Glomac Annual Report 2012 - E Book by Glomac Berhad

OUR VISION Our vision is to help improve the quality of life by providing a better place for all to live, work and play. By carrying out this vision, we want to be recognised by our customers, shareholders and employees as a world-class property developer.

OUR MISSION Our mission as a caring and reliable property developer is to deliver outstanding service, quality products and value for money for our customers. Through dedication, innovation and passion, we are confident about our ability to achieve these goals.

FORWARD It starts with inspiration. A vision to provide ideal homes, work places and recreational facilities; to create an environment that enhances the quality of our lives. From pen to paper, plan to reality, we build the vision. Glomac’s vision is to enrich our lives in the most fundamental ways - value, quality and service. This is the bedrock of our business and the secret of our success, affirming our reputation as a visionary property developer.

CORPORATE PROFILE Glomac traces its corporate history back to 1988, when the two entrepreneurs and founders of the Group, Tan Sri Dato’ FD Mansor, Group Executive Chairman and Datuk Richard Fong, Group Executive Vice Chairman, joined forces to start Glomac. The company is currently helmed by Dato’ FD Iskandar, Group Managing Director/Chief Executive Officer. Today, Glomac Berhad comprises more than 50 subsidiaries with involvement in every face of the real estate business encompassing property development, property investment, construction, property management and car park management. Glomac Berhad was listed on the Main Board of Bursa Malaysia Securities Berhad on 13 June 2000. Property development remains the core focus of the Group since its inception. With this, it continues to affirm the Group’s reputation as a responsible and visionary property developer with its sold record of developing townships, residential, commercial and mixed development properties. To-date, the Group has completed more than a total sales value over RM4 billion. Moving forward, Glomac is entering into a new phase of growth as it is in the midst of launching more than RM1 billion worth of property. As a long term player committed to escalating our presence in the real estate market particularly focusing in the prime area of the Greater Kuala Lumpur, where the Group is well established. Glomac is continuously planning and designing new projects for our existing landbank, and evaluating new landbank opportunities and looking out for new opportunities in the country.

Suria Saujana, Saujana Utama

CONTENTS 2 AT A GLANCE 4 CORPORATE INFORMATION 6 GROUP STRUCTURE 8 BOARD OF DIRECTORS 10 DIRECTORS’ PROFILE 16 GLOMAC IN THE NEWS 18 CORPORATE SOCIAL RESPONSIBILITY (CSR) 22 CHAIRMAN’S STATEMENT/PENYATA PENGERUSI 30 GROUP MANAGING DIRECTOR/CEO’S REVIEW OF OPERATIONS 38 5-YEAR FINANCIAL HIGHLIGHTS 40 CORPORATE GOVERNANCE STATEMENT 50 AUDIT COMMITTEE REPORT 53 STATEMENT ON INTERNAL CONTROL 57 FINANCIAL STATEMENTS & REPORTS 154 LIST OF INVESTMENT & DEVELOPMENT PROPERTIES 157 ANALYSIS OF SHAREHOLDINGS 160 ANALYSIS OF WARRANT HOLDINGS 162 NOTICE OF 28TH ANNUAL GENERAL MEETING 165 STATEMENT ACCOMPANYING NOTICE OF 28TH ANNUAL GENERAL MEETING

Menara Prestige (formerly known as Glomac Tower)

GLOMAC BERHAD

AT A GLANCE

Revenue

rm652.4 million

• Highest revenue in the history of the Group. • 9.2% increase year on year.

Profit Before Tax

rm161.1 million

• Record profit before tax. • A 24.4% improvement from the previous year.

Profit Attributable to Owners of the Company

rm85.2 million

• Significant 35.2% increase compared with the previous year. • Achieved due to the continued success of our projects.

2012 ANNUAL REPORT

Unbilled Sales

rm731 million

• Record unbilled sales. • Stronger performance underpinned by key ongoing projects.

Total Available GDV

rm7 billion

• Projects anchored by ongoing and pipeline projects which further drive revenue and profits.

Total Gross Dividend Per Share

5.5 sen

• A record gross dividend to date. • Higher than 4.75 sen per share declared in the last financial year.

GLOMAC BERHAD

CORPORATE INFORMATION

BOARD OF DIRECTORS Tan Sri Dato’ Mohamed Mansor bin Fateh Din Group Executive Chairman Datuk Richard Fong Loong Tuck Group Executive Vice-Chairman Dato’ Fateh Iskandar bin Tan Sri Dato’ Mohamed Mansor Group Managing Director/Chief Executive Officer Dato’ Ikhwan Salim bin Dato’ Sujak Senior Independent Non-Executive Director Datuk Ali bin Tan Sri Abdul Kadir Independent Non-Executive Director Mr. Chong Kok Keong Independent Non-Executive Director

COMPANY SECRETARIES Mohd Nor Azam bin Mohd Salleh (MAICSA 7028137) Ong Shaw Ching (MIA 7819)

AUDIT AND RISK COMMITTEE Datuk Ali bin Tan Sri Abdul Kadir Chairman Dato’ Ikhwan Salim bin Dato’ Sujak Member Mr. Chong Kok Keong Member

Glomac Damansara

2012 ANNUAL REPORT

REMUNERATION COMMITTEE AND NOMINATION COMMITTEE Dato’ Ikhwan Salim bin Dato’ Sujak Chairman Datuk Ali bin Tan Sri Abdul Kadir Member Dato’ Fateh Iskandar bin Tan Sri Dato’ Mohamed Mansor Member

AUDITORS Deloitte KassimChan (AF 0080) Level 19, Uptown 1 1 Jalan SS 21/58 Damansara Uptown 47400 Petaling Jaya Selangor Darul Ehsan Tel : 03 7723 6500 Fax : 03 7726 3986

REGISTERED OFFICE

WEBSITE www.glomac.com.my

STOCK EXCHANGE Main Market of Bursa Malaysia Securities Berhad Stock Code: 5020

REGISTRAR Shareworks Sdn Bhd 10-1, Jalan Sri Hartamas 8 Sri Hartamas 50480 Kuala Lumpur Tel : 03 6201 1120 Fax : 03 6201 3121

MAJOR BANKERS AmBank Berhad Malayan Banking Berhad HSBC Amanah Malaysia Berhad

Level 15, Menara Glomac Glomac Damansara Jalan Damansara 60000 Kuala Lumpur Tel : 603 7723 9000 Fax : 603 7729 7000

Menara Glomac, Glomac Damansara

GLOMAC BERHAD

GROUP STRUCTURE

PROPERTY DEVELOPMENT

100% Glomac Land Sdn Bhd Saujana Utama, Sg. Buloh

100% Glomac Jaya Sdn Bhd Glomac Cyberjaya, Cyberjaya

100% Magic Season Sdn Bhd Saujana Utama II, Sg. Buloh

100% Glomac Maju Sdn Bhd Suria Residen, Cheras

100% Regency Land Sdn Bhd Saujana Utama III, Sg. Buloh

100% Glomac Rawang Sdn Bhd Saujana Rawang, Rawang

100% Glomac Sutera Sdn Bhd Sri Saujana, Kota Tinggi, Johor

100% Glomac Resources Sdn Bhd Glomac Galleria, Kuala Lumpur

100% Glomac Enterprise Sdn Bhd Sungai Buloh Country Resort, Sg. Buloh

100% Glomac Vantage Sdn Bhd Taman Mahkota Laksamana, Seksyen III, Melaka

100% Glomac Alliance Sdn Bhd Lakeside Residences, Puchong

70%

100% Glomac City Sdn Bhd Plaza Glomac, Kelana Jaya 100% Glomac Consolidated Sdn Bhd Bukit Saujana, Sg. Buloh 100% Glomac Damansara Sdn Bhd Glomac Damansara, Kuala Lumpur

Reflection Residences @ Mutiara Damansara

51%

FDA Sdn Bhd Sri Bangi, Section 8, Bandar Baru Bangi Glomac Al Batha Sdn Bhd Glomac Tower, Kuala Lumpur

51%

Glomac Al Batha Mutiara Sdn Bhd Reflection Residences, Mutiara Damansara

30%

PPC Glomac Sdn Bhd Bandar Sri Permaisuri, Cheras

100% Glomac Segar Sdn Bhd (Proposed Phase 4 of Plaza Kelana Jaya) 100% Dunia Heights Sdn Bhd (Proposed residential development in Sg. Buloh) 100% Glomac Kristal Sdn Bhd Glomac Centro, Petaling Jaya 100% FDM Development Sdn Bhd (Proposed mixed development of Glomac Utama, Petaling Jaya) 100% Berapit Properties Sdn Bhd Glomac Cyberjaya 2, Cyberjaya

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Zara, Saujana Rawang

PROPERTY INVESTMENT & MANAGEMENT

OTHER ACTIVITIES

100% Berapit Development Sdn Bhd Kelana Business Centre, Kelana Jaya

100% Kelana Centre Point Sdn Bhd Kompleks Kelana Centre Point, Kelana Jaya

100% Sungai Buloh Country Resort Sdn Bhd Kelab Saujana Utama, Sg. Buloh 100% Prima Sixteen Sdn Bhd Prima 16 Condominium, Phase I & II, Petaling Jaya 100% Bangi Integrated Corporation Sdn Bhd Plaza Kelana Jaya, Phase II, Kelana Jaya

PROJECT MANAGEMENT

100% Glomac Group Management Services Sdn Bhd PROPERTY MANAGEMENT

100% Glomac Property Services Sdn Bhd

DORMANT COMPANIES

100% Elmina Equestrian Centre (Malaysia) Sdn Bhd 100% Glomac Leisure Sdn Bhd 100% Kelana Seafood Centre Sdn Bhd 100% Prisma Legacy Sdn Bhd

100% Kelana Property Services Sdn Bhd

60%

CONSTRUCTION

100% Glomac Real Estate Sdn Bhd

51%

Glomac Bina Sdn Bhd

CAR PARK OPERATIONS/ MANAGEMENT

60%

Prominent Excel Sdn Bhd Dataran Glomac, Kelana Jaya

INVESTMENT HOLDING

100% Glomac Nusantara Sdn Bhd Dataran Glomac, Kelana Jaya

100% Glomac Australia Pty Ltd

100% Glomac Regal Sdn Bhd Suria Stonor, Kuala Lumpur

100% Glomac Realty Sdn Bhd

100% Berapit Pertiwi Sdn Bhd Suria Stonor, Kuala Lumpur

60%

Glomac Utama Sdn Bhd

30%

Irama Teguh Sdn Bhd

100% Glomac Restaurants Sdn Bhd

85.7% Glomac Power Sdn Bhd

Glomac Excel Sdn Bhd

100% OUG Square Sdn Bhd 100% Glomac Thailand Sdn Bhd 100% Glomac Cekap Sdn Bhd (formerly known as Kristal Taipan Sdn Bhd)

100% Crest Dollars Sdn Bhd 100% Anugerah Armada Sdn Bhd 100% Magnitud Teknologi Sdn Bhd 100% BH Interiors Sdn Bhd 100% Kelana Kualiti Sdn Bhd 100% Magical Sterling Sdn Bhd

45.5% VIP Glomac Pty Ltd As trustee for VIP Glomac Unit Trust 45.9% VIP Glomac Unit Trust 380 Lonsdale Street, Australia

Zara, Saujana Rawang

GLOMAC BERHAD

BOARD OF DIRECTORS

From left Datuk Ali bin Tan Sri Abdul Kadir Dato’ Fateh Iskandar bin Tan Sri Dato’ Mohamed Mansor Tan Sri Dato’ Mohamed Mansor bin Fateh Din Datuk Richard Fong Loong Tuck Dato’ Ikhwan Salim bin Dato’ Sujak Mr. Chong Kok Keong

2012 ANNUAL REPORT

GLOMAC BERHAD

DIRECTORS’ PROFILE

TAN SRI DATO’ MOHAMED MANSOR BIN FATEH DIN Group Executive Chairman Aged 71, Malaysian

Tan Sri Dato’ Mohamed Mansor bin Fateh Din or better known as FD Mansor was appointed to the Board on 1 April 1986. Before he founded the Glomac Group, he was employed with Utusan Malaysia Berhad as the Group Personnel Director. Tan Sri Dato’ Mohamed Mansor has extensive experience in the property development business through his involvement in the industry for the past 25 years. He was the Honorary Secretary of the Malay Chamber of Commerce and Industry, Selangor from 1987 to 1995 and was awarded the Selangor Entrepreneur of the Year 1995 by the Dewan Perniagaan Melayu Malaysia Negeri Selangor in recognition of his contributions to the state. In September 2005, he was awarded the prestigious “Property Man of the Year” by FIABCI Malaysia. Being a genuine Malay businessman and entrepreneur, he was presented the award of “Anugerah Usahasama Tulen” by the Malay Chamber of Commerce, Malaysia in June 2008. In June 2011, Tan Sri Dato’ Mohamed Mansor was recognized and awarded as a recipient of “Jewels of Muslim World 2011” as the recognition of achievements and contributions made by high profile business leaders in the Muslim World. He also sits as the Advisory Council in Iqra Foundation. Tan Sri Dato’ Mohamed Mansor attended all Board Meetings held during the financial year ended 30 April 2012.

2012 ANNUAL REPORT

DATUK RICHARD FONG LOONG TUCK Group Executive Vice-Chairman Aged 61, Malaysian

Datuk Richard was appointed to the Board on 4 April 1988. He graduated with a Bachelor of Science (Hons) in Civil Engineering from University of London, UK. Datuk Richard began his career in Mudajaya Construction Sdn Bhd and IJM Corporation Berhad before founding Glomac Group in 1988. He has more than 30 years of experience in the field of property development, building construction and engineering. He served as the Secretary General of FIABCI (International Real Estate Federation) Malaysian Chapter for the term 1998-2000 and was appointed President of FIABCI Malaysia from August 2006 to 2010. As the former President of FIABCI, he was instrumental in the formation of Malaysia Property Incorporated (“MPI”), a body set-up by the Economic Planning Unit of the Prime Minister’s Department, to promote property investments among foreigners in Malaysia. Datuk Richard also served as the Chairman of the Board of Directors of MPI from February 2008 to June 2010. Datuk Richard is frequently invited as guest speakers at forum and seminars on property market in Malaysia both locally and internationally. Datuk Richard attended all Board Meetings held during the financial year ended 30 April 2012.

GLOMAC BERHAD

DIRECTORS’ PROFILE (Cont’d)

DATO’ FATEH ISKANDAR BIN TAN SRI DATO’ MOHAMED MANSOR Group Managing Director/ Chief Executive Officer Member of Remuneration Committee & Nomination Committee Aged 44, Malaysian

Dato’ Fateh Iskandar bin Tan Sri Dato’ Mohamed Mansor was appointed to the Board on 5 February 1997. Dato’ Iskandar was the Group Executive Director from 1997 up to October 2004 when he assumed the position of Group Managing Director of Glomac Berhad. Subsequently, on 24 March 2009, he was appointed as Chief Executive Officer of Glomac Berhad. Dato’ Fateh Iskandar attended the Malay College Kuala Kangsar and later obtained a law degree from the University of Queensland, Australia and subsequently went on to obtain his Masters in Business Administration. He practiced law in Australia before coming back to Malaysia joining Kumpulan Perangsang Selangor Berhad and thereafter joining the Glomac Group of Companies in 1991. Dato’ Fateh Iskandar is currently the Deputy President of The Real Estate & Housing Developer’s Association (“REHDA”) Malaysia and Immediate Past Chairman for REHDA Selangor. He is also Director of Malaysia Property Incorporated, a body that promotes property investments among foreigners in Malaysia. Dato’ Fateh Iskandar is also the Vice Chairman of the Malaysian Australian Business Council, Chairman of Gagasan Badan Ekonomi Melayu (GABEM), Selangor Branch, a body that promotes entrepreneurial ship amongst Malays in the country and the Treasurer of Selangor State UMNO. He is the Co-Chair of the Special Taskforce to Facilitate Business Group (PEMUDAH) on Legal & Services and is also a Member of PEMUDAH Selangor Group. With around 20 years of experience and involvement in property development industry, his vast experiences and expertise has made him a very well-known and respected figure among his peers locally as well as on the international arena. He is frequently invited as a guest speaker in forums, seminars and conventions, both locally and internationally, to offer his insights and views on the property market in Malaysia. Dato’ Fateh Iskandar currently sits on the Boards of Axis Reit Managers Berhad, the first REITs company to be listed on Bursa Malaysia, Media Prima Berhad and New Straits Times Press (Malaysia) Berhad as well as several private limited companies. Dato’ Iskandar attended all Board Meetings held during the financial year ended 30 April 2012.

2012 ANNUAL REPORT

DATO’ IKHWAN SALIM BIN DATO’ SUJAK Senior Independent Non-Executive Director Chairman of Nomination Committee & Remuneration Committee and Member of Audit and Risk Committee Aged 55, Malaysian

Dato’ Ikhwan Salim bin Dato’ Sujak was appointed to the Board on 9 February 2000. Dato’ Ikhwan Salim holds a Bachelor of Science degree in Economics/Accounting from Queen’s University, Belfast, Ireland, UK. He began his career as an Auditor with Coopers & Lybrand, UK and joined Nestle (M) Sdn Bhd in 1979. In 1980, he moved on to be the Group Financial Planning Manager of Kumpulan Low Keng Huat Sdn Bhd. In 1982 and upon restructuring his family’s varied business operations in 1981, he was made the Director for the holding company, Jaya Holdings Sdn. Bhd. In 1999, Dato’ Ikhwan Salim was appointed Executive Chairman of Konsortium Jaringan Selangor Sdn. Bhd and on 2003 he was also appointed as Non-Executive Chairman of Malaysia Steel Works (KL) Berhad and appointed as a Director in Land and General Berhad on 2007. He is the Division Head of Petaling Jaya Utara Division of United Malay National Organisation (UMNO). Dato’ Ikhwan Salim also sits on the Board of several private companies in Malaysia. Dato’ Ikhwan Salim attended all Board Meetings held during the financial year ended 30 April 2012.

GLOMAC BERHAD

DIRECTORS’ PROFILE (Cont’d)

DATUK ALI BIN TAN SRI ABDUL KADIR Independent Non-Executive Director Chairman of Audit and Risk Committee and Member of Remuneration Committee & Nomination Committee Aged 63, Malaysian

Datuk Ali was appointed to the Board on 20 February 2009. Datuk Ali Abdul Kadir is a Fellow of the Institute of Chartered Accountants in England and Wales (“ICAEW”), member of the Malaysian Institute of Certified Public Accountants and the Malaysian Institute of Accountants. He is also currently Honorary Advisor to ICAEW Malaysia, Honorary Fellow of the Institute of Chartered Secretaries & Administrators (UK) and the Malaysian Institute of Directors. Datuk Ali is currently the Chairman of Jobstreet Corporation Berhad, Milux Corporation Berhad, Microlink Solutions Berhad, Privasia Technology Berhad and the Financial Reporting Foundation. He is a Board Member of Glomac Berhad, Labuan Financial Services Authority, Labuan IBFC and member of the Advisory Panel of the Companies Commission of Malaysia. Datuk Ali was appointed as the Chairman of the Securities Commission of Malaysia on 1 March 1999 and served in that capacity until 29 February 2004. During his tenure, he launched the Capital Market Masterplan and chaired the Capital Market Advisory Council. He was a member of a number of national committees including the National Economic Consultative Council II, the Foreign Investment Committee, the Oversight Committee of National Asset Management Company (Danaharta) and the Finance Committee on Corporate Governance. Prior to his appointment to the Securities Commission, he was the Executive Chairman and Partner of Ernst & Young and its related firms. He was also the former President of the Malaysian Association of Certified Public Accountants, chairing both its Executive Committee and Insolvency Practices Committee and co-chairing the Company Law Forum. He was appointed as an Adjunct Professor in the Accounting and Business Faculty, University of Malaya in 2008 and retired in August 2011. He was then appointed to the Advisory Board of the same Faculty. Datuk Ali attended 3 out of 5 Board Meetings held during the financial year ended 30 April 2012.

2012 ANNUAL REPORT

CHONG KOK KEONG Independent Non-Executive Director Member of Audit and Risk Committee Aged 63, Malaysian

Mr Chong Kok Keong was appointed to the Board on 21 September 2000. He holds a Bachelor of Engineering (Hons) from University of Malaya. He is a Fellow of the Institution of Engineers and a registered engineer with the Board of Engineers, Malaysia. He began his career as a Trainee Engineer with Malayawata Steel Berhad and later as a Service Executive with the Caterpillar Distributor, Tractors Malaysia Berhad. His achievements included setting up the assembly plant for Kubota Engines and the design and production of a mid-mounted grader adapted from a standard agricultural tractor. In 1980, he was appointed Manager, Engines Division of Tractors Malaysia Berhad and responsible for Market development and Service Support. Mr. Chong was one of the pioneers of Pilecon Engineering Berhad where he set up the Plant Division and was part of the team which invented and patented the ‘Tripile Piling System’. He was appointed Group Managing Director of Pilecon Engineering Berhad from 1992 to 1999. Mr. Chong has extensive experience in construction, specialised foundation works, large civil engineering projects and also in property sector, having been involved as an advisor to various projects since 2000. He also sits on the Board of Sunway Geotechnics (M) Sdn Bhd, a wholly owned subsidiary of Sunway Berhad, as an advisor, and on the Boards of various private limited companies. Mr. Chong attended all Board Meetings held during the financial year ended 30 April 2012.

Notes: 1. Family Relationship with Director and/or Major Shareholder Save and except for Tan Sri Dato’ Mohamed Mansor bin Fateh Din and Dato’ Fateh Iskandar bin Tan Sri Dato’ Mohamed Mansor, who are father and son respectively, none of the Directors has any family relationship with any director and/or major shareholder of the Company. 2. Conflict of Interest Other than the mandated related party transactions, none of the Directors has any conflict of interest with the Company and its Group. 3. Conviction for Offences None of the Directors has been convicted for offences within the past 10 years other than traffic offences, if any.

GLOMAC BERHAD

GLOMAC IN THE NEWS

2012 ANNUAL REPORT

GLOMAC BERHAD

CORPORATE SOCIAL RESPONSIBILITY (CSR)

At Glomac, we strongly believe that the community is an extension of our organisation. Hence, in pursuit of our corporate goals, we are equally committed to the wellbeing and sustainability of the community within the areas we operate and develop. Our philosophy is to contribute, as an organisation, in delivering sustainable value to the lives of the people we impact, especially in the workplace, the community, the environment and the marketplace. This, together with ensuring equitable returns for our shareholders, constitutes the foundation of our CSR as a caring developer and a good corporate citizen.

The Workplace Employees with good knowledge, competent skills and positive attitude are among the cornerstones of Glomacâ&#x20AC;&#x2122;s continuous success. In this aspect, the Group strives to maintain high standards of recruitment, development and retention of employees in the workplace, aimed at being a sustainable employer of choice. The Group provides a healthy and safe work environment for our employees including the provision of insurance coverage in terms of hospitalisation and surgical, group term life and personal accident for employees to cover medical or accidental contingencies. As for human capital development, the Group continues to offer comprehensive training and development courses for employees at all levels to further enhance their skills and knowledge. We give attention to the professional and personal development of our employees as this is important for the growth of the Group and our business. With proper training and well-equipped knowledge on their tasks, employees will deliver a higher performance in their work. We believe that a strong company requires not only skilled but driven, motivated and loyal employees. To foster good working relationships and to build strong team spirit among employees, Glomac organises various activities for staff.

2012 ANNUAL REPORT

The Community As a caring and responsible organisation, Glomac has always practiced the principle of giving back to the community. The Group regularly contributes to the funds of orphanages, schools and charitable organisations. During the financial year under review, the Group has, amongst others, participated in the following community activities: •

Breaking fast with Rumah Aman One of the annual events held by Glomac is breaking fast with the less fortunate children of Rumah Aman. During this event, which was held in the month of Ramadhan, the children received gifts and green packets. Glomac also contributes to Rumah Aman as part of our corporate social responsibility.

•

The Edge – BursaMalaysia Kuala Lumpur Rat Race Glomac has been participating in this annual event for 11 consecutive years as this is another way for Glomac to help the less fortunate while at the same time encouraging our employees to devote their personal time and energy to ahealthy and worthy cause.

•

The New Straits Times School Sponsorship Programme Glomac collaborates with The New Straits Times Press Berhad in providing newspapers to primary and secondary schools within our township development of Bandar Saujana Utama, Sungai Buloh. The objective of this contribution is to improve and empower the students in command of the English language through regular reading of one of the main newspapers in Malaysia.

•

Plant a Tree Program In order to preserve nature and create more wholesome living spaces, Glomac organised a “Plant a Tree” programme at our township development in Sri Saujana, Johor. This community service activity is a testament to the priority that Glomac places on nurturing green environments within our developments.

GLOMAC BERHAD

CORPORATE SOCIAL RESPONSIBILITY (CSR) (Cont’d)

•

Blood Donation Drive Doing our part in helping save lives, Glomac spearheaded a Blood Donation Drive in Bandar Saujana Utama. There was a continuous stream of members of the public volunteering to be part of the event. In view of the overwhelming response Glomac is hopes to hold more blood donation drives in the future so as to make the act of donating blood more accessible to the public.

•

Contribution to Sungai Buloh Country Resort Community Association (MySBCR) for Treasure Hunt Competition Recently, Glomac made a contribution to Sungai Buloh Country Resort Community Association (MySBCR) for their Treasure Hunt Competition, in our bid to contribute to activities that foster stronger community ties.

•

An Afternoon with Glomac “Cuci The Musical – Last Kopek” Glomac sponsored a matinee show of the local musical theatre performance, “Cuci The Musical – Last Kopek” in appreciation of Glomac’s purchasers, media and management. Held at Istana Budaya, Kuala Lumpur, well-known local artistes entertained our guests with funny yet touching performances.

Building and maintaining our relationship with the communities we serve are part of Glomac’s corporate social responsibilities. We continue to be actively involved in diverse community events to facilitate our relationship with those who live in these communities and keep an ear out to opinions and suggestions on how to further improve facilities and development of the area. We are continually looking at ways in which we can play a meaningful role in uplifting the quality of lives of the communities surrounding our developments – which represent the central focus of our current business operations.

2012 ANNUAL REPORT

The Environment As one of the nation’s leading developers, we are committed to reducing our carbon footprint by monitoring and reducing our waste, emissions and environmental risks. Glomac’s commitment to the environment is manifested through the implementation of resource saving efforts in order to preserve the greenery within our developments. During the year under review, Glomac implemented a rain water harvesting system for gardening and sewerage purposes in one of our township developments. This effort signals the beginning of more to come in our future developments. Through progressive innovative steps, we hope to positively contribute towards the global effort in addressing the challenges of climate change.

The Marketplace Glomac maintains an open channel of communication with our shareholders, institutional investors and the investing public at large with the objectives of providing a clear and complete picture of the Group’s performance and position. Glomac values feedbacks and dialogues with our investors and believes that a constructive and effective investor relationship is an essential factor in enhancing value for our shareholders. In addition to various announcements made during the year, the timely release of annual reports, circulars to shareholders, press releases and financial results on a quarterly basis provides shareholders and investors with an overview of the Group’s performance and operations. Glomac also actively responds to requests for discussions with institutional shareholders and analysts, locally and abroad, to provide them better insights of the Group. The Group also takes a proactive approach in reaching out to the investing community via visits to project sites, small group meetings, luncheons and participating in roadshows and investor conferences. Such activities are usually spearheaded by the Executive Directors. It is hoped that such approaches will allow the shareholding and investor communities to make more informed investment decisions based not only on past performance, but also the future direction of our Group.

GLOMAC BERHAD

CHAIRMAN’S STATEMENT/ PENYATA PENGERUSI

“Gaining progressive recognition and offering the right mix of development projects, Glomac’s projects continued to enjoy strong demand spurring profit from RM63.0 million in financial year 2011 to RM85.2 million in financial year 2012.” Pengiktirafan yang berterusan dan keupayaannya menawarkan projek pembangunan bercampur yang diminati ramai membolehkan projek-projek Glomac kekal menikmati permintaan kukuh sehingga meningkatkan keuntungannya kepada RM85.2 juta pada tahun kewangan 2012 daripada RM63.0 juta pada tahun kewangan 2011.

Tan Sri Dato’ F.D. Mansor Group Executive Chairman Pengerusi Eksekutif Kumpulan August, 2012

2012 ANNUAL REPORT

1. Zara, Saujana Rawang 2. Boutique Retail, Glomac Centro 3. Living Area, Zara, Saujana Rawang

Dear Valued Shareholders, On behalf of the Board of Directors, I am pleased to present Glomac Berhadâ&#x20AC;&#x2122;s Annual Report and Financial Statements for the financial year ended 30 April 2012 (Financial Year 2012). It was a record year for Glomac as the group continued on its exciting growth path with a 35.2% jump on profit buoyed by robust sales. Total sales figures for the year surpassed our internal target of RM500 million to hit RM663.3 million, boosted by good response to our Saujana Utama and Saujana Rawang townships, as well as to our ongoing Glomac Damansara Residences and Reflection Residences projects. This increased our revenue by 9.2%, to register RM652.4 million, compared with RM597.5 million a year ago.

Kepada para pemegang saham yang dihormati, Bagi pihak Lembaga Pengarah, saya dengan sukacitanya membentangkan Laporan Tahunan dan Penyata Kewangan Glomac Berhad bagi tahun kewangan berakhir pada 30 April, 2012 (Tahun Kewangan 2012). Tahun kewangan ini, Glomac sekali lagi telah mencatat rekod pencapaian membanggakan apabila Kumpulan terus berada di landasan pertumbuhan yang menggalakkan dengan meraih keuntungan lebih tinggi sebanyak 35.2% berikutan hasil jualan yang mantap. Jumlah jualan dalam tahun kewangan mencecah RM663.3 juta, sekali gus mengatasi sasaran dalaman kami sebanyak RM500 juta, berikutan sambutan yang baik terhadap projek pembangunan pembandaran, masing-masing di Saujana Utama dan Saujana Rawang, berserta projek-projek yang sedang diusahakan iaitu Glomac Damansara Residences dan Reflection Residences. Perkembangan itu menyaksikan pendapatan kami meningkat sebanyak 9.2% kepada RM652.4 juta berbanding RM597.5 juta setahun lalu.

GLOMAC BERHAD

CHAIRMAN’S STATEMENT PENYATA PENGERUSI (Cont’d)

Profits were anchored by the Company’s key projects such as Glomac Damansara, Glomac Cyberjaya and final billings from the completed Glomac Tower.

Keuntungan itu disumbangkan terutamanya oleh Glomac Damansara, Glomac Cyberjaya dan juga Glomac Tower yang berada di peringkat akhir proses pengebilan penjualannya.

DIVIDENDS

DIVIDEN

Glomac has accomplished a remarkable track record of continuous annual dividend payments since our public listing more than a decade ago. This year, we continue to deliver.

Glomac telah mencapai satu rekod pencapaian luar biasa apabila mampu membuat pembayaran dividen tahunan secara berterusan sejak menjadi syarikat senaraian awam lebih sedekad lalu. Malah, pembayaran dividen pada tahun ini juga tidak terkecuali.

The Board of Directors has proposed a final gross dividend of 2.75 sen per share less 25% tax. The total dividend declared for the current financial year would amount to 5.5 sen which is higher than the 4.75 sen declared in the previous financial year.

Lembaga Pengarah telah mencadangkan dividen akhir kasar sebanyak 2.75 sen sesaham ditolak 25% cukai. Jumlah dividen dicadangkan dalam tahun kewangan adalah sebanyak 5.5 sen, menjadikannya 4.75 sen lebih tinggi daripada tahun kewangan lalu.

The latest dividend makes Glomac among the highest dividend paying property developer in Malaysia.

Perisytiharan dividen terbaru ini menjadikan Glomac antara syarikat pemaju hartanah yang membayar kadar dividen tertinggi di Malaysia.

OPERATING ENVIRONMENT

PERSEKITARAN OPERASI

Moving from a post-crisis bounce-back phase of the recovery, the world economy in 2011 presented slower but still solid growth, with developing countries contributing almost half of global growth. Global GDP, which touched 5.2% in 2010, slowed to 3.8% in 2011, with developing countries continuing to outstrip growth in high-income countries.

Ekonomi dunia, setelah dilanda krisis sebelum ini dan kini memasuki fasa pemulihan, telah mencatat pertumbuhan perlahan tetapi kukuh pada tahun 2011 dengan negara-negara membangun menyumbang hampir separuh kepada pertumbuhan sejagat. Keluaran Dalam Negara Kasar (GDP) dunia yang berkembang 5.2% pada tahun 2010, sebelum menyusut kepada 3.8% pada tahun 2011, menyaksikan pertumbuhan negaranegara sedang membangun terus mengatasi pencapaian negara-negara berpendapatan tinggi.

The Malaysian economy grew at a slower pace declining from 2010’s 7.2% to register 5.1% in 2011 on account of external global developments and weak exports, which led to a significant year-on-year decline in the first and last quarters of the year. Fortunately, domestic demand continued to provide a buffer boosted by the Government’s strategic initiatives through the implementation of the Economic Transformation Programme (“ETP”), Government Transformation Programme (“GTP”) and 10th Malaysian Plan (“10 MP”).

Ekonomi Malaysia berkembang pada kadar lebih perlahan dengan catatan sebanyak 5.1% pada tahun 2011, berbanding 7.2% pada tahun 2010 selepas dipengaruhi oleh perkembangan luar negara dan permintaan eksport yang lemah sehingga membawa kepada kejatuhan ketara dalam prestasi tahun-ke-tahun pada suku pertama dan terakhir tahun kewangan. Negara, bagaimanapun bernasib baik kerana permintaan domestik kekal menjadi penampan terhadap keadaan tersebut, berikutan hasil daripada inisiatif strategik yang dilaksanakan oleh Kerajaan melalui pelaksanaan Program Transformasi Ekonomi (“ETP”), Program Transformasi Kerajaan (“GTP”) dan Rancangan Malaysia Ke-10 (“RMK-10”).

2012 ANNUAL REPORT

1. Suria Stonor, KLCC 2. Sinar 2, Saujana Utama 3. Entrance, Saujana Utama

In line with the stable economic environment, improved labour market conditions and rising inflationary fears, the property market remained on the growth trend that moderated only towards the end of the year. It was a significant year for the Malaysian property market as property transactions breached the RM1 billion mark, to record a five-year high with 430,403 transactions valued at RM137.9 billion which were 14% and 28% higher respectively compared to 2010.

Sejajar dengan persekitaran ekonomi yang stabil, keadaan pasaran buruh lebih baik dan kebimbangan yang meningkat terhadap inflasi, pasaran hartanah kekal berada dalam aliran pertumbuhan dan hanya menjadi sederhana menjelang akhir tahun kewangan. Tahun kewangan mewakili tempoh yang penting kepada pasaran hartanah Malaysia apabila urus niaga hartanah melepasi paras RM1 bilion, untuk mencatat paras tertinggi dalam tempoh lima tahun dengan urus niaga berjumlah 430,403 bernilai RM137.9 bilion, masing-masing adalah 14% dan 28% lebih tinggi berbanding pada tahun 2010.

Growth was spearheaded by the residential sector which took up 62.7% share of total transactions and 44.9% of the total transaction value with 269,789 transactions worth RM61.9 billion. Both residential sales volume and value recorded a double-digit growth of 18.9% and 22.1% respectively. Agriculture property was the second most active market, making up 19.7% of total volume transactions, with an increase of 4.7% in volume and 65.4% in value over the previous year. In the retail market, shops recorded 24,997 transactions worth RM13.8 billion, a rise in volume of 0.8% compared with 24,731 transactions in 2010. Total values had risen 11.7%, and was a major contributor to the commercial subsector sales, representing 57.2% or 24,997 units of the total transactions. The industrial sector contributed only 2.4% and 8.4% of the total market share in terms of volume and value respectively. Last year recorded 10,479 transactions worth RM11.5 billion. The volume increased by 6.5% from 2010, while value increased by 17.4%.

Pertumbuhan itu diterajui oleh sektor kediaman yang mewakili 62.7% daripada jumlah transaksi dan juga merupakan 44.9% daripada jumlah nilai transaksi melibatkan 269,789 urus niaga bernilai RM61.9 bilion. Jumlah dan nilai jualan hartanah kediaman mencatat pertumbuhan dua angka, masing-masing sebanyak 18.9% dan 22.1%. Hartanah pertanian merupakan pasaran yang kedua paling cergas, apabila mewakili 19.7% daripada keseluruhan transaksi dengan mencatatkan peningkatan jumlah dagangan sebanyak 4.7% dan 65.4% daripada segi nilai berbanding tahun sebelumnya. Dalam sektor hartanah peruncitan, rumah kedai mencatatkan transaksi sebanyak 24,997 bernilai RM13.8 bilion, mewakili kenaikan jumlah dagangan sebanyak 0.8% daripada 24,731 urus niaga pada tahun 2010. Jumlah nilainya meningkat 11.7% dan menjadi penyumbang utama bagi jualan sektor kecil komersial, dengan mewakili 57.2% atau 24,997 buah daripada jumlah transaksi. Sektor perindustrian pula hanya menyumbang 2.4% dan 8.4%, masing-masing kepada jumlah pasaran dan nilai. Pada tahun lalu, ia mencatatkan 10,479 urus niaga bernilai RM11.5 bilion. Jumlah dagangannya meningkat sebanyak 6.5% dari tahun 2010, manakala nilainya meningkat sebanyak 17.4%.

GLOMAC BERHAD

CHAIRMAN’S STATEMENT PENYATA PENGERUSI (Cont’d)

Gaining progressive recognition and offering the right mix of development projects, Glomac’s projects continued to enjoy strong demand spurring profit to RM63.0 million in financial year 2011 to RM85.2 million in financial year 2012. This was driven by ongoing sales for our mixed development projects in Glomac Damansara, Saujana Utama, Saujana Rawang and Glomac Cyberjaya; final billings from the completed Glomac Tower, as well as healthy take up rates from our new launches.

Pengiktirafan yang berterusan dan keupayaannya menawarkan projek pembangunan bercampur yang diminati ramai membolehkan projekprojek Glomac kekal menikmati permintaan kukuh sehingga meningkatkan keuntungannya kepada RM85.2 juta pada tahun kewangan 2012 daripada RM63.0 juta pada tahun kewangan 2011. Pencapaian itu diraih melalui jualan berterusan projek-projek di Glomac Damansara, Saujana Utama, Saujana Rawang dan Glomac Cyberjaya; peringkat akhir pengebilan penjualan Glomac Tower yang telah siap dibina, serta permintaan yang baik terhadap projek-projek kami yang baru dilancarkan.

The launch of Glomac’s 39-storey Reflection Residences and the freehold serviced apartment project in Mutiara Damansara in March 2012 with a gross development value (GDV) of RM270 million received good response with the latter already recording 90% take-up to date.

Pelancaran projek Reflection Residences setinggi 39-tingkat dan projek apartmen khidmat pegangan bebas di Mutiara Damansara pada bulan Mac 2012 dengan nilai pembangunan kasar (GDV) berjumlah RM270 juta, telah mendapat sambutan baik apabila setakat ini, mencatat tempahan sehingga 90 peratus.

PROSPECTS

PROSPEK

A more challenging operating environment is anticipated in 2012. Business prospects, at least in the first half of 2012 are unlikely to match the highs of 2011. While sluggish exports are likely to continue weighing down the overall Gross Domestic Product (“GDP”) growth, the resilience of domestic demand is expected to pick up the slack thanks to supportive policy measures.

Suasana operasi yang lebih mencabar dijangkakan pada tahun 2012. Prospek perniagaan, untuk separuh pertama 2012 sukar untuk menyamai prestasi tinggi pada tahun 2011. Ketika penurunan eksport akan terus menjejaskan keseluruhan pertumbuhan Keluaran Dalam Negara Kasar (KDNK), ketahanan permintaan domestik dijangka membantu pertumbuhan terutamanya dengan adanya dasar yang menyokong ke arah itu.

Inflation continues to be relatively benign with year-on-year headline inflation growing only 2.2%, as of February 2012, a 14-month low. The results of MIER’s first quarter Consumer Sentiments Survey and Business Conditions Survey suggest that both consumer and business confidence was up in the first quarter. The first quarter Consumer Sentiments Index rose 8 points quarteron-quarter to settle higher at 114.3 points. The Business Conditions Index meanwhile reversed its downtrend to settle higher at 116.5 points, up from 96.6 points in the previous quarter.

Inflasi secara relatifnya tidak membimbangkan dengan kadar inflasi utama dalam perbandingan tahun-ke-tahun setakat bulan Februari 2012, akan hanya berkembang 2.2% untuk berada di paras terendah sejak 14 bulan. Keputusan Kaji Selidik Sentimen Konsumer dan Keadaan Perniagaan MIER bagi suku pertama mencadangkan keyakinan perniagaan dan konsumer telah meningkat pada suku berkenaan. Indeks Sentimen Konsumer meningkat lapan (8) mata berdasarkan perbandingan suku-ke-suku kepada 114.3 mata. Manakala Indeks Keadaan Perniagaan berubah daripada aliran menurun kepada meningkat sehingga paras 116.5 mata berbanding 96.6 mata pada suku sebelum ini.

2012 ANNUAL REPORT

1. Glomac Tower, KLCC (now known as Menara Prestige) 2. Dâ&#x20AC;&#x2122;Cini Lakeside, Sri Saujana, Johor 3. Recreational Park, Sri Saujana, Johor

The Malaysian economy is projected to grow at a steady, albeit slower, pace of 4%-5%, anchored by the resilient growth in domestic demand. Nevertheless, Bank Negara Malaysia (BNM) had adopted a pre-emptive approach for macroeconomic stability and to ensure prudent level of household debts. Among the measures implemented were the maximum loan-to-value (LTV) ratio of 70% on third and subsequent housing loans, the new measures on credit cards to promote prudent financial management and the usage of net income criteria for assessing loan application eligibility.

Ekonomi Malaysia diunjur berkembang baik, meskipun perlahan sedikit pada paras 4%-5% dengan disokong oleh pertumbuhan permintaan domestik yang berdaya tahan. Bank Negara Malaysia (BNM) telah melaksanakan pendekatan awal atau pre-emptive bagi mencapai kestabilan makro ekonomi dan memastikan paras hutang isi rumah terkawal. Antara langkah yang diambil adalah pelaksanaan nisbah maksimum pinjaman berbanding nilai (LTV) sebanyak 70% untuk pinjaman rumah yang ketiga atau seterusnya, pengenaan langkah baru bagi kad kredit untuk menggalakkan pengurusan kewangan secara berhemah dan mengguna pakai kreteria pendapatan bersih bagi penilaian kemampuan untuk mendapatkan pinjaman.

BNM is widely expected to retain the Overnight Policy Rate (â&#x20AC;&#x153;OPRâ&#x20AC;?) at 3.0% throughout 2012; with the possibility of a series of rate-cuts should the economic outlook deteriorate.

BNM juga dijangka mengekalkan Kadar Dasar Semalaman (OPR) pada paras 3.0% sepanjang tahun 2012 dengan kemungkinan pengurangan kadar tersebut bakal dilakukan sekiranya tinjauan ekonomi didapati semakin buruk.

With our balanced mix of affordable products within the greater Kuala Lumpur/ Klang Valley area, Glomac is well-positioned to capitalise on the stable property outlook and aims to maximise opportunities by monitoring the quantum and timing of future launches to match market demand.

Dengan adanya keseimbangan tawaran produk mampu milik dalam Greater Kuala Lumpur/ Lembah Kelang, Glomac berada di kedudukan terbaik untuk mendapat manfaat daripada tinjauan hartanah yang stabil dan mensasarkan untuk memaksimumkan peluang-peluang dengan memantau kesesuaian untuk melancarkan pembangunan baru bersandarkan kepada permintaan pasaran pada masa hadapan.

GLOMAC BERHAD

CHAIRMANâ&#x20AC;&#x2122;S STATEMENT PENYATA PENGERUSI (Contâ&#x20AC;&#x2122;d)

Moving forward, the groupâ&#x20AC;&#x2122;s earnings growth will come from its record unbilled sales of RM731 million, alongside its pipeline of development projects with a total available GDV of about RM7 billion. To cater to the strong demand for affordable housing while sustaining its long-term growth, Glomac has invested in development landbanks of 200 acres in Sungai Buloh, adjacent to Saujana Utama and 191 acres in Dengkil for a new township project. These projects are estimated to generate a GDV of RM800 million each for the financial year ending 2013 and beyond.

CORPORATE SOCIAL RESPONSIBILITY Beyond its focus on maximising shareholder values and capturing growth opportunities, Glomac is increasingly involved in supporting socially responsible initiatives and the setting of sustainable standards for the industry. Our business strategies and sustainability are intrinsically linked as we integrate corporate social responsibility (CSR) into our core business operations as a means of enhancing our performance today and over the long term. Our commitment to CSR is based on the thrusts of building homes and communities that enrich the lifestyles of our customers, practising good corporate Governance and investor relations, caring for the development and well-being of our employees within a safe and nurturing workplace, implementing environmentally sound practices and processes, and enriching the lives of the local communities through charitable programmes and activities. We remain committed to broadening our CSR scope so as to continuously bolster our growth as a socially responsible company.

Dalam melangkah ke hadapan, pertumbuhan pendapatan Kumpulan akan diperoleh daripada jualan belum diterima atau dibilkan yang mencapai paras rekod berjumlah RM731 juta, bersamasama projek-projek pembangunan yang berada dalam perancangan dengan jumlah GDV sebanyak RM7 bilion. Dalam usaha memenuhi permintaan yang tinggi terhadap rumah mampu milik dan mengekalkan pertumbuhan jangka panjang, Glomac akan membangunkan bank tanah seluas 200 ekar di Sungai Buloh bersebelahan dengan Saujana Utama dan kawasan seluas 191 ekar di Dengkil, kedua-duanya bertujuan mengadakan projekprojek perbandaran baru. Setiap projek tersebut dijangka menjana nilai pembangunan kasar atau GDV berjumlah RM800 juta bagi tahun kewangan berakhir pada 2013 dan tahun-tahun seterusnya.

TANGGUNG JAWAB SOSIAL KORPORAT 1

Selain menumpukan kepada memaksimumkan nilai pemegang saham dan mendapatkan peluangpeluang pertumbuhan, Glomac juga meningkatkan penglibatannya dalam menyokong inisiatif tanggungjawab sosial dan menetapkan standard kemapanan untuk industri hartanah. Strategi perniagaan kami dan kemapanan itu berkait rapat kerana kami mengintegrasikan tanggungjawab sosial korporat (CSR) di dalam teras operasi perniagaan dalam usaha meningkatkan prestasi kami hari ini dan juga dalam jangka panjang. Komitmen kami terhadap CSR adalah bersandarkan kepada amanah untuk membangunkan rumah kediaman dan komuniti yang mampu meningkatkan lagi gaya hidup pelanggan kami, mengamalkan tadbir urus korporat dan hubungan pelabur yang baik, mengambil berat terhadap pembangunan dan kebajikan kakitangan kami dengan persekitaran tempat kerja yang baik dan selamat, melaksanakan amalan mesra alam yang baik serta memperkayakan kehidupan komuniti tempatan melalui aktiviti dan program kebajikan. Kami kekal komited untuk meluaskan skop CSR kami dan seterusnya melonjakkan pertumbuhan kami sebagai syarikat yang mengambil berat terhadap perkembangan sosial di negara ini.

2012 ANNUAL REPORT

1. Saujana Square, Saujana Rawang

ACKNOWLEDGEMENTS

PENGHARGAAN

Our momentum of growth is accelerating as Glomac continues to make advancements in operational excellence and strong financial performance, adopting best practices in corporate governance and transparency with the intention of rewarding shareholders with consistent and sustainable long-term growth.

Dalam usaha untuk terus melonjak ke hadapan, Glomac Berhad sentiasa berusaha menerajui kecemerlangan operasi dan mencatatkan prestasi kewangan yang teguh, menerapkan amalanamalan terbaik tadbir urus korporat dan ketelusan dengan hasrat untuk memberikan manfaat kepada para pemegang saham melalui pertumbuhan yang konsisten dan mapan dalam jangka masa panjang.

In ushering the new financial year, I, on behalf of the Board, would like to thank the management and employees of Glomac for their unwavering commitment and valuable contribution to the company. I am confident that with their passion and sound company policy, Glomac will continue to grow and ensure good returns to shareholdersâ&#x20AC;&#x2122; funds.

Ketika mengalu-alukan kedatangan tahun kewangan yang baru, saya bagi pihak Lembaga Pengarah ingin menyatakan rasa terima kasih kepada pengurusan dan pekerja-pekerja Glomac di atas komitmen dan sumbangan yang cukup berharga kepada syarikat. Saya yakin dengan semangat yang tinggi dan dasar syarikat yang baik, Glomac akan terus berkembang dan mampu memastikan pulangan yang baik kepada dana pemegang saham.

2. Suria Residen

We also thank our shareholders, investors, customers, business associates, bankers, contractors, members of the media, and governing authorities who have given us a strong anchor from which we take courage to reach for our dreams. I also wish to thank our Board of Directors for their guidance and support and look forward to reporting another successful year at the end of FY2013. Thank you. Tan Sri Datoâ&#x20AC;&#x2122; F.D. Mansor Group Executive Chairman 16 August, 2012

Kami juga berterima kasih kepada para pemegang saham kami, pelabur-pelabur, pelanggan, rakanrakan kongsi perniagaan, bank-bank, kontraktor-kontraktor dan pihak media serta pihak berkuasa berkaitan yang memberikan sokongan kuat untuk kami mencapai impian yang diharapkan. Saya juga ingin merakam penghargaan kepada semua ahli Lembaga Pengarah di atas bimbingan mereka dan berharap untuk mencapai satu lagi tahun yang cemerlang pada tahun kewangan 2013. Terima kasih.

Tan Sri Datoâ&#x20AC;&#x2122; F.D. Mansor Pengerusi Eksekutif Kumpulan 16 Ogos, 2012

GLOMAC BERHAD

GROUP MANAGING DIRECTOR/ CEO’S REVIEW OF OPERATIONS

It was another historic year of growth for Glomac as the Group performed beyond expectations in the financial year ended 30 April 2012. Record sales of RM663.3 million surpassed our internal target and increased our profit after tax attributable to owners of the Company by 35.2% to RM85.2 million. Our impressive sales numbers are a testament of the Group’s improved branding and product desirability in both our ongoing and new developments.

FINANCIAL REVIEW For the financial year ended 30 April 2012 (FY2012), the Group achieved revenue of RM652.4 million, compared to RM597.5 million in the previous financial year. This reflects Glomac’s sustained robust topline performance, primarily driven by on-going sales and progressive recognition of our development projects in Glomac Damansara, Saujana Utama, Saujana Rawang and Glomac Cyberjaya, as well as final profits from the completed Glomac Tower (now known as Menara Prestige) project. With a 3.0% point improvement in our profit before tax margin, profit performance for the year was strong. The Group’s profit before tax rose 24.4% to RM161.1 million from RM129.5 million previously. The Group’s profit after tax attributable to owners of the Company increased 35.2% to RM85.2 million from RM63.0 million achieved in financial year 2011. This translates into a 38.3% basic increase in basic earnings per share, which have been set to 14.8 sen, based on a weighted average capital base of 576.3 million shares. In comparison, we registered an earnings per share of 10.7 sen registered last year, based on a weighted average share base of 586.6 million. At the same time our balance sheet has never been stronger and we are on a strong foothold now for further development with gearing of about 0.1 times. Having continued to expand on our landbank robustly, in the year under review, with purchase of new parcels of land within the Greater Kuala Lumpur area, Glomac to date, has a net asset value of RM1.12 per share and a higher internal Revalued Net Asset Value of RM2.40.

HIGHLIGHTS FOR THE FINANCIAL YEAR ENDED 30 APRIL FY2012 RM mil

FY2011 RM mil

+/- (%)

Revenue

652.4

597.5

+9.2

Pre-tax Profit

161.1

129.5

+24.4

Net Profit

85.2

63.0

+35.2

Net EPS (sen)*

14.8

10.7

+38.3

Based on weighted average share base of 576.3m shares for FY2012 and 586.6m shares for FY2011

2012 ANNUAL REPORT

1. Glomac Cyberjaya 2 2. Serviced Apartments, Glomac Centro 3. Glomac Centro

REVIEW OF OPERATIONS Property development continues to be the main driver of earnings for the Group recording 98.1% of the total turnover in FY2012. As Glomac evolves into a sizeable and esteemed property developer, our proactive moves in the critical areas of branding and sales, project management and delivery, landbank acquisition and value-enhancement, and prudent financial management are bearing fruit for the third consecutive year. We have enjoyed tremendous growth in the last three years due to the increased number of projects we have embarked on. In fact, we are now simultaneously developing more than 10 projects of different sizes, to date. Total sales of RM663.3 million achieved in FY2012 were 32.7% higher than our internal target of RM500 million, driven by our recent successful launch of Reflection Residences @ Mutiara Damansara (formerly known as Mutiara Damansara Residences), Glomac Damansara Residences (located in the established prime mixed development of Glomac Damansara) and the Saujana Utama and Saujana Rawang townships. These projects provided a solid and resilient earnings base for the Group and contributed total sales of over RM500 million during the year under review, with additional sales from Glomac Centro (formerly known as Glomac Utama) and our commercial development Glomac Cyberjaya 2 making up the rest. Prime location and enhanced connectivity are catalysing our projects’ success. Our current developments have good access to major highways and our new projects are benefitting from national level development plans such as the provision of a new My Rapid Transit (MRT) network within Greater Kuala Lumpur. Currently three of our projects – Glomac Centro, Reflection Residences and Glomac Damansara – are set to have close proximity to planned MRT stations. With the continued stability of our domestic economy, thanks to the Government’s sustained commitment to the Economic Transformation Programme (ETP), we are confident that these projects will continue to garner good response. Unbilled sales, which translate to future revenue, stand at a healthy RM731 million, another record high for the Group in FY2012. On top of this, our prospects for the coming year are anchored on a gross development value (GDV) of RM7 billion comprising anticipated sales of available units at ongoing projects plus an estimated RM5.6 billion GDV in new projects. This puts us in a good position as we welcome the new financial year.

GLOMAC BERHAD

GROUP MANAGING DIRECTOR/ CEO’S REVIEW OF OPERATIONS (Cont’d)

Glomac Damansara Launched: On-going since 2009 GDV: RM950 million

Glomac Damansara, unveiled in 2009, started out with a GDV of RM500 million. Today, it has more than doubled to RM950 million for a 6.8 acre site. The mixed development of prime freehold land is Kuala Lumpur address. It fronts Jalan Damansara and is located in the immediate vicinity of the affluent Damansara/Taman Tun Dr Ismail neighbourhoods. With direct access to the North Klang Valley Expressway and SPRINT Highway, Glomac Damansara, has convenient access to most of the major hubs in Kuala Lumpur and Petaling Jaya. This four-phase mixed development features 12 units of 5 and 8-storey shop offices anchored by a 16-storey office block, two towers of residential units, a retail mall and a 25-storey office tower. The project has chalked up sales of above RM400 million since its launch, through the sale of 5 and 8 storey shop offices which were handed over in May 2012; the 16-storey office block, now known as Menara Glomac, completed in June 2012; and the en-bloc sale of the 25-storey office tower to Lembaga Tabung Haji, which will be completed by early 2013. The two towers of residential units named Glomac Damansara Residences were launched in February 2011. The towers house 356 units of serviced apartments, priced from RM600 per square foot and upwards, and will have easy access to the planned TTDI MRT station. Response has been overwhelming and take up is above 85% for this RM285 million GDV project. In the near future, we look forward to the launch of the boutique retail mall to provide enhanced lifestyle offerings within the Glomac Damansara neighbourhood. With an estimated GDV of RM350 million, the neighbourhood mall will offer upscale amenities and services that centre around entertainment and dining. Future sales of Glomac Damansara Residences and this upcoming retail mall should continue to underpin our earnings for the next two to three years. Glomac Cyberjaya 2 Launched: 2012 GDV: RM250 million

Glomac Cyberjaya 2 is the continuation of our fully sold Glomac Cyberjaya commercial development. The site was acquired shortly after the highly successful launch of the maiden project’s 63 units of shop offices. Recognising the potential of the somewhat untapped market for shop offices in this location, we negotiated for the adjacent plot of land to further capitalise on growth opportunities. The site is strategically located along Persiaran Apec surrounded by multinational corporations such as HSBC, Ericsson, IBM and DHL as its surrounding neighbours. Glomac Cyberjaya 2 comprises shop offices and a modern office tower to present a wider range of investment opportunities that are ideally suited for small to medium-sized businesses seeking a stylish business address in the heart of Cyberjaya. In November 2011, we launched the sale of 55 units of 3, 31/2 and 41/2 storey shop offices with total GDV of RM130 million.

2012 ANNUAL REPORT

1. Boutique Retail, Glomac Damansara 2. Warisan, Saujana Utama

Saujana Utama Launched: On-going since 1997 GDV: RM1,448 billion

This is Glomac’s flagship township development in Sungai Buloh which continues to generate sustainable sales of RM10 to RM12 million per month. To-date we have sold and successfully delivered over RM1 billion worth of properties to our customers. In the last 15 years, this township has grown into an established full-fledged community with its own residents’ clubhouse, parks, primary and secondary schools, shop offices and hypermarket. Yet it is still expanding as we continue to maximise on the land potential by delivering on community demands and improving connectivity for our residents. With the completion of the KL-Kuala Selangor Expressway in June 2011, and upcoming plans for MRT access in the vicinity, Saujana Utama’s popularity as an accessible and connected township is on the rise. New sales at this township amounted to RM129 million in FY2012 with the launch of Sinar 2 and Suria Saujana homes undertaken during the year under review. In line with demand trends, the projects targeted the affordable segments of the market and received good response. For the current year, we are planning to launch 90 link-bungalow properties with a GDV of RM63 million to cater to a segment of customers looking for luxury homes. These homes will be designed with utmost consideration to the latest lifestyle trends to ensure that the layout and designs of our homes remain relevant and are up to buyers’ expectations.

GLOMAC BERHAD

GROUP MANAGING DIRECTOR/ CEO’S REVIEW OF OPERATIONS (Cont’d)

Saujana Rawang Launched: On-going since 2008 GDV: RM337 million

Glomac’s Saujana Rawang township is envisioned to provide comfortable and affordable homes for young families looking for a peaceful and verdant community in which to plant their roots. Spanning 345 acres, the concept encompasses a township involving different product components. Saujana Rawang gains from its excellent location in the Northern Growth Corridor, just 10 minutes from the Rawang Interchange. It is accessible via existing trunk roads linked to the North-South Highway. The opening of AEON Mall and new neighbourhood amenities has increased the attractiveness of the township. In November 2011, phase 1 or 52 units of Zara Bungalows were launched to highly encouraging response which proved the growing popularity of the township’s concept and location. This was followed up in January 2012 with the launch of 30 units of double-storey Botania terrace houses. These enjoyed a healthy take-up within a few months of launching. With more phases in the pipeline, Saujana Rawang is poised to deliver consistent returns to the Group. Glomac Centro (formerly known as Glomac Utama) Launched: 2012 GDV: RM370 million

Located in the Petaling Jaya growth corridor, Glomac Centro has superb accessibility to major highways such as SPRINT, NKVE and LDP; and is surrounded by excellent amenities and public facilities, with higher education centres such as KDU, KBU and Segi College just a short drive away. It is a mixed development comprising double storey shop offices and a contemporary 29-storey Serviced Apartment. Built on 7.62 acres within Bandar Utama, GDV for the shop offices is RM120 million while the GDV for the serviced apartments is RM250 million. At end 2011, 54 units of shop office were launched to positive response. Designed to cater to different spectrums of commercial concepts, from food and beverage outlets to grocers, these shop offices are an attractive prelude to the Glomac Centro serviced apartments. The serviced apartments were launched at end March 2012 and are scheduled for completion in 2015. Glomac Centro benefits greatly from a large population catchment area as it sits in the midst of lively and well established areas; Bandar Utama, Damansara Utama, Taman Tun Dr. Ismail, Mutiara Damansara and Mont Kiara, An upcoming MRT station is planned just 1.5km away and will facilitate greater connectivity and a rise in real estate value in the near future.

2012 ANNUAL REPORT

1. Boutique Retail, Glomac Centro 2. Reflection Residences 3. Swimming Pool, Refection Residences

Reflection Residences@Mutiara Damansara (formerly known as Mutiara Damansara Residences) Launched: 2012 GDV: RM270 million

Reflection Residences@Mutiara Damansara is the Groupâ&#x20AC;&#x2122;s recently launched project located within the popular retail strip of Tesco, The Curve and IPC shopping centre. The 39-storey residence will comprise 299 units of serviced apartments on 2.6 acres of freehold commercial land and commands a gross development value of RM270 million. Facing the LDP, the project boasts superb accessibility to the Penchala Link, MRR2, SPRINT and NKVE. Designed to cater to the increased demand for classy high-rise living concepts in Petaling Jaya, Reflection Residences presents a modern contemporary facade of transparent glass walls, complemented by full-fledged facilities within. So far it has proven popular among upgraders, investors and young professionals. Prospects of the development are good due to its location and concept. Launched at end March 2012, Reflection Residences has enjoyed robust demand with only a few units left, to date.

GLOMAC BERHAD

GROUP MANAGING DIRECTOR/ CEO’S REVIEW OF OPERATIONS (Cont’d)

ACQUISITION OF NEW LANDBANK To cater to the strong demand for affordable housing while sustaining its long-term growth, Glomac continues to identify sizeable tracts of land in Greater Kuala Lumpur. In February of this year, we entered into a transaction to further expand our stock of landbank in the Klang Valley. We signed an agreement to acquire 200 acres of leasehold land in Sungai Buloh, adjacent to Saujana Utama, for a total consideration of RM44 million. More recently in June 2012, another land transaction was made to acquire another 191 acres of land in Dengkil, Sepang for a total consideration of RM66 million. Both land acquisitions are earmarked for a township project for the future, to take advantage of the steady growth of interest in the surrounding area.

NEW PROJECTS Beyond our current offerings, Glomac has also lined up a series of new projects targeted to launch within the next year. These will focus more on residential township developments as for the last six months the residential market has remained the strongest segment in the property sector, and has consistently overtaken the demand for commercial properties since 2011. Therefore our upcoming project line-ups will focus on landed properties supported by phases of commercial projects. Project Type Plaza Kelana Jaya (Phase 4) Lakeside Residences New land in Sungai Buloh New land in Dengkil

Location

GDV (RM million)

Kelana Jaya

240

Puchong

2,000

Sungai Buloh

800

Dengkil

800

We are targeting to unveil four new developments together with the on-going developments with a combined total GDV in excess of RM5 billion. These will spearhead Glomac into its next phase of growth. The development of Lakeside Residences in Puchong is an exciting venture for the Group as we recently completed the sale and purchase for 200 acres in Puchong for RM77 million. The land is within the vicinity of Tesco Puchong and there are plans to extend the LRT route, approximately 200 metres from the site. Good access and connectivity promise to increase the value of the site. The location is ideal for development being in the heart of Puchong, yet not far away from the periphery. Set to be the new feather in our cap, we are anticipating the launch of a mix of residential and commercial developments by end-2012. With a potential GDV of RM2 billion, this will be the Group’s single largest project and will surpass our present total GDV of RM1.46 billion. The Sungai Buloh and Dengkil township projects are expected to be launched in 2014, with a potential GDV of RM800 million each. Both of the developments will feature affordable double storey terrace homes, as well as commercial schemes and amenities.

2012 ANNUAL REPORT

1. Lakeside Residences 2. Zara, Saujana Rawang

STRATEGY & OUTLOOK At Glomac we are looking ahead to better times with more projects and a bigger landbank in Greater Kuala Lumpur. We continue to focus our resources in this region as 67% of the RM107 billion residential sales for the whole of Malaysia last year was from within the Greater Kuala Lumpur. Internally, over the last few years, Glomac has embarked on many business strategies to heighten operational efficiency and build staff competencies to sharpen our competitive edge. We intend to steadfastly adhere to our position at the forefront of the development business, and ultimately deliver higher returns to our shareholders. On the corporate front, the Group’s market capitalisation has grown from RM300 million to RM600 million in the last two to three years. Moving forward, the Group is confident of sustaining earnings despite the economic headwinds. Our recent land acquisitions in Puchong, Sungai Buloh and Dengkil have expanded our landbank to a comfortable 591 acres more, with an estimated GDV of RM3.6 billion. This GDV will be the source of growth going forward as it enables a pipeline of new development projects. Anchored by available GDV of approximately RM7 billion, available units at ongoing projects plus RM5.6 billion worth of new projects, our total launches for the current financial year are targeted to hit over RM1 billion in GDV. Coupled with that, our record high unbilled sales of RM731 million assures us steady growth for the next 18 months. At the same time our balance sheet has never been stronger, providing us healthy resources for further land acquisitions. We are poised and ready to act should opportunities crop up at the right price, especially in the Greater Kuala Lumpur area where we have built a strong branding. Last but not least, I am pleased to report that in July 2012, Glomac Berhad has moved to its new headquarters at Menara Glomac, Glomac Damansara Kuala Lumpur. This marks the beginning of a new chapter for our Group, and I look forward to serving up another year of performance distinction. Dato’ F.D. Iskandar Bin Tan Sri Dato’ F.D. Mansor Group Managing Director/Chief Executive Officer

GLOMAC BERHAD

5-YEAR FINANCIAL HIGHLIGHTS

652,406

2012

597,478

2011

Revenue RM’000

2010

316,756 345,266

2009 2008

324,335

161,067

2012

129,492

2011

Profit Before Tax RM’000

2010 2009 2008

74,893 56,240 50,193

85,160

2012

Profit Attributable to: Owners of the Company RM’000

62,981

2011 2010 2009 2008

40,854 31,977 35,145

6.3%

2012

4.6%

2011

Return on Total Assets

2010

3.5%

2009

2.8%

2008

2.8%

14.8

2012

10.7

2011

Basic Earnings Per Share (Sen)

14.2

2010

11.4

2009

13.6

2008

5.9

2012

6.8

2011

Net Dividend Per Share (Sen)

6.4

2010 2009 2008

4.5 6.7

2012 ANNUAL REPORT

2012 RM’000

2011 RM’000

2010 RM’000

2009 RM’000

2008 RM’000

Revenue Profit Before Tax and Exceptional Item Exceptional Item

652,406 161,067 –

597,478 129,492 –

316,756 74,893 –

345,266 56,240 –

324,335 50,193 –

Profit Before Tax Taxation

161,067 (41,475)

129,492 (36,761)

74,893 (17,614)

56,240 (17,430)

50,193 (15,582)

Profit For The Year

119,592

92,731

57,279

38,810

34,611

85,160 34,432

62,981 29,750

40,854 16,425

31,977 6,833

35,145 (534)

119,592

92,731

52,279

38,810

34,611

1,353,136 304,614 637,116

1,354,882 297,174 599,684

1,154,027 297,170 553,090

1,132,076 297,169 516,418

1,270,403 297,169 501,839

13.4% 6.3%

10.5% 4.6%

7.4% 3.5%

6.2% 2.8%

7.0% 2.8%

14.8 1.12 5.9

10.7 1.02 6.8

14.2 1.88 6.4

11.4 1.85 4.5

13.6 1.75 6.7

Profit Attributable to: Owners of the Company Minority Interest ASSETS AND EQUITY Total Assets Employed Paid-up share Capital Equity Attributable To Owners of the Company Return on Shareholders’ Funds Attributable To Owners of the Company Return On Total Assets SHARE INFORMATION Basic Earnings Per Share (Sen) Net Assets Per Share (RM) Net Dividend Per Share (Sen)

Notes: (i) The earnings per share and net assets per share for 2011 have been restated to take into account the effect of share split exercise in financial year ended 30 April 2012.

GLOMAC BERHAD

CORPORATE GOVERNANCE STATEMENT

The Board of Directors (“Board”) of Glomac Berhad (“Company” or “Group”) recognizes the importance of corporate governance and is committed to continue applying high standards of corporate governance throughout the Group by adopting and applying the Malaysian Code of Corporate Governance (Revised 2007) (“Code”) in safeguarding the interest of all stakeholders as well as enhancing shareholders’ value and financial performance of the Group. Throughout the financial year ended 30 April 2012, the Group has generally applied the principles and complied with best practices of the Code as required under Bursa Malaysia Securities Berhad’s (“Bursa Securities”) Main Market Listing Requirements (“Main Market LR”) including those Main Market LR amendments issued on 22 September 2011. The Group also noted the Malaysian Code on Corporate Governance 2012 (“MCCG 2012”) issued by the Securities Commission Malaysia in March 2012, and is continuously studying the broad principles and specific recommendations as set in the new MCCG 2012, for its next annual reporting on the adoption progress and compliance status. The Board is pleased to report on the manner in which the Group has applied the principles of the Code and the extent to which it has complied with best practices of the Code during the financial year ended 30 April 2012.

BOARD OF DIRECTORS 1.

THE BOARD The Company is led and controlled by the Board which assumes overall responsibility for corporate governance, strategic direction and investments made by the Group. The Board, however, delegates certain responsibilities to the Board Committees, all of which operate within defined terms of reference to assist the Board in the execution of its duties and responsibilities. The Board Committees include the Audit and Risk Committee, Nomination Committee and Remuneration Committee. These Committees are tasked to examine specific areas and issues and report to the Board on their deliberations together with recommendations. However, the ultimate responsibility for the final decision on all matters lies with the Board.

BOARD BALANCE The Board consists of 6 members, comprising 3 Executive Directors and 3 Independent Non-Executive Directors which fulfill the criteria of independence as prescribed by the Main Market LR. The profiles of each Director are presented on pages 10 to 15 of this Annual Report. The Board composition reflects a balance of Executive and Non-Executive Directors with a mix of suitably qualified and experienced professionals. Together, the Directors bring with them a broad range of skills, experience and knowledge required to successfully direct and supervise the Company’s business activities, which are vital to the success of the Group. The Executive Directors are responsible for implementing policies of the Board, overseeing the Group’s operations and developing the Group’s business strategies established by the Board. The Independent Non-Executive Directors fulfill a pivotal role in corporate accountability; providing independent view, advice and judgment to ensure a balanced and unbiased decision making process to ensure that the long term interests of all stakeholders are well protected. In view thereof, one of the Independent Non-Executive Directors, Dato’ Ikhwan Salim bin Dato’ Sujak, has been designated Senior Independent Director of the Company. There is also a clear division of responsibilities between the Executive Chairman and the Group Managing Director/Chief Executive Officer to ensure a balance of power and authority. The Executive Chairman is responsible in ensuring Board effectiveness and standard of conduct whilst the management of the Group’s businesses, implementation of policies and the day-to-day running of the businesses are the responsibilities of the Group Managing Director/Chief Executive Officer.

2012 ANNUAL REPORT

BOARD MEETINGS Board meetings for the ensuing year are scheduled at the start of each financial year to enable the Board to plan their schedules accordingly. The Board meets at least 4 times in a year with additional meetings being convened as and when necessary. During the financial year under review, the Board met five (5) times and the attendance record for each Director is as follows: Total meetings attended

Percentage of attendance (%)

Tan Sri Dato’ Mohamed Mansor bin Fateh Din Group Executive Chairman

5/5

100

Datuk Fong Loong Tuck Group Executive Vice Chairman

5/5

100

Dato’ Fateh Iskandar bin Tan Sri Dato’ Mohamed Mansor Group Managing Director/Chief Executive Officer

5/5

100

Dato’ Ikhwan Salim bin Dato’ Sujak Senior Independent Non-Executive Director

5/5

100

Datuk Ali bin Tan Sri Abdul Kadir Independent Non-Executive Director

3/5

Chong Kok Keong Independent Non-Executive Director

5/5

100

Name of Director

All Directors have complied with the minimum 50% attendance requirement in respect of Board meetings as stipulated by the Main Market LR. Besides these Board meetings, the Board also exercises control on matters that require its approval by way of circular resolutions and informal meetings with sufficient information required to make an informed decision. Proceedings of the relevant meetings and the resolutions reached have been properly recorded and duly minuted. Directors are also required to declare their respective shareholdings in the Company and related companies and their interests in contracts or proposed contracts with the Company or any of its related companies. The Directors concerned shall abstain from any deliberation and voting in relation to these transactions.

GLOMAC BERHAD

CORPORATE GOVERNANCE STATEMENT (Cont’d)

SUPPLY OF INFORMATION AND ACCESS TO MANAGEMENT AND INDEPENDENT PROFESSIONAL ADVICE The Directors have full and unrestricted access to all information pertaining to the Group’s business affairs, whether as a full Board or in their individual capacity, to enable them to discharge their duties. Prior to the Board meetings, all Directors receive the agenda together with a set of Board papers containing information relevant to the business of the meeting. This allows the Directors to obtain further explanations/clarifications from management, where necessary, to facilitate informed decision making. Senior management officers and external advisers may be invited at the Board meetings when necessary, to furnish the Board with explanation and comments on the relevant agenda. All Directors also have full access to the advice and services of the Company Secretaries who ensure that Board procedures are adhered to at all times and advise the Board on matters including corporate governance issues, and Directors’ responsibilities in complying with relevant legislation and regulations. All directors may obtain independent professional advice, at the Company’s expense, if required, in furtherance of their duties. Directors and employees of the Group who are in possession of price-sensitive information regarding the Company which are not publicly available, and who deal in the securities of the Company are required to notify the Company within a specific timeframe as prescribed by the Main Market LR.

APPOINTMENT AND RE-ELECTION TO THE BOARD In accordance with the Company’s Articles of Association, at least one third of the Directors shall retire from office every year provided always that all Directors shall retire from office at least once in every three (3) years but shall be eligible for re-election in the Annual General Meeting. Directors who are 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. Appointments to the Board shall be made based on the recommendations of the Nomination Committee which was established on 23 March 2009. The Nomination Committee comprise of the following members: •

Dato’ Ikhwan Salim bin Dato’ Sujak, Chairman

•

Datuk Ali bin Tan Sri Abdul Kadir, Member

•

Dato’ Fateh Iskandar bin Tan Sri Dato’ Mohamed Mansor, Member

The terms of reference of the Nomination Committee are: •

to consider, in making its recommendations to the Board, candidates for all directorships/board committees including the position of Independent Non-Executive Director, in respect of their skills, knowledge, expertise, experience, professionalism and integrity; and in the case of Independent Non-Executive Directors, their abilities to discharge such responsibilities/functions as expected from an Independent Non-Executive Director;

•

to assist the Board in reviewing on an annual basis the required mix of skills and experience of the Directors of the Board/Board Committees;

•

to recommend the appropriate Board balance and size of non-executive participation; and

•

to establish procedures and processes towards an annual assessment of the effectiveness of the Board as a whole and contribution of each individual Director and Board Committee member including Independent Non-Executive Directors as well as the Group Managing Director/Chief Executive Officer. The assessments and evaluations are properly documented.

•

to assist the shareholders in their decision, sufficient information such as personal profile and attendance of meetings for the Directors standing for re-election are disclosed in the Directors’ Profile on pages 10 to 15 of this Annual Report. The details of their interest in the securities of the Company are set out in the Analysis of Shareholdings which appears on page 159 of this Annual Report.

2012 ANNUAL REPORT

DIRECTORS’ TRAINING The Group acknowledges that continuous education is vital for the Board members to gain insight into the state of economy, technological advances, regulatory updates and management strategies to enhance the Board’s skills and knowledge in discharging its responsibilities. All Directors appointed to the Board, apart from attending the Mandatory Accreditation Programme accredited by Bursa Securities, have also attended other relevant trainings and seminars organised by the relevant regulatory and professional bodies to further enhance their business acumen and professionalism in discharging their duties to the Group. Members of the Board had also been invited to participate in forums and/or seminars in their capacity as speakers, moderators or panelists in areas of their expertise. Some of the trainings/conferences/seminars and/or workshop in which members of the Board have participated as at 30 April 2012, were as follows: Tan Sri Dato’ Mohamed Mansor bin Fateh Din • Developer Appreciation High Tea Forum – CIMB • Yayasan Iqra Luncheon Talk – International Centre For Education in Islamic Finance (INCEIF) • Developer Appreciation High Tea – Maybank • Jihad Ekonomi Bumiputra Forum – Gagasan Badan Ekonomi Melayu (GABEM) Datuk Richard Fong Loong Tuck • Jury Member for Evaluation panel – FIABCI Property Award for Year 2011 • FIABCI Morning Talk: Field Audit • Judging panel – The Edge Top Property Developer Year 2011 • FIABCI Morning Talk: Economic Transformation Programme – An Update • FIABCI Morning Talk: Overseas Marketing • Singapore Property Market Updates • FIABCI Morning Talk: Shaping Sustainable Growth Budget 2012 – What’s in for you? Dato’ Fateh Iskandar bin Tan Sri Dato’ Mohamed Mansor • Directors’ Training Programme by Media Prima Berhad • FIABCI Brown Paper Bag Seminar (Kuala Lumpur) – FIABCI • ASLI Summit – 4th National Housing & Property Summit – ASLI • Media Prima Inspiration Series Talk • Islamic Real Estate World Asia 2011 Conference (Hong Kong) – Terrapinn Pte Ltd • Build-Then-Sell (BTS) Via Islamic Banking – REHDA Institute • Singapore Real Estate Roundtable/Rehda Malaysia – REHDA Institute • Malaysia-Australia Business Council (MABC)/Ministry for International Trade & Industry (MITI) Dialogue Dato’ Ikhwan Salim bin Dato’ Sujak • Director’s Duties Conference 2011 – Regulatory Updates, Govenance and Current Issues – Aram Global Sdn Bhd • Green Solutions for Property Development 2011 (Greener Cities) – REHDA Institute • Key Amendments to Listing Requirements 2011 & Corporate Disclosure Guide 2011 – Directors’ Training Programme for Land & General Berhad

GLOMAC BERHAD

CORPORATE GOVERNANCE STATEMENT (Cont’d)

Datuk Ali bin Tan Sri Abdul Kadir • IFRS’ 5th Asia-Oceania IFRS Regional Policy Forum – Indonesian Institute of Accountants (IAI) • Labuan FSA’s Top Team Effectiveness Workshop – Labuan Financial Services Authority (Labuan FSA) Mr Chong Kok Keong • Tribunal of Homebuyers - REHDA Institute • Director’s Duties Conference 2011 – Regulatory Updates, Govenance and Current Issues – Aram Global Sdn Bhd • Green Solutions for Property Development 2011 (Greener Cities) – REHDA Institute • The New Corporate Governance Blueprint And Regulatory Updates Seminar 2011 “What Directors and Company Secretary Should Know” – Malaysian Institute of Corporate Governance (MICG) • Malaysian Annual Real Estate Convention (MAREC 2012) Property Investment – The Way Forward – MAREC

DIRECTORS’ REMUNERATION The Board had established a Remuneration Committee on 23 March 2009 which comprises of the following members: •

Dato’ Ikhwan Salim bin Dato’ Sujak, Chairman

•

Datuk Ali bin Tan Sri Abdul Kadir, Member

•

Dato’ Fateh Iskandar bin Tan Sri Dato’ Mohamed Mansor, Member

The terms of reference of the Remuneration Committee are: • to review the annual remuneration packages of each individual Director (both Executive and Non-Executive) such that the levels of remuneration are sufficient to attract and retain the Directors needed to run the Company successfully; and • to recommend to the Board the remuneration packages of the Directors (both Executive and Non-Executive) of the Company. Individual Directors do not participate in the decisions regarding their individual remuneration. The Executive Directors’ remunerations comprise salaries, other emoluments and benefits-in-kind made available as appropriate whilst the Non-Executive Directors’ remunerations comprise only fees. The Directors’ aggregate remuneration for the financial year ended 30 April 2012, distinguishing between Executive and Non-Executive Directors is as set out in the Notes to the audited financial statements on pages 100 and 101 of this Annual Report. The Board has chosen not to disclose remuneration of Directors on an individual basis as the Board believes that such information will not add significantly to the understanding and evaluation of the Group’s standards of corporate governance.

2012 ANNUAL REPORT

SHAREHOLDERS Communications between the Company and Investors The Company maintains an open channel of communication with its shareholders, institutional investors and the investing public at large with the objectives of inter alia, providing a clear and complete picture of the Group’s performance and position as possible. The Company values feedbacks and dialogues with its investors and believes that a constructive and effective investor relationship is an essential factor in enhancing value for its shareholders. In addition to various announcements made during the year, the timely release of annual reports, circulars to shareholders, press releases and financial results on a quarterly basis provides shareholders and investors with an overview of the Group’s performance and operations. The Company holds analyst results briefings immediately after each announcement of quarterly results to Bursa Securities. The Company also actively responds to requests for discussions with institutional shareholders and analysts, locally and abroad, to provide them better insights of the Group. The Group also takes a proactive approach in reaching out to the investing community via visits to project sites, small group meetings, luncheons and participating in roadshows and investors conferences and such activities are usually spearheaded by the Executive Directors. Such approaches will allow shareholders and investor communities to make more informed investment decisions based not only on past performance but also the future direction of the Group. In addition, the Company’s website, www.glomac.com.my is accessible for the shareholders, investors and members of the public to obtain information on the Group’s announcements, corporate information, operations, financial performance and other matters affecting shareholders’ and investors’ interests. Annual General Meeting (“AGM”) The AGM of the Company serves as the principal forum that provides the opportunity for shareholders to raise questions pertaining to issues in the Annual Report, Audited Financial Statements, and corporate developments in the Group, the resolutions being proposed and on the businesses of the Group. The Chairman as well as the Managing Director/Chief Executive Officer and the external auditors, if so required, will respond to shareholders’ questions during the meeting. In addition, a press conference will generally be held after such general meetings whereat, the Directors would explain and clarify any issues posed by the members of the media regarding the Company, save and except for such information that may be regarded as material or price sensitive in nature, which disclosure shall be made in strict adherence to the disclosure requirements as prescribed under the Main Market LR and other various contractual or statutory rules and provisions that the Group may be subjected to.

GLOMAC BERHAD

CORPORATE GOVERNANCE STATEMENT (Cont’d)

ACCOUNTABILITY AND AUDIT Financial Reporting The Board aims to provide and present a clear, balanced and comprehensive assessment of the Group’s financial performance and prospects at the end of the financial year, primarily through the annual financial statements, quarterly announcement of results to shareholders as well as the Chairman’s statement and the Managing Director’s review of operations in the annual report. The Board is assisted by the Audit Committee to oversee the Group’s financial reporting processes and the quality of its financial reporting. Internal Control The Statement on Internal Control set out on page 53 of this Annual Report provides an overview of the state of internal controls within the Group. Relationship with Auditors The Company maintains a transparent relationship with its auditors and seeks their professional advice to ensure that accounting standards are complied with. The Audit Committee discusses with the external auditors the nature and scope of the audit and reporting obligations before the audit commences. The Audit Committee ensures that the management provides timely responses on all material queries raised by the external auditors after the audit in respect of the accounting records, financial accounts or systems of control. It is a policy of the Audit Committee to meet up with the external auditors at least twice a year without the presence of the Executive Director and the Management to discuss on audit findings, audit plan and the Company’s financial statements. Directors’ Responsibility Statement The Directors are required by the Companies Act, 1965, to prepare financial statements for each financial year which have been made out in accordance with the applicable approved accounting standards and give a true and fair view of the state of affairs of the Group and Company at the end of the financial year and of the results and cash flows of the Group and Company for the financial year. The Directors are satisfied that in preparing the financial statements of the Group and of the Company for the financial year ended 30 April 2012, the Group has used the appropriate accounting policies and applied them consistently. The Directors are also of the view that relevant approved accounting standards have been followed in the preparation of these financial statements.

COMPLIANCE STATEMENT The Board has deliberated, reviewed and approved this Statement on Corporate Governance. The Board considers that the Statement on Corporate Governance provides the information necessary to enable shareholders to evaluate how the Code has been applied. The Board considers and is satisfied that the Company has fulfilled its obligation under the Code, the Main Market LR and all applicable laws and regulations throughout the financial year ended 30 April 2012. This Statement is made in accordance with a resolution of the Board of Directors dated 16 August 2012.

2012 ANNUAL REPORT

ADDITIONAL COMPLIANCE INFORMATION 1.

UTILISATION OF PROCEEDS There were no corporate proposals to raise funds during the financial year ended 30 April 2012.

SHARE BUY-BACK During the financial year, the Company repurchased 29,183,800 of its own shares from the open market of Bursa Securities for a total consideration of RM31,086,853. The shares are being held as treasury shares. Details of the shares repurchased during the financial year are as follows: No of shares bought back/(resold) Month

Highest Price paid/(sold) RM

Lowest Price paid/(sold) RM

Average Price paid/ (received) RM

Total consideration RM

2011 May

1,559,900

1.85

1.69

1.75

2,733,285

June

1,218,300

1.87

1.69

1.79

2,180,002

July

823,400

1.85

1.78

1.82

1,497,504

Aug

1,116,000

1.79

1.57

1.66

1,853,620

Sept

2,620,400

1.56

1.34

1.45

3,789,964

Oct

1,384,500

1.48

1.42

1.45

2,008,602

With effect from 13 October 2011 the ordinary shares of the Company was subdivided from 1 ordinary shares of RM1.00 each into 2 ordinary shares of RM0.50 each. No of shares bought back/(resold) Month

Highest Price paid/(sold) RM

Lowest Price paid/(sold) RM

Average Price paid/ (received) RM

Total consideration RM

2011 Oct

3,260,000

0.85

0.84

0.82

2,662,392

Nov

2,775,000

0.84

0.80

0.82

2,273,110

Dec

10,367,600

0.84

0.81

0.83

8,627,997

Jan

50,000

0.84

0.82

0.83

41,553

Feb

678,700

0.87

0.84

0.86

586,694

Mar

1,649,000

0.88

0.85

0.86

1,413,345

Apr

1,681,000

0.85

0.83

0.84

1,418,785

2012

GLOMAC BERHAD

CORPORATE GOVERNANCE STATEMENT (Cont’d)

OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES The Company has not issued any options, warrants or convertible securities in respect of the financial year ended 30 April 2012.

DEPOSITORY RECEIPT PROGRAMME The Company did not sponsor any depository receipt programme for the financial year ended 30 April 2012.

IMPOSITION OF SANCTIONS/PENALTIES There were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or the management by the regulatory bodies.

NON-AUDIT FEES The amount of non-audit fee incurred for the services rendered to the Company and its Group by its external auditors, Messrs Deloitte KassimChan, for the financial year ended 30 April 2012 is RM5,000.

VARIATION IN RESULTS There were no profit estimate, forecasts or projections made or released by the Company for the financial year ended 30 April 2012.

PROFIT GUARANTEE No profit guarantee was received by the Company in respect of the financial year ended 30 April 2012.

MATERIAL CONTRACTS There were no material contracts entered into by the Company and its subsidiaries involving Directors’ and major shareholders’ interests either subsisting as at 30 April 2012 or entered into since the end of the financial year ended 30 April 2011.

2012 ANNUAL REPORT

10.

RECURRENT RELATED PARTY TRANSACTIONS At the 27th Annual General Meeting of the Company held on 28 September 2011, the Company had obtained a general mandate from its shareholders on the renewal to enter into recurrent related party transactions of a revenue or trading nature (“”RRPT”), which are necessary for its day-to day operations and in the ordinary course of its business with related parties (“RRPT Mandate”). The said RRPT Mandate took effect on 28 September 2011 until the conclusion of the forthcoming Annual General Meeting of the Company. At the forthcoming Annual General Meeting to be held on 16 October 2012, the Company intends to seek its shareholders’ approval to renew the existing RRPT Mandate. The following is the disclosure of the aggregate value of transactions conducted pursuant to the RRPT Mandate during the financial year ended 30 April 2012: Nature of transactions

Transacting Parties

Award of contracts and/or projects for construction works

Glomac Bina Sdn Bhd

Provision of project management fees

Sale of properties by the Group in the ordinary course of business

FDA Sdn Bhd

Directors and Major Shareholders of the Company and its subsidiaries and Persons Connected to them

Related Parties

Relationship

• TSFDM

• TSFDM is a Director & Major Shareholder of Glomac Bina Sdn Bhd

• Interested Directors/Major Shareholders

• Interested Directors are Directors & Major Shareholders of the Company

• DFDI

• DFDI is a Director & Major Shareholder of FDA Sdn Bhd

• Interested Directors/Major Shareholders

• Interested Directors are Directors & Major Shareholders of the Company

Directors and Major Shareholders of the Company and its subsidiaries and Persons Connected to them

Notes: • Tan Sri Dato’ Mohamed Mansor bin Fateh Din (“TSFDM”) • Dato’ Fateh Iskandar bin Tan Sri Dato’ Mohamed Mansor (“DFDI”) • Interested Directors/Major Shareholders – TSFDM, DFDI and Datuk Fong Loong Tuck collectively

Value of Transaction (RM) 161,504,495.39

824,533.07

6,775,698.01

GLOMAC BERHAD

AUDIT COMMITTEE REPORT

The Audit Committee assists the Board in overseeing of the Company’s financial statements and reporting in fulfilling its fiduciary responsibilities relating to internal controls, financial and accounting records and policies as well as financial reporting practices of the Company and its subsidiaries (“Group”).

MEMBERS The Audit Committee comprises 3 Directors, all of whom are Independent Non-Executive Directors: Datuk Ali bin Tan Sri Abdul Kadir (Chairman/Independent Non-Executive Director) Dato’ Ikhwan Salim bin Dato’ Sujak (Senior Independent Non-Executive Director) Chong Kok Keong (Independent Non-Executive Director)

TERMS OF REFERENCE 1.

COMPOSITION a.

The Audit Committee shall consist of not less than three (3) members, all of whom shall be Non-Executive Directors, with a majority being Independent Directors.

At least of one (1) member of the Audit Committee:i.

must be a member of the Malaysian Institute of Accountants; or

ii.

if he is not member of the Malaysian Institute of Accountants, he must have at least 3 years’ working experience and – aa. he must have passed the examinations specified in Part I if the 1st Schedule of the Accountants Act 1967; or bb. he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act 1967; or

iii.

fulfils such other requirements as prescribed or approved by the Exchange.

The Chairman of the Audit Committee shall be an Independent Director.

No alternate director shall be appointed as a member of the Audit Committee.

In the event of any vacancy in Audit Committee resulting in the non-compliance of the Bursa Malaysia Securities Berhad’s (“Bursa Securities”) Main Market Listing Requirements (“Main Market LR”) pertaining the composition of the audit committee, the Board of Directors shall, within three (3) months of that event, fill the vacancy.

2012 ANNUAL REPORT

MEETINGS AND QUORUM During the financial year ended 30 April 2012, the Committee held five (5) meetings. The details of the attendance of each Committee member are as follows:

Name of Audit Committee Member

Total meetings attended

Datuk Ali bin Tan Sri Abdul Kadir

3/5

Dato’ Ikhwan Salim bin Dato’ Sujak

4/5

Chong Kok Keong

5/5

The Audit Committee shall meet at least four (4) times a year, with additional meetings convened as and when necessary and attended by the Department Head charged with the responsibility of the Group’s financial reporting. Attendance of other Directors and employees at any particular Audit Committee Meeting will be at the invitation of the Audit Committee. The presence of the Internal and External Auditor for a meeting will be requested if required. The quorum for any meeting shall be two (2) members of which the majority must be independent directors. 3.

SECRETARY TO AUDIT COMMITTEE AND MINUTES The Company Secretary shall be the secretary of the Committee and as a reporting procedure the minutes shall be circulated to all members of the Board.

AUTHORITY The Committee is authorised by the Board to investigate any activity within its terms of reference. It is authorised to seek any information it requires from any employee for the purpose of discharging its functions and responsibilities. The Committee is also authorised to obtain legal or other independent professional advice and to ensure the attendance of outsiders with relevant experience and expertise if it considers this necessary.

DUTIES AND RESPONSIBILITIES The duties and responsibilities of the Audit Committee shall be: i.

To review the Company’s and the Group’s Quarterly and Annual financial statements before submission to the Board. The review shall focus on: •

any changes in accounting policies and practices

•

major judgmental areas

•

significant and unusual events

•

the going concern assumption

•

compliance with accounting standards and other legal requirements

•

compliance with Main Market LR

ii.

To review with the external auditors their audit plan, scope and nature of audit for the Company and the Group.

iii.

To assess the adequacy and effectiveness of the systems of internal control and accounting control procedures of the Company and the Group by reviewing the external auditors’ management letters and management response.

iv.

To hear from the external auditors problems and reservations arising from their interim and final audits.

GLOMAC BERHAD

AUDIT COMMITTEE REPORT (Cont’d)

To review the internal audit plan, consider the major findings of internal audit, fraud investigations and actions and steps taken by management in response to audit findings and to review the adequacy of the competency of the internal audit function.

vi.

To review any related party transactions that may arise within the Company or the Group.

vii.

To consider the appointment of the external auditors, the terms of reference of their appointment and any question of resignation or dismissal.

viii. To undertake such other responsibilities as may be agreed to by the Committee and the Board.

SUMMARY OF AUDIT COMMITTEE ACTIVITIES In line with the terms of reference of the Committee, activities carried out by the Committee during the financial year ended 30 April 2012 in the discharge of its duties and responsibilities included the following: •

Reviewed with the external auditors on: –

the scope of work and audit plan of the Company and of the Group for the financial year ended 30 April 2012; and

–

significant issues and concerns arising from the audit

•

Reviewed the audited financial statements for financial year ended 30 April 2012

•

Reviewed the unaudited quarterly financial results announcements of the Group prior to the Board of Directors’ approval with particular focus on: –

compliance with accounting standards and regulatory requirements; and

–

the Group’s accounting policies and practices

•

Reviewed the Related Party Transactions entered into by the Company and the Group and the draft proposal to seek shareholders’ mandate for the Company and the Group to enter into recurrent related party transactions of a revenue or trading nature

•

Reviewed with the internal auditors on: –

the scope of work and audit plan of the Company and of the Group for the financial year ended 30 April 2012;

–

significant issues and concerns arising from the audit; and

–

accessing the internal auditor’s findings and the management’s responses thereto and thereafter, making the necessary recommendations or changes to the Board of Directors

•

Considered and recommended to the Board for approval of the audit fees payable to the internal and external auditors

•

Reviewed the Risk Management reports on the risk profile of the Group and the adequacy and integrity of internal control systems to manage these risks

INTERNAL AUDIT FUNCTION The Internal Audit (“IA”) function is considered an integral part of the assurance framework within the Group. IA function plays an intermediary role in that it assists in the discharge of the oversight function which is delegated by the Board to the Audit Committee. It serves as a means of obtaining sufficient assurance of regular review and/or appraisal of the adequacy and effectiveness of the risk, control and governance framework of the Group. The Group outsources its IA function to KPMG Business Advisory Sdn Bhd (“KPMG”), which has adequate resources and appropriate standing to undertake its activities independently and objectively to provide reasonable assurance to the Audit Committee regarding the adequacy and effectiveness of risk management, internal control and governance systems. KPMG reports directly to the Audit Committee. As at 30 April 2012, the reimbursable costs incurred for the audit function is RM70,000.

2012 ANNUAL REPORT

STATEMENT ON INTERNAL CONTROL

Directors of listed companies are required to disclose in their annual reports on the state of internal control of the listed company as a group in accordance with the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa”). The Statement on Internal Control - Guidance for Directors of Public Listed Companies (“Guidance”), a publication of Bursa, provides guidance for directors to make such disclosure.

BOARD RESPONSIBILITY The Board recognises the importance of a sound risk management and internal control system for good corporate governance. The Board acknowledges its overall responsibility for identifying principal risks within the Group and ensuring the implementation of appropriate systems to manage these risks, as well as reviewing the adequacy and integrity of the Group’s internal control system. The Group’s system of internal control is designed to manage the principal business risks that may impede the Group from achieving its business objectives, as well as comply with applicable laws, regulations, rules, directives and guidelines. The system, by its nature, can only provide reasonable but not absolute assurance against any material misstatement or loss occurrence.

RISK MANAGEMENT The Board firmly believes that risk management is critical to the Group’s continued profitability and the enhancement of shareholder value. Thus, the Board appointed an independent professional firm to facilitate the implementation of an enterprise risk management (“ERM”) framework for the Group’s core business division, i.e. the Property Development Division in 2010. The development of the ERM framework largely entailed: •

formalisation of a structured process on risk identification, evaluation and controls, and risk reporting for adoption across the Group; and

•

the development of risk management policy and guidelines for adoption by the Board.

A Risk Management Committee (“RMC”), chaired by the Group MD/ CEO, was formed to oversee the following: •

communicate the Board’s vision, strategy, policy, responsibilities, and reporting lines to all personnel across the Group;

•

identify and communicate to the Board, critical risks (present or potential) the Group faces, their changes, and Management’s action plans to manage the risks;

•

perform risk oversight and review risk profile and organisational performance;

•

aggregating the Group’s risk position and half yearly reporting to the Board on the risk situation/ status;

•

set performance measures for the Group; and

•

provide guidance to the business units and departments on the Group’s risk appetite and capacity, and other criteria which, when exceeded, trigger an obligation to report upward to the Board.

Subsequent to the formalisation and adoption of the ERM framework by the Group, the RMC meets on an ongoing basis to assess and evaluate risks that may impede the Group from achieving its strategic and operational objectives, as well as develop action plans to reduce/mitigate such risks from occurring. The results of the ERM framework and risk updates deliberated during RMC meetings, i.e. the internal controls to address key risks identified, were used as the basis to develop a risk-based internal audit plan for the financial year ended 30 April 2012, which was approved by the Audit Committee.

GLOMAC BERHAD

STATEMENT ON INTERNAL CONTROL (Cont’d)

SYSTEMS OF INTERNAL CONTROL The following key processes have been established by the Board in reviewing the adequacy and integrity of the Group’s system of internal controls: Clear lines of accountability and reporting within the organisation Key responsibilities and accountability in the organisational structure are clearly defined, with clear reporting lines up to the Board and its Committees. Established delegation of authority sets out the appropriate authority levels for decision-making, including matters requiring Board’s approval. Strategic business planning processes Appropriate business plans are established where the Group’s business objectives, strategies and targets are articulated. Business planning and budgeting are undertaken annually, to establish plans and targets against which performance is monitored on an ongoing basis. ISO 9001:2000 Accreditation The Construction Division of the Group has been accorded full ISO 9001:2000 accreditation in line with the Group’s quest in consistently improving the strength of its internal controls. Formalised and Documented Policies and Procedures Internal policies and procedures, which are set out in a series of clearly documented standard operating manuals covering a majority of areas within the Group, are maintained and subject to review as and when necessary. Performance Monitoring & Reporting The Group’s management team monitors and reviews financial and operational results, including monitoring and reporting of performance against the operating plans. The management team formulates and communicates action plans to address areas of concern. Financial Performance The preparation of periodic and annual results and the state of affairs of the Group is reviewed and approved by the Board before release of the same to the regulators whilst the full year financial statements are audited by the external auditors before their issuance to the regulators and shareholders. Quality Control The Group takes continuous efforts in maintaining the quality of products and services. Safety and health regulations, environmental requirements and relevant legislations affecting the Group’s operations are considered and complied with, as appropriate.

2012 ANNUAL REPORT

THE INTERNAL AUDIT FUNCTION Regular internal audits are carried out by an independent professional firm to review the adequacy and integrity of the internal control systems of the business units (operational and non-operational) within the Group. The internal audit function reports directly to the Audit Committee on improvement measures pertaining to internal controls, including a follow-up on the status of Managementâ&#x20AC;&#x2122;s implementation of recommendation by the Internal Audit function. Internal audit reports are submitted to the Audit Committee, who reviews the findings with Management at its quarterly meetings. In addition, the External Auditorsâ&#x20AC;&#x2122; management letters and managementâ&#x20AC;&#x2122;s responsiveness to the control recommendations on deficiencies noted during financial audits provide added assurance that control procedures on matters of finance are in place, and are being followed. In assessing the adequacy and effectiveness of the system of internal controls and accounting control procedures of the Group, the Audit Committee reports to the Board its activities, significant results, findings and the necessary recommendations or changes.

CONCLUSION The Board is of the view that there was no breakdown or weaknesses in the system of internal control of the Group for the financial year ended 30 April 2012 that resulted in a significant loss to the Group. The Board continues to take the necessary measures to ensure that the system of internal control is in place and functioning effectively.

GLOMAC BERHAD

2012 ANNUAL REPORT

FINANCIAL STATEMENTS & REPORTS

DIRECTORS’ REPORT

INDEPENDENT AUDITORS’ REPORT

STATEMENTS OF COMPREHENSIVE INCOME

68 STATEMENTS OF FINANCIAL POSITION 70

STATEMENTS OF CHANGES IN EQUITY

STATEMENTS OF CASH FLOWS

NOTES TO THE FINANCIAL STATEMENTS

152 SUPPLEMENTARY INFORMATION – DISCLOSURE ON REALISED AND UNREALISED PROFITS 153 STATEMENT BY DIRECTORS 153 DECLARATION BY THE OFFICER PRIMARILY RESPONSIBLE FOR THE FINANCIAL MANAGEMENT OF THE COMPANY

GLOMAC BERHAD

DIRECTORS’ REPORT

DIRECTORS’ REPORT The directors of GLOMAC BERHAD have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended 30 April 2012.

PRINCIPAL ACTIVITIES The principal activities of the Company are property development and investment holding. The principal activities of the subsidiary and associated companies are disclosed in Note 42 to the Financial Statements. During the financial year, the Company acquired the following subsidiary companies: Subsidiary companies

Equity interest

Crest Dollars Sdn. Bhd. Glomac Cekap Sdn. Bhd. (formerly known as Kristal Taipan Sdn. Bhd.) Kelana Kualiti Sdn. Bhd. Magical Sterling Sdn. Bhd.

100% 100% 100% 100%

The details of the acquisition of the subsidiary companies are disclosed in Note 17 to the Financial Statements. Other than as stated above, there have been no significant changes in the nature of the principal activities of the Company and of its subsidiary companies during the financial year.

RESULTS The results of the Group and of the Company for the financial year are as follows:

The Group The Company RM RM

Profit before tax Income tax expense

161,067,448 (41,475,321)

80,531,985 (9,316,044)

Profit for the year

119,592,127

71,215,941

Profit attributable to: Owners of the Company Minority interests

85,160,064 34,432,063

71,215,941 –

119,592,127

71,215,941

In the opinion of the directors, the results of operations of the Group and of the Company during the financial year have not been substantially affected by any item, transaction or event of a material and unusual nature other than as disclosed in Note 9 to the Financial Statements.

2012 ANNUAL REPORT

DIVIDENDS The amounts of dividends paid or declared by the Company since the end of the previous financial year were as follows:

In respect of the financial year ended 30 April 2011 as reported in the directorsâ&#x20AC;&#x2122; report of that year: Final dividend of RM0.0500 per share of RM1.00 each, on 294,070,321 ordinary shares less 25% tax, paid on 6 October 2011

11,027,636

In respect of the financial year ended 30 April 2012: First interim dividend of RM0.0275 per share of RM0.50 each, on 670,766,338 ordinary shares less 25% tax, paid on 20 June 2012

13,834,540

The directors propose a final dividend of RM0.0275 per share of RM0.50 each on 673,255,178 ordinary shares, less 25% tax, totalling approximately RM13,885,888 (RM0.0206 per share) in respect of the current financial year. This dividend is subject to the approval of the shareholders at the forthcoming Annual General Meeting of the Company, and has not been included as a liability in the financial statements. Upon approval by the shareholders, the cash dividend payment will be accounted for in equity as an appropriation of retained earnings during the financial year ending 30 April 2013. The proposed dividend for 2012 is payable in respect of all outstanding ordinary shares in issue at a date to be determined by the directors subsequent to the approval of the shareholders at the forthcoming Annual General Meeting.

RESERVES AND PROVISIONS There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the financial statements.

ISSUE OF SHARES AND DEBENTURES During the financial year, the Company completed the subdivision of every one ordinary share of RM1.00 each into two ordinary shares of RM0.50 each. A total of 500,000,000 ordinary shares of RM1.00 each were subdivided into 1,000,000,000 ordinary shares of RM0.50 each. During the financial year, the Company increased its number of ordinary shares and paid up capital from RM297,174,221, comprising 297,174,221 ordinary shares of RM1.00 each to RM304,614,311, comprising 609,228,622 ordinary shares of RM0.50 each by way of: (a) The issuance of 302,471,721 new ordinary shares of RM0.50 each as a consequence of the subdivision of every one (1) ordinary share of RM1.00 each into two (2) ordinary shares of RM0.50 each; and (b) The issuance of 5,297,500 and 4,285,180 new ordinary shares of RM1.00 and RM0.50 each respectively for cash arising from the exercise of Warrants at the following exercise prices per ordinary share: Exercise price (RM)

Number of Warrants

Increase in Paid-up Capital (RM)

1.10 0.55

5,297,500 4,285,180

5,297,500 2,142,590

9,582,680

7,440,090

The new ordinary shares issued rank pari passu in all respects with the then existing ordinary shares of the Company. The Company did not issue any debentures during the financial year.

GLOMAC BERHAD

DIRECTORS’ REPORT (Cont’d)

WARRANTS The Warrants 2007/2012 (“Warrants”) of the Company are constituted by a Deed Poll dated 5 September 2007 (“Deed Poll”). The salient features of the Warrants 2007/2012 are as follows: (a) The issue date of the Warrants is 25 October 2007 and the expiry date is 24 October 2012. Any Warrants not exercised at the expiry date will lapse and cease to be valid for any purpose; (b) As a consequence of the subdivision of every one (1) ordinary share of RM1.00 each into RM0.50 each in the Company, the Exercise Price of the Warrants was adjusted from RM1.10 to RM0.55 for each warrant and an additional 62,009,946 new warrants were issued in accordance with the provision of the Deed Poll; (c) The Warrant holders are not entitled to participate in any distribution and/or offer of further securities in the Company (except for the issue of new warrants pursuant to adjustment as mentioned in item above), until and unless such holders exercise the rights under the Warrants to subscribe for new ordinary shares; (d) Subject to the provision in the Deed Poll, the Company is free to issue shares to shareholders either for cash or as a bonus distribution and further subscription rights upon such terms and conditions as the Company sees fit but the Warrant holders will not have any participating rights in such issues unless otherwise resolved by the Company in general meeting; and (e) All shares to be issued upon the exercise of the Warrants shall, on allotment and issue, rank pari passu in all respects with the then existing shares of the Company except that they shall not be entitled to any dividends, that may be declared prior to the date of exercise of the Warrants, nor shall they be entitled to any distributions or entitlements for which the entitlement date is prior to the date of exercise of the Warrants. The movements in the Company’s Warrants are as follows:

Number of warrants over ordinary shares of RM0.50 each Balance as of Balance as of 1.5.2011 Adjustment Granted Exercised 30.4.2012

Number of unexercised warrants *

67,307,446*

62,009,946

–

(9,582,680)

119,734,712

Over ordinary shares of RM1.00 each

SHARE OPTIONS No options have been granted by the Company to any parties during the financial year to take up unissued shares of the Company. No shares have been issued during the financial year by virtue of the exercise of any option to take up unissued shares of the Company. As at the end of the financial year, there were no unissued shares of the Company under options.

TREASURY SHARES During the financial year, the Company purchased 29,183,800 units of its own shares through purchases on Bursa Malaysia Securities Berhad. The total amount paid for acquisition of the shares was approximately RM31,087,000 and it has been deducted from equity. The repurchased transactions were financed by internally generated funds and the average price paid for the shares were RM0.82 per share. The repurchased shares are held as treasury shares in accordance with Section 67A of the Companies Act, 1965.

2012 ANNUAL REPORT

OTHER STATUTORY INFORMATION Before the statements of comprehensive income and the statements of financial position of the Group and of the Company were made out, the Directors took reasonable steps: (a) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts, and had satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for doubtful debts; and (b) to ensure that any current assets which were unlikely to realise their values as shown in the accounting records in the ordinary course of business had been written down to an amount which they might be expected so to realise. At the date of this report, the Directors are not aware of any circumstances: (a) which would render the amount written off for bad debts or the amount of allowance for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent; or (b) which would render the values attributed to the current assets in the financial statements of the Group and of the Company misleading; or (c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate; or (d) not otherwise dealt with in this report or financial statements which would render any amount stated in the financial statements of the Group and of the Company misleading. At the date of this report, there does not exist: (a) any charge on the assets of the Group and of the Company which has arisen since the end of the financial year which secures the liability of any other person; or (b) any contingent liability of the Group and of the Company which has arisen since the end of the financial year. 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, in the opinion of the directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due. In the opinion of the directors, 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 operations of the Group and of the Company for the succeeding financial year.

GLOMAC BERHAD

DIRECTORS’ REPORT (Cont’d)

DIRECTORS The following directors served on the Board of the Company since the date of the last report: Tan Sri Dato’ Mohamed Mansor bin Fateh Din Datuk Fong Loong Tuck Dato’ Fateh Iskandar bin Tan Sri Dato’ Mohamed Mansor Dato’ Ikhwan Salim bin Dato’ Sujak Datuk Ali bin Tan Sri Abdul Kadir Chong Kok Keong In accordance with Article 84 of the Company’s Articles of Association, Dato’ Fateh Iskandar bin Tan Sri Dato’ Mohamed Mansor and Datuk Ali bin Tan Sri Abdul Kadir retire by rotation at the forthcoming Annual General Meeting of the Company and, being eligible, offer themselves for re-election. Pursuant to Section 129(2) of the Companies Act, 1965, Tan Sri Dato’ Mohamed Mansor bin Fateh Din retires and a resolution will be proposed for his re-appointment as director under the provision of Section 129(6) of the Act to hold office until the conclusion of the following Annual General Meeting of the Company.

DIRECTORS’ INTERESTS The shareholdings in the Company and in related companies of those who were directors at the end of the financial year, as recorded in the Register of Directors’ Shareholdings kept by the Company under Section 134 of the Companies Act, 1965, are as follows:

Balance as of 1.5.2011∆

Number of ordinary shares of RM0.50 each Share Bought/ Balance as of Split* Exercise+ Sold 30.4.2012

Shares in the Company Registered in the name of directors Tan Sri Dato’ Mohamed Mansor bin Fateh Din Datuk Fong Loong Tuck Dato’ Fateh Iskandar bin Tan Sri Dato’ Mohamed Mansor Dato’ Ikhwan Salim bin Dato’ Sujak Datuk Ali bin Tan Sri Abdul Kadir Chong Kok Keong * + ∆

60,985,141 53,234,029

– 140,000

43,398,800 10,400 390,000 331,500

– – 920,000 15,000

– – – – – (10,000)

121,970,282 106,608,058 86,797,600 20,800 1,700,000 668,000

As a result of the subdivision of every one ordinary share of RM1.00 each into two ordinary shares of RM0.50 each which was completed on 13 October 2011 Shares acquired via the exercise of the 5-year 2007/2012 warrants of the Company Number of ordinary shares of RM1.00 each

2012 ANNUAL REPORT

Number of ordinary shares of RM1.00 each Balance as of Balance as of 1.5.2011 Bought Sold 30.4.2012

Shares in a subsidiary company, Glomac Bina Sdn. Bhd. Registered in the name of director Tan Sri Dato’ Mohamed Mansor bin Fateh Din

1,092,000

–

1,092,000

75,000

–

75,000

Shares in a subsidiary company, FDA Sdn. Bhd. Registered in the name of director Dato’ Fateh Iskandar bin Tan Sri Dato’ Mohamed Mansor

By virtue of all the above directors having interest in shares of the Company, they are deemed to have an interest in the shares of all the subsidiary companies of the Company to the extent the Company has an interest.

DIRECTORS’ BENEFITS Since the end of the previous financial year, none of the directors of the Company has received or become entitled to receive any benefit (other than those disclosed as directors’ remuneration in the financial statements) by reason of a contract made by the Company or a related corporation with the 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 any benefit which may be deemed to have arisen by virtue of the transactions as disclosed in Note 39 to the Financial Statements. During and at the end of the financial year, no arrangement subsisted to which the Company was a party whereby directors of the Company might acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.

SIGNIFICANT EVENTS The significant events during the financial year are disclosed in Note 44 to the Financial Statements.

SUBSEQUENT EVENTS The subsequent events are disclosed in Note 45 to the Financial Statements.

GLOMAC BERHAD

DIRECTORS’ REPORT (Cont’d)

AUDITORS The auditors, Messrs. Deloitte KassimChan, have indicated their willingness to continue in office. Signed on behalf of the Board in accordance with a resolution of the Directors,

_______________________________________________________ TAN SRI DATO’ MOHAMED MANSOR BIN FATEH DIN

_______________________________________________________ DATO’ FATEH ISKANDAR BIN TAN SRI DATO’ MOHAMED MANSOR

Kuala Lumpur 16 August 2012

2012 ANNUAL REPORT

INDEPENDENT AUDITORS’ REPORT

TO THE MEMBERS OF GLOMAC BERHAD (Incorporated in Malaysia)

Report on the Financial Statements We have audited the financial statements of GLOMAC BERHAD, which comprise the statements of financial position of the Group and of the Company as of 30 April 2012 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 financial year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 67 to 151. Directors’ Responsibility for the Financial Statements 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 is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors 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 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 that 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 of 30 April 2012 and of their financial performance and cash flows for the year then ended.

Report on Other Legal and Regulatory Requirements In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report that: (a) in our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and the subsidiary companies of which we have acted as auditors, have been properly kept in accordance with the provisions of the Act; (b) we have considered the accounts and auditors’ reports of subsidiary companies, of which we have not acted as auditors, as shown in Note 42 to the financial statements, being accounts that have been included in the financial statements of the Group; (c) we are satisfied that the financial statements of the subsidiary companies that have been consolidated with the financial statements of the Company are in form and content appropriate and proper for the purpose of the preparation of the financial statements of the Group, and we have received satisfactory information and explanations as required by us for these purposes; and (d) the auditors’ report on the accounts of the subsidiary companies were not subject to any qualification and did not include any adverse comment made under sub-section (3) of Section 174 of the Act.

GLOMAC BERHAD

INDEPENDENT AUDITORS’ REPORT

TO THE MEMBERS OF GLOMAC BERHAD (Incorporated in Malaysia) (Cont’d)

Other Reporting Responsibilities The supplementary information set out on page 152 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. 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.

Other Matters 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 towards any other person for the contents of this report.

DELOITTE KASSIMCHAN AF 0080 Chartered Accountants

YEE YOON CHONG Partner - 1829/07/13 (J) Chartered Accountant

Petaling Jaya 16 August 2012

2012 ANNUAL REPORT

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 APRIL 2012

Note Revenue Cost of sales

5 6

The Group 2012 RM

2011 RM

652,406,076 597,477,728 (429,386,843) (436,504,493)

The Company 2012 2011 RM RM 86,111,758 –

30,660,000 –

Gross profit Investment revenue 7 Other operating income Share of (loss)/profit of associated companies 18 Marketing expenses Administration expenses Finance costs 8 Other operating expenses

223,019,233 9,567,341 19,292,537 (810,357) (17,367,163) (33,786,380) (6,312,901) (32,534,862)

160,973,235 3,628,604 5,860,544 2,328,449 (8,224,732) (20,827,699) (6,749,427) (7,496,978)

86,111,758 4,520,680 1,267,521 – – (1,515,736) (7,042,521) (2,809,717)

30,660,000 1,199,433 7,404,277 – – (1,143,663) (6,035,357) (3,142,248)

9 10

161,067,448 (41,475,321)

129,491,996 (36,761,279)

80,531,985 (9,316,044)

28,942,442 (5,404,105)

119,592,127

92,730,717

71,215,941

23,538,337

114,432

–

Profit before tax Income tax expense

Profit for the year Other comprehensive (loss)/income Exchange differences on translation foreign operations

(29,803)

Total comprehensive income for the year

119,562,324

92,845,149

71,215,941

23,538,337

Profit attributable to: Owners of the Company Minority interests

85,160,064 34,432,063

62,980,867 29,749,850

71,215,941 –

23,538,337 –

119,592,127

92,730,717

71,215,941

23,538,337

Total comprehensive income attributable to: Owners of the Company Minority interests

85,130,261 34,432,063

63,095,299 29,749,850

71,215,941 –

23,538,337 –

119,562,324

92,845,149

71,215,941

23,538,337

14.78 13.79

10.74* 9.87*

Earnings per share (sen) 11 Basic Diluted *

The earnings per share for 2011 has been restated for the effects of the share subdivision into two ordinary shares of RM0.50 each for every one share of RM1.00 in the Company as mentioned in Note 31.

The accompanying Notes form an integral part of the Financial Statements.

GLOMAC BERHAD

STATEMENTS OF FINANCIAL POSITION AS OF 30 APRIL 2012

Note

The Group

The Company 2012 2011 RM RM

2012 RM

2011 RM

4,203,472 76,857 59,103,259 511,536,023 – 33,908,005 4,000,000 395,165 17,590,398

7,604,126 80,902 17,323,972 517,493,530 – 61,785,261 4,000,000 395,165 9,092,459

1,544,894 – – – 368,665,577 – – – 3,050,201

2,037,627 – – – 367,563,955 – – – 2,502,747

Total Non-current Assets

630,813,179

617,775,415

373,260,672

372,104,329

Current Assets Inventories 22 Property development costs 23 Accrued billings 25 Trade receivables 26 Other receivables 27 Amount due from subsidiary companies 28 Amount due from associated companies 28 Tax recoverable Deposits, cash and bank balances 29

83,124,305 127,244,124 57,368,828 61,559,939 40,651,282 – 1,217,184 8,786,164 337,411,118

57,733,389 158,245,982 34,156,585 245,847,745 25,502,087 – 3,930,759 6,271,147 176,718,725

1,295,942 – – – 1,726,836 140,742,203 42,184 1,797,398 48,812,415

1,295,942 – – – 240,940 62,100,930 39,603 1,711,930 27,660,035

Non-current assets classified as held for sale 30

717,362,944 4,959,784

708,406,419 28,700,000

194,416,978 –

93,049,380 –

Total Current Assets

722,322,728

737,106,419

194,416,978

93,049,380

1,353,135,907 1,354,881,834

567,677,650

465,153,709

ASSETS Non-current Assets Property, plant and equipment Prepaid lease payments on leasehold land Investment properties Land held for property development Subsidiary companies Associated companies Other investments Goodwill on consolidation Deferred tax assets

13 14 15 16 17 18 19 20 21

TOTAL ASSETS

2012 ANNUAL REPORT

Note

The Group 2012 RM

2011 RM

The Company 2012 2011 RM RM

EQUITY AND LIABILITIES Capital and Reserves Issued capital 31 Share premium Foreign currency translation reserve Treasury shares 31 Retained earnings 32

304,614,311 42,165,380 89,549 (34,921,214) 325,167,660

297,174,221 41,421,371 119,352 (3,834,361) 264,803,505

304,614,311 42,165,380 – (34,921,214) 56,423,398

297,174,221 41,421,371 – (3,834,361) 10,003,366

Equity attributable to owners of the Company Minority interests

637,115,686 61,299,717

599,684,088 64,415,778

368,281,875 –

344,764,597 –

Total Equity

698,415,403

664,099,866

368,281,875

344,764,597

Non-current Liabilities Long term liabilities Deferred tax liabilities

331,095,244 326,794

182,933,692 385,892

78,788,213 –

1,067,951 –

Total Non-current Liabilities

331,422,038

183,319,584

78,788,213

1,067,951

Current Liabilities Trade payables 34 Other payables and accrued expenses 35 Advance billings 25 Amount due to contract customers 24 Amount due to subsidiary companies 28 Amount due to associated companies 28 Hire-purchase and lease payables 33 Borrowings 36 Tax liabilities Dividend payable

79,479,148 60,121,589 55,835,704 – – – 577,562 98,690,937 14,758,986 13,834,540

79,276,599 70,674,477 203,472,322 – – 143,175 954,687 137,693,771 5,277,636 9,969,717

3,234 1,013,805 – – 35,476,245 – 279,738 70,000,000 – 13,834,540

3,234 2,369,308 – – 1,713,328 – 265,574 105,000,000 – 9,969,717

Total Current Liabilities

323,298,466

507,462,384

120,607,562

119,321,161

Total Liabilities

654,720,504

690,781,968

199,395,775

120,389,112

1,353,135,907 1,354,881,834

567,677,650

465,153,709

33 21

TOTAL EQUITY AND LIABILITIES

The accompanying Notes form an integral part of the Financial Statements.

GLOMAC BERHAD

STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 APRIL 2012

The Group Non-distributable Reserves Foreign Distributable Currency Reserve- Issued Share Translation Retained Treasury Capital Premium Reserve Earnings Shares RM RM RM RM RM

Attributable to Owners of the Company RM

Total Equity RM

297,169,721

39,081,873

4,920

221,617,012

34,763,187

588,021,356

Profit for the year Other comprehensive income for the year

– –

– 114,432

62,980,867 –

– –

62,980,867 114,432

29,749,850 –

92,730,717 114,432

Total comprehensive income for the year Share of minority interests in results of associated companies Dividends to owners of the Company (Note 12) Disposal of treasury shares (Note 31) Share buyback (Note 31) Warrants exercised

–

114,432

62,980,867

–

63,095,299

29,749,850

92,845,149

–

– – – 4,500

– 2,339,048 – 450

– – – –

As of 30 April 2011

297,174,221

41,421,371

119,352 264,803,505

(3,834,361) 599,684,088

As of 1 May 2011

119,352 264,803,505

(3,834,361) 599,684,088

As of 1 May 2010

(19,794,374) – – –

(4,615,357) 553,258,169

Minority Interests RM

– (19,794,374) 6,563,652 8,902,700 (5,782,656) (5,782,656) – 4,950

(97,259) – – – –

(97,259) (19,794,374) 8,902,700 (5,782,656) 4,950

64,415,778 664,099,866

297,174,221

41,421,371

Profit for the year Other comprehensive loss for the year

– –

– (29,803)

85,160,064 –

– –

85,160,064 (29,803)

34,432,063 –

119,592,127 (29,803)

Total comprehensive income for the year Share of minority interests in results of associated companies Dividend to minority shareholders Dividends to owners of the Company (Note 12) Share buyback (Note 31) Warrants exercised

–

(29,803)

85,160,064

–

85,130,261

34,432,063

119,562,324

– –

– – 7,440,090

– – 744,009

– – –

304,614,311

42,165,380

89,549

As of 30 April 2012

(24,795,909) – (24,795,909) – (31,086,853) (31,086,853) – – 8,184,099 325,167,660

(34,921,214) 637,115,686

64,415,778 664,099,866

17,205 17,205 (37,565,329) (37,565,329) – – – 61,299,717

(24,795,909) (31,086,853) 8,184,099 698,415,403

2012 ANNUAL REPORT

The Company Issued Capital RM

Nondistributable Reserve Shares Premium RM

As of 1 May 2010 Total comprehensive income for the year Disposal of treasury shares (Note 31) Dividends (Note 12) Share buyback (Note 31) Warrants exercised

297,169,721 – – – – 4,500

39,081,873 – 2,339,048 – – 450

6,259,403 23,538,337 – (19,794,374) – –

(4,615,357) – 6,563,652 – (5,782,656) –

337,895,640 23,538,337 8,902,700 (19,794,374) (5,782,656) 4,950

As of 30 April 2011

297,174,221

41,421,371

10,003,366

(3,834,361)

344,764,597

As of 1 May 2011 Total comprehensive income for the year Dividends (Note 12) Share buyback (Note 31) Warrants exercised

297,174,221 – – – 7,440,090

41,421,371 – – – 744,009

10,003,366 71,215,941 (24,795,909) – –

As of 30 April 2012

304,614,311

42,165,380

56,423,398

The accompanying Notes form an integral part of the Financial Statements.

Distributable ReserveRetained Earnings RM

Treasury Share RM

Total RM

(3,834,361) 344,764,597 – 71,215,941 – (24,795,909) (31,086,853) (31,086,853) – 8,184,099 (34,921,214)

368,281,875

GLOMAC BERHAD

STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 30 APRIL 2012

The Group 2012 RM

2011 RM

The Company 2012 2011 RM RM

CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES Profit for the year 119,592,127 92,730,717 71,215,941 Adjustments for: Income tax expense recognised in profit or loss 41,475,321 36,761,279 9,316,044 Provision for bumiputra quota penalties – 1,069,438 – Provision for bumiputra quota penalties no longer required (1,069,438) – – Depreciation of property, plant and equipment 1,808,727 1,891,935 522,313 Bad debts written off 307,877 55,839 – Finance costs 6,312,901 6,749,427 7,042,521 Unrealised foreign exchange loss/(gain) – (20,365) 440,970 Amortisation of prepaid lease payments on leasehold land 4,045 4,045 – Provision for foreseeable property development losses 21,542,369 1,701,507 – (Gain)/Loss on change in fair value of investment properties (1,484,636) 1,256,595 – Interest income (9,567,341) (3,628,604) (4,520,680) Share of loss/(profit) of associated companies 810,357 (2,328,449) – Gain on disposal of associated company (8,408,149) – – Loss/(Gain) on disposal of property, plant and equipment 20,401 (320,746) – Impairment loss on goodwill on consolidation – 467,680 – Impairment loss on investment in associated company 1,439,102 – – Impairment loss on property, plant and equipment 2,392,003 – – Property, plant and equipment written off 379 – – Allowance for: Trade receivables 108,785 366,492 – Amount due from subsidiary companies – – – Allowance for doubtful debts no longer required (7,207) (30,360) – Reversal of provision for diminution in value of investment in subsidiaries – – (99,110) Dividend income – – (86,111,758) Operating Profit/(Loss) Before Working Capital Changes Decrease/(Increase) in: Land held for property development Associated companies Inventories Property development costs Accrued billings Receivables (Decrease)/Increase in: Payables Advance billings Cash Generated From/(Used In) Operations Tax paid Finance costs paid Net Cash From/(Used In) Operating Activities

175,277,623

136,726,430

(288,077,791) (204,249,481) 2,570,400 105,868 1,395,729 (37,865,897) 246,008,639 187,604,444 (23,212,243) (21,517,338) 168,897,717 (183,620,045)

23,538,337 5,404,105 – – 338,955 – 6,035,357 (1,575,463) – – – (1,199,433) – – (248,497) – – – – – 2,103,506 – (4,400,085) (30,660,000)

(2,193,759)

(663,218)

– (2,581) – – – (1,485,896)

– (1,137) – – – 568,227

(45,538) –

(158,390) –

(11,477,902) (147,636,618)

21,878,029 24,387,094

123,745,554 (43,066,025) (16,946,544)

(76,550,896) (37,460,631) (14,224,609)

(3,727,774) (64,216) (8,352,486)

(254,518) (110,502) (5,648,727)

63,732,985

(128,236,136)

(12,144,476)

(6,013,747)

2012 ANNUAL REPORT

Note

The Group 2012 RM

2011 RM

The Company 2012 2011 RM RM

CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES Purchase of property, plant and equipment * (358,924) (724,268) (29,580) Proceeds from disposal of property, plant and equipment 4,558 320,750 – Proceeds from disposal of associated company 29,063,564 – – Proceeds from disposal of non–current assets held for sale 28,700,000 – – Purchase of shares in subsidiary companies – – (1,002,504) Withdrawal of short–term investments – 84,688,113 – (Increase)/Decrease in amount due from subsidiary companies – – (79,082,243) Interest received 8,288,866 3,600,226 4,520,680 Dividend received from: Subsidiary companies – – 76,227,008 Associated companies – 381,150 – Net cash outflow on acquisition of subsidiary companies (Note 17) – (250,000) (8)

(530,045) 248,500 – – (1,499,996) 24,290,713 5,893,584 1,199,433 23,995,000 – (250,004)

Net Cash From Investing Activities

65,698,064

88,015,971

CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES Drawdown of revolving credits Proceeds from issuance of shares – warrants exercised Decrease/(Increase) in bank balances and deposits pledged Disposal of treasury shares Increase/(Decrease) in amount due to subsidiary companies Repayment of Islamic debt securities Repayment of bonds Drawdown of term loans and bridging loans Repayment of hire-purchase and lease payables Share buyback Dividend paid Dividend paid to minority shareholders

8,680,423 8,184,099 3,313,556 – – – (50,000,000) 157,011,612 (1,184,865) (31,086,853) (20,931,086) (37,565,329)

59,851,468 4,950 (2,359,147) 8,902,700 – (9,000,000) (28,000,000) 64,803,734 (941,739) (5,782,656) (18,634,818) –

15,000,000 8,184,099 94,272 – 33,762,917 – (50,000,000) 78,000,000 (265,574) (31,086,853) (20,931,086) –

50,000,000 4,950 4,044,825 8,902,700 (37,833,882) (9,000,000) (28,000,000) – (106,475) (5,782,656) (18,634,818) –

36,421,557

68,844,492

32,757,775

(36,405,356)

165,852,606 164,007,530

28,624,327 135,383,203

21,246,652 27,565,763

10,928,082 16,637,681

329,860,136

164,007,530

48,812,415

27,565,763

Net Cash From/(Used In) Financing Activities NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR CASH AND CASH EQUIVALENTS AT END OF YEAR *

633,353

53,347,185

During the current financial year, the Group and the Company acquired property, plant and equipment as follows:

The Group

The Company 2012 2011 RM RM

2012 RM

2011 RM

Hire-purchase arrangements Cash payment

466,490 358,924

1,750,040 724,268

– 29,580

1,440,000 530,045

Total (Note 13)

825,414

2,474,308

29,580

1,970,045

The accompanying Notes form an integral part of the Financial Statements.

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS

1. GENERAL INFORMATION 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 Company is principally involved in property development and investment holding. The principal activities of the subsidiary and associated companies are disclosed in Note 42. During the financial year, the Company acquired the following subsidiary companies: Subsidiary companies Crest Dollars Sdn. Bhd. Glomac Cekap Sdn. Bhd. (formerly known as Kristal Taipan Sdn. Bhd.) Kelana Kualiti Sdn. Bhd. Magical Sterling Sdn. Bhd.

Equity interest 100% 100% 100% 100%

The details of the acquisition of the subsidiary companies are disclosed in Note 17. Other than as stated above, there have been no significant changes in the nature of the principal activities of the Company and of its subsidiary companies during the financial year. The financial statements of the Group and of the Company are expressed in Ringgit Malaysia (“RM”). The registered office and principal place of business of the Company is located at Level 15, Menara Glomac, Glomac Damansara, Jalan Damansara, 60000 Kuala Lumpur. The financial statements of the Group and of the Company were authorised for issue by the Board of Directors in accordance with a resolution of the Directors on 16 August 2012.

2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS The financial statements of the Group and of the Company have been prepared in accordance with Financial Reporting Standards (“FRSs”) and the provisions of the Companies Act, 1965 in Malaysia. Adoption of New and Revised Financial Reporting Standards In the current financial year, the Group and the Company have adopted all the new and revised FRSs and Issues Committee Interpretations (“IC Interpretations”) and amendments to FRSs and IC Interpretations issued by the Malaysian Accounting Standards Board (“MASB”) that are effective for annual financial periods beginning on or after 1 May 2011.

2012 ANNUAL REPORT

2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (Contâ&#x20AC;&#x2122;d) FRS 1

First-time Adoption of Financial Reporting Standards (revised)

FRS 1

First-time Adoption of Financial Reporting Standards (Amendments relating to limited exemption from Comparative FRS 7 Disclosures for First-time Adopters)

FRS 1

First-time Adoption of Financial Reporting Standards (Amendments relating to additional exemptions for first-time adopters)

FRS 2

Share-based Payment (Amendments relating to scope of FRS 2 and revised FRS 3)

FRS 2

Share-based Payment (Amendments relating to group cash-settled share-based payment transactions)

FRS 3

Business Combinations (revised)

FRS 5

Non-current Assets held for sale and Discontinued Operations (Amendments relating to plan to sell controlling interest in a subsidiary)

FRS 7

Financial Instruments: Disclosures (Amendments relating to improving disclosures about financial instruments)

FRS 101

Amendments to FRS 101 - Clarification of statement of changes in equity

FRS 127

Consolidated and Separate Financial Statements (revised)

FRS 128

Investments in Associates (revised)

FRS 132

Financial Instruments: Disclosure (Amendments relating classification of rights issue)

FRS 138

Intangible Assets (Amendments relating to additional consequential amendments arising from revised FRS 3)

FRS 139

Financial Instruments: Recognition and Measurement (Amendments relating to additional consequential amendments arising from revised FRS 3 and revised FRS 127)

Improvements to FRSs issued in 2010 IC Interpretation 4

Determining whether an Arrangement contains a Lease

IC Interpretation 9

Reassessment of Embedded Derivatives (Amendments relating to additional consequential amendments arising from revised FRS 3)

IC Interpretation 12 Service Concession Arrangements IC Interpretation 16 Hedges of a Net Investment in a Foreign Operation IC Interpretation 17 Distributions of Non-cash Assets to Owners IC Interpretation 18 Transfers of Assets from Customers The adoption of these new and revised FRSs and IC Interpretations did not result in significant changes in the accounting policies of the Group and of the Company and has no significant effect on the financial performance or position of the Group and of the Company except for those discussed below: Standards affecting presentation and disclosure Amendments to FRS 7 Financial Instruments: Disclosures (Improving disclosures about financial instruments) The amendments to FRS 7 expand the disclosures required in respect of fair value measurements and liquidity risk. The Group has elected not to provide comparative information for these expanded disclosures in the current year in accordance with the transitional reliefs offered in these amendments.

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (Cont’d) Amendments to FRS 101 Presentation of Financial Statements The amendments to FRS 101 clarify that an entity may choose to present the required analysis of items of other comprehensive income either in the statement of changes in equity or in the notes to the financial statements. In the current year, for each component of equity, the Group and the Company have chosen to present such analysis in the Group’s and the Company’s statement of changes in equity. These amendments have been applied retrospectively. Standards affecting the financial performance and/or financial position FRS 3 - Business Combinations (revised) The revised FRS 3: •

allows a choice on a transaction-by-transaction basis for the measurement of non-controlling interests (previously referred to as ‘minority’ interests) either at fair value or at the non-controlling’s share of the fair value of the identifiable net assets of the acquiree;

•

changes the recognition and subsequent accounting requirements for contingent consideration. Under the previous version of the Standard, contingent consideration was recognised at the acquisition date only if payment of the contingent consideration was probable and it could be measured reliably; any subsequent adjustments to the contingent consideration were always made against the cost of the acquisition. Under the revised Standard, contingent consideration is measured at fair value at the acquisition date; subsequent adjustments to the consideration are recognised against the cost of the acquisition only to the extent that they arise from new information obtained within the measurement period (a maximum of 12 months from the acquisition date) about the fair value at the acquisition date. All other subsequent adjustments to contingent consideration classified as an asset or a liability are recognised in statements of comprehensive income;

•

requires the recognition of a settlement gain or loss where the business combination in effect settles a pre-existing relationship between the Group and the acquiree; and

•

requires acquisition-related costs to be accounted for separately from the business combination, generally leading to those costs being recognised as an expense in profit or loss as incurred, whereas previously they were accounted for as part of the cost of the acquisition.

Upon adoption, this Standard was applied prospectively and therefore, no restatements were required in respect of transactions prior to the date of adoption.

2012 ANNUAL REPORT

2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (Cont’d) FRS 127 – Consolidated and Separate Financial Statements (revised) The revised Standard will affect the Group’s accounting policies regarding changes in ownership interests in its subsidiaries that do not result in a change in control. Previously, in the absence of specific requirements in FRSs, increases in interests in existing subsidiaries were treated in the same manner as the acquisition of subsidiaries, with goodwill or a bargain purchase gain being recognised, where appropriate; for decreases in interests in existing subsidiaries regardless of whether the disposals would result in the Group losing control over the subsidiaries, the difference between the consideration received and the carrying amount of the share of net assets disposed of was recognised in profit or loss. Under FRS 127 (revised), increases or decreases in ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are dealt with in equity and attributed to the owners of the parents, with no impact on goodwill or profit or loss. When control of a subsidiary is lost as a result of a transaction, event or other circumstance, FRS 127 (revised) requires that the Group derecognises all assets, liabilities and minority interests at their carrying amounts. Any retained interest in the former subsidiary is recognised at its fair value at the date when control is lost, with the resulting gain or loss being recognised in profit or loss. Upon adoption, this Standard was applied prospectively and therefore, no restatements were required in respect of transactions prior to the date of adoption. FRS 128 (revised in 2010) Investments In Associates (Revised) The principle adopted under FRS 127 (revised in 2010) that a loss of control is recognised as a disposal and re-acquisition of any retained interest at fair value is extended by consequential amendments to FRS 128. Therefore, when significant influence is lost, the investor measures any investment retained in the former associate at fair value, with any consequential gain or loss recognised in profit or loss. As part of Improvements to FRSs issued in 2010, FRS 128 (revised in 2010) has been amended to clarify that the amendments to FRS 128 regarding transactions where the investor loses significant influence over an associate should be applied prospectively. The Group has applied the amendments to FRS 128 (revised in 2010) in the current year.

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (Cont’d) FRSs and IC Interpretations in Issue But Not Yet Effective At the date of authorisation for issue of these financial statements, the new and revised Standards and IC Interpretation which were in issue but not yet effective and not early adopted by the Company are as listed below: FRS 7

Financial Instruments: Disclosures (Amendments relating to Disclosures - Transfers of Financial Assets)1

FRS 7

Financial Instruments: Disclosures (Amendments relating to Mandatory Effective Date of FRS 9 (IFRS 9 issued by IASB in November 2009 and October 2010 respectively) and Transition Disclosures)2

FRS 7

Financial Instruments: Disclosures (Amendments relating to Disclosures - Offsetting Financial Assets and Financial Liabilites)3

FRS 9

Financial Instruments (IFRS 9 issued by IASB in November 2009)4

FRS 9

Financial Instruments (IFRS 9 issued by IASB in October 2010)4

FRS 10

Consolidated Financial Statements3

FRS 11

Joint Arrangements3

FRS 12

Disclosures of Interests in Other Entities3

FRS 13

Fair Value Measurement3

FRS 101

Presentation of Financial Statements (Amendments relating to Presentation of Items of Other Comprehensive Income)5

FRS 112

Income Taxes (Amendments relating to Deferred Tax - Recovery of Underlying Assets)1

FRS 119

Employee Benefits (2011)3

FRS 124

Related Party Disclosures (Revised)1

FRS 127

Separate Financial Statements (2011)3

FRS 128

Investments in Associates and Joint Ventures (2011)3

FRS 132

Financial Instruments: Presentation (Amendments relating to Offsetting Financial Assets and Financial Liabilities)6

IC Interpretation 14 FRS 119 – The limit on a Defined Benefit Asset, Minimum Funding Requirements and Their Interaction (Amendments relating to prepayments of a minimum funding requirement)7 IC Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments7 IC Interpretation 20 Stripping Costs in the Production Phase of a Surface Mine3 3 4

7 5

Effective for annual periods beginning on or after 1 January 2012 Effective immediately on issuance date of 1 March 2012 Effective for annual periods beginning on or after 1 January 2013 Effective for annual periods beginning on or after 1 January 2015 instead of 1 January 2013 immediately upon the issuance of Amendments to FRS 9 (IFRS 9 issued by IASB on November 2009 and October 2010 respectively) and FRS 7 relating to “Mandatory Effective Date of FRS 9 and Transition Disclosures” on 1 March 2012 Effective for annual periods beginning on or after 1 July 2012 Effective for annual periods beginning on or after 1 January 2014 Effective for annual periods beginning on or after 1 July 2011

Consequential amendments were also made to various FRSs as a result of these new/revised FRSs. The Directors anticipate that abovementioned Standards and IC Interpretations will be adopted in the annual financial statements of the Group and of the Company when they become effective and that the adoption of these Standards and IC Interpretations will have no material impact on the financial statements of the Group and of the Company in the period of initial application.

2012 ANNUAL REPORT

2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (Cont’d) Malaysian Financial Reporting Standard (“MFRS Framework”) On 19 November 2011, the MASB issued a new MASB approved accounting framework, the MFRS Framework in conjunction with its planned convergence of FRSs with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board on 1 January 2012. The MFRS Framework is a fully IFRS-compliant framework, equivalent to IFRSs which is mandatory for adoption by all Entities Other Than Private Entities for annual periods beginning on or after 1 January 2012, with the exception for Transitioning Entities. Transitioning Entities, being entities which are subject to application of MFRS 141 Agriculture and/or IC Interpretation 15 Agreements for Construction of Real Estate are given an option to defer adoption of the MFRS Framework for an additional one year. Transitioning Entities also include those entities that consolidate, equity account or proportionately consolidate an entity that has chosen to continue to apply the FRS Framework for annual periods beginning on or after 1 January 2012. Subsequently, on 30 June 2012, MASB extended the aforementioned transitional period for another one year. Thus, Transitioning Entities are given an additional option to continue to apply the FRS Framework for annual periods beginning on or after 1 January 2013. Consequently, the MFRS Framework will be mandatory for application for annual periods beginning on or after 1 January 2014. Accordingly, the Group and the Company, being Transitioning Entities, have availed themselves of this transitional arrangement and will continue to apply FRSs in their next set of financial statements. Therefore, the Group and the Company will be required to apply MFRS 1 First-time Adoption of Malaysian Financial Reporting Standard (“MFRS 1”) in its financial statements for the financial year ending 30 April 2015, being the first set of financial statements prepared in accordance with the new MFRS Framework. Further, an explicit and unreserved statement of compliance with IFRSs will be made in these financial statements.

3. SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Accounting The financial statements of the Group and of the Company have been prepared under the historical cost convention unless otherwise indicated in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for assets. (b) Revenue Recognition Revenue is recognised when it is probable that the economic benefits associated with the transaction will flow to the Group and the Company and the amount of the revenue can be measured reliably. Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business. (i) Sale of development properties Revenue from sale of residential and commercial properties are accounted for by the stage of completion method as described in Note (o). Sale of completed property units is recognised when the risk and reward associated with ownership transfers to the property purchasers. (ii) Construction contracts Revenue from construction contracts is accounted for by the stage of completion method as described in Note (p).

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

3. SIGNIFICANT ACCOUNTING POLICIES (Cont’d) (b) Revenue Recognition (Cont’d) (iii) Project management fee Project management fee is recognised when such service is rendered. (iv) Dividend income Dividend income is recognised when the right to receive payment is established. (v) Rental income Rental income is recognised over the tenure of the rental period of properties. (vi) Interest income Interest income is recognised when it is probable that the economic benefits will flow to the Group and the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount on initial recognition. (c) Employee Benefits (i) Short-term benefits 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 and of the Company. Short-term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences and short-term non-accumulating compensated absences such as sick leave are recognised when the absences occur. (ii) Defined contribution plan As required by law, companies in Malaysia make contributions to the Employees Provident Fund (“EPF”), a statutory defined contribution plan for all their eligible employees based on certain prescribed rates of the employees’ salaries. Such contributions are recognised as an expense in profit or loss as incurred. Once the contributions have been paid, the Group and the Company have no further payment obligations. (d) Foreign currency The individual financial statements of each group entity are presented in the currency of the primary economic environment in which the entity operates (its functional currency). For the purpose of the financial statements of the Group, the results and financial position of each entity are expressed in RM, which is the functional currency of the Company and the presentation currency for the financial statements of the Group. In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

2012 ANNUAL REPORT

3. SIGNIFICANT ACCOUNTING POLICIES (Cont’d) (d) Foreign currency (Cont’d) For the purpose of presenting financial statements of the Group, the assets and liabilities of the Group’s foreign operations are expressed in RM using exchange rates prevailing at the end of the reporting period. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during the period, in which case the exchange rates of the dates of the transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity (attributed to minority interests as appropriate). On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation, loss of joint control over a jointly controlled entity that includes a foreign operation, or loss of significant influence over an associate that includes a foreign operation), all of the accumulated exchanges differences in respect of that operation attributable to the Group are reclassified to profit or loss. Any exchange differences that have previously been attributed to minority interests are derecognised, but they are not reclassified to profit or loss. (e) Income Taxes Income tax in profit or loss for the year comprises current and deferred tax. Current tax is the expected amount of income taxes payable in respect of the taxable profit for the year and is measured using the tax rates that have been enacted or substantively enacted by the end of the reporting period. Deferred tax is provided for, using the “liability” method, on temporary differences as of the end of reporting period between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax liabilities are recognised for all taxable temporary differences while deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Deferred tax is not recognised if the temporary difference arises from goodwill or negative goodwill or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither the accounting profit nor taxable profit. Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted by the end of the reporting period. Deferred tax is recognised in profit or loss except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also charged or credited directly in equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient future taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group and the Company intend to settle their current tax assets and liabilities on a net basis.

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

3. SIGNIFICANT ACCOUNTING POLICIES (Cont’d) (f ) Basis of Consolidation The financial statements of the Group incorporate the financial statements of the Company and entities controlled by the Company (its subsidiary companies). Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The financial statements of the Group incorporate the financial statements of the Company and of its subsidiary companies as mentioned in Note 42 made up to 30 April 2012. The results of subsidiary companies acquired or disposed of during the year are included in profit or loss from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiary companies to bring their accounting policies into line with those used by other members of the Group. All significant intercompany transactions, balances and resulting unrealised profits are eliminated on consolidation. Unrealised losses are eliminated on consolidation unless costs cannot be recovered. The financial statements of the Group reflect external transactions only. Non-controlling interests in subsidiaries are identified separately from the Group’s equity therein. The interests of non-controlling shareholders may be initially measured either at fair value or at the non-controlling interests’ proportionate share of the fair value of the acquiree’s identifiable net assets. The choice of measurement basis is made on an acquisitionby-acquisition basis. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of subsequent changes in equity. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance. Changes in the Group’s interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted at the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company. Where the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. Amounts previously recognised in other comprehensive income in relation to the subsidiary are accounted for in the same manner as would be required if the relevant assets or liabilities were disposed of. The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under FRS 139 Financial Instruments : Recognition and Measurement or, when applicable, the cost on initial recognition of an investment in an associate or jointly controlled entity.

2012 ANNUAL REPORT

3. SIGNIFICANT ACCOUNTING POLICIES (Cont’d) (g) Business Combinations Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The consideration for each acquisition is measured at the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred. Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent consideration arrangement, measured at its acquisition-date fair value. Subsequent changes in such fair values are adjusted against the cost of acquisition where they qualify as measurement period adjustments. All other subsequent changes in the fair value of contingent consideration classified as an asset or liability are accounted for in accordance with relevant FRSs. Changes in the fair value of contingent consideration classified as equity are not recognised. Where a business combination is achieved in stages, the Group’s previously held interests in the acquired entity are remeasured to fair value at the acquisition date and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss, where such treatment would be appropriate if that interest were disposed of. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under FRS 3 (revised) are recognised at their fair value at the acquisition date, except that: •

deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognised and measured in accordance with FRS 112 Income Taxes and FRS 119 Employee Benefits respectively;

•

liabilities or equity instruments related to the replacement by the Group of an acquiree’s share-based payment awards are measured in accordance with FRS 2 Share-based Payment; and

•

assets (or disposal groups) that are classified as held for sale in accordance with FRS 5 Non-current Assets Held for Sale and Discontinued Operations are measured in accordance with that Standard.

If the initial accounting for a business combination is incomplete by end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items of which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period, or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognised as of that date. The measurement period is the period from the date of acquisition to the date the Group obtains complete information about facts and circumstances that existed as of the acquisition date, and is subject to a maximum of one year. (h) Investments in Subsidiary Companies Investments in unquoted shares of subsidiary companies, which are eliminated on consolidation, are stated in the Company’s financial statements at cost. When there is an indication of impairment in the value of the investment, the carrying amount of the investment is assessed and written down immediately to its recoverable amount.

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

3. SIGNIFICANT ACCOUNTING POLICIES (Cont’d) (i) Investments in Associated Company An associated company is an entity over which the Group has significant influence and that is neither a subsidiary company nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. Investments in associated companies are accounted for in the financial statements of the Group using the equity method of accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance with FRS 5 Non-current Assets Held for Sale and Discontinued Operations. Under the equity method, investments in associated company are carried in the consolidated statement of financial position at cost as adjusted for post-acquisition changes in the Group’s share of the net assets of the associated company, less any impairment in the value of individual investments. Losses of an associated company in excess of the Group’s interest in that associated company (which includes any long-term interests that, in substance, form part of the Group’s net investment in the associated company) are not recognised unless the Group has incurred legal or constructive obligations or made payments on behalf of the associated company. Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of the associated company recognised at the date of acquisition is recognised as goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of the investment. Any excess of the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognised immediately in profit or loss. Where a group entity transacts with an associated company of the Group, profits and losses are eliminated to the extent of the Group’s interest in the relevant associated company. (j) Goodwill Goodwill arising on the acquisition of a subsidiary company represents the excess of the cost of acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the subsidiary company recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period. On the disposal of a subsidiary company, the attributable amount of goodwill is included in the determination of the gain or loss on disposal.

2012 ANNUAL REPORT

3. SIGNIFICANT ACCOUNTING POLICIES (Cont’d) (k) Impairment of Assets Excluding Goodwill At the end of each reporting period, the Group reviews the carrying amounts of its assets to determine whether there is any indication that these assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Recoverable amount is the higher of fair value less costs to sell and 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 the current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss. (l) Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note (k). Construction in progress is not depreciated. Depreciation of other property, plant and equipment is computed on a straight-line basis to write-off the cost of the property, plant and equipment over their estimated useful lives. The principal annual rates used are as follows: Building and improvements Furniture and fittings Office equipment Computers

6 years to 30 years 10% – 20% 10% – 20% 20% – 33 1/3%

Motor vehicles

20%

Plant and machinery

20%

At the end of each reporting period, the residual values, useful lives and depreciation method of the property, plant and equipment are reviewed, and the effects of any changes are recognised prospectively. Gain or loss arising on the disposal or retirement of an asset is determined as the difference between the estimated net disposal proceeds and the carrying amount of the asset, and is recognised in profit or loss.

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Contâ&#x20AC;&#x2122;d)

3. SIGNIFICANT ACCOUNTING POLICIES (Contâ&#x20AC;&#x2122;d) (m) Investment Property Investment property, which is property held to earn rentals and/or for capital appreciation, is measured initially at cost, including transaction costs. Subsequent to initial recognition, investment property is measured at fair value. Gains or losses arising from changes in the fair value of investment property are based on active market prices, adjusted, if necessary, for any difference in the nature, location or conditions of the specific asset. If this information is not available, the Group uses alternative valuation methods such as recent prices on less active markets or discounted cash flow projections. Changes in fair value are included in profit or loss in the period in which they arise. On the disposal of the investment property, or when it is permanently withdrawn from use and no economic benefits are expected from its disposal, it shall be derecognised (eliminated from the statement of financial position). The difference between the net proceeds and the carrying amount is recognised in profit or loss in the period of the retirement or disposal. (n) Non-Current Assets Held for Sale Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the non-current asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification. Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell. Any differences are included in profit of loss. (o) Land Held for Property Development and Property Development Costs Land and development expenditure are classified as property development costs under current assets when significant development work has been undertaken and is expected to be completed within the normal operating cycle. Property development revenue are recognised for all units sold using the percentage of completion method, by reference to the stage of completion of the property development projects at the end of the reporting period as measured by the proportion that development costs incurred for work performed to-date bear to the estimated total property development costs on completion. When the outcome of a property development activity cannot be estimated reliably, property development revenue is recognised to the extent of property development costs incurred that are probable of recovery. Any anticipated loss on property development project (including costs to be incurred over the defects liability period), is recognised as an expense immediately as foreseeable losses. Accrued billings represent the excess of property development revenue recognised in profit or loss over the billings to purchasers while advance billings represent the excess of billings to purchasers over property development revenue recognised in profit or loss. Land held for development and costs attributable to the development activities which are held for future development where no significant development has been undertaken is stated at cost less impairment costs (if any). Such assets are transferred to property development activities when significant development has been undertaken and the development is expected to be completed within the normal operating cycle.

2012 ANNUAL REPORT

3. SIGNIFICANT ACCOUNTING POLICIES (Contâ&#x20AC;&#x2122;d) (p) Construction Contracts Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the end of the reporting period, measured as the physical proportion that contract costs incurred for work performed to date bear to the estimated total contract costs, except where this would not be representative of the stage of completion. Variations in contract work, claims and incentive payments are included to the extent that they have been agreed with the customer. Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that are probable of recovery. Contract costs are recognised as expenses in the period in which they are incurred. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately as allowance for foreseeable loss. When costs incurred on construction contracts plus recognised profits (less recognised losses) exceeds billings to contract customers, the balance is shown as amount due from contract customers. When billings to contract customers exceed costs incurred plus recognised profits (less recognised losses), the balance is shown as amount due to contract customers. (q) Borrowing Costs Interest incurred on borrowings related to property development activities or construction of assets are capitalised as part of the cost of the asset during the period of time required to complete and prepare the asset for its intended use. Capitalisation of borrowing costs ceases when the assets are ready for their intended use or sale. All other borrowing costs are recognised as an expense in profit or loss in the period in which they are incurred. (r) Inventories Inventories comprise completed property units for sale and are valued at the lower of cost (determined on the specific identification basis) and net realisable value. (s) Property, Plant and Equipment Under Hire-Purchase Arrangements Property, plant and equipment acquired under hire-purchase arrangements are recognised in the financial statements and the corresponding obligations treated as liabilities. Finance charges are allocated to profit or loss to give a constant periodic rate of interest on the remaining hire-purchase liabilities.

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Contâ&#x20AC;&#x2122;d)

3. SIGNIFICANT ACCOUNTING POLICIES (Contâ&#x20AC;&#x2122;d) (t) Leases (i) Finance Lease Assets acquired under leases which transfer substantially all of the risks and rewards incident to ownership of the assets are capitalised under property, plant and equipment. The assets and the corresponding lease obligations are recorded at their fair values or, if lower, at the present value of the minimum lease payments of the leased assets at the inception of the respective leases. In calculating the present value of the minimum lease payments, the discount factor used is the interest rate implicit in the lease, when it is practicable to determine; otherwise, the Groupâ&#x20AC;&#x2122;s incremental borrowing rate is used. Lease payments are apportioned between the finance costs and the reduction of the outstanding liability. Finance costs, which represent the difference between the total leasing commitments and the fair value of the assets acquired, are recognised as an expense in profit or loss over the term of the relevant lease period so as to produce a constant periodic rate of charge on the remaining balance of the obligations for each accounting period. The depreciation policy for leased assets and assets under hire-purchase is consistent with that for depreciable property, plant and equipment as described in Note 3(l). (ii) Operating Lease Leases of assets where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating lease are charged to profit or loss over the lease period. (u) Prepaid Lease Payments on Leasehold Land Lease of land with title not expected to pass to the lessee by the end of the lease term is treated as operating lease as land normally has an indefinite economic life. The up-front payments made on entering into a lease or acquiring a leasehold land that is accounted for as an operating lease are accounted for as prepaid lease payments that are amortised over the lease term on a straight line basis except for leasehold land classified as investment property. (v) Provisions Provisions are made when the Group and the Company have a present legal or constructive obligation as a result of past events, when it is probable that an outflow of resources will be required to settle the obligation and when a reliable estimate of the amount can be made. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

2012 ANNUAL REPORT

3. SIGNIFICANT ACCOUNTING POLICIES (Cont’d) (w) Shares Bought Back Shares bought back held as treasury shares are accounted for on the cost method and presented as a deduction from equity. Should such shares be cancelled, their nominal amounts will be eliminated, and the differences between their cost and nominal amounts will be taken to reserves as appropriate. When such shares are subsequently sold or reissued, any consideration received, net of any directly attributable incremental external cost and the deferred tax effects, is recognised in equity. (x) Cash and Cash Equivalents The Group and the Company adopt the indirect method in the preparation of statements of cash flows. For the purposes of the statements of cash flows, cash and cash equivalents include cash on hand and at bank and shortterm highly liquid investments which have an insignificant risk of changes in value, net of outstanding bank overdrafts. (y) Financial Instruments Financial instruments are recognised in the statement of financial position when, and only when, the Group or the Company becomes a party to the contractual provisions of the instruments. Where the purchase or sale of a financial asset is under a contract whose terms require delivery of the financial asset within the timeframe established by the market concerned, such financial assets are recognised and derecognised on trade date. Financial instruments are initially measured at fair value, plus transaction costs, except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value. Financial Assets Financial assets are classified into the following specified categories: financial assets ‘at fair value through profit or loss’ (FVTPL), ‘held-to-maturity’ investments, ‘available-for-sale’ (AFS) financial assets and, ‘loans and receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

3. SIGNIFICANT ACCOUNTING POLICIES (Cont’d) (y) Financial Instruments (Cont’d) (i) Effective interest method The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, or (where appropriate) a shorter period, to the net carrying amount on initial recognition. Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as at FVTPL. (ii) Financial assets at FVTPL Financial assets are classified as at FVTPL when the financial asset is either held for trading or it is designated as at FVTPL. A financial asset is classified as held for trading if: •

it has been acquired principally for the purpose of selling it in the near term; or

•

on initial recognition it is part of a portfolio of identified financial instruments that the Group and the Company manage together and has a recent actual pattern of short-term profit-taking; or

•

it is a derivative that is not designated and effective as a hedging instrument.

A financial asset other than a financial asset held for trading may be designated as at FVTPL upon initial recognition if: •

such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or

•

the financial asset forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

•

it forms part of a contract containing one or more embedded derivatives, and FRS 139 Financial Instruments: Recognition and Measurement permits the entire combined contract (asset or liability) to be designated as at FVTPL.

Financial assets at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset and is included in the “other gains and losses” line item in profit or loss. (iii) Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity dates that the Group and the Company have the positive intent and ability to hold to maturity. Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using the effective interest method less any impairment, with revenue recognised on an effective yield basis.

2012 ANNUAL REPORT

3. SIGNIFICANT ACCOUNTING POLICIES (Cont’d) (y) Financial Instruments (Cont’d) (iv) AFS financial assets AFS financial assets are non-derivatives that are either designated as available-for-sale or are not classified as loans and receivables, held-to-maturity investments or financial assets at FVTPL. All AFS assets are measured at fair value at the end of the reporting period. Gains and losses arising from changes in fair value are recognised in other comprehensive income and accumulated in the investments revaluation reserve, with the exception of impairment losses, interest calculated using the effective interest method, and foreign exchange gains and losses on monetary assets, which are recognised in profit or loss. Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously accumulated in the investments revaluation reserve is reclassified to profit or loss. AFS equity investments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured and derivatives that are linked to and must be settled by delivery of such unquoted equity investments are measured at cost less any identified impairment losses at the end of the reporting period. Dividends on AFS equity instruments are recognised in profit or loss when the Group’s right to receive the dividends is established. The fair value of AFS monetary assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. The foreign exchange gains and losses that are recognised in profit or loss are determined based on the amortised cost of the monetary asset. Other foreign exchange gains and losses are recognised in other comprehensive income. (v) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. (vi) Impairment of financial assets Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected. For equity investments classified as AFS, a significant or prolonged decline in the fair value of the security below its cost is considered to be objective evidence of impairment. For all other financial assets, including redeemable bonds classified as AFS and finance lease receivables, objective evidence of impairment could include: •

significant financial difficulty of the issuer or counterparty; or

•

default or delinquency in interest or principal payments; or

•

it becoming probable that the borrower will enter bankruptcy or financial re-organisation.

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

3. SIGNIFICANT ACCOUNTING POLICIES (Cont’d) (y) Financial Instruments (Cont’d) (vi) Impairment of financial assets (Cont’d) For certain categories of financial asset, such as trade receivables, assets that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Group’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period ranging from 14 to 60 days, as well as observable changes in national or local economic conditions that correlate with default on receivables. For financial assets carried at amortised cost, the amount of the impairment loss recognised is 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 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 is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss. When an AFS financial asset is considered to be impaired, cumulative gains or losses previously recognised in other comprehensive income are reclassified to profit or loss in the period. With the exception of AFS equity instruments, 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 through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised. In respect of AFS equity securities, impairment losses previously recognised in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognised in other comprehensive income. (vii) Derecognition of financial assets The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

2012 ANNUAL REPORT

3. SIGNIFICANT ACCOUNTING POLICIES (Cont’d) Financial Liabilities and equity instruments issued by the Group and the Company Classification as debt or equity Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement. Equity instruments An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group and the Company are recognised at the proceeds received, net of direct issue costs. Ordinary shares are equity instruments. Ordinary shares are recorded at the proceeds received, net of direct attributable transactions costs. Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared. Financial liabilities Financial liabilities are classified as either financial liabilities ‘at FVTPL’ or ‘other financial liabilities’. Financial liabilities at FVTPL Financial liabilities are classified as at FVTPL when the financial liability is either held for trading or it is designated as at FVTPL. A financial liability is classified as held for trading if: •

it has been acquired principally for the purpose of repurchasing it in the near term; or

•

on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has a recent actual pattern of short-term profit-taking; or

•

it is a derivative that is not designated and effective as a hedging instrument.

A financial liability other than a financial liability held for trading may be designated as at FVTPL upon initial recognition if: •

such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or

•

the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

•

Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability and is included in the ‘other gains and losses’ line item in the statements of comprehensive income/profit or loss.

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

3. SIGNIFICANT ACCOUNTING POLICIES (Cont’d) Financial Liabilities and equity instruments issued by the Group and the Company (Cont’d) Other financial liabilities The Group’s and the Company’s other financial liabilities include trade payables, other payables and accrued expenses, amount due to subsidiary companies, amount due to associated companies, hire-purchase and lease payables, borrowings and dividend payable, are initially measured at fair value, net of transaction costs and subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or a shorter period, to the net carrying amount on initial recognition. Derecognition of financial liabilities The Group and the Company derecognise financial liabilities when, and only when, the Group’s and Company’s obligations are discharged, cancelled or they expire. Financial Guarantee Contracts A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtors fails to make payment when due. Financial guarantee contracts are recognised initially as a liability at fair value, net of transaction costs. Subsequent to initial recognition, financial guarantee contracts are recognised as income in profit or loss over the period of the guarantee. If the debtor fails to make payment relating to financial guarantee contract when it is due and the Group, as the issuer, is required to reimburse the holder for the associated loss, the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the end of the reporting period and the amount initially recognised less cumulative amortisation.

2012 ANNUAL REPORT

4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (a) Critical judgments in applying the Group’s accounting policies In the process of applying the Group’s accounting policies, which are described in Note 3 above, management is of the opinion that there are no instances of application of judgment which are expected to have a significant effect on the amounts recognised in the financial statements except as discussed below: (i) Revenue Recognition on Property Development and Construction Contracts The Group recognises property development and contract revenue in profit or loss by using the stage of percentage-ofcompletion method, which is standard for similar industries. The stage of completion is determined by the proportion that property development and contract costs incurred for work performed to date bear to the estimated total property development and contract costs. Estimated losses are recognised in full when determined. Property development and contract revenue and expenses estimates are reviewed and revised periodically as work progresses and as variation orders are approved. Significant judgment is required in determining the stage of completion, the extent of the property development and contract costs incurred, the estimated total property development and contract revenue and costs, as well as the recoverability of the project undertaken. In making the judgment, the Group evaluates based on past experience and by relying on the work of specialists. If the Group is unable to make reasonably dependable estimates, the Group would not recognise any profit before a contract is completed, but would recognise a loss as soon as the loss becomes evident. Adjustments based on the percentage-of-completion method are reflected in property development and contract revenue in the reporting period. To the extent that these adjustments result in a reduction or elimination of previously reported property development and contract revenue and costs, the Group recognises a charge or credit against current earnings and amounts in prior periods, if any, are not restated. Note 3(b) describes the Group’s policy to recognise revenue from sales of properties using the percentage of completion method. Property development revenue is recognised in respect of all development units that have been sold. (ii) Classification between Investment Properties and Property, Plant and Equipment Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that is held for own use for administrative purposes. If these portions would be sold separately (or leased out separately under a finance lease), the Group would account for the portions separately. If the portions could not be sold separately, the property is an investment property only if an insignificant portion is held for own use for administrative purposes. Judgement is made on an individual property basis to determine whether ancillary services are so significant that a property does not qualify as an investment property. The Group has several properties being sub-let but has decided not to treat these properties as investment property because it is not the Group’s intention to hold these properties in the long-term for capital appreciation or rental income. Accordingly, these properties are still classified as property, plant and equipment.

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (Cont’d) (a) Critical judgments in applying the Group’s accounting policies (Cont’d) (iii) Deferred Tax Assets Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to the extent that it is probable that future taxable profits will be available against which the losses and capital allowances can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies. Further details are contained in Note 21. (iv) Fair Value of Investment Properties The directors use their judgement in selecting and applying an appropriate valuation technique, by reference to market evidence of transaction prices for similar properties. (b) Key sources of estimation uncertainty The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. (i) Estimated Impairment of Goodwill The Group tests goodwill for impairment annually in accordance with its accounting policy. More regular reviews are performed if events indicate that this is necessary. Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating unit to which goodwill has been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. The carrying amount of goodwill at the end of the reporting period was RM395,165 (2011: RM395,165). (ii) Revenue Recognition on Variation Orders Some portions of the Group’s revenue are billed under fixed price contracts. Variation orders are commonly billed to customers in the normal course of business and these are recognised to the extent they have been agreed with the customers and can be reasonably estimated. (iii) Allowance for Doubtful Debts The Group makes allowance for doubtful debts based on an assessment of the recoverability of trade receivables. Allowances are applied to trade receivables where events or changes in circumstances indicate that the balances may not be collectible. The identification of doubtful debts requires the use of judgement and estimates. Where the expectation is different from the original estimate, such difference will impact the carrying value of trade receivables and doubtful debts expenses in the period in which such estimate has been changed.

2012 ANNUAL REPORT

4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (Cont’d) (b) Key sources of estimation uncertainty (Cont’d) (iv) Impairment of Non-Current Assets The Group reviews the carrying amount of its non-current assets, which include property, plant and equipment, investment properties, land held for property development and other investments, to determine whether there is an indication that those assets have suffered an impairment loss. As of 30 April 2012, the impairment loss on other investments is disclosed in Note 19.

5. REVENUE

The Group 2012 RM

2011 RM

The Company 2012 2011 RM RM

Property development Rental income Construction contracts Project management fee Dividends from subsidiary companies: Gross dividends Single tier dividends Exempt dividends

640,262,047 10,913,091 213,668 1,017,270

585,551,706 – 10,117,151 – 409,252 1,399,619 –

– – – –

– – –

39,539,000 45,582,989 989,769

26,660,000 4,000,000 –

652,406,076

597,477,728

86,111,758

30,660,000

6. COST OF SALES

The Group

The Company 2012 2011 RM RM

2012 RM

2011 RM

Property development costs Construction contract costs Rental and related costs

424,905,777 214,477 4,266,589

432,976,911 185,637 3,341,945

– – –

429,386,843

436,504,493

–

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

7. INVESTMENT REVENUE

The Group

The Company 2012 2011 RM RM

2012 RM

2011 RM

Interest income from: Deposits with licensed financial institutions Housing development accounts Overdue balances of house purchasers Other investments Stakeholders’ sum Subsidiary companies Imputed interest adjustment on trade payables

5,895,995 1,455,270 900,766 119,475 85,921 – 1,109,914

1,081,228 843,541 634,845 608,333 67,478 – 393,179

370,103 – – 116,835 – 4,033,742 –

124,284 – – 282,904 – 792,245 –

9,567,341

3,628,604

4,520,680

1,199,433

The following is an analysis of investment revenue earned on financial assets by category of asset.

The Group

The Company 2012 2011 RM RM

2012 RM

2011 RM

Loans and receivables (including deposit, cash and bank balances) Held to maturity investment Other financial liabilities

8,337,952 119,475 1,109,914

2,627,092 608,333 393,179

4,403,845 116,835 –

916,529 282,904 –

9,567,341

3,628,604

4,520,680

1,199,433

8. FINANCE COSTS

The Group

Interest expenses on: Term loans Bonds Hire-purchase and Lease Islamic debt securities Overdrafts, revolving credit and other borrowings Imputed interest on trade payables Less: Finance charges capitalised: Property development costs (Note 23) Land held for property development (Note 16)

The Company 2012 2011 RM RM

2012 RM

2011 RM

11,740,318 1,100,264 138,320 – 2,669,230 259,917

6,074,234 4,880,774 131,511 131,856 3,234,050 22,584

2,883,686 1,100,264 58,426 – 3,000,145 –

– 4,880,774 28,525 131,856 994,202 –

15,908,049

14,475,009

7,042,521

6,035,357

(4,015,056) (5,580,092)

(7,725,582) –

– –

6,312,901

6,749,427

7,042,521

6,035,357

2012 ANNUAL REPORT

9. PROFIT BEFORE TAX (a) Profit before tax has been arrived at after charging/(crediting):

The Group

Impairment loss on goodwill on consolidation (Note 20) Depreciation of property, plant and equipment (Note 13) Impairment loss on property, plant and equipment (Note 13) Bad debts written off Auditors’ remuneration: Current Underprovision in prior year Other services: Current Underprovision in prior year Tax penalties Property, plant and equipment written off Allowance for: Trade receivables Amount due from subsidiary companies Rental of premises Amortisation of prepaid lease payments on leasehold land (Note 14) Provision for foreseeable property development losses Impairment loss on investment in associated company Loss/(Gain) on disposal of property, plant and equipment Provision for bumiputra quota penalties Provision for bumiputra quota penalties no longer required (Gain)/Loss on change in fair value of investment properties (Note 15) Gain on disposal of associated company Allowance for doubtful debts no longer required Realised foreign exchange gain Unrealised foreign exchange loss/(gain) Rental income Reversal of provision for diminution in value of investment in subsidiaries

The Company 2012 2011 RM RM

2012 RM

2011 RM

– 1,808,727

467,680 1,891,935

– 522,313

– 338,955

2,392,003 307,877

– 55,839

– –

455,153 20,734

404,141 33,075

66,000 –

40,000 –

5,000 30,000 – 379

15,884 – 1,120 –

5,000 – – –

108,785 – 252,313

366,492 – 317,711

– – 19,349

– 2,103,506 64,602

4,045 21,542,369 1,439,102

4,045 1,701,507 –

– – –

(320,746) 1,069,438

– –

20,401 – (1,069,438) (1,484,636) (8,408,149) (7,207) (473,219) – (197,100) –

– 1,256,595 – (30,360) – (20,365) (31,592) –

–

(248,497) – –

– – – – 440,970 (17,400)

– – – – (1,575,463) –

(99,111)

(4,400,085)

100

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

9. PROFIT BEFORE TAX (Cont’d) (b) Staff costs

The Group

The Company 2012 2011 RM RM

2012 RM

2011 RM

18,425,649 2,411,503 133,836

16,517,240 1,984,438 137,387

304,810 36,681 1,854

192,230 22,122 1,431

Less: Amount charged to property development costs (Note 23)

20,970,988

18,639,065

343,345

215,783

(4,618,643)

(11,919,096)

–

16,352,345

6,719,969

343,345

215,783

Wages, salaries and bonuses Pension costs - defined contribution plan Social security contributions

The Group The Company 2012 2011 2012 2011 RM RM RM RM Directors of the Company Executive: Salaries and other emoluments 5,474,000 3,990,000 238,750 199,500 Pension costs defined contribution plan 617,280 478,800 28,650 23,940 Benefits-in-kind 105,600 105,600 30,600 30,600 Non-Executive: Fees

6,196,880

4,574,400

298,000

254,040

96,000

Total

6,292,880

4,670,400

394,000

350,040

Analysis excluding benefits-in-kind: Total executive directors’ remuneration excluding benefits-in-kind 6,091,280 4,468,800 267,400 Total non-executive directors’ remuneration excluding benefits-in- kind 96,000 96,000 96,000

223,440

Less: Amount charged to property development costs (Note 23)

6,187,280

4,564,800

(4,294,113)

(3,171,354)

1,893,167

1,393,446

96,000

363,400

319,440

–

363,400

319,440

101

2012 ANNUAL REPORT

9. PROFIT BEFORE TAX (Cont’d) (c) Directors’ remuneration (Cont’d) The number of Directors of the Company whose total remuneration for the year fell within the following bands is as follows:

Executive Directors Range of remuneration: Below RM50,000 RM1,000,001 to RM1,500,000 RM1,500,001 to RM1,600,000 RM1,600,001 to RM1,700,000 RM1,700,001 to RM1,800,000 RM1,800,001 to RM1,900,000

2012

2011

– – – – 2 1

– 2 1 – – –

Non-executive directors 2012 2011 3 – – – – –

3 – – – – –

10. INCOME TAX EXPENSE

The Group 2012 RM

2011 RM

The Company 2012 2011 RM RM

Income tax: Malaysian income tax (Over)/Underprovision in prior years

9,361,804 501,694

5,387,503 167,349

50,032,358 38,877,004 9,863,498 Deferred tax (Note 21):

5,554,852

Current (Under)/Overprovision in prior years

51,139,190 (1,106,832)

35,580,253 3,296,751

(7,731,808) (825,229)

(2,442,557) 326,832

(29,560) (517,894)

42,360 (193,107)

(8,557,037)

(2,115,725)

(547,454)

(150,747)

41,475,321

36,761,279

9,316,044

5,404,105

102

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

10. INCOME TAX EXPENSE (Cont’d) A reconciliation of income tax expense applicable to profit before tax at the statutory income tax rate to income tax expense at the effective income tax rate of the Group and of the Company is as follows:

The Group 2012 RM

2011 RM

The Company 2012 2011 RM RM

Profit before tax Less: Share of loss/(profit) of associated companies

161,067,448 810,357

129,491,996 (2,328,449)

80,531,985 –

28,942,442 –

161,877,805

127,163,547

80,531,985

28,942,442

Taxation at Malaysian statutory tax rate of 25% (2011: 25%) Tax effects of income not subject to tax Tax effects of expenses not deductible for tax purposes Deferred tax assets not recognised Realisation of deferred tax assets previously not recognised (Under)/Overprovision of deferred tax in prior years (Over)/Under provision of income tax expense in prior years Tax expense for the year

40,469,451 (2,709,288) 4,616,390 1,205,221

31,790,887 (1,920,431) 3,028,287 264,654

20,132,996 (11,409,782) 609,030 –

7,235,611 (2,536,928) 731,180 –

(174,392) (825,229)

(25,701) 326,832

– (517,894)

– (193,107)

(1,106,832)

3,296,751

501,694

167,349

41,475,321

36,761,279

9,316,044

5,404,105

As of 30 April 2012, subject to agreement of the Inland Revenue Board, the Company has tax exempt income account of RM12,967,221 (2011: RM11,977,451) arising from tax exempt dividends received from subsidiary companies which is available for tax-exempt dividend distributions up to the same amount.

2012 ANNUAL REPORT

103

11. EARNINGS PER SHARE (a) Basic Basic earnings per ordinary share of the Group is calculated by dividing the profit attributable to owners of the Company for the financial year by the weighted average number of ordinary shares in issue during the financial year as follows:

The Group 2012

2011

85,160,064

62,980,867

Number of shares in issue (net of treasury shares) as of 1 May Effect of subdivision of shares Effect of treasury shares Effect of warrants exercised

295,015,821 291,590,821 (14,008,018) 3,672,495

293,672,021 293,314,593 (357,467) 639

Weighted average number of ordinary shares in issue

576,271,119

586,629,786

Profit attributable to owners of the Company (RM)

Basic earnings per share (sen)

14.78

10.74*

(b) Diluted Dilutive earnings per share have been calculated by dividing the profit attributable to owners of the Company for the financial year by the weighted average number of ordinary shares that would have been in issue upon full exercise of the remaining Warrants, adjusted by the number of such shares that would have been issued at fair value as follows:

The Group 2012

2011

Profit attributable to owners of the Company (RM)

85,160,064

62,980,867

Weighted average number of ordinary shares outstanding Effect of warrants dilution

576,271,119 41,336,984

586,629,786 51,736,320

Adjusted weighted average number of ordinary shares

617,608,103

638,366,106

Diluted earnings per share (sen) *

13.79

9.87*

104

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

12. DIVIDENDS The Group and The Company Amount Net Dividends per Ordinary Share 2012 2011 2012 2011 RM RM Sen Sen In respect of financial year ended 30 April 2010: – Final dividend of RM0.045 per share of RM1.00 each on 292,169,421 ordinary shares less 25% tax, paid on 30 November 2010 In respect of financial year ended 30 April 2011: – First interim dividend of RM0.045 per share of RM1.00 each on 293,435,644 ordinary shares less 25% tax, paid on 22 June 2011 – Final dividend of RM0.050 per share of RM1.00 each on 294,070,321 ordinary shares less 25% tax, paid on 6 October 2011 In respect of financial year ended 30 April 2012: – First interim dividend of RM0.0275 per share of RM0.50 each on 670,766,338 ordinary shares ess 25% tax paid on 20 June 2012 Overprovision in prior year

13,834,540 (66,267)

24,795,909

–

9,860,705

–

3.4

–

9,969,717

–

3.4

11,027,636

–

3.8

–

2.1 –

– –

5.9

6.8

– (36,048) 19,794,374

105

2012 ANNUAL REPORT

13. PROPERTY, PLANT AND EQUIPMENT The Group Cost

Building and improvements RM

Furniture and Office Motor fittings equipment Computers vehicles RM RM RM RM

Plant and machinery RM

Total RM

As of 1 May 2010 Additions Disposals

6,376,612 11,483 –

2,167,351 3,885 –

1,705,411 70,038 –

2,028,226 164,204 –

6,706,638 1,817,620 (1,408,729)

2,451,876 407,078 –

21,436,114 2,474,308 (1,408,729)

As of 30 April 2011/ 1 May 2011 Additions Disposals Write-offs

6,388,095 9,140 (9,809) –

2,171,236 32,795 – –

1,775,449 107,055 – (1,080)

2,192,430 105,637 – –

7,115,529 466,490 – (64,615)

2,858,954 104,297 (28,708) –

22,501,693 825,414 (38,517) (65,695)

As of 30 April 2012

6,387,426

2,204,031

1,881,424

2,298,067

7,517,404

2,934,543

23,222,895

2,783,200

1,672,178

1,217,959

1,898,170

5,174,147

1,668,703

14,414,357

344,466 –

128,994 –

143,457 –

85,196 –

3,127,666

1,801,172

1,361,416

1,983,366

Accumulated Depreciation As of 1 May 2010 Charge for the year (Note 9a) Disposals As of 30 April 2011/ 1 May 2011 Charge for the year (Note 9a) Disposals Write-offs As of 30 April 2012

199,141 (4,496) –

118,078 – –

128,969 – (702)

85,235 – –

910,877 (1,408,725) 4,676,299 980,854 – (64,614)

278,945 – 1,947,648 296,450 (9,062) –

1,891,935 (1,408,725) 14,897,567 1,808,727 (13,558) (65,316)

3,322,311

1,919,250

1,489,683

2,068,601

5,592,539

2,235,036

16,627,420

Accumulated Impairment Loss As of 1 May 2010/ 30 April 2011/ 1 May 2011 Charge for the year (Note 9a)

–

2,392,003

–

2,392,003

As of 30 April 2012

2,392,003

–

2,392,003

Carrying Amount As of 30 April 2011

3,260,429

370,064

414,033

209,064

2,439,230

911,306

7,604,126

As of 30 April 2012

673,112

284,781

391,741

229,466

1,924,865

699,507

4,203,472

Allowance for impairment loss of the Group amounting to RM2,392,003 (2011: RMNil) relates to write down of the equestrian facilities structure based on present value of the future net cash flows. The discount rate used in measuring the present value was 6% per annum. The impairment loss has been included in other operating expenses in the statements of comprehensive income.

106

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

13. PROPERTY, PLANT AND EQUIPMENT (Cont’d) The Company Cost

Building and improvements RM

Furniture and fittings RM

As of 1 May 2010 Additions Disposal

820,574 – –

293,324 – –

176,872 11,430 –

364,695 140,995 –

1,734,364 1,817,620 (1,235,000)

3,389,829 1,970,045 (1,235,000)

As of 30 April 2011/ 1 May 2011 Additions

820,574 –

293,324 –

188,302 9,860

505,690 19,720

2,316,984 –

4,124,874 29,580

As of 30 April 2012

820,574

293,324

198,162

525,410

2,316,984

4,154,454

588,832

195,705

149,454

314,941

1,734,357

2,983,289

74,482 –

30,715 –

13,167 –

38,829 –

181,762 (1,234,997)

338,955 (1,234,997)

663,314

226,420

162,621

353,770

681,122

2,087,247

74,482

29,265

9,197

45,845

363,524

522,313

As of 30 April 2012

737,796

255,685

171,818

399,615

1,044,646

2,609,560

Net Carrying Amount As of 30 April 2011

157,260

66,904

25,681

151,920

1,635,862

2,037,627

82,778

37,639

26,344

125,795

1,272,338

1,544,894

Accumulated Depreciation As of 1 May 2010 Charge for the year (Note 9a) Disposal As of 30 April 2011/ 1 May 2011 Charge for the year (Note 9a)

As of 30 April 2012

Office equipment Computers RM RM

Motor vehicles RM

Total RM

At the end of the reporting period, certain property, plant and equipment of the Group and of the Company with net carrying amount of RM2,511,583 and RM1,272,335 (2011: RM3,150,139 and RM1,635,858) respectively were acquired under hire-purchase and lease arrangements.

2012 ANNUAL REPORT

14. PREPAID LEASE PAYMENTS ON LEASEHOLD LAND

Group Leasehold Land Unexpired period less than 30 years RM Cost As of 1 May 2010/30 April 2011/1 May 2011/30 April 2012

121,353

Accumulated Amortisation As of 1 May 2010 Amortisation for the year (Note 9a)

36,406 4,045

As of 30 April 2011/1 May 2011 Amortisation for the year (Note 9a)

40,451 4,045

As of 30 April 2012

44,496

Net Book Value As of 30 April 2011

80,902

As of 30 April 2012

76,857

107

108

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

15. INVESTMENT PROPERTIES The investment properties, which pertain to subsidiary companies, are held for investment potential and rental income in future. The Group Freehold Leasehold land and land and buildings buildings RM RM

Freehold land and buildings under construction RM

Total RM

At fair value: As of 1 May 2010 Change in fair value of investment properties (Note 9a) Transfer to non-current asset held for sale (Note 30)

12,318,356 807,708 –

As of 30 April 2011/1 May 2011 Change in fair value of investment properties (Note 9a) Transfer from land held for property development (Note 16)

13,126,064 1,484,636 –

4,197,908 – –

– – 40,294,651

17,323,972 1,484,636 40,294,651

As of 30 April 2012

14,610,700

4,197,908

40,294,651

59,103,259

34,962,211 (2,064,303) (28,700,000)

– – –

47,280,567 (1,256,595) (28,700,000)

The fair value of the Group’s investment properties as of 30 April 2012 has been arrived at on the basis of the Directors’ best estimates, by reference to market evidence of transaction prices for similar properties. Based on the above, the Directors are of their opinion that the carrying amount of the investment properties of the Group approximates the fair value. The property rental income earned by the Group from its investment properties, all of which are leased out under operating leases, amounted to RM842,429 (2011: RM3,364,393). Direct operating expenses arising on the investment properties amounted to RM186,813 (2011: RM488,549). Investment properties amounting to RM2,276,852 (2011: RM2,276,852) are charged as securities for banking facilities granted to the Group as mentioned in Note 33.

109

2012 ANNUAL REPORT

16. LAND HELD FOR PROPERTY DEVELOPMENT

The Group 2012 RM

2011 RM

170,948,474 97,191,949 249,353,107

120,742,527 111,763,500 202,316,266

Additions: Freehold land - at cost Leasehold land - at cost Development expenditure

517,493,530

434,822,293

– 89,408,722 204,249,161

50,205,947 2,940,921 151,102,613

Provision for forseeable loss Transfer to investment properties (Note 15): Freehold land - at cost Development expenditure

293,657,883 (11,317,425)

204,249,481 –

(5,876,125) (34,418,526)

– –

Cost: At beginning of year: Freehold land - at cost Leasehold land - at cost Development expenditure

(40,294,651) – Transfer to property development costs (Note 23): Freehold land - at cost (69,352,664) – Leasehold land - at cost (15,607,112) (17,512,472) Development expenditure (163,043,538) (104,065,772)

(248,003,314) (121,578,244)

511,536,023

517,493,530

At end of year: Freehold land - at cost Leasehold land - at cost Development expenditure

95,719,685 170,993,559 244,822,779

170,948,474 97,191,949 249,353,107

511,536,023

517,493,530

Current year charges to development expenditure include the following: Finance costs (Note 8)

The Group 2012 RM

2011 RM

5,580,092

–

110

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

16. LAND HELD FOR PROPERTY DEVELOPMENT (Cont’d) Land held for development of certain subsidiary companies are charged together with property development costs for banking facilities granted as disclosed in Note 33. In accordance to a Joint Venture Agreement (“JVA”) with Permodalan Negeri Selangor Berhad (“PNSB”), Glomac Rawang Sdn. Bhd., a wholly owned subsidiary company, is obliged to pay PNSB entitlement on the higher of either RM41,400,000 (2011: RM41,400,000) or a sum equal to 30% of the gross profit before tax (as defined in the JVA) to be generated by the development of the parcel of land belonging to PNSB progressively. A total entitlement of RM41,400,000 has been included in the land held for property development. As of 30 April 2012, RM16,800,000 (2011: RM10,800,000) has been paid and the remaining amount of RM21,783,722 (2011: RM24,427,844) has been recognised as land cost payable in Note 35. In accordance to a Privatisation Agreement (“PA”) with Perbadanan Kemajuan Negeri Selangor (“PKNS”), FDA Sdn. Bhd., a 70% owned subsidiary company, is obliged to pay PKNS entitlement based on percentage of sales value (as defined in the PA) to be generated by the development of the parcel of lands progressively. A total entitlement of RM29,137,226 (2011: RM29,121,826) has been included in the land held for property development. Pursuant to the PA, the computation of the said entitlement is based on agreed percentage on the total projected gross sales value of several types of property development of the land, subject to any subsequent increase in the gross sales value of the development. As of 30 April 2012, an amount of RM27,055,798 (2011: RM20,616,998) has been paid and the remaining amount of RM2,081,428 (2011: RM8,504,828) has been recognised as land cost payable in Note 35. In accordance to a Deed of Assignment (“DA”) with Edisi Cangkat Sdn Bhd (“EDISI”), FDA Sdn. Bhd. is obliged to progressively pay EDISI a consideration amounting to RM1,600,000 or 30% on the gross profit of the development of the land, whichever is higher. In accordance with the DA, a total consideration of RM1,600,000 has been included in the property development cost. As of 30 April 2012, an amount of RM1,160,000 (2011: RM1,160,000) has been paid and the remaining amount of RM440,000 (2011: RM440,000) has been recognised as land cost payable in Note 35. In accordance to a Joint Venture Agreement (“JVA”) with Leader Domain Sdn. Bhd. (“LDSB”), Glomac Resources Sdn. Bhd., a wholly owned subsidiary company, is obliged to pay LDSB entitlement based on profit-sharing (as defined in the JVA) to be generated by the development of the parcel of lands progressively. A total entitlement of RM11,007,472 (2011: RM11,007,472) has been included in the property development costs. As of 30 April 2012, an amount of RM9,770,522 (2011: RM9,570,522) has been paid and the remaining amount of RM1,236,950 (2011: RM1,436,950) has been recognised as land cost payable in Note 35. In 2009, pursuant to a Supplementary Joint Venture Agreement (“SJVA”) with LDSB, Glomac Resources Sdn Bhd has agreed to purchase the car park allotment (as defined in the SJVA). A total consideration of RM4,200,000 has been included in the property development costs. As of 30 April 2012, an amount of RM4,200,000 (2011: RM3,360,000) has been paid and the remaining amount of RMNil (2011: RM840,000) has been recognised as land cost payable in Note 35. Prior to the above SJVA, LDSB has entered into a Joint Venture Agreement with the proprietor of the development land as its attorney to carry out and complete the development land with a guarantee return of RM15,500,000 (2011: RM15,500,000) as land value. As of 30 April 2012, an amount of RM8,300,000 (2011: 1,500,000) has been paid and the remaining amount of RM7,200,000 (2011: RM14,000,000) has been recognised as land cost payable in Note 35.

111

2012 ANNUAL REPORT

17. SUBSIDIARY COMPANIES

The Company 2012 2011 RM RM

Unquoted shares, at cost Less: Accumulated impairment losses

370,182,314 (1,516,737)

369,179,802 (1,615,847)

368,665,577

367,563,955

Details of the subsidiary companies are set out in Note 42. (a) Acquisition of subsidiary companies During the financial year, the Company acquired the following: Subsidiary companies Equity No. of shares Total cash interest acquired consideration RM Crest Dollars Sdn. Bhd. Glomac Cekap Sdn. Bhd. (formerly known as Kristal Taipan Sdn. Bhd) Kelana Kualiti Sdn. Bhd. Magical Sterling Sdn. Bhd.

100% 100% 100% 100%

2 2 2 2

In previous financial year, the Company acquired the following: Subsidiary companies Equity No. of shares Total cash interest acquired consideration RM Berapit Properties Sdn. Bhd. Kelana Property Services Sdn. Bhd. Berapit Pertiwi Sdn. Bhd.

100% 100% 100%

250,000 2 2

The effects of the abovementioned acquisitions on the financial results of the Group are as follows: Post-acquisition results of the subsidiary companies acquired:

The Group 2012 RM

2011 RM

Revenue Administration expenses

– –

– (228,088)

Loss before tax Income tax expense

– –

(228,088) –

Net loss for the year

–

(228,088)

Attributable to: Owners of the Company Minority interests

– –

(228,088) –

112

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

17. SUBSIDIARY COMPANIES (Cont’d) (a) Acquisition of subsidiary companies (Cont’d) If the acquisition had been completed on 1 May 2011, total group profit before tax for the year would have been RM163,365,280 (1 May 2010: RM129,491,996). The net fair value of the assets arising from the acquisitions are as follows: The Group Carrying values Fair values on acquisitions 2012 2011 2012 2011 RM RM RM RM Net assets acquired: Cash and bank balances Other receivables Other payable and accruals

8 – –

4 250,674 (674)

8 – –

4 250,674 (674)

250,004

Goodwill on acquisition

–

Total purchase consideration

250,004

The Group 2012 RM

Purchase consideration satisfied by cash: Berapit Properties Sdn. Bhd. Kelana Property Services Sdn. Bhd. Berapit Pertiwi Sdn. Bhd. Kelana Kualiti Sdn. Bhd. Glomac Cekap Sdn. Bhd. (formerly known as Kristal Taipan Sdn. Bhd) Magical Sterling Sdn. Bhd. Crest Dollars Sdn. Bhd. Less: Cash and cash equivalents of subsidiary companies acquired Net cash outflow of the Group

2011 RM

– – – 2 2 2 2 (8)

250,000 2 2 – – – – (4)

–

250,000

2012 ANNUAL REPORT

113

17. SUBSIDIARY COMPANIES (Cont’d) (b) Additional investments in subsidiary companies On 22 June 2011, the Company acquired additional 499,998 ordinary shares of RM1.00 each in the share capital of FDM Development Sdn. Bhd. for a cash consideration of RM499,998. On 1 November 2011, the Company acquired additional 10 ordinary shares of RM1.00 each representing 10% equity in Glomac Thailand Sdn. Bhd. (“GTSB”) for a cash consideration of RM10. Pursuant to the acquisition, GTSB became a whollyowned subsidiary of the Company. On 2 February 2012, the Company acquired the entire issued and paid-up share capital of Kelana Kualiti Sdn. Bhd., with an authorised share capital of RM100,000 comprising of 100,000 ordinary shares of RM1.00 each, of which 2 ordinary shares are issued and fully paid up, for a cash consideration of RM2.00. On 20 April 2012, the Company acquired additional 499,998 ordinary shares of RM1.00 each in the share capital of Kelana Kualiti Sdn. Bhd. for a cash consideration of RM499,998. On 15 February 2012, the Company acquired the entire issued and paid-up share capital of Kristal Taipan Sdn. Bhd. (“KTSB”) with an authorised share capital of RM100,000 comprising of 100,000 ordinary shares of RM1.00 each, of which 2 ordinary shares are issued and fully paid up, for a cash consideration of RM2.00. On 21 February 2012, KTSB has increased its authorised share capital from RM100,000 to RM5,000,000 and subsequently changed its name to Glomac Cekap Sdn. Bhd. on 27 February 2012. On 28 February 2012, the Company acquired the entire issued and paid-up share capital of Magical Sterling Sdn. Bhd., with an authorised share capital of RM100,000 comprising of 100,000 ordinary shares of RM1.00 each, of which 2 ordinary shares are issued and fully paid up, for a cash consideration of RM2.00. On 28 February 2012, the Company acquired the entire issued and paid-up share capital of Crest Dollars Sdn. Bhd., with an authorised share capital of RM100,000 comprising of 100,000 ordinary shares of RM1.00 each, of which 2 ordinary shares are issued and fully paid up, for a cash consideration of RM2.00. On 26 April 2012, the Company acquired additional 2,498 ordinary shares of RM1.00 each in the share capital of Kelana Property Services Sdn. Bhd., a wholly-owned subsidiary of the Company for a cash consideration of RM2,498.

114

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

18. ASSOCIATED COMPANIES

The Group 2012 RM

2011 RM

Unquoted shares, at cost Share of post acquisition reserves

18,875,235 15,032,770

41,334,501 20,450,760

33,908,005

61,785,261

The summarised financial information of the associated companies are as follows: Assets and Liabilities Total assets Total liabilities

The Group 2012 RM

2011 RM

207,753,891 336,040,019 (121,691,914) (198,222,882)

Net assets

86,061,977

137,817,137

Group’s share of associated companies’ net assets Goodwill on acquisition

33,908,005 –

58,202,831 3,582,430

33,908,005

61,785,261

Results Total revenue Total profit for the year Group’s share of (loss)/profit of associated companies for the year

67,448,841 3,883,707 (810,357)

40,436,531 4,938,857 2,328,449

On 14 September 2011, Glomac Thailand Sdn. Bhd. (“Glomac Thailand”) entered into a Share Sale and Purchase Agreement with WHA Corporation Co. Ltd. for disposal of Glomac Thailand’s entire 49% equity interest comprising 15,190,000 ordinary shares held in WHA Glomac Alliance Company Limited, a company incorporated in Thailand, for a total consideration of THB 285,403,997 (equivalent to RM29,063,564) resulting in a gain on disposal of RM8,408,149. Details of the associated companies are set out in Note 42.

115

2012 ANNUAL REPORT

19. OTHER INVESTMENTS

The Group

Available-for-sale Unquoted shares, at cost Held to maturity Unquoted subordinated bonds, at cost Allowance for diminution in value

2012 RM

2011 RM

4,000,000

10,300,000 (10,300,000)

The Company 2012 2011 RM RM –

–

10,300,000 (10,300,000)

–

4,000,000

–

The investment in unquoted subordinated bonds is in relation to the Bonds as detailed in Note 33(e).

20. GOODWILL ON CONSOLIDATION Cost At beginning and end of year

The Group 2012 RM

2011 RM

1,032,918

Accumulated impairment losses At beginning of year Impairment loss recognised during the year (Note 9a)

(637,753) –

(170,073) (467,680)

At the end of year

(637,753)

Carrying amount At beginning of year

395,165

862,845

At end of year

395,165

116

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

20. GOODWILL ON CONSOLIDATION (Cont’d) Goodwill acquired in a business combination is allocated, at acquisition, to the cash-generating unit (“CGU”) that is expected to benefit from that business combination. Before recognition of any impairment losses, the carrying amount of goodwill had been allocated to the following business segment as independent CGUs:

The Group

Property development division

2012 RM

2011 RM

395,165

The Group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired. The recoverable amount of the CGU is determined from value-in-use calculation which uses cash flow projections derived from the most recent financial budgets approved by management covering a three-year period, and an estimated discount rate of 6% per annum and an average growth rate of 10% per annum. At the end of the reporting period, the Group assessed the recoverable amount of goodwill, and determined that goodwill associated with property investment and management activities were impaired by RMNil (2011: RM467,680). Management is expecting no future cash flows from these CGUs. The impairment loss was included in the other operating expenses line item in the statements of comprehensive income.

21. DEFERRED TAX ASSETS/(LIABILITIES)

The Group

The Company 2012 2011 RM RM

2012 RM

2011 RM

At beginning of year

8,706,567

6,590,842

Recognised in profit or loss (Note 10): Property, plant and equipment Amount owing by subsidiary companies Property development activities Unused tax losses and unabsorbed capital allowances Others

(3,909) – 4,497,009 3,857,295 206,642

(113,592) – 2,265,185 – (35,868)

21,577 525,877 – – –

(42,360) – – – 193,107

8,557,037

2,115,725

547,454

150,747

17,263,604

8,706,567

3,050,201

2,502,747

At end of year

2,502,747

2,352,000

117

2012 ANNUAL REPORT

21. DEFERRED TAX ASSETS/(LIABILITIES) (Cont’d) Certain deferred tax assets and deferred tax liabilities have been offset in accordance with the Group’s accounting policy. The following is an analysis of the deferred tax balances (after offset) for statements of financial position purposes:

The Group 2012 RM

2011 RM

The Company 2012 2011 RM RM

Deferred tax assets Deferred tax liabilities

17,590,398 (326,794)

9,092,459 (385,892)

3,050,201 –

2,502,747 –

17,263,604

8,706,567

3,050,201

2,502,747

Deferred tax liabilities (before offsetting) Temporary differences arising from: Property, plant and equipment (230,299) (210,133) (50,676) Others (215,246) (175,759) –

(72,253) –

Offsetting

(445,545) 118,751

(385,892) –

(72,253) 72,253

Deferred tax liabilities (after offsetting)

(326,794)

(385,892)

(50,676) 50,676 –

–

Deferred tax assets(before offsetting) Temporary differences arising from: Property, plant and equipment 16,256 – – Property development activities 10,584,111 6,087,102 – Other investments 2,575,000 2,575,000 2,575,000 Amount owing by subsidiary companies – – 525,877 Unused tax losses and unabsorbed capital allowances 4,287,652 430,357 – Others 246,130 – –

– – 2,575,000 – – –

Offsetting

17,709,149 (118,751)

9,092,459 –

3,100,877 (50,676)

2,575,000 (72,253)

Deferred tax assets (after offsetting)

17,590,398

9,092,459

3,050,201

2,502,747

118

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

21. DEFERRED TAX ASSETS/(LIABILITIES) (Cont’d) As mentioned in Note 3(e), the tax effects of transactions are recognised using the “liability” method and all taxable temporary differences are recognised. Where deductible temporary differences, unused tax losses and unused tax credits would give rise to net deferred tax assets, the tax effects are generally recognised to the extent that it is probable that future taxable profits will be available against which deductible temporary differences, unused tax losses and unused tax credits can be utilised. As of 30 April 2012, the estimated amount of deductible temporary differences, unused tax losses and unabsorbed capital allowances pertaining to certain subsidiary companies, for which no deferred tax assets have been recognised in the financial statements due to uncertainty of their realisation, is as follows:

The Group 2012 RM

2011 RM

Unused tax losses Unabsorbed capital allowances Property development activities

8,881,949 339,171 920,158

4,157,482 335,708 1,524,772

10,141,278

6,017,962

No deferred tax assets were recognised in the financial statements of these subsidiary companies in the Group due to uncertainty of their recoverability. The unabsorbed capital allowances and unused tax losses, which are subject to agreement by the Inland Revenue Board, are available indefinitely for offset against future taxable profits of the respective subsidiary companies in the Group.

22. INVENTORIES Inventories of the Group amounting to RM38,509,023 (2011: RM38,509,023) is pledged to financial institutions as security for bank borrowings of the Group as mentioned in Note 33.

119

2012 ANNUAL REPORT

23. PROPERTY DEVELOPMENT COSTS At beginning of year Freehold land – at cost Leasehold land – at cost Development expenditure Costs incurred during the year Freehold land – at cost Leasehold land – at cost Development expenditure

The Group 2012 RM

2011 RM

228,527,325 214,527,325 104,564,837 86,775,379 1,990,106,694 1,647,219,859 2,323,198,856 1,948,522,563 3,367,323 15,400 179,529,471

14,000,000 276,986 238,821,063

182,912,194

253,098,049

69,352,664 15,607,112 163,043,538

– 17,512,472 104,065,772

Transfer to inventories: Freehold land – at cost Leasehold land – at cost Development expenditure

248,003,314

121,578,244

(231,284) (328,471) (26,226,890)

– – –

(26,786,645)

–

Provision for foreseeable losses

(18,802,681)

Transfer from land held for property development (Note 16): Freehold land – at cost Leasehold land – at cost Development expenditure

(8,577,737)

Costs recognised as an expense in profit or loss: Previous year Current year

(2,156,375,137) (1,723,398,226) (424,905,777) (432,976,911)

Cumulative costs at end of year

(2,581,280,914) (2,156,375,137)

127,244,124

158,245,982

At end of year: Freehold land – at cost Leasehold land – at cost Development expenditure

72,268,041 26,226,865 28,749,218

63,076,020 15,192,862 79,977,100

127,244,124

158,245,982

120

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

23. PROPERTY DEVELOPMENT COSTS (Cont’d) Current year charges to development expenditure include the following: Finance costs (Note 8) Directors’ remuneration (Note 9c) Staff costs (Note 9b)

The Group 2012 RM

2011 RM

4,015,056 4,294,113 4,618,643

7,725,582 3,171,354 11,919,096

Land held for development and property development costs of certain subsidiary companies amounting to RM373,568,852 (2011: RM255,021,478) are charged for banking facilities granted to the subsidiary companies as mentioned in Note 33.

24. AMOUNT DUE TO CONTRACT CUSTOMERS

The Group 2012 RM

2011 RM

Contract costs Portion of profit attributable to contract works performed todate

68,758,187 2,386,205

67,818,786 1,895,607

Billings to contract customers

71,144,392 (71,144,392)

69,714,393 (69,714,393)

–

Represented by: Amount due to contract customers

–

25. ACCRUED BILLINGS/(ADVANCE BILLINGS) Revenue recognised in profit or loss todate Progress billings todate Represents: Accrued billings Advance billings

The Group 2012 2011 RM RM 3,086,824,683 2,441,315,713 (3,085,291,559) (2,610,631,450) 1,533,124

(169,315,737)

57,368,828 34,156,585 (55,835,704) (203,472,322)

2012 ANNUAL REPORT

121

26. TRADE RECEIVABLES

The Group 2012 RM

2011 RM

Trade receivables Allowance for doubtful debts

62,660,736 246,846,964 (1,100,797) (999,219)

61,559,939

245,847,745

Included in the Group’s trade receivables are retention sums receivable from customers of RMNil (2011: RM1,015,437). Also, included in the Group’s trade receivables is an amount of RMNil (2011: RM917,250) due from a related party, representing amounts receivable from the sale of property development units in the normal course of business. The Group’s normal trade credit term ranges from 14 to 60 days (2011: 14 to 60 days). Other credit terms are assessed and approved on a case-by-case basis. Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group. The Group has no significant concentration of credit risk that may arise from exposures to a single debtor or groups of debtors. Ageing of past due but not impaired

The Group 2012 RM

2011 RM

1 – 30 days 31 – 60 days 61 – 90 days > 90 days

10,699,750 10,576,086 7,885,986 21,096,307

19,278,391 9,879,870 65,792,056 25,843,850

Total

50,258,129

120,794,167

Movement in the allowance for doubtful debts Balance at beginning of year Impairment losses recognised on receivables Impairment losses reversed Balance at end of year

The Group 2012 RM 999,219 108,785 (7,207) 1,100,797

2011 RM 663,087 366,492 (30,360) 999,219

In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade receivable from the date credit was initially granted up to the end of the reporting period. The concentration of credit risk is limited due to the customer base being large and unrelated.

122

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

26. TRADE RECEIVABLES (Cont’d) Ageing of past due and impaired

The Group

> 90 days

2012 RM

2011 RM

1,100,797

999,219

27. OTHER RECEIVABLES

The Group 2012 RM Other receivables Less: Allowance for doubtful debts

19,438,556 (118,353)

Prepaid expenses Refundable deposits Deposits paid for land acquisition Stakeholders’ sum Accrued interest income

19,320,203 2,317,909 7,932,213 5,866,689 4,998,875 215,393

40,651,282

2011 RM 3,917,900 (118,353)

The Company 2012 2011 RM RM 32,764 –

87,257 –

3,799,547 5,062,164 14,270,125 – 2,323,419 46,832

32,764 152,404 1,541,668 – – –

87,257 111,261 42,422 – – –

25,502,087

1,726,836

240,940

Included in other receivables of the Group is an amount of RM14,749,288 (2011: RMNil) representing amount received from house buyers for future repayment of banking facilities of the Group. Included in other receivables of the Group is an amount of RM240,563 (2011: RM240,913) due from KJ Leisure Sdn. Bhd., a company in which certain directors of the Company have interest. The amount mainly arose from the transactions pursuant to a project management agreement entered into for a property development project. Stakeholders’ sum represents retention sums held by solicitors upon handling over of vacant possession to individual purchasers of development properties. These amounts will be paid from 6 to 18 months after the delivery of vacant possession together with interest earned.

2012 ANNUAL REPORT

123

28. AMOUNT DUE FROM/(TO) SUBSIDIARY AND ASSOCIATED COMPANIES Amount due from subsidiary companies, which arose mainly from trade transactions, assignment of debts, payment made on behalf and advances granted, bears interest at 6.16% (2011: 5.91%) per annum and is unsecured and repayable on demand.

The Company 2012 2011 RM RM

Amount due from subsidiary companies Allowance for doubtful debts

142,845,709 (2,103,506)

64,204,436 (2,103,506)

140,742,203

62,100,930

Amount due to subsidiary companies, which arose mainly from assignment of debts and advances, is interest-free, unsecured and repayable on demand. Amount due from associated companies, which arose mainly from expenses paid on behalf, is interest-free, unsecured and repayable on demand. Amount due to associated companies, which arose mainly from advances, is interest-free, unsecured and repayable on demand. During the financial year, significant transactions, which are determined on a basis as negotiated between the Company and its subsidiary companies, are as follows: Dividend receivable from subsidiary companies Interest income receivable from subsidiary companies Head office allocation income Assignment of debts to subsidiary companies – net Assignment of debts by subsidiary companies – net

The Company 2012 2011 RM RM 86,111,758 4,033,742 1,122,730 – –

30,660,000 792,245 591,197 (23,875,897) 23,875,897

124

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

29. DEPOSITS, CASH AND CASH EQUIVALENTS

The Group

Cash on hand and at banks Deposits with: Licensed banks Other licensed financial institutions Deposits, cash and bank balances Less: Bank balances pledged Deposits pledged Bank overdrafts (Note 36) Cash and cash equivalents

The Company 2012 2011 RM RM

2012 RM

2011 RM

211,774,576

122,620,288

40,809,793

7,660,035

122,633,920 3,002,622

54,098,437 –

5,000,000 3,002,622

20,000,000 –

337,411,118

176,718,725

48,812,415

27,660,035

– (4,402,916) (3,148,066) 329,860,136

(244,272) (7,472,200) (4,994,723) 164,007,530

– – – 48,812,415

(94,272) – – 27,565,763

Included in the Group’s cash and bank balances is an amount of RM80,621,086 (2011: RM59,153,983) which is held under Housing Development Accounts pursuant to Section 7A of the Housing Developers Act 1966. These accounts consist of monies received from purchasers and are used for the payment of property development expenditure incurred. The surplus monies, if any, will be released to the Group upon the completion of the property development and after all property development expenditure have been fully settled. Deposits of the Group totalling RM4,402,916 (2011: RM7,472,200) have been pledged to secure the bank guarantee facilities. The weighted average effective interest rates for deposits at the end of the reporting period are as follows:

The Group

Licensed banks Other licensed financial institutions

2012 %

2011 %

3.2 2.9

2.7 1.8

The Company 2012 2011 % % 3.1 2.9

3.1 –

The average maturity periods relating to the various deposits held at the end of the reporting period are as follows:

The Group

Licensed banks Other licensed financial institutions

2012 Days

2011 Days

30 1

30 –

The Company 2012 2011 Days Days 30 –

30 –

125

2012 ANNUAL REPORT

30. NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE At beginning of year Transfer from: Investment property (Note 15) Investment in associated company Less: Impairment loss on investment in associated company Disposal during the year At end of year

The Group 2012 RM

2011 RM

28,700,000

–

28,700,000

6,398,886 (1,439,102)

– –

4,959,784 (28,700,000)

– –

4,959,784

28,700,000

On 2 July 2012, Glomac Utama Sdn. Bhd. (“Glomac Utama”), a subsidiary of the Company entered into a Share Sale and Purchase Agreement with Worldwide Holdings Berhad for the disposal of Glomac Utama’s entire 49% equity interest comprising 2,450,000 ordinary shares held in Worldwide Glomac Development Sdn. Bhd., for a total consideration of RM4,959,784. The disposal was completed on 31 July 2012. During the previous financial year, a subsidiary company entered into a Sales and Purchase Agreement to dispose of its investment properties for a total consideration of RM28,700,000. The transaction was completed during the current financial year.

31. SHARE CAPITAL AND SHARE PREMIUM Authorised: Ordinary shares At beginning and end of year: 1,000,000,000 of RM0.50 each as of 1 May 2011; 500,000,000 of RM1.00 each as of 1 May 2010 Issued and fully paid: Ordinary shares At beginning of year: 297,174,221 of RM1.00 each as of 1 May 2011; 297,169,721 of RM1.00 each as of 1 May 2010 Issued during the year: 5,297,500 of RM1.00 each and 4,285,180 of RM0.50 each in 2012; 4,500 of RM1.00 each in 2011 At end of year: 609,228,622 of RM0.50 each as of 30 April 2012; 297,174,221 of RM1.00 each as of 30 April 2011

financial_0063.indd 125

The Group and The Company 2012 2011 RM RM

500,000,000

297,174,221

297,169,721

7,440,090

4,500

304,614,311

297,174,221

13/09/12 1:12 PM

126

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

31. SHARE CAPITAL AND SHARE PREMIUM (Cont’d) During the financial year, the Company completed the subdivision of every one ordinary share of RM1.00 each into two ordinary shares of RM0.50 each. A total of 500,000,000 ordinary shares of RM1.00 each were subdivided into 1,000,000,000 ordinary shares of RM0.50 each. During the financial year, the Company increased its number of ordinary shares and paid up capital from RM297,174,221, comprising 297,174,221 ordinary shares of RM1.00 each to RM304,614,311, comprising 609,228,622 ordinary shares of RM0.50 each shares by way of: (a) The issuance of 302,471,721 new ordinary shares of RM0.50 each as a consequence of the subdivision of every one (1) ordinary share of RM1.00 each into two (2) ordinary shares of RM0.50 each; and (b) The issuance of 5,297,500 and 4,285,180 new ordinary shares of RM1.00 and RM0.50 each respectively for cash arising from the exercise of Warrants at the following exercise prices per ordinary share: Exercise price Number of (RM) Warrants

Increase in Paid-up Capital (RM)

1.10 0.55

5,297,500 4,285,180

5,297,500 2,142,590

9,582,680

7,440,090

The new ordinary shares issued rank pari passu in all respects with the then existing ordinary shares of the Company. Treasury shares The shareholders of the Company, by an ordinary resolution passed at the 27th Annual General Meeting held on 28 September 2011, renewed their approval for the Company’s plan to repurchase to its own shares up to a maximum of 10% of the total issued and fully paid up share capital listed on the Bursa Malaysia Securities Berhad. The directors of the Company are committed to enhancing the value of the Company for its shareholders and believe that the repurchase plan can be applied in the best interests of the Company and its shareholders. The shares repurchased are held as treasury shares as allowed under section 67A of the Companies Act 1965 and are carried at cost. The Company has a right to reissue these shares at a later date. As treasury shares, the rights attached as to voting, dividends and participation in other distribution are suspended.

2012 ANNUAL REPORT

127

31. SHARE CAPITAL AND SHARE PREMIUM (Cont’d) Treasury shares (Cont’d) The details of the shares bought back as of 30 April 2012 are as follows: Month

No. of shares bought back RM

Highest price paid RM

Lowest price paid RM

Average Total price paid consideration RM

Purchases prior to financial year 2011

2,158,400

1.78

3,834,361

Before subdivision of shares May’11 June’11 July’11 August’11 September’11 October’11

1,559,900 1,218,300 823,400 1,116,000 2,620,400 1,384,500

1.75 1.79 1.82 1.66 1.45 1.45

2,733,285 2,180,002 1,497,504 1,853,620 3,789,964 2,008,602

8,722,500

14,062,977

1.85 1.87 1.85 1.79 1.56 1.48

1.69 1.69 1.78 1.57 1.34 1.42

Effect of subdivision of shares

10,880,900

After subdivision of shares October’11 November’11 December’11 January’12 February’12 March’12 April’12

3,260,000 2,775,000 10,367,600 50,000 678,700 1,649,000 1,681,000

0.82 0.82 0.83 0.83 0.86 0.86 0.84

2,662,392 2,273,110 8,627,997 41,553 586,694 1,413,345 1,418,785

20,461,300

17,023,876

42,223,100

34,921,214

0.85 0.84 0.84 0.84 0.87 0.88 0.85

0.84 0.80 0.81 0.82 0.84 0.85 0.84

The shares were bought using internally generated funds. In the previous financial year, 5,010,300 of treasury shares repurchased were sold for a net cash consideration of RM8,902,700. Share premium The increase in share premium during the year arose from the conversion of warrants.

128

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

31. SHARE CAPITAL AND SHARE PREMIUM (Cont’d) Warrants The Warrants 2007/2012 (“Warrants”) of the Company are constituted by a Deed Poll dated 5 September 2007 (“Deed Poll”). The salient features of the Warrants 2007/2012 are as follows: (a) The issue date of the Warrants is 25 October 2007 and the expiry date is 24 October 2012. Any Warrants not exercised at the expiry date will lapse and cease to be valid for any purpose; (b) As a consequence of the subdivision of every one (1) ordinary share of RM1.00 each into RM0.50 each in the Company, the Exercise Price of the Warrants was adjusted from RM1.10 to RM0.55 for each warrant and an additional 62,009,946 new warrants were issued in accordance with the provisions of the Deed Poll; (c) The Warrant holders are not entitled to participate in any distribution and/or offer of further securities in the Company (except for the issue of new warrants pursuant to adjustment as mentioned in item above), until and unless such holders exercise the rights under the Warrants to subscribe for new ordinary shares; (d) Subject to the provision in the Deed Poll, the Company is free to issue shares to shareholders either for cash or as a bonus distribution and further subscription rights upon such terms and conditions as the Company sees fit but the Warrant holders will not have any participating rights in such issues unless otherwise resolved by the Company in general meeting; and (e) All shares to be issued upon the exercise of the Warrants shall, on allotment and issue, rank pari passu in all respects with the then existing shares of the Company except that they shall not be entitled to any dividends, that may be declared prior to the date of exercise of the Warrants, nor shall they be entitled to any distributions or entitlements for which the entitlement date is prior to the date of exercise of the Warrants. The movements in the Company’s Warrants are as follows:

Number of warrants over ordinary shares of RM0.50 each Balance as of Balance as of 1.5.2011 Adjustment Granted Exercised 30.4.2012

Number of unexercised warrants *

67,307,446*

62,009,946

–

(9,582,680)

119,734,712

Over ordinary shares of RM1.00 each

32. RETAINED EARNINGS In accordance with the Finance Act 2007, the single tier income tax system became effective from the year of assessment 2008. Under this system, tax on a company’s profit is a final tax, and dividends paid are exempted from tax in the hands of the shareholders. Unlike the previous imputation system, the recipient of the dividend would no longer be able to claim any tax credit. Companies without Section 108 tax credit balance will automatically move to the single tier income tax system on 1 January 2008. However, companies with such tax credits are given an irrevocable option to elect for the single tier income tax system and disregard the tax credit or to continue to use the tax credits under Section 108 account to frank the payment of cash dividends on ordinary shares for a period of 6 years ending 31 December 2013 or until the tax credits are fully utilised, whichever comes first. During the transitional period, any tax paid will not be added to the Section 108 account and any tax credits utilised will reduce the tax credit balance. All companies will be on the new system by 1 January 2014. As of the end of the reporting period, the Company has not elected for the irrevocable option to disregard the Section 108 tax credits. Accordingly, subject to the agreement of the Inland Revenue Board and based on the prevailing tax rate applicable to dividends, the Company has sufficient Section 108 tax credit and tax exempt income (Note 10) to frank dividends out of its entire retained earnings as of 30 April 2012.

129

2012 ANNUAL REPORT

33. LONG-TERM LIABILITIES

The Group

Land cost payable (Note 35) Secured: Hire-purchase and lease payables Bridging loans Term loans Revolving credits

(a) (b) (c) (d)

Unsecured: Bonds

(e)

The Company 2012 2011 RM RM

2012 RM

2011 RM

14,683,723

19,029,133

–

1,452,587 – 299,106,294 15,852,640

1,793,837 – 155,296,319 6,814,403

788,213 – 78,000,000 –

1,067,951 – – –

331,095,244

182,933,692

78,788,213

1,067,951

–

331,095,244

182,933,692

78,788,213

1,067,951

(a) Hire-purchase and lease payables

The Group 2012 RM

2011 RM

Minimum lease payments: Not later than one year Later than 1 year but not later than 5 years

672,483 1,554,025

1,082,634 1,958,447

Future finance charges

2,226,508 (196,359)

3,041,081 (292,557)

Present value of hire-purchase and lease liabilities

2,030,149

2,748,524

Present value of hire-purchase and lease liabilities: Not later than 1 year More than 1 year and less than 2 years More than 2 years and less than 5 years

577,562 564,603 887,984

954,687 681,732 1,112,105

2,030,149

2,748,524

Analysed as follows: Due within 12 months (shown under current liabilities) Due after 12 months

577,562 1,452,587

954,687 1,793,837

2,030,149

2,748,524

130

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

33. LONG-TERM LIABILITIES (Cont’d) (a) Hire-purchase and lease payables (Cont’d)

The Company 2012 2011 RM RM

Minimum payment: Not later than one year Later than 1 year but not later than 5 years

324,000 837,000

324,000 1,161,000

Future finance charges

1,161,000 (93,049)

1,485,000 (151,475)

Present value of hire-purchase and lease liabilities

1,067,951

1,333,525

Present value of hire-purchase and lease liabilities: Not later than 1 year More than 1 year and less than 2 years More than 2 years and less than 5 years

279,738 293,902 494,311

265,574 279,738 788,213

1,067,951

1,333,525

279,738 788,213

265,574 1,067,951

1,067,951

1,333,525

Analysed as follows: Due within 12 months (shown under current liabilities) Due after 12 months

The hire-purchase and lease payables of the Group and of the Company bear interest at rates ranging from 2.4% to 7.5% and 2.5% (2011: 2.4% to 7.5% and 2.5%) per annum respectively. Interest rates are fixed at the inception of the hire-purchase and lease arrangements. The Group’s hire-purchase and lease payables are secured by the financial institutions’ charge over the assets under hirepurchases/leases. (b) Bridging loans

The Group 2012 RM Amount repayable Due within 1 year (Note 36) Long-term portion

3,103,113 (3,103,113) –

2011 RM 2,979,861 (2,979,861) –

The Company 2012 2011 RM RM – –

– –

–

131

2012 ANNUAL REPORT

33. LONG-TERM LIABILITIES (Cont’d) (c) Term loans

The Group 2012 RM

The Company 2012 2011 RM RM

2011 RM

Amount repayable Due within 1 year (Note 36)

318,546,052 (19,439,758)

161,657,692 (6,361,373)

78,000,000 –

– –

Long-term portion

299,106,294

155,296,319

78,000,000

–

The long-term portion of the loans are repayable as follows: More than 1 year and less than 2 years More than 2 years and less than 5 years

77,742,674 221,363,620

17,561,935 137,734,384

– 78,000,000

– –

299,106,294

155,296,319

78,000,000

–

As of 30 April 2012, the Group has credit facilities issued under Syariah Principles amounting to RM148,000,000 (2011: RM73,300,000), which were obtained from licensed financial institutions. The facility of the subsidiary companies was secured by a first party legal charge over 7 acres of their freehold land. The details of significant bridging loans and term loans facilities of the Group are as follows: (a) term loans with tenure ranging from 15 months to 48 months totalling RM309,778,065; and (b) term loans with tenure of 15 years totalling RM8,618,695. The abovementioned bridging and term loans are secured by way of the following: (a) the respective subsidiary companies’ stamped facility agreements; (b) fixed charges over certain investment properties of subsidiary companies; (c) first party legal charge over 2 parcels of freehold land of subsidiary companies held for development; (d) a fixed charge and floating charge by way of a debenture on subsidiary companies’ present and future assets; (e) assignment of sales proceeds arising from sale of development properties of certain subsidiary companies; (f ) assignment of all monies in the Housing Development Accounts of certain subsidiary companies, subject to the provisions of the Housing Development Account Regulations 1991; (g) assignment of future rental or lease proceeds on development properties of certain subsidiary companies; (h) legal assignment of certain subsidiary companies’ interest under the Joint Venture Agreement (“JVA”) with a third party over a parcel of land held for development; and (i) legal assignment of a third party’s interest under the Supplemental Joint Venture Agreement with another third party over a parcel of land held for development.

132

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

33. LONG-TERM LIABILITIES (Cont’d) (d) Revolving credits

The Group 2012 RM Amount repayable Due within 1 year (Note 36) Long-term portion

2011 RM

88,852,640 (73,000,000)

80,172,217 (73,357,814)

15,852,640

6,814,403

The Company 2012 2011 RM RM 70,000,000 (70,000,000) –

55,000,000 (55,000,000) –

(e) Bonds

The Group 2012 RM Amount repayable Due within 1 year (Note 36)

– –

Long-term portion

–

2011 RM 50,000,000 (50,000,000) –

The Company 2012 2011 RM RM – – –

50,000,000 (50,000,000) –

The unsecured Bonds were obtained from financial institutions which included a condition to subscribe for the subordinated bonds disclosed in Note 19 which was issued pursuant to the Primary Collateralised Loan Obligations Transaction and were limited to 10% of the principal amount of the Bonds. The purpose of the facilities was for working capital and general corporate purposes. The facilities bear interest at prescribed rates of Nil (2011: 6.25% to 7.63%) per annum.

34. TRADE PAYABLES Included in the Group’s trade payables are retention sums of RM26,706,442 (2011: RM23,884,625) payable to subcontractors. The normal credit terms granted to the Group range from 1 to 60 days (2011: 1 to 60 days).

133

2012 ANNUAL REPORT

35. OTHER PAYABLES AND ACCRUED EXPENSES

The Group

The Company 2012 2011 RM RM

2012 RM

2011 RM

Other payables Land cost payable Accrued expenses Deposits received from purchasers and tenants Accrued interest expense

5,399,687 32,742,100 17,392,464 19,121,301 149,760

11,023,796 49,649,622 17,526,135 10,044,332 1,459,725

608,492 – 190,703 64,850 149,760

298,497 – 546,236 64,850 1,459,725

Less: Non-current portion - Land cost payable (Note 33)

74,805,312

89,703,610

1,013,805

2,369,308

(14,683,723)

(19,029,133)

–

60,121,589

70,674,477

1,013,805

2,369,308

Other payables comprise amounts outstanding for ongoing costs and operating expenses payable. Included in the Group’s other payables is an amount of RMNil (2011: RM2,037,098) owing to corporate shareholders of certain subsidiary companies. This amount is unsecured, interest-free and repayable on demand.

36. BORROWINGS

The Group

The Company 2012 2011 RM RM

2012 RM

2011 RM

3,148,066 3,103,113 19,439,758 73,000,000

4,994,723 2,979,861 6,361,373 73,357,814

– – – 70,000,000

– – – 55,000,000

–

50,000,000

–

50,000,000

98,690,937

137,693,771

70,000,000

105,000,000

Short-Term Borrowings Secured: Bank overdrafts Bridging loans (Note 33b) Term loans (Note 33c) Revolving credits (Note 33d) Unsecured: Bonds (Note 33e)

134

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

36. BORROWINGS (Cont’d) The weighted average effective interest rates per annum at the end of the reporting period for borrowings are as follows:

The Group

Bank overdrafts Bridging loans Term loans Revolving credits Bonds

2012 %

2011 %

7.1 8.1 5.5 5.3 –

6.8 6.0 5.5 5.9 6.9

The Company 2012 2011 % % – – 4.6 4.6 –

– – – 4.8 6.9

The bank overdrafts and revolving credits of the Group and of the Company are secured by fixed charges over certain investment properties of subsidiary companies and debentures over the assets of a subsidiary company. Certain revolving credits of the Company and its subsidiary companies are secured by first legal charges over certain property development projects of certain subsidiary companies and fixed charges over certain investment properties of certain subsidiary companies of the Group.

37. CORPORATE GUARANTEES The Company has provided corporate guarantees to certain financial institutions pertaining to the banking facilities utilised by its subsidiary companies as of 30 April 2012. The total amount of corporate guarantees provided by the Company for the abovementioned facilities amounted to RM552,888,000 (2011: RM391,554,797). The financial guarantees have not been recognised since the fair value on initial recognition was not material as the financial guarantees provided by the Company did not contribute towards credit enhancement of the subsidiary companies’ borrowings in view of the securities pledged by the subsidiary companies as disclosed in Note 33.

38. CAPITAL COMMITMENT As of the end of reporting period, the Group and the Company have the following capital commitments:

The Group

Approved and contracted for: Purchase of land held for property development

2012 RM

2011 RM

39,600,000

79,634,151

The Company 2012 2011 RM RM –

-–

135

2012 ANNUAL REPORT

39. RELATED PARTY TRANSACTIONS Saved as disclosed elsewhere in the financial statements, the related parties and their relationship with the Company and its subsidiary companies are as follows: Name of related parties

Relationship

KJ Leisure Sdn. Bhd.

A company in which certain directors of the Company have direct interest A company in which certain directors of the Company have direct interest Director of the Company Director of the Company Son to the director of the Company Daughter to the director of the Company A company in which a director of the Company has direct interest and is also director of the company A company in which a director of the Company has direct interest and is also director of the Company A company in which a director of the Company has direct interest and is also director of the company A company in which a director of the Company has direct interest and is also director of the company A company in which a director of the Company has direct interest and is also director of the company

Petramco (M) Sdn. Bhd. Tan Sri Dato’ Mohamed Mansor bin Fateh Din Dato’ Fateh Iskandar bin Tan Sri Dato’ Mohamed Mansor Fong Kah Kuen Fara Eliza binti Tan Sri Dato’ Mohamed Mansor Rio Capital Sdn. Bhd. Dutaflex Sdn. Bhd. Ivory Paradigm Sdn. Bhd. KK Chong Perunding Sdn. Bhd. Globpark Sdn. Bhd.

Significant transactions undertaken on agreed terms and prices by the Group with their related parties during the financial year are as follows:

2012 Amount of Outstanding Transaction Amount RM RM The Group Progress billing of properties sold to certain directors of the Company Progress billing of properties sold to close members of the family of certain directors Progress billing of properties sold to a company in which certain directors of the Company have interest

2011 Amount of Outstanding Transaction Amount RM RM

–

13,335,000

917,250

452,244

33,466

–

5,246,069

152,005

1,020,000

–

136

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

39. RELATED PARTY TRANSACTIONS (Cont’d) Compensation of key management personnel

The Group

The Company 2012 2011 RM RM

2012 RM

2011 RM

Directors’ fees Salaries and other emoluments Benefits-in-kind

96,000 5,474,000 105,600

96,000 3,990,000 105,600

96,000 238,750 30,600

96,000 199,500 30,600

Total short-term employment benefits Post employment benefits: EPF

5,675,600

4,191,600

365,350

326,100

617,280

478,800

28,650

23,940

6,292,880

4,670,400

394,000

350,040

Salaries and other emoluments Benefits-in-kind

5,058,915 57,004

3,054,849 40,950

1,733,187 26,525

416,984 17,000

Total short-term employment benefits Post employment benefits: EPF

5,115,919

3,095,799

1,759,712

433,984

564,250

361,232

193,595

49,932

5,680,169

3,457,031

1,953,307

483,916

11,973,049

8,127,431

2,347,307

833,956

Directors

Other key management personnel

Total Compensation

40. SEGMENTAL INFORMATION (a) Business Segments The Group is organised into three major businesses: (i) Property development - the development of residential and commercial properties for sale and sale of land (ii) Construction - the construction of buildings (iii) Property investment - the investment of land and buildings held for investment potential and rental income in future Other business segments include investment holding which are not separately reported as the segment’s operations are not material to the Group. The accounting policies of the reportable segments are the same as the Group’s accounting policies described in Note 3. Management has determined the operating segments based on the reports viewed by the Chief Executive Officer (the chief operating decision-maker) for the purpose of resources allocation and assessment of segment performance. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise corporate income, expenses, assets and liabilities. The directors are of the opinion that all inter-segment transactions have been entered into in the normal course of business and have been established on terms and conditions that are not materially different from those obtainable in transactions with unrelated parties.

2012 ANNUAL REPORT

137

40. SEGMENTAL INFORMATION (b) Geographical Segments The Group operates and derives its income in Malaysia. Accordingly, the financial information by geographical segment has not been presented. 2012

Property Development Construction RM RM

Property Investment RM

Other Operations RM

Eliminations RM

Consolidated RM

REVENUE External revenue 640,262,047 Inter-segment revenue –

213,668 117,386,264

10,913,091 454,861

1,017,270 14,418,196

– (132,259,321)

652,406,076 –

Total revenue

117,599,932

11,367,952

15,435,466

(132,259,321)

652,406,076

640,262,047

RESULTS Segment results 180,961,739 4,236,790 1,287,793 (271,814) (4,248,246) Unallocated corporate expenses

181,966,262 (8,931,646)

Operating profit Finance costs Interest income Change in fair value of investment properties Gain on disposal of investment in associated company Impairment loss on property, plant and equipment Impairment loss on investment in associated company Provision for bumiputra penalties no longer required Provision for foreseeable property development losses Share of loss of associated companies Income tax expense

173,034,616 (6,312,901) 9,567,341

Profit for the year

119,592,127

1,484,636

8,408,149

(2,392,003)

(1,439,102)

1,069,438

(21,542,369) (810,357) (41,475,321)

138

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

40. SEGMENTAL INFORMATION (Cont’d) 2012

Property Development Construction RM RM

Property Investment RM

Other Operations RM

Eliminations RM

Consolidated RM

ASSETS Segment assets 1,162,530,174 37,686,384 38,299,312 176,092 – 1,238,691,962 Investment in associated companies – 17,907,776 16,000,229 – – 33,908,005 Unallocated corporate assets 80,535,940 Consolidated total assets 1,353,135,907 LIABILITIES Segment liabilities 453,568,987 13,111,072 9,909,866 75,281 – Unallocated corporate liabilities Consolidated total liabilities OTHER INFORMATION Capital expenditure Non-cash expenses Depreciation and amortisation Provision for foreseeable property development losses Impairment loss on property, plant and equipment Impairment loss on investment in associated company Bad debts written off

476,665,206 178,055,298 654,720,504

647,906

10,978

136,950

29,580

–

825,414

863,799

65,621

359,776

523,576

–

1,812,772

21,542,369

–

21,542,369

–

2,392,003

–

2,392,003

– –

1,439,102 –

– 307,877

– –

1,439,102 307,877

2012 ANNUAL REPORT

139

40. SEGMENTAL INFORMATION (Cont’d) 2012

Property Development Construction RM RM

Non-cash income Provision for bumiputra quota penalties no longer required Gain on change in fair value of investment properties Gain on disposal of associated company Allowance for doubtful debts no longer required

(1,069,438)

–

Property Investment RM

Other Operations RM

Eliminations RM

–

(1,069,438)

–

(1,484,636)

–

(8,408,149)

–

(7,207)

–

(7,207)

(1,484,636)

(8,408,149)

Consolidated RM

2011 REVENUE External revenue Inter-segment revenue

585,551,706 –

409,252 134,262,079

10,117,151 1,225,940

1,399,619 5,031,330

– (140,519,349)

597,477,728 –

Total revenue

585,551,706

134,671,331

11,343,091

6,430,949

(140,519,349)

597,477,728

RESULTS Segment results 130,551,141 3,138,219 1,623,823 (177,786) (2,540,481) Unallocated corporate expenses

132,594,916 1,716,994

Operating profit Finance costs Interest income Change in fair value of investment properties Provision for foreseeable property development losses Provisions for bumiputra quota penalties Share of profit of associated companies 1,021,596 – 1,306,853 – – Income tax expense

134,311,910 (6,749,427) 3,628,604

2,328,449 (36,761,279)

Profit for the year

92,730,717

(1,256,595)

(1,701,507)

(1,069,438)

140

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

40. SEGMENTAL INFORMATION (Cont’d) 2011

Property Development Construction RM RM

Property Investment RM

Other Operations RM

Eliminations RM

Consolidated RM

ASSETS Segment assets 1,108,568,621 27,883,829 94,822,136 2,498,633 – 1,233,773,219 Investment in associated companies 6,294,607 16,384,551 39,106,103 – – 61,785,261 Unallocated corporate assets 59,323,354 Consolidated total assets 1,354,881,834 LIABILITIES Segment liabilities 495,352,329 15,063,008 47,625,817 66,612 – Unallocated corporate liabilities

132,674,202

Consolidated total liabilities

690,781,968

OTHER INFORMATION Capital expenditure Non-cash expenses Depreciation and amortisation Provision for foreseeable property development losses Provision for bumiputra quota penalties Loss on change in fair value of investment properties Allowance for trade receivables Non-cash income Gain on change in fair value of investment properties Gain on disposal of property, plant and equipment Allowance for doubtful debts no longer required

558,107,766

47,214

14,810

2,412,284

–

2,474,308

987,392

103,757

677,665

127,166

–

1,895,980

1,701,507

–

1,701,507

1,069,438

–

1,069,438

–

590,000

1,474,303

–

2,064,303

125,806

–

240,686

–

366,492

–

(807,708)

–

(807,708)

–

(320,746)

–

(30,360)

(72,249) –

– –

– (30,360)

(248,497) –

2012 ANNUAL REPORT

141

41. FINANCIAL INSTRUMENTS (i) Capital risk management The Group and the Company manage its capital to ensure that it will be able to continue as a going concern while maximising returns to its shareholder through the optimisation of debt and equity balance. The Group’s and the Company’s overall strategy remain unchanged from 2011. The Group and the Company did not engage in any transaction involving financial derivative instruments during the financial year. The Group’s and the Company’s risk management committee review the capital structure of the Group and the Company on a regular basis. The Group manages its capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristic of the underlying assets. No changes were made in the objectives, policies or processes during the financial year ended 30 April 2012. Gearing ratio The gearing ratio at end of the reporting period is as follows:

The Group 2012 RM Debt Deposits, cash and bank balances Net debt Equity Net debt to equity ratio

The Company 2012 2011 RM RM

2011 RM

415,680,020 (337,411,118)

302,553,017 (176,718,725)

149,067,951 (48,812,415)

106,333,525 (27,660,035)

78,268,902

125,834,292

100,255,536

78,673,490

698,415,403 11%

664,099,866 19%

368,281,875 27%

344,764,597 23%

Debt is defined as long and short-term borrowings, as described in Notes 33 and 36 excluding land cost payable. Equity includes all capital and reserves of the Group and the Company that are managed as capital. Significant Accounting Policies Details of the significant accounting policies and methods adopted (including the criteria for recognition, the bases of measurement and the bases for recognition of income and expenses), for each class of financial asset, financial liability and equity instrument are disclosed in Note 3.

142

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

41. FINANCIAL INSTRUMENTS (Cont’d) (i) Capital risk management (Cont’d) Categories of Financial Instruments

The Group

Financial assets Loans and receivables Amortised cost Trade receivables Other receivables Amount due from subsidiary companies Amount due from associated companies Deposit, cash and bank balances Available-for-sale Other investments Financial liabilities Amortised cost Term loans Hire-purchase and lease payables Bonds Bank overdrafts Bridging loans Dividend payable Trade payables Other payables Amount due to associated companies Land cost payable Deposits received from purchasers and tenants Accrued expenses Revolving credits

The Company 2012 2011 RM RM

2012 RM

2011 RM

61,559,939 32,466,684 – 1,217,184 337,411,118

245,847,745 20,439,923 – 3,930,759 176,718,725

– 1,574,432 140,742,203 42,184 48,812,415

– 129,679 62,100,930 39,603 27,660,035

4,000,000

–

318,546,052 2,030,149 – 3,148,066 3,013,113 13,834,540 79,479,148 5,399,687 – 32,742,100 19,121,301 17,542,224 88,852,640

161,657,692 2,748,524 50,000,000 4,994,723 2,979,861 9,969,717 79,276,599 11,023,796 143,175 49,649,622 10,044,332 18,985,860 80,172,217

78,000,000 1,067,951 – – – 13,834,540 3,234 608,492 – – 64,850 340,463 70,000,000

– 1,333,525 50,000,000 – – 9,969,717 3,234 298,497 – – 64,850 2,005,961 55,000,000

(ii) Financial Risk Management Objectives The operations of the Group are subject to a variety of financial risk, credit risk, interest rate risk, foreign currency risk and liquidity risk. The Group has formulated a financial risk management framework whose principal objective is to minimise the Group’s exposure to risks and/or costs associated with the financing, investing and operating activities of the Group. Financial risk management is carried out through risk reviews, internal control systems and adherence to Group financial risk management policies. The Board regularly reviews these risks and approves the treasury policies, which cover the management of these risks.

2012 ANNUAL REPORT

143

41. FINANCIAL INSTRUMENTS (Cont’d) (iii) Credit Risk Management Credit risk refers to the risk that a counter party will default on its contractual obligation resulting in financial loss to the Group. The Group is exposed to credit risk mainly from its customer base, including trade receivables. The Group extends credit to its customers based upon careful evaluation of the customer’s financial condition and credit history. Trade receivables are monitored on an ongoing basis by the Group’s credit control department. Exposure to credit risk At the reporting date, the Group’s and the Company’s maximum exposure to credit risk is the carrying amount of financial assets which are mainly trade and other receivables, deposits with licensed bank and cash and bank balances. The carrying amount of financial assets recognised in the financial statements, which is net of impairment losses, represents the Group’s maximum exposure to credit risk, without taking into account collateral or other credit enhancements held. (iv) Interest Rate Risk Management The Group and the Company are exposed to interest rate risk through the impact of rate changes on interest-bearing deposits, hire-purchase creditors and borrowings. The Group’s and the Company’s exposure to interest rates on financial liabilities are detailed in the liquidity risk management section of this note. Interest rate exposure is measured using sensitivity analysis as disclosed below: Interest rate sensitivity analysis The sensitivity analyses below have been determined based on the exposure to interest rates for both derivatives and nonderivative instruments at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates. If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Group’s: •

profit for the year ended 30 April 2012 would decrease/increase by RM2,067,800. This is mainly attributable to the Group’s exposure to interest rates on its variable rate borrowings; and

The Group’s sensitivity to interest rates has increased during the current period mainly due to the increased in variable rate debt instruments.

144

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

41. FINANCIAL INSTRUMENTS (Cont’d) (v) Foreign Currency Risk Management Foreign exchange exposures in transactional currencies other than functional currencies of the operating entities are kept to an acceptable level. The carrying amounts of the Group’s and of the Company’s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:

The Group

The Company 2012 2011 RM RM

2012 RM

2011 RM

Assets Australian Dollar (AUD) Thai Baht (THB)

1,211,899 –

1,300,056 3,463,207

18,827,244 –

18,708,261 5,283

Liabilities Australian Dollar (AUD)

25,820

147,382

–

Foreign currency sensitivity analysis The Group is mainly exposed to the currency of AUD and THB. The following table details the Group’s sensitivity to a 10% increase and decrease in the RM against the relevant foreign currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates. The sensitivity analysis includes external loans as well as loans to foreign operations within the Group where the denomination of the loan is in a currency other than the currency of the lender or the borrower. A positive number below indicates an increase in profit and other equity where the RM strengthens 10% against the relevant currency. For a 10% weakening of the RM against the relevant currency, there would be a comparable impact on the profit and other equity, and the balances below would be negative.

The Group Profit or loss 2012 2011 RM RM Impact of AUD Impact of THB

118,608 –

115,267 2,000

The Company Profit or loss 2012 2011 RM RM 1,882,724 –

1,870,826 706

This is mainly attributable to the exposure outstanding on AUD receivables and payables in the Group at the end of the reporting period. In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the year end exposure does not reflect the exposure during the year. During the financial year, no other transaction denominated in foreign currency was undertaken by the Group except for disposal of its investment in WHA Glomac Alliance Company Limited for a total consideration of THB285,403,997 which is equivalent to RM29,063,564.

2012 ANNUAL REPORT

145

41. FINANCIAL INSTRUMENTS (Cont’d) (vi) Liquidity Risk Management The Group and the Company seek to invest cash assets safely and profitably. The Group also seeks to control credit risk by setting counterparty limits and ensuring that sale of products and services are made to customers with an appropriate credit history, and monitoring customers’ financial standing through periodic credit review and credit checks at point of sales. The Group and the Company consider the risk of material loss in the event of non-performance by a financial counterparty to be unlikely. The following tables detail the Group’s and the Company’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The tables include both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period. The contractual maturity is based on the earliest date on which the Group may be required to pay.

Weighted average effective interest rate %

Less than 1 year RM

1-2 years RM

2-5 years RM

5+ years RM

Total RM

– 4.3

145,824,411 672,483

8,158,393 864,624

4,292,614 689,401

– –

158,275,418 2,226,508

5.5

118,067,419

80,390,223

286,335,703

30,925,439

515,718,784

– 2.5

14,851,579 279,738

– 293,902

– 494,311

– –

14,851,579 1,067,951

5.2 –

77,066,600 –

16,513,900 –

63,615,825 –

6,551,675 –

163,748,000 –

The Group 30 April 2012 Non-interest bearing Finance lease liability Variable interest rate instrument The Company 30 April 2012 Non-interest bearing Finance lease liability Variable interest rate instruments Financial guarantee*

146

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

41. FINANCIAL INSTRUMENTS (Cont’d) (vi) Liquidity Risk Management (Cont’d) The Group 30 April 2011 Non-interest bearing Finance lease liability Variable interest rate instruments Fixed interest rate instruments The Company 30 April 2011 Non-interest bearing Finance lease liability Variable interest rate rate instrument Fixed interest rate instruments Financial guarantee* *

Weighted average effective interest rate %

Less than 1 year RM

1-2 years RM

2-5 years RM

5+ years RM

Total RM

– 4.3

129,954,021 966,735

30,206,176 703,282

11,753,770 1,160,689

– –

171,913,967 2,830,706

5.7

94,355,107

42,715,648

111,396,886

30,865,187

279,332,828

6.6

53,470,000

–

53,470,000

– 2.5

2,372,542 265,574

– 279,738

– 788,213

– –

2,372,542 1,333,525

4.8

57,623,500

–

57,623,500

6.2 –

55,287,841 –

– –

55,287,841 –

At the end of the reporting period, it was not probable that the counterparties to financial guarantee contracts will claim under the contracts. Consequently, the amount included above is nil.

147

2012 ANNUAL REPORT

41. FINANCIAL INSTRUMENTS (Cont’d) (vi) Liquidity Risk Management (Cont’d) Fair Value of Financial Instruments The carrying amounts of financial assets and financial liabilities of the Group and of the Company approximate their fair values due to the relatively short-term maturity period for these financial instruments excepts as follows:

The Group

Financial assets Available-for-sale Other investments Financial liabilities Amortised cost Trade payables Land cost payable Hire-purchase and lease payables Term loans Revolving credits

The Company 2012 2011 RM RM

2012 RM

2011 RM

4,000,000

–

76,610,090 30,220,672 2,030,149 318,546,052 88,852,640

78,833,834 48,908,940 2,748,524 161,657,692 80,172,217

– – 788,213 78,000,000 –

– – 1,067,951 – –

It is not practical to estimate the fair value of unquoted investments of the Group as there is a lack of quoted market prices and related information. Trade payables, land cost payable, hire-purchase and lease payables, term loans and revolving credits The fair value of trade payables, land cost payable, hire-purchase and lease payables, term loans and revolving credits are determined using the present value of future cash flows estimated and discounted using the current interest rates for similar instruments at the end of the reporting period.

148

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Contâ&#x20AC;&#x2122;d)

42. SUBSIDIARY AND ASSOCIATED COMPANIES

Name of Company

Effective Equity Interest 2012 2011 % %

Principal Activities

Subsidiary companies Incorporated in Malaysia Bangi Integrated Corporation Sdn. Bhd. Berapit Development Sdn. Bhd.# BH Interiors Sdn. Bhd. # Dunia Heights Sdn. Bhd. # Elmina Equestrian Centre (Malaysia) Sdn. Bhd. # Glomac Alliance Sdn. Bhd. # Glomac Consolidated Sdn. Bhd. # Glomac City Sdn. Bhd. # Glomac Damansara Sdn. Bhd. Glomac Enterprise Sdn. Bhd. Glomac Group Management Services Sdn. Bhd. #

100 100 100 100 100 100 100 100 100 100 100

Glomac Jaya Sdn. Bhd. Glomac Land Sdn. Bhd. # Glomac Leisure Sdn. Bhd. # Glomac Maju Sdn. Bhd. Glomac Nusantara Sdn. Bhd. # Glomac Property Services Sdn. Bhd. # Glomac Rawang Sdn. Bhd. Glomac Real Estate Sdn. Bhd. Glomac Realty Sdn. Bhd. # Glomac Regal Sdn. Bhd. Glomac Resources Sdn. Bhd. Glomac Restaurants Sdn. Bhd.* Glomac Segar Sdn. Bhd. # Glomac Sutera Sdn. Bhd. # Glomac Vantage Sdn. Bhd. Kelana Centre Point Sdn. Bhd.* # Kelana Seafood Centre Sdn. Bhd.* Magic Season Sdn. Bhd.* # OUG Square Sdn. Bhd. # Prisma Legacy Sdn. Bhd. *# Prima Sixteen Sdn. Bhd.* Regency Land Sdn. Bhd. Sungai Buloh Country Resort Sdn. Bhd. # Glomac Thailand Sdn. Bhd. #

100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100

100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 90

Property investment Property investment and management Dormant Property development and investment Dormant Property development and investment Property development and investment Property development and investment Property development and investment Property development and investment holding Property development, investment holding and project management Property development and investment Property development and investment Dormant Property development and investment Property development and investment Property management and investment Property development and investment Property development and investment Property investment and management Property development and investment Property development and investment Investment holding Property development and investment Property development and investment Property development and investment Property investment and management Dormant Property development and investment Property development and investment Dormant Property investment and management Property investment and management Managing and operating of a clubhouse Investment holding

2012 ANNUAL REPORT

42. SUBSIDIARY AND ASSOCIATED COMPANIES (Cont’d)

Name of Company Subsidiary companies (Cont’d) Incorporated in Malaysia Glomac Power Sdn. Bhd. # FDA Sdn. Bhd. Glomac Excel Sdn. Bhd. # Glomac Utama Sdn. Bhd. Prominent Excel Sdn. Bhd. # Glomac Al Batha Sdn. Bhd. Glomac Al Batha Mutiara Sdn. Bhd. * Glomac Bina Sdn. Bhd. Glomac Kristal Sdn. Bhd. # FDM Development Sdn. Bhd. # Berapit Properties Sdn. Bhd. # Kelana Property Services Sdn. Bhd. # Berapit Pertiwi Sdn. Bhd. # Kelana Kualiti Sdn. Bhd. # Glomac Cekap Sdn. Bhd. (formerly known as Kristal Taipan Sdn. Bhd.) # Magical Sterling Sdn. Bhd. # Crest Dollars Sdn. Bhd. # Incorporated in Australia Glomac Australia Pty Ltd. # Associated companies Incorporated in Malaysia Irama Teguh Sdn. Bhd. (held through PPC Glomac Sdn. Bhd.) # PPC Glomac Sdn. Bhd. (held through Glomac Power Sdn. Bhd.) # Worldwide Glomac Development Sdn. Bhd. (held through Glomac Utama Sdn. Bhd.) # Incorporated in Thailand WHA Glomac Alliance Co. Ltd. (held through Glomac Thailand Sdn. Bhd.) # Incorporated in Australia VIP Glomac Pty. Ltd. (held through Glomac Australia Pty Ltd) # VIP Glomac Unit Trust (held through Glomac Australia Pty Ltd)#

Effective Equity Interest 2012 2011 % %

Principal Activities

85.7 70 60 60 60 51 51 51 100 100 100 100 100 100 100

85.7 70 60 60 60 51 51 51 100 100 100 100 100 – –

Investment holding Property development and investment Dormant Investment holding Car park operators and managers Property development and investment Property development and investment Building contractor Property development and investment Property development and investment Property development and investment Property management Dormant Dormant Dormant

100 100

– –

100

– 100

Investment holding

Turnkey contractor

29.4

Property development

–

44.1

Warehouse contractor and investment holding

45.45

Trustee management

45.85

Real estate investment

Dormant Dormant

* Interest held through subsidiary companies # The financial statements of these companies are examined by auditors other than the auditors of the Company.

149

150

GLOMAC BERHAD

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

43. MATERIAL LITIGATION A wholly owned subsidiary, Glomac Alliance Sdn Bhd (“GASB”) had been served with Writ of Summons and Statement of Claims (“the Claim”) dated 21 March 2011 filed by both Score Option Sdn Bhd (“SOSB”) and Austral Development Sdn Bhd (“ADSB”) (“the Plaintiffs”) against the Receivers and Managers (“R & M”) as the 1st and 2nd defendants, Malayan Banking Berhad (“MBB”) as the 3rd defendant and GASB as the 4th defendant. The Claim against GASB is inter alia the following:1. A declaration that the Sales & Purchase Agreement (“SPA”) dated 24 January 2011 entered into between GASB and SOSB is null and void; 2. A declaration that the approval given to GASB to complete the 79 units (the development of 21/2 storey houses) is null and void; and 3. Injunction order against GASB to enter the Land. There is no pleaded claim for monetary or damages against GASB in this suit, only for an injunction to restrain the completion of the SPA entered into by GASB with SOSB for the purchase of the Land from SOSB acting through the R & M. On 21 March 2011, SOSB and ADSB filed a suit against the R & M, MBB and GASB. On 22 March 2011, SOSB filed summon in chambers for injunction application. On 13 July 2011, the court fixed for decision in which the injunction application was dismissed with costs to be paid by the directors of SOSB and R & M striking out application was allowed with costs. On 11 August 2011, SOSB and ADSB filed notice of appeal to the Court of Appeal but were dismissed on 21 March 2012 with an order against the directors of SOSB & ADSB to pay the costs to each of the respondents. On 18 April 2012, one of the directors of SOSB made an application by filing Notice of Motion for leave of appeal to the Federal Court. The court has fixed the matter for further case management on 10 October 2012 for the application for leave to appeal to the Federal Court. The application is currently pending grounds of decision from Court of Appeal. Pending the decision from the Federal Court, GASB has not recognised any profits or fair value enhancement to the Land. There is no other material litigation which will adversely affect the position or business of the Group.

2012 ANNUAL REPORT

151

44. SIGNIFICANT EVENTS (i) On 14 September 2011, Glomac Thailand Sdn. Bhd. entered into a Share Sale and Purchase Agreement with WHA Corporation Co Ltd for disposal of Glomac Thailand’s entire 49% equity interest comprising 15,190,000 ordinary shares held in WHA Glomac Alliance Company Limited, a company incorporated in Thailand, for a total consideration of THB 285,403,997 or equivalent to RM29,063,564. The disposal, which was completed on 14 September 2011, resulted in a gain on disposal of RM8,408,149. (ii) On 13 October 2011, the Company subdivided its existing 302,471,721 ordinary shares of RM1.00 each into 604,943,442 ordinary shares of RM0.50 each. Accordingly, the subdivided shares were listed and quoted on the Main Market of Bursa Securities on 14 October 2011. (iii) On 13 November 2009, FDM Development Sdn. Bhd. (“FDM”) entered into a Sale and Purchase Agreement with Motif Bakti Sdn. Bhd. for the acquisition of leasehold land in Pekan Kayu Ara, Daerah Petaling, Selangor Darul Ehsan for a total purchase consideration of RM31,200,000. The said acquisition was completed on 31 January 2012. (iv) On 21 January 2011, Glomac Alliance Sdn. Bhd (“GASB”) entered into a Sale and Purchase Agreement with Score Option Sdn. Bhd. (Receivers and Managers Appointed) acting through Messrs Ernst & Young (Receiver and Manager) for the proposed acquisition of 200 acres of leasehold land for a purchase consideration of RM77,000,000. The proposed acquisition was completed on 25 June 2012. (v) On 17 February 2012, Kelana Kualiti Sdn. Bhd.(“KKSB”), a wholly-owned subsidiary of the Company, received the Memorandum from the Kuala Lumpur High Court confirming successful bidding of the auction sale for 2 pieces of land located at Mukim of Ijok, District of Kuala Selangor, Selangor for a total consideration of RM44,000,000.00. On the same day, the first 10% deposit was paid. On 20 April 2012, the Company acquired additional 499,998 ordinary shares of RM1.00 each in the share capital of KKSB. On 5 June 2012, KKSB made full payment of the balance of the purchase consideration amounting to RM39.6 million, representing 90% of the purchase consideration.

45. SUBSEQUENT EVENTS (i) On 17 February 2012, the Company entered into a tripartite Shareholders’ Agreement with Glomac Cekap Sdn. Bhd. (formerly known as Kristal Taipan Sdn. Bhd.) and Mr. Chong Wan Ping to govern the material aspects of the joint venture (“JV”), the conduct of the business and the management of the JV Company. On 23 May 2012, the JV parties entered into a Mutual Termination Agreement to mutually terminate the Shareholders’ Agreement. (ii) On 1 June 2012, Magical Sterling Sdn. Bhd. (“Purchaser”), a wholly-owned subsidiary of Glomac Berhad, entered into a Sales and Purchase Agreement (“SPA”) with Lee Chin Cheng Dengkil Oil Palm Plantations Sdn. Bhd. (“Vendor”) for a parcel of agricultural land held under P.N. No. 4767, Lot No. 6984, Mukim of Dengkil, Daerah Sepang, Negeri Selangor and measuring in area approximately 77.5985 hectares (191.75 acres) for a purchase consideration of RM66,821,040.

Deposits of RM6,682,104 representing 10% of the purchase consideration has been paid upon execution of the SPA. The remaining consideration amounting to RM60,138,936 shall be payable to the Vendor’s stakeholder within 30 days from the date of receipt by the Purchaser’s solicitors of a certified true copy of the Estate Land Board Approval and documentary evidence from Vendor’s solicitors on the withdrawal of caveats on the land.

(iii) On 7 June 2012, the Company acquired the entire issued and paid-up share capital of Magnitud Teknologi Sdn. Bhd. and Anugerah Armada Sdn. Bhd., with both having authorised share capital of RM100,000 comprising of 100,000 ordinary shares of RM1.00 each, of which 2 ordinary shares are issued and fully paid up, for a cash consideration of RM2.00. (iv) On 2 July 2012, Glomac Utama Sdn. Bhd. (“Glomac Utama”), a subsidiary of the Company entered into a Share Sale and Purchase Agreement with Worldwide Holdings Berhad for the disposal of Glomac Utama’s entire 49% equity interest comprising 2,450,000 ordinary shares held in Worldwide Glomac Development Sdn. Bhd., for a total consideration of RM4,959,784. The said disposal was completed on 31 July 2012.

152

GLOMAC BERHAD

SUPPLEMENTARY INFORMATION – DISCLOSURE ON REALISED AND UNREALISED PROFITS

On 25 March 2010, Bursa Malaysia Securities Berhad (“Bursa Malaysia”) issued a directive to all listed issuers pursuant to Paragraph 2.06 and 2.23 of the Bursa Securities Main Market Listing Requirements. The directive requires all listed issuers to disclose the breakdown of the retained earnings or accumulated losses as of the end of the reporting period, into realised and unrealised profits or losses. On 20 December 2010, Bursa Malaysia further issued guidance on the disclosure and the prescribed format of disclosure. The breakdown of the retained earnings of the Group and of the Company as of 30 April 2012 into realised and unrealised profits or losses, pursuant to the directive, is as follows:

The Group

The Company 2012 2011 RM RM

2012 RM

2011 RM

367,035 14,632

297,998 14,946

53,895 2,528

5,925 4,078

11,765

20,451

–

Less: Consolidation adjustments

393,432 (68,264)

333,395 (68,591)

56,423 –

10,003 –

Total retained earnings as per statements of financial position

325,168

264,804

56,423

10,003

Total retained earnings of the Group and the Company Realised Unrealised Total share of retained profits from associated companies Realised

The determination of realised and unrealised profits or losses is based on Guidance of Special Matter No. 1 “Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Securities Listing Requirements” as issued by the Malaysian Institute of Accountants on 20 December 2010. A charge or credit to the profit or loss of a legal entity is deemed realised when it is resulting from the consumption of resource of all types and form, regardless of whether it is consumed in the ordinary course of business or otherwise. A resource may be consumed through sale or use. Where a credit or a charge to the profit or loss upon initial recognition or subsequent measurement of an asset or a liability is not attributed to consumption of resource, such credit or charge should not be deemed as realised until the consumption of resource could be demonstrated. This supplementary information has been made solely for complying with the disclosure requirements as stipulated in the directive of Bursa Malaysia Securities Berhad and is not made for any other purposes.

2012 ANNUAL REPORT

153

STATEMENT BY DIRECTORS

The directors of GLOMAC BERHAD state that, in their opinion, the accompanying financial statements are drawn up in accordance with Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of 30 April 2012 and of the financial performance and the cash flows of the Group and of the Company for the year ended on that date. The supplementary information set out on page 152, which is not part of the financial statements, is prepared in all material respects, 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 and the directive of Bursa Malaysia Securities Berhad. Signed in accordance with a resolution of the Directors,

_______________________________________________________ TAN SRI DATO’ MOHAMED MANSOR BIN FATEH DIN

_______________________________________________________ DATO’ FATEH ISKANDAR BIN TAN SRI DATO’ MOHAMED MANSOR

Kuala Lumpur 16 August 2012

DECLARATION BY THE OFFICER PRIMARILY RESPONSIBLE FOR THE FINANCIAL MANAGEMENT OF THE COMPANY

I, ONG SHAW CHING the Officer primarily responsible for the financial management of GLOMAC BERHAD, do solemnly and sincerely declare that the accompanying financial statements 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.

_______________________________________________________ ONG SHAW CHING Subscribed and solemnly declared by the abovenamed ONG SHAW CHING at KUALA LUMPUR this 16th day of August, 2012. Before me,

_______________________________________________________ COMMISSIONER FOR OATHS

154

GLOMAC BERHAD

LIST OF INVESTMENT AND DEVELOPMENT PROPERTIES as at 30 April 2012

List of Investment Properties

Location

Description of Asset/ Existing Use

Tenure

Age of Buildings (Years)

Size (Sq. Ft.)

Net Book Value as at 30 April 2012 (RM’000)

Date of Acquisition

GM 2003 Lot 73 Tempat Pekan Sg Pencala Mukim Kuala Lumpur (Glomac Damansara)

Office Building/ Tenanted

Freehold

less than 1

98,619

40,295

1 January 2012

C-01 – C-06 Jalan SS7/13A Plaza Kelana Jaya 47301 Kelana Jaya Petaling Jaya (Plaza Kelana Jaya Phase II)

Office Building/ Tenanted

Freehold

28,012

13,305

3 August 2006

List of Development Properties

Tenure

Size (Acre)

Net Book Value as at 30 April 2012 (RM’000)

Land approved for mixed development/ Vacant

Freehold

2.9

75,005

18 December 2006

Geran 44783 Lot 3443 & Geran 47896 of PT 9889 to PT 9904 Lot 4382 Mukim Ulu Langat Daerah Ulu Langat (Suria Residen)

Land approved for residential development/Vacant

Freehold

43.0

37,429

5 March 2004

HS(D) 266265, PT 47868 Mukim of Sungai Buloh Daerah Petaling (Mutiara Damansara)

Land approved for commercial development/ Development in progress

Freehold

2.7

40,453

1 July 2008

Location

Description of Asset/ Existing Use

Date of Acquisition

Wilayah Persekutuan GM 2003 Lot 73 Tempat Pekan Sg Pencala Mukim Kuala Lumpur (Glomac Damansara) Selangor

2012 ANNUAL REPORT

Location

Description of Asset/ Existing Use

Tenure

Size (Acre)

Net Book Value as at 30 April 2012 (RM’000)

Date of Acquisition

155

HS(D) 135936 Lot PT 1 Pekan Kayu Ara Daerah Petaling Negeri Selangor (Glomac Centro)

Land approved for commercial development/ Development in progress

99 years leasehold, expiring 04.04.2099

4.5

39,939

13 November 2009

HS(D) 135937 Lot PT 2 Pekan Kayu Ara Daerah Petaling Negeri Selangor

Land approved for commercial development/ Vacant

99 years leasehold, expiring 04.04.2099

3.1

12,560

13 November 2009

HS (D) 1127 Lot P.T. 837 Mukim of Ijok District of Kuala Selangor (Saujana Utama III)

Land approved for mixed residential and commercial development/ Development in progress

99 years leasehold, expiring 17.04.2089

19.5

9,993

18 August 2003

HS (D) 2025 – 2030 Lot P.T. 1887 – 1892 Mukim of Ijok District of Kuala Selangor

Land approved for residential development/ Vacant

99 years leasehold, expiring 22.06.2094

16.5

3,317

3 July 1995

Hakmilik 17412 & 17413 Lot 3799 & 3800 Mukim of Ijok District of Kuala Selangor (Bukit Saujana)

Land approved for residential development/ Vacant

99 years leasehold, expiring 24.03.2095

4.5

1,353

5 October 2009

HS (D) 2452 Lot P.T. 1685 Mukim of Ijok District of Kuala Selangor

Land approved for residential development/ Vacant

99 years leasehold, expiring 18.02.2093

10.0

2,074

27 July 1995

P121A located at parent Lot No 43988 Geran 170283 Mukim of Dengkil District of Sepang (Cyberjaya)

Land approved for commercial building/ Vacant

Freehold

1.4

5,596

18 January 2008

156

GLOMAC BERHAD

LIST OF INVESTMENT AND DEVELOPMENT PROPERTIES (Cont’d) as at 30 April 2012

Location

Description of Asset/ Existing Use

Tenure

Size (Acre)

Net Book Value as at 30 April 2012 (RM’000)

Date of Acquisition

Geran 90687 Lot 36468 Geran 90688 Lot 36470 & Geran 102858 Lot 36469 Seksyen 40 Bandar Petaling Jaya Dearah Petaling Negeri Selangor (Plaza Kelana Jaya Phase IV)

Land approved for commercial building/ Vacant

Freehold

3.2

22,033

1 April 2008

Lot P128A (Part of Lot 43987) Mukim of Dengkil Daerah Sepang (Cyberjaya 2)

Land approved for commercial development/ Vacant

Freehold

1.4

6,101

30 August 2010

Land approved for mixed housing development/ Development in progress

Freehold

97.5

49,104

25 September 1995

Land approved for mixed residential and commercial development/ Vacant

99 years leasehold, expiring 17.11.2095

10.0

13,909

18 October 1995

Johore Lot 2265 & 888, Geran No. 18689 & 20146 Mukim of Kota Tinggi District of Kota Tinggi (Sri Saujana) Malacca Lot No. 1183 Town of Kawasan Bandar VI District of Melaka Tengah Melaka (Taman Kota Laksamana Seksyen 3)

157

2012 ANNUAL REPORT

ANALYSIS OF SHAREHOLDINGS as at 28 August 2012

Authorised Capital

: RM500,000,000.00

Issued Capital

: 683,984,458

Paid-up Capital

: RM341,992,229.00

Type of Shares

: Ordinary Shares of RM0.50 each

No. of Shareholders

: 6,249

Voting Rights

: One vote per ordinary share

A. Distribution of Shareholdings

Size of Holdings

No. of Holders

% of holders Total Holdings

% of issued capital 0.00

Less than 100 100 â&#x20AC;&#x201C; 1,000 1,001 to 10,000 10,001 to 100,000 100,001 to less than 5% of issued shares 5% and above of issued shares

68 323 4,305 1,326 223 4

1.09 5.17 68.89 21.22 3.57 0.06

1,866 198,834 18,827,126 41,334,160 307,768,446 315,854,026

0.03 2.75 6.04 45.00 46.18

Total

6,249

100.00

683,984,458

100.00

No. of Shares

144,536,198 90,331,088

21.13 13.21

43,500,000 37,486,740

6.36 5.48

24,158,200

3.53

23,447,512

3.43

20,000,000

2.93

17,800,000

2.60

17,771,718 9,748,000

2.60 1.43

B. List of Thirty (30) Largest Shareholders Name of Shareholders 1 2

Mohamed Mansor bin Fateh Din Cimsec Nominees (Tempatan) Sdn Bhd CIMB Bank for Fateh Iskandar bin Mohamed Mansor

3 4

Lembaga Tabung Haji Cimsec Nominees (Tempatan) Sdn Bhd CIMB Bank for Fong Loong Tuck Amnahraya Trustees Berhad Public Smallcap Fund Cimsec Nominees (Tempatan) Sdn Bhd CIMB for Fateh Iskandar bin Mohamed Mansor RHB Capital Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Fong Loong Tuck Alliancegroup Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Fong Loong Tuck Fong Loong Tuck Citigroup Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Fong Loong Tuck

5 6 7 8 9 10

158

GLOMAC BERHAD

ANALYSIS OF SHAREHOLDINGS (Cont’d)

as at 28 August 2012

B. List of Thirty (30) Largest Shareholders (Cont’d) Name of Shareholders 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

Glomac Berhad Share Buy Back Account JF Apex Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Union Hub Cartaban Nominees (Asing) Sdn Bhd Exempt An for Royal Bank of Canada (Asia) Limited HSBC Nominees (Asing) Sdn Bhd TNTC for Fidelity Emerging Asia Fund (FID INV TST) HSBC Nominees (Tempatan) Sdn Bhd HSBC (M) Trustee Bhd for MAAKL Al-Faid Malaysia Nominees (Tempatan) Sendirian Berhad Great Eastern Life Assurance (Malaysia) Berhad HSBC Nominees (Tempatan) Sdn Bhd HSBC (M) Trustee Bhd for MAAKL Al-Fauzan Malaysia Nominees (Tempatan) Sendirian Berhad Great Eastern Life Assurance (Malaysia) Berhad RHB Capital Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Oon Poh Choo Citigroup Nominees (Asing) Sdn Bhd CBNY for Dimensional Emerging Markets Value Fund Amsec Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Fong Loong Tuck OSK Nominees (Tempatan) Sdn Berhad DMG & Partners Securities Pte Ltd for Lee Chee Seng Cartaban Nominees (Tempatan) Sdn Bhd Exempt An for Credit Industriel ET Commercial Malaysia Nominees (Tempatan) Sendirian Berhad Great Eastern Life Assurance (Malaysia) Berhad Carrie Fong Kah Wai Malaysia Nominees (Tempatan) Sendirian Berhad Great Eastern Life Assurance (Malaysia) Berhad KAF Trustee Berhad KAF Fund Management Sdn Bhd for Abu Talib bin Othman Maybank Nominees (Tempatan) Sdn Bhd Maybank Trustees Berhad for MAAKL Value Fund HSBC Nominees (Tempatan) Sdn Bhd HSBC (M) Trustee Bhd for MAAKL Dividend Fund Amsec Nominees (Tempatan) Sdn Bhd Amtrustee Berhad for Pacific Pearl Fund Total

No. of Shares

9,454,300 9,383,700

1.38 1.37

7,395,800

1.08

6,305,100

0.92

5,500,600

0.80

5,362,000

0.78

5,329,600

0.78

5,000,000

0.73

4,806,200

0.70

4,390,500

0.64

3,991,600

0.58

3,600,000

0.53

3,420,100

0.50

3,226,600

0.47

3,200,000 3,184,000

0.47 0.47

3,120,000

0.46

2,956,000

0.43

2,944,200

0.43

2,792,300

0.41

524,142,056

76.63

159

2012 ANNUAL REPORT

C. Substantial Shareholders Name of Substantial Shareholders 1. 2. 3. 4.

Tan Sri Dato’ Mohamed Mansor bin Fateh Din Datuk Fong Loong Tuck Dato’ Fateh Iskandar bin Tan Sri Dato’ Mohamed Mansor Lembaga Tabung Haji *

No. of Shares Held Direct Indirect 144,536,198 106,798,058* 113,778,600* 43,500,000

– – – –

21.13 15.61 16.63 6.36

No. of Shares Held Direct Indirect

Include shares held by Nominee Companies.

D. Directors’ Shareholdings Name of Directors 1. 2. 3. 4. 5. 6.

Tan Sri Dato’ Mohamed Mansor bin Fateh Din Datuk Fong Loong Tuck Dato’ Fateh Iskandar bin Tan Sri Dato’ Mohamed Mansor Dato’ Ikhwan Salim bin Dato’ Sujak Datuk Ali bin Tan Sri Abdul Kadir Chong Kok Keong *

Include shares held by Nominee Companies.

144,536,198 106,798,058* 113,778,600* 20,800 1,700,000* 768,000

– – – – – –

21.13 15.61 16.63 0.003 0.25 0.11

160

GLOMAC BERHAD

ANALYSIS OF WARRANT HOLDINGS as at 28 August 2012

No. of Warrants

: 44,907,876

Exercise Price of Warrants

: RM0.55

Exercise Period of Warrants

: 25 October 2007 to 24 October 2012

Exercise Rights

: Each warrant entitles the holder to subscribe for one new ordinary shares of RM0.50 each in the Company

Voting Rights at Meetings of Warrant Holders

: One vote per warrant on a poll

A. Distribution of Holdings Size of Holdings Less than 100 100 â&#x20AC;&#x201C; 1,000 1,001 to 10,000 10,001 to 100,000 100,001 to less than 5% of issued warrants 5% and above of issued warrants Total

No. of Holders

% of holders Total Holdings

% of issued warrants

18 615 416 215 44 1

1.38 46.98 31.78 16.42 3.36 0.08

940 446,628 1,502,810 7,754,360 24,736,440 10,466,698

0.00 0.99 3.35 17.27 55.08 23.31

1,309

100.00

44,907,876

100.00

No. of Warrants

10,466,698 4,630,200

23.31 10.31

4,533,340

10.09

3,000,000

6.68

2,065,000 1,139,600

4.60 2.54

600,000 600,000 500,000 484,400

1.34 1.34 1.11 1.08

B. List of Thirty (30) Largest Warrant Holders Name of Warrant Holder 1 2 3 4 5 6 7 8 9 10

Fong Loong Tuck Maybank Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Lim Gim Leong Cimsec Nominees (Tempatan) Sdn Bhd CIMB Bank for Fong Loong Tuck (MM0886) OSK Nominees (Tempatan) Sdn Berhad DMG & Partners Securities Pte Ltd for Lee Chee Seng Lim Jit Hai JF Apex Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Union Hub Fara Inez binti Mohamed Mansor Fara Eliza binti Mohamed Mansor Tan Leng Hock Lim Khuan Eng

161

2012 ANNUAL REPORT

B. List of Thirty (30) Largest Warrant Holders (Cont’d) Name of Warrant Holder 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

Leong Sui Leng Maybank Securities Nominees (Asing) Sdn Bhd Maybank Kim Eng Securities Pte Ltd for Neo Kwee Eng Citigroup Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Fong Loong Tuck Alliancegroup Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Chai Hon Wai RHB Capital Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Oon Poh Choo Lim Ching Choon Cimsec Nominees (Asing) Sdn Bhd Exempt An for CIMB Securities (Singapore) Pte Ltd Chong Kok Keong Ma Pin Ling Lee Chiah Cheang Amsec Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Fong Loong Tuck Ng Chin Keong Zuriana binti Din Leow Kuan Shu Ong Shaw Ching Tan Sin Chee Maybank Nominees (Tempatan) Sdn Bhd Tracey Goh Su Leen Chuah Theong Yee Public Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Teoh Geek Hung HLG Nominee (Tempatan) Sdn Bhd Total

No. of Warrants

450,000 400,000

1.00 0.89

378,000

0.84

356,500

0.79

330,800

0.74

320,000 253,000

0.71 0.56

245,000 231,500 223,000 216,000

0.55 0.52 0.50 0.48

200,000 200,000 200,000 200,000 190,000 187,400

0.45 0.45 0.45 0.45 0.42 0.42

180,400 172,300

0.40 0.38

170,000

0.38

33,123,138

73.76

C. Directors’ Warrant Holdings Name of Directors 1. 2. 3. 4. 5. 6. *

No. of Warrants Held Direct Indirect – 15,594,038* – – – 245,000

– – – – – -

% – 34.72 – – – 0.55

162

GLOMAC BERHAD

NOTICE OF 28TH ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the 28th Annual General Meeting of Glomac Berhad (“Glomac” or “Company”) will be held at Ballroom 1, 1st Floor, Sime Darby Convention Centre, 1A, Jalan Bukit Kiara 1, 60000 Kuala Lumpur on Tuesday, 16 October 2012 at 10.00 a.m. for the following purposes: AGENDA As Ordinary Business 1.

To receive the Audited Financial Statements for the financial year ended 30 April 2012 together with the Reports of the Directors and Auditors thereon.

(Please refer to Explanatory Note A)

To approve a final dividend of 2.75 sen per share less 25% tax for the financial year ended 30 April 2012.

Resolution 1

To approve the Directors’ fees for the financial year ended 30 April 2012.

Resolution 2

To re-appoint Tan Sri Dato’ Mohamed Mansor bin Fateh Din who retires pursuant to Section 129(6) of the Companies Act, 1965.

Resolution 3

To re-elect the following Directors, who retire in accordance with Article 84 of the Company’s Articles of Association and, being eligible, have offered themselves for re-election:

Datuk Ali bin Tan Sri Abdul Kadir

Resolution 4

ii.

Dato’ Fateh Iskandar bin Tan Sri Dato’ Mohamed Mansor

Resolution 5

To re-appoint Messrs Deloitte KassimChan as the Auditors of the Company and to authorise the Directors to fix their remuneration.

Resolution 6

As Special Business To consider and if thought fit, to pass the following ordinary/special resolutions: 7.

ORDINARY RESOLUTION 1 – AUTHORITY TO ISSUE SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965 “THAT, subject always to the Companies Act, 1965, (“Act”), the provisions of the Memorandum and Articles of Association of the Company and other relevant regulatory authorities, the Directors of the Company (“Board”) be and are hereby empowered, pursuant to Section 132D of the Act, to allot and issue shares in the Company at any time and upon such terms and conditions and for such purposes as the Board may in their discretion deem fit and expedient in the interest of the Company, provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the issued share capital of the Company for the time being AND THAT the Board be and is also empowered to obtain the approval for the listing and quotation of the additional shares so issued on Bursa Malaysia Securities Berhad (“Bursa Securities”) AND FURTHER THAT such authority shall continue to be in force until the conclusion of the next Annual General Meeting (“AGM”) of the Company.”

Resolution 7

2012 ANNUAL REPORT

ORDINARY RESOLUTION 2 – PROPOSED RENEWAL OF AUTHORITY FOR SHARE BUY-BACK “THAT, subject to the Act, provisions of the Memorandum and Articles of Association of the Company, the Main Market Listing Requirements of Bursa Securities (“Main Market LR”) and other relevant regulatory authorities, the Company be and is hereby authorised to exercise a buy-back of its ordinary shares as determined by the Board from time to time through Bursa Securities upon such terms and conditions as the Board in their discretion deem fit and expedient in the interest of the Company (“Proposed Share Buy-Back”) provided that: i.

the maximum number of ordinary shares which may be purchased or held by the Company shall be equivalent to 10% of the issued and paid-up share capital of the Company at the point of purchase;

ii.

the maximum amount of funds to be allocated by the Company for the purpose of purchasing its shares shall not exceed the retained profits and/or share premium account of the Company at the time of the purchase(s);

iiii. the authority conferred by this resolution will commence immediately upon passing of this ordinary resolution and will continue to be in force until: a.

the conclusion of the next AGM of the Company at which time it will lapse, unless the authority is renewed by a resolution passed at a general meeting, either unconditionally or subject to conditions; or

the expiration of the period within which the next AGM after that date is required by law to be held; or

revoked or varied by ordinary resolution passed by the shareholders in general meeting, whichever occurs first, but not so as to prejudice the completion of purchase(s) by the Company before the aforesaid expiry date and, in any event, in accordance with the provisions of the Main Market LR and any prevailing laws, rules, regulations, orders, guidelines and requirements issued by any relevant authorities; and

iv.

upon completion of the purchase(s) of the its shares by the Company, the Board be and is hereby authorised to: a.

cancel the shares so purchased; or

retain the shares so purchased as treasury shares, either to be distributed as dividends to the shareholders and/or resold on the market of Bursa Securities;

retain part of the shares so purchased as treasury shares and cancel the remainder; or

deal in any other manner as prescribed by the Act, rules, regulations and orders made pursuant to the Act and the Main Market LR and any other relevant authority for the time being in force

AND THAT the Board be and is hereby authorised to take do all such acts, deeds and things as they may consider expedient or necessary in the best interest of the Company to give full effect to the Proposed Share Buy-Back with full powers to assent to any condition, modification, variations and/or amendment as may be imposed by the relevant authorities and to do all such steps, acts and things as the Board may deem fit and expedient in the best interest of the Company.”

Resolution 8

163

164

GLOMAC BERHAD

NOTICE OF 28TH ANNUAL GENERAL MEETING (Cont’d)

ORDINARY RESOLUTION 3 – PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS “THAT, the mandate granted by the shareholders of the Company on 28 September 2011, authorising the Company and its subsidiaries and associated companies to enter into the categories of recurrent related party transactions of a revenue or trading nature (“Proposed Shareholders’ Mandate”), the details of which are set out in Section 3.0 of the Company’s Circular to Shareholders dated 20 September 2012 which are necessary for its day-to-day operations, be and is hereby renewed provided that: i.

the transactions are in the ordinary course of business and are on normal commercial terms which are not more favourable to the related parties than those generally available to the public and are not to the detriment of the minority shareholders of the Company; and

ii.

disclosure is made in the Annual Report of the aggregate value of transactions conducted pursuant to the shareholders’ mandate based on the type of transactions, names of the related parties and their relationship.

Resolution 9

AND THAT, such approval shall continue to be in force until: i.

the conclusion of the next AGM of the Company at which time it will lapse, unless the authority is renewed by a resolution passed at the meeting;

ii.

the expiration of the period within which the next AGM of the Company is required to be held pursuant to Section 143(1) of the Act (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Act); or

iii.

revoked or varied by resolution passed by shareholders in general meeting,

whichever is the earlier. AND FURTHER THAT the Board be and is hereby authorised to complete and do all such acts and things as they may consider expedient or necessary in the best interest of the Company to give full effect to the transactions described by this Ordinary Resolution.” 10.

SPECIAL RESOLUTION – PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION OF THE COMPANY (“PROPOSED AMENDMENTS”) “THAT, the proposed amendments to the Articles of Association of the Company in the form and manner as set out in Section 4.0 of the Circular to Shareholders dated 20 September 2012, be and are hereby approved and adopted. AND THAT, in order to implement, complete and give full effect to the Proposed Amendments, approval be and is hereby given for the Board to do all acts, deeds and things and to execute, sign and deliver on behalf of the Company, all such documents as it may deem necessary, expedient and/or appropriate to implement, give full effect to and complete the Proposed Amendments with full powers to assent to any condition, modification, variation and/or amendment thereto as the Board may deem fit and/or as may be imposed by any relevant authorities in connection with the Proposed Amendments.”

11.

To transact any other business of the Company of which due notice shall have been given in accordance with the Company’s Articles of Association and the Act.

By Order of the Board Mohd Nor Azam Mohd Salleh (MAICSA 7028137) Ong Shaw Ching (MIA 7819) Company Secretaries Kuala Lumpur 20 September 2012

Resolution 10

2012 ANNUAL REPORT

165

NOTES: A. This Agenda item is meant for discussion only as under the provisions of Section 169(1) of the Companies Act, 1965 and Company’s Articles of Association, the audited financial statements do not require the formal approval of the shareholders. As such, this matter will not be put forward for voting. Proxy 1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend and vote in his stead. A proxy need not be a member of the Company. 2. The instrument appointing a proxy must be deposited at the registered office of the Company at Level 15, Menara Glomac, Glomac Damansara, Jalan Damansara, 60000 Kuala Lumpur, Malaysia not less than forty-eight (48) hours before the time appointed for holding the meeting or any adjournment thereof. 3. The instrument appointing a proxy shall be in writing under the hand of the appointer or of his/her attorney duly appointed or if such appointer is a corporation, either under its Common Seal or under the hand of a duly authorised officer or attorney duly appointed under a Power of Attorney. Explanatory Notes to Special Business 1. The proposed Ordinary Resolution 1, if passed, will empower the Directors of the Company, to allot and issue shares in the Company up to and not exceeding in total 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 best 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. This mandate is a renewal to the general mandate which was approved by the shareholders at the last AGM. Save and except for the issuance of additional ordinary shares arisen from the exercise of the 5-year 2007/2012 warrants, the Company has not issued any new share under this general mandate as at the date of this Notice. The renewed mandate will also enable the Board to take advantage of any strategic opportunity which involve the issue/placing of shares for investments, acquisitions or to raise fund for investments and/or working capital. 2. The proposed Ordinary Resolution 2, if passed, will empower the Board to exercise a buy-back of its ordinary shares up to 10% of the issued and paid-up share capital of the Company by utilizing the funds allocated which shall not exceed the retained profits and/or share premium account of the Company. This authority will, unless revoked or varied at a general meeting, expire at the conclusion of the next AGM of the Company. The details of the proposal are set out in Section 2.0 of the Circular to Shareholders dated 20 September 2012 which is dispatched together with the Company’s abridged version of the 2012 Annual Report. 3. The proposed Ordinary Resolution 3, if passed, will enable the Company and/or its subsidiaries to enter into recurrent related party transactions or a revenue or trading in nature with related parties which are necessary for the Group’s day-to-day operations and are in the ordinary course of business and are on normal commercial terms which are not more favourable to the related parties than those generally available to the public and are not to the detriment of the minority shareholders of the Company. The details of the proposal are set out in Section 3.0 of the Circular to Shareholders dated 20 September 2012 which is dispatched together with the Company’s abridged version of the 2012 Annual Report. 4. The proposed Special Resolution, if passed, will ensure that the Company’s Articles of Association comply with the additional requirements of the Listing Requirements following certain amendments that were recently made to the Main Market LR. The details of the proposal are set out in Section 4.0 of the Circular to Shareholders dated 20 September 2012 which is dispatched together with the Company’s abridged version of the 2012 Annual Report. Members Entitled to Attend For the purpose of determining a member who shall be entitled to attend this 28th AGM, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd in accordance with the provisions under Article 42 of the Company’s Articles of Association and Section 34(1) of the Securities Industry (Central Depositories) Act 1991 to issue a General Meeting Record of Depositors (“ROD”) as at 10 October 2012. Only a depositor whose name appears on the ROD as at 10 October 2012 shall be entitled to attend the said Meeting or appoint proxies to attend and vote on his/her behalf.

Statement Accompanying Notice of 28th Annual General Meeting (Pursuant to Paragraph 8.27(2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad) Further details of Directors standing for re-election as Directors are set out in their respective profiles which appear in the Directors’ Profiles on pages 10 to 15 of this Annual Report and the details of their interest in the securities of the Company are disclosed on page 159 of this Annual Report.

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FORM OF PROXY

No. of shares CDS Account No. I/We __________________________________________________________________________________________________________ of ____________________________________________________________________________________________________________ being a member of GLOMAC BERHAD (“the Company”), hereby appoint __________________________________________________ of ____________________________________________________________________________________________________________ or failing him/her, the Chairman of the Meeting, as my/our proxy, to vote for me/us on my/our behalf at the 28th Annual General meeting of the Company to be held at Ballroom 1, 1st Floor, Sime Darby Convention Centre, 1A, Jalan Bukit Kiara 1, 60000 Kuala Lumpur on Tuesday, 16 October 2012 at 10.00 a.m. or at any adjournment, in the manner indicated below: FOR Resolution 1

To approve a final dividend of 2.75 sen per share less 25% tax

Resolution 2

To approve the payment of Directors’ fees

Resolution 3

To re-appoint Tan Sri Dato’ Mohamed Mansor bin Fateh Din who retires pursuant to Section 129(6) of the Companies Act, 1965

Resolution 4

To re-elect Datuk Ali bin Tan Sri Abdul Kadir who retires in accordance with Article 84 of the Company’s Articles of Association

Resolution 5

To re-elect Dato’ Fateh Iskandar bin Tan Sri Dato’ Mohamed Mansor who retires in accordance with Article 84 of the Company’s Articles of Association

Resolution 6

To re-appoint Messrs Deloitte KassimChan as Auditors and to authorise the Board to fix their remuneration

Resolution 7

Proposed authority to allot shares pursuant to Section 132D of the Companies Act, 1965

Resolution 8

Proposed renewal of authority for share buy-back

Resolution 9

Proposed renewal of shareholders’ mandate for recurrent related party transaction

Resolution 10

Proposed amendments to the Articles of Association of the Company

AGAINST

Please indicate with an ‘X’ in the appropriate box against each resolution on how you wish your votes to be casted. If no instruction is given, the Proxy will vote or abstain from voting at his/her discretion. Signed (and sealed) this ______________ day of ____________________2012 Signature/Seal _____________________________ Notes: 1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend and vote in his stead. A proxy need not be a member of the Company. 2. The instrument appointing a proxy must be deposited at the Registered Office of the Company at Level 15, Menara Glomac, Glomac Damansara, Jalan Damansara, 60000 Kuala Lumpur not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof. 3. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly appointed or if such appointor is a corporation, either under its Common Seal or under the hand of an officer or attorney duly appointed under a power of attorney.

Affix Stamp

The Company Secretary

Glomac Berhad (110532-M) Level 15, Menara Glomac Glomac Damansara Jalan Damansara 60000 Kuala Lumpur