CEPAT-AnnualReport2011 (1.6MB)

7/30/2019 CEPAT-AnnualReport2011 (1.6MB)

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A N N UA L REPO RT 2 0 1 1


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Contents

Annual Report 2011 1

Not ice of Tw elf th Annual General M eet ing 2

Corporate Inform at ion 5

Profile of Board of Directors 6

Group St ructure 9

Chairm ans Statement 10

Corporate Governance Statement 12

Statement of Directors Responsibility for Preparing the Financial Statem ents 20

Audit Comm it tee Report 21

Statement on Internal Cont rol 26

Directors Report 28

Statement by Directors 33

Statutory Declarat ion 33

Independent Auditors Report to the M em bers 34

Statement s of Comprehensive Incom e 36

Statement s of Financial Posit ion 37

Statement s of Changes in Equity 39

Statement s of Cash Flow s 41

Notes to the Financial Statem ents 43

List of Propert ies of the Group 103

Stat ist ical Report 105

Proxy Form


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NOTICE IS HEREBY GIVEN THAT th e Tw elft h A nnu al General M eeting of th e Com pany w ill be h eld aExecut ive Parlour (6th Floor), Sabah Ho tel Sandakan, KM 1, Jalan Ut ara, Sandakan, Sabah on Wednesday,25 A pril 2012 at 1 0.30 a.m. f or the f ollowing b usiness:

AGENDA

1. To receive the Audited Financial Statements of the Company for th e financialyear ended 31 December 2 011 togeth er w ith the Directors and Auditors Reportsthereon.

2. To approve the payment of a single tier final dividend of 1.5% in respect o f t hefinancial year ended 31 December 2011.

3. To re-elect Tan Ah Seng retiring in accordance with Art icle 76 of th e Com panysArt icles of Association.

4. To re-elect Choong Pak Wan ret ir ing in accordance w ith Art ic le 76 of t heComp anys Articles of Association.

5. To re-appoint M r. Chan Kam Leong retiring in accordance w ith Section 129 ofthe Companies Act, 196 5.

6. To appoint M essrs Ernst & Young as Auditors of the Com pany for the ensuringyear and to authorise the Directors to fix their remuneration.

7. As Special Business to consider and if thou ght fit, to pass the following OrdinaryResolutions, w ith or w ithout mo difications:

ORDINA RY RESOLUTION 1- AUTHORITY TO ISSUE SHARES

THAT subject always to the approvals of the relevant governmental and/orregulatory autho rities, th e Directors be and are hereby authorised pu rsuant toSection 13 2D of the Com panies Act, 1 965 to issue shares in the Com pany at anytime un til the conclusion of the next A nnual General Meeting u pon such termsand conditions and for such purposes as the Directors may in their absolutediscretion d eem f it provided that the agg regate numb er of shares to be issuedpursuant to this Resolution does not exceed 10% of the issued share capital ofthe Company for th e time being.

ORDINA RY RESOLUTION 2- PROPOSED RENEWAL OF SHARE BUY-BACK AUTHORITY

THAT subject to t he Com panies Act, 19 65 (A ct ), provisions of t he CompanysMemorandum and Articles of Association and the requirements of Bursa MalaysiaSecurities Berhad (Bursa Securities) and any other relevant authorities, andother relevant approvals, the Directors of the Company be and are herebyauthorised to purchase the Com panys ordinary shares of RM 1.00 each (Shares )

thro ugh Bursa Securities, subject t o t he follow ing:

(a) The maximum num ber of Shares w hich m ay be purchased by the Com panyshall not exceed t en per centum (10% ) of the issued and paid-up ordinaryshare capital of the Company at any point in time;

Annual Report 20112

Not ice of th e Tw elfth A nnual General M eeting

Resolut ion No.

1

2

3

4

5

6


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(b) The maximum fund to be allocated by the Comp any for the purpose ofpurchasing its shares shall not exceed t he retained prof its and share premiumaccounts of the Comp any;

(c) The authority conferred by this resolution w ill be effective upon passing ofthis resolution and will continue in force until:-

( i) the conclusion of the next Annual General M eet ing (AGM ) of theCompany follow ing th e AGM at w hich this resolut ion w as passed, atw hich tim e the aut hority shall lapse, unless the aut hority is renew ed byan ordinary resolution passed at the next AGM; or

( ii ) the expiry of the period within which the next AGM of the Companyafter that date is required to b e held pursuant t o Section 143 (1) of t heAct (but shall not extend to such extensions as may be allowed pursuantto Section 143(2) of the Act); or

(iii) the aut hority is revoked or varied by an ordinary resolution passed bythe shareholders in a general meet ing;

whichever occurs first;

(d) Upon com pletion of t he purchase(s) of th e Shares by the Com pany, theShares shall be dealt with in the following manner:-

(i) cance l the Shares so purchased; o r(ii) retain the Shares so purchased as treasury shares; or(iii) retain part of the Shares so purchased as treasury shares and/ or cancel

the remainder; or(iv) distribute the treasury shares as dividends to shareholders; or(v) resell the Treasury Shares on Bursa Securities in accordance w ith the

relevant rules of Bursa Securit ies.

THAT the Directors of the Comp any be and are hereby autho rised to take all suchsteps and enter into all agreements, arrangements and guarantees with any partyor parties as are necessary to implement, finalise and give full effect to theaforesaid purchase with full powers to assent to any conditions, modifications,revaluations, variations and/ or am endm ent s (if any) as m ay be imp osed by therelevant authorities from time to time to implement or to effect the purchaseof its ow n shares.

8. To t ransact any other business for w hich due no tice shall have been given.

BY ORDER OF THE BOARDKANG SHEW M ENGSEOW FEI SANSecretaries

Pet aling Jaya2 Ap ril 2012

Notice of t he Tw elfth A nnual General M eeting (contd)


Resolut ion No.

7


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Annual Report 20114

Notes:-

(i) Proxy

(a) Only a depositor w hose name app ears on t he Record of Depositors as at 18 April 2012 shall beentitled to attend, speak and vote at the said m eeting or appo int proxies on his/ her behalf.

(b) A proxy may but need not be a mem ber of the Company and if the proxy is not a m ember ofthe Company, the proxy shall be an advocate or an approved company auditor or a personapproved by t he Registrar o f Com panies.

(c) To be valid th is form duly completed m ust be deposited at the Com panys Share Registrars Off iceat Tricor Investor Services Sdn . Bhd., Level 17, The Gardens Nor th Tow er, M id Valley City, LingkaranSyed Putra, 59 200 Kuala Lum pur, not less than fort y-eight (48 ) hours before the t ime fo r holdingthe m eeting.

(d) A m ember shall be entitled to appoint mo re than one (1) proxy (subject alw ays to a maximumof t w o (2) proxies at each m eeting) to attend and vote at the same m eeting.

(e) W here a member appoints mo re than one (1) proxy (subject always to a maximum of tw o (2)proxies at each meeting) the appointment shall be invalid unless he specifies the proportion ofhis shareholdings to be represented by each proxy.

(f) If the appointer is a corporation, the Form of Proxy must be executed under its seal or und er thehand o f its att orney.

(g) Form of Proxy sent t hroug h facsimile transm ission shall not be accepted.

(ii) Explanator y Not e on Special Business

* Reso lu tio n No . 6

The proposed Ordinary Resolution 6, if passed, will empower the Directors of the Company to issueand allot not more than 10% of the issued share capital of the Company subject to the approvals ofall the relevant g overnment al and/ or ot her regulator y bodies and fo r such purp oses as th e Directorsconsider would be in the interest of the Company. This authorisation will, unless revoked or variedby the Comp any in a general meeting, expire at t he next A nnual General M eeting of the Comp any.

As at the date of this Notice, no n ew shares in the Com pany w ere issued pu rsuant to the aut horitygranted to the Directors at the Eleventh Ann ual General M eeting held on 2 1 Ap ril 2011 and w hichwill lapse at the conclusion of the Twelfth Annual General Meeting.

The autho rity w ill provide flexibility to th e Comp any for any p ossible fund raising activities, includingbut not l imited t o f urther placing of shares, for p urpose of fun ding fu ture investm ent p roject(s),working capital and/or acquisitions.

* Reso lu tio n No . 7

The proposed Ordinary Resolution 7, if passed, will empower the Directors of the Company to continueto purchase the Companys shares up to ten percent (10%) of the issued and paid-up share capitalof th e Comp any (Proposed Share Buy-Back ) by utilising t he f und s allocated w hich shall not exceedthe to tal retained earnings and share premium account o f t he Company. Further inform ation on thePropo sed Renew al of the Share Buy-Back Au tho rity is set out in t he Share Buy-back Statem ent dated2 A pril 2012 w hich is despatched togeth er w ith Companys Annu al Report 2011 .

Notice of t he Tw elfth A nnual General M eeting (contd)


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Corp orate Informat ion

BOARD OF DIRECTORS

Executive ChairmanDato Seri M ah King Thian @ M ah King Thiam

Managing DirectorDato M ah King Seng

Execut ive DirectorTan A h Seng

Independent & Non-Executive DirectorsChua Kim YinChan Kam LeongChoong Pak Wan

AUDI T COM M ITTEEChua Kim Yin(Chairman)Chan Kam Leong(Member)Choong Pak Wan(Member)

EXECUTIVE COM M ITTEE

Dato M ah King Seng(Chairman)Dato Seri M ah King Thian@ M ah King Thiam(Member)Tan A h Seng(Member)

REM UNERATION COM M ITTEEDato Seri M ah King Thian@ M ah King Thiam(Chairman)Chua Kim Yin(Member)Chan Kam Leong(Member)

NOM INATION COM M ITTEEChua Kim Yin(Chairman)Chan Kam Leong(Member)Choong Pak Wan(Member)

COM PANY SECRETARIESKang Shew Meng(M AICSA 07 78565)Seow Fei San(MA ICSA 700 9732)

REGISTERED OFFICELot 70, Block 6, Prima SquareM ile 4, Nort h Road,900 00 Sandakan, SabahTel: 089 -272 773Fax: 089-2727 72, 22088 1,

221494E-mail: [email protected]: www.cepatgroup.com

AUDITORSErnst & Youn g16t h FloorW ism a Khoo Siak ChiewJalan Buli Sim Sim900 00 Sandakan, SabahTel: 089 -217 266Fax: 089 -272 002

SHARE REGISTRARTricor Investor Services Sdn BhdLevel 17, The Gardens North Tow erM id Valley CityLing karan Syed Putra5920 0 Kuala Lum pur

Tel: 03-226 438 83Fax: 03-228 218 86

PRINCIPAL BANKERSAlliance Bank M alaysia BerhadAm Bank (M ) BerhadHong Leong Bank BerhadM alayan Banking BerhadRHB Bank BerhadPub lic Bank Berhad

STOCK EXCHANGE LISTINGBursa M alaysia SecuritiesBerhad


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Annual Report 20116

Prof ile of Board o f Directors

DATO SERI M AH KING THIAN @ M AH KING THIAMM alaysian aged 49 Executive Director/Chairman

Dato Seri M ah King Thian @ M ah King Thiam w as appointed as a Director and Chairman o f t he Comp anyon 2 7 Octo ber 200 5 and 3 1 Octo ber 200 5 respectively. He is also a m emb er of t he Execut ive Com m itteeand th e Chairman of the Remuneration Comm ittee.

He graduat ed fro m M onash University, Australia with a Bachelor of Econ om ics Degree, majoring inAccounting in 1986 and also a Bachelor of Laws Degree in 1987. He was subsequently admitted andenrolled as an Advocate and Solicitor of the High Court of Malaya in 1989. He is also a Fellow Memberof Certified Practising Account ant Australia (FCPA). He is the M anaging Director of M HC Plantation s Bhdand a Director of Anson O il Industries Berhad, bo th pub lic compan ies, and also a Director o f Behrang202 0 Sdn Bhd and several other private lim ited com panies.

Dato Seri M ah King Thian @ M ah King Thiam is deemed connected to M HC Plantations Bhd and YewLee Holdings Sdn. Berhad, t w o o f the substantial shareholders of the Company. He is the younger b rotherof Dato M ah King Seng, th e M anaging Director of the Company and has no conflict of interest w ith theCompany. He has no conviction for offences within the past ten (10) years. He attended six Board Meetingsheld du ring t he finan cial year.

DATO M AH KING SENGM alaysian aged 54 M anaging Director

Dato M ah King Seng w as appointed as a Director and M anaging Director of the Comp any on 27 Octo ber200 5 and 27 February 20 08 respectively. He is the Chairman of the Executive Com m ittee.

He graduat ed from University of M innesota, United Stat es of A merica w ith a degree in Agricultural Sciencein 197 8. In 19 80 , he att ended t he Palm Oil M ill Engineer/ Execut ive Training course on palm o il m illoperat ions organised by the M alaysian Oil Palm Grow ers Coun cil. He subsequent ly obt ained his Bachelorof Laws Degree in 1985 from the University of Buckingham , United Kingdo m and w as admitt ed andenrolled as an Ad vocate and Solicitor o f t he High Cour t o f M alaya in 1 990 . He is the Executive Chairmanof MHC Plantations Berhad and a Director of Anson Oil Industries Berhad, both public companies, andalso a Director o f Behrang 2 020 Sdn Bhd and several other private lim ited com panies.

Dato M ah King Seng is deemed connected to M HC Plantation s Bhd and Yew Lee Holdings Sdn. Berhad,tw o o f t he substant ial shareholders of the Com pany. He is the elder brot her of Dato Seri M ah King Thian@ M ah King Thiam , the Execut ive Director/ Chairman o f t he Comp any and has no con flict of int erest w iththe Com pany. He has no conviction for of fences w ithin th e past ten (10 ) years. He att ended six BoardM eetings held during t he financial year.


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Prof ile of Board o f Directors(contd)

TAN AH SENGM alaysian aged 65 Executive Director

M r. Tan Ah Seng w as appo inted as a Director of th e Com pany on 2 1 July 2005 . He is also a m emb er ofth e Execut ive Com mit tee.

He started h is career as a laborator y assistant in th e Ento mo logy Division, M inistry o f Ag riculture in 196 6.Then in 1 967, he w ent for f urth er education in Britannia Royal Naval College in United Kingd om . Uponreturning from United King dom , he joined the Royal Malaysian Navy as Short Service Com m ission O ff icerfo r eight (8) years. He left th e Royal M alaysian Navy and started h is career in t he plant ation indu str y in197 5 w ith SOCFIN Company Berhad. In 1995 , he at tended the Corporate and Executive DevelopmentCourse at Sund ridge Park in United Kingd om . He has more t han t hirty (30) years of experience in theplantation industry.

He is a mem ber of the Incorp orated Society of Planters since 1975. Prior to joining t he Comp any, he w asth e Plantat ion Cont roller of IOI Corporat ion Berhad fo r Sandakan Regional Of fice in Sabah.

He has no family relationship with any directors and/or major shareholders of the Company and has noconflict of interest w ith t he Company. He has no conviction fo r of fences w ithin the p ast t en (10) years.He atten ded f ive Board M eetings held during th e financial year.

CHUA KIM YIN (JP)M alaysian aged 51Independent Non-Executive Director

M r. Chua Kim Yin w as appo inted as an Indep enden t No n-Execut ive Director o f t he Comp any on 21 July2005 and he is the Chairman o f bo th t he Audit Com mitt ee and Nom ination Comm ittee. He is also am em ber of th e Remu neration Comm itt ee. M r. Chua w as appo inted a Justice of The Peace (JP) by YangDi-Pertu a Negeri Sabah in Septem ber 1 996 .

He obt ained his Bachelor of Econom ics (Accoun ting) in 19 84 and Bachelor of Law s in 1986 from M onashUniversity, Victoria, Australia. He was then admitted to practice as a Barrister and Solicitor of the SupremeCourt of Victoria, Australia in 1987. A year later, he w as admit ted as an Advocate of th e High Court inBorneo, in t he Stat e of Sabah. He is currently a part ner in t he legal firm, M essrs RCK & Co. in Kot a Kinabalu,Sabah. He is also an Associate M emb er of Certified Practising A ccoun tant Australia.

He has no family relationship with any directors and/or major shareholders of the Company and has noconflict of interest w ith t he Company. He has no conviction fo r of fences w ithin the p ast t en (10) years.He atten ded f ive Board M eetings held during th e financial year.


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Annual Report 20118

CHAN KA M LEONGM alaysian aged 72 Independent Non-Executive Director

M r. Chan Kam Leong w as appointed as an Independent Non-Executive Director of the Com pany on 2 M ay2008 . He is a memb er of the Aud it Com mitt ee, Remuneration Com mit tee and Nomination Comm ittee.

He holds the qu alifications of Bachelor of Science (Eng ), M aster of Science (Con stru ction M anagem ent )and Prof ession al Eng ineer, M alaysia as w ell as Chart ered Engineer, Unit ed King do m (UK). He is alsomemb ers of The Institu tion of Civil Engineers, UK, The Institut ion o f Struct ural Engineers, UK, The Institut ioof Eng ineers, Malaysia (IEM ) and The Associatio n of Consulting Eng ineers, Malaysia.

He had three years working experience in Singapore and three and a half years working experience inLond on before fo und ing K.L. Chan & Associates of w hich he is presently a partn er. He has more t hanthirty one years of experience in civil and structural engineering consultancy. He was also the winner ofth e TAN SRI HJ. YUSOFF PRIZE in 20 07 fo r pu blishing an o ut stan ding p aper in th e IEM Jou rnal.

He is a Director o f M HC Plant atio ns Berhad , a com pany listed o n t he Bursa M alaysia Securities Berhad .

He has no family relationship with any directors and/or major shareholders of the Company and has noconflict of interest w ith t he Company. He has no conviction fo r of fences w ithin the p ast t en (10) years.He att ended six Board M eetings held during t he finan cial year.

CHONG PAK WANM alaysian aged 68 Independent Non-Executive Director

M r. Choong Pak Wan w as appointed as an Independent Non-Executive Director o f t he Comp any on 2 5February 2009. He is a mem ber of t he Audit Com mit tee and Nom ination Com mit tee.

He is a Project Director in an established architect firm in Ipoh . He has mo re th an 4 0 years experience inthe p ropert y developm ent and construct ion industries, mainly in developm ent p lanning, project feasibilitystudy and implementation. . He also acts as adviser and is a director in various development companiesnam ely AI Archi-M anagem ent Sdn Bhd , M C Square Sdn Bhd, CNT Builders Sdn Bhd and Simp ulai LandSdn Bhd.

He has no family relationship with any directors and/or major shareholders of the Company and has noconflict of interest w ith t he Company. He has no conviction fo r of fences w ithin the p ast t en (10) years.He att ended six Board M eetings held during t he finan cial year.

Prof ile of Board o f Directors(contd)


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100% Suara Baru Sdn Bhd

100% Sw if t urn Sdn Bhd

100% Gelang Usaha Sdn Bhd


Group Stru cture

100% Libarran Island Resort Sdn Bhd

100% Bakara Sdn Bhd

100% Prima Semasa Sdn Bhd

100% Sun ggu h M ulia Sdn Bhd

100% Kovu sak Sdn Bhd

100% Sri Likas M ew ah Sdn Bhd

100% Razijaya Sdn Bhd

100% Wong Tet-JungPlant ati ons Sdn Bhd

51%

100% Ult isearch Tradin g Sdn Bhd

100% M inelin k Sdn Bhd

100% Jutategak Sdn Bhd

100% Liga Sem arak Sdn Bhd

100% Tentu Cergas Sdn Bhd

100% Tent u Bernas Sdn Bhd49% Pro lif ic Yield Sdn Bhd

100% Cepat w aw asan Sdn Bhd

100% Syarikat M elabau Sdn Bhd

100% Ayu Semp urn a Sdn Bhd

100% Cash Nexu s (M ) Sdn Bhd

60% Ladang Cepat-KPD Sdn Bhd

70% M istral Engi neering Sdn Bhd

70% Cash Hor se (M ) Sdn Bhd

100% Magnum Kapital Sdn Bhd

Plantation Investmentholding

Plantatio n / Quarry

Palm o il mill / plantation

Intended forpow er generationand selling Cert ifiedEmission Reductio nDormant

100% Hikayat A ngg un Sdn Bhd


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Chairmans Statement

Annual Report 201110

On b ehalf o f t he Board of Directors, it is my pleasure to p resent t o you th e Annu al Report of the Comp anyand its subsidiaries (Group) for the financial year ended 31 December 2011.

Groups Performance

The Group recorded revenue of RM 290.27 million and profit before tax of RM 62.20 million in 201 1 ascompared to RM 231.82 million and 35.28 million respectively in 2010. Profit after tax has increased byalmost 8 0% to RM 46.4 m illion f rom RM 25.87 million in 201 0. As a consequence, the Groups netearnings per share has increased from 7.91 sen to 14.14 sen and net tangible assets per share attributableto o rdinary equity holders of t he parent from 172 sen to 190 sen.

These increases in revenue and prof it af ter t ax w ere mainly du e to the increases in t he average p rices ofCrude Palm Oil (CPO) and Palm Kernel (PK) and a 15% increase in the production of Fresh FruitBunches ( FFB) .

The Group p rodu ced 148,4 51 M etric Tonn es ( M T) of FFB at an average yield of 19 .45 M T per hectarein 2011 as compared to 128,52 0 M T at an average yield of 16.84 M T per hectare in 2010. This includesproduction f rom the new ly mat ured area of about 1,939 h ectares in Paitan, Sabah.

The Groups Palm Oil M ill prod uced 71 ,333 M T of CPO at an average Oil Extraction Rate of 20.4 9% and16,688 MT of PK at an average Kernel Extraction Rate of 4.79%. In 2011, CPO was sold at an averageprice of RM 3,20 0 per M T wh ereas PK w as sold at an average price of RM 2,15 0 per M T.

Dividend

On 29 November 2011, the Group declared a first interim tax exempt (single-tier) dividend of 2% on205 ,978 ,615 ordinary shares (excluding 9,47 8,300 treasury shares) in respect of the financial year ended31 Decemb er 2011 amou nting to RM4 ,119,572, w hich w as fully paid on 22 December 2011.

At the forthcoming Annual General Meeting, a final tax exempt (single-tier) dividend in respect of thefinancial year ended 31 December 20 11 of 1.5% on 3 08,967 ,910 o rdinary shares amou nting t o a dividendpayable of RM 4,634,519 w ill be propo sed for your approval.

Prospects

The average CPO price in 20 11 increased by about 20% to RM 3,200 per M T from RM 2,700 per M T in2010.

During t he second half o f 2 011 , CPO prices started to ease to arou nd RM 2,800 per M T due to risingsupply and uncertainty from the eurozone crisis. However, towards the end of 2011, prices increased toabove RM 3,000 per MT due to adverse weather affecting supply.

Average CPO p rice in 20 12 is expected to continue above RM 3,00 0 p er M T as mo st analysts believe th atcrude oil supp lies w ill remain tigh t an d oil prices cont inue to rem ain firm.

Thus, barring any unforeseen circumstances, the Group expects higher profit in 2012 as it strives tom aintain a low o perating cost and g earing. M oreover, about 25% of t he Groups tot al planted area, w hichmatured in 2008 and 2009, will significantly enhance the Groups FFB production in 2012.

The Group also expects positive cont ribution s from its bio-renewab le electricity pro jects aft er 201 2.


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Corpo rat e Social Respo nsibilit y ( CSR )

As part of its CSR, the Group has constructed a M osque at Prima Semasa Estat e in Paitan, Sabah. Com pletedin December 20 11 o n a 0.5 acre site at a tot al cost of aro und RM 200 ,000 , M asjid Prima Semasa as itis know n w ill provide th e M uslim comm unity living around t he area a convenient place for w orship.

The Group w ill also construct o n a goto ng royong basis w ith the local comm unity at Kampun g M arakParak, Kota Merudu, a hostel that can accommodate 40 to 50 students. The purpose of this project isto facilitate underprivileged village children living far aw ay to at tend school by staying at the hostel duringthe school days.

Acknow ledgement

I w ish to express my gratitude to our M anagement and Staf f f or t heir dedicated services and cont ributionsthroug hout the year.

To all our valued suppliers, customers, bankers, business associates and advisers, thank you very muchfor your loyalty and comm itment .

And finally, to all our shareholders, please accept m y heartfelt t hanks for your un w avering and cont inuoussupp ort . M ay I w ish you all a very successfu l and prosperous year ahead.

Dato Seri M ah King Thian @ M ah King ThiamExecutive Chairm an


Chairm ans Stat ement (contd)

M osque at Prima Semasa Estate


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Corp orate Governance Stat ement


The Board o f Directors (the Board) o f Cepatw awasan Grou p Berhad (the Com pany) is pleased to reporton t he mann er in w hich th e Com pany has applied t he principles and th e extent of compliance w ith theBest Practices of Corporat e Governance as cont ained in t he M alaysian Code on Corporat e Governancepu rsuant to p aragraph 1 5.25 of M ain M arket Listing Requirem ent s of Bursa M alaysia Securities Berhad(Listing Requirements).

The Board recognises that the exercise of goo d Corp orate Governance is a pre-requisite to w ards thecontinuing success of the Company as well as safeguarding and enhancing shareholders value andprotecting the interest of other stakeholders.

1. Dir ect or s

1.1 Board Composit i onThe Board currently consists of six Directors as at the date of this report :-

Execut ive Director / Chairman Dato Seri M ah King Thian @ M ah King Thiam

Managing Director Dato M ah King Seng

Executive Director M r Tan A h Seng

Independent Non-Execut ive Director s M r Chua Kim YinM r Chan Kam LeongM r Choon g Pak Wan

The Chairman, M anaging Director and Executive Director have many years of experience in th eoperations of plantations and palm oil mill. The Non-Executive Directors have extensive experiencein commercial and corporate finance. The Independent Directors are actively involved in theBoard M eetings and the m eetings of th e various Board Com m ittees and p rovide unbiased andindependent judgement into all deliberations.

The roles of t he Chairm an, th e M anaging Director an d t he Executive Director are separate andeach has a clearly accepted division of responsibilities to ensure a balance of power and authority.The Chairman is primarily responsible for the orderly conduct and working of the Board whilethe M anaging Director h as overall respon sibilities in the im plemen tat ion o f Board p olicies anddecisions. The Execut ive Director is prim arily respo nsible for som e of th e Grou ps day-to -dayoperations.

The Company has complied with the requirement of paragraph 15.02 of the Listing Requirementsw hereby half of th e Board of Directors are Indep endent Non -Execut ive Directors.


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1. Dir ect or s(contd)

1.1 Board Composit i on(contd)

The Board h eld six (6) Board M eeting s during th e financial year. The details of att endan ce ofeach individual Director are as follows:-

Name M eet ings at tendedDato Seri M ah King Thian @ M ah King Thiam 6/ 6Dato M ah King Seng 6/ 6Tan Ah Seng 5/ 6

Chua Kim Yin 5/ 6Chan Kam Leong 6/ 6Choong Pak Wan 6/ 6

1.2 Principal responsibility of the Board

The Board assumes full responsibility for the operations of the Group. In discharging theirrespo nsibility, th e Board considers all aspects of t he op erations of t he Group and in p articularthe following areas:

Review ing and adopt ing a strateg ic business plan for the Group . Overseeing the conduct of the business of the Group. Ident ifying and putt ing in place system s to manag e any principal risk. Succession planning for senior managem ent. Developing and implementing investor relations programm e or shareholder comm unications

policy. Review ing internal control and managem ent inform ation systems.

The Board has a formal schedule of matters reserved to itself, which includes the overall Groupbusiness strategy, acquisition or divestment policy, approval of major capital expenditure,consideration of significant financial matters and it reviews the financial and operating performanceof t he Group.

1.3 Supp ly of in fo rmat ion

In carrying out their duties, the Directors have complete access to all staff for informationpert aining to th e Grou ps aff airs. The Directors also have full access to ad vice and services ofthe Company Secretary. Where necessary, the Directors engage independent professional foradvice at the Groups expense to enable them to discharge their duties with full knowledge ofthe cause and effect.

1 .4 Appointment and Re-elect ion of Directors

The Art icles of Association o f t he Com pany requires that all Directors shall be subject to electionby shareholders at the first opportunity after their appointment and that at least one third (1/3)or t he num ber nearest t o o ne third (1/ 3) of the Directors, be subject to re-election th ereaft erby rotat ion on ce at least in every three (3) years at t he An nual General Meet ing.

Corp orat e Governance Stat ement(contd)


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1.5 Commit t ee o f D ir ecto rs

The Company has established four Committee of Directors (Committees) to assist in theperformance of certain duties of the Board under specific terms of reference. Three (3) of theComm itt ees are comp osed of a m ajority of Non -Execut ive Directors. The Board considers thatthe mix of comm ercial experience from the Non-Executive Directors will complement the Execut iveDirectors and create an effect ive Board.

The Comm itt ees estab lished are as follow s:

(i) Audit Committ ee

The role of the A udit Com mit tee is to suppo rt the Board of Directors in overseeing theprocesses for p roduct ion of the f inancial data, review ing t he financial reports and t heinternal controls of the Company. The composition and terms of reference of thisCommittee together with its report are presented on pages 21 to 25 of the AnnualReport.

(i i) Nomination Committee

The fun ctions of the Nom ination Comm ittee are as follows:

Recomm end to the Board the candidates for a ll directorships to be f i lled by theshareholders or th e Board.

Recomm end to the Board the Directors to fil l the seats on Comm ittees of Directors.

Review the required mix of ski lls and experience and other qual it ies includingcore comp etencies w hich Non-Execut ives shou ld bring to th e Board.

Assess the effectiveness of the Board as a w hole, the Committees of Directors andthe contribution of each Director.

(iii) Remuneration Committee

The functions of the Remuneration Committee are as follows:

To recomm end to the Board the remuneration packages of the Executive Directorsof the Company.



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1.5 Commit t ee o f D ir ecto rs(contd)

(iv) Executive Committ ee ( EXCO )

The EXCO is ent rusted w ith t he responsibility of carrying ou t t asks wh ich are assignedto it by the Board. The EXCO acts on behalf of the Board on matters concerningadministrations, operations, capital expenditure, debt approvals and investments.It meets at regular intervals to review and decide on administrative and operationalmatters, budgets and investment strategies of the Group.

2. Directors Remunerat ion

2.1 The Level and M ake-up of Remun eration

The Remuneration Comm ittee p rovides remuneration packages w hich are suf ficient and necessaryto att ract, retain and mo tivate Executive Directors to run the Com pany. The remuneration o fNon-Executive Directors is linked to their experience and level of responsibilities undertaken bythem.

2.2 Procedures

The Remuneration Committee consists of three members, the majority of whom are IndependentNon-Executive Directors. The Committee is responsible for setting up a policy framework forall elements of remuneration such as reward structure, fringe benefits and other terms ofemp loyment of the Executive Directors.

2.3 Disclosure

The aggregate remuneration paid or payable to all Directors of the Company for the financialyear ended 31 December 2011 are as follows:-

Fees Emolument s EPF TotalRM RM RM RM

Execut ive Directors - 1,603,125 192,387 1,795,512

Non-Execut ive Directors 120,000 - - 120,000

Total 120,000 1,603,125 192,387 1,915,512



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2. Directors Remunerat ion(contd)

2.3 Disclosure(contd)

The num ber of Directors w hose total remuneration falls within t he follow ing range are asfollows:

Range of Rem unerat ion Execut ive Direct ors Non-Execut ive Direct ors

Below RM 50,000 - 3

RM 200,001 to RM 250,000 1 -

RM 650,001 to RM 700,000 2 -

3. Directors Training

All the Directors have undergon e the M andator y Accreditation Programm e (M AP). The Directors havecomplied with Practice Note 15/2003 (now repealed) and have all obtained the requisite ContinuingEducation Programme (CEP) points. The Directors will continue to undergo training and other relevantprogrammes to further enhance their skills and knowledge where relevant.

During the f inancial year ended 3 1 Decemb er 2011 , the follow ing training prog ramm es and seminars

were attended by the Directors:

Sustainability Programm e for Corporate M alaysia Plantation Sector;

National Seminar on Biogas and Palm Oil M ill Effluent Treatment; and

Guide to disclosure by directors & secretarial practice issue.

4. Shareho lder s

4.1 Dialogue betw een Companies and Investors

The annual report, quarterly reports and various mandatory announcements are the mainchannel of information by the Company of its financial performance, operations and corporatedevelopments.

The Companys website at www.cepatgroup.com contains vital information concerning theGroup which is updated on a regular basis and shareholders are able to put questions to theCompany through t he w ebsite.

The Board considers it essential that investors are kept informed of all the latest financial resultand d evelopment s of the Com pany and w here appropriate, w ill provide disclosure that is in the

best interest of the Company and also of the shareholders. All such reporting information canbe ob tained f rom the w ebsites of t he Com pany and Bursa M alaysia Securities Berhad.




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4. Shareho lder s (contd)

4.2 The Ann ual General M eeting

The Annual General Meeting is an important event for the Company as the Board has theoppo rtun ity to h ave a dialogu e w ith th e shareholders to present t he results and perform anceof the Group and to address all questions that may arise. Suggestions and comments byshareholders will be noted by the Board fo r consideration.

5. Corpo rate Social Responsibilities

As part of its CSR, th e Grou p h as construct ed a M osque at Prima Semasa Estat e in Paitan, Sabah.Completed in December 201 1 on a 0.5 acre site at a tot al cost of aroun d RM 200 ,000 , M asjid PrimaSemasa as it is know n w ill provide the M uslim com m unit y living aro und the area a convenient placefor w orship.

The Group w ill also construct o n a goton g royong basis w ith the local com mun ity at KampungM arak Parak, Kota M erudu, a hostel that can accom mo date 40 t o 50 stud ents. The purpo se of t hisproject is to facilitate underprivileged village children living far away to attend school by staying atthe h ostel during t he schoo l days.

6 Financial Repor t ing

The financial statements of the Company are drawn up in compliance with the provisions of theCom pan ies Act , 196 5 and t he app licable Financial Repo rt ing Stan dard s in M alaysia. The Board isresponsible to ensure that the financial statements of the Company give a true and fair view of thes ta te of a ffa i r s o f the Company. Accord ingly, the Board has prepared the s ta tement ofresponsibility for the preparation of the annual audited financial statements on page 20.

The qu arterly and ann ual financial statem ents are reviewed by the A udit Comm ittee and subsequentlyby th e Board, prior t o release fo r ann oun cement to Bursa M alaysia Securities Berhad.

7. Int ernal Con t ro l

The Directors acknow ledge their respon sibility to m aintain a system of internal control fo r the Grou pincluding risk assessment and risk management to ensure that the operations of the Group are runeffectively and efficiently, the proper financial and corporate compliance controls are in place andthe assets of t he Group are safegu arded so as to pro tect shareholders investm ent. The Groups systemof internal cont rol can only provide reasonable but not absolute assurance against m aterial misstatemen ts,fraud or loss.

The Board has prepared the statement o n internal cont rol, which can be f ound on p age 26 and 27.


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8. Relat ionsh ip w i th Auditors

The Com pany has always maint ained a form al and transparent relationship w ith its auditors.

The role of t he Aud it Comm ittee in relation to the external auditors is set ou t in the Report of AuditCom mit tee on pages 21 to 25 .

9. Compliance Statement

The Com pany has complied w ith t he Best Practices of Corpo rate Governance as contained in t heM alaysian Code on Corporate Governance except for t he follow ing m inor exception s that , in theopinion of the Directors, adequately suits the circumstances:

- Disclosure of remun eration is no t made in det ail for each Director. How ever, th e remu neratio npaid is disclosed in ag gregates of th e categories of remu neration and , in com pliance w ith t heListing Requirement s, is analysed int o b ands of RM 50,0 00.

10. Addit ional Com pliance Informat ion

In compliance with the Listing Requirements, the following additional information is provided:-

10.1 Ut ili sat i on o f Proceeds

This was not applicable du ring t he f inancial year.

10.2 Sh ar e Bu yb ack s

During the financial year, the Company purchased 5,477,300 Shares and all the purchaseswere made in March 2011 and November 2011. The relevant price details are as follow:

Highest price paid : RM 1.49Low est price paid : RM 1.14Average price paid : RM 1.28Total considerat ion paid : RM 6,963,012.00 (excluding t ransact ion cost)

As at 31 December 2011, all the purchased shares were retained as treasury shares and therewas no resale or cancellation of these purchased shares.

10.3 Options, Warrants or Convert ible Securit ies

There are no o pt ions, w arrants or con vertible securities exercised in respect of th e finan cialyear un der review .

10.4 American Deposit Receipt (ADR) or Global Deposit Receipt (GDR) Programm e

During t he financial year, the Com pany did no t sponsor any ADR or GDR prog ramm e.



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10. Addit ional Com pliance Informat ion(contd)

10.5 Imposi t ion of Sanct ions/ Penal t ies

There w ere no sanctions and/ or p enalties impo sed on the Com pany and its subsidiaries,Directors or management by the relevant authorities.

10.6 No n-A ud it Fees

No n on-audit fees were paid t o t he external auditors in respect o f t he finan cial year.

10.7 Profit Est imate, Forecast or Project ion

No m aterial variance arose betw een the audited results for t he financial year and th e unaud itedresults previously announ ced. There w ere no prof it estimates, fo recasts or p rojections for t hefinancial year ended 31 December 2011.

10.8 Pr of it Gu aran tee

No pro fit g uarantee w as given by the Comp any in respect o f t he financial year.

10.9 M a ter ial Co nt ract s

There w ere no mat erial cont racts entered int o b y the Com pany and its subsidiaries involvingDirectors and substantial shareholders either subsisting at the end of the financial year ended31 December 2011 or entered into since the previous financial year except for those disclosedunder related party transactions on pages 92.

10.10 Recurr ent Related Par t y Transactio ns

There are no recurrent related part y transactions transacted by the Comp any and it s subsidiaries.



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Statement of Directors Responsibility for Preparing the Financial Stat ement s


The Directors are required by the Com panies Act, 1 965 to prepare financial statem ents for each financialyear which give a true and fair view of the state of affairs of the Group and of the Company as at theend o f t he financial year and of their results and cash flow s for t he finan cial year then end ed.

In preparing the f inancial statem ents, the Directors have:

selected appropriate accounting policies and applied them consistently; made judgements and estimates that are reasonable and prudent; and stated whether applicable accounting standards have been followed and made a statement to the

effect in the financial statements, subject to any material departures being disclosed and explainedin the f inancial stat ement s.

The Directors are responsible for ensuring that proper accounting records are kept which disclose withreasonable accuracy at any tim e the f inancial position of the Com pany and Group and t o enable th emto ensure that the f inancial statem ents com ply with the provisions of the Com panies Act, 19 65 and theapplicable approved account ing stan dards in M alaysia. They are respon sible for taking reasonab le stepsto safeguard the assets of the Company and Group, fo r the prevention and d etection o f f raud and oth erirregularities.


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Audit Com mit tee Repor t


COM M ITTEE M EM BERS

The m embers of the A udit Comm ittee as at th e date of this report are as follows:

Chairman M r. Chua Kim Yin(Independent Non-Execut ive Director)

Commit tee Members Mr. Chan Kam Leong(Independent Non-Execut ive Director)M r. Choong Pak Wan(Independent Non-Execut ive Director)

TERMS OF REFERENCE

1. Co m po sit io n

1.1 The Com mit tee shall comprise of at least th ree directors w ho m ust be Non-Executive Directorand a m ajority of w hom are independent directors. There shall be at least o ne m ember w hois:

(a) a member of the Malaysian Inst i tute of Accountants, or

(b) otherwise, he shall have at least 3 years w orking experience and(i) he shall have passed th e examinat ions specified in Part 1 of th e First Schedu le of

the Account ants Act 1967 ; or(ii) he shall be a memb er of one of t he associations of accountants specified in Part

II of the First Schedule of the Accountants Act 1967; or

(c) he fulfils such other requirement s as prescribed or approved by the Exchange.

1 .2 The members of the audit committee shall elect a Chairman from among their number whoshall be an independen t d irector.

1.3 No alternate director, Managing Director or Executive Director shall be appointed as a memb erof the Audit Comm ittee.

1.4 Any vacancy in the Audit Comm ittee resulting in the non-compliance of the above, shall befilled w ithin three mon ths.


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Audit Committee Report(contd)

2. Aut horit y

The audit committee shall:

(a) have the authority to investigate any activity of t he Group w ithin its terms of reference;

(b) have resources w hich are required to perform its duties;

(c) have full and unrestricted access to the Groups information;

(d) have direct comm unicat ion channels w ith the external audi tors, internal audi tors and allemployees of the Group;

(e) be able to obtain independent professional or other advice; and

(f) be able to convene meetings w ith the external auditors, the internal auditors or both (excludingthe executive directors and employees), if necessary.

3. Fu nct io ns

The audit com mitt ee is to:

3.1 Review t he following and report the same to the board of directors:

a) w it h th e ext ern al au dit ors:

i) t he ext ern al au dit p lan ,ii) the evaluation of the system of internal controls; andiii) the externa l audit repor t .

b) adequacy of the scope, functions, competency and resources of the internal audit functions;

c) the internal audit programm e, processes, the resul ts of the internal audi t programme,processes or investigat ion und ertaken;

d) the quarterly financial reports and year end financial statements, prior to the approvalby the board of directors;

e) any related party transactions and conflict of interest situation that may arise within theGroup;

f) le t ter of resignat ion from the external auditors, if any; and

g) w hether there is any reason (supported by grounds) to believe that the external auditorsis not suitable for reappointm ent.


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3. Funct ions(contd)

3.2 Consider the nominat ion of external auditors.

3.3 Review the scope of audit and general extent of the external auditor.

3.4 Review the Companys general policies and procedures.

3.5 Discuss w ith the external auditors any relevant recom mend ations in their letter of comm ents.

3.6 Evaluate the cooperation received by the external auditors during their examination.

3.7 Review the scope and results of t he internal audit procedures.

4 . Quorum and At tendance of Meet ings

4.1 The quorum of m eetings of the Committee shall be majority of the members w ho are IndependentDirectors.

4.2 M embers of t he audit comm ittee are to be present at all meetings. If necessary or desirable,the chairman m ay request t hat m embers of managem ent, the head of internal audit and

representatives of the external auditors be present at meetings of the Committee.

4.3 The Comp any Secretary or his/ her representative shall be the secretary of t he Audit Comm ittee.

5. Frequency of Meetings and Minutes

5.1 The Audit Committee is to meet at least four times per year.

5.2 At least tw ice a year, the Com mittee shall meet with the external auditors, the internal auditorsor both without the presence of any executives of the Company.

5.3 M inutes of each Audit Committee meeting are to be made available to the Board of Directors.


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M EETINGS

The Audit Comm ittee m embers held fo ur (4) meetings during th e financial year ended 31 December 2011 .

The attend ance of the m embers at t he Audit Com mit tee meetings is as follows:

M ember M eet ings at t endedChua Kim Yin 4/ 4Chan Kam Leong 4/ 4Choong Pak Wan 4/ 4

Members of the senior management were invited to attend these meetings as and when necessary. Theexternal auditors have also at tend ed th e meet ings by invitation .

ACTIVITIES

The sum m ary of the activities of t he Au dit Com mit tee in th e discharge of its duties and respon sibilitiesfor the financial year included the following:-

( i) Reviewed the scope of work and audit plan of the external auditors.

(ii) Review ed, with the external auditors, the results of their audit, the audit report and internal controlrecom mend ations in respect of improvements in the internal control procedures not ed in th e courseof t heir audit.

(ii i) Review ed the adequacy of th e internal audit scope and plan, and the findings identified by theinternal audit fu nction.

(iv) Review ed the necessity and need for special audit .

(v) Review ed the annual report and the audited financial statements of the Company prior to submissionto the Board for their consideration and approval. The review was to ensure that the audited financialstatement s were draw n up in accordance w ith the provisions of the Comp anies Act, 19 65 and theapp licable approved account ing stand ards issued by t he M alaysian Account ing Stan dards Board.

(vi) Review ed the compliance of the Company w ith the Revamped Listing Requirements of the BursaM alaysia Securities Berhad and t he app licable approved account ing stand ards issued by the M alaysianAccount ing Stand ards Board.

(vii) Review ed the unaudited quarterly Group results before recomm ending to t he Board for approvalfor anno uncem ent to Bursa M alaysia Securities Berhad.

(viii) Review ed the related party transactions entered into by the Group.

(ix) Review ed and recommended to t he Board the re-appointm ent of external auditors and their auditfees.


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ACTIVITIES(contd)

(iv) Review ed the necessity and need for special audit .

(v) Review ed the annual report and the audited financial statements of the Company prior to submissionto the Board for their consideration and approval. The review was to ensure that the audited financialstatement s were draw n up in accordance w ith the provisions of the Comp anies Act, 19 65 and theapp licable approved account ing stand ards issued by t he M alaysian Account ing Stan dards Board.

(vi) Review ed the compliance of the Company w ith the Revamped Listing Requirements of the BursaM alaysia Securities Berhad and t he app licable approved account ing stand ards issued by the M alaysianAccount ing Stand ards Board.

(vii) Review ed the unaudited quarterly Group results before recomm ending to t he Board for approvalfor anno uncem ent to Bursa M alaysia Securities Berhad.

(viii) Review ed the related party transactions entered into by the Group.

(ix) Review ed and recommended to t he Board the re-appointm ent of external auditors and their auditfees.

(x) Review ed the status of compliance of the Company w ith the Malaysian Code on Corporate Governance

for the purpose of issuing the Corporate Governance Statement pursuant to the requirement ofparagraph 15.2 5 o f M ain M arket Listing Requirement s of Bursa M alaysia Securities Berhad.

INTERNAL AUDIT FUNCTION

The Group o utsourced its internal audit fun ction. The role of t he internal audit f unction, w hich report sdirectly to t he Audit Comm ittee, is to support t he Audit Comm ittee by providing it w ith independent andobjective reports on the adequacy and effectiveness of t he system of internal cont rol and t he extent ofcompliance with the procedures and by recommending ways to rectify shortfall and improve the existingcontrol environm ent in relation to the Group s operations. It submits its findings and recomm endationsto th e Audit Com mit tee and senior management of the Group.

Two internal audits had been performed during the financial year under review. The internal audit activitiescarried ou t f or t he finan cial year include, inter alia, the follow ing:

- Fert i liser applicat ion and monthly report ing;- Estate payroll and job contract ing;- Procurement of engineering spares, repair and maintenance procedures;- Estate f ield upkeep and frond stacking; and- Harvest ing of FFB and Ganoderma management .

The audit report incorporating the internal auditors findings and recommendations with regard to thesystem operations and control weaknesses noted in the course of their audit and the managementsresponses thereto w ere subsequently subm itted to the A udit Com mitt ee.




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Statem ent o n Int ernal Cont rol

BOARDS RESPONSIBILITY

The Board acknowledges its responsibility for establishing an efficient and effective system of internalcontrol covering not only financial controls but also controls relating to operational, compliance and riskmanagem ent to safeguard shareholders value and t he Groups assets. There is an on-go ing review processby the Board to ensure its adequacy and integ rity of t he system .

In view of the limitations that are inherent in any system of internal control, this system is designed tom anage, rath er than elim inate th e risk of failure to achieve corpo rate ob jectives. Accordingly, the systemcan only provide reasonable but not absolute assurance against m aterial misstat emen t, o peration al failures,fraud or loss.

RISK M ANAGEM ENT FRAM EWORK AND CONTROL SELF-ASSESSM ENT

The Man agem ent h as reviewed t he Group s internal control system and fo rmalised th e risk man agem entpractices to com ply wit h th e M alaysian Code o n Corporat e Governance (t he Code ). In consequence, aform al risk management f ramew ork has been established to ensure that struct ured and consistent approachand m etho ds are practised in th e on -go ing process of ident ifying an d assessing various critical risks thatare considered likely to affect the profitable operation of the business units in the Group. The Board issupp ort ed by the Group Risk M anagemen t Com m ittee th at com prises the Execut ive Chairman, M anagingDirector, Executive Director and senior m anagement in overseeing the risk m anagement effo rts w ithin

the Group.

The Managem ent has wo rked w ithin the approved and adopt ed framew ork for p rincipal risks affectingthe Groups strategic business objectives throughout the year. Additional reviews will be carried out asand when required annually.

The on-going im plementat ion is mo nitored by the M anagement and is reported quart erly to the Board.

INTERNAL AUDIT FUNCTION

The Board recognised th at ef fective m onitoring on a continuo us basis is a vital com ponen t o f a soundinternal control system . In t his respect, t he Board thro ugh the Aud it Com mit tee regularly receives andreview reports on internal cont rol from its internal audit funct ion.

The internal audit fu nction is out sourced t o KPM G and Pantro pical Agricultural Services (Pant ropas) Sdn.Bhd. which reports directly to the Audit Committee. The scope of work covered by the internal auditfunction is determined by the Audit Committee after careful consideration and discussion of the auditplan w ith th e Board. The costs incurred for the internal audit f unction for t he financial year ended 3 1December 2011 w ere RM 58,428.


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Stat ement o n Int ernal Cont rol(contd)

OTHER KEY ELEM ENTS OF INTERNAL CONTROL

Oth er key elemen ts of t he Group s internal contro l are as follow s:

i. BOARD M EETINGS

The Board meets at least quarterly and has a formal agenda on matters for discussion. TheChairman, together with the Executive Director, leads the presentations of board papers andprovides comp rehensive explanation o f pert inent issues. The Board is also kept u pdated on theComp anys and t he Group s activities and operat ions on a regular basis including any materialissues.

ii. ORGANISATION AL STRUCTURE

The Group s organisational structu re is form ed w ith f orm ally defined repo rting lines andauthorities to facilitate quick response to changes in the evolving business environment andaccountability for operational performance.

To identify, discuss and resolve business and operational issues, weekly management meetingsat head office as well as scheduled meetings at operation sites are held. The EXCO is awareof the significant issues identified in those meetings, and when necessary the EXCO shall beinvolved in resolving t hose issues. The Grou p h as been restructu red in such a w ay that dut ies

are properly segregated to ensure safe custody of the Group s assets and t o p rovide clear andtransparent reporting lines.

iii. PERFORM ANCE M ANAGEM ENT FRAM E WORK

M anagement reports are generated on a m ont hly basis to facilitate t he Boards review of theGroup s financial and op erating perf orm ance. The review covers areas such as financial andnon -financial key perform ance indicators and variances betw een bud get and o perating results.

The Board has reviewed and approved the Groups budget for the next financial year. Thebud geting process involves the p reparation of bud gets by individual operating un its, w hich arethen reviewed and approved at management level and ultimately by the Board. The M anagementw ill mo nitor t he actual perform ance against the Group s budg et o n a m ont hly basis. Significantvariances are ident ified, investigated and report ed.

W EAKNESS IN INTERNA L CONTROL

There were no material internal control failures nor have any of the reported weaknesses resulted inmaterial losses or contingencies during the financial year.


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Directors Repor t

The Directors have pleasure in presenting their report together with the audited financial statements ofthe Group and of the Comp any for the financial year ended 31 Decemb er 2011.

Principal activ ities

The principal activities of the Com pany are investm ent h olding and p rovision of m anagem ent services toits subsidiary companies.

The principal activities of th e subsidiary comp anies are stated in Not e 19 to the f inancial statem ents.

There have been n o significant chang es in th e natu re of the p rincipal activities during t he f inancial year.

ResultsGroup Company

RM 000 RM 000

Prof it net of t ax 46,429 105,221

Profit at tributable to:

Ow ners of the parent 43,916 105,221Non-cont rolling interest s 2,513 -

46,429 105,221

There w ere no m aterial transfers to o r f rom reserves or provisions during t he f inancial year ot her t hanas disclosed in the financial statements.

In the opinion of the Directors, the results of the operations of the Group and of the Company duringthe financial year were not substantially affected by any item, transaction or event of a material andunusual nature.


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Directors Report(contd)

Dividends

The amounts of dividends paid by the Company since 31 December 2010 were as follows:

RM000In respect of the financial year ended 31 December 2010

as reported in the Directors report of that year:

Final tax exempt (single-tier) dividend of 2% on 207,478,615ordinary shares (excluding 7,97 8,30 0 treasury shares),declared on 27 April 2011 and paid on 25 M ay 2011 4,150

In respect of the financial year ended 31 December 2011:

First interim tax exempt (single-tier) dividend of 2% on 205,978,615ordinary shares (excluding 9,47 8,30 0 treasury shares),declared on 29 Novem ber 2011 and paid on 22 Decem ber 2011 4,119

8,269

At the forthcoming Annual General Meeting, a final tax exempt (single-tier) dividend in respect of the

financial year ended 31 December 2011, of 1.5% on 308,967,910 ordinary shares, amounting to adividend payable of RM4,634,519 (1.5 sen per ordinary share) will be proposed for shareholders approval.The financial statements for the current financial year do not reflect this proposed dividend. Such dividend,if approved by the shareholders, will be accounted for in equity as an appropriation of retained earningsin the financial year ending 31 December 2012.

Directors

The nam es of the Directors of the Com pany in o ff ice since the d ate of the last report and at t he date ofth is report are:

Dato Seri M ah King Thian @ Mah King ThiamDato M ah King SengTan A h SengChua Kim YinChan Kam LeongChoong Pak Wan


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Directors benefits

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

Since the end of the previous financial year, no Director has received or become entitled to receive abenefit (other than benefits included in the aggregate amount of emoluments received or due andreceivable by the Directors or the fixed salary of a full-time employee of the Company as shown in Note10 to the f inancial statem ents) by reason of a contract m ade by the Com pany or a related corporationw ith any Director o r w ith a firm of w hich he is a mem ber, or w ith a comp any in w hich he has a substantialfinancial interest ot her th an as disclosed in No te 30 to the f inancial stat emen ts.

Directors interests

According to the register of Directors shareholdings, the interests of Directors in of fice at the end of thefinancial year in shares in t he Com pany du ring t he f inancial year w ere as follow s:

Num ber of ord inar y shares of RM1 Each1.1.2011 Acquired Sold 31.12.2011

Name of director

Direct interest:

Tan Ah Seng 100 - - 100Choong Pak Wan 10,000 - - 10,000

Indirect int erest:

Dato Seri M ah King Thian@ M ah King Thiam 78,265,800 955,000 - 79,220,800

Dato M ah King Seng 78,265,800 955,000 - 79,220,800

Dato Seri M ah King Thian @ M ah King Thiam and Dato M ah King Seng by virtu e of their interests inshares in t he Com pany are also d eemed interested in shares of all the Com panys subsidiaries to t he extentth e Com pany has an interest.

None o f t he ot her Directors in of fice at the en d o f t he financial year had any interest in shares in theComp any or its related corp oration s during the f inancial year.


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Treasury shares

During the financial year, the Company repurchased 5,477,300 of its issued ordinary shares from openm arket at an average price of RM 1.28 per share. The tot al consideration p aid for the repurchase includingtransaction costs was RM 6,98 7,59 0.

As at 31 December 20 11, t he Company held as treasury shares a tot al of 9,47 8,300 of its 215,45 6,915issued o rdinary shares. Such t reasury shares are held at a carrying am oun t of RM 11,0 96,1 94 and f urt herrelevant d etails are disclosed in Not e 28 to the financial statem ents.

Other statut ory information

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

(i) to ascertain that proper action had been taken in relation to the w riting off of bad debts andthe m aking of p rovision for d oub tf ul debts and satisfied them selves that all know n bad d ebtshad been w ritten off and that adequate provision had been made for dou btf ul debts; and

(ii) to ensure that any current assets w hich w ere unlikely to realise their value as show n in theaccounting records in the ordinary course of business had been written down to an amount

w hich they migh t b e expected so to realise.

(b) At the date of this report, the Directors are not aw are of any circumstances w hich w ould render:

( i) the amount w rit ten off for bad debts or the amount of the provision for doubtful debts inthe financial statements of the Group and of the Company inadequate to any substantialextent; and

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

(c) At t he date of this report, the Directors are not aw are of any circumstances w hich have arisen w hichwould render adherence to the existing method of valuation of assets or liabilities of the Groupand o f t he Company m isleading or inappropriate.

(d) At the date of this report, the Directors are not aw are of any circumstances not ot herwise dealtw ith in this report o r financial statem ents of the Group and of t he Com pany wh ich w ould renderany amount stated in the financial statements misleading.

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

(i) any charge on the assets of the Group or of the Com pany w hich has arisen since the endof the financial year w hich secures the liabilities of any o ther person; or

(ii) any contingent liabili ty of the Group or of the Comp any w hich has arisen since the end ofthe financial year.


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(f ) In t he op in ion of t he D irecto rs:

(i) no contingent or other liabili ty has becom e enforceable or is l ikely to become enforceablew ithin the period of tw elve mo nths after the end o f t he financial year which w ill or may affectthe ability of t he Group or o f t he Company to m eet their obligations w hen they fall due; and

(ii) no i tem, t ransact ion or event of a mater ial and unusual nature has arisen in the intervalbetween the end of the financial year and the date of this report which is likely to affectsubstantially the results of th e operations of th e Group or of the Com pany for th e financialyear in w hich this report is m ade.

Significant events

In add ition to the significant event s disclosed elsew here in t his repor t, o ther significant event s are disclosedin Note 2 to the financial statements.

Subsequent event

Detail of subsequent event is disclosed in Note 3 6 to the f inancial statem ents.

Auditors

The auditors, Ernst & Youn g, h ave expressed t heir w illingness to cont inue in o ff ice.

Signed on behalf of the Board in accordance with a resolution o f t he Directors dated 12 M arch 2 012.

DATO SERI M AH KING THIAN @ M AH KING THIAM TAN AH SENG



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Statem ent by DirectorsPursuant to Section 16 9(15) of the Com panies Act, 19 65

W e, DATO SERI M AH KING THIAN @ M AH KING THIAM and TAN AH SENG, being t w o of the Direof CEPATWAW ASAN GROUP BERHAD, do hereby state that , in the opinion of the Directors, the accompanyinfinancial statements set out on pages 36 to 102 are drawn up in accordance with Financial ReportingStand ards and t he Comp anies Act, 1 965 in M alaysia so as to g ive a true and fair view of the f inancialposition of the Group and o f t he Com pany as at 31 December 2011 and of their financial perform anceand cash flows for the year then ended.

The inform ation set out in Note 3 8 to the f inancial statem ents have been prepared in accordance w ithth e Guidance on Special M att er No.1 , Determ ination of Realised and Unrealised Prof its or Losses in th eContext o f Disclosure Pursuant to Bursa M alaysia Securities Berhad Listing Requirement s, as issued by th eM alaysian Institut e of Account ants.

Signed on behalf of the Board in accordance with a resolution of the Directors dated 12 March 2012.

DATO SERI M AH KING THIAN @ M AH KING THIAM TAN AH SENG

Statutory DeclarationPursuant to Section 16 9(16) of the Com panies Act, 19 65

I , NOK CHUNG YUAN, being the Officer pr imari ly responsible for the f inancial management ofCEPATWAW ASAN GROUP BERHAD, do solem nly and sincerely declare that th e accom panying finan cialstatements set out on pages 36 to 102 are in my opinion correct, and I make this solemn declarationconscientiously believing t he sam e to be t rue and b y virtu e of the p rovisions of t he Stat uto ry DeclarationsAct, 1960.

Subscribed and solemnly declaredby the abovenamed NOK CHUNGYUAN at Sandakan in t he State o fSabah on 12 M arch 2012 NOK CHUNG YUAN

Before me,

HAM SAH BINTI HJ. M OHD. TAHAComm issioner f or O aths (No. S-029 )


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Independent A uditors Report to the M embers ofCEPATWAWASAN GROUP BERHAD(Incorporat ed in Malaysia)

Repor t o n t he financial stat ements

We have audited t he financial statem ents of Cepatw awasan Group Berhad, w hich com prise statem entsof the f inancial position as at 31 December 201 1 of the Group and of the Company, and t he statement sof comp rehensive income, statem ents of changes in equity and statem ents of cash f low s of the Groupand of the Comp any for the year then ended , and a sum mary of significant account ing po licies and ot herexplanatory notes, as set out on pages 36 to 102.

Director s responsibilit y for the financial statem ents

The directors of th e Com pany are respon sible for th e preparation of financial statem ents that give a trueand fair view in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia,and for such internal control as the directors determine are necessary to enable the preparation of financialstatement s that are free from m aterial misstatement , w hether due to fraud or error.

Aud itors responsibilit y

Our responsibility is to express an opinion on these financial statements based on our audit. We conductedour audit in accordance with approved standards on auditing in Malaysia. Those standards require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonable assuranceabout w hether the financial statement s are free from material misstatement .

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures inthe financial statements. The procedures selected depend on our judgement, including the assessmentof risks of material misstatem ent o f t he financial statem ents, whet her due to fraud or error. In makingthose risk assessments, we consider internal control relevant to the entitys preparation of financialstatem ents that g ive a true and fair view in order to design audit procedures that are appropriate in t hecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internalcontrol. A n aud it also includes evaluating the appropriateness of t he accounting policies used and thereasonab leness of accoun ting estim ates made by th e directors, as well as evaluating the overall presentat ionof the financial statements.

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

Opinion

In our o pinion, t he financial statem ents have been prop erly drawn up in accordance w ith Financial Report ingStand ards and t he Comp anies Act, 1 965 in M alaysia so as to g ive a true and fair view of the f inancialposition of the Group and o f t he Com pany as at 31 December 2011 and of their financial perform anceand cash flows for the year then ended.


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Independent Auditors Report to the Members ofCEPATWAW ASAN GROUP BERHAD (Incorpo rated in M alaysia) (cont d)

Repor t on ot her legal and regulator y requirements

In accordance with the requirements of t he Companies Act, 19 65 in M alaysia, we also report the fo llow ing:

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

(b) We are satisfied that the financial statem ents of th e subsidiaries that have been consolidated withthe f inancial statem ents of the Com pany are in form and content app ropriate and prop er for thepurposes of t he p reparation of the consolidated f inancial statem ents and w e have received satisfactoryinformation and explanations required by us for those purposes.

(c) The auditors reports on the f inancial sta tements of the subsidiar ies w ere not subject to anyqualification and did not include any comment required to be made under Section 174(3) of theAct.

Other r epor ting responsibilities

The supplement ary inform ation set o ut in Note 38 on p age 102 is disclosed to meet t he requirement ofBursa M alaysia Securities Berhad. The directors are respon sible for the preparation of the supp lement ary

inform ation in accordance w ith Guidance on Special M att er No. 1, Determ ination o f Realised and UnrealisedProf its or Losses in th e Cont ext o f Disclosure Pursuant to Bursa M alaysia Securities Berhad ListingRequirements, as issued b y the M alaysian Institut e of Accountant s ( M IA Guidance ) and the directiveof Bursa M alaysia Securities Berhad. In o ur o pinion, t he supplement ary inform ation is prepared, in allm aterial respects, in accordan ce wit h th e M IA Guidan ce and th e directive of Bursa M alaysia SecuritiesBerhad.

Other mat ters

This report is made solely to the members of the Company, as a body, in accordance with Section 174of the Com panies Act, 19 65 in M alaysia and for n o o ther pu rpose. We d o no t assum e responsibility toany other person fo r the content o f t his report.

Ernst & Young Chin M ui Khiong PeterAF: 0039 1881/ 03/ 14(J)Chartered Accountant s Chartered Accountant

Kuching, M alaysia12 M arch 2012


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Stat ement s of Com prehen sive Incom eFor th e financial year ended 3 1 December 2 011

Group CompanyNote 2011 2010 2011 2010

RM000 RM000 RM000 RM000

Revenue 4 290,186 231,816 109,196 7,326

Cost of sales (217,894) (185,561) - -

Gross prof it 72,292 46,255 109,196 7,326

Other it ems of income

Interest income 5 841 582 763 730

Other income 6 1,214 1,316 - -

Oth er items of expense

M arket ing and dist ribut ion costs (4,926) (4,041) - -

Administ rative expenses (6,654) (8,063) (2,687) (3,360)

Finance costs 7 (567) (772) (713) (722)

Profit before tax 8 62,200 35,277 106,559 3,974Income tax expense 11 (15,771) (9,409) (1,338) (692)

Profit net of t ax 46,429 25,868 105,221 3,282

Other com prehensive income - - - -

Tot al comp rehensiveincome for t he year 46,429 25,868 105,221 3,282

Profit / tot al comp rehensiveincom e attributable to:

Ow ners of the parent 43,916 24,883 105,221 3,282Non-controlling interests 2,513 985 - -

46,429 25,868 105,221 3,282

Earnings per share attribu table toow ners of t he parent(sen per share):

- Basic 12 14.12 7.91

- Diluted 12 14.12 7.91

The accompanying accounting p olicies and explanatory not es form an integral part o f t he financial statem ents.


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Statem ent s of Finan cial Positio nAs at 31 December 2011


RM000 RM000 RM000 RM000

ASSETS

Non-current assets

Property, plant and equipment 14 164,896 137,415 2,961 2,881Biological assets 15 151,876 151,021 - -Investment properties 16 20,279 20,279 - -

Intangible assets 17 92,088 92,088 - -Land use rights 18 2,106 2,134 - -Investments in subsidiaries 19 - - 229,458 229,458Deferred tax assets 20 2,191 2,312 - -Other receivables 21 8,697 2,705 - -

442,133 407,954 232,419 232,339

Current assets

Inventories 22 18,606 9,245 - -Trade and other receivables 21 16,559 14,806 116,185 90,320Tax recoverable 99 257 62 107Short term investm ents 23 11,168 6,259 - -Cash and bank balances 24 33,234 37,229 2,315 499

79,666 67,796 118,562 90,926

Tot al assets 521,799 475,750 350,981 323,265

EQUITY A ND LIA BILITIES

Current liabilities

Loans and borrow ings 25 3,081 2,946 - -Trade and other payables 26 22,199 24,297 18,235 80,449Income tax payable 2,028 2,237 - -

27,308 29,480 18,235 80,449

Net current assets 52,358 38,316 100,327 10,477


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Statements of Financial PositionAs at 31 December 201 1 (contd)


RM000 RM000 RM000 RM000

Non-current liabilities

Deferred tax liabilit ies 20 45,880 45,585 5 40Loans and borrow ings 25 38,849 21,496 - -Lease rental payable 27 267 267 - -

84,996 67,348 5 40

Tot al liabilities 112,304 96,828 18,240 80,489

Net assets 409,495 378,922 332,741 242,776

Equity at tributable to ow nersof t he parent

Share capital 28 215,457 215,457 215,457 215,457Treasury shares 28 (11,096) (4,109) (11,096) (4,109)Retained earnings 29 186,796 151,149 128,380 31,428

391,157 362,497 332,741 242,776

Non-controlling interests 18,338 16,425 - -

Total equity 409,495 378,922 332,741 242,776

Total equity and liabilities 521,799 475,750 350,981 323,265


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Att ributable to owners of t he parentNon-

dist ributable Dist ributableEquity

attributableto owners Non-

Equity, of the parent, Share Treasury Retained controllingNot e t ot al t ot al capit al shares earnings int erest s

RM000 RM000 RM000 RM000 RM000 RM000Group

At 1 January 2010 357,684 341,844 215,457 (4,109) 130,496 15,840

Total comp rehensiveincome 25,868 24,883 - - 24,883 985

Transaction with owners

Dividends on ordinary shares 13 (4,230) (4,230) - - (4,230) -

Dividends paid tonon-controlling interests (400) - - - - (400)

Total t ransaction sw ith ow ners (4,630) (4,230) - - (4,230) (400)

At 31 December 2010 378,922 362,497 215,457 (4,109) 151,149 16,425

Total comprehensive income 46,429 43,916 - - 43,916 2,513

Transaction with owners

Purchase of treasury shares 28 (6,987) (6,987) - (6,987) - -

Dividends on ordinary shares 13 (8,269) (8,269) - - (8,269) -

Dividends paid tonon-controlling interests (600) - - - - (600)

Total t ransaction sw ith ow ners (15,856) (15,256) - (6,987) (8,269) (600)

At 31 December 2011 409,495 391,157 215,457 (11,096) 186,796 18,338


Statements of Changes in EquityFor t he financial year ended 3 1 December 2 011


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Stat ement s of Changes in Equit yFor t he financial year ended 31 December 2011 (contd)

Non-dist ribut able Dist ribut able

Equi ty, Share Treasury RetainedNote total capital shares earnings

RM 000 RM 000 RM 000 RM 000

Company

At 1 January 2010 243,724 215,457 (4,109) 32,376

Total comprehensiveincom e 3,281 - - 3,281

Transaction w ith ow ners

Dividends on ordinary shares 13 (4,229) - - (4,229)

Tot al t ransactionsw ith ow ners (4,229) - - (4,229)

At 31 December 2010 242,776 215,457 (4,109) 31,428

Total comprehensiveincom e 105,221 - - 105,221

Transaction w ith ow ners

Purchase of treasury shares 28 (6,987) - (6,987) -

Dividends on ordinary shares 13 (8,269) - - (8,269)

Tot al t ransactionsw ith ow ners (15,256) - (6,987) (8,269)

At 31 December 2011 332,741 215,4 57 (11,0 96) 1 28,380


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Statem ent s of Cash Flow sFor th e financial year ended 3 1 December 2 011


RM000 RM000 RM000 RM000Operating activit ies

Profit before tax 62,200 35,277 106,559 3,974

Adjustm ents for:

Dividend incom e 4 - - (106,960) (5,075)Interest incom e 5 (841) (582) (763) (730)Finance costs 7 1,144 942 713 722Depreciation of property, plant

and equipm ent 8 6,125 5,895 177 167Net g ain on d isposal of

plant and equipm ent 8 (377) (43) - -Am ort isat ion of land use rights 8 28 28 - -Am ortisation of quarry development

expenditure 8 28 - - -Inventories w rit ten off 8 28 - - -Bad debts w rit ten off 8 18 159 - -Equipm ent scrapped off 8 - 18

Goodw ill w rit ten off 8 - 15 - -Im pairm ent loss on receivables 8 - 191 - -

Total adjustm ents 6,153 6,623 (106,833) (4,916)

Operating cash flow s beforechanges in working capital 68,353 41,900 (274) (942)

Changes in working capital

(Increase)/ decrease in inventories (9,389) 7,125 - -Increase in receivables (7,763) (2,834) (432) (405)(Decrease)/ increase in payables (2,098) 7,542 21 140

Total changes in w orking capital (19,250) 11,833 (411) (265)

Cash flow s from/ (used in) o perations 49,103 53,733 (685) (1,207)Interest received 841 582 763 730Interest paid (1,144) (942) (713) (722)Tax refunded 368 - - -Income taxes paid (15,774) (10,256) (1,328) (521)

Net cash flow s from/ (used in)operating activities 33,394 43,117 (1,963) (1,720)


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Stat ement s of Cash Flow sFor t he financial year ended 31 December 2011 (contd)


RM000 RM000 RM000 RM000Investing activit ies

Purchase of prop erty, plant andequipm ent 14 (32,617) (17,289) (257) (861)

Proceeds from disposal ofplant and equipm ent 1,143 398 - 1

Additions of biological assets 15 (855) (340) - -Acquisition of ordinary shares

from non-controlling interests - (15) - -Additional investm ents in subsidiaries - - - (12,250)Dividend received - - 106,960 5 ,075Decrease in amounts due from

subsidiary companies - - (25,433) 1,830

Net cash flow s (used in)/ frominvesting activities (32,329) (17,246) 81,270 (6,205)

Financing activ ities

Dividend paid (8,269) (4,229) (8,269) (4,229)Dividend paid to non-controlling

shareholders by subsidiaries (600) (400) - -Purchase of treasury shares (6,987) - (6,987) -Proceeds f rom draw dow n of bank loans 18,995 6,000 - -Repayment of bank loans (2,425) (4,899) - -Repayment of obligations under

finance leases (865) (738) - -Increase in am oun ts due t o subsidiary

companies - - (62,235) 12,325

Net cash flow s (used in)/ fromfinancing activit ies (151) (4,266) (77,491) 8,096

Net increase in cashand cash equiv alents 914 21,605 1,816 171

Cash and cash equ ivalent s at1 January 43,488 21,883 499 328

Cash and cash equ ivalent s at31 Decemb er 24 44,402 43,488 2,315 499


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Not es to th e Financial St atem ent sFor th e financial year ended 3 1 December 2 011

1. Co rp orat e in fo rm at io n

The Company is a public limited liability company incorporated and domiciled in Malaysia and is listedon the Bursa Malaysia Securities Berhad. The registered office of the Company is located at Lot 70, Block6, Prima Square, Mile 4, Nor th Road, 9 000 0 Sandakan, Sabah.

The principal activities of the Company are investment holding and provision of management servicesto its subsidiary companies.

The principal activities of the subsidiary companies are stated in Note 19 to the financial statements.

There have been n o significant changes in the natu re of the p rincipal activities during the f inancial year.

2. Significant event s

(a) On 7 September 2011, Magnum Kapital Sdn. Bhd. ("M KSB"), a subsidiary of the Company hadentered into a condit ional Sale and Purchase of Shares Agreement w ith t hree Indon esian citizens,the Promo ter and the Sellers to p urchase the ent ire 500 shares of PT Mu kti Sejahtera Abadi ( PTMSA) representing 100% equity of PT MSA for a cash consideration of Rp.125.000.000 equivalentto approximately RM 46,125.

PT M SA is currently in the p alm o il plantation business and a holder of Location Permit issued bythe relevant authority, for plot of land located in Batu Ampar District, East Kutai Regency, Provinceof East Kalimantan, Indonesia, covering an area of 5,290 hectare (Land).

(b) On 28 September 2011, the shareholders of the Company approved to undertake a bonus issueof up to 107,728,458 new CGB Shares of RM 1 each to be credited as fully paid-up on the basisof one (1) Bonus Share for every two (2) existing CGB Shares held on an entitlement date to bedetermined later.

The Proposed Bonus Issue was completed by issuance of 102,989,295 Bonus Shares to theshareholders of the Company subsequent to year ended on 18 January 2012.

(c) On 15 December 2011, the Company acquired 2 ordinary shares of RM 1.00 each in HikayatAnggun Sdn. Bhd., representing its entire equity interest for a total consideration of RM 2, resultingin the latter becoming a wholly-owned subsidiary of the Group.

3. Summary of signif icant account ing policies

3.1 Basi s o f preparat ion

The financial statem ents of t he Group and of the Com pany have been prepared in accordancewith Financial Reporting Standards and the Companies Act, 1965 in Malaysia. At the beginningof the current financial year, the Grou p and the Com pany adopt ed new and revised FRS w hich

are mandator y for f inancial periods beginning on or af ter 1 January 2011 as described f ully in Note3.2.


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Not es to th e Financial Stat ement sFor t he financial year ended 31 December 2011 (contd)

3. Summary of signif icant account ing policies(contd)

The financial statem ents have been prepared on the historical cost basis except as disclosed in theaccoun ting policies below.

The financial statements are presented in Ringgit Malaysia (RM) and all values are rounded to the nearestthousand (RM 000) except w hen ot herw ise indicated.

3.2 Changes in accounting policies

The accounting policies adopted are consistent with those of the previous financial year exceptas follow s:

On 1 January 2011, the Group a

CEPAT-AnnualReport2011 (1.6MB)

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