upln atnh eagr Berhad Hartanah Kumpulan (559747-W) aoa Tahunan Laporan

Kumpulan Hartanah Selangor Berhad

(559747-W) Report Annual 2009 Lot 1A, Level 1A, Plaza Perangsang, Persiaran Perbandaran, 40000 , Selangor Darul Ehsan, . Tel : (603) 5522 3888 Fax : (603) 5510 5188 www.khsb.com.my

Pulau Indah ~ Destination for Invesment at the Leading Halal Hub in Malaysia Laporan Tahunan | Annual Report 2009 Kumpulan Hartanah Selangor berhad • B

The Cover The Leading Halal Hub in Malaysia By mapping the key central positioning of Selangor Halal Hub (SHHPI) within the strategic shipping gateway and its accessible highways to major routes in the state, the Group is laying the foundation to become the Leading Halal Hub in Malaysia.

Envisioning the future by building the foremost portside development and transshipment centre in the region, the Group is laying the blueprints of the future, by tapping the thriving and vibrant global halal markets that will spur its ability to forge ahead with relevance and presence. contentskandungan 20 32 40 Chairman’s Board of Statement of Statement Directors’ Profile Corporate Governance Perutusan Pengerusi Profil Lembaga Pengarah Penyata Tadbir Urus Korporat

Vision & Mission 4 Chairman’s Statement 20 Human Resource Review 58 Visi & Misi Perutusan Pengerusi Laporan Sumber Manusia Corporate Information 6 Five-Year Financial Highlights 29 Corporate Social Responsibility 60 Maklumat Korporat Maklumat Kewangan Lima Tahun Tanggungjawab Sosial Korporat Corporate Profile 8 Board of Directors’ Profile 32 Financial Statements 61 Profil Korporat Profil Lembaga Pengarah Penyata Kewangan Notice of Annual General Meeting 10 Statement of Corporate Governance 40 List of Properties 144 Notis Mesyuarat Agung Tahunan 12 Penyata Tadbir Urus Korporat Senarai Hartanah Statement Accompanying Audit Committee Report 51 Analysis of Shareholdings 147 Notice of Annual General Meeting 14 Laporan Jawatankuasa Audit Analisa Pegangan Saham Penyata Bersama Notis Statement of Internal Control 56 Proxy Form • Mesyuarat Agung Tahunan 15 Penyata Kawalan Dalaman Borang Proksi Corporate Structure 17 Struktur Korporat Kumpulan Hartanah Selangor berhad • 2

Still determined in soaring above horizon • 3

We believe that the future lies in our ability to see ahead of the horizon by understanding the position of the industry we are in, and in adapting to change that remains constant. Kumpulan Hartanah Selangor berhad • 4

Vision THE FLAGSHIP PROPERTY GROUP OF THE STATE OF SELANGOR, NATIONALLY AND REGIONALLY ACCLAIMED FOR PROVIDING AFFORDABLE QUALITY LIVING Visi Kumpulan Hartanah Terunggul Negeri Selangor, Diiktiraf Di Peringkat Nasional Dan Serantau Dalam Menawarkan Kehidupan Berkualiti Yang Mampu Dimiliki

Pier 2 Jetty, Laguna Park Pulau Indah • 5

Aerial view Laguna Park, Pulau Indah

MISSION MISI • To position KHSB as developer of choice • Menempatkan KHSB sebagai pemaju pilihan utama • To build KHSB as leading GLC nationally and regionally • Membina KHSB sebagai peneraju Syarikat Tersenarai Kerajaan (GLC) di • To optimize shareholder’s value peringkat kebangsaan dan antarabangsa • To contribute to State and National development • Mengoptimakan nilai pemegang saham kami • Menyumbang kepada pembangunan Negeri dan Negara Kumpulan Hartanah Selangor berhad • 6 Corporate Information Maklumat Korporat

Board of Directors Tender Committee Members Principal Bankers Lembaga Pengarah Ahli-Ahli Jawatankuasa Tender Bank-Bank Utama YBhg. Dato’ Haji Abd. Karim bin Munisar YBhg. Dato’ Haji Abd. Karim bin Munisar CIMB Bank Berhad (Chairman / Pengerusi) (Chairman / Pengerusi) Shah Alam Branch / Cawangan Shah Alam YBhg. Dato’ Azman bin Mahmood YBhg. Dato’ Azman bin Mahmood Malayan Banking Berhad YBhg. Dato’ Azlan bin Hashim YBhg. Dato’ Azlan bin Hashim Shah Alam Branch / Cawangan Shah Alam RHB Bank Berhad Encik Wong Yien Kim Encik Wong Yien Kim Shah Alam Branch / Cawangan Shah Alam Encik Lee Siew Choong Encik Azman bin Marzuki Employee Share Option Scheme (ESOS) Committee Members Auditors Juruaudit Audit Committee Members Ahli-Ahli Jawatankuasa Skim Opsyen Ahli-Ahli Jawatankuasa Audit Saham Kakitangan (“ESOS”) Messrs Ernst & Young Level 23A, Menara Milenium YBhg. Dato’ Azman bin Mahmood YBhg. Dato’ Azman bin Mahmood Jalan Damanlela (Chairman / Pengerusi) (Chairman / Pengerusi) Pusat Bandar Damansara YBhg. Dato’ Haji Abdul Karim bin Munisar YBhg. Dato’ Azlan bin Hashim 50490 Kuala Lumpur Encik Wong Yien Kim Encik Lee Siew Choong YM Raja Ahmad Hidzir bin Raja Muhamad Stock Exchange Listing Penyenaraian BURSA saham Nomination Committee Members Ahli-Ahli Jawatankuasa Pencalonan Company Secretaries Main Board / Papan Utama Encik Lee Siew Choong Setiausaha-Setiausaha Syarikat Bursa Malaysia Securities Berhad (Chairman / Pengerusi) Puan Maziyah binti Mohd Zin (MACS 01276) (22 July 2003 / 22 Julai 2003) YBhg. Dato’ Haji Abd. Karim bin Munisar Puan Norlida binti Jamaludin (LS 0006467) YBhg. Dato’ Azman bin Mahmood Share Registrar Registered Office Pendaftar Saham Remuneration Committee Members Pejabat Berdaftar Symphony Share Registrars Sdn Bhd Ahli-Ahli Jawatankuasa Imbuhan Lot 1A, Level 1A, Plaza Perangsang Level 6, Symphony House Persiaran Perbandaran, 40000 Shah Alam Pusat Dagangan Dana 1 YBhg. Dato’ Azman bin Mahmood Selangor Darul Ehsan Jalan PJU 1A/46 (Chairman / Pengerusi) 47301 Tel : 03-5522 3888 YBhg. Dato’ Azlan bin Hashim Selangor Darul Ehsan Fax : 03-5510 5188 Encik Lee Siew Choong Tel : 03-7841 8000 Fax : 03-7841 8151 / 7841 8152 • 7 Kumpulan Hartanah Selangor berhad • 8 Corporate Profile Profil Korporat

AN EMERGING FORCE IN THE PROPERTY BUSINESS Kemunculan Kuasa Baru Dalam Perniagaan Hartanah

Kumpulan Hartanah Selangor Berhad (KHSB) was established on 24 September 2001 and listed on the Bursa Malaysia Berhad on 22 July 2003. KHSB is the property vehicle of Kumpulan Darul Ehsan Berhad (KDEB), the Selangor State Government’s investment arm. KHSB which has a paid up capital of RM 450 million, envisages to be a major player in the property sector in the nation, particularly in the State of Selangor.

KHSB has a wealth of experience in developing a wide range of fully integrated townships complete with modern infrastructure, recreational and public amenities. Taman Tun Abdul Razak (Taman TAR), a prized KHSB residential development is based on a “resort living within the city“ concept while Resort’s medium to high end products built around lush greenery provide a soothing ambience for residents. • 9

1. 2.

1. 2. Phase 2A Single Terrace Factories, Tiara 2-Storey Terrace Houses, Pulau Indah Industrial Park Laguna Park, Pulau Indah

Kumpulan Hartanah Selangor Berhad (KHSB) ditubuhkan KHSB through its subsidiary company, Central Spectrum Melalui syarikat subsidiarinya, Central Spectrum (M) Sdn pada 24 September 2001 dan kemudiannya disenaraikan (M) Sdn Bhd is developing 5,324 acres of land in Pulau Bhd, KHSB juga merupakan pemaju kawasan seluas 5,324 di Bursa Malaysia Berhad pada 22 Julai 2003. KHSB Indah, a part of which has been designated as the ekar di Pulau Indah yang mana sebahagian daripadanya adalah syarikat hartanah bagi Kumpulan Darul Ehsan Selangor Halal Hub. Selangor Halal Hub is a one-stop dikhaskan untuk pembangunan Selangor Halal Hub. Berhad (KDEB), iaitu syarikat pelaburan Kerajaan Negeri facility for fast track approval and assistance from Selangor Halal Hub menyediakan kemudahan serba Selangor. Dengan modal berbayar berjumlah RM450 relevant bodies in obtaining the Global Halal Status. lengkap bagi memperolehi kelulusan dan bantuan juta, KHSB berazam untuk menjadi sebuah syarikat segera daripada pihak-pihak berkuasa berkaitan untuk hartanah terkemuka di negara, khususnya di Selangor. KHSB’s competitive edge lies in its collaborative mendapatkan Global Halal Status. marketing strategies and strong position and this has KHSB berpengalaman di dalam pelbagai pembangunan enabled the company to capitalise on the opportunities KHSB mempunyai kelebihan daya saing melalui strategi bersepadu yang lengkap, disokong oleh infrastruktur, presented by Selangor’s vibrant property market. The pemasaran secara usahasama, dan berada di kedudukan rekreasi dan kemudahan awam yang serba moden. slogan “Commitment To Quality Living“ symbolises yang kukuh bagi membolehkannya memanfaatkan Taman Tun Abdul Razak (Taman TAR) yang merupakan KHSB’s commitment to ensuring customer satisfaction peluang-peluang yang terbuka di dalam pasaran sebuah pembangunan kediaman kebanggaan KHSB, by providing quality living through the delivery of hartanah Selangor yang rancak. “Komitmen terhadap dibangunkan berdasarkan konsep “kehidupan pusat quality products and services. Kehidupan Berkualiti” adalah slogan yang mencerminkan peranginan dalam bandaraya”, manakala Templer Park keazaman KHSB untuk memastikan kepuasan pelanggan Resort pula menawarkan produk-produk sederhana Going forward, KHSB is optimistic in enhancing the dengan menyediakan kehidupan berkualiti melalui dan mewah yang dibina di tengah-tengah kehijauan property industry of the State of Selangor. produk dan perkhidmatannya. merimbun bagi membentuk persekitaran nyaman untuk para penghuni. Dalam usaha untuk melangkah lebih jauh ke hadapan, KHSB sentiasa yakin dalam mempertingkatkan industri hartanah Negeri Selangor. Kumpulan Hartanah Selangor berhad • 10 th Notice of Annual General Meeting NOT08ICE IS HEREBY GIVEN THAT the Eighth Annual General Meeting of Kumpulan Hartanah Selangor Berhad (“the Company”) will be held at Kayangan Ballroom, Quality Hotel Shah Alam, Plaza Perangsang, Persiaran Perbandaran, 40000 Shah Alam, Selangor Darul Ehsan on Thursday, 17 June 2010 at 10.00 a.m. to transact the following businesses:-

AS ORDINARY BUSINESS 1. t o receive the Audited Financial Statement together with the reports of the Directors and Auditors thereon for the financial year ended 31 December 2009. Resolution 1

2. 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:-

a) YBhg. Dato’ Azlan bin Hashim Resolution 2

b) encik Wong Yien Kim Resolution 3

3. to approve the Directors’ fees for the financial year ended 31 December 2009. Resolution 4

4. to re-appoint Messrs Ernst & Young as the Auditors of the Company and to authorise the Directors to fix their remuneration. Resolution 5

5. to transact any other ordinary business of which due notice shall have been given in accordance with the Companies Act 1965.

By Order Of The Board

NORLIDA JAMALUDIN (LS 0006467) MAZIYAH MOHD ZIN (MACS 01276) Company Secretaries

Shah Alam 26 May 2010 • 11

Notes : 1. every member is entitled to appoint a proxy or in the case of a corporation, to appoint a representative to attend and vote in his place. A proxy need not be a member of the Company.

2. t he Proxy Form must be signed by the appointer or his attorney duly authorised in writing or if the appointer is a corporation, either under seal or under the hand of an officer or attorney duly authorised. In the case of joint holdings, the signature of the first named holder is sufficient.

3. If the Proxy Form is returned without indication as to how the proxy shall vote, the proxy will vote or abstain as he thinks fit.

4. If the name is not inserted in the space for the name of your proxy, the Chairman of the Meeting will act as your proxy.

5. all Proxy Forms should be deposited at the Company’s Share Registrar’s office, Symphony Share Registrars Sdn Bhd, Level 6, Symphony House, Pusat STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Details of the Directors, who are standing for re-election at this Annual General Ehsan not less than forty-eight (48) hours before the time fixed for holding Meeting, as required under Appendix 8A of the Main Market Listing Requirements the meeting or any adjournment thereof or in the case of poll, not less than of Bursa Malaysia Securities Berhad, can be found on pages 33 to 38 under Board twenty four (24) hours before the time appointed for the taking of the poll. of Directors’ Profile in this Annual Report. Kumpulan Hartanah Selangor berhad • 12

Notis Mesyuarat Agung Tahunan Kelapan

DENGAN INI DIMAKLUMKAN BAHAWA Mesyuarat Agung Tahunan Kelapan bagi Kumpulan Hartanah Selangor Berhad (“Syarikat”) akan diadakan di Kayangan Ballroom, Quality Hotel Shah Alam, Plaza Perangsang, Persiaran Perbandaran, 40000 Shah Alam, Selangor Darul Ehsan pada hari Khamis, 17 Jun 2010 jam 10.00 pagi untuk melaksanakan urusan-urusan berikut:-

SEBAGAI URUSAN BIASA 1. untuk menerima Laporan Penyata Kewangan yang diaudit bagi tahun kewangan berakhir 31 Disember 2009 bersama-sama dengan Laporan Pengarah dan Laporan Juruaudit. Resolusi 1

2. u ntuk memilih semula Para Pengarah berikut yang bersara menurut Artikel 84 Tataurusan Syarikat dan oleh kerana layak, telah menawarkan diri mereka untuk dipilih semula:-

a) YBhg. Dato’ Azlan bin Hashim Resolusi 2

b) encik Wong Yien Kim Resolusi 3

3. untuk meluluskan yuran para Pengarah bagi tahun kewangan berakhir 31 Disember 2009. Resolusi 4

4. untuk melantik semula Tetuan Ernst & Young sebagai Juruaudit Syarikat dan memberi kuasa kepada para Pengarah untuk menetapkan imbuhan mereka. Resolusi 5

5. untuk melaksanakan sebarang urusan biasa yang lain dimana notis secukupnya telah diberikan.

Dengan Perintah Lembaga Pengarah

NORLIDA JAMALUDIN (LS 0006467) MAZIYAH MOHD ZIN (MACS 01276) Setiausaha-setiausaha Syarikat

Shah Alam 26 Mei 2010 • 13

Catatan : 1. Setiap pemegang saham berhak untuk melantik seorang proksi atau jika sebuah syarikat, berhak melantik wakil untuk menghadiri dan mengundi bagi pihaknya. Proksi tersebut tidak semestinya pemegang saham Syarikat.

2. b orang Proksi mestilah ditandatangani oleh pelantik atau peguam yang telah diberi kuasa secara bertulis atau sekiranya pelantik adalah sebuah syarikat, mestilah dengan dimeterai atau ditandatangani oleh pegawai atau peguam yang telah diberi kuasa. Dalam hal pegangan bersama, tandatangan pemegang pertama adalah mencukupi.

3. Sekiranya Borang Proksi dikembalikan tanpa menjelaskan cara pengundian, proksi akan mengundi atau tidak mengundi menurut cara yang difikirkannya sesuai.

4. Sekiranya tiada nama tercatit di dalam ruang nama proksi anda, Pengerusi Mesyuarat akan bertindak sebagai proksi anda.

5. Semua Borang Proksi mestilah dihantar ke pejabat Pendaftar Saham Syarikat, Symphony Share Registrars Sdn Bhd, Level 6, Symphony House, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan tidak lewat daripada empat puluh lapan (48) jam sebelum masa yang ditetapkan untuk mengadakan mesyuarat tersebut atau pada sebarang penangguhannya atau sekiranya dalam hal pengundian, tidak lewat daripada dua puluh empat (24) jam sebelum masa yang ditetapkan untuk mengundi.

PENYATA BERSAMA NOTIS MESYUARAT AGUNG TAHUNAN Butir-butir para Pengarah yang menawarkan diri untuk dipilih semula dalam Mesyuarat Agung Tahunan ini, sepertimana yang diperlukan mengikut Lampiran 8A Keperluan Penyenaraian Bursa Malaysia Securities Berhad terdapat di mukasurat 33 hingga 38 pada profil Pengarah didalam Laporan Tahunan ini. Kumpulan Hartanah Selangor berhad • 14 Statement Accompanying Notice of Annual General Meeting

Statement Pursuant to Paragraph 8.28 (2) of the Listing Requirements of Bursa Malaysia Securities Berhad

1. directors who are standing for re-election at the Eighth Annual General Meeting of the Company are as follows:-

• YBhg. Dato’ Azlan bin Hashim

• Encik Wong Yien Kim

the profiles of the Directors standing for re-election are set out on pages 33 to 38 of this Annual Report.

2. board Meetings held during the financial year ended 31 December 2009 are as follows:-

a total of eight (8) Board Meetings were held during the financial year ended 31 December 2009 of which four (4) were ordinary Board Meetings and four (4) were Special Board Meetings. A total of seven (7) Board Meetings were held at the Board Room, Kumpulan Darul Ehsan Berhad / Kumpulan Perangsang Selangor Berhad, 17th Floor, Plaza Perangsang, Persiaran Perbandaran, 40000 Shah Alam, Selangor Darul Ehsan and one (1) Board Meeting was held at Crystalville Sdn Bhd, Suite 10.08, 10th Floor, Block B, No.2, Jalan 1/70C, Plaza Mont Kiara, 50480 Kuala Lumpur.

3. details of attendance at Board Meetings held in the financial year ended 31 December 2009 are as follows:

Name of Directors Number Of Meetings Attended

YBhg. Dato’ Haji Abd. Karim bin Munisar 7/8

YBhg. Dato’ Azman bin Mahmood 8/8

YBhg. Dato’ Azlan bin Hashim 7/8

encik Wong Yien Kim 7/8

encik Lee Siew Choong 6/8

encik Azman bin Marzuki (Appointed on 23 April 2009) 5/5 • 15

Penyata Bersama Notis Mesyuarat Agung Tahunan

Penyata Menurut Perenggan 8.28 (2) Keperluan Penyenaraian Bursa Malaysia Securities Berhad

1. pengarah-pengarah yang menawarkan diri untuk dipilih semula di Mesyuarat Agung Tahunan Syarikat yang Kelapan adalah seperti berikut:-

• YBhg. Dato’ Azlan bin Hashim

• Encik Wong Yien Kim

profil Pengarah-pengarah yang akan dipilih semula terdapat di mukasurat 33 hingga 38 Laporan Tahunan ini.

2. mesyuarat Lembaga yang diadakan pada tahun kewangan berakhir 31 Disember 2009 adalah seperti berikut:-

lapan (8) Mesyuarat Lembaga telah diadakan pada tahun kewangan berakhir 31 Disember 2009 yang mana empat (4) daripadanya adalah Mesyuarat Lembaga biasa dan empat (4) adalah Mesyuarat Khas Lembaga. Tujuh (7) Mesyuarat Lembaga diadakan di Bilik Mesyuarat Lembaga, Kumpulan Darul Ehsan Berhad / Kumpulan Perangsang Selangor Berhad, Tingkat 17, Plaza Perangsang, Persiaran Perbandaran, 40000 Shah Alam, Selangor Darul Ehsan dan satu (1) Mesyuarat Lembaga diadakan di Crystalville Sdn Bhd, Suite 10.08, 10th Floor, Block B, No.2, Jalan 1/70C, Plaza Mont Kiara, 50480 Kuala Lumpur.

3. butiran lanjut kehadiran ke Mesyuarat Lembaga pada tahun kewangan berakhir 31 Disember 2009 adalah seperti berikut:

Nama Pengarah Bilangan Mesyuarat Yang Dihadiri

YBhg. Dato’ Haji Abd. Karim bin Munisar 7/8

YBhg. Dato’ Azman bin Mahmood 8/8

YBhg. Dato’ Azlan bin Hashim 7/8

encik Wong Yien Kim 7/8

encik Lee Siew Choong 6/8

encik Azman bin Marzuki (Dilantik pada 23 April 2009) 5/5 Kumpulan Hartanah Selangor berhad • 16 • 17 Corporate Structure Struktur Korporat

KDEB 60.70% KPSB 56.57% KHSB

100% SAP 100% SAP Rawang Development Sdn. Bhd.

100% SAP Leisure & Resort Sdn. Bhd. 100% SAP Langkawi Development Sdn. Bhd. 100% SAP Air Hitam Properties Sdn. Bhd. 100% templer Park Equestrian Centre Sdn. Bhd. 100% SAP Heritage Hotels & Properties Sdn. Bhd. 51% templer Park Development Sdn. Bhd. 100% SAP Development Sdn. Bhd. 95% perangsang Templer Landscape Sdn. Bhd. 100% SAP Bengkulen Plantation Sdn. Bhd. 95% templer Park Golf & Resort Berhad 100% SAP Sungai Pusu Development Sdn. Bhd. 100% KHSB Titijaya Sdn. Bhd. 100% SAP Urus Harta Sdn. Bhd. 51% SUH – IMEJ Parking Sdn. Bhd. 100% megatown Corporation Sdn. Bhd. 100% Central Holdings Management Services Sdn. Bhd. 100% pISB Trading Sdn. Bhd. 100% SAP Education Sdn. Bhd. 80% Akademi Kecemerlangan SAP Sdn. Bhd. 100% SAP Project Consultant Sdn. Bhd. 100% SAP Sdn. Bhd. 40% Ulu Yam Golf & Country Club Sdn. Bhd. 20% Waste Water Management (M) Sdn. Bhd. 20% beruntung Transport City Sdn. Bhd.

60% KHSBPSB KDEB - Kumpulan Darul Ehsan Berhad KPSB - Kumpulan Perangsang Selangor Berhad KHSB - Kumpulan Hartanah Selangor Berhad 76.67% CSSB 40% PMB Spectrum Sdn. Bhd. SAP - SAP Holdings Berhad CSSB - Central Spectrum (M) Sdn. Bhd. KHSBPSB - KHSB Properties Sdn. Bhd. Kumpulan Hartanah Selangor berhad • 18 • 19

Still together in exploring beyond frontiers

Continuing to seize new opportunities that will come our way, we are strategising steps to optimise on our resources in a challenging climate that will fortify our resilience and presence. Kumpulan Hartanah Selangor berhad • 20

YBhg. Dato’ Haji Abd. Karim bin Munisar (Chairman / Pengerusi) • 21 Chairman`s Statement Perutusan Pengerusi

Dear Valued Shareholders, On behalf of the Board of Directors and the Management of Kumpulan Hartanah Selangor Berhad, I share our journey throughout 2009 with you accompanied by the Audited Financial Statements of the Group for the financial year ended 31 December 2009.

Para Pemegang Saham yang dihargai, Bagi pihak Lembaga Pengarah dan Pengurusan Kumpulan Hartanah Selangor Berhad, saya ingin berkongsi perjalanan Kumpulan sepanjang 2009 dan mengemukakan LapOran Kewangan Kumpulan yang telah diaudit bagi tahun berakhir 31 Disember 2009.

ECONOMIC ENVIRONMENT PERSEKITARAN EKONOMI In 1st half of 2009, regional economies were badly hit by the global slowdown Dalam separuh tahun 2009, ekonomi serantau telah dilanda kemerosotan ekonomi however the slowdown was mitigated by the stimulus package, whereby the global di mana ekonomi domestik juga tidak terkecuali. Bagaimanapun, kesan domestic economy was not immune to the global slump. kemerosotan tersebut telah dapat diringankan melalui pakej rangsangan ekonomi.

Worsening unemployment conditions amid closure of some electronic Keadaan pengangguran yang semakin buruk hasil penutupan beberapa firma firms has affected the nation’s consumer confidence and overall consumer elektronik telah memberi kesan ke atas keyakinan pengguna dan perbelanjaan business spending. keseluruhannya.

As the Global slump began to ease in third Quarter 09, domestic economy Kadar kemerosotan ekonomi global semakin berkurang pada sukuan ketiga 2009 started to improve as the positive impact from Government’s fiscal stimulus dan pada sukuan keempat, ekonomi domestik telah mula bertambah baik hasil and Bank Negara rate cuts from November 2008 were beginning to show from dari kesan positif dari rangsangan fiskal kerajaan dan penurunan kadar pinjaman fourth Quarter. oleh Bank Negara sejak November 2008. Kumpulan Hartanah Selangor berhad • 22 Chairman’s Statement • Perutusan Pengerusi • 23

FINANCIAL PERFORMANCE PRESTASI KEWANGAN 1. 2. 3. The Group registers a net profit of RM27.110 million Kumpulan telah merekodkan keuntungan bersih RM27.11 on the back of RM125.123 million revenue for the year juta dari pendapatan sebanyak RM125.123 juta pada 1. ended 31 December 2009. This compared favorably tahun kewangan berakhir 31 Disember 2009. Ia adalah Templer Impian Condominium, with a net loss of RM35.025 million in 2008 from satu pencapaian yang memberangsangkan berbanding Templer Park Resort revenue of RM92.358 million. kerugian RM35.025 juta di atas pendapatan sebanyak RM92.358 juta yang dicatatkan pada tahun 2008. 2. The higher revenue was attributable to land sale of Templer Heritage 2-Storey Terrace, RM98.08 million (2008: RM71.260 million) which is Pendapatan yang lebih tinggi ini adalah hasil dari Templer Park Resort mainly derived from the sales of industrial land in penjualan tanah sebanyak RM98.08 juta (2008 : RM71.26 Pulau Indah and higher revenue recorded from sales juta) yang kebanyakannya adalah dari penjualan tanah 3. of completed properties of RM12.866 million (2008: industri di Pulau Indah dan hasil yang lebih tinggi Templer Suasana 2-Storey Terrace, RM0.449 million). yang direkodkan dari penjualan hartanah yang siap Templer Park Resort dibina sebanyak RM12.866 juta (2008 : RM0.449 juta). Despite the global slump which has lingered since 2008 I am pleased to announce that the Group is now Walaupun dalam keadaan kemerosotan ekonomi sejak back on track of its transformation largely thank to MBI, 2008, saya dengan berbesar hati ingin memaklumkan the ultimate holding company which has announced a bahawa Kumpulan sekarang ini kembali berada pada grant to KHSB Group during the year. landasan transformasi, atas sokongan Perbadanan Menteri Besar, syarikat induk Kumpulan yang telah memberi geran kepada Kumpulan KHSB pada tahun 2009. DIVIDEND For the financial year ended 31st December 2009, the Board of Directors is not recommending any dividend. DIVIDEN Untuk tahun kewangan berakhir 31 Disember 2009, Ahli Lembaga Pengarah tidak mengesyorkan pengisytiharan pembayaran dividen. Kumpulan Hartanah Selangor berhad • 24 Chairman’s Statement • Perutusan Pengerusi

CORPORATE DEVELOPMENT PEMBANGUNAN KORPORAT Selangor Halal Hub Hab Halal Selangor Global demand for Halal products is fast changing the Permintaan global ke atas barangan halal telah landscape of Halal business. Due to that, Selangor State menukar lanskap bisnes halal dengan pesat. Oleh yang Government has made the first step to become the demikian, Kerajaan Negeri Selangor telah mengambil leading Halal hub in Malaysia through its investment langkah pertama untuk menjadi pemacu hab halal arm, Kumpulan Darul Ehsan Berhad (KDEB) who is di Malaysia melalui syarikat pelaburannya, Kumpulan turn, has entrusted Central Spectrum (M) Sdn. Bhd. Darul Ehsan Berhad (“KDEB”). KDEB selanjutnya telah (CSSB) to undertake the project called Selangor Halal memberi kepercayaan kepada Central Spectrum (M) Hub Pulau Indah (SHHPI). Sdn. Bhd. (“CSSB”) untuk melaksanakan projek yang dinamakan Selangor Halal Hub Pulau Indah (“SHHPI”). Strategically located along the highway to Westport, SHHPI has excellent infrastructure and easy road and SHHPI yang terletak dilokasi strategik berhampiran rail access to major airport - KLIA, capital cities - Kuala Westport mempunyai kemudahan infrastruktur yang Lumpur, , etc. makes it the ultimate choice for sangat baik dan boleh dihubungi melalui jalinan discerning investors. lebuhraya dan keretapi ke lapangan terbang KLIA, bandaraya Kuala Lumpur, Putrajaya dan sebagainya, To date, CSSB has successfully developed Phase 1 menjadikannya pilihan utama para pelabur. SHHPI, an area of 300 acres complete with infrastructure to meet the demand of the industry players. Due Sehingga kini, CSSB telah berjaya membangunkan Fasa to the overwhelming demand from the investors, 1 SHHPI, iaitu sebuah kawasan seluas 300 ekar yang Phase 2 SHHPI with an area of 400 acres is being dilengkapi dengan kemudahan infrastruktur untuk developed. The first part of Phase 2 will be completed memenuhi permintaan industri. Atas permintaan yang by middle of 2010. A total area of 85 acres of Phase tinggi para pelabur, Fasa 2 seluas 400 ekar sedang 2 SHHPI have been sold or booked by investors to dibangunkan. Bahagian pertama Fasa 2 dijangka akan date. Subsequently Phase 3 of SHHPI, covering some siap pada pertengahan 2010. Seluas 85 ekar tanah 300 acres will be developed in the near future. In total industri di Fasa 2 telahpun dijual atau ditempah oleh SHHPI will cover an area of about 1000 acres. para pelabur. Seterusnya, Fasa 3 seluas 300 ekar akan dimajukan pada waktu terdekat. Keseluruhannya SHHPI akan meliputi kawasan seluas lebih kurang 1,000 ekar.

“Global demand for Halal products is fast changing the landscape of Halal business. Due to that, Selangor State Government has made the first step to become the leading Halal hub in Malaysia.” • 25

Selangor Halal Hub Phase 1 Factory Kumpulan Hartanah Selangor berhad • 26 Chairman’s Statement • Perutusan Pengerusi

Artist Impression – Section 14, P.J. (Designed by ARC Partnership) Currently, several manufacturing plants are under construction by the investors in Phase 1 of SHHPI and upon completion, SHHPI is expected to be a driving force for the growth of Pulau Indah development. All the industrial plots in Phase 1 SHHPI have been sold to both locals and foreign investors. It is estimated that the total investment for Phase 1 SHHPI is more than RM900 million with job opportunities created for 2000 people.

SHHPI is an Accredited Halal Park by the Halal Industry Development Corporation (HDC) since 15 August 2008 where investors are eligible for special tax incentives like investment tax allowances of 100% of qualifying capital expenditure within a period of 10 years. Thus allowance can be set off against 100% of statutory income for each year assessment or exemption on statutory income from export sales for 5 years, subject to HDC Standards and Guidelines, These incentives will continue to attract investors to SHHPI.

Section 14 Petaling Jaya The Group’s decision to acquire the very last piece of the huge prime development land in the heart of Petaling Jaya is a strategic move to prepare the Group for the next property boom. We are completing the Sales and Purchase of the land and the timing is good that the economy is starting to show and record a strong growth. The present strong economy coupled with a very conducive building environment – high financial liquidity and demand – makes the land ready for development. The acquisition is indeed visionary and it would put the Group in strong earning positions in the years to come. • 27

Buat masa ini, beberapa kilang pengeluaran barangan The Group recognizes that any development of this Kumpulan sedar untuk pembangunan sebegini, halal di Fasa 1 sedang dalam pembinaan dan setelah siap, nature, due to its size and complexities, requires kerana saiz dan kerumitannya, memerlukan sumber dijangka akan menjadi pemangkin kepada pertumbuhan financial and technical capabilities beyond what exists kewangan dan keupayaan teknikal di luar kemampuan pembangunan Pulau Indah. Kesemua tanah industri di in the Group now. The Group also intends to accelerate yang ada sekarang. Kumpulan juga bercadang untuk Fasa 1 telahpun habis dijual kepada pelabur luar dan the development to meet the demand. With these in mempercepatkan pembangunan bagi memenuhi dalam negara dengan jumlah pelaburan dianggarkan mind, the Group is considering several potential strong permintaan. Dengan mengambil kira perkara ini, melebihi RM900 juta dan akan menyediakan 2,000 partners with track record and a strong balance sheet Kumpulan sedang mempertimbangkan beberapa peluang pekerjaan. to jointly undertake the development. These would rakan kongsi yang mempunyai rekod pencapaian yang bridge all gaps on the Group capabilities and would baik dan kewangan yang kukuh untuk sama-sama SHHPI adalah kawasan halal yang telah diakreditasi oleh further mitigate potential risks. menjalankan pembangunan tersebut. Ini diharapkan Halal Industry Development Corporation (“HDC”) sejak dapat mengukuhkan kemampuan Kumpulan dan 15 Ogos 2008 dimana para pelaburnya layak menikmati Mineral Extractions mengurangkan potensi risiko. insentif cukai istimewa seperti elaun cukai pelaburan The Group is also embarking into mineral extraction 100% dari perbelanjaan modal yang dibelanjakan businesses. It is envisaged that this new venture will Pengeluaran Bahan Galian dalam tempoh 10 tahun. Elaun ini boleh diimbangi create value added benefits from non strategic lands Kumpulan juga sedang menceburi bisnes pengeluaran dengan 100% pendapatan statutori untuk setiap tahun as the economy shows strong growth and increased bahan galian. Penglibatan dalam usaha ini akan taksiran atau pelepasan ke atas pendapatan statutori demands. This will generate positive earnings before memberi nilai tambahan yang berbaloi kepada tanah- dari hasil eksport selama 5 tahun, tertakluk kepada the non strategic land becomes suitable for future tanah yang tidak strategik dengan pengukuhan Garispanduan and Piawaian HDC. Insentif ini akan property developmental projects. ekonomi dan peningkatan permintaan. Ini akan menarik lebih ramai pelabur ke SHHPI. menghasilkan pulangan yang positif kepada Kumpulan Other Property Development Prospects sebelum tanah tersebut sesuai pada masa depan untuk Seksyen 14, Petaling Jaya For the last quarter of 2010 the Group will undertake dibangunkan dengan projek pembangunan hartanah. Keputusan Kumpulan untuk membeli satu-satunya a sizeable property development project located in bidang tanah pembangunan yang luas di tengah Petaling on the Group’s existing land bank. The Prospek Lain-lain Pembangunan Hartanah Jaya adalah langkah strategik sebagai persediaan project will comprises mixed residential products that Untuk sukuan terakhir 2010, Kumpulan akan menghadapi kepesatan hartanah yang akan datang. are currently in demand in the area. It is envisaged melancarkan projek pembangunan hartanah di Kami sedang memuktamadkan Perjanjian Jual Beli tanah that the project will increase the Group activities and Salak Tinggi. Pembangunan yang dicadangkan tersebut dan sekarang adalah masa yang terbaik kerana participation in a period of growing economy. adalah pembangunan perumahan bercampur yang keadaan ekonomi yang mula merekodkan pertumbuhan mempunyai permintaan yang baik di kawasan tersebut. yang memberangsangkan. Keadaan ekonomi yang Projek ini dijangka akan meningkatkan aktiviti dan kukuh serta persekitaran pembangunan yang kondusif – penglibatan Kumpulan dalam ekonomi yang sedang tahap kecairan kewangan dan permintaan yang tinggi - kembali berkembang ini. menjadikan tanah ini sesuai untuk dibangunkan dengan segera. Kami menganggap pembelian hartanah ini adalah berwawasan yang akan meletakkan Kumpulan di dalam keadaan berpendapatan yang lebih kukuh untuk tahun-tahun mendatang. Kumpulan Hartanah Selangor berhad • 28 Chairman’s Statement • Perutusan Pengerusi

CORPORATE GOVERNANCE Tadbir Urus Korporat KHSB affirms to the commitment in observing and KHSB komited dalam memastikan piawai yang tinggi maintaining the standards in Corporate Governance. dalam tadbir urus korporatnya dengan mempraktik We do so fully subscribing to the principles and best sepenuhnya prinsip dan amalan terbaik seperti practices contained in the Malaysia Code of Corporate yang terkandung dalam Kod Tadbir Urus Korporat Governance. Additionally, the Board judiciously Malaysia. Di samping itu, Lembaga Pengarah juga telah plays its role in enhancing the business integrity memainkan peranan yang penting untuk meningkatkan and governance to ensure that the interest of all integriti bisnes dan tadbir urusnya dalam melindungi shareholders is protected. kepentingan pemegang saham.

ACKNOWLEDGEMENT Penghargaan I would like to thank to State Government and Menteri Saya ingin mengucapkan terima kasih kepada Kerajaan Besar Incorporated (MBI), my fellow Board members, Negeri dan Perbadanan Menteri Besar, rakan-rakan the Management and the employees for their untiring Lembaga Pengarah, pihak Pengurusan dan kakitangan effort and contributions to the Group. di atas usaha gigih dan sumbangan mereka kepada Kumpulan. To our valuable purchasers, shareholders, authorities, bankers, business associates and authorities, I wish to Kepada para pembeli, pemegang saham, pihak convey my sincere thanks for their continued trust and berkuasa, institusi kewangan dan rakan niaga yang support to the Group. dihargai, saya ingin merakamkan ucapan terima kasih di atas kepercayaan dan sokongan berterusan kepada Kumpulan.

YBHG. DATO’ Haji ABD. KARIM BIN MUNISAR (Chairman / Pengerusi) DSSA, SSA, KMN, ASA • 29 Five-Year Financial Highlights Maklumat Kewangan Lima Tahun

RM Million / Juta 2005 2006 2007 2008 2009

Revenue 211.454 251.430 219.116 92.358 125.123 Hasil

Cost of Sales (177.370) (178.061) (161.154) (48.228) (81.093) Kos Jualan

Gross Profit 34.084 73.369 57.962 44.130 44.030 Keuntungan Kasar

Other Operating Income 7.967 57.451 70.717 84.257 163.542 Pendapatan Operasi Lain

Administration and Other Expenses (208.068) (85.776) (60.256) (142.232) (172.657) Pentadbiran dan Perbelanjaan Lain

Operating Profit / (Loss) (166.017) 45.044 68.423 (13.845) 34.915 Keuntungan / (Kerugian) Operasi

Finance Costs (31.877) (32.575) (27.362) (21.538) (15.858) Kos Pembiayaan

Profit / (Loss) Before Tax (197.894) 12.469 41.061 (35.383) 19.057 Keuntungan / (Kerugian) Sebelum Cukai

Taxation and Zakat 10.880 (5.399) (14.341) 0.062 8.053 Pencukaian dan Zakat

Profit / (Loss) From Discontinued Operation 0.391 (0.402) (0.109) 0.296 0.000 Keuntungan / (Kerugian) dari Operasi Ditamatkan

Lost / Profit For The Year (186.623) 6.668 26.611 (35.025) 27.110 Keuntungan / (Kerugian) Tahunan

Share Information

Earning / (loss) Per Share (Sen) (42.72) 0.88 4.67 (8.47) 4.77

Net Assets Per Share (RM) 1.06 1.06 1.11 1.03 1.08 Kumpulan Hartanah Selangor berhad • 30

Still focused on bridging new potentials • 31

Our people are the asset of the company, and will be decisive in their focused performance, committed to constantly be on the edge in providing solutions to each and every project we undertake. Kumpulan Hartanah Selangor berhad • 32 Board of Directors’ Profile Profil Lembaga Pengarah • 33

YBhg. Dato’ Haji Abd. Karim bin Munisar YBHG. DATO’ HAJI ABD. KARIM BIN MUNISAR, DSSA, of Kinta District Council; Assistant District Officer 1, Pemangku Yang Dipertua Majlis Daerah Sepang dari SSA, KMN, ASA, a Malaysian, aged 59, was redesignated Kampar; Chairman of Kampar / Gopeng Municipal tahun 1998 hingga 2003. Dato’ Haji Abd. Karim pernah as Chairman of Kumpulan Hartanah Selangor Berhad Council and also Assistant State Secretary of Perak menjadi Yang Dipertua Majlis Perbandaran (KHSB) on 6 September 2009. He is a member of (UPEN). In 1974, he was the Assistant Director at the pada tahun 1992 hingga1996. the Nomination Committee and Chairman of the Ministry of Finance, Malaysia. Tender Committee. He holds a Bachelor of Economics Beliau pernah berkhidmat sebagai Ketua Penolong (Honours) from University of Malaya, Advance Diploma Dato’ Haji Abd. Karim currently sits on the Board of Setiausaha Kerajaan Negeri Selangor (Bahagian Kerajaan in Economic Development (with Distinction) from Kumpulan Darul Ehsan Berhad as President, a position Tempatan) pada tahun 1987; Timbalan Pengarah, Urusetia University of Manchester, United Kingdom and held since 6 September 2004. Dato’ Haji Abd. Karim is also Perancangan Lembah Klang, Jabatan Perdana Menteri pada Master in Business Administration from University of the Executive Chairman of Kumpulan Perangsang Selangor tahun 1982; Ketua Penolong Pegawai Daerah 1 (Tanah) Edinburgh, Scotland. He also attended an Advanced Berhad and Chairman of Taliworks Corporation Berhad. Pejabat Daerah Kuantan dan Ketua Penolong Setiausaha Course in Urban Planning JICA at Tokyo, Japan. Kerajaan Negeri Pahang (Bahagian Perumahan).

Dato’ Haji Abd. Karim was the President of Petaling YBHG. DATO’ HAJI ABD. KARIM BIN MUNISAR, DSSA, Diantara tahun 1975 hingga 1980, Dato’ Haji Abd. Karim Jaya Municipal Council in 2003 to 2004. Prior to that, SSA, KMN, ASA, warganegara Malaysia, berusia 59 telah memegang beberapa jawatan di beberapa daerah he was the District Officer cum Acting President of tahun, dilantik semula sebagai Pengerusi Kumpulan dalam Negeri Perak sebagai Penolong Pegawai Daerah, Council from 1998 to 2003. Dato’ Haji Hartanah Selangor Berhad (KHSB) pada 6 September Kinta; Pengerusi Majlis Daerah Kinta; Penolong Pegawai Abd. Karim also served as the President of Ampang 2009. Beliau ialah ahli Jawatankuasa Pencalonan dan Daerah 1, Kampar; Pengerusi Majlis Daerah Kampar Jaya Municipal Council in 1992 to 1996. Pengerusi Jawatankuasa Tender. Beliau memiliki Ijazah / Gopeng dan Penolong Setiausaha Kerajaan Negeri Sarjana Muda Ekonomi (Kepujian) dari Universiti Malaya, Perak (UPEN). Pada tahun 1974, beliau menjawat jawatan He was the Chief Assistant State Secretary of Selangor Diploma Lanjutan dalam bidang Pembangunan Ekonomi Penolong Pengarah di Kementerian Kewangan, Malaysia. (Local Authority Division) in 1987; Deputy Director (dengan Cemerlang) dari Universiti of Manchester, United of Planning Secretariat, Prime Minister Kingdom dan Ijazah Sarjana Pentadbiran Perniagaan Dato’ Haji Abd. Karim menganggotai Lembaga Kumpulan Department in 1982; Chief Assistant District Officer 1 dari Universiti of Edinburgh, Scotland. Beliau juga telah Darul Ehsan Berhad sebagai Presiden, jawatan yang disandang (Land) of Kuantan District Office and Chief Assistant menghadiri Kursus Lanjutan dalam Perancangan Bandar sejak 6 September 2004. Dato’ Haji Abd. Karim juga adalah State Secretary of Pahang (Housing Division) in 1980. JICA di Tokyo, Jepun. Pengerusi Eksekutif Kumpulan Perangsang Selangor Berhad dan Pengerusi Taliworks Corporation Berhad. Between 1975 to 1980, Dato’ Haji Abd. Karim held Dato’ Haji Abd. Karim adalah Yang Dipertua Majlis different positions in various districts in the State Perbandaran Petaling Jaya pada tahun 2003 hingga of Perak as Assistant District Officer, Kinta; Chairman 2004. Sebelum itu, beliau adalah Pegawai Daerah dan Kumpulan Hartanah Selangor berhad • 34 Board of Directors’ Profile • Profil Lembaga Pengarah

YBHG. DATO’ AZMAN BIN MAHMOOD YBHG. DATO’ AZMAN BIN MAHMOOD, DJMK, AMS, From 1983, Dato’ Azman served as Group Financial YBHG. DATO’ AZMAN BIN MAHMOOD, DJMK, AMS, a Malaysian, aged 59, was appointed to the Board Controller of Kumpulan Perangsang Selangor Berhad warganegara Malaysia, berusia 59 tahun, telah dilantik of Kumpulan Hartanah Selangor Berhad (KHSB) on for seven (7) years until 1990. In 1991, he became sebagai Pengarah Kumpulan Hartanah Selangor Berhad 19 May 2003. He is an Independent Non-Executive the Managing Director of Worldwide Holdings Berhad (KHSB) pada 19 Mei 2003. Beliau merupakan Pengarah Director. He is the Chairman of the Audit Committee until 1996. Bukan Eksekutif Bebas. Beliau adalah Pengerusi and Remuneration Committee. He is also a member of Jawatankuasa Audit dan Jawatankuasa Imbuhan. the Nomination Committee and Tender Committee. Presently, Dato’ Azman is the Executive Chairman of Beliau juga adalah ahli Jawatankuasa Pencalonan dan Fine Access Sdn Bhd, a company involved in property Jawatankuasa Tender. He is a member of the Institute of Chartered Accountants development and has held this position since 1997. He of England and Wales. is also a Director of Crystalville Sdn Bhd (since 2006) Beliau ialah ahli Institut Akauntan Berkanun, England and Subang Alam Sdn Bhd (since 2007), where both of dan Wales. Dato’ Azman began his career with Lim, Ali & Co., an the companies are involved in property development. audit firm based in Johor Bahru from 1975 to 1977. He is also the Chairman of Cocoaland Holdings Berhad Dato’ Azman memulakan kerjayanya dengan Lim, Ali & Later, he served RD Neville & Co., a firm of Chartered and is an Independent Non-Executive Director of Jaks Co., sebuah firma audit di Johor Bahru dari tahun 1975 Accountants in Essex, England as an Auditor until 1980. Resources Berhad. hingga 1977. Selepas itu, beliau berkhidmat dengan In 1981, he joined MMC Services Limited in London, a RD Nevillie & Co., sebuah firma Akauntan Berkanun di subsidiary of Malaysia Mining Corporation Berhad until Essex, England sebagai Juruaudit hingga tahun 1980. 1983. Then he joined MUI Bank Berhad (now known as Pada tahun 1981, beliau menyertai MMC Services Hong Leong Bank Berhad) as a Senior Manager. Limited di London, sebuah anak syarikat Malaysia Mining Corporation Berhad hingga tahun 1983. Beliau kemudianya menyertai MUI Bank Berhad (kini dikenali sebagai Hong Leong Bank Berhad) sebagai Pengurus Kanan.

Dari tahun 1983, Dato’ Azman berkhidmat dengan Kumpulan Perangsang Selangor Berhad sebagai Pengawal Kewangan Kumpulan selama tujuh (7) tahun hingga tahun 1990. Pada tahun 1991, beliau menjadi Pengarah Urusan Worldwide Holdings Berhad hingga tahun 1996.

Ketika ini, Dato’ Azman adalah Pengerusi Eksekutif Fine Access Sdn Bhd, sebuah syarikat yang terlibat dalam pembangunan hartanah dan telah menyandang jawatan ini sejak tahun 1997. Beliau juga merupakan Pengarah Crystalville Sdn Bhd (sejak tahun 2006) dan Subang Alam Sdn Bhd (sejak tahun 2007) dimana kedua-dua syarikat ini terlibat dalam pembangunan hartanah. Beliau juga adalah Pengerusi Cocoaland Holdings Berhad dan merupakan Pengarah Bukan Eksekutif Bebas untuk Jaks Resources Berhad. • 35

YBhg. Dato’ AZLAN bin HASHIM YBHG. DATO’ AZLAN BIN HASHIM, DSSA, DSNS, a Malaysian, aged 68, was appointed to the Board of Kumpulan Hartanah Selangor Berhad (KHSB) on 22 April 2008. He is a Non-Independent Non-Executive Director. He is a member of the Audit Committee, Remuneration Committee and Tender Committee.

Dato’ Azlan is a Fellow of the Institute of Chartered Accountants (Ireland), Economic Development Institute (World Bank, Washington) and Institute of Bankers Malaysia.

Dato’ Azlan, a qualified Chartered Accountant, served with the Malayan Railways from 1966 to 1971 and YBHG. DATO’ AZLAN BIN HASHIM, DSSA, DSNS, Salleh & Co., sebuah firma akauntan awam dan merupakan was its Chief Accountant for two (2) years. In 1972, he warganegara Malaysia, berusia 68 tahun, telah dilantik rakan kongsi Kanan firma tersebut sebelum menyertai became a Partner of a public accounting firm, Messrs sebagai Pengarah Kumpulan Hartanah Selangor Lembaga Pengarah Arab-Malaysian Development Berhad Azman Wong Salleh & Co. and was a Senior Partner of Berhad (KHSB) pada 22 April 2008. Beliau merupakan pada tahun 1982 hingga Julai 2007. the firm prior to joining the Board of Arab-Malaysian Pengarah Bukan Eksekutif Bukan Bebas. Beliau ialah Ketika ini, Dato’ Azlan ialah Timbalan Pengerusi AMMB Development Berhad from 1982 to July 2007. ahli Jawatankuasa Audit, Jawatankuasa Imbuhan dan Jawatankuasa Tender. Holdings Berhad dan Pengerusi AmInternational (L) Presently, Dato’ Azlan is the Deputy Chairman of AMMB Limited dan PT AmCapital Indonesia. Beliau merupakan Holdings Berhad and Chairman of AmInternational (L) Dato’ Azlan ialah Penaung Institut Akauntan Berkanun Pengarah Bukan Eksekutif AmFraser Securities Limited and PT AmCapital Indonesia. He is currently the (Ireland), Institut Pembangunan Ekonomi (World Bank, Pte Ltd dan AmFraser International Pte Ltd. selain Non-Executive Director of AmFraser Securities Pte Ltd Washington) dan Institut Bank-Bank Malaysia. menganggotai Lembaga Pengarah Metrod (M) Berhad, and AmFraser International Pte Ltd. He also sits on the Paramount Corporation Berhad, Sapura Industrial Dato’ Azlan, seorang Akauntan Berkanun Berkelayakan Boards of Metrod (M) Berhad, Paramount Corporation Berhad, Kumpulan Perangsang Selangor Berhad, Kesas berkhidmat dengan Malayan Railways dari tahun 1966 Berhad, Sapura Industrial Berhad, Kumpulan Perangsang Holdings Berhad, Global Carriers Berhad dan Syarikat hingga tahun 1971 di mana beliau menyandang jawatan Selangor Berhad, Kesas Holdings Berhad, Global Carriers Permodalan & Perusahaan Selangor Berhad. Beliau juga sebagai Ketua Akauntan selama dua (2) tahun. Pada tahun Berhad and Syarikat Permodalan & Perusahaan Selangor adalah Pengerusi Eksekutif Global Carriers Berhad. 1972, beliau menjadi rakan kongsi Tetuan Azman Wong Berhad. He is also the Executive Chairman of Global Carriers Berhad. Kumpulan Hartanah Selangor berhad • 36 Board of Directors’ Profile • Profil Lembaga Pengarah

ENCIK WONG YIEN KIM, SIS, PPT, warganegara Malaysia, berusia 56 tahun, telah dilantik sebagai Pengarah Kumpulan Hartanah Selangor Berhad (KHSB) pada 22 April 2008. Beliau adalah Pengarah Bukan Eksekutif Bukan Bebas. Beliau juga adalah ahli Jawatankuasa Tender.

Encik Wong memperolehi kelayakan profesional dari Institut Akauntan Berkanun di England dan Wales pada tahun 1982. Beliau ialah ahli Institut Akauntan Malaysia dan Institut Akauntan Berkanun, England dan Wales. ENCIK WONG YIEN KIM ENCIK WONG YIEN KIM, SIS, PPT, a Malaysian, aged 56, He joined Kumpulan Perangsang Selangor Berhad Beliau mula berkhidmat dengan Kumpulan Perangsang was appointed to the Board of Kumpulan Hartanah (KPS), a subsidiary company of Kumpulan Darul Ehsan Selangor Berhad (KPS), anak syarikat Kumpulan Selangor Berhad (KHSB) on 22 April 2008. He is a Non- Berhad (KDEB) in 1983 as an Accountant and was Darul Ehsan Berhad (KDEB) pada tahun 1983 sebagai Independent Non-Executive Director. He is a member appointed as Chief Accountant for several of KPS’s Akauntan dan telah dilantik sebagai Ketua Akauntan of the Tender Committee. subsidiaries. He served SAP Holdings Berhad for seven di beberapa anak syarikat KPS. Beliau berkhidmat (7) years as Head of Finance Division. Encik Wong was dengan SAP Holdings Berhad selama tujuh (7) tahun Encik Wong obtained his professional qualification also the General Manager Finance of KPS, a position memegang jawatan sebagai Ketua Bahagian Kewangan from the Institute of Chartered Accountants in England held since 2000. sebelum menyandang jawatan beliau sekarang. Encik and Wales in 1982. He is a member of the Malaysian Wong juga merupakan Pengurus Besar Kewangan KPS, Institute of Accountants and Institute of Chartered Presently, Encik Wong is an Executive Director of KPS and jawatan yang dipegang oleh beliau sejak tahun 2000. Accountants of England and Wales. also sits on the Board of Taliworks Corporation Berhad. Ketika ini, Encik Wong ialah Pengarah Eksekutif KPS dan beliau juga menganggotai Lembaga Pengarah Taliworks Corporation Berhad. • 37

encik lee siew choong ENCIK LEE SIEW CHOONG, a Malaysian, aged 67, was appointed to the Board of Kumpulan Hartanah Selangor Berhad (KHSB) on 23 June 2008. He is an Independent Non-Executive Director. He is a member of the Audit Committee and Remuneration Committee. He is also the Chairman of the Nomination Committee.

Encik Lee graduated with a Bachelor of Laws (Honours) Degree from Singapore and was called to the Malaysian Bar in 1968.

Encik Lee currently sits on the Boards of Bolton Berhad, KAF-Seagroatt & Campbell Berhad, KAF Investment Bank Berhad, Center for Marketplace Leadership Berhad, KAF Trustee Berhad and various private companies.

ENCIK LEE SIEW CHOONG, warganegara Malaysia, berusia 67 tahun, telah dilantik sebagai Pengarah Kumpulan Hartanah Selangor Berhad (KHSB) pada 23 Jun 2008. Beliau merupakan Pengarah Bukan Eksekutif Bebas. Beliau ialah ahli Jawatankuasa Audit dan Jawatankuasa Imbuhan. Beliau juga adalah Pengerusi Jawatankuasa Pencalonan.

Encik Lee berkelulusan Sarjana Muda Undang-Undang (Kepujian) dari Singapura dan telah menganggotai Badan Peguam Malaysia pada tahun 1968.

Ketika ini, Encik Lee menganggotai Lembaga Pengarah Bolton Berhad, KAF-Seagroatt & Campbell Berhad, KAF Investment Bank Berhad, Center for Marketplace Leadership Berhad, KAF Trustee Berhad dan beberapa buah syarikat swasta. Kumpulan Hartanah Selangor berhad • 38 Board of Directors’ Profile • Profil Lembaga Pengarah

ENCIK AZMAN BIN MARZUKI ENCIK AZMAN BIN MARZUKI a Malaysian aged 45, was Encik Azman holds a Master of Business Administration dengan pembinaan Trans Borneo Highway, Sabah di appointed to the Board on 23 April 2009. from IMD Business School, Switzerland in 2003. He bawah Bank Dunia. Selepas itu beliau telah menyertai obtained a Bachelor of Engineering (Civil) (Honours) Pengurusan Lebuhraya Berhad and terlibat dengan Currently, he is the Acting Chief Executive Officer of from the University of Wollongong, Australia in 1987. Projek Lebuhraya Utara Selatan (PLUS) dari mula Kumpulan Hartanah Selangor Berhad (KHSB). He has He attended Senior Management Development hingga siap pembinaannya. over 20 years of experience in Business Management, Programme with Harvard Business School in 1998 Project Management and Construction Management and Programme for Executive Development with IMD Sebagai Ketua Pegawai Operasi PECD Berhad dahulu, both local and international levels. He started his Business School, Switzerland in 2001. Encik Azman bertanggungjawab ke atas segala operasi engineering career in 1988 with Minconsult and was berkaitan pemasaran, pembangunan perniagaan, involved in the Trans Borneo Highway in Sabah under tender dan perlaksanaan projek. Beliau berpengalaman the World Bank. Subsequently he joined Pengurusan ENCIK AZMAN BIN MARZUKI, warganegara Malaysia luas di dalam projek projek kejuruteraan besar seperti Lebuhraya Berhad and was involved in the North South berusia 45 tahun telah dilantik menyertai Lembaga lebuhraya dan jambatan, bangunan-bangunan Expressway (PLUS) from its inception to completion. Pengarah pada 23 April 2009. komersial, kediaman dan institut.

As Chief Operating Officer of PECD Berhad previously, Ketika ini, beliau merupakan Pemangku Ketua Pegawai Encik Azman memperolehi Sarjana dalam Pentadbiran he was responsible for all operational matter including Eksekutif KHSB. Berpengalaman lebih 20 tahun di Perniagaan daripada IMD Business School, Switzerland marketing, business development, tendering and dalam pengurusan perniagaan, pengurusan projek pada tahun 2003. Beliau juga mempunyai Ijazah project implementation. He has vast experience in large dan pengurusan pembinaan di dalam dan luar Kejuruteraan (Awam) (Kepujian) daripada Universiti engineering projects such as highway and bridges, negara. Memulakan kerjaya kejuruteraannya pada Wollongong, Australia pada tahun 1987. Beliau juga commercial, residential and institutional buildings. tahun 1988 bersama Minconsult dan telah terlibat pernah menyertai Program Pembangunan Pengurusan Kanan di Harvard Business School pada tahun 1998 dan juga Program Pembangunan Eksekutif di IMD Business School, Switzerland pada tahun 2001

Note: Other than disclosed in the profile of Board of Directors, all the Directors do not have any family relationship with any Director and / or major shareholder of the Company. They have no personal interest in any business arrangement involving the company. They have had no convictions within the past ten (10) years.

Nota: Selain daripada yang dimaklumkan di dalam profil Lembaga Pengarah, kesemua ahli lembaga Pengarah tidak mempunyai sebarang hubungan kekeluargaan dengan mana-mana Pengarah dan / atau pemegang saham utama Syarikat. Mereka tidak mempunyai kepentingan peribadi dalam sebarang urusan perniagaan yang melibatkan Syarikat. Mereka juga tidak pernah disabitkan dengan sebarang kesalahan dalam tempoh sepuluh (10) tahun yang lepas. • 39 Kumpulan Hartanah Selangor berhad • 40 Statement of Corporate Governance Penyata Tadbir Urus Korporat

The Board recognises the importance of corporate governance and is fully Pihak Lembaga menyedari akan kepentingan tadbir urus korporat dan dengan committed to ensuring that the principles and best practices as articulated in itu benar-benar komited untuk memastikan bahawa prinsip dan amalan terbaik Part 1 and 2 of the Malaysian Code of Corporate Governance (“the Code”) are seperti yang digariskan dengan jelas dalam Bahagian 1 dan 2 Kod Tadbir Urus adopted and complied with throughout the Group. The Board believes building Korporat (“Kod”) diguna pakai dan dipatuhi oleh Kumpulan. Lembaga yakin a strong governance foundation and undertaking continous efforts in its strive bahawa usaha mewujudkan asas urus tadbir yang teguh dan juga usaha yang for perfection shall remain the focus of the Board in order for the Company to berterusan bagi mencapai kesempuranaan dan terus diberi perhatian oleh preserve and promote the interest of all stakeholders. Lembaga agar Syarikat dapat mengekalkan dan mempromosi kepentingan semua pihak yang berkepentingan. The Board has given due consideration and efforts have been made to evaluate and apply the said Principles and Best Practices of the Code for the Group Pihak Lembaga telah memberikan pertimbangan dan melaksanakan usaha throughout the financial year ended 31 December 2009. yang sewajarnya untuk menilai dan menggunakan prinsip-prinsip serta Amalan Terbaik dalam Kod tersebut untuk Kumpulan sepanjang tahun kewangan berakhir The Board of Directors continues to place the highest standard of the said 31 Disember 2009. principles in all of the Group’s activities to protect and enhance shareholders value and financial performance. Lembaga Pengarah terus meletakkan piawai yang paling utama bagi prinsip-prinsip tersebut dalam semua aktiviti Kumpulan bagi melindungi dan meningkatkan nilai pemegang saham dan prestasi kewangan. 1.0 tHE BOARD OF DIRECTORS 1.1 the Group is steered and guided by an effective Board. The principal focus of the Board among others, charting the overall strategic 1.0 lembaga PENGARAH direction, control and development of the Group and supervising its 1.1 Kumpulan diterajui dan dibimbing oleh Lembaga yang berkesan. affairs to ensure its success within a framework of acceptable risks and Fokus utama Lembaga, antara lainnya adalah menentukan arah strategik effective controls. The Board is responsible for approving key matters keseluruhan, pengawalan, pembangunan serta pemantauan hal ehwal involving amongst others, business plans and budgets, major capital Kumpulan untuk memastikan kejayaannya berada dalam lingkungan expenditure, acquisition and disposal of assets, interim and annual risiko yang munasabah dan berkesan. Lembaga bertanggungjawab results, investment and new business. untuk meluluskan hal-hal penting yang melibatkan antara lainnya, rancangan perniagaan dan belanjawan, perbelanjaan modal utama, pengambilalihan dan penjualan aset, keputusan kewangan interim dan tahunan, pelaburan dan perniagaan baru. • 41

1.2 guided by the Chairman, Board members bring a wide range of 1.2 dengan dipimpin oleh Pengerusi, Ahli Lembaga membawa bersama relevant expertise, vast experience and business acumen to serve the mereka kepakaran dan pengalaman yang luas dalam pelbagai bidang Group. The Board’s composition takes into consideration the balance yang berkaitan untuk berkhidmat kepada Kumpulan. Komposisi between power and authority, as evidenced from the number of Lembaga mengambil kira keseimbangan di antara kuasa dan pengaruh Non-Executive Directors. This balance enabled the Board to provide seperti yang digambarkan oleh bilangan Pengarah Bukan Eksekutif. clear and effective leadership to the Group and to bring informed and Keseimbangan ini membolehkan Lembaga memberikan kepimpinan independent judgment to many aspects of the Group’s strategy and yang jelas dan berkesan kepada Kumpulan dan untuk memberi performance, so as to ensure that the highest standards of conduct maklum dan pertimbangan yang bebas terhadap pelbagai aspek yang and integrity were maintained by the Group. The Independent Director melibatkan strategi dan prestasi Kumpulan, agar dapat memastikan is free from any business or other relationships that could materially piawai perlaksanaan dan integriti yang tinggi dapat dikekalkan oleh interfere with the business of the Company. Kumpulan. Pengarah Bebas juga tidak terikat dengan mana-mana perniagaan atau perhubungan lain yang boleh mempengaruhi 1.3 t o ensure the effective discharge of its fiduciary duties, the Board perlaksanaan perniagaan Syarikat. has delegated specific responsibilities to the following four (4) Board committees namely the Audit, the Tender, Nomination and 1.3 untuk memastikan tugas-tugas yang diamanahkan dilakukan dengan Remuneration. This is to allow members of the Board committees to berkesan, Lembaga telah mengagihkan tanggungjawab tertentu kepada deliberate and examine the issues within their terms of reference in empat (4) Jawatankuasa Lembaga iaitu Audit, Tender, Pencalonan dan greater detail, as set out by the Board of Directors. Imbuhan. Langkah ini bertujuan untuk membolehkan Jawatankuasa Lembaga mempertimbangkan dan meneliti isu-isu yang tertakluk di dalam bidang rujukan mereka dengan lebih teliti, seperti mana yang 2.0 dIRECTORS’ TRAINING telah ditentukan oleh Lembaga Pengarah. 2.1 t he company undertook an orientation programme for new Board members to acquaint them with the Group’s businesses, its business plan, the management and operating environment. The Directors also 2.0 latIHAN PENGARAH-PENGARAH participated in an introductory session with senior management and 2.1 Syarikat telah mengendalikan program orientasi untuk ahli-ahli key staff members. Lembaga bagi mendedahkan mereka kepada perniagaan, rancangan perniagaan, pengurusan dan persekitaran operasi Kumpulan. Para 2.2 all Directors have attended and successfully completed the Mandatory Pengarah juga terlibat dalam sesi pengenalan dengan pengurusan Accreditation Programme (“MAP”) organised by Bursatra Sdn. Bhd. In kanan dan kakitangan utama. addition, all Directors have also attended continuous education courses to update themselves of developments in the market place. 2.2 Semua Pengarah telah menghadiri dan menamatkan dengan jayanya Program Akreditasi Mandatori (“MAP”) yang dianjurkan oleh Bursatra Sdn. Bhd. Sebagai tambahan, para Pengarah juga telah menghadiri pelbagai kursus secara berterusan untuk melengkapkan diri mereka dengan perkembangan terkini di pasaran. Kumpulan Hartanah Selangor berhad • 42 Statement of Corporate Governance • Penyata Tadbir Urus Korporat

2.3 the training attended by the Directors during the year are summarised 2.3 latihan yang telah dihadiri oleh para Pengarah sepanjang tahun adalah as follows:- seperti berikut:-

Name of Directors / Nama Pengarah programme / Program

YBhg. Dato’ Haji Abd. Karim bin Munisar Water Congress APAC Series (6 & 7 October 2009 / 6 & 7 Oktober 2009)

YBhg. Dato’ Azman bin Mahmood Talk on Project Construction Process (21 February 2009 / 21 Februari 2009)

Workshop on Appraising for Self Improvements & The Company (19 August 2009 / 19 Ogos 2009)

YBhg. Dato’ Azlan bin Hashim Financial Institutions Directors Education Program – Invitation to “A Session with Jim Rogers” (3 February 2009 / 3 Februari 2009)

musharakah & Its Application in Islamic Finance by dr Mohd Daud Bakar & Dr Syed Musa Alhabshi (24 June 2009 / 24 Jun 2009)

encik Wong Yien Kim Overseas Business Expansion by LGB Group (27 March 2009 / 27 Mac 2009)

encik Lee Siew Choong KAF Group Training on FRS 7, FRS 139 & Corporate Governance (7 December 2009 / 7 Disember 2009)

encik Azman bin Marzuki Mandatory Accreditation Programme For Directors Of Public Listed Companies (Appointed on 23 April 2009 / (23 & 24 June 2009 / 23 & 24 Jun 2009) Dilantik pada 23 April 2009) International Conference – Urban Regeneration Towards Selangor’s Sustainable Future (30 November & 1 December 2009 / 30 November & 1 Disember 2009)

2.4 the Directors will continue to attend other relevant training programme 2.4 para Pengarah akan terus menghadiri program latihan lain yang difikirkan as appropriate to enhance their knowledge. relevan untuk menambah pengetahuan mereka. • 43

3.0 board MEETINGS AND SUPPLY OF INFORMATION 3.0 meSYUARAT LEMBAGA DAN BEKALAN MAKLUMAT 3.1 the Board meets at least once every quarter with additional meetings 3.1 lembaga bermesyuarat sekurang-kurangnya sekali setiap suku tahun held between the scheduled meetings as and when required to dengan tambahan mesyuarat di antara mesyuarat-mesyuarat yang telah deliberate a variety of significant matters involving among others dijadualkan apabila perlu untuk membincangkan pelbagai hal penting business plan, budget, quarterly financial result, legal cases, operational melibatkan rancangan perniagaan, belanjawan, keputusan kewangan activities, corporate affairs and other corporate proposals. All Directors suku tahunan, kes perundangan, hal ehwal korporat, aktiviti operasi, dan have complied with the minimum number of attendance for Board cadangan korporat. Semua Pengarah telah mematuhi bilangan kehadiran meeting as stipulated by the Listing Requirements of Bursa Malaysia minimum dalam mesyuarat Lembaga seperti yang ditetapkan oleh Securities Berhad. Keperluan Penyenaraian Bursa Malaysia Securities Berhad.

a set of Board papers with an Agenda be circulated to all Directors prior Satu set buku yang mengandungi Agenda diserahkan kepada semua to Board Meetings. The Directors are supplied with adequate information Pengarah sebelum Mesyuarat Lembaga. Para Pengarah dibekalkan to enable them to review and to make informed decisions. dengan maklumat lengkap untuk disemak agar dapat membuat keputusan yang tepat. d uring the financial year ended 31 December 2009, eight (8) Board meetings were held. Detail of attendance of the respective Directors pada tahun kewangan berakhir 31 Disember 2009, lapan (8) Mesyuarat are as follows. Lembaga telah diadakan. Maklumat kehadiran Pengarah adalah seperti berikut.

Board Members Number Of Meetings Held Attendance Ahli-Ahli Lembaga Bilangan Mesyuarat Yang Diadakan Kehadiran

YBhg. Dato’ Haji Abd. Karim bin Munisar 8 7

YBhg. Dato’ Azman bin Mahmood 8 8

YBhg. Dato’ Azlan bin Hashim 8 7

encik Wong Yien Kim 8 7

encik Lee Siew Choong 8 6

encik Azman bin Marzuki 5 5 (Appointed on 23 April 2009 / Dilantik pada 23 April 2009) Kumpulan Hartanah Selangor berhad • 44 Statement of Corporate Governance • Penyata Tadbir Urus Korporat

t he Board members have access to the advice and services of the a hli Lembaga boleh mendapatkan nasihat dan khidmat Setiausaha Company Secretary and other Management to all information in Syarikat dan Pengurusan lain bagi memperolehi semua maklumat relation to the Group’s financial and to make further enquiries whenever berkaitan kewangan Syarikat dan mengemukakan pertanyaan lanjutan, deemed necessary in discharging their duties. apabila perlu, bagi menjalankan tugas-tugas mereka.

3.2 In addition to financial information, other information deemed suitable 3.2 Sebagai tambahan kepada maklumat kewangan, maklumat lain yang such as corporate and strategic proposals, projects, sales and marketing dianggap sesuai adalah seperti cadangan strategik korporat, projek, operations activities are also provided. operasi jualan dan pemasaran juga disediakan.

3.3 decisions and deliberations by the Board are recorded in the minutes of 3.3 Keputusan dan perbincangan oleh Lembaga direkodkan dalam minit the Board meetings. All minutes of proceedings or circular resolutions mesyuarat Lembaga. Semua minit prosiding atau resolusi pekeliling yang signed and passed by the Board and/or Board Committees are kept at ditandatangani dan diluluskan oleh Lembaga dan/atau Jawatankuasa the registered office of the Company. Whether as a Board or individually, Lembaga disimpan di pejabat berdaftar Syarikat. Sama ada sebagai ahli Directors can seek professional, independent counsel or opinions in Lembaga atau secara individu, Pengarah boleh mendapatkan nasihat discharging their duties if necessary. atau pendapat yang bebas dan professional dalam menjalankan tugas, jika perlu.

4.0 board COMPOSITION the Board currently comprises of six (6) members including one (1) Chairman, 4.0 KOMPOSISI LEMBAGA one (1) Executive Director, two (2) Non-Independent Non-Executive Directors pada masa kini Lembaga Pengarah terdiri daripada enam (6) ahli termasuk and two (2) Independent Non-Executive Directors. seorang (1) Pengerusi, seorang (1) Pengarah Eksekutif, dua (2) Pengarah Bukan Eksekutif Bukan Bebas dan dua (2) Pengarah Bukan Eksekutif Bebas.

5.0 re-ELECTION OF DIRECTORS all Directors, are required to offer themselves for re-election at the appointed 5.0 perlantIKAN SEMULA PENGARAH-PENGARAH period at least once in every three (3) years in accordance with the Company’s Semua Pengarah, perlu menawarkan diri mereka untuk dipilih semula pada Articles of Association. tempoh yang telah ditetapkan sekurang-kurangnya sekali pada setiap tiga (3) tahun, selaras dengan Tataurusan Syarikat. • 45

6.0 board COMMITTEE 6.0 aHLI JAWATANKUASA LEMBAGA to ensure the effective discharge of its fiduciary duties, the Board has delegated u ntuk memastikan perlaksanaan yang berkesan bagi tugas-tugas yang certain responsibilities to the following Board Committees. The Committees are diamanahkan, Lembaga telah mengagihkan tanggungjawab tertentu thus able to deliberate the issues on a broad and in depth basis before putting kepada Jawatankuasa-Jawatankuasa Lembaga berikut. Maka, Jawatankuasa- up any recommendation to the Board. The Committees operate within their Jawatankuasa ini boleh membincangkan isu-isu secara meluas dan clearly defined terms of reference as set out by the Board. mendalam sebelum mengemukakan sebarang cadangan kepada Lembaga. Jawatankuasa-Jawatankuasa tersebut beroperasi dalam bidang tugas yang 6.1 audIT COMMITTEE telah ditentukan dengan jelas oleh Lembaga. the Audit Committee (“Committee”) as at the date comprises of, 6.1 JAWATANKUASA AUDIT three (3) Non Executive Directors, two (2) of whom are Independent Directors. YBhg. Dato’ Azman bin Mahmood (Independent Director) is pada tarikh Laporan Tahunan ini, Jawatankuasa Audit (“Jawatankuasa”) the Chairman of the Committee. The other members are YBhg. Dato’ terdiri daripada tiga (3) Pengarah Bukan Eksekutif, dua (2) daripadanya Azlan bin Hashim (Non-Independent Director) and Encik Lee Siew adalah Pengarah Bebas. YBhg. Dato’ Azman bin Mahmood (Pengarah Choong (Independent Director). Bebas) ialah Pengerusi Jawatankuasa. Dua (2) ahli lain adalah YBhg. Dato’ Azlan bin Hashim (Pengarah Bukan Bebas) dan Encik Lee Siew t he Company had complied with the Listing Requirements of Bursa Choong (Pengarah Bebas). Malaysia Securities Berhad under Part C Chapter 15 Paragraph 15.10. Syarikat telah mematuhi Keperluan Penyenaraian Bursa Malaysia please refer to the Audit Committee Report in respect of the financial Securities Berhad Bahagian C Bab 15 Perenggan 15.10. year ended 31 December 2009 in this Annual Report. Sila rujuk kepada Laporan Jawatankuasa Audit untuk tahun kewangan berakhir 31 Disember 2009 dalam Laporan Tahunan ini. 6.2 nomINATION COMMITTEE the Nomination Committee (“Committee”) is empowered to nominate and 6.2 JAWATANKUASA PENCALONAN recommend new appointments to the Board, after evaluation was made. Jawatankuasa Pencalonan (“Jawatankuasa”) diberikan kuasa untuk mencalonkan dan mencadangkan perlantikan baru Lembaga Pengarah during the financial year ended 31 December 2009, the Committee selepas penilaian dilakukan. comprises of Non-Executive Directors, one (1) Non-Independent and two (2) Independent Directors. Members of the Nomination Committee are:- p ada tahun Kewangan berakhir 31 Disember 2009, Jawatankuasa ini terdiri daripada Pengarah Bukan Eksekutif, seorang (1) Pengarah Bukan (a) encik Lee Siew Choong (Chairman) Bebas dan dua (2) Pengarah Bebas. Ahli Jawatankuasa Pencalonan terdiri daripada:- (b) YBhg. Dato’ Haji Abd. Karim bin Munisar (a) encik Lee Siew Choong (Pengerusi) (c) YBhg. Dato’ Azman bin Mahmood (b) YBhg. Dato’ Haji Abd. Karim bin Munisar the meeting of the Nomination Committee are held as and when necessary. Two members present shall form the quorum. (c) YBhg. Dato’ Azman bin Mahmood

m esyuarat Jawatankuasa ini diadakan apabila perlu. Dua ahli yang hadir akan mencukupkan korum. Kumpulan Hartanah Selangor berhad • 46 Statement of Corporate Governance • Penyata Tadbir Urus Korporat

6.3 remuneratION COMMITTEE 6.3 JAWATANKUASA IMBUHAN the Remuneration Committee (“Committee”) is empowered to review, Jawatankuasa Imbuhan (“Jawatankuasa”) diberi kuasa untuk mengkaji recommend and fix the remuneration packages of Board members, semula, mencadang dan menetapkan pakej imbuhan ahli Lembaga according to the criteria recommended in the Code of Corporate Pengarah, mengikut kriteria yang dicadangkan dalam Kod Urus Tadbir Governance, including the Executive Directors, in line with their Korporat, termasuk Pengarah Eksekutif, selaras dengan akauntabiliti accountabilities and responsibilities. dan tanggungjawab mereka.

executive Directors are excluded from discussing and voting with pengarah Eksekutif dikecualikan daripada perbincangan dan pengundian reference to their remuneration package and in-kind benefits. mengenai pakej imbuhan dan manfaat bukan berbentuk wang.

during the financial year ended 31 December 2009, the Committee pada tahun kewangan berakhir 31 Disember 2009, Jawatankuasa comprises of Non-Executive Directors, one (1) Non-Independent ini terdiri daripada Pengarah Bukan Eksekutif, seorang (1) Pengarah and two (2) Independent Directors. Members of the Remuneration Bukan Bebas dan dua (2) Pengarah Bebas. Ahli Jawatankuasa Imbuhan Committee are:- terdiri daripada:-

(a) YBhg. Dato’ Azman bin Mahmood (Chairman) (a) YBhg. Dato’ Azman bin Mahmood (Pengerusi)

(b) YBhg. Dato’ Azlan bin Hashim (b) YBhg. Dato’ Azlan bin Hashim

(c) encik Lee Siew Choong (c) encik Lee Siew Choong

the meeting of the Remuneration Committee are held as and when is m esyuarat Jawatankuasa diadakan apabila perlu dengan sekurang- necessary with at least once in a financial year. Two members present kurangnya sekali dalam tahun kewangan. Dua ahli yang hadir akan shall form a quorum. mencukupkan korum.

the details of the remuneration for Directors of the Company comprising butiran lanjut imbuhan kepada Pengarah Syarikat terdiri daripada yang remuneration received/receivable from the Company for the financial telah diterima/akan di terima daripada Syarikat untuk tahun kewangan year ended 31 December 2009 are as follows. berakhir 31 Disember 2009 adalah seperti berikut.

Executive Director / Non-Executive Director/ Total / Pengarah Eksekutif Pengarah Bukan Eksekutif Jumlah (RM) (RM) (RM)

fees 107,736.11 250,000.00 357,736.11

Salaries 510,000.00 - 510,000.00

allowances 111,000.00 217,902.78 328,902.78 • 47

the number of Directors of the Company according to remuneration bilangan Pengarah Syarikat mengikut julat imbuhan:- range:-

Number of Director / Bilangan Pengarah

Range of Remuneration / Julat Imbuhan Executive Director / Non-Executive Director / (RM) Pengarah Eksekutif Pengarah Bukan Eksekutif

below 50,000 - -

50,001 - 200,000 - 4

200,001 - 400,000 2 -

400,001 - 600,000 - -

6.4 tender COMMITTEE 6.4 JAWATANKUASA TENDER t he Tender Committee (“Committee”) was established in compliance Jawatankuasa Tender (“Jawatankuasa”) telah dibentuk selaras dengan with the policies, having independent approvals from the Board. dasar-dasar dan mendapat kelulusan yang bebas daripada Lembaga. The principal duties and responsibilities of the Committee are to ensure Tugas dan tanggungjawab utama Jawatankuasa ini adalah untuk that the tendering process complies with the relevant procedures and memastikan bahawa proses tender mematuhi dasar dan peraturan, requirements and to consider, evaluate, approve and award tender of dan mempertimbang, menilai, meluluskan serta memberi tender project. In this regard, the Committee takes into consideration various berkaitan perlaksanaan projek. Dalam hal ini, Jawatankuasa mengambil factors such as the price, contractors past records, credibility and kira pelbagai faktor seperti harga, rekod kontraktor, kredibiliti dan experiences. pengalaman.

the Tender Committee also monitors and decides on relevant matters after Jawatankuasa Tender juga mengawal selia dan membuat keputusan awarding the tenders, until the accounts are finalised at the end of the tentang hal-hal yang relevan selepas pemberian tender, sehinggalah project. It also governed tight controls over submission of project tenders akaun dimuktamadkan pada tarikh akhir projek. Jawatankuasa ini juga and to award to those that meet with the Company’s requirements. mengawal penyerahan tender projek dan pemberian kepada pihak yang memenuhi keperluan Syarikat. Kumpulan Hartanah Selangor berhad • 48 Statement of Corporate Governance • Penyata Tadbir Urus Korporat

during the financial year ended 31 December 2009, Members of the Jawatankuasa Tender bagi tahun kewangan berakhir 31 Disember 2009 Tender Committee comprise of the following:- terdiri daripada ahli-ahli berikut:-

(a) YBhg. Dato’ Haji Abd. Karim bin Munisar (Chairman) (a) YBhg. Dato’ Haji Abd. Karim bin Munisar (Pengerusi)

(b) YBhg. Dato’ Azman bin Mahmood (b) YBhg. Dato’ Azman bin Mahmood

(c) YBhg. Dato’ Azlan bin Hashim (c) YBhg. Dato’ Azlan bin Hashim

(d) encik Wong Yien Kim (d) encik Wong Yien Kim

the quorum for holding a Tender Meeting must be at least three (3) Korum untuk mengadakan mesyuarat mesti sekurang-kurangnya tiga (3) members present. ahli hadir.

6.5 emploYEE SHARE OPTION SCHEME (ESOS) COMMITTEE 6.5 JAWATANKUASA SKIM OPSYEN SAHAM KAKITANGAN (“ESOS”) the ESOS Committee was established to administer the implementation Jawatankuasa “ESOS” telah ditubuhkan untuk menguruskan perlaksanaan of KHSB’s ESOS in accordance with the approved bye-laws to determine “ESOS” KHSB selaras dengan undang-undang kecil untuk menentukan participation eligibility, option offers, share allocations and to attend kelayakan penyertaan, tawaran opsyen, peruntukan saham dan such other matters as may be required. menangani perkara-perkara lain sebagaimana mungkin diperlukan.

7.0 addITIONAL COMPLIANCES INFORMATION 7.0 maKLUMAT PEMATUHAN TAMBAHAN 7.1 share Buy Backs 7.1 belian Semula Saham t here was no share buy back exercise by the Company during the tiada belian semula dilaksanakan oleh Syarikat pada tahun kewangan financial year ended 31 December 2009. berakhir 31 Disember 2009.

7.2 Options, Warrants Or Convertible Securities Exercised 7.2 Opsyen, Waran Atau Sekuriti Boleh Ubah Yang Dijalankan the Company has not exercised any options or warrants and has not Syarikat tidak pernah melanggan apa-apa opsyen atau waran dan issued any convertible securities in respect of the financial year ended tidak menerbitkan apa-apa sekuriti boleh ubah pada tahun kewangan 31 December 2009. berakhir 31 Disember 2009.

7.3 non-Audit Fees 7.3 yuran Bukan Audit the amount of non-audit fees payable to the external auditors by the amaun yuran bukan audit dibayar kepada Juruaudit Luar oleh Syarikat Company and its subsidiaries for the financial year ended 31 December dan subsidiari-subsidiarinya bagi tahun kewangan berakhir 31 Disember 2009 was RM95,000.00. 2009 ialah RM95,000.00. • 49

7.4 imposition Of Sanctions And/Or Penalties From 1 January 2009 To 7.4 Pengenaan Sekatan/Penalti Dari 1 Januari 2009 Hingga 31 Disember 2009 31 December 2009 tiada sekatan atau penalti yang dikenakan terhadap Syarikat dan anak there were no sanctions and/or penalties imposed on the Company syarikatnya, Pengarah atau Pengurusan oleh badan kawal selia yang and its subsidiaries, Directors or Management by the relevant regulatory relevan bagi tempoh 1 Januari 2009 hingga 31 Disember 2009. bodies for the period from 1 January 2009 to 31 December 2009. 7.5 Kontrak Penting Kumpulan Hartanah Selangor Berhad Dan Anak 7.5 Material Contracts Of Kumpulan Hartanah Selangor Berhad And Its Syarikatnya Yang Melibatkan Kepentingan Pengarah Dan Pemegang Subsidiaries Involving Directors’ And Major Shareholders’ Interests Still Saham Utama Yang Masih Wujud Pada Hujung Tahun Kewangan Subsisting At The End Of Financial Year Ended 31 December 2009 Berakhir 31 Disember 2009 o ther than disclosed in the financial statements, the Company and Selain daripada yang dinyatakan dalam penyata kewangan, Syarikat its subsidiaries have not entered into any material contracts involving dan subsidiari-subsidiari tidak terlibat dengan apa-apa kontrak penting directors’ and major shareholders’ interest. yang melibatkan kepentingan pengarah dan pemegang saham utama.

7.6 utilisation Of Proceeds 7.6 Penggunaan Pendapatan the Company did not call for or raise any capital for the financial year Syarikat tidak membuat sebarang panggilan atau penambahan modal ended 31 December 2009. untuk tahun kewangan berakhir 31 Disember 2009.

7.7 Financial Results 7.7 Keputusan Kewangan there was no variance exceeding 10% or more from any profit tiada perbezaan melebihi 10% atau lebih daripada apa-apa anggaran estimate, forecast, projection or unaudited result previously released or keuntungan, ramalan, unjuran atau keputusan kewangan yang announced by the Company. belum diaudit, yang dikeluarkan sebelumnya atau yang diumumkan oleh Syarikat. 7.8 Profit Guarantee the Company did not make any profit guarantee for the financial year 7.8 jaminan Keuntungan ended 31 December 2009. Syarikat tidak mengeluarkan apa-apa jaminan keuntungan bagi tahun kewangan berakhir 31 Disember 2009 7.9 american Depository Receipt (ADR) Or Global Depository Receipt (GDR) t he Company has not sponsored any ADR or GDR program in the 7.9 resit Depositori Amerika (ADR) Atau Resit Depositori Global (GDR) financial year ended 31 December 2009. Syarikat tidak menaja apa-apa program ADR atau GDR pada tahun kewangan berakhir 31 Disember 2009. Kumpulan Hartanah Selangor berhad • 50 Statement of Corporate Governance • Penyata Tadbir Urus Korporat

7.10 List Of Properties 7.10 senarai Hartanah t he list of properties is set out on pages 144 to 146 of this Annual Senarai hartanah dinyatakan pada halaman 144 hingga 146 dalam Report. Laporan Tahunan ini.

7.11 revaluation Policy On Landed Properties 7.11 Polisi Penilaian Semula Hartanah the Company does not have a policy of regular revaluation of landed Syarikat tidak mempunyai polisi penilaian berkala hartanahnya. properties. 7.12 urus Niaga Pihak Berkaitan Yang Berulang Bagi Jenis Hasil Atau Dagangan 7.12 recurrent Related Party Transactions Of A Revenue Or Trading Nature Syarikat tidak perlu memohon mandat untuk Urus Niaga Berulang the Company is not required to obtain Mandate for Recurrent Related Pihak Berkaitan yang berbentuk Hasil atau Perniagaan pada tahun Party Transactions of a Revenue or Trading Nature in the financial year kewangan berakhir 31 Disember 2009. ended 31 December 2009. • 51 Audit Committee Report Laporan Jawatankuasa Audit

THIS STATEMENT gives details of the Audit Committee Report in respect of the Butiran PENYATA Laporan Jawatankuasa Audit bagi tahun kewangan berakhir financial year ended 31 December 2009. 31 Disember 2009.

1.0 memberSHIP 1.0 KEAHLIAN t he Company had formed an Audit Committee (“Committee”) pursuant to Syarikat telah menubuhkan Jawatankuasa Audit (“Jawatankuasa”) menurut Paragraph 15.10 of the Listing Requirements of Bursa Malaysia Securities Perenggan 15.10 Keperluan Penyenaraian Bursa Malaysia Securities Berhad. Berhad. The Members of the Audit Committee comprises of three (3) Non- Ahli Jawatankuasa Audit terdiri daripada tiga (3) Pengarah Bukan Eksekutif Executive Director, two (2) of whom including the Chairman are Independent di mana dua (2) daripadanya termasuk Pengerusi adalah Pengarah Bebas. Directors. The Chairman of the Committee is a member of the Malaysian Pengerusi Jawatankuasa adalah ahli Institut Akauntan Malaysia (“MIA”) Institute of Accountants (“MIA”). pada tahun kewangan ini, enam (6) mesyuarat Jawatankuasa telah diadakan. for the financial year under review, a total of six (6) meetings of the Komposisi Jawatankuasa dan butiran lanjut kehadiran ke mesyuarat adalah Committee were held. The composition of the Committee and details of seperti berikut:- attendance to the meetings are as follows:-

audit Committee Members Number Of Meetings Held Attendance Ahli-Ahli Jawatankuasa Audit Bilangan Mesyuarat Yang Diadakan Kehadiran

YBhg. Dato’ Azman bin Mahmood 6 6

YBhg. Dato’ Azlan bin Hashim 6 6

encik Lee Siew Choong 6 6

2.0 meetINGS 2.0 meSYUARAT 2.1 the Committee shall meet at least once in three (3) months during 2.1 Jawatankuasa bermesyuarat sekurang-kurangnya setiap tiga (3) bulan the year. However, additional meetings may be called at any time at sekali dalam setahun. Bagaimanapun, mesyuarat tambahan boleh the Chairman’s discretion or the frequency of meetings would increase diadakan pada bila-bila masa mengikut budi bicara Pengerusi atau depending on the scope of the Audit activities and the number of kekerapan mesyuarat boleh ditambah bergantung pada skop aktiviti Audit reports produced. Audit dan bilangan laporan Audit yang dikeluarkan.

2.2 In order to form a quorum, the majority of the members present 2.2 bagi mencukupkan korum mesyuarat, majoriti hendaklah terdiri must be Independent Non-Executive Directors. In the absence of the daripada Pengarah Bukan Eksekutif Bebas. Tanpa kehadiran Pengerusi, Chairman, the members present shall elect a Chairman for meeting ahli yang hadir boleh melantik Pengerusi mesyuarat dari kalangan from among the members present. The Company Secretary shall act as mereka. Setiausaha Syarikat akan bertindak sebagai Setiausaha kepada Secretary to the Committee. Jawatankuasa. Kumpulan Hartanah Selangor berhad • 52 Audit Committee Report • Laporan Jawatankuasa Audit

2.3 t he Meetings shall normally be attended by the Internal Auditor, 2.3 mesyuarat biasanya akan dihadiri oleh Juruaudit Dalaman, Pemangku Acting Chief Executive Officer, General Manager Finance and other Ketua Pegawai Eksekutif, Pengurus Besar Kewangan manakala Senior Management will be invited as and when required. Pengurusan Kanan yang lain akan dijemput jika perlu.

2.4 the External Auditors are normally invited to attend meetings as and 2.4 Juruaudit Luar biasanya dijemput menghadiri mesyuarat bila diperlukan when necessary. sahaja.

2.5 the Secretary of the Audit Committee shall provide the necessary 2.5 Setiausaha Jawatankuasa Audit akan memberikan perkhidmatan dan services and information for the effective functioning of the Committee. maklumat yang berkaitan bagi memastikan fungsi Jawatankuasa lebih The Minutes of Meeting shall be circulated to the Committee Members efektif. Minit mesyuarat diedarkan kepada Ahli Jawatankuasa untuk for confirmation in the subsequent meeting. disahkan dalam mesyuarat yang berikutannya.

2.6 t he Committee met with the External Auditors at least twice a year 2.6 Jawatankuasa akan bertemu dengan Juruaudit Luar sekurang-kurangnya without the presence of any executive member of the Board. dua kali setahun tanpa kehadiran ahli eksekutif dari kalangan Lembaga Pengarah.

3.0 obJECTIVES OF THE AUDIT COMMITTEE It is the objective of the Audit Committee to assist the Board of Directors in 3.0 obJEKTIF JAWATANKUASA AUDIT fulfilling its fiduciary responsibilities relating to internal controls, corporate adalah menjadi matlamat Jawatankuasa Audit untuk membantu Lembaga accounting and reporting practices for Kumpulan Hartanah Selangor Pengarah dalam memenuhi tanggungjawab fidusiarinya yang berkaitan kawalan Berhad. The Audit Committee will endeavour to adopt certain practices dalaman, perakaunan korporat dan amalan laporan untuk Kumpulan Hartanah aimed at maintaining appropriate standard of responsibility, integrity and Selangor Berhad. Jawatankuasa Audit akan berusaha untuk menerimapakai accountability to the Company’s stakeholders. kaedah-kaedah tertentu bertujuan mengekalkan piawaian yang sewajarnya dalam tanggungjawab, kewibawaan dan kebertanggungjawaban kepada para pemegang kepentingan dalam Syarikat. 4.0 dutIES AND RESPONSIBILITIES OF THE AUDIT COMMITTEE Scope of duties and responsibilities of the Audit Committee are as follows:- 4.0 tugaS DAN TANGGUNGJAWAB JAWATANKUASA AUDIT 4.1 to review with the External Auditors, the audit plan, the evaluation of bidang tugas dan tanggungjawab Jawatankuasa Audit antara lain adalah:- the system of internal accounting control and the audit report on the financial statements. 4.1 bersama Juruaudit Luar untuk mengkaji perancangan audit, penilaian sistem kawalan perakaunan dalaman dan audit ke atas penyata kewangan. 4.2 review of the assistance given by the Company’s officers to the auditors. 4.2 mengkaji kerjasama yang diberikan oleh para pegawai Syarikat kepada juruaudit.

• 53

4.3 review the quarterly and year end annual financial statements with the 4.3 mengkaji penyata kewangan suku tahunan dan akhir tahun bersama management and the auditors upon completion of the audit prior to pihak pengurusan dan juruaudit setelah audit diselesaikan sebelum them being approved by the full board for public release. dikemukakan kepada Lembaga Pengarah untuk kelulusan dan pengumuman awam. 4.4 review any related party transaction that may arise within the Company or Group. 4.4 mengkaji sebarang kemungkinan wujudnya urusniaga pihak berkaitan yang berkepentingan di dalam Syarikat atau Kumpulan. 4.5 t o consider the appointment, resignation or termination of External Auditors for the Company and negotiate on the audit fees. 4.5 m empertimbangkan perlantikan, perletakan jawatan atau penamatan Juruaudit Luar untuk Syarikat dan merunding yuran audit. 4.6 Consider any matters the auditors wish to bring to the attention of the Board of Directors or shareholders. 4.6 mempertimbangkan sebarang perkara yang ingin dibawa oleh juruaudit ke perhatian Lembaga Pengarah atau pemegang saham. 4.7 review the Management’s general policies and procedures to reasonably assure the adequacy of accounting and financial reporting control. 4.7 mengkaji dasar dan prosedur am Pengurusan bagi memastikan perakaunan dan laporan kewangan dikawal sewajarnya. 4.8 r eview the arrangement established by Management for compliance with any regulatory or other external requirements. 4.8 mengkaji semula penyusunan yang telah dibentuk oleh Pengurusan supaya pematuhan dengan peraturan atau keperluan perundangan lain 4.9 review the change, if any, during the year in the Company’s accounting dipatuhi. principles or their applications. 4.9 mengkaji sebarang perubahan prinsip perakaunan Syarikat atau cara 4.10 make recommendations for improvements of operating performance penggunaannya pada sepanjang tahun, jika ada. and management control arising from internal and external audit recommendations. 4.10 mengesyorkan cadangan untuk memperbaiki prestasi operasi dan pengawalan pengurusan susulan daripada cadangan yang dibuat oleh 4.11 r eview internal audit programme and result of the internal audit juruaudit dalaman dan luar. process and where necessary ensure the appropriate action is taken on the recommendation of the Group Internal Audit Division. 4.11 menyemak program dan proses keputusan juruaudit dalaman dan sekiranya perlu, memastikan tindakan yang setimpal diambil seperti 4.12 review the adequacy of the scope, functions, competency and resources yang dicadangkan oleh Bahagian Audit Dalaman Kumpulan. of the internal audit function and that it has the necessary authority to carry out its work. 4.12 m engkaji kecukupan skop, fungsi-fungsi, kecekapan dan sumber fungsi audit dalaman dan memastikan ianya mempunyai kuasa yang 4.13 to consider and examine such other matters as may be agreed upon sepatutnya bagi menjalankan tugas. by the Audit Committee and the Board of Directors. 4.13 menimbang dan meneliti perkara-perkara lain yang boleh dipersetujui oleh Jawatankuasa Audit dan Lembaga Pengarah. Kumpulan Hartanah Selangor berhad • 54 Audit Committee Report • Laporan Jawatankuasa Audit

5.0 autHORITY 5.0 KUASA the Board has empowered the Audit Committee to undertake the followings:- lembaga Pengarah telah memberi kuasa kepada Jawatankuasa Audit untuk melaksanakan langkah-langkah berikut:- 5.1 to investigate any activity and matter within its scope, duties and terms of reference. 5.1 u ntuk menyiasat sebarang aktiviti dan perkara-perkara dalam skop bidang tugas. 5.2 to seek independent legal advice or other professional if it considers necessary. 5.2 u ntuk mendapatkan nasihat perundangan bebas atau profesional sekiranya difikirkan perlu. 5.3 to obtain an unrestricted access of any information and relevant documents to that effect. 5.3 untuk mendapatkan sebarang maklumat dan dokumen-dokumen yang berkaitan. 5.4 to liaise and communicate directly with the internal auditors, external auditors, senior management and employees of the Group. 5.4 u ntuk berhubung dan berkomunikasi secara terus dengan juruaudit dalaman, juruaudit luar, pengurusan kanan dan kakitangan-kakitangan 5.5 make recommendations for improvements of operating performance Kumpulan. and management control arising from internal and external audit recommendations. 5.5 memberikan cadangan untuk menambahbaik prestasi operasi dan kawalan pengurusan yang timbul daripada cadangan audit dalaman 5.6 to review and assess the adequacy of the scope, functions, competency dan luar. and resources of the Internal Audit functions. 5.6 mengkaji dan menilai kewajaran skop, fungsi, kecekapan dan sumber 5.7 t o hold meeting with the External Auditor, Internal Auditor or both fungsi Audit Dalaman. without the presence of the other Directors and Management/ employees of the Company. 5.7 mengadakan mesyuarat dengan Juruaudit Luar, Juruaudit Dalaman atau kedua-dua sekali tanpa kehadiran Pengarah dan Pengurusan/ kakitangan Syarikat yang lain. 6.0 SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE the main responsibility of the Committee is to assist the Board of Directors on all matters inclusive of critical activities and operations by reviewing it 6.0 rINGKASAN AKTIVITI JAWATANKUASA AUDIT and recommending it to be implemented in accordance with the terms of tanggungjawab utama Jawatankuasa Audit adalah untuk membantu Lembaga reference of the Committee. Pengarah dalam semua perkara termasuk aktiviti-aktiviti dan operasi-operasi kritikal. Mengkaji semula dan mencadangkan perlaksanaannya selaras 6.1 during the financial year, the Audit Committee reviewed and appraised dengan bidang tugas Jawatankuasa. the performance of the Company. The audit reports were prepared by the Management and the External Auditors. The Committee also 6.1 d alam tahun kewangan, Jawatankuasa Audit mengkaji dan menilai appraised and reported audit issues and suggested improvement prestasi Syarikat. Laporan yang disediakan oleh pihak Pengurusan dan measures. Juruaudit Luar. Jawatankuasa juga menilai dan melaporkan isu-isu audit serta mencadangkan langkah-langkah penambahbaik.

• 55

6.2 on a quarterly basis and financial year end, the Committee reviewed 6.2 berdasarkan prestasi kewangan sukuan dan akhir tahun, Jawatankuasa the financial statements prepared by the Management before the mengkaji penyata kewangan yang disediakan oleh pihak Pengurusan report is submitted to the Board of Directors for approval and its sebelum laporan tersebut dibentang kepada Lembaga Pengarah untuk announcements to Bursa Malaysia Securities Berhad. kelulusan dan pengumuman kepada Bursa Malaysia Securities Berhad.

6.3 t he Committee is also responsible for recommending to the 6.3 Jawatankuasa juga bertanggungjawab mencadangkan kepada pihak Management a process for better internal controls and company Pengurusan satu proses yang lebih baik dalam pengawalan dalaman procedures where relevant and deemed appropriate to be implemented dan prosedur syarikat sekiranya berkaitan dan dikira sesuai untuk by the Company. dilaksanakan oleh Syarikat.

6.4 reviewed the External Auditor’s scope of work and audit plan prior to 6.4 mengkaji semula skop kerja dan perancangan audit Juruaudit Luaran the commencement of the audit plan for the financial year. sebelum melaksanakan perancangan audit bagi tahun kewangan.

6.5 r eviewed with the External Auditors their Audit Report and 6.5 mengkaji bersama Juruaudit Luaran berhubung dengan Laporan Audit Management’s responses. mereka dan maklum balas daripada pihak Pengurusan.

6.6 reviewed and approved the annual internal audit plan and activities 6.6 m engkaji dan meluluskan perancangan tahunan audit dalaman dan for the financial year to ensure the scope of audit adequately and aktiviti-aktiviti bagi tahun kewangan untuk memastikan skop audit yang comprehensively covered the activities of the Group. komprehensif dengan mengambilkira semua aktiviti-aktiviti Kumpulan.

7.0 INTERNAL AUDIT MANAGEMENT FUNCTION AND ACTIVITIES 7.0 fungSI DAN AKTIVITI PENGURUSAN JURUAUDIT DALAMAN 7.1 t he Internal Audit Management is independent of the activities or 7.1 p engurusan Juruaudit Dalaman adalah bebas dari operasi unit-unit operations or other operating units. The principal role is to undertake yang lain dalam menjalankan operasi dan aktivitinya. Tugas utama independent regular and systematic reviews of the systems of internal adalah untuk menjalankan kajian bebas dan sistematik terhadap sistem control so as to provide reasonable assurance that such system kawalan dalaman supaya memberi jaminan sewajarnya agar sistem continues to operate satisfactorily and effectively. tersebut terus beroperasi dengan berkesan dan memuaskan.

7.2 t he Management Audit practices a risk-based approach in its audit 7.2 Juruaudit Dalaman mempraktikkan pendekatan berdasarkan risiko plan and examination. It is the responsibility of the Internal Audit di dalam rancangan audit dan pemeriksaannya. Ianya menjadi Management to provide the Audit Committee with independent tanggungjawab Pengurusan Juruaudit Dalaman untuk menyediakan and objective reports on the state of internal control of the various kepada Jawatankuasa Audit laporan kawalan dalaman yang objektif operating units within the Group and the extent of compliance of the dan bebas mengenai keadaan kawalan dalaman bagi semua unit units with the Group and the established policies and procedures as operasi di dalam Kumpulan dan tahap pematuhan unit-unit terhadap well as relevant statutory requirements. polisi-polisi dan prosedur Kumpulan yang telah dibentuk dan juga peraturan yang berkaitan. 7.3 the Internal Audit reports directly to the Audit Committee. 7.3 Juruaudit Dalaman melapor terus kepada Jawatankuasa Audit. Kumpulan Hartanah Selangor berhad • 56 Statement of Internal Control Penyata Kawalan Dalaman

INTRODUCTION PENGENALAN The Bursa Malaysia Securities Berhad Listing Requirements requires directors of Keperluan Penyenaraian Bursa Malaysia Securities Berhad menghendaki para listed companies to include a statement in their annual reports on the state of pengarah syarikat-syarikat senarai awam untuk menyertakan satu penyata dalam their internal controls. The Board of Directors is pleased to provide the following laporan tahunan berhubung keadaan kawalan dalaman. Lembaga Pengarah dengan statement, which outlines the nature and scope of internal control of the Group sukacita membentangkan penyata berikut, yang menggariskan bentuk dan skop during the financial year ended 31 December 2009. kawalan dalaman Kumpulan pada tahun kewangan berakhir 31 Disember 2009.

THE BOARD`S RESPONSIBILITY TANGGUNGJAWAB LEMBAGA The Board of Directors acknowledges its responsibility for the Group’s system of Lembaga Pengarah mengakui tanggungjawabnya ke atas sistem kawalan internal controls and for reviewing its adequacy and integrity. Such system covers dalaman Kumpulan serta mengkaji kecukupan dan ketelusannya. Sistem tersebut not only financial controls but also controls relating to operational, risk management meliputi bukan hanya kawalan kewangan, tetapi juga kawalan berkaitan operasi, and compliance with applicable laws, regulations, rules and guidelines. pengurusan risiko dan pematuhan dengan undang-undang, penguatkuasaan, peraturan dan garis panduan yang bersesuaian. In view of the inherent limitations in any system of internal control, this system is designed to manage, rather than eliminate the risk of failure to achieve Group’s Memandangkan wujudnya batasan yang sediada dalam mana-mana sistem business objectives. Accordingly, the system can only provide reasonable and not kawalan dalaman, sistem ini telah direka untuk mengurus risiko-risiko yang akan absolute assurance against material misstatement or loss. menghalang pencapaian objektif-objektif perniagaan Kumpulan dan bukan untuk mengenepikannya. Oleh itu, sistem ini hanya menyediakan kepastian yang berpatutan dan bukan mutlak terhadap salah nyata yang ketara ataupun kerugian. RISK MANAGEMENT FRAMEWORK The Board is aware and will continue to assess and monitor the significant risks, both from external and internal sources that may have an impact on the Company. RANGKA KERJA PENGURUSAN RISIKO Lembaga menyedari dan akan terus menilai serta memantau risiko-risiko penting, The Group will continue to monitor the major risks which may have an impact on baik daripada sumber luar mahupun dalaman yang mungkin akan memberikan the Company’s performance. kesan kepada Syarikat.

Kumpulan akan terus memantau risiko-risiko utama yang mungkin akan CONTROL STRUCTURE AND ENVIRONMENT mendatangkan kesan ke atas prestasi Syarikat. The Board is committed to maintain a strong control structure and environment for the proper conduct of the Group’s business operation. The key elements are as follows: STRUKTUR KAWALAN DAN PERSEKITARAN Lembaga komited dalam mengekalkan struktur kawalan dan persekitaran yang 1. Organisation Structure With Clearly Defined Roles And Responsibilities kukuh bagi perlaksanaan operasi perniagaan Kumpulan yang tersusun. Elemen- the organisation structure includes clear definition to the terms of reference- elemen utama adalah seperti berikut: functions, authorities and responsibilities of the various committees of the Board. The management of the various companies in the Group is delegated 1. Struktur Organisasi Dengan Peranan Dan Tanggungjawab to the respective chief executive officer, whose role and responsibilities and Yang Ditakrif Dengan Jelas authority limits are set by the respective Board. S truktur organisasi meliputi takrifan yang jelas terhadap fungsi terma rujukan, kuasa dan tanggungjawab jawatankuasa Lembaga. Perihal pengurusan syarikat-syarikat di dalam Kumpulan diamanahkan kepada Ketua Pegawai Operasi masing-masing di mana peranan dan tanggungjawab serta had bidang kuasa ditetapkan oleh Lembaga Pengarah masing-masing. • 57

2. Independence Of The Audit Committee 2. Jawatankuasa Audit Sebagai Entiti Bebas the Audit Committee comprises independent non-executive members of the Jawatankuasa Audit terdiri daripada ahli-ahli Lembaga Bukan Eksekutif Board and provides direction and oversight over the internal audit function Berkecuali yang memberi hala tuju serta penyeliaan ke atas fungsi audit dalaman to enhance its independence from the management. agar tidak mempunyai sebarang hubungan dengan pihak pengurusan.

3. Detailed Budgeting Process 3. Proses Bajet Terperinci a detailed budgeting process is established requiring all key operating proses bajet terperinci memerlukan kesemua syarikat utama di dalam Kumpulan companies in the Group to prepare budgets annually, which are discussed menyediakan bajet tahunan, di mana ia akan dibincangkan dengan pihak and approved by the Board. pengurusan dan dibentangkan untuk kelulusan oleh Lembaga Pengarah.

Continuous marketing strategies and collection planning are detailed out in Strategi pemasaran dan perancangan pungutan yang berterusan akan the budget to speed up the stock clearance and improve the collection of diperincikan di dalam belanjawan untuk mempercepatkan penghabisan stok the Group. dan mempertingkatkan pungutan Kumpulan.

MONITORING AND REVIEW PEMANTAUAN DAN KAJIAN The processes adopted to monitor and review the effectiveness of the system of Proses-proses pemantauan dan kajian yang diguna untuk memastikan keberkesanan internal control are: sistem kawalan dalaman adalah:

1. management Meetings are conducted to obtain feedbacks on the progress 1. mesyuarat Pengurusan diadakan untuk mendapatkan maklum balas of activities undertaken by the operating business units. berhubung perkembangan aktiviti yang dijalankan oleh unit-unit perniagaan yang beroperasi. 2. the Management Audit Division, which reports directly to the Audit Committee, conducts reviews on the systems of control and the effectiveness 2. bahagian Audit Pengurusan, yang melapor secara terus kepada Jawatankuasa of the processes management has in place to identify, manage and report Audit, menjalankan kajian ke atas sistem kawalan dan keberkesanan risks. The audit investigation is conducted according to the annual audit plan pengurusan proses yang tersedia untuk mengenalpasti, mengurus dan and/or on ad hoc basis to rectify the problem areas. melaporkan risiko. Penyiasatan audit dijalankan menurut rancangan audit tahunan dan/atau secara “ad hoc” untuk memperbetulkan bidang-bidang 3. the Quarterly Financial Reports were reviewed by the members of Audit yang bermasalah. Committee before being tabled to the Board of Directors meeting for approval. Announcement of quarterly and year end Financial Results to Bursa Malaysia 3. laporan Kewangan Suku Tahunan dikaji oleh ahli-ahli Jawatankuasa Audit were made upon Board approval on the advice by the Audit Committee. sebelum dibentangkan di mesyuarat Lembaga Pengarah untuk diluluskan. Pengumuman Keputusan Kewangan suku tahunan dan akhir tahun kepada The monitoring, review and reporting arrangements in place give reasonable Bursa Malaysia dilakukan selepas kelulusan Lembaga diperolehi, berdasarkan assurance that the structure of controls and its operations as described in this nasihat oleh Jawatankuasa Audit. statement is considered by the Board to be adequate to safeguard the Group’s assets and the risks are at an acceptable level throughout the Group’s business. Aturan pemantauan, kajian dan laporan yang tersedia memberi jaminan berpatutan The Board will continually seek regular assurance on the effectiveness of the bahawa struktur kawalan dan operasinya yang dinyatakan di dalam penyata ini, internal control system through appraisals by the internal auditors. pada pendapat Lembaga, adalah mencukupi untuk melindungi aset Kumpulan dan risiko pula berada di tahap yang boleh diterima di seluruh perniagaan Kumpulan. Lembaga akan terus berusaha mendapatkan jaminan secara kerap berhubung keberkesanan sistem kawalan dalaman melalui taksiran oleh juruaudit dalaman. Kumpulan Hartanah Selangor berhad • 58 Human Resource Review Laporan Sumber Manusia

HUMAN RESOURCE DEVELOPMENT KHSB is committed to the development of its human capital to bring about immediate and long term benefits to the organization and ensure sustainability of the Company.

KHSB has set its sights on being nothing less than a ‘world-class’ Government Link Company (GLC), and the key to getting there is through its human resources which is its pillars of strength. Acknowledging the importance of its human asset, KHSB’s Human Capital Development Strategy is geared towards overall improvement of its employees’ skills and knowledge on long term basis, with key areas of focus being on employees’ competency and knowledge capability building.

In support of the above, KHSB continues to undertake several initiatives in providing a conducive environment that will promote to the course.

Multitasking and Job Rotation Employees are continuously encouraged to take up additional tasks or explore other areas to expand their portfolio and enhance their skills. This is made possible through multitasking and job rotation on a continuous basis.

Performance Evaluation Commitee In encouraging culture of ‘high performance’, the company has moved a step further to enhance its performance evaluation system via the setting up of the Performance Evaluation Committee (PEC) with Heads of Department as its members. The cross assessment by the PEC helps promote for an ‘all rounder’ employee as evaluation of the performance is not just confined to an employee’s scope of work but also in the context of teamwork within the company. • 59

PEMBANGUNAN SUMBER MANUSIA Training Seminar KHSB komited kepada pembangunan modal insannya KHSB realizes the need for highly skilled and KHSB menyedari keperluan kepada kakitangan yang bagi memenuhi keperluan semasa dan faedah jangka knowledgeable employees to move the company berkemahiran dan berpengetahuan untuk memacu panjang organisasi demi memastikan kesinambungan forward. Acknowledging this need, employees are syarikat maju ke hadapan. Menyedari hakikat ini, syarikat. occasionally sent for external courses and training kakitangan seringkali dihantar untuk menghadiri related to their line of duty and responsibility to seminar dan latihan luar yang berkaitan dengan KHSB telah meletakkan sasaran sebagai sebuah ‘GLC’ enhance their skills and knowledge. tugasan dan tanggungjawab masing-masing bagi bertaraf dunia dan kunci ke arah mencapai tahap menambah kemahiran dan pengetahuan mereka. tersebut adalah melalui pembangunan sumber Long Service Award manusianya yang merupakan tonggak kekuatan Anugerah Perkhidmatan Lama In promoting ‘sense of belonging’ and pride for the syarikat. Strategi Pembangunan Sumber Manusia KHSB Dalam menggalakkan semangat ‘pemilikan’ dan rasa company, employees who have served the company memberi penekanan ke arah peningkatan pengetahuan bangga terhadap syarikat, kakitangan yang telah for 10, 15, 20 and 25 years were given cash token as dan kemahiran kakitangan untuk jangka masa panjang, berkhidmat selama 10, 15, 20 dan 25 tahun diberi imbuhan dengan tumpuan utama kepada penerapan kompetensi an appreciation for their long term service and loyalty sagu hati bagi menghargai jasa dan kesetiaan mereka dan kemampuan pengetahuan. to the company. kepada syarikat.

Selaras dengan matlamat di atas, KHSB telah meneruskan Academic Achievement Award Anugerah Anak-Anak Cemerlang beberapa inisiatif dalam melahirkan suasana kondusif Children of employees who did well in their examinations yang dapat menyumbang ke arah pencapaian Anak kakitangan yang telah mencapai kejayaan dalam were also not forgotten and appropriate recognition in matlamat tersebut. peperiksaan turut tidak dilupakan dan penghargan the form of cash reward were given to the deserving yang sewajarnya turut diberikan kepada mereka yang Kepelbagaian Tugasan dan Pertukaran Tugas children who excelled in their UPSR, PMR, SPM and layak melalui hadiah wang tunai di atas kecemerlangan STPM examination. dalam peperiksaan UPSR, PMR, SPM dan STPM. Kakitangan sentiasa digalakkan untuk mengambil tugasan tambahan atau meneroka bidang-bidang Donation Sumbangan lain dalam memperluaskan portfolio mereka dan meningkatkan kemahiran dan keupayaan masing- ‘Togetherness’ and the ‘spirit of sharing’ are not just Semangat kekitaan dan perkongsian bukan hanya masing. Peluang ini diperolehi melalui kepelbagaian reflected during the times of joy but also in timesof dapat dilihat ketika meraikan sesuatu kejayaan malah tugas dan pertukaran tugas dari semasa ke semasa need. Employees who lost their loved ones or close dalam waktu yang memerlukan. Kakitangan yang secara berterusan. family members were not forgotten and left alone in kehilangan orang tersayang atau ahli keluarga sentiasa times of their grievances by their colleague. Donation tidak dilupakan dan dibiarkan bersendirian pada saat- Jawatankuasa Penilaian Prestasi drive were occasionally initiated by other employee to saat kesusahan. Sumbangan ikhlas diusahakan oleh kakitangan lain bagi meringankan beban rakan mereka ease the burden of those affected, hence promoting Dalam menggalakkan budaya kecemerlangan, yang berduka, sekaligus mengeratkan silaturrahim dan ‘closeness’ and ‘family’ bond among the employees KHSB telah melangkah setapak ke hadapan untuk hubungan kekeluargaan sesama kakitangan. meningkatkan sistem Penilaian Prestasi Kerja melalui of KHSB. pembentukan Jawatankuasa Penilaian Prestasi (PEC), dengan Ketua-Ketua Jabatan bertindak sebagai ahli. Penilaian bersilang oleh Jawatankuasa Penilaian Prestasi membantu ke arah pembentukan kakitangan yang serba boleh memandangkan penilaian tidak hanya tertumpu kepada skop kerja kakitangan secara individu tetapi juga dalam konteks kerja berpasukan dengan kakitangan lain di syarikat. Kumpulan Hartanah Selangor berhad • 60 Corporate Social Responsibility Tanggungjawab Sosial Korporat

Corporate Social Responsibility (CSR) has been an Various community project were implemented Tanggungjawab Sosial Korporat telah menjadi satu integral but unheralded part of an organisation’s to lighten the hardship of the people within the keperluan tetapi sering tidak ditonjolkan dalam corporate strategy until fairly recently. Corporate vicinity of the development. During the financial strategi korporat sesebuah organisasi sehinggalah Malaysia is slowly realizing the tangible business value year ended 31 December 2009, we made monetary kebelakangan ini. Warga Korporat di Malaysia telah mula of CSR in terms of building brand equity and goodwill contributions to various causes for the underprivileged. menyedari nilai perniagaan sebenar Tanggungjawab among stakeholders. Sosial Korporat dalam pembinaan jenama dan nilainya We also believe our employees are the key enablers di kalangan pemegang saham. We have been and will always be building for the to achieve our ambitious plan to be a premier community. The Group is constantly reciprocating by property developer in the country. We, therefore Kumpulan Hartanah Selangor Berhad (KHSB) telah giving back to the society. KHSB places significant have a responsibility to nurture the talent within our dan sentiasa menyokong kepada pembangunan value on being a responsible corporate citizen by organization. Numerous programmes were designed to sahsiah masyarakat. KHSB meletakkan nilai dan sharing with people and organization in need. create and sustain a positive working environment for penekanan penting untuk menjadi warga korporat employees and ensure the welfare of our employees yang bertanggungjawab melalui perkongsian dengan are well taken care of. masyarakat dan organisasi yang memerlukan.

Pelbagai bentuk projek komuniti telah dilaksanakan oleh Syarikat dengan tujuan untuk meringankan penderitaan golongan yang berada di dalam dan berdekatan dengan kawasan pembangunan Syarikat. Untuk tahun kewangan 2009, Syarikat tampil memberi sumbangan kewangan bagi memenuhi pelbagai keperluan golongan yang kurang berkemampuan ini.

Syarikat juga percaya bahawa kakitangan merupakan penggerak utama bagi mencapai cita-cita syarikat untuk berada di kalangan kumpulan pemaju hartanah utama di negara ini. Sehubungan dengan itu, syarikat mempunyai tanggungjawab untuk mengembangkan kemahiran sedia ada di dalam organisasi. Pelbagai program telah direka bagi membina dan melestarikan suasana kerja yang positif untuk kakitangan bagi memastikan kebajikan mereka sentiasa dijaga. Financial statements

Directors’ Report 62 Consolidated Statement of Changes in Equity 72 Statement by Directors 66 Company Statement of Changes in Equity 73 Statutory Declaration 66 Consolidated Cash Flow Statement 74 Independent Auditors’ Report 67 Company Cash Flow Statement 76 Income Statements 69 Notes to the Financial Statements 78 Balance Sheets 70 Kumpulan Hartanah Selangor berhad • 62 Directors’ Report

The directors hereby present their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2009.

Principal activities The principal activities of the Company are investment holding, property development and provision of management services to its subsidiaries. The principal activities of the subsidiary companies are set out in Note 39 to the financial statements.

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

Results

Group Company RM’000 RM’000

Profit/(loss) for the year 27,110 (99,898)

Attributable to: Equity holders of the Company 21,448 (99,898) Minority interests 5,662 –

27,110 (99,898)

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

In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature other than:

(a) the gain arising from the bad debts recovered arising from assignment of debt and specific grant from ultimate holding corporation which has resulted in an increase in the Group’s profit for the year by RM115,101,407 as disclosed in Note 5 and Note 44 to the financial statements respectively;

(b) the impairment of the goodwill and impairment of investment in a subsidiary which have resulted in a reduction in the Group’s profit for the year by RM49,740,000 and an increase in the Company’s loss for the year by RM49,740,000 as disclosed in Note 17 and Note 20 tothe financial statements respectively; and

(c) the provision for doubtful debts for a subsidiary which has resulted in an increase in the Company’s loss for the year by RM30,196,000 as disclosed in Note 7 to the financial statements.

Dividends No dividend has been paid, declared or proposed by the Company since the end of the previous financial year. The directors do not recommend the payment of any dividend in respect of the current financial year. • 63

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

YBhg Dato’ Haji Abd. Karim bin Munisar YBhg Dato’ Azman bin Mahmood YBhg Dato’ Azlan bin Hashim Wong Yien Kim Lee Siew Choong Azman bin Marzuki

Directors’ benefits Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the Company was a party, whereby thedirectors might acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate, other than those arising from the share options granted under the Company’s and immediate holding company, Kumpulan Perangsang Selangor Berhad’s Employee Share Option Schemes.

Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than benefits included in the aggregate amountof emoluments received or due and receivable by the directors or the fixed salary of a full–time employee of the Company as shown in Note 9 to the financial statements) by reason of a contract made by the Company or a related corporation with any director or with a firm of which he is a member, or with a company in which hehasa substantial financial interest.

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

|------Number of ordinary shares of RM1 each ------| 1.1.2009 Acquired Sold 31.12.2009

Immediate holding company – Kumpulan Perangsang Selangor Berhad YBhg Dato’ Haji Abd. Karim bin Munisar 1,000,000 – – 1,000,000 YBhg Dato’ Azman bin Mahmood 50,000 105,000 (20,000) 135,000 YBhg Dato’ Azlan bin Hashim 370,000 – – 370,000 Kumpulan Hartanah Selangor berhad • 64 Directors’ Report

Directors’ interests (cont’d)

Number of options over ordinary shares of RM1 each 1.1.2009 granted Exercised 31.12.2009 The Company – Kumpulan Hartanah Selangor Berhad YBhg Dato’ Haji Abd. Karim bin Munisar 4,500,000 – – 4,500,000 YBhg Dato’ Azman bin Mahmood 1,000,000 – – 1,000,000

Immediate holding company – Kumpulan Perangsang Selangor Berhad YBhg Dato’ Haji Abd. Karim bin Munisar 3,250,000 – – 3,250,000 YBhg Dato’ Azlan bin Hashim 300,000 – – 300,000 Wong Yien Kim 1,000,000 – – 1,000,000

The other directors in office at the end of the financial year had no interest in shares in the Company or its related corporations during the financial year.

Employee share option scheme The Kumpulan Hartanah Selangor Berhad’s Employee Share Option Scheme (“KHSB ESOS”) is governed by the by-laws approved by the shareholders at the Extraordinary General Meeting held on 15 June 2004. The ESOS was implemented on 21 December 2005 and is to be in force for a period of 5 years from the date of implementation.

The salient features and other terms of the ESOS are disclosed in Note 38 to the financial statements.

The Company has been granted exemption by the Companies Commission of Malaysia from having to disclose the names of option holders, other than directors, who have been granted options to subscribe for less than 850,000 ordinary shares of RM1 each.

Details of options granted to directors are disclosed in the section on Directors’ interests in this report.

Other statutory information (a) Before the income statements and balance sheets of the Group and of the Company were made out, the directors took reasonable steps:

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

(ii) to ensure that any current assets which were unlikely to realise their value 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. • 65

Other statutory information (cont’d) (b) At the date of this report, the directors are not aware of any circumstances which would render:

(i) it necessary to write off any bad debts or the amount of the provision for doubtful debts inadequate to any substantial extent; and

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

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

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

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

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

(ii) any contingent liability of the Group or of the Company which has arisen since the end of the financial year.

(f) In the opinion of the directors:

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

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

Significant events Details of significant events are disclosed in Note 44 to the financial statements.

Subsequent event Details of a subsequent event are disclosed in Note 45 to the financial statements.

Auditors The auditors, Ernst & Young, have expressed their willingness to continue in office.

Signed on behalf of the Board in accordance with a resolution of the directors dated 21 April 2010.

Dato’ Haji Abd. Karim bin Munisar Azman bin Marzuki Kumpulan Hartanah Selangor berhad • 66

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

We, Dato’ Haji Abd. Karim bin Munisar and Azman bin Marzuki, being two of the directors of Kumpulan Hartanah Selangor Berhad, do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 69 to 143 are drawn up in accordance with Financial Reporting Standards and the CompaniesAct, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2009 and of the results and the cash flows of the Group and of the Company for the year then ended.

Signed on behalf of the Board in accordance with a resolution of the directors dated 21 April 2010.

Dato’ Haji Abd. Karim bin Munisar Azman bin Marzuki

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

I, Ching Hong Seng, being the officer primarily responsible for the financial management of Kumpulan Hartanah Selangor Berhad, do solemnly and sincerely declarethat the accompanying financial statements set out on pages 69 to 143 are in my opinion correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the abovenamed Ching Hong Seng at Shah Alam in Selangor Darul Ehsan on 21 April 2010. Ching Hong Seng

Before me, • 67

Independent Auditors’ Report to the members of Kumpulan Hartanah Selangor Berhad (Incorporated in Malaysia)

Report on the financial statements We have audited the financial statements of Kumpulan Hartanah Selangor Berhad, which comprise the balance sheets as at 31 December 2009 ofthe Group and of the Company, and the income statements, statements of changes in equity and cash flow statements of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 69 to 143.

Directors’ responsibility for the financial statements The directors of the Company are responsible for the preparation and fair presentation of these financial statements in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; andmaking accounting estimates that are reasonable in the circumstances.

Auditors’ responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards and the Companies Act, 1965in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2009 and of their financial performance and cash flows for the year then ended. Kumpulan Hartanah Selangor berhad • 68 Independent Auditors’ Report to the members of Kumpulan Hartanah Selangor Berhad (Incorporated in Malaysia)

Report on other legal and regulatory requirements In accordance with the requirements of the Companies Act, 1965 (“Act”) in Malaysia, we also report the following:

(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries have been properly kept in accordance with the provisions of the Act.

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

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

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 to any other person for the content of this report.

Ernst & Young Nik Rahmat Kamarulzaman bin Nik Ab. Rahman AF: 0039 No. 1759/02/12(J) Chartered Accountants Chartered Accountant

Kuala Lumpur, Malaysia 21 April 2010 • 69

Income Statements for the year ended 31 December 2009

Group Company Note 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

Continuing operations Revenue 3 125,123 92,358 40,512 39,753 Cost of sales 4 (81,093) (48,228) (7,836) (11,990)

Gross profit 44,030 44,130 32,676 27,763 Other income 5 163,542 84,257 510 11,669 Administrative expenses (23,717) (26,995) (12,392) (15,495) Other expenses (148,940) (115,237) (108,092) (5,951)

Operating profit/(loss) 34,915 (13,845) (87,298) 17,986 Finance costs 6 (15,858) (21,538) (7,506) (10,476)

Profit/(loss) before tax and zakat 7 19,057 (35,383) (94,804) 7,510 Income tax and zakat 10 8,053 62 (5,094) 455

Profit/(loss) for the year from continuing operations 27,110 (35,321) (99,898) 7,965 Discontinued operations Profit for the year from discontinued operations 11 – 296 – –

Profit/(loss) for the year 27,110 (35,025) (99,898) 7,965

Attributable to: Equity holders of the Company 21,448 (38,141) (99,898) 7,965 Minority interests 5,662 3,116 – –

27,110 (35,025) (99,898) 7,965

Earnings/(loss) per share attributable to equity holders of the Company (sen): Basic, for profit/(loss) from continuing operations 12(a) 4.77 (8.54) Basic, for profit from discontinued operations 12(a) – 0.07

Basic, for profit/(loss) for the year 4.77 (8.47)

Diluted, for profit/(loss) for the year 12(b) N/A N/A

The accompanying notes form an integral part of the financial statements. Kumpulan Hartanah Selangor berhad • 70

Balance Sheets as at 31 December 2009

Group Company Note 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

Assets Non-current assets Property, plant and equipment 13 5,216 5,746 812 1,100 Land held for property development 14(a) 270,620 319,704 55,479 59,133 Investment properties 15 7,644 7,792 – – Prepaid land lease payments 16 665 673 – – Goodwill 17 99,963 149,703 – – Long term receivables 19 – – – – Investment in subsidiaries 20 – – 414,765 464,505 Investment in associates 21 2,000 2,000 – – Other investments 22 1,466 1,740 – – Deferred tax assets 34 117 111 – –

387,691 487,469 471,056 524,738

Current assets Property development costs 14(b) 505,624 458,515 136,895 139,367 Inventories 23 75,129 59,395 3,159 – Trade receivables 24 93,821 116,448 9,003 29,726 Other receivables 25 12,460 13,056 7,327 6,091 Amount due from ultimate holding corporation 18(a) 115,101 – – – Amount due from penultimate holding company 18(b) 81,256 86,001 68,922 69,605 Amount due from subsidiaries 26(a) – – 154,765 169,101 Amount due from related companies 26(c) 2,013 26,017 8 24,008 Tax recoverable 162 816 – 3,785 Cash and bank balances 27 51,396 27,986 7,958 2,679

936,962 788,234 388,037 444,362

Total assets 1,324,653 1,275,703 859,093 969,100 • 71

Group Company Note 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

Equity and liabilities Equity attributable to equity holders of the Company Share capital 35 450,000 450,000 450,000 450,000 Share premium 36 306,112 306,112 306,112 306,112 Share option reserve 37 626 626 626 626 (Accumulated losses)/retained earnings (322,743) (344,191) (95,581) 4,317

433,995 412,547 661,157 761,055 Minority interests 50,035 48,840 – –

Total equity 484,030 461,387 661,157 761,055

Non-current liabilities Borrowings 29 154,033 123,862 154,000 120,000 Long term payable 33 26,245 36,547 – – Deferred tax liabilities 34 32,182 38,687 – –

212,460 199,096 154,000 120,000

Current liabilities Provision 28 13,476 13,526 – – Borrowings 29 62,648 121,523 5,800 50,014 Trade payables 31 483,870 399,836 21,311 19,477 Other payables 32 52,355 63,743 14,777 12,092 Amount due to penultimate holding company 18(b) 442 45 – – Amount due to immediate holding company 18(c) 2,553 1,931 2,018 1,431 Amount due to a subsidiary 26(b) – – – 5,000 Amount due to related companies 26(c) 38 39 30 31 Tax payable 12,781 14,577 – –

628,163 615,220 43,936 88,045

Total liabilities 840,623 814,316 197,936 208,045

Total equity and liabilities 1,324,653 1,275,703 859,093 969,100

The accompanying notes form an integral part of the financial statements. Kumpulan Hartanah Selangor berhad • 72

Consolidated Statement of Changes in Equity for the year ended 31 December 2009

minority Total |------Attributable to equity holders of the Company ------| interests equity Distributable |---- Non-distributable -----| Share Share Share option Accumulated capital premium reserve losses Total (Note 35) (Note 36) (Note 37) RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2008 450,000 306,112 – (306,050) 450,062 47,600 497,662 (Loss)/profit for the year – – – (38,141) (38,141) 3,116 (35,025) Share options granted under KHSB ESOS – – 626 – 626 – 626 Dividends – – – – – (1,876) (1,876)

At 31 December 2008 450,000 306,112 626 (344,191) 412,547 48,840 461,387

At 1 January 2009 450,000 306,112 626 (344,191) 412,547 48,840 461,387 Profit for the year – – – 21,448 21,448 5,662 27,110 Disposal of interest in a subsidiary (Note 44(iii)) – – – – – 200 200 Dividends – – – – – (4,667) (4,667)

At 31 December 2009 450,000 306,112 626 (322,743) 433,995 50,035 484,030

The accompanying notes form an integral part of the financial statements. • 73

Company Statement of Changes in Equity for the year ended 31 December 2009

Distributable |----- Non-distributable -----| Share (Accumulated Share Share option losses)/ capital premium reserve retained Total (Note 35) (Note 36) (Note 37) earnings equity RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2008 450,000 306,112 – (3,648) 752,464 Profit for the year – – – 7,965 7,965 Share options granted under KHSB ESOS – – 626 – 626

At 31 December 2008 450,000 306,112 626 4,317 761,055

At 1 January 2009 450,000 306,112 626 4,317 761,055 Loss for the year – – – (99,898) (99,898)

At 31 December 2009 450,000 306,112 626 (95,581) 661,157

The accompanying notes form an integral part of the financial statements. Kumpulan Hartanah Selangor berhad • 74

Consolidated Cash Flow Statement for the year ended 31 December 2009

Note 2009 2008 RM’000 RM’000

Cash flows from operating activities Profit/(loss) before tax and zakat from: Continuing operations 19,057 (35,383) Discontinued operations 11 – 263 Adjustments for: Finance costs 6 15,858 21,538 Dividend income 5 (33) (75) Interest income 5 (1,352) (1,357) Provision for doubtful debts 7 46,060 65,823 Share options granted under KHSB ESOS 8 – 626 Depreciation of property, plant and equipment 833 1,740 Depreciation of investment properties 7 148 224 Property, plant and equipment written off 7 – 5 Amortisation of prepaid land lease payments 7 8 8 Gain on disposal of property, plant and equipment 5 (53) (241) Gain on disposal of a subsidiary 5 – (13,945) Loss on disposal of other investment 7 60 – Loss on disposal of interest in a subsidiary 7 200 – Impairment of land held for property development 7 23,239 – Impairment of property development costs 7 – 27,736 Impairment of goodwill 7 49,740 – Impairment of investment properties 7 – 59 Impairment of other investments 7 – 78 Reversal of provision no longer required 5 (1,866) (5,055) Write-down of inventories 7 9,370 82 Reversal of provision for doubtful debts 5 (1,146) (3,634)

Operating profit before working capital changes 160,123 58,492 Increase in inventories (25,104) (87) Increase in property development costs (21,264) (23,131) Increase in receivables (136,584) (40,207) Increase in payables 64,055 53,207 Net movement in related company balances 29,763 421 • 75

Note 2009 2008 RM’000 RM’000

Cash flows from operating activities (cont’d) Cash generated from operations 70,989 48,695 Tax refund received, net of tax paid 421 4,901 Real property gain tax paid – (425) Zakat paid (21) (266) Interest paid (15,703) (21,094) Liquidated damages paid 28 (50) (1,329)

Net cash generated from operating activities 55,636 30,482

Cash flows from investing activities Proceeds from disposal of property, plant and equipment 167 919 Purchase of property, plant and equipment 13 (417) (1,384) Capital repayment from other investment 10 – Net cash inflow arising from disposal of a subsidiary 20(b) – 6,758 Dividends received 33 75 Interest received 1,352 1,357

Net cash generated from investing activities 1,145 7,725

Cash flows from financing activities Net repayment of hire purchases (19) (90) Repayment of borrowings (15,457) (53,677) Dividend paid to minority interest (4,667) (1,876)

Net cash used in financing activities (20,143) (55,643)

Net increase/(decrease) in cash and cash equivalents 36,638 (17,436) Cash and cash equivalents at beginning of year (22,085) (4,649)

Cash and cash equivalents at end of year 27 14,553 (22,085)

The accompanying notes form an integral part of the financial statements. Kumpulan Hartanah Selangor berhad • 76

Company Cash Flow Statement for the year ended 31 December 2009

Note 2009 2008 RM’000 RM’000

Cash flows from operating activities (Loss)/profit before tax (94,804) 7,510 Adjustments for: Property, plant and equipment written off 7 – 5 Reversal of provision for doubtful debts 5 – (6,000) Dividend income 3 (20,444) (1,612) Interest income 5 (462) (666) Share options granted under KHSB ESOS 8 – 626 Gain on disposal of a subsidiary 5 – (5,000) Impairment of investment in a subsidiary 7 49,740 – Impairment of land held for property development 7 23,239 – Provision for doubtful debts 7 30,196 – Finance costs 6 7,506 10,476 Depreciation of property, plant and equipment 7 343 522

Operating (loss)/profit before working capital changes (4,686) 5,861 (Increase)/decrease in property development costs (17,113) 6,921 Increase in inventories (3,159) – Decrease in receivables 19,487 2,875 Increase/(decrease) in payables 3,743 (1,387) Net movement in related company balances 4,409 7,081

Cash generated from operations 2,681 21,351 Interest paid (6,730) (9,992) Tax refund received, net of tax paid 3,802 3,158

Net cash (used in)/generated from operating activities (247) 14,517

Cash flows from investing activities Purchase of property, plant and equipment 13 (55) (280) Dividends received 15,333 1,193 Interest received 462 666 Proceeds from disposal of a subsidiary – 10,000

Net cash generated from investing activities 15,740 11,579 • 77

Note 2009 2008 RM’000 RM’000

Cash flows from financing activities Repayment of term loan (10,200) (50,000) Net repayment of hire purchases (14) (86)

Net cash used in financing activities (10,214) (50,086)

Net increase/(decrease) in cash and cash equivalents 5,279 (23,990) Cash and cash equivalents at beginning of year 2,679 26,669

Cash and cash equivalents at end of year 27 7,958 2,679

The accompanying notes form an integral part of the financial statements. Kumpulan Hartanah Selangor berhad • 78

Notes to the Financial Statements 31 December 2009

1. Corporate 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 registered office of the Company is located at Lot 1A, Level 1A, Plaza Perangsang, Persiaran Perbandaran, 40000 Shah Alam, Selangor Darul Ehsan.

the immediate holding company is Kumpulan Perangsang Selangor Berhad, a public limited liability company listed on the Main Market of Bursa Malaysia Securities Berhad. The penultimate holding company is Kumpulan Darul Ehsan Berhad. Both companies are incorporated in Malaysia and produce financial statements available for public use. The ultimate holding corporation is Menteri Besar Selangor (Pemerbadanan), a corporate body formed under Enactment No.3 of Menteri Besar Selangor (Incorporation), Enactment 1994.

the principal activities of the Company are investment holding, property development and provision of management services to its subsidiaries. The principal activities of the subsidiary companies are set out in Note 39. There have been no significant changes in the nature of the principal activities during the financial year.

the financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 21 April 2010.

2. Significant accounting policies 2.1 Basis of preparation the financial statements comply with Financial Reporting Standards (“FRS”) and the Companies Act, 1965 in Malaysia.

the financial statements of the Group and of the Company have also been prepared on a historical basis.

the financial statements are presented in Ringgit Malaysia (RM) and all values are rounded to the nearest thousand (RM’000) except when otherwise indicated.

2.2 Summary of significant accounting policies (a) Subsidiaries and basis of consolidation (i) Subsidiaries Subsidiaries are entities over which the Group has the ability to control the financial and operating policies so as to obtain benefits from their activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group has such power over another entity.

In the Company’s separate financial statements, investments in subsidiaries are stated at cost less impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss. • 79

2. Significant accounting policies (cont’d) 2.2 Summary of significant accounting policies (cont’d) (a) Subsidiaries and basis of consolidation (cont’d) (ii) Basis of consolidation the consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the balance sheet date. The financial statements of the subsidiaries are prepared for the same reporting date as the Company.

Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. In preparing the consolidated financial statements, intragroup balances, transactions and unrealised gains or losses are eliminated in full. Uniform accounting policies are adopted in the consolidated financial statements for like transactions and events in similar circumstances.

Acquisitions of subsidiaries are accounted for using the purchase method. The purchase method of accounting involves allocating the cost of the acquisition to the fair value of the assets acquired and liabilities and contingent liabilities assumed at the date of acquisition. The cost of an acquisition is measured as the aggregate of the fair values, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity instruments issued, plus any costs directly attributable to the acquisition.

Any excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities represents goodwill.

Any excess of the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition is recognised immediately in profit or loss.

minority interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group. It is measured at the minorities’ share of the fair value of the subsidiaries’ identifiable assets and liabilities at the acquisition date and the minorities’ share of changes in the subsidiaries’ equity since then.

(b) Associates Associates are entities in which the Group has significant influence and that is neither a subsidiary 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 not in control or joint control over those policies.

Investments in associates are accounted for in the consolidated financial statements using the equity method of accounting. Under the equity method, the investment in associate is carried in the consolidated balance sheet at cost adjusted for post-acquisition changes in the Group’s share of net assets of the associate. The Group’s share of the net profit or loss of the associate is recognised in the consolidated profit or loss. Where there has been achange recognised directly in the equity of the associate, the Group recognises its share of such changes. In applying the equity method, unrealised gains and losses on transactions between the Group and the associate are eliminated to the extent of the Group’s interest in the associate. After application of the equity method, the Group determines whether it is necessary to recognise any additional impairment loss with respect to the Group’s net investment in the associate. The associate is equity accounted for from the date the Group obtains significant influence until the date the Group ceases to have significant influence over the associate. Kumpulan Hartanah Selangor berhad • 80 Notes to the Financial Statements 31 December 2009

2. Significant accounting policies (cont’d) 2.2 Summary of significant accounting policies (cont’d) (b) Associates (cont’d) goodwill relating to an associate is included in the carrying amount of the investment and is not amortised. Any excess of the Group’s share of the net fair value of the associate’s identifiable assets, liabilities and contingent liabilities over the cost of the investment is excluded from the carrying amountofthe investment and is instead included as income in the determination of the Group’s share of the associate’s profit or loss in the period in which the investment is acquired.

When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any long-term interests that, in substance, form part of the Group’s net investment in the associate, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

the management accounts of the associates as at 31 December 2009 are used by the Group in applying the equity method. Uniform accounting policies are adopted for like transactions and events in similar circumstances.

on disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss.

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

(d) Property, plant and equipment, and depreciation All items of property, plant and equipment are initially recorded at cost. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

Subsequent to recognition, property, plant and equipment except for freehold land are stated at cost less accumulated depreciation and any accumulated impairment losses. • 81

2. Significant accounting policies (cont’d) 2.2 Summary of significant accounting policies (cont’d) (d) Property, plant and equipment, and depreciation (cont’d) Freehold land has an unlimited useful life and therefore is not depreciated. Depreciation of other property, plant and equipment is provided for on a straight-line basis to write off the cost of each asset to its residual value over the estimated useful life, at the following annual rates:

Buildings 2% motor vehicles 20% Renovations 10% – 20% Furniture and fittings 10% – 50% Computer and office equipment 10% – 33.3%

the residual values, useful life and depreciation method are reviewed at each financial year-end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. The difference between the net disposal proceeds, if any and the net carrying amount is recognised in profit or loss.

(e) Investment properties Investment properties are properties which are held either to earn rental income or for capital appreciation or for both. Such properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and any accumulated impairment losses, consistent with the accounting policy for property, plant and equipment as described in Note 2.2(d).

Depreciation of investment properties is provided for on a straight-line basis to write off the cost of each asset to its residual value over the estimated useful life, at the annual rate of 2% per annum for buildings.

A property interest under an operating lease is classified and accounted for as an investment property on a property-by-property basis when the Group holds it to earn rentals or for capital appreciation or both. Any such property interest under an operating lease classified as an investment property is carried at fair value. Fair value is arrived at by reference to market evidence of transaction prices for similar properties.

Investment properties are derecognised when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal of an investment property are recognisedin profit or loss in the year in which they arise. Kumpulan Hartanah Selangor berhad • 82 Notes to the Financial Statements 31 December 2009

2. Significant accounting policies (cont’d) 2.2 Summary of significant accounting policies (cont’d) (f) Land held for property development and property development costs (i) Land held for property development land held for property development consists of land where no development activities have been carried out or where development activities are not expected to be completed within the normal operating cycle. Such land is classified within non-current assets and is stated at cost less any accumulated impairment losses.

land held for property development is reclassified as property development costs at the point when development activities have commenced and where it can be demonstrated that the development activities can be completed within the normal operating cycle.

(ii) Property development costs property development costs comprise all costs that are directly attributable to development activities or that can be allocated on a reasonable basis to such activities.

When the financial outcome of a development activity can be reliably estimated, property development revenue and expenses are recognised in the income statement by using the stage of completion method. The stage of completion is determined by the proportion that property development costs incurred for work performed to date bear to the estimated total property development costs or survey of work performed.

Where the financial outcome of a development activity cannot be reliably estimated, property development revenue is recognised only to the extent of property development costs incurred that is probable will be recoverable, and property development costs on properties sold are recognised as an expense in the period in which they are incurred.

Any expected loss on a development project, including costs to be incurred over the defects liability period, is recognised as an expense immediately.

property development costs not recognised as an expense are recognised as an asset, which is measured at the lower of cost and net realisable value.

the excess of revenue recognised in the income statement over billings to purchasers is classified as accrued billings within trade receivables and the excess of billings to purchasers over revenue recognised in the income statement is classified as progress billings within trade payables. • 83

2. Significant accounting policies (cont’d) 2.2 Summary of significant accounting policies (cont’d) (g) Impairment of non-financial assets the carrying amounts of assets, other than investment properties, property development costs, inventories and deferred tax assets, are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated to determine the amount of impairment loss.

For goodwill, intangible assets that have an indefinite useful life and intangible assets that are not yet available for use, the recoverable amount is estimated at each balance sheet date or more frequently when indicators of impairment are identified.

For the purpose of impairment testing of these assets, recoverable amount is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, recoverable amount is determined for the cash-generating unit (“CGU”) to which the asset belongs to. Goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s CGUs, or groups of CGUs, that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.

An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs to sell and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time valueofmoney and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and iswritten down to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to those units or groups of units and then, to reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis.

An impairment loss is recognised in profit or loss in the period in which it arises, unless the asset is carried at a revalued amount, in whichcasethe impairment loss is accounted for as a revaluation decrease to the extent that the impairment loss does not exceed the amount held in the asset revaluation reserve for the same asset.

Impairment loss on goodwill is not reversed in a subsequent period. An impairment loss for an asset other than goodwill is reversed if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. The carrying amount of an asset other than goodwill is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of impairment loss for an asset other than goodwill is recognised in profit or loss, unless the asset is carried at revalued amount, in which case, such reversal is treated as a revaluation increase.

(h) Inventories Inventories are stated at the lower of cost and net realisable value.

the cost of unsold properties is determined using the first in, first out method and comprises cost associated with the acquisition of land, direct costs and appropriate proportions of common costs.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Kumpulan Hartanah Selangor berhad • 84 Notes to the Financial Statements 31 December 2009

2. Significant accounting policies (cont’d) 2.2 Summary of significant accounting policies (cont’d) (i) Financial instruments Financial instruments are recognised in the balance sheet when the Group has become a party to the contractual provisions of the instrument.

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends and gains and losses relating to a financial instrument classified as a liability, are reported as expense or income. Distributions to holders of financial instruments classified as equity are recognised directly in equity. Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle either on a net basis or to realise the asset and settle the liability simultaneously.

(i) Cash and cash equivalents For the purposes of the cash flow statements, cash and cash equivalents include cash on hand and at bank and deposit with licensed financial institutions which have an insignificant risk of changes in value, net of outstanding bank overdrafts.

(ii) Other non-current investments Non-current investments other than investments in subsidiaries, associates and investment properties are stated at cost less impairment losses. On disposal of an investment, the difference between net disposal proceeds and its carrying amount is recognised in profit or loss.

(iii) Marketable securities marketable securities are carried at the lower of cost and market value, determined on an individual basis. Cost is determined on the weighted average basis while market value is determined based on quoted market values. Increases or decreases in the carrying amount of marketable securities are recognised in profit or loss. On disposal of marketable securities, the difference between net disposal proceeds and the carrying amount is recognised in profit or loss.

(iv) Receivables Receivables are carried at anticipated realisable values. Bad debts are written off when identified. An estimate is made for doubtful debts based on a review of all outstanding amounts as at the balance sheet date.

(v) Payables payables are stated at the fair value of the consideration to be paid in the future for goods and services received.

(vi) Interest bearing loans and borrowings All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs. After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method.

(vii) Equity instruments ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared.

the transaction costs of an equity transaction are accounted for as a deduction from equity, net of tax. Equity transaction costs comprise only those incremental external costs directly attributable to the equity transaction which would otherwise have been avoided. • 85

2. Significant accounting policies (cont’d) 2.2 Summary of significant accounting policies (cont’d) (j) Leases (i) Classification A lease is recognised as a finance lease if it transfers substantially to theGroup all the risks and rewards incidental to ownership. Leases of land and buildings are classified as operating or finance leases in the same way as leases of other assets and the land and buildings elements of a lease of land and buildings are considered separately for the purposes of lease classification. All leases that do not transfer substantially all the risks and rewards are classified as operating leases, with the following exceptions:

– property held under operating leases that would otherwise meet the definition of an investment property is classified as an investment property on a property-by-property basis and, if classified as investment property, is accounted for as if held under a finance lease (Note 2.2(e)); and

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

(ii) Finance leases – the Group as lessee Assets acquired by way of hire purchase or finance leases are stated at an amount equal to the lower of their fair values and the present value of the minimum lease payments at the inception of the leases, less accumulated depreciation and impairment losses. The corresponding liability is included in the balance sheet as borrowings. 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 Company’s incremental borrowing rate is used. Any initial direct costs are also added to the carrying amount of such assets.

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 in the profit or loss over the term of the relevant lease so as to produce a constant periodic rate of charge on the remaining balance of the obligations of each accounting period.

the depreciation policy for leased assets is in accordance with that for depreciable property, plant and equipment as described in Note 2.2(d).

(iii) Operating leases – the Group as lessee operating lease payments are recognised as an expense on a straight-line basis over the term of the relevant lease. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.

In the case of a lease of land and buildings, the minimum lease payments or the up-front payments made are allocated, whenever necessary, between the land and the buildings elements in proportion to the relative fair values for leasehold interests in the land element and buildings element of the lease at the inception of the lease. The up-front payment represents prepaid lease payments and are amortised on a straight-line basis over the lease term. Kumpulan Hartanah Selangor berhad • 86 Notes to the Financial Statements 31 December 2009

2. Significant accounting policies (cont’d) 2.2 Summary of significant accounting policies (cont’d) (k) Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

(l) Income tax Income tax on the 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 at the balance sheet date.

Deferred tax is provided for, using the liability method. In principle, deferred tax liabilities are recognised for all taxable temporary differences and 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 taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Deferred taxisnot recognised if the temporary differences arises from goodwill or from the initial recognition of an asset or liability in a transaction which is not abusiness combination and at the time of the transaction, affects neither 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 at the balance sheet date. Deferred tax is recognised as income or an expense and included in the profit or loss for the period, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also recognised directly in equity.

(m) Provisions provisions are recognised when the Group has a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount canbemade. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. Where the effect of the time value of money is material, provisions are discounted usinga current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision duetothe passage of time is recognised as finance cost. • 87

2. Significant accounting policies (cont’d) 2.2 Summary of significant accounting policies (cont’d) (n) 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. 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. Short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.

(ii) Defined contribution plans Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into separate entities or funds and will have no legal or constructive obligation to pay further contributions if any of the funds do not hold sufficient assets to pay all employee benefits relating to employee services in the current and preceding financial years. Such contributions are recognised as an expense in the profit orlossas incurred. As required by law, companies in Malaysia make such contributions to the Employees Provident Fund (“EPF”).

(iii) Share-based compensation the Kumpulan Hartanah Selangor Berhad’s Employee Share Option Scheme (“KHSB ESOS”), an equity-settled, share-based compensation plan, allows the Group’s employees to acquire ordinary shares of the Company. The total fair value of share options granted to employees is recognised as an employee cost with a corresponding increase in the share option reserve within equity over the vesting period and taking into account the probability that the options will vest. The fair value of share options is measured at grant date, taking into account, if any, the market vesting conditions upon which the options were granted but excluding the impact of any non-market vesting conditions. Non-market vesting conditions are included in the assumptions about the number of options that are expected to become exercisable on vesting date.

(o) Revenue recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

(i) Sale of properties Revenue from sales of properties is accounted for by the stage of completion method as described in Note 2.2(f)(ii) and is recognised net of discount.

(ii) Revenue from hotel operations and recreational facilities Revenue from rental of hotel rooms, food, beverages and recreation are recognised when the services are rendered.

(iii) Dividend income Dividend income is recognised when the Group’s right to receive payment is established.

(iv) Rental income Rental income from investment property is recognised on a straight-line basis over the term of the lease. The aggregate cost of incentives provided to lessees is recognised as a reduction of rental income over the lease term on a straight-line basis. Kumpulan Hartanah Selangor berhad • 88 Notes to the Financial Statements 31 December 2009

2. Significant accounting policies (cont’d) 2.2 Summary of significant accounting policies (cont’d) (o) Revenue recognition (cont’d) (v) Interest income Interest income is recognised on an accrual basis using the effective interest method.

(vi) Management and administrative fees management and administrative fees are recognised when services are rendered.

(p) Discontinued operations A component of the Group is classified as a discontinued operations when the criteria to be classified as held for sale have been met or it has been disposed of and such a component represents a separate major line of business or geographical area of operations, is part of a single co-ordinated major line of business or geographical area of operations or is a subsidiary acquired exclusively with a view to resale.

2.3 Changes in accounting policies and future accounting standards Standards and interpretations issued but not yet effective At the date of authorisation of these financial statements, the following new FRSs, revised FRSs, amendments to FRSs and interpretations were issued butnot yet effective and have not been applied by the Group and the Company, which are:

Effective for financial periods beginning on or after 1 July 2009 FRS 8 Operating Segments

Effective for financial periods beginning on or after 1 January 2010 FRS 4 Insurance Contracts FRS 7 Financial Instruments: Disclosures FRS 101 Presentation of Financial Statements (revised) FRS 123 Borrowing Costs FRS 139 Financial Instruments: Recognition and Measurement Amendments to FRS 1 and FRS 127 First-time Adoption of Financial Reporting Standards and Consolidated and Separate Financial Statements: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate Amendments to FRS 2 Share-based Payment – Vesting Conditions and Cancellations Amendments to FRS 132 Financial Instruments: Presentation Amendments to FRS 139, FRS 7 and IC Financial Instruments: Recognition and Measurement, Disclosures and Reassessment of Embedded Derivatives Interpretation 9 Amendments to FRSs Improvements to FRSs (2009) IC Interpretation 9 Reassessment of Embedded Derivatives • 89

2. Significant accounting policies (cont’d) 2.3 Changes in accounting policies and future accounting standards (cont’d) Standards and interpretations issued but not yet effective (cont’d) Effective for financial periods beginning on or after 1 January 2010 (cont’d) IC Interpretation 10 Interim Financial Reporting and Impairment IC Interpretation 11 FRS 2 – Group and Treasury Share Transactions IC Interpretation 13 Customer Loyalty Programmes IC Interpretation 14 FRS 119 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction TR i – 3 Presentation of Finance Statements of Islamic Financial Institutions

Effective for financial periods beginning on or after 1 July 2010 FRS 1 First-time Adoption of Financial Reporting Standards FRS 3 Business Combinations (revised) FRS 127 Consolidated and Separate Financial Statements (amended) Amendments to FRS 2 Share-based Payment Amendments to FRS 5 Non-current Assets Held for Sale and Discontinued Operations Amendments to FRS 138 Intangible Assets Amendments to IC Interpretation 9 Reassessment of Embedded Derivatives IC Interpretation 12 Service Concession Arrangements IC Interpretation 15 Agreements for the Construction of Real Estate IC Interpretation 16 Hedges of a Net Investment in a Foreign Operation IC Interpretation 17 Distributions of Non-cash Assets to Owners

Kumpulan Hartanah Selangor berhad • 90 Notes to the Financial Statements 31 December 2009

2. Significant accounting policies (cont’d) 2.3 Changes in accounting policies and future accounting standards (cont’d) Standards and interpretations issued but not yet effective (cont’d) the Group and the Company plan to adopt the above pronouncements when they become effective in the respective financial period. Unless otherwise described below, these pronouncements are expected to have no significant impact to the financial statements of the Group and the Company upon their initial application:

FRS 3: Business Combinatios (revised) and FRS 127: Consolidated and Separate Financial Statements (amended) FRS 3 (revised) introduces a number of changes to the accounting for business combinations occuring on or after 1 July 2010. These include changes that affect the valuation of non-controlling interest, the accounting for transaction costs, the initial recognition and subsequent measurement of a contingent consideration and business combinations achieved in stages. These changes will impact the amount of goodwill recognised, the reported results in the period that an acquisition occurs and future reported results.

FRS 127 (amended) requires that a change in the ownership interest of a subsidiary (without loss of control) is accounted for as a transaction with owners in their capacity as owners and to be recorded in equity. Therefore, such transaction will no longer give rise to goodwill, nor will it give rise to a gain or loss. Furthermore, the amended Standard changes the accounting for losses incurred by the subsidiary as well as loss of control of a subsidiary.

the changes by FRS 3 (revised) and FRS 127 (amended) will be applied prospectively and only affect future acquisition or loss of control of subsidiaries and transactions with non-controlling interests.

FRS 8: Operating Segments FRS 8 replaces FRS 1142004: Segment Reporting and requires a ‘management approach’, under which segment information is presented on a similar basis to that used for internal reporting purposes. As a result, the Group’s external segmental reporting will be based on the internal reporting to the “chief operating decision maker”, who makes decisions on the allocation of resources and assesses the performance of the reportable segments. As this is a disclosure standard, there will be no impact on the financial position or results of the Group.

FRS 101: Presentation of Financial Statements (revised) the revised FRS 101 separates owner and non-owner changes in equity. Therefore, the consolidated statement of changes in equity will now include only details of transactions with owners. All non-owner changes in equity are presented as a single line labelled as total comprehensive income. The Standard also introduces the statement of comprehensive income: presenting all items of income and expense recognised in the income statement, together with all other items of recognised income and expense, either in one single statement, or in two linked statements. The Group is currently evaluating the format to adopt. In addition, a statement of financial position is required at the beginning of the earliest comparative period following a change in accounting policy, the correction ofan error or the reclassification of items in the financial statements. This revised FRS does not have any impact on the financial position and results of the Group and the Company.

FRS 123: Borrowing Costs the Group’s current accounting policy is consistent with the provision of FRS 123 Borrowing Costs. • 91

2. Significant accounting policies (cont’d) 2.3 Changes in accounting policies and future accounting standards (cont’d) Standards and interpretations issued but not yet effective (cont’d) FRS 139: Financial Instruments: Recognition and Measurement, FRS 7: Financial Instruments: Disclosures and Amendments to FRS 139: Financial Instruments: Recognition and Measurement, FRS 7: Financial Instruments: Disclosures the new Standard on FRS 139: Financial Instruments: Recognition and Measurement establishes principles for recognising and measuring financial assets, financial liabilities and some contracts to buy and sell non-financial items. Requirements for presenting information about financial instruments are in FRS 132: Financial Instruments: Presentation and the requiremetns for disclosing information about financial instruments are in FRS 7: Financial Instruments: Disclosures.

FRS 7: Financial Instruments: Disclosures is a new Standard that requires new disclosures in relation to financial instruments. The Standard is considered to result in increased disclosures, both quantitative and qualitative of the Group’s and Company’s exposure to risks, enhanced disclosure regarding components of the the Group’s and Company’s financial position and performance, and possible changes to the way of presenting certain items in the financial statements.

In accordance with the respective transitional provisions, the Group and the Company are exempted from disclosing the possible impact to the financial statements upon the initial application.

Amendments to FRSs ‘Improvements to FRSs (2009)’ FRS 140 Investment Property: Property under construction or development for future use as an investment property is classified as investment property. Where the fair value model is applied, such property is measured at fair value. If fair value cannot be realiably determined, the investment under construction will be measured at cost until such time as fair value can be determined or construction is complete. The Group has previously accounted for such assets using the cost model. The amendment also includes changes in terminology in the Standard to be consistent with FRS 108. The change will be applied prospectively.

IC Interpretation 15: Agreements for the Construction of Real Estate In applying IFRIC 15, the Group is required to recognise the revenue from property development activities on a completion basis. The impact of IFRIC 15 cannot be reasonably estimated, due to the uncertainties surrounding the expectation of future sales and fluctuation of development costs.

2.4 Significant accounting estimates and judgements Estimates, assumptions concerning the future and judgements are made in the preparation of the financial statements. They affect the application of the Group’s accounting policies, reported amounts of assets, liabilities, income and expenses and disclosures made. They are assessed on an on-going basis and are based on historical experience and relevant factors, including expectations of future events that are believed to be reasonable under the circumstances.

(a) Key sources of estimation uncertainty the key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below: (i) Impairment of goodwill the Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the value-in-use of the cash-generating units (“CGU”) to which goodwill is allocated. Estimating a value-in-use amount requires management to make an estimate of the expected future cash flows from theGU C and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The carrying amount of goodwill as at 31 December 2009 was RM99,963,000 (2008: RM149,703,000). Further details are disclosed in Note 17. Kumpulan Hartanah Selangor berhad • 92 Notes to the Financial Statements 31 December 2009

2. Significant accounting policies (cont’d) 2.4 Significant accounting estimates and judgements (cont’d) (a) Key sources of estimation uncertainty (cont’d) (ii) Depreciation of property, plant and equipment the cost of property, plant and equipment are depreciated on a straight-line basis over the assets’ useful lives up to its residual value. Management reviews the residual values, useful lives and depreciation method at the end of each financial year end and ensures consistency with previous estimates and patterns of consumptions of the economic benefits that embodies the items in these assets. Changes in useful lives and residual values of these assets may result in revision in future depreciation charges.

(iii) Assessment of provision for doubtful receivables the Group makes provision for doubtful receivables based on an assessment of the recoverability of trade and other receivables. Provision are applied to trade and other receivables where events or changes in circumstances indicate that the balances may not be collectible. The identification of doubtful receivables requires use of judgement and estimates. Where the expectation is different from the original estimate, such difference will impact the carrying value of the trade and other receivables and doubtful receivables expenses in the period in which such estimate has been changed. As at 31 December 2009, provision for doubtful receivables for trade and other receivables have been disclosed in Note 24 and Note 25 respectively.

(iv) Income taxes and deferred tax assets Judgement is involved in determining the provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group and the Company recognise liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

Deferred tax assets are recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary differences 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.

the details of income taxes and deferred tax of the Group and the Company are disclosed in Note 10 and Note 34 respectively.

(b) Critical judgement made in applying accounting policies Property development the Group recognises property development revenue and expenses in the income statement by using the stage of completion method. The stage of completion is determined by the proportion that property development costs incurred for work performed to date bear to the estimated total property development costs or survey of work performed.

Significant judgement is required in determining the stage of completion, the extent of the property development costs incurred, the estimated total property development revenue and costs, as well as the recoverability of the development projects. In making the judgement, the Group evaluates based on past experience and by relying on the work of specialists. • 93

2. Significant accounting policies (cont’d) 2.4 Significant accounting estimates and judgements (cont’d) (b) Critical judgement made in applying accounting policies (cont’d) Property development (cont’d) As the Group is involved in the sales of land and property development, certain land are sold as part of a development project. In such instances, where the Group has to undertake development obligations, expressed or implied, the profit from the sale is recognised on a percentage of completion basis. Taking into consideration terms and conditions as set out in sales and purchase agreements and overall project development plans/intentions, management has to exercise judgement as to whether certain sales should be outright land sales or property development project sales.

3. Revenue

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

Sales of development properties 13,737 19,635 922 9,846 Sales of land 98,408 71,260 14,029 25,790 Sales of completed properties 12,866 449 – – Fees from property management 112 1,014 – – Project management fees – – 1,500 – Management and administrative fees from subsidiaries – – 3,617 2,505 Dividend income from a subsidiary – – 20,444 1,612

125,123 92,358 40,512 39,753

4. Cost of sales

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

Property development costs (Note 14(b)) 7,729 24,236 932 8,502 Cost of land sold 62,660 22,798 6,904 3,488 Cost of completed properties sold 10,704 1,194 – –

81,093 48,228 7,836 11,990 Kumpulan Hartanah Selangor berhad • 94 Notes to the Financial Statements 31 December 2009

5. other income

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

Interest income – third parties 1,288 1,114 150 269 – penultimate holding company 36 243 – – – immediate holding company 28 – – – – a subsidiary – – 312 397 Rental income from operating leases, other than those relating to investment properties 2,033 1,979 – – Rental income from investment properties 739 357 – – Dividend income 33 75 – – gain on disposal of a subsidiary – 13,945 – 5,000 Waiver of debts – 45,000 – – gain on disposal of property, plant and equipment 53 241 – – Compensation received from authorities for land acquired 39,427 11,951 – – Reversal of provision no longer required 1,866 5,055 – – Reversal of provision for doubtful debts – third parties 1,114 3,634 – – – subsidiaries – – – 6,000 – a related company 32 – – – Bad debts recovered arising from assignment of debt and specific grant from ultimate holding corporation 115,101 – – – miscellaneous 1,792 663 48 3

163,542 84,257 510 11,669 • 95

6. Finance costs

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

Interest expense on: – a subsidiary – – 941 397 – term loans 11,603 16,158 6,443 10,017 – bank overdrafts and short term borrowings 4,123 4,879 – 4 – others 132 501 122 58

15,858 21,538 7,506 10,476

7. pRofit/(loss) before tax and zakat the following amounts have been included in arriving at profit/(loss) before tax and zakat:

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

Employee benefits expense (Note 8) 13,300 15,020 9,921 11,351 Non-executive directors’ remuneration (Note 9) 537 580 367 312 Auditors’ remuneration: – statutory audits 230 230 33 33 – other services 95 95 95 95 Depreciation of property, plant and equipment 833 962 343 522 property, plant and equipment written off (Note 13) – 5 – 5 Amortisation of prepaid land lease payments (Note 16) 8 8 – – Depreciation of investment properties (Note 15) 148 224 – – Impairment of land held for property development (Note 14(a)) 23,239 – 23,239 – Impairment of property development costs (Note 14(b)) – 27,736 – – Impairment of investment properties (Note 15) – 59 – – Impairment of other investments – 78 – – Impairment of goodwill (Note 17) 49,740 – – – Impairment of investment in a subsidiary – – 49,740 – Write-down of inventories 9,370 82 – – Kumpulan Hartanah Selangor berhad • 96 Notes to the Financial Statements 31 December 2009

7. pRofit/(loss) before tax and zakat (cont’d)

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

loss on disposal of interest in a subsidiary 200 – – – loss on disposal of other investment 60 – – – Rental of land and buildings – third parties – 73 – – – immediate holding company 580 594 580 594 provision for doubtful debts – third parties 46,060 65,823 – – – a subsidiary – – 30,196 – project expenses written off 15,027 13,219 1,121 643 Direct operating expenses of investment properties: – revenue generating during the year 109 68 – – – non-revenue generating during the year – 2 – – loss on termination of sales – 679 – –

8. Employee benefits expense

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

Wages and salaries 8,689 8,927 6,499 6,875 Social security contributions 81 83 63 65 Contributions to defined contribution plan 1,275 1,330 944 973 Share options granted under KHSB ESOS (Note 37) – 626 – 626 other staff related expenses 3,255 4,054 2,415 2,812

13,300 15,020 9,921 11,351

Included in employee benefits expense of the Group and of the Company are executive directors’ remuneration amounting to RM830,000 (2008: RM1,028,000) and RM743,000 (2008: RM890,000) respectively as further disclosed in Note 9. • 97

9. Directors’ remuneration

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

Directors of the Company Executive directors’ remuneration: – Salaries 510 564 510 564 – Fees 168 231 108 97 – Pension costs 64 80 64 80 – Bonus – 90 – 90 – Allowance 65 63 61 59

807 1,028 743 890

Non-executive directors’ remuneration (Note 7): – Fees 257 277 250 252 – Allowance 119 62 117 60

376 339 367 312

Directors of subsidiaries Executive director’s remuneration: – Salaries 17 – – – – Fees 4 – – – – Pension costs 2 – – –

23 – – –

Non-executive directors’ remuneration (Note 7): – Fees 158 239 – – – Allowance 3 2 – –

161 241 – –

total directors’ remuneration 1,367 1,608 1,110 1,202 Kumpulan Hartanah Selangor berhad • 98 Notes to the Financial Statements 31 December 2009

9. Directors’ remuneration (cont’d) the number of directors of the Company whose total remuneration during the financial year fell within the following bands is analysed below:

Number of directors 2009 2008

Executive directors: RM100,001 – RM350,000 – 1 RM350,001 – RM700,000 2 1

Non-executive directors: less than RM50,000 – 6 RM50,001 – RM150,000 4 2

10. Income tax and zakat

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

Continuing operations: Current income tax: malaysian income tax 2,862 1,942 5,111 419 overprovision in prior years (4,425) (2,397) (17) (874) Real property gain tax – 1,520 – –

(1,563) 1,065 5,094 (455)

Deferred tax (Note 34): Relating to reversal and origination of temporary differences (6,497) 283 – – Effect of changes in tax rates on opening balance of deferred tax – (1,620) – – overprovision in prior years (14) (56) – –

(6,511) (1,393) – –

Zakat 21 266 – –

(8,053) (62) 5,094 (455) • 99

10. Income tax and zakat (cont’d)

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

Discontinued operations (Note 11): Deferred tax (Note 34): Relating to reversal of temporary differences – (33) – –

total income tax and zakat (8,053) (95) 5,094 (455)

Domestic income tax is calculated at the Malaysian statutory tax rate of 25% (2008: 26%) of the estimated assessable profit for the year.

prior to the year of assessment 2009, companies with paid up capital of RM2,500,000 or less at the beginning of the basis period enjoy a concessionary tax rate of 20% on the first RM500,000 of chargeable income, while any balance of chargeable income is taxed at the normal corporate tax rate. With effect from year of assessment 2009, a company that has paid up capital of RM2,500,000 or less but controls or is being controlled directly or indirectly by another company which has paid up capital of more than RM2,500,000 in respect of ordinary shares will not be eligible for the concessionary tax rate. As a result, the companies in this Group are no longer entitled to claim the above preferential tax rates.

Zakat has been calculated at 2.5% of the adjusted net current assets multiplied by the estimated Muslim equity holding in the Company.

A reconciliation of income tax applicable to profit/(loss) before tax and zakat at the statutory income tax rate to income tax at the effective income tax rateofthe Group and of the Company is as follows:

2009 2008 RM’000 RM’000

Group profit/(loss) before tax and zakat from: Continuing operations 19,057 (35,383) Discontinued operations (Note 11) – 263

19,057 (35,120) Kumpulan Hartanah Selangor berhad • 100 Notes to the Financial Statements 31 December 2009

10. Income tax and zakat (cont’d)

2009 2008 RM’000 RM’000

Group (cont’d) taxation at Malaysian statutory tax rate of 25% (2008: 26%) 4,764 (9,131) Effect of lower tax rate for small and medium scale companies – (30) Deferred tax recognised at different rate – (10) Effect of changes in tax rates on opening balance of deferred tax – (1,620) Income not subject to tax (17,095) (24,040) Expenses not deductible for tax purposes 25,283 17,244 utilisation of previously unrecognised tax losses and unabsorbed capital allowances (21,819) (2,667) Deferred tax assets not recognised 5,232 20,826 overprovision of tax expense in prior years (4,425) (2,397) overprovision of deferred tax in prior years (14) (56) Real property gain tax – 1,520

Income tax for the year (8,074) (361)

2009 2008 RM’000 RM’000

Company (Loss)/profit before tax (94,804) 7,510

taxation at Malaysian statutory tax rate of 25% (2008: 26%) (23,701) 1,953 Income not subject to tax (1,253) (2,930) Expenses not deductible for tax purposes 28,066 2,954 utilisation of previously unrecognised tax losses and unabsorbed capital allowances – (1,558) Deferred tax assets not recognised 1,999 – overprovision of tax expense in prior years (17) (874)

Income tax for the year 5,094 (455) • 101

10. Income tax and zakat (cont’d) tax savings during the financial year arising from:

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

utilisation of current year tax losses 39 283 – – utilisation of previously unrecognised tax losses 21,781 2,206 – 1,112

11. Discontinued operations Discontinued operations in the previous year on 19 June 2008, the Company disposed of its wholly-owned subsidiary, Brisdale International Hotel Sdn. Bhd. (“BIHSB”), which represents the entire recreational facilities and hospitality segment. The results from this subsidiary was presented separately on the consolidated income statement as discontinued operations.

(a) An analysis of the results of discontinued operations was as follows:

Group 1.1.2008 to 31.7.2008 RM’000

Revenue 3,771 other income 199 Expenses (3,707)

profit before tax from discontinued operations 263 Income tax (Note 10) 33

profit for the year from discontinued operations 296 Kumpulan Hartanah Selangor berhad • 102 Notes to the Financial Statements 31 December 2009

11. Discontinued operations (cont’d) (b) the following amounts had been included in arriving at profit before tax of discontinued operations:

Group 1.1.2008 to 31.7.2008 RM’000

Employee benefits expense 1,065 Depreciation of property, plant and equipment 778 Auditors’ remuneration 13

the cash flows attributed to the discontinued operations were as follows:

Group 2008 RM’000

operating cash flows 951 Investing cash flows (872)

total cash flows 79 • 103

12. Earnings/(loss) per share (a) Basic Basic earnings/(loss) per share are calculated by dividing the net profit/(loss) for the year attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares in issue during the financial year.

2009 2008 RM’000 RM’000

profit/(loss) from continuing operations attributable to ordinary equity holders of the Company 21,448 (38,437) profit from discontinued operations attributable to ordinary equity holders of the Company (Note 11) – 296

profit/(loss) attributable to ordinary equity holders of the Company 21,448 (38,141)

Weighted average number of ordinary shares in issue 450,000 450,000

2009 2008 sen sen

Basic earnings/(loss) per share for: profit/(loss) from continuing operations 4.77 (8.54) profit from discontinued operations – 0.07

profit/(loss) for the year 4.77 (8.47)

(b) Diluted As disclosed in Note 38, the Company has outstanding options granted pursuant to the KHSB ESOS, to subscribe for 34,475,000 ordinary shares at RM1 each. In accordance with the provisions laid down by FRS 133: Earnings Per Share, share options are dilutive when they are issued for no consideration or where a portion of the outstanding share options are deemed dilutive in situations where the exercisable price of the options is below its fair value.

Since the exercisable price of the options is above the fair value of the Company’s shares, the option is deemed non-dilutive. As such, the options have no dilution effect on the earnings per share of the Group. Kumpulan Hartanah Selangor berhad • 104 Notes to the Financial Statements 31 December 2009

13. pRoperty, plant and equipment

Computer M motor Furniture and office Buildings vehicles and fittings equipment Total RM’000 RM’000 RM’000 RM’000 RM’000

Group At 31 December 2009 Cost At 1 January 2009 11,186 1,409 1,797 6,017 20,409 Additions 24 242 38 113 417 Disposals (159) (103) – (39) (301) Written off (Note 7) – – (6) (37) (43)

At 31 December 2009 11,051 1,548 1,829 6,054 20,482

Accumulated depreciation and impairment At 1 January 2009 6,563 1,005 1,715 5,380 14,663 Depreciation charge for the year 368 182 31 252 833 Disposals (45) (103) – (39) (187) Written off (Note 7) – – (6) (37) (43)

At 31 December 2009 6,886 1,084 1,740 5,556 15,266

Net carrying amount At 31 December 2009 4,165 464 89 498 5,216 • 105

13. pRoperty, plant and equipment (cont’d)

Computer Freehold Motor Furniture and office land Buildings vehicles and fittings equipment Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Group (cont’d) At 31 December 2008 Cost At 1 January 2008 4,794 66,863 1,268 8,629 6,621 88,175 Additions – 39 206 850 289 1,384 Disposals – (917) – – (13) (930) Written off (Note 7) – – – (1) (144) (145) Disposal of a subsidiary (Note 20(b)) (4,794) (58,012) (65) (5,204) – (68,075) Reclassification – 3,213 – (2,477) (736) –

At 31 December 2008 – 11,186 1,409 1,797 6,017 20,409

Accumulated depreciation and impairment At 1 January 2008 – 28,338 857 6,927 5,519 41,641 Depreciation charge for the year – 842 155 286 457 1,740 Disposals – (241) – – (11) (252) Written off (Note 7) – – – (1) (139) (140) Disposal of a subsidiary (Note 20(b)) – (25,190) (7) (3,129) – (28,326) Reclassification – 2,814 – (2,368) (446) –

At 31 December 2008 – 6,563 1,005 1,715 5,380 14,663

Net carrying amount At 31 December 2008 – 4,623 404 82 637 5,746 Kumpulan Hartanah Selangor berhad • 106 Notes to the Financial Statements 31 December 2009

13. pRoperty, plant and equipment (cont’d)

Computer Furniture and office Motor Renovation and fittings equipment vehicles Total RM’000 RM’000 RM’000 RM’000 RM’000

Company At 31 December 2009 Cost At 1 January 2009 642 90 1,611 775 3,118 Additions – – 55 – 55 Written off (Note 7) – – (39) – (39)

At 31 December 2009 642 90 1,627 775 3,134

Accumulated depreciation At 1 January 2009 305 48 1,258 407 2,018 Depreciation charge for the year 64 18 128 133 343 Written off (Note 7) – – (39) - (39)

At 31 December 2009 369 66 1,347 540 2,322

Net carrying amount At 31 December 2009 273 24 280 235 812 • 107

13. pRoperty, plant and equipment (cont’d)

Computer Furniture and office Motor Renovation and fittings equipment vehicles Total RM’000 RM’000 RM’000 RM’000 RM’000

Company (cont’d) At 31 December 2008 Cost At 1 January 2008 642 104 1,472 629 2,847 Additions – 15 119 146 280 Written off (Note 7) – – (9) – (9) Reclassification – (29) 29 – –

At 31 December 2008 642 90 1,611 775 3,118

Accumulated depreciation At 1 January 2008 241 41 945 273 1,500 Depreciation charge for the year 64 23 301 134 522 Written off (Note 7) – – (4) – (4) Reclassification – (16) 16 – –

At 31 December 2008 305 48 1,258 407 2,018

Net carrying amount At 31 December 2008 337 42 353 368 1,100

Net carrying amounts of property, plant and equipment held under hire purchase arrangements are as follows:

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

motor vehicles 23 173 – 139 Equipment 1 27 1 27

24 200 1 166 Kumpulan Hartanah Selangor berhad • 108 Notes to the Financial Statements 31 December 2009

14. lAND held for property development and property development costs (a) Land held for property development

Development Land costs Total RM’000 RM’000 RM’000

Group At 31 December 2009 Cost At 1 January 2009 307,176 14,931 322,107 Additions 24,226 603 24,829 Disposals (39,148) (1,422) (40,570) transfer to property development costs (Note 14(b)) (10,104) – (10,104)

At 31 December 2009 282,150 14,112 296,262

Accumulated impairment losses At 1 January 2009 (2,403) – (2,403) Impairment losses for the year (Note 7) (23,239) – (23,239)

At 31 December 2009 (25,642) – (25,642)

Carrying amount at 31 December 2009 256,508 14,112 270,620

At 31 December 2008 Cost At 1 January 2008 304,760 19,597 324,357 Additions 8,633 167 8,800 transfer to property development costs (Note 14(b)) (6,217) (4,833) (11,050)

At 31 December 2008 307,176 14,931 322,107

Accumulated impairment losses At 1 January/31 December 2008 (2,403) – (2,403)

Carrying amount at 31 December 2008 304,773 14,931 319,704 • 109

14. lAND held for property development and property development costs (cont’d) (a) Land held for property development (cont’d)

Development Land costs Total RM’000 RM’000 RM’000

Company At 31 December 2009 Cost At 1 January 2009 59,004 129 59,133 Additions 24,000 714 24,714 Disposals (5,000) (129) (5,129)

At 31 December 2009 78,004 714 78,718

Accumulated impairment losses At 1 January 2009 – – – Impairment losses for the year (Note 7) (23,239) – (23,239)

At 31 December 2009 (23,239) – (23,239)

Carrying amount at 31 December 2009 54,765 714 55,479

At 31 December 2008 Cost At 1 January/31 December 2008 59,004 129 59,133 Kumpulan Hartanah Selangor berhad • 110 Notes to the Financial Statements 31 December 2009

14. lAND held for property development and property development costs (cont’d) (b) Property development costs

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

Cumulative property development costs At 1 January Land costs 212,965 217,915 70,314 71,345 Development costs 807,352 833,689 154,522 151,910

1,020,317 1,051,604 224,836 223,255

Costs incurred during the year Land costs – 3,342 – 1,983 Development costs 133,176 58,023 3,525 3,086

133,176 61,365 3,525 5,069

Reversal of completed projects Land costs (5,955) (1,617) (79) – Development costs (337,317) (79,287) (29,889) –

(343,272) (80,904) (29,968) –

transfer from land held for property development (Note 14(a)) Land costs 10,104 6,217 – – Development costs – 4,833 – –

10,104 11,050 – –

Disposal of land Land costs (13,019) (12,892) (1,630) (3,014) Development costs (40,007) (9,906) (275) (474)

(53,026) (22,798) (1,905) (3,488)

Accumulated impairment losses At 1 January (57,933) (30,197) – – Impairment losses for the year (Note 7) – (27,736) – – Reversal of completed projects 4,676 – – –

At 31 December (53,257) (57,933) – – • 111

14. lAND held for property development and property development costs (cont’d) (b) Property development costs (cont’d)

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

Accumulated provision for forseeable losses At 1 January/31 December (10,054) (10,054) – –

unsold units transferred to inventories Land costs (633) – – – Development costs (34,783) – (3,160) –

(35,416) – (3,160) –

At 31 December 668,572 952,330 193,328 224,836

Cumulative costs recognised in income statement At 1 January (493,815) (550,483) (85,469) (76,967) Recognised during the year (Note 4) (7,729) (24,236) (932) (8,502) Reversal of completed projects 338,596 80,904 29,968 –

At 31 December (162,948) (493,815) (56,433) (85,469)

Property development costs at 31 December 505,624 458,515 136,895 139,367

(i) titles to certain leasehold lands amounting to RM6,914,000 (2008: RM11,705,000) of the Group have yet to be transferred to a subsidiary company by the State Secretary Selangor (Incorporated) and Yayasan Selangor.

(ii) A charge has been created over development properties amounting to RM5,350,000 (2008: RM5,350,000) in favour of a third party by a subsidiary company.

(iii) During the year, development properties of the Company amounting to approximately RM25,671,000 have been pledged for credit facilities granted to the Company and a subsidiary company as disclosed in Note 29. Kumpulan Hartanah Selangor berhad • 112 Notes to the Financial Statements 31 December 2009

15. Investment properties

G gROUP 2009 2008 RM’000 RM’000

Cost At 1 January/31 December 9,378 9,378

Accumulated depreciation and impairment At 1 January 1,586 1,303 Depreciation charge for the year (Note 7) 148 224 Impairment loss recognised in profit or loss (Note 7) – 59

At 31 December 1,734 1,586

Carrying amount at 31 December 7,644 7,792

Fair value at 31 December 9,470 8,583

Investment properties with an aggregate carrying value of RM7,196,000 (2008: RM7,337,000) have been pledged for credit facilities granted to a subsidiary as disclosed in Note 29.

16. pREpaid land lease payments

G gROUP 2009 2008 RM’000 RM’000

Cost At 1 January/31 December 828 828

Accumulated amortisation At 1 January 155 147 Amortisation for the year (Note 7) 8 8

At 31 December 163 155

Carrying amount at 31 December 665 673 • 113

17. goodwill

G gROUP 2009 2008 RM’000 RM’000

At 1 January 149,703 149,703 Impairment loss recognised in profit or loss (Note 7) (49,740) –

At 31 December 99,963 149,703

Impairment tests for goodwill goodwill is allocated to the Group’s cash–generating units (“CGU’s”) identified in property development and management segment.

the recoverable amount of CGU of the property development and management segment is determined based on value-in-use calculation. A ten to fifteen year period cash flow projections were used in the value-in-use calculation. The cash flow projections were based on financial budgets approved by Board of Directors covering a five financial year period. Cash flow projections for the period beyond the approved budget were extrapolated using zero growth rate. The value-in-use calculation was approved by the Board of Directors.

Key assumptions used for value-in-use calculation:

P property development and management

Discount rate 6.0% and 8.3%

(i) the discount rate used is consistent with the segment’s weighted average cost of borrowings and/or expected annual dividend yield.

(ii) the projects will be launched on the assumed due dates and the projects’ cash flows will occur as projected.

(iii) proceeds from sale of land will be received as projected.

the above assumptions have been used for the analysis of each CGU. Management determined project launch dates based on management’s operation plans and estimated proceeds from sale of land based on agreements.

the Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated in Note 2.2(g).

If the estimated discount rate applied to the discounted cash flows had been 1% higher than management’s estimates, the Group would not need to reduce the carrying value of goodwill. Kumpulan Hartanah Selangor berhad • 114 Notes to the Financial Statements 31 December 2009

18. Amou nt due from ultimate holding corporation, amount due from/(to) penultimate holding company and amount due to immediate holding company (a) the amount due from ultimate holding corporation is unsecured, is non-interest bearing and is repayable on demand.

(b) Included in the amount due from penultimate holding company for both the Group and the Company is deposits amounting to RM21,112,000 (2008: RM21,112,000) paid for purchase of land banks.

the amount due from/(to) penultimate holding company is unsecured, is non-interest bearing and is repayable on demand.

(c) the amount due to immediate holding company is unsecured, is non-interest bearing and is repayable on demand.

19. long term receivables

G gROUP 2009 2008 RM’000 RM’000

trade receivables – 73,925 less: Provision for doubtful debts – (73,925)

– –

20. Investment in subsidiaries

COMPANY 2009 2008 RM’000 RM’000

unquoted shares at cost At 1 January 464,505 469,505 Disposal of a subsidiary – (5,000)

At 31 December 464,505 464,505 less: Accumulated impairment losses (49,740) –

414,765 464,505

the Group’s equity interest in the subsidiaries and the subsidiaries’ respective principal activities are shown in Note 39. • 115

20. Investment in subsidiaries (cont’d) (a) Transfer of a subsidiary during the year on 2 November 2009, 500,000 ordinary shares of RM1 each representing the entire issued and paid up share capital of KHSB Properties Sdn. Bhd. held by SAP Holdings Berhad, a subsidiary of the Company had been transferred to the Company for a cash consideration of RM1.

(b) Disposal of a subsidiary in the previous year on 19 June 2008, Brisdale International Hotel Sdn. Bhd. (“BIHSB”), a wholly owned subsidiary of the Company, was disposed of for a total consideration of RM53,000,000, comprising of:

(i) disposal of the entire issued and paid up share capital of BIHSB for a cash consideration of RM10,000,000; and

(ii) settlement of the debt owing by BIHSB to the Company of RM43,000,000.

the disposal had the following effects on the financial position of the Group as at the end of the previous year:

2008 RM’000

property, plant and equipment (Note 13) 39,749 other assets 4,381 Deferred tax liabilities (Note 34) (2,169) Current liabilities (45,906)

Net liabilities disposed (3,945) total disposal proceeds (10,000)

gain on disposal of a subsidiary (13,945)

Cash inflow arising on the disposal: Cash consideration 10,000 Cash and cash equivalents of a subsidiary disposed (3,242)

Net cash inflow of the Group 6,758 Kumpulan Hartanah Selangor berhad • 116 Notes to the Financial Statements 31 December 2009

21. Investment in associates

G gROUP 2009 2008 RM’000 RM’000

unquoted shares, at cost 5,720 5,720 less: Accumulated impairment losses (3,720) (3,720)

2,000 2,000

the Group’s equity interest in the associates and the associates’ respective principal activities are shown in Note 40.

the financial statements of the associates of the Group are not coterminous with that of the Group, except for PMB Spectrum Sdn. Bhd. For the purpose of applying equity method of accounting, management has used the management accounts as at 31 December 2009 of the associates.

the summarised financial information of the associates, including the aggregate amounts of assets, liabilities, revenue and loss are as follows:

2009 2008 RM’000 RM’000

Assets and liabilities Current assets/total assets 7,880 9,404

Current liabilities/total liabilities 7 9

Results Revenue – – loss for the year (1,522) (763) • 117

22. other investments

G gROUP 2009 2008 RM’000 RM’000

quoted in Malaysia, at cost: – Shares 1,204 1,213 – Unit trusts 50 50

1,254 1,263 less: Accumulated impairment losses (698) (698)

556 565

Club memberships, at cost 1,030 1,295 less: Accumulated impairment losses (120) (120)

910 1,175

Carrying amount as at 31 December 1,466 1,740

Market values: – Quoted shares in Malaysia 727 869 – Unit trusts quoted in Malaysia 77 67

804 936 Kumpulan Hartanah Selangor berhad • 118 Notes to the Financial Statements 31 December 2009

23. Inventories

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

Cost Completed properties 31,123 17,445 3,159 – land – 5,594 – –

31,123 23,039 3,159 – Net realisable value Completed properties 44,006 36,356 – –

75,129 59,395 3,159 –

Inventories of the Group amounting to approximately RM12,143,000 (2008: RM17,718,000) have been pledged for credit facilities granted to a subsidiary as disclosed in Note 29.

24. tRADE receivables

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

trade receivables 83,910 132,797 9,003 29,726 less: Provision for doubtful debts (16,390) (17,022) – –

67,520 115,775 9,003 29,726 Accrued billings in respect of property development cost 26,301 673 – –

93,821 116,448 9,003 29,726

the Group’s normal trade credit terms range from 30 to 120 days (2008: 30 to 120 days). Other credit terms are assessed and approved on a case-by-case basis.

the Group has no significant concentration of credit risk that may arise from exposures to a single debtor or groups of debtors. • 119

25. other receivables

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

Advances – 142 – 142 prepayments 97 54 42 25 Deposits 9,140 9,328 5,116 5,116 Sundry receivables 5,196 5,337 2,169 808

14,433 14,861 7,327 6,091 less: Provision for doubtful debts (1,973) (1,805) – –

12,460 13,056 7,327 6,091

the Group has no significant concentration of credit risk that may arise from exposures to a single debtor or groups of debtors.

26. Amount due from subsidiaries, amount due to a subsidiary and amount due from/(to) related companies

COMPANY 2009 2008 RM’000 RM’000

(a) Amount due from subsidiaries 224,961 209,101 less: Provision for doubtful debts (70,196) (40,000)

154,765 169,101

the amount due from subsidiaries are unsecured, are non-interest bearing and are repayable on demand except for the advances to a subsidiary amounting to RM5,000,000 in the previous year, which bore interest of 5% per annum.

(b) In the previous year, the amount due to a subsidiary was unsecured, bore interest of 5% per annum and was repayable on demand.

(c) the amount due from/(to) related companies are unsecured, are non-interest bearing and are repayable on demand. Kumpulan Hartanah Selangor berhad • 120 Notes to the Financial Statements 31 December 2009

27. Cash and cash equivalents

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

Cash on hand and at banks 13,330 9,141 614 626 Deposits with: Licensed banks 9,226 9,932 7,344 2,053 Licensed finance company 25,000 6,000 – – Housing Development Accounts 3,840 2,913 – –

Cash and bank balances 51,396 27,986 7,958 2,679

the Housing Development Accounts are held pursuant to Section 7A of the Housing Development (Control and Licensing) Act, 1966 and are restricted from use in other operations.

Deposits with a licensed bank of the Group and the Company amounting to RM7,344,000 (2008: RM2,053,000) and RM7,344,000 (2008: RM2,053,000) respectively are held for the purpose of term loan repayment and therefore restricted from use in other operations. The said deposits have been pledged for a credit facility granted to the Company as disclosed in Note 29.

Deposits with licensed banks of the Group amounting to RM505,000 (2008: RM505,000) have been pledged for credit facilities granted to certain subsidiaries.

For the purpose of the cash flow statements, cash and cash equivalents comprise the following as at the balance sheet date:

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

Deposits, cash and bank balances 51,396 27,986 7,958 2,679 Bank overdrafts (Note 29) (36,843) (50,071) – –

Cash and cash equivalents 14,553 (22,085) 7,958 2,679 • 121

27. Cash and cash equivalents (cont’d) the weighted average effective interest rates of deposits at the balance sheet date are as follows:

Group Company 2009 2008 2009 2008 % % % %

licensed banks 2.13 3.11 2.02 3.15 licensed finance company 2.00 3.00 – –

the average maturities of deposits as at end of financial year are as follows:

Group Company 2009 2008 2009 2008 Days Days Days Days

licensed banks 31 31 31 31 licensed finance company 30 30 – –

28. pRovision

G gROUP 2009 2008 RM’000 RM’000

At 1 January 13,526 14,855 utilisation of provision – payment (50) (1,329)

At 31 December 13,476 13,526

provision of the Group comprises provision for liquidated damages in respect of projects undertaken by certain subsidiaries. The provision is recognised for expected liquidated damages claims based on the terms of the applicable sale and purchase agreements. Kumpulan Hartanah Selangor berhad • 122 Notes to the Financial Statements 31 December 2009

29. Borrowings

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

Short term borrowings Secured: Bank overdrafts 5,723 8,774 – – Revolving credit 5,000 5,000 – – term loans 5,800 51,433 5,800 50,000 Hire purchase payables (Note 30) 5 19 – 14

16,528 65,226 5,800 50,014

unsecured: Bank overdrafts 31,120 41,297 – – Revolving credit 15,000 15,000 – –

46,120 56,297 – –

62,648 121,523 5,800 50,014

Long term borrowings Secured: term loans 154,000 123,824 154,000 120,000 Hire purchase payables (Note 30) 33 38 – –

154,033 123,862 154,000 120,000

Total borrowings Bank overdrafts (Note 27) 36,843 50,071 – – Revolving credits 20,000 20,000 – – term loans 159,800 175,257 159,800 170,000 Hire purchase payables (Note 30) 38 57 – 14

216,681 245,385 159,800 170,014 • 123

29. Borrowings (cont’d)

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

Maturities of borrowings (excluding hire purchase payables) Within one year 62,643 121,504 5,800 50,000 more than 1 year and less than 2 years 77,000 53,824 77,000 50,000 more than 2 years and less than 5 years 77,000 70,000 77,000 70,000

216,643 245,328 159,800 170,000

the weighted average effective interest rates at the balance sheet date for borrowings, excluding hire purchase payables, are as follows:

Group Company 2009 2008 2009 2008 % % % %

Bank overdrafts 7.05 8.25 – – term loans 6.91 8.00 6.91 8.00 Revolving credits 5.50 6.60 – –

(a) the bank overdraft facilities are secured by way of:

– certain development properties of the Company as disclosed in Note 14;

– certain investment properties of the Group as disclosed in Note 15;

– certain inventories of the Group as disclosed in Note 23; and

– corporate guarantees from the Company and immediate holding company. Kumpulan Hartanah Selangor berhad • 124 Notes to the Financial Statements 31 December 2009

29. Borrowings (cont’d) (b) Revolving credit is secured by way of first legal charge over certain inventories of the Group as disclosed in Note 23.

(c) Included as term loans are the following:

(i) RM159,800,000 term loan facility granted by a licensed bank, which is secured by way of:

– fixed deposits of RM7,344,000 under lien to CIMB Bank Berhad as disclosed in Note 27;

– charge over the Company’s Escrow Account and Debt Service Reserve Account;

– debenture over the Company’s assets;

– third party debenture on the Company’s subsidiaries’ assets and undertakings;

– assignment of all rights, benefits, contracts, insurance and undertaking of the Company and its subsidiaries;

– third party first legal charge over 13 pieces of land situated at Bandar , Batang Berjuntai owned by the Company;

– assignment of proceeds from the sale of of the following:

– 347 acres land in Mukim Plentong, Johor Bahru;

– 1,359 acres land in MC5 and MC6, Mukim ; and

– corporate guarantee from Kumpulan Perangsang Selangor Berhad.

(ii) the other term loans in the previous year were secured by certain inventories of the Group as disclosed in Note 23. • 125

30. Hire purchase payables

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

Future minimum lease payments: Not later than 1 year 8 25 – 17 later than 1 year and not later than 2 years 39 47 – –

47 72 – 17 less: Future finance charges (9) (15) – (3)

38 57 – 14

Analysis of present value of hire purchase payables: Not later than 1 year 5 19 – 14 later than 1 year and not later than 2 years 33 38 – –

38 57 – 14

In the current year, the hire purchase payable bears interest at the balance sheet date at rate of 4.3% per annum. In the previous year, the hire purchase payables bore interest at the balance sheet date at rates between 2.95% to 4.30% per annum.

31. tRADE payables

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

trade payables 168,924 178,021 18,920 18,920 progress billings in respect of property development cost 94,258 87,188 – 557 provision for future costs to complete 220,688 134,627 2,391 –

483,870 399,836 21,311 19,477

trade payables are non–interest bearing and the normal trade credit terms granted to the Group and the Company range from 30 to 90 days (2008: 30 to 90 days). Kumpulan Hartanah Selangor berhad • 126 Notes to the Financial Statements 31 December 2009

32. other payables

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

Accruals 16,292 15,186 12,230 10,013 Advances received 4,051 5,552 – 1,501 Sundry payables 32,012 43,005 2,547 578

52,355 63,743 14,777 12,092

33. long term payable The long term payable is unsecured, is non–interest bearing and is repayable after 12 months.

34. Deferred tax

G gROUP 2009 2008 RM’000 RM’000

At 1 January 38,576 42,171 Recognised in income statement (Note 10) (6,511) (1,426) Disposal of a subsidiary (Note 20(b)) – (2,169)

At 31 December 32,065 38,576

presented after appropriate offsetting as follows: Deferred tax assets (117) (111) Deferred tax liabilities 32,182 38,687

32,065 38,576 • 127

34. Deferred tax (cont’d) the components and movements of deferred tax liabilities and assets during the financial year prior to offsetting are as follows:

Deferred tax liabilities of the Group:

property, Development plant and properties equipment Inventories Total RM’000 RM’000 RM’000 RM’000

At 1 January 2009 36,541 1,327 819 38,687 Recognised in income statement (6,434) (71) – (6,505)

At 31 December 2009 30,107 1,256 819 32,182

At 1 January 2008 37,802 3,600 852 42,254 Recognised in income statement: – Continuing operations (1,261) (71) (33) (1,365) – Discontinued operations – (33) – (33)

(1,261) (104) (33) (1,398)

Disposal of a subsidiary (Note 20(b)) – (2,169) – (2,169)

At 31 December 2008 36,541 1,327 819 38,687

Deferred tax assets of the Group:

Provisions Total RM’000 RM’000

At 1 January 2009 (111) (111) Recognised in income statement (6) (6)

At 31 December 2009 (117) (117)

At 1 January 2008 (83) (83) Recognised in income statement (28) (28)

At 31 December 2008 (111) (111) Kumpulan Hartanah Selangor berhad • 128 Notes to the Financial Statements 31 December 2009

34. Deferred tax (cont’d) Deferred tax assets have not been recognised on:

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

Unabsorbed capital allowances 2,081 2,033 2,031 1,852 Unused tax losses 78,996 146,674 17,995 11,453 Others 7,858 6,577 2,578 1,304

88,935 155,284 22,604 14,609

the unabsorbed capital allowances and unused tax losses of the Group and the Company are available for offsetting against future taxable profits subject tono substantial change in shareholdings under the Income Tax Act, 1967 and guidelines issued by the tax authority.

35. Share capital

Number of ordinary shares of RM1 each Amount 2009 2008 2009 2008 ’000 ’000 RM’000 RM’000

Authorised At 1 January/ 31 December 1,000,000 1,000,000 1,000,000 1,000,000

Issued and fully paid At 1 January/ 31 December 450,000 450,000 450,000 450,000

36. Share premium

Group/Company 2009 2008 RM’000 RM’000

At 1 January/31December 306,112 306,112 • 129

37. Share option reserve

Group/Company 2009 2008 RM’000 RM’000

At 1 January 626 – Share options granted under KHSB ESOS (Note 8) – 626

At 31 December 626 626

38. Employee benefits Kumpulan Hartanah Selangor Berhad’s Employee Share Option Scheme (“KHSB ESOS”) The Company implemented a KHSB ESOS on 21 December 2005 for a period of 5 years. The ESOS is governed by the by-laws which were approved by the shareholders at the Extraordinary General Meeting on 15 June 2004.

The salient features of the KHSB ESOS are as follows:

(i) the total number of ordinary shares to be issued by the Company under the KHSB ESOS shall not exceed 15% of the total issued and paid-up ordinary shares of the Company, such that not more than 50% of the shares available under the KHSB ESOS is allocated, in aggregate, to directors and senior management.

(ii) Not more than 10% of the shares available under the KHSB ESOS is allocated to any individual director or employee who, either individually or collectively through his/her associates, holds 20% or more in the issued and paid-up capital of the Company.

(iii) Any director (both executive and non-executive directors) of the Group (other than a company within the Group which is dormant) or an employee of the Group who is employed full time and is on the payroll of the Group (other than a company within the Group which is dormant), but does not include employees under probation, are eligible to participate in the scheme, subject to the final decision of the Options Committee.

(iv) the option price under the KHSB ESOS is the average of the mean market quotation of the shares of the Company as quoted in the Daily Official List issued by Bursa Malaysia Securities Berhad, for the five market days preceding the offer date, or the par value of the shares of the Company of RM1, whichever is higher.

(v) the options granted are exercisable from the date of grant and have a contractual option term of five years.

(vi) options granted under the KHSB ESOS carry no dividend or voting rights. Upon exercise of the options, shares issued rank pari passu in all respects with existing ordinary shares of the Company. Kumpulan Hartanah Selangor berhad • 130 Notes to the Financial Statements 31 December 2009

38. Employee benefits (cont’d) Kumpulan Hartanah Selangor Berhad’s Employee Share Option Scheme (“KHSB ESOS”) (cont’d) the terms of share options outstanding as at the end of the financial year are as follows:

As at 31 December 2009

Grant Expiry Exercise |------Number of share options ------| date date price 1.1.2009 Granted terminated Exercised 31.12.2009 RM ’000 ’000 ’000 ’000 ’000

28.12.2005 28.12.2010 1.00 38,085 – (5,117) – 32,968 05.01.2008 28.12.2010 1.00 2,347 – (840) – 1,507

As at 31 December 2008

Grant Expiry Exercise |–------Number of share options ------| date date price 1.1.2008 Granted terminated Exercised 31.12.2008 RM ’000 ’000 ’000 ’000 ’000

28.12.2005 28.12.2010 1.00 38,161 – (76) – 38,085 05.01.2008 28.12.2010 1.00 – 2,662 (315) – 2,347

Fair value of share options granted in the previous year The fair value of share options granted in the previous year was estimated by an external valuer using a binomial model, taking into account the terms and conditions upon which the options were granted. The fair value of share options measured at grant date and the assumptions were as follows:

2008

Fair value of share options at 5 January 2008 (RM): 0.24 Expected volatility (%) 60.00 Expected life (years) 2.18 Risk free rate of interest (%) 3.58 Expected dividend yield (%) –

The expected life of the share options was based on historical data and was not necessarily indicative of exercise patterns that may occur. The expected volatility reflected the assumption that the historical volatility was indicative of future trends, which may also not necessarily be the actual outcome. No other features ofthe option grant were incorporated into the measurement of fair value. • 131

39. Subsidiaries Details of the subsidiaries which are incorporated in Malaysia are as follows:

Proportion of ownership interest Name of subsidiaries Principal activities 2009 2008 % %

Subsidiaries of the Company SAP Holdings Berhad Property development 100 100 Central Spectrum (M) Sdn. Bhd. Property development 76.67 76.67 KHSB Properties Sdn. Bhd. Dormant 60 –

Subsidiaries of SAP Holdings Berhad @ Akademi Kecemerlangan SAP Sdn. Bhd. Dormant 80 80 SUH-Imej Parking Sdn. Bhd. Provision of parking services 51 51 @ SAP Education Sdn. Bhd. Dormant 100 100 SAP Urus Harta Sdn. Bhd. Property management 100 100 SAP Project Consultant Sdn. Bhd. Ceased operation 100 100 SAP Ulu Yam Sdn. Bhd. Property development and property management 100 100 SAP Leisure and Resort Sdn. Bhd. Development of a tourist resort and property investment 100 100 @ SAP Heritage Hotels & Properties Sdn. Bhd. Dormant 100 100 KHSB Properties Sdn. Bhd. Dormant – 100 @ SAP Rawang Development Sdn. Bhd. Dormant 100 100 SAP Air Hitam Properties Sdn. Bhd. Property development 100 100 @ SAP Sepang Development Sdn. Bhd. Dormant 100 100 KHSB Titijaya Sdn. Bhd. Dormant 100 100 @ megatown Corporation Sdn. Bhd. Dormant 100 100 @ SAP Sungai Pusu Development Sdn. Bhd. Dormant 100 100 @ SAP Bengkulen Plantation Sdn. Bhd. Dormant 100 100 Central Holdings Management Services Sdn. Bhd. Dormant 100 100 @ pISB Trading Sdn. Bhd. Ceased operation 100 100 Kumpulan Hartanah Selangor berhad • 132 Notes to the Financial Statements 31 December 2009

39. Subsidiaries (cont’d) Details of the subsidiaries which are incorporated in Malaysia are as follows: (cont’d)

Proportion of ownership interest Name of subsidiaries Principal activities 2009 2008 % %

Subsidiaries of SAP Leisure and Resort Sdn. Bhd. templer Park Golf & Resort Berhad Property development 95 95 perangsang Templer Landscape Sdn. Bhd. Property development, landscaping and golf maintenance work 95 95 templer Park Development Sdn. Bhd. Property development 51 51 templer Park Equestrian Centre Sdn. Bhd. Property development 100 100 SAP Langkawi Development Sdn. Bhd. Dormant 100 100

@ the financial statements of the subsidiaries have been prepared on a break-up basis as they have been submitted for strike-off.

40. Associates Details of associates which are incorporated in Malaysia are as follows:

Proportion of ownership interest Name of of associates Principal activities 2009 2008 % %

Associates of SAP Holdings Berhad * ∆ ulu Yam Golf and Country Club Sdn. Bhd. Development and management of a golf and country club 40 40 * ∆ Beruntung Transport City Sdn. Bhd. Development of logistic park 20 20 * ∆ Waste Water Management (M) Sdn. Bhd. Consultancy services and construction works for water supply, 20 20 reticulation and central coverage system

Associate of Central Spectrum (M) Sdn. Bhd. * pmB Spectrum Sdn. Bhd. Provision of common waste water treatment plant facilities 31 31 and other development projects

* Audited by a firm of auditors other than Ernst & Young.

∆ the financial statements of the associates are not available. The said investments have been fully written down. In view of this, the effect of not equity accounting for investment in associates is not material to the Group. • 133

41. Capital commitments

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

Capital expenditure: Approved but not contracted for purchase of land 14,279 14,279 14,279 14,279

42. Contingent liabilities

G gROUP 2009 2008 RM’000 RM’000

(i) Secured: Foreclosure proceedings taken by a financial institution in respect of a third party charge granted by a subsidiary company on a piece of land 39,676 35,857

(ii) unsecured: other claims filed against the Group 7,852 18,338

(iii) A third party filed an action alleging that a subsidiary’s termination of the joint venture agreement and the agreements ancillary thereto (“JVA”) due to the third party’s breach of four fundamental conditions of the JVA was wrongful and claimed for the transfer of the ownership of the said land to the third party, damages to be assessed and the loss of profits of approximately RM350 million. The subsidiary has filed its defence and made a counter-claim against the third party for the said four fundamental breaches of the JVA by the third party and claiming amongst others, for the return of vacant possession of the said land, damages for the sum totalling to approximately RM399 million and an indemnity against all claims in the foreclosure proceedings as stated in (i) above. Both parties have obtained an ex-parte injunction against each other in respect of the said land. The third party has filed an application to set aside the Ad-Interim injunction obtained in favour of the subsidiary until the disposal of the inter-parte hearing of the Injunction Applications. The hearing of the cases for all interlocutory will be fixed by the court accordingly. Kumpulan Hartanah Selangor berhad • 134 Notes to the Financial Statements 31 December 2009

43. Significant related party transactions (a) In addition to the transactions detailed elsewhere in the financial statements, the Group and the Company had the following transactions with related parties during the financial year:

2009 2008 RM’000 RM’000

Group Construction costs incurred with a subsidiary of penultimate holding company, Kumpulan Darul Ehsan Berhad (“KDEB”), Cekal Tulin Development Sdn. Bhd. 9,071 38,968 Interest charged to penultimate holding company (36) (243) Interest charged to immediate holding company (28) – Management fees charged by KDEB 784 676 Rental charged by immediate holding company, Kumpulan Perangsang Selangor Berhad (“KPS”) 580 594

Company Management fees charged by KDEB 784 676 Rental charged by immediate holding company, KPS 580 594 Interest charged by a subsidiary 941 397 Net dividends from a subsidiary (15,333) (1,193) Management fees from subsidiaries (3,617) (2,505) Project management fees charged to a subsidiary (1,500) – Interest charged to a subsidiary (312) (397) • 135

43. Significant related party transactions (cont’d) (b) Compensation of key management personnel The remuneration of directors and other members of key management during the year was as follows:

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

Salaries, wages and bonuses 2,932 3,748 2,508 3,028 Contribution to defined contribution plans 341 428 303 379 Other employee benefit 276 110 149 103

3,549 4,286 2,960 3,510

Included in the total key management personnel are:

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

Directors’ remuneration (Note 9) 1,367 1,608 1,110 1,202

Executive directors of the Group and the Company and other members of key management have been granted the following number of options under KHSB ESOS:

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

At 1 January 22,044 21,417 20,694 20,067 Granted – 627 – 627 Terminated (3,100) – (3,100) –

At 31 December 18,944 22,044 17,594 20,694

The share options were granted on the same terms and conditions as those offered to other employees of the Company as disclosed in Note 38. Kumpulan Hartanah Selangor berhad • 136 Notes to the Financial Statements 31 December 2009

44. Significant events (i) Memorandum of Agreement in relation to a specific grant provided by the ultimate holding corporation, Menteri Besar Incorporated to the Company On 30 December 2009, the Company had entered into the Memorandum of Agreement (“MOA”) with Menteri Besar Incorporated (“MBI”) on behalf of the State Darul Ehsan (“State”) whereby MBI has agreed to provide the Company a specific grant for the principal amount of RM115,101,407 (“Grant”).

The salient terms of the MOA are as follows:

(a) mBI shall distribute the Grant to the Company on behalf of the State in order to ease the Company’s burden. The Grant may include the transfer and/or alienation of State owned lands at no cost to the Company.

(b) the Company may forward all claims made by the State to MBI and MBI undertakes to immediately pay on behalf of the Company the applicable sums provided always the payments made forming the Grant collectively do not exceed the value of the Grant.

(c) For purposes of the MOA, a waiver by the State of:

(i) any land revenue, being sum due or which shall become due, to the State on account of any premium or rent payable in respect of alienated land, or under any license or permit relating to land, and fees of any kind chargeable under the National Land Code, 1965 (“Land Code”) (“Land Revenue”); or

(ii) any rent, being annual sum payable to the State by way of rent, any other annual payment due to the State which by any written law is to be collected as if it were rent or Land Revenue and any fee due to the State in respect of arrears of rent by virtue of rules under the Land Code;

procured by MBI for the benefit of the Company shall constitute as MBI discharging its obligations contained in the MOA and shall form part of the Grant.

(d) the Grant shall not constitute a loan by MBI to the Company and there shall be no repayment obligations on the part of the Company.

(e) the MOA shall continue in full force and effect until the complete satisfaction of the Grant in favour of the Company and/or its subsidiaries.

(f) the MOA is intended to have legal effect and bind the parties to the extent and in relation to the performance of their respective responsibilities, obligations and undertakings as set out in the MOA.

(ii) Transfer of a subsidiary, KHSB Properties Sdn. Bhd. On 2 November 2009, 500,000 ordinary shares of RM1 each representing the entire issued and paid up share capital of KHSB Properties Sdn. Bhd. held by SAP Holdings Berhad, a subsidiary of the Company had been transferred to the Company for a cash consideration of RM1.

(iii) Proposed disposal, proposed arrangement and proposed joint venture On 9 November 2009, the Company had entered into the following agreements with Kumpulan Perangsang Selangor Berhad (“KPS”):

(a) a share sale agreement for the disposal of 40% equity interest in KHSB Properties Sdn. Bhd. (“KHSB Properties”), comprising of 200,000 ordinary shares of RM1 each to KPS, for a consideration of RM1.

(b) a sub-lease agreement whereby KPS has agreed to sub-lease all its rights to KHSB Properties to undertake mining operations on the land held under Lot 8527, Mukim Tanjung Duabelas, Daerah Kuala Langat, Negeri Selangor Darul Ehsan (“Mining Operation”).

(c) a joint venture agreement for the purpose of KHSB Properties to undertake the Mining Operation. • 137

44. Significant events (cont’d) (iv) Assignment of debt On 3 November 2009, the Company had entered into the Assignment of Debt Agreement (“ADA”) with State Government of Selangor Darul Ehsan (“State”) and Talam Corporation Berhad (“Talam”) whereas:

(a) talam is indebted to the Company and/or its subsidiaries for the principal amount of RM115,101,407 (“Debt”) which is evidenced by a confirmation of debt dated 3 November 2009.

(b) the Company wishes to grant, assign, transfer and set over unto the State its entire right, title and interest in and to the Debt upon the terms and conditions contained in the ADA.

Therefore the ADA witnesses that in consideration of the premises and mutual promises, covenants, conditions, representations and warranties hereinafter contained and the sum of RM10 paid by the State to the Company, the receipt of which is acknowledged, and subject to the terms and conditions as set out in the ADA.

(v) Significant sales during the year (a) Sale of land to Inai Kiara Sdn. Bhd. (“IKSB”) On 22 July 2009, a subsidiary of the Company, Central Spectrum (M) Sdn. Bhd. had entered into a Sale & Purchase Agreement (“SPA”) with IKSB to sell the industrial lot, on part of PN7942, Lot No.74082, Section 11, Pulau Indah, Negeri Selangor Darul Ehsan measuring approximately net area of 78.55 acres for a total consideration of RM18,819,983.

(b) Sale of land to Summit Streams Sdn. Bhd. (“SSSB”) On 31 July 2009, Yayasan Selangor had entered into a SPA on behalf of SAP Ulu Yam Sdn. Bhd., an indirect subsidiary of the Company with SSSB to sell a piece of leasehold land held under part of HS(D) 4104, PT No, 2731, Mukim Hulu Yam, Daerah Kuala Selangor, Negeri Selangor Darul Ehsan measuring approximately 72.366 hectares for a consideration of RM4,827,600.

(c) Sale of land to B&G Capital Resources Berhad (“B&G”) On 10 November 2009, Templer Park Golf & Resort Berhad, an indirect subsidiary of the Company had entered into a SPA with B&G to sell a piece of land known as Phase 3D and 2C in Pekan Templer, Daerah Gombak, Negeri Selangor Darul Ehsan measuring approximately 5.19 acres for a total consideration of RM4,628,000.

On 10 November 2009, Templer Park Equestrian Centre Sdn. Bhd., an indirect subsidiary of the Company had entered into a SPA with B&G to sell a piece of land known as Phase 4D in Pekan Templer, Daerah Gombak, Negeri Selangor Darul Ehsan measuring approximately 4.66 acres for a total consideration of RM7,971,000.

(d) Sale of land to Vibrant Domain Sdn. Bhd. (“VDSB”) On 7 July 2009, SAP Holdings Berhad (“SAP”), a subsidiary of the Company had entered into a SPA with VDSB to sell a piece of land held under part of PN 24391, Lot No. 22527, Bandar , Daerah Gombak, Negeri Selangor Darul Ehsan measuring 78.8 acres (Plot 1) for a total consideration of RM4,176,400.

The SPA is conditional upon SAP obtaining the consent to transfer and issuance of the Individual Subdivided Documents of Title from the relevant State Authority. Kumpulan Hartanah Selangor berhad • 138 Notes to the Financial Statements 31 December 2009

44. Significant events (cont’d) (v) Significant sales during the year (cont’d) (e) Sale of land to Topaz Best Sdn. Bhd. (“TBSB”) On 3 August 2009, SAP, a subsidiary of the Company had entered into a SPA with TBSB to sell a piece of land held under part of PN 24391, Lot No. 22527, , Daerah Gombak, Negeri Selangor Darul Ehsan measuring 77.8 acres (Plot 2) for a total consideration of RM4,123,400.

The SPA is conditional upon SAP obtaining the consent to transfer and the issuance of Individual Subdivided Documents of Title from the relevant State Authority.

45. Subsequent event On 15 March 2010, SAP, a subsidiary of the Company had entered into a SPA with Kumpulan Perangsang Selangor Berhad, the immediate holding company of the Company for the disposal of a three storey office building with a basement car park known as Wisma SAP held under HSM 16799, 16800, 16801 & 16802 and PT 28955, 28956, 28957 & 28958 respectively, located at Bandar Baru , Mukim Batu, Negeri Selangor Darul Ehsan on an “as is where is” basis for a total consideration of RM7 million.

46. Financial instruments (a) Financial risk management objectives and policies The Group’s financial risk management policy seeks to ensure that adequate financial resources are available for the development of the Group’s businesses whilst managing its interest rate risks, liquidity risk and credit risk. The Board reviews and agrees policies for managing each of these risks and they are summarised below. It is, and has been throughout the year under review, the Group’s policy that no trading in derivative financial instruments shall be undertaken.

(b) Interest rate risks Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates.Fairvalue interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates. As the Group has no significant interest- bearing financial assets, the Group’s income and operating cash flows are substantially independent of changes in market interest rates. The Group’s interest- bearing financial assets are mainly short term in nature and have been mostly placed in fixed deposits or occasionally, in short term commercial papers.

The Group’s interest rate risk arises primarily from interest-bearing borrowings. Borrowings at floating rates expose the Group to cash flow interest rate risk. The information on maturity dates and effective interest rates of financial assets and liabilities are disclosed in their respective notes.

(c) Credit risk The Group’s credit risk is primarily attributable to trade receivables. The Group trades only with recognised and creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis and the Group’s exposure to bad debts is not significant. Since the Group trades only with recognised and creditworthy third parties, there is no requirement for collateral.

(d) Liquidity risk The Group manages its operating cash flows and the availability of funding so as to ensure that funding needs are met. As part of its overall liquidity management, the Group maintains sufficient levels of cash or cash convertible investments to meet its working capital requirements. In addition, the Group strives to maintain available banking facilities at a reasonable level to its overall debt position. • 139

46. Financial instruments (cont’d) (e) Fair values The carrying amounts of financial assets and liabilities of the Group and of the Company at the balance sheet date approximated their fair values except for the followings:

Group Company Carrying Fair Carrying Fair Note amount value amount value RM’000 RM’000 RM’000 RM’000

Financial assets At 31 December 2009 Other investments 22 910 * – –

At 31 December 2008 Other investments 22 1,175 * – –

Financial liabilities At 31 December 2009 Term loans 29 154,000 126,268 154,000 126,268 Hire purchase payable 30 33 24 – – Long term payable 33 26,245 20,662 – –

At 31 December 2008 Term loans 29 123,824 109,381 120,000 105,850 Hire purchase payables 30 38 30 – – Long term payable 33 36,547 33,746 – –

* the directors are of the view that it is not practicable within the constraints of timeliness and cost to estimate reliably the fair values of unquoted investments. Kumpulan Hartanah Selangor berhad • 140 Notes to the Financial Statements 31 December 2009

47. Segmental information The Group adopts business segment analysis as its primary reporting format. The Group does not have a secondary reporting format as the Group operates only in Malaysia.

In the current year, the Group’s business segment is only limited to property development and management.

Property development and management Elimination Total RM’000 RM’000 RM’000

31 December 2009 Revenue Sales to external customers 125,123 – 125,123 Others 25,561 (25,561) –

Total revenue 150,684 (25,561) 125,123

Results Segment results 34,915 – 34,915 Finance costs (15,858)

Profit before tax 19,057 Income tax and zakat 8,053

Profit for the year 27,110

Assets Segment assets 1,322,653 – 1,322,653 Investment in associates 2,000 – 2,000

Total assets 1,324,653 • 141

47. Segmental information (cont’d)

Property development and management Elimination Total RM’000 RM’000 RM’000

31 December 2009 (cont’d) Liabilities Segment liabilities 840,623 – 840,623

Total liabilities 840,623

Other segment information Capital expenditure 417 – 417 Depreciation 981 – 981 Amortisation 8 – 8 Impairment losses recognised in profit and loss 72,979 – 72,979 Other significant non-cash expense: – provisions 46,060 – 46,060 Kumpulan Hartanah Selangor berhad • 142 Notes to the Financial Statements 31 December 2009

47. Segmental information (cont’d)

|------Continuing operations ------| Discontinued Property operations development Recreational and facilities and Total management Elimination Total hospitality operations RM’000 RM’000 RM’000 RM’000 RM’000

31 December 2008 Revenue Sales to external customers 92,358 – 92,358 3,771 96,129 Others 4,118 (4,118) – – –

Total revenue 96,476 (4,118) 92,358 3,771 96,129

Results Segment results (13,845) – (13,845) 263 (13,582) Finance costs (21,538) – (21,538)

(Loss)/profit before tax (35,383) 263 (35,120) Income tax and zakat 62 33 95

(Loss)/profit for the year (35,321) 296 (35,025) • 143

47. Segmental information (cont’d)

|------Continuing operations ------| Discontinued Property operations development Recreational and facilities and Total management Elimination Total hospitality operations RM’000 RM’000 RM’000 RM’000 RM’000

31 December 2008 (cont’d) Assets Segment assets 1,273,703 – 1,273,703 – 1,273,703 Investment in associates 2,000 – 2,000 – 2,000

Total assets 1,275,703 – 1,275,703

Liabilities Segment liabilities 814,316 – 814,316 – 814,316

Total liabilities 814,316 – 814,316

Other segment information Capital expenditure 512 – 512 872 1,384 Depreciation 1,186 – 1,186 778 1,964 Amortisation 8 – 8 – 8 Impairment losses recognised in profit and loss 27,873 – 27,873 – 27,873 Other significant non-cash expense: – Provisions 65,823 – 65,823 – 65,823 Kumpulan Hartanah Selangor berhad • 144 List of Properties Senarai Hartanah

Net Book Value L land Area tenure/Lease given by A/C Acres Expiry (Years) Nilai Buku Bersih location Title Particulars Keluasan Existing Use Tempoh/Tamat Given By A/C No. Lokasi Hakmilik Tanah Ekar Kegunaan Semasa Pegangan (Tahun) (RM'000)

1. mukim Batu PT 28955 - PT 28958, 0.30 4 units Leasehold 5,252 Daerah Gombak PT 28953 - PT 28954 (3 1/2 storey office) 99/2091 2 units (3 storey office)

2. mukim Rawang Lot 609 (Part) 1.52 Building Land Leasehold 135 Daerah Gombak 99/2094

3. mukim Batu PT 14406 26.62 Building Land Leasehold 591 Daerah Gombak 99/2081

4. mukim Kundang PT 2106 77.00 Agriculture Land Leasehold 199 Daerah Gombak 99/2104

5. mukim Labu Lot 1384 - Lot 1465 & 3.50 Commercial Land Leasehold 4,667 Daerah Sepang Lot 1466 - Lot 1485 99/2096

6. mukim Labu Lot 1490 2.15 Building Land Leasehold 3,114 Daerah Sepang 99/2096

7. mukim PT 10450 (Part) 122.00 Building Land Leasehold 16,785 Daerah Hulu Selangor 99/2096

8. mukim Hulu Yam PT 2721 - PT 2723 302.49 Agriculture Land Leasehold 6,005 Daerah Hulu Selangor 99/2093

9. mukim Hulu Yam PT 2727, PT 2728 33.68 Building Land Leasehold 903 Daerah Ulu Selangor 99/2093

10. mukim PT 2377, PT 2531 0.58 Building Land Leasehold 405 Daerah Kuala Selangor 99/2095 • 145

Net Book Value L land Area tenure/Lease given by A/C Acres Expiry (Years) Nilai Buku Bersih location Title Particulars Keluasan Existing Use Tempoh/Tamat Given By A/C No. Lokasi Hakmilik Tanah Ekar Kegunaan Semasa Pegangan (Tahun) (RM’000)

11. mukim Kuala Selangor PT 620,PT 621, PT 624, PT 626 5.43 Building Land Leasehold 1,062 Daerah Kuala Selangor 99/2098

12. mukim Klang PT 51675, PT 51676, PT 51679, 46.48 Building Land Leasehold 30,765 Daerah Klang PT 52159, PT 52409, PT 52540, Industry Land 99/2102 P pt 52807, PT 52963, PT 53039 P pt 53051, PT 53158 P pt 52162 - PT 52214, P pt 52226 - PT 52232, P pt 52233 - PT 52246, P pt 52306 - PT 52313, P pt 52330 - PT 52337 P pt 52805

13. Bandar Port Dickson PN 2477 / M2/2/148 & 0.05 Apartment Leasehold 447 Daerah Port Dickson PN 2477 / M1/1/8/89 99/2087

14. mukim Plentong PT 171000-171002 332.69 Agriculture Land Freehold 48,883 Daerah Johor Bahru

15. mukim Dengkil PT 32546, PT 41836 100.00 Agriculture Land Leasehold 957 Daerah Sepang 99/2104

16. mukim Dengkil PT 32611 - PT 32614 46.63 Building Land Leasehold 446 Daerah Sepang 99/2104

17. mukim Kuala pt 2687 (Part) 191.00 Building Land Leasehold 24,714 Daerah Ulu Selangor 99/2107 Kumpulan Hartanah Selangor berhad • 146 List of Properties • Senarai Hartanah

Net Book Value L land Area tenure/Lease given by A/C Acres Expiry (Years) Nilai Buku Bersih location Title Particulars Keluasan Existing Use Tempoh/Tamat Given By A/C No. Lokasi Hakmilik Tanah Ekar Kegunaan Semasa Pegangan (Tahun) (RM’000)

18. phase 1A, Section 8 64352-67630 1.38 acres vacant Commercial Leasehold 213 pulau Indah Industrial Park 64165-67448 (5591.65 sq.m) 99/2097 pulau Indah Land for development for menara Indah Point

19. phase 2C, Section 4, 7937-74076 411.77 acres vacant Industrial Leasehold 82,625 pulau Indah Industrial Park 7936-74077 land under 99/2097 pulau Indah development

20. Section 1, HS(D) 70913-PT 90870 35.70 acres vacant Industrial Leasehold 33,893 pulau Indah Industrial Park HS(D) 70914-PT 90871 216.07 acres land for 99/2097 pulau Indah development

21. Section 2, PN 7935-74078 281.14 acres vacant Industrial Leasehold 71,082 pulau Indah Industrial Park pN 7934-74079 295.52 acres land for 99/2097 pulau Indah development

22. Section 3, PN 7931-Lot 74083 217.35acres vacant Industrial Leasehold 27,349 pulau Indah Industrial Park land for 99/2097 pulau Indah development

23. Section 9, PN 7928-Lot 74086 32.66 acres vacant Land for Leasehold 28,442 pulau Indah Industrial Park pN 7929-Lot 7408 85.14 acres development 99/2097 pulau Indah PN 7930-Lot 74084 105.77 acres (Commercial & Institution)

24. Section 11 PN7926-Lot 74087 187.91 acres vacant Land for Leasehold 58,172 pulau Indah Industrial Park pN7925-Lot 74988 233.02 acres development 99/2097 (Residential) • 147

Analysis of Shareholdings as at 30 April 2010 Analisa Pegangan Saham pada 30 April 2010

Authorised Share Capital / Modal Saham dibenar : RM1,000,000,000.00 Issued and Paid–up Share Capital / Modal Saham diterbitkan dan dibayar : RM450,000,000.00 Class of Shares / Kelas Saham : ordinary Shares of RM1.00 Each / Saham Biasa RM1.00 Sesaham Voting Rights / Hak Mengundi : one Vote per Ordinary Share / Satu Undian untuk Satu Saham Biasa

Analysis by Size of Shareholdings / Analisa Menurut Saiz Pegangan

Size of Shareholdings / No. of Shareholders / % of Shareholders / No. of Shares Held / % of Shareholdings / Bilangan Saham Saiz Pegangan Bilangan Pemegang Saham % Pemegang Saham Yang Dipegang % Pegangan

Less than 100 / 666 7.59 30,144 0.01 kurang dari 100 100 – 1,000 3,190 36.38 1,291,769 0.29 1,001 – 10,000 3,158 36.01 17,300,885 3.84 10,001 – 100,000 1,606 18.31 49,935,304 11.10 100,001 to less than 5% / 147 1.68 70,942,425 15.76 100,001 ke kurang dari 5% 5% and above / 3 0.03 310,499,473 69.00 5% dan ke atas

Total / Jumlah 8,770 100.00 450,000,000 100.00

List of Substantial Shareholders (5% and above) / Senarai Pemegang Saham Utama (5% dan ke atas)

No. Names / Shareholdings / Nama Pegangan Saham Direct / % Indirect / % Langsung Tidak Langsung

1. Kumpulan Perangsang Selangor Berhad 254,562,576 56.57 – – Shares held in the name of:- a) KPSB Account – 114,562,576 b) Amsec Nominees (Tempatan) Sdn Bhd – 70,000,000 c) Malaysia Nominees (Tempatan) Sdn Bhd – 40,000,000 d) EB Nominees (Tempatan) Sdn Bhd – 30,000,00

2. tabung Warisan Negeri Selangor 32,056,000 7.12 – – 3. perbadanan Kemajuan Negeri Selangor 23,880,897 5.31 – – Kumpulan Hartanah Selangor berhad • 148 Analysis of Shareholdings as at 30 April 2010 • Analisa Pegangan Saham pada 30 April 2010

List of Thirty (30) Largest securities Account Holders Senarai Tiga Puluh (30) Akaun Pemegang Saham Terbesar (Without aggregating the securities from different securities accounts belonging to the same person)

No. Names / Shareholdings / % Nama Pegangan Saham

1. Kumpulan Perangsang Selangor Berhad 114,562,576 25.46

2. Amsec Nominees (Tempatan) Sdn Bhd 70,000,000 15.56 a/c Kumpulan Perangsang Selangor Berhad

3. malaysia Nominees (Tempatan) Sdn Bhd 40,000,000 8.89 a/c Kumpulan Perangsang Selangor Berhad (01-00058-000)

4. tabung Warisan Negeri Selangor 32,056,000 7.12

5. EB Nominees (Tempatan) Sdn Bhd 30,000,000 6.67 a/c Kumpulan Perangsang Selangor Berhad (SHA)

6. perbadanan Kemajuan Negeri Selangor 23,837,697 5.30

7. tA Nominees (Tempatan) Sdn Bhd 16,334,000 3.63 a/c Chan Ah Chye @ Chan Chong Yoon

8. RHB Capital Nominees (Tempatan) Sdn Bhd 7,829,600 1.74 a/c Noor Azman @ Noor Hizam b Mohd Nurdin (CEB)

9. Alliancegroup Nominees (Tempatan) Sdn Bhd 2,800,000 0.62 a/c Noor Azman @ Noor Hizam b Mohd Nurdin (8037673)

10. RHB Capital Nominees (Tempatan) Sdn Bhd 1,953,200 0.43 a/c Norazlan bin Mohamad Nordin (CEB)

11. Cheah See Han 1,761,200 0.39

12. RHB Capital Nominees (Tempatan) Sdn Bhd 1,500,000 0.33 a/c Nor Hayati binti Abd Malik (1181002)

13. tA Nominees (Tempatan) Sdn Bhd 1,394,400 0.31 a/c Gurjeet Singh A/L Chanan Singh

14. Cimsec Nominees (Tempatan) Sdn Bhd 1,364,600 0.30 a/c Lim Chow Lee (MM 0741) • 149

List of Thirty (30) Largest securities Account Holders Senarai Tiga Puluh (30) Akaun Pemegang Saham Terbesar (Without aggregating the securities from different securities accounts belonging to the same person)

No. Names / Shareholdings / % Nama Pegangan Saham

15. tan Kok Sing 1,030,000 0.23

16. tung Ah Kiong 822,100 0.18

17. Cimsec Nominees (Tempatan) Sdn Bhd 802,500 0.18 a/c Mak Ngia Ngia @ Mak Yoke Lum (MM0749)

18. Sultan Idris Shah 780,000 0.17

19. EB Nominees (Tempatan) Sdn Bhd 776,500 0.17 a/c Chan Ah Chye @ Chan Chong Yoon (BB)

20. tan Kok Sing 750,000 0.17

21. Selangor Industrial Corporation Sdn Bhd 735,700 0.16

22. Citigroup Nominees (Asing) Sdn Bhd 708,600 0.16 a/c DFA Emerging Markets Small Cap Series

23. Worldwide Holdings Berhad 649,000 0.14

24. mayban Nominees (Tempatan) Sdn Bhd 598,800 0.13 a/c Kek Lian Lye

25. lim Beng Kit 550,000 0.12

26. Citigroup Nominees (Asing) Sdn Bhd 520,000 0.12 a/c Dimensional Emerging Markets Value Fund

27. leow Chai Quin-Kristel 500,000 0.11

28. tA Nominees (Tempatan) Sdn Bhd 490,500 0.11 a/c Intelbest Corporation Sdn Bhd

29. public Nominees (Tempatan) Sdn Bhd 472,100 0.10 a/c Tung Ah Kiong (E-KLG)

30. lee Suay Nee 464,000 0.10 Kumpulan Hartanah Selangor berhad • 150 Analysis of Shareholdings as at 30 April 2010 • Analisa Pegangan Saham pada 30 April 2010

List of Directors’ Shareholdings Senarai Pegangan Saham Para Pengarah

Names / NRIC No. / Nationality / No. of Shares Held / Nama No. Kad Pengenalan Warganegara Jumlah Pegangan Saham Direct / % Indirect / % Langsung Tidak Langsung

Dato’ Haji Abd. Karim bin Munisar 500608-02-5531 Malaysian – – – – Dato’ Azman bin Mahmood 510606-03-5081 Malaysian – – – – Dato’ Azlan bin Hashim 410906-10-5119 Malaysian – – – – Wong Yien Kim 540103-10-5049 Malaysian – – – – Lee Siew Choong 420607-08-5639 Malaysian – – – – Azman bin Marzuki 650318-02-5289 Malaysian – – – –

Total / Jumlah – – – – PROXY FORM/BORANG PROKSI Proxy Form for the Eight Annual General Meeting / Borang Proksi untuk Mesyuarat Agung Tahunan Kelapan Number of Ordinary Shares Held / KUMPULAN HARTANAH SELANGOR BERHAD (559747-W) Jumlah Saham Biasa Dipegang (Incorporated in Malaysia under the Companies Act, 1965)

I/We / Saya/Kami *(full name in capital letters / nama penuh dengan huruf besar)

NRIC/Passport/Company No. / No. Kad Pengenalan/Paspot/Syarikat of / yang beralamat di *(full address / alamat penuh) being a member or members of / sebagai pemegang saham atau pemegang-pemegang saham Kumpulan Hartanah Selangor Berhad (“the Company”)/(“Syarikat”), hereby appoint / dengan ini melantik *(full name / nama penuh) of / yang beralamat di *(full address / alamat penuh) or failing him, the Chairman of the Meeting as my/our proxy to vote for me/us at the Eighth Annual General Meeting of the Company to be held at Kayangan Ballroom, Quality Hotel Shah Alam, Plaza Perangsang, Persiaran Perbandaran, 40000 Shah Alam, Selangor Darul Ehsan on Thursday, 17 June 2010 at 10:00 a.m. and/or at any adjournment thereof. My/Our proxy is to vote on the Resolutions as indicated by an ‘X’ in the appropriate spaces below. If this proxy form is returned without any indication as to how the proxy shall vote, the proxy shall vote as he/she thinks fit. atau sekiranya beliau tidak dapat hadir, Pengerusi Mesyuarat sebagai proksi saya/kami untuk mengundi bagi pihak saya/kami di Mesyuarat Agung Tahunan Kelapan Syarikat yang akan diadakan di Kayangan Ballroom, Quality Hotel Shah Alam, Plaza Perangsang, Persiaran Perbandaran, 40000 Shah Alam, Selangor Darul Ehsan pada hari Khamis, 17 Jun 2010, pada jam 10:00 pagi dan/atau pada sebarang penangguhannya. Proksi saya/kami akan mengundi Resolusi-resolusi yang telah ditentukan dengan tanda ’X’ di ruang yang bersesuaian di bawah. Sekiranya borang proksi ini dikembalikan tanpa apa-apa penentuan mengenai cara pengundian, proksi akan mengambil tindakan yang sewajarnya untuk mengundi atau tidak.

Resolution / Resolusi 1 2 3 4 5

For / Menyokong

Against / Menentang

Dated this/Bertarikh Signature of Shareholder/Common Seal Tandatangan Pemegang Saham/Cop Mohor Important Notes/Nota-nota penting: 1. Every member is entitled to appoint a proxy or in the case of a corporation, to appoint a representative to attend and vote in his place. A proxy need not be a member of the Company. Setiap pemegang saham berhak untuk melantik seorang proksi atau jika sebuah syarikat, berhak melantik wakil untuk menghadiri dan mengundi bagi pihaknya. Proksi tersebut tidak semestinya pemegang saham Syarikat. 2. the Proxy Form must be signed by the appointer or his attorney duly authorised in writing or if the appointer is a corporation, either under seal or under the hand of an officer or attorney duly authorised. In the case of joint holdings, the signature of the first named holder is sufficient. Borang Proksi mestilah ditandatangani oleh pelantik atau peguam yang telah diberi kuasa secara bertulis atau sekiranya pelantik adalah sebuah syarikat, mestilah dengan memeterai atau ditandatangani oleh pegawai atau peguam yang telah diberi kuasa. Dalam hal pegangan bersama, tandatangan pemegang pertama adalah mencukupi. 3. If the Proxy Form is returned without indication as to how the proxy shall vote, the proxy shall vote or abstain as he thinks fit. Sekiranya Borang Proksi dikembalikan tanpa menjelaskan cara pengundian, proksi akan mengundi atau tidak mengundi menurut cara yang difikirkannya sesuai. 4. If the name is not inserted in the space for the name of your proxy, the Chairman of the Meeting will act as your proxy. Sekiranya tiada nama tercatit di dalam ruang nama proksi anda, Pengerusi Mesyuarat akan bertindak sebagai proksi anda. 5. All Proxy Forms should be deposited at the Company's Share Registrar’s office; Symphony Share Registrars Sdn Bhd, Level 6, Symphony House, Pusat Dangangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time fixed for holding the meeting or any adjournment thereof or in the case of poll, not less than twenty four (24) hours beforethetime appointed for the taking of the poll. Semua Borang Proksi mestilah dihantar ke pejabat Pendaftar Saham Syarikat; Symphony Share Registrars Sdn Bhd, Level 6, Symphony House, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan, tidak kurang dari empat puluh lapan (48) jam sebelum masa yang ditetapkan untuk mengadakan mesyuarat tersebut atau pada sebarang penangguhannya atau sekiranya dalam hal pengundian, tidak kurang dari dua puluh empat (24) jam sebelum masa yang ditetapkan untuk mengundi. * fold here along dotted line/lipat di sini

* fold here along dotted line/lipat di sini

Stamp

SYMPHONY SHARE REGISTRARS SDN BHD Level 6, Symphony House Pusat Dagangan Dana 1 Jalan PJU 1A/46 47301 Petaling Jaya Selangor Darul Ehsan

* fold here along dotted line/lipat di sini