MUI Properties Berhad - MalaysiaStock.Biz

MUI Properties BerhadCompany No: 6113-W

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

C O N T E N T S

Notice of Meeting 2

Corporate Information 5

Profile� of� Directors� 6�

Statement on Corporate Governance 8

Directors’� Responsibilities� in� respect� of� Financial� Statements� 15�

Statement� on� Risk� Management� and� Internal� Control� 16�

Other� Information� 19�

Report� of� the� Audit� Committee� 20�

Chairman’s� Statement� 24�

Financial� Highlights� 27�

Directors’� Report� 28�

Statement� by� Directors� 33�

Statutory� Declaration� 33�

Independent� Auditors’� Report� 34�

Income� Statements� 36

Statements� of� Comprehensive� Income� 37�

Statements� of� Financial� Position� 38�

Statement� of� Changes� in� Equity� 40�

Statements� of� Cash� Flows� 41�

Notes� to� the� Financial� Statements� 43�

Properties� Owned� by� the� Group� 102

Analysis� of� Shareholdings� 103�

Form� of� Proxy

MUI Properties Berhad6113-W

Incorporated in Malaysia

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NOTICE� IS� HEREBY� GIVEN� that� the� Forty-Seventh� Annual� General� Meeting� of � the� Company� will� be� held� at� Rembau� Room,� Corus� Paradise� resort� Port� Dickson,� 3.5km,� Jalan� Pantai,� 71000� Port� Dickson,� Negeri� Sembilan� Darul� Khusus� on� Thursday,� 27� June� 2013� at� 3.00� p.m.� for� the� following� purposes:-

As Ordinary Business

1.� � To� receive� the� audited� financial� statements� together� with� the� reports� of � the� Directors� and� Auditors� thereon� for� the� � financial� year� ended� 31� December� 2012.

2.� To� approve� Directors’� fees� of � RM160,200.� Resolution 1

3.� To� consider� and,� if � thought� fit,� pass� a� resolution� that� pursuant� to� Section� 129(6)� of � the� Companies� Act,� 1965,� � Tan� Sri� Dato’� Khoo� Kay� Peng� be� re-appointed� as� Director� of � the� Company� to� hold� office� until� the� conclusion� of � � the� next� Annual� General� Meeting� of � the� Company.� � � � Resolution 2

4.� � To� re-elect� Encik� Abdul� Rashid� bin� Ismail� who� is� retiring� in� accordance� with� Article� 109� of � the� Company’s� Articles� � of � Association.� � � Resolution 3

5.� � To� re-appoint� Messrs� Ernst� &� Young� as� auditors� and� to� authorize� the� Directors� to� fix� their� remuneration. Resolution 4As Special Business

To� consider� and,� if � thought� fit,� pass� the� following� resolutions:-

6.� Ordinary� Resolution� � -� Proposed� Authority� to� Allot� and� Issue� Shares� pursuant� to� Section� 132D� of � the� Companies� Act,� 1965

� “THAT� pursuant� to� Section� 132D� of � the� Companies� Act,� 1965� and� subject� to� the� approval� of � the� relevant� � authorities,� the� Directors� be� and� are� hereby� authorized� to� allot� and� issue� shares� in� the� Company� at� any� time� until� � the� conclusion� of � the� next� Annual� General� Meeting� or� until� the� expiration� of � the� period� within� which� the� next� � Annual� General� Meeting� is� required� by� law� to� be� held,� whichever� is� the� earlier� and� upon� such� terms� and� conditions� � and� for� such� purposes� as� the� Directors� may,� in� their� absolute� discretion,� deem� fit,� provided� always� that� the� � aggregate� number� of � shares� to� be� issued� pursuant� to� this� resolution� does� not� exceed� ten� per� centum� (10%)� of � the� � issued� and� paid-up� share� capital� of � the� Company� for� the� time� being.”� � � Resolution 5

7.� � Ordinary� Resolution� -� Proposed� Renewal� of � Authority� for� the� Purchase� of � Own� Shares� by� MUI� Properties� Berhad

� “THAT,� subject� to� the� Companies� Act,� 1965� and� all� other� applicable� laws,� guidelines,� rules� and� regulations,� � approval� be� and� is� hereby� given� to� the� Company� to� purchase� and/or� hold� such� amount� of � ordinary� shares� of � � RM0.20� each� in� the� Company� (“Proposed� Share� Buy-Back”)� as� may� be� determined� by� the� Directors� of � the� � Company� from� time� to� time� through� Bursa� Malaysia� Securities� Berhad� (“Bursa� Securities”)� provided� that� the� � aggregate� number� of � ordinary� shares� which� may� be� purchased� and/or� held� by� the� Company� pursuant� to� this� � resolution� shall� not� exceed� ten� per� centum� (10%)� of � the� issued� and� paid-up� share� capital� of � the� Company� at� the� � time� of � purchase;

� AND� THAT� the� maximum� funds� to� be� allocated� by� the� Company� for� the� purpose� of � the� Proposed� Share� Buy- � Back� shall� not� exceed� the� balances� of � the� Company’s� retained� earnings� and� share� premium� account.� Based� on� the� � audited� financial� statements� for� the� financial� year� ended� 31� December� 2012,� the� Company’s� retained� earnings� and� � share� premium� account� stood� at� RM4,194,460� and� RM9,656,367� respectively;�

N O T I C E O F M E E T I N G



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� AND� THAT� the� authority� conferred� by� this� resolution� will� be� effective� immediately� upon� the� passing� of � this� � resolution,� and� will,� subject� to� renewal� thereat,� expire� at� the� conclusion� of � the� next� Annual� General� Meeting� of � � the� Company� following� the� passing� of � this� Ordinary� Resolution� or� the� expiry� of � the� period� within� which� the� � next� Annual� General� Meeting� is� required� by� law� to� be� held� (unless� earlier� revoked� or� varied� by� ordinary� resolution� � in� a� general� meeting� of � shareholders� of � the� Company),� whichever� occurs� first� and� in� any� event,� in� accordance� with� � the� provisions� of � Bursa� Securities� Main� Market� Listing� Requirements� and/or� any� other� relevant� authorities;

� AND� THAT� authority� be� and� is� hereby� given� to� the� Directors� of � the� Company� to� decide� in� their� absolute� � discretion� to:-� (i)� � cancel� the� shares� so� purchased;� or� (ii)� � retain� the� shares� so� purchased� as� treasury� shares;� or� (iii)� � retain� part� of � the� shares� so� purchased� as� treasury� shares� and� cancel� the� remainder;� or� (iv)� � distribute� the� treasury� shares� as� dividends� to� shareholders� and/or� resell� on� Bursa� Securities� and/or� cancel� all� � � � or� part� of � them;

� AND� THAT� the� Directors� be� and� are� hereby� authorized� to� do� all� such� acts� and� things� (including� executing� any� � relevant� documents)� as� they� may� consider� expedient� or� necessary� to� complete� and� give� effect� to� the� aforesaid� � authorization� with� full� powers� to� assent� to� any� conditions,� modifications,� variations� or� amendments� (if � any)� as� � may� be� imposed� by� the� relevant� governmental/regulatory� authorities� from� time� to� time� and� with� full� power� to� � do� all� such� acts� and� things� thereafter� in� accordance� with� the� Companies� Act,� 1965,� the� provisions� of � the� � Company’s� Memorandum� and� Articles� of � Association� and� the� requirements� of � Bursa� Securities� and� all� other� � governmental/regulatory� authorities.”� � � � � � � � � � � � � Resolution 6

8.� � To� transact� any� other� business� of � which� due� notice� shall� have� been� received.

By� order� of � the� Board

Soo-Hoo� Siew� HoonHo� Chun� FuatJoint Company Secretaries

Kuala� Lumpur5� June� 2013

Notes:-

1. Only a member whose name appears on the Record of Depositors as at 17 June 2013 shall be entitled to attend and vote at the meeting or appoint proxies to attend and/or

vote on his or her behalf. 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.

2.� � A� member� shall� not� be� entitled� to� appoint� more� than� two� (2)� proxies� to� attend� and� vote� at� the� same� meeting.� Where� a� member� is� an� authorized� nominee� as� defined�

under the Securities Industry (Central Depositories) Act, 1991, it may appoint one (1) proxy only in respect of each securities account it holds with ordinary shares

of 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.� An� exempt� authorised� nominee� refers� to� an� authorised� nominee� defined� under� the� Central�

Depositories Act which is exempted from compliance with the provisions of subsection 25A(1) of the Central Depositories Act.

3.� Where� a� Member� and/or� an� exempt� authorised� nominee� appoint� two� (2)� or� more� proxies,� the� appointments� shall� be� invalid� unless� he� specifies� the� proportions� of � his�

shareholdings to be represented by each proxy in the instrument appointing the proxies.

4. The Form of Proxy shall be in writing under the hand of the appointor or his attorney duly authorized in writing or if such appointor is a corporation, under its

common seal or under the hand of the attorney.

5.� � The� Form� of � Proxy� must� be� deposited� at� the� registered� office� of � the� Company� at� Unit� 3,� 191,� Jalan� Ampang,� 50450� Kuala� Lumpur� not� less� than� 48� hours� before� the�

time appointed for holding the meeting or any adjournment thereof.



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EXPLANATORY NOTES ON SPECIAL BUSINESS

1.� � The� Ordinary� Resolution� proposed� under� item� 6� is� a� renewal� of � the� general� authority� for� the� Directors� to� issue� � shares� pursuant� to� Section� 132D� of � the� Companies� Act,� 1965� (“general� authority� to� issue� shares”).� If � passed,� it� will� � empower� the� Directors� of � the� Company,� from� the� date� of � the� above� Annual� General� Meeting� until� the� next� Annual� � General� Meeting� to� allot� and� issue� shares� in� the� Company� up� to� and� not� exceeding� in� total� ten� per� centum� (10%)� � of � the� issued� and� paid-up� share� capital� of � the� Company� for� the� time� being� for� such� purposes� as� they� consider� � would� be� in� the� interests� of � the� Company.� This� authority� will� expire� at� the� next� Annual� General� Meeting� of � the� � Company,� unless� revoked� or� varied� at� a� general� meeting.

� The� Company� has� not� issued� any� new� shares� under� the� general� authority� to� issue� shares� which� was� approved� at� the� � Forty-Sixth� Annual� General� Meeting� held� on� 27� June� 2012� and� which� will� lapse� at� the� conclusion� of � the� Forty- � Seventh� Annual� General� Meeting� to� be� held� on� 27� June� 2013.

� The� general� authority� to� issue� shares� will� allow� the� Company� to� take� advantage� of � any� strategic� opportunities,� � including� but� not� limited� to,� issuance� of � new� shares� for� purpose� of � funding� investment� project(s),� working� capital� � and/or� acquisitions� which� require� new� shares� to� be� allotted� and� issued� speedily� and� would� also� save� the� cost� � involved� in� convening� a� general� meeting� to� approve� such� issuance� of � shares.

2.� � The� Ordinary� Resolution� proposed� under� item� 7,� if � passed,� will� empower� the� Directors� of � the� Company� to� � purchase� MUI� Properties� Berhad� shares� through� Bursa� Malaysia� Securities� Berhad� up� to� ten� per� centum� (10%)� of � � the� issued� and� paid-up� share� capital� of � the� Company.

N O T I C E O F M E E T I N G ( C o n t ’d )



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C O R P O R A T E I N F O R M A T I O N

Board of Directors

Tan� Sri� Dato’� Khoo� Kay� Peng,� P.S.M.,� D.P.M.J.,� K.M.N.,� J.P.,� HonD� Litt,� Hon� LLD,� Hon� Ph.D, Chairman & Chief Executive

Christopher� Martin� BoydAbdul� Rashid� bin� IsmailTan� Sri� Dato’� Dr� Yeoh� Oon� KhengDatin� Ngiam� Pick� Ngoh

Joint Company Secretaries

Soo-Hoo� Siew� HoonHo� Chun� Fuat

Auditors

Ernst� &� Young Chartered Accountants

Principal Bankers

Malayan� Banking� BerhadCIMB� Bank� Berhad

Registrar

Tricor� Investor� Services� Sdn.� Bhd.Level� 17,� The� Gardens� North� Tower,� Mid� Valley� City,� Lingkaran� Syed� Putra,� 59200� Kuala� LumpurTel.� No.:� 03-22643883� Fax.� No.:� 03-22821886

Registered� Office

Unit� 3,� 191,� Jalan� Ampang,� 50450� Kuala� Lumpur� Tel.� No.:� 03-21487696� Fax.� No.:� 03-21445209� � Website:� www.muiproperties.com.my



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P R O F I L E O F D I R E C T O R S

Tan Sri Dato’ Khoo Kay Peng

Age� 74.� Chairman� and� Chief � Executive� of � MUI� Properties� Berhad.� Appointed� as� Director� on� 25� November� 1977� and� has� been� Chairman� since� 1979.� Was� conferred� an� Honorary� Doctor� of � Letters� by� the� Curtin� University� of � Technology,� Perth,� Australia� in� 1993,� Honorary� Doctor� of � Law� by� Northwest� University,� Kirkland,� Seattle,� USA� in� 2000� and� Doctor� of � Philosophy� in� Business� Management� (Honoris� Causa)� by� UCSI� University,� Malaysia� in� 2011.� In� 1985,� was� awarded� the� Manager� of � the� Year� by� the� Harvard� Business� School� Alumni� Club� of � Malaysia� and� was� also� honoured� with� the� Entrepreneur� of � the� Year� Award� by� the� Asian� Institute� of � Management� Graduates’� Association� of � Malaysia� and� the� Association� of � Banks,� Malaysia.� Was� conferred� in� 2013� a� medal� by� the� United� States� Commission� on� � International� Religious� Freedom,� a� Commission� established� by� the� United� States� Congress.� Was� the� Chairman� of � the� then� Tourist� Development� Corporation� (now� known� as� the� Malaysia� Tourism� Promotion� Board),� Vice� Chairman� of � Malayan� Banking� Berhad� (Maybank)� and� a� trustee� of � the� National� Welfare� Foundation.� Currently,� also� the� Chairman� and� Chief � Executive� of � Malayan� United� Industries� Berhad.� He� is� also� the� Chairman� of � Pan� Malaysian� Industries� Berhad,� Laura� Ashley� Holdings� plc� and� Corus� Hotels� Limited� (formerly� known� as� Corus� Hotels� plc),� United� Kingdom.� Also� sits� on� the� Boards� of � Metrojaya� Berhad,� MUI� Continental� Berhad� (formerly� known� as� MUI� Continental� Insurance� Berhad),� SCMP� Group� Limited� (South� China� Morning� Post)� and� The� Bank� of � East� Asia� Limited,� Hong� Kong.� He� is� presently� a� trustee� of � Regent� University,� Virginia,� USA,� a� board� member� of � Northwest� University,� a� Council� Member� of � the� Malaysian-British� Business� Council,� the� Malaysia-China� Business� Council� and� the� Asia� Business� Council.� A� deemed� substantial� shareholder� of � MUI� Properties� Berhad.� Attended� all� the� four� (4)� Board� Meetings� held� during� the� financial� year.

Christopher Martin Boyd

Age� 66.� Independent� Non-Executive� Director.� Appointed� as� Director� on� 27� July� 1994� and� subsequently� on� 1� April� 1995� was� appointed� as� Managing� Director.� Relinquished� his� post� as� Managing� Director� on� 1� February� 2001,� but� remained� as� Non-Executive� Director.� Chairman� of � the� Audit� Committee� and� Nomination� Committee.� A� member� of � the� Remuneration� Committee.� Fellow� of � the� Royal� Institution� of � Chartered� Surveyors� and� the� Institution� of � Surveyor� (Malaysia).� Also� a� member� of � the� Singapore� Institute� of � Surveyors� and� Valuers� and� an� Associate� of � the� Australian� Property� Institute.� Formerly,� a� partner� of � Jones� Lang� Wootton� Malaysia� from� 1974� to� 1981;� a� Director� of � Jones� Lang� Wootton� Singapore� from� 1981� to� 1985� and� a� partner� of � Knight� Frank� Baillieu� Malaysia� from� 1986� to� 1995;� all� of � which� are� firms� principally� engaged� in� property� valuation,� agency,� management� and� consultancy.� Currently,� he� is� the� Chairman� of � CB� Richard� Ellis� (Malaysia)� Sdn� Bhd,� a� firm� engaged� in� property� valuation,� estate� agency,� property� � management� and� research.� He� also� sits� on� the� Board� of � Eastern� &� Oriental� Berhad.� Attended� all� the� four� (4)� Board� Meetings� held� during� the� financial� year.

Abdul Rashid bin Ismail

Age� 42.� Independent� Non-Executive� Director.� Appointed� as� Director� on� 3� January� 2007.� Chairman� of � Remuneration� Committee.� A� member� of � the� Audit� Committee� and� Nomination� Committeee.� An� Advocate� and� Solicitor� of � the� High� Court� of � Malaya.� Holds� an� LLB� (Hons)� Degree� from� University� of � Exeter,� England.� He� was� admitted� as� a� Barrister� at� Law� of � the� Honourable� Society� of � Lincoln’s� Inn,� England� in� 1994.� Admitted� as� an� Advocate� and� Solicitor� of � the� High� Court� of � Malaya� in� 1995.� Currently,� he� is� a� partner� of � the� law� firm,� Messrs� Rashid� Zulkifli.� Attended� three� (3)� Board� Meetings� held� during� the� financial� year.



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Tan Sri Dato’ Dr Yeoh Oon Kheng

Age� 60.� Independent� Non-Executive� Director.� Appointed� as� Director� on� 18� October� 2011.� A� member� of � the� Audit� Committee.� He� graduated� in� Economics� &� Accounting� from� Monash� University� and� did� his� practical� accounting� training� with� PricewaterhouseCoopers� in� Melbourne.� He� has� attended� the� Harvard� Business� School,� Aresty� Institute� of � Wharton� School� in� USA,� the� Melbourne� Business� School� of � Management� and� UCLA� Andersen� Graduate� School� of � Management.� He� was� conferred� the� Doctorate� of � Laws� Honoris� Causa� by� Britains’s� University� of � Nottingham.� He� is� Vice-President� of � Malaysian� Institute� of � Directors� and� Institute� of � Management� Consultants,� Malaysia,� Member� of � the� Institute� of � Directors,� UK� and� Fellow� of � the� Malaysian� Institute� of � Management.�

He� is� the� Co-Founder� &� CEO� of � the� Asian� Strategy� &� Leadership� Institute� (ASLI).� He� is� also� Joint� Secretary- General� of � the� Malaysia-China� Business� Council,� the� ASEAN� Business� Forum� and� the� Corporate� Malaysia� Roundtable.� His� management� career� covers� over� ten� years’� experience� in� the� financial� sector� where� he� was� Principal� Adviser� of � Southern� Bank� Berhad.� He� was� also� a� Director� of � SB� Venture� Capital� Corporation� Sdn� Bhd,� SBB� Capital� Markets� Sdn� Bhd,� SBB� Asset� Management� Sdn� Bhd,� Star� Publications� (Malaysia)� Berhad,� National� Heart� Institute,� Wisma� MCA� Berhad� and� Executive� Director,� Organisational� Resources� Corporation/Formis� Berhad,� Huaren� Holdings� Sdn� Bhd,� Malaysian� Strategic� Consultancy� Sdn� Bhd� and� Sunway� College/Asian� Strategy� &� Leadership� Institute.� He� had� also� served� Multi-Purpose� Holdings� Berhad� and� PricewaterhouseCoopers,� Melbourne� in� various� capacities.� He� was� appointed� by� the� Prime� Minister� and� Government� of � Malaysia� to� be� Malaysia’s� Representative � (with� Ambassadorial� status)� on� the� new� ASEAN� High� Level� Task� Force.� Contributing� his� time� to� National� Service,� he� served� on� the� First� and� Second� National� Economic� Consultative� Council� and� NEAC� Globalisation� Task� Force.� He� was� appointed� by� the� Prime� Minister� to� the� National� Unity� Advisory� Panel� and� the� Royal� Commission� on� Police.� He� was� a� Commissioner� on� Malaysia’s� Human� Rights� Commission� (SUHAKAM)� and� served� as� Chairman� of � its� Economic,� Cultural� and� Social� Rights� Working� Group.� In� April� 2011,� he� was� appointed� by� the� Prime� Minister� to� be� a� Commissioner� in� Malaysia’s� newly� established� Competition� Commission.� He� has� written� several� books� on� Management,� Leadership� and� Malaysian� Politics.� He� also� sits� on� the� Board� of � Pan� Malaysia� Corporation� Berhad.� Attended� all� the� four� (4)� Board� Meetings� held� during� the� financial� year.

Datin Ngiam Pick Ngoh

Age� 58.� Independent� Non-Executive� Director.� Appointed� as� Director� on� 16� November� 2011.� Holds� a� Bachelor� of � Arts� (Hons)� in� Sociology� &� Anthropology,� University� of � Malaya� and� a� Diploma� in� Advertising� and� Marketing,� Institute� of � Communication,� Advertising� and� Marketing� (CAM),� United� Kingdom.� She� currently� sits� on� the� Board� of � Star� Publications� (Malaysia)� Berhad� (“The� Star”),� Hong� Leong� Assurance� Berhad� and� Guinness� Anchor� Berhad.� She� was� appointed� as� Group� Managing� Director/Chief � Executive� Officer� of � The� Star� on� 1� July� 2008� and� retired� on� 30� June� 2011.� She� served� as� Deputy� Group� General� Manager� from� 2004� until� her� appointment� as� Group� Chief � Operating� Officer� in� The� Star� in� 2005.� Prior� to� this,� she� was� General� Manager,� Advertising� and� Business� Development� (1985-2003).� She� is� also� a� member� of � The� Star� Finance� Committee.� �

She� was� a� Board� Member� of � the� Audit� Bureau� of � Circulations� (ABC)� Malaysia� and� Chairman� of � the� Audit� Bureau� of � Circulations� (ABC)� Content� &� Communications� Committee� and� was� the� honorary� secretary� of � the� Malaysian� Newspaper� Publishers� Association� (MNPA)� and� board� member� of � the� Advertising� Standards� Authority� Malaysia� (ASA).

She� also� served� as� Chairman� on� the� subsidiaries� of � The� Star� Group� namely,� Cityneon� Holdings� Ltd,� Singapore,� StarRfm� Sdn� Bhd,� Rimakmur� Sdn� Bhd� and� Leaderonomics� Sdn� Bhd.� Attended� all� the� four� (4)� Board� Meetings� held� during� the� financial� year.

Note:-

None� of � the� Directors� has� any� family� relationship� with� any� Director� and/or� major� shareholders� of � the� Company.� None� of � the� Directors� has� any� conflict� of � interest� with� the� Company� nor�

have they been convicted of any offences within the past ten (10) years.

All the Directors are Malaysians except for Christopher Martin Boyd who is British with Malaysian Permanent Resident status.



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The� Board� of � Directors� (the� “Board”)� is� committed� to� the� principles� of � corporate� governance� set� out� in� the� Malaysian� Code� on� Corporate� Governance� 2012� (the� “Code”).

The� Board� will� continuously� evaluate� the� status� of � the� Group’s� corporate� governance� practices� and� procedures� with� a� view� to� adopt� and� implement� the� recommendations� of � the� Code� wherever� applicable� in� the� best� interests� of � the� shareholders� of � the� Company.� The� Board� considers� that� it� has� generally� applied� the� principles� and� recommendations� of � the� Code.

Set� out� below� is� the� description� on� the� manner� in� which� the� Company� has� applied� the� principles� and� recommendations� of � the� Code.

1. Board of Directors

1.1 Composition of Board

� � The� Board� is� responsible� for� the� overall� performance� of � the� Company� and� focuses� mainly� on� strategies,� � � performance,� standards� of � conduct� and� critical� business� issues.

� � The� Board� currently� consists� of � five� (5)� Directors:-� � •� One� (1)� Chairman� and� Chief � Executive� � •� Four� (4)� Independent� Non-Executive� Directors

� � The� Chairman� functions� both� as� Chairman� of � the� Board� and� Chief � Executive.� The� Board� is� mindful� of � the� � � combined� roles� but� is� comfortable� that� there� is� no� concern� as� all� related� party� transactions� are� dealt� with� in� � � accordance� with� the� Bursa� Malaysia� Securities� Berhad� (“Bursa� Securities”)� Main� Market� Listing� Requirements� � � (“Listing� Requirements”).

� � Recommendation� 3.5� of � the� Code� states� that� the� Board� must� comprise� a� majority� of � Independent� Directors� � � where� the� Chairman� of � the� Board� is� not� an� Independent� Director.� Currently,� the� Board� has� a� majority� of � � � Independent� Directors.

� � The� Board� also� complies� with� the� Bursa� Securities� Listing� Requirements� that� requires� at� least� two� (2)� or� one- � � third� (1/3)� of � the� Board,� whichever� is� higher,� to� be� Independent� Directors.

� � The� Board� has� reserved� certain� material� matters� for� the� collective� review� and� decision� by� the� Board.� The� roles� � � and� contributions� of � Independent� Directors� also� provide� an� element� of � objectivity,� independent� judgement� � � and� check� and� balance� on� the� Board.

� � Together,� the� Directors� bring� a� wide� range� of � business� and� financial� experience� for� effective� direction� and� � � management� of � the� Group’s� businesses.� A� brief � description� of � the� background� of � each� Director� is� presented� in� � � pages� 6� and� 7� of � the� Annual� Report.

� � Mr� Christopher� Martin� Boyd� has� been� identified� as� the� Senior� Independent� Non-Executive� Director� to� whom� � � concerns� regarding� the� Company� may� be� conveyed.

� � The� Board� has� established� Board� committees,� which� operate� within� defined� terms� of � reference.� These� � � committees� are:-� � •� Audit� Committee� � •� Nomination� Committee� � •� Remuneration� Committee

S T A T E M E N T O N C O R P O R A T E G O V E R N A N C E



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The� Report� of � the� Audit� Committee� for� the� financial� year� ended� 31� December� 2012� is� set� out� in� pages� 20� to� � � 22� of � the� Annual� Report.

� � Details� of � the� Nomination� Committee� and� Remuneration� Committee� are� set� out� in� Section� 2.2� and� Section� � � 2.3� respectively� of � this� Statement.

1.2 Independence of Directors

Recommendation� 3.2� of � the� Code� recommends� that� the� tenure� of � an� Independent� Director� should� not� exceed� � � a� cumulative� term� of � nine� (9)� years.� However,� upon� completion� of � the� nine� (9)� years,� the� Independent� Director� � � may� continue� to� serve� the� Board.

� � The� Board� will� continually� evaluate� from� time� to� time� the� independence� of � each� of � its� Independent� Directors.� � � In� this� regard,� the� Board� will� be� guided� by� the� criteria� set� out� in� the� Bursa� Securities� Listing� Requirements.�

1.3 Board Charter

The� Board� has� established� a� Board� Charter� which� prescribes,� among� other� things,� the� roles� of � the� Board,� � � schedule� of � matters� reserved� for� the� Board’s� collective� decision� and� a� Code� of � Ethics� and� Conduct.�

� � The� Board� Charter� is� subject� to� review� by� the� Board� from� time� to� time� to� ensure� that� the� Board� Charter� � � remains� consistent� with� the� Board’s� objectives,� current� laws� and� practices.

� � The� Board� Charter� is� available� in� the� Company’s� corporate� website.

1.4 Board Meetings

The� Board� meets� at� least� four� (4)� times� a� year,� with� additional� meetings� convened� as� necessary.� The� Chairman� � � � is� responsible� for� setting� the� agenda� for� Board� meetings.� Any� Board� member� may,� however,� recommend� the� � � � inclusion� of � items� on� the� agenda.� Such� recommendations� will� be� accommodated� to� the� extent� practicable.� � � � The� agenda� typically� reaches� the� Board� at� least� two� (2)� weeks� prior� to� Board� meetings.� Board� meetings� are� � � � typically� scheduled� a� year� in� advance.

� � � Four� (4)� Board� Meetings� were� held� during� the� financial� year� ended� 31� December� 2012.� Details� of � the� � � � attendance� of � the� Directors� are� set� out� in� the� Profile� of � Directors� appearing� in� pages� 6� and� 7� of � the� Annual� � � � Report.

1.5 Appointments to the Board

The� Nomination� Committee� has� the� responsibility� to� identify� and� evaluate� potential� candidates� based� on� their� � � � skills,� experience,� knowledge,� expertise� and� commitment� to� fulfill� the� role� and� responsibilities� of � the� position� � � � before� making� any� recommendation� to� the� Board� for� approval� of � the� appointment.� The� proposed� � � � appointment� of � each� new� Director� will� be� deliberated� by� the� Board� based� on� the� recommendation� by� the� � � � Nomination� Committee.

� � � The� Board� has� taken� note� of � the� recommendation� in� the� Code� pertaining� to� the� establishment� of � board� gender� � � � diversity� policy.� The� Board� recognizes� the� importance� of � boardroom� diversity� and� aims� to� ensure� diversity� in� � � � its� composition.� The� Board� currently� has� one� (1)� female� director,� namely� Datin� Ngiam� Pick� Ngoh.



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1. Board of Directors (Cont’d)

1.5 Appointments to the Board (Cont’d)

� � � The� Directors� have� direct� access� to� the� services� of � the� Joint� Company� Secretaries� who� are� responsible� for � � � ensuring� that� all� appointments� are� properly� made� and� all� necessary� information� is� obtained� from� Directors,� � � � � both� for� the� Company’s� own� records� and� for� the� purposes� of � meeting� the� requirements� of � the� Companies� � � � Act,� 1965,� Bursa� Securities� Listing� Requirements� and� other� regulatory� requirements.

1.6 Re-election and Re-appointment of Directors

� � � In� accordance� with� the� Company’s� Articles� of � Association,� Directors� who� are� appointed� by� the� Board� are� � � � subject� to� election� by� shareholders� at� the� next� Annual� General� Meeting� following� their� appointment.

� � � The� Company’s� Articles� of � Association� provide� that� at� every� Annual� General� Meeting,� one-third� of � the� � � � Directors� for� the� time� being,� or,� if � their� number� is� not� three� or� a� multiple� of � three,� then� the� number� nearest� � � � one-third,� shall� retire� from� office� and� shall� be� eligible� for� re-election.� The� Company’s� Articles� of � Association� � � � further� provide� that� subject� to� the� provisions� of � any� contract� between� a� Managing� Director� and� the� Company,� � � � all� Directors� shall� retire� from� office� at� least� once� in� every� three� years� and� shall� be� eligible� for� re-election.

� � � Directors� over� seventy� (70)� years� of � age� are� required� to� submit� themselves� for� re-appointment� annually� in� � � � accordance� with� Section� 129� of � the� Companies� Act,� 1965.

1.7 Directors’ Remuneration

� � � The� Remuneration� Committee� will� review� the� remuneration� of � the� Directors� and� submit� its� � � � recommendations� to� the� Board� for� approval.� The� individual� director� concerned� will� abstain� from� discussion� � � � of � their� own� remuneration.� Directors’� fees� are� approved� at� the� Annual� General� Meeting� by� the� shareholders.

For� the� financial� year� ended� 31� December� 2012,� the� aggregate� of � remuneration� of � the� Directors� received� � � � from� the� Company� and� its� subsidiaries� categorized� into� appropriate� components� were� as� follows:- Benefits- Salaries Fees in-kind Others Total RM’000 RM’000 RM’000 RM’000 RM’000 Executive Directors

� � Received� from� the� � -� Company� � 461� 72� 32� 132� 697� � -� Subsidiary� companies� -� 10� -� -� 10� � � � � � � 461� 82� 32� 132� 707 Non-Executive Directors

� � Received� from� the - Company - 56 - 15 71 - Subsidiary companies - 10 - - 10 - 66 - 15 81 461 148 32 147 788

S T A T E M E N T O N C O R P O R A T E G O V E R N A N C E ( C o n t ’d )



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� The� number� of � Directors� of � the� Company� whose� remuneration� during� the� year� falls� within� the� respective� bands� � are� as� follows:- Number of Directors Executive Non-Executive� Range� of � Remuneration� Below� RM50,000� -� � 4� RM200,001� to� RM250,000� � 1� � -� RM550,001� to� RM600,000� 1� � -

1.8 Supply of Information

� � � The� Board� has� unrestricted� access� to� information� necessary� for� the� furtherance� of � their� duties.

� � � The� Board� is� also� updated� by� the� Joint� Company� Secretaries� on� new� statutory� and� regulatory� requirements� � � � concerning� their� duties� and� responsibilities� from� time� to� time.�

� � � Board� papers� are� distributed� to� Board� members� prior� to� the� meeting.� Important� matters� that� are� reasonably� � � � expected� to� have� a� material� effect� on� the� price,� value� or� market� activity� of � the� Company’s� shares� may� be� � � � discussed� at� the� meeting� without� materials� being� distributed� prior� to� the� meeting.

� � � All� Directors� have� access� to� the� advice� and� services� of � the� Joint� Company� Secretaries� and� where� necessary,� � � � in� the� furtherance� of � their� duties,� obtain� independent� professional� advice� at� the� Group’s� expense.

1.9 Directorships in Other Companies

In� accordance� with� the� Bursa� Securities� Listing� Requirements,� each� member� of � the� Board� holds� not� more� � � � than� five� (5)� directorships� in� public� listed� companies.� Prior� to� acceptance� of � any� other� appointment� for� � � � directorships� in� other� public� listed� companies,� the� Directors� are� required� to� consult� with� the� Chairman� to� � � � ensure� that� the� acceptance� of � the� new� directorships� would� not� affect� their� commitments� and� responsibilities� � � � to� the� Group.� Any� acceptance� of � new� directorship� must� be� notified� to� the� Company� immediately� and� the� � � � Board� is� informed� on� changes� to� the� directorships� held� by� the� Directors� at� the� following� Board� meeting.

1.10 Directors’ Training

� � � All� Directors� have� attended� and� successfully� completed� the� Mandatory� Accreditation� Programme� prescribed� � � � by� Bursa� Securities.� During� the� year,� the� Directors� attended� training� that� aids� them� in� the� discharge� of � their� � � � duties� as� Directors� which� included� an� in-house� seminar� on� the� subject� of � “Corporate� Disclosure� Guide� � � � 2011”.

� � � All� Directors� are� encouraged� to� attend� various� training� and� programmes� and� seminars� to� ensure� that� they� are� � � � kept� abreast� on� various� issues� related� to� business� of � the� Group,� governance,� compliance,� risk� management� � � � and� sustainability.



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2. Board Committees

2.1 Audit Committee

� � The� Audit� Committee� comprises� exclusively� of � Non-Executive� Directors,� and� all� are� Independent� Directors.� � � The� members� of � Audit� Committee� are� as� follows:-

� � Chairman� Christopher� Martin� Boyd� � � -� Independent� Non-Executive� Director�

� � Members� Abdul� Rashid� bin� Ismail� � � -� Independent� Non-Executive� Director� � � � Tan� Sri� Dato’� Dr� Yeoh� Oon� Kheng� -� Independent� Non-Executive� Director

� � The� terms� of � reference,� attendance� of � members� at� the� Audit� Committee� Meeting� and� activities� of � Audit� � � Committee� for� the� financial� year� ended� 31� December� 2012� are� set� out� in� Report� of � the� Audit� Committee� in� � � page� 20� and� 21� of � the� Annual� Report.

2.2 Nomination Committee

� � The� Nomination� Committee� comprises� exclusively� of � Non-Executive� Directors,� and� all� are� Independent� � � Directors.� The� members� of � Nomination� Committee� are� as� follows:-

� � Chairman� Christopher� Martin� Boyd� -� Independent� Non-Executive� Director

� � Member� Abdul� Rashid� bin� Ismail� -� Independent� Non-Executive� Director

� � The� functions� of � the� Nomination� Committee� are:-� � •� identifying� and� recommending� new� nominees� for� the� Board� and� Board� Committees;� � •� annually� assessing� the� effectiveness� of � the� Board� as� a� whole,� the� Board� Committees� and� contribution� of � � � � each� Director� on� an� on-going� basis;� � •� annually� reviewing� the� mix� of � skills,� experience� and� other� qualities,� including� core� competencies� of � non- � � � executive� Directors;� and� � •� � annually� reviewing� the� Board� structure,� size� and� composition.

� � The� Nomination� Committee� has� carried� out� the� annual� assessment� for� financial� year� ended� 31� December� � � 2012� and� is� satisfied� that� the� size� of � the� Board� is� optimum� and� there� is� an� appropriate� mix� of � knowledge,� � � skills,� attributes,� diversity� and� core� competencies� in� the� Board’s� composition.� 2.3 Remuneration Committee

� � The� Remuneration� Committee� comprises� exclusively� of � Non-Executive� Directors,� and� all� are� Independent� � � Directors.� � The� members� of � the� Remuneration� Committee� are� as� follows:-

Chairman Abdul Rashid bin Ismail - Independent Non-Executive Director

Member Christopher Martin Boyd - Independent Non-Executive Director

!e primary duty and responsibility of the Remuneration Committee is to recommend to the Board the remuneration of Executive Directors in all forms, drawing from outside advice as necessary. Nevertheless, the determination of remuneration packages of Executive Directors is a matter for the Board as a whole and individual Executive Directors are required to abstain from discussion of their own remuneration.




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� � The� Remuneration� Committee� shall� also� recommend� to� the� Board� the� remuneration� of � Non-Executive� � � Directors.� The� determination� of � the� remuneration� of � the� Non-Executive� Directors� is� a� matter� for� the� Board� � � collectively.

3. Corporate Disclosure Policy

� The� Company� aims� to� provide� accurate� and� fair� disclosure� of � corporate� information� to� enable� informed� and� orderly� � market� decisions� by� investors� in� accordance� with� the� requirements� under� the� Bursa� Securities� Listing� � Requirements.

4. Relationship with Shareholders and Investors

� In� addition� to� various� announcements� made� during� the� year,� the� timely� release� of � quarterly� interim� financial� � reports� provide� shareholders� with� a� regular� overview� of � the� Group’s� performance� and� operations.

� Shareholders� and� members� of � the� public� can� also� obtain� information� on� the� annual� and� quarterly� reports� and� the� � announcements� made� by� the� Company� by� accessing� Bursa� Securities’� website� and� the� Company’s� corporate� � website.

� Notice� of � the� Annual� General� Meeting� and� the� Annual� Report� are� sent� to� all� shareholders.� At� Annual� General� � Meetings,� shareholders� have� direct� access� to� the� Directors� and� are� given� the� opportunity� to� ask� questions� during� � the� question� and� answer� session.

� Shareholders� and� other� interested� parties� may� contact� the� Joint� Company� Secretaries� for� investor� relations� matter� � by� writing� or� via� telephone/facsimile� as� follows:

� Postal� Address� :� Unit� 3,� 191,� Jalan� Ampang,� 50450� Kuala� Lumpur� Telephone� number� :� 03-21487696� Facsimile� number� :� 03-21445209� �

� The� Board� encourages� poll� voting� at� general� meetings.�

5. Accountability and Audit

5.1 Financial Reporting

� � The� Audit� Committee� is� tasked� to� assist� the� Board� in� ensuring� that� the� financial� statements� comply� with� � � the� Companies� Act,� 1965� and� the� applicable� financial� reporting� standards.� The� Board� has� the� overall� � � responsibility� to� ensure� that� the� financial� statements� reviewed� and� recommended� by� the� Audit� Committee� � � for� the� Board’s� approval� are� prepared� in� accordance� with� the� Companies� Act,� 1965� and� applicable� financial� � � reporting� standards� so� as� to� present� a� true� and� fair� view� of � the� state� of � affairs� of � the� Group.

� � The� Statement� by� Directors� pursuant� to� Section� 169� of � the� Companies� Act,� 1965� is� set� out� in� page� 33� of � the� � � Annual� Report,� and� the� Statement� explaining� the� Directors’� responsibilities� for� preparing� the� annual� audited� � � financial� statements� pursuant� to� paragraph� 15.26(a)� of � Bursa� Securities� Listing� Requirements� is� set� out� in� � � page� 15� of � the� Annual� Report.



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5. Accountability and Audit (Cont’d)

5.2 Risk Management and Internal Control

� � The� Directors� acknowledge� their� responsibilities� for� the� internal� control� system� in� the� Group,� covering� � � not� only� financial� controls� but� also� controls� relating� to� operational,� compliance� and� risk� management.� The� � � system� of � internal� control� involves� each� key� business� unit� and� its� management,� including� the� Board,� and� is� � � designed� to� meet� the� business� units’� particular� needs,� and� to� manage� the� risks� to� which� they� are� exposed.� � � The� system,� by� its� nature,� can� only� provide� reasonable� and� not� absolute� assurance� against� material� � � misstatement,� loss� or� fraud.� The� concept� of � reasonable� assurance� recognizes� the� costing� aspect,� whereby� the� � � cost� of � control� procedures� is� not� to� exceed� the� expected� benefits.� The� Board� has� established� an� internal� audit� � � function� who� reports� directly� to� the� Audit� Committee.� Details� of � the� internal� audit� function� are� set� out� in� � � Report� of � the� Audit� Committee� in� page� 22� of � the� Annual� Report.

� � The� Board� recognizes� that� risks� cannot� be� fully� eliminated.� As� such,� the� Group� has� an� Enterprise� Risk� � � Management� (“ERM”)� framework� in� place� to� minimize� and� manage� them.� The� Board� has� established� a� Risk� � � Management� Committee� and� guided� by� documented� terms� of � reference� and� meetings� are� held� regularly� to� � � deliberate� on� risk� and� control� issues.� Ongoing� reviews� are� continuously� carried� out� to� ensure� the� � � effectiveness,� adequacy� and� integrity� of � the� system� of � internal� controls� and� ERM� framework� in� safeguarding� � � the� Group’s� assets.

� � Details� of � the� Company’s� internal� control� system� and� risk� management� are� set� out� in� Statement� on� Risk� � � Management� and� Internal� Control� in� page� 16� to� 18� of � the� Annual� Report.

5.3 Relationship with the External Auditors

� � The� Company’s� external� auditors,� Messrs� Ernst� &� Young� has� continued� to� report� to� members� of � the� Audit� � � Committee� on� their� findings� which� are� included� as� part� of � the� Company’s� financial� reports� with� respect� to� � � each� year’s� audit� on� the� statutory� financial� statements.� In� doing� so,� the� Company� has� established� a� � � transparent� arrangement� with� the� auditors� to� meet� their� professional� requirements.

� � The� Audit� Committee� met� the� external� auditors� three� times� during� the� financial� year� ended� 31� December� � � 2012� without� presence� of � management� to� discuss� on� key� concerns� and� obtain� feedback� relating� to� the� � � Company’s� affairs.

� � The� Audit� Committee� is� responsible� for� reviewing� audit-related� and� non-audit� services� provided� by� the� � � external� auditors.� The� Audit� Committee� has� reviewed� the� provision� of � non-audit� services� by� the� external� � � auditors� during� the� financial� year� ended� 31� December� 2012� and� concluded� that� the� provision� of � these� � � non-audit� services� did� not� impair� the� independence� of � the� external� auditors� as� the� amount� of � the� fees� paid� � � were� not� significant� compared� to� the� total� fees� paid� to� the� external� auditors.

� � The� role� of � the� Audit� Committee� in� relation� to� the� external� auditors� is� set� out� in� the� Report� of � the� Audit� � � Committee� in� pages� 20� to� 22� of � the� Annual� Report.




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The� Directors� are� required� by� the� Companies� Act,� 1965� to� prepare� financial� statements� for� each� financial� year,� which� give� a� true� and� fair� view� of � the� financial� position� of � the� Group� and� of � the� Company� as� at� the� end� of � the� financial� year� and� of � the� financial� performance� and� cash� flows� of � the� Group� and� of � the� Company� for� the� financial� year.

The� Directors� ensure� that� suitable� accounting� policies� have� been� used� and� applied� consistently,� and� that� reasonable� and� prudent� judgements� and� estimates� have� been� made,� in� the� preparation� of � the� financial� statements.

The� Directors� also� ensure� that� applicable� approved� Financial� Reporting� Standards� in� Malaysia� have� been� followed.

The� Directors� are� responsible� for� keeping� proper� accounting� records,� which� disclose� with� reasonable� accuracy� at� any� time� the� financial� position� of � the� Group� and� of � the� Company� and� to� enable� them� to� ensure� that� the� financial� statements� comply� with� the� Companies� Act,� 1965.

D I R E C T O R S ’ R E S P O N S I B I L I T I E S I N R E S P E C T O F F I N A N C I A L S T A T E M E N T S



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BOARD’S RESPONSIBILITY

The Board of Directors (“Board”) is responsible for the Group’s system of internal control and risk management and� for� reviewing� the� adequacy� and� integrity� of � the� system.� The� system� includes� financial,� operational,� regulatory� and� compliance� controls.� This� system� is� designed� to� manage,� rather� than� to� eliminate,� the� risks� in� the� pursuit� of � the� Group’s� business objective as well as to safeguard shareholders’ investments and Group’s assets. The system serves to provide reasonable� but� not� absolute� assurance� against� the� risk� of � material� misstatement,� loss� or� fraud.

The Malaysian Code on Corporate Governance requires listed companies to maintain a sound system of risk management and internal controls to safeguard shareholders’ investments and the Group’s assets. The Bursa Malaysia Securities Berhad’s (“Bursa Securities”) Listing Requirements require directors of public listed companies to include a statement in their annual reports on the state of their risk management and internal controls framework. The Bursa Securities’ Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers (“Guidelines”) provides guidance for compliance with these requirements. Set out below is the Board’s Statement on Risk� Management� and� Internal� Control,� which� has� been� prepared� in� accordance� with� the� Guidelines.

RISK MANAGEMENT

The� Board� confirms� that� an� ongoing� process� for� identifying,� measuring� and� managing� the� Group’s� principal� risks� is� in� place. This process is carried out via the following risk management governance structure:-

•� � The� Board� –� is� fully� responsible� for� the� risk� management� of � the� Group� and� has� carried� out� its� duties� by� having� � regular� Board� meetings� to� review� and� approve� business� strategies,� risk� management� policies� and� business� performance of the Group.

•� � The� Audit� Committee� –� whose� key� function� is� to� review� the� adequacy� and� effectiveness� of � internal� control� and� � governance� systems� of � the� Group.� The� Audit� Committee’s� main� role� is� to� review,� on� behalf � of � the� Board,� the� � system� of � internal� controls� necessary� to� manage� the� key� risk� inherent� in� the� business� and� to� present� its� findings� � to� the� Board.� The� Audit� Committee� assumes� its� roles� and� responsibilities� via� the� internal� audit� function.

•� � The� Risk� Management� Committee� (“RMC”)� –� whose� key� function� is� to� review� the� adequacy� and� effectiveness� of � � risk� management� of � the� Group.� The� RMC’s� main� roles� is� to� review,� on� behalf � of � the� Board,� the� system� of � risk� � management� necessary� to� manage� the� key� risks� inherent� in� the� business� and� to� present� its� findings� to� the� Audit� � Committee.� The� RMC� shall� meet� on� a� quarterly� basis.� Additional� meetings� may� be� called� as� and� when� required� � by� the� RMC.� The� membership� of � the� RMC,� which� has� been� approved� by� the� Board,� comprised� the� Group’s� � Chief � Operating� Officer,� the� Chief � Financial� Officer� and� the� Head(s)� of � Operations.

RISK MANAGEMENT PROCESS

Risks� are� reported� and� monitored� at� the� operational� level� using� a� Risk� Register� which� captures� risks,� mitigating� measures� and� risk� ratings.� Where� applicable,� Key� Risk� Indicators� (“KRIs”)� are� established� to� monitor� risks.

For� risks� that� are� material,� the� mitigating� measures� and� KRIs� are� presented� to� the� RMC� for� review� on� a� regular� basis.� Risks� are� reviewed� and� managed� at� each� level� of� reporting� and� consolidated� for� review� at� the� next� higher� level,� before� they are escalated for review at Group level.

High� and� new� risk� areas� are� immediately� flagged� and� reported� to� the� Audit� Committee� whose� comments� and� advice� are noted for the full Board’s information.

S T A T E M E N T O N R I S K M A N A G E M E N T A N D I N T E R N A L C O N T R O L



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TYPES OF RISKS

The� principal� business� activities� of � the� Group� are� investment� holding,� property� development,� sale� of � oil� palm� fruits� and� property� investment.� There� have� been� no� significant� changes� in� the� nature� of � these� activities� during� the� financial� year.

The� risk� exposure� faced� by� the� Group� during� the� financial� year� can� be� broadly� categorized� into� financial,� operational,� legal� and� external� risks� as� follows:

Financial� Risk

The� risk� of � loss� due� to� investment� and� foreign� exchange� exposure.

Operational� Risk

The� risk� of � loss� resulting� from� material� defects,� property� development� costs� overrun,� safety� and� quality� of � building� works� issues.

Legal� Risk

The� risk� of � loss� due� to� non-compliance� with� Housing� Development� Act,� building� by-laws� and� other� rules� and� regulations,� legal� suits� and� prosecutions.

External� Risk

The� risk� of � loss� due� to� fluctuation� in� building� materials� cost� and� CPO� prices,� more� stringent� end-financing� approval� requirements� and� emergence� of � new� developments� within� close� proximity.

KEY ELEMENTS OF INTERNAL CONTROL

The� key� elements� of � the� Group’s� internal� control� system,� that� are� regularly� reviewed� by� the� Board� and� are� in� accordance� with� the� Guidelines,� are� described� below:-

•� Establishment� of � a� conducive� control� environment� in� respect� of � the� overall� attitude,� awareness� and� actions� of � � Directors� and� Management� regarding� the� internal� control� system� and� its� importance� to� the� Group;

•� Recruitment� of � experienced,� skilled� and� professional� staff � to� fulfill� the� respective� responsibilities� and� ensuring� � that� adequate� control� are� in� place;

•� � Clear� Group� structure,� reporting� lines� of � responsibilities� and� appropriate� levels� of � delegation;

•� � Documented� policies,� procedures� and� limits� of � approving� authorities� for� key� aspects� of � the� business.� This� � provides� a� sound� framework� of � authority� and� accountability� within� the� organization� and� facilitates� proper� � corporate� decision� making� at� the� appropriate� level� in� the� organization’s� hierarchy;

•� � Establishment� of � an� effective� segregation� of � duties� via� independent� checks,� review� and� reconciliation� activities� � to� prevent� human� errors,� fraud� and� abuses;



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•� � Regular� and� comprehensive� management� reports� to� the� Board� from� various� lines� of � operations� and� business� � � units,� on� key� business� performance,� operating� statistics� and� regular� matters.� This� allows� for� an� effective� � � monitoring� of � significant� variances� and� deviation� from� standard� operating� procedures� and� budget;

•� Group� Internal� Audit� function� independently� reviews� the� risk� identification� procedures� and� control� processes� � � implemented� by� Management,� and� reports� to� the� Audit� Committee� on� a� quarterly� basis.� The� Group� Internal� � � Audit� function� provides� assurance� over� the� operation� and� validity� of � the� system� of � internal� control� in� relation� to� � � the� level� of � risk� involved� using� Risk-Based-Auditing� methodology;� and

•� The� Audit� Committee� regularly� convenes� meetings� to� deliberate� on� the� findings� and� recommendations� for� � � improvement� by� the� Group� Internal� Audit� function,� external� auditors� as� well� as� regulatory� authorities.� The� Audit� � � Committee� reviews� the� actions� taken� to� rectify� the� findings� in� a� timely� manner,� and� to� evaluate� the� effectiveness� � � and� adequacy� of � the� Group’s� internal� control� systems.

ADEQUACY AND EFFECTIVENESS OF THE GROUP’S RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM

The� Board� has� received� assurance� from� the� Chief � Operating� Officer� and� the� Chief � Financial� Officer� that� based� on� the� risk� management� and� internal� control� of � the� Group� as� well� as� the� inquiry� and� information� provided,� the� Group’s� risk� � management� and� internal� control� system� is� operating� adequately� and� effectively� in� all� material� aspects.

The� Board� is� of � the� view� that� the� risk� management� and� internal� control� system� in� place� for� the� year� under� review� and� up� to� the� date� of � issuance� of � the� financial� statements,� is� adequate� and� effective� to� safeguard� the� shareholders’� � investment,� the� interests� of � customers,� regulators� and� employees,� and� the� Group’s� assets.

REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS

The� external� auditors� have� reviewed� this� Statement� on� Risk� Management� and� Internal� Control� for� inclusion� in� the� � annual� report� of� the� Company� for� the� year� ended� 31� December� 2012� and� reported� to� the� Board� that� nothing� has� come� to� their� attention� that� causes� them� to� believe� that� the� Statement� is� inconsistent� with� their� understanding� of� the� � processes� adopted� by� the� Board� in� reviewing� the� adequacy� and� effectiveness� of� the� risk� management� and� internal� control� system.

S T A T E M E N T O N R I S K M A N A G E M E N T A N D I N T E R N A L C O N T R O L ( C o n t ’d )



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1. Utilisation of Proceeds raised from Corporate Proposal

� The� Company� does� not� have� any� corporate� proposal� during� the� financial� year� ended� 31� December� 2012.

2. Share Buy-Back

� The� Company� has� not� made� any� purchase,� resale� or� cancellation� of � its� own� shares� in� the� financial� year� ended� 31� � December� 2012.� As� at� 31� December� 2012,� 23,145,300� ordinary� shares� were� held� as� treasury� shares� in� accordance� � with� section� 67A� of � the� Companies� Act,� 1965� and� are� stated� at� cost.

3. Options, Warrants or Convertible Securities

� There� were� no� options,� warrants� or� convertible� securities� issued� and� exercised� during� the� financial� year� ended� 31� � December� 2012.

4. Sponsored Depository Receipt Programme

� The� Company� did� not� sponsor� any� depository� receipt� programme.

5. Sanctions and/or Penalties Imposed

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

6. Non-Audit Fees

� For� the� financial� year� ended� 31� December� 2012,� non-audit� fees� paid� to� the� external� auditors� amounted� to� � RM19,000� (2011� :� RM19,000).

7. Variation in Results

� There� was� no� material� variances� between� the� audited� financial� statements� for� the� financial� year� ended� 31� December � � 2012� and� the� unaudited� results� announced� to� Bursa� Malaysia� Securities� Berhad� on� 27� February� 2013.�

8.� Profit� Guarantee

� There� was� no� profit� guarantee� for� the� financial� year� ended� 31� December� 2012.

9. Material Contracts

� There� were� no� material� contracts� entered� into� by� the� Company� and� its� subsidiaries� involving� Directors’� and� major� � shareholders’� interests,� either� still� subsisting� at� the� end� of � the� financial� year� ended� 31� December� 2012� or� entered� � into� since� the� end� of � the� previous� financial� year� except� as� disclosed� in� the� financial� statements.

O T H E R I N F O R M A T I O N



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MEMBERS OF THE COMMITTEE

Name DesignationChristopher� Martin� Boyd� -� Chairman Independent Non-Executive Director

Abdul� Rashid� bin� Ismail� � � � � Independent Non-Executive Director

Tan� Sri� Dato’� Dr� Yeoh� Oon� Kheng� � Independent Non-Executive Director

TERMS OF REFERENCE

1. Constitution� The� Audit� Committee� was� established� on� 5� July� 1994.� The� Board� shall� ensure� that� the� composition� of � the� Audit� � Committee� comply� with� Bursa� Securities� Listing� Requirements� as� well� as� other� regulatory� requirements.

2. Authority� •� � The� Audit� Committee� is� authorized� by� the� Board� to� investigate� any� activity� within� its� terms� of � reference.� It� � � is� authorized� to� seek� any� information� it� requires� from� any� employee� and� all� employees� are� directed� to� � � co-operate� with� any� request� made� by� the� Audit� Committee.� •� � The� Audit� Committee� shall� have� unlimited� access� to� all� information� and� documents� relevant� to� its� activities� � � as� well� as� to� the� internal� and� external� auditors� and� senior� management� of � the� Group.� •� � The� Audit� Committee� is� authorized� by� the� Board� to� obtain� outside� legal� or� other� independent� professional� � � advice� and� to� secure� the� attendance� of � outsiders� with� relevant� experience� and� expertise� if � it� considers� this� � � necessary.

3. Functions� The� functions� of � the� Audit� Committee� shall� be:-� •� � to� report� to� the� Board� after� reviewing� the� following:-� � (a)� � the� audit� plan� with� the� external� auditors;� � (b)� the� evaluation� of � the� system� of � internal� controls� with� the� external� auditors;� � (c)� the� audit� report� with� the� external� auditors;� � (d)� � � the� assistance� and� co-operation� given� by� the� employees� of � the� Company� to� the� external� auditors;� � (e)� � the� adequacy� of � the� scope,� functions,� competency� and� resources� of � the� internal� audit� function� and� that� � � � it� has� the� necessary� authority� to� carry� out� its� work;� � (f)� � the� internal� audit� programme,� processes,� the� results� of � the� internal� audits,� processes� or� investigation� � � � undertaken� and� whether� or� not� appropriate� action� is� taken� on� the� recommendations� of � the� internal� � � � audit� function;� � (g)� � the� quarterly� results� and� year� end� financial� statements,� prior� to� the� approval� by� the� Board,� focusing� � � � particularly� on:-� � � (i)� � changes� in� or� implementation� of � major� accounting� policy� changes;� � � (ii)� � significant� and� unusual� events;� � � (iii)� � significant� adjustments� arising� from� the� audit;� � � (iv)� the� going� concern� assumption;� and� � � (v)� � compliance� with� accounting� standards� and� other� legal� requirements;� � (h)� � any� related� party� transaction� and� conflict� of � interest� situation� that� may� arise� within� the� Company� or� � � � Group� including� any� transaction,� procedure� or� course� of � conduct� that� raises� questions� of � management� � � � integrity;� � (i)� any� letter� of � resignation� from� the� external� auditors;� � (j)� whether� there� is� any� reason� (supported� by� grounds)� to� believe� that� the� Company’s� external� auditors� are� � � � not� suitable� for� re-appointment;

R E P O R T O F T H E A U D I T C O M M I T T E E



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� •� � to� recommend� the� nomination� of � a� person� or� persons� as� external� auditors;� •� � to� consider� the� external� auditors’� fee� and� any� questions� of � dismissal;� •� � to� discuss� problems� and� reservations� arising� out� of � external� or� internal� audits� and� any� matters� which� the� � � auditors� may� wish� to� bring� up� (in� the� absence� of � the� Executive� Directors� and� employees� of � the� Group� � � whenever� deemed� necessary);� •� � to� review� the� external� auditors’� management� letter� and� management’s� response;� and� •� � to� consider� the� major� findings� of � internal� investigations� and� management’s� response,� together� with� such� other� � � functions� as� may� be� agreed� to� by� the� Audit� Committee� and� the� Board.

4. Meetings� During� the� financial� year� ended� 31� December� 2012,� five� (5)� Audit� Committee� Meetings� were� held� and� all� Audit� � Committee� members� attended� all� the� five� (5)� meetings.

� In� addition� to� the� Committee� members,� the� Chief � Financial� Officer� and� Head� of � Internal� Audit� are� invited� for� � attendance� at� each� meeting.� The� respective� head� of � companies/departments� and� their� management� team� attend� � when� audit� reports� on� their� companies/departments� are� tabled� for� discussion.� The� presence� of � the� external� auditors� � will� be� requested� when� required.

� Upon� the� request� of � the� external� auditors,� the� Chairman� shall� convene� a� meeting� of � the� Audit� Committee� to� � consider� any� matter� the� external� auditors� believe� should� be� brought� to� the� attention� of � the� Board� or� � shareholders.

5. Summary of Activities of the Audit Committee during the Financial Year Ended 31 December 2012� The� Audit� Committee� reviewed� the� unaudited� quarterly� interim� financial� reports� and� the� audited� financial� � statements� of � the� Company� together� with� the� Chief � Financial� Officer� prior� to� recommending� the� same� for� � approval� by� the� Board,� upon� being� satisfied� that� the� financial� reporting� and� disclosure� requirements� of � the� relevant� � authorities� had� been� complied� with.� Any� significant� issues� resulting� from� the� audit� of � the� financial� statements� by� � the� external� auditors� were� deliberated.

� The� Audit� Committee� met� with� the� external� auditors� and� discussed� the� nature� and� scope� of � the� audit,� considered� � any� significant� changes� in� accounting� and� auditing� issues,� reviewed� audit� issues� and� concerns� affecting� the� � financial� statements� of � the� Group� and� discussed� applicable� accounting� and� auditing� standards� that� may� have� � significant� implication� on� the� Group’s� financial� statements.� The� Audit� Committee� also� reviewed� related� party� � transactions� carried� out� by� the� Group.

� The� Audit� Committee� reviewed� and� approved� the� Internal� Audit� Plan� for� the� calendar� year� 2013.� In� its� review� � of � the� Internal� Audit� Plan,� the� Audit� Committee� reviewed� the� scope� and� coverage� over� the� activities� of � the� � respective� business� units� of � the� Group.



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6. Internal Audit Function !e internal audit function is performed by the Internal Audit Department of Malayan United Management Sdn Bhd, a company under the MUI Group of companies; together with co-source services from external accounting firm. Both are independent of the activities audited. !e function is performed with impartiality, proficiency and due professional care. !e Internal Audit Department reports directly to the Audit Committee Chairman, and regularly reviews and appraises the Group’s key operations to ensure that key risk and control concerns are being e"ectively managed. Its activities include:

appropriate systems of internal control

regulations

produced within the Group

address control issues highlighted, and

!e Internal Audit carries out audit assignments based on an audit plan that is reviewed and approved by the Audit Committee. !e reports of the audits undertaken were presented to the Audit Committee and forwarded to the management concerned for attention and necessary action.

!e cost incurred for the internal audit function for the financial year ended 31 December 2012 is RM14,800. (2011: RM60,000)

R E P O R T O F T H E A U D I T C O M M I T T E E ( C o n t ’d )



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The medal was awarded to Tan Sri Dato’ Dr Khoo by the USCIRF in recognition of the exemplary way he has carried himself as a Christian businessman in Malaysia, a Muslim-majority country, where he has engaged in peaceful collaboration with business partners of various faiths, and also in the global, secular marketplace. The medal is typically given to heads of state and other world leaders who

have contributed to religious freedom and peaceful inter-religious cooperation.

The USCIRF medal was conferred on Tan Sri Dato’ Dr Khoo at the

commencement ceremony of Northwest University in Kirkland, Washington, the United States of America, on Saturday, 11th May 2013. Tan Sri Dato’ Dr Khoo is a member of the Board of Directors of Northwest University and was awarded an Honorary Doctor of Law by the University in 2000.

The USCIRF was established by the United States Congress through the enactment of the International Religious Freedom Act of 1998 (IRFA) as an independent, bipartisan federal government entity to foster international freedom of religion or belief. It provides policy recommendations to the President, Secretary of State, and Congress of the United States of America.

MUI Properties Berhad congratulates Chairman and Chief Executive Tan Sri Dato’ Dr Khoo Kay Peng for having been awarded a medal by the United States Commission on International Religious Freedom (USCIRF), a federal government entity created by the United States Congress.



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On behalf of the Board of Directors, I am pleased to present the Annual Report of our Company and the� Group� for� the� financial� year� ended� 31� December� 2012.�

ECONOMIC REVIEW

The global economy, in real gross domestic product� (“GDP”)� terms,� moderated� to� 3.2%� growth� in� 2012� compared� to� 4.0%� growth� in� 2011,� according� to� the� International� Monetary� Fund.� � Growth� in� the� advanced� economies� in� 2012� was� uneven� with� the� US� economy� recovering� slowly� and� the� Eurozone� remaining� in� recession.

According to Bank Negara Malaysia (“BNM”), the� Malaysian� economy� recorded� higher� growth� of � 5.6%� in� 2012� compared� with� 5.1%� in� the� previous� year,� in� real� GDP� terms.� Economic� growth� was� attributed� to� resilient� domestic� demand� which� was� supported� by� strong� growth� in� private� consumption� and� investments� in� fixed� assets� by� the� government� and� private� sector.

Pertinent to the Group, the Malaysian construction sector� registered� strong� growth� of � 18.5%� in� 2012� compared� with� 4.6%� in� 2011,� driven� by� the� commencement and progress of several major infrastructure� projects.�

FINANCIAL HIGHLIGHTS

For� the� 12� months� ended� 31� December� 2012,� the� Group� recorded� revenue� of � RM38.2� million,� 2.0%� higher� compared� with� revenue� of � RM37.5� million� in� the� prior� year.� The� better� revenue� was� mainly� contributed by the Group’s property development projects� in� Bandar� Springhill.

Despite the rise in revenue from property development,� pretax� profit� was� largely� unchanged� at� RM6.6� million� compared� to� RM6.5� million� in� 2011� due� primarily� to� lower� contribution� from� the� sale� of � oil palm fresh fruit bunches (“FFBs”), on the back of lower� crude� palm� oil� (“CPO”)� prices.

C H A I R M A N ’ S S T A T E M E N T

Bandar Springhill, an integrated township in Port Dickson, Negeri Sembilan



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REVIEW OF OPERATIONS

MUI Properties Berhad is involved primarily in property� development.� The� Group’s� flagship� project is� the� Bandar� Springhill� township,� a� 1990-acre� development by West Synergy Sdn Bhd (“West Synergy”),� a� joint-venture� with� Chin� Teck� Plantations� Berhad.� West� Synergy� also� derives� income� from� the� sale� of � FFBs.

West� Synergy� chalked� up� revenue� of � RM30.5� million� from� property� development� in� 2012,� up� 25.7%� from� the� previous� year.� Profit� before� tax� from� property� development� increased� by� 30.1%� to� RM6.9� million� due� mainly� to� higher� revenue.

There� was� a� distinct� improvement� in� sales,� especially� of � shop� offices,� after� the� opening� of � the� UCSI� International� School� in� September� 2012.� Cumulatively,� as� at� end-2012,� the� Group� has� sold� 2,542� units� of � residential� homes� and� commercial� properties� in� the� Bandar� Springhill� township.�

In� November� 2012,� West� Synergy� launched� 52� units� of � double-storey� terraced-houses� under� Phase� E3� of � Park� Residences,� Type� Ara� 2.� This� was� a� sub-phase� launch� incorporating� a� new� design� for� Phase� E3� which� was� initially� launched� in� November� 2009.� The� new� launch� was� well� received� with� about� 80%� of � the� units� sold� so� far.

Revenue� from� the� sale� of � FFBs� for� the� year� was� RM6.1� million,� lower� by� 13.2%� compared� to� 2011.� This� was� due� mainly� to� a� 14.1%� decline� in� the� average� price� of � CPO.� According� to� the� Malaysian� Palm� Oil� Board,� the� average� price� of � CPO� fell� to� RM2,764� per� tonne� in� 2012� from� RM3,219� per� tonne� in� 2011.� As� a� result,� profit� before� tax� from� this� business� declined� by� 21.2%� to� RM3.8� million.

CORPORATE DEVELOPMENTS

In� February� 2013,� the� Group� signed� a� Sale� &� Purchase� Agreement� to� sell� a� 2.0� hectare� plot� of � development land at Teluk Kemang, Port Dickson, Negeri� Sembilan.� Proceeds� from� the� sale� � amounted� to� RM11.6� million.

In� April� 2013,� the� Group� disposed� of � 16,058,400� shares� of � RM0.50� each� in� George� Kent� (Malaysia)�

Park� Residences� Type� Ara� 2� Double-Storey� Terraced� Houses

UCSI International School in Bandar Springhill

Springhill� Heights� Type� Sapphire� II� Bungalow



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Berhad. The cash consideration for the shares was RM14.0 million.

These disposals of non-core assets are part of the Group’s efforts to streamline its portfolio of assets. Proceeds from the disposals would enable the Group to fund future developments to enhance shareholder value.

CORPORATE SOCIAL RESPONSIBILITY

The Group strives to conduct its business in a socially responsible manner. Our subsidiary, West Synergy, continues to develop homes that are affordable, well-built and attractively designed in a clean, well-maintained environment with wide open spaces.

In 2012, the Group, together with other companies in Malayan United Industries Berhad, sponsored the “Harmony” concert by the Philharmonic Society of Selangor community choir on 1 September 2012. The event to commemorate Merdeka Day was co-sponsored by the Majlis Bandaraya Petaling Jaya (MBPJ) and held at Dewan Sivik in Petaling Jaya. Specially invited to the concert were residents, staff and volunteers from 20 charitable organisations and homes.

Besides sponsoring the “Harmony” concert, the Group� also� made� a� donation� to� the� flood� victims� of Kampung Batu 7, near Bandar Springhill, in Port Dickson.

PROSPECTS FOR 2013

According to BNM, the Malaysian economy is expected to grow between 5.0% and 6.0% in 2013 in terms of real GDP. BNM expects the economy to be driven by strong growth in domestic demand, supported by a gradual improvement in the external sector.

Bandar Springhill has been garnering heightened investor interest since the opening of the UCSI International School in September 2012. Also, the completion in March 2013 of the overhead bridge over the Seremban-Port Dickson Highway, connecting both the eastern and western sectors of the township, would facilitate the launch of our projects in the western sector in 2013.

We plan to step up the pace of our development activities to enable our projects to launch at the most opportune times, and to intensify our marketing efforts.

DIRECTORATE

The Board wishes to take this opportunity to thank Mr Tang Kim Siw, who retired as an Executive Director of the Company on 4 September 2012, for his contributions to the Group.

ACKNOWLEDGEMENTS

On behalf of the Board, I wish to take this opportunity to thank our customers, shareholders, bankers and business associates for their continuing support. I also wish to express my sincere appreciation to the management and staff of the Group for their dedication and commitment. Last but not least, I would like to express my heartfelt gratitude to my fellow Directors for their invaluable counsel and contributions.

To God Be The Glory

Tan Sri Dato’ Khoo Kay PengChairman

20 May 2013

F I N A N C I A L H I G H L I G H T S

2012 2011 2010 2009 2008

KEY RESULTS (RM'000) Revenue 38,229 37,466 25,959 17,540 30,359

Operating profit (EBITDA) 7,661 8,113 6,497 10,319 (8)

Profit/(Loss) before tax 6,610 6,525 4,685 8,851 (1,745)

Net profit/(loss) attributable to owners of the Company 502 441 193 6,783 (5,283)

OTHER KEY DATA (RM'000)

Total assets 323,912 334,211 339,179 383,224 365,523

Total liabilities 14,025 18,464 24,247 25,529 30,320

Share Capital (ordinary shares of RM0.20 each) 152,812 152,812 152,812 152,812 152,812

Equity attributable to owners of the Company 243,858 249,386 251,582 296,768 275,656

Total equity 309,887 315,747 314,932 357,695 335,203

Total borrowings 2,690 8,385 15,578 20,873 21,517

FINANCIAL RATIOS

Operating profit margin (%) 20.04 21.65 25.03 58.83 (0.03)

Current ratio (times) 12.28 8.69 6.76 6.72 5.53

Gearing ratio (times) 0.01 0.03 0.06 0.07 0.08 SHARE INFORMATION

Basic earnings/(loss) per share (sen) 0.07 0.06 0.03 0.92 (0.71)

Net assets per share attributable to owners of the Company (RM) 0.33 0.34 0.34 0.40 0.37



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D I R E C T O R S ’ R E P O R T

Principal activities

ResultsGroup Company

RM'000 RM'000

Profit from operations 7,307 2,733 Finance costs (697) (859) Profit before taxation 6,610 1,874 Taxation (2,840) (43) Profit for the year 3,770 1,831 Attributable to:

Owners of the Company 502 1,831 Non-controlling interests 3,268 -

3,770 1,831

Movements in reserves and provisions

Dividends

The Directors hereby present their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2012.

The principal activity of the Company is investment holding whilst the principal activities of its subsidiaries are property development, sale of oil palm fruits, property investment and investment holding. There have been no significant changes in the nature of these activities during the financial year.

There were no material movements in reserves and provisions during the financial year other than as disclosed in the financial statements. In the opinion of the Directors, the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature.

Since the end of the Company's last financial year, a final dividend of 1 sen per 20 sen share (5.0%) less tax at 25% amounting to RM5,556,859 in respect of the financial year ended 31 December 2011, was approved on 27 June 2012 and subsequently paid on 27 July 2012. No dividend was recommended by the Directors for the current financial year.



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Directors

Tan Sri Dato' Khoo Kay Peng (Chairman & Chief Executive)Christopher Martin BoydAbdul Rashid bin Ismail Tan Sri Dato' Dr Yeoh Oon KhengDatin Ngiam Pick NgohTang Kim Siw (Executive Director) (Retired on 4 September 2012)

Ordinary shares of 20 sen eachin MUI Properties Berhad Balance at Balance at

1.1.2012 Bought Sold 31.12.2012Tan Sri Dato' Khoo Kay Peng

Deemed interest 550,862,661 6,500,000 (6,750,000) 550,612,661

Ordinary shares of RM1 each inMalayan United Industries Berhad ("MUI") Balance at Voluntary Balance at

1.1.2012 Conversion Sold 31.12.2012Tan Sri Dato' Khoo Kay Peng

Deemed interest 1,013,841,027 15,000,000 - 1,028,841,027 Tan Sri Dato' Dr Yeoh Oon Kheng

Direct interest 355,882 - - 355,882

Ordinary shares of 50 sen each inPan Malaysia Corporation Berhad Balance at Balance at


Deemed interest 428,544,500 - (240,000) 428,304,500

Number of shares

Number of shares

Number of shares

The Directors of the Company in office since the date of the last report and at the date of this report are:-

None of the Directors who held office at the end of the financial year had, according to the Register of Directors' Shareholdings, any interest in the shares and/or securities of the Company and its related corporations except as stated below:-

#



Annu

al Re

port

2012

29

Directors (cont'd)

Ordinary shares of 10 sen each inPan Malaysia Holdings Berhad Balance at Balance at


Deemed interest 643,330,487 - - 643,330,487

Ordinary shares of RM1 each inMetrojaya Berhad Balance at Balance at


Deemed interest 118,073,133 - - 118,073,133

Class A1 Irredeemable Convertible Unsecured Loan Balance at Balance atStocks in MUI 1.1.2012 Bought Sold Conversion* 31.12.2012

Tan Sri Dato' Khoo Kay Peng Deemed interest 179,927,921 - (30,282,917) (149,645,004) -



Tan Sri Dato' Dr Yeoh Oon KhengDirect interest 310,882 - (310,000) (882) -



Tan Sri Dato' Dr Yeoh Oon KhengDirect interest 46,697 - (45,000) (1,697) -

*

#

Nominal Value (RM)

Nominal Value (RM)

Number of shares

Number of shares

Nominal Value (RM)

By virtue of his deemed interests in the shares of MUI, Tan Sri Dato' Khoo Kay Peng is deemed to have an interest in the shares in all the other subsidiaries of MUI to the extent that MUI has an interest.

On 28 December 2012, the Class A1, Class A2 and Class A3 ICULS in MUI matured and were mandatorily converted into ordinary shares of RM1 each in MUI (“New MUI Shares”). The New MUI Shares were allotted to each ICULS holder on 8 January 2013.

During the year, RM15,000,000 of Class A3 ICULS in MUI were voluntarily converted into 15,000,000 ordinary shares of RM1 each in MUI.

#



Annu

al Re

port

2012

30

D I R E C T O R S ’ R E P O R T ( C o n t ’d )

Directors (cont'd)

Treasury shares

Other statutory information

(a) In the opinion of the Directors:-

(i)

(ii)

(b)

(i)

(ii)

(c)

(i)

(ii)

no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of the operations of the Group or of the Company for the financial year in which this report is made; and

to ascertain that proper action has been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves there were no known bad debts and that adequate provision had been made for doubtful debts; and

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

Before the statements of comprehensive income and statements of financial position of the Group and of the Company were made out, the Directors took reasonable steps:-

At the date of this report, the Directors are not aware of any circumstances which would render:-

it necessary to write off any bad debts or the amount of the provision for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent; and

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

As at the end of the financial year, the Company held as treasury shares a total of 23,145,300 of its ordinary shares and the number of outstanding ordinary shares issued and paid-up after deducting treasury shares held is 740,914,596 ordinary shares of RM0.20 each. The treasury shares are held by the Company at cost of RM6,301,000.

no contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which will or may affect the ability of the Group or of the Company to meet their obligations when they fall due.

Since the end of the previous financial year, no Director has received or become entitled to receive any benefit (other than as disclosed in the financial statements or remuneration received by certain Directors as Directors/executives of the Company or its related corporations) by reason of a contract made by the Company or a related corporation with any Director or with a firm of which the Director is a member or with a company in which the Director has a substantial financial interest other than as disclosed in Note 29 to the financial statements. Neither at the end of the financial year, nor at any time during the year, did there subsist any arrangement, to which the Company is a party, whereby Directors might acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.



Annu

al Re

port

2012

31

Other statutory information (cont'd)

(d)

(e) As at the date of this report, there does not exist:-

(i)

(ii)

(f)

Subsequent events

Details of subsequent events are disclosed in Note 32 to the financial statements.

Ultimate holding company

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

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

any contingent liability in respect of the Group or of the Company which has arisen since the end of the financial year.

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

The ultimate holding company is Malayan United Industries Berhad, a public limited liability company, incorporated and domiciled in Malaysia, and listed on the Main Market of Bursa Malaysia Securities Berhad.

Auditors

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

Christopher Martin Boyd

Abdul Rashid bin Ismail

The auditors, Ernst & Young, have expressed their willingness to accept re-appointment as auditors.



Annu

al Re

port

2012

32

D I R E C T O R S ’ R E P O R T ( C o n t ’d )

S T A T U T O R Y D E C L A R A T I O N

Pursuant to Section 169(16) of the Companies Act 1965

S T A T E M E N T B Y D I R E C T O R S

Pursuant to Section 169(15) of the Companies Act 1965

Christopher Martin Boyd Abdul Rashid bin Ismail

We, Christopher Martin Boyd and Abdul Rashid bin Ismail, being two of the Directors of MUI Properties Berhad, do hereby state that in the opinion of the Directors, the accompanying financial statements set out on pages 36 to 100 are drawn up in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2012 and of their financial performance and cash flows for the year then ended. The information set out in Note 33 on page 101 to the financial statements have been prepared in accordance with the Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants. Signed on behalf of the Board in accordance with a resolution of the Directors dated 29 April 2013.

Ho Chun Fuat

Before me

P. ValliamahCommissioner for Oaths

I, Ho Chun Fuat, being the person primarily responsible for the financial management of MUI Properties Berhad, do solemnly and sincerely declare that the accompanying financial statements set out on pages 36 to 100 are in my opinion correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act 1960. Subscribed and solemnly declared by the abovenamed Ho Chun Fuat at Kuala Lumpur in the Federal Territory on 29 April 2013.



Annu

al Re

port

2012

33

I N D E P E N D E N T A U D I T O R S ’ R E P O R T

To the members of MUI Properties Berhad

Report on the financial statements

Directors' responsibility for the financial statements

Auditors' responsibility

We have audited the financial statements of MUI Properties Berhad, which comprise the statements of financial position as at 31 December 2012 of the Group and of the Company, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 36 to 100.

The directors of the Company are responsible for the preparation of financial statements that give a true and 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 financial statements that are free from material misstatement, whether due to fraud or error.

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our auditaccordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity's preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2012 and of their financial performance and cash flows for the year then ended.

financial



Annu

al Re

port

2012

34

To the members of MUI Properties Berhad

Report on other legal and regulatory requirements

(a)

(b)

(c)

(d)

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

We have considered the financial statements and the auditors' reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 11 to the financial statements being financial statements that have been included in the consolidated financial statements.

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

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

In accordance with the requirements of the Companies Act 1965 in Malaysia, we also report the following:

Other reporting responsibilities

Other matter

Ernst & Young Leong Chooi MayAF:0039 No. 1231/03/15 (J)Chartered Accountants Chartered Accountant

Ipoh, Perak Darul Ridzuan, MalaysiaDate: 29 April 2013

The supplementary information set out in Note 33 on page 101 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants ("MIA Guidance") and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

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



Annu

al Re

port

2012

35

I N C O M E S T A T E M E N T S

For the financial year ended 31 December 2012



Annu

al Re

port

2012

36

Note 2012 2011 2012 2011RM'000 RM'000 RM'000 RM'000

Revenue 3 38,229 37,466 6,161 20,072 Cost of sales (22,626) (21,696) - - Gross profit 15,603 15,770 6,161 20,072 Other operating income 1,370 648 40 114 Administrative expenses (8,762) (7,369) (3,095) (2,393) Other operating expenses (904) (1,278) (373) (16,348) Profit from operations 7,307 7,771 2,733 1,445 Finance costs (697) (1,246) (859) (1,379) Profit before taxation 4 6,610 6,525 1,874 66 Taxation 5 (2,840) (3,073) (43) - Profit for the year 3,770 3,452 1,831 66

Profit attributable to:-

Owners of the Company 502 441 1,831 66 Non-controlling interests 3,268 3,011 - -

3,770 3,452 1,831 66

Sen Sen

Earnings per share (basic) 6 0.07 0.06

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

Group Company

S T A T E M E N T S O F C O M P R E H E N S I V E I N C O M E


2012 2011 2012 2011RM'000 RM'000 RM'000 RM'000

(Restated) (Restated)

Profit for the year 3,770 3,452 1,831 66 Foreign currency translation differences for overseas subsidiaries (1,995) 1,317 - - Fair value adjustment for available-for-sale investments, as previously stated 1,522 (3,954) 258 209 Effects arising from adoption of FRS 9 (1,522) 3,954 (258) (209)

- - - - Fair value changes for investments classified as fair value through other comprehensive income 1,522 (3,954) 258 209 Total comprehensive income for the year 3,297 815 2,089 275

Total comprehensive income attributable to:

Owners of the Company 29 (2,196) 2,089 275 Non-controlling interests 3,268 3,011 - -

3,297 815 2,089 275


Group Company



Annu

al Re

port

2012

37

STA

TE

ME

NT

S O

F FI

NA

NC

IAL

POSI

TIO

N

As a

t 31

Dece

mber

2012

Not

e20

1220

111.

1.20

1120

1220

111.

1.20

11R

M'0

00RM

'000

RM'0

00R

M'0

00RM

'000

RM'0

00(R

estat

ed)

(Rest

ated

)(R

estat

ed)

(Rest

ated

)A

SSE

TS

Non

-cur

rent

ass

ets

Prop

erty

, plan

t and

equ

ipm

ent

87,

438

7,88

3

7,

861

37

11

0

175

In

vest

men

t pro

perti

es9

29,9

05

29,8

14

29

,840

165

16

5

165

La

nd h

eld

for p

rope

rty d

evelo

pmen

t10

35,2

63

35,2

63

35

,263

-

-

-

Subs

idiar

ies

11-

-

-

26

9,23

7

269,

237

28

0,78

3

Inve

stm

ents

12

97,0

35

97,1

33

10

0,15

4

-

1,53

5

1,

326

Def

erre

d ta

x as

sets

1386

9

686

73

4

-

-

-

Goo

dwill

on

cons

olid

atio

n14

5,00

0

5,

000

5,00

0

-

-

-

17

5,51

0

175,

779

17

8,85

2

269,

439

27

1,04

7

282,

449

Cur

rent

ass

ets

Inve

ntor

ies

1530

,169

27,3

98

30

,345

-

-

-

Prop

erty

dev

elopm

ent c

osts

1084

,762

81

,631

75,2

64

-

-

-

Rece

ivab

les

168,

621

10,2

21

6,

666

136,

478

14

8,48

6

152,

454

O

ther

cur

rent

ass

ets

171,

958

1,87

6

2,

513

63

-

-

Ta

x re

cove

rabl

e18

1

115

-

-

-

D

epos

its, b

ank

balan

ces a

nd c

ash

1822

,874

37

,305

45,4

24

10

0

3,03

0

39

148,

402

15

8,43

2

160,

327

13

6,64

1

151,

516

15

2,49

3

TO

TA

L A

SSE

TS

323,

912

33

4,21

1

339,

179

40

6,08

0

422,

563

43

4,94

2

Gro

upCo

mpa

ny



Annu

al Re

port

2012

38

Not

e20

1220

111.

1.20

1120

1220

111.

1.20

11R

M'0

00RM

'000

RM'0

00R

M'0

00R

M'0

00RM

'000

(Rest

ated

)(R

estat

ed)

(Rest

ated

)(R

estat

ed)

EQ

UIT

Y A

ND

LIA

BIL

ITIE

SE

quity

attr

ibut

able

to o

wne

rs o

f the

Com

pany

Shar

e ca

pita

l 19

152,

812

15

2,81

2

152,

812

15

2,81

2

152,

812

15

2,81

2

Trea

sury

shar

es20

(6,3

01)

(6,3

01)

(6,3

01)

(6,3

01)

(6,3

01)

(6,3

01)

Rese

rves

2197

,347

10

2,87

5

105,

071

13,8

52

17

,320

17,0

45

243,

858

24

9,38

6

251,

582

16

0,36

3

163,

831

16

3,55

6

Non

-con

trol

ling

inte

rest

s66

,029

66

,361

63,3

50

-

-

-

Tot

al e

quity

309,

887

31

5,74

731

4,93

216

0,36

316

3,83

116

3,55

6

Non

-cur

rent

liab

ilitie

s

Paya

bles

221,

698

-

-

-

-

-

Em

ploy

ee b

enef

its23

241

23

4

546

13

6

80

14

2

1,93

9

23

4

546

13

6

80

14

2

Cur

rent

liab

ilitie

s

Paya

bles

228,

039

8,19

9

7,

559

242,

862

25

0,26

7

255,

666

O

ther

cur

rent

liab

ility

2429

0

811

19

-

-

-

Borr

owin

gs25

2,69

0

8,

385

15,5

78

2,

690

8,38

5

15

,578

Prov

ision

for t

axat

ion

1,06

7

83

5

545

29

-

-

12,0

86

18

,230

23,7

01

24

5,58

1

258,

652

27

1,24

4

Tot

al li

abili

ties

14,0

25

18

,464

24,2

47

24

5,71

7

258,

732

27

1,38

6

TO

TA

L E

QU

ITY

AN

D L

IAB

ILIT

IES

323,

912

33

4,21

1

339,

179

406,

080

42

2,56

3

434,

942

The

acco

mpan

ying a

ccoun

ting p

olicie

s and

expla

nator

y note

s for

m an

integ

ral p

art o

f the

se fin

ancia

l stat

emen

ts.

Gro

upCo

mpa

ny



Annu

al Re

port

2012

39



Annu

al Re

port

2012

40

STAT

EM

EN

TS

OF

CHAN

GE

S IN

EQ

UIT

YFo

r the

fina

ncial

year

ende

d 31

Dece

mber

2012

Gro

upN

on-

cont

rolli

ngTo

tal

Inte

rest

sEq

uity

D

istrib

utab

leEx

chan

geFa

ir va

lue

Sh

are

Trea

sury

Shar

eTr

ansla

tion

Gen

eral

Adju

stm

ent

Oth

erRe

tain

edN

ote

Capi

tal

Shar

esPr

emiu

mRe

serv

eRe

serv

eRe

serv

eRe

serv

eEa

rnin

gsTo

tal

RM'0

00RM

'000

RM'0

00RM

'000

RM'0

00RM

'000

RM'0

00RM

'000

RM'0

00RM

'000

RM'0

00

At 1

Janu

ary

2011

, as p

revi

ously

stat

ed15

2,81

2

(6

,301

)

9,65

6

10,3

24

10

,649

12

,257

-

62,1

85

25

1,58

2

63

,350

314,

932

E

ffect

s aris

ing

from

ado

ptio

n of

FRS

9-

-

-

-

-

(1

2,25

7)

12,2

57

-

-

-

-

At 1

Janu

ary

2011

, as r

esta

ted

152,

812

(6,3

01)

9,

656

10

,324

10,6

49

-

12,2

57

62,1

85

25

1,58

2

63

,350

314,

932

To

tal c

ompr

ehen

sive

inco

me

for t

he y

ear

-

-

-

1,

317

-

-

(3,9

54)

44

1

(2

,196

)

3,01

1

81

5

At 3

1 D

ecem

ber 2

011

152,

812

(6,3

01)

9,

656

11

,641

10,6

49

-

8,30

3

62,6

26

24

9,38

6

66

,361

315,

747

At 1

Janu

ary

2012

, as p

revi

ously

stat

ed15

2,81

2

(6

,301

)

9,65

6

11,6

41

10

,649

8,

303

-

62

,626

249,

386

66,3

61

315,

747

E

ffect

s aris

ing

from

ado

ptio

n of

FRS

9-

-

-

-

-

(8

,303

)

8,30

3

-

-

-

-

At 1

Janu

ary

2012

, as r

esta

ted

152,

812

(6,3

01)

9,

656

11

,641

10,6

49

-

8,

303

62

,626

249,

386

66,3

61

315,

747

To

tal c

ompr

ehen

sive

inco

me

for t

he y

ear

-

-

-

(1

,995

)

-

-

1,5

22

502

29

3,26

8

3,

297

Disp

osal

of e

quity

inst

rum

ents

-

-

-

-

-

-

(2

,583

)

2,58

3

-

-

-

Tran

sact

ion

with

ow

ners

of t

he C

ompa

ny:

D

ivid

end

paid

7-

-

-

-

-

-

-

(5

,557

)

(5

,557

)

-

(5,5

57)

D

ivid

end

paid

to n

on-c

ontro

lling

s

hare

hold

ers

-

-

-

-

-

-

-

-

-

(3,6

00)

(3,6

00)

A

t 31

Dec

embe

r 201

215

2,81

2

(6

,301

)

9,65

6

9,64

6

10

,649

-

7,24

2

60,15

4

24

3,85

8

66

,029

30

9,88

7

N

on-D

istrib

utab

leD

istrib

utab

leCo

mpa

ny

Fair

valu

eSh

are

Trea

sury

Shar

eAd

just

men

tO

ther

Reta

ined

N

ote

Capi

tal

Shar

esPr

emiu

mRe

serv

eRe

serv

eEa

rnin

gsTo

tal

RM'0

00RM

'000

RM'0

00RM

'000

RM'0

00RM

'000

RM'0

00

At 1

Janu

ary

2011

, as p

revi

ously

stat

ed15

2,81

2

(6

,301

)

9,

656

64

6

-

6,74

3

16

3,55

6

Effe

cts a

risin

g fr

om a

dopt

ion

of F

RS 9

--

-(6

46)

64

6

-

-

A

t 1 Ja

nuar

y 20

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S T A T E M E N T S O F C A S H F L O W S


2012 2011 2012 2011

RM'000 RM'000 RM'000 RM'000

Operating activities

Profit before taxation 6,610 6,525 1,874 66

Adjustments for:-Allowance for impairment of amounts due from

subsidiaries - - 164 4,735 Depreciation of investment properties 27 26 - - Depreciation of property, plant and equipment 327 316 55 68 Dividends from investments (801) (805) - - Dividends from subsidiaries - - (6,000) (20,000) Gain on disposal of property, plant and equipment (40) (13) (40) - Impairment loss on investments in subsidiaries - - - 11,546 Interest expense 697 1,246 859 1,379

Interest income (645) (817) (161) (71) Interest income from financial liabilities

measured at amortised cost (344) - - - Net unrealised (gain)/loss on foreign exchange (288) 143 154 (114) Provision for employee benefits 58 25 58 - Reversal of allowance for impairment of trade

receivables - (110) - - Write back of debts (16) - - - Write back of provision for employee benefits (58) (332) - (62)

Total adjustments (1,083) (321) (4,911) (2,519) Operating cash flows before changes in working capital 5,527 6,204 (3,037) (2,453) Changes in working capital

Inventories (2,771) 2,947 - - Property development costs (3,131) (6,367) - - Receivables 1,518 (2,951) (64) 4 Payables 1,182 1,432 261 7

Total changes in working capital (3,202) (4,939) 197 11 Cash flows from/(used in) operations 2,325 1,265 (2,840) (2,442)

Interest paid (697) (1,246) (859) (1,379) Interest received 645 817 161 71 Dividends received from investments 801 805 - - Tax refund - 117 - - Income tax paid (2,598) (2,724) (14) -

Net cash flows generated from/(used in)operating activities 476 (966) (3,552) (3,750)

Group Company



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S T A T E M E N T S O F C A S H F L O W S


( C o n t ’d )

2012 2011 2012 2011

RM'000 RM'000 RM'000 RM'000

Investing activitiesProceeds from disposal of property, plant and equipment 62 21 62 - Proceeds from disposal of investment 6,505 - 1,793 - Purchase of property, plant and equipment (9) (172) (4) (3) Purchase of investment properties (118) - - - Purchase of investments (6,219) - - - Repayment by subsidiaries - - 10,023 13,937

Net cash flows generated from/(used in)investing activities 221 (151) 11,874 13,934

Financing activitiesDividend paid to shareholders (5,557) - (5,557) - Dividend paid to non-controlling shareholders (3,600) - - - Repayment of bank borrowings (8,000) (5,000) (8,000) (5,000)

Net cash flows used in financing activities (17,157) (5,000) (13,557) (5,000)

Net (decrease)/increase in cash and cash equivalents (16,460) (6,117) (5,235) 5,184 Effect of exchange rate changes on cash and cash equivalents 212 (555) - - Cash and cash equivalents at 1 January

As previously reported 36,920 42,846 2,645 (2,539) Effect of exchange rate changes on cash and cash equivalents (488) 746 - -

As restated 36,432 43,592 2,645 (2,539) Cash and cash equivalents at 31 December 20,184 36,920 (2,590) 2,645

Cash and cash equivalents consist of the following:-Deposits, bank balances and cash 22,874 37,305 100 3,030 Bank overdrafts (Note 25) (2,690) (385) (2,690) (385)

20,184 36,920 (2,590) 2,645


Group Company



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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

31 December 2012

1. Corporate information

2. Significant accounting policies

2.1 Basis of preparation

2.2 Summary of significant accounting policies

(a) Basis of consolidation

MUI Properties Berhad (“the Company”) is a public limited liability company incorporated and domiciled in Malaysia, and is listed on the Main Market of Bursa Malaysia Securities Berhad. The registered office and principal place of business of the Company are located at Unit 3, 191, Jalan Ampang, 50450 Kuala Lumpur. The principal activity of the Company is investment holding and the principal activities of the subsidiaries are set out in Note 11 to the financial statements. There have been no significant changes in the nature of these principal activities during the financial year. The holding company is Malayan United Industries Berhad, a public limited liability company incorporated and domiciled in Malaysia, and listed on the Main Market of Bursa Malaysia Securities Berhad. The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the Directors dated 29 April 2013.

The financial statements of the Group and of the Company have been prepared in accordance with Financial Reporting Standards ("FRS") and the Companies Act 1965 in Malaysia. At the beginning of the current financial year, the Group and the Company adopted new and revised FRSs, which are mandatory for the financial periods beginning on or after 1 January 2012 as described fully in Note 2.3. The financial statements have been prepared on the historical cost basis except as disclosed in the accounting policies below. The financial statements are presented in Ringgit Malaysia ("RM") and all values are rounded to the nearest thousand (RM'000) except when otherwise indicated.

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparation of the consolidated financial statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied to like transactions and events in similar circumstances. All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated in full.



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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( C o n t ’d )

31 December 20122. Significant accounting policies (cont'd)

2.2 Summary of significant accounting policies (cont'd)

(a) Basis of consolidation (cont'd)

(b) Transactions with non-controlling interests

(c) Goodwill

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

Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of business combination over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. Following the initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is not amortised but instead, it is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Acquisitions of subsidiaries are accounted for by applying the purchase method. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Adjustments to those fair values relating to previously held interests are treated as a revaluation and recognised in other comprehensive income. The cost of a business combination is measured as the aggregate of the fair values, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity instruments issued, plus any costs directly attributable to the business combination. Any excess of the cost of business combination over the Group’s share in the net fair value of the acquired subsidiary's identifiable assets, liabilities and contingent liabilities is recorded as goodwill on the statement of financial position. The accounting policy for goodwill is set out in Note 2.2(c). Any excess of the Group’s share in the net fair value of the acquired subsidiary's identifiable assets, liabilities and contingent liabilities over the cost of business combination is recognised as income in profit or loss on the date of acquisition. When the Group acquires a business, embedded derivatives separated from the host contract by the acquiree are reassessed on acquisition unless the business combination results in a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required under the contract. Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases.



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2. Significant accounting policies (cont'd)


(d) Investment properties

(e) Property, plant and equipment

%Buildings 2Plant & machinery 7.5Motor vehicles 10 to 20 Furniture, fittings & equipment 5 to 20

Investment properties are land and buildings held by the Group for their investment potential and rental income and are stated at cost except for the freehold land of the Company which was revalued in 1982 based on independent professional valuation using open market value basis. The freehold land of the Company has not been revalued since it was first revalued in 1982. The Directors have not adopted a policy of regular revaluations of such asset and no later valuation has been recorded. As permitted under the transitional provisions of IAS 16 (Revised): Property, Plant and Equipment, this asset continues to be stated at its 1982 valuation. Depreciation is charged to the profit or loss on a straight-line basis over the estimated useful lives of 50 years for buildings. Leasehold land is amortised over the period of the lease. Freehold land is not depreciated. The Directors periodically assess the carrying value of the Group's investment properties. Where an indication of impairment exists, the carrying value of an investment property is assessed and written down to its recoverable amount.

Property, plant and equipment are stated at historical cost less accumulated depreciation and impairment losses if any. Freehold land and assets under construction are not depreciated. Depreciation of all other property, plant and equipment is calculated to write off the cost or valuation on the straight-line basis over the expected useful lives of the assets concerned. The principal annual rates used for this purpose are:-

The residual values, useful life and depreciation method are reviewed at each financial year-end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment. Upon the disposal of an item of property, plant or equipment, the difference between the net disposal proceeds and the net carrying amount is recognised in the profit or loss and the unutilised portion of the revaluation surplus on that item is taken directly to retained earnings.



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31 December 2012



(f) Impairment of non-financial assets

The carrying amounts of assets, other than property development cost, inventories, deferred tax assets and non-current assets held for sale, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the assets' recoverable amounts are estimated and an impairment loss is recognised whenever the recoverable amount is less than the carrying amount of the asset. The impairment loss is recognised in profit or loss immediately. For goodwill, the recoverable amount is estimated at each reporting date or more frequently when indicators of impairment are identified. For the purpose of impairment testing of these assets, recoverable amount is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, recoverable amount is determined for the cash-generating unit ("CGU") to which the asset belongs to. Goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group's CGUs, or groups of CGUs, that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units. An asset's recoverable amount is the higher of an asset's or CGU's fair value less costs to sell and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to those units or groups of units and then, to reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis. An impairment loss is recognised in profit or loss in the period in which it arises, unless the asset is carried at a revalued amount, in which case the impairment loss is accounted for as a revaluation decrease to the extent that the impairment loss does not exceed the amount held in the asset revaluation reserve for the same asset. Impairment loss on goodwill is not reversed in a subsequent period. An impairment loss for an asset other than goodwill is reversed if, and only if, there has been a change in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognised. The carrying amount of an asset other than goodwill is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of impairment loss for an asset other than goodwill is recognised in profit or loss, unless the asset is carried at revalued amount, in which case, such reversal is treated as a revaluation increase.



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(g) Subsidiaries

(h) Inventories

(i) Land held for property development

(j) Property development costs

Land held for property development consists of land where no development activities have been carried out or where development activities are not expected to be completed within the normal operating cycle. Such land is classified as non-current and is stated at cost less accumulated impairment losses, if any. The policy for the recognition and measurement of impairment losses is in accordance with Note 2.2(f). Land held for property development is reclassified as property development costs at the point when development activities have commenced and where it can be demonstrated that the development activities can be completed within the normal operating cycle.

Property development costs comprise all costs that are directly attributable to development activities or that can be allocated on a reasonable basis to such activities. When the financial outcome of a development activity can be reliably estimated, property development revenue and expenses are recognised in the profit or loss by using the stage of completion method. The stage of completion is determined by surveys of work performed. Where the financial outcome of a development activity cannot be reliably estimated, property development revenue is recognised only to the extent of property development costs incurred that is probable will be recoverable, and property development costs on properties sold are recognised as an expense in the period in which they are incurred.

A subsidiary is an entity over which the Group has the power to govern the financial and operating policies so as to obtain benefits from its activities. In the Company’s separate financial statements, investments in subsidiaries are stated at cost less accumulated impairment losses, if any.

Inventories are valued at the lower of cost and net realisable value. The cost of the completed development property units is determined on the specific identification basis and includes costs of land, construction and appropriate development overheads. Net realisable value represents the estimated selling price less all estimated costs to be incurred in marketing and selling.



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31 December 2012



(j) Property development costs (cont'd)

(k) Cash and cash equivalents

(l) Foreign currencies

(i) Functional and presentation currency

(ii) Foreign currency transactions

(iii) Foreign operations

Cash and cash equivalents include cash and bank balances, deposits and other short term, highly liquid investments which are readily convertible to cash with insignificant risk of changes in value, net of outstanding bank overdrafts.

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

Transactions in foreign currencies are converted into Ringgit Malaysia at the exchange rates ruling at the transaction dates. Monetary assets and liabilities in foreign currencies at the reporting date are converted into Ringgit Malaysia at the rates of exchange ruling on that date. Exchange differences arising from the settlement of foreign currency transactions and from the translation of foreign currency monetary assets and liabilities are included in the profit or loss.

Profit or loss of foreign entities are translated into Ringgit Malaysia at average rates for the financial year and the statement of financial position are translated at exchange rates ruling at the reporting date. All exchange differences are dealt with through the exchange translation reserve account.

Any expected loss on a development project, including costs to be incurred over the defects liability period, is recognised as an expense immediately. Property development costs not recognised as an expense are recognised as an asset, which is measured at the lower of cost and net realisable value. The excess of revenue recognised in the profit or loss over billings to purchasers is classified as accrued billings within trade receivables and the excess of billings to purchasers over revenue recognised in the profit or loss is classified as progress billings within trade payables.



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(m) Revenue recognition

(i) Revenue from property development

(ii) Sale of oil palm fruits

(iii) Dividend income

(iv) Property rental and related income

(v) Interest income

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

Dividends from subsidiaries and other investments are recognised when the shareholder's right to receive payment is established.

Rental income from investment property is recognised on a straight-line basis over the term of the lease.

Interest income is recognised using the effective interest method.

Profit from development properties is recognised on the percentage of completion method in cases where the outcome of the development can be reliably estimated. Anticipated losses are provided for in full. Sale of completed development property units are recognised when the risks and rewards associated with the ownership transfer to the property purchasers.

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



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49




(n) Income taxes

(i) Current tax

(ii) Deferred tax

-

-

-

-

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date. Current taxes are recognised in profit or loss except to the extent that the tax relates to items recognised outside profit or loss, either in other comprehensive income or directly in equity.

Deferred tax is provided using the liability method on temporary differences at the reporting datebetween the tax bases of assets and liabilities and their carrying amounts for financial reportingpurposes. Deferred tax liabilities are recognised for all temporary differences, except:-

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

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

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

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

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



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(n) Income taxes (cont'd)

(ii) Deferred tax (cont'd)

(o) Employee benefits

Provision is made for employee entitlements accumulated as a result of employees rendering services up to the reporting date. These benefits include annual leave and retirement gratuity. Liabilities arising in respect of annual leave and retirement gratuity are measured at their nominal amounts. Short term benefits such as wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which the associated services are rendered by employees of the Group. As required by law, the Group makes contributions to the Employees Provident Fund and such contributions are expensed in profit or loss as and when incurred.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax assets to be utilised. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date. Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.



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31 December 2012



(p) Financial instruments

(i) Initial recognition and measurement

(ii) Subsequent measurement

Financial assets

Financial instruments carried in the statements of financial position include cash and cash equivalents, financial assets, provisions and financial liabilities. The particular recognition methods adopted are disclosed in the individual accounting policy statements associated with each item. Prior to 1 January 2012, certain accounting policies were different. The changes in accounting policy are applied on a retrospective basis, except as follows:

A financial instrument is recognised in the financial statements when, and only when, the Company becomes a party to the contractual provisions of the instrument. A financial instrument is recognised initially, at its fair value plus, in the case of a financial instrument not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial instrument. If a hybrid contract contains a host that is a financial instrument, the entire hybrid contract will be accounted as a single financial instrument. If a hybrid contract contains a host that is not a financial instrument, the embedded derivative is accounted separately from the host contract if, and only if, it is not closely related to the economic characteristics and risks of the host contract and the hybrid contract is not measured at fair value through profit or loss. In the previous year, an embedded derivative that qualifies for separation from the host is always accounted separately from the host even when the host is a financial instrument. The host contract, in the event an embedded derivative is recognised separately, is accounted for in accordance with the policy applicable to the nature of the host contract.

A financial asset is subsequently measured at either amortised cost or fair value depending on the Company’s business model for managing the financial asset and the contractual cash flow characteristics of the financial asset. A financial asset shall be measured at amortised cost if the asset is held to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. A gain or loss on a financial asset that is measured at amortised cost and is not part of a hedging relationship is recognised in profit or loss when the financial asset is derecognised, impaired or reclassified and through the amortisation process. All financial assets measured at amortised costs are subject to review for impairment (see Note 2.2(q)).



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(p) Financial instruments (cont'd)

(ii) Subsequent measurement (cont'd)

Financial assets (cont'd)

Financial liabilities

A financial asset that is not measured at amortised cost is measured at fair value. A gain or loss on a financial asset that is measured at fair value and is not part of a hedging relationship is recognised in profit or loss unless the financial asset is an investment in an equity instrument and the Company has elected to present gains and losses on that investment in other comprehensive income. Prior to 1 January 2012, subsequent measurement of a financial asset was dependent on the categorisation of the asset. Fair value through profit or loss category comprised financial assets that were held for trading, including derivatives, and were subsequently measured at their fair values with gain or loss recognised in profit or loss. A debt instrument that was not quoted in an active market was categorised as loans and receivables and was subsequently measured at amortised cost using the effective interest method. Available-for-sale category comprises investment in equity and debt instruments that were not held for trading. Investments in equity instruments that did not have a quoted market price in an active market and whose fair value cannot be reliably measured were measured at cost. Other financial assets categorised as available-for-sale were subsequently measured at their fair values with gain or loss recognised in other comprehensive income, except for impairment losses, and foreign exchange gains and losses arising from monetary items were recognised in profit or loss. On derecognition, the cumulative gain or loss recognised in other comprehensive income is reclassified from equity into profit or loss. Interest calculated for a debt instrument using the effective interest method was recognised in profit or loss.

All financial liabilities are subsequently measured at amortised cost other than those categorised as fair value through profit or loss. Fair value through profit or loss category comprises financial liabilities that are held for trading, derivatives (except for a derivative that is a financial guarantee contract) or financial liabilities that are specifically designated into this category upon initial recognition. Financial liabilities categorised as fair value through profit or loss are subsequently measured at their fair values with the gain or loss recognised in profit or loss.



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31 December 2012



(p) Financial instruments (cont'd)

(iii) Derecognition

(q) Impairment of financial assets

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

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

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

A financial asset or part of it is derecognised when, and only when the contractual rights to the cash flows from the financial asset expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between the carrying amount (measured at the date of derecognition) and the consideration received (including any new asset obtained less any new liability assumed) is recognised in profit or loss. For financial assets measured at fair value through other comprehensive income, the cumulative gain or loss previously presented in other comprehensive income shall not be subsequently transferred to profit or loss. However, the Company may transfer the cumulative gain or loss within equity when the financial asset is derecognised. A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged or cancelled or expires. On derecognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.



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(q) Impairment of financial assets (cont'd)

(i) Trade and other receivables and other financial assets carried at amortised cost (cont'd)

(ii) Unquoted equity securities carried at cost

(iii) Available-for-sale financial assets

If any such evidence exists, the amount of impairment loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the financial asset's original effective interest rate. The impairment loss is recognised in profit or loss. The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable becomes uncollectible, it is written off against the allowance account. If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.

Prior to 1 January 2012, an impairment loss in respect of available-for-sale financial assets is recognised in profit or loss and is measured as the difference between the asset’s acquisition cost (net of any principal repayment and amortisation) and the asset’s current fair value, less any impairment loss previously recognised. Where a decline in the fair value of an available-for-sale financial asset has been recognised in the other comprehensive income, the cumulative loss in other comprehensive income is reclassified from equity and recognised to profit or loss.

Prior to 1 January 2012, if there is objective evidence (such as significant adverse changes in the business environment where the issuer operates, probability of insolvency or significant financial difficulties of the issuer) that an impairment loss on financial assets carried at cost has been incurred, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment losses are not reversed in subsequent periods.



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31 December 2012



(r) Provisions for liabilities

(s) Borrowing costs

(t) Equity instruments

Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared. The transaction costs of an equity transaction are accounted for as a deduction from equity, net of tax. Equity transaction costs comprise only those incremental external costs directly attributable to the equity transaction which would otherwise have been avoided. The consideration paid, including attributable transaction costs on repurchased ordinary shares of the Company that have not been cancelled, are classified as treasury shares and presented as a deduction from equity. No gain or loss is recognised in profit or loss on the sale, re-issuance or cancellation of treasury shares. When treasury shares are reissued by resale, the difference between the sales consideration and the carrying amount is recognised in equity.

Provisions for liabilities are recognised when the Group has a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount can be made. Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. Where the effect of the time value of money is material, the amount of a provision is the present value of the expenditure expected to be required to settle the obligation.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale are added to the cost of those assets until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in profit or loss in the period in which they are incurred.



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56



(u) Leases

(i) Classification

-

-

(ii) Operating leases - the Group as lessee

(iii) Operating leases - the Group as lessor

Operating lease payments are recognised as an expense on a straight-line basis over the term of the relevant lease. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis. In the case of a lease of land and buildings, the minimum lease payments or the up-front payments made are allocated, whenever necessary, between the land and the buildings elements in proportion to the relative fair values for leasehold interests in the land element and buildings element of the lease at the inception of the lease. The up-front payment represents prepaid lease payments and are amortised on a straight-line basis over the lease term.

Assets leased out under operating leases are presented on the statements of financial position according to the nature of the assets. Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease (Note 2.2(m)(iv)). Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.

A lease is recognised as finance lease if it transfers substantially to the Group all the risks and rewards incidental to ownership. Leases of land and buildings are classified as operating or finance lease in the same way as leases of other assets and the land and buildings elements of a lease of land and buildings are considered separately for the purposes of lease classification. All leases that do not transfer substantially all the risks and rewards are classified as operating leases, with the following exceptions:

Property held under operating leases that would otherwise meet the definition of an investment property is classified as an investment property on a property-by-property basis and, if classified as investment property, is accounted for as if held under a finance lease.

Land held for own use under an operating lease, the fair value of which cannot be measured separately from the fair value of a building situated thereon at the inception of the lease, is accounted for as being held under a finance lease, unless the building is also clearly held under an operating lease.



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57


31 December 2012


2.3 Changes in accounting policies

Effective forannual periods

FRS, Amendments to FRS and IC Interpretations beginning on or after

Amendments to FRS 7 Financial Instruments: Disclosures - Mandatory Date of FRS 9 and Transition Disclosures Effective immediatelyAmendments to FRS 1: Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters 1 January 2012Amendments to FRS 7: Disclosures - Transfers of Financial Assets 1 January 2012Amendments to FRS 112: Deferred Tax: Recovery of Underlying Assets 1 January 2012FRS 124: Related Party Disclosures 1 January 2012FRS 9: Financial Instruments 1 January 2015

Revised FRS 124 : Related Party Disclosures

FRS 9: Financial Instruments

The revised FRS 124 clarifies the definition of a related party to simplify the identification of such relationships and to eliminate inconsistencies in its application. The revised FRS 124 expands the definition of a related party and would treat two entities as related to each other whenever a person (or a close member of that person's family) or a third party has control or joint control over the entity, or has significant influence over the entity. The revised standard also introduces a partial exemption of disclosure requirements for government-related entities. The revised affects disclosure only and has no impact on the Group's financial position or performance.

The accounting policies adopted are consistent with those of the previous financial year except as follows: On 1 January 2012, the Group and the Company adopted the following new and amended FRSs and IC Interpretations mandatory for annual financial periods beginning on or after the dates stated below:

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

As a result of the early adoption of FRS 9, the Group and the Company have measured their financial assets subsequently either at amortised cost or at fair value depending on the Group's and the Company's business model for managing the financial assets and the contractual cash flow characteristics of the financial assets. The details of the changes in accounting policies and the effects arising from the adoption of FRS 9 are discussed below:



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2.3 Changes in accounting policies (cont'd)

FRS 9: Financial Instruments (cont'd)

Equity instruments - held for non-trading

(a) Statement of financial position as at 1 January 2012 (date of initial application of FRS 9)

Under UnderFRS 139 Adjustments FRS 9RM'000 RM'000 RM'000

Group1 January 2012 (date of initial application of FRS 9)Fair value adjustment reserve 8,303 (8,303) - Other reserve - 8,303 8,303

1 January 2011Fair value adjustment reserve 12,257 (12,257) - Other reserve - 12,257 12,257

Company1 January 2012 (date of initial application of FRS 9)Fair value adjustment reserve 855 (855) - Other reserve - 855 855

Prior to 1 January 2012, the Group and the Company classified their investments in equity instruments which were held for non-trading purposes as available-for-sale financial assets and which were stated at fair value. Any gains or losses from changes in fair value of the financial assets were recognised in other comprehensive income, except that impairment losses and interest were recognised in profit or loss. The cumulative gain or loss previously recognised in other comprehensive income and presented within equity were transferred to profit or loss when the financial asset was derecognised. Investments in equity instruments whose fair value cannot be reliably measured were measured at cost less impairment loss. Available-for-sale financial assets were classified as non-current assets unless they were expected to be realised within 12 months after the reporting date. Upon adoption of FRS 9, the Group and the Company have made an irrevocable election to present in other comprehensive income changes in the fair value of these investments in equity instruments. Accordingly these investments are classified as fair value through other comprehensive income ("FVTOCI"). The impact arising from the adoption of FRS 9 is as stated below:



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59


31 December 2012


2.3 Changes in accounting policies (cont'd)

FRS 9: Financial Instruments (cont'd)

(a) Statement of financial position as at 1 January 2012 (date of initial application of FRS 9) (cont'd)


Company1 January 2011Fair value adjustment reserve 646 (646) - Other reserve - 646 646

(b) Statement of comprehensive income for the year ended 31 December 2011


GroupFair value adjustment for available -for-sale investment (3,954) 3,954 - Fair value changes for investments classified as fair value through other comprehensive income - (3,954) (3,954)

CompanyFair value adjustment for available -for-sale investment 209 (209) - Fair value changes for investments classified as fair value through other comprehensive income - 209 209

2.4 Standards and interpretations issued but not yet effective


FRSs, Amendements to FRSs and IC Interpretations beginning on or after

FRS 101: Presentation of Items of Other Comprehensive Income (Amendments to FRS 101) 1 July 2012

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



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60


2.4 Standards and interpretations issued but not yet effective (cont'd)


FRSs, Amendements to FRSs and IC Interpretations beginning on or after

Amendments to FRS 101: Presentation of Financial Statements (Improvements to FRSs (2012)) 1 January 2013FRS 10: Consolidated Financial Statements 1 January 2013FRS 11: Joint Arrangements 1 January 2013FRS 12: Disclosure of Interests in Other Entities 1 January 2013FRS 13: Fair Value Measurement 1 January 2013FRS 119: Employee Benefits 1 January 2013FRS 127: Separate Financial Statements 1 January 2013FRS 128: Investment in Associate and Joint Ventures 1 January 2013Amendment to IC Interpretation 2: Members' Shares in Co-operative Entities and

Similar Instruments (Improvements to FRSs (2012)) 1 January 2013IC Interpretation 20: Stripping Costs in the Production Phase of a Surface Mine 1 January 2013Amendments to FRS 7: Disclosures - Offsetting Financial Assets and Financial Liabilities 1 January 2013Amendments to FRS 1: First-time Adoption of Malaysian Financial Reporting Standards - Government Loans 1 January 2013Amendments to FRS 1: First-time Adoption of Malaysian Financial Reporting Standards (Improvements to FRSs (2012)) 1 January 2013Amendments to FRS 116: Property, Plant and Equipment (Improvements to FRSs (2012)) 1 January 2013Amendments to FRS 132: Financial Instruments: Presentation (Improvements to FRSs (2012)) 1 January 2013Amendments to FRS 134: Interim Financial Reporting (Improvements to FRSs (2012)) 1 January 2013Amendments to FRS 10: Consolidated Financial Statements: Transition Guidance 1 January 2013Amendments to FRS 11: Joint Arrangements: Transition Guidance 1 January 2013Amendments to FRS 12: Disclosure of Interests in Other Entities: Transition Guidance 1 January 2013Amendments to FRS 132: Offsetting Financial Assets and Financial Liabilities 1 January 2014Amendments to FRS 10, FRS 12 and FRS 127: Investment Entities 1 January 2014FRS 9: Financial Instruments 1 January 2015

The Group plans to adopt these standards, if applicable, when they become effective in the respective financial periods, except FRS 9: Financial Instruments. The effect of the early adoption of FRS 9 is reflected in Note 2.3 and 2.2(p)(ii) to the financial statements.



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31 December 2012



FRS 10: Consolidated Financial Statements

FRS 12: Disclosures of Interests in Other Entities

FRS 13: Fair Value Measurement

FRS 127: Separate Financial Statements

The Directors expect that the adoption of the standards and interpretations above will have no material impact on the financial statements in the period of initial application, except as disclosed below:

FRS 12 includes all disclosure requirements for interests in subsidiaries, joint arrangements, associates and structured entities. A number of new disclosures are required. This standard affects disclosures only and has no impact on the Group's financial position and performance.

As a consequence of the new FRS 10 and FRS 12, FRS 127 is limited to accounting for subsidiaries, jointly controlled entities and associates in separate financial statements.

FRS 10 replaces part of FRS 127 Consolidated and Separate Financial Statements that deals with consolidated financial statements and IC Interpretation 112 Consolidation – Special Purpose Entities. Under FRS 10, an investor controls an investee when (a) the investor has power over an investee, (b) the investor has exposure, or rights, to variable returns from its involvement with the investee, and (c) the investor has ability to use its power over the investee to affect the amount of the investor’s returns. Under FRS 127 Consolidated and Separate Financial Statements, control was defined as the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. FRS 10 includes detailed guidance to explain when an investor has control over the investee. FRS 10 requires the investor to take into account all relevant facts and circumstances. Based on the preliminary analysis performed, FRS 10 is not expected to have any impact on the investments currently held by the Group.

FRS 13 establishes a single source of guidance under FRS for all fair value measurements. FRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under FRS when fair value is required or permitted. Upon adoption of FRS 13, the Group will take into consideration the highest and best use of certain properties in measuring the fair value of such properties. The adoption of FRS 13 is expected to result in higher fair value of certain properties of the Group.



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port

2012

62



FRS 119: Employee Benefits

Amendments to FRS 101: Presentation of Financial Statements (Annual Improvements 2009-2011 Cycle)

Malaysian Financial Reporting Standards

The amendments to FRS 101 change the grouping of items presented in other comprehensive income. Items that could be reclassified (or recycled) to profit or loss at a future point in time (for example, exchange differences on translation of foreign operations and net loss or gain on available-for-sale financial assets) would be presented separately from items which will never be reclassified (for example, actuarial gains and losses on defined benefit plans and revaluation of land and buildings). The amendment affects presentation only and has no impact on the Group's financial position and performance.

The most significant change relates to the accounting for changes in defined benefit obligations and plan assets. The amendments require the recognition of changes in defined benefit obligations and in fair value of plan assets when they occur, and hence eliminate the “corridor approach” as permitted under the previous version of FRS 119 and accelerate the recognition of past service costs. The amendments require all actuarial gains and losses to be recognised immediately through other comprehensive income in order for the net pension asset or liability recognised in the consolidated statement of financial position to reflect the full value of the plan deficit or surplus. The amendments to FRS 119 require retrospective application with certain exceptions. The Directors anticipate that the application of the amendments to FRS 119 may have impact on amounts reported in respect of the Group’s defined benefit plans. However, the Group is currently assessing the impact that this standard will have on the financial position and performance of Group.

On 19 November 2011, the Malaysian Accounting Standards Board ("MASB") issued a new MASB approved accounting framework, the Malaysian Financial Reporting Standards ("MFRS") Framework. The MFRS Framework is to be applied by all Entities Other Than Private Entities for annual periods beginning on or after 1 January 2012, with the exception of entities that are within the scope of MFRS 141 Agriculture (MFRS 141) and IC Interpretation 15 Agreements for Construction of Real Estate (IC 15), including its parent, significant investor and venturer (herein called ‘Transitioning Entities’). Adoption of the MFRS Framework by Transitioning Entities will be mandatory for annual periods beginning on or after 1 January 2014. The Group falls within the scope definition of Transitioning Entities and has opted to defer adoption of the new MFRS Framework. Accordingly, the Group will be required to prepare financial statements using the MFRS Framework in its first MFRS financial statements for the year ending 31 December 2014. In presenting its first MFRS financial statements, the Group will be required to restate the comparative financial statements to amounts reflecting the application of MFRS Framework. The majority of the adjustments required on transition will be made, retrospectively, against opening retained earnings.



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63




Malaysian Financial Reporting Standards (cont'd)

2.5 Significant accounting estimates and judgements

(a) Judgements made in applying accounting policies

(i) Deferred tax assets

Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances tothe extent that it is probable that taxable profit will be available against which the losses andcapital allowances can be utilised. Significant management judgement is required to determine theamount of deferred tax assets that can be recognised, based upon the likely timing and level offuture taxable profits together with future tax planning strategies. The total carrying value ofrecognised tax losses and capital allowances of the Group as at 31 December 2012 wasRM2,112,000 (2011: RM2,120,000) and the unrecognised tax losses of the Group as at 31December 2012 was RM7,749,000 (2011: RM6,616,000), as disclosed in Note 13.

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 theamounts recognised in the financial statements:

The preparation of the Group's and the Company's financial statements requires management to makejudgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets andliabilities, and the disclosure of contingent liabilities at the reporting date. However, uncertainty about theseassumptions and estimates could result in outcomes that could require a material adjustment to the carryingamount of the asset or liability affected in the future.

At the date of these financial statements, the Group has not completed its quantification of the financialeffects of the differences between Financial Reporting Standards and accounting standards under the MFRSFramework. Accordingly, the financial performance and financial position as disclosed in these financialstatements for the year ended 31 December 2012 could be different if prepared under the MFRSFramework. The Group expects to be in a position to fully comply with the requirements of the MFRS Framework forthe financial year ending 31 December 2014.



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port

2012

64


2.5 Significant accounting estimates and judgements (cont'd)

(b) Key sources of estimation uncertainty

(i) Impairment of goodwill

(ii) Depreciation of property, plant and equipment

(iii) Property development

The Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the recoverable amount of the cash-generating units ("CGU") to which goodwill is allocated. This is based on the fair value less costs to sell of the CGU. The carrying amounts of goodwill as at 31 December 2012 was RM5,000,000 (2011: RM5,000,000), as disclosed in Note 14.

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

The cost of property, plant and equipment is depreciated on a straight-line basis over the asset's useful lives. Management estimates the useful lives of these property, plant and equipment to be within 5 to 50 years. These are the common life expectancies applied generally. Changes in the expected level of usage could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.

The Group recognises property development revenue and expenses in profit or loss by using the stage of completion method. The stage of completion method is determined by surveys of work performed. Significant judgement is required in determining the stage of completion, the extent of the property development costs incurred, the estimated total property development revenue and costs, as well as the recoverability of the development projects. In making the judgement, the Group evaluates based on past experience and by relying on the work of specialists. It is impractical to ascertain the sensitivity analysis for the estimated total property development revenue or cost against the actual Group revenue and cost of sales due to material price fluctuation.



Annu

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port

2012

65


31 December 2012

3. Revenue

2012 2011 2012 2011 RM'000 RM'000 RM'000 RM'000

Revenue from property development 30,533 28,691 - - Sale of oil palm fruits 6,129 7,063 - - Dividend income 801 805 6,000 20,000 Property rental and related income 167 159 - - Interest income 599 748 161 72

38,229 37,466 6,161 20,072

4. Profit before taxation

2012 2011 2012 2011 RM'000 RM'000 RM'000 RM'000

This is arrived at after charging:-Auditors' remuneration:

Statutory - current 325 328 59 56 - under provision in prior years 12 8 3 8

Allowance for impairment of amounts due fromsubsidiaries - - 164 4,735

Depreciation of investment properties 27 26 - - Depreciation of property, plant and equipment 327 316 55 68 Directors' remuneration receivable by:

Directors of the Company Receivable from the Company - fees 282 151 282 151 - other emoluments 608 697 608 697 Receivable from subsidiaries - fees 20 15 - - Directors of subsidiaries - fees 40 30 - - - other emoluments 61 61 - -

Impairment loss on investments in subsidiaries - - - 11,546 Interest expense

- bank overdrafts and bank revolving credits 697 1,246 606 1,114 - subsidiary - - 253 265

Net foreign exchange loss - unrealised - 143 154 - Provision for employee benefits 58 25 58 - Rent of equipment 30 30 18 18 Rent of premises 205 210 205 210

Group Company

Group Company



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port

2012

66

4. Profit before taxation (cont'd)

2012 2011 2012 2011RM'000 RM'000 RM'000 RM'000

This is arrived at after charging:- (cont'd)Staff costs

- Salaries and other staff related expenses 1,558 1,804 494 520 - Defined contribution plans 161 176 41 63

and after crediting:-Dividend income from

- quoted investments 801 805 - - - unquoted investments in subsidiaries - - 6,000 20,000

Gain on disposal of property, plant and equipment 40 13 40 -

Interest income - fixed deposits 341 606 - - - financial liabilities measured at amortised cost 344 - - - - others 304 211 49 2 - subsidiaries - - 112 69

Net foreign exchange gain - unrealised 288 - - 114

Rental income from land and building 347 424 - - Reversal of allowance for impairment of trade

receivables - 110 - - Write back of debts 16 - - - Write back of provision for employee benefits 58 332 - 62

2012 2011Executive directors:

RM450,001 - RM500,000 1 1 RM150,001 - RM200,000 - 1 RM100,001 - RM150,000 1 -

Non-executive directors:Below RM50,000 4 5

Group Company

Number of directors

The estimated monetary value of benefits-in-kind received by the Directors from the Group and the Companyamounted to RM32,023 (2011: RM40,551).

The number of directors of the Company whose total remuneration during the financial year fall within thefollowing bands are as follows:



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port

2012

67

5. Taxation

2012 2011 2012 2011RM'000 RM'000 RM'000 RM'000

Current taxation based on profit for the financial year- Malaysian 3,072 2,897 29 -

(Over)/Under provision in respect of prior years- Malaysian (41) 114 14 -

3,031 3,011 43 -

Deferred tax (Note 13) :Relating to origination and reversal of temporary differences (194) 110 - - Under/(Over) provision in prior years 3 (48) - -

(191) 62 - - Total income tax expense 2,840 3,073 43 -

2012 2011 2012 2011RM'000 RM'000 RM'000 RM'000

Profit before taxation 6,610 6,525 1,874 66

Taxation at Malaysian statutory tax rate 1,653 1,631 469 17 Effects of different tax rates (142) (149) - - Income not subject to tax (462) (158) (1,510) (5,044) Expenses not deductible for tax purposes 1,829 1,683 1,070 5,027 (Over)/Under provision of current income tax in prior years (41) 114 14 - Under/(Over) provision of deferred tax in prior years 3 (48) - - Tax expense for the year 2,840 3,073 43 -

6. Earnings per share (basic)

Group Company

Group Company

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

The reconciliation between tax expense and the product of accounting profit multiplied by the applicable corporate tax rate for the years ended 31 December 2012 and 2011 are as follows:

The earnings per share is calculated based on the consolidated net profit for the financial year of RM502,000(2011: RM441,000) and the weighted average number of ordinary shares of 20 sen each in issue during thefinancial year of 740,914,596 (2011: 740,914,596).



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68


7. Dividends

2012 2011RM'000 RM'000

In respect of financial year ended 31 December 2011:

Final dividend of 5.0% less tax at 25%: 1 sen per share 5,557 -

In respect of financial year ended 31 December 2011:

Proposed but not recognised as liabilities as at 31 December 2011: Final dividend of 5.0% less tax at 25%: 1 sen per share - 5,557

Group and Company

Since the end of the Company's last financial year, a final dividend of 1 sen per 20 sen share (5.0%) less tax at 25% amounting to RM5,556,859 in respect of the financial year ended 31 December 2011, was approved on 27 June 2012 and subsequently paid on 27 July 2012. No dividend was recommended by the Directors for the current financial year.



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69

8.Pr

oper

ty, p

lant

and

equ

ipm

ent

Gro

up

Furn

iture

,As

sets

Free

hold

Plan

t &M

otor

fit

tings

&un

der

land

Build

ings

mac

hine

ryve

hicl

es e

quip

men

tco

nstru

ctio

nT

otal

2012

RM

'000

RM

'000

RM

'000

RM

'000

RM

'000

RM

'000

RM

'000

Cost

A

t 1 Ja

nuar

y 20

1289

1

7,34

7

74

1,

136

1,

982

775

12

,205

Exc

hang

e di

ffer

ence

s(1

6)

(109

)

-

-

-

(1

4)

(1

39)

87

5

7,23

8

74

1,

136

1,

982

761

12,0

66

A

dditi

ons

-

-

-

-

9

-

9

Disp

osals

-

-

-

(100

)

-

-

(1

00)

A

t 31

Dec

embe

r 201

287

5

7,23

8

74

1,

036

1,

991

761

11,9

75

Accu

mul

ated

dep

reci

atio

nA

t 1 Ja

nuar

y 20

12-

1,

896

74

771

1,58

1

-

4,

322

Exc

hang

e di

ffer

ence

s-

(3

4)

-

-

-

-

(34)

-

1,

862

74

771

1,58

1

-

4,

288

Char

ge fo

r the

yea

r-

14

5

-

10

6

76

-

32

7

Disp

osals

-

-

-

(78)

-

-

(7

8)

At 3

1 D

ecem

ber 2

012

-

2,00

7

74

79

9

1,65

7

-

4,

537

Net

car

ryin

g am

ount

At 3

1 Dec

embe

r 201

287

5

5,23

1

-

237

33

4

761

7,43

8



Annu

al Re

port

2012

70

8.Pr

oper

ty, p

lant

and

equ

ipm

ent (

cont

'd)

Gro

up

Furn

iture

,As

sets

Free

hold

Plan

t &M

otor

fit

tings

&un

der

land

Build

ings

mac

hine

ryve

hicl

es e

quip

men

tco

nstru

ctio

nT

otal

2011

RM

'000

RM

'000

RM

'000

RM

'000

RM

'000

RM

'000

RM

'000

Cost

A

t 1 Ja

nuar

y 20

1186

5

7,17

1

74

1,

425

1,

973

753

12,2

61

E

xcha

nge

diff

eren

ces

26

17

6

-

-

-

22

22

4

891

7,

347

74

1,42

5

1,97

3

77

5

12

,485

Add

ition

s-

-

-

16

3

9

-

172

D

ispos

als-

-

-

(4

46)

-

-

(446

)

Writ

ten

off

-

-

-

(6)

-

-

(6

)

A

t 31

Dec

embe

r 201

189

1

7,34

7

74

1,

136

1,

982

775

12,2

05

Accu

mul

ated

dep

reci

atio

nA

t 1 Ja

nuar

y 20

11-

1,

700

74

1,12

5

1,50

1

-

4,

400

Exc

hang

e di

ffer

ence

s-

50

-

-

-

-

50

-

1,

750

74

1,12

5

1,50

1

-

4,

450

Char

ge fo

r the

yea

r-

14

6

-

90

80

-

31

6

Disp

osals

-

-

-

(438

)

-

-

(4

38)

W

ritte

n of

f-

-

-

(6

)

-

-

(6)

At 3

1 D

ecem

ber 2

011

-

1,89

6

74

77

1

1,

581

-

4,32

2

Net

car

ryin

g am

ount

At 3

1 Dec

embe

r 201

189

1

5,45

1

-

365

401

77

5

7,

883



Annu

al Re

port

2012

71


31 December 2012

8. Property, plant and equipment (cont'd)

CompanyFurniture,

Motor fittings &vehicles equipment Total

2012 RM'000 RM'000 RM'000CostAt 1 January 2012 481 624 1,105 Additions - 4 4 Disposal (100) - (100) At 31 December 2012 381 628 1,009

Accumulated depreciationAt 1 January 2012 379 616 995 Charge for the year 55 - 55 Disposals (78) - (78) At 31 December 2012 356 616 972

Net carrying amount at 31 December 2012 25 12 37

2011CostAt 1 January 2011 481 621 1,102 Additions - 3 3 At 31 December 2011 481 624 1,105

Accumulated depreciationAt 1 January 2011 315 612 927 Charge for the year 64 4 68 At 31 December 2011 379 616 995

Net carrying amount at 31 December 2011 102 8 110



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al Re

port

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72

9. Investment properties

2012 2011 2012 2011RM'000 RM'000 RM'000 RM'000

Cost or valuationAt 1 January - at cost 30,235 30,235 15 15 - at valuation 150 150 150 150

30,385 30,385 165 165 Addition 118 - - - At 31 December 30,503 30,385 165 165

Accumulated depreciationAt 1 January 571 545 - - Charge for the year 27 26 - - At 31 December 598 571 - -

Net carrying amount at 31 December - at cost 29,755 29,664 15 15 - at valuation 150 150 150 150

29,905 29,814 165 165

Fair value at 31 December 53,000 53,000 200 200

The following are recognised in profit or loss in respect of investment properties:-

2012 2011 2012 2011RM'000 RM'000 RM'000 RM'000

Rental income 240 232 - -

Direct operating expenses- income generating investment properties 156 180 2 2

Group Company

Group Company

Fair value of investment properties as at 31 December was estimated by the Directors based on market values ofcomparable properties. The investment properties comprise properties held to earn rentals or for capitalappreciation or both.

The value of the Company's freehold land of RM150,000 is based on valuation in 1982 by independentprofessional valuers on the basis of open market value.



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31 December 20129. Investment properties (cont'd)

2012 2011RM'000 RM'000

Long term leasehold land 935 950 Buildings 333 345

1,268 1,295

10. Development properties

(a) NON-CURRENTLand held for property development

2012 2011RM'000 RM'000

Costs:-At 1 January/31 December 35,263 35,263

(b) CURRENTProperty development costs

2012 2011RM'000 RM'000

Land and development costs at 1 January:-Freehold land 23,147 23,288 Development costs 80,703 67,244 Exchange difference (152) (200)

103,698 90,332

Group

Group

Group

The long term leasehold land is amortised over its remaining lease period of 88 years as at the date of acquisition.

Investment properties held under lease terms and their net carrying amounts as at 31 December are as follows:-



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2012

74

10. Development properties (cont'd)

(b) CURRENT (cont'd)Property development costs (cont'd)

2012 2011RM'000 RM'000

Costs incurred for the year:-Development costs 26,788 23,177

Accumulated costs reversed during the year in respect of completed projects:- Freehold land (242) (94) Development costs (21,238) (7,280)

(21,480) (7,374)

Accumulated costs recognised in profit or loss:-At 1 January (15,567) (8,568) Recognised for the year (19,616) (14,373) Accumulated costs reversed during the year in respect of completed projects 21,480 7,374 At 31 December (13,703) (15,567)

Accumulated impairment:- At 1 January/31 December (6,500) (6,500)

Transfers at 31 December:- To inventories (3,977) (2,484)

Exchange difference (64) 47 Property development costs at 31 December 84,762 81,631

Group



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2012

75


31 December 2012

11. Subsidiaries

2012 2011RM'000 RM'000

CostUnquoted investmentsAt 1 January/31 December 292,985 292,985

Accumulated impairment lossesAt 1 January 23,748 12,202 Impairment losses for the year - 11,546 At 31 December 23,748 23,748

Net carrying amount at 31 December 269,237 269,237

Details of the subsidiaries are as follows:-Country of Principal

Subsidiaries incorporation activities 2012 2011% %

AIGM Sdn Bhd Malaysia Inactive 100 100 Appreplex (M) Sdn Bhd Malaysia Investment holding 100 100

Bahtera Muhibbah Sdn Bhd Malaysia Investment holding 100 100# C. S. Investments Private Limited Singapore Investment holding 100 100# Cesuco Trading Limited Hong Kong Investment holding 100 100

CSB Holdings Sdn Bhd Malaysia Property investment 100 100CSB Sdn Bhd Malaysia Investment holding 100 100Delray Sdn Bhd Malaysia Property investment 100 100

# Dirnavy Pty Limited Australia Inactive 100 100Elegantplex (M) Sdn Bhd Malaysia Investment holding 100 100

## Green Nominees (Tempatan) Malaysia Inactive 100 100 Sdn Bhd (In liquidation)Heritage Challenger (M) Sdn Bhd Malaysia Investment holding 100 100Indanas Sdn Bhd Malaysia Investment holding 100 100Integrated Mark (M) Sdn Bhd Malaysia Investment holding 100 100Intercontinental Properties Sdn Bhd Malaysia Investment holding 100 100Lambaian Maju Sdn Bhd Malaysia Investment holding 100 100Lembaran Makmur Sdn Bhd Malaysia Investment holding 100 100

and trading# Lunula Pty Limited Australia Property Investment 100 100

### Malayan United Properties Sdn Bhd Malaysia Inactive 100 100Malayan United Realty Sdn Bhd Malaysia Property investment 100 100

and investment holding# Mecomas Pty Limited Australia Inactive 100 100# Ming Court Hotel (Vancouver) Ltd Canada Investment holding 100 100

### Ming Fung Sendirian Berhad Malaysia Inactive 100 100# MUI Australia Pty Ltd Australia Investment holding 100 100

Company

Equity interest



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2012

76

11. Subsidiaries (cont'd)

Details of the subsidiaries are as follows (cont'd):-

Country of PrincipalSubsidiaries incorporation activities 2012 2011

% %# MUI Carolina Corporation United States Property investment 100 100

of America and development# MUI Investments (Canada) Ltd Canada Investment holding 100 100

MUI Plaza Sdn Bhd Malaysia Investment holding 100 100MUI Property Services Sdn Bhd Malaysia Property services 100 100

## MUI Resorts Sdn Bhd (In liquidation) Malaysia Inactive 100 100Peristal Enterprise Sdn Bhd Malaysia Investment holding 100 100

## Pistole Holdings Sdn Bhd (In liquidation) Malaysia Inactive 100 100Polacre Sdn Bhd Malaysia Property development 100 100Portico Sdn Bhd Malaysia Property development 100 100Prescada Sdn Bhd Malaysia Investment holding 100 100Resort & Leisure Homes Sdn Bhd Malaysia Property development 100 100

### Shun Fung Sendirian Berhad Malaysia Inactive 100 100Superex Sdn Bhd Malaysia Inactive 100 100Unique Octagon Sdn Bhd Malaysia Investment holding 100 100West Synergy Sdn Bhd Malaysia Property investment 60 60

and development

# Subsidiary not audited by member firm of Ernst & Young Malaysia.## Placed under members'/creditors' voluntary winding-up on 31 January 2007.

### Placed under members' voluntary winding-up on 14 February 2013.

Equity interest



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2012

77


31 December 2012

12. Investments

Carrying Market Carrying MarketAmount Value Amount ValueRM'000 RM'000 RM'000 RM'000

Non-currentFair value through other comprehensive income financial assets:

Group

Quoted shares - Malaysia 17,409 17,409 21,339 21,339

- Overseas 11 11 9 9 At 1 January/31 December 17,420 17,420 21,348 21,348

Unquoted shares At 1 January 75,785 75,785 75,068 75,068 Additions 4,907 4,907 - - Exchange differences (1,077) (1,077) 717 717 At 31 December 79,615 79,615 75,785 75,785

Net carrying amount at 31 December 97,035 97,035 97,133 97,133

Company

Quoted shares - Malaysia

At 1 January/31 December - - 1,535 1,535

2012 2011

The redemption of the unquoted shares shall be upon application by the holder(s) thereof and at a price equal to theoriginal subscription price paid plus an amount equal to the share of the investee company's surplus assets at thetime of redemption on a pari passu basis with other classes of stock based on the price paid for these stocksrespectively.



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2012

78

12. Investments (cont'd)

The dividend recognised during the financial year is as follows:

2012 2011RM'000 RM'000

Quoted shares 801 805

13. Deferred taxation

2012 2011RM'000 RM'000

At 1 January (686) (734) Exchange adjustments 8 (14) Transfer to profit or loss (Note 5) (191) 62 At 31 December (869) (686)

Presented after appropriate offsetting as follows:-

Deferred tax assets (869) (686)

Group

Group

During the financial year, the Group and the Company had disposed of equity investments at a fair value ofRM6,505,000 and RM1,793,000 respectively for working capital purposes. A cumulative gain of RM2,583,000 andRM1,113,000 respectively were transferred within equity.

As at 1 January 2012, the Group and the Company have designated their investments in equity instruments as at fairvalue through other comprehensive income in accordance to FRS 9 on the basis of the facts and circumstances thatexist at the date of initial application. This designation was chosen as these investments are expected to be held forlong-term for strategic purposes.

Prior to 1 January 2012, these investments are designated as available-for-sale.



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2012

79


31 December 2012

13. Deferred taxation (cont'd)

(a)

Deferred tax liabilities/(assets):-

Deferred taxliabilities

Tax lossesand

Property, Retirement unabsorbedplant and benefit capital

equipment obligations Provisions allowances TotalRM'000 RM'000 RM'000 RM'000 RM'000

At 1 January 2012 63 (39) (180) (530) (686) Exchange adjustments - - - 8 8 Recognised in profit or loss (7) - (178) (6) (191) At 31 December 2012 56 (39) (358) (528) (869)

At 1 January 2011 45 (42) (224) (513) (734) Exchange adjustments - - - (14) (14) Recognised in profit or loss 18 3 44 (3) 62 At 31 December 2011 63 (39) (180) (530) (686)

(b) Deferred tax assets are not recognised in respect of the following items:-

2012 2011RM'000 RM'000

Unused tax losses 7,749 6,616

Deferred tax assets

Group

The components and movements of deferred tax liabilities and assets during the financial year prior tooffsetting are as follows:-

The unused tax losses are available indefinitely for offset against future taxable profits of the subsidiaries inwhich those items arose. Deferred tax assets have not been recognised in respect of these items as they maynot be used to offset taxable profits of other subsidiaries in the Group and they have arisen in subsidiaries thathave a recent history of losses.



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2012

80

14. Goodwill on consolidation

2012 2011RM'000 RM'000

At 1 January 5,936 5,936 Less: Accumulated impairment loss (936) (936) At 31 December 5,000 5,000

15. Inventories

16. Receivables

2012 2011 2012 2011RM'000 RM'000 RM'000 RM'000

CurrentTrade receivablesThird parties 7,460 8,936 - - Less: Allowance for impairment (108) (108) - -

7,352 8,828 - -

Group

Group Company

Goodwill has been allocated to the Group's Cash-Generating Units ("CGU") identified which is in respect ofproperty development segment in Malaysia for both 2012 and 2011 respectively.

No impairment is provided for goodwill allocated to CGU identified as development properties operations. The fairvalue of the development properties is estimated by the Directors based on market value of comparable propertiesat RM174,000,000 (2011: RM222,000,000) and the carrying amount of tangible and intangible assets of the allocatedCGU is recorded at RM104,040,000 (2011: RM104,540,000). The management is of the opinion that no impairmentof goodwill is required as the fair value exceeded the carrying amount.

Inventories comprising completed development property units are stated at cost.

The cost of inventories recognised as cost of sales during the year amounted to RM1,204,000 (2011: RM2,374,000).



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2012

81


31 December 2012

16. Receivables (cont'd)

2012 2011 2012 2011RM'000 RM'000 RM'000 RM'000

Other receivablesOther receivables 442 590 - - Less: Allowance for impairment (110) (110) - -

332 480 - - Refundable deposits 226 204 76 75

558 684 76 75 Amounts due from subsidiaries - - 135,827 147,836 Amounts due from related companies 711 709 575 575 1,269 1,393 136,478 148,486

Total trade and other receivables 8,621 10,221 136,478 148,486 Add: Deposits, bank balances and cash (Note 18) 22,874 37,305 100 3,030 Total loans and receivables 31,495 47,526 136,578 151,516

(a) Trade receivables

Ageing analysis of trade receivables

2012 2011RM'000 RM'000

Neither past due nor impaired 1,035 2,646

1 to 30 days past due not impaired 1,284 3,315 31 to 60 days past due not impaired 965 741 61 to 90 days past due not impaired 331 282 91 to 120 days past due not impaired 482 482 More than 121 days past due not impaired 3,255 1,362

6,317 6,182 Impaired 108 108

7,460 8,936

Group

Group Company

Trade receivables are non-interest bearing and are generally on 14 to 30 days (2011: 14 to 30 days) terms. They are recognised at their original invoice amounts which represent their fair values on initial recognition. TheGroup has no significant concentration of credit risk that may arise from exposure to a single debtor or groupof debtors.

The ageing analysis of the Group's trade receivables is as follows:-



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2012

82


(a) Trade receivables (cont'd)

Receivables that are neither past due nor impaired

Receivables that are past due but not impaired

Receivables that are impaired

2012 2011 2012 2011 2012 2011RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Trade receivables-nominal amounts - - 108 108 108 108 Less: Allowance for impairment - - (108) (108) (108) (108)

- - - - - -

Movement in allowance accounts:

2012 2011RM'000 RM'000

At 1 January 108 218 Reversal of allowance for impairment - (110) At 31 December 108 108

GroupCollectively impaired Individually impaired Total

Group

Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group. None of the Group’s trade receivables that are neither past due nor impaired have been renegotiated during the financial year.

The Group has trade receivables amounting to RM6,317,000 (2011: RM6,182,000) that are past due at the reporting date but not impaired. Receivables that were past due but not impaired relate to customers that have a good track record with the Group. Based on past experience, the Directors of the Group are of the opinion that no provision for impairment is necessary in respect of these balances as there has not been a significant change in credit quality and the balances are still considered fully recoverable. The Group does not hold any collateral or other credit enhancement over these balances.

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

The Group’s trade receivables that are impaired at the reporting date and the movement of the allowance accounts used to record the impairment are as follows:



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31 December 2012


(b) Related party balances

Company

2012 2011RM'000 RM'000

US Dollar 4,264 4,417

Group and Company

17. Other current assets

2012 2011 2012 2011RM'000 RM'000 RM'000 RM'000

Prepayments 226 157 63 - Accrued billings in respect of property development costs 1,732 1,719 - - 1,958 1,876 63 -

18. Deposits, bank balances and cash

2012 2011 2012 2011RM'000 RM'000 RM'000 RM'000

Term deposits with licenced banks 8,470 26,922 - 3,000 Cash at banks and on hand 14,404 10,383 100 30 Cash and bank balances 22,874 37,305 100 3,030

Group Company

Company

Group Company

The currency exposure profile of amounts due from subsidiaries are as follows:-

Amounts due from subsidiaries are stated net of allowance for impairment of RM27,842,000 (2011:RM27,678,000). The amounts are unsecured, interest-free and have no fixed terms of repayment.

Amounts totalling RM2,146,000 (2011: RM2,501,000) bear interest at 4% (2011: 4%) per annum.

Amounts due from related companies represent payments made on behalf by the Group, are unsecured,interest-free and have no fixed terms of repayment.



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2012

84

18. Deposits, bank balances and cash (cont'd)

2012 2011 2012 2011RM'000 RM'000 RM'000 RM'000

Australian Dollar 601 588 26 - Canadian Dollar 41 10 2 2 Hong Kong Dollar 259 1,457 1 - Sterling Pound 1,106 1,095 8 1 US Dollar 116 4,562 18 2 Others 23 16 19 13

% % % %

Term deposits with licensed banks 2.58 to 3.20 1.50 to 3.20 - -Bank balances (HDA accounts only) 1.61 to 2.57 1.00 to 2.00 - -

Group Company

Deposits of the Group have maturities ranging from 2 to 21 days (2011: 7 to 30 days) at reporting date.

Included in bank balances and cash of the Group are funds held under the Housing Development Accounts("HDA accounts") amounting to RM13,383,000 (2011: RM9,823,000) pursuant to Section 7A of the HousingDevelopment (Control & Licensing) Act 1966.

The currency exposure profile of deposits, bank balances and cash are as follows:-

The effective interest rates of deposits, bank balances and cash are as follows:-



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2012

85

19. Share capital

2012 2011 2012 2011RM'000 RM'000

Authorised:-At 1 January/31 December - Ordinary shares of 20 sen each 5,000,000,000 5,000,000,000 1,000,000 1,000,000

Issued and fully paid:-At 1 January/31 December - Ordinary shares of 20 sen each 764,059,896 764,059,896 152,812 152,812

20. Treasury shares

Group/CompanyNumber of shares Amount

Of the total 764,059,896 issued and fully paid ordinary shares as at 31 December 2012, 23,145,300 (2011:23,145,300) shares are held as treasury shares by the Company. As at 31 December 2012, the number of outstandingordinary shares in issue after the set off is therefore 740,914,596 (2011: 740,914,596) ordinary shares of 20 seneach.

As at 31 December 2012, 23,145,300 (2011: 23,145,300) ordinary shares are held as treasury shares in accordancewith Section 67A of the Companies Act, 1965 and are stated at the amount of consideration paid of RM6,301,000(2011: RM6,301,000) representing an average price of approximately RM0.27 (2011: RM0.27) per share.

There were no share buy-backs, share cancellations and resale of treasury shares by the Company for the financialyear ended 31 December 2012.



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2012

86


31 December 2012

21. Reserves

2012 2011 1.1.2011 2012 2011 1.1.2011(Restated) (Restated) (Restated) (Restated)

RM'000 RM'000 RM'000 RM'000 RM'000 RM'000Non-Distributable

Share premium 9,656 9,656 9,656 9,656 9,656 9,656 Exchange translation reserve 9,646 11,641 10,324 - - - General reserve 10,649 10,649 10,649 - - - Other reserve 7,242 8,303 12,257 - 855 646

37,193 40,249 42,886 9,656 10,511 10,302 Distributable

Retained earnings 60,154 62,626 62,185 4,196 6,809 6,743 97,347 102,875 105,071 13,852 17,320 17,045

Retained earnings of the Group are analysed as follows:-

2012 2011RM'000 RM'000

The Company 4,196 6,809 Subsidiaries 55,958 55,817

60,154 62,626

(a) Retained earnings

(b) Exchange translation reserve

Group Company

Group

Prior to the year of assessment 2008, Malaysian companies adopted the full imputation system. In accordance with the Finance Act 2007 which was gazetted on 28 December 2007, companies shall not be entitled to deduct tax on dividend paid, credited or distributed to its shareholders, and such dividends will be exempted from tax in the hands of the shareholders ("single tier system"). However, there is a transitional period of six years, expiring on 31 December 2013, to allow companies to pay franked dividends to their shareholders under limited circumstances. Companies also have an irrevocable option to disregard the 108 balance and opt to pay dividends under the single tier system. The change in the tax regislation also provides for the 108 balance to be locked-in as at 31 December 2007 in accordance with Section 39 of the Finance Act 2007.

As at 31 December 2012, the Company has sufficient credit in the 108 balance to pay franked dividends out of its entire retained earnings.

The exchange translation reserve represents exchange differences arising from the translation of the financialstatements of foreign operations whose functional currencies are different from that of the Group'spresentation currency.



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2012

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31 December 2012

21. Reserves (cont'd)

(c) Other reserve

22. Payables

2012 2011 2012 2011RM'000 RM'000 RM'000 RM'000

CurrentTrade payablesThird parties 4,927 4,556 - -

Other payablesOther payables 3,112 3,643 400 139 Amounts due to subsidiaries - - 242,462 250,128

3,112 3,643 242,862 250,267 8,039 8,199 242,862 250,267

Non-currentTrade payablesThird parties 1,698 - - - Total trade and other payables 9,737 8,199 242,862 250,267 Add: Loans and borrowings (Note 25) 2,690 8,385 2,690 8,385 Total financial liabilities carried at amortised cost 12,427 16,584 245,552 258,652

(a) Trade payables

(b) Other payables

(c) Related party balances

Company

Group Company

The other reserve represents the fair value gain and losses of the investments in equity instrument that arenot held for trading, which the Group and the Company have elected at initial recognition to present suchgain and losses in other comprehensive income. The gain and losses within this reserve are never reclassifiedto profit and loss. However, the Group and the Company may transfer the cumulative gain or loss withinequity when the investments are derecognised.

These amounts are non-interest bearing. Trade payables are normally settled on 14 to 30 (2011: 14 to 30)days terms (excluding retention sum).

Included in the other payables is the current portion of the provision for employee benefits of RM10,000(2011: RM17,500) for the Group and RM9,000 (2011: RM6,500) for the Company.

Amounts due to subsidiaries are unsecured and have no fixed terms of repayment. Amounts totallingRM3,913,000 (2011: RM7,355,000) bear interest at 3.58% to 3.6% (2011: 3.4% to 4.1%) per annum.



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2012

88

23. Employee benefits

2012 2011 2012 2011RM'000 RM'000 RM'000 RM'000

At 1 January 251 558 87 149 Provision for the financial year 58 25 58 - Write back (58) (332) - (62)

251 251 145 87 Current portion included in other payables (10) (17) (9) (7) At 31 December 241 234 136 80

24. Other current liability

2012 2011RM'000 RM'000

Progress billings in respect of property development costs 290 811

25. Borrowings

2012 2011RM'000 RM'000

CurrentUnsecured:Bank overdrafts 2,690 385 Bank revolving credits - 8,000 Total loans and borrowings 2,690 8,385

Group

Group/Company

Group Company

Provision is made for employee entitlements accumulated as a result of employees rendering services up to the reportingdate. These benefits include annual leave and retirement gratuity.

Liabilities arising in respect of annual leave and retirement gratuity are measured at their nominal amounts.



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2012

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31 December 2012

25. Borrowings (cont'd)

The effective interest rates of borrowings are as follows:-

2012 2011% %

Bank overdrafts - floating rate 7.80 to 8.10 7.80 to 8.10Bank revolving credits - floating rate - 6.74 to 8.10

The remaining maturities of the borrowings as at 31 December are as follows:-

2012 2011RM'000 RM'000

On demand or within one year 2,690 8,385

26. Segment information of the Group

(a) Business segments

:

:

Group/Company

Group/Company

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

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which, in certain respects as explained below, is measured differently from operating profit or loss in the consolidated financial statements. Group financing (including finance costs) and income taxes are managed on a group basis and are not allocated to operating segments.

(i) Properties

(ii) Investment holding

Development of residential and commercial properties for sale, property investment and sale of oil palm fruits from land not opened up for development yet.

Holding of investments and related activities.



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2012

90

26. Segment information of the Group (cont'd)

(a) Business segments (cont'd)

2012Investment

Properties Holding TotalRM'000 RM'000 RM'000

Revenue 37,297 932 38,229

ResultsSegment results 9,996 (2,689) 7,307 Finance costs (91) (606) (697) Profit before taxation 9,905 (3,295) 6,610 Taxation (2,594) (246) (2,840) Profit for the year 7,311 (3,541) 3,770

Other informationSegment assets 215,118 107,907 323,025 Unallocated assets 887 Total assets 323,912

Segment liabilities 9,503 3,455 12,958 Unallocated liabilities 1,067 Total liabilities 14,025

Capital expenditure 6 3 9 Depreciation 253 101 354



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2012

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31 December 2012


(a) Business segments (cont'd)

2011Investment

Properties Holding TotalRM'000 RM'000 RM'000

Revenue 36,428 1,038 37,466

ResultsSegment results 10,032 (2,261) 7,771 Finance costs (201) (1,045) (1,246) Profit before taxation 9,831 (3,306) 6,525 Taxation (2,866) (207) (3,073) Profit for the year 6,965 (3,513) 3,452

Other informationSegment assets 210,921 122,603 333,524 Unallocated assets 687 Total assets 334,211

Segment liabilities 8,664 8,965 17,629 Unallocated liabilities 835 Total liabilities 18,464

Capital expenditure 168 4 172 Depreciation 229 113 342

(b) Geographical segments

NorthMalaysia Australia Asia-Pacific America TotalRM'000 RM'000 RM'000 RM'000 RM'000

2012

Revenue 37,345 4 880 - 38,229 Assets employed 225,430 5,777 23,606 68,212 323,025 Capital expenditure 9 - - - 9

The Group's operations are principally property development, property investments and investment holdingin Malaysia, ownership and property investment in Australia, and investment holding and property investmentin Asia-Pacific and North America region.



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2012

92


(b) Geographical segments (cont'd)

NorthMalaysia Australia Asia-Pacific America TotalRM'000 RM'000 RM'000 RM'000 RM'000

2011

Revenue 36,429 5 1,032 - 37,466 Assets employed 227,900 6,008 30,007 69,609 333,524 Capital expenditure 172 - - - 172

27. Capital commitments

28. Contingent liabilities

29. Related party disclosures

(i) Significant related party transactions

2012 2011RM'000 RM'000

GroupRent of equipment from a related company 30 30 Accounting and secretarial fees charged by a related company 300 300 Rental and related expenses charged by a related party 208 216 Computer related charges charged by a related party 6 6

Transactions

As at 31 December 2012, the Group and the Company do not have any significant capital commitments

In addition to the transactions detailed elsewhere in the financial statements, the Group and the Company hadthe following transactions with related parties during the financial year:

A subsidiary and Kensington Place Owners Association, Inc. ("KPOA") have been named as defendants in alawsuit arising from alleged deficiencies and deferred maintenance issues at the Kensington Place condominiumcomplex. The plaintiffs are suing the subsidiary and KPOA to recover maintenance and repair costs, which aredisputed. A corresponding claim has been asserted against the subsidiary by KPOA. The subsidiary has denied thealleged damages and is pursuing numerous defenses. On April 1, 2011, the cross-claim asserted against thesubsidiary by KPOA was dismissed by the Court and is currently on appeal. Due to the uncertainties in thelitigation process it is not possible for management and its counsel to calculate a reliable estimate of the outcome ofthis matter.



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2012

93

.


31 December 2012

29. Related party disclosures (cont'd)

(i) Significant related party transactions (cont'd)

2012 2011RM'000 RM'000

CompanyInterest income from subsidiaries 112 69 Repayment by subsidiaries 10,023 13,937 Dividend income from subsidiaries 6,000 20,000 Interest expense charged by a subsidiary 253 265 Rent of equipment from a related company 18 18 Rental and related expenses charged by a related party 208 216

(ii) Identities of related parties

The relationships between the Group and related parties are as follows:-

Related parties Relationship with the Group

Related companies

Related party

(iii) Compensation of key management personnel

The remuneration of Directors and other members of key management during the year are as follows:-

2012 2011 2012 2011RM'000 RM'000 RM'000 RM'000

Short term employee benefits 1,100 1,040 790 779 Contribution to defined contribution plan 144 174 132 163

1,244 1,214 922 942

Transactions

Group Company

The related party transactions described above were carried out on terms and conditions in the normal courseof business and the terms were mutually agreed between the respective parties.

The Company is a subsidiary company of Malayan United Industries Berhad("MUI"). Related companies refer to other subsidiaries of MUI.

Significant balances with related parties at the reporting date are disclosed in Notes 16 and 23.

Pan Malaysian Industries Berhad ("PMI") is a major corporate shareholder ofMUI. The related party in this case refers to a subsidiary of PMI.



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2012

94

30. Financial instruments

(i) Financial risk management policies

(a) Credit risk

(b) Interest rate risk

(c) Liquidity and cash flow risks

The Group's and the Company's financial risk management policy seeks to ensure that adequate financial resources are available for the development of the Group's businesses whilst managing its risks. The main areas of the financial risks faced by the Group and the policy in respect of the major areas of treasury activity are set out as follows:-

The Group and the Company have no significant concentration of credit risk. Cash is held with financial institutions of good standing. The maximum credit risk is represented by the carrying amount of each financial asset in the statement of financial position.

Interest rate risk is the risk that the fair value or future cash flows of the Group's and the Company's financial instruments will fluctuate because of changes in market interest rates. The Group's and the Company's exposure to interest rate risk arises primarily from their borrowings and short term fixed deposits. All of the Group's and the Company's financial assets and liabilities at floating rates are contractually re-priced on a monthly basis (2011: on a monthly basis) from the reporting date. The Group monitors the interest rate on borrowings closely to ensure that the borrowings are maintained at reasonable rates. As at 31 December 2012 and 31 December 2011, none of the Group's borrowings are at fixed rates of interest. At the reporting date, if interest rates had been 10 basis points lower/higher, with all other variables held constant, the Group's profit before tax would have been RM2,690 higher/lower arising as a result of lower/higher interest expense on floating rate borrowings. The assumed movement in basis points for interest rate sensitivity analysis is based on the currently observable market environment.

Prudent liquidity risk management implies maintaining sufficient cash and availability of funding through an adequate amount of available credit facilities. Due to the dynamic nature of the underlying business, the Group aims at maintaining flexibility in funding by keeping credit lines available.



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port

2012

95


31 December 2012

30. Financial instruments (cont'd)

(i) Financial risk management policies (cont'd)

(c) Liquidity and cash flow risks

On demandor within One to Over fiveone year five years years Total

RM'000 RM'000 RM'000 RM'0002012GroupTrade and other payables 8,039 1,698 - 9,737 Loans and borrowings 2,690 - - 2,690 Total undiscounted financial liabilities 10,729 1,698 - 12,427

CompanyTrade and other payables 242,862 - - 242,862 Loans and borrowings 2,690 - - 2,690 Total undiscounted financial liabilities 245,552 - - 245,552

2011GroupTrade and other payables 8,199 - - 8,199 Loans and borrowings 8,385 - - 8,385 Total undiscounted financial liabilities 16,584 - - 16,584

CompanyTrade and other payables 250,267 - - 250,267 Loans and borrowings 8,385 - - 8,385 Total undiscounted financial liabilities 258,652 - - 258,652

(d) Foreign currency risks

The maturity profile of the Group's and the Company's liabilities at the reporting date based on contractual undiscounted repayment obligations are summarised as follows:-

The Group incurs foreign currency risk on transactions and holds cash and cash equivalents denominated in a currency other than Ringgit Malaysia. The currencies giving rise to the risk as disclosed in Note 18 are mainly Australian Dollar, Hong Kong Dollar, Sterling Pound and United States Dollar. Exposure to foreign currency risk is monitored on an ongoing basis by the Group to ensure the net exposure is at an acceptable level.



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(i) Financial risk management policies (cont'd)

(d) Foreign currency risks (cont'd)

Sensitivity analysis for foreign currency risk

Group Company Group Company

RM'000 RM'000 RM'000 RM'000

AUD/RM- strengthened 2% (2011: 3%) +14 +1 +18 - - weakened 2% (2011: 3%) -14 -1 -18 -

GBP/RM- strengthened 2% (2011: 3%) +20 - +33 - - weakened 2% (2011: 3%) -20 - -33 -

HKD/RM- strengthened 3% (2011: 3%) +7 - +44 - - weakened 3% (2011: 3%) -7 - -44 -

USD/RM- strengthened 3% (2011: 3%) +4 +132 +137 +133- weakened 3% (2011: 3%) -4 -132 -137 -133

2012 2011

Profit net of tax Profit net of tax

The following table demonstrates the sensitivity of the Group's profit net of tax to a reasonably possible change in the Australian Dollar, Canadian Dollar, Sterling Pound, Hong Kong Dollar and United States Dollar against the respective functional currencies of the Group entities, with all other variables held constant.



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31 December 2012


(ii) Fair value of financial instruments that are carried at fair value

Quoted pricesin active Significant

markets for other Significantidentical observable unobservable

instruments inputs inputs TotalLevel 1 Level 2 Level 3

RM RM RM RMAt 31 December 2012

GroupFinancial assets:

Investments (Note 12) - Equity instruments (quoted in Malaysia) 17,409 - - 17,409 - Equity instruments (quoted in overseas) 11 - - 11 - Equity instruments (unquoted in overseas) - - 79,615 79,615

CompanyFinancial assets:

Investments (Note 12) - Equity instruments (quoted in Malaysia) - - - -

At 31 December 2011

GroupFinancial assets:

Investments (Note 12) - Equity instruments (quoted in Malaysia) 21,339 - - 21,339 - Equity instruments (quoted in overseas) 9 - - 9 - Equity instruments (unquoted in overseas) - - 75,785 75,785

CompanyFinancial assets:

Investments (Note 12) - Equity instruments (quoted in Malaysia) 1,535 - - 1,535

The following table shows an analysis of financial instruments carried at fair value by level of fair value hierarchy:



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(ii) Fair value of financial instruments that are carried at fair value (cont'd)

(a) Fair value hierarchy

2012 2011RM'000 RM'000

Balance as at 1 January 75,785 75,068 Additions 4,907 - Effect of movements in exchange rate (1,077) 717 Balance as at 31 December 79,615 75,785

(b) Determination of fair value

Quoted equity instrument

Unquoted equity instrument

Group

The Group and the Company classify fair value measurement using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

Level 1 -

Level 2 -

Level 3 -

Quoted prices (unadjusted) in active markets for identical assets or liabilities,

Inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly (i.e., as prices) or indirectly (i.e., derived from prices), and

Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

There have been no transfers between Level 1 and Level 2 fair value measurements during the financial years ended 31 December 2012 and 31 December 2011.

The following table shows a reconciliation from the beginning balances to the ending balances for Level 3 fair value measurement.

It is not practical to estimate the fair value of the Group's unquoted equity instruments due to insufficient recent information is available to determine fair value because the lack of quoted market prices and the management is unable to determine redemption price on the share of investee's surplus assets at the time of redemption on a pari passu basis. Therefore, the cost may be an appropriate estimate of fair value.

Fair value is determined directly by reference to their published market bid price at reporting date.



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31 December 2012


(iii) Fair value of financial instruments that are not carried at fair value and whose carryingamounts are reasonable approximation of fair value

NoteReceivables (current) 16Payables (current) 22Borrowings (current) 25

31. Capital management

32. Subsequent events

(i)

(ii)

(iii)

The primary objective of the Group's capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value. The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the years ended 31 December 2012 and 31 December 2011.

The following are classes of financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value:

The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values, either due to their short-term nature or that they are floating rate instruments that are re-priced to market interest rates on or near the reporting date.

On 14 February 2013, the subsidiaries, Malayan United Properties Sdn Bhd, Ming Fung Sendirian Berhad and Shun Fung Sendirian Berhad were placed under member's voluntary liquidation pursuant to a member's resolution passed at an Extraordinary General Meeting held on that date. The liquidator of the Company is Mr. Chong Say Woon of Messrs Yoong Siew Wah & Co.

On 17 April 2013, the Group disposed of a total of 16,058,400 shares of RM0.50 each in George Kent (Malaysia) Berhad, with a carrying amount/market value of RM15,416,064 as at 31 December 2012, for a total cash consideration of RM13,970,808.

On 6 February 2013, a subsidiary entered into a Sale and Purchase Agreement for the purchase of a residential suite for a total consideration of RM1,851,000.



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33. Disclosure of realised and unrealised profits

2012 2011 2012 2011RM'000 RM'000 RM'000 RM'000

Realised 191,345 208,771 4,350 6,694 Unrealised (1,190) 1,689 (154) 115

190,155 210,460 4,196 6,809 Less: Consolidation adjustments (130,001) (147,834) - - Total group retained profits as per audited financial statements 60,154 62,626 4,196 6,809

Group Company

The breakdown of the retained profits of the Group and of the Company as at 31 December 2012 and 31December 2011 into realised and unrealised profits is presented in accordance with the directive issued by BursaMalaysia Securities Berhad dated 25 March 2010 and prepared in accordance with Guidance on Special MatterNo. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant toBursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.

Retained profits of the Group and the Company comprise the following:-

The disclosure of realised and unrealised profits above is solely for complying with the disclosure requirementsstipulated in the directive of Bursa Malaysia and should not be applied for any other purposes.



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102

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P R O P E R T I E S O W N E D B Y T H E G R O U P

As at 31 December 2012Location, Description and Usage Approximate Approximate Net Book

Land Area Age of Building ValueSq. meter Years RM'000

MALAYSIA

Federal Territory of Kuala Lumpur

68 4 29 1,269

State of Selangor Darul Ehsan

2,182 - 409

771 - 165

State of Negeri Sembilan Darul Khusus

20,259 - 6,47

5,070,743 - 141,485

19,534 - 28,472

State of Pahang Darul Makmur

582 13 1,210

AUSTRALIA

24,970 35 5,664

UNITED STATES OF AMERICA

937 17 1,827

3 lots of leasehold land with a 4-storey shoplot each at nos.14, 16 & 18, Taman Indrahana, Jalan Kuchai Lama, KualaLumpur ( Lease expires in 2077 )Date of Acquisition : June/November 1990

Balance of freehold land held for residential developmentknown as Vila Sri Ukay at Mukim of Hulu Kelang, SelangorDarul EhsanDate of Acquisition : April 19956 lots of freehold land held for future development at Seksyen3, Pekan Batu Tiga, Mukim Damansara, Selangor Darul EhsanDate of Last Revaluation : December 1982

1 lot of freehold land held for a 366 unit resort condominiumdevelopment known as Pasirindu at 5 1/2 mile, Jalan Pantai,Port Dickson, Negeri Sembilan Darul KhususDate of Acquisition : June 1980

Balance of freehold land held for township developmentknown as Bandar Springhill at Mukim of Jimah, District ofPort Dickson, Negeri Sembilan Darul KhususDate of Acquisition : January 1995

1 lot of freehold land with a 60-room hotel known as PacificVista Hotel at 20, Kirby Court, West Hobart, TasmaniaDate of Acquisition : October 1996

Balance of units in a 110 units, 7-storey, freeholdcondominium complex located within the Regent ParkComplex in Fort Mill, South CarolinaDate of Acquisition : March 1993

4 lots of freehold land held for future development at Jalan Tuanku Munawir, Seremban, Negeri Sembilan Darul Khusus.Date of Acquisition : November 2005

4 apartments at Block E Equatorial Hill Resort CameronHighlands, Pahang Darul Makmur.Date of Acquisition : May 2009

4

Class� of � Share� :� Ordinary� share� of � 20� sen� eachVoting� Rights� � :� 1� vote� per� ordinary� share

Substantial� Shareholdersas per Register of Substantial Shareholders

Direct Interest Deemed Interest Name No. of Shares % # No. of Shares % #

1.� Malayan� United� Industries� Berhad� � � � 173,984,872� 23.48� 376,627,789� 50.832.� Pan� Malaysian� Industries� Berhad� -� -� 550,612,661� 74.323.� Tan� Sri� Dato’� Khoo� Kay� Peng� -� -� 550,612,661� 74.324.� Marco� Polo� Trading� Sdn� Bhd� 196,990,789� 26.59� -� -5.� United� Review� (M)� Sdn� Bhd� 45,010,000� 6.07� -� -6.� Regal� Classic� Sdn� Bhd� � � 39,027,000� 5.27� -� -7.� KKP� Holdings� Sdn� Bhd� � -� -� 550,612,661� 74.328.� Soo� Lay� Holdings� Sdn� Bhd� -� -� 550,612,661� 74.329.� Norcross� Limited� � -� -� 550,612,661� 74.3210.� Cherubim� Investment� (HK)� Limited� -� -� 550,612,661� 74.32

Directors’� Shareholdings� In� The� Company� And� Related� Corporationsas per Register of Directors’ Shareholdings

Direct Interest Deemed Interest No. of Shares % # No. of Shares % #

Ordinary shares of 20 sen each inMUI Properties Berhad

Tan� Sri� Dato’� Khoo� Kay� Peng� � –� � –� � 550,612,661� 74.32�

Ordinary shares of RM1 each inMalayan United Industries Berhad

Tan� Sri� Dato’� Khoo� Kay� Peng� -� -� 1,397,855,289� 47.67Tan� Sri� Dato’� Dr� Yeoh� Oon� Kheng� 358,461� 0.01� -� -

Ordinary shares of 50 sen each inPan Malaysia Corporation Berhad

Tan� Sri� Dato’� Khoo� Kay� Peng� � –� � –� � 471,146,200� 66.51

Ordinary shares of 10 sen each inPan Malaysia Holdings Berhad

Tan� Sri� Dato’� Khoo� Kay� Peng� � –� � –� � 643,330,487� � 69.26

Ordinary shares of RM1 each inMUI Continental Berhad(Formerly known as MUI Continental Insurance Berhad)

Tan� Sri� Dato’� Khoo� Kay� Peng� � –� � –� � 5,221� � 52.21

Ordinary shares of RM1 each inMetrojaya Berhad

Tan� Sri� Dato’� Khoo� Kay� Peng� � –� � –� � 118,073,133� � 94.52

A N A L Y S I S O F S H A R E H O L D I N G S

As at 30 April 2013



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Distribution� of � Shareholders Holdings No. of holders % No. of shares %#Less� than� 100� shares� � � � � 76� 1.01� 2,653� 0.00100� to� 1,000� shares� 1,135� 15.07� 1,006,138� 0.141,001� to� 10,000� shares� 4,231� 56.17� 20,905,275� 2.8210,001� to� 100,000� shares� 1,829� 24.28� 64,015,224� 8.64100,001� to� less� than� 5%� of � issued� shares#� � � � 258� 3.42� 199,972,645� 26.995%� and� above� of � issued� shares#� � � � � � � 4� 0.05� 455,012,661� 61.41

Total� 7,533� 100.00� 740,914,596� 100.00

Note:-

#� Based� on� the� issued� and� paid-up� share� capital� of � the� Company� comprising� 764,059,896� ordinary� shares� and� after� deduction� of � 23,145,300� treasury� shares�

retained by the Company as per Record of Depositors.



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A N A L Y S I S O F S H A R E H O L D I N G S ( C o n t ’d )

List of Thirty (30) Largest Securities Account Holders

Name No. of Shares %#

1. Marco Polo Trading Sdn Bhd 196,990,789 26.59 2. Malayan United Industries Berhad 173,984,872 23.48 3. United Review (M) Sdn Bhd 45,010,000 6.07 4. Regal Classic Sdn Bhd 39,027,000 5.27 5. Ample Line Sdn Bhd 36,411,000 4.91 6. Continental Capitals Sdn Bhd 32,800,000 4.43 7. PM Nominees (Tempatan) Sdn Bhd 11,200,000 1.51 - PCB Asset Management Sdn Bhd for Millionmart Sdn Bhd 8. Jomuda Sdn Bhd 10,000,000 1.35 9. Teo Kwee Hock 5,586,000 0.75 10. Carulli Holdings Sdn Bhd 5,189,000 0.70 11. Chua Ah Moi @ Chua Sai Peng 4,041,000 0.55 12. Citigroup Nominees (Asing) Sdn Bhd 3,935,224 0.53 - Exempt An for OCBC Securities Private Limited � 13.� Zulkifli� bin� Hussain� � 3,687,900� 0.50� 14.� Public� Nominees� (Tempatan)� Sdn� Bhd� 3,081,700� 0.42� - Securities Account for Lee Kin Kheong 15. Onn Ping Lan 2,534,900 0.34 16. CIMSEC Nominees (Tempatan) Sdn Bhd 2,000,000 0.27 - Securities Account for Ong Teng Chai 17. CIMSEC Nominees (Asing) Sdn Bhd 1,909,798 0.26 - Exempt An for CIMB Securities (Singapore) Pte Ltd � 18.� Public� Invest� Nominees� (Asing)� Sdn� Bhd� 1,862,000� 0.25 - Exempt An for Phillip Securities Pte Ltd � 19.� Zainab� bt� Abdul� Razak� � 1,744,000� 0.24 20. Kenanga Nominees (Tempatan) Sdn Bhd 1,653,300 0.22 - Securities Account for Chin Kiam Hsung 21. JF Apex Nominees (Tempatan) Sdn Bhd 1,562,000 0.21 - Securities Account for Teo Kwee Hock 22. HLB Nominees (Tempatan) Sdn Bhd 1,352,900 0.18 - Securities Account for Mah Siew Seong 23. Lim Kian Siong 1,297,000 0.18� 24.� Maybank� Nominees� (Tempatan)� Sdn� Bhd� 1,200,000� 0.16 - Securities Account for Man Singh A/L Sham Singh 25. Yap Sook Chin 1,200,000 0.16 26. RHB Nominees (Asing) Sdn Bhd 1,124,900 0.15 - DMG & Partners Securities Pte Ltd for Lee Chay Boon 27. HLIB Nominee (Asing) Sdn Bhd 1,036,074 0.14 - Exempt An for UOB Kay Hian Pte Ltd 28. Lim Siew Kheong 1,000,000 0.13 29. RHB Capital Nominees (Tempatan) Sdn Bhd 1,000,000 0.13� � -� Securities� Account� for� Shahar� bin� Abd� Karim� 30. Yee Poh Choo 1,000,000 0.13 Total 594,421,357 80.21

Note:-

# Based on the issued and paid-up share capital of the Company comprising 764,059,896 ordinary shares and after deduction of 23,145,300 treasury shares retained by the Company

as per Record of Depositors.

As at 30 April 2013



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F O R M O F P R O X Y IMPORTANT! Please take note that all the fields underlined in this proxy form are mandatory and must be completed in full and accurately. The Company reserves the right to invalidate and/or reject any proxy form which is not complete or accurately filled in. No. of Shares Held: I/We

NRIC/Company No.

of Tel. No. being a member of MUI PROPERTIES BERHAD hereby appoint NRIC No. of (percentage of shareholding represented: %) and/or failing him/her, NRIC No. of (percentage of shareholding represented: %) or failing him/her, the Chairman of the meeting, as my/our proxy to vote for me/us and on my/our behalf at the Forty-Seventh Annual General Meeting of the Company to be held at Rembau Room, Corus Paradise resort Port Dickson, 3.5km, Jalan Pantai, 71000 Port Dickson, Negeri Sembilan Darul Khusus on Thursday, 27 June 2013 at 3.00 p.m. and at any adjournment thereof, and to vote as indicated below:-

Resolutions For Against 1. To approve Directors’ fees of RM160,200. 2. To re-appoint Tan Sri Dato’ Khoo Kay Peng as Director of the Company. 3. To re-elect Encik Abdul Rashid bin Ismail as Director of the Company. 4. To re-appoint Messrs Ernst & Young as auditors and to authorise the Directors to

fix their remuneration.

5. Proposed authority to allot and issue shares pursuant to Section 132D of the Companies Act, 1965.

6. Proposed renewal of authority for the purchase of own shares by MUI Properties Berhad.

(Please indicate with (X) how you wish to cast your vote. If you do not do so, the proxy will vote or abstain from voting at his discretion.) _______________________

Signature Signed this ___________ day of __________________ 2013 Notes:- 1. Only a member whose name appears on the Record of Depositors as at 17 June 2013 shall be entitled to attend and vote at the meeting or appoint proxies to attend and/or vote on

his or her behalf. 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.

2. A member shall not be entitled to appoint more than two (2) proxies to attend and vote at the same meeting. Where a member is an authorized nominee as defined under the Securities Industry (Central Depositories) Act, 1991, it may appoint one (1) proxy only in respect of each securities account it holds with ordinary shares of 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. An exempt authorised nominee refers to an authorised nominee defined under the Central Depositories Act which is exempted from compliance with the provisions of subsection 25A(1) of the Central Depositories Act.

3. Where a Member and/or an exempt authorised nominee appoint two (2) or more proxies, the appointments shall be invalid unless he specifies the proportions of his shareholdings to be represented by each proxy in the instrument appointing the proxies.

4. The Form of Proxy shall be in writing under the hand of the appointor or his attorney duly authorized in writing or if such appointor is a corporation, under its common seal or under the hand of the attorney.

5. The Form of Proxy must be deposited at the registered office of the Company at Unit 3, 191, Jalan Ampang, 50450 Kuala Lumpur not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

Seal



The Company Secretary MUI Properties Berhad Unit 3, 191, Jalan Ampang 50450 Kuala Lumpur Malaysia

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