECRETARY : HoTsaeFeng

AUDITORS : BakerTillyMonteiroHeng Chartered Accountants Monteiro&HengChambers 22,JalanTunSambanthan3 50470KualaLumpur Tel :03-22748988 Fax :03-22601708

REGISTRARS : SectrarsServicesSdnBhd No.28-1,JalanTunSambanthan3 Brickfields,50470KualaLumpur Tel :03-22746133 Fax :03-22741016

REGISTERED OFFICE : Level3,EastWing,WismaSynergy No.72,PesiaranJubliPerak Seksyen22,40000ShahAlam SelangorDarulEhsan Tel :03-51928822 Fax :03-51928811

PRINCIPAL BANKER : AffinBankBerhad

STOCK EXCHANGE LISTING : MainMarketofBursaMalaysiaSecuritiesBerhad

WEBSITE : www.asb.com.my

Board of Directors & Corporate Information


annual report 2011

Directors

Dato’ Ahmad Sebi Bakar,64,aMalaysian,isaNon-IndependentDirectorandtheExecutiveChairmanofAdvanceSynergyBerhad.HewasappointedtotheBoardon9April1991.Dato’AhmadSebiBakarholdsaBachelorofArts(Hons)degreefromtheUniversityofMalaya,KualaLumpur,aDiplomainJournalismfromtheThomsonFoundation,UnitedKingdomandaMasterofArtsfromMichiganStateUniversity,UnitedStatesofAmerica.HewastheEditoroftheMalayMail,amemberoftheNewStraitsTimesPressGroupfrom1976to1982andsubsequentlytheGroupEditorofBeritaHarianfrom1983to1986.From1986to1989,hewastheManagingDirectorofSistemTelevisyenMalaysiaBhdandadirectoroftheNewStraitsTimesPressGroupfrom1988to1989.HewasalsotheNon-ExecutiveChairmanofUnifiedCommunicationsHoldingsLimited,anindirectsubsidiaryofAdvanceSynergyBerhadwhichislistedontheSingaporeExchangeSecuritiesTradingLimited,fromDecember2003toJune2006.

HewasconferredtheAhliMangkuNegara(A.M.N.)bytheYangDi-PertuanAgong,DYMMTuankuHajiAhmadShahAl-MustainBillahIbniAlmarhumSultanAbuBakarin1983,theJusticeofPeace(J.P.)byDYMMSultanAzlanMuhibbuddinShahIbniAlmarhumSultanYusoffIzzuddinShahGhafarullah,SultanofPerak,in1986andtheDato’SetiaDirajaKedah(D.S.D.K.)byDYMMTuankuAlhajAbdulHalimMu’adzamShahIbniAlmarhumSultanBadlishah,SultanofKedah,in1988.

Currently,hesitsontheBoardofvariouscompaniesincludingKumpulanPowernetBerhad,inwhichheholdsboththepositionsasExecutiveChairmanandManagingDirector.HeisactivelyinvolvedinsocialandcharitableworkandistheChairmanofseveralnon-profitorganisations,namely,theprivatelyfundedOrphanageFoundationofMalaysia(YATIM)andinthepasttheBosniaActionFront,Malaysia.HewasalsothePresidentoftheMalaysianNationalWritersAssociation(PENA)from1992to2008.

Dato’AhmadSebiBakardoesnothaveanyfamilyrelationshipwithanydirectorand/ormajorshareholderofAdvanceSynergyBerhad,norhasheanyconflictofinterestwithAdvanceSynergyBerhad,exceptthatheisalsoasubstantialshareholderofAdvanceSynergyBerhadandSuasanaDinamikSdnBhd,whichisalsoasubstantialshareholderofAdvanceSynergyBerhad.HissonisalsoadirectorofSuasanaDinamikSdnBhd.Hehashadnoconvictionsforanyoffenceswithinthepast10years.

Lee Su Nie,52,aMalaysian, isaNon-IndependentExecutiveDirectorandtheChiefExecutiveOfficerofAdvanceSynergyBerhad.Shewasappointed to theBoardon9July2007.MsLeeSuNieholdsaBachelorofCommerce(Accounting) degree from the University of Birmingham, United Kingdom and a Master of Science (BusinessAdministration) degree from theUniversity of Bath,UnitedKingdom. She is a FellowMember of TheAssociationofCharteredCertifiedAccountants,UnitedKingdom. In 1985, she joinedKassimChanManagementConsultantsSdn Bhd, where she providedmanagement consultancy services. She joined the Corporate Finance Departmentof RakyatMerchant Bankers Berhad in 1989. In 1991, she left RakyatMerchant Bankers Berhad to join PerdanaMerchantBankersBerhad.ShesubsequentlyleftherpositionasFirstVicePresident,CorporateFinanceoftheBankto joinAdvanceSynergyBerhad in1995asAssistantGeneralManagerofCorporatePlanning&Finance.ShewassubsequentlyappointedtheGroupGeneralManager,Operations,ofAdvanceSynergyBerhadpriortoherappointmentasChiefExecutiveOfficeron22April2004.

SheisaNon-IndependentNon-ExecutiveDirectorofUnifiedCommunicationsHoldingsLimited,anindirectsubsidiaryofAdvanceSynergyBerhadwhichislistedontheSingaporeExchangeSecuritiesTradingLimited.

Shedoesnothaveanyfamilyrelationshipwithanydirectorand/ormajorshareholderofAdvanceSynergyBerhad,norhassheanyconflictofinterestwithAdvanceSynergyBerhad.Shehashadnoconvictionsforanyoffenceswithinthepast10years.


annual report 2011

Dato’ Abdul Murad Bin Khalid, 58, aMalaysian, is an Independent Non-Executive Director of Advance SynergyBerhad.HewasappointedtotheBoardon9July2007.Dato’AbdulMuradBinKhalidholdsaBachelorofEconomics(Hons)andDiplomainAccountingfromtheUniversityofMalayaandisaMemberofMalaysianInstituteofCharteredPublicAccountants.

In1976,Dato’AbdulMuradBinKhalidjoinedBankNegaraMalaysiaasAdministrativeOfficerandwassubsequentlyappointedasAssistantGovernorin1994.InJanuary1999,heleftBankNegaraMalaysiatojoinRHBBankBerhadasExecutiveDirector.HeleftRHBBankBerhadinSeptember1999.

Dato’AbdulMuradBinKhalidcurrentlyholdsdirectorshipsinRexitBerhadandseveralprivatelimitedcompanies.Heisalsopresentlymanaginghisfamilybusiness.

Dato’AbdulMuradBinKhalidistheChairmanoftheRemunerationCommitteeofAdvanceSynergyBerhad.Heisalsoamember of theNominationCommittee,RiskManagementCommittee andAuditCommittee ofAdvanceSynergyBerhad.

Hedoesnothaveanyfamilyrelationshipwithanydirectorand/ormajorshareholderofAdvanceSynergyBerhad,norhasheanyconflictofinterestwithAdvanceSynergyBerhad.Hehashadnoconvictionsforanyoffenceswithinthepast10years.

Datin Masri Khaw Binti Abdullah,59,aMalaysian,isaNon-IndependentNon-ExecutiveDirectorofAdvanceSynergyBerhad.ShewasappointedtotheBoardon6January1995.DatinMasriKhawBintiAbdullahwasoneof thefirstAsianstocompletetheGeneralManager’sProgrammeattheHolidayInnUniversityinMemphis,USAin1976.In1982,shecompletedasummercourseonHotelDevelopment&DesignatCornellUniversity,USAandhadundergoneHoteltraininginSingaporeandCanada.ShewasawardedtheBestMarketingPersonoftheYearforHolidayInnHotelsAsiaPacificin1985.DatinMasriKhawBintiAbdullahplayedakeyrolewhenAntaraHolidayVillasSdnBhdgarneredseveralawardsnamely,theSpecialAwardforQualityManagementintheIndustryExcellenceAward1997(organisedbytheMinistryofInternationalTradeandIndustryandreceivedthisprestigiousawardfromtheformerPrimeMinisterTunDr.MahathirMohamadon18December1997),theNationalHRExcellenceAward2004andtheIndustryExcellenceAward2005-ExportExcellence(Services).Herexperienceinthehotelindustrydatesbackto1969andshehassincecontributedsignificantlytothedevelopmentofnewhotels.SheinitiatedtheHolidayVillachainin1987withtheopeningofHolidayVillaCherating.

SheispresentlytheManagingDirectorandChiefExecutiveOfficerofAntaraHolidayVillasSdnBhdandHolidayVillasInternationalLimited,subsidiariesofAdvanceSynergyBerhad.Shealsositson theBoardofothersubsidiariesofAdvanceSynergyBerhad,includingCheratingHolidayVillaBerhad,whichisanon-listedpubliccompany.

DatinMasriKhawBintiAbdullahisamemberoftheRemunerationCommitteeandNominationCommitteeofAdvanceSynergyBerhad.

Shedoesnothaveanyfamilyrelationshipwithanydirectorand/ormajorshareholderofAdvanceSynergyBerhad,norhassheanyconflictofinterestwithAdvanceSynergyBerhad.Shehashadnoconvictionsforanyoffenceswithinthepast10years.


annual report 2011

Chim Wai Khuan,61,aMalaysian, isan IndependentNon-ExecutiveDirectorofAdvanceSynergyBerhad.HewasappointedtotheBoardon12December2001.MrChimWaiKhuanisamemberoftheMalaysianInstituteofAccountants.Hehasvastexperienceinauditing,taxationandmanagementconsultancyserviceswhilehewasattachedtoseveralaccountingfirmsinMalaysiaandtheUnitedKingdomfrom1974to1985.Currently,hemanageshisownpracticeunderthenameWKCo.,anauditfirm.

Heisalsoanindependentnon-executivedirectorofUnitedU-LiCorporationBerhadandGabunganPAHoldingsBerhad.

MrChimWaiKhuanistheChairmanoftheNominationCommitteeaswellasamemberoftheAuditCommittee,RiskManagementCommitteeandRemunerationCommitteeofAdvanceSynergyBerhad.

Hedoesnothaveanyfamilyrelationshipwithanydirectorand/ormajorshareholderofAdvanceSynergyBerhad,norhasheanyconflictofinterestwithAdvanceSynergyBerhad.Otherthantrafficoffences,hehashadnoconvictionsforanyoffenceswithinthepast10years.

Yong Teck Ming,58,aMalaysian,wasappointedtotheBoardon9July2007.HeisanIndependentNon-ExecutiveDirector of Advance Synergy Berhad. He also serves as Chairman of the Audit Committee and RiskManagementCommittee.

HeholdsaBachelorofCommerceDegreefromtheUniversityofAuckland,NewZealand.HeisamemberoftheInstituteofCharteredAccountants,NewZealandandamemberof the InstituteofCharteredSecretariesandAdministrators,UnitedKingdom.

Mr Yong TeckMing started his career in New Zealand in 1973 andworked in several accounting positions beforereturningtoMalaysiainFebruary1979.FromMarch1979toJanuary1995,heservedinvariouspositionsintheBerjayaGroupofCompaniesincludingasGroupExecutiveDirectorfromFebruary1988untilJanuary1995.HecurrentlysitsontheBoardsofseveralprivatelimitedcompanies.

Hedoesnothaveanyfamilyrelationshipwithanydirectorand/ormajorshareholderofAdvanceSynergyBerhad,norhasheanyconflictofinterestwithAdvanceSynergyBerhad.Hehashadnoconvictionsforanyoffenceswithinthepast10years.


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Management Information

HEADS OF KEY GROUP DIVISIONS

ADVANCE SYNERGY BERHAD GROUPCORPORATE OFFICE

HOTELS & RESORTS

ALANGKA-SUKA HOTELS & RESORTS SDN BHDDato'AzmanShahHaronChairman

DatinMasriKhawBintiAbdullahManaging Director &ChiefExecutiveOfficer

INFORMATION & COMMUNICATIONS TECHNOLOGY

UNIFIED COMMUNICATIONS HOLDINGS LIMITEDWongTzeLengGroupExecutiveChairman

AntonSyaziDato’AhmadSebiGroupChiefExecutiveOfficer

INVESTMENT HOLDING

ADVANCE SYNERGY CAPITAL SDN BHDWongJoonHianManaging Director

PROPERTY DEVELOPMENT

ADVANCE SYNERGY REALTY SDN BHDSngNgiapKoonExecutiveDirector/ChiefOperatingOfficer

TRAVEL & TOURS

ORIENT ESCAPE TRAVELSDN BHDCheahPingHueyExecutiveDirector

SYNERGY TOURS SDN BHDFabio DelisiChiefExecutiveOfficer

COACH BUILDING

QUALITY BUS & COACH (M)SDN BHDDatoMatHassanBinEsaChairman

FrankMichaelTurrisiChiefExecutiveOfficer

MANUFACTURING,MARKETING & DISTRIBUTION

ADVANSA PTY LTDAntonSyaziDato’AhmadSebiExecutiveDirector

CARD & PAYMENT SERVICES

SYNERGY CARDS SDN BHDWongJoonHianManaging Director &ChiefExecutiveOfficer

REWARDSTREET.COM (MALAYSIA) SDN BHDSienToeKwokChiefExecutiveOfficer

TRADITIONALCHINESE MEDICINE

DAMA TCM SDN BHDYapCheeKongChiefExecutiveOfficer

LeeThiamHuatChiefOperatingOfficer

Dato’ Ahmad Sebi BakarExecutiveChairman

Lee Su NieExecutiveDirector/ChiefExecutiveOfficer

Anton Syazi Dato’ Ahmad SebiGeneral ManagerCorporate Development

Chan Kian HeoiGeneral ManagerCorporate Services

Tan Mui PingManagerFinance

Ho Tsae FengManagerSecretarial

Zuhaida ZainuddinManagerInternal Audit

Tengku Norzurin BintiTengku FathelManagerHumanResource


annual report 2011

Statement on Corporate Governance

TheBoardofDirectors(“Board”or“Directors”)fullysubscribestotherecommendationsoftheMalaysianCodeon Corporate Governance (“the Code”) and is committed in ensuring that the Company and its subsidiaries (“the Group”) practise the highest standard of Corporate Governance as a fundamental part of discharging its responsibilitiestoprotectandenhancelong-termshareholdervalueandthefinancialperformanceoftheGroup.

Thedisclosurestatementdescribesthemanner inwhichtheGrouphasappliedtheCode’sPrinciplesandtheextentofcompliancewiththebestpracticesadvocatedtherein.

BOARD OF DIRECTORS

ThedirectionandcontroloftheGrouprestfirmlywiththeBoardasiteffectivelyassumestheoverallresponsibilityfor corporate governance, strategic direction, formulation of policies and overseeing the investments andoperationsoftheGroup.Inaddition,thereisascheduleofmattersreservedspecificallyfortheBoard’sdecision.

Duringthefinancialyearended31December2011,three(3)BoardmeetingswereheldwhereitdeliberateduponandconsideredavarietyofmattersincludingtheGroup’scorporatedevelopments,financialresults,investmentsandstrategicdecisionsanddirectionsoftheGroup.AllproceedingsfromtheBoardmeetingsareminutedandsignedbytheChairmanofthemeeting.DetailsofattendanceofeachDirectoratBoardMeetingsheldduringthefinancialyearareasfollows:

Name of Directors No.ofMeetingsAttended

Dato’AhmadSebiBakar 3 / 3

LeeSuNie 3 / 3

Dato’AbdulMuradBinKhalid 3 / 3

DatinMasriKhawBintiAbdullah 3 / 3

ChimWaiKhuan 3 / 3

YongTeckMing 3 / 3

TheBoardhasestablishedthree(3)committees:anAuditCommittee,aNominationCommitteeandaRemunerationCommittee,thedetailsofwhicharesetout inthisStatementandAnnualReport.TheseCommitteeshavetheauthoritytoexamineparticular issuesandreportbacktotheBoardwiththeirrecommendations.Theultimateresponsibilityfordecisionsonallmatters,however,lieswiththeBoard.

BOARD BALANCE

TheBoardcurrentlyconsistsofanExecutiveChairman,anExecutiveDirector/ChiefExecutiveOfficerandfour(4)Non-ExecutiveDirectors, three (3) ofwhomare independent. The currentDirectors bring awide rangeofbusinessandfinancialexperience,skillsandknowledgenecessaryfortheeffectivestewardshipoftheGroup.ProfilesoftheDirectorsaresetoutonpages9to11ofthisAnnualReport.

TheExecutiveChairmanisentrustedwiththetaskofrunningthebusinessoftheGroupandimplementationofthepoliciesandstrategiesadoptedbytheBoard.

Thepresenceofthree(3)IndependentNon-ExecutiveDirectorsrepresenting50%ofthetotalnumberofDirectorsfulfils a pivotal role in ensuring that there is balance of power and authority. Although all theDirectors havean equal responsibility for theGroup’s operations, the role of these IndependentNon-ExecutiveDirectors isparticularlyimportantinensuringthatthestrategiesproposedbytheexecutivemanagementarefullydeliberatedupon,andtakeintoaccountthelongterminterestsoftheshareholders,employees,customers,suppliersandthemanycommunitiesinwhichtheGroupconductsitsbusiness.Together,theirrepresentationsontheBoardfairlyreflecttheinvestmentoftheminorityshareholdersoftheCompanyandinadditioncarrysufficientweightfordecisionmaking.


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BOARD BALANCE (continued)

TheBoardisoftheviewthatitisnotnecessarytonominateanindividualdirectortoassumetheroleofaSeniorIndependentNon-ExecutiveDirector towhomconcerns regarding theCompanymaybeconveyed, asall ourIndependentNon-ExecutiveDirectorsareaccessibleandtheybringindependentjudgementtobearonissueofstrategy,performanceandstandardofconduct.

SUPPLY OF INFORMATION

EachDirectorhasunrestrictedaccesstoseniormanagement,allinformationwithintheCompanyandisentitledtotheadviceandservicesoftheCompanySecretarywhoseappointmentandremovalshouldbeamatterfortheBoardasawhole.TheDirectorswhetherasfullBoardorintheirindividualcapacity,mayinfurtheranceoftheirduties,takeindependentprofessionaladviceattheCompany’sexpense,ifrequired.

PriortoBoardmeetings,theAgendaforeachmeetingtogetherwithreportsandpaperscontaininginformationrelevant to the business of themeetings (including information onmajor financial, operational and corporatemattersaswellasactivitiesandperformanceoftheGroupandminutesofCommitteesoftheBoardandBoardmeetings) are circulated to the Board members to provide time for the Board members to read and contemplate theissues.DuringBoardmeetings,managementprovidesfurtherdetailsoneachissueraisedfordiscussionorassupplementaryinformation.

APPOINTMENTS TO THE BOARD

With the establishment of the Nomination Committee, a formal transparent procedure is in place for theappointmentofnewDirectorstotheBoard.CandidatesfordirectorshipwillbeidentifiedandrecommendedtotheBoardbytheNominationCommittee.

Nomination Committee

TheNominationCommitteeconsistsofthree(3)Non-ExecutiveDirectors.MembersoftheNominationCommitteeare:

• ChimWaiKhuan (Chairman,IndependentNon-ExecutiveDirector)

• Dato’AbdulMuradBinKhalid (Member,IndependentNon-ExecutiveDirector)

• DatinMasriKhawBintiAbdullah (Member,Non-IndependentNon-ExecutiveDirector)

TheNominationCommittee is responsible formaking recommendationsonanynomination to theBoardandto Committees of the Board. In making these recommendations, due consideration is given to the requiredmixofskillsandexperiencethattheproposeddirectorsshouldbringtotheBoardandtotherespectiveBoardCommittees. The actual decision as to who shall be nominated is the responsibility of the full Board afterconsideringtheNominationCommittee’srecommendations.

TheNominationCommitteewillalsoassessannually,theeffectivenessoftheBoardasawhole,theCommitteesoftheBoardandthecontributionofeachindividualDirectorincludingIndependentNon-ExecutiveDirectors,aswellasChiefExecutiveOfficer.TheBoard,throughtheNominationCommittee,reviewsannuallyitsrequiredmixofskillsandexperienceandotherqualities,includingcorecompetencies,whichNon-ExecutiveDirectorsshouldbringtotheBoard.

TheCompanySecretaryisresponsibleforensuringthatallappointmentsareproperlymadeandallnecessaryinformation are obtained from Directors, for the Company’s own records and for purposes of meeting therequirementsoftheAct,ListingRequirementsofBursaSecuritiesandotherregulatoryrequirements.

TheNominationCommitteeshallmeetonceayearandadditionalmeetingscanbeschedulediftheChairmanoftheCommitteeconsidersnecessary.


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APPOINTMENTS TO THE BOARD (continued)

Nomination Committee (continued)

AllDirectorshaveattendedtheMandatoryAccreditationProgrammeasrequiredundertheListingRequirementsofBursaSecurities.Duringthefinancialyearended31December2011,theDirectorshaveattendedindividuallyand collectively various training programmes such as Sustainability Programme for Corporate Malaysia,GovernanceProgrammeonAssessingtheRiskandControlEnvironment,CSRProgrammeonBridgingaGapin Developing CSR Capacity, Key Components of Boardroom Effectiveness and Blue Ocean Strategy. TheDirectorshavealsobeenregularlyupdatedondevelopmentsincorporategovernance,relevantlaws,regulationsandbusinesspracticesasacontinuingefforttotrainandequipthemselvestoeffectivelydischargetheirduties.TheBoardshallevaluateanddeterminethetrainingneedsofitsmembersonacontinuousbasispursuanttotheListingRequirementsofBursaSecurities.

RE-ELECTION

InaccordancewiththeCompany’sArticlesofAssociation,one-third(1/3)oftheDirectorsretirefromofficeateachAGMbutshallbeeligibleforre-election.DirectorswhoareappointedbytheBoardduringeachfinancialyeararesubjecttoelectionbyshareholdersatthefirstAGMfollowingtheirappointments.TheArticlesofAssociationoftheCompanyprovidethatallDirectorsshallsubmitthemselvesforre-electionatleastonceeverythree(3)years.

AUDIT COMMITTEE

ThesummaryofthetermsofreferenceaswellasfurtherinformationontheAuditCommitteearesetoutonpages19to22ofthisAnnualReport.

DIRECTORS’ REMUNERATION

TheremunerationforallDirectorsaredeterminedatlevelssoastoensurethattheCompanyattractsandretainsthe rightcalibreofDirectorsneeded to run theGroupsuccessfully.TheRemunerationCommittee reviewsandrecommends to theBoard, theCompany’s remunerationpolicy forExecutiveDirectors to ensure that theyareappropriatelyrewardedfortheircontributiontotheGroup.

ThedeterminationoftheremunerationoftheNon-ExecutiveDirectorsisamatterfortheBoardasawhole.

NoDirectorshalltakepartindecisionspertainingtohisorherownremuneration.

Remuneration Committee

ThemembersoftheRemunerationCommitteeduringthefinancialyearended31December2011areasfollows:

• Dato’AbdulMuradBinKhalid (Chairman,IndependentNon-ExecutiveDirector)

• DatinMasriKhawBintiAbdullah (Member,Non-IndependentNon-ExecutiveDirector)

• ChimWaiKhuan (Member,IndependentNon-ExecutiveDirector)

TheRemunerationCommitteeshallmeetat leastonceayearandadditionalmeetingscanbescheduled if theChairmanoftheCommitteeconsidersnecessary.


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DIRECTORS’ REMUNERATION (continued)

Remuneration Committee (continued)

Details of the aggregate remuneration for the Directors of the Company (including remuneration earned as ExecutiveDirectorsofsubsidiaries)forthefinancialyearended31December2011areasfollows:

1. AggregateremunerationofDirectorscategorisedintoappropriatecomponents:ctor Fees Salaries &

Category of DirectorFees

RM’000Salaries & Bonus

RM’000Benefits-in-kind

RM’000Total

RM’000

Executive 187 768 30 985

Non-Executive 355 460 - 815

2. Rangeofaggregateremuneration:

Range of remuneration (RM)

Number of Directors

Executive Non-Executive

Below50,000 - 3

400,001-450,000 1 -

550,001-600,000 1 -

700,001-750,000 - 1

SHAREHOLDERS

TheBoardacknowledgestheimportanceofestablishingadirectlineofcommunicationwithshareholdersandinvestors through timely dissemination of information on the Group’s performance and operations via distribution ofannualreportsandrelevantcirculars,releaseofquarterlyfinancialresults,pressreleasesandannouncements.

TheAGMistheprincipalforumfordialoguewithshareholders.Thereisanopenquestionandanswersessioninwhichshareholdersmayposequestions regarding the resolutionsbeingproposedat themeetingandalsoonmatters relating to theGroup’s businesses and affairs. TheBoardmembers are in attendance to provideexplanationstoallshareholders’queriesandshareholdersareencouragedtoparticipateindiscussionsandtogivetheirviewstotheDirectors.

ToenhancethequalityandvalueoftheAGM,theBoardensuresthat,forre-electionofDirectors,theNoticeofAGMidentifiestheDirectorsstandingforre-electionorelectionwithabriefdescriptiontoincludematterssuchasage,relevantexperience,listofdirectorshipsinpubliccompanies,dateofappointmenttotheBoard,detailsofparticipationinBoardCommitteesandwhethertheparticularDirectorisindependent.Inaddition,eachitemofspecialbusinessincludedintheNoticeofAGMwillbeaccompaniedbyafullexplanationoftheeffectsofaproposedresolution.

ItisalsothepracticeoftheBoardtoholdapressconferencewithjournalistsuponrequestafteranAGM.


annual report 2011

FINANCIAL REPORTING

Inpresentingtheannualfinancialstatementsandquarterlyannouncementofresults,theBoardaimstopresentabalancedandunderstandableassessmentoftheGroup’spositionandprospects.Thisalsoappliestootherprice-sensitivepublicreportsandreportstoregulators.TheAuditCommitteeassiststheBoardinscrutinizingsuchreportstoensureaccuracyandadequacy.

Statement on Directors’ Responsibility for Preparing Financial Statements

TheDirectorsarerequiredbytheActtopreparefinancialstatementsforeachfinancialyearwhichhavebeenmadeoutinaccordancewithapplicableapprovedFinancialReportingStandardsinMalaysiaandgiveatrueandfairviewofthestateofaffairsoftheGroupandtheCompanyattheendofthefinancialyearandoftheresultsandcashflowsoftheGroupandtheCompanyforthefinancialyear.

Inpreparingthefinancialstatements,theDirectorshave:

• Selectedsuitableaccountingpoliciesandappliedthemconsistently;

• Madejudgmentsandestimatesthatarereasonableandprudent;

• EnsuredthatallapplicableFinancialReportingStandardshavebeenfollowed;and

• PreparedfinancialstatementsonangoingconcernbasisastheDirectorshaveareasonableexpectation,havingmadeenquiries,thattheGroupandtheCompanyhaveadequateresourcestocontinueinoperationalexistencefortheforeseeablefuture.

TheDirectorshavetheresponsibilityforensuringthattheCompanykeepsaccountingrecordswhichdisclosewithreasonableaccuracythefinancialpositionoftheGroupandtheCompanyandwhichenablethemtoensurethatthefinancialstatementscomplywiththeAct.

TheDirectorshaveoverallresponsibilitiesfortakingsuchstepsasarereasonablyopentothemtosafeguardtheassetsoftheGroupandtopreventanddetectfraudandotherirregularities.

INTERNAL CONTROL

TheBoardacknowledgesitsoverallresponsibilityformaintainingasoundsystemofinternalcontroltosafeguardshareholders’ investments, theCompany’sassets,and theneed to review theadequacyand integrityof thosesystemsregularly. Inestablishingandreviewing thesystemof internalcontrol, theDirectors recognise that thesystemof internal control canonlyprovide reasonablebutnot absoluteassuranceagainst the riskofmaterialmisstatement or loss. The effectiveness of theGroup’s system of internal controls is reviewed periodically bytheAuditCommitteeandsuchreviewcovers the financial,operationalandcompliancecontrolsaswellas riskmanagement.

TheStatementonInternalControlsassetoutonpages23to24ofthisAnnualReportprovidesanoverviewofthestateofinternalcontrolwithintheGroup.

RELATIONSHIP WITH AUDITORS

ThroughtheAuditCommittee,theBoardhasestablishedaformaltransparentandappropriaterelationshipwiththeCompany’sauditors.TheexternalauditorsareinvitedtoattendAuditCommitteeMeetingsatleasttwiceayeartodiscussthenatureandscopeoftheauditandproblemsandreservationsarisingfromthefinalaudit.


annual report 2011

Additional Compliance Information

1. OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES

On31January2008,the1,182,277,6662%10-YearIrredeemableConvertibleUnsecuredLoanStocksat100%ofthenominalvalueofRM0.15each(“ICULS”)issuedon29January2008bytheCompanypursuanttoarightsissuebytheCompanywerelistedontheMainMarketofBursaSecurities.Duringthefinancialyearended31December2011,atotalof31,413,000ICULSwereconvertedinto15,706,500newordinarysharesofRM0.30each of the Company by surrendering for cancellation two (2) ICULS for every one (1) new ordinary shareofRM0.30each in theCompany. Inaddition, a totalof525,000newordinary sharesofRM0.30eachof theCompanywereissuedconsequentialtoaconversionbysurrenderingforcancellationone(1)ICULSandcashpaymentofRM0.15forone(1)newordinaryshareofRM0.30eachintheCompany.

Saveasdisclosedabove,theCompanyhasnotissuedanyoptions,warrantsorconvertiblesecuritiesduringthefinancialyearended31December2011.

2. NON-AUDIT FEES PAID TO EXTERNAL AUDITORS

Non-statutoryauditfeespaidtotheexternalauditors,MessrsBakerTillyMonteiroHeng,bytheCompanyandtheGroupforthefinancialyearended31December2011amountedtoRM44,000andRM69,000respectively.

3. MATERIAL CONTRACTS INVOLVING DIRECTORS AND MAJOR SHAREHOLDERS

TherewerenomaterialcontractsenteredintobytheGroupwhichinvolveddirectors’andmajorshareholders’interestseitherstillsubsistingattheendofthefinancialyearended31December2011orenteredintosincetheendofthepreviousfinancialyear.Notwithstandingtheforegoing,Dato’AhmadSebiBakar(adirectorandmajorshareholderoftheCompany),witheffectfrom29October2010becametheultimateownerofthe100%equityinterestinacompanywhichownstheHolidayVillaHotel&SuitesLondon(“Hotel”),hasanindirectinterestinthefollowingsubsistingagreementsinrespectoftheHotel:

(a) LeaseAgreementdated16December2005enteredintobyHolidayVilla(UK)Ltd,awholly-ownedsubsidiaryoftheCompany[heldviaHolidayVillasInternationalLimited,awholly-ownedsubsidiaryofAlangka-SukaHotels&ResortsSdnBhd(“ASHR”),whichinturnisawholly-ownedsubsidiaryoftheCompany],inrelationtotheleaseoftheHotelforaperiodoften(10)years;and

(b) OptionAgreementdated16December2005enteredintobyAlangka-SukaInternationalLimited(“ASIL”),awholly-ownedsubsidiaryoftheCompany[heldviaASHR],inrelationtotheoptionforASILtobuybacktheHotelattheendoftheleaseassetoutinitem(a)above.


annual report 2011

MEMBERSHIP AND ATTENDANCE

ThemembersoftheAuditCommitteeduringthefinancialyearended31December2011anddetailsofattendanceofeachmemberatthefive(5)meetingsheldduringthefinancialyearareasfollows:

Name of Directors No.ofMeetingsAttended

YongTeckMingChairman/IndependentNon-ExecutiveDirector

5 / 5

Dato’AbdulMuradBinKhalidMember/IndependentNon-ExecutiveDirector

5 / 5

ChimWaiKhuanMember/IndependentNon-ExecutiveDirector

5 / 5

ACTIVITIES

TheAuditCommitteecarriedoutitsdutiesassetoutinthetermsofreferenceforactivitiesrelatedtotheyear2011.

INTERNAL AUDIT FUNCTION

The Board, with the assistance of the Audit Committee and Group Risk Management Committee, is activelymonitoringtheriskmanagementandinternalcontrolsoftheGroup.

TheAuditCommitteehasadoptedatopdown,riskbasedapproachtotheimplementationandmonitoringofinternalcontrolsoftheGroup.ThiswasachievedviathecriticalandindepthreviewanddeliberationofthemanagementreportsandrelevantissuespresentedduringtheAuditCommitteemeetings.Thistopdown,riskbasedapproachwillenabletheAuditCommitteetoidentifyanymajorbreakdownintheriskmanagementandinternalcontrolsoftheGroupandtomakethenecessaryrecommendationstoaddresstheissues.

TheAuditCommittee isassistedby internal audit function inmaintainingasoundsystemof internal control tosafeguard shareholders’ investment. The Internal Audit Department is responsible for undertaking regular andsystematicreviewsofthesystemofcontrolsandreportsdirectlyandindependentlytotheAuditCommittee.

Duringthefinancialyear,ourInternalAuditDepartmentcarriedoutvariousoperational,systemandriskassessmentreviewsinaccordancewiththeInternalAuditPlanapprovedbytheAuditCommittee.Follow-upauditswerealsoperformed by the Internal Audit Department to ensure that audit recommendations and corrective action plans were implemented accordingly. The cost incurred for the internal audit function of theGroup in respect of thefinancialyearended31December2011wasaboutRM210,000.

SUMMARY OF THE TERMS OF REFERENCE OF THE AUDIT COMMITTEE

MEMBERSHIP

TheAuditCommitteeshallbeappointedbytheBoardfromamongsttheDirectorsoftheCompanyandshallconsistofnotlessthanthree(3)members,allofwhomshallbeNon-ExecutiveDirectorsandamajorityshallbeIndependentDirectors.NoalternatedirectorshallbeappointedasamemberoftheAuditCommittee.

AllmembersoftheAuditCommitteeshallbefinanciallyliterateandatleastone(1)memberoftheAuditCommittee:

(i) MustbeamemberoftheMalaysianInstituteofAccountants;or

Audit Committee Report


annual report 2011

SUMMARY OF THE TERMS OF REFERENCE OF THE AUDIT COMMITTEE (continued)

MEMBERSHIP (continued)

(ii) Ifhe/sheisnotamemberoftheMalaysianInstituteofAccountants,he/shemusthaveatleastthree(3)yearsworkingexperienceand:

(a) He/shemusthavepassedtheexaminationsspecifiedinPartIofthe1stScheduleoftheAccountantsAct1967;

(b)He/shemustbeamemberofoneoftheassociationsofaccountantsspecifiedinPartIIofthe1stScheduleoftheAccountantsAct1967;or

(c) FulfilssuchotherrequirementsasprescribedorapprovedbyBursaSecurities.

TheChairmanoftheAuditCommitteeshallbeanIndependentNon-ExecutiveDirectorandshallbeappointedbytheBoard.

TheappointmentofanAuditCommitteememberterminateswhenthememberceasestobeaDirector.

MEETINGS

Aquorumshallbetwo(2)memberspresent,bothofwhommustbeIndependentDirectors.

TheAuditCommitteeshallmeetatleastfour(4)timesayear,ormorefrequentlyastheAuditCommitteeconsidersnecessary.TheAuditCommitteeshallmeetwiththeexternalauditorswithoutexecutiveBoardmemberspresentatleasttwiceayear.

TheHeadofFinance,HeadofInternalAuditandarepresentativeoftheexternalauditorsshallnormallybeinvitedtoattendthemeetings.OtherBoardmembersmayattendmeetingsupontheinvitationoftheAuditCommittee.TheSecretarytotheAuditCommitteeshallbetheCompanySecretary.

TheSecretary of theAuditCommitteewill prepare theminutes,which shall be signedby theChairmanof themeetinganddistributed toeachmemberof theAuditCommitteeandof theBoard.TheChairmanof theAuditCommitteeshallreportoneachmeetingtotheBoard.

AUTHORITY

TheAuditCommitteeisauthorisedbytheBoard:

(i) Toinvestigateanyactivitywithinitstermsofreference;

(ii) TohavetheInternalAuditFunctionreportdirectlytotheAuditCommittee;

(iii)Tohavetheresourcesrequiredtoperformitsduties;

(iv)TohavefullandunrestrictedaccesstoanyinformationpertainingtotheGroup;

(v) Tohavedirectcommunicationchannelswiththeinternalandexternalauditors;

(vi)Toobtainexternallegalorotherindependentadviceasnecessary;and

(vii)Toconvenemeetingswiththeexternalauditors,theinternalauditorsorboth,excludingtheattendanceofotherDirectorsandemployeesoftheCompany,wheneverdeemednecessary.


annual report 2011


FUNCTIONS AND DUTIES

ThefunctionsanddutiesoftheAuditCommitteeshallbe:

(i) ToreporttotheBoardonthefollowing:

(a) thereviewwiththeexternalauditor,theauditplanandthenatureandscopeoftheaudit;

(b) thereviewwiththeexternalauditor,hisevaluationofthesystemofinternalcontrols;

(c) thereviewwiththeexternalauditor,hisauditreport;

(d) theassistancegivenbytheemployeesoftheGrouptotheexternalauditor;

(e) anyletterofresignationfromtheexternalauditorsoftheCompany;

(f) whether there is reason (supported by grounds) to believe that the external auditor is not suitable forreappointment;

(g) theexternalauditors’managementletterandmanagement’sresponse;

(h) theconsiderationandrecommendationstotheBoardontheappointmentofexternalauditorsandtheirfeeandanyquestionofresignationordismissal;

(i) thediscussionwiththeexternalauditorsonproblemsandreservationsarisingfromtheinterimandfinalaudits,theirevaluationofthesystemofinternalcontrols,andanymatterstheexternalauditormaywishtodiscuss(intheabsenceofmanagementwherenecessary);

(j) the quarterly results and year end financial statements prior to the approval by the Board, focusingparticularlyon:

- changesinorimplementationofmajoraccountingpolicyandpracticeschanges;

- significantandunusualevents;

- significantadjustmentsarisingfromtheaudit;

- thegoingconcernassumption;and

- compliancewithaccountingstandards,requirementsofBursaSecuritiesandotherlegalrequirements;

(k) anyrelatedpartytransactionandconflictof interestsituationthatmayarisewithintheCompanyortheGroup includingany transaction,procedureorcourseofconduct that raisesquestionsofmanagementintegrity;and

(l) theadequacyoftheRiskManagementpoliciesandprocedureoftheCompanyandtheGroup;


annual report 2011


FUNCTIONS AND DUTIES (continued)

ThefunctionsanddutiesoftheAuditCommitteeshallbe(continued):

(ii) TodothefollowinginrelationtotheinternalauditfunctionandreportthesametotheBoard:

(a) reviewtheadequacyofthescope,functions,competencyandresourcesoftheinternalauditfunctionsandthatithasthenecessaryauthoritytocarryoutitswork;

(b) reviewtheinternalauditprogrammeandprocesses,theresultsoftheinternalauditprogramme,processesorinvestigationsundertakenandwhetherornotappropriateactionistakenontherecommendationsoftheinternalauditfunction;

(c) reviewanyappraisalorassessmentoftheperformanceofthemembersoftheinternalauditfunctions;

(d)approveanyappointmentorterminationofseniorstaffmembersoftheinternalauditfunctions;and

(e) takecognisanceofresignationsofinternalauditstaffmembersandprovidetheresigningstaffmemberanopportunitytosubmithisreasonsforresigning;

(iii)TopreparetheAuditCommitteeReportfortheannualreportasestablishedbyparagraph15.15oftheListingRequirementsofBursaSecurities;

(iv)WheretheAuditCommitteeisoftheviewthatanymatterreportedbyittotheBoardhasnotbeensatisfactorilyresolved resulting inabreachof theListingRequirementsofBursaSecurities, theAuditCommitteemustpromptlyreportsuchmatterstoBursaSecurities;

(v) ToconsiderthemajorfindingsofinternalinvestigationsauthorisedbytheBoardandmanagement’sresponse;and

(vi)TocarryoutanyotherfunctionthatmaybemutuallyagreeduponbytheAuditCommitteeandtheBoard.

TheChairmanoftheAuditCommitteeshallengageonacontinuousbasiswithseniormanagement,suchastheChairman,theChiefExecutiveOfficer,theHeadofFinance,theHeadofInternalAuditandtheexternalauditorsinordertobekeptinformedofmattersaffectingtheCompany.


annual report 2011

Statement on Internal Control

TheCodestipulatesthatalistedcompanyshallmaintainasoundsystemofinternalcontroltosafeguarditsshareholders’investmentanditsassets.

TheBoardispleasedtopresentitsStatementofInternalControlforthefinancialyearended31December2011whichismadepursuanttoParagraph15.26(b)oftheListingRequirementsofBursaSecuritiesandinaccordancewiththe“Standardof InternalControl-Guidance forDirectorsofPublicListedCompanies” issuedby the Instituteof InternalAuditorsandadoptedbyBursaSecurities.

ForthepurposeofthisStatement,theGroupmeanstheCompanyanditssubsidiaries,excludingtheassociates.ThisStatementdoesnotcoverassociatesastheCompanydoesnothavecontrolovertheoperations,managementandinternalcontrolsystemofthesecompanies.

BOARD RESPONSIBILITY

The Board acknowledges its ultimate responsibility for the Group’s system of internal control, which includes theestablishmentofanappropriatecontrolenvironmentandframeworkaswellasreviewing itsadequacyand integrityonaregularbasis.Inviewofthelimitationsthatareinherentinanysystemofinternalcontrol,theGroup’ssystemisdesignedtomanage,ratherthaneliminate,theriskoffailuretoachievecorporateobjectives.Accordingly,itcanonlyprovidereasonablebutnotabsoluteassuranceagainstmaterialmisstatement,operationalfailures,fraudorloss.TheGroup’ssystemofinternalcontrolcoversriskmanagementandfinancial,operationalandcompliancecontrols.Exceptforinsurableriskwhereinsurancecoversarepurchased,othersignificantrisksfacedbytheGrouparereportedtoandmanagedbytherespectiveBoardswithintheGroup.

GROUP RISK MANAGEMENT

TheGroupbelieves thatasound riskmanagement isessential toensuringsuccess inour risk-takingactivities.Weregularly reviewour riskmanagementapproaches toensure thatwe thoroughlyunderstand the risksweare takingandtoidentifyareasofsignificantrisksatanearlystage,aswellastoformulatetimelyandappropriaterisk-responsestrategies.

Themostimportantaspectofaneffectiveriskmanagementistheinculcationofariskawarenesscultureacrossalllevelsofstaffthrougheffectivecommunication,trainingandthecommitmentofallemployeestotheGroupRiskManagementFramework.

TheBoardestablishestheGroup’sriskappetiteandriskprinciples.TheRiskManagementCommitteeisresponsibleinoverseeingtheGroup’sriskmanagement.ItreviewsandapprovestheGroup’soverallriskmanagementpolicies,riskmanagement frameworksand riskmodels.TheRiskManagementCommitteealsooversees theestablishmentandoperationoftheriskmanagementsystemsandreceivesregularreviewsastotheireffectiveness.

INTERNAL AUDIT FUNCTION

The internalauditadoptsarisk-basedapproach indeveloping itsauditplanbasedontheGroup’skeyrisksprofile.Internal audit plan and the scope of the internal audit are presented and approved by the Audit Committee on a yearly basis.

Duringtheyear,InternalAuditDepartmenthasundertakenandcompletedauditassignmentsonallkeydepartmentsandsubsidiarieswithintheGroupinaccordancewiththeapprovedannualauditplan.TheinternalauditfunctionprovidesassuranceoftheeffectivenessofthesystemofinternalcontrolswithintheGroup.


annual report 2011

INTERNAL AUDIT FUNCTION (continued)

Internalauditperformsriskassessmentandoperationalandsystemreviewaspartoftheauditactivities.Theareasofauditcoveragearebasedonareasofhighriskthatareindependentlyassessed.Allauditfindingsaredeliberatedand resolved with the management. Follow-up reviews will subsequently be performed to ascertain the extent ofimplementationoftherecommendedcorrectiveactionforimprovements.TheAuditCommittee,onbehalfoftheBoard,reviewstheinternalcontrolissuesidentified,andrecommendationsmadebytheinternalauditorsonaregularbasisandrecommendationsmadebytheexternalauditorsduringtheannualstatutoryaudit.

Apartfrominternalauditandriskmanagement,theBoardhasputinplacethefollowingprocessestoprovideacertaindegreeofassurancetotheBoardastotheoperationandvalidityofthesystemoninternalcontrolwithintheGroup:

• RigorousreviewofthequarterlyfinancialresultsandreportsandevaluatingthereasonsforunusualvariancesnotedthereofbytheBoardandAuditCommittee;

• TheExecutiveDirectorcloselymonitors thebusinessandoperationsof theGroupandreports to theBoardonsignificantchangesinthebusinessandexternalenvironment,whichaffecttheoperationsoftheGroupatlarge;and

• TheBoardhasinplaceanorganisationalstructurewithformallydefinedlinesofresponsibility,propersegregationofdutiesanddelegationofauthority.Aprocessofhierarchicalreportinghasbeenestablishedwhichprovidesforadocumentedandauditabletrailofaccountability.Theproceduresincludetheestablishmentoflimitsofauthorityandpoliciesonhealthandsafety,traininganddevelopment,equalityofopportunity,staffperformanceandseriousmisconduct. These procedures are implemented across theGroup to provide continuous assurance to seniormanagementandfinallytotheBoard.

WEAKNESSES IN INTERNAL CONTROLS THAT RESULT IN MATERIAL LOSSES

Therewerenomateriallossesincurredduringthecurrentfinancialyearasaresultofweaknessesininternalcontrol.TheBoard,togetherwiththemanagement,continuestotakemeasurestostrengthenthecontrolenvironment.


annual report 2011

TheGroup acknowledges the importance of Corporate Social Responsibility (“CSR”) towards thewell-beingof its employees, community andenvironmentandviews it asanextensionof theGroup’seffort in fosteringastrongcorporategovernanceculture. InApril2010,theGroupparticipatedintheACHIEVECSRProgramme(“ACHIEVE”)whichaimedtopoolandfocustheeffortsandresourcesoftheGroupwithlike-mindedcorporationsthatsharethecommondesire tosupportand implementmeaningfulCSRactivities.TheACHIEVECommitteewas formedwith representatives fromvariousdivisionsofourGroupparticipatingascommitteemembers, tospearheadCSRactivitiesviasynergycollaborationwithidentifiedorganisations.

ENVIRONMENT

Werecognisetheimportanceofgoodenvironmentalmanagement/preservationpractices.Inourdailyoperations,theGroupcontinuestobecommittedonrecycling,energy-savingpracticesandundertakingmeasurestoreducewastages,pollutionandharmfulemissions.Wealsoencourageourstafftobeenvironmentalfriendly.

The“GoingGreen@HolidayVilla”campaignlaunchedbyourhotelsandresortsdivisionatalltheHolidayVillahotelsaimstocontributesignificantlytothepreservationofournationalhabitatandenvironment.Webelievethisstrategywillresultintheleastdisruptiontotheenvironmentandcontributetosustainabledevelopment.

Inourcoachbuildingdivision,allwastematerialsproducedaredepositedatdesignatedareasanddisposedofperiodicallyinanenvironmentallysafemanner,byourauthorisedwastedisposalagents.

COMMUNITY

Oneofourvaluesistohonouroursocialobligationsandcontributetotheeconomicandsocialwellbeingofeverycommunityinwhichweoperate.Wealsobelieveintheimportanceofprovidingopportunitiesespeciallytotheyoungergeneration,forthebettermentofoursociety.

In line with the above, the Group offers graduate placement programmes, industrial training and internshipin our hotels and resorts, property development, coach building aswell as information and communicationstechnologydivisions.Inaddition,ourhotelsandresortsdivisiongivesfirstpreferencetolocalworkforceinthelocationwhereitoperates.WealsoprovidetrainingopportunitiestoorphansunderthecareofYATIM(YayasanKebajikanAnak-AnakYatimMalaysia).

In our yearly programmes, our hotels and resorts divisionparticipated in various community projects for theunfortunate, such as contributing either financially or in-kind to various non-profit organisations, orphanagehomesandunder-privilegedfamilies.“Blooddonation”campaignisalsoanannualeventamongstourhotels.

MARKETPLACE

OurGroupaimsforsustainablegrowth,productivepartnershipsandfairnessinallbusinessdealings.

Inmaintaining transparency and accountability to our shareholders, we ensure thatmaterial information aredisseminated to the stock exchange in a timely manner and simultaneously released to the market via ourwebsite.Corporateinformationandkeyinformationonproductsandservicesareregularlyupdatedandpostedonourwebsite.

Our hotels and resorts division devotes considerable efforts towards cultivating excellent business ethicsandvalues,goodcorporategovernanceandstakeholderengagement,procurementsystems,andqualityandinnovativehospitalityproductsandservices.Theyregularlycarryouttheirreviewsonpoliciesandprocedures,internal control system, riskmanagement traininganddevelopmentprogrammes,process improvementsandqualityassuranceassessments,tocontinuouslyenhancethedeliveryoftheirhospitalityproductsandservices.Wealsogivepriorityandsupportforlocallyproducedproductssuchasusinglocallyproducedwaterboilersandtelevisionsatourhotelproperties.

Ourmanufacturingdivisionensuresthattheirsuppliers’productscomplywithapplicableandprevailingsafetyandenvironmentalprotectionrulesandregulationsandgoodmanufacturingpractices.

Corporate Social Responsibility


annual report 2011

WORKPLACE

TheGroupcontinuouslypromoteshumancapitaldevelopmentbyencouragingandsponsoringtheparticipationof our staff in training programmes and seminars to enhance their knowledge and skills while promoting amotivatedworkingteam.

OurGroupiscommittedtoprovideourstaffanenvironmentofequalopportunitytostrive.

TheGroup strives to forge a safeworking environment andpromotes healthywork practices for all levels ofstaff.ThewellbeingofourstaffiscriticaltotheGroup.Trainingcourseswerecarriedouttoensurecontinuousimprovementofsafetyandhealthpractices.


annual report 2011

Chairman’s Statement

OnbehalfoftheBoardofDirectors,IampleasedtopresenttheAnnualReportofAdvanceSynergyBerhadanditsgroupofcompanies(“theGroup”)forthefinancialyearended31December2011.

FINANCIAL RESULTS

Fortheyearended31December2011,theGroup’srevenueofRM222.3millionwasmarginallyhigherby0.20%fromRM221.9millionin2010.Despitethehigherrevenue,grossprofitfortheGroupwaslowerby3.4%atRM83.4million in 2011 compared to RM86.7million in 2010. Therewas also higher other operating income in 2010 atRM36.7millioncomparedtoRM25.0millionin2011arisingmainlyfromhigherwritebackofprovisions.TheGroupresultsthisyearwasalsoaffectedbythelowercontributionfromassociatedcompanies.

However,theoperatingexpensesin2011werealsolowerbyRM22.0millionfromRM120.5millionin2010mainlyduetoprovisionmadein2010forimpairmentlossonavailableforsaleinvestments.ThenetimpactoftheaboveresultedinahigherGroupprofitbeforetaxofRM8.9millioncomparedtoaprofitofRM7.4millionin2010.Thenetprofitaftertaxandnon-controllingintereststandsatRM4.2millionascomparedtoRM3.3millioninthepreviousyear.

TheGroup’searningspershareforthefinancialyearended31December2011was0.85sencomparedto0.70senforthepreviousyear.

GROUP OPERATIONS

Hotels and Resorts

TheGroup’shotelsandresortsdivision(undertheHolidayVillabrand)achievedatotalrevenueofRM76.2millioninfinancialyear2011.Thisrepresentsamarginal2.4%abovethetotalrevenueofprecedingyear.Inlinewiththeincreaseinrevenue,thegrossprofitofRM50.3millionis1.9%abovepreviousyear.

The areas that performed well in 2011 where the Holiday Villa hotels operate areMalaysia, Indonesia, UnitedKingdom, Qatar and Europe where the source of business is from the leisuremarket and business travellers.Meanwhile,thedivisioncontinuestofacechallengesinplaceslikeKhartoum,HalongBay,PhnomPenhandnearerhome,Cherating.

Thehotelsandresortsdivision’sprofitbeforetaxisloweratRM6.2millioncomparedtoaprofitbeforetaxofRM9.7millionin2010.Thelowerprofitin2011comparedtotheprecedingyear2010wasmainlyduetorealisationofforeignexchangelosses.

AgroundbreakingceremonyofficiatedbytheDatukBandarofKualaLumpurwasheldon22September2011fortheconstructionofabrandnew4-starthematicHolidayVillaKualaLumpurCityCentre.Thisprojectisdevelopedunderourassociatedcompany,HolidayVillaKualaLumpurSdnBhd.

InJune2011,ourhotelsand resortsdivisionsignedahotel licensingagreement fora4-star300-roomhotel inKotaKinabalu;inSeptember2011,ahotelmanagementagreementtomanagea322-roomcityhotelinJohorBaruwhichisexpectedtocommencebusinessin2014andinMarch2011,ahotelmanagementagreementtomanagea200-room4-starhotelinBahrain.

Thehotelsandresortsdivisionalsolauncheda“TreatForTwo”ContestfromNovember2010to30June2011atparticipatinghotelproperties.RoomguestsduringtheperiodweregivenanentryformforachancetowinaGrandPrizeofaholidaypackagetoEuropeorAsiawith2returnair-tickets,7days/6nightsstayatHolidayVillahotelsin London andParis (Europe Package) or at Holiday Villa hotels in Subang andCherating/DiwangkaraHolidayVillaBali(AsianPackage)withdailybreakfastandonesetdinnerfor2persons.Inaddition,ourhotelsandresortsdivision also awarded hotel vouchers for 5 Consolation Prizewinners andMonthly Prizewinners. The contestattractedover5,000entries.

Holiday Villa Group’s ranking in the September 2011 issue of ‘Hotels’ magazine, a leading international hotelindustrymagazine,hasmovedupfrom284to165initsOctober2010issue.


annual report 2011

GROUP OPERATIONS (continued)

Information and Communications Technology (“ICT”)

The Group’s ICT division’s revenue in the current year was lower by approximately RM9.1 million or 21.1%comparedto2010’srevenueofRM43.1million,mainlyduetolowersystemsalesrevenuerecordedbyallbusinessunits(“BU”)inallthree(3)regions(SouthEastAsia,SouthAsiaandMiddleEast-Africa).Thelowerrevenuefromsystemsales across allBUswashoweverpartlymitigatedby highermanaged services revenue recordedbyValue-added-ServicesalesBUinSouthAsia.

Gross profit achieved by our ICT division was also lower this year, in line with the lower revenue recorded.However,themagnitudeofthedeclinewaslowerthanthatofrevenue,fallingonlyby16%,asopposedtothedeclineinrevenueof21.1%.Thisreflectedthehigheraveragegrossprofitmarginfortheyearof54.4%,whichresultedfromthemorefavourablesalesmixfor2011,wherehighermarginmanagedservicecontractrevenuescomprised64%ofourICTdivisionfortheyear.

Profitbeforetaxfortheyeardeclineddisproportionatelylesscomparedtotherevenue–fallingbyapproximately10.5%toRM5.9million, fromprofitbefore taxachieved in theprecedingyearofRM6.6million.Thiswasdueto lowerotheroperatingexpensesincurredduringthecurrentyearandanimprovement inoverallgrossprofitmargin,aswellasafairvaluegainrecordedonthedivision’sinvestmentproperty.

AlthoughourICTdivisionhadadisappointingyearintermsoffailingtobettertheirfinancialresultsof2010,theyearwassignificantinthatitrepresentedtheICTdivisionfourthconsecutiveyearofprofitability.Midwaythrough2011theICTdivisionreceivedformalnotificationfromSingaporeExchangeSecuritiesTradingLimited(“SGX”)thatourapplicationtoberemovedfromtheWatchListpursuanttothealternativeexitcriteriaunderRule1314oftheListingRulesoftheSGXhadbeensuccessful.ThisalternativeexitcriteriawhichthedivisionhadbeenaimingtofulfilinordertoapplyforremovalfromtheWatchList,involvedtheachievementofaminimumcumulativepre-taxprofitofSGD7.5millionoverthree(3)consecutivefinancialyearsofpre-taxprofitability.

Property Development

TotalrevenueachievedbytheGroup’spropertydevelopmentdivision,representedprimarilybyAdvanceSynergyRealtySdnBhd(“ASR”)amountedtoRM5.8million,adecreaseof48.2%comparedtoRM11.2millionin2010.

In2011,ASRstartedthedevelopmentofMatangJayaIII,aprojectconsistingof36unitsresidentialhousesinMatangJaya,Kuching,Sarawak.Meanwhile,theconstructionofKennyHillVillasinKuching,Sarawak,aprojectconsistingof14unitsofthreestoreysemi–detachedluxuryhomeslocatedwithinthehighlydesirableKennyHillisinprogress.

The lower revenue in 2011wasattributablemainly to the slower thanexpectedprogress forKennyHill Villasprojectduetoshortageofskilledworkers.TheprojectwaslaunchedonlyinSeptember2011.

DespitethesubstantialdropinrevenuebyRM5.4millionforthefinancialyearended31December2011comparedto revenue in the preceding year, the profit before tax of the property divisionwasRM474,000 compared toRM736,000inthepreviousyearmainlyattributabletotheloweroverheadsin2011.


annual report 2011

GROUP OPERATIONS (continued)

Travel and Tours

TotalrevenueachievedbytheGroup’stravelandtoursdivision,representedprimarilybyOrientEscapeTravelSdnBhdandSynergyToursSdnBhdamountedtoRM81.9million,anincreaseof20.3%overthepreviousyear.

Thisincreaseinrevenuewasdrivenprimarilybysubstantialgrowthinticketingrevenuesfortheoutboundtravelandtoursbusiness.Ourcorporateticketingsectioncontinuestogrowfromstrengthtostrength.However,ourinboundtravelsectionhasbeenadverselyaffectedbytheongoingEuropeaneconomiccrisis.

Despitehigherrevenue,profitbeforetaxin2011iscomparabletotheprecedingyearmainlyduetothehigheroperatingexpensesin2011.

Others

TheGroup’sotherdivisionscomprisesmanufacturing,cardandpaymentservices,coachbuildingandtraditionalchinesemedicinedivisions.

TotalrevenueachievedbyotherdivisionsamountedtoRM23.5million,amarginaldecreaseof5.1%comparedto thepreviousyear.Highercontribution fromcardandpaymentservicesdivisionand revenue from thenewdivisionundertheGroup,traditionalchinesemedicinedivision,representedbyDamaTCMSdnBhd,wereoffsetbylowerrevenuefromourcoachbuildingandmanufacturingdivisions.

However, lower losses from other divisions by 33.6% compared to 2010, were mainly due to write back ofprovisionandloweroverheads.

Thenon-profitabledivisionshaveundergonesomerestructuringwherebywehaveselectivelyscaleddownthebusinessandhaveputinplaceplanstoturnaroundthedivisions.

THE PROSPECT

With the uncertainty in the global economic outlook, and the euro zone debt crisis coupledwith the risk oflowergrowthforChinaandmanyeconomies,theDirectorsexpecttheGroup’soperatingenvironmenttoremainchallengingforthefinancialyearending31December2012.

However, each business within the Group will continue to assess and execute their respective growth anddevelopment planswhichmay include geographical expansion, increasing distribution channels, andmarketandproductdevelopment.

Performance from our property development division is expected to improve for 2012 in anticipation of newlaunchesplannedfortheyear.

Ourhotels&resortsdivisioniscontinuouslyexpandingitsoperationsandinthisrespect,thedivisionismovingaggressively in securing hotel management and operating agreements and expects to open more hotels invariouscountriesin2012.Thedivisionwillcontinuewiththeirtradeshowsasithasproventobesuccessfulandto increase their brand presence for all hotels in various internet distribution systems and offer attractive early birddiscountsthroughourownon-linebookingsystem.


annual report 2011

THE PROSPECT (continued)

TheICTdivisionwillcontinuetodefenditsexistingbusinessesandtore-establishitsgrowthpathorganicallyandbywayofacquisitionofand/orstrategicinvestmentincomplementarybusinesses.Thedivisionisoptimisticofextendingitstrackrecordofprofitableperformance,butexpectstheyearaheadtocontinuetobechallengingduetofactorssuchasintensifiedcompetitionformanyofthedivision’smorematuredproductsandtechnologies,recruitmentandretentionissuesontalentstosupportgrowth,andchangesinmanagement,ownershipand/orstrategicemphasisoftheirexistingandprospectivecustomers.

Theinboundtravelandtoursbusinessmayexperiencevolatilityinitsoverseasmarket,buttheoutboundtravelandtoursbusinessisexpectedtoenjoystrongdemandfromthedomesticmarket.

DIVIDENDS

TheBoardofDirectorsofAdvanceSynergyBerhadispleasedtorecommendforshareholders’approval,afirstandfinalgrossdividendof0.50senpershareless25%taxforthefinancialyearended31December2011.

APPRECIATION

Toall shareholders,customersandassociates, Iextendourdeepestgratitude for theirconfidence, trustandcontinuedsupport.Totheregulatoryauthorities,ourappreciationfortheircontinuedguidanceandsupport,andtothemanagementandstaff,myappreciationforyourperseveranceanddedicationinhelpingachievethegoalsoftheGroup.

DATO’ AHMAD SEBI BAKAR

ExecutiveChairman


annual report 2011

Financial StatementsADVANCESYNERGYBERHAD

ANNUALREPORT2011


A N N U A L R E P O R T 2 0 1 1


annual report 2011

TheDirectors hereby submit their report togetherwith the audited financial statements of theGroup and of theCompanyforthefinancialyearended31December2011.

PRINCIPAL ACTIVITIES

TheprincipalactivitiesoftheCompanyarethatofinvestmentholdingandtheprovisionoffullcorporateandfinancialsupporttoitssubsidiaries.TheprincipalactivitiesofthesubsidiariesarestatedinNote8tothefinancialstatements.

Therehavebeennosignificantchangesinthenatureoftheseprincipalactivitiesduringthefinancialyear.

RESULTS

GroupRM’000

CompanyRM’000

Netprofitforthefinancialyear 6,890 9,054

Attributableto:

Ownersoftheparent 4,227 9,054Non-controllinginterests 2,663 -

6,890 9,054

DIVIDENDS

NodividendhasbeenpaidordeclaredbytheCompanysincetheendofthepreviousfinancialyear.

AttheforthcomingAnnualGeneralMeeting,afinalgrossdividendof0.50senpershareless25%taxinrespectofthefinancialyearended31December2011willbeproposedforshareholders’approval.

Thefinancialstatementsforthecurrentfinancialyeardonotreflectthisproposeddividend.Suchdividend,ifapprovedby theshareholders,willbeaccounted for inequityasanappropriationof retainedearnings in thefinancialyearending31December2012.

RESERVES AND PROVISIONS

Allmaterialtransferstoandfromreservesandprovisionsduringthefinancialyearhavebeendisclosedinthefinancialstatements.

BAD AND DOUBTFUL DEBTS

BeforethestatementsofcomprehensiveincomeandstatementsoffinancialpositionoftheGroupandoftheCompanyweremadeout,theDirectorstookreasonablestepstoascertainthatactionhadbeentakeninrelationtothewritingoffofbaddebtsandthemakingofallowancefordoubtfuldebts,andhadsatisfiedthemselvesthatallknownbaddebtshadbeenwrittenoffandadequateallowancehadbeenmadefordoubtfuldebts.

Atthedateofthisreport,theDirectorsarenotawareofanycircumstancesthatwouldrendertheamountwrittenoffforbaddebtsortheamountoftheallowancefordoubtfuldebtsinthefinancialstatementsoftheGroupandoftheCompanyinadequatetoanysubstantialextent.

Directors’ Report


annual report 2011

CURRENT ASSETS

Before the statements of comprehensive income and statements of financial position of theGroup and of theCompanyweremadeout,theDirectorstookreasonablestepstoensurethatanycurrentassets,otherthandebts,whichwere unlikely tobe realised in theordinary courseof business, their values as shown in the accountingrecordsoftheGroupandoftheCompanyhadbeenwrittendowntoanamountthattheymightbeexpectedtoberealised.

Atthedateofthisreport,theDirectorsarenotawareofanycircumstancesthatwouldrenderthevaluesattributedtothecurrentassetsinthefinancialstatementsoftheGroupandoftheCompanymisleading.

VALUATION METHODS

At the date of this report, the Directors are not aware of any circumstances which have arisen which renderadherencetotheexistingmethodofvaluationofassetsorliabilitiesoftheGroupandoftheCompanymisleadingorinappropriate.

CONTINGENT AND OTHER LIABILITIES

Atthedateofthisreport,theredoesnotexist:

(i) anychargeontheassetsoftheGroupandoftheCompanythathasarisensincetheendofthefinancialyearwhichsecurestheliabilitiesofanyotherperson;or

(ii) any contingent liabilities in respect of the Group and of the Company that has arisen since the end of the financialyear,otherthanasdisclosedinNote29tothefinancialstatements.

IntheopinionoftheDirectors,nocontingentliabilitiesorotherliabilitiesoftheGroupandoftheCompanyhavebecomeenforceable,or is likely tobecomeenforceablewithin theperiodof twelvemonthsafter theendof thefinancial yearwhich,will ormaysubstantially affect theabilityof theGroupandof theCompany tomeet theirobligationsasandwhentheyfalldue.

CHANGE OF CIRCUMSTANCES

Atthedateofthisreport,theDirectorsarenotawareofanycircumstances,nototherwisedealtwithinthisreportorthefinancialstatementsoftheGroupandoftheCompanythatwouldrenderanyamountstatedinthefinancialstatementsmisleading.

ITEMS OF AN UNUSUAL NATURE

TheresultsoftheoperationsoftheGroupandoftheCompanyforthefinancialyearwerenot,intheopinionoftheDirectors,substantiallyaffectedbyanyitem,transactionoreventofamaterialandunusualnature.

Noitem,transactionoreventofamaterialandunusualnaturehasarisen inthe intervalbetweentheendofthefinancialyearandthedateofthisreportwhichislikelytoaffectsubstantiallytheresultsoftheoperationsoftheGroupandoftheCompanyforthefinancialyearinwhichthisreportismade.

ISSUE OF SHARES AND DEBENTURES

During the financial year ended31December2011, a total of 31,413,0002%10-Year IrredeemableConvertibleUnsecuredLoanStocksat100%ofthenominalvalueofRM0.15each(“ICULS”)wereconvertedinto15,706,500newordinarysharesofRM0.30eachoftheCompanybysurrenderingforcancellationtwo(2)ICULSforeveryone(1)newordinaryshareofRM0.30eachintheCompany.

Inaddition,atotalof525,000newordinarysharesofRM0.30eachwereissuedconsequentialtoaconversionbysurrenderingforcancellationone(1)ICULSofnominalvalueofRM0.15andcashpaymentofRM0.15forone(1)newordinaryshareofRM0.30eachintheCompany.

ThenewordinarysharesissuedduringthefinancialyearrankparipassuinallrespectswiththeexistingordinarysharesoftheCompany.

Directors’ Report (continued)


annual report 2011

OPTIONS GRANTED OVER UNISSUED SHARES

NooptionsweregrantedtoanypersontotakeupunissuedsharesoftheCompanyduringthefinancialyear.

DIRECTORS

ThenamesoftheDirectorsoftheCompanyinofficesincethedateofthelastreportandatthedateofthisreportare:

Dato’AhmadSebiBakarLeeSuNie Dato’AbdulMuradBinKhalid DatinMasriKhawBintiAbdullahChimWaiKhuanYongTeckMing

REMUNERATION COMMITTEE

TheRemunerationCommitteereviewsandrecommendstotheBoardofDirectors,theCompany’sremunerationpolicyforExecutiveDirectorstoensurethattheyareappropriatelyrewardedfortheircontributiontotheGroup.

ThemembersoftheRemunerationCommitteeduringthefinancialyearended31December2011areasfollows:

• Dato’AbdulMuradBinKhalid (Chairman,IndependentNon-ExecutiveDirector)• ChimWaiKhuan (Member,IndependentNon-ExecutiveDirector)• DatinMasriKhawBintiAbdullah (Member,Non-IndependentNon-ExecutiveDirector)

DIRECTORS’ INTERESTS

AccordingtotheRegisterofDirectors’ShareholdingskeptbytheCompanyunderSection134oftheCompaniesAct,1965, the interestsof thoseDirectorswhoheldofficeat theendof the financialyear in thesecuritiesofAdvance Synergy Berhad (“ASB”) and shares of its related corporations during the financial year ended 31 December2011areasfollows:

Number of ASB Ordinary Shares of RM0.30 each

At At

1.1.2011 Bought Sold 31.12.2011

Direct Interest

Dato’AhmadSebiBakar# 15,203,509 - - 15,203,509

ChimWaiKhuan 100,000 - (100,000) -

Indirect Interest

Dato’AhmadSebiBakar# *¹95,057,609 - - *¹95,057,609

DatinMasriKhawBintiAbdullah 5,000,000 - - 5,000,000

LeeSuNie *²365,000 - - *²365,000

ChimWaiKhuan - *³100,000 *³(100,000) -



annual report 2011

DIRECTORS’ INTERESTS (continued)

Number of ordinary shares At At

1.1.2011 Bought Sold 31.12.2011Subsidiary companyUnified Communications Holdings LimitedDeemed InterestLeeSuNie 200,000 - - 200,000

Number of ASB ICULS At At

1.1.2011 Bought Sold 31.12.2011Direct InterestDato’AhmadSebiBakar 123,212,999 - - 123,212,999YongTeckMing 500,000 - (500,000) -

Indirect InterestDato’AhmadSebiBakar *4149,602,489 - - *4149,602,489DatinMasriKhawBintiAbdullah 12,240,000 - - 12,240,000

# By virtue of his interest inASB,Dato’ AhmadSebiBakar is also deemed to be interested in the shares of all investeecompanies(includingsubsidiaries)totheextentthatASBhasaninterest.

*1 Thisincludeshisson’sinterestin6,000,000ordinarysharesofASBwhichshallbetreatedashisinterestintheordinarysharesofASBpursuanttoSection134(12)(c)oftheCompaniesAct,1965.

*2 Thisisherspouse’sinterestintheordinarysharesofASBwhichshallbetreatedasherinterestintheordinarysharesofASBpursuanttoSection134(12)(c)oftheCompaniesAct,1965.

*3 Thisishisdaughter’sinterestintheordinarysharesofASBwhichshallbetreatedashisinterestintheordinarysharesofASBpursuanttoSection134(12)(c)oftheCompaniesAct,1965.

*4 This includeshisson’s interest in48,934,000 ICULSofASBwhichshallbe treatedashis interest in the ICULSofASBpursuanttoSection134(12)(c)oftheCompaniesAct,1965.

Other thanasdisclosedabove, noneof theotherDirectors inoffice at theendof the financial year hadanyinterestinthesecuritiesoftheCompanyandsharesofitsrelatedcorporationsduringthefinancialyear.

DIRECTORS’ BENEFITS

Since theendof theprevious financial year, noDirectorof theCompanyhas receivedorbecomeentitled toreceive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivableby theDirectorsshown in the financialstatements)by reasonofacontractmadeby theCompanyorarelatedcorporationwiththeDirectororwithafirmofwhichtheDirectorisamember,orwithacompanyinwhichtheDirectorhasasubstantialfinancialinterest,exceptasdisclosedinNote32tothefinancialstatements.

NeitherduringnorattheendofthefinancialyearwastheCompanyapartytoanyarrangementwhoseobjectwastoenabletheDirectorstoacquirebenefitsbymeansoftheacquisitionofordinarysharesin,ordebenturesof,theCompanyoranyotherbodycorporate.



annual report 2011

SIGNIFICANT EVENTS

DetailsofthesignificanteventsaredisclosedinNote37tothefinancialstatements.

SIGNIFICANT SUBSEQUENT EVENTS

DetailsofthesignificantsubsequenteventsaredisclosedinNote38tothefinancialstatements.

AUDITORS

Theauditors,MessrsBakerTillyMonteiroHeng,haveexpressedtheirwillingnesstocontinueinoffice.

OnbehalfoftheBoard,

DATO’ AHMAD SEBI BAKAR YONG TECK MING Director Director

SelangorDarulEhsan24 April 2012



annual report 2011

Group Company31.12.2011 31.12.2010 31.12.2011 31.12.2010

Note RM’000 RM’000 RM’000 RM’000

ASSETS

Non-current assets

Property,plantandequipment 4 190,541 202,182 45 44

Investment property 5 8,870 - - -

Intangible assets 6 77,389 75,591 - -

Investment in subsidiaries 8 - - 473,748 484,398

Investment in associates 9 22,675 30,759 - -

Investment securities 11 31,866 32,673 4,900 4,900

Tradeandotherreceivables 12 2,574 6,400 - -

Deferredtaxassets 13 3,141 2,870 1,113 1,304

Total non-current assets 337,056 350,475 479,806 490,646

Current assets

Propertydevelopmentcosts 14 29,854 24,552 - -

Inventories 15 25,599 32,950 - -

Tradeandotherreceivables 12 57,131 54,002 98,102 98,156

Taxrecoverable 2,770 2,721 2,491 2,400

Investment securities 11 928 919 - -

Cashandbankbalances and short term deposits

16 191,686 110,670 5,196 668

Total current assets 307,968 225,814 105,789 101,224

Non-current assets classified as held for sale

17 8,038 114,955 - -

TOTAL ASSETS 653,062 691,244 585,595 591,870

Statements Of Financial Positionas at 31 December 2011

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


annual report 2011

Group Company31.12.2011 31.12.2010 31.12.2011 31.12.2010

Note RM’000 RM’000 RM’000 RM’000

EQUITY AND LIABILITIES

Equity attributable to owners of the parent

Share capital 18 151,318 146,448 151,318 146,448

Share premium 117,317 117,317 117,317 117,317

Other reserves 19 6,510 7,355 69 69

Retained earnings/(Accumulated losses) 19 74,643 70,416 (12,705) (21,759)

ICULS-equitycomponent 20 111,162 115,340 111,162 115,340

Shareholders’ funds 460,950 456,876 367,161 357,415

Non-controllinginterests 31,777 29,670 - -

Total equity 492,727 486,546 367,161 357,415

Non-current liabilities

Borrowings 21 75,940 81,469 - -

Deferredtaxliabilities 13 2,620 2,748 - -

Provisionforretirementbenefitobligations 22 876 747 - -

ICULS-liabilitycomponent 20 12,278 14,391 12,278 14,391

Total non-current liabilities 91,714 99,355 12,278 14,391

Current liabilities

Tradeandotherpayables 23 59,454 68,187 206,156 190,064

Borrowings 21 7,995 36,168 - 30,000

Taxpayable 1,172 988 - -

Total current liabilities 68,621 105,343 206,156 220,064

Total liabilities 160,335 204,698 218,434 234,455

TOTAL EQUITY AND LIABILITIES 653,062 691,244 585,595 591,870

Statements Of Financial Position as at 31 December 2011 (continued)



annual report 2011

Group Company2011 2010 2011 2010

Note RM’000 RM’000 RM’000 RM’000

Revenue 24 222,285 221,852 40,126 3,751

Cost of sales (138,547) (135,155) - -

Gross profit 83,738 86,697 40,126 3,751

Other operating income 25,041 36,680 - 31,022

Distribution costs (9,697) (10,241) - -

Administrativeexpenses (54,990) (48,877) (4,642) (2,859)

Otheroperatingexpenses (33,802) (61,410) (11,710) (28,051)

Operating profit 25 10,290 2,849 23,774 3,863

Finance costs 26 (8,216) (8,051) (5,473) (2,074)

Share of results of associates 6,835 12,633 - -

Profit before tax 8,909 7,431 18,301 1,789

Incometaxexpense 27 (2,019) (964) (9,247) (246)

Profit for the financial year 6,890 6,467 9,054 1,543

Other comprehensive income/(expenses) for the financial year, net of tax:

Foreign currency translation differences for foreign operations

(3,878) (11,184) - -

Realisation of revaluation and foreign exchangereserve

4,908 (4,583) - -

Realisationofavailable-for-salereserves (1,139) - - -

Fairvalueofavailable-for-salefinancialassets

(807) 1,929 - -

Share of other comprehensive income of associates,netoftax

12 987 - -

(904) (12,851) - -

Total comprehensive income for the financial year

5,986 (6,384) 9,054 1,543

Statements Of Comprehensive Income for the financial year ended 31 December 2011



annual report 2011

Group Company2011 2010 2011 2010

Note RM’000 RM’000 RM’000 RM’000

Profit attributable to:

Ownersoftheparent 4,227 3,327 9,054 1,543


6,890 6,467 9,054 1,543

Total comprehensive income/(loss) attributable to:

Ownersoftheparent 3,382 (9,051) 9,054 1,543


5,986 (6,384) 9,054 1,543

Earnings per ordinary share attributable to owners of the parent (sen)

-Basic 28 0.85 0.70

-Diluted 28 0.59 0.50

Statements Of Comprehensive Income for the financial year ended 31 December 2011 (continued)



annual report 2011

Statements of Changes in Equity for the financial year ended 31 December 2011

A

ttri

but

able

to

ow

ners

of

the

par

ent

No

n-D

istr

ibut

able

D

istr

ibut

able

Sha

reC

apit

al

ICU

LS-

Eq

uity

Co

mp

one

ntS

hare

P

rem

ium

Rev

alua

tio

nR

eser

ve

Exc

hang

e Tr

ansl

atio

nR

eser

ve

Ava

ilab

leFo

r-S

ale

Res

erve

Ret

aine

d

Ear

ning

sTo

tal

No

n-C

ont

rolli

ng

Inte

rest

s To

tal

Eq

uity

Gro

upR

M’0

00R

M’0

00R

M’0

00R

M’0

00R

M’0

00R

M’0

00R

M’0

00R

M’0

00R

M’0

00R

M’0

00

At1January2011

146,448115,340

117,317

12,767

(9,476)

4,064

70,416456,876

29,670

486,546

Netprofitforthefinancialyear

-

-

-

-

-

-4,227

4,227

2,663

6,890

Fairvalueofavailable-for-sale

financialassets

-

--

-

-

(807

)-

(80

7)-

(807

)

Realisationofavailable-for-

sal

e re

serv

e-

--

--

(1,139)

-(1,139)

-(1,139)

Sha

re o

f oth

er c

omp

rehe

nsiv

eincomeofassociates,netof

tax

-

--

--

12

-

12

-

1

2

Rea

lisat

ion

of fo

reig

n

exchangereserve

-

--

-

4,908

-

-

4,908

-4,908

Fore

ign

curr

ency

tra

nsla

tion

diff

eren

ces

for

fore

ign

op

erat

ions

-

--

2

(3,821)

-

-(3,819)

(59)

(3,878)

Totalcomprehensive

inc

ome/

(loss

) for

the

yea

r-

-

-

2

1,087

(1,934)

4,227

3,382

2,604

5,986

Tran

sact

ions

wit

h o

wne

rs:

Issueofnewordinaryshares

pur

suan

t to

the

con

vers

ion

ofICULS

4,791(4,178)-

-

-

--

613

-613


79

--

--

--

79

-

79

Totaltransactionswithowners

4,870(4,178)-

-

-

--

692

-692

Div

iden

ds

pai

d t

onon-controllinginterestof

a s

ubsi

dia

ry-

-

-

-

-

-

-

-

(497

)

(4

97)

At

31 D

ecem

ber

201

1151,318111,162

117,317

12,769

(8,389)2,130

74,643460,950

31,777

492,727


annual report 2011

Statements of Changes in Equity for the financial year ended 31 December 2011 (continued)

A

ttri

but

able

to

ow

ners

of

the

par

ent

N

on-

Dis

trib

utab

le

Dis

trib

utab

le

Sha

reC

apit

al

ICU

LS-

Eq

uity

Co

mp

one

ntS

hare

P

rem

ium

Rev

alua

tio

nR

eser

ve

Exc

hang

e Tr

ansl

atio

nR

eser

ve

Ava

ilab

leFo

r-S

ale

Res

erve

Ret

aine

d

Ear

ning

sTo

tal

No

n-C

ont

rolli

ng

Inte

rest

s To

tal

Eq

uity

Gro

upR

M’0

00R

M’0

00R

M’0

00R

M’0

00R

M’0

00R

M’0

00R

M’0

00R

M’0

00R

M’0

00R

M’0

00

At1January2010

-aspreviouslystated

142,014

119,208

117,317

12,591

5,862

-

67,054

464,046

27,422

491,468

-effectofadoptingFRS139

-

-

-

-

-

1,280

35

1,315

-

1,315

At1January2010,restated

142,014

119,208

117,317

12,591

5,862

1,280

67,089

465,361

27,422

492,783

Netprofitforthefinancialyear

-

-

-

-

-

-

3,327

3,327

3,140

6,467

Fairvalueofavailable-for-sale

financialassets

-

-

-

-

-1,929

-

1,929

-

1,929

Sha

re o

f oth

er c

omp

rehe

nsiv

eincomeofassociates,netof

tax

-

-

--

132

8

55

-

987

-

987

Rea

lisat

ion

of r

eval

uatio

n an

d

foreignexchangereserve

-

-

--

(4,583)

-

-(4,583)-

(4,583)

Fore

ign

curr

ency

tra

nsla

tion

diff

eren

ces

for

fore

ign

op

erat

ions

-

-

-176

(10,887)

-

-(10,711)

(473

)(11,184)

Totalcomprehensive

inc

ome/

(loss

) for

the

yea

r-

-

-

176

(15,338)

2,784

3,327

(9,051)

2,667

(6,384)

Tran

sact

ions

wit

h o

wne

rs:


pur

suan

t to

the

con

vers

ion

ofICULS

4,434

(3,868)

-

-

-

-

-

566

-

566

Totaltransactionswithowners

4,434

(3,868)

-

-

-

-

-

566

-

566

Div

iden

ds

pai

d t

o non-controllinginterestof

a s

ubsi

dia

ry-

-

-

-

-

-

-

-

(419

) (4

19)

At

31 D

ecem

ber

201

0146,448

115,340

117,317

12,767

(9,476)

4,064

70,416

456,876

29,670

486,546


annual report 2011

Attributable to owners of the Company Non-Distributable Distributable

Share

Capital

ICULS-Equity

ComponentShare

PremiumCapitalReserve

AccumulatedLosses Total

Company RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At1January2010 142,014 119,208 117,317 69 (23,302) 355,306

Totalcomprehensiveincomeforthefinancialyear - - - -

1,543 1,543

Transactions with owners:

Issueofnewordinaryshares pursuant to the conversion ofICULS

4,434 (3,868) - - - 566

Totaltransactionswithowners 4,434 (3,868) - - - 566

At 31 December 2010 146,448 115,340 117,317 69 (21,759) 357,415

Totalcomprehensiveincomeforthefinancialyear - - - -

9,054 9,054

Transactions with owners:

Issueofnewordinaryshares pursuant to the conversion ofICULS

4,791 (4,178) - - - 613

Issueofnewordinaryshares 79 - - - - 79

Totaltransactionswithowners 4,870 (4,178) - - - 692

At 31 December 2011 151,318 111,162 117,317 69 (12,705) 367,161

Statements of Changes in Equity for the financial year ended 31 December 2011 (continued)



annual report 2011

Statements of Cash Flowsfor the financial year ended 31 December 2011

Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000 CASHFLOWSFROMOPERATINGACTIVITIES: Profitbeforetax 8,909 7,431 18,301 1,789 Adjustmentsfor: Allowanceforinventoriesobsolescence 15 86 - - Amortisation of intangible assets 1,715 1,482 - - Bad debts recovered (299) (46) - -Baddebtswrittenoff 574 765 - - Depreciation 7,176 7,428 23 30 Fair value gain on investment property (946) - - -Gainondisposalof: -property,plantandequipment (231) (189) - --non-currentassetsclassifiedasheldforsale (4,269) - - --asubsidiary (201) - - --anassociatedcompany (2,936) - - -

Gross dividend income (406) (432) (40,000) (3,724)Impairmentlosson: -goodwill 2 - - --loanandreceivables 164 1,116 - --developmentexpenditure - 1,057 - --heldfortradinginvestments 10 - - --investmentinsubsidiaries - - 10,650 --available-for-saleinvestmentsecurities - 27,274 - 27,274-property,plantandequipment - 1,736 - -Interestexpenses 8,216 8,051 5,473 2,074 Interest income (3,979) (2,340) (126) (26)(Gain)/Lossondisposalofheldfortradinginvestments (19) 25 - -Netunrealisedloss/onforeignexchange 53 2,202 36 12 Property,plantandequipmentwrittenoff 57 90 - -Provisionforretirementbenefitsobligations 156 136 - -Provisionforcontingenciesandcommitments 42 - - -Realisationofforeignexchangereserve 4,908 (4,583) - - Share of results in associates (6,835) (12,633) - -Writebackofimpairmentlosson: -loanandreceivables (171) (16,887) - --investmentinassociates - (3,414) - --investmentinsubsidiaries - - - (31,000)-heldfortradinginvestments - (191) - --property,plantandequipment (165) - - -Writebackofpayables (3,932) - - -

Operatingprofit/(loss)beforeworkingcapitalchanges 7,608 18,164 (5,643) (3,571)


annual report 2011

Statements of Cash Flows for the financial year ended 31 December 2011 (continued)

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

ChangesInworkingcapital:

Propertydevelopmentcosts (5,302) (2,242) - -

Inventories 7,366 2,292 - -

Receivables 541 17,597 (111) 5,644

Investment securities - (188) - -

Payables (4,835) 1,441 16,275 970

Net cash generated from operations 5,378 37,064 10,521 3,043

Retirementbenefitspaid (27) (18) - -

Taxation(paid)/refunded (2,363) (3,983) 793 859

Net cash generated from operating activities 2,988 33,063 11,314 3,902

CASH FLOWS FROM INVESTING ACTIVITIES:

Acquisitionofintangibleassets (2,789) (3,647) - -

Acquisitionofheldfortradinginvestments (323) - - -

Acquisitionofasubsidiary,netofcashacquired 8(b)(iv) (568) - - -

Acquisitionofadditionalsharesinanassociate (25) 415 - -

Capital repayment from an associated company 10,906 - - -

Dividendincomereceived,netoftax 4,406 4,217 30,000 2,879

Interest received 3,979 2,340 126 26

Proceedsfromdisposalofheldfortradinginvestments 323 612 - -

Proceedsfromdisposalofnon-currentassetsclassifiedasheldforsale

118,071 - - -

Proceedsfromdisposalofproperty,plantandequipment 257 225 - -

Proceedsfromdisposalofsharesinanassociated company

2,985 - - -

Disposalofasubsidiary,netofcashdisposed 8(b)(iii) (4) - - -

Purchaseofproperty,plantandequipment* (6,678) (11,238) (24) (5)

Purchaseofinvestmentproperty (7,926) - - -

Net cash generated from/(used in) investing activities 122,614 (7,076) 30,102 2,900


annual report 2011

Statements of Cash Flowsfor the financial year ended 31 December 2011 (continued)


CASHFLOWSFROMFINANCINGACTIVITIES:

Dividendspaidtonon-controllinginterestsofasubsidiary (497) (419) - -Drawdownofhirepurchase 114 120 - -Drawdownoftermloans 1,155 - - -Interest paid (9,509) (9,443) (6,967) (6,893)Paymentstohirepurchasepayables (234) (408) - -Placementofpledgeddeposits (2,759) (1,993) - -

Proceedsfromissuanceofsharecapital 79 - 79 -

Repayment of term loans (35,996) (4,788) (30,000) -

Netcash(usedin)financingactivities (47,647) (16,931) (36,888) (6,893)

Effectsofexchangeratechanges (386) (685) - - NETCHANGEINCASHANDCASHEQUIVALENTS 77,569 8,371 4,528 (91) CASHANDCASHEQUIVALENTSATTHE BEGINNINGOFTHEFINANCIALYEAR

As previously reported 83,747 77,967 668 781 Effectofexchangeratechanges (80) (2,591) - (22)

83,667 75,376 668 759

CASHANDCASHEQUIVALENTSATTHE

ENDOFTHEFINANCIALYEAR 161,236 83,747 5,196 668

ANALYSISOFCASHANDCASHEQUIVALENTS: Cashandbankbalances 16 40,051 46,535 96 68Short term deposits 16 151,635 64,135 5,100 600Bankoverdrafts 21 (768) - - -

190,918 110,670 5,196 668

Less:Depositplacedwithleasepayablesassecurity deposit for lease payments

16 (19,079) (18,298) - -

Less:Depositpledgedtolicensedbanks 16 (10,103) (8,139) - -Less:CashheldunderHousingDevelopmentAccount 16 (500) (486) - -

161,236 83,747 5,196 668


annual report 2011

Statements of Cash Flowsfor the financial year ended 31 December 2011 (continued)

NOTES TO THE STATEMENTS OF CASH FLOWS

* PURCHASEOFPROPERTY,PLANTANDEQUIPMENT

During the financialyear, theGroupacquiredproperty,plantandequipmentamounting toRM6.79million(2010:RM11.36million) ofwhichRM0.11million (2010:RM0.12million)was acquired under hire purchaseinstalmentplans.CashpaymentamountingtoRM6.68million(2010:RM11.24million)wasmadeduringthefinancialyear.


annual report 2011

Notes to the Financial Statements 31 December 2011

1. GENERAL INFORMATION

The principal activities of the Company during the financial year are that of investment holding and theprovisionoffullcorporateandfinancialsupporttoitssubsidiaries.TheprincipalactivitiesoftheCompany’ssubsidiariesarestatedinNote8tothefinancialstatements.Therehavebeennosignificantchangesinthenatureoftheseprincipalactivitiesduringthefinancialyear.

TheCompanyisapubliclimitedliabilitycompany,incorporatedanddomiciledinMalaysiaandlistedontheMainMarketofBursaMalaysiaSecuritiesBerhad(“BursaSecurities”).

TheregisteredofficeoftheCompanyislocatedatLevel3,EastWing,WismaSynergy,No.72,PesiaranJubliPerak,Seksyen22,40000ShahAlam,SelangorDarulEhsan.

TheprincipalplaceofbusinessoftheCompanyis locatedatLevel3,WestWing,WismaSynergy,No.72,PesiaranJubliPerak,Seksyen22,40000ShahAlam,SelangorDarulEhsan.

ThefinancialstatementsareexpressedinRinggitMalaysia(“RM”)andallvaluesareroundedtothenearestthousand(’000)exceptwhenotherwisestated.

Thefinancialstatementswereapprovedandauthorisedfor issuebytheBoardofDirectors inaccordancewitharesolutionoftheDirectorson24April2012.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of Preparation

ThefinancialstatementsoftheGroupandoftheCompanyhavebeenpreparedinaccordancewiththeFinancialReportingStandards(“FRS”)andtheprovisionsoftheCompaniesAct,1965inMalaysia.

ThefinancialstatementsoftheGroupandoftheCompanyhavebeenpreparedunderthehistoricalcostbasis,exceptasdisclosedinthesignificantaccountingpoliciesinNote2.4tothefinancialstatements.

The preparation of financial statements in conformity with FRS requires the use of certain criticalaccounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosuresofcontingentassetsandliabilitiesatthedateofthefinancialstatements,andthereportedamountsof the revenueandexpensesduring the reportedperiod. It also requires theDirectors’bestknowledgeofcurrenteventsandactions,andthereforeactualresultsmaydiffer.

The areas involving a higher degree of judgement or complexity, or areas where assumptions andestimatesaresignificanttothefinancialstatementsaredisclosedinNote3tothefinancialstatements.

Notes to the Financial Statements31 December 2011 (continued)


annual report 2011

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

2.2 New and Revised FRSs, Amendments/Improvements to FRSs, New IC Interpretations (“IC Int”), Amendments to IC Int and New Malaysian Accounting Standards Board (“MASB”) Approved Accounting Standards, Malaysian Financial Reporting Standards (“MFRSs”)

(a) Adoption of Revised FRSs, Amendments/Improvements to FRSs, New IC Int and Amendments to IC Int

TheGroupandtheCompanyhadadoptedthefollowingrevisedFRSs,amendments/improvementstoFRSs,newICIntandamendmentstoICIntthataremandatoryforthecurrentfinancialyear:

Revised FRSsFRS 1 First-timeAdoptionofFinancialReportingStandardsFRS 3 Business CombinationsFRS 127 Consolidated and Separate Financial Statements

Amendments/Improvements to FRSsFRS 1 First-timeAdoptionofFinancialReportingStandardsFRS 2 Share-basedPaymentFRS 3 Business CombinationsFRS 5 Non-currentAssetsHeldforSaleandDiscontinuedOperationsFRS 7 FinancialInstruments:DisclosuresFRS 101 PresentationofFinancialStatementsFRS 121 TheEffectsofChangesinForeignExchangeRatesFRS 128 Investments in AssociatesFRS 131 InterestsinJointVenturesFRS 132 FinancialInstruments:PresentationFRS 134 Interim Financial ReportingFRS 138 Intangible AssetsFRS 139 FinancialInstruments:RecognitionandMeasurement

NewICIntIC Int 4 DeterminingWhetheranArrangementcontainsaLeaseIC Int 12 Service Concession ArrangementsICInt16 HedgesofaNetInvestmentinaForeignOperationIC Int 17 DistributionofNon-cashAssetstoOwnersIC Int 18 TransfersofAssetsfromCustomers

Amendments to IC IntIC Int 9 ReassessmentofEmbeddedDerivativesIC Int 13 CustomerLoyaltyProgrammes



annual report 2011


2.2 New and Revised FRSs, Amendments/Improvements to FRSs, New IC Interpretations (“IC Int”), Amendments to IC Int and New Malaysian Accounting Standards Board (“MASB”) Approved Accounting Standards, Malaysian Financial Reporting Standards (“MFRSs”) (continued)

(a) Adoption of Revised FRSs, Amendments/Improvements to FRSs, New IC Int and Amendments to IC Int (continued)

Themaineffectsof theadoptionof theaboverevisedFRSs,amendments/improvementstoFRSs,newICIntandamendmentstoICIntaresummarisedbelow:

FRS 3 Business Combinations (Revised)

TheadoptionoftheFRS3affectsthewayinwhichtheGroupaccountsforbusinesscombinations.Themainchangesmadeinthisrevisedstandardwere:

• All the acquisition-related costs incurred by the acquirer in connection with the businesscombinationshallberecognisedasexpenseintheprofitorlossintheperiodinwhichthecostsareincurred(ratherthanincludedingoodwill);

• Allconsiderationstransferredbytheacquirer,includingcontingentconsiderations,inabusinesscombinationshallbemeasuredatfairvalueasattheacquisitiondate.Subsequentchangesinthe fair value of contingent consideration classified as liabilities are recognised in accordance withFRS139,FRS137orotherFRSs,asappropriate(ratherthanbyadjustinggoodwill);

• Anacquirerisnolongerpermittedtorecognisecontingenciesacquiredinabusinesscombinationthatdonotmeetthedefinitionofaliability;

• For each business combination, the acquirer must measure any non-controlling interest inthe acquiree either at fair valueor at thenon-controlling interest’sproportionate shareof theacquiree’snetidentifiableassets.Previously,onlythelatterwaspermitted;

• Forabusinesscombinationachievedinstages,theequityinterestsheldbytheacquirerintheacquireeimmediatelybeforeachievingcontrolarere-measuredatitsacquisition-datefairvaluewithanycorrespondinggainorlossrecognisedinprofitorloss;and

• Goodwill arising from the business combination is measured as the difference between theaggregatefairvalueofconsiderationtransferred,anynon-controllinginterestintheacquiree,andthefairvalueatacquisitiondateofanypreviously-heldequity interest intheacquiree,andthefairvalueofidentifiableassetsacquiredandliabilitiesassumed(includingcontingentliabilities)atacquisitiondate.

ThisrevisedFRS3shallbeappliedprospectivelytobusinesscombinationsforwhichtheacquisitiondate is on or after the beginning of the first annual reporting period beginning on or after 1 July2010.ThereisnosignificantfinancialimpactonthefinancialstatementsoftheGroupforthecurrentfinancialyear.

FRS 127 Consolidated and Separate Financial Statements (Revised)

The revised FRS 127 requires that any changes in a parent’s ownership interest in a subsidiarycompanythatdonotresultinthelossofcontrolareaccountedforwithinequity.WhentheGrouploses control of a subsidiary company, any remaining interest retained in the former subsidiarycompanywillbemeasuredatfairvalueandanyresultinggainorlossisrecognisedinprofitorloss.Totalcomprehensiveincomewillbeproportionatelyallocatedtotheownersoftheparentandtothenon-controllinginterestsevenifitresultsinthenon-controllinginterestshavingadeficitbalance.

TherevisedFRS127shallbeappliedprospectivelytobusinesscombinationsforwhichtheacquisitiondateisonorafter1July2010.ThereisnosignificantfinancialimpactonthefinancialstatementsoftheGroupforthecurrentfinancialyear.



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(a) Adoption of Revised FRSs, Amendments/Improvements to FRSs, New IC Int and Amendments to IC Int (continued)

Amendments to FRS 7 Financial Instruments: Disclosures

Disclosuresonfairvalueand liquidityhavebeenenhancedupontheadoptionofthisamendment.Inparticular,financialinstrumentsmeasuredatfairvaluearedisclosedbyclassinathree-levelfairvaluemeasurement hierarchy,with specific disclosures related to transfers between levels in thehierarchyanddetaileddisclosuresonlevelthreeofthefairvaluehierarchy.Certaindisclosuresonliquidityarealsomodified.TheadoptionofthisamendmentresultedinadditionaldisclosuresinthefinancialstatementsbutdidnothaveanyfinancialimpactontheGroupandtheCompany.

IC Int 4 Determining Whether an Arrangement Contains a Lease

ThisICIntclarifiesthatwhenthefulfilmentofanarrangementisdependentontheuseofaspecificasset and the arrangement conveys a right to use the asset, then the arrangement should beaccountedforasaleaseunderFRS117,eventhoughitdoesnottakethelegalformofalease.ThisinterpretationdidnothaveanyfinancialimpactontheGroupandtheCompany.

(b) New and Revised FRSs, Amendments/Improvements to FRSs, New IC Int and Amendments to IC Int that are issued, not yet effective and have not been adopted early

The Group and Company have not adopted the following new and revised FRSs, amendments/improvements toFRSs, IC Int andamendments to IC Int that havebeen issuedas at thedateofauthorisationofthesefinancialstatementsbutarenotyeteffectivefortheGroupandtheCompany:

Effective for financial periods beginning on

or afterNewFRSsFRS 9 Financial Instruments 1January2015FRS 10 Consolidated Financial Statements 1January2013FRS 11 JointArrangements 1January2013FRS 12 DisclosuresofInterestsinOtherEntities 1January2013FRS 13 FairValueMeasurement 1January2013

Revised FRSsFRS 119 EmployeeBenefits 1January2013FRS 124 RelatedPartyDisclosures 1January2012FRS 127 Separate Financial Statements 1January2013FRS 128 InvestmentsinAssociatesandJointVentures 1January2013

Amendments/Improvements to FRSsFRS 1 First-timeAdoptionofFinancialReportingStandards 1January2012FRS 7 FinancialInstruments:Disclosures 1January2012and

1January2013FRS 101 PresentationofFinancialStatements 1July2012FRS 112 IncomeTaxes 1January2012FRS 132 FinancialInstruments:Presentation 1January2014



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(b) New and Revised FRSs, Amendments/Improvements to FRSs, New IC Int and Amendments to IC Int that are issued, not yet effective and have not been adopted early (continued)

Effective for financial periods beginning on

or afterNewICIntIC Int 19 ExtinguishingFinancialLiabilitieswithEquityInstruments 1July2011IC Int 20 StrippingCostsintheProductionPhaseofaSurfaceMine 1January2013

Amendments to IC IntIC Int 14 FRS119–TheLimitonaDefinedBenefitAsset,Minimum

FundingRequirementsandtheirInteraction1July2011

Abriefdiscussionon theabovesignificantnewand revisedFRSs,amendments/improvements toFRSs,newICIntandamendmentstoICIntaresummarisedbelow.Duetothecomplexityofthesenewstandards,thefinancialeffectsoftheiradoptionarecurrentlystillbeingassessedbytheGroupandtheCompany.

FRS 9 Financial Instruments

FRS9specifieshowanentityshouldclassifyandmeasurefinancialassetsandfinancialliabilities.

This standard requires all financial assets to be classified based on how an entity manages itsfinancialassets (itsbusinessmodel)and thecontractualcash flowcharacteristicsof the financialasset.Financialassetsare tobe initiallymeasuredat fairvalue.Subsequent to initial recognition,dependingonthebusinessmodelunderwhichtheseassetsareacquired,theywillbemeasuredateitherfairvalueoratamortisedcost.

Inrespectofthefinancialliabilities,therequirementsaregenerallysimilartooftheformerFRS139.However,thisstandardrequiresthatforfinancialliabilitiesdesignatedasatfairvaluethroughprofitorloss,changesinfairvalueattributabletothecreditriskofthatliabilityaretobepresentedinothercomprehensiveincome,whereastheremainingamountofthechangeinfairvaluewillbepresentedintheprofitorloss.

FRS 10 Consolidated Financial Statements and FRS 127 Separate Financial Statements (Revised)

FRS 10 replaces the consolidation part of the former FRS 127 Consolidated and Separate Financial Statements.TherevisedFRS127willdealonlywithaccountingforinvestmentinsubsidiaries, jointventuresandassociatesintheseparatefinancialstatementsofaninvestorandrequiretheentitytoaccountforsuchinvestmentseitheratcost,orinaccordancewithFRS9.

FRS10bringsaboutconvergencebetweenFRS127andSIC-12,whichinterpretstherequirementsofFRS10 inrelationtospecialpurposeentities.FRS10 introducesanewsinglecontrolmodel toidentifyaparent-subsidiary relationshipbyspecifying that “an investorcontrolsan investeewhentheinvestorisexposed,orhasrights,tovariablereturnsfromitsinvolvementwiththeinvesteeandhastheabilitytoaffectthosereturnsthroughitspowerovertheinvestee”.Itprovidesguidanceonsituationswhen control is difficult to assess such as those involvingpotential voting rights, or incircumstancesinvolvingagencyrelationships,orwheretheinvestorhascontroloverspecificassetsoftheentity,orwheretheinvesteeentityisdesignedinsuchamannerwherevotingrightsarenotthedominantfactorindeterminingcontrol.



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(b) New and Revised FRSs, Amendments/Improvements to FRSs, New IC Int and Amendments to IC Int that are issued, not yet effective and have not been adopted early (continued)

FRS 11 Joint Arrangements

FRS11supersedestheformerFRS131InterestsinJointVentures.UnderFRS11,anentityaccountsfor its interest ina jointlycontrolledentitybasedon the typeof jointarrangement,asdeterminedbasedonanassessmentof itsrightsandobligationsarisingfromthearrangement.Therearetwotypesofjointarrangementnamelyjointventureorjointoperationasspecifiedinthisnewstandard.Ajointventurerecognisesitsinterestinthejointventureasaninvestmentandaccountforitsusingtheequitymethod.Theproportionateconsolidationmethodisdisallowedinsuchjointarrangement.Ajointoperatoraccountsfortheassets,liabilities,revenueandexpensesrelatedtoitsinterestdirectly.

FRS 12 Disclosures of Interests in Other Entities

FRS 12 is a single disclosure standard for interests in subsidiary companies, joint ventures,associatedcompaniesandunconsolidatedstructuredentities.Thedisclosurerequirements in thisFRS are aimed at providing standardised and comparable information that enable users of financial statementstoevaluatethenatureof,andrisksassociatedwith,theentity’sinterestsinotherentities,andtheeffectsofthoseinterestsonitsfinancialposition,financialperformanceandcashflows.

FRS 13 Fair Value Measurement

FRS 13 defines fair value and sets out a framework formeasuring fair value, and the disclosurerequirements about fair value. This standard is intended to address the inconsistencies in therequirements for measuring fair value across different accounting standards. As defined in thisstandard,fairvalueisthepricethatwouldbereceivedtosellanassetorpaidtotransferaliabilityinanorderlytransactionbetweenmarketparticipantsatthemeasurementdate.

Amendments to FRS 112 Income Taxes

This amendment to FRS 112 addresses the measurement approach for deferred tax assets andliabilities in respect of investment properties which are measured at fair value. The amendmentintroducesarebuttablepresumptionthattheinvestmentpropertyisrecoveredentirelythroughsale.Insuchcases,deferredtaxassetsorliabilitiesareprovidedattaxratesapplicablewhenrecoveringthepropertyentirely throughsale. If thispresumption isrebutted,deferredtaxassetsor liabilitiesare providedbased on tax rates applicablewhen consuming substantially the economic benefitsembodiedinthepropertyoveraperiodoftime(forexampleviarentalincome).

FRS 128 Investments in Associates and Joint Ventures (Revised)

ThisrevisedFRS128incorporatestherequirementsforaccountingforjointventuresintothesameaccountingstandardasthatforaccountingforinvestmentsinassociatedcompanies,astheequitymethodwasapplicableforbothinvestmentsinjointventuresandassociatedcompanies.However,therevisedFRS128exemptstheinvestorfromapplyingequityaccountingwheretheinvestmentintheassociatedcompanyorjointventureisheldindirectlyviaventurecapitalorganisationsormutualfundsandsimilarentities.Insuchcases,theentityshallmeasuretheinvestmentatfairvaluethroughprofitorloss,inaccordancewithFRS9.



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(c) MASB Approved Accounting Standards, MFRSs

InconjunctionwiththeplannedconvergenceofFRSswithInternationalFinancialReportingStandardsasissuedbytheInternationalAccountingStandardsBoardon1January2012,theMASBhadon19November2011issuedanewMASBapprovedaccountingstandards,MFRSs(“MFRSsFramework”)forapplicationintheannualperiodsbeginningonorafter1January2012.

The MFRSs Framework is mandatory for adoption by all Entities Other Than Private Entities forannualperiodsbeginningonorafter1January2012,with theexceptionofentitiessubject to theapplication of MFRS 141 Agriculture and/or IC Int 15 Agreements for the Construction of Real Estate (“Transitioning Entities”).TheTransitioningEntitiesaregivenanoption todeferadoptionoftheMFRSsframeworkforanadditionaloneyear.TransitioningEntitiesalsoincludesthoseentitiesthatconsolidateorequityaccountorproportionatelyconsolidateanotherentitythathaschosentocontinuetoapplytheFRSsframeworkforannualperiodsbeginningonorafter1January2012.

Accordingly,theGroupandtheCompanywhicharenotTransitioningEntitiesarerequiredtoadopttheMFRSsframeworkforthenextfinancialyear,ie:forthefinancialyearending31December2012,beingthefirstsetoffinancialstatementspreparedinaccordancewiththeMFRSsframework.

As at 31 December 2011, all FRSs issued under the existing FRSs framework are equivalent tothe MFRSs issued under MFRSs framework except for differences in relation to the transitionalprovisions,theadoptionofMFRS141Agriculture and IC Int 15 Agreements for the Construction of Real Estateaswellasdifferences ineffectivedatescontained incertainof theexistingFRSs. Assuch,except thoseasdiscussedbelow, themaineffectsarising fromthe transition to theMFRSsFrameworkhasbeendiscussedinNote2.2(c)tothefinancialstatements.TheeffectisbasedontheGroup’s and theCompany’sbest estimates at reportingdate. The financial effectmaychangeoradditionaleffectsmaybeidentified,priortothecompletionoftheGroup’sandtheCompany’sfirstMFRSsbasedfinancialstatements.

Application of MFRS 1: First-time Adoption of Malaysian Financial Reporting Standards (“MFRS 1”)

MFRS1requirescomparativeinformationtoberestatedasiftherequirementsofMFRSseffectiveforannualperiodsbeginningonorafter1stJanuary2012havealwaysbeenapplied,exceptwhenMFRS 1 allows certain elective exemptions from such full retrospective application or prohibitsretrospective application of some aspects ofMFRSs. TheGroup and the Company are currentlyassessing the impactofadoptionofMFRS1, including identificationof thedifferences inexistingaccountingpoliciesascomparedtothenewMFRSsandtheuseofoptionalexemptionsasprovidedforinMFRS1.Asatthedateofauthorisationofissueofthefinancialstatements,accountingpolicydecisionsorelectionshavenotbeen finalised.Thus, the impactofadoptionofMFRS1cannotbedeterminedandestimatedreliablyuntiltheprocessiscompleted.

MFRS 141 Agriculture

MFRS141requiresabiologicalassetshallbemeasuredoninitialrecognitionandattheendofeachreportingperiodatitsfairvaluelesscoststosell,exceptwherethefairvaluecannotbemeasuredreliably.MFRS141also requiresagriculturalproduceharvested fromanentity’sbiological assetsshallbemeasuredatitsfairvaluelesscoststosellatthepointofharvest.Gainsorlossesarisingoninitial recognition of a biological asset and the agricultural produce at fair value less costs to sell and from a change in fair value less costs to sell of a biological asset shall be included in the profit or loss fortheperiodinwhichitarises.TheGroupdoesnotexpectanyimpactonthefinancialstatementsarisingfromtheadoptionofthisstandard.



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(c) MASB Approved Accounting Standards, MFRSs (continued)

IC Int 15 Agreements for the Construction of Real Estate

ICInt15establishesthedeveloperwillhavetoevaluatewhethercontrolandsignificantrisksandrewardsof the ownership of work in progress, can be transferred to the buyer as construction progressesbeforerevenuecanberecognised.TheGroupiscurrentlyassessingtheimpactoftheadoptionofthisInterpretation.

2.3 Significant Changes in Accounting Policies

Except for the changes in accounting policies arising from the adoption of the revised FRS 3 and theamendmentstoFRS127asdetailedinNote2.2(a)tothefinancialstatementsaswellasthenewdisclosuresrequiredundertheAmendmentstoFRS7,theDirectorsexpectthattheadoptionoftheotherstandardsandinterpretationsabovewillhavenomaterial impactonthefinancialstatements intheperiodof initialapplication.

2.4 Significant Accounting Policies

Thefollowingaccountingpolicieshavebeenusedconsistentlyindealingwithitemswhichareconsideredmaterialinrelationtothefinancialstatements:

(a) Basis of Consolidation

The consolidated financial statements include the financial statements of the Company and itssubsidiariesmadeuptotheendofthefinancialyear.

Thefinancialstatementsoftheparentanditssubsidiariesarealldrawnuptothesamereportingdate.

Subsidiaries are consolidated using the acquisition method of accounting. Under the acquisitionmethodofaccounting,subsidiariesarefullyconsolidatedfromthedateonwhichcontrolistransferredtotheGroupandarede-consolidatedfromthedatethatcontrolceases.

Theconsiderationtransferredforacquisitionofasubsidiaryisthefairvaluesoftheassetstransferred,the liabilities incurred and the equity interests issued by the Group. The consideration transferredincludesthefairvalueofanyassetorliabilityresultingfromacontingentconsiderationarrangement.Acquisition related costs are expensed as incurred. Identifiable assets acquired and liabilities andcontingent liabilities assumed in a business combination are measured initially at their fair values at theacquisitiondate.

Inabusinesscombinationachievedinstages,previouslyheldequityinterestintheacquireeisre-measuredtofairvalueattheacquisitiondateandanycorrespondinggainorlossisrecognisedinprofitorloss.

TheexcessofthecostoftheacquisitionoverthenetfairvalueoftheGroup’sshareoftheidentifiablenet assets, liabilities and contingent liabilities represents goodwill. Thepolicy for the goodwill is inaccordancewithNote2.4(i)tothefinancialstatements.AnyexcessofthenetfairvalueoftheGroup’sshare of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition isrecognisedimmediatelyinprofitorloss.

Intra-grouptransactionsandbalances,andresultingunrealisedgainsareeliminatedonconsolidation.Unrealised losses resulting from intra-group transactions are also eliminated on consolidation tothe extent of the cost of the asset that canbe recovered. The extent of the costs that cannot berecoveredistreatedasimpairmentlossesasappropriate.Wherenecessary,adjustmentsaremadetothefinancialstatementsofthesubsidiariestoensureconsistencywiththeaccountingpoliciesadoptedbytheGroup.



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2.4 Significant Accounting Policies (continued)

(a) Basis of Consolidation (continued)

Non-controlling interests at the end of the reporting period, being the equity in a subsidiarynot attributable directly or indirectly to the equity holders of the Company, are presented in theconsolidated statement of financial position and statement of changes in equity within equity,separately fromequityattributable to theownersof theCompany.Non-controlling interests in theresults of the Group is presented in the consolidated financial statement of comprehensive income as anallocationoftheprofitorlossandthecomprehensiveincomefortheyearbetweennon-controllinginterests and the owners of theCompany. Losses applicable to the non-controlling interests in asubsidiaryareallocatedtothenon-controllinginterestsevenifthatresultsinadeficitbalance.

Foreachbusinesscombination,theGroupelectswhethertomeasurethenon-controllinginterestsintheacquireeattheacquisitiondateeitheratfairvalueorattheproportionateshareoftheacquiree’sidentifiablenetassets.

Changes in theGroup’s equity interest in a subsidiary that do not result in a loss of control areaccountedforasequitytransactions.Insuchcircumstances,thecarryingamountsofthecontrollingandnon-controllinginterestsareadjustedtoreflectthechangesintheirrespectiveinterestsinthesubsidiary.Anydifferencebetweentheamountbywhichthenon-controllinginterestisadjustedandthefairvalueoftheconsiderationpaidorreceivedisrecogniseddirectlyonshareholders’equity.

Upon the lossof control of a subsidiary, theGroupderecognises the assets and liabilities of thesubsidiary,anynon-controllinginterestsandtheothercomponentsofequityrelatedtothesubsidiary.Anygainorlossarisingonthelossofcontrolisrecognisedinprofitorloss.IftheGroupretainsanyinterestintheprevioussubsidiary,thensuchinterestismeasuredatfairvalueatthedatethecontrolis lost.Subsequently, it isaccountedforasanequity investeeorasanavailable forsale financialassetdependingonthelevelofinfluenceretained.

(b) Subsidiaries

SubsidiariesarethosecorporationsinwhichtheGrouphasthepowertoexercisecontroloverthefinancialandoperatingpoliciessoastoobtainbenefitsfromtheiractivities,generallyaccompanyinga shareholding of more than one half of the voting rights. The existence and effect of potentialvotingrightsthatarecurrentlyexercisableorconvertibleareconsideredwhenassessingwhethertheGrouphassuchpoweroveranotherentity.

In the Company’s separate financial statements, investments in subsidiaries are stated at costsless accumulated impairment losses, if any. The policy for the recognition and measurement ofimpairment losses is in accordance with Note 2.4(k) to the financial statements. On disposal ofsuch investments, thedifferencebetween thenetdisposalproceedsand theircarryingamount isrecognisedasgainorlossinprofitorloss.

IntheGroup’sconsolidatedfinancialstatements,thedifferencebetweenthenetdisposalproceedsand the Group’s share of the subsidiary’s net assets as of the date of disposal including the cumulative amount of any exchange differences that relate to the subsidiary is recognised in profit or lossattributabletotheparent.



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(c) Associates

Associatesareentities,includingunincorporatedentities,inwhichtheGrouphassignificantinfluence,butnotcontrol,overthefinancialandoperatingpolicies.

Investments in associates, other than those for which there is a published price quotation, areaccountedfor in theCompany’sseparatefinancialstatementsatcost lessaccumulated impairmentlosses,ifany.ThepolicyfortherecognitionandmeasurementofimpairmentlossesisinaccordancewithNote2.4(k)tothefinancialstatements.

Investmentsinassociatesareaccountedforintheconsolidatedfinancialstatementsusingtheequitymethodofaccounting.Undertheequitymethod,investmentsinassociatesarestatedintheconsolidatedstatementoffinancialpositionatcostadjustedforpostacquisitionchangesintheGroup’sshareofnetassetsoftheassociates,lessdistributionreceivedandlessanyaccumulatedimpairmentlosses,ifany.ThepolicyfortherecognitionandmeasurementofimpairmentlossesisinaccordancewithNote2.4(k)tothefinancialstatements.

The consolidated statement of comprehensive income reflects the share of the associates’ resultsaftertax.Wheretherehasbeenachangerecogniseddirectly intheequityofassociates,theGrouprecognisesitsshareofsuchchanges.UnrealisedgainsorlossesontransactionsbetweentheGroupanditsassociatesareeliminatedtotheextentoftheGroup’sinterestinassociates.WhentheGroup’sshare of losses exceeds its interest in an associate, the Group does not recognise further lossesexcept to theextent that theGrouphas legalorconstructiveobligationsormadepaymentson thebehalfoftheassociate.

Goodwillrelatingtoanassociateisincludedinthecarryingamountoftheinvestment.AnyexcessoftheGroup’sshareofthenetfairvalueoftheassociate’sidentifiableassets,liabilitiesandcontingentliabilities over the cost of the investment is included as income in the determination of the Group’s shareoftheassociate’sprofitorlossintheperiodinwhichtheinvestmentisacquired.

Aftertheapplicationoftheequitymethod,theGroupdetermineswhetheritisnecessarytorecogniseanyimpairmentlosswithrespecttotheGroup’snetinvestmentintheassociate.TheGroupdeterminesateachreportingdatewhetherthereisanyobjectiveevidencethattheinvestmentintheassociateisimpaired.Inviewofthis,theGroupcalculatestheimpairmentasthedifferencebetweentherecoverableamountoftheassociateanditscarryingvalueandrecognisetheamountintheshareofprofitofanassociateintheprofitorloss.ThepolicyfortherecognitionandmeasurementofimpairmentlossesisinaccordancewithNote2.4(k)tothefinancialstatements.

TheassociateisequityaccountedforfromthedatetheGroupobtainssignificantinfluenceuntilthedatetheGroupceasestohavesignificant influenceovertheassociate.Uponlossofsignificant influenceovertheassociate,theGroupmeasuresandrecognisesanyretaininginvestmentatitsfairvalue.Anydifferencebetweenthecarryingamountoftheassociateuponlossofsignificantinfluenceandthefairvalueoftheretainedinvestmentandproceedsfromdisposalisrecognisedinprofitorloss.

ThemostrecentavailableauditedormanagementfinancialstatementsoftheassociatesareusedbytheGroupinapplyingtheequitymethod.WherethedatesoftheauditedfinancialstatementsusedarenotcoterminouswiththoseoftheGroup,theshareofresultsisarrivedatfromthelastauditedfinancialstatements available and management financial statements to the end of the accounting period.Uniformaccountingpoliciesareadoptedforliketransactionsandeventsinsimilarcircumstances.

On disposal of such investment, the differences between net disposals proceed and the carryingamountoftheinvestmentinanassociateisreflectedasagainorlossondisposalinprofitorloss.



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(d) Joint Venture

A joint venture is a contractual arrangement whereby the Group and other parties undertake aneconomicactivity that issubject to jointcontrol,which iswhen thestrategicfinancialandoperatingpolicydecisionsrelatingtotheactivitiesrequiretheunanimousconsentofthepartiessharingcontrol.

InvestmentsinjointventureareaccountedforintheCompany’sseparatefinancialstatementsatcostlessimpairmentlosses,ifany.ThepolicyfortherecognitionandmeasurementofimpairmentlossesisinaccordancewithNote2.4(k)tothefinancialstatements.

WhereaGroupentityundertakes itsactivitiesunder jointventurearrangementsdirectly, theGroup’sshareofjointlycontrolledassetsandanyliabilitiesincurredjointlywithotherventurersarerecognisedinthefinancialstatementsoftherelevantentityandclassifiedaccordingtotheirnature.Liabilitiesandexpenses incurreddirectly inrespectof interests in jointlycontrolledassetsareaccountedforonanaccrualbasis.IncomefromthesaleoruseoftheGroup’sshareoftheoutputofjointlycontrolledassets,anditsshareofjointventureexpenses,arerecognisedwhenitisprobablethattheeconomicbenefitsassociatedwiththetransactionswillflowto/fromtheGroupandtheiramountcanbemeasuredreliably.

Jointventurearrangementsthatinvolvetheestablishmentofaseparateentityinwhicheachventurerhasan interest are referred toas jointly controlledentities. TheGroup reports its interests in jointlycontrolledentitiesusingproportionateconsolidation.TheGroup’sshareoftheassets,liabilities,incomeandexpensesofjointlycontrolledentitiesarecombinedwiththeequivalentitemsintheconsolidatedfinancialstatementsonaline-by-linebasis.ThejointventureisproportionatelyconsolidatedfromthedatetheGroupobtainsjointcontroluntilthedatetheGroupceasestohavejointcontroloverthejointventure.

AdjustmentsaremadeintheGroup’sconsolidatedfinancialstatementstoeliminatetheGroup’sshareofintragroupbalances,incomeandexpensesandunrealisedprofitsandlossesontransactionsbetweentheGroupanditsjointlycontrolledentities.UnrealisedprofitsareeliminatedtotheextentoftheGroup’sinterestinthejointventure.Unrealisedlossesareeliminatedinthesamewayasunrealisedgains,butonlytotheextentthatthereisnoimpairment.

ThefinancialstatementsofthejointventurearepreparedasofthesamereportingdateastheGroup.Wherenecessary,adjustmentsaremadetobringtheaccountingpoliciesinlinewiththoseoftheGroup.

Ondisposalofsuchinvestment,thedifferencesbetweennetdisposalsproceedandthecarryingamountoftheinvestmentinajointventureisreflectedasagainorlossondisposalinprofitorloss.

(e) Property, Plant and Equipment and Depreciation

All property, plant and equipmentwere initially stated at cost. Certain buildingswere subsequentlyshown at market value, based on valuations of external independent valuers, less subsequentaccumulateddepreciationand impairment losses, ifany.Allotherproperty,plantandequipmentarestatedathistoricalcostlessaccumulateddepreciationandimpairmentloss,ifany.Thepolicyfortherecognitionandmeasurementof impairment losses is inaccordancewithNote2.4(k) to thefinancialstatements.

Costincludesexpenditurethatisdirectlyattributabletotheacquisitionoftheasset.Whensignificantpartsofanitemofproperty,plantandequipmenthavedifferentusefullives,theyareaccountedforasseparateitemsofproperty,plantandequipment.

Thecostofreplacingpartofanitemofproperty,plantandequipmentisincludedintheasset’scarryingamount or recognised as a separate asset, as appropriate, onlywhen it is probable that the futureeconomicbenefitsassociatedwiththepartwillflowtotheGroupanditscostcanbemeasuredreliably.The carrying amount of the replaced part is derecognised. All other repairs and maintenance arechargedtoprofitorlossasincurred.



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(e) Property, Plant and Equipment and Depreciation (continued)

Freeholdlandsarenotdepreciatedasithasaninfinitelife.Systemsinprogressandconstructionworkinprogressarenotdepreciateduntilitisreadyforitsintendeduse.Uponcompletion,constructionworksinprogressaretransferredtocategoriesofproperty,plantandequipment,dependingonthenatureoftheassets.Depreciationonbusesunderrefurbishmentcommenceswhenthebussesarereadyfortheirintendeduse.

Allotherproperty,plantandequipmentaredepreciatedonastraightlinebasistowriteoffthecostofeachassettoitsresidualvalueovertheestimatedusefullivesoftheassetsconcerned.Theannualratesusedforthispurposeareasfollows:

Hotelproperties(buildings) 30-50yearsBuildings 0.5%-5%Plantandmachinery 10%-20%Motorvehicles 15%-20%Furniture,fittingsandequipment 2%-25%Renovation 10%-20%Computerequipmentandsoftware 20%-33.33%Buses in operation Over 7 yearsTelecommunications,researchanddevelopmentequipment 20%-33.33%

Crockery, glassware, cutleries, linen and kitchen utensils are capitalised at the minimum levelrequiredfornormaloperations.Replacementsarewrittenofftoprofitorlossinthefinancialyearinwhichtheyareincurred.

The residual valuesanduseful livesofproperty,plantandequipmentare reviewed,andadjustedifappropriate,atendofeachfinancialyear.Theeffectsofanyrevisionsoftheresidualvaluesandusefullivesareincludedinprofitorlossforthefinancialyearinwhichthechangesarise.

Ateachfinancialyearend,theGroupassesswhetherthereisanyindicationofimpairment.Ifsuchindicationsexist,ananalysisisperformedtoassesswhetherthecarryingamountoftheassetisfullyrecoverable.Awritedownismadeifthecarryingamountexceedstherecoverable.Thepolicyfortherecognitionandmeasurementof impairment loss is inaccordancewithNote2.4(k)tothefinancialstatements.

Fullydepreciatedassetsareretainedintheaccountsuntiltheassetsarenolongerinuse.

Anitemofproperty,plantandequipmentisderecognisedupondisposalorwhennofutureeconomicbenefitsareexpectedfromitsuseordisposal.Anygainorlossarisingonderecognitionoftheassetisincludedinprofitorlossinthefinancialyeartheassetisderecognised.

(f) Revaluation of Assets

Freehold land and buildings at valuation are revaluedwith sufficient regularity to ensure that thecarryingvaluesoftherevaluedlandandbuildingsdonotdiffermateriallyfromthatwhichwouldbedeterminedusingfairvalueatendofthefinancialyear.

Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amountoftheassetandthenetamountisrestatedtotherevaluedamountoftheasset.Anysurplusordeficit arising from the revaluationswillbedealtwith in theRevaluationReserveAccount.Anydeficitisset-offagainsttheRevaluationReserveAccountonlytotheextentofthesurpluscreditedfrom the previous revaluation of the land and buildings and the excess of the deficit is chargedto profit or loss. Upon disposal or retirement of an asset, any revaluation reserve relating to theparticularassetistransferreddirectlytoretainedearnings.



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(g) Investment Property

Investmentproperty,whichispropertyheldtoearnrentalsand/orforcapitalappreciation,ismeasuredinitiallyatitscost,includingtransactioncosts.Subsequenttoinitialrecognition,investmentpropertyismeasuredatfairvalue.Gainsorlossesarisingfromchangesinthefairvalueofinvestmentpropertyareincludedinprofitorlossfortheperiodinwhichtheyarise.

Investment property is subject to renovations or improvements at regular intervals. The costs ofmajorrenovationsandimprovementsarecapitalisedasadditionsandthecarryingamountsofthereplacedcomponentsarewrittenofftoprofitorloss.Thecostsofmaintenance,repairsandminorimprovementarechargedtoprofitorlosswhenincurred.

On disposal or retirement of an investment property, the difference between the net disposalproceedsandthecarryingamountoftheassetisrecognisedinprofitorloss.

(h) Leases and Hire Purchase

(i) Finance Leases and Hire Purchase

Assetsfinancedbyfinanceleasesandhirepurchasearrangementswhichtransfersubstantiallyall the risks and rewards of ownership to the Group are capitalised as property, plant andequipment,andthecorrespondingobligationsaretreatedasliabilities.Theassetssocapitalisedaredepreciatedinaccordancewiththeaccountingpolicyonproperty,plantandequipment.

Assetsacquiredbywayoffinanceleaseandhirepurchasearrangementsarestatedatanamountequaltotheloweroftheirfairvaluesandthepresentvalueofminimumleasepaymentsattheinceptionoftheleases,lessaccumulateddepreciationandimpairmentlosses,ifany.Thepolicyfor the recognition andmeasurement of impairment losses is in accordancewith Note 2.4(k)tothefinancialstatements.Thecorrespondingliabilityisincludedinthestatementoffinancialpositionasborrowings.Incalculatingthepresentvalueofminimumleasepayments,thediscountfactorusedistheinterestrateimplicitinthelease,whenitispracticabletodetermine;otherwise,theGroup’sincrementalborrowingrateisused.Property,plantandequipmentacquiredunderfinance leases and hire purchase are depreciated over the shorter of the estimated useful life of theassetandtheleaseterm.

Leasepaymentsareapportionedbetweenthefinancecostsandthereductionoftheoutstandingliability. Finance cost,which represent the difference between the total leasing commitmentsandthefairvalueoftheassetsacquired,arerecognisedasanexpenseinprofitorlossovertheterm of the relevant lease so as to produce a constant periodic rate of charge on the remaining balanceoftheobligationsforeachaccountingperiod.

(ii) Operating Leases

Anoperatingleaseisaleaseotherthanafinancelease.Leasepaymentsunderoperatingleasearerecognisedasanexpenseinprofitorlossonastraightlinebasisovertheleaseperiod.

(iii) Leases of Land and Buildings

Forleasesoflandandbuildings,thelandandbuildingselementsareconsideredseparatelyforthe purpose of lease classification and these leases are classified as operating or finance leases inthesamewayasleasesofotherassets.



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(h) Leases and Hire Purchase (continued)

(iii) Leases of Land and Buildings (continued)

Theminimum leasepayments includingany lump-sumupfrontpaymentsmade toacquire theinterestinthelandandbuildingareallocatedbetweenthelandandthebuildingelementsofthelease in proportion to the relative fair values for leasehold interest in the land element and the buildingelementoftheleaseattheinceptionofthelease.

Leaseholdlandthatnormallyhasanindefiniteeconomiclifeandwheretheleasedoesnottransfersubstantiallyalltherisksandrewardsincidentaltoownershipistreatedasanoperatinglease.The lump-sum upfront lease payment made on entering into or acquiring leasehold land areaccounted for as prepaid lease payments and are amortised over the lease term on a straight line basisexceptforleaseholdlandthatisclassifiedasanassetheldunderpropertydevelopment.Leaseholdlandwhichinsubstanceisafinanceleaseclassifiedasproperty,plantandequipment.

ThebuildingselementisclassifiedasafinanceoroperatingleaseinaccordancewithNote2.4(h)(i)and(h)(ii)tothefinancialstatements.Iftheleasepaymentcannotbeallocatedreliablybetweenthesetwoelements,theentireleaseisclassifiedasafinancelease,unlessitisclearthatbothelementsareoperatinglease,inwhichcasetheentireleaseisclassifiedasanoperatinglease.

Fora leaseof landandbuilding inwhichtheamount thatwould initiallyberecognised for thelandelementisimmaterial,thelandandbuildingsistreatedasasingleunitforthepurposeofleaseclassificationandisaccordinglyclassifiedasafinanceoroperatinglease.Insuchacase,theeconomiclifeofthebuildingsisrecognisedastheeconomiclifeoftheentireleasedassets.

(i) Intangible Assets

(i) Goodwill

GoodwillacquiredinabusinesscombinationisrecognisedasanassetattheacquisitiondateandisinitiallymeasuredatcostbeingtheexcessofthecostofbusinesscombinationovertheGroup’sinterestinthenetfairvalueoftheidentifiableassets,liabilitiesandcontingentliabilities.Afterinitialrecognition,goodwillismeasuredatcostlessaccumulatedimpairmentlosses,ifany.ThepolicyfortherecognitionandmeasurementofimpairmentlossesisinaccordancewithNote2.4(k) to the financialstatements.Goodwill isnotamortisedbut instead tested for impairmentannuallyormorefrequentlyifeventsorchangesincircumstancesindicatethatthecarryingvaluemaybeimpaired.

For the purpose of impairment testing, goodwill is allocated, at the acquisition date, to eachof the Group’s cash-generating units that are expected to benefit from the synergies of thecombination, irrespectiveofwhetherotherassetsor liabilitiesof theacquireeareassigned tothoseunits.Acash-generatingunittowhichgoodwillhasbeenallocatedistestedforimpairmentannually,andwheneverthere isan indicationthattheunitmaybe impaired,bycomparingthecarryingamountoftheunit,includingthegoodwill,withtherecoverableamountoftheunit.Animpairment loss is recognised foracash-generatingunitwhen the recoverableamountof theunitislessthanthecarryingamountoftheunit.Anyimpairmentlossrecognisedisfirstallocatedtoreducethecarryingamountofanygoodwillallocatedtotheunitandthen,totheotherassetsoftheunitwithinprorataonthebasisofthecarryingamountofeachapplicableassetintheunit.Anyimpairmentlossrecognisedforgoodwillisnotreversed.



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(i) Intangible Assets (continued)

(i) Goodwill (continued)

Wheregoodwillformspartofacash-generatingunitandpartoftheoperationwithinthatcash-generating-unitisdisposedof,thegoodwillassociatedwiththeoperationdisposedofisincludedin thecarryingamountof theoperationwhendetermining thegainor lossondisposal of theoperation. Goodwill disposed of in this circumstance is measured based on the relative fairvaluesoftheoperationdisposedofandtheportionofthecash-generatingunitretained.

Goodwillandfairvalueadjustmentsarisingfromtheacquisitionofforeignoperationsaretreatedas assets and liabilities of the foreign operations and are recorded in the functional currency of theforeignoperationsandtranslatedinaccordancewithNote2.4(aa)tothefinancialstatements.

(ii) Other Intangible Assets

Other intangible assets are recognised only when identifiable, control and economic benefitprobabilitycriteriaaremet.

The Group recognises at the acquisition date separately from goodwill, an intangible assetof the acquiree if the fair value can be measured reliably, irrespective of whether the assethad been recognised by the acquiree before the business combination. In-process researchand development projects acquired in such combinations are recognised as an asset even ifsubsequentexpenditure iswrittenoffbecause thecriteriaspecified in thepolicy for researchanddevelopmentisnotmet.

Intangible assets are initially measured at cost. The cost of intangible assets acquired in abusinesscombinationistheirfairvaluesasatthedateofacquisition.

Afterinitialrecognition,intangibleassetsarecarriedatcostlessaccumulatedamortisationandanyaccumulatedimpairmentlosses,ifany.ThepolicyfortherecognitionandmeasurementofimpairmentlossesisinaccordancewithNote2.4(k)tothefinancialstatements.Theusefullivesofintangibleassetsareassessedtobeeitherfiniteorindefinite.Intangibleassetswithfinitelivesare amortised on a straight line basis over the estimated economic useful lives and are assessed foranyindicationthattheassetmaybeimpaired.Ifanysuchindicationexists,theentityshallestimate the recoverable amount of the asset. The amortisation period and the amortisationmethodforanintangibleassetwithafiniteusefullifearereviewedatleastateachfinancialyearend.Theamortisationexpenseonintangibleassetswithfinitelivesisrecognisedinprofitorlossandisincludedwithintheotheroperatingexpenseslineitem.

An intangibleassethasan indefiniteuseful lifewhenbasedon theanalysisofall the relevantfactors;thereisnoforeseeablelimittotheperiodoverwhichtheassetisexpectedtogeneratenetcashinflowstotheGroup.Intangibleassetswithindefiniteusefullivesaretestedforimpairmentannually and whenever there is an indication that the carrying value may be impaired. Suchintangibleassetsarenotamortised.Theirusefullivesarereviewedannuallytodeterminewhethereventsandcircumstancescontinuetosupporttheindefiniteusefullifeassessmentfortheasset.Iftheydonot,thechangeintheusefullifeassessmentforindefinitetofiniteisaccountedforasachangeinaccountingestimateinaccordancewithFRS108AccountingPolicies,ChangesinAccountingEstimatesandErrors.

Expenditureonanintangibleitemthatisinitiallyrecognisedasanexpenseisnotrecognisedaspartofthecostofanintangibleassetatalaterdate.



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(i) Intangible Assets (continued)

(ii) Other Intangible Assets (continued)

Anintangibleassetisderecognisedondisposalorwhennofutureeconomicbenefitsareexpectedfromitsuse.Thegainorlossarisingfromthederecognitiondeterminedasthedifferencebetweenthenetdisposalproceeds,ifany,andthecarryingamountoftheassetisrecognisedinprofitorlosswhentheassetisderecognised.

Research and Development Expenditure

Expenditure on research activities is recognised as an expense in the period in which it isincurred.

An internally-generated intangible asset arising from development (or from the developmentphaseofaninternalproject)isrecognised,if,anyonlyif,allthefollowinghavebeendemonstrated:- thetechnicalfeasibilityofcompletingtheintangibleassetsothatitwillbeavailableforuse

orsale;- theintentiontocompletetheintangibleassetanduseorsellit;- theabilitytouseorselltheintangibleasset;- howtheintangibleassetwillgenerateprobablefutureeconomicbenefits;- the availability of adequate technical, financial and other resources to complete the

developmentandtouseorselltheintangibleassets;and- theabilitytomeasurereliablytheexpenditureattributabletotheintangibleassetduringits

development.

The amount initially recognised for internally-generated intangible assets is the sum of theexpenditureincurredfromthedatewhentheintangibleassetfirstmeetstherecognitioncriterialistedabove.Whereno internally generated intangible asset canbe recognised,developmentexpenditureischargedtoprofitorlossintheperiodinwhichitisincurred.

Subsequenttoinitialrecognition,internally-generatedintangibleassetsarereportedatcostlessaccumulatedamortisationandaccumulatedimpairmentlosses,onthesamebasisasintangibleassetsacquiredseparately.

Theamortisationperiodandamortisationmethodof intangibleassetsother thangoodwillarereviewedatleastatendofeachfinancialyear.Theeffectsofanyrevisionarerecognisedinprofitorlosswhenthechangesarise.

Intellectual Property

Expenditureonacquiredintellectualpropertyiscapitalisedandamortisedusingthestraightlinemethodovertheirexpectedbenefits,notexceedingaperiodoffive(5)years.

Subsequenttoinitialrecognition,acquiredintellectualpropertyisstatedatcostlessaccumulatedamortisationandaccumulatedimpairmentlosses,ifany.

ThepolicyfortherecognitionandmeasurementofimpairmentlossesisinaccordancewithNote2.4(k)tothefinancialstatements.



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(j) Financial Assets

Financial assets are recognised in the statement of financial position when, and only when, theGroupandtheCompanybecomeapartytothecontractualprovisionsofthefinancialinstrument.

Oninitialrecognition,financialassetsaremeasuredatfairvalue,plustransactioncostsforfinancialassetsnotat’fairvaluethroughprofitorloss’.

Effective interestmethod isamethodofcalculating theamortisedcostof financialassetsandofallocating the interest income over the relevant period. The effective interest rate is the rate thatexactlydiscountsestimatefuturecashreceiptsthroughtheexpectedlifeofthefinancialassetsorashorterperiodtothenetcarryingamountofthefinancialassets.

After initial recognition, financialassetsareclassified intooneof fourcategories: financialassetsat ‘fair value through profit or loss’, ‘held-to-maturity’ investments, loans and receivables and‘available-for-sale’financialassets.

(i) Financial Assets at Fair Value Through Profit or Loss

Fair value throughprofitor losscategorycomprises financialassets thatareheld for trading,includingderivatives(exceptforaderivativethatisafinancialguaranteecontractoradesignatedand effective hedging instrument) or financial assets that are specifically designated into this categoryuponinitialrecognition.

Derivatives that are linked to andmustbe settledbydeliveryof unquotedequity instrumentswhosefairvaluescannotbereliablymeasuredaremeasuredatcost.

Otherfinancialassetscategorisedasfairvaluethroughprofitorlossaresubsequentlymeasuredattheirfairvalueswiththegainorlossrecognisedinprofitorloss.

(ii) Loans and Receivables

Financialassetswithfixedordeterminablepaymentsthatarenotquotedinanactivemarketareclassifiedasloansandreceivables.

Subsequentto initialrecognition, loansandreceivablesaremeasuredatamortisedcostusingtheeffectiveinterestmethod.Gainsandlossesarerecognisedinprofitorlosswhentheloansandreceivablesarederecognisedorimpaired,andthroughtheamortisationprocess.

Loansandreceivablesareclassifiedascurrentassets,exceptforthosehavingmaturitydateslaterthan12monthsafterthereportingdatewhichareclassifiedasnon-current.

(iii) Held-to-Maturity Investments

FinancialassetswithfixedordeterminablepaymentsandfixedmaturityareclassifiedasheldtomaturitywhentheGrouphasthepositiveintentionandabilitytoholdtheinvestmenttomaturity.

Subsequenttoinitialrecognition,held-to-maturityinvestmentsaremeasuredatamortisedcostusing the effective interest method. Gains and losses are recognised in profit or loss whenthe held-to-maturity investments are derecognised or impaired, and through the amortisationprocess.

Held-to-maturity investments are classified as non-current assets, except for those havingmaturitywithin12monthsafterthereportingdatewhichareclassifiedascurrent.



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(j) Financial Assets (continued)

(iv) Available-for-Sale Financial Assets

Available-for-salefinancialassetsarefinancialassetsthataredesignatedasavailableforsaleorarenotclassifiedinanyofthethreeprecedingcategories.

Afterinitialrecognition,available-for-salefinancialassetsaremeasuredatfairvalue.Anygainsorlosses fromchanges in fairvalueof thefinancialassetsare recognised inothercomprehensiveincome,exceptthatimpairmentlosses,foreignexchangegainsandlossesonmonetaryinstrumentsand interestcalculatedusing theeffective interestmethodare recognised inprofitor loss.Thecumulativegainorlosspreviouslyrecognisedinothercomprehensiveincomeisreclassifiedfromequitytoprofitorlossasareclassificationadjustmentwhenthefinancialassetisderecognised.Interest income calculated using the effective interest method is recognised in profit or loss.Dividendsonavailable-for-saleequityinstrumentarerecognisedinprofitorlosswhentheGroup’sandtheCompany’srighttoreceivepaymentisestablished.

Investmentsinequityinstrumentswhosefairvaluecannotbereliablymeasuredaremeasuredatcostlessaccumulatedimpairmentloss,ifany.

Available-for-salefinancialassetsareclassifiedasnon-currentassetsunlesstheyareexpectedtoberealisedwithin12monthsafterthereportingdate.

Afinancialassetisderecognisedwherethecontractualrighttoreceivecashflowsfromtheassetshasexpired.Onderecognitionofafinancialassetinitsentirety,thedifferencebetweenthecarryingamount and the sum of the consideration received and any cumulative gain or loss that had been recognisedinothercomprehensiveincomeisrecognisedinprofitorloss.

Regularwaypurchasesor salesarepurchasesor salesof financial assets that requiredeliveryofassetswithin theperiodgenerallyestablishedbyregulationorconvention in themarketplaceconcerned.Allregularwaypurchasesandsalesoffinancialassetsarerecognisedandderecognisedon the tradedate i.e. thedate that theGroupand theCompanycommit topurchaseorsell theasset.

(k) Impairment

(i) Impairment of Financial Assets

All financial assets (except for financial assets categorised as fair value through profit or loss,investment insubsidiariesandassociates)areassessedateachreportingdatewhetherthere isanyobjectiveevidenceofimpairmentasaresultofoneormoreeventshavinganimpactontheestimatedfuturecashflowsoftheasset.Lossesexpectedasaresultoffutureevents,nomatterhowlikely,arenotrecognised.Foranequityinstrument,asignificantorprolongeddeclineinthefairvaluebelowitscostisanobjectiveevidenceofimpairment.

An impairment loss in respect of loans and receivables and held-to-maturity investments isrecognisedinprofitorlossandismeasuredasthedifferencebetweentheasset’scarryingamountandthepresentvalueofestimatedfuturecashflowsdiscountedat theasset’soriginaleffectiveinterestrate.Thecarryingamountoftheassetisreducedthroughtheuseofanallowanceaccount.

An impairment loss in respectofavailable-for-salefinancialassets is recognised in theprofitorlossandismeasuredasthedifferencebetweentheasset’sacquisitioncost(netofanyprincipalrepaymentandamortisation)andtheasset’scurrentfairvalue,lessanyaccumulatedimpairmentloss previously recognised. Where a decline in the fair value of an available-for-sale financialasset has been recognised in the other comprehensive income, the cumulative loss in othercomprehensiveincomeisreclassifiedfromequityandrecognisedtoprofitorloss.



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(k) Impairment (continued)

(i) Impairment of Financial Assets (continued)

Animpairmentlossinrespectofunquotedequityinstrumentthatiscarriedatcostisrecognisedinprofitorlossandismeasuredasthedifferencebetweentheasset’scarryingamountandthepresentvalueof estimated future cash flowsdiscountedat the currentmarket rateof return for a similarfinancialasset.

Impairment losses recognised in profit or loss for an investment in an equity instrument is notreversedthroughtheprofitorloss.

If, ina subsequentperiod, the fair valueofadebt instrument increasesand the increasecanbeobjectivelyrelatedtoaneventoccurringaftertheimpairmentlosswasrecognisedinprofitorloss,the impairment loss is reversed, to the extent that the asset’s carrying amountdoes not exceedwhatthecarryingamountwouldhavebeenhadtheimpairmentnotbeenrecognisedatthedatetheimpairmentisreversed.Theamountofthereversalisrecognisedintheprofitorloss.

(ii) Impairment of Non-Financial Assets

Thecarryingamountsofnon-financialassets(exceptforinventories,assetsarisingfromconstructioncontract, deferred tax asset, assets arising from employee benefits, investment property that ismeasured at fair value and non-current assets (or disposal groups) classified as held for sale)are reviewedat theendof each reportingperiod todeterminewhether there is any indicationofimpairment.

Ifanysuchindicationexists,thentheasset’srecoverableamountisestimated.Forthepurposeofimpairment testing,assetsaregrouped together into thesmallestgroupofassets thatgeneratescashinflowsfromcontinuingusethatarelargelyindependentofthecashinflowsofotherassetsorgroupsofassets.Thegoodwillacquiredinabusinesscombination,forthepurposeofimpairmenttesting,isallocatedtocashgeneratingunits(“CGU”)thatareexpectedtobenefitfromthesynergiesofthecombination.

TherecoverableamountofanassetorCGUisthegreaterofitsvalueinuseanditsfairvaluelesscosts to sell. In assessing value in use, the estimated future cash flows are discounted to theirpresent valueusingapre-taxdiscount rate that reflects currentmarket assessmentsof the timevalueofmoneyandtherisksspecifictotheasset.

AnimpairmentlossisrecognisedifthecarryingamountofanassetoritsCGUexceedsitsrecoverableamount.

Impairmentlossesarerecognisedinprofitorloss.Impairmentlossesrecognisedinrespectofcash-generatingunitsareallocatedfirst toreducethecarryingamountofanygoodwillallocatedtotheunits and then to reduce the carrying amount of the other assets in the unit groups of units on a pro ratabasis.

An impairment loss in respectofgoodwill isnot reversed. In respectofotherassets, impairmentlosses recognised in prior periods are assessed at the end of each reporting period for any indications thatthelosshasdecreasedornolongerexists.Animpairmentlossisreversediftherehasbeena change in the estimates used to determine the recoverable amount since the last impairment losswas recognised. An impairment loss is reversedonly to theextent that theasset’scarryingamountdoesnotexceedthecarryingamountthatwouldhavebeendetermined,netofdepreciationor amortisation, if no impairment loss had been recognised. Reversals of impairment losses arecreditedtoprofitorlossintheyearinwhichthereversalsarerecognised.



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(l) Property Development Activities

(i) Land Held for Property Development

Land held for property development consists of development costs on which no significantdevelopmentworkhasbeenundertakenorwheredevelopmentactivitiesarenotexpectedtobecompletedwithinthenormaloperatingcycle.Suchlandisclassifiedasnon-currentassetandisstatedatcostlessanyaccumulatedimpairmentlosses,ifany.ThepolicyfortherecognitionandmeasurementofimpairmentlossesisinaccordancewithNote2.4(k)tothefinancialstatements.

Cost comprises the cost of land and all related costs incurred on activities necessary to prepare the landfor its intendeduse.WheretheGrouphadpreviouslyrecordedthe landatarevaluedamount,itcontinuestoretainthisamountasitssurrogatecostasallowedbyFRS201PropertyDevelopmentActivities.

Landheldforpropertydevelopmentistransferredtopropertydevelopmentcostsandincludedunder current assets when development activities have commenced and are expected to becompletedwithinthenormaloperatingcycle.

(ii) Property Development Costs

Propertydevelopmentcostscompriseallcoststhataredirectlyattributabletothedevelopmentactivitiesor thatcanbeallocatedona reasonablebasis tosuchactivities.Theycomprise thecosts of land under development, construction costs and other related development costscommontothewholeprojectincludingborrowingcosts.

Propertydevelopmentcostsonwhichdevelopmentactivitieshavecommencedorwhereitcanbedemonstratedthatthedevelopmentactivitiescanbecompletedwithinthenormaloperatingcycleareclassifiedascurrentassets.

When the financial outcome of a development activity can be estimated reliably, propertydevelopmentrevenueandexpensesarerecognisedinprofitorlossbyreferencetothestageofcompletionofdevelopmentactivityattheendofthefinancialyear.Thestageofcompletionisdeterminedbytheproportionthatpropertydevelopmentcosts incurredforworkperformedtodatebeartotheestimatedtotalpropertydevelopmentcosts.

Whenthefinancialoutcomeofadevelopmentactivitycannotbereliablyestimated,thepropertydevelopment revenue shall be recognised only to the extent the property development costsincurredthatisprobabletoberecovered.Propertydevelopmentcostsonthedevelopmentunitssoldarerecognisedasexpensesintheperiodinwhichtheyareincurred.

Any expected lossonadevelopmentproject, including costs tobe incurredover thedefectsliabilityperiod,isrecognisedasanexpenseimmediately.

Propertydevelopmentcostsnotrecognisedasanexpensearerecognisedasanasset,whichismeasuredatthelowerofcostandnetrealisablevalue.

Whenrevenuerecognisedinprofitorlossexceedsprogressbillingstopurchasers,thebalancesis shown as accrued billings under current assets. When progress billings exceed revenuerecognisedinprofitorloss,thebalanceisshownasprogressbillingsundercurrentliabilities.



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(m) Contract Work-In-Progress

Where the outcome of a construction contract can be estimated reliably, revenue and costs arerecognised by reference to the stage of completion of the contract activity at the end of the financial year (“percentage-of-completionmethod”), except where this would not be representative of thestageofcompletion.Variationsincontractwork,claimsandincentivepaymentsareincludedtotheextentthattheyhavebeenagreedwiththecustomer.

Where the outcome of a construction contract cannot be estimated reliably, contract revenue isrecognisedtotheextentofcontractcostsincurredthatarelikelytoberecoverable.Contractcostsarerecognisedasexpensesintheperiodinwhichtheyareincurred.Whenitisprobablethattotalcontractcostswill exceed totalcontract revenue, theexpected loss is recognisedasanexpenseimmediately.

Attheendofthefinancialyear,theaggregatedcostsincurredplusrecognisedprofit(lessrecognisedloss) on each contract is compared against the progress billings.Where costs incurred plus therecognisedprofits (less recognised losses) exceedprogressbillings, thebalance ispresentedonthe face of the statement of financial position as “Amount due from contract customers”.Whereprogressbillingsexceedcostsincurredplusrecognisedprofits(lessrecognisedlosses),thebalanceispresentedas“Amountsduetocontractcustomers”.

Progressbillingsnotyetpaidbycustomersandretentionsare includedwithin“Amountsduefromcontractcustomers”.

(n) Inventories

Inventoriesarestatedatthelowerofcostandnetrealisablevalue.

Costoftheinventoriesisdeterminedonthefollowingbasis:

(i) Finishedgoods,foodandbeverages,operatingsuppliesforHotelsandResortssegment-First-in,first-outbasis.

(ii) Completedunitsofunsolddevelopedproperties–Specificidentificationbasis.

(iii) Finishedgoods, consumablegoods,operating supplieswork-in-progress –Weightedaveragebasis.

Thecostofrawmaterials,foodandbeverageandoperatingsuppliescomprisesallcostofpurchaseplusthecostofbringingthe inventoriestotheirpresent locationandcondition.Thecostofwork-in-progressand finishedgoods includes thecostof rawmaterials,direct labourandaproportionofproductionoverheadsbasedonnormaloperatingcapacityoftheproductionfacilities.Thecostofcompletedpropertiesheldforsalecomprisescostassociatedwiththeacquisitionofland,directcostsandappropriateproportionofcommoncosts.

Net realisable value is the estimated selling price in the ordinary course of business, less theestimatedcostsofcompletionandtheestimatedcostsnecessarytomakethesale.

(o) Cash and Cash Equivalents

Forthepurposeofcashflowstatements,cashandcashequivalentscomprisecashinhand,bankbalances,fixeddeposits,demanddepositsandshorttermhighlyliquidinvestments,thatarereadilyconvertibletoknownamountsofcashwhicharesubjecttoaninsignificantriskofchangesinvalue,netofbankoverdraftsanddepositspledgedtofinancialinstitutions.



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(p) Non-Current Assets Classified as Held for Sale

Non-currentassetsareclassifiedasheldforsaleiftheircarryingamountwillberecoveredprincipallythroughasaletransactionratherthancontinuinguse.Thisconditionisregardedasmetonlywhenthe sale is highly probable and the asset is available for immediate sale in its present condition subjectonlytothetermsthatareusualandcustomary.

Immediately before classification as held for sale, themeasurement of the non-current assets isbrought up-to-date in accordancewith applicableFRSs.Then,on initial classification asheld forsale,non-currentassets(otherthaninvestmentproperties,deferredtaxassets,employeebenefitsassets,financialassetsandinventories)aremeasuredinaccordancewithFRS5thatisatthelowerofthecarryingamountandfairvaluelesscoststosell.Anydifferencesarerecognisedinprofitorloss.

(q) Equity Instruments

Ordinarysharesarerecordedatthenominalvalueandtheconsiderationinexcessofnominalvalueofsharesissued,ifany,isaccountedforassharepremium.Bothordinarysharesandsharepremiumareclassifiedasequity.

Dividends on ordinary shares are recognised as liabilitieswhen proposed or declared before thefinancial year end. A dividend proposed or declared after the financial year end, but before thefinancialstatementsareauthorisedforissue,isnotrecognisedasaliabilityatthefinancialyearend.

Cost incurred directly attributable to the issuance of the shares are accounted for as a deduction fromsharepremium,ifany,otherwiseitischargedtoprofitorloss.Equitytransactioncostscompriseonly those incremental external costs directly attributable to the equity transaction which wouldotherwisehavebeenavoided.

(r) ICULS

ICULSwithfixedcouponratesareregardedascompoundinstrumentsconsistingpredominantlyanequitycomponentandaliabilitycomponent.

(s) Financial Liabilities

Financial liabilities are classified according to the substance of the contractual arrangements entered intoandthedefinitionsofafinancialliability.

Financialliabilities,withinthescopeofFRS139,arerecognisedinthestatementoffinancialpositionwhen,andonlywhen,theGroupandtheCompanybecomeapartytothecontractualprovisionsofthe financial instrument.Financial liabilitiesareclassifiedaseither financial liabilitiesat fair valuethroughprofitorlossorotherfinancialliabilities.

(i) Financial Liabilities at Fair Value Through Profit or Loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading andfinancialliabilitiesdesignateduponinitialrecognitionasatfairvaluethroughprofitorloss.

Financial liabilities held for trading include derivatives entered into by the Group and the Company thatdonotmeetthehedgeaccountingcriteria.Derivativeliabilitiesareinitiallymeasuredatfairvalueandsubsequentlystatedatfairvalue,withanyresultedgainsorlossesrecognisedinprofitorloss.Netgainsorlossesonderivativesincludeexchangedifferences.

TheGroupandtheCompanyhavenotdesignatedanyfinancialliabilitiesasatfairvaluethroughprofitorloss.



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(s) Financial Liabilities (continued)

(ii) Other Financial Liabilities

TheGroup’sandtheCompany’sotherfinancialliabilitiesincludetradepayables,otherpayablesandloansandborrowings.

Tradeandotherpayablesarerecognisedinitiallyatfairvalueplusdirectlyattributabletransactioncostsandsubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod.

Loansandborrowingsarerecognisedinitiallyatfairvalue,netoftransactioncostsincurred,andsubsequentlymeasuredatamortisedcostusingtheeffective interestmethod.Borrowingsareclassified as current liabilities unless the Group has an unconditional right to defer the settlement oftheliabilityforatleast12monthsafterthereportingdate.

Forotherfinancialliabilities,gainsandlossesarerecognisedinprofitorlosswhentheliabilitiesarederecognised,andthroughtheamortisationprocess.

Afinancialliabilityisderecognisedwhentheobligationundertheliabilityisextinguished.Whenanexistingfinancialliabilityisreplacedbyanotherfromthesamelenderonsubstantiallydifferentterms,orthetermsofanexisting liabilityaresubstantiallymodified,suchanexchangeormodification istreated as a derecognition of the original liability and the recognition of a new liability, and thedifferenceintherespectivecarryingamountsisrecognisedinprofitorloss.

(t) Financial Guarantee Contracts

Afinancialguaranteecontractisacontractthatrequirestheissuertomakespecifiedpaymentstoreimbursetheholderforalossitincursbecauseaspecifieddebtorfailstomakepaymentwhendue.

Financial guaranteecontracts are recognised initially as a liability at fair value, netof transactioncosts.Subsequenttoinitialrecognition,financialguaranteecontractsarerecognisedasincomeinprofitorlossovertheperiodoftheguarantee.IfthedebtorfailstomakepaymentrelatingtofinancialguaranteecontractwhenisdueandtheGroup,astheissuer,isrequiredtoreimbursetheholderfortheassociated loss, the liability ismeasuredat thehigherof thebestestimateof theexpenditurerequiredtosettlethepresentobligationatthereportingdateandtheamountinitiallyrecognisedlesscumulativeamortisation.

(u) Provisions for Liabilities

ProvisionforliabilitiesarerecognisedwhentheGrouphasapresentobligationasaresultofapastevent,whenitisprobablethatanoutflowofresourcesembodyingeconomicbenefitswillberequiredtosettletheobligation,andareliableestimateoftheamountcanbemade.WheretheGroupexpectsaprovisiontobereimbursed,thereimbursement isrecognisedasaseparateassetbutonlywhenthe reimbursement is virtually certain. Provisions are not recognised for future operating losses.Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate.Wheretheeffectof thetimevalueofmoney ismaterial,provisionsarediscountedusingacurrentpre-taxratethatreflects,whereappropriate,therisksspecifictotheliability.Wherediscountingisused,theincreaseintheprovisionduetothepassageoftimeisrecognisedasfinancecost.



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(v) Government Grant

Governmentgrantsarerecognisedattheir fairvaluewherethere isreasonableassurancethatthegrantwillbereceivedandallattachingconditionswillbecompliedwith.Wherethegrantrelatestoanasset,thefairvalueisrecognisedasdeferredcapitalgrantonthestatementoffinancialpositionandisamortisedtoprofitorlossovertheexpectedusefullifeoftherelevantassetbyequalannualinstalment.

Singapore

TheSingaporegovernmentintroducedacashgrantknownastheJobsCreditSchemeinitsBudgetfor2009inabidtohelpbusinessespreservejobsintheeconomicdownturn.Theamountsreceivedfor jobs credit are to be paid to eligible employers in 2009 in four payments and the amount anemployercanreceivewoulddependonthefulfillmentoftheconditionsasstatedintheScheme.

InOctober2009,theGovernmentannouncedthattheJobsCreditSchemewouldbeextendedforhalfayearwithanother2paymentsatstepped-downratesinMarchandJune2010basedon6%ofwagestobepaidinMarch2010and3%ofwagestobepaidinJune2010.

TheGrouprecognisestheamountsreceivedforjobscreditattheirfairvalueasotherincomeinthemonthofreceiptofthesegrantsfromthegovernment.

Malaysia

In2009, a subsidiary inMalaysiawasapprovedagrantofRM767,764 for thedevelopmentof theGlobeOssRoamingAssuranceProjectunderMSCMalaysiaResearch&DevelopmentGrantScheme.

(w) Revenue Recognition

Revenue is measured at the fair value of the consideration received or receivable for the sale of goodsandrenderingofservicesintheordinarycourseoftheGroup’sactivities.

Revenue is recognised to theextent that it isprobable that theeconomicbenefitswill flow to theGroupand the revenuecanbe reliablymeasured.The followingspecific recognitioncriteriamustalsobemetbeforerevenueisrecognised.

(i) Revenue from the Sale of Goods

Revenue from the sale of goods is measured at the fair value of the consideration received or receivable,netof returnsandallowances, tradediscountsandvolume rebates.Revenue isrecognisedwhen the significant risks and rewardsof ownership havebeen transferred to thebuyer, recovery of the consideration is probable, the associated costs andpossible return ofgoodscanbeestimatedreliably,andthere isnocontinuingmanagement involvementwiththegoods.

(ii) Revenue from Services

Revenue in respect of the rendering of services is recognised based on the stage of completion at the financial year end andwhen the cost incurred can be reliablymeasured. The stage ofcompletion is determined by the services performed to date as a percentage of total services to beperformed.



annual report 2011



(w) Revenue Recognition (continued)

(iii) Hotel and Resort Services

Revenue represents income from the rental of rooms, sale of food and beverages and otherrelatedservices.

Revenueisrecognisedasfollows:- roomrevenueisrecogniseduponactualoccupancybyguest;- foodandbeveragerevenueisrecogniseduponservicing;and- otherrelatedservicesarerecogniseduponrenderingofservices.

(iv) Information and Communications Technology Related Services

(a) Revenue from service contracts

Revenue and profit from contracts are recognised on an individual contract basis using the percentageof completionmethod,when the stageof contract completioncanbe reliablydetermined,coststodatecanbeclearlyidentified,andthetotalrevenuetobereceivedandcoststocompletecanbereliablyestimated.Thepercentageofcompletionisestimatedbymanagementwithreferencetothestageofcompletionoftheobligationsunderthecontractwiththecustomer.Whereitisprobablethatalosswillarisefromacontract,theexcessoftotalestimatedcostsoverrevenueisrecognisedasanexpenseimmediately.

(b) Revenue from maintenance contract is recognised on a straight line basis over the period of therespectivecontracts.

(v) Coach Building

Revenue from sale of buses is recognisedwhen significant risk and rewards of ownership ofthebuseshasbeentransferredtothecustomerandwheretheGroupretainsneithercontinuingmanagerialinvolvementoverthebuses,whichcoincideswithdeliveryofbusesandservicesandacceptancebycustomers.

(vi) Property Development

Revenue represents sales value of completed development properties sold and proportionate salesvalueofdevelopmentpropertiestostageofcompletion.

Propertydevelopmentrevenueisrecognisedinrespectofalldevelopmentunitsthathavebeensold.Revenuerecognitioncommenceswhenthesaleofthedevelopmentunitiseffected,uponthecommencementofdevelopmentandconstructionactivitiesandwhenthefinancialoutcomecanbereliablyestimated.Theattributableportionofpropertydevelopmentcostisrecognisedas an expense in the period inwhich the related revenue is recognised. The amount of suchrevenue and expenses recognised is determined by reference to the stage of completion ofdevelopmentactivityat theendof the financialyear.Thestageofcompletion ismeasuredbyreferencetotheproportionthatpropertydevelopmentcostsincurredforworkperformedtodatebeartotheestimatedtotalpropertydevelopmentcost.

Whenthefinancialoutcomeofadevelopmentactivitycannotbereliablyestimated,thepropertydevelopmentrevenue isrecognisedonly totheextentofpropertydevelopmentcosts incurredthat is probable to be recoverable and the property development costs on the development units soldarerecognisedasanexpenseintheperiodinwhichtheyareincurred.

Anyexpectedlossonadevelopmentprojectisrecognisedasanexpenseimmediately,includingcoststobeincurredoverthedefectsliabilityperiod.



annual report 2011



(w) Revenue Recognition (continued)

(vii) Rental Income

Rentalincomeisaccountedforonastraightlinebasisovertheleasetermsonongoingleases.Theaggregatecostofincentivesprovidedtolesseesisrecognisedasareductionofrentalincomeovertheleasetermonastraightlinebasis.

(viii) Travel and Tours

Revenuefrominvoicedvalueofticketssoldisrecognisedinprofitorlossuponissuanceofthetickets.

Revenue from travel and tour is recognised in profit or loss based on accrual basis uponperformanceofservices.

Revenue from foreign currencies exchange is recognised in profit or loss upon customer’sacceptance.

(ix) Interest Income

Interestincomeisrecognisedasitaccrues,usingtheeffectiveinterestmethodunlesscollectabilityisindoubt.

(x) Dividend Income

Dividendincomeisrecognisedinprofitorlossonreceiptbasis.

(xi) Card and Payment Services

Joiningfeesisrecogniseduponissuanceofcardstoapprovedmembers.Cashadvancefeesisrecogniseduponbillingstocardmembers.Discountrevenueandinterchangefeesarerecognisedupon the billing to/bymerchants and inter-member banks. Interest income from line of creditfacilitiesgrantedisrecognisedonanaccrualbasis.

(xii) Traditional Chinese Medicine Services

RevenuefromtraditionalChinesemedicineservices isrecognisedwhenservicesarerenderedandgoodsaredelivered,netofdiscountandrebates.

(x) Borrowing Costs

Borrowingcostsarecapitalisedaspartofthecostsofaqualifyingassetiftheyaredirectlyattributabletotheacquisition,constructionorproductionofthatasset.Capitalisationofborrowingcostscommenceswhentheactivitiestopreparetheassetforitsintendeduseorsalesareinprogressandtheexpendituresandborrowingcostsare incurred.Borrowingcostsarecapitaliseduntil theassetsaresubstantiallycompleted for their intendeduseorsale.Capitalisationofborrowingcostswillbesuspendedwhentheassetsarecompletedorduringtheperiodinwhichdevelopmentandconstructionareinterrupted.

The amount of borrowing costs eligible for capitalisation is the actual borrowings incurred on thatborrowing during the period less any investment income on the temporary investment of fundsdrawdownfromthoseborrowingfacilities.

Allotherborrowingcostsarerecognisedasanexpenseinprofitorlossintheperiodinwhichtheyareincurred.BorrowingcostsconsistofinterestandothercoststhattheGroupandtheCompanyincurredinconnectionwiththeborrowingoffunds.



annual report 2011



(y) Income Taxes

Thetaxexpenseinprofitorlossrepresentstheaggregateamountofcurrenttaxanddeferredtax.Currenttaxistheexpectedamountofincometaxespayableinrespectofthetaxableprofitfortheyearandismeasuredusingthetaxratesthathavebeenenactedatthereportingdate.

Deferred tax isprovided for, using the liabilitymethod,on temporarydifferencesat the reportingdate between the tax bases of assets and liabilities and their carrying amounts in the financialstatements.Inprinciple,deferredtaxliabilitiesarerecognisedforalltaxabletemporarydifferencesanddeferredtaxassetsarerecognisedforalldeductibletemporarydifferences,unusedtaxlossesandunusedtaxcreditstotheextentthat it isprobablethattaxableprofitwillbeavailableagainstwhich the deductible temporary differences, unused tax losses and unused tax credits can beutilised.Deferredtaxisnotrecognisedifthetemporarydifferencearisesfromgoodwillornegativegoodwillorfromtheinitialrecognitionofanassetorliabilityinatransactionwhichisnotabusinesscombinationandattimeofthetransaction,affectsneitheraccountingprofitnortaxableprofit.

Deferredtaxismeasuredatthetaxratesthatareexpectedtoapplyintheperiodwhentheassetisrealisedortheliabilityissettled,basedontaxratesthathavebeenenactedorsubstantivelyenactedatthereportingdate.Deferredtaxisrecognisedintheprofitor loss,exceptwhenitarisesfromatransactionwhichisrecogniseddirectlyinequity,inwhichcasethedeferredtaxisalsochargedorcrediteddirectly inequity,orwhen itarises fromabusinesscombinationthat isanacquisition, inwhichcasethedeferredtaxisincludedintheresultinggoodwillortheamountofanyexcessoftheacquirer’sinterestinthenetfairvalueoftheacquiree’sidentifiableassets,liabilitiesandcontingentliabilitiesoverthecostofthecombination.

(z) Employee Benefits

(i) Short Term Employee Benefits

Wages,salaries,bonusesandsocialsecuritycontributionsare recognisedasexpenses in theyear in which the associated services are rendered by employees of the Group. Short termaccumulatingcompensatedabsencessuchaspaidannualleavearerecognisedwhenservicesarerenderedbyemployeesthatincreasetheirentitlementtofuturecompensatedabsences,andshort termnon-accumulatingcompensatedabsencessuchassick leavearerecognisedwhentheabsencesoccur.

(ii) Defined Contribution Plans

TheGroupcontributestotheEmployeesProvidentFund,thenationaldefinedcontributionplan.The contributions are charged to profit or loss in the period to which they relate. Once thecontributionshavebeenpaid,theGrouphasnofurtherpaymentobligations.

(iii) Defined Benefits Plans

Certainsubsidiariesoperateanunfundedretirementbenefitsplanforrankandfileemployeesinaccordancewithanarticlecontainedinthecollectiveunionagreement.Theliabilitiesinrespectof the retirement benefits plan are determined by an actuarial valuation for its defined benefit obligationsundertheProjectedUnitCreditMethod.Underthismethod,thecurrentservicecostiscalculatedasthepresentvalueofbenefitsthatwillaccrueonvaluationdate(byreferencetothenumberofemployeesproviding theservice in thatyearandprojected final salaries). Theliabilitieswillberecognisedimmediatelyintheyeartheyareincurred.



annual report 2011



(aa) Foreign Currencies

(i) Functional and Presentation Currency

Items included in the financial statements of each entity in the Group are measured using the currency of the primary economic environment inwhich the entity operates (“the functionalcurrency”). The financial statements are presented in RM, which is the Group’s functionalcurrencyandpresentationcurrency.

(ii) Transactions and Balances

TransactionsinforeigncurrenciesaremeasuredintherespectivefunctionalcurrenciesoftheCompany and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates approximately those ruling at the transactiondates.Monetary assets andliabilitiesdenominatedinforeigncurrenciesaretranslatedattherateofexchangerulingatthereportingdate.Non-monetary itemsdenominated in foreigncurrencies thataremeasuredathistoricalcostaretranslatedusingtheexchangeratesatthedatesoftheinitialtransactions.Non-monetary itemsdenominated in foreigncurrenciesmeasuredat fairvalueare translatedusingtheexchangeratesatthedatewhenthefairvaluewasdetermined.

Exchangedifferencesarisingonthesettlementofmonetaryitemsorontranslatingmonetaryitems at the reporting date are recognised in profit or loss except for exchange differencesarising inmonetary items that formpartof theGroup’snet investment in foreignoperations,whicharerecognisedinitially inothercomprehensive incomeandaccumulatedunderforeigncurrencytranslationreserveinequity.TheforeigncurrencytranslationreserveistransferredtoprofitorlossoftheGroupondisposaloftheforeignoperation.

Exchangedifferencesarisingonthetranslationofnon-monetaryitemscarriedatfairvalueareincludedinprofitorlossfortheperiodexceptforthedifferencesarisingonthetranslationonnon-monetary items in respect of which gains and losses are recognised directly in equity.Exchange differences arising from such non-monetary items are also recognised directly inequity.

(iii) Foreign Operations

TheassetsandliabilitiesofforeignoperationsaretranslatedintoRMattherateofexchangerulingatthereportingdateandincomeandexpensesaretranslatedatexchangeratesatthedatesofthetransactions.Theexchangedifferencesarisingonthetranslationaretakendirectlyto other comprehensive income.On disposal of a foreign operation, the cumulative amountrecognisedinothercomprehensiveincomeandaccumulatedinequityunderforeigncurrencytranslation reserve relating to that particular foreign operation us recognised in the profit or loss.

Goodwillandfairvalueadjustmentsarisingontheacquisitionofforeignoperationsaretreatedas assets and liabilities of the foreign operations and are recorded in the functional currency of theforeignoperationsandtranslatedattheclosingrateatthereportingdate.

(ab) Earnings per Ordinary Share

TheGrouppresentsbasicanddilutedearningspershare(“EPS”)foritsordinaryshares.

BasicEPS iscalculatedbydividing theprofitor lossattributable toordinaryshareholdersof theCompanybytheweightedaveragenumberofordinarysharesoutstandingduringtheperiod.



annual report 2011



(ab) Earnings per Ordinary Share (continued)

Diluted earnings/(loss) per share of the Group is calculated by dividing the profit/(loss) for the financial year attributable to equity holders of the Company by the adjusted weighted averagenumberofordinarysharesinissueduringthefinancialyear.TheadjustedweightedaveragenumberofordinarysharesinissueisarrivedatassumingfullconversionoftheICULSwhichrepresentsthedilutivepotentialoftheordinaryshares.

(ac) Contingencies

A contingent liability or asset is a possible obligation or asset that arises from past events and whoseexistencewillbeconfirmedonlybytheoccurrenceornon-occurrenceofuncertaineventsnotwhollywithinthecontroloftheGroup.

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

(ad) Operating Segments

Inthepreviousyears,asegmentwasdistinguishablecomponentoftheGroupthatwasengagedeither inprovidingproductsorservices (businesssegment),or inprovidingproductsorserviceswithinaparticulareconomicenvironment(geographicalsegment)whichwassubjecttorisksandrewardsthatweredifferentfromthoseofothersegments.

FollowingtheadoptionofFRS8OperatingSegments,anoperatingsegmentisacomponentoftheGroup thatengages inbusinessactivities fromwhich itmayearn revenuesand incurexpenses,including revenues and expenses that relate to transactions with any of the Group’s othercomponents.Anoperatingsegment’soperatingresultsarereviewedregularlybythemanagement,tomakedecisionsaboutresourcestobeallocatedtothesegmentandassessitsperformance,andforwhichdiscretefinancialinformationisavailable.

3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS

ThepreparationoftheGroup’sfinancialstatementsrequiresmanagementtomakejudgements,estimatesand assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and thedisclosureofcontingentliabilitiesatthereportingdate.However,uncertaintyabouttheseassumptionsandestimatescouldresultinoutcomesthatcouldrequireamaterialadjustmentstothecarryingamountoftheassetorliabilityaffectedinthefuture.

3.1 Judgements Made in Applying Accounting Policies

In the process of applying the Group’s accounting policies, management has made the followingjudgements, apart from those involving estimations, which have the most significant effect on theamountsrecognisedinthefinancialstatements:

(a) Classification of Financial Assets

TheGrouphasclassifiedcertainofitsfinancialassetsasavailable-for-saleinvestments.Inapplyingtheaccountingpolicy,theGroupassessesitsnatureandtheintention.Shouldthecircumstanceschangeinthefuture,theclassificationofthesefinancialassetsasavailable-for-salemaynolongerbeappropriate.

(b) Leases

TheGrouphasreassessedandjudgedthattheleaseholdlandoftheGroupwhichareinsubstancearefinanceleasesandhasreclassifiedtheleaseholdlandtoproperty,plantandequipment.



annual report 2011

3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)

3.2 Key Source of Estimation Uncertainty

(a) Useful Lives of Property, Plant and Equipment

TheGroup estimates the useful lives of property, plant and equipment based on the period overwhichtheassetsareexpectedtobeavailableforuse.Theestimatedusefullivesofproperty,plantand equipment are reviewed periodically and are updated if expectations differ from previousestimatesduetophysicalwearandtear,technicalorcommercialobsolescenceandlegalorotherlimitson theuseof the relevantassets. Inaddition, theestimationof theuseful livesofproperty,plantandequipmentarebasedoninternaltechnicalevaluationandexperiencewithsimilarassets.It is possible, however, that future results of operations could bematerially affected by changesintheestimatesbroughtaboutbychanges infactorsmentionedabove.Theamountandtimingofrecordedexpensesforanyperiodwouldbeaffectedbychangesinthesefactorsandcircumstances.A reduction in theestimateduseful livesof theproperty,plantandequipmentwould increase therecordedexpensesanddecreasethenon-currentassets.

(b) Useful Lives of Other Intangible Assets

TheGroupestimatestheusefullifetoamortiseotherintangibleassetsbasedonthefutureperformanceof the assets acquired andmanagement’s judgement of the period overwhich economic benefitwill bederived from the asset. The estimated useful lives of other intangible assets are reviewedperiodically,takingintoconsiderationfactorssuchaschangesintechnology.Itispossible,however,that future results of operations could be materially affected by changes in the estimates brought aboutbychanges in factorsmentionedabove.Theamountsand timingof recordedexpenses foranyperiodwouldbe affectedby changes in these factors andcircumstances.A reduction in theestimated useful lives of the other intangible assets would increase the recorded expenses anddecreasethenon-currentassets.

(c) Impairment of Intangible assets-Goodwill

TheGroupdetermineswhethergoodwill is impairedat leastonanannualbasis. This requiresanestimation of the value-in-use of CGU to which goodwill is allocated. Estimating a value-in-useamount requiresmanagement tomake an estimation of the expected future cash flows from theCGU and also to choose a suitable discount rate in order to calculate the present value of those cash flows.Thecarryingamountofgoodwillasat31December2011wasRM59.86million(2010:RM59.42million)asdisclosedinNote7tothefinancialstatements.

(d) Impairment of Investment in Subsidiaries and Recoverability of Amount Owing by Subsidiaries

TheGrouptestsinvestmentinsubsidiariesforimpairmentannuallyinaccordancewithitsaccountingpolicy.Moreregularreviewsareperformedifeventsindicatethatthisisnecessary.Theassessmentofthenettangibleassetsofthesubsidiariesaffectstheresult of the impairment test. Costs ofinvestments in subsidiarieswhich have ceased operationswere impaired up to net assets of thesubsidiaries.Theimpairmentmadeoninvestmentinsubsidiariesentailsanimpairmentofreceivablestobemadetotheamountowingbythesesubsidiaries.

Significantjudgementisrequiredintheestimationofthepresentvalueoffuturecashflowsgeneratedbythesubsidiaries,whichinvolveuncertaintiesandaresignificantlyaffectedbyassumptionsusedand judgement made regarding estimates of future cash flows and discount rates. Changes inassumptions could significantly affect the results of the Group’s tests for impairment of investment insubsidiaries.



annual report 2011


3.2 Key Source of Estimation Uncertainty (continued)

(e) Impairment of Investment in Associates and Recoverability of Amount Owing by Associates

TheGrouptestsinvestmentinassociatesfor impairmentannuallyinaccordancewithitsaccountingpolicy.Moreregularreviewsareperformedifeventsindicatethatthisisnecessary.Theassessmentofthenettangibleassetsoftheassociatesaffectstheresultoftheimpairmenttest.Costsofinvestmentsinassociateswhichhaveceasedoperationswereimpaireduptoshareofnetassetsoftheassociates.Theimpairmentmadeoninvestmentinassociatesentailsanimpairmentofassociatestobemadetotheamountowingbytheseassociates.

Significantjudgementisrequiredintheestimationofthepresentvalueoffuturecashflowsgeneratedbytheassociates,whichinvolveuncertaintiesandaresignificantlyaffectedbyassumptionsusedandjudgementmaderegardingestimatesoffuturecashflowsanddiscountrates.ChangesinassumptionscouldsignificantlyaffecttheresultsoftheGroup’stestsfor impairmentof investment inassociates.Inaddition,theassessmentofthenettangibleassetsoftheassociatesandthemarketvalueoftheassociates(forthosequotedshares)alsoaffectstheresultoftheimpairmenttest.

(f) Impairment on Investment Securities- Available for Sale Financial Assets

The Group tests investment in unquoted shares for impairment annually in accordance with itsaccountingpolicy.Significant judgement is required in theestimationof thepresentvalueof futurecash flows generated by the investment in unquoted shares, which involve uncertainties and aresignificantlyaffectedbyassumptionsusedand judgementmaderegardingestimatesof futurecashflowsanddiscountrates.ChangesinassumptionscouldsignificantlyaffecttheresultsoftheGroup’stestsforimpairmentofinvestmentinunquotedshares.

(g) Allowances for Impairment –Trade and Other Receivables

The Group makes allowances for impairment based on an assessment of the recoverability ofreceivables. Allowances for impairment are applied to receivables where events or changes incircumstances indicatethatthecarryingamountsmaynotberecoverable.Managementspecificallyanalysedhistoricalbaddebts,customerconcentrations,customercreditworthiness,currenteconomictrendsandchangesincustomerpaymenttermswhenmakingajudgementtoevaluatetheadequacyof theallowance for impairmentof receivables.Where theexpectation isdifferent from theoriginalestimate,suchdifferencewillimpactthecarryingvalueofreceivables.

(h) Classification of equity and liability component on ICULS

TheGrouphasrecognisedthecompoundinstrumentsconsistingofanequityandliabilitycomponent.Attheissuedate,thevalueoftheliabilitycomponentisdeterminedusingaprevailingmarketinterestrate.The judgment ismadeon themarket interest rateused forclassificationofequityand liabilitycomponent.

(i) Income Taxes

TheGroupissubjecttoincometaxesinnumerousjurisdictions.Significantjudgementisrequiredindeterminingthecapitalallowancesanddeductibilityofcertainexpensesduringtheestimationoftheprovisionfor incometaxes.Therearemanytransactionsandcalculationsforwhichtheultimatetaxdetermination is uncertain during the ordinary course of business.Where the final tax outcome ofthesemattersisdifferentfromtheamountsthatwereinitiallyrecorded,suchdifferenceswill impacttheincometaxanddeferredincometaxprovisionsintheperiodinwhichsuchdeterminationismade.



annual report 2011


3.2 Key Source of Estimation Uncertainty (continued)

(j) Deferred Tax Assets

Deferredtaxassetsarerecognisedforallunutilisedtaxlossesandunabsorbedcapitalallowancestotheextentthatitisprobablethattaxableprofitwillbeavailableagainstwhichthelossesandcapitalallowancescanbeutilised.Significantmanagementjudgementisrequiredtodeterminetheamountofdeferredtaxassetsthatcanberecognised,baseduponthelikelytimingandleveloffuturetaxableprofit together with future tax planning strategies. The total carrying values of the unrecogniseddeductible/(taxable) temporary differences, tax losses and capital allowances of the Group wasRM261.36million(2010:RM267.69million)asdisclosedinNote13tothefinancialstatements.

(k) Allowance for Inventories

Reviewsaremadeperiodicallybymanagementondamaged,obsoleteandslow-movinginventories.Thesereviewsrequirejudgementandestimates.Possiblechangesintheseestimatescouldresultinrevisionstothevaluationofinventories.

(l) Property Development Projects

TheGrouprecognisespropertydevelopmentprojectsinprofitorlossbyusingthestageofpercentageofcompletionmethod,whichisthestandardforsimilarindustries.

Thestageofcompletionisdeterminedbytheproportionthatpropertydevelopmentandcontractscosts incurred forwork performed to date bear to the estimated total property development andcontract costs. Estimated losses are recognised in full when determined. Property developmentprojectsandexpensesestimatesarereviewedandrevisedperiodicallyasworkprogressesandasvariationordersareapproved.

Significantjudgementisrequiredindeterminingthestageofcompletion,theextentofthepropertydevelopmentprojectsincurred,theestimatedtotalpropertydevelopmentandcontractrevenueandcosts,aswellastherecoverabilityoftheprojectsundertaken.Inmakingthejudgement,theGroupevaluatesbasedonpastexperienceandbyrelyingontheworkofspecialists.IftheGroupwouldnotrecogniseanyprofitbeforeacontractiscompleted,butwouldrecognisealossassoonasthelossbecomesevident.

Adjustmentsbasedonthepercentageofcompletionmethodarereflectedinpropertydevelopmentandcontractrevenueinthereportingperiod.Totheextentthattheseadjustmentsresultinareductionor elimination of previously reported property development and contract revenue and costs, theGrouprecognisesachargeorcreditagainstcurrentearningsandamountsinpriorperiods, ifany,arenotrestated.

Note2.4(w)(vi)tothefinancialstatements,describestheGroup’spolicytorecogniserevenuefromsalesofpropertiesusing thepercentageofcompletionmethod.Propertydevelopment revenue isrecognisedinrespectofalldevelopmentunitsthathavebeensold.

(m) Contract Work-In-Progress

Revenueandcostsassociatedwithaprojectarerecognisedasrevenueandexpensesrespectivelyby reference to the management’s estimated stage of completion of a project at the end of thefinancialyear.Thisestimationofrevenueandcostsarebasedonthepresumptionthattheoutcomeofaprojectcanbeestimatedreliably.Managementhasperformedthecostreviewforcontractwork-in-progresstakingintoaccountthecoststodateandcoststocompleteeachprojectandhasalsoreviewedthestatusofsuchprojectsindeterminingthevalueofcontractwork-in-progressasat31December2011asdisclosedinNote12tothefinancialstatements.



annual report 2011

4.

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RM

’000

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At1January2011

43,875

1,906

27,886

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9,149

54,838

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16,792

4,741

26,800

98 320,894

Ad

diti

ons

-

--

54 1,272

1,089

2,388

2

94

298

17

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1,217

-6,791

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-

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-364

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(30)

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--

--

(593

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105

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(426)

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---

-

-

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-

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--

--

(7,791)

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-

38

-

(4,267)

4

2 36

(995

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4

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75

(328

)22

7 -

(5,153)

At

31 D

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ber

201

136,0841,944

27,886

100,996

12,89310,209

55,529

13,080

4,604

17,116

4,413

27,264

98

312,116

Representing:

Co

st36,084

---

12,89310,209

55,529

13,080

4,604

17,116

4,413

27,264

98 181,290

Valuation

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1,944

27,886

100,996

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-

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-

--

--

130,826

Total

36,0841,944

27,886

100,996

12,89310,209

55,529

13,080

4,604

17,116

4,413

27,264

98

312,116



annual report 2011

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0 R

M’0

00

RM

’00

0

Ac

cu

mu

late

dD

ep

rec

iati

on

At1January2011

-664-

13,990

1,369

7,524

43,623

4,731

4,753

16,056

1,468

16,405

-110,583

Acquisitionofa

sub

sid

iary

-

---

-

-

39

42

-

30

-

-

-

1

11

Dep

reci

atio

n fo

rthefinancialyear

-

88 -

2,017

27

9

243

2,573

7

19

272

22

2

-

763

-

7,176

Dis

po

sals

-

---

-

-

(4)

-

(1,008)

(2)

-(16)

-(1,030)

Dis

po

sal o

f a s

ubsi

dia

ry-

---

-

-

(3)

-

-

(36)

-(4

38)

-

(4

77)

Writtenoff

-

---

-

-

(520

)(16)

-

--

--

(536)

Reclassification

-

--

86

(9

8)

(21)

(77

)

1

7

(

15)

--

(320

)-

(428

)

Cap

italis

atio

n to

in

tang

ible

ass

ets

-

---

-

-

43

32

-

37

-

147

-

259

Foreignexchange


-

14 -

(1,069)

1

4

53

(8

80)

14

(28

)

78

(19

9)

60

-

(1,943)

At

31 D

ecem

ber

201

1-

766

-

15,0241,564

7,799

44,794

5,539

3,974

16,385

1,269

16,601

-113,715

Ac

cu

mu

late

dIm

pa

irm

en

t L

oss

At1January2011

-

--

1,621

-

-

807

3,017

-

--

2,684

-8,129

Writebackofimpairment

lossforthefinancial

year

-

---

-

-

-

-

-

-

-(165)

-

(165)

Dis

po

sal o

f a s

ubsi

dia

ry-

---

-

-

-

-

-

--

(64)

-(64)

Reclassification

-

---

-

-

-

-

-

--

(82)

-(8

2)

Foreignexchange


-

---

-

-

-

-

-

-

-

42

-

4

2

At

31 D

ecem

ber

201

1-

--

1,621

-

-

807

3,017

-

--

2,415

-7,860

Ca

rryi

ng

Am

ou

nt

at

31 D

ec

em

be

r 20

1136,0841,178

27,886

84,351

11,329

2,410

9,928

4,524

630

731

3,144

8,248

98

190,541

Representing:

Co

st36,084

---

11,329

2,410

9,928

4,524

630

731

3,144

8,248

98

77,126

Valuation

-

1,178

27,886

84,351

-

-

-

-

-

--

--

113,415

Total

36,0841,178

27,886

84,351

11,329

2,410

9,928

4,524

630

731

3,144

8,248

98 190,541



annual report 2011

4.

PR

OP

ER

TY, P

LA

NT A

ND

EQ

UIP

ME

NT (conti

nued)

Gro

up

Free

hold

land

Le

aseh

old

land

Hot

el

prop

ertie

s-F

reeh

old

land

Hot

el

prop

ertie

s-B

uild

ings

B

uild

ings

Pla

nt a

nd

mac

hine

ry

Furn

iture

, fit

tings

and

eq

uipm

ent

Ren

ovat

ion

Mot

or

vehi

cles

Com

pute

r eq

uipm

ent

and

soft

war

e

Cro

cker

ies,

gl

assw

are,

cu

tleri

es,

linen

and

ki

tche

n ut

ensi

ls

Tele

com

-m

unic

atio

ns

and

rese

arch

and

de

velo

pmen

t eq

uipm

ent

Cons

truc

tion

wor

k-in

- pr

ogre

ss

Tot

al

2010

RM

’000

R

M’0

00 R

M’0

00

RM

’000

R

M’0

00

RM

’000

R

M’0

00

RM

’000

R

M’0

00

RM

’00

0 R

M’0

00

RM

’00

0 R

M’0

00

RM

’00

0

Co

st/V

alu

ati

on

At1January2010

43,875

3,120

27,886

127,285

9,327

7,767

54,404

11,324

5,641

16,660

5,261

24,575

98

337,223

Ad

diti

ons

-

--

-

2,322

920

3,103

1,819

335

3

87

-

2,471

-

11,357

Dis

po

sals

-

--

-

-

-

(14)

(10)

(618)

(30)

-

(45)

-

(717

)

Writtenoff

-

--

-

-

-

(1,140)

(19)

-

(126)

-

-

-

(1,285)

Reclassification

-

(1,041)

-

(9,649)

266

582

496

(266)

-

(21)

-

76

-

(9,557)

Foreignexchange


-

(173

)-

(12,532)

(257

) (1

20)

(2,011)

(138

) (2

1) (7

8) (5

20)

(277

)-

(16,127)

At

31 D

ecem

ber

201

043,875

1,906

27,886

105,104

11,658

9,149

54,838

12,710

5,337

16,792

4,741

26,800

98

320,894

Representing:

Co

st43,875

-

-

-11,658

9,149

54,838

12,710

5,337

16,792

4,741

26,800

98

185,998

Valuation

-

1,906

27,886

105,104

-

-

-

-

-

-

-

-

-

134,896

Total

43,875

1,906

27,886

105,104

11,658

9,149

54,838

12,710

5,337

16,792

4,741

26,800

98

320,894



annual report 2011

4.

PR

OP

ER

TY, P

LA

NT A

ND

EQ

UIP

ME

NT (conti

nued)

Gro

up

Free

hold

land

Le

aseh

old

land

Hot

el

prop

ertie

s-F

reeh

old

land

Hot

el

prop

ertie

s-B

uild

ings

B

uild

ings

Pla

nt a

nd

mac

hine

ry

Furn

iture

, fit

tings

and

eq

uipm

ent

Ren

ovat

ion

Mot

or

vehi

cles

Com

pute

r eq

uipm

ent

and

soft

war

e

Cro

cker

ies,

gl

assw

are,

cu

tleri

es,

linen

and

ki

tche

n ut

ensi

ls

Tele

com

-m

unic

atio

ns

and

rese

arch

and

de

velo

pmen

t eq

uipm

ent

Cons

truc

tion

wor

k-in

- pr

ogre

ss

Tot

al

2010

RM

’000

R

M’0

00 R

M’0

00

RM

’000

R

M’0

00

RM

’000

R

M’0

00

RM

’000

R

M’0

00

RM

’00

0 R

M’0

00

RM

’00

0 R

M’0

00

RM

’00

0

Ac

cu

mu

late

dD

ep

rec

iati

on

At1January2010

-

713

-

12,882

1,218

7,258

44,318

4,071

5,078

15,979

1,724

15,351

-

108,592

Dep

reci

atio

n fo

rthefinancialyear

-

107

-

2,552

198

3

71

2,049

669

304

206

12

960

-

7,428

Dis

po

sals

-

--

-

-

-

(14)

(10)

(583

) (2

7)

-

(16)

-

(650)

Writtenoff

-

--

-

-

-

(1,134)

-

-

(61)

-

-

-

(1,195)

Reclassification

-

(110

)-

-

18

-

54

23

-

41

-

214

-

240

Foreignexchange


-

(46)

-

(1,444)

(65)

(105

)(1,650)

(22)

(46)

(82)

(268)

(104

)-

(3,832)

At

31 D

ecem

ber

201

0-

664

-

13,990

1,369

7,524

43,623

4,731

4,753

16,056

1,468

16,405

-

110,583

Ac

cu

mu

late

dIm

pa

irm

en

t L

oss

At1January2010

-

-

-

1,621

-

-

807

3,017

-

-

-

979

-

6,424

Imp

airm

ent

loss

fo

r thefinancialyear

-

-

-

-

-

-

-

-

-

-

-

1,736

-

1,736

Dis

po

sals

-

-

-

-

-

-

-

-

-

-

-

(18)

-

(18)

Foreignexchange


-

-

-

-

-

-

-

-

-

-

-

(13)

-

(13)

At

31 D

ecem

ber

201

0-

-

-

1,621

-

-

807

3,017

-

-

-

2,684

-

8,129

Ca

rryi

ng

Am

ou

nt

at

31 D

ec

em

be

r 20

1043,875

1,242

27,886

89,493

10,289

1,625

10,408

4,962

584

736

3,273

7,711

98

202,182

Representing:

Co

st43,875

-

-

-10,289

1,625

10,408

4,962

584

736

3,273

7,711

98

83,561

Valuation

-

1,242

27,886

89,493

-

-

-

-

-

-

-

-

-

118,621

Total

43,875

1,242

27,886

89,493

10,289

1,625

10,408

4,962

584

736

3,273

7,711

98

202,182



annual report 2011

4. PROPERTY, PLANT AND EQUIPMENT (continued)

Computer equipment

Motor vehicles

Furniture,fittings andequipment Total

RM’000 RM’000 RM’000 RM’000Company2011

Cost

At1January2011 83 5 131 219 Additions 5 - 19 24

At 31 December 2011 88 5 150 243

Accumulated Depreciation

At1January2011 72 5 98 175 Depreciationforthefinancialyear 9 - 14 23

At 31 December 2011 81 5 112 198

Carrying Amount at 31 December 2011 7 - 38 45

Company2010

Cost

At1January2010 79 5 909 993 Additions 4 - 1 5 Writtenoff - - (779) (779)

At 31 December 2010 83 5 131 219

Accumulated Depreciation

At1January2010 55 5 864 924 Depreciationforthefinancialyear 17 - 13 30 Writtenoff - - (779) (779)

At 31 December 2010 72 5 98 175

Carrying Amount at 31 December 2010 11 - 33 44

(a) Includedinproperty,plantandequipmentoftheGroupareassetsacquiredunderhirepurchaseinstalmentplanswiththefollowingcarryingamounts:

Group 2011 2010 RM’000 RM’000

Motor vehicles 383 536



annual report 2011

4. PROPERTY, PLANT AND EQUIPMENT (continued)

(b) Included in property, plant and equipment of theGroup are assets pledged to the licensedbanks tosecurecreditfacilitiesgrantedtotheCompanyanditssubsidiarieswiththefollowingcarryingamounts:

Group 2011 2010 RM’000 RM’000

Freehold land 16,707 16,707Hotelproperties 45,075 45,912Buildings 1,345 1,355

63,127 63,974

(c) ThehotelpropertiesoftheGroupstatedatvaluationarebasedonindependentprofessionalvaluationcarriedoutonanopenmarketbasis.

Had the revalued assets been carried at cost less accumulated depreciation, the carrying amountswouldhavebeenasfollows:

Group Cost Accumulateddepreciation

Carrying amount

2011 RM’000 RM’000 RM’000

Hotelproperties-freeholdland 20,234 - 20,234-buildings 87,800 (14,864) 72,936

108,034 (14,864) 93,170

2010 Hotelproperties -freeholdland 20,234 - 20,234-buildings 91,291 (14,056) 77,235

111,525 (14,056) 97,469

(d) Included inproperty,plantandequipmentof theGroupareassetsunder saleand finance leasebackarrangementsasfollows:

Group 2011 2010 RM’000 RM’000

Freehold land 17,220 17,220Hotelproperties 15,653 15,857

32,873 33,077

(e) Inpreviousfinancialyear,animpairmentlossofRM1.74million,beingtheexcessofthecarryingvalueofequipmentsoveritsrecoverableamount,wasrecognisedintheGroupduetoitsexpectedrealisablevaluebeinglowerthanitscost.



annual report 2011

5. INVESTMENT PROPERTY

Group 2011 2010 RM’000 RM’000

Atfairvalue:

At1January - -

Additions 7,926 -

Fairvaluegainrecognisedtoprofitorloss 946 -

Foreign currency translation differences (2) -

At 31 December 8,870 -

ThefairvalueoftheGroup’sinvestmentpropertyasat31December2011wasdeterminedbyanindependentprofessional valuer with recent experience in the location and category of the investment property. Thevaluationwasarrivedatbyreferencetomarketevidence,beingtheestimatedamountforwhichapropertycouldbeexchangedonthedateofvaluationbetweenawillingbuyerandawillingsellerinanarm’slengthtransactions.

DetailsofGroup’sinvestmentpropertyareasfollows:

Descriptions Location Existing use

FreeholdShopoffice Lot3A-5-1,5thfloor,block3A,PlazaSentral,KualaLumpur,Malaysia

Generate rental income

Thefollowingamountsarerecognisedintheprofitorloss:

Group 2011 2010 RM’000 RM’000

Rental income 610 -

Directoperatingexpensesarisingfrominvestmentpropertythatgeneraterentalincome (120) -



annual report 2011

6. INTANGIBLE ASSETS

Goodwill on consolidation

*Purchasedgoodwill

**Intellectual property

Software development expenditure

Total

Group RM’000 RM’000 RM’000 RM’000 RM’0002011 (Note 7)

CostAt1January2011 59,424 9,643 5,250 13,993 88,310Additions - - - 2,789 2,789

Capitalisationofdevelopmentequipment - - - 259 259

Acquisitionofasubsidiary 439 - - - 439

At 31 December 2011 59,863 9,643 5,250 17,041 91,797

Accumulated Amortisation and Impairment At1January2011 1 1,346 5,250 6,122 12,719Amortisationforthefinancialyear - 3 - 1,712 1,715Impairmentlossforthefinancialyear 2 - - - 2 Foreignexchangetranslationdifference - (38) - 10 (28)

At 31 December 2011 3 1,311 5,250 7,844 14,408

Carrying Amount at 31 December 2011 59,860 8,332 - 9,197 77,389

Group2010

CostAt1January2010 59,424 1,346 5,250 9,439 75,459Additions - - - 4,626 4,626

Disposal - - - (72) (72)

Reclassification - 8,297 - - 8,297

At 31 December 2010 59,424 9,643 5,250 13,993 88,310

Accumulated Amortisation and Impairment At1January2010 1 1,346 5,250 3,525 10,122Amortisationforthefinancialyear - - - 1,482 1,482Impairmentlossforthefinancialyear - - - 1,057 1,057Foreignexchangetranslationdifference - - - 58 58

At 31 December 2010 1 1,346 5,250 6,122 12,719

Carrying Amount at 31 December 2010 59,423 8,297 - 7,871 75,591

Included in intangibleassetsof theGroupareassetspledgedto licensedbankstosecurecredit facilitiesgrantedtoasubsidiarywiththefollowingcarryingamounts:

Group 2011 2010 RM’000 RM’000

Purchasedgoodwill 8,332 8,297



annual report 2011

6. INTANGIBLE ASSETS (continued)

* Purchasedgoodwillincludesthepurchaseofahotelbusinesswhichcomprisesthefollowing:

a. therelatedclienteleandgoodwill;

b. theclassificationcertificateasathreestarhotel;

c. licencetoservebeverageandalcohol;

d. therighttotheleaseswherethehotelbusinessiscarriedout;

e. thelistofclients;

f. therighttotransferthetelephoneline;

g. aswellasanyelementsbeingpartofthehotelbusiness,nodescriptionbeingnecessary.

** Intellectualpropertycomprisesrightsandtitlesrelatingtomobilesoftware,theamortisationofwhichisrecognisedascostofsalesinprofitorloss.

7. GOODWILL ON CONSOLIDATION

Group 2011 2010 RM’000 RM’000

At1January 59,423

59,423

Acquisitionofasubsidiary 439 -Impairmentlossforthefinancialyear (2) -

At 31 December 59,860 59,423

ThecarryingamountsofgoodwillallocatedtotheGroup’sCGUareasfollows:

Group 2011 2010 RM’000 RM’000

Informationandcommunicationstechnology–CGU1 53,138 53,138Others 6,722 6,285

59,860 59,423

TherecoverableamountofCGU1isbasedonitsvalueinuse.

CGU 1

The5-yearcashflowprojectionsforthefinancialyearsending31December2012to2016arepreparedbasedonavailableinformationandanticipatedprojects.Thegrowthrateusedtoextrapolatecashflowprojectionsrangefrom7%to22%overtheperiod.Thebudgetedgrossprofitmarginusedrangefrom55%to66%overtheperiod.Adiscountfactorof10.4%hasbeenappliedinarrivingatthepresentvalueoffuturecashflows.

ThevaluesassignedtotheabovekeyassumptionsrepresentDirectors’assessmentoffuturetrendsintheindustryandarebasedonbothexternalsourcesandinternalsourceofinformation.

Basedonthesensitivityanalysisperformed,DirectorsbelievethatnoreasonablypossiblechangeinbasecasekeyassumptionswouldcausethecarryingvaluesoftheCGUtoexceeditsrecoverableamounts.



annual report 2011

8. INVESTMENT IN SUBSIDIARIES

Company 2011 2010 RM’000 RM’000

Unquotedshares-atcost

702,579702,579

Less:Impairmentlosses (228,831) (218,181)

473,748 484,398

(a) CertainsharesofquotedsubsidiariesandunquotedsubsidiariesintheGroupwiththecarryingamountof RM10.28million (2010: RM10.28million) andRM61.94million (2010: RM63.52million) respectively,havebeenchargedtofinancialinstitutionsforcreditfacilitiesgrantedtotheGroup.

(b) Duringthefinancialyear,thefollowingtransactionsweretransacted:

(i) On 10 February 2011, the Company announced that Triton Feeder Services Sdn Bhd (“TFS”), awholly-ownedsubsidiaryofAdvanceSynergyCapitalSdnBhd (“ASC”),which in turn isawholly-ownedsubsidiaryoftheCompany,hadon10February2011receivedanoticepursuanttoSection308(4)oftheCompaniesAct,1965fromSuruhanjayaSyarikatMalaysiainformingthatTFShasbeenstruckofffromtheregisteroftheRegistrarofCompanies.

(ii) On2November 2011, theCompanyannounced that a notice from theAccounting andCorporateRegulatoryAuthority,Singaporewasreceivedon2November2011informingthatthenameofTritonExpress(S)Pte.Ltd.,anindirectwholly-ownedsubsidiaryofASC,wasstruckofftheRegisteron14October2011.

(iii) On 31 May 2011, the Company announced that Unified Communications Pte. Ltd. (“UCPL”), awholly-owned subsidiary of Unified Communications Holdings Limited (“UCHL”), which in turn isa58.3%-ownedsubsidiaryof theCompany (held viaWorldwideMatrixSdnBhd, awholly-ownedsubsidiaryoftheCompany)haddisposedits51%equityinterestinUnifiedCommunicationsLimited(“UCL”),asubsidiary incorporated inHongKong, toaDirectorandmanagementstaffofUCL,Mr.ChingMingWai.

FollowingthecompletionofthedisposalofUCLshares,UCLceasedtobeasubsidiaryofUCPLandtheCompany.ThesummaryoftheeffectsonthedisposalofUCLsharesareasfollows:

2011 RM’000

Property,plantandequipment 9 Inventories 11 Receivables 24 Cashandbankbalances 6Payables (249)

Net liabilities deemed disposed (199)Less:Netproceedsfromdisposal 2

Gain on disposal of a subsidiary (201)

Net proceeds from disposal 2 Less:Cashandcashequivalentsofasubsidiarydisposed (6)

Netcashoutflow (4)



annual report 2011

8. INVESTMENT IN SUBSIDIARIES (continued)

(b)Duringthefinancialyear,thefollowingtransactionsweretransacted(continued):

(iv)On15September2011,theCompanyannouncedthatitswholly-ownedsubsidiary,ExcellentDisplaySdn Bhd (“EDSB”), had entered into an agreement for the acquisition of 100% equity interest inDamaTCMSdnBhd(“DamaTCM”)comprising380,000issuedandfullypaid-upordinarysharesofRM1.00eachforacashconsiderationofRM600,000.00(“AcquisitionofDamaTCM”).ConcurrentlywiththecompletionoftheAcquisitionofDamaTCM,EDSBwillenterintoaservicecontractwithLeeThiamHuattoappointhimastheChiefOperatingOfficerofDamaTCM.Toincentiviseandensurealongtermcommitment,20%oftheenlargedsharecapitalofDamaTCMwillbetransferredtoLeeThiamHuatatanominalvalueofRM1.00(“ProposedTransfer”).UponcompletionoftheProposedTransfer,EDSB’sequityinterestinDamaTCMwillbereducedto80%.PleaserefertoNote38(c)tothefinancialstatementsforthecompletionoftheProposedTransfersubsequenttotheendofthefinancialyear.On7December2011,theCompanyannouncedthattheAcquisitionofDamaTCMhasbeencompletedandaccordingly,DamaTCMbecameawholly-ownedsubsidiaryofEDSBandtheCompany.ThesummaryoftheeffectsontheacquisitionofDamaTCMsharesareasfollows:

2011 RM’000

Property,plantandequipment 249 Receivables 40 Inventories 43 Cashandbankbalances 32 Payables (203)

Shareofnetassetsacquired 161Goodwillonconsolidation 439

Totalpurchaseconsideration 600

Totalpurchaseconsideration 600Less:Cashandcashequivalentsofasubsidiaryacquired (32)

Netcashoutflow 568

(v) On26September2011,ASCacquired186,074ordinarysharesofRM1.00each representing10%equityinterestinQualityBus&Coach(M)SdnBhd(“QBC”)fromQualityBus&CoachPty.Ltd.foratotalcashconsiderationofRM1.00onlypursuanttoaninternalreorganisationandconsequentialthereto,QBCbecamea61%-ownedsubsidiaryofASC.

(vi) On 25October 2011, theCompany announced that the disposal of SuntopCorporation SdnBhd(“Suntop”)(as detailed in Note 9(b) to the financial statements) was completed and accordingly,SuntopceasedtobeasubsidiaryoftheCompany.

(vii)On13December2011,theCompanyannouncedthattheshareholdersofAlangka-SukaAustraliaPty.Ltd.(“ASAPL”)andHolidayVillaAustraliaPty.Ltd.(“HVAPL”),bothindirectwholly-ownedsubsidiariesof theCompany [held viaLarkswoodAssetsLimited,awholly-ownedsubsidiaryofAlangka-SukaInternationalLimited,whichisinturnawholly-ownedsubsidiaryofAlangka-SukaHotels&ResortsSdn Bhd, a wholly-owned subsidiary of the Company] have respectively passed a resolution tovoluntaryderegisterASAPLandHVAPL.PleaserefertoNote38(d)tothefinancialstatementsforthederegistrationofASAPLandHVAPLsubsequenttotheendofthefinancialyear.



annual report 2011


(b)Duringthefinancialyear,thefollowingtransactionsweretransacted(continued):

(viii) On22December2011,theCompanyannouncedthatAdvanceSynergyPropertiesSdnBhd(“ASP”),awholly-ownedsubsidiaryoftheCompany,acquired100%equityinterestintwoshelfcompaniesincorporatedinHongKong,namelyExcellentResultInvestmentsLimited(“ExcellentResult”)andBestAlphaInvestmentsLimited(“BestAlpha”),eachcomprising1issuedandfullypaid-upordinaryshare of HKD1.00 each (“Acquisition”). Excellent Result and Best Alpha became wholly-ownedsubsidiariesofASPandtheCompanyaftertheacquisition.

(c) Duringthefinancialyear,theGrouprecognisedthefollowingimpairmentlosses:

ImpairmentlossofRM10.65millionforinvestmentinsubsidiarieswasrecognisedbasedontheestimatedrecoverableamount.

Inthepreviousfinancialyear,theCompanyhadwrittenbackimpairmentlossoninvestmentinsubsidiariesofRM31.00millioninviewthattheunderlyingfairvalueoftheinvestmentinsubsidiariesmainlyinrespectofthelandandbuildingsvalueofthesubsidiarieswashigherthanthecarryingamount.

(d) Thedetailsofthesubsidiariesareasfollows:

Effective

Equity Interest Country of 2011 2010 Name of Company Incorporation % % Principal Activities

Direct subsidiaries

AdvanceSynergyCapitalSdn.Bhd. Malaysia 100 100 Investment holding and provision of management services

AdvanceSynergyPropertiesSdn.Bhd. Malaysia 100 100 Investment holding

*AdvanceSynergyRealtySdn.Bhd. Malaysia 100 100 Propertydevelopment

AdvanceSynergyTimberSdn.Bhd. Malaysia 100 100 Dormant

AlamSamuderaCorporationSdn.Bhd. Malaysia 100 100 Investment holding

Alangka-SukaHotels&ResortsSdn.Bhd.

Malaysia 100 100 Investment holding

*AusbornSawmillSdn.Bhd. Malaysia 100 100 Inactive

*BornionSawmillSdn.Bhd. Malaysia 100 100 Inactive

Calmford Incorporated BritishVirginIslands

100 100 Investment holding

DiversifiedGainSdn.Bhd. Malaysia 100 100 Investment holding

ExcellentArchSdn.Bhd. Malaysia 100 100 Investment holding

ExcellentDisplaySdn.Bhd. Malaysia 100 100 Investment holding

**iSynergySdn.Bhd. Malaysia 80 80 Provisionofpaymentrelatedproducts and services

Nagapura Management Corporation Sdn.Bhd.

Malaysia 100 100 Provisionofmanagementservices



annual report 2011


(d) Thedetailsofthesubsidiariesareasfollows(continued):

Effective


Direct subsidiaries (continued)

SadongDevelopmentSdn.Bhd. Malaysia 100 100 Propertydevelopment,management and rental of properties

Strategic Research &ConsultancySdn.Bhd.

Malaysia 100 100 Inactive

#SynergyCardsSdn.Bhd. Malaysia 92 92 Provisionofdesignatedpaymentinstruments and products

Synergy Gold Incorporated BritishVirginIslands

100 100 Inactive

SynergyPetroleumIncorporated BritishVirginIslands


WorldwideMatrixSdn.Bhd. Malaysia 100 100 Investment holding

Indirect subsidiaries held throughAdvance Synergy Capital Sdn. Bhd.

AESBIPowerSystemsSdn.Bhd. Malaysia 100 100 Propertyinvestmentandmanagement services

ASCCreditSdn.Bhd. Malaysia 100 100 Credit and leasing

ASCEquitiesSdn.Bhd. Malaysia 100 100 Investment holding and venture capital

QualityBus&Coach(M)Sdn.Bhd. Malaysia 61 61 Designing,buildingandfabrication of coaches

TritonEngineeringSdn.Bhd. Malaysia 100 100 Inactive

TritonExpressSdn.Bhd. Malaysia 100 100 Inactive

TritonFeederServicesSdn.Bhd. Malaysia - 100 Struckoffanddissolvedon 21 February 2011

Triton-KSdn.Bhd. Malaysia 100 100 Management services

TritonKhidmatSdn.Bhd. Malaysia 100 100 Inactive

Indirect subsidiary held throughTriton Express Sdn. Bhd.

*TritonExpress(S)Pte.Ltd. Singapore - 100 Struckoffanddissolvedon 14 October 2011



annual report 2011



Effective Equity

Interest Country of 2011 2010 Name of Company Incorporation % % Principal Activities

Indirect subsidiary held throughAdvance Synergy PropertiesSdn. Bhd.

^BestAlphaInvestmentsLimited HongKong 100 - Dormant

^ExcellentResultInvestmentsLimited HongKong 100 - Dormant

Synergy Realty Incorporated BritishVirginIslands

100 100 Inactive

Indirect subsidiary held through Synergy Realty Incorporated

*BuilderworksPty.Ltd. Australia 100 100 Inactive

Indirect subsidiary held through Alam Samudera Corporation Sdn. Bhd.

SynergyTours(Borneo)Sdn.Bhd. Malaysia 100 100 Travelandtouragent

Indirect subsidiaries held throughAlangka-Suka Hotels & ResortsSdn. Bhd.

Alangka-SukaInternationalLimited BritishVirginIslands


AlorSetarHolidayVillaSdn.Bhd. Malaysia 100 100 OperatesHolidayVillaHotel& Suites Alor Setar

AntaraHolidayVillasSdn.Bhd. Malaysia 100 100 Provisionofhotelmanagement services

AsbinaHotel&PropertySdn.Bhd. Malaysia 100 100 LeaseholdownerofHolidayVillaHotel&SuitesPhnomPenh

CheratingHolidayVillaBerhad Malaysia 100 100 OperatesHolidayVillaBeach Resort Cherating

GrandHotelSudanLimited BritishVirginIslands

100 100 LeaseholdownerofGrandHolidayVillaHotel&SuitesKhartoum

HolidayVillaSubangSdn.Bhd. Malaysia 100 100 Dormant

HolidayVillaTravel&ToursSdn.Bhd. Malaysia 100 100 Hiringoflimousines

HolidayVillasInternationalLimited BritishVirginIslands

100 100 Hotelmanagementservices

LangkawiHolidayVillaSdn.Bhd. Malaysia 100 100 OperatesHolidayVillaBeach Resort & Spa Langkawi

MayorHotelsSdn.Bhd. Malaysia 100 100 OwnsandoperatesCityVillaKualaLumpur



annual report 2011



Effective

Equity Interest Country of 2011 2010Name of Company Incorporation % % Principal Activities

Indirect subsidiaries held throughAlangka-Suka Hotels & ResortsSdn. Bhd. (continued)

SuperLeisureSdn.Bhd. Malaysia 100 100 Investment holding

*Alangka-SukaParisSAS France 100 100 OwnstherealestateofHolidayVillaLafayetteParis

*LagendadeMalaisieSAS France 100 100 Operation and management of restaurants

Indirect subsidiaries held throughAlangka-Suka International Limited

AsbinaShenzhenLimited BritishVirginIslands

90 90 Dormant

*GrandHolidayVillaKhartoumCo.Ltd. Republic of Sudan

100 100 OperatesGrandHolidayVillaHotel&SuitesKhartoum

HolidayVillaMakkahLimited(formerlyknownasLauncestonDevelopmentsLimited)

BritishVirginIslands

100 100 Inactive

*InterwellManagementLimited EnglandandWales

100 100 Dormant

LarkswoodAssetsLimited BritishVirginIslands


*P.T.DiwangkaraHolidayVillaBali Republic of Indonesia

90 90 Operates and manages DiwangkaraHolidayVillaBeachResortBali&HolidayVillaHotelWinaKuta

Indirect subsidiary held through Asbina Hotel & Property Sdn. Bhd.

AsbinaHotel&Property(Cambodia)Pte.Ltd.

KingdomofCambodia

100 100 OperatesHolidayVillaHotel&SuitesPhnomPenh

Indirect subsidiaries held through Holiday Villas International Limited

HolidayVillaChinaInternationalLimited BritishVirginIslands


HolidayVillaMiddleEastLimited BritishVirginIslands


*HolidayVilla(UK)Ltd. EnglandandWales

100 100 OperatesHolidayVillaHotel&SuitesLondon



annual report 2011



Effective


Indirect subsidiary held throughHoliday Villa China InternationalLimited

*ChangshuHolidayVillaHotelManagementCo.Ltd.

People’sRepublic of

China


Indirect subsidiary held through Alangka-Suka Paris SAS

*HolidayVillaLafayetteParisSAS France 100 100 Ownsandoperatestheon-goingbusinessofHolidayVillaLafayetteParis

Indirect subsidiaries held through Larkswood Assets Limited

*Alangka-SukaAustraliaPty.Ltd. Australia 100 100 Voluntaryderegisteredon16February2011

*HolidayVillaAustraliaPty.Ltd. Australia 100 100 Voluntaryderegisteredon16February2011

Indirect subsidiaries held through Calmford Incorporated

*AdvansaPty.Ltd. Australia 100 100 Manufacturingandmarketingof builderhardwareproducts

AdvansaSdn.Bhd. Malaysia 100 100 Provisionofmanagementservices

*HomeCinemaStudioPty.Ltd. Australia 100 100 Inactive

Indirect subsidiary held through Diversified Gain Sdn. Bhd.

OrientEscapeTravelSdn.Bhd. Malaysia 100 100 Travelandtouragent,licensedmoney changer and the provision of travel related services

Indirect subsidiaries held through Orient Escape Travel Sdn. Bhd.

MarketingandEventManagementIntegratedSdn.Bhd.

Malaysia 100 100 Inactive

MotorsportsAdventureSdn.Bhd. Malaysia 100 100 Inactive

OrientEscapeTravel(Penang)Sdn.Bhd. Malaysia 100 100 Inactive

SynergyToursSdn.Bhd. Malaysia 100 100 Travelandtouragent



annual report 2011



Effective


Indirect subsidiary held through Excellent Arch Sdn. Bhd.

AdvanceSynergyFurnitureSdn.Bhd. Malaysia 100 100 Inliquidation

Indirect subsidiary held through Excellent Display Sdn. Bhd.

DamaTCMSdn.Bhd. Malaysia 100 - Engagedinthebusinessof traditional Chinese medicine services

Indirect subsidiaries held through iSynergy Sdn. Bhd.

Cosmocourt.com(Malaysia)Sdn.Bhd. Malaysia 80 80 Inactive

Rewardstreet.com(Malaysia)Sdn.Bhd. Malaysia 80 80 Inactive

DatakeySdn.Bhd. Malaysia 80 80 Dormant

Indirect subsidiaries held through Nagapura Management Corporation Sdn. Bhd.

AcrylicSynergySdn.Bhd. Malaysia 81 81 Inactive

SyarikatFitandWeldEngineering(M)Sdn.Bhd. Malaysia 70 70 Inliquidation

XgoTechnikSdn.Bhd. Malaysia 100 100 Inactive

Indirect subsidiary held through Sadong Development Sdn. Bhd.

HotelGoldenDragonSdn.Bhd. Malaysia 95 95 Propertydevelopment

Indirect subsidiary held through Hotel Golden Dragon Sdn. Bhd.

SimpangTigaRealtySdn.Bhd. Malaysia 95 95 Propertydevelopment

Indirect subsidiary held through Worldwide Matrix Sdn. Bhd.

*UnifiedCommunicationsHoldingsLimited Singapore 58.30 58.30 Investment holding and the provision of management services

Indirect subsidiaries held throughUnified Communications Holdings Limited

*MobilizationSdn.Bhd. Malaysia 58.30 58.30 Creation and operation ofnext-generationmobile applications and mobilemedia-basedservices including mobile advertising services and such mobile media value-added-servicesthat operate on an advertisement-supportedoradvertisement-fundedrevenue model



annual report 2011



Effective

Equity Interest Country of 2011 2010 Name of Company Incorporation % % Principal ActivitiesIndirect subsidiaries held through

Unified Communications Holdings Limited (continued)

*UnifiedAssetsSdn.Bhd. Malaysia 58.30 58.30 Investment holding

*UnifiedCommunications(OHQ)Sdn.Bhd. Malaysia 58.30 58.30 Provisionofmanagementservices

*UnifiedCommunications(OSS)Sdn.Bhd. Malaysia 58.30 58.30 Investment holding

*UnifiedCommunicationsPte.Ltd. Singapore 58.30 58.30 Distribution of telecommunications products,thedesignanddevelopment of telecommunications solutions,projectmanagement,andmaintenance and support services for the telecommunications industry

*UnifiedCommunicationsSdn.Bhd. Malaysia 58.30 58.30 Researchanddevelopment,softwareengineering,systemintegration,projectmanagement,andmaintenance and support services for the telecommunications industry

Indirect subsidiary held through Unified Communications (OSS) Sdn. Bhd.

*GlobeOSSSdn.Bhd. Malaysia 29.73 29.73 Provisionofglobalroamingqualityofservice management solutions

Indirect subsidiary held through GlobeOSS Sdn. Bhd.

*GlobeOSSPte.Ltd. Singapore 29.73 29.73 Provisionofglobalroamingqualityofservice management solutions

Indirect subsidiaries held through Unified Communications Pte. Ltd.

*AttrixTechSdn.Bhd. Malaysia 58.30 58.30 Distribution of information technology and telecommunications products

*UnifiedCommunicationsLimited HongKong - 29.73 Distribution of telecommunications products,thedesignand development of telecommunicationssolutions,projectmanagement,andmaintenance and support services for the telecommunications industry

*UnifiedCommunications(Private)Limited

Pakistan 58.30 58.30 Provisionoftelecommunicationsproducts,technologyandcustomised solutions to telecommunicationsoperators,service providers and enterprises



annual report 2011



Effective


Indirect subsidiaries held through Unified Communications Pte. Ltd. (continued)

*UnifiedCommunications(VAS)Sdn.Bhd.

Malaysia 58.30 58.30 Provisionoftelecommunicationsproducts,technologyandcustomised solutions to telecommunicationsoperators,service providers and enterprises

*Unified(Thailand)Limited Thailand 51.89 51.89 Distribution of telecommunications products,thedesignand development of telecommunicationssolutions,projectmanagement,andmaintenance and support services for the telecommunications industry

Indirect subsidiaries held through Unified Communications Sdn. Bhd.

*UnifiedCommunications(Tech)Pte.Ltd.(formerlyknownasAttrixTechnologyPte.Ltd.)

Singapore 58.30 58.30 Distribution of information technology and telecommunications products

*UnifiedCommunications(Shenzhen)Pte.Ltd.

People’sRepublic of

China

58.30 58.30 Distribution of telecommunications products,developementoflocalisedtelecommunications solutions and maintenance and support services for the telecommunications industry

* CompaniesauditedbyanotherfirmsotherthanBakerTillyMonteiroHeng.

** 29%oftheequityinterestofthesecompaniesareheldbyAdvanceSynergyCapitalSdn.Bhd.,awholly-ownedsubsidiaryoftheCompany.

# 41%oftheequityinterestofthesecompaniesareheldbyAdvanceSynergyCapitalSdn.Bhd.,awholly-ownedsubsidiaryoftheCompany.

^ The companieswere acquired on 22December 2011 and therewere no audited financial statements for theperiodended31December2011.



annual report 2011

9. INVESTMENT IN ASSOCIATES

Group 2011 2010 Note RM’000 RM’000

Atcost:

Quotedshares 12,758 12,758Less:Allowanceforimpairmentloss (450) (450)

12,308 12,308

Unquotedshares 21,219 63,930Less:Allowanceforimpairmentloss - -

21,219 63,930

Shareofpost-acquisitionreserve,netofdividendsreceived (10,852) 68,545

22,675 144,783Reclassifiedtonon-currentassetsclassifiedasheldforsale 17 - (114,024)

22,675 30,759

Marketvalueofquotedshares 3,157 4,961

Thetransactionsinvolvingassociatesduringthefinancialyearareasfollows:

(a) On2February2011,theCompanyannouncedthattheBoardofDirectorsoftheCompanyhadresolvedtoseektheapprovalfromitsshareholdersfortheproposeddisposalbyASCofitsentireshareholdingof49,000,000ordinarysharesofRM1.00eachrepresenting49%ofthetotalissuedandpaid-upsharecapitalinACESynergyInsuranceBerhad(“ASIB”)toACEINAInternationalHoldingsLtd.(“ACEINA”)foratotalcashconsiderationofRM117.0million(“DisposalofASIB”).

ASIB ceased to be an associated company of ASC subsequent to the Disposal of ASIB which wasdeemedcompletedon14June2011.

(b) On17March2011, theCompanyannounced thatAlangka-SukaHotels&ResortsSdnBhd (“ASHR”),hadacquiredanadditional30%equityinterestinSuntopcomprising61,500ordinarysharesofRM1.00each(“AcquisitionofSuntop”).Consequentially,ASHR’sequity interest inSuptopincreasedfrom40%to70%aftertheAcquisitionofSuntop.On7July2011,theCompanyannouncedthatitswholly-ownedsubsidiary,ASHR,hadenteredintoanagreementforthedisposalofitsentireshareholdingof143,500sharesrepresenting70%equityinterestinSuntopforacashconsiderationofRM3,269,000(“DisposalofSuntop”).On25October2011,theCompanyannouncedthattheDisposalofSuntopwascompletedandaccordingly,SuntopceasedtobeanassociateoftheCompany.

(c) On12December2011,SuperLeisureSdnBhd (“SuperLeisure”),an indirectwholly-ownedsubsidiaryof theCompany [held viaASHRwhich iswholly-ownedby theCompany], subscribed for 24,500newordinarysharesofRM1.00eachrepresenting49%equityinterestinSmileIntegratedSolutionSdnBhd(“SmileIntegratedSolution”)atanissuepriceofRM1.00pernewordinaryshare.Consequentialthereto,SmileIntegratedSolutionbecameanassociatecompanyofSuperLeisureandtheCompany.

(d) On14October2011,theCompanyannouncedthatUnifiedCommunicationsSdnBhd(“UCSB”),awholly-ownedsubsidiaryofUCHL,hadenteredintoanagreementfortheacquisitionoftheremaining228,000ordinarysharesofRM1.00eachrepresenting60%equityinterestinAheadMobileSdnBhd(“AMSB”)notalreadyownedbyUCSBforatotalcashconsiderationofuptoRM22.5million(“AcquisitionofAMSB”).Please refer to Note 38(a) to the financial statements for the completion of the Acquisition of AMSBsubsequenttotheendofthefinancialyear.



annual report 2011

9. INVESTMENT IN ASSOCIATES (continued)

Thesummarisedfinancialinformationoftheassociatesareasfollows:

Group 2011 2010 RM’000 RM’000

Results Revenue 27,087 30,034Profitforthefinancialyear 22,859 6,223

Assets and Liabilities Totalassets 105,021 151,455Totalliabilities 6,489 10,462

Thedetailsoftheassociatesareasfollows:

Effective Equity Interest

Country of 2011 2010 Name of Company Incorporation % % Principal Activities

Indirect associates held through Advance Synergy Capital Sdn. Bhd.

*ACESynergyInsuranceBerhad Malaysia - 49 Underwritingofgeneralinsurancebusiness

KumpulanPowernetBerhad Malaysia 20 20 Investment holding

*QualityBus&CoachPty.Ltd. Australia 50 50 Designing,buildingandfabricationofcoaches

*SIBB Berhad Malaysia 20 20 Investment dealing

Indirect associates held through Alangka-Suka Hotels & Resorts Sdn. Bhd.

SuntopCorporationSdn.Bhd. Malaysia - 40 Investment holding

HolidayVillaHotels&ResortsSdn.Bhd. Malaysia 40 40 Dormant

HolidayVillaKualaLumpurSdn.Bhd. Malaysia 40 40 Investment holding

Indirect associate held through Langkawi Holiday Villa Sdn. Bhd.

MOODPerfumesSdn.Bhd. Malaysia 30 30 Perfumesretailer

Indirect associate held through Super Leisure Sdn. Bhd.

SmileIntegratedSolutionSdn.Bhd. Malaysia 49 - ProvidestotalsolutionforhotelindustryconcentratinginmarketingofSMILEHospitalitySystem,providing training and maintenance ofsoftware.

Indirect associates held through Unified Communications Sdn. Bhd.

*AheadMobileSdn.Bhd. Malaysia 23.32 23.32 Softwareengineering,systemintegration,projectmanagement,and maintenance and support services for the telecommunications industry




annual report 2011

10. INVESTMENT IN JOINT VENTURE

Thedetailsofthejointventureareasfollows:

Effective Equity Interest

Country of 2011 2010 Name of Company Incorporation % % Principal Activities

Indirect joint venture held through Unified Communications Pte. Ltd.

*UnifiedTelecomPrivateLimited India 29.15 29.15 Provisionoftelecommunicationsproducts,servicesandcustomisedsolutions


The following amounts represent theGroup’s 29.15%share of the assets and liabilities, and income andexpensesof the joint venturewhichare included in theconsolidatedstatementsof financialpositionandstatementsofcomprehensiveincomeoftheGroupusingtheline-by-lineformatofproportionateconsolidation.

The Group’s aggregate share of the current assets, non-current assets, current liabilities, non-currentliabilities,incomeandexpensesofthejointlycontrolledentitiesareasfollows:

Group 2011 2010 RM’000 RM’000

Results

Revenue - 149 Lossforthefinancialyear (339) (255)

Assets

-Currentassets 100 158 -Non-currentassets 44 60

144 218

Liabilities

-Currentliabilities 108 237

Operatingcashoutflows (437) (50)Investingcashoutflows - (19)Financingcashinflows 361 149



annual report 2011

11. INVESTMENT SECURITIES

Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000 Non-Current:Available-for-sale financial assets Quoted securitiesIn Malaysia-Equityinstruments 20,284 20,284 - --Less:Allowanceforimpairmentloss (9,825) (9,018) - -

10,459 11,266 - -

Available-for-sale financial assets

Unquoted securities

In Malaysia

-Equityinstruments,atcost 52,662 52,662 52,658 52,658-Less:Allowanceforimpairmentloss (47,757) (47,757) (47,758) (47,758)

4,905 4,905 4,900 4,900

Outside Malaysia

-Equityinstruments,atcost 16,502 16,502 - -

21,407 21,407 4,900 4,900

Total non-current investment securities 31,866 32,673 4,900 4,900

Current:Financial assets at fair value through profit and loss:Held for trading investmentsQuoted securitiesIn Malaysia-Equityinstruments 928 919 - -

Total current investment securities 928 919 - -

Total investment securities 32,794 33,592 4,900 4,900

Market value of quoted investments 11,387 12,185 - -

Inthepreviousfinancialyear,theGrouprecognisedanimpairmentlossofRM27.3millionforunquotedequityinstrumentsclassifiedasavailable-for-salefinancialassetswhichwasrecognisedbasedontheestimatedrecoverableamountoftheinvestments.



annual report 2011

12. TRADE AND OTHER RECEIVABLES

Group Company 2011 2010 2011 2010 Note RM’000 RM’000 RM’000 RM’000 Non-Current:Trade Tradereceivables 2,150 6,400 - -

2,150 6,400 - -

Less : Allowance for impairmentTradereceivables - - - -

- - - -

Total non-current receivables 2,150 6,400 - -

Non-Trade Other assets 424 - - -

424 - - -

Total non-current receivables 2,574 6,400 - -

Current: Trade Tradereceivables (a) 34,860 36,961 - -Amountowingfromcustomersforcontractwork (b) 1,068 5,341 - - Accrued billings (c) 265 1,225 - -

36,193 43,527 - -

Less : Allowance for impairment

Tradereceivables (2,342) (7,694) - -

33,851 35,833 - -

Current:Non-Trade Other receivables 12,537 7,299 426 66 Deposits 2,551 1,290 5 5 Prepayments 8,709 9,611 - -Amountsowingfromassociates (d) 429 953 12 42 Amountsowingfromsubsidiaries (e) - - 97,659 98,043

24,226 19,153 98,102 98,156

Less : Allowance for impairment

Other receivables (946) (984) - -

(946) (984) - -

23,280 18,169 98,102 98,156

Total current receivables 57,131 54,002 98,102 98,156

Total trade and other receivables 59,705 60,402 98,102 98,156

Add: Cash and bank balances and short term deposits (Note 16) 191,686 110,670 5,196 668

Total loan and receivables 251,391 171,072 103,298 98,824



annual report 2011

12. TRADE AND OTHER RECEIVABLES (continued)

(a) Trade receivables

Trade receivables are non-interest bearing and normal credit terms offered by theGroup range from30to90days(2010:30to90days).Othercredittermsareassessedandapprovedonacasebycasebasis.Theyarerecognisedat theiroriginal invoiceamountswhichrepresent their fairvalueson initialrecognition.

Thecarryingamountsoftradeandotherreceivablesapproximatetheirfairvalues.

TheageinganalysisoftheGroup’stradereceivablesisasfollows:Group

2011 2010 RM’000 RM’000

Neither past due nor impaired 19,341 19,955Pastdue0to3months 9,477 9,001Pastdue3to9months 3,501 4,309Pastdueover9months 2,349 2,402

15,327 15,712Impaired-Individually 1,977 7,328Impaired-Collectively 365 366

37,010 43,361

Receivables that are neither past due nor impaired

TradeandotherreceivablesthatareneitherpastduenorimpairedarecreditworthydebtorswithgoodpaymentrecordswiththeGroup.

Receivables that are past due but not impaired

Included in the Group’s trade and other receivable balances are receivables with carrying values ofRM15.3million(2010:RM15.7million)whicharepastduebutnotimpairedattheendofthefinancialyear.TheGrouphasnotmadeanyallowancesforimpairmentforthesereceivablessincetherehasnotbeenasignificantchangeinthecreditqualityofthesereceivablesandtheamountsowingarestillconsideredasrecoverable.

In determining the recoverability of a trade receivable, theGroup considers any change in the creditqualityofthetradereceivablesfromthedatethecreditwasinitiallygranteduptothereportingdate.TheGrouphaspoliciesinplacetoensurethatcreditisextendedonlytocustomerswithacceptablecredithistoryand/orpaymenttrackrecords.AllowancesforimpairmentaremadeonspecifictradereceivableswhenthereisobjectiveevidencethattheGroupwillnotbeabletocollectallamountsdue.Includedincurrentyearprovisionsaremainlyspecificallowancesforimpairment.

Receivables that are impaired

TheGroup’stradereceivablesthatareimpairedatthereportingdateandthemovementinallowanceaccountsusedtorecordtheimpairmentareasfollows:



annual report 2011


(a) Trade receivables (continued)

Receivables that are impaired (continued)

Movementinallowanceaccounts:

Group 2011 2010 RM’000 RM’000

At1January 7,694 8,679Chargeforthefinancialyear 135 435 Disposal of a subsidiary (64) -Writtenoff (5,284) (934)Reversal of impairment loss (172) (436)Exchangedifferences 33 (50)At 31 December 2,342 7,694

Tradereceivablesthatareindividuallydeterminedtobeimpairedatthereportingdaterelatetoreceivablesthatareinsignificantfinancialdifficultiesandhavedefaultedonpayments.

Inthepreviousfinancialyear,theGrouphasreversedimpairmentlossesonotherreceivablesofRM16.89millionafterthereassessmentoftherecoverabilityofotherreceivablesbythemanagement.

(b) Amount Owing From/(To) Customers from Customers for Contract Work

Group 2011 2010 RM’000 RM’000

Aggregatecostsincurredtodateandattributableprofitsrecognisedtodate 28,921 11,074Less:Progressbillings (28,165) (5,783)

756 5,291Analysedasfollows:Amountowingtocustomersforcontractwork (312) (50)Amountowingfromcustomersforcontractwork 1,068 5,341

756 5,291

(c) Accrued Billings

Group 2011 2010 RM’000 RM’000

Aggregate costs incurred to date 4,596 8,280Add:Attributableprofits 1,138 1,283

5,734 9,563Less:Progressbillings (5,469) (8,338)

265 1,225



annual report 2011


(d) Amount Owing from Associates

The amount owing from associates are unsecured, interest-free and are repayable on demand.

(e) Amount Owing from Subsidiaries

Company 2011 2010 RM’000 RM’000

Amount owing from subsidiaries 207,869 211,915 Less : Allowance for impairment (110,210) (113,872)

97,659 98,043

The amount owing from subsidiaries are unsecured, interest-free and are repayable on demand.

In 2009, 2010 and 2011, the Group implemented an intercompany loan restructuring exercise to address and re-align the intercompany balances within the Group through a method not involving any substantial cash payment, write back or write off.

13. DEFERRED TAX

(a) Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same tax authority. The amounts of deferred tax assets and liabilities, after appropriate offsetting, are as follows:


At 1 January (122) (443) (1,304) (1,493)Recognised in profit or loss 27 (461) 256 130 131 Recognised directly in equity 20 61 58 61 58 Foreign exchange translation adjustment 1 7 - - At 31 December (521) (122) (1,113) (1,304)

Presented after appropriate offsetting:Deferred tax asset, net (3,141) (2,870) (1,113) (1,304)

Deferred tax liabilities, net 2,620 2,748 - -

(521) (122) (1,113) (1,304)

The deferred tax assets of the Company are in relation to the ICULS.



annual report 2011

13. DEFERRED TAX (continued)

(b) Thecomponentandmovementsofdeferredtaxassetsand liabilitiesduringthe financialyearprior tooffsettingareasfollows:

Deferred tax liabilities of the Group Property, Plant and

Equipment Others Total RM’000 RM’000 RM’000

At1January2011 2,788 (40) 2,748Recognisedinprofitorloss (109) (19) (128)

At 31 December 2011 2,679 (59) 2,620

At1January2010 2,919 (38) 2,881

Recognisedinprofitorloss (131) (2) (133)

At 31 December 2010 2,788 (40) 2,748

Deferred tax assets of the Group

Unutilised tax losses

and unabsorbed

capital allowances Others Total

RM’000 RM’000 RM’000

At1January2011 1,886 984 2,870Recognisedinprofitorloss 440 (169) 271

At 31 December 2011 2,326 815 3,141

At1January2010 1,476 1,848 3,324Recognisedinprofitorloss 410 (864) (454)

At 31 December 2010 1,886 984 2,870

(c) The amount of temporary differences forwhich no deferred tax assets have been recognised are asfollows:

Group 2011 2010 RM’000 RM’000

Deductible/(taxable)temporarydifferences 19,190 (618)Unutilisedtaxlosses 221,005 227,561Unabsorbedcapitalallowances 21,168 40,749

261,363 267,692

Theunutilisedtaxlossesanddeductibletemporarydifferencesdonotexpireundercurrenttaxlegislation.



annual report 2011

14. PROPERTY DEVELOPMENT COSTS

Leasehold land

Leasehold land Development

- at cost - at valuation costs Total RM’000 RM’000 RM’000 RM’000

Group2011

Cumulative property development costs

At1January2011 15,453 1,426 8,437 25,316Incurredduringthefinancialyear 2,250 - 2,714 4,964

At 31 December 2011 17,703 1,426 11,151 30,280

Cumulative costs recognisedin profit or lossAt1January2011 (352) (35) (377) (764)Recognisedduringthefinancialyear (28) - 366 338

At 31 December 2011 (380) (35) (11) (426)

Carrying Amount at 31 December 2011 17,323 1,391 11,140 29,854

Group2010

Cumulative property development costs

At1January2010 16,117 1,426 5,510 23,053Incurredduringthefinancialyear - - 8,711 8,711Transferredtoinventories - - (363) (363)Completed properties (664) - (5,421) (6,085)

At 31 December 2010 15,453 1,426 8,437 25,316

Cumulative costs recognisedin profit or loss

At1January2010 (1,016) (35) 308 (743)Recognisedduringthefinancialyear - - (6,107) (6,107)Completedprojects 664 - 5,422 6,086

At 31 December 2010 (352) (35) (377) (764)

Carrying Amount at 31 December 2010 15,101 1,391 8,060 24,552

Includedinpropertydevelopmentcostsarethefollowingchargesincurredduringthefinancialyear:

Group 2011 2010 RM’000 RM’000

Interestexpenses 185 182



annual report 2011

14. PROPERTY DEVELOPMENT COSTS (continued)

CertainleaseholdlandoftheCompanywererevaluedbytheDirectorsin1993aftertakingintoconsiderationthevaluationcarriedoutby independentprofessionalfirmsofvaluerson27February1992andsince then,therevaluationhasnotbeenupdated.TherevaluationresultedinasurplusofRM6.17millionwhichhasbeentransferred to the asset revaluation reserve. The asset revaluation reserve is transferred to retainedprofitsupondevelopmentandsaleofsuchland.AtotalamountofRM5.86millionhasbeentransferredtoretainedprofitsasat31December2011.

CertainleaseholdlandheldunderdevelopmentwithcarryingamountofRM14.48million(2010:RM14.19million)havebeenchargedtofinancialinstitutionsforcreditfacilitiesgrantedtoasubsidiaryasdisclosedinNote21tothefinancialstatements.

15. INVENTORIES

Group 2011 2010 RM’000 RM’000

Atcost/netrealisablevalue: Completed development properties 14,071 18,837Rawmaterials 606 636Work-in-progress 498 1,793 Finished goods 6,432 7,459 Food and beverages 313 614 Operating supplies 3,679 3,611

25,599 32,950

CertainunitsofcompleteddevelopmentpropertieswithcarryingamountofRM0.69million(2010:RM0.69million) of theGrouphavebeenpledged to licensedbanks for credit facilitiesgranted to a subsidiary asdisclosedinNote21tothefinancialstatements.

16. CASH AND BANK BALANCES AND SHORT TERM DEPOSITS

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

Cashandbankbalances 40,051 46,535 96 68Short term deposits 151,635 64,135 5,100 600

191,686 110,670 5,196 668

IncludedintheshorttermdepositsoftheGroupare:

(a) anamountofRM10.10million(2010:RM8.14million)chargedtolicensedbanksassecurityforbankingfacilitiesgrantedtocertainsubsidiariesasdisclosedinNote21tothefinancialstatements.

(b) IncludedindepositswithlicensedbanksoftheGroupattheendofthereportingperiodwasanamountof RM0.50 million (2010: RM0.49 million) held under the Housing Development Account pursuant toSection7AoftheHousingDevelopment(ControlandLicensing)Act,1966andthereforerestrictedfromuseinotheroperations.

(c) anamountofRM19.08million(2010:RM18.30million)placedwithleasepayablesassecuritydepositsforleasepaymentsasdisclosedinNote21tothefinancialstatements.



annual report 2011

17. NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE

Theassetsandliabilitiesofthenon-currentassetsclassifiedasheldforsaleareasfollows:

Group 2011 2010 Note RM’000 RM’000

InvestmentinASIB-atcarryingamount* 9 - 114,024Property,plantandequipment-atcarryingamount# 8,038 931

8,038 114,955

* Assetout inNote9(a)tothefinancialstatements,ASIBceasedtobeanassociatedcompanyofASCconsequentialtothedisposalbyASCofitsentireshareholdingof49,000,000ordinarysharesofRM1.00eachrepresenting49%ofthetotalissuedandpaid-upsharecapitalinASIBtoACEINAforatotalcashconsiderationofRM117.0millionwhichwasdeemedcompletedon14June2011.

# Inthepreviousfinancialyear,theGroupenteredintosaleandpurchaseagreementtodisposeapieceofleaseholdland.ThedisposalwascompletedinDecember2011.

On18April2011andon20Dec2011,theGroupenteredintosaleandpurchaseagreementtodisposeacondominiumandapieceoffreeholdland.

18. SHARE CAPITAL

2011 2010

Number of

Shares

Number of Shares

’000 RM’000 ’000 RM’000

Authorised:At1January/31December 3,000,000 900,000 3,000,000 900,000

Issued and fully paid:At1January 488,160 146,448 473,379 142,014ArisingfromconversionofICULS(Note20) 15,970 4,791 14,781 4,434Issueofnewordinaryshares 263 79 - -

At 31 December 504,393 151,318 488,160 146,448

For the financial year ended 31 December 2011, a total of 31,413,000 ICULS have been converted into15,706,500newordinarysharesofRM0.30eachof theCompanybysurrendering forcancellation two (2)ICULS for everyone (1) newordinary shareofRM0.30each in theCompany, anda total of 525,000newordinarysharesofRM0.30eachwereissuedconsequentialtoaconversionbysurrenderingforcancellationone (1) ICULSofnominalvalueofRM0.15andcashpaymentofRM0.15 forone (1)newordinaryshareofRM0.30eachintheCompany.

Warrants 2000/2010

Asattheexpirydateon27August2010,noneofthe168,896,809warrantsissuedbytheCompany(“ASBWarrants”)on29August2000hadbeenexercised.TheASBWarrantshavebeenremovedfromtheOfficialListofBursaSecuritieswitheffectfrom9.00a.m.onMonday,30August2010.



annual report 2011

19. RESERVES


Non-distributableAvailable for sale reserve (a) 2,130 4,064 - -Capital reserve - - 69 69Foreignexchangetranslationreserve (b) (8,389) (9,476) - -Revaluation reserve (c) 12,769 12,767 - -

6,510 7,355 69 69Share premium 117,317 117,317 117,317 117,317

123,827 124,672 117,386 117,386

Distributable Retained earnings/ (Accumulated losses) (d) 74,643 70,416 (12,705) (21,759)

198,470 195,088 104,681 95,627

(a) Available for Sale Reserve

The available for sale reserve represents the fair value reserve relating to the fair valuation of financialassetscategorisedasavailableforsaleandshareofavailableforsalereserveofassociates.

(b) Foreign Exchange Translation Reserve

Theforeignexchangetranslationreserveisusedtorecordforeigncurrencyexchangedifferencesarisingfrom the translation of the financial statements of foreign operations whose functional currencies aredifferentfromthatoftheGroup’spresentationcurrency.Itisalsousedtorecordtheexchangedifferencesarisingfrommonetary itemswhichformpartoftheGroup’snet investment inforeignoperations,wherethe monetary item is denominated in either the functional currency of the reporting entity or the foreign operationandshareofforeignexchangetranslationreserveofassociates.

(c) Revaluation Reserve

TherevaluationreserverepresentsthesurplusontherevaluationofcertainhotelpropertiesoftheGroupandshareofrevaluationreserveofassociates.

(d) Retained Earnings

TheFinanceAct,2007 introducedasingletiercompany incometaxsystemwitheffect fromtheyearofassessment2008.However,thereisatransitionalperiodofsixyears,expiringon31December2013,toallowcompaniestopayfrankeddividendstotheirshareholderunderlimitedcircumstances.CompaniesalsohaveanirrevocableoptiontodisregardtheSection108taxcreditandopttopaydividendsunderthesingletiersystem.ThechangeinthetaxlegislationalsoprovidesfortheSection108taxcreditbalancetobefrozenasat31December2007inaccordancewithSection39oftheFinanceAct,2007.

TheCompanydidnotelectfortheirrevocableoptiontodisregardtheSection108taxcredit.Accordingly,duringthetransitionalperiod,theCompanymayutilisethetaxcreditunderSection108asat31December2011todistributecashdividendpaymentstoordinaryshareholders(whohaveheldthesharesfor90dayspriortothepayout)asdefinedundertheFinanceAct,2007.



annual report 2011

20. ICULS

On29January2008,theCompanyissued1,182,277,666ICULS.

TheICULSareconstitutedbyaTrustDeeddated10December2007andaSupplementalTrustDeeddated4August2008(“TrustDeed”).TheICULShaveatenureoften(10)yearsfromthedateof issueandarenotredeemableincash.Unlessconverted,alloutstandingICULSwillbemandatorilyconvertedbytheCompanyintonewordinarysharesoftheCompany(“ASBShares”)at theconversionpriceapplicableonthematuritydate(i.e.26January2018).

TheICULSmaybeconvertedintonewASBSharesby:

(a) surrenderingtheICULSwithanaggregatenominalvalueequivalenttoRM0.30foreveryone(1)newASBShare(subjecttoadjustmentsinaccordancewiththeprovisionsoftheTrustDeed)(“ConversionPrice”);or

(b) surrenderingone(1)ICULStogetherwiththenecessarycashpaymentconstitutingthedifferencebetweentheConversionPriceand thenominal valueof the ICULSsurrendered, forone (1) newASBShare.Foravoidanceofdoubt, for everyone (1) ICULSsurrendered togetherwith the requiredcashpayment, theholderwillonlybeentitledtosubscribeforone(1)newASBShare

The new ASB Shares to be issued upon conversion of the ICULSwill, upon allotment and issuance, rankparipassuinallrespectswiththethenexistingissuedASBSharessavethattheywillnotbeentitledforanydividends, rights, allotments and/or other distributions, the entitlement date ofwhich is before the date ofallotmentofthenewASBSharespursuanttotheconversionoftheICULS.

The interest on the ICULS at the rate of 2%per annumon the nominal value of the outstanding ICULS ispayableannually inarrears,onthe lastdayofeachoftheten(10)successiveperiodsoftwelve(12)monthscalculatedfromtheissuedatewiththelastinterestpaymentdatefallingonthematuritydateoftheICULS.

TheICULSisrecognisedinthestatementsoffinancialpositionoftheGroupandoftheCompanyasfollows:

Group and Company

Note

Equity Component

Liability Component Total

RM’000 RM’000 RM’000

2011 Nominal value

At1January2011 115,340 18,574 133,914Deferredtaxassets 13 - (61) (61)Convertedtoordinarysharesduringthefinancialyear 18 (4,178) (613) (4,791)

At 31 December 2011 111,162 17,900 129,062

Expenserecognisedinprofitorloss: At1January2011 - 3,794 3,794Recognisedduringthefinancialyear-ICULSinterest - 1,116 1,116

At 31 December 2011 - 4,910 4,910

Interestpaid/accrued: At1January2011 - (7,977) (7,977)Paid/accruedduringthefinancialyear - (2,555) (2,555)

At 31 December 2011 - (10,532) (10,532)

At 31 December 2011 111,162 12,278 123,440



annual report 2011

20. ICULS (continued)

Group and Company

Note

Equity Component

Liability Component Total

RM’000 RM’000 RM’000

2010 Nominal valueAt1January2010 119,208 19,198 138,406Deferredtaxassets 13 - (58) (58)Convertedtoordinarysharesduringthefinancialyear 18 (3,868) (566) (4,434)

At 31 December 2010 115,340 18,574 133,914

Expenserecognisedinprofitorloss: At1January2010 - 2,577 2,577Recognisedduringthefinancialyear-ICULSinterest - 1,217 1,217

At 31 December 2010 - 3,794 3,794

Interestpaid/accrued: At1January2010 - (5,298) (5,298)Paid/accruedduringthefinancialyear - (2,679) (2,679)

At 31 December 2010 - (7,977) (7,977)

At 31 December 2010 115,340 14,391 129,731

InterestexpenseontheICULSiscalculatedbasedontheeffectiveyieldbyapplyingtheeffective interestrateof7%foranequivalentnon-convertibleloanstocktotheliabilitycomponentoftheICULS.

21. BORROWINGS


Current liabilities

Bankoverdrafts (a) 768 - - -Finance lease payable (b) 1,548 1,540 - -Hirepurchasepayables (c) 91 115 - -Termloans (d) 5,588 34,513 - 30,000

7,995 36,168 - 30,000Non-current liabilities

Finance lease payable (b) 21,132 21,019 - -Hirepurchasepayables (c) 92 81 - -Termloans (d) 54,716 60,369 - -

75,940 81,469 - -

83,935 117,637 - 30,000Total liabilities

Bankoverdrafts (a) 768 - - -Finance lease payable (b) 22,680 22,559 - -Hirepurchasepayables (c) 183 196 - -Termloans (d) 60,304 94,882 - 30,000

83,935 117,637 - 30,000



annual report 2011

21. BORROWINGS (continued)

(a) Bank OverdraftsGroup

2011 2010 RM’000 RM’000

Bankoverdrafts:-secured 768 -

Thebankoverdraftsaresecuredbywayof:

(i) apledgeofshorttermdeposits;and

(ii) aguaranteeandanindemnityfromtheCompanyanditssubsidiaries.

TheeffectiveinterestrateofthebankoverdraftisdisclosedinNote35(c)tothefinancialstatements.

(b) Finance Lease Payable

Group 2011 2010 RM’000 RM’000

Minimumleasepayments:-notlaterthanoneyear 1,661 1,652-laterthanoneyearbutnotlaterthanfiveyears 28,712 6,694-laterthanfiveyears - 23,679

30,373 32,025Less:Futurefinanceleaseinterest (7,693) (9,466)

Presentvalueoffinanceleaseliabilities 22,680 22,559

Representedby:Current -notlaterthanoneyear 1,548 1,540Non-current-laterthanoneyearbutnotlaterthanfiveyears 21,132 5,240-laterthanfiveyears - 15,779

22,680 22,559

Finance lease payable represents obligation arising from the finance lease for a hotel property pursuant tosaleandleasebackagreementsenteredintoinyear2006.

TheGrouphasanoptiontobuybackthehotelpropertyatRM23millionattheendoftheleaseterm,whichisforaperiodoften(10)yearswithanoptiontoextendforanotherperiodoffive(5)years.

TheeffectiveinterestrateofthefinanceleasepayableisdisclosedinNote35(c)tothefinancialstatements.

Thefinanceleasepayableissecuredbywayofapledgeofshorttermdeposit.



annual report 2011


(c) Hire Purchase Payables

Group 2011 2010 RM’000 RM’000

Minimumhirepurchasepayments:-notlaterthanoneyear 100 121 -laterthanoneyearbutnotlaterthanfiveyears 99 82

199 203 Less:Futurehirepurchaseinterest (16) (7)

Presentvalueofhirepurchaseliabilities 183 196

Representedby:Current -notlaterthanoneyear 91 115 Non-current-laterthanoneyearbutnotlaterthanfiveyears 92 81

183 196

The effective interest rate of the hire purchase payable is disclosed in Note 35(c) to the financialstatements.

(d) Term Loans


Termloans-secured 54,055 88,815 - 30,000-unsecured 6,249 6,067 - -

60,304 94,882 - 30,000

Representedby:Current -notlaterthanoneyear 5,588 34,513 - 30,000Non-current

-laterthanoneyearbutnotlaterthanfiveyears 47,261 51,919 - --laterthanfiveyears 7,455 8,450 - -

54,716 60,369 - -

60,304 94,882 - 30,000



annual report 2011


(d) Term Loans (continued)

Thetermloansaresecuredbywayof:

(i) fixedchargesoverthefreeholdlandandcertainhotelandotherpropertiesoftheGroup;

(ii) theentireissuedandpaidupsharecapitalofcertainsubsidiaries;

(iii) certainsharesofquotedsubsidiariesandunquotedsubsidiariesatcarryingamountsofRM10.28million(2010:RM10.28million)andRM61.94million(2010:RM63.52million)respectively;

(iv) certainassetsbeneficiallyownedbyaDirectoroftheCompany;

(v) fixedandfloatingchargesovertheassetsofcertainsubsidiaries;and

(vi) acorporateguaranteebytheCompany.

TheeffectiveinterestrateofthetermloansisdisclosedinNote35(c)tothefinancialstatements.

22. PROVISION FOR RETIREMENT BENEFIT OBLIGATIONS

TheGroupoperatesunfundeddefinedretirementbenefitplansforsomeofitsemployees.

Thetotalamountrecognisedinthestatementsoffinancialpositionareasfollows:

Group 2011 2010 RM’000 RM’000

Presentvalueofunfundeddefinedbenefitsobligations 1,107 935 Unrecognised actuarial gain (231) (188)

876 747

Thetotalexpensesrecognisedinprofitorlossareasfollows:

Group 2011 2010 RM’000 RM’000

Current service cost 90 77 Interest cost 60 48 Amortisation of net loss 6 11

Expensesrecognisedintheprofitorlossunderadministrativeexpenses 156 136



annual report 2011

22. PROVISION FOR RETIREMENT BENEFIT OBLIGATIONS (continued)

Themovementsduringthefinancialyearontheamountrecognisedinthestatementoffinancialpositioninrespectoftheretirementbenefitsplansareasfollows:

Group 2011 2010 RM’000 RM’000

At1January 747 629Provisionmadeinthecurrentfinancialyear 156 136Paidduringthefinancialyear (27) (18)

At 31 December 876 747

Theprincipalactuarialassumptionsusedareasfollows:Group

2011 2010 % %

Discount rate 6.5 6.0Expectedrateofsalaryincrease 6.0 6.0

23. TRADE AND OTHER PAYABLES Group Company

2011 2010 2011 2010 Note RM’000 RM’000 RM’000 RM’000

Current:Trade Amountowingtocustomersforcontractwork 12(b) 312 50 - -Tradepayables (a) 13,697 19,178 - -

14,009 19,228 - -

Current:Non-Trade Accruals 22,540 22,825 679 828 Accrued interest 2,356 2,488 2,356 2,488Amountowingtoassociates (b) 51 163 - -Amountowingtosubsidiaries (c) - - 203,092 186,719 Deposits received 1,735 1,335 - - Other payables 18,763 22,148 29 29

45,445 48,959 206,156 190,064

Total trade and other payables 59,454 68,187 206,156 190,064

(a) Trade Payables

Tradepayablesarenon-interestbearingandthenormalcredittermsgrantedtotheGrouprangefrom30to90days(2010:30to90days).

(b) Amount Owing to Associates

Theamountowingtoassociatesisunsecured,interest-freeandisrepayableondemand.

(c) Amount Owing to Subsidiaries

Theamountowingtosubsidiariesisunsecured,interest-freeandisrepayableondemand.



annual report 2011

24. REVENUE


Sales of goods 33,438 35,182 - -

Hotelsandresortsservices 59,705 56,951 - -

Coach building 2,896 3,844 - -

Information,communicationstechnologyandrelatedservice 34,019 43,087 - -

Travelandtours 81,584 67,606 - -

Card and payment services 3,422 2,734 - -

Interestandfinancingincome 126 55 126 27

Propertydevelopment 5,734 11,063 - -

Rental income 1,361 1,330 - -

Gross dividend income - - 40,000 3,724

222,285 221,852 40,126 3,751

25. OPERATING PROFIT

Operatingprofithasbeenarrivedat:


After charging:

Amortisation of intangible assets 1,715 1,482 - -

Auditors’ remuneration

-statutory:

-holdingcompany 84 80 84 80

-subsidiaries 803 722 - -

-under/(over)accrualinprioryears 27 (27) 9 4

-non-statutory:

-holdingcompany 44 4 44 4

-subsidiaries 35 80 - -

Baddebtswrittenoff 574 765 - -

Depreciation 7,176 7,428 23 30

Directors’remuneration:

-fees 542 611 254 254

-otheremoluments 1,228 1,089 536 478



annual report 2011

25. OPERATING PROFIT (continued)

Operatingprofithasbeenarrivedat(continued):


After charging:

Impairmentlosson:

-developmentexpenditure - 1,057 - -

-goodwill 2 - - -

-available-for-saleinvestmentsecurities - 27,274 - 27,274

-heldfortradinginvestments 10 - - -

-investmentinsubsidiaries - - 10,650 -

-inventories 15 86 - -

-loanandreceivables 164 1,116 - -

-property,plantandequipment - 1,736 - -

Leaserental 10,122 10,078 - -

Lossonforeignexchange:

-realised - 181 - -

-unrealised 53 2,202 36 12

Lossondisposalofheldfortradinginvestments - 25 - -

Property,plantandequipmentwrittenoff 57 90 - -

Provisionforretirementbenefitsplan 156 136 - -

Provisionforcontingenciesandcommitments 42 - - -

Realisationofforeignexchangereserve 4,908 - - -

Rentalexpenses:

-equipment 98 137 - -

-premises 2,862 3,099 438 243

-others 22 23 - -

Staffcost:

-salariesandwages 36,443 33,939 2,115 1,914

-definedcontributionplan 4,008 3,622 344 325

-otheremployeebenefits 4,432 4,292 (60) 33



annual report 2011

25. OPERATING PROFIT (continued)

Operatingprofithasbeenarrivedat(continued):


And crediting:

Bad debts recovered 299 46 - -

Fair value gain on investment property 946 - - -

Gainondisposalofproperty,plantandequipment 231 189 - -

Gainondisposalofnon-currentassetsclassifiedas held for sale

4,269 - - -

Gain on disposal of a subsidiary 201 - - -

Gain on disposal of an associated company 2,936 - - -

Gain on disposal of held for trading investments 19 - - -

Realisedgainonforeignexchange 1,408 2,277 - 22

Grossdividendincomefrom:

Available-for-salefinancialassets

-Malaysia:

-quotedsecurities 403 429 - -

-unquotedsecurities 3 3 - -

Interestincome:

-Shorttermdeposits 3,579 1,802 - -

-Loanandreceivables 274 483 - -

Rental income 1,899 1,094 - -

Realisationofforeignexchangereserve - 4,583 - -

Writebackofimpairmentlosson:

-investmentinassociates - 3,414 - -

-investmentinsubsidiaries - - - 31,000

-heldfortradinginvestments - 191 - -

-loanandreceivables 171 16,887 - -

-property,plantandequipment 165 - - -

Writebackofpayables 3,932 - - -



annual report 2011

26. FINANCE COSTS


Interestexpenses

-advancesfromsubsidiaries - - - (3,321)

-bankoverdrafts 167 23 110 -

-financelease 1,652 1,644 - -

-hirepurchases 8 39 - -

-ICULS 1,116 1,217 1,116 1,217

-termloans 5,223 5,128 940 983

-others 50 - 3,307 3,195

8,216 8,051 5,473 2,074

27. INCOME TAX EXPENSE


In Malaysia:

Incometax

-currentyear 2,501 1,210 9,156 48

-prioryears (263) (1,030) (39) 67

Deferredtax(Note13)

-currentyear (459) 202 - -

-prioryears (2) 54 130 131

1,777 436 9,247 246

Outside Malaysia:

Incometax 242 528 - -

2,019 964 9,247 246

Theincometaxiscalculatedatthestatutoryrateof25%(2010:25%)oftheestimatedassessableprofitfortheyear.

Two subsidiaries of the Company, Unified Communications Sdn Bhd and GlobeOSS Sdn Bhd had beengranted pioneer status asMultimedia Super Corridor (“MSC”) status under the Promotion of InvestmentAct,1986.ThebenefitstoacompanyhavingMSCstatusincludeafiveyearpioneerstatustaxexemptiononprofitsgeneratedfromtheMSCqualifyingactivitiesduringthesameperiod.TheMSCstatusofUnifiedCommunicationsSdnBhd,afterbeingextendedonce,hadexpiredon20December2010.TheMSCstatusofGlobeOSSSdnBhd,ontheotherhand,commencedfrom15January2007andwillexpireon14January2012. GlobeOSS Sdn Bhd’s MSC status is in the midst of being renewed for a further five year periodcommencingon15January2012to14January2017,ofwhichaformalapplicationhasbeensubmittedon20December2011totheMultimediaDevelopmentCorporation(“MDC”),theMalaysianbodythatoverseesthedevelopmentofMSC.



annual report 2011

27. INCOME TAX EXPENSE (continued)

Ontheotherhand,anothersubsidiaryoftheCompany,UnifiedCommunications(OHQ)SdnBhdhasbeengranted Operational Headquarters (“OHQ”) status under the Malaysia Industrial Development Authority(“MIDA”).ThebenefitstoacompanyhavingOHQstatusincludetenyearspioneerstatustaxexemptiononprofitsgeneratedfromtheOHQqualifyingactivitiesduringthesameyear.TheOHQstatusofthecompanycommencedon27October2009andwillexpireon26October2019.

Areconciliationofincometaxexpenseapplicabletoprofit/(loss)beforetaxationatthestatutoryincometaxratetoincometaxexpenseattheeffectiveincometaxrateoftheGroupandoftheCompanyareasfollows:

Group Company 2011 2010 2011 2010 % % % %

Applicabletaxrate 25 25 25 25

Taxeffectsarisingfrom

-Nonallowableexpenses 59 163 25 408

-Nontaxableincome (55) (158) - (433)

-Utilisationofpreviouslyunrecognisedtaxlossesandcapitalallowances

(9) (11) - -

-Deferredtaxassetsnotrecognisedintheyear 18 36 - -

-Differenttaxrateinforeignjurisdiction 7 5 - -

-Reversalofdeferredtaxasset - 9 - -

-Taxincentivesandallowances - (1) - -

-Shareoftaxofassociatesincludedinshareofprofitofassociates

(19) (43) - -

26 25 50 -

-(over)/underaccrualinprioryears (3) (12) - 14

Averageeffectivetaxrate 23 13 50 14

ThetaxsavingsoftheGroupandoftheCompanyareasfollows:


Arising from utilisation of previouslyunutilisedtaxlosses 802 821 - -



annual report 2011

28. EARNINGS PER ORDINARY SHARE

(a) Basic earnings per ordinary share

Group 2011 2010 RM’000 RM’000

Consolidatedprofitattributabletoownersoftheparent 4,227 3,327

2011 2010 ’000 ’000

Weightedaveragenumberofordinarysharesinissue 499,899 476,205

2011 2010 Sen Sen

Basic earnings per share 0.85 0.70

(b) Diluted earnings per ordinary share

Diluted earnings per share of the Group is calculated by dividing the profit/(loss) for the financial year attributabletoownersoftheparentbytheadjustedweightedaveragenumberofordinarysharesinissueduringthefinancialyear.TheadjustedweightedaveragenumberofordinarysharesinissueisarrivedatassumingfullconversionoftheICULSwhichrepresentsthedilutivepotentialoftheordinaryshares.

Group 2011 2010 RM’000 RM’000

Consolidatedprofitattributabletoownersoftheparent 4,227 3,327

InterestexpensesonICULS(netoftax) 1,246 1,349

ProfitaftermandatoryconversionofICULS 5,473 4,676

2011 2010 ’000 ’000

Weightedaveragenumberofordinarysharesinissue 499,899 476,205

AdjustmentforordinarysharesdeemedconvertedfromICULS 429,253 452,728

WeightedaveragenumberofordinarysharesinissueafterdeemedconversionofICULS

929,152 928,933

2011 2010 Sen Sen

Diluted earnings per share 0.59 0.50



annual report 2011

29. CONTINGENT LIABILITIES

Corporate Guarantee


Unsecured:

Corporateguaranteegiventobankfor credit facilities granted to subsidiaries - - 41,979 42,511

At the end of the reporting period, it was not probable that the counterparty to the financial guaranteecontractwillclaimunderthecontract.Consequently,thefairvalueforthecorporateguaranteeisRMNil.

30. MATERIAL LITIGATION

(a) ACEINAfirstcommencedlegalproceedingsagainstASCregardingtheCallOption(i.e.thecalloptionnoticeissuedbyACEINAovertheremaining49,000,000ordinarysharesofRM1.00eachinASIBheldbyASC)whenon3November2009ACEINAissuedanOriginatingSummons(“OS”)attheHighCourtKualaLumpurvideOriginatingSummonsNo.D-24NCC-72-2009seekinginter-aliaanordertocompelASCtofurnishitswrittenconsentforACEINAtoapplytoBankNegaraMalaysia(“BNM”)fortheapprovaloftheMinisterofFinance(“MOF”)underSection67oftheInsuranceAct,1996forthedisposalandacquisitionofASC’s49%equityinterestinASIB.

On12May2010,theHighCourtmadeanorderinthe1stOSforASCtogiveitswrittenconsent(“1stOSCourtOrder”).

By a letter dated 9 September 2010, BNM informed ASC of MOF approval under Section 67 of theInsurance Act, 1996 for the disposal and acquisition of ASC’s 49% equity interest in ASIB (“MOFApproval”).

Subsequentlyon22September2010,theCompanyannouncedthatASChadreceivedaletterdated20September2010fromthesolicitorsofACEINA(“ACEINASolicitors”)notifyingASCthatACEINAhasacceptedthetermsoftheaforesaidMOFApproval.Inthesaidletter,ACEINASolicitorsinformedASCthattherelevantsaleandpurchaseagreementfortheProposedDisposalmustbeexecutedbyASCandtheCompanywithin3daysfromthedateof the letter, failingwhichtheagreement isdeemedtohavebecome effective andbinding onASCand theCompany. ACE INASolicitors also informedASC thatcompletionoftheProposedDisposalshalloccuron28September2010.

On8October2010,ACEINAcommencedproceedingsagainstASCattheHighCourtKualaLumpurinOriginatingSummonsNo.D-24NCC-332-2010(“2ndOS”)seekingorderstocompelASCtogiveeffecttotheProposedDisposal.

On29November2010,theHighCourtKualaLumpurmadeordersforASCtoimplementtheDisposalofASIB(“2ndOSCourtOrder”).



annual report 2011

30. MATERIAL LITIGATION (continued)

(a) ThefollowinglegalproceedingsbetweenASCandACEINAinconnectionwiththe2ndOSCourtOrder/DisposalofASIBhavebeendismissedonthefollowingdates:

(i) 8 April 2011

• ASC’smotiontotheFederalCourtforanOrderthat:

(a) the Order made by the Federal Court on 8 November 2010 dismissing the ASC’s motion in the FederalCourtforLeavetoAppealtotheFederalCourtagainstthedecisionoftheCourtofAppealmadeon9July2010dismissingASC’sAppealagainstthe1stOSCourtOrdermadeintheOriginatingSummonson12May2010,besetaside;and

(b) in thealternative,Leavebegranted toAppealagainst thedecisionof theCourtofAppealgivenon9July2010.

• ASC’smotion forLeave forAppeal to theFederalCourtagainst thedismissalby theCourtofAppeal on16February 2011ofASC’s InterventionAppeal arising from the InterventionOrdergrantedtoACEINAintheJudicialReviewProceedings.

(ii) 19 April 2011

• ASC’sappealagainstthe2ndOSCourtOrder.

(iii) 21 April 2011

• ASC’sApplication forLeave forJudicialReviewat theHighCourtandconsequently,noorderwasmadeonASC’sapplicationtostaytheMOFApprovalfortheDisposalofASIB.

ACEINAcommencedcommittalproceedingsagainstASC,theCompanyandtheirDirectorsforallegeddisobedienceofthe2ndOSOrder.TheCourthason20May2011delivereditsdecisionandissuedordersforcommittalagainstASC,theCompanyandtheirDirectors.On20May2011,theCompanydispatchedthecirculartoshareholdersinrelationtotheDisposalofASIBandthenoticeofanextraordinarygeneralmeeting of the Company (“EGM”) held on 6 June 2011 to procure its shareholders’ approval for theDisposalofASIB.

AttheEGMheldon6June2011,shareholdersoftheCompanyapprovedtheDisposalofASIB.On13June2011,theCompanyandtheDirectorsofASCandtheCompanyweredischargedfromthecommittalorder dated 20May 2011.On 14 June 2011, theCompany announced that theDisposal of ASIBwasdeemedcompletedfollowingthereceiptbyASCofthecashproceedarisingfromtheDisposalofASIB.

Theonlypendingappeal istheappealbyASCtotheCourtofAppealofMalaysiaagainsttheorderoftheHighCourtdated21April2011refusingleaveforjudicialreviewagainsttheMOFApprovalinrespectof theDisposalofASIBvideCivilAppealNo.:W-01-283-2011.Theappeal ispendingdisposalandnohearinghasyetbeenfixedinrespectofthesame.

(b) TheCompanyhadon14 June2004 instituted legal action againstPKNK to recover its investment ofRM52,500,000representing70%equityinterestinKMSBtogetherwithothersums,damages,interestsand costs. The Company’s solicitors have obtained the signed and sealed copy of the Judgment inDefaultofAppearancedated1August2004(“DefaultJudgment”)fromtheHighCourtofAlorSetarforthesumofRM52,500,000,interestthereonattherateof8%perannumfromthedateofjudgmenttothedateofrealisationandcostofRM225.On10November2004,PKNKappliedtothecourt tosetasidetheDefault Judgment.On3August 2005, the court had allowedPKNK’s application to set aside theDefaultJudgment.Asaproceduralsteptoprogressthesuittoatrial,theCompany’ssolicitorhadon29December2005forwardedtothecourtforfilingoftheNoticetoAttendPre-TrialCaseManagementandthePre-TrialCaseManagementwasfixedforhearingon17May2006.



annual report 2011

30. MATERIAL LITIGATION (continued)

(b) Due to a change in PKNK’s solicitors, PKNK’s new solicitors had asked for an adjournment on thegroundsthattheyrequiretimetotaketheirclient’sinstructionsandthereisalikelihoodforanapplicationtoamendtheStatementofDefence.ThecourthadfixedthePre-TrialCaseManagement(“PTCM”)formentionon21November2006.PKNK’snewsolicitorsfiledanapplicationtoamendPKNK’sStatementofDefenceandtheapplicationwasalsofixedforhearingon21November2006.On21November2006,thecourtgrantedleavetoPKNKtoamendtheirStatementofDefence.

Sincethen,thecasewasfixedforcasemanagement,mentionandPTCMonvariousdatesandthelastdatefixedforfurtherPTCMwason2November2010.

Atthehearingon13January2011forPKNK’sapplicationforthedeterminationofpointsorissuesoflawforthedisposalofthecase,theCourtwasoftheviewthattheCompany’sclaimistime-barredunderthePublicAuthoritiesProtectionAct(“PAPA”)orevenifnotunderPAPA,thenitistime-barredundertheLimitationActandassuch,theCompany’sclaimagainstPKNKwasdismissedwithcosts.

TheCompany’ssolicitorsareoftheviewthatthelearnedJudicialCommissionererredindecidingthattheCompany’sclaimistime-barredandhaveappealedthedecisionof13January2011totheCourtofAppealofMalaysiavideCivilAppealNo.K-01-85-2011.Theappealispendingdisposalandhasnotbeenfixedforhearing.

31. COMMITMENTS

(a) Capitalcommitmentsinrespectof:

Group 2011 2010 RM’000 RM’000

Capitalexpenditure:-authorisedandcontractedfor 1,780 7,055

Analysedasfollows:-purchaseofproperty,plantandequipment 1,780 7,055-constructionofhotelbuildings * *

1,780 7,055

* Asubsidiaryhadentered intoa leaseagreementon31January1996with theMunicipalityCouncilofPhnomPenhwhich stipulated that the subsidiary has anobligation to construct a newhotel buildingandcarryoutrenovationandrefurbishmentworksontheexistinghotelbuilding.Theexpecteddateofcompletioniswithin36monthsfrom1October1999.TheamountcontractedshallnotbelessthanUSD3million forbothbuildings.Anextensionof timehasbeengranted for thesubsidiary tocommence theconstructionofthenewhotelbuildingnotlaterthan1October2002andtobecompletedby1October2004.Therefurbishmentworkontheexistinghotelbuildinghassincebeencompletedbutconstructionofthenewhotelbuildinghasnotbegunasattodate.

Thesubsidiarywasgrantedapprovalfromthemunicipalityforafurtherdefermentonthecommencementoftheconstructionofthenewbuildingto2007.InMarch2008,thesubsidiaryhasdecidedtoproceedwiththeconstructionofthenewhotelbuilding.ThebuildingplanshavebeensubmittedtotheMunicipalityCouncilofPhnomPenhonMarch2008andcurrentlyarependingitsapproval.



annual report 2011

31. COMMITMENTS (continued)

(b) TheGrouphasleasecommitmentsundernon-cancellableoperatingleases,whicharepayableasfollows:

Group 2011 2010 RM’000 RM’000

Not later than one year 10,826 10,506Laterthanoneyearbutnotlaterthanfiveyears 36,484 42,275Laterthanfiveyears 27,659 30,659

74,969 83,440

32. SIGNIFICANT RELATED PARTY DISCLOSURES

(a) Identification of related parties

PartiesareconsideredtoberelatedtotheCompanyiftheCompanyhastheability,directlyorindirectly,to control theparty or exercise significant influence over theparty inmaking financial andoperatingdecisions,orviceversa,orwheretheCompanyandthepartyaresubjecttocommoncontrolorcommonsignificantinfluence.Relatedpartiesmaybeindividualsorotherentities.

TheCompanyhascontrollingrelatedpartyrelationshipwithitsdirectandindirectsubsidiaries.

(b) Significant related party transactions and balances

Significantrelatedpartytransactionsotherthanthosedisclosedelsewhereinthefinancialstatementsareasfollows:


Income

(i) Interest receivable from a subsidiary

-iSynergySdn.Bhd.(“iSynergy”) - - - 3,321

(ii) Rental receivable from an associate-KumpulanPowernetBerhad 106 111 - -

Expenses(i) Rental payable to a subsidiaryAESBIPowerSystemsSdn.Bhd. - - 438 243

(ii)PurchaseofgoodsandservicesfromasubsidiaryOrientEscapeTravelSdn.Bhd. - - 153 144

(iii)Leaserentalpayabletoacompanyofwhichadirectorhasdeemedinterest:

-LeedsPropertyLimited 3,694 631 - -

(iv)Directors’emoluments:-fees 542 611 254 254 -salariesandbonuses 1,228 1,089 536 478 -benefit-in-kind 30 30 23 23



annual report 2011

32. SIGNIFICANT RELATED PARTY DISCLOSURES (continued)

(b) Significant related party transactions and balances (continued)

Therelatedpartytransactionsdescribedabovewereenteredintointheordinarycourseofbusinessandhavebeenestablishedundernegotiatedterms.

Individually significant outstanding balances arising during the financial year from transactions other thannormaltradetransactionswithrelatedpartiesareasfollows:

Company 2011 2010 RM’000 RM’000

Amountowingbyasubsidiary-Interestreceivable-iSynergy - 3,321

(c) Compensation of key management personnel

The remunerationofDirectorsandotherkeymanagementpersonnelduring the finanacialyearareasfollows:


Fees 608 704 254 254

Shorttermemployeebenefits 3,443 3,237 833 780 Contributionstodefinedcontributionplan 359 348 100 94

4,410 4,289 1,187 1,128

Benefit-in-kind 39 73 30 30

Theestimatedmonetaryvalueofotherbenefits,not included in theabove, receivedbyDirectorsandotherkeymanagementpersonneloftheCompanyanditssubsidiarieswereRM29,900(2010:RM29,900)fortheCompanyandRM39,320(2010:RM72,725)fortheGroup.

IncludedintheemployeebenefitsoftheGroupandoftheCompanyareExecutiveDirectors’remunerationamountingRM1,228,420(2010:RM1,089,220)andRM535,920(2010:RM477,520)respectively.

33. SEGMENT INFORMATION

Inthepreviousfinancialyear,theGroupadoptedFRS8OperatingSegments.FRS8requirestheidentificationofoperatingsegmentsonthebasisofinternalreportsthatareregularlyreviewedbythemanagementinordertoallocateresourcestothesegmentsandassesstheirperformance.Nevertheless,thereplacedFRS114 2004 requiredtheidentificationoftwosetsofsegments-onebasedonrelatedproductsandservices,andtheotherongeographicalareas.FRS114 2004 regarded one set as primary segments and the other as secondary segments.TheGroupconcludedthatthereportableoperatingsegmentsdeterminedinaccordancewithFRS8arethesameasthebusinesssegmentspreviouslyidentifiedunderFRS114.



annual report 2011

33. SEGMENT INFORMATION (continued)

The Group’s operating segments are as follows:

Investment holding : Investment holding and providing full corporate and financial support to the Group.

Property development : Development of residential and commercial properties.

Hotels and resorts : Operate and manage hotels and resorts and other related services.

Information andcommunications technology

: Design and development of telecommunications software applications and systems and the provision of solutions and services for the telecommunications industry.

Travel and tours : Travel and tour agent, licensed money changer and provision of travel related services.

Others : Businesses involving manufacturing and marketing of builder hardware products, design, building and fabrication of coaches and bus maintenance and related services, trading, card and payment related services and traditional Chinese medicine services.

The following table provides an analysis of the Group’s revenue, results, assets, liabilities and other information by operating segment:

Invest-ment

holding

Property develop-

ment

Hotelsand

resorts

Informa-tion and commu-nicationstechno-

logy

Traveland

tours

Others

Elimi-nation

Total 2011 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Revenue

External 1,132 5,784 76,236 34,019 81,584 23,530 - 222,285

Inter-segment 728 8 - - 363 - (1,099) -

1,860 5,792 76,236

34,019 81,947 23,530 (1,099) 222,285

Results

Segment results (5,139) 474 6,268 3,411 797 (4,528) 791 2,074

Share of results of associates 4,385 - (43) 2,493 - - - 6,835

Consolidated profit before tax (754) 474 6,225 5,904 797 (4,528) 791 8,909

Tax expense (2,019)

Net profit for the financial year 6,890

Attributable to;

Non-controlling interests 2,663

Owners of the parent 4,227



annual report 2011


The following table provides an analysis of the Group’s revenue, results, assets, liabilities and otherinformationbyoperatingsegment:(continued)

Invest-ment

holding

Property develop-

ment

Hotelsand

resorts


logy

Traveland

tours

Others

Elimi-nation


Other information

Segments assets 150,032 55,588 223,369 135,513 13,943 37,993 - 616,438Investment in associates 16,767 - 3,958 1,950 - - - 22,675Non-currentassetsheldforsale 7,791 247 - - - - - 8,038Unallocated corporate assets 5,911

Totalassets 653,062

Segment liabilities 17,454 6,179 96,510 9,171 5,022 22,207 -156,543Unallocated corporate liabilities 3,792

Totalliabilities 160,335

Capitalexpenditure-Property,plantandequipment 346 1 4,681 1,546 43 174 - 6,791-investmentproperty - - - 7,926 - - - 7,926

-Softwaredevelopmentexpenditure - - - 2,789 - - - 2,789

Amortisation of intangible assets - - 3 1,712 - - - 1,715Depreciation 545 41 4,824 1,203 207 356 - 7,176Interest Income 1,857 133 812 1,001 86 102 (12) 3,979Finance cost 5,501 - 2,307 - 70 750 (412) 8,216Impairmentlosson:-heldoftradinginvestments - - 10 - - - - 10 -inventories - - - 15 - - - 15 -loanandreceivables 30 - 11 51 - 72 - 164

Writebackofimpairmentlosson:-loanandreceivables - - - 131 - 40 - 171 -Property,plantandequipment - - - 165 - - - 165Non-cashexpensesotherthan

depreciation and amortisation and impairment loss - - 200 4 570 13 - 787



annual report 2011


The following table provides an analysis of the Group’s revenue, results, assets, liabilities and otherinformationbyoperatingsegment(continued):

Invest-ment

holding

Property develop-

ment

Hotelsand

resorts


logy

Traveland

tours

Others

Elimi-nation


Revenue

External 903 11,158 74,457 43,087 67,606 24,641 - 221,852

Inter-segment 4,593 14 - - 526 155 (5,288) -

5,496 11,172 74,457 43,087 68,132 24,796 (5,288) 221,852

Results

Segment results (10,827) 736 9,695 3,884 783 (6,824) (2,649) (5,202)

Share of results of associates 9,940 - (17) 2,710 - - - 12,633

Consolidatedprofitbeforetax (887) 736 9,678 6,594 783 (6,824) (2,649) 7,431

Taxexpense (964)

Netprofitforthefinancialyear 6,467

Attributableto;

Non-controllinginterests 3,140

Ownersoftheparent 3,327

Other information

Segments assets 72,496 58,386 221,000 134,702 11,986 41,369 - 539,939

Investment in associates 27,934 - - 2,825 - - - 30,759

Non-currentassetsheldforsale 114,955 - - - - - - 114,955

Unallocated corporate assets 5,591

Totalassets 691,244

Segment liabilities 50,351 8,132 99,467 14,661 4,283 24,068 - 200,962

Unallocated corporate liabilities 3,736

Totalliabilities 204,698



annual report 2011


The following table provides an analysis of the Group’s revenue, results, assets, liabilities and otherinformationbyoperatingsegment(continued):

Invest-ment

holding

Property develop-

ment

Hotelsand

resorts


logy

Traveland

tours

Others

Elimi-nation


Other information (continued)

Capitalexpenditure

-Property,plantandequipment 1,434 1 6,049 3,093 339 441 - 11,357

-Softwaredevelopmentexpenditure - - - 4,626 - - - 4,626

Depreciation 620 85 4,908 1,350 187 278 - 7,428

Interest Income 279 128 849 981 43 60 - 2,340

Finance cost 2,119 - 2,233 3 35 4,366 (705) 8,051

Amortisation of intangible assets - - - 1,482 - - - 1,482

Impairmentlosson:

-property,plantandequipment - - - 1,736 - - - 1,736

-investmentsecurities 27,274 - - - - - - 27,274

-inventories - - - 86 - - - 86

-developmentexpenditure - - - 1,057 - - - 1,057

-loanandreceivables 611 - 297 193 - 15 - 1,116

Writebackofimpairmentlosson:

-investmentinassociates 3,414 - - - - - - 3,414

-heldoftradinginvestments 90 - 98 - 3 - - 191

-loanandreceivables 16,341 - - 546 - - - 16,887

Non-cashexpensesotherthandepreciation and amortisation and impairment loss 634 - 919 195 281 78 - 2,107



annual report 2011


Geographical Information

The Group operates mainly in Malaysia, Singapore, Africa and Middle East, Europe and Australia. Indetermining the geographical segments of theGroup, revenue is basedon the geographical locations ofcustomers.Segmentassetsandcapitalexpenditurearebasedonthegeographicallocationoftheassets.Thecompositionofeachgeographicalsegmentisasfollows:

Malaysia : InvestmentholdingandprovidingfullcorporateandfinancialsupporttotheGroup,propertydevelopment,ownerandoperatorofhotelsandresorts,travelandtoursrelated services, card and payment related services, design and developmentof telecommunications software applications and systems and the provision ofsolutionsandservices for the telecommunications industry,design,buildingandfabricationofcoaches,andbusmaintenanceandrelatedservicesandtraditionalChinesemedicineservices.

Singapore : Designanddevelopmentoftelecommunicationssoftwareapplicationsandsystemsand theprovisionofsolutionsandservices for the telecommunications industry,provisionofmanagementandinvestmentholdings.

AfricaandMiddleEast : Operate and manage hotels and resorts, design and development oftelecommunications software applications and systems and the provision ofsolutionsandservicesforthetelecommunicationsindustry.

Europe : Operateandmanagehotelsandresorts.

Australia : Manufacturing,andmarketingofbuilderhardwareproducts.

Others : Operate and manage hotels and resorts, design and development oftelecommunications software applications and systems and the provision ofsolutionsandservicesforthetelecommunicationsindustry.

ThefollowingtableprovidesananalysisoftheGroup’srevenue,segmentassetsandcapitalexpenditurebygeographicalsegment:

Revenue Segment assets Capital expenditure2011 2010 2011 2010 2011 2010

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

Malaysia 157,568 153,941 465,877 390,109 13,653 9,953

Singapore 1,708 1,842 5,970 7,546 - 963

Africa&MiddleEast 15,018 16,542 42,885 43,690 163 1,829

Europe 18,923 16,793 41,207 41,232 3,283 1,994

Australia 17,185 18,218 22,609 21,302 36 255

Others 11,883 14,516 37,890 36,060 371 989

222,285 221,852 616,438 539,939 17,506 15,983



annual report 2011

34. FAIR VALUE OF FINANCIAL INSTRUMENTS

(a) (Financial instruments that are not carried at fair value and whose carrying amounts are not reasonably approximated to fair value:

Thefollowingareclassesoffinancial instrumentsthatarenotcarriedatfairvalueandwhosecarryingamountsarenotreasonableapproximationoffairvalue:

Group Company

Carrying amount

Fair

value

Carrying amount

Fair

value Note RM’000 RM’000 RM’000 RM’000

2011

Financial Assets

Investmentinsecurities: 11

-unquotedsecuritiesinMalaysia 4,905 * 4,900 *

-unquotedsecuritiesoutsideMalaysia 16,502 * - -

2010

Financial Assets

Investmentinsecurities: 11

-unquotedsecuritiesinMalaysia 4,905 * 4,900 *

-unquotedsecuritiesoutsideMalaysia 16,502 * - -

* It is not practical to estimate the fair value of the unquoted investment in securities due to thelackofcomparablequotedmarketprocessandtheinabilitytoestimatefairvaluewithoutincurringexcessivecost.

(b) Financial instruments that are not carried at fair value and whose carrying amounts are reasonably approximated to fair value

Thefollowingareclassesoffinancial instrumentsthatarenotcarriedatfairvalueandwhosecarryingamountsarereasonableapproximationoffairvalue:

Note

Financial AssetsTradeandotherreceivables 12Cashandbankbalancesandshorttermdeposits 16

Financial LiabilitiesTradeandotherpayables 23Borrowings 21ICULS 20

Thecarryingamountofthesefinancialassetsandliabilitiesisreasonableapproximationsoffairvalues,eitherduetotheirshort-termnatureorthattheyarefloatingrateinstrumentsthatarere-pricedtomarketinterestratesonornearthereportingdate.



annual report 2011

34. FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)

(b) Financial instruments that are not carried at fair value and whose carrying amounts are reasonably approximated to fair value (continued)

Thecarryingamountofthecurrentportionofborrowingsisreasonableapproximationsoffairvaluesduetotheinsignificantimpactofdiscounting.

Thefairvalueofcurrentloansandborrowingsareestimatedbydiscountingexpectedfuturecashflowsatmarketincrementallendingrateforsimilartypesoflendingorborrowingarrangementsatthereportingdate.

Thefairvaluesofamountsduefrom/tosubsidiaries,amountsduefrom/toassociatesandfixedratebankborrowingsareestimatedbydiscountingexpectedfuturecashflowsatmarketincrementallendingrateforsimilartypesoflendingorborrowingarrangementsatthereportingdate.

ThefairvalueoftheliabilitycomponentandtheequitycomponentweredeterminedattheissuanceofICULS.

(c) Fair value hierarchy

Thefollowingareclassesoffinancialinstrumentsthatarecarriedatfairvalue,byvaluationmethod.Thedifferentlevelshavebeendefinedasfollows:

(i) Level1–Unadjustedquotedpricesinactivemarketforidenticalfinancialinstruments

(ii) Level2–InputsotherthanquotedpricesincludedwithinLevel1thatareobservableeitherdirectly orindirectly.

(iii) Level3–Inputthatarenotbasedonobservablemarketdata

Comparativefigureshavenotbeenpresentedfor31December2010byvirtueofparagraph44GofFRS7.

Level 1RM’000

Group2011

Non-Current:Financial AssetsInvestmentinsecurities:-Available-for-salefinancialassets 10,459-Heldfortradinginvestments 928

TheGroupdoesnot have any financial assetsor financial liabilitiesmeasuredat Level 2 andLevel 3hierarchy.

35. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

TheoperationsoftheGroupandoftheCompanyaresubjecttoavarietyoffinancialrisks,includingcreditrisk,liquidityrisk,interestraterisk,foreigncurrencyriskandmarketpricerisk.TheGroupandtheCompanyhaveformulatedafinancialriskmanagementframeworkwhoseprincipalobjectiveistominimisetheGroup’sand theCompany’sexposure to risksand/orcostsassociatedwith the financing, investingandoperatingactivitiesoftheGroupandoftheCompany.

The following sectionsprovidedetails regarding theGroup’s and theCompany’s exposure to the above-mentionedfinancialrisksandtheobjectives,policiesandprocessesforthemanagementoftheserisks.



annual report 2011

35. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)

(a) Credit Risk

Creditriskistheriskoflossthatmayariseonoutstandingfinancialinstrumentsshouldacounterpartydefaulton itsobligation.TheGroup’sandtheCompany’sexposuretocredit riskarisesprimarily fromtradeandotherreceivables.ItistheGroup’sandtheCompany’spolicytomonitorthefinancialstandingof these receivables on an ongoing basis to ensure that the Group and the Company is exposed tominimalcreditrisk.

Cashdepositsandtradereceivablesmaygiverisetocreditriskwhichrequiresthelosstoberecognisedifacounterpartyfailstoperformascontracted.ItistheGroup’sandthecompany’spolicytomonitorthefinancial standing of these receivables on an ongoing basis to ensure that the Group and the Company isexposedtominimalcreditrisk.

Exposure to credit risk

Asatendoffinancialyear,theGroupandtheCompanyhavenosignificantconcentrationofcreditriskother thananamountowing fromadebtorofRM10.25million (2010:RM12.14million).TheGroupandthe Company does not anticipate the carrying amounts as at the end of financial year to be significantly differentfromthevaluesthatwouldeventuallybereceived.

Themaximumexposurestocreditriskarerepresentedbythecarryingamountsofthefinancialassetsinthestatementoffinancialposition.

Credit risk concentration profile

TheGroupdetermines concentrations of credit riskby industry sector profile of its trade receivableson an ongoing basis. The credit risk concentration profile of the Group’s and the Company’s tradereceivablesatthereportingdateareasfollows:

Group 2011 2010 RM’000 % of total RM’000 % of total

By industry sectors:

Investment holding 114 0.3% 21 0.1%

Propertydevelopment 2,214 6.4% 3,441 9.6%

Hotelsandresorts 9,332 26.9% 8,537 23.9%

Information and communications technology 14,066 40.6% 15,004 42.1%

Travelandtours 5,415 15.6% 4,663 13.1%

Others 3,527 10.2% 4,001 11.2%

34,668 100% 35,667 100%

Financial assets that are neither past due nor impaired

Information regarding trade receivables that are neither past due nor impaired is disclosed in Note 12 to thefinancialstatements.Depositswithbanksandotherfinancialinstitutions,investmentsecuritiesandderivativesareplacedwithorentered intowithreputablefinancial institutionsorcompanieswithhighcreditratingsandnohistoryofdefault.

Financial assets that are either past due or impaired

Information regarding financial assets that are past due or impaired is disclosed in Note 12 to the financial statements.



annual report 2011


(a) Credit Risk (continued)

Inter company balances

TheCompanyprovidesunsecuredloansandadvancestosubsidiaries.TheCompanymonitorstheresultsofthesubsidiariesregularly.

Asattheendofthereportingperiod,themaximumexposuretocreditriskisrepresentedbytheircarryingamountsinthestatementoffinancialposition.

Financial guarantees

The Company provides unsecured financial guarantees to banks in respect of banking facilities grantedto certain subsidiaries. TheCompanymonitors on an ongoing basis the results of the subsidiaries andrepaymentsmadebythesubsidiaries.

ThemaximumexposuretocreditriskamountstoRM41.98million(2010:RM42.51million)representingtheoutstandingbankingfacilitiesofthesubsidiariesasattheendofthereportingperiod.

Asattheendofthereportingperiod,therewasnoindicationthatanysubsidiarywoulddefaultonrepayment.

Thefinancialguaranteeshavenotbeenrecognisedsincethefairvalueoninitialrecognitionwasnotmaterial.

(b) Liquidity Risk

LiquidityriskistheriskthattheGroupandtheCompanywillnotbeabletomeetitsfinancialobligationsasthey falldue.TheGroup’sand theCompany’sexposure to liquidity riskarisesprincipally from itsvariouspayables,loansandborrowings.

TheGroupand theCompanymaintainsa levelof cashandcashequivalentsandbank facilitiesdeemedadequatebythemanagement toensure,as faraspossible, that itwillhavesufficient liquidity tomeet itsliabilitieswhentheyfalldue.

Maturity analysis

ThetablebelowsummarisesthematurityprofileoftheGroup’sandtheCompany’sliabilitiesatthereportingdatebasedoncontractualundiscountedrepaymentobligations.

Within1 Year

1 - 5Years

More than5 Years Total

Note RM’000 RM’000 RM’000 RM’000

2011Group

Financial LiabilitiesTradeandotherpayables 23 59,454 - - 59,454Finance lease payable 21(b) 1,548 21,132 - 22,680Hirepurchasepayables 21(c) 91 92 - 183 Bankoverdrafts 21(a) 768 - - 768Termloans 21(d) 5,588 47,261 7,455 60,304ICULS 20 - - 123,440 123,440

CompanyTradeandotherpayables 23 206,156 - - 206,156ICULS 20 - - 123,440 123,440



annual report 2011


(b) Liquidity Risk (continued)

ThetablebelowsummarisesthematurityprofileoftheGroup’sandtheCompany’sliabilitiesatthereportingdatebasedoncontractualundiscountedrepaymentobligations(continued).

Within1 Year

1 - 5Years

More than5 Years Total

Note RM’000 RM’000 RM’000 RM’000

2010

Group

Financial LiabilitiesTradeandotherpayables 23 68,187 - - 68,187Finance lease payable 21(b) 1,540 5,240 15,779 22,559Hirepurchasepayables 21(c) 115 81 - 196Termloans 21(d) 34,513 51,919 8,450 94,882ICULS 20 - - 129,731 129,731

Company

Tradeandotherpayables 23 190,064 - - 190,064Termloans 21(d) 30,000 - - 30,000ICULS 20 - - 129,731 129,731

(c) Interest Rate Risk

Interest rate risk is the risk that the fair valueor futurecash flowsof theGroup’sand theCompany’sfinancialinstrumentswillfluctuatebecauseofchangesinmarketinterestrates.

TheGroup’sincomeandoperatingcashflowsaresubstantiallyindependentofchangesinmarketinterestrates.InterestrateexposurearisesfromtheGroup’sborrowingsandismanagedthroughtheuseoffixedandfloatingratedebts.TheGroupdoesnotusederivativefinancialinstrumentstohedgeitsrisk.

TheCompanymanages thenetexposure to interest rate risksbymaintainingsufficient linesofcredittoobtainacceptablelendingcostsandbymonitoringtheexposuretosuchrisksonanongoingbasis.Management does not enter into interest rate hedging transactions since it considers that the cost of suchinstrumentsoutweighthepotentialriskofinterestratefluctuation.



annual report 2011


(c) Interest Rate Risk (continued)

The interest rate profile of the Group’s and the Company’s significant interest-bearing financialinstruments,basedoncarryingamountsasattheendofthereportingperiodwere:

2011 2010 Weighted average

Effective Interest Rate

Weighted average Effective

Interest Rate Note % RM’000 % RM’000

Fixed Rate

Group

Financial LiabilitiesFinance lease payable 21(b) 7.32 22,680 7.32 22,559Hirepurchasepayables 21(c) 2.60 183 3.27 196Termloans 21(d) 6.22 12,431 6.18 12,617

35,294 35,372ICULS 20 2.00 123,440 2.00 129,731

158,734 165,103

Company

ICULS 20 2.00 123,440 2.00 129,731

Floating Rate

Group

Financial AssetsShort term deposits 16 2.81 151,635 3.02 64,135

Financial LiabilitiesBankoverdrafts 21(a) 7.78 768 - -Termloans 21(d) 7.39 47,873 4.94 82,265

48,641 82,265

Company

Financial AssetsShort term deposits 16 2.00 5,100 1.75 600

Financial LiabilitiesTermloans 21(d) - - 3.54 30,000

Sensitivity analysis for interest rate risk

(i) Fair value sensitivity analysis for fixed rate instruments

TheGroupandtheCompanydonotaccountforanyfixedratefinancialassetsatfairvaluethroughprofitorlossandequity.Thereforeachangeininterestratesatthereportingdatewouldnotaffectprofitorlossandequity.



annual report 2011


(c) Interest Rate Risk (continued)

Sensitivity analysis for interest rate risk (continued)

(ii) Cash flow sensitivity analysis for variable rate instruments

Atthereportingdate,ifinterestrateshadbeen100basispointslower/higher,withallothervariablesheldconstant,theGroup’sandtheCompany’sprofitnetoftaxwouldhavebeenRM0.78millionandRM0.04millionhigher/lowerrespectively,arisingmainlyasaresultoflower/higherinterestexpenseon floating rate loans and borrowings and higher/lower interest income from floating rate fixeddeposits.Theassumedmovementinbasispointsforinterestratesensitivityanalysisisbasedonaprudentestimateofthecurrentmarketenvironment.

(d) Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument willfluctuatebecauseofchangesinforeignexchangerates.

TheGrouphastransactionalcurrencyexposuresarisingfromsalesorpurchasesthataredenominatedinacurrencyotherthantherespectivefunctionalcurrenciesofGroupentities,primarilyRM,SingaporeDollar(“SGD”)andUSDollar(“USD”).TheforeigncurrenciesinwhichthesetransactionsaredenominatedaremainlyUSDollar(“USD”)andEuro.

TheGroupandtheCompanyensurethatthenetexposuretothisriskiskepttoanacceptablelevelbybuyingorselling foreigncurrenciesatspot rateswherenecessary toaddressshort-term imbalances.Management does not enter into currency hedging transactions since it considers that the cost of such instrumentsoutweighthepotentialriskofexchangeratefluctuations.

Theunhedgedfinancialassetsand liabilitiesof theGroupthatarenotdenominated intheir functionalcurrenciesareasfollows:

Functional currencies

GroupRinggit

Malaysia Australia

Dollar US

Dollar Singapore

DollarHK

Dollar Thai Baht Total

2011 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Financial assets and liabilitiesnot held in functional currency

Investment securities

US Dollar 14,809 - - - - - 14,809Renminbi - - 1,693 - - - 1,693

Trade receivables

Brunei Dollar 440 - - - - - 440 Euro 40 - - - - - 40 Sudanese Dinar - - 86 - - - 86US Dollar 1,229 - - 3,250 - - 4,479

1,709 - 86 3,250 - - 5,045



annual report 2011


(d) Foreign Currency Risk (continued)

Theunhedgedfinancialassetsand liabilitiesof theGroupthatarenotdenominated intheir functionalcurrenciesareasfollows:(continued)


GroupRinggit

Malaysia Australia

Dollar US

Dollar Singapore

DollarHK


2011 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000


Other receivables Australia Dollar 370 - - - - - 370 Singapore Dollar 7 - - - - - 7 US Dollar 279 - - 56 - - 335 Euro 54 - - 54 - - 108 Others - - - 100 - 20 120

710 - - 210 - 20 940

Cash and bank balancesAustralia Dollar 24 - - - - - 24 Euro 39 - - - - - 39 HongKongDollar 28 - - - - - 28 PoundSterling 21 - 31 - - - 52 Renminbi 19 - - - - - 19 Singapore Dollar 74 - - - - - 74 US Dollar 3,484 - - 1,415 - - 4,899Others 11 - - - - - 11

3,700 - 31 1,415 - - 5,146

Trade payables US Dollar 413 396 - 1,757 - - 2,566Singapore Dollar 100 - - - - - 100 Australia Dollar 5 - - - - - 5 Euro 2,834 - - 24 - - 2,858Sudanese Dinar - - 113 - - - 113 Others - - 22 443 - 5 470

3,352 396 135 2,224 - 5 6,112

Group 2010


Investment securitiesUS Dollar 14,809 - - - - - 14,809Renminbi - - 1,693 - - - 1,693



annual report 2011



Theunhedgedfinancialassetsand liabilitiesof theGroupthatarenotdenominated intheir functionalcurrenciesareasfollows:(continued)


GroupRinggit

Malaysia Australia

Dollar US

Dollar Singapore

DollarHK


2010 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000


Trade receivables Australia Dollar 83 - - - - - 83 Brunei Dollar 471 - - 48 - - 519 Euro 1,054 - - - - - 1,054Sudanese Dinar - - 366 - - - 366US Dollar 3,172 - - 1,511 92 - 4,775

4,780 - 366 1,559 92 - 6,797

Other receivables Australia Dollar 617 - - - - - 617Singapore Dollar 69 - - - - - 69US Dollar 290 - - 77 - - 367Euro 133 - - - - - 133 Others - - - - - 19 19

1,109 - - 77 - 19 1,205

Cash and bank balancesAustralia Dollar 52 - - - - - 52 Euro 168 - - - - - 168HongKongDollar 1 - - - - - 1 PoundSterling 24 - 49 - - - 73 Renminbi 13 - - - - - 13 Singapore Dollar 7,136 - - - - - 7,136US Dollar 3,560 - - 1,657 110 - 5,327Others 844 - - - - 2 846

11,798 - 49 1,657 110 2 13,616

Trade payables US Dollar 1,793 592 - 1,859 203 - 4,447Singapore Dollar 339 - - - - - 339 Australia Dollar 9 - - - - - 9 Euro 1,386 - - - - - 1,386Brunei Dollar 36 - - - - - 36Sudanese Dinar - - 133 - - - 133 Others - - 27 433 - 6 466

3,563 592 160 2,292 203 6 6,816



annual report 2011



Sensitivity analysis for foreign currency risk

ThefollowingtabledemonstratesthesensitivityoftheGroup’sprofitnetoftaxtoareasonablypossiblechangeintheUSD,andEUROexchangerateagainsttherespectivefunctionalcurrenciesoftheGroupentities,withallothervariablesheldconstant.

Group2011

RM’000Profit/lossfortheyear

USD/RM -strengthened10% 458

-weekened10% (458)

USD/SGD -strengthened10% 296

-weekened10% (296)

EURO/RM -strengthened10% (270)

-weekened10% 270

(e) Market Price Risk

MarketpriceriskistheriskthatthefairvalueorfuturecashflowsoftheGroup’sfinancialinstrumentswillfluctuatebecauseofchangesinmarketprices(otherthaninterestorexchangerates).

TheGroupisexposedtoequitypriceriskarisingfromitsinvestmentinquotedequityinstruments.ThequotedequityinstrumentsinMalaysiaarelistedonBursaSecurities.Theseinstrumentsareclassifiedasheldfortradingoravailable-for-salefinancialassets.TheGroupdoesnothaveexposuretocommoditypricerisk.

Sensitivity analysis for equity price risk

ThisanalysisassumesthatallothervariablesremainconstantandtheGroup’sequityinvestmentsmovedincorrelationwithFTSEBursaMalaysiaKLCI(FBMKLCI).

A10percentstrengtheninginFBMKLCIattheendofthereportingperiodwouldhaveincreasedequitybyRM1.14millionandpost taxprofitor lossbyRM0.09million.A10percentweakening inFBMKLCIwouldhavehadequalbutoppositeeffectonequityandprofitorlossrespectively.

36. CAPITAL MANAGEMENT

TheGroupactivelyandregularlyreviewsandmanagesitscapitalstructurewiththeobjectivesofensuringthattheGroupwillbeabletocontinueasagoingconcernwhilemaximisingthereturntostakeholders.ThesereviewstakeintoconsiderationfuturecapitalrequirementsoftheGroup,prevailingandprojectedprofitability,projectedoperatingcashflows,projectedcapitalexpendituresandstrategicinvestmentopportunities.

The capital structure of theGroup consists of debtwhich includes borrowings (Note 21), cash and cashequivalents(Note16),andequityattributabletoequityholdersoftheCompany.



annual report 2011

36. CAPITAL MANAGEMENT (continued)

TheGroup’soverallcapitalmanagementstrategyremainsunchangedfrom2010andthisincludesmaintainingahealthygearingratiotakingintoconsiderationtheobjectivesoftheGroup.Asatreportingdate,thegearingratiocalculatedastotalborrowingsdividedbytotalequityisasfollows:

Group 2011 2010 RM’000 RM’000

Totalborrowings

83,935117,637

Less:Cashandcashequivalents (161,236) (83,747)

Net debt (77,301) 33,890

Totalequity 492,727 486,546

Debt-to-equityratio (0.16) 0.07

TherewerenochangesintheGroup’sapproachtocapitalmanagementduringtheyear.

TheGroupisalsorequiredtocomplywiththedisclosureandnecessarycapitalrequirementsasprescribedintheMainMarketListingRequirementsofBursaSecurities.

37. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

(a) ASIBceased tobeanassociatedcompanyofASCconsequential to theDisposalofASIBwhichwasdeemedcompletedon14June2011.PleaserefertoNote9(a)andNote30(a)tothefinancialstatementsforfurtherdetailsontheDisposalofASIB.

(b) On14October2011, theCompanyannouncedtheAcquisitionofAMSB.Pleaserefer toNote9(d)andNote38(a)tothefinancialstatementsforfurtherdetailsontheAcquisitionofAMSB.

(c) On7December2011,theCompanyannouncedthattheAcquisitionofDamaTCMhasbeencompletedandaccordingly,DamaTCMbecameawholly-ownedsubsidiaryofEDSBandtheCompany.PleaserefertoNote8(b)(iv)tothefinancialstatementsforfurtherdetailsontheAcquisitionofDamaTCM.

38. SIGNIFICANT SUBSEQUENT EVENTS

(a) SubsequenttotheCompany’sannouncementon14October2011concerningtheAcquisitionofAMSBassetout inNote9(d) tothefinancialstatements.On16January2012,theCompanyannouncedthattheAcquisitionofAMSBwascompletedandaccordingly,AMSBbecameawholly-ownedsubsidiaryofUCSB.

(b) On 16 January 2012, Synergy Tours SdnBhd (“Synergy Tours”), an indirectwholly-owned subsidiaryoftheCompany[heldviaOrientEscapeTravelSdnBhd,whichinturnisawholly-ownedsubsidiaryofDiversifiedGainSdnBhd,awholly-ownedsubsidiaryoftheCompany]hadincorporateda50%-ownedcompany in Italy,namelyLe IndieViaggiS.R.L. toconductall typesofoutboundand incoming travelbusinesses for distribution through internet with a share capital of £100,000 through subscription inequalamountsbythetwoshareholderswith£50,000each.Consequentialthereto,LeIndieViaggiS.R.L.becamea50%-ownedassociatecompanyofSynergyToursandtheCompany.

(c) On31January2012, theProposedTransfer inDamaTCM (asdetailed inNote8(b)(iv) to the financialstatements)wascompletedandaccordingly,DamaTCMbecamean80%-ownedsubsidiaryofEDSBandtheCompany.



annual report 2011

38. SIGNIFICANT SUBSEQUENT EVENTS (continued)

(d) FurthertotheresolutionpassedbytheshareholdersofASAPLandHVAPLtovoluntaryderegisterASAPLandHVAPL as announced by the Company on 13 December 2011 (as set out in Note 8(b)(vii) to thefinancial statements), pursuant to a notice dated 16 February 2012 from the Australian Securities &InvestmentsCommission,ASAPLandHVAPLwerederegisteredon16February2012.

(e) On 22 March 2012, the Company announced that Unified Communications (Shenzhen) Pte. Ltd., awholly-ownedsubsidiaryofUCHLinthePeople’sRepublicofChina,hadbeenvoluntarilywoundupon20March2012.


annual report 2011

SUPPLEMENTARY INFORMATION ON THE DISCLOSURE OF REALISED AND UNREALISED PROFITS OR LOSSES

On25March2010,BursaSecuritiesissuedadirectivetoalllistedissuerspursuanttoParagraphs2.06and2.23ofMainMarketListingRequirementsofBursaSecurities.Thedirectiverequiresalllistedissuerstodisclosethebreakdownoftheretainedprofitsoraccumulatedlossesasattheendofthereportingperiod,intorealisedandunrealisedprofitsandlosses.

On20December2010,BursaSecuritiesfurtherissuedguidanceonthedisclosureandtheformatrequired.

Pursuanttothedirective,theamountsofrealisedandunrealisedprofitsorlossesincludedintheretainedprofitsoftheGroupandtheCompanyasat31December2011areasfollows:


Totalretainedearnings/(accumulatedlosses)oftheCompanyanditssubsidiaries:-Realised (378,264) (448,054) (12,973) (22,228)

-Unrealised (18,542) (22,948) 268 469

(396,806) (471,002) (12,705) (21,759)

Totalshareofretainedearnings/(accumulatedlosses)fromassociatedcompanies:-Realised (1,193) 65,586 - --Unrealised 212 (658) - -

Totalshareofretainedearnings/(accumulatedlosses)fromjointlycontrolledentities:-Realised (634) (289) - --Unrealised - - - -

(398,421) (406,363) (12,705) (21,759)Less:Consolidationadjustments 473,064 476,779 - -

Totalgroupretainedearnings/(accumulatedlosses)asperstatementsoffinancialposition

74,643 70,416 (12,705) (21,759)

Thedeterminationof realisedandunrealisedprofitsor losses isbasedonGuidanceofSpecialMatterNo.1,Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants on 20December2010.

The disclosure of realised and unrealised profits or losses above is solely for complyingwith the disclosurerequirementsstipulatedinthedirectiveofBursaSecuritiesandshouldnotbeappliedforanyotherpurposes.


annual report 2011

Statement By Directors

We, DATO’ AHMAD SEBI BAKAR and YONG TECK MING, being two of the Directors of ADVANCE SYNERGY BERHAD, do hereby state that in the opinion of the Directors, the accompanying financial statements set out on pages 37 to 145 are properly drawn up in accordance with the Financial Reporting Standards and the provisions of 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 2011 and of the results and cash flows of the Group and of the Company for the financial year ended on that date.

The supplementary information set out on page 146 has been prepared in accordance with the Guidance of Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants.

Signed on behalf of the board in accordance with a resolution of the Directors,

DATO’ AHMAD SEBI BAKAR Director

YONG TECK MINGDirector

Selangor Darul Ehsan24 April 2012


annual report 2011

I,LEE SU NIE,being theDirectorprimarily responsible for the financialmanagementofADVANCESYNERGYBERHAD,dosolemnlyandsincerelydeclarethattothebestofmyknowledgeandbelief,thefinancialstatementssetoutonpages37to145andthesupplementaryinformationsetoutonpage146arecorrect,andImakethissolemndeclarationconscientiouslybelievingthesametobetrue,andbyvirtueoftheprovisionsoftheStatutoryDeclarationsAct,l960.

LEE SU NIE

SubscribedandsolemnlydeclaredbytheabovenamedatKualaLumpurintheFederalTerritoryon24April2012.

Beforeme,ARSHAD ABDULLAHNo.W550Commissioner for OathsMalaysia

Statutory Declaration


annual report 2011

Report on the Financial Statements

Wehaveaudited the financialstatementsofADVANCESYNERGYBERHAD,whichcomprise thestatementsoffinancialpositionasat31December2011oftheGroupandoftheCompany,andthestatementsofcomprehensiveincome,statementsofchangesinequityandstatementsofcashflowsoftheGroupandoftheCompanyforthefinancialyearthenended,andasummaryofsignificantaccountingpoliciesandotherexplanatoryinformation,assetoutonpages37to145.

Directors’ Responsibility for the Financial Statements

TheDirectorsoftheCompanyareresponsibleforthepreparationoffinancialstatementsthatgiveatrueandfairviewinaccordancewiththeFinancialReportingStandardsandtheCompaniesAct,1965inMalaysia,andforsuchinternal controls as the Directors determine are necessary to enable the preparation of financial statements that arefreefrommaterialmisstatement,whetherduetofraudorerror.

Auditors’ Responsibility

Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.Weconductedouraudit inaccordancewithapprovedstandardsonauditing inMalaysia.Thosestandardsrequire thatwecomplywith ethical requirements and plan and perform the audit to obtain reasonable assurance about whether thefinancialstatementsarefreefrommaterialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financialstatements.Theproceduresselecteddependonourjudgement,includingtheassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.Inmakingthoseriskassessments,weconsiderinternalcontrolsrelevanttotheCompany’spreparationoffinancialstatementsthatgiveatrueandfairviewinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheCompany’sinternalcontrols.Anauditalsoincludesevaluatingthe appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors,aswellasevaluatingtheoverallpresentationofthefinancialstatements.

Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.

Opinion

Inouropinion,thefinancialstatementshavebeenproperlydrawnupinaccordancewiththeFinancialReportingStandardsandtheCompaniesAct,1965inMalaysiasoastogiveatrueandfairviewofthefinancialpositionoftheGroupandoftheCompanyasat31December2011andoftheirfinancialperformanceandcashflowsforthefinancialyearthenended.

Report on Other Legal and Regulatory Requirements

InaccordancewiththerequirementsoftheCompaniesAct,1965inMalaysia,wealsoreportthefollowing:

(a) In our opinion, the accounting and other records and the registers required by the Companies Act, 1965inMalaysiatobekeptbytheCompanyand itssubsidiariesofwhichwehaveactedasauditorshavebeenproperlykeptinaccordancewiththeprovisionsoftheCompaniesAct,1965inMalaysia.

(b) Wehaveconsideredthefinancialstatementsandtheauditors’reportsofallthesubsidiariesofwhichwehavenotactedasauditors,whichareindicatedinNote8tothefinancialstatements.

(c) WearesatisfiedthatthefinancialstatementsofthesubsidiariesthathavebeenconsolidatedwiththeCompany’sfinancial statements are in form and content appropriate and proper for the purposes of the preparation of the financialstatementsoftheGroupandwehavereceivedsatisfactoryinformationandexplanationsrequiredbyusforthosepurposes.

Independent Auditors’ Report to the Members of Advance Synergy Berhad


annual report 2011

Report on Other Legal and Regulatory Requirements (continued)

In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following(continued):

(d) Theauditors’reportsonthefinancialstatementsofthesubsidiariesdidnotcontainanyqualificationoranyadversecommentmadeunderSection174(3)oftheCompaniesAct,1965inMalaysia.

Other Reporting Responsibilities

The supplementary information set out on Page 146 is disclosed to meet the requirement of BursaMalaysiaSecuritiesBerhadand isnotpartof the financialstatements.TheDirectorsare responsible for thepreparationof the supplementary information in accordancewith theGuidance onSpecialMatterNo. 1,Determination ofRealised andUnrealisedProfits or Losses in theContext ofDisclosurePursuant toBursaMalaysia SecuritiesBerhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and thedirectiveofBursaMalaysiaSecuritiesBerhad. Inouropinion, thesupplementary information isprepared, inallmaterialrespects,inaccordancewiththeMIAGuidanceandthedirectiveofBursaMalaysiaSecuritiesBerhad.

Other Matters

This report ismadesolely to themembersof theCompany,asabody, inaccordancewithSection174of theCompaniesAct,1965inMalaysiaandfornootherpurpose.Wedonotassumeresponsibilitytoanyotherpersonforthecontentofthisreport.

Baker Tilly Monteiro Heng Heng Ji KengNo.AF0117 No.578/05/12(J/PH)CharteredAccountants Partner

KualaLumpur24 April 2012

Independent Auditors’ Report to the Members of Advance Synergy Berhad (continued)


annual report 2011

Statement on Directors’ Interests in the Company and related corporations as at 4 May 2012

Ordinary shares of RM0.30 eachDirect Interest in the Company Number Percentage

Dato’AhmadSebiBakar* 15,203,509 2.99

Indirect Interest in the Company

Dato’AhmadSebiBakar* 95,057,609 1 18.68DatinMasriKhawBintiAbdullah 5,000,000 0.98LeeSuNie 365,000 2 0.07

Ordinary sharesDirect Interest in related corporation Number Percentage

Unified Communications Holdings Limited

LeeSuNie 200,000 0.06

ICULS**Direct Interest in the Company Number Percentage

Dato’AhmadSebiBakar 123,212,999 14.66

Indirect Interest in the Company

Dato’AhmadSebiBakar 149,602,489 3 17.80DatinMasriKhawBintiAbdullah 12,240,000 1.46

* ByvirtueofhisinterestintheCompany,Dato’AhmadSebiBakarisalsodeemedtobeinterestedinthesharesofallinvesteecompanies(includingsubsidiaries)totheextentthattheCompanyhasaninterest.

** 2%10-YearIrredeemableConvertibleUnsecuredLoanStocksat100%ofthenominalvalueofRM0.15each.

Notes:

1 This includeshisson’s interest in6,000,000ordinarysharesoftheCompanywhichshallbetreatedashis interest intheordinarysharesoftheCompanypursuanttoSection134(12)(c)oftheCompaniesAct,1965.

2 This isherspouse’s interest in theordinarysharesof theCompanywhichshallbetreatedasher interest in theordinarysharesoftheCompanypursuanttoSection134(12)(c)oftheCompaniesAct,1965.

3 Thisincludeshisson’sinterestin48,934,000ICULSoftheCompanywhichshallbetreatedashisinterestintheICULSoftheCompanypursuanttoSection134(12)(c)oftheCompaniesAct,1965.


annual report 2011

AUTHORISEDSHARECAPITAL :RM900,000,000dividedinto3,000,000,000ordinarysharesofRM0.30each.

ISSUEDANDFULLYPAID-UPCAPITAL :RM152,645,664.00dividedinto508,818,880ordinarysharesofRM0.30each.

VOTINGRIGHT :1voteperordinaryshare.

ANALYSIS OF SHAREHOLDINGS

Size of shareholdings No. ofshareholders

% ofshareholders

No. ofshares held

% of issuedshare capital

Lessthan100shares 255 1.16 6,756 negligible

100-1,000shares 5,546 25.31 5,174,344 1.021,001-10,000shares 11,847 54.07 50,931,276 10.0110,001-100,000shares 3,745 17.09 124,643,775 24.50100,001-lessthan5%ofissuedshares 515 2.35 250,544,130 49.245% and above of issued shares 1 negligible 77,518,599 15.23

21,909 100.00 508,818,880 100.00

LIST OF TOP 30 SHAREHOLDERS

No. Name No. of shares held Percentage

1. SJSecNominees(Tempatan)SdnBhdSuasanaDinamikSdnBhd

77,518,599 15.23

2. Dato’AhmadSebiBakar 15,203,509 2.99

3. SJSecNominees(Tempatan)SdnBhdBrightExistenceSdnBhd

11,539,010 2.27

4. PMNominees(Tempatan)SdnBhdMalpac Management Sdn Bhd

9,874,361 1.94

5. TanPakNang 6,320,000 1.24

6. SJSecNominees(Tempatan)SdnBhdEighthReview(M)SdnBhd

6,000,000 1.18

7. HoKatSin 5,561,100 1.09

8. ChewLeeHwa 5,492,000 1.08

9. MaybankNominees(Asing)SdnBhdPledgedSecuritiesAccountforSanTuanSam

5,343,300 1.05

10. OSKNominees(Tempatan)SdnBerhadPledgedSecuritiesAccountforHeeYuenSang

5,300,000 1.04

11. ASHHoldingsSdnBhd 5,000,000 0.98

12. BerjayaSOMPOInsuranceBerhad 5,000,000 0.98

13. CIMSECNominees(Tempatan)SdnBhdCIMBBankforChanSaiKim

4,593,000 0.90

Statistics on Shareholdings as at 4 May 2012


annual report 2011

LIST OF TOP 30 SHAREHOLDERS (continued)

No. Name No. of shares held Percentage

14. TayTeckHo 3,655,000 0.72

15. Goh Boon Seng 2,975,000 0.58

16. ChokSuSang 2,882,500 0.57

17. CIMSECNominees(Tempatan)SdnBhdCIMBBankforLeeYoonSing

2,625,650 0.52

18. GohGeokChoo 2,398,600 0.47

19. HSBCNominees(Asing)SdnBhdCoutts&CoLtdSGforQuekLengChye

2,216,500 0.44

20. MaybankSecuritiesNominees(Tempatan)SdnBhdUOBKayHianPrivateLimitedforLingFookKwang

2,175,500 0.43

21. TanKimWah 2,072,000 0.41

22. ChanLian 2,051,000 0.40

23. PublicNominees(Tempatan)SdnBhdPledgedSecuritiesAccountforLeeYokKoon

1,940,400 0.38

24. TanSongMo 1,926,000 0.38

25. PublicNominees(Tempatan)SdnBhdPledgedSecuritiesAccountforTeeKimHew

1,616,000 0.32

26. WongTenAn 1,530,000 0.30

27. LimChinSean 1,450,000 0.29

28. MaybankNominees(Tempatan)SdnBhdPledgedSecuritiesAccountforLiewPauShin@JimmyLiew

1,400,000 0.27

29. OoiBinKeong 1,203,000 0.24

30. LohSiewHooi 1,200,000 0.24

198,062,029 38.93

SUBSTANTIAL SHAREHOLDERS

Name of substantial shareholders No. of shares held % of issued share capital

Direct Indirect Direct Indirect

Dato’AhmadSebiBakar 15,203,509 89,057,609 2.99 17.50

SuasanaDinamikSdnBhd 77,518,599 - 15.23 -


annual report 2011

NO.OFICULSINISSUE :840,602,144VOTINGRIGHT :1voteperICULSinrespectofICULSholders’Meeting.

ANALYSIS OF ICULS HOLDINGS

Size of shareholdings No. of ICULSHolders

% of ICULSHolders

No. ofICULS held

% of ICULSHoldings

Lessthan100ICULS 11 0.25 472 negligible

100-1,000ICULS 80 1.79 29,297 negligible

1,001-10,000ICULS 1,492 33.33 8,642,144 1.0310,001-100,000ICULS 2,288 51.12 82,785,805 9.85100,001-lessthan5%oftheICULSinissue 600 13.40 374,299,092 44.535%andaboveoftheICULSinissued 5 0.11 374,845,334 44.59

4,476 100.00 840,602,144 100.00

LIST OF TOP 30 ICULS HOLDERS

No. Name No. of ICULS held Percentage

1. Dato’AhmadSebiBakar 123,212,999 14.66

2. SJSecNominees(Tempatan)SdnBhdBrightExistenceSdnBhd

94,105,835 11.20

3. LimHongLiang 57,381,700 6.83

4. Citigroup Nominees (Asing) Sdn BhdExemptAnforCitibankNA,Singapore

51,210,800 6.09

5. SJSecNominees(Tempatan)SdnBhdEighthReview(M)SdnBhd

48,934,000 5.82

6. ChewLeeHwa 28,728,000 3.42

7. SJSecNominees(Tempatan)SdnBhdPledgedSecuritiesAccountforChanSaiKim

27,361,300 3.25

8. Malpac Capital Sdn Bhd 22,538,300 2.68

9. MaybankSecuritiesNominess(Tempatan)SdnBhdPledgedSecuritiesAccountforMalpacCapitalSdnBhd

20,000,000 2.38

10. ASHHoldingsSdnBhd 12,240,000 1.46

11. CIMSECNominees(Tempatan)SdnBhdCIMBBankforChanSaiKim

8,611,050 1.02

12. GohGeokChoo 6,703,400 0.80

13. SJSecNominees(Tempatan)SdnBhdSuasanaDinamikSdnBhd

6,562,654 0.78

14. LohSiewHooi 6,000,000 0.71

Statistics on ICULS Holdings as at 4 May 2012


annual report 2011

LIST OF TOP 30 ICULS HOLDERS (continued)

No. Name No. of ICULS held Percentage

15. MaybankNominess(Tempatan)SdnBhdLayManWan@LaiMunWan

5,223,000 0.62

16. OnnKokPuay 4,495,000 0.53

17. ChuahKimSeng 4,345,700 0.52

18. Goh Boon Seng 4,112,500 0.49

19. SJSecuritiesSdnBhd 3,783,500 0.45

20. WongTenAn 3,575,000 0.42

21. RHBCapitalNominees(Tempatan)SdnBhdPledgedSecuritiesAccountforHiewKatKee

3,168,100 0.38

22. NgFaai@NgYokePei 3,076,600 0.37

23. OngSheokKheng 3,000,000 0.36

24. RHBCapitalNominees(Tempatan)SdnBhdPledgedSecuritiesAccountforSuMingKeat

2,775,000 0.33

25. MohdJamelBinAbdulMunin 2,278,000 0.27

26. LeeWeiGia 2,100,000 0.25

27. ECMLNominees(Tempatan)SdnBhdPledgedSecuritiesAccountforLimAiLeng

2,000,000 0.24

28. LohSayBeeSdnBerhad 2,000,000 0.24

29. NgSwan 2,000,000 0.24

30 OliveLimSweeLian 1,945,000 0.23

563,467,438 67.03


annual report 2011

List of Properties

Thetop10propertiesoftheGroupasat31December2011areasfollows:

Location Description Landarea

Approx.age of

building (Years)

Tenure Carrying Amount (RM’000)

Date of last revaluation /acquistion

*GM1126Lot1301,GM424Lot1302,GM857Lot1303,GM405Lot1305,HS(M)1096PT1300&HS(M)1082PT1303MukimSungaiKarangCheratingPahangDarulMakmur

Landwithhotelbuilding,recreationalfacilities,restaurantsand apartmentblock

15 acres

181/2-24 Freehold 32,873 28.03.2005

72,PesiaranJubliPerak,Seksyen2240000 Shah AlamSelangorDarulEhsan

Industrial land and buildings

61,492sq.m.

18 Freehold 32,029 03.06.2003

Geran85,Lot203469,JalanHajiHussein50300KualaLumpur

18 storey hotel building

3,214sq.m.

36 Freehold 29,491 25.03.2005

Nile AvenueKhartoumSudan

Landwithhotelbuilding,recreationalfacilities and restaurants

30,550sq.m.

> 99 Leaseholdexpiringin

2039

22,229 30.12.2005

89,MonivongBlvd.SangkatMonoromKhan7MakaraPhnomPenhCambodia

Hotelbuilding 750sq.m.

12 Leaseholdexpiringin2066

14,084 30.12.2005

Lot4,46ruedeTrévise,75009Paris,France

Hotelbuilding 510sq.m.

>101 Freehold 13,388 28.10.2009

e d at


annual report 2011

Thetop10propertiesoftheGroupasat31December2011areasfollows(continued):

Location Description Landarea

Approx.age of

building (Years)

Tenure Carrying Amount (RM’000)

Date of last revaluation /acquistion

Geran 25343LotNo.3787MukimTebrauDaerahJohorBahruJohorDarulTakzim

Industrial landand bus depot

39,242sq.m.

6 Freehold 8,916 26.04.2005

Lot3A-5-1,5thfloorBlock3A,PlazaSentralKualaLumpur

ShopOffice 8,060sq.m.

8 Freehold 8,870 12.01.2011

Geran 25342LotNo.3786MukimTebrauDaerahJohorBahruJohorDarulTakzim

Industrial land 38,388sq.m.

- Freehold 7,791 26.04.2005

Lot3,46ruedeTrévise,75009Paris,France

Shop 152sq.m.

>101 Freehold 3,398 28.07.2010

*Hotelpropertyunderfinancelease.

Thispagehasbeenintentionallyleftblank.


Proxy FormADVANCESYNERGYBERHAD

ANNUALREPORT2011


A N N U A L R E P O R T 2 0 1 1

Thispagehasbeenintentionallyleftblank.

I/We ContactNo. (fullnameinblockletters)

NRIC/CompanyNo. orCDSAccountNo. (for nominee companies only)

of (full address)

beingashareholder/shareholdersofADVANCESYNERGYBERHAD,herebyappoint

NRICNo. (fullnameinblockletters)

of (full address)

orfailinghim/her, NRICNo. (fullnameinblockletters)

of (full address)

orfailinghim/her,THECHAIRMANOFTHEMEETINGasmy/ourproxytovoteforme/usandonmy/ourbehalfattheEighty-EighthAnnualGeneralMeetingoftheCompanytobeheldattheAuditorium,Level4,ThePodium,WismaSynergy,No.72,PesiaranJubliPerak,Seksyen22,40000ShahAlam,SelangorDarulEhsanonTuesday,26June2012at10.30a.m.andatanyadjournmentthereofandthereattovoteasindicatedbelow:

Pleaseindicatewith( )howyouwishtocastyourvote.Ifneither“FOR” nor “AGAINST”isindicated,theproxywillvoteorabstainfromvotingathis/herdiscretion.

NO. RESOLUTION FOR AGAINST

1. AdoptionoftheAuditedFinancialStatementsforthefinancialyearended31December2011andtheDirectors’andAuditors’reportsthereon.

2. Declarationoffirstandfinaldividend.

3. ApprovalofthepaymentofDirectors’fees.

4. Re-electionofDato’AbdulMuradBinKhalidasDirector.

5. Re-electionofChimWaiKhuanasDirector.

6. Re-appointmentofMessrsBakerTillyMonteiroHengasauditorsoftheCompanyandauthorisationfortheDirectorstofixtheirremuneration.

7. Authorisation for Directors to allot and issue new shares pursuant toSection132DoftheCompaniesAct,1965.

8. AmendmentstotheArticlesofAssociation.

Dated this day of 2012 Number of shares held Signature

Notes:

(1)Inrespectofdepositedsecurities,onlymemberswhosenamesappearintheRecordofDepositorson18June2012(GeneralMeetingRecordofDepositors)shallbeentitledtoattend,speakandvoteatthisEighty-EighthAGM.

(2) AmemberoftheCompanyentitledtoattendandvoteatthegeneralmeetingisentitledtoappointatleastone(1)proxybutnotmorethantwo(2)proxiestoattendandvoteinhis/herstead.AproxyneednotbeamemberoftheCompany.

(3)AmemberoftheCompanywhoisanauthorisednomineeasdefinedundertheSecuritiesIndustry(CentralDepositoriesAct),1991mayappointatleastone(1)proxybutnotmorethantwo(2)proxiesinrespectofeachsecuritiesaccountitholdswithsharesoftheCompanystandingtothecreditofthesaidsecuritiesaccount.

(4) Theinstrumentappointingaproxyinthecaseofanindividualshallbesignedbytheappointerorhis/herattorneydulyauthorisedinwritingandinthecaseofacorporation,theinstrumentappointingaproxymustbeunderitscommonsealorunderthehandofanofficerorattorneydulyauthorised.

(5) Theinstrumentappointingaproxyandthepowerofattorneyorotherauthority,ifany,underwhichitissigned(oranotariallycertifiedcopyofsuchpowerorauthority)shallbedepositedattheRegisteredOfficeoftheCompanyatLevel3,EastWing,WismaSynergy,No.72,PesiaranJubliPerak,Seksyen22,40000ShahAlam,SelangorDarulEhsannotlessthan48hoursbeforethetimeappointedforholdingthemeetingoranyotheradjournmentthereof.

ADVANCE SYNERGY BERHAD (CompanyNo:1225-D) Proxy Form

Please fold here

Please fold here

THESECRETARY

ADVANCE SYNERGY BERHADLevel3,EastWing,WismaSynergyNo.72,PesiaranJubliPerakSeksyen2240000 Shah AlamSelangorDarulEhsan

AFFIXSTAMP

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ADVANCE SYNERGY BERHAD (1225-D)Level 3, East Wing, Wisma SynergyNo. 72, Pesiaran Jubli PerakSeksyen 22, 40000 Shah AlamSelangor Darul Ehsan Malaysia

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