ANNUAL REPORT 2011

Professional Passionate

Caring

Innovative Trustworthy

BUILDING VALUE TOGETHER 49TH ANNUAL GENERAL MEETING

DATE 27 June 2012, Wednesday

TIME 10.00 a.m.

VENUE Ballroom 1, 1st Floor Sime Darby Convention Centre 1A, Jalan Bukit Kiara 1 60000, Kuala Lumpur

BUILDING VALUE TOGETHER

For Faber, Building Value Together means taking pride in partnering with our stakeholders to create sustainable value based on mutually-benefi cial long term relationships.

Wherever we operate, and in all our business relationships, we adopt a collaborative approach, providing comprehensive and innovative services backed by extensive resources and robust systems and processes.

Our business commitments are built on the strengths of our people, who share our core values of being Professional, Passionate, Caring, Innovative, and Trustworthy.

CORE VALUES

Professional We constantly strive for customers’ service excellence in ways that will make us their No.1 choice.

Passionate We dedicate all our energy and aspiration to exceeding our customers’ needs and expectations.

Caring We are committed to creating sustainable value for all stakeholders.

Innovative We are relentless in our determination to continually enhance the way we operate.

Trustworthy We practice transparency, integrity and the highest ethical standards in everything we do. CONTENTS

ABOUT FABER KEY INITIATIVES 2 2011 Key Highlights 51 Human Capital Development 3 Our Vision, Mission and Core Values 52 Building Value at Our Workplace 4 Company Profi le 56 Sustaining Stakeholders’ Value 7 Integrated Facilities Management 59 Our Focus on Quality Services 65 Our Commitment to Safety, Health & Environment STRIVING FOR GROWTH 68 Caring for Our Community 8 Chairman’s Statement 12 Operations Review TRANSPARENCY • Integrated Facilities Management 72 Statement on 17 Operations Review Corporate Governance • Property Development 90 Statement on Internal Control 95 Audit and Risk Committee Report PERFORMANCE REVIEW 104 Statement of Directors’ 20 5-Year Group Financial Highlights Responsibility in Respect of 21 5-Year Group Financial Summary Audited Financial Statements 23 2011 Group Quarterly Performance 24 Group Statement of Value Added FINANCIAL REVIEW 25 2011 Group Manpower Summary 105 Financial Statements 27 Share Price Movement 28 Group Financial Calendar ACCOUNTABILITY 218 Analysis of Shareholdings CORPORATE FRAMEWORK 221 Properties Held by the Group 30 Corporate Structure 223 Additional Compliance Information 31 Organisation Chart 224 Recurrent Related 32 Corporate Information Party Transactions 34 Group Milestones 228 Notice of the 36 Our Achievements 49th Annual General Meeting 38 Calendar of Events 233 Statement Accompanying 40 Media Highlights Notice of the 49th Annual General Meeting LEADERSHIP 42 Board of Directors’ Profi le • PROXY FORM 48 Group Management Profi le • GROUP DIRECTORY 50 Heads of Overseas Subsidiaries 50 Senior Management Team 2 ABOUT FABER

2011 KEY HIGHLIGHTS

Shareholders’ Funds increased by Dividend Payout of Return On Equity of 8.7% to 13.5% RM21.8 RM488.0 million million

Total Assets increased by Net Tangible Assets improved by 11.5% to 11.4% to RM1.1 127 sen billion per share

Launched Talent Pool of over RM225.7 7,400 million employees worth of high-end property projects

FABER GROUP BERHAD ANNUAL REPORT 2011 3 ABOUT FABER

OUR VISION, MISSION AND CORE VALUES

Our Vision • to be the no. 1 partner in Integrated Facilities Management • to be a niche Property Developer Our Mission • to continuously raise the standards in Integrated Facilities Our Management Core Values • to deliver valued realty

Professional

Passionate

Caring

Innovative

Trustworthy

FABER GROUP BERHAD ANNUAL REPORT 2011 4 ABOUT FABER

COMPANY PROFILE

Cleansing Services.

Biomedical Linen and Engineering Laundry Maintenance Services. Services.

Faber Group Berhad (“Faber” or “the Group”) is listed on the Main BEMS Market of Bursa Malaysia Securities Berhad under the Trading/ • Maintains more than 76,000 units of BEMS assets valued at RM1.7 billion. Services Sector. From a Malaysian hospitality concern founded 49 • Maintains 684 different types of years ago, Faber has, following a successful restructuring exercise therapeutic, diagnostic and laboratory and strategic initiatives, grown into a leading player in the Integrated equipment. Facilities Management (“IFM”) and Property Development sectors. CLS • Cleans more than 3.64 million sq. meters of fl oor area daily. Today, Faber is one of the nation’s largest INTEGRATED FACILITIES MANAGEMENT • Invested RM5.6 million in cleansing companies providing IFM for Hospital Support (CONCESSION) equipment. Services, ranging from Facilities Engineering Malaysia Maintenance Services (“FEMS”), Biomedical Faber Medi-Serve Sdn Bhd LLS Engineering Maintenance Services (“BEMS”) • Purchased RM150.0 million worth of and Cleansing Services (“CLS”) to Linen and Serves 81 Government hospitals (including linen since 1997. Laundry Services (“LLS”) and Clinical Waste two laboratories) in 6 states: Perak, Kedah, • Invested more than RM84.0 million in Management Services (“CWMS”). Penang, Perlis, Sabah and Sarawak. laundry plants and equipment.

Faber also provides professionally managed Undertakes CWMS for more than 820 CWMS IFM services, maximising asset lifespan, private clinics and private hospitals • Invested more than RM66.7 million in functionality and reliability, in other sectors, throughout the country. clinical waste incineration plants and local and international. equipment. FEMS • Undertakes about 730,000 scheduled • Maintains more than 172,000 units of pick-ups each year. FEMS assets valued at RM1.78 billion.

FABER GROUP BERHAD ANNUAL REPORT 2011 5 ABOUT FABER

Mercu UEM Kuala Lumpur.

Rajiv Gandhi International Airport.

INTEGRATED FACILITIES MANAGEMENT India United Arab Emirates (NON-CONCESSION) Faber Sindoori Management Services Faber L.L.C. Malaysia Private Limited Faber Facilities Sdn Bhd Provides FEMS for Sheikh Khalifa Medical A joint venture with Apollo Sindoori Hotels City and Al-Rahbah Hospital under the Maintains 13 properties comprising 8 Limited. auspices of the General Health Authority in commercial properties and 5 residential the Emirate of Abu Dhabi. properties including: Provides CLS and BEMS to Apollo Group of Hospitals. • Commercial properties: Kota Iskandar in Johor; Menara Undertakes FEMS for the Rajiv Gandhi Worldwide, Faber Towers, Mercu UEM, International Airport in Hyderabad. the International Medical University and Persada PLUS in the Klang Valley; Provides IFM services to Women and Mahkota Medical Centre in Melaka; and Children Hospital, Pondicherry, Tamil Kuantan Medical Centre in Pahang. Nadu, India.

• Residential properties: Faber Star Facilities Management Limited Danau Impian, Danau Murni, Taratak Muhibbah 1, Taratak Muhibbah 2 and A wholly owned subsidiary with its Seroja Apartment, all located in Kuala headquarters in Noida, Uttar Pradesh. Lumpur. Provides FEMS and BEMS for private Provides GBI Facilitator and Commissioning hospitals and other commercial buildings Specialist services for 6 new projects in Delhi. in Cyberjaya, Shah Alam and Sepang, Selangor.

FABER GROUP BERHAD ANNUAL REPORT 2011 6 ABOUT FABER

COMPANY PROFILE (CONTINUED)

Armada Villa Taman Danau Desa Kuala Lumpur.

Exclusive lakeside link villas of Vila Prima in Taman Danau Desa, Kuala Lumpur.

PROPERTY DEVELOPMENT DIVISION Flagship developments including: Malaysia • Taman Desa, Taman Danau Desa and Faber Development Holdings Sdn Bhd Laman Rimbunan in Kuala Lumpur. • Taman Grandview, Sandakan and Taman A reputable, established and reliable Hilltop Perdana, Kota Kinabalu in Sabah. developer with a track record spanning almost 40 years. Proven track record of completed projects comprising: Differentiates itself by undertaking the • 1,398 landed residential units. development of properties focusing on • 546 commercial property units. prime locations, competitive pricing and • 5,191 condominium and apartment units. quality fi nishing. Taman Hilltop Perdana Practices QLASSIC standards established Kota Kinabalu Sabah. Focuses on enhancing value propositions by the Construction Industry Development with innovative designs and well-planned Board (“CIDB”) to enhance the delivery and development projects. quality of products.

Remains as one of Faber’s core businesses and a signifi cant revenue contributor to the Group.

FABER GROUP BERHAD ANNUAL REPORT 2011 7 ABOUT FABER

INTEGRATED FACILITIES MANAGEMENT SERVICES

FACILITIES ENGINEERING MAINTENANCE CLEANSING SERVICES (“CLS”) LINEN AND LAUNDRY SERVICES (“LLS”) SERVICES (“FEMS”) • General and Public Area Cleaning. • Linen and Laundry Management • Asset and Inventory Management. • Hygienic and Infectious Control Services covering: • Asset Maintenance Services: Breakdown, Management. - Linen Procurement/Supply. Corrective, Planned Preventive and • Specialised Area Cleaning. - Supply of Equipment, Tools and Predictive Maintenance. • Spillage Management. Consumables. • Civil, Mechanical and Electrical Systems • Provision of Cleaning Supplies and - Linen Collection and Delivery Maintenance. Consumables. Management. • Communications and Audio Visual • Systematic and Consistent Cleaning - Linen Inventory. Systems Maintenance. Schedules. - Linen Loss and Condemnation • Energy and Environment Management. • Quality Assurance Programmes. Management. • Fire and Emergency Response • Linen Processing Management: Sorting, Management. CLINICAL WASTE MANAGEMENT Washing, Drying, Ironing, Folding, • Vehicle Maintenance. SERVICES (“CWMS”) Packing and Salvaging. • Ground Maintenance and Landscaping. • Clinical Waste Segregation, Collection • Operational and Linen Quality Test in line • Medical Gases, Liquefi ed Petroleum Storage and Transportation. with Guidelines set by Australian/New Gas, Industrial Gas and Steam Supply • Spillage Management. Zealand Standard (AS/NZS 4146:2000). Systems Maintenance. • Hygienic and Infectious Control • Quality Assurance Programmes. • Occupational Safety and Health Management. Management. • Incineration and Treatment. HEALTHCARE QUALITY AND • Road and Drainage Systems Maintenance. • Inert Ash Disposal into Approved Land ACCREDITATION CONSULTANCY • Pest Control. Fills. SERVICES • Quality Assurance Programmes. • Operational Adherence to Guidelines • Plumbing and Sewerage Systems by Department of Environment (“DoE”), IFM SERVICES FOR COMMERCIAL Maintenance. World Health Organisation (“WHO”) and BUILDINGS SECTOR • Technical Advisory. Environment Quality Act (“EQA”) 1974. • Offi ce / Residential Towers and Buildings. • Warranty Management. • Supply of Clinical Waste Supplies and • Airport Terminals. • CCTV and Building Automation System Consumables. • Port Terminals and Storage Facilities. Maintenance. • Supply of Scheduled Waste Approved and • Gated Residential and Industrial Registered Fleet. Communities. BIOMEDICAL ENGINEERING • Technical and Educational Consultancy MAINTENANCE SERVICES (“BEMS”) Services. OTHER RELATED SERVICES • Acceptance, Calibration and • Treatment plants comply to the United • Green IFM Services including Testing Performance Testing. States Environmental Protection Agency and Commissioning, Consultancy and • Emergency Response and Repair. (“USEPA”) Standards. Post Certifi cations Sustainable IFM • Equipment Maintenance Services: • Quality Assurance Programme. Management. Breakdown, Corrective, Planned • Facility Management Consultancy. Preventive and Predictive Maintenance. • Equipment Failure Analysis and Risk Factor Calculations. • Equipment Safety Testing. • Hazardous and Contaminated Devices Handling. • Asset Management Programmes. • Spare Parts Planning and Procurement Support. • Warranty Management. • Technical Advisory.

FABER GROUP BERHAD ANNUAL REPORT 2011 8 STRIVING FOR GROWTH

CHAIRMAN’S STATEMENT

Dear Shareholders,

During the year under review, Faber Group Bhd (“Faber” or “the Group”) continues to focus on its core businesses: Integrated Facilities Management (“IFM”) Services and Property Development.

In 2011, we recorded a decrease in revenue for the IFM Non-Concession Division due to the non-renewal of the contracts for infrastructure and low cost houses maintenance in United Arab Emirates (“UAE”). We are consolidating our position in UAE and prioritising our efforts to recover the revenue and receivables from these projects. Meanwhile, we remain focus on our IFM services in India and the future prospects within this region.

For the IFM Concession, we have received a letter from Unit Kerjasama Awam Swasta (“UKAS”) dated 27 April 2012 whereby the existing Hospital Support Services (“HSS”) Concession Agreement (“CA”) shall in the interim continue until the signing of a new HSS CA with the Ministry of Health (“MoH”). We have taken all necessary steps and actions to ensure the success of the HSS CA extension. The decision on the HSS CA extension is still pending from the Government.

Our Property Development Division registered higher revenue and profi t as compared to DATO’ IKMAL HIJAZ BIN HASHIM prior year from our ongoing projects namely Armada Villa and Vila Prima in Taman Danau Chairman Desa and Areca Residence in Laman Rimbunan Kepong, both in Kuala Lumpur.

Against this background, I present you herewith the Annual Report and Audited Financial Statements of the Group for the fi nancial year ended 31 December 2011.

FINANCIAL PERFORMANCE Group Profi t Before Tax for the year was RM121.7 million against RM129.2 million in In 2011, Group revenue of RM880.1 million 2010 due to lower profi t contribution from was marginally lower than the previous IFM Non-Concession Division. year of RM888.8 million. As stated earlier, the IFM Non-Concession Division reported For Headline Key Performance Indicators lower revenue as a result of the non-renewal (“KPIs”), the Group did not achieve the target of contracts for infrastructure and low cost KPI for revenue growth of between 12% and houses maintenance in the UAE. Our IFM 15% due to reasons stated earlier. Return Concession Division recorded a positive On Equity (“ROE”) recorded a growth rate variance due to recognition of variation of 13.5%* against target of between 15% orders for hospitals namely Sungai Petani and 18%. This was mainly due to the lower and Alor Setar, both in Kedah. In addition, profi t margin on the revenue recorded on our Property Development Division UAE projects. recorded higher revenue as compared to * For the computation of ROE, the Profi t Attributable to previous year following the launches of Owners of the Parent for fi nancial year 2011 excludes Armada Villa and Areca Residence Section the negative impact of non-recurring one-off items 1 and 2 in 2010, and Areca Residence Section amounting to RM1.7 million. 3 in 2011.

FABER GROUP BERHAD ANNUAL REPORT 2011 9 STRIVING FOR GROWTH

DIVIDEND Malaysia: IFM Concession Meanwhile, FMS maintained its commitment in the provision of the HSS Despite recent challenges, we remain totally As per the terms of the HSS CA, FMS had through investments in capital expenditure committed to enhancing shareholders’ submitted to MoH on the intention to extend and human capital development. In 2011, value. For 2011, the Board therefore the HSS concession on 26 October 2009. FMS invested RM2.5 million in both recommends a fi nal dividend of 8.00 sen Subsequent to this, on 3 October 2011, FMS management and technical trainings with less 25% tax on 363,001,053 ordinary had submitted to UKAS the Request for the aim of improving its service delivery. shares of RM0.25 each, amounting to a Proposal (“RFP”) and on 27 October 2011, dividend of RM21,780,063 (6.00 sen net per FMS received a letter from UKAS for an In line with this long-term commitment to ordinary share). extension on the HSS CA for a six-month continually enhancing service delivery, the period effective 28 October 2011 until 27 new RM18.0 million laundry plant at Bukit INTEGRATED FACILITIES MANAGEMENT April 2012 based on the prevailing terms Beruntung Industrial Park, Selangor was Gearing for Extension of Concession and conditions. On 23 February 2012, FMS offi cially launched by the Health Minister, YB Business has submitted the HSS Addendum to UKAS Dato’ Sri Liow Tiong Lai on 20 January 2012. detailing and clarifying on the technical and In 2011, the Group continued efforts in commercial proposals submitted earlier. To Malaysia: IFM Non-Concession improving our service deliverables to date, FMS continues with the existing HSS CA our customers and clients particularly in as per the letter received from UKAS dated FFSB offers comprehensive maintenance enhancing the key areas of service quality 27 April 2012. services in Malaysia and to date, FFSB and cost effi ciency in relation to our service manages IFM services for eight commercial operations. We will continue to maintain As per previous years, FMS provides properties and fi ve residential properties. high service standards to ensure we are in a HSS comprising Facilities Engineering position of strength in IFM services. Maintenance Services (“FEMS”), Biomedical Engineering Maintenance Services (“BEMS”), In 2011, two major awards: “Best Practices- Linen and Laundry Services (“LLS”), Healthcare Asset Management Award Clinical Waste Management Services 2011” by Institute of Infrastructure Asset (“CWMS”) and Cleansing Services (“CLS”) Management, New York, United States for 81 Government hospitals including two of America and “Facilities Management laboratories. Company of the Year 2011” by Frost & Sullivan Malaysia attested to the calibre of FMS also undertakes CWMS for 820 private our IFM services. clinics as well as various private hospitals nationwide. In Malaysia, our IFM services are undertaken by two wholly owned subsidiaries, Faber Medi-Serve Sdn Bhd (“FMS”) and Faber Facilities Sdn Bhd (“FFSB”).

Health Minister, YB Dato’ Sri Liow Tiong Lai offi cially launched FMS RM18.0 million Bukit Beruntung Laundry Plant.

FABER GROUP BERHAD ANNUAL REPORT 2011 10 STRIVING FOR GROWTH

CHAIRMAN’S STATEMENT (CONTINUED)

With increased awareness on green building India It is encouraging that we are able to standards and the Green Building Index continue to deliver good results even in a (“GBI”), FFSB has also expanded its service FFSB provides CLS, BEMS and FEMS for difficult marketplace. The niche projects portfolio by offering the GBI Facilitator private hospitals and commercial properties currently ongoing in Taman Danau Desa, and Commissioning Specialist services. To in India. Kuala Lumpur, is changing the landscape date, FFSB has secured the GBI Facilitator of Taman Desa by our offering of the high and Commissioning Specialist services for The Group commenced operations in India quality exclusive properties. In Laman fi ve projects in Cyberjaya and Shah Alam. in 2006 through its subsidiaries, Faber Star Rimbunan Kepong, Kuala Lumpur, we are In February 2012, FFSB was awarded to Facilities Management Limited (“Faber offering homes with contemporary designs undertake GBI Facilitator and Commissioning Star”) and Faber Sindoori Management to meet the customers discerning taste for Specialist services for the new Tune Hotel at Services Private Limited (“Faber Sindoori”). trendy and comfortable homes. Kuala Lumpur International Airport 2. Based in Noida, Uttar Pradesh, Faber Star In 2011, we launched Vila Prima and Areca Moving forward, FFSB has set specific undertakes FEMS and BEMS for private Residence Section 3. Vila Prima, a lakeside targets to focus on companies that require hospitals as well as for other commercial property in Taman Danau Desa, features IFM services through outsourcing as this will buildings in Delhi with combined annual 31 upscale link villas and 3 bungalows enable the companies to focus on their core total revenue of RM8.6 million. On 20 April whilst Areca Residence Section 3 in Laman activities. 2011, Faber Star became a wholly owned Rimbunan comprising 54 three-storey semi- subsidiary of FFSB when the Group increased detached houses. United Arab Emirates its shareholding in Faber Star from 51% to 100%. In 2012, FDH plans to unveil a 191 high-end The Group holds a 75% benefi ciary interest condominium units spread over 2.5 acres of in Faber L.L.C., a subsidiary company Meanwhile, Faber Sindoori has 9 contracts prime land along Persiaran Gurney, Kuala incorporated in Dubai. for BEMS and 38 contracts for CLS at the Lumpur, less than 2 kilometres from KLCC Apollo Group of Hospitals, and provides Twin Towers. This project is targeted to be For the infrastructure and low cost houses FEMS to the Rajiv Gandhi International launched by the fourth quarter of 2012. maintenance contracts by the Department Airport in Hyderabad. These contracts have of Municipal Affairs, Western Region a combined annual value of RM28.1 million. With our 40 years of expertise and Municipality (“WRM”) in Abu Dhabi, we have experience in Property Development, we engaged the services of claims consultant Moving forward, we will continue to explore will continue to search for land banks and legal advisor to facilitate and pursue the IFM business opportunities within this region. with key focus in prime locations for the Faber L.L.C. payment claims. Further to this, development of valued property serving the Faber L.L.C. is also in negotiation with WRM PROPERTY DEVELOPMENT high expectations of today’s house buyers. to expedite the payments. In Property Development, Faber Development QUALITY Currently, Faber L.L.C. provides FEMS for Holdings Sdn. Bhd. (“FDH”), a wholly owned Sheikh Khalifa Medical City and Al-Rahbah subsidiary of Faber experienced another In the light of the increasing challenging Hospital under the auspices of the General challenging year. Our efforts remained focused business environment, our commitment Health Authority in the Emirate of Abu Dhabi. on facing these challenges and we will continue in excellent services delivery and quality to adapt to these changing property market products to our stakeholders have conditions in particular the demand and consistently driven the Group towards expectations of the discerning buyers. improving and enhancing our management systems and business framework.

FABER GROUP BERHAD ANNUAL REPORT 2011 11 STRIVING FOR GROWTH

Faber has implemented various PROSPECTS management systems certifiable to internationally recognised standards and Looking ahead, in 2012 and beyond, the incorporated relevant world best practices Group aims not only to continue to serve and guidelines in the provisioning of our the nation via its IFM services, but also to products and services. In ensuring our further expand its IFM business locally and customers’ requirements are met, Faber overseas. Key focus will be on opportunities has undertaken numerous improvement with companies that view outsourcing their initiatives and regularly reviewed our IFM activities and partnering with the IFM processes and procedures to improve providers, as a catalyst to enable them to products and services performance. focus on their core businesses in achieving their company’s goals and objectives more Towards this end, Faber has implemented effi ciently. the Business Excellence Framework (“BEF”) Vila Prima, a lakeside using the Malaysia Productivity Corporation’s For our Property Development Division, property featuring 31 (“MPC”) BEF as a holistic approach and we will strive to increase our land banks upscale link villas and 3 bungalows catalyst to further enhance organisational in prime locations and also to explore in excellence to remain competitive in the acquiring land banks through mergers and marketplace. Faber‘s business excellence joint ventures. efforts have so far met the stringent BEF Finally, I offer my gratitude for the dedication assessment criteria and was shortlisted In the year ahead, the Group continues to and commitment provided throughout the by MPC as one of the finalists to vie for improve contribution from all business year by my fellow Board members and the the Quality Management Excellence Award divisions and focus our efforts on IFM Group’s entire management team. (“QMEA”) 2011 under the large corporation business expansion. However, in view of category. The result of the QMEA 2011 will the non-renewal of IFM Non-Concession With the continued support of our be announced in October 2012. contracts in UAE, the Group expects the stakeholders, we will continue to strive revenue contribution to be lower. The harder in 2012 for the Group to prosper in its GOVERNANCE contribution from IFM Concession is quests to further enhance the businesses subject to the terms of extension of the and create sustainable value. The Group is keenly aware of its HSS CA. responsibilities to all its stakeholders and the public at large, and is wholeheartedly THANK YOU NOTE committed to conducting its business with integrity, transparency and accountability At the end of a challenging year I would like in accordance with the highest ethical to express my sincere appreciation to all our standards. In line with our core values of staff, whose hard work and commitment being professional, passionate, caring, ensured that we once again maintained the DATO’ IKMAL HIJAZ BIN HASHIM innovative and trustworthy, we are optimistic high products and services standards that Chairman that our efforts will enable us to build a our customers rightly demand. business and work culture that are in line with our corporate vision and mission. I would also like to thank our customers, investors, business partners and bankers for their support as well as our appreciation to the Government and all relevant regulatory authorities.

FABER GROUP BERHAD ANNUAL REPORT 2011 12 STRIVING FOR GROWTH

OPERATIONS REVIEW INTEGRATED FACILITIES MANAGEMENT

In Malaysia, Faber Group Berhad (“Faber” or “the Group”) Integrated Facilities Management (“IFM”) services are undertaken by two wholly owned subsidiaries, Faber Medi-Serve Sdn Bhd (“FMS”) and Faber Facilities Sdn Bhd (“FFSB”). FFSB also provides IFM in India through its subsidiaries, Faber Star Facilities Management Limited (“Faber Star”) and Faber Sindoori Management Services Private Limited (“Faber Sindoori”) whereas Faber’s activities in the United Arab Emirates (“UAE”) are undertaken by Faber L.L.C.

During the year under review, the IFM Division contributes RM722.9 million in revenue and RM83.5 million Profi t Before Tax to the Group.

FABER MEDI-SERVE SDN BHD (“FMS”) FMS performs Preventive The growth of Faber’s IFM began in Malaysia on 28 October 1996, when FMS was awarded and Predictive Maintenance of biomedical devices a 15-year Government Concession by the Ministry of Health (“MoH”) to provide Hospital Support Services (“HSS”) to 71 Government hospitals in the states of Perak, Kedah, Penang, and Perlis in Peninsular Malaysia, Sabah and Sarawak in East Malaysia.

FMS has since been operating and maintaining HSS for Government hospitals by providing Facilities Engineering Maintenance Services (“FEMS”), Biomedical Engineering Maintenance Services (“BEMS”), Cleansing Services (“CLS”), Linen & Laundry Services (“LLS”) and Clinical Waste Management Services (“CWMS”). Over the years, the number of hospitals has grown from 71 to 81 including two laboratories, making FMS, Malaysia’s leading player in the HSS arena.

As reported in the Chairman’s Statement, the HSS Concession Agreement (“CA”) has been extended on the same terms for six months. On 27 April 2012, FMS has further received a letter from Unit Kerjasama Awam Swasta (“UKAS”) whereby FMS shall in the interim FMS sustains both a dependable continue with the existing Concession Agreement until the signing of the new HSS CA with supply and consistent quality of MoH. linen to hospitals.

The concession became a catalyst for IFM outsourcing in Malaysia, and Faber, as a pioneer in this fi eld, consistently strives to raise the standards of IFM. Faber has developed a comprehensive business model for the provision of HSS including human capital resources with both technical expertise and management experience; an extensive infrastructure of facilities and equipment; and highly effi cient systems and processes. All of these have enhanced the quality of services and also illustrate Faber’s determination to grow its IFM business including further expansion into other business sectors.

The technologically advanced Kamunting Incineration and Laundry Plants have improved the effi ciency of Clinical Waste Management Services and Linen and Laundry Services provided by Faber.

FABER GROUP BERHAD ANNUAL REPORT 2011 13 STRIVING FOR GROWTH

The new Bukit Beruntung Laundry Plant is equipped with the latest equipment and technology.

Revenue FINANCIAL REVIEW RM Million FMS revenue increased to RM568.5 million in 2011, refl ecting a 2% increase over 2010’s 568.5 earnings. Profi t Before Tax (“PBT”) advanced nearly 29%, climbing to RM109.8 million from RM85.3 million in 2010. 557.8 In addition to the provision of HSS to Government hospitals, FMS also undertakes CWMS for 820 private clinics as well as various private hospitals nationwide which include 536.1 Sunway Medical Centre and Darul Ehsan Medical Centre in Selangor and Gleneagles-Intan Medical Centre in Kuala Lumpur; FMS also provides CWMS and LLS to Hospital Angkatan 2009 2010 2011 Tentera Tuanku Mizan, Kuala Lumpur.

OPERATIONAL HIGHLIGHTS

Profit Before Tax Opening of Bukit Beruntung Laundry Plant (“BBLP”) To develop the capacity of its LLS, FMS has built a new laundry plant at Bukit Beruntung Industrial Park, 52km north of central Kuala Lumpur. YB Dato’ Sri Liow Tiong Lai, Malaysia’s Health Minister offi cially launched the RM18.0 million BBLP on 20 January 2012.

With the addition of BBLP, FMS is well-positioned to respond to increasing demand for laundry services from private hospitals throughout central Peninsular Malaysia. The plant, equipped with the latest technology can process up to 15 tonnes of linen per day. It can also accommodate future upgrades which will increase its capacity to 40 tonnes per day.

FMS currently has four other laundry plants at Kuala Ketil (Kedah), Kamunting (Perak), Kota Kinabalu (Sabah) and Sejingkat (Sarawak). The combined capacity of all these plants is 61 tonnes per day.

ANNUAL REPORT 2011 14 STRIVING FOR GROWTH

OPERATIONS REVIEW INTEGRATED FACILITIES MANAGEMENT (CONTINUED)

FMS LLS adopt and comply with international best practices and guidelines for quality, safety, health and environmental standards, such as AS/NZS 4146:2000, ISO 9001:2008, ISO 14001:2004, and OHSAS 18001:2007. BBLP meets MSQH (Malaysian Society for Quality in Health) and JCI (Joint Commission International) standards for its LLS operations. All FMS’s laundry plants meet both hygiene and environmental standards as specifi ed by the MoH and the Department of Environment Malaysia.

Improving Facilities and Capacity for CWMS and LLS FMS has invested RM3.5 million for a portable incinerator in Lahad Datu, Sabah, to further strengthen Faber’s position as one of the largest operators of CWMS in Malaysia. The incinerator can be easily relocated on demand and vastly improves FMS capacity and logistical fl exibility in East Malaysia.

In Peninsular Malaysia, FMS has upgraded the LLS equipment at Kuala Ketil Laundry Plant in Kedah. The RM5.1 million project will increase the processing capacity from 13 The portable incinerator in Lahad Datu, Sabah is a modular plant, which can be to 20 tonnes of linen per day. Both of these improvements illustrate FMS’s commitment dismantled and relocated. in enhancing its service levels and meeting the increasing demands for CWMS and LLS.

FABER FACILITIES SDN BHD (“FFSB”)

FFSB, a wholly owned subsidiary of Faber provides professionally administered IFM services for commercial and residential properties, and private hospitals.

FFSB’s comprehensive IFM services include Facilities Management & Administration, Building Maintenance Services, Housekeeping Management, Security, Safety & Health Management, Financial & Tenancy Management and Biomedical Engineering Maintenance Services.

FFSB started as an in-house department providing services for the properties developed by the Group’s Property Development Division. Over the years, it has developed its Implementation of comprehensive maintenance programmes that uphold capabilities and now offers professionally administered IFM services to business and quality and promote effi ciency to property owners in the private and commercial sectors. optimise the lifespan of assets.

FFSB has made inroads into the power conservation arena by offering the Energy Performance Management Services and supporting energy effi ciency for its clients. With increasing awareness in Green Building Standards and the Green Building Index (“GBI”) rating systems, FFSB has also expanded its service portfolio as a GBI Facilitator and Commissioning Specialist.

Continuously pursuing the highest standards in IFM, FFSB improved its systems and processes and obtained ISO 14001:2004 certifi cation for Environmental Management Systems on 26 October 2011.

During the year, FFSB established “Mobile Unit” to further raise customer service levels. The mobile unit is specially equipped to provide Planned Preventive Maintenance (“PPM”) and, Mechanical and Engineering (“M&E”) services at various sites in the Klang Valley. The mobile unit’s team of technically skilled employees repair major M&E breakdowns, respond promptly to calls for both scheduled and unscheduled maintenance, and generally FFSB established “Mobile Unit” to improve effi ciency and uptime for its clients. further raise customer service levels.

FABER GROUP BERHAD ANNUAL REPORT 2011 15 STRIVING FOR GROWTH

Revenue FINANCIAL REVIEW RM Million For the fi nancial year 2011, FFSB recorded revenue of RM51.2 million, an increase of 17% over 2010’s earnings. FFSB registered a Profi t Before Tax of RM0.2 million in 2011 which 51.2 excludes an impairment of RM8.2 million. 43.8 OPERATIONS IN MALAYSIA

31.9 With growing specialisation in GBI, FFSB further expanded its portfolio to provide GBI Facilitator and Commissioning Specialist services for fi ve new projects in Cyberjaya and Shah Alam, Selangor. FFSB’s role is to provide independent third-party specialist services 2009 2010 2011 advocating greater environmental effi ciency. The Group’s latest contract is for the new Tune Hotel at Kuala Lumpur International Airport 2 which was awarded in February 2012.

FFSB provides IFM services to Menara Worldwide Kuala Lumpur, Mahkota Medical Profi t /(Loss) Before Tax Centre in Melaka and Kuantan Medical Centre in Pahang. Other FFSB clients include Kota RM Million Iskandar, the Johor State Administrative Centre located in Nusajaya, Johor and in Klang Valley FFSB’s clients include the International Medical University, Mercu UEM, Persada 0.7 0.6 PLUS, Faber Towers and fi ve condominiums and apartment blocks in Taman Desa and Laman Rimbunan, Kepong, Kuala Lumpur.

OPERATIONS IN INDIA

[8.0]* Faber Star Facilities Management Limited (“Faber Star”) During the year under review, FFSB successfully completed the acquisition of 49% equity 2009 2010 2011 interest in Faber Star from the local joint venture partner, Singa Real Estates Limited on 20 April 2011. Faber Star is now a wholly owned subsidiary of FFSB.

* Included in LBT is an impairment of RM8.2 million. Faber Star based in Noida, Uttar Pradesh, is currently undertaking 11 projects for FEMS and BEMS worth a combined total contract value of RM8.6 million annually. Five of these contracts were secured in 2011.

Faber Star will focus in this regional market for growth and expansion, and will continue to strive to secure more projects for FEMS and BEMS in India.

FABER GROUP BERHAD ANNUAL REPORT 2011 16 STRIVING FOR GROWTH

OPERATIONS REVIEW INTEGRATED FACILITIES MANAGEMENT (CONTINUED)

Faber Sindoori Management Services Private Limited (“Faber Sindoori”) Faber Sindoori is a 51% subsidiary of FFSB and the local joint venture partner is Apollo Sindoori Hotels Limited. Faber Sindoori has 9 contracts to provide BEMS and 38 contracts for Cleansing services with the Apollo Group of Hospitals. Faber Sindoori also provides FEMS for the Rajiv Gandhi International Airport in Hyderabad. The combined contract value of these projects is RM28.1 million per annum.

During the year under review, Faber Sindoori secured 3 BEMS contracts for Apollo Group Hospitals and has commenced operations at the Women and Children’s Hospital, Pondicherry in the state of Tamil Nadu. Faber Sindoori also improved its systems and processes and achieved ISO 9001:2008 and OHSAS 18001:2007 certifi cation by National Quality Assurance (“NQA”), India on 11 March 2011.

FABER L.L.C. Faber Sindoori provides FEMS for the Rajiv Gandhi International Airport in Faber L.L.C. is a subsidiary company based in Dubai, UAE which was formed to explore Hyderabad, India. business opportunities for IFM services in the region. Faber L.L.C. provides FEMS for Sheikh Khalifa Medical City and Al-Rahbah Hospital under the auspices of the General Health Authority in the Emirate of Abu Dhabi.

FINANCIAL REVIEW

During the year under review, Faber L.L.C. reported RM103.1 million in revenue and Revenue Loss Before Tax (“LBT”) of RM18.3 million. The decline in fi nancial performance was due RM Million to the non-renewal of the three contracts involving infrastructure and low cost houses 224.0 maintenance from the Department of Municipal Affairs, Western Region Municipality (“WRM”) in Abu Dhabi. The infrastructure maintenance contract ceased with effect from 3 April 2011 and the low cost houses maintenance contracts with effect from 1 June 2011. Faber L.L.C. provided for impairment on receivables amounting to RM14.0 million during the year under review resulting in LBT of RM18.3 million. 123.2 103.1 Faber L.L.C. has engaged the services of claims consultant and legal advisor to facilitate and pursue the Faber L.L.C. payment claims. Further to this, Faber L.L.C. is also in negotiation with WRM to expedite the payments. 2009 2010 2011

Profi t /(Loss) Before Tax RM Million 45.7 33.0

[18.3]

2009 2010 2011

FABER GROUP BERHAD ANNUAL REPORT 2011 17 STRIVING FOR GROWTH

OPERATIONS REVIEW PROPERTY DEVELOPMENT

FABER DEVELOPMENT HOLDINGS SDN BHD (“FDH”)

Property Development undertaken by Faber’s wholly owned subsidiary, FDH remains one of the Group’s core businesses. Backed with 40 years of experience, the Division’s strategic shift towards innovative niche property development in the past two years has contributed positively to the Group’s results.

Faber’s fl agship developments in Taman Desa and Taman Danau Desa, Kuala Lumpur is ranked among the Klang Valley’s premier neighbourhoods offering an ideal blend of landed residential units, high-rise condominiums and commercial properties including comprehensive amenities.

Niche property at Taman Danau Desa, Faber’s mixed-development projects in Laman Rimbunan, Kepong, Kuala Lumpur, Kuala Lumpur. comprising landed residential units and commercial properties have transformed into a well-planned and highly desirable residential enclave.

FDH has consistently delivered value in meeting its customers’ demand for quality real estate. With prime locations, designs and fi nishing that fi ts discerning property purchasers, Faber’s property developments have earned the trust and confi dence from home buyers and investors who value reliability and timely delivery. Due to the strategic locations of FDH’s property development, purchasers have generally enjoyed capital gain as most of the properties within Taman Desa, Taman Danau Desa and Laman Rimbunan Kepong have Revenue signifi cantly appreciated in value. RM Million In East Malaysia, Faber has also established its presence as a niche property developer with housing projects in Taman Hilltop Perdana, Kota Kinabalu and Taman Grandview, 157.2 Sandakan, Sabah. 122.5 During the year under review, FDH launched two new development projects. Vila Prima which is a high-end property development comprising 31 link villas and 3 exclusive 69.1 bungalows by the lakeside. All units are designed with luxurious fi nishing and comprehensive facilities surrounded by beautifully landscaped gardens overlooking the adjacent lake. This 2009 2010 2011 development is located in Taman Danau Desa and was launched in February 2011 whilst Areca Residence Section 3 in Laman Rimbunan, Kepong was launched in July 2011.

FINANCIAL REVIEW Profi t Before Tax RM Million FDH achieved revenue growth in its fi nancial performance for the year under review, from 48.6 RM69.1 million in 2010 to RM157.2 million in 2011.Meanwhile, Profi t Before Tax increased from RM15.4 million in 2010 to RM48.6 million in 2011.

This positive performance is attributed by higher progress billings from projects launched 28.1 namely Armada Villa and Areca Residence Section 1, 2 and 3.

15.4

2009 2010 2011

FABER GROUP BERHAD ANNUAL REPORT 2011 18 STRIVING FOR GROWTH

OPERATIONS REVIEW PROPERTY DEVELOPMENT (CONTINUED)

CURRENT PROJECTS

Armada Villa ( Three-storey Semi-detached Houses and Bungalows) Taman Danau Desa, Kuala Lumpur Launched in April 2010, Armada Villa Taman Desa, Kuala Lumpur is an upscale lakeside residential development covering 5.7 acres. A joint venture with Dewan Bandaraya Kuala Lumpur (“DBKL”), the development has a Gross Development Value (“GDV”) of RM140.8 million and comprises 5 three-storey bungalows, 40 three-storey semi-detached houses and an exclusive clubhouse. With an average built-up area of 6,365 sq. ft. and priced from RM4.7 million to RM7.5 million, the bungalows come in four designs, two of which have private swimming pools. The semi-detached houses have an average built-up area of 3,944 sq. ft. and are priced between RM2.6 million and RM3.4 million with 87% of the units sold.

The development is scheduled for completion by end of 2012. The Areca Residence comprises spacious semi- detached homes in Kepong, Kuala Lumpur. Areca Residence (Three-storey Semi-detached Houses) Laman Rimbunan, Kepong, Kuala Lumpur Areca Residence is located just 10km from Kuala Lumpur City Centre (“KLCC”) at the heart of Kepong township; it is one of Kepong’s most sought-after investments due to the vast array of local amenities and ease of access to major destinations in the Klang Valley.

The project consists of three sections:

Sections 1 and 2 Launched in 2010, this development has a GDV of RM187.0 million. 83% of the 102 units of three-storey semi-detached houses have already been sold. Perimeter fencing surrounds these distinctive residential units with built-up areas ranging from 3,070 sq. ft. to 4,295 sq. ft. Prices are between RM1.48 million and RM2.6 million and the project is scheduled for completion end of 2012.

Section 3 The remaining 54 three-storey semi-detached houses were launched in July 2011 with

46% of the units sold. With a GDV of RM99.0 million, the prices range from RM1.7 million to Vila Prima offers RM2.3 million. Each unit offers a built-up area of 3,372 sq.ft. The development is scheduled modern design and for completion end of 2012. quality fi nishing.

Vila Prima (Four-storey Link Villas and Bungalows) Taman Danau Desa, Kuala Lumpur Launched in February 2011, this lakeside residential project has a GDV of RM126.7 million. An exclusive gated and guarded community with an exclusive clubhouse, Vila Prima offers modern design and innovative features including individual glass lifts and a minimum of four parking bays per unit. The development features 31 resort-style four-storey link villas and 3 bungalows with average built-up areas of 4,500 sq. ft. and 5,800 sq. ft., Prices range from RM2.7 million to RM5.0 million and the project is scheduled for completion by end of 2013.

Areca Residence in Laman Rimbunan, Kepong and Vila Prima in Taman Danau Desa are the fi nal developments in their respective neighbourhoods.

FABER GROUP BERHAD ANNUAL REPORT 2011 19 STRIVING FOR GROWTH

FUTURE PROJECTS

Proposed High-End Condominium: Persiaran Gurney, Kuala Lumpur This project located within 2km of KLCC Twin Towers is slated to provide 191 high-end condominium units spread over 2.5 acres of strategic land along Persiaran Gurney. The concave shaped modern building design, with comprehensive condominium facilities has been orientated to provide most of the units with KLCC view. FDH is presently in the fi nal phase of the approval process by the relevant authorities and targets to start construction works by fourth quarter of 2012.

Proposed High-End Condominium: Lucky Heights, Kota Kinabalu, Sabah Lucky Heights which is marked as a high-end residential area sits on a fi ve-acre land of which FDH plans to build a luxury condominium comprising of 413 units. Pending approval from the local authorities, the development is scheduled to be launched in 2013.

Quality and Innovation for Niche Markets Current market trends demand innovative design and superior quality. Over the years, Faber has shifted its focus to this niche market segment in its property ventures. The

Vila Prima, an exclusive gated Group shall maintain this approach in the coming years by leveraging its expertise and and guarded community in competitive advantage to accelerate growth. Taman Danau Desa, Kuala Lumpur. In line with the above, FDH has implemented the Quality Assessment System in Construction (“QLASSIC”). This will ensure that all construction processes and quality of workmanship meet the approved standards set by the Construction Industry Development Board (“CIDB”).

The Group will continue to search for land banks with key focus in prime locations for the development of valued property serving the high expectations of today’s house buyers.

INTENSIFYING EFFORTS TO SUSTAIN PERFORMANCE FOR IFM AND PROPERTY DEVELOPMENT

Despite the challenges in UAE, Faber continues to sustain its fi nancial performance in 2011 by capitalising on its core competencies and opportunities in both the IFM and Property Development Divisions.

Moving ahead, the Group will continuously enhance its operational effi ciencies and performance to focus on expanding our IFM services beyond HSS and also explore business opportunities in other business sectors. The Group will also intensify its efforts in securing new land banks in prime locations through outright purchases, mergers and joint ventures.

The Group will continue to deliver maximum value to all stakeholders for both IFM and Property Development.

Vila Prima link villas with garden and water view, a lakeside sanctuary at Taman Danau Desa, Kuala Lumpur.

FABER GROUP BERHAD ANNUAL REPORT 2011 20 PERFORMANCE REVIEW

5-YEAR GROUP FINANCIAL HIGHLIGHTS

RM MILLION RM MILLION RM MILLION

1000 600 160 888.8 880.1 141.2 805.3 488.0 129.2 448.9 121.7 111.5 750 450 120 669.7 661.2 389.2 99.4

318.1 296.3 500 300 80

250 150 40

0 0 0

2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011

REVENUE SHAREHOLDERS’ FUNDS PROFIT BEFORE TAX

RM MILLION SEN SEN

43 1200 45 150 1,103.3 127 989.6 114 890.0 890.5 900 97 759.4 30 100

23 80 22 77 600 17 16 15 50 300

0 0 0

2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 2007 2010 2009 2008 2011

TOTAL ASSETS EARNINGS PER SHARE NET TANGIBLE ASSETS PER SHARE

FABER GROUP BERHAD ANNUAL REPORT 2011 21 PERFORMANCE REVIEW

5-YEAR GROUP FINANCIAL SUMMARY

AS AT 31 DECEMBER IN RM MILLION 2007 2008 2009 2010 2011

STATEMENTS OF FINANCIAL POSITION Assets Non-current assets 158.7 172.5 188.9 154.6 272.4 Current assets 519.8 586.9 701.6 835.0 830.9 Assets of disposal group/Non-current asset classifi ed as held for sale 211.5 – – – –

TOTAL ASSETS 890.0 759.4 890.5 989.6 1,103.3

EQUITY AND LIABILITIES Equity attributable to owners of the parent Share capital 363.0 363.0 363.0 363.0 90.8 Share premium 116.0 116.0 116.0 116.0 – Redeemable Convertible Preference Shares 115.0 – – – – Other reserves 13.5 (0.3) (0.8) (4.3) (4.4) (Accumulated losses)/ Retained earnings (311.2) (160.6) (89.0) (25.8) 401.6

296.3 318.1 389.2 448.9 488.0 Non-controlling interests 106.4 59.1 67.2 67.0 75.4

Total equity 402.7 377.2 456.4 515.9 563.4

Non-current liabilities 208.4 193.5 183.3 166.6 47.8 Current liabilities 211.8 188.7 250.8 307.1 492.1 Liabilities directly associated with assets classifi ed as held for sale 67.1 – – – –

Total liabilities 487.3 382.2 434.1 473.7 539.9

TOTAL EQUITY AND LIABILITIES 890.0 759.4 890.5 989.6 1,103.3

Net tangible asset per share (sen) 80.1 77.3 97.5 113.6 126.9 Current ratio (times) 2.5 3.1 2.8 2.7 1.7 Liquidity ratio (times) 1.0 1.7 1.2 0.9 0.7 Gearing ratio (times) 0.7 0.6 0.5 0.4 0.4

FABER GROUP BERHAD ANNUAL REPORT 2011 22 PERFORMANCE REVIEW

5-YEAR GROUP FINANCIAL SUMMARY (CONTINUED)

AS AT 31 DECEMBER IN RM MILLION 2007 2008 2009 2010 2011

INCOME STATEMENTS Continuing Operations Revenue 669.7 661.2 805.3 888.8 880.1

Earnings before interest, taxation, depreciation and amortisation 127.5 143.0 169.0 158.2 150.7

Profi t before tax 99.4 111.5 141.2 129.2 121.7 Income tax expense (25.4) (29.8) (34.8) (25.8) (48.5)

Profi t from continuing operations, net of tax 74.0 81.7 106.4 103.4 73.2

Discontinued Operations Profi t/(loss) for the year from discontinued operation, net of tax 3.3 93.2 (0.3) – –

Profi t net of tax 77.3 174.9 106.1 103.4 73.2

Attributable to: Owners of the parent 52.0 155.7 82.7 78.8 61.6 Non-controlling interests 25.3 19.2 23.4 24.6 11.6

77.3 174.9 106.1 103.4 73.2

Earnings per share (sen) 16.0 42.9 22.8 21.7 17.0 Earnings before interest, taxation, depreciation and amortisation as a percentage of revenue (%) 19 22 21 18 17 Pre-tax profi t as a percentage of revenue (%) 15 17 18 15 14 Pre-tax profi t as a percentage of shareholders’ funds at year end (%) 34 35 36 29 25 Dividend per share paid during the year - gross (sen) 2.0 3.0 4.0 6.0 8.0

FABER GROUP BERHAD ANNUAL REPORT 2011 23 PERFORMANCE REVIEW

2011 GROUP QUARTERLY PERFORMANCE

Revenue by Segment Profi t /(Loss) Before Tax by Segment (RM Million) (RM Million)

260.0 80.0 270 80

176.9 180 151.4 60 134.6

90 40 49.4 51.5 35.0 21.3 24.1 21.5 16.4 0 20 11.8 14.6 5.8 Q1 Q2 Q3 Q4 (4.3) [4.4) [42.1] (2.9) 1.3 0

Integrated Facilities Mangement [20] Property Development

Others [40]

Q1 Q2 Q3 Q4

FOR THE YEAR ENDED 31 DECEMBER 2011

QUARTER RM’000 1ST 2ND 3RD 4TH TOTAL

Revenue 198,188 186,420 309,396 186,066 880,070 Operating expenses (165,908) (153,315) (335,275) (84,503) (739,001) Other Income 1,640 2,462 2,445 3,075 9,622 Earnings before interest, taxation, depreciation and amortisation 33,920 35,567 (23,434) 104,638 150,691 Profi t/[loss] before taxation 25,636 28,782 (30,411) 97,707 121,714 Profi t/[loss] attributable to owners of the parent 14,154 16,502 (26,869) 57,802 61,589 Earnings/[loss] per share (sen) 3.9 4.5 (7.4) 15.9 17.0

BY SEGMENT

QUARTER RM’000 1ST 2ND 3RD 4TH TOTAL

Revenue Integrated Facilities Management 176,895 151,398 259,990 134,596 722,879 Property Development 21,293 35,022 49,406 51,470 157,191

Group 198,188 186,420 309,396 186,066 880,070

Profi t/[loss] before taxation Integrated Facilities Management 24,110 21,472 (42,116) 80,011 83,477 Property Development 5,843 11,751 14,633 16,399 48,626 Others (4,317) (4,441) (2,928) 1,297 (10,389)

Group 25,636 28,782 (30,411) 97,707 121,714

FABER GROUP BERHAD ANNUAL REPORT 2011 24 PERFORMANCE REVIEW

GROUP STATEMENT OF VALUE ADDED

DISTRIBUTION OF VALUE ADDED

19% 26%

Employee cost 56% 53% Taxation 10% Dividend & Non-controlling interests 13% Depreciation, amortisation & 15% retained earnings 2011 8% 2010

STATEMENT OF VALUE ADDED 2011 2010 RM MILLION RM MILLION

VALUE ADDED Revenue 880 889 Other income 2 1 Interest income 8 8 Operating expenses (558) (567) Finance cost (6) (7)

Value added available for distribution 326 324

DISTRIBUTION To Employees Employee cost 182 172

To Government Taxation 48 26

To Shareholders Dividend 22 16 Non-controlling interests 12 25

Retained for reinvestment and future growth Depreciation, amortisation 23 22 Retained earnings 39 63

Total distributed 326 324

FABER GROUP BERHAD ANNUAL REPORT 2011 25 PERFORMANCE REVIEW

2011 GROUP MANPOWER SUMMARY

MANPOWER STRENGTH BY REGION

2.1% 2.7%

51.7% 53.8% 46.2% 43.5% Malaysia India United Arab Emirates

as at 31 December 2011 as at 31 December 2010 TOTAL: 7,417 TOTAL: 7,358

EMPLOYEE COMPOSITION BY LEVEL

11.1% 11.1%

88.9% 88.9%

Executive Non-Executive

as at 31 December 2011 as at 31 December 2010 TOTAL: 7,417 TOTAL: 7,358

EMPLOYEE COMPOSITION BY ETHNICITY IN MALAYSIA

5.1% 0.2% 5.5% 0.3% 3.1% 3.1%

58.4% 58.3% Malay 33.2% 32.8% Sabahan/Sarawakian Chinese Indian Others

as at 31 December 2011 as at 31 December 2010 TOTAL: 3,839 TOTAL: 3,959

FABER GROUP BERHAD ANNUAL REPORT 2011 26 PERFORMANCE REVIEW

2011 GROUP MANPOWER SUMMARY (CONTINUED)

TRAINING EXPENDITURE DISTRIBUTION

6.2% 9.6% 3.2% 5.1% 3.6% 2.1% 2.7% 7.0%

85.5% 79.8%

Soft Skill Training: Technical Training: RM1,696,819.30 RM1,292,116.34

14.1% 9.6% 5.4% 2.1% 2.7% 5.4%

23.9% 62.0% IFM (Concession) IFM ( Non-Concession) 79.6% Property Development Corporate Offi ce

Leadership Training: Emerging Leadership RM35,500.00 Programme and Continuing Education Programme: RM330,950.00

FABER GROUP BERHAD ANNUAL REPORT 2011 27 PERFORMANCE REVIEW

SHARE PRICE MOVEMENT

SHARE PRICE MOVEMENT FOR THE PERIOD FROM 26 APRIL 2011 TO 26 APRIL 2012

2.40 1681

2.20 1641

1601

2.00 1561

1521 1.80 1481

1441 1.60

PRICE PER UNIT 1401

1361 1.40

1321

1.20 1281

26 APR 1129 JUL 11 12 DEC 11 13 MAR 12

Faber Composite

PRICE RM DATE

Highest 2.26 28 April 2011

Lowest 1.25 26 September 2011

Highest volume during this period is 72,656 on 30 December 2011

FABER GROUP BERHAD ANNUAL REPORT 2011 28 PERFORMANCE REVIEW

GROUP FINANCIAL CALENDAR

2011 12 January 15 March 6 May • Announcement on the non-renewal of Analysts and Media Briefi ng on 2010 Results Announcement on fi nancial results for the 1st the contract awarded by the Department and other Corporate updates. quarter ended 31 March 2011. of Municipal Affairs, Western Region Municipality, Emirate of Abu Dhabi for 17 March 18 May infrastructure maintenance with an Announcement on the Proposed Par Value • 48 th Annual General Meeting estimated total contract price of RM129.0 Reduction, Proposed Share Premium • Extraordinary General Meeting in relation million annually. Reduction and Proposed Amendment to to the Proposed Par Value Reduction, • Announcement on the non-renewal of the Memorandum of Association of FGB to the Proposed Share Premium Reduction the contract awarded by the Department facilitate the Proposed Par Value Reduction. and the Proposed Amendment to the of Municipal Affairs, Western Region Memorandum of Association of FGB to Municipality, Emirate of Abu Dhabi for 31 March facilitate the Proposed Par Value Reduction. residential maintenance with an estimated Payment of Redeemable Secured Loan Stocks total contract price of RM55.0 million (“RSLS”) coupon due for the fi rst six months 21 June annually. from 1 October 2010 to 31 March 2011 and Announcement on acquisition by FFSB, partial redemption of cumulative outstanding a wholly owned subsidiary of FGB, of the entire 25 February balance of RSLS amounting to RM6.1 million. issued and paid-up share capital of General • Announcement on fi nancial results for the Field Sdn Bhd for a total cash consideration 4th quarter ended 31 December 2010. 21 April of RM2.00. • Announcement on Key Performance Announcement on Share Purchase Indicator (“KPI”) Targets for the fi nancial Agreement entered into by and amongst 23 June year 2011. Faber Facilities Sdn Bhd (“FFSB”), a wholly Payment of final dividend of 8% less 25% • Announcement on proposed fi nal dividend owned subsidiary of FGB, Singa Real Estates income tax per ordinary share of RM1.00 each for fi nancial year 2010. Ltd (“SREL”) and Faber Star Facilities for fi nancial year ended 31 December 2010. Management Ltd (“FSFML”) whereby all the 8 March terms and conditions of the Share Purchase 23 August Announcement on Faber Group Berhad Agreement dated 4 November 2010 have been Announcement on fi nancial results for the 2nd (“FGB”) to spearhead the proposed project complied with on 20 April 2011. Pursuant to quarter ended 30 June 2011. on the Energy Performance Management the completion, FFSB and/or its nominees System as announced by the Prime Minister have increased their shareholdings in FSFML 25 August on 8 March 2011. FGB had commenced energy from 51% to 100% and accordingly, FSFML Announcement on the grant of order audits at fi ve selected Government buildings has become a direct wholly owned subsidiary confirming the Proposed Par Value as a pilot project. This project will ensure of FFSB. In turn, FSFML is an indirect wholly Reduction and the Proposed Share Premium the efficient use of energy in Government owned subsidiary of FGB. Reduction pursuant to Section 64 of the buildings as well as support the Entry Point Companies Act, 1965 by the High Court of Project on Improving Energy Effi ciency. Malaya at Kuala Lumpur.

FABER GROUP BERHAD ANNUAL REPORT 2011 29 PERFORMANCE REVIEW

2012 19 September 29 February Announcement on the lodgement of the • Anouncement on fi nancial results for the certifi ed true copy of the sealed order of the 4th quarter ended 31 December 2011. High Court of Malaya at Kuala Lumpur dated • Anouncement on KPI Targets for the 22 August 2011 confirming the Par Value fi nancial year 2012. Reduction and Share Premium Reduction, • Anouncement on proposed fi nal dividend with the Registrar of Companies of Malaysia. for fi nancial year 2011. Accordingly, the Par Value Reduction and Share Premium Reduction take effect from 22 March even date and the Proposals have been Payment of RSLS coupon due for the first completed. six months from 1 October 2011 to 31 March 2012 and partial redemption of cumulative 30 September outstanding balance of RSLS amounting to Payment of RSLS coupon due for the second RM35.0 million. six months from 1 April 2011 to 30 September 2011 and partial redemption of cumulative 20 April outstanding balance of RSLS amounting to Announcement on amended fi nancial results RM8.98 million. for the financial year ended 31 December 2011. 27 October Announcement on the receipt by Faber Medi- 27 April Serve Sdn Bhd (“FMS”) of a letter dated 27 Announcement on the receipt by FMS of a October 2011 from Unit Kerjasama Awam letter dated 27 April 2012 from UKAS whereby Swasta (“UKAS”) whereby FMS shall continue FMS shall in the interim continue with the the existing Concession for an interim period existing Consssion untill the signing of a new of six months commencing on 28 October HSS Concession Agreement with MoH. 2011, subject to the prevailing terms and conditions of the Concession, or until the signing of a new Concession Agreement for Privatisation of Hospital Support Services (“HSS”) with the Ministry of Health (“MoH”), whichever is the earlier.

30 November Announcement on fi nancial results for the 3rd quarter ended 30 September 2011.

FABER GROUP BERHAD ANNUAL REPORT 2011 30 CORPORATE FRAMEWORK

CORPORATE STRUCTURE GROUP’S KEY OPERATING COMPANIES

INTEGRATED PROPERTY FACILITIES DEVELOPMENT MANAGEMENT DIVISION DIVISION

100% 100% 75% 100% FABER HEALTHCARE FABER FACILITIES FABER L.L.C. FABER DEVELOPMENT MANAGEMENT SDN BHD SDN BHD HOLDINGS SDN BHD

43% 57% 100% 100% Faber Medi-Serve Faber Facilities Management Faber Union Sdn Bhd Sdn Bhd Sdn Bhd 100% 60% 100% Country View Healthtronics (M) Faber Star Facilities Development Sdn Bhd Sdn Bhd Management Limited 100% 60% 51% Faber Grandview Fresh Linen Services Faber Sindoori Management Development (Sabah) (Sabah) Sdn Bhd Services Private Limited Sdn Bhd

55% 100% 55% Fresh Linen Services General Field Sdn Bhd Rimbunan Melati (Sarawak) Sdn Bhd Sdn Bhd

FABER GROUP BERHAD ANNUAL REPORT 2011 31 CORPORATE FRAMEWORK

ORGANISATION CHART

BOARD OF DIRECTORS Audit and Risk Committee

Nomination and Remuneration Committee

Investment Committee MANAGING DIRECTOR

CORPORATE OPERATIONS OFFICE

Corporate Services

INTEGRATED Corporate Communications PROPERTY FACILITIES DEVELOPMENT Corporate Human Resource MANAGEMENT and Administration

Corporate Finance and Investor Relations Concession

Corporate Organisational Non-Concession Improvement and Compliance

Corporate Legal and Secretarial

FABER GROUP BERHAD ANNUAL REPORT 2011 32 CORPORATE FRAMEWORK

CORPORATE INFORMATION

BOARD OF DIRECTORS

NOMINATION AND AUDIT AND RISK REMUNERATION INVESTMENT NAME POSITION COMMITTEE COMMITTEE COMMITTEE

Dato’ Ikmal Hijaz bin Hashim Chairman/Independent Non-Executive Chairman

Adnan bin Mohammad Managing Director Member

Datuk Zainal Abidin bin Alias Senior Independent Non-Executive Member Member

Datuk Mohamed Zain bin Independent Non-Executive Member Chairman Member Mohamed Yusuf

Dato’ Mohd Izzaddin bin Idris Non-Independent Non-Executive

Oh Kim Sun^ Independent Non-Executive Chairman

Elakumari a/p Kantilal* Non-Independent Non-Executive Member

Puasa bin Osman Independent Non-Executive

Suhaimi bin Halim Non-Independent Non-Executive

Annuar Marzuki bin Abdul Aziz Non-Independent Non-Executive Member Member

^ member of the Malaysian Institute of Certifi ed Public Accountants * member of the Malaysian Institute of Accountants

FABER GROUP BERHAD ANNUAL REPORT 2011 33 CORPORATE FRAMEWORK

COMPANY SECRETARY REGISTERED OFFICE PRINCIPAL BANKERS 20th Floor, Menara 2 CIMB BANK BERHAD Suriati binti Ashari Faber Towers ALLIANCE BANK MALAYSIA BERHAD (LS0009029) Jalan Desa Bahagia, Taman Desa PUBLIC BANK BERHAD Off Jalan Kelang Lama 58100 Kuala Lumpur GROUP MANAGEMENT Tel : +6 03 7628 2888 PRINCIPAL SOLICITORS Fax : +6 03 7628 2828 SHEARN DELAMORE & CO FABER GROUP BERHAD www.fabergroup.com.my ZAIN & CO Adnan bin Mohammad CHEANG & ARIFF Managing Director AUDITORS FABER MEDI-SERVE SDN BHD ERNST & YOUNG (AF 0039) STOCK EXCHANGE LISTING Syed A Hamid bin Syed A Rahman CHARTERED ACCOUNTANTS MAIN MARKET OF BURSA MALAYSIA Chief Executive Offi cer Level 23A, Menara Milenium SECURITIES BERHAD Jalan Damanlela STOCK NAME/CODE: FABER/1368 FABER FACILITIES SDN BHD Pusat Bandar Damansara STOCK SECTOR: TRADING/SERVICES Mohamad Muhazni bin Mukhtar 50490 Kuala Lumpur Chief Operating Offi cer Tel : +6 03 7495 8000 Fax : +6 03 7495 8114 FABER DEVELOPMENT HOLDINGS SDN BHD Khalid bin Abd Majid SHARE REGISTRAR Head of Company SYMPHONY SHARE REGISTRARS SDN BHD FABER L.L.C. Level 6, Symphony House Riad Ahmad Ramzi Block D13, Pusat Dagangan Dana 1 Chief Executive Offi cer Jalan PJU 1A/46 47301 Petaling Jaya Selangor Tel : +6 03 7841 8000 Fax : +6 03 7841 8008

FABER GROUP BERHAD ANNUAL REPORT 2011 34 CORPORATE FRAMEWORK

GROUP MILESTONES

2010 2009 2008

2010 1996

November 30 December 2011 Areca Residence in Kepong, Kuala Lumpur Exit from Food and Nutritional Services 20 April launched by FDH with a GDV of RM187.0 upon completion of the disposal of Kesan Suci Faber Star Facilities Management Limited million. 102 units of three-storey semi- Sdn Bhd. became a wholly owned subsidiary of detached houses. Faber Facilities Sdn Bhd (“FFSB”) with the acquisition of the remaining 49% equity 2008 interest from Singa Real Estates Ltd. 2009 18 February 18 March The sale of Sheraton Hanoi Hotel marks 19 September Faber L.L.C. was awarded contracts by the Faber’s exit from the Hotel sector. Completion of the Par Value Reduction and Department of Municipal Affairs, Western Share Premium Reduction of Faber. Region Municipality, Emirate of Abu Dhabi 26 June for low cost houses maintenance. The annual Faber Medi-Serve Sdn Bhd became a wholly 2010 total contract is estimated at RM62.0 million. owned subsidiary of Faber with the acquisition April of the remaining 30% equity interest from Faber Development Holdings Sdn Bhd (“FDH”) 23 November Medlux Overseas (Gurnsey) Ltd. launched Armada Villa in Taman Danau Desa, Faber L.L.C. was awarded a contract by the Kuala Lumpur with a Gross Development Department of Municipal Affairs, Western 3 November Value (“GDV”) of RM140.8 million. 40 three- Region Municipality, Emirate of Abu Dhabi for Capital repayment to Jeram Bintang Sdn Bhd storey semi-detached houses and 5 three- infrastructure maintenance with an estimated of RM115.0 million Redeemable Convertible storey bungalows complete with a clubhouse annual total contract price of RM144.0 million. Preference Shares. spread across 5.7 acres.

FABER GROUP BERHAD ANNUAL REPORT 2011 35 CORPORATE FRAMEWORK

1993 1990 1963

1964

2007 2000 1990 Faber paid a dividend of 2% less 27% Completed the First Debt Restructuring 22 November taxation in respect of FY2006 after a lapse Exercise under the purview of the Corporate Changed name to Faber Group Berhad. of 22 years. Debt Restructuring Committee. 1972 2004 1996 Merged with Faber Union Sdn Bhd, a property 30 September 28 October developer company to form Faber Merlin Completed Second Restructuring Exercise Awarded a 15-year concession for Hospital Malaysia Berhad. and formation of Special Purpose Vehicle. Support Services to 71 Government hospitals in Perak, Penang, Kedah, Perlis, Sabah and Sarawak. Embarked on service provision for 1964 5 November 2 January Bursa Malaysia Securities Berhad uplifted the Integrated Facilities Management Sector. Listed under the Hotel Sector on the Main Faber’s PN4 condition. Board of the Kuala Lumpur Stock Exchange.

8 November 1993 Embarked on expansion and rebranding of the Faber reclassifi ed under the Trading/Services Hotel Division with the tie-up with Starwood 1963 Sector on the Main Board of Bursa Securities. 31 May International to rebrand some of the hotels to Incorporated as Merlin Hotels Malaysia the “Sheraton” brand. Berhad. Hotel owner and manager of the 2003 “Merlin” brand. 18 November Faber fell under PN4 condition due to negative shareholders’ funds.

FABER GROUP BERHAD ANNUAL REPORT 2011 36 CORPORATE FRAMEWORK

OUR ACHIEVEMENTS

2011 Institute for Infrastructure Asset Management, United States of America Best Practices – Healthcare Asset Management Award 2011

2011/2010 Starbiz-ICR Malaysia Corporate Responsibility Awards 2010 Winner for Marketplace category for companies below RM1 billion market capitalisation

2011 Frost & Sullivan Malaysia Excellence Award Facilities Management Company of the Year

FABER GROUP BERHAD ANNUAL REPORT 2011 37 CORPORATE FRAMEWORK

2009 STARBIZ-ICR MALAYSIA CORPORATE RESPONSIBILITY AWARDS 2009 Finalist for Workplace category for companies below RM1 billion market capitalisation

ASIA PACIFIC ENTREPRENEURSHIP AWARD (“APEA”) 2009 Outstanding Entrepreneurship Award conferred to Adnan bin Mohammad, Managing Director of Faber Group Berhad

ANUGERAH KUMPULAN UEM “Sri Cemerlang” Award for People and Organisational Development

NATIONAL AWARD FOR MANAGEMENT ACCOUNTING 2009 (“NAfMA”) Practice Solution Award (Non-Listed Company) conferred to Faber Medi-Serve Sdn Bhd

2008 STARBIZ-ICR MALAYSIA CORPORATE RESPONSIBILITY AWARDS 2008 Winner for Workplace category for companies below RM1 billion market capitalisation

ANUGERAH KUMPULAN UEM “Sri Cemerlang” Award for Productivity of Resources

UEM LIVE TALENT EXTRAVAGANZA 2008 1st Runner Up

CONTINUAL IMPROVEMENT COMPETITION UEM 2007 Champion – “LLS” Team

CONTINUAL IMPROVEMENT COMPETITION UEM 2007 2nd Runner Up – “Kamunting Plant” Team

2007 NATIONAL AWARD FOR MANAGEMENT ACCOUNTING 2007 (“NAfMA”) Practice Solution Award (Non-Listed Company) conferred to Faber Medi-Serve Sdn Bhd

NATIONAL PRODUCTIVITY CORPORATION Gold Award – National Innovative and Creative Circles Convention 2007

ANUGERAH KUMPULAN UEM “Sri Wijaya” Award for the Group’s strong commitment and support to GLC Transformation Programmes

ANUGERAH KUMPULAN UEM “Sri Cemerlang” Award for People and Organisational Development

ANUGERAH KUMPULAN UEM “Sri Cemerlang” Award for Systems and Processes Improvement

FABER GROUP BERHAD ANNUAL REPORT 2011 38 CORPORATE FRAMEWORK

CALENDAR OF EVENTS

20 January 2012 8 March 2011 15 March 2011

22 February 2011

19 February 8 March 2012 Faber Development Holdings Sdn Bhd Announcement by Prime Minister YAB Dato’ 20 January launched Vila Prima, an exclusive gated Sri Najib bin Tun Abdul Razak that Faber YB Dato’ Sri Liow Tiong Lai, the Health and guarded niche residential development was identified to spearhead the proposed Minister of Malaysia, officially launched comprising 31 units 4-storey link villas and project on Energy Performance Management Faber Medi-Serve (“FMS”) Bukit Beruntung 3 bungalows with an exclusive clubhouse System for Government entities during the Laundry Plant. spread across 2.77 acres in Taman Danau 4th Economic Transformation Programme. Desa, Kuala Lumpur. This Entry Point Project (“EPP”) is to ensure the efficient use of energy in Government 2011 22 February buildings and to support EPP 9: Improving 13 January Faber participated in the 3-day inaugural Energy Effi ciency. With the focus on the expansion of Faber’s IFM World Congress and Exhibition on business in the Oil and Gas Instrumentation Infrastructure Asset Management 15 March sector, a familiarisation visit to Petronas (“INFRAASSETS 2011”). In conjunction with Faber’s Annual Analysts and Media briefi ng Penapisan (M) Sdn Bhd in Melaka was held the event, Faber received the “Best Practices was chaired by En. Adnan bin Mohammad for Faber’s Board of Directors and Senior - Healthcare Asset Management Award with Faber Senior Management team to Management. 2011”, by the Institute for Infrastructure provide update on Faber’s performance and Asset Management, United States of America corporate developments. acknowledging Faber’s contribution towards its efforts for Healthcare Asset Management.

FABER GROUP BERHAD ANNUAL REPORT 2011 39 CORPORATE FRAMEWORK

18 May 2011 24-25 May 2011 10-13 October 2011

24-26 June 2011

29 March 24-26 June 28 July Faber was named the winner for the Faber participated in the 3-day GLC Open Faber Facilities Sdn Bhd (“FFSB”) launched Marketplace category for companies Day under UEM Group at the Kuala Lumpur its Mobile Unit and Maintenance Workshop below RM1 billion market capitalisation Convention Centre. The 3-day event is aimed at Faber Towers, Kuala Lumpur to enhance at the 3rd Star-Biz ICR Malaysia Corporate at creating awareness and increasing the its customer service levels at various sites Responsibility Awards 2010 held at the public’s understanding of the role played by within the Klang Valley. The Mobile Unit Intercontinental Hotel Kuala Lumpur. Government-Linked Investment Companies attends to major mechanical and engineering (“GLICs”) and Government-Linked Companies breakdown and repairs immediately as 14 April (“GLCs”) organised by the Putajaya Committee well as undertakes Planned Preventive Faber was awarded "Facilities Management on GLC High Performance. Maintenance. Company of the Year" at the 2011 Frost & Sullivan Malaysia Excellence Awards. 23-24 July 10-13 October Rimbunan Melati Sdn Bhd held an official Faber held its annual Directors and 18 May launching ceremony at its show unit Management Retreat attended by members Faber held its 48th Annual General Meeting introducing Areca Residence Section 3, of the Board of Directors and Senior and Extraordinary General Meeting chaired its final phase of development at Laman Management of the Group for strategic review by Dato’ Ikmal Hijaz bin Hashim at the Sime Rimbunan, Kepong in Kuala Lumpur. and planning. Darby Convention Centre Kuala Lumpur. 9- 10 November 24-25 May FFSB hosted a 2-day visit by the Senior FMS participated in the 2-day Public Private Management Team from Fortis Healthcare Partnership Workshop 2011 held at the Sime (India) Ltd. The Fortis team was briefed on Darby Convention Centre Kuala Lumpur the provision of IFM services particularly in officiated by YB Tan Sri Nor Mohamed bin Hospital Support Services including visits Yakcop, Minister at the Prime Minister to FMS Incineration and Laundry Plants in Department. Kamunting, Perak.

FABER GROUP BERHAD ANNUAL REPORT 2011 40 CORPORATE FRAMEWORK

MEDIA HIGHLIGHTS

FABER GROUP BERHAD ANNUAL REPORT 2011 41 CORPORATE FRAMEWORK

FABER GROUP BERHAD ANNUAL REPORT 2011 42 LEADERSHIP

BOARD OF DIRECTORS’ PROFILE

DATO’ IKMAL HIJAZ BIN HASHIM 59, Malaysian Chairman/Independent Non-Executive Director

DATE APPOINTED TO THE BOARD: • 1 March 2009

MEMBERSHIP OF • Chairman of the Investment Committee BOARD COMMITTEES:

QUALIFICATIONS: • Master of Philosophy in Land Management, University of Reading, United Kingdom • Bachelor of Arts with Honours, Universiti Malaya

MEMBERSHIP OF ASSOCIATIONS: • None

WORKING EXPERIENCE AND • 1976 – 1990: Served in the Administrative and Diplomatic Service of the Government in various OCCUPATION: capacities in the District Offi ce, Regional Development Authorities, and Training Management and Administrative under various Ministries. • 1991 – 1992: Joined United Engineers (M) Berhad as the General Manager of the Malaysia-Singapore Second Crossing Project. • 1993 – 1999: Appointed as the Chief Operating Offi cer of Projek Lebuhraya Utara-Selatan Berhad (“PLUS”) on 1 January 1993 and subsequently appointed as Managing Director from 1 January 1995 to 30 June 1999. Resigned as Managing Director of PLUS in 1999, but remained as a Director until November 2001. • 1999: Appointed as the Managing Director of Prolink Development Sdn Bhd (“Prolink”) and Acting Chairman of the Supervisory Board for the Property Division of the Renong Group in July 1999. • 2000: Appointed as the President of the Renong Group’s Property Division in February 2000 while maintaining the position as the Managing Director of Prolink. • 2002: Appointed as the Managing Director of Renong Berhad until October 2003. • 2003 – 2007: Appointed as the Managing Director/Chief Executive Offi cer of Pos Malaysia Berhad on 6 December 2003. Appointed as the Executive Director of Pos Malaysia & Services Holdings Berhad (“PMSHB”) on 19 December 2003. Re-designated as PMSHB’s Group Managing Director/Chief Executive Offi cer on 13 April 2004. • 2007 – 2009: Assumed the post of Chief Executive Offi cer of Iskandar Regional Development Authority on 23 February 2007 until February 2009. • 2009 – present: Chairman of Faber Group Berhad from 1 March 2009.

DIRECTORSHIP OF • Nadayu Properties Berhad (formerly known as Mutiara Goodyear Development Berhad). PUBLIC COMPANIES (IF ANY): • EP Manufacturing Berhad.

NO. OF BOARD MEETINGS • 11/11 ATTENDED FOR THE FINANCIAL YEAR:

FABER GROUP BERHAD ANNUAL REPORT 2011 43 LEADERSHIP

ADNAN BIN MOHAMMAD 51, Malaysian Managing Director

DATE APPOINTED TO THE BOARD: • 1 April 2007

MEMBERSHIP OF • Member of the Investment Committee BOARD COMMITTEES:

QUALIFICATIONS: • Bachelor of Business Administration (Finance), University of Missouri, Kansas City, United States of America • Diploma in Banking Studies from MARA Institute of Technology

MEMBERSHIP OF ASSOCIATIONS: • Member of the Malaysian Institute of Management

WORKING EXPERIENCE AND • 1985 – 1986: Served at Malayan Banking Berhad. OCCUPATION: • 1989: Served at Bank Rakyat Berhad. • 1989 – 1990: Joined Projek Lebuhraya Utara-Selatan Berhad (“PLUS”) as a Project Finance Offi cer. • 1990 –1992: Joined Bumiputera Merchant Bankers Berhad as a Corporate Banking Offi cer. • 1992 – 2000: Appointed as Project Finance Assistant Manager at PLUS and subsequently promoted to Senior General Manager of the Finance Division. • 2000 – 2005: Served the UEM Group in various capacities including as the Managing Director of TIMEdotNet Berhad, the Chief Operating Offi cer of Intria Berhad, the Managing Director of Park May Berhad and the Chief Executive Offi cer of E-Idaman Sdn Bhd. • 2005 – 2007: Appointed as the Chief Operating Offi cer of UEM Builders Berhad. • 2007 – present: Managing Director of Faber Group Berhad.

DIRECTORSHIP OF OTHER • None PUBLIC COMPANIES:

NO. OF BOARD MEETINGS • 11/11 ATTENDED FOR THE FINANCIAL YEAR:

FABER GROUP BERHAD ANNUAL REPORT 2011 44 LEADERSHIP

BOARD OF DIRECTORS’ PROFILE (CONTINUED)

DATUK ZAINAL ABIDIN DATUK MOHAMED ZAIN BIN ALIAS BIN MOHAMED YUSUF 68, Malaysian 72, Malaysian Senior Independent Independent Non-Executive Director Non-Executive Director

DATE APPOINTED TO THE BOARD: • 22 October 2001 (Board of Directors) • 22 October 2001 • 23 May 2003 (Senior Independent Non-Executive Director)

MEMBERSHIP OF • Member of the Audit and Risk Committee • Chairman of the Nomination and Remuneration BOARD COMMITTEES: • Member of the Nomination and Remuneration Committee Committee • Member of the Audit and Risk Committee • Member of the Investment Committee

QUALIFICATIONS: • Bachelor of Arts (History) with Honours, • Bachelor of Economics with Honours, Universiti Malaya University of Western Australia • Harvard Senior Management Programme

MEMBERSHIP OF ASSOCIATIONS: • None • Member and Immediate Past Chairman of Malaysia Australia Business Council

WORKING EXPERIENCE AND • 1967 – 1999: Served with the Malaysian • 1986 – 1996: Marketing Consultant to Shell OCCUPATION: Diplomatic and Administrative Service throughout International, based in London before being his career and retired in 1999 as the Ambassador appointed as the fi rst Malaysian Marketing to Indonesia. Attached to the Ministry of Foreign Director of Shell Marketing Companies in Affairs with postings to Malaysian Embassies in Malaysia in 1989. Subsequently he was elevated Washington DC, Jakarta, New Delhi, Hong Kong to the Board of Directors of the Shell Group as and Tokyo. Subsequently, he was appointed as Executive Director, both in the upstream and the Malaysia’s Ambassador to Kuwait with downstream companies as well as 18 other Shell concurrent accreditation as the Ambassador joint-venture companies. Resigned in 1996 as to Bahrain, Qatar, The United Arab Emirates Director of Shell Refi ning Company (Federation and Oman. Also served as the Malaysian of Malaya) Berhad. Ambassador to Thailand and Indonesia and was • 1997 – 2000: Director of Insas Berhad from then appointed as the ASEAN Director General March 1997 to January 2000 and Director of for Malaysia and as the Chief of Protocol. PJBumi Berhad from May 2003 to March 2008. • 2001 – present: Director of Faber Group Berhad. • 1999 – 2001: Director of MBF Finance Berhad from May 1999 to December 2001. • 2001 – present: Director of Faber Group Berhad. Presently, he is the Chairman of Confoil (M) Sdn Bhd and Malacca Securities Sdn Bhd.

DIRECTORSHIP OF • None • Mission NewEnergy Ltd, a company listed on the PUBLIC COMPANIES (IF ANY): Australian Stock Exchange and in 2011 concurrently listed in Nasdaq.

NO. OF BOARD MEETINGS • 11/11 • 10/11 ATTENDED FOR THE FINANCIAL YEAR:

FABER GROUP BERHAD ANNUAL REPORT 2011 45 LEADERSHIP

DATO’ MOHD IZZADDIN OH KIM SUN BIN IDRIS 63, Malaysian 49, Malaysian Independent Non-Independent Non-Executive Director Non-Executive Director

DATE APPOINTED TO THE BOARD: • 5 August 2010 • 28 September 2007

MEMBERSHIP OF • None • Chairman of the Audit and Risk Committee BOARD COMMITTEES:

QUALIFICATIONS: • Bachelor of Commerce Degree (First Class • Institute of Chartered Accountants in England Honours in Finance), University of New and Wales (“ICAEW”) South Wales, Australia

MEMBERSHIP OF ASSOCIATIONS: • Fellow of Chartered Public Accountants, • Member of the Malaysian Institute of Certifi ed Australia Public Accountants • Member of Malaysian Institute of Accountants • Malaysia Financial Reporting Foundation

WORKING EXPERIENCE AND • 1985 – 1996: Served at Malaysian International • 1972 – 1994: Began career with Coopers & OCCUPATION: Merchant Bankers Berhad which included a Lybrand in London. He also held positions as the 3-year secondment in the late 1980s to Barclays Finance Director of Taiko Plantations Sdn Bhd, de Zoete Wedd Limited, a London-based the Financial Controller of ICI Malaysia, and the investment bank and a subsidiary of then Barclays Finance Manager (Secondment) at the ICI Bank PLC. Headquarters in London responsible for Northern • 1996 – 2004: Joined Southern Bank Berhad as Europe. He led a successful management buyout the Senior Vice President (Corporate Finance) of ICI’s Malaysian operations in 1994. and the Chief Financial Offi cer (“CFO”) of Ranhill • 1994 – 2003: Appointed Group Executive Director Berhad. He also held the position of the Chief of Chemical Company of Malaysia Berhad. Operating Offi cer of Malaysian Resources • 2004 – present: Currently serves on the Board Corporation Berhad. of Directors of several Public Listed Companies. • 2004 – 2009: Joined Tenaga Nasional Berhad as the CFO/Senior Vice President (Group Finance). • 2009 – Present: Appointed as the Group Managing Director/Chief Executive Offi cer of UEM Group Berhad and also the Non-Executive Deputy Chairman of PLUS Expressways Berhad.

DIRECTORSHIP OF • Cement Industries of Malaysia Berhad • UEM Land Holdings Berhad PUBLIC COMPANIES (IF ANY): • OPUS Group Berhad • Golden Land Berhad • PLUS Expressways Berhad • Nikko Electronics Berhad (In Liquidation) • Projek Lebuhraya Utara-Selatan Berhad • Projek Lebuhraya Usahasama Berhad • TIME Engineering Berhad • UEM Builders Berhad • UEM Group Berhad • UEM Land Holdings Berhad

NO. OF BOARD MEETINGS • 9/11 • 10/11 ATTENDED FOR THE FINANCIAL YEAR:

FABER GROUP BERHAD ANNUAL REPORT 2011 46 LEADERSHIP

BOARD OF DIRECTORS’ PROFILE (CONTINUED)

ELAKUMARI A/P PUASA BIN OSMAN KANTILAL 67, Malaysian 55, Malaysian Independent Non-Independent Non-Executive Director Non-Executive Director

DATE APPOINTED TO THE BOARD: • 22 October 2001 • 19 June 2003

MEMBERSHIP OF • Member of the Audit and Risk Committee • None BOARD COMMITTEES:

QUALIFICATIONS: • Masters of Science in Finance and Accounting, • Master in Business Administration, Ohio University of East Anglia, United Kingdom University, United States of America • Bachelor of Accounting, Universiti Kebangsaan • Bachelor of Arts (Economics) with Honours, Malaysia Universiti Malaya

MEMBERSHIP OF ASSOCIATIONS: • Member of the Malaysian Institute of Accountants • None

WORKING EXPERIENCE AND • 1981 – 1994: Served in various senior positions • 1973 – 1999: Joined Bank Pertanian Malaysia OCCUPATION: with the Government in the Accountant General’s from August 1973 to September 1999, Offi ce and the Ministry of Finance. serving in various managerial positions in the • 1994 – current: Director of the Investment Department of Personnel and Training, Branch Division of Khazanah Nasional Berhad. Operations, Retail Banking and Credit Operations. • 2003 – present: Director of Faber Group Berhad.

DIRECTORSHIP OF • TIME dotCom Berhad • None PUBLIC COMPANIES (IF ANY): • TIME Engineering Berhad

NO. OF BOARD MEETINGS • 11/11 • 11/11 ATTENDED FOR THE FINANCIAL YEAR:

FABER GROUP BERHAD ANNUAL REPORT 2011 47 LEADERSHIP

SUHAIMI BIN HALIM ANNUAR MARZUKI 56, Malaysian BIN ABDUL AZIZ Non-Independent 41, Malaysian Non-Executive Director Non-Independent Non-Executive Director

DATE APPOINTED TO THE BOARD: • 1 September 2010 • 3 September 2009

MEMBERSHIP OF • None • Member of the Investment Committee BOARD COMMITTEES: • Member of the Nomination and Remuneration Committee

QUALIFICATIONS: • Bachelor of Science in Civil Engineering, • Honours Degree in Accountancy and Master University of Glasgow, Scotland Degree in Business Administration (Finance), International Islamic University of Malaysia • Diploma in Comparative Law, Institute of Islamic Studies

MEMBERSHIP OF ASSOCIATIONS: • None • Fellow of the CPA, Australia • Member of the Malaysian Institute of Accountants

WORKING EXPERIENCE AND • 1988 – 1996: Joined Opus International (M) Berhad, • 1993 – 1994: Served at the Audit & Business OCCUPATION: a wholly owned subsidiary of Opus Group Berhad. Advisory Services division of Pricewaterhouse. • 1996 – 1997: Appointed as the Chief Operating • 1994 –1995: Moved to the Audit Department of Offi cer of Kinta Kellas Plc and Pengurusan LRT UMW Corporation Sdn Bhd. Sdn Bhd. • 1995 – 1996: Served at the Internal Audit Department • 1997 – 2002: Assumed the position of the Managing of Renong Berhad (now part of the UEM Group). Director (“MD”) at Linkedua (Malaysia) Berhad and • 1996 – 1999: Moved to the Corporate Finance was then transferred to Expressway Lingkaran Department of Commerce International Tengah Sdn Bhd where he held the post of MD. Merchant Bankers Berhad. • 2002 – 2005: Appointed as the MD of Kinta Kellas • 1999 – 2003: Joined the Corporate Finance Plc, which later changed its name to Opus Department of Renong Berhad. International Group Plc (“Opus Plc”) in 2005. • 2003 – 2004: Appointed as the General Manager • 2007 – October 2010: In 2007, through an internal of Corporate Finance at Time Engineering Berhad. reorganisation, Opus Plc (now known as Opus • 2004 – May 2006: Transferred to UEM Group as International Limited) was replaced by Opus Group the General Manager in the offi ce of the Managing Berhad as the holding company of Opus Group Director/Chief Executive Offi cer. where he continued as the MD of Opus Group Berhad. • June 2006 – August 2009: Appointed as the Chief • 2010 – Present: Assumed the position of MD, Asset Financial Offi cer (“CFO”) at PLUS Expressways & Facility Management Group of Companies under Berhad. UEM Group Berhad. • Sept 2009 – Present: Appointed as the Group CFO of UEM Group Berhad

DIRECTORSHIP OF • OPUS Group Berhad • Projek Penyelenggaraan Lebuhraya Berhad PUBLIC COMPANIES (IF ANY): • OPUS International Ltd (foreign company • Time Engineering Berhad registered in Malaysia) • United Growth Berhad • Projek Penyelenggaraan Lebuhraya Berhad

NO. OF BOARD MEETINGS • 10/11 • 10/11 ATTENDED FOR THE FINANCIAL YEAR:

FABER GROUP BERHAD ANNUAL REPORT 2011 48 LEADERSHIP

GROUP MANAGEMENT PROFILE

ADNAN BIN MOHAMMAD SYED A HAMID BIN SYED A RAHMAN 51 54 Managing Director Chief Executive Offi cer, Faber Medi-Serve Sdn Bhd

DATE OF APPOINTMENT: • 1 July 2007

QUALIFICATIONS: Note: Please refer to page 43 for Adnan bin Mohammad’s • Bachelor in Engineering (Civil), Universiti Teknologi complete profi le MARA, Malaysia

WORKING EXPERIENCE • 1983 – 1987: Site Engineer at GKM-C Itoh Fudo AND OCCUPATION: Joint Venture for 32 km InterUrban Toll Expressway. • 1987 – 1988: Resident Engineer at Perunding Bersatu Engineers Sdn Bhd for two blocks of 16 storey apartments. • 1989 – 1997: Joined Pengurusan Lebuhraya Berhad as Construction Manager and was then promoted to Regional Construction Manager in 1994 for construction of North-South Expressway and Malaysia-Singapore Second Crossing (MSSC). • 1997 – 1999: Chief Executive Offi cer of Time Automation & Management Services Sdn Bhd. • 1999 – 2007: Managing Director of Projek Penyelenggaraan Lebuhraya Berhad (PROPEL Berhad). • 2007 – present: Chief Executive Offi cer of Faber Medi-Serve Sdn Bhd.

FABER GROUP BERHAD ANNUAL REPORT 2011 49 LEADERSHIP

KHALID BIN ABD MAJID MOHAMAD MUHAZNI BIN MUKHTAR 47 44 Head of Company, Chief Operating Offi cer, Faber Development Holdings Sdn Bhd Faber Facilities Sdn Bhd

DATE OF APPOINTMENT: • 1 December 2008 • 1 October 2011

QUALIFICATIONS: • Bachelor in Civil Engineering, Victoria University • Bachelor of Business Administration, of Technology, Victoria, Australia (formerly The University of Iowa known as Footscray Institute of Technology) • Master of Business Administration, The Ohio University • Master of Science in Business Leadership University of Northumbria at Newcastle in association with Imperial Consulting, Malaysia

WORKING EXPERIENCE • 1990 – 1991: Started his career as a Project • 1991 – 1992: Started his career in London AND OCCUPATION: Engineer with Emkay Associates Sdn Bhd. Pacifi c Insurance as a Management Trainee • 1991 – present: Joined Faber Development Holdings and confi rmed as a Marketing Executive. Sdn Bhd, the property arm of FGB in May 1991 as • 1993: Joined Renong Group Berhad as a Project Executive, after which he was promoted to Management Trainee and confi rmed as several positions. He was previously promoted to Management Executive in Corporate Affairs Senior General Manager in July 2007 before Department of PLUS Expressways Berhad. assuming his current position in December 2008. • 1996: Transferred to Rangkaian Segar Sdn Bhd, now known as Touch ‘n Go Sdn Bhd, to set up the company in a team of fi ve. Rose up the rank to eventually be the General Manager of Operations. Last position was as General Manager, Project Management Department. • 2009: Joined Faber Group as General Manager, Corporate Services. • 2011 – present: Appointed as Chief Operating Offi cer, Faber Facilities Sdn Bhd.

FABER GROUP BERHAD ANNUAL REPORT 2011 50 LEADERSHIP

HEADS OF OVERSEAS SUBSIDIARIES

UNITED ARAB EMIRATES INDIA

FABER L.L.C. FABER SINDOORI MANAGEMENT FABER STAR FACILITIES RIAD AHMAD RAMZI SERVICES PRIVATE LIMITED MANAGEMENT LIMITED Chief Executive Offi cer JANARDANAN A/L R S MUNIANDY MOHAMAD MUHAZNI BIN MUKHTAR Executive Director Director

SENIOR MANAGEMENT TEAM

FABER GROUP BERHAD INTEGRATED FACILITIES MANAGEMENT PROPERTY DEVELOPMENT

JULIZA BINTI JALIL ZAINAL ABIDIN BIN AB SAMAD LIEW CHIA YEE Chief Financial Offi cer, FGB Head of Central Technical Development Head of Project Development, FDH and Support, FGB SURIATI BINTI ASHARI LINDA LIM KHENG LIN Head of Corporate Legal and Secretarial, RAMLAN BIN HJ AWANG ALI Head of Finance, FDH FGB Head of Operations, FMS RADIN BAIDURILAH BINTI RADIN HASLINA BINTI ALIAS HASNIYAH BINTI HJ MOHD SAAD SOENARDI Head of Corporate Human Resource and Head of Human Resource and Head of Project Development, RMSB Administration, FGB Administration, FMS GAN SENG KEONG AHMAD YUSRI BIN YAHAYA KIDMAN CEZEREE BIN KAMARUDIN Head of Business Development, FDH Head of Corporate Services, FGB Head of Concession Monitoring and Development, FMS ONG BAN LENG MASELA BINTI IBRAHIM Head of Sales & Marketing, FDH Head of Corporate Communications, FGB RAZLIAH BINTI RAMLI Head of Finance, FMS ROSLAN BIN MANAP AINON BINTI SULEIMAN Head of Land Administration, FDH Head of Corporate Organisational NOR SUHAILA BINTI KAMARUDIN SOHAMI Improvement and Compliance, FGB Head of Contracts Management, FMS HANIZAH BINTI MOHD RAMLI Head of Customer Service and Credit BAD LATIF BIN MANSOR Control, FDH Head of Operations and Technical Support, FFSB

ROZAIFEE BIN ABU ZAHARIM Head of Finance, FFSB

FGB: Faber Group Berhad FDH: Faber Development Holdings Sdn Bhd FFSB: Faber Facilities Sdn Bhd FMS: Faber Medi-Serve Sdn Bhd RMSB: Rimbunan Melati Sdn Bhd

FABER GROUP BERHAD ANNUAL REPORT 2011 51 KEY INITIATIVES

HUMAN CAPITAL DEVELOPMENT

We are a team of over 7,400 committed employees located in Malaysia, the United Arab Emirates and India. Our workforce consists of professional, technical, operational and support staff from diverse disciplines, dedicated to delivering excellence and enhancing the value of our service offerings in Integrated Facilities Management (“IFM”) and Property Development based on the following discipline:

• Finance & Accounts • Healthcare Operations • Corporate Finance • Plant Maintenance & Production • Corporate Services • Laboratories • Business Development • Knowledge Management • Human Resource Development • Research & Development • Corporate Secretarialship • Technology Development & Support • Legal • Health & Safety • Administration • Organisational Improvement • Corporate Communications • Technical & Engineering areas: • Customer Service - Electrical • Credit Control & Billings - Mechanical • Contracts Management - Civil • Procurement & Purchasing - Environmental • Quantity Surveying - Biomedical • Project Management - Process • Information & Communications Technology - Infrastructure

FABER GROUP BERHAD ANNUAL REPORT 2011 52 KEY INITIATIVES

BUILDING VALUE AT OUR WORKPLACE

DEVELOPING COMPETENCIES AND ALIGNMENT

Faber has always recognised the value of its human capital as we continue to drive our growth in an increasingly competitive local and global business environment. Over the years, through Corporate Human Resource and Administration (“CHRAD”), Faber has adopted the strategic initiatives to ensure its human capital is aligned to the business strategies.

Throughout 2011, to attract high-calibre recruits, job competency profi ling was carried out for key positions right from the recruitment and selection stage onwards. Development plans were also in place to nurture high-potential individuals by providing technical and soft skills training to bridge any competency gaps. This will ensure the Group has a ready pool of talents to support its strategic plans in any foray it may take by offering IFM services in other business sectors.

CULTIVATING A LEARNING CULTURE Brand Training Workshop. Based on a training needs analysis and performance assessment, a two-year training programme (2011-2012) for both the IFM and Property Divisions has been drawn up to narrow the gaps in both behavioural and technical skills among the Group’s employees.

The Group has invested approximately RM3.3 million in workforce training and development. The training budget was mainly spent on developing technical competencies including courses and programmes that are unique to the needs of the other sectors in IFM. The average number of training man-days per employee is seven days.

The training and development programmes attended by employees include the following:

• Leadership Management and Development • Strategic Innovation Management & Thinking • Customer Relations Services • Quality Services • Health & Safety • Energy Management • Preventive and Predictive Maintenance • Medical Gas & Equipment • Facilities and Biomedical Engineering • Green Building Index • Project Management

In 2011, the Group also embarked on a Work Based Learning Programme whereby a team Faber’s employees development agenda is consisting of Human Resource [“HR”] and Technical personnel was deployed to the Group’s focused on technical, professional, health overseas subsidiary in India for competencies-assessment and in-house training. This and safety programmes. collaboration will continue throughout 2012 to ensure the continuous transfer of technical skills and the nurturing of competencies for our India operations.

FABER GROUP BERHAD ANNUAL REPORT 2011 53 KEY INITIATIVES

Encik Adnan bin Mohammad, Managing Director presenting an appreciation certifi cate to one of the recipients during the Quaterly Employees' Briefi ng.

Knowledge Sharing Session.

In 2011, the Group also embarked on an Internal Brand Awareness Training Programme to communicate the Group’s Brand Personality to employees. A total of 21 brand training sessions were conducted at various locations in the Klang Valley and regionally in Perak, Kedah, Perlis, Penang, Sabah and Sarawak. Driven by our core values and brand personality of being Professional, Passionate, Caring, Innovative and Trustworthy, the Group aims to further enhance our presence and competitive advantage so as to strengthen the Faber Brand. Faber’s participation in one of the career fairs organised by higher institutions and professional bodies. LIFE-LONG LEARNING AND SELF DEVELOPMENT PROGRAMMES

In Faber, we believe in continuous learning and enhancing skills with the focus on Leadership and Talent Development. These have been the core of Faber’s human capital strategy under the banner of life-long learning and self development programmes. Several stages of Leadership and Talent Development programmes have been conducted under the banner of UEM Learning Centre for selected candidates.

For the past few years, more than 30 selected candidates from various levels within Faber have graduated under the Leadership and Talent Development programmes which comprised of four levels:

• Emerging Leadership Programme (“ELP”) This refers to the junior management talent development programme for Junior Executives. ELP is a structured 18-month study programme in Management and Leadership including the challenge to solve value added projects besides enhancing the executives’ behavioural competencies. The programme also includes job attachments at various departments within the UEM Group of Companies.

• Strathclyde MBA International Programme (“MBA”) This MBA is a twinning programme with the University of Strathclyde, United Kingdom with key subjects in Business Administration, Financial Management and Marketing for the Middle and Senior Management. The MBA is a two-year part time study to further enhance the general business management know-how of the executives. One of the benefi ts of this MBA is the entitlement for a partial sponsorship under a centralised learning fund.

FABER GROUP BERHAD ANNUAL REPORT 2011 54 KEY INITIATIVES

BUILDING VALUE AT OUR WORKPLACE (CONTINUED)

• Masters of Science in Business Leadership (“MBL”) The MBL is a customised Business Leadership programme covering four core critical business areas: Strategic Management, Business Acumen, Organisational Management and Innovative Leadership. It is also aligned to the subscribed 4Es 1P (Energy, Energise, Edge, Execute and Passion) leadership values. The programme involves a six-month team assignment where participants can apply their business leadership experience Innovasion Catalyst Camp. in work-based related projects. This two-and-a-half years MBL is a collaboration programme with the University of Northumbria, United Kingdom aims to prepare selected candidates to meet the demand for leadership talents in the organisation.

• Leadership Acceleration Programme (“LeAP”) LeAP is a premier leadership programme for high calibre Middle and Senior Management levels to prepare them as potential future leaders through various impact modules including global leadership and management. This programme is designed by the Australia Institute of Management to enhance the managerial skills of selected candidates as potentials for higher designations within the organisation. Using both strategic and operational approach, this premier programme creates leadership skills and business acumen in managing issues and challenges.

EMPLOYMENT VALUE PROPOSITION

Since 2009, CHRAD has been spearheading the Faber Employment Value Proposition (“EVP”) which primarily aims to achieve a balance between what the employer and the employee can contribute to the organisation. It also aims to attract and retain competent key talents, building a strong people brand and culture and enhancing Faber’s job marketability to potential staff.

CHRAD has been promoting and enhancing Faber’s job marketability through participation in career market programmes and career fairs organised by higher institutions and professional bodies such as UKM, UPM, UiTM, UM, ACCA, MIA, IEM and MIM. Additionally, to attract new talents, the Group has advertised in Job Street, “Graduan” and HR Professionals magazines highlighting Faber’s Employment Branding information.

FABER GROUP BERHAD ANNUAL REPORT 2011 55 KEY INITIATIVES

Meet-The Staff Staff Performance Session. during annual dinner.

EMPLOYEE COMMUNICATIONS AND ENGAGEMENT

Faber is proactive in identifying and understanding workforce needs and requirements, and aims to create a harmonious workplace using the fi ndings of its Employee Engagement Survey [“EES”]. Based on the EES results, key initiatives have been prioritised to further enhance communication and employee engagement. Other EVP action plans includes the implementation of a Talent Management Framework to ensure that these individuals have their specifi c career path and development plan as well as the opportunity to be part of the strategic team.

Faber has various channels of communication to enhance engagement and foster a balanced work-life culture that include:

• HR Help Desk ([email protected]): a dedicated channel for two-way communications between employer and employees. • Myportal: an internal, online staff portal to facilitate communication amongst employees throughout Malaysia. • Berita Faber: internal newsletter to highlight corporate events and staff activities. • E-buzz: monthly online updates on Quality, Safety, Health and Environment. • Quarterly Employees’ Briefi ng and Recognition Award (“ERA”) sessions: a town hall briefi ng by Top Management on quarterly fi nancial performance and recognition of excellent staff performance. • Meet-The Staff Session: face-to face dialogue between the Managing Director and staff at various levels to share concerns, issues and recommendations. • Brainwave / Ada Cadagan: employees’ suggestion scheme that solicits suggestions and ideas from employees on ways to improve the many aspects of the Group’s operations, management and workplace. • Knowledge Management Sharing sessions: business performances reviews and committee meetings for 5S, QSHE, IQA teams and focus group discussions. • Other communication channels: electronic media which include emails and smart phones. • Employees’ Recreation and Social and Sports activities: organised by the Committee for Recreational, Welfare and Sports (“CREWS”).

FABER GROUP BERHAD ANNUAL REPORT 2011 56 KEY INITIATIVES

SUSTAINING STAKEHOLDERS’ VALUE

Encik Adnan bin Mohammad, Managing Director of Faber conducts regular analysts and media briefi ngs to update the public on the Group’s progress.

Faber’s 48th AGM and EGM held on 18 May 2011.

CONTINUOUS EFFORTS IN STAKEHOLDERS’ COMMUNICATION

Faber has always strived to strengthen and promote open communications in gaining the trust of its stakeholders as we continuously recognise them as our partners. We fi rmly believe in practicing transparency and accountability and the importance of two–way communications in building stakeholders’ confi dence which is vital in achieving the Group’s business objectives and sustainability.

Over the years, the Group has embarked in various mechanisms to enhance our communications and relationship with the stakeholders. These include Annual General Meetings, Extraordinary General Meetings, briefi ng sessions on the updates of the Group’s performances and the communication is always integrated with dialogue sessions between The Investor Relations section in Faber’s our senior management and stakeholders in particular the shareholders, investment website, providing online information to the community, potential business partners and investors as well as the media. Other areas of investment community and the public. stakeholder engagement involve our participation in selected conventions and exhibitions which are strategically linked with the Group’s businesses.

Through the Group’s corporate website at www.fabergroup.com.my, we have a dedicated Investor Relations (“IR”) section for Stakeholders Communications. The Group is committed to fair and timely disclosure of information guided by the Investor Relations Policy and Disclosure Policy. This dedicated IR section provides an avenue and online reference for shareholders and members of the public to access information pertaining to the Group. The website is updated regularly with timely announcements to Bursa Malaysia Securities Berhad (“Bursa Securities”) such as the release of quarterly fi nancial reports, corporate proposals, meetings, and all other announcements that are required pursuant to the Main Market Listing Requirements of Bursa Securities.

Other initiatives in 2011 include the Analysts and Media briefi ng, one-on-one meetings and conference calls with analysts and fund managers and site visits to provide corporate updates and awareness of the Group’s core businesses in IFM and Property Development. Faber’s Senior Management team updating the analysts and media during the Analysts and Media Briefi ng held at the Sime Darby Convention Centre, Kuala Lumpur.

FABER GROUP BERHAD ANNUAL REPORT 2011 KEY INITIATIVES

Shareholders and employees at Faber’s 48th Annual General Meeting.

CORPORATE EXERCISE

The key corporate exercise carried out in 2011 was the successful completion of the Par Value Reduction and Share Premium Reduction exercise (“Proposals”). The Proposals were aimed at reducing the accumulated losses of Faber thus allowing the Company to attain greater fl exibility in determining Faber’s future dividend payout.

FOCUSED BRAND TRAINING ON REVITALISING THE FABER BRAND

In 2011, we continued with the Internal Brand Awareness Training Programme to Analysts site visit to communicate and inculcate the Brand Values of being Professional, Passionate, Caring, Kamunting Incineration and Laundry Plants, Perak. Innovative and Trustworthy amongst the employees. A total of 1,211 employees from Klang Valley, Perak, Kedah, Perlis, Penang, Sabah and Sarawak were trained in 21 brand training sessions.

A series of brand building initiatives was launched to engage employees to align and integrate the Brand Values in their respective roles wherever the Group operates. These initiatives were aimed at steering the employees towards a cohesive and focused identity and taking pride in partnering with our stakeholders to create sustainable value based on mutually-benefi cial long term relationships.

Internal Brand Awareness Training.

FABER GROUP BERHAD ANNUAL REPORT 2011 58 KEY INITIATIVES

SUSTAINING STAKEHOLDERS’ VALUE (CONTINUED)

FFSB established “Mobile Unit” to further raise customer service levels within Klang Valley.

CUSTOMER SUPPORT SERVICES

The Group’s commitment in ensuring customers’ needs and satisfaction constantly drive us to improve our service quality and delivery.

These include our 24-Hours Help Desk for Hospital Support Services (“HSS”) to serve the respective hospitals’ requests on work orders and provide status reports in a timely manner.

For the IFM Non-Healthcare Division, we have established a mobile unit to further raise customer service levels within Klang Valley. The mobile unit operated by technically skilled employees, repairs major Mechanical and Engineering breakdowns and responds promptly for both scheduled and unscheduled maintenance that improves effi ciency and uptime for our clients.

Under Property Development Division, a dedicated Customer Service and Credit Control Department was established to cater for any enquiries and complaints by the customers.

Regular Customer Satisfaction Surveys are also conducted to monitor, track and improve our service level performances to our customers. The basis of these surveys is for us to track and monitor our systems and processes to ensure they are aligned with the customers’ needs and requirements that are ever changing due to the advancement of service provisioning in these competitive environments for both the IFM and Property Development Divisions.

The stakeholders’ relations will always remain the centre of our deliverables in meeting the Group’s business objectives and goals.

FABER GROUP BERHAD ANNUAL REPORT 2011 59 KEY INITIATIVES

OUR FOCUS ON QUALITY

QUALITY POLICY

“Committed to Excellence” “We are what we repeatedly do, excellence then is not an act but a habit”

QUALITY OBJECTIVES

“EXCEL” • Effective System • Excellent Practice • Continual Improvement • Ethics and Integrity • Learning Culture

In Faber, we ascribe to our Quality Policy “Committed to Excellence” and Quality Objectives “EXCEL” as the cornerstones in raising the bar for quality in delivering our products and services in Integrated Facilities Management (“IFM”) and Property Development.

STRENGTHENING OUR INTEGRATED SYSTEMS

In Faber, all companies within Faber have obtained the ISO 9001:2008 certifi cation for their respective Quality Management System (“QMS”). For improved effi ciency, the QMS has been integrated with Safety and Health Management System (“SHMS”) and Environmental Management System (“EMS”). This integration is aimed to provide a more effi cient and holistic approach to management and service operations. Over the years, the QMS has contributed to prudent cost management, improved effi ciency through continual improvement and benchmarking. The SHMS is focus on reducing risks associated with safety and health, and improved performance. The EMS strives to establish the Group’s environmental ethics and enhance its ability to monitor and track environmental impact and to improve environmental performance.

In our pursuit for continuously raising the standards in IFM, Faber Facilities Sdn Bhd has implemented EMS and obtained its ISO14001:2004 certifi cation on 26 October 2011. Healthtronics (M) Sdn Bhd was also certifi ed with ISO 14001:2004 and OHSAS 18001:2007 on 31 December 2011. In India, Faber Sindoori Management Services Private Limited received ISO 9001:2008 and OHSAS 18001:2007 certifi cation for its QMS and SHMS respectively on 23 March 2011.

The above achievements demonstrate the Group’s commitment to meeting the clients, safety, health, environment and related regulatory requirements by providing consistent standards of service delivery with effective safety practices while preserving the environment in our business activities. The benefi ts of these certifi cations are crucial in a competitive marketplace where clients expect more than just the pricing factor for their outsourcing needs.

FABER GROUP BERHAD ANNUAL REPORT 2011 60 KEY INITIATIVES

OUR FOCUS ON QUALITY (CONTINUED)

MANAGEMENT RESPONSIBILITY

OBJECTIVES, MEASUREMENT, TARGETS & ANALYSIS & PROGRAMMES IMPROVEMENT

OHSAS ISO 9001:2008 18001:2007/MS QUALITY 1722:2005 VIEWS OF CUSTOMER MANAGEMENT SAFETY & HEALTH INTERESTED REQUIREMENTS SYSTEM MANAGEMENT PARTIES SYSTEM

ISO 13485:2003 ISO 14001:2004 QUALITY CUSTOMER SUPPLIERS ENVIRONMENTAL MANAGEMENT SATISFACTION MANAGEMENT SYSTEM FOR SYSTEM MEDICAL DEVICES

RESOURCE PRODUCT MANAGEMENT REALISATION

OPERATIONAL CONTROL

INTEGRATED MANAGEMENT SYSTEMS MAP

FABER GROUP BERHAD ANNUAL REPORT 2011 61 KEY INITIATIVES

FDH practices QLASSIC standards established by CIDB to enhance the quality of workmanship of its development projects.

QUALITY ASSESSMENT SYSTEM IN CONSTRUCTION (“QLASSIC”)

In Property Development, we continue to deliver projects, which are known for their innovative concepts, aesthetic designs and quality fi nishing. Towards this end, Faber Development Holdings Sdn Bhd (“FDH”) adopts the QLASSIC standard established by the Construction Industry Development Board (“CIDB”) in their process of assessing the quality of building workmanship delivered by the contractors. This internal assessment system enables FDH to educate the contractors on the preferred method statement based on QLASSIC standard. This is in line with the Group’s quest for delivery of quality products to our discerning customers.

During the year under review, no QLASSIC assessments were carried out by CIDB assessors as the constructions were in progress. Once completed, FDH will engage CIDB to assess the construction quality of their property development projects. The QLASSIC score is also being used as one of the assessment criteria in contractor evaluation system which allows FDH to benchmark its contractors’ performance.

BEST PRACTICES AND INTERNATIONAL GUIDELINES

In Faber, we adopt the best practices and international guidelines in our operations. Benchmarking with leading players in the industry or selected processes helps us to raise our standards of products and services to our customers.

We adopt best practices and international guidelines in our operations.

FABER GROUP BERHAD ANNUAL REPORT 2011 62 KEY INITIATIVES

OUR FOCUS ON QUALITY (CONTINUED)

Certifi cations awarded to Faber Group of companies:

CERTIFICATION LOCATION

ISO 9001:2008 • Head offi ces of Faber Group Berhad (“FGB”), Faber Medi-Serve Sdn Bhd (“FMS”), Faber (Quality Management System) Facilities Sdn Bhd (“FFSB”) and Faber Union Sdn Bhd • 4 FMS Regional Offi ces in Ipoh, Alor Setar, Kuching and Kota Kinabalu • 81 FMS operation sites at hospitals and public health laboratories • FMS Kamunting Incineration and Laundry Plant • FMS Kuala Ketil Laundry Plant • FMS Lok Kawi Incineration Plant • FMS Sibu Incineration Plant • Fresh Linen Sarawak Sdn Bhd - Sejingkat Laundry Plant • Fresh Linen Sarawak Sdn Bhd- Bintulu Laundry Plant • Healthtronics (M) Sdn Bhd (“HMSB”) • Faber Sindoori Management Services Private Limited (“Faber Sindoori”), India

ISO 14001:2004 • Head offi ce of FGB (Environmental Management System) • FMS Kamunting Incineration and Laundry Plant • FMS Kuala Ketil Laundry Plant • HMSB • FFSB

OHSAS 18001:2007 • Head Offi ce of FGB (Occupational Safety & Health • FMS Kamunting Incineration and Laundry Plants Management System) • FMS Kuala Ketil Laundry Plant • Faber Facilities Sdn Bhd -Persada PLUS • HMSB • Faber Sindoori

MS 1722:2005 • FMS Kuala Ketil Laundry Plant (Occupational Safety & Health • HMSB Management System)

ISO 13485:2003 • Head offi ces of FMS and HMSB (Quality Management System for • FMS at Penang General Hospital, Yan Hospital, Taiping Hospital and Teluk Intan Hospital Medical Devices) • HMSB at Penang General Hospital, Yan Hospital, Taiping Hospital, Teluk Intan Hospital, Changkat Melintang Hospital, Sultanah Bahiyah Hospital, Alor Setar, Bukit Mertajam Hospital, Sg Bakap Hospital, Tuanku Fauziah Hospital, Kangar

FABER GROUP BERHAD ANNUAL REPORT 2011 63 KEY INITIATIVES

Best practices and international guidelines implemented in Faber include:

BEST PRACTICES/GUIDELINES SERVICES

British Institute of Cleansing Service (“BICS”) Cleansing Services

AS/NZS 4146:2000 Linen and Laundry Services

Emergency Care Research Institute (“ECRI”) Biomedical Engineering Maintenance Services

International Electrotechnical Commission Biomedical Engineering Maintenance Services (“IEC”)

American Society for Hospital Engineering Facilities Engineering Maintenance Services (“ASHE”)

American Society of Heating, Refrigerating and Facilities Engineering Maintenance Services Air-Conditioning Engineers (“ASHRAE”)

UK Health Technical Memorandum (“UKHTM”) Facilities Engineering Maintenance Services

Institute of Healthcare Engineering and Estate • Biomedical Engineering Maintenance Services Management (“IHEEM”) • Facilities Engineering Maintenance Services

World Health Organisation (“WHO”) Clinical Waste Management Services

European Union Emission Standards Clinical Waste Incineration

Quality Assessment System in Construction Property Development (“QLASSIC”) – Construction Industry Development Board (“CIDB”)

FABER GROUP BERHAD ANNUAL REPORT 2011 64 KEY INITIATIVES

OUR FOCUS ON QUALITY (CONTINUED)

BUSINESS EXCELLENCE FRAMEWORK

DRIVER SYSTEM RESULT

PLANNING

PEOPLE

LEADERSHIP INFORMATION RESULTS

PROCESSES

CUSTOMERS

LEARN INNOVATE TRANSFORM Senior leaders set A set of well-defi ned Delivers ever-improving directions and seek processes for meeting the customer values and future opportunities organisation‘s performance organisational performance requirements

BUSINESS EXCELLENCE (“BE”)

Using the Malaysia Productivity Corporation’s (“MPC”) Business Excellence Framework (“BEF”) as a guide, Faber has taken a holistic approach to further enhance organisational excellence to remain competitive in the marketplace and strive to strengthen its capability and capacity to be a world-class organisation.

During the year, workshops and trainings were conducted to train executives on BEF that focused on seven key dimensions of excellence namely leadership, planning, information, customers, people, processes and results. During the workshops, BEF Gap Assessments were carried out followed by action plans to improve our business excellence in the respective key dimensions. Selected staffs were trained as Internal BE Assessors to conduct internal assessment with the assistance from MPC.

Faber‘s business excellence efforts have so far met the stringent BEF assessment criterias and was shortlisted by MPC as one of the fi nalists to vie for the Quality Management Excellence Award (“QMEA”) 2011 under the large corporation category. The result of the QMEA 2011 will be announced in October 2012.

RECOGNISING EMPLOYEES’ IDEAS

Faber employees make signifi cant contribution to Faber’s performance and the delivery of quality products and services. Through an Employees Suggestion Scheme better known as “Ada Cadangan”, Faber is not only able to tap ideas and suggestions on enhancing work environment, promoting effi ciency and ensuring individual wellbeing but more importantly to improve business and service performance, strengthen work processes and procedures. In return, the employees whose ideas are accepted by the managements are rewarded to inculcate creative thinking and innovation.

In 2011, 1,662 suggestions were received and 56% of the suggestions that were accepted by the Management have been implemented.

Faber has been implementing Faber Improvement Programme (“FIP”) with the aim to nurture creativity, innovation and systematic problem solving to bring reduction in operation costs, enhance revenue generation, improve productivity, improve quality of services and products as part of our efforts in instilling continual improvement culture across the Group.

FABER GROUP BERHAD ANNUAL REPORT 2011 65 KEY INITIATIVES

OUR COMMITMENT TO SAFETY, HEALTH & ENVIRONMENT

As a responsible corporate citizen, Faber undertakes its responsibility seriously to ensure its core businesses of IFM and Property Development are operated safely and sustainably while endeavouring to preserve the natural resources on which its operations depend.

STEADFAST IN SAFETY AND HEALTH OF OUR WORKFORCE

With the implementation of the Safety and Health Management System (“SHMS”), Faber has managed to reduce the level of safety and health risks. Fundamental to the SHMS is Hazard Identifi cation, Risk Assessment and Developing Control (“HIRADC”) process where safety and health hazards are identifi ed, followed by assessment of safety and health risks and determination of appropriate control mechanisms to minimise or eliminate the risks.

In 2011, the management has organised a series of training programmes to promote awareness and deeper understanding of safety and health concerns amongst the workforce.

NO. SAFETY AND HEALTH TRAININGS OR TALK TOPICS NO. SAFETY AND HEALTH TRAININGS OR TALK TOPICS

1 UNDERSTANDING OHSAS 18001:2007 STANDARD REQUIREMENTS 18 KESELAMATAN SISTEM ELEKTRIK & KESELAMATAN DI TEMPAT KERJA

2 SAFETY & HEALTH MANAGEMENT SYSTEM AWARENESS TRAINING 19 RADIATION SAFETY & STATUTORY REQUIREMENT

3 HEALTH TALK : PROPER DIETING 20 RADIATION SAFETY TRAINING

4 HEALTH TALK : MY HEART 21 SAFETY AT WORK PLACE AND 5S AWARENESS

5 MANAGING HIGH BLOOD PRESSURE 22 ENVIRONMENTAL AWARENESS & HAZARDOUS WASTE MANAGEMENT

6 SAFETY & HEALTH AWARENESS TRAINING 23 SEMINAR ON MALAYSIAN STANDARDS (MS) FOR WASTE MANAGEMENT

7 SHE MS INTERNAL AUDIT 24 SEMINAR ON MS ISO 50001: 2001 - ENERGY MANAGEMENT SYSTEM

8 ACCIDENT INVESTIGATION WORKSHOP 25 SEMINAR QSHE WEEK CAMPAIGN 2011

9 HIRADC WORKSHOP 26 SHE SOP TRAINING

11 SAFETY & HEALTH BRIEFING FOR CLEANERS 27 WORKSHOP ON GOOD RADIATION SAFETY PRACTICE

12 FIRST AID AND CPR COURSE 28 HEALTH TALK : EAT HEALTHILY

13 ACCIDENT INVESTIGATION WORKSHOP 29 HEALTH TALK : STRUCTURED WEIGHT LOSS

14 BASIC FIRE FIGHTING TRAINING 30 HEALTH TALK : HOW TO COUNT CALORIES

15 BASIC FIRST AID TRAINING 31 HEALTH TALK : FOOD INTEREST - BELIEVE ME, YOU'RE NOT HUNGRY

16 EMERGENCY PREPAREDNESS AND RESPONSE TRAINING 32 HEALTH TALK : EXERCISE TO LOSE WEIGHT

17 FIRE SAFETY TRAINING AT LAUNDRY PLANT

FABER GROUP BERHAD ANNUAL REPORT 2011 66 KEY INITIATIVES

OUR COMMITMENT TO SAFETY, HEALTH & ENVIRONMENT (CONTINUED)

ADDRESSING OCCUPATIONAL ILLNESS AND DISEASE

Over the past 4 years, we have included occupational illness and disease in our monitoring of safety and health to enable us to track if there are any long-term health issues prevalent in our operations. Through this monitoring, 43 cases considered as occupational illness and disease were reported for period 2008-2011, of which 35% were ergonomic-related illness such as back-pain and cervical spondylosis followed by heart-related disease (21%). In view of this trend, we are intensifying our Ergonomic Awareness Programme to educate our workforce on the right way to approach and perform their job both at operation and offi ce environment. We are also looking at other appropriate engineering and administrative controls to address occupational illness and disease.

CARING FOR THE ENVIRONMENT

Faber places high commitment to minimise its environmental impact and ensure the long-term sustainability of its business and the environment on which it operates. The implementation of the Environmental Management System (“EMS”) has prioritised our focus on optimising the use of available resources.

Fundamental to EMS, all environmental aspects related to our business activities are identifi ed, assessed and signifi cant impacts are controlled or minimised if not eliminated to ensure our activities and processes do not have adverse impact on the environment. Various environmental programmes and initiatives have been developed as part of the control measures which include training and awareness programme, recycling programme, energy saving programme, environmental management system auditing campaign and promotion.

NO. ENVIRONMENTAL TRAININGS OR TALK TOPICS

1 UNDERSTANDING ISO 14001 STANDARD REQUIREMENTS AWARENESS

2 ENVIRONMENTAL MANAGEMENT SYSTEM AWARENESS TRAINING

3 SCHEDULED WASTE MANAGEMENT

4 HAZARDOUS WASTE MANAGEMENT

5 ENVIRONMENTAL MANAGEMENT SYSTEM INTERNAL AUDIT

6 ACCIDENT INVESTIGATION WORKSHOP

7 ENVIRONMENTAL ASPECT SIGNIFICANT IMPACT (EASI) WORKSHOP

8 SEMINAR ON MALAYSIAN STANDARDS (MS) FOR WASTE MANAGEMENT

9 SEMINAR ON MS ISO 50001: 2001 - ENERGY MANAGEMENT SYSTEM

10 ENVIRONMENTAL SOP TRAINING

Faber has also introduced green technology in IFM to help clients protect and preserve the environment as well as providing services in Green Building Commissioning and Energy Audit leading to Energy Performance Management System (“EPMS”).

WATER

Our main water usage is in the laundry plants which draw water from treated-water supplier. We have also established water treatment plants in our laundry plants in accordance with Department of Environment ("DoE") guidelines aimed at reducing the risks of environmental pollution. Appointed authorised external party conducts the weekly and monthly tests to ensure the discharged water quality are within permissible limits (Environmental Quality (Sewage and Industrial Effl uents) Regulations, Third Schedule).

To conserve water consumption, water from the fi nal rinse process is recycled for fi rst washing of soiled linen at Kuala Ketil Laundry Plant (Kedah) and Bukit Beruntung Laundry Plant (Selangor).

FABER GROUP BERHAD ANNUAL REPORT 2011 67 KEY INITIATIVES

AIR EMISSIONS

Faber provides clinical wastes management applying cradle to grave concept. We collect the clinical wastes from point of generation at healthcare facilities, store in refrigerated containers and transport them in dedicated licensed vehicles to our 14 incineration plants. Our incineration plants comply with the stringent DoE guidelines and emission standards. The Kamuunting Incineration Plant (“KIP”), Perak is equipped with Air Pollution Control Equipment (“ACPE”) which meets the European Union Emission Standards. To monitor the air emissions level, Faber has also installed Continuous Emission Monitoring System (“CEMS”) at KIP, which gathers emission data every minute and transmits the average reading over 30 minutes directly to the DOE via electronic link. In addition to the continuous monitoring, Faber also appoints an independent party to conduct air emission test to ensure the air emission quality is within permissible limits as per requirement of Environmental Quality Act (EQA) 1974.

SCHEDULED WASTE

The incineration process generates fl y ash and bottom ash which are categorised as schedule waste. The ashes are sent to licensed service provider for further treatment to reduce environmental pollution.

ENERGY

As part of the Malaysia Economic Transformation Programme, Faber spearheaded the proposed project on the Energy Performance Management System (“EPMS”) for Government entities. Faber has completed the pilot project to conduct energy audits at fi ve selected Government buildings and working towards fi nalising the implementation mechanism. Due to growing awareness on EMPS, Faber has been appointed to carry out similar audit for several other commercial buildings to help building owners manage their energy effi ciently to reduce carbon emissions.

Faber is constantly looking for application of renewable energy in our serivce operations. The KIP has started using clinical waste as a form of renewal energy since 2008, which converts heat from the incineration process to generate steam for the adjacent laundry plant. To further reduce the natural resource-based fuel, the laundry plants at Kamunting and Kuala Ketil have switched from Liquefi ed Petroleum Gas to Natural Gas as their fuel source. Laundry plants at Sejingkat (Kuching) and Kota Kinabalu (Sabah) use woodchips, which are recycled from waste generated from the timber processing industry as biomass fuel for boiler.

Other energy conservation efforts include replacing fl uorescent tubes with energy savings bulbs and installing sensors at escalators which are activated on demand.

OTHER GREEN INITIATIVES

Faber has been consistently promoting 3R Programme to help reduce wastages and inculcate greater environmental awareness among employees and clients. These programmes include recycling of paper at our offi ces and operations, and encouraging employees to use electronic means instead of hardcopy documents. Campaign on Mobile Phone and Accessories, Battery Recycling, recycling of other usable items for charity sales and ‘No Polystyrenes Campaign’ received encouraging response from our employees. Active employees’ participation in Energy Saving Campaign at Head Offi ce saw a 24% reduction in total yearly electricity consumption from 503,486 kWh in 2010 to 383,347 kWh in 2011, exceeding our initial target of 10%.

To strengthen commitment on sustainable environment, Faber purchases A4 papers made of 100% plantation fi bre from renewable, sustainable plantations. We are considering other viable options in our procurement to purchase consumable or materials that meet specifi ed international standards or renewable resources to minimise the impact to the environment.

FABER GROUP BERHAD ANNUAL REPORT 2011 68 LEADERSHIP

CARING FOR OUR COMMUNITY

At Faber, we recognise that every business has an impact on the communities and societies in which we operate. As one of the leading player in Integrated Facilities Management (“IFM”), we are focused on ensuring continuity in the development of skills and knowledge in IFM. With this in mind, Faber’s fl agship CSR programme focuses on Education and Human Capital Development. Towards this end, our CSR programmes are an extension of our corporate culture. We are committed in our roles and responsibilities in the development of a progressive yet compassionate society.

CHAMPIONING EDUCATION THROUGH WORK-BASED LEARNING (“WBL”)

This refers to the collaboration with the Ministry of Higher Education (“MoHE”) since 2007 to transfer our knowledge, expertise and experience in the IFM sector, especially in Facilities Engineering Maintenance Services (“FEMS”) and Biomedical Engineering Maintenance Services (“BEMS”).

A joint curriculum was developed by Faber and MoHE for a one-year WBL programme for the Diploma in Facilities Management and Maintenance with Community College Hulu Langat (“CCHL”) in October 2007. The following year, the curriculum for another WBL programme was developed with Politeknik Sultan Salahuddin Abdul Aziz Shah (“PSA”), Shah Alam, Selangor for an “Advance Diploma in Electronics Engineering (Medical)” in November 2008.

The WBL is a form of pedagogy that blends classroom instruction with structured real-life work experience to give students a competitive edge in today’s workplace.

DIPLOMA IN FACILITIES MANAGEMENT AND MAINTENANCE (“DFMM”)

Under this programme, 40 CCHL students have successfully graduated and obtained their DFMM following their successful attachments to the Group’s IFM Healthcare sector offi ces at Faber Medi-Serve Sdn Bhd (“FMS”) Ipoh and FMS Penang in 2009 and 2010 respectively.

The DFMM programme (previously facilitated by the Community College Education Division) was transferred to the Polytechnic Education Department in 2010. It is now being facilitated by PSA and the DFMM syllabus has been reviewed and adjusted to that of “Advance Diploma in Facility Management”. The fi rst batch of students intake is planned for in 2012.

ADVANCE DIPLOMA IN ELECTRONICS ENGINEERING (MEDICAL)

In November 2008, Faber and MoHE, facilitated by PSA, have developed the fi rst Advance Diploma in Electronics Engineering (Medical) focusing on BEMS in Malaysia.

Through this collaboration, Faber aims to share its expertise in developing a workforce with specialised skills to meet the increasing demand and expectations of the IFM Healthcare Sector in BEMS. This programme includes a one-year WBL industry attachment based on the structured curriculum with strict adherence to the Malaysian Qualifi cation Agency requirements comprising both academic and on-the-job training.

To date, 20 PSA students have successfully graduated from this programme, with 18 of the graduates being absorbed as full- time employees of the Group. The third intake, comprising 12 PSA students and commencing 11 January 2012, is currently undergoing practical WBL attachments at the Group’s various FMS offi ces in Kedah, Penang, Perak, Sabah and Sarawak.

Faber’s initiatives in the WBL programmes are proof of our commitment to generate well-prepared, industry-relevant graduates.

FABER GROUP BERHAD ANNUAL REPORT 2011 69 LEADERSHIP

HELPING THOSE IN NEED THROUGH “MISI AMAL BERSAMA FABER”

“Misi Amal Bersama Faber” is a community outreach programme which contributes to the various needs of the communities where the Group operates. The programmes include fund raising, monetary assistance, provision of food supplies and benefi t-in-kind to the needy and the underpriviledged.

Some of the key community initiatives include the following:

9 June 2011 Faber presented donations collected from the Group’s employees to Rumah Anak Yatim Hidayah Madrasah Al-Taqwa Hulu Langat Selangor, to aid the victims of a landslide tragedy which occurred on 21 May 2011.

19 June 2011 Faber organised a Charity Sale during the Quality, Safety, Health and Environment Campaign in May 2011. Four poor families in Seremban, Negeri Sembilan were 14 August 2011 amongst the recipients of the proceeds. Faber Development Holdings Sdn Bhd (“FDH”) handed over donations in cash 25-26 June 2011 and in-kind to the single mothers, elderly 11 August 2011 Faber Facilities Sdn Bhd (“FFSB”) lent and physically disabled residents at the Faber visited Rumah Titian Kasih, a a helping hand to Taman Desa Women’s Persatuan Satu Penduduk Lorong-Lorong home for orphans, single mothers, Community Club by providing a venue for Kiri Datuk Keramat, Kuala Lumpur. the physically impaired and elderly its charity sales. The proceeds assisted a people located in Taman Tasik critically ill cancer patient needing further Titiwangsa, Kuala Lumpur. treatment.

19 August 2011 Faber management and staff organised a “Majlis Tazkirah and Berbuka Puasa” with the tahfi z students of Masjid Al-Muhsinin, Taman Desa, Kuala Lumpur during the month of Ramadhan.

FABER GROUP BERHAD ANNUAL REPORT 2011 70 LEADERSHIP

CARING FOR OUR COMMUNITY (CONTINUED)

24 September 2011 FDH held a gotong-royong campaign at the Seroja Apartments in Laman Rimbunan, Kepong, Kuala Lumpur. The employees of FDH teamed up with the residents to clean the surrounding areas.

10 October 2011 FMS organised the “1001 Green” initiative at the Pusat Jantung Hospital Umum Sarawak (”PJHUS”). 1001 Green is the symbolic name for this project, signifying 25 and 26 September 2011 Faber’s continuous commitment to improving and In Sabah, FMS contributed funds for the protecting the environment by planting trees and repair and maintenance of the Masjid plants. Faber’s 1001 Green project supports the Kampung Binsuluk, Masjid Kampung Government’s ’green’ initiatives to enhance public Mawau, Surau Kampung Brunei Laut and awareness on environmental conservation. Surau SMK Saga–Saga, all of which are located in Membakut, Sabah, as well as improving the surau at Queen Elizabeth Hospital, Kota Kinabalu. These efforts were part of the “Misi Amal Bersama Faber” projects in East Malaysia.

FABER BLOOD DONATION CAMPAIGN

As a leading IFM service provider in the Healthcare sector, Faber is keenly aware of the importance of blood supply to patients in need. The Group has championed this cause over the years by organising Faber Blood Donation Campaigns nationwide.

Faber organised four blood donation campaigns in 2011:

• FFSB and the National Blood Bank jointly organised a blood donation drive in Faber 22 October 2011 Towers, Kuala Lumpur on 6 May 2011. FDH organised a Safety Awareness and Crime Prevention Talk by the Polis Di • Faber Sindoori Management Services Private Limited organised blood donation Raja Malaysia (“PDRM”) for Taman Desa campaigns at its Headquarters in Chennai on 19 August 2011 and at the Apollo Hospital Residents Association in Kuala Lumpur. in Ahmedabad, India on 15 September 2011 respectively. The event created awareness on crime prevention and also to enhance rapport • FMS and the National Blood Bank jointly held a blood donation campaign at the National between PDRM and the local community. Blood Bank, Kuala Lumpur on 14 December 2011.

CSR has long been embedded in Faber’s corporate values. With the support and involvement of our employees, we strive to make positive contributions to the community, and CSR will remain an integral part of our business culture wherever we operate.

FABER GROUP BERHAD ANNUAL REPORT 2011 TRANSPARENCY

72 Statement on Corporate Governance

90 Statement on Internal Control

95 Audit and Risk Committee Report

104 Statement of Directors’ Responsibility in Respect of Audited Financial Statements 72 TRANSPARENCY

STATEMENT ON CORPORATE GOVERNANCE

The Board of Directors (“the Board”) of Faber Group Berhad (“FGB”) regards Corporate Governance as vitally important to the success of FGB’s businesses and are unreservedly committed to applying the principles as set out in the Malaysian Code on Corporate Governance (“the Code”) necessary to ensure that the following principles of good governance is practiced in all of its business dealings in respect of its shareholders and relevant stakeholders:-

(a) The Board is the focal point of FGB’s Corporate Governance system. It is ultimately accountable and responsible for the performance and affairs of FGB;

(b) All Board members are expected to act in a professional manner, thereby upholding the core values of integrity and enterprise with due regard to their fi duciary duties and responsibilities;

(c) All Board members are responsible to FGB for achieving a high level of good governance;

(d) The Terms of Reference of the Board of FGB shall constitute, and form, an integral part of each Director’s duties and responsibilities; and

(e) Having regard to the responsibilities and obligations, the Board will direct and supervise the Management of the business and affairs of the subsidiaries of FGB (“Faber Group”) to strengthen the performance of the Group.

The Board is pleased to set out below the statement, which outlines the main corporate governance practices of Faber Group.

BOARD OF DIRECTORS

The Board has the ultimate and overall responsibility for corporate governance, strategic direction, fi nancial and organisational matters of Faber Group.

The Board has assumed the following 6 specifi c responsibilities which facilitate the discharge of the Board’s stewardship responsibilities pursuant to the Best Practices as set out in the Code:-

• Establishing, reviewing and adopting the strategic plan and direction for Faber Group;

• Overseeing the conduct of the business of Faber Group to evaluate whether the business is being properly managed;

• Identifying principal risks and ensure the implementation of appropriate systems to manage these risks;

• Succession planning, including appointing, training, fi xing the compensation of and where appropriate, replacing senior management;

• Developing and implementing an investor relations programme or Corporate Disclosure policy for Faber Group; and

• Reviewing the adequacy and the integrity of Faber Group’s internal control systems and management information systems, including system for compliance with applicable laws, regulations, rules, directives and guidelines.

FABER GROUP BERHAD ANNUAL REPORT 2011 73 TRANSPARENCY

BOARD COMPOSITION AND BALANCE

The Board currently consists of 10 members, 5 or more than 1/3 are Independent Non-Executive Directors. FGB complies with the requirement of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) for Independent Non- Executive Directors to make up at least 1/3 of the Board membership, as well as the requirement for a Director who is a member of the Malaysian Institute of Accountants to sit on the Audit Committee.

The Board is of the opinion that its current composition and size constitute an effective Board to Faber Group. Furthermore, the strong representation of high caliber Independent Non-Executive Directors, provides necessary balance. The role of the Independent Non- Executive Directors is important in ensuring that the strategies proposed by Management are fully discussed and deliberated, and the interests of the shareholders, employees, customers, suppliers and other stakeholders are taken into consideration.

The Board has maintained its mix of Directors from diverse professional backgrounds with a wide range of experience and expertise in fi nance and accounting, economics, corporate management and marketing. This provides a collective range of skills, expertise and experience which is vital for the successful direction of Faber Group. A brief profi le of each Director is presented on pages 42 to 47 of the Annual Report.

ROLES AND RESPONSIBILITIES OF THE CHAIRMAN AND THE MANAGING DIRECTOR

FGB aims to ensure a balance of power and authority between the Chairman and the Managing Director with a clear division of responsibility between the running of the Board and FGB’s business respectively. The positions of Chairman and the Managing Director are separated and clearly defi ned.

The roles and responsibilities of the Chairman and the Managing Director are clearly defi ned and reviewed if there are signifi cant changes to FGB’s strategy, operations, performance or management. Each has clear scope of duties and responsibilities that ensures a more equitable distribution of accountabilities, this distinction also reinforces the check and balance proposition.

The Chairman of the Board together with the other Board members, are responsible for setting the policy framework within which Management is to work. His main responsibility is to lead and manage the work of the Board in order to ensure that it operates effectively and fully discharges its legal and regulatory responsibilities. He serves as the main liaison person between the Board and Management. Together with the other Non-Executive and Independent Directors, he leads the discussion on the strategies and policies recommended by Management. He also chairs the meetings of the Board and the shareholders.

The Managing Director is subject to the control of the Board. He is primarily responsible for overseeing the day-to-day management of the business in accordance to the objectives and strategies established by the Board. He is accountable for leading the Management team, implementing the policies/decisions approved by the Board, building a dynamic corporate culture with the requisite skills and competency and acting as the Faber Group’s offi cial spokesperson. He is also responsible for mapping the medium to longer term strategies including policies and decisions for the Board’s deliberation and approval and making sure that they are carried through their desired outcomes and address any shortcomings identifi ed. He carries the primary responsibility for ensuring management competency including effective succession planning to sustain continuity.

At the onset of each fi nancial year, the Board considers and approves a set of Key Performance Indicators and expectations on the basis of the Balanced Scorecard for the Managing Director, which is then cascaded down to Head of Companies and Senior Management of FGB. This serves as a yardstick against which his performance will be measured, evaluated and rewarded.

FABER GROUP BERHAD ANNUAL REPORT 2011 74 TRANSPARENCY

STATEMENT ON CORPORATE GOVERNANCE (CONTINUED)

BOARD MEETINGS

To ensure effective management of the Faber Group, the Board normally meets quarterly to review fi nancial, operational and business performances. Additional meetings are also convened on an ad-hoc basis with formal agenda for the Board to deliberate on urgent issues that require immediate decision-making. The agenda together with the relevant board papers for each Board meeting are forwarded to the Directors in advance of the Board meeting for their study and evaluate the matters to be discussed.

A total of 11 Board meetings were held during the fi nancial year ended 31 December 2011. The details of the Directors’ attendance are as follows:-

DIRECTORS STATUS OF DIRECTORSHIP NO. OF MEETINGS ATTENDED

Dato’ Ikmal Hijaz bin Hashim (Chairman) Chairman/Independent Non-Executive Director 11/11

Datuk Zainal Abidin bin Alias Senior Independent Non-Executive Director 11/11

Datuk Mohamed Zain bin Mohamed Yusuf Independent Non-Executive Director 10/11

Dato’ Mohd Izzaddin bin Idris Non-Independent Non-Executive Director 9/11

Oh Kim Sun Independent Non-Executive Director 10/11

Elakumari a/p Kantilal Non-Independent Non-Executive Director 11/11

Puasa bin Osman Independent Non-Executive Director 11/11

Suhaimi bin Halim Non-Independent Non-Executive Director 10/11

Annuar Marzuki bin Abdul Aziz Non-Independent Non-Executive Director 10/11

Adnan bin Mohammad Managing Director 11/11

BOARD EFFECTIVENESS ASSESSMENT

Following the launch of the Green Book on Enhancing Board Effectiveness by the Putrajaya Committee on GLC High Performance on 26 April 2006, the Board Effectiveness Assessment (“BEA”) for the Board of FGB has been conducted annually since 2007. The main purpose of the BEA is to maintain cohesiveness of the Board of FGB and, at the same time, serves to improve the Board’s effectiveness.

In 2008, the BEA framework was revised and enhanced to incorporate additional information which would assist the FGB Board in ensuring effective day-to-day Board operations and interaction apart from structuring a high performing Board. In addition, the revised BEA aims to assist the Board towards achieving the optimal governance framework and to fulfi ll its fundamental roles and responsibilities at best practice levels.

FABER GROUP BERHAD ANNUAL REPORT 2011 75 TRANSPARENCY

Upon completion of the BEA by the Board members, the results are collated and a detailed report will be presented to the Nomination and Remuneration Committee for its assessments, evaluations and thereafter to make appropriate recommendation to the Board. All assessments and evaluations carried out by the Nomination and Remuneration Committee in the discharge of all its functions are properly documented.

For year 2011, PricewaterhouseCoopers Advisory Services Sdn Bhd (“PwCAS”) was appointed to provide an independent BEA services and their scope involved facilitating the performance evaluations of the Board, Board's Committees and Directors' contribution. The work undertaken by PwCAS in designing the framework for the Board's evaluation has taken into consideration the key elements and recommendations of the Securities Commission's Corporate Governance Blueprint 2011, with the objective of assessing the effectiveness of the Board in discharging its governance role.

RE-APPOINTMENT AND RE-ELECTION OF DIRECTORS

FGB’s Articles of Association provides that 1/3 of the Directors shall retire from offi ce at every Annual General Meeting (“AGM”). The Articles also provide that all Directors shall retire from offi ce once at least in each 3 years. A retiring Director shall be eligible for re-election. Directors who are appointed by the Board during the fi nancial period before an AGM are subject to re-election by the shareholders at the next AGM to be held following their appointments.

Pursuant to Section 129(6) of the Companies Act, 1965, Director of or over the age of 70 years may be appointed or re-appointed as a Director of FGB to hold offi ce until the conclusion of the next annual general meeting of FGB.

SUPPLY OF INFORMATION

The Board has full and unrestricted access to all information pertaining to Faber Group’s business and affairs to enable it to discharge its duties effectively. Further, the Board also expects timely information and advice to be furnished on all material information.

All Directors have direct access to the advice and services of the Company Secretary, whose terms of appointment permit her removal and appointment only by the Board as a whole.

In carrying out its duties and responsibilities, the Directors whether as a full Board or in their individual capacities shall have the following rights:-

(a) have resources required to perform its duties;

(b) have full and unrestricted access to any information, records, properties, and personnel of the Company and its subsidiaries. The Board should receive information that is not just historical and fi nancial oriented, but information that goes beyond assessing quantitative performance and looks at other factors, such as customer satisfaction, products and quality, market share, market reaction, environmental performance and so on; and

(c) be able to obtain independent professional or other advice at the Company’s expense.

FABER GROUP BERHAD ANNUAL REPORT 2011 76 TRANSPARENCY

STATEMENT ON CORPORATE GOVERNANCE (CONTINUED)

DIRECTORS’ CONTINUAL PROFESSIONAL DEVELOPMENT

All Directors have and successfully completed the Mandatory Accreditation Programme. During the year, the Directors have attended various seminars and training programmes to gain insights into the latest regulatory and industry developments in relation to the Faber Group’s businesses. The details seminars and training programmes attended by the Directors during the year are as follows:-

DIRECTOR DATE DESCRIPTION TRAINER/ ORGANISER

Dato’ Ikmal Hijaz bin 13 January 2011 Oil & Gas Site Exposure Petronas Penapisan (Melaka) Hashim Sdn Bhd

7-9 March 2011 Study and Verifi cation Trip to Melbourne, Links Living International and Australia A comparison study between Investors/UEM Land Holdings Australian and Malaysian Practices Berhad (Community Title vs. Landed Strata Title)

31 March 2011 Launch of Corporate Integrity Pledge Performance Management and Delivery Unit (“PEMANDU”)

14-16 July 2011 UEM Land Management Retreat UEM Land Holdings Berhad

7-8 October 2011 In-house Management Training (Strategy) EPMB Manufacturing Berhad

10-12 October 2011 FGB: Directors & Management Retreat FGB

19-21 October 2011 UEM Group Directors’ Gathering 2011 & UEM Group Berhad Chairman’s Forum 2011

6 December 2011 MINDA Breakfast Talk – “War of Talent : Malaysian Directors Academy A Battle Malaysia Cannot Afford to Lose” (“MINDA”)

Datuk Zainal Abidin bin 13 January 2011 Oil & Gas Site Exposure Petronas Penapisan (Melaka) Alias Sdn Bhd

10-12 October 2011 FGB: Directors & Management Retreat FGB

FABER GROUP BERHAD ANNUAL REPORT 2011 77 TRANSPARENCY

DIRECTOR DATE DESCRIPTION TRAINER/ ORGANISER

Datuk Mohamed Zain bin 25 January 2011 MINDA Luncheon Talk with Dr. Stephen B MINDA Mohamed Yusuf Young –“It’s People Who Create Value, Not Money”

24 March 2011 Assessing the Risk and Control Bursa Malaysia Securities Berhad Environment (”Bursa Securities”)

10-12 October 2011 FGB: Directors & Management Retreat FGB

19-20 October 2011 UEM Group Directors Gathering 2011 & UEM Group Berhad Chairman’s Forum 2011

30 November - Malaysian Accounting Standards Board MASB 1 December 2011 (“MASB”) Senior Comprehensive Overview of Standards

Dato’ Mohd Izzaddin bin 25 January 2011 MINDA Luncheon Talk with Dr. Stephen MINDA Idris Young – “It’s People Who Create Value, Not Money”

9 February 2011 UEM Business Development Workshop Group Strategy and Business Development Department, UEM Group Berhad

24 February 2011 Public Private Partnership (“PPP”) Asia Executive Programmes in Workshop Series 1 – Malaysian PPP collaboration with PPP Unit under Framework: Defi ning Roles, Processes Prime Minister’s Department and And Expectations Within The Context Of Commonwealth Secretariat The Public Private Partnership Unit (3PU) Malaysia

25 April 2011 Permanent International Association of Ministry of Works, Malaysia Road Congresses (PIARC), International Seminar 2011

23 June 2011 UEM Group Treasury Knowledge Seminar UEM Group Berhad

14-16 July 2011 UEM Land Management Retreat UEM Land Holdings Berhad

27 September 2011 Khazanah Megatrends Forum Khazanah Nasional Berhad (“Khazanah”)

10-12 October 2011 FGB: Directors & Management Retreat FGB

FABER GROUP BERHAD ANNUAL REPORT 2011 78 TRANSPARENCY

STATEMENT ON CORPORATE GOVERNANCE (CONTINUED)

DIRECTOR DATE DESCRIPTION TRAINER/ ORGANISER

Oh Kim Sun 17 January 2011 Market Outlook Seminar Credit Suisee Seminar

24 March 2011 Governance Programme for Director - First Bursa Securities session titled : “Assessing the Risk and Control Environment”

31 March 2011 Launch of Corporate Integrity Pledge PEMANDU

12 April 2011 Directors’ Training Workshop : Meeting PricewaterhouseCoopers Bursa’s Financial Reporting Timelines

5 May 2011 The Board’s Responsibility for Corporate Bursa Securities Culture – Selected Governance Concerns and Tolls for Addressing Corporate Culture and Board Performance”

23-25 May 2011 79th IFA Annual Conference in Montreal, IFA (“International Fertilizer Canada Industry Association”)

10-12 October 2011 FGB: Directors & Management Retreat FGB

19-20 October 2011 UEM Group Directors Gathering UEM Group Berhad

2-4 November 2011 IFA Crossroads Asia-Pacifi c Conference IFA 2011

16 November 2011 MINDA Luncheon Talk – Board Composition MINDA and Diversity : Strategies, Lessons and Looking Forward

19 December 2011 Competition Act and what it means to CCM Chemical Company of Malaysia (“CCM”)

Elakumari a/p Kantilal 25 January 2011 MINDA Luncheon Talk with Dr. Stephen MINDA Young – “It’s People Who Create Value, Not Money”

12-13 March 2011 Invest Malaysia Bursa Securities

31 March 2011 Launch of Corporate Integrity Pledge PEMANDU

11 May 2011 Communications forum PricewaterhouseCoopers

FABER GROUP BERHAD ANNUAL REPORT 2011 79 TRANSPARENCY

DIRECTOR DATE DESCRIPTION TRAINER/ ORGANISER

Elakumari a/p Kantilal 18 July 2011 The 7 myths about Managing People in Khazanah (Continued) Malaysia

21 July 2011 Directors & offi cers liability - A changing CIMB Insurance Brokers Sdn Bhd landscape

26-28 September 2011 Khazanah Megatrends Forum 2011 Khazanah

10-12 October 2011 FGB: Directors & Management Retreat FGB

6 December 2011 Special luncheon talk Professor Ha-Joon Khazanah Chang

6 December 2011 The XL Story-Case Study Collaborative Khazanah Discussion

Puasa bin Osman 13 January 2011 Oil & Gas Site Exposure Petronas Penapisan (Melaka) Sdn Bhd

25 January 2011 MINDA Luncheon Talk with Dr. Stephen MINDA Young – “It’s People Who Create Value, Not Money”

23 March 2011 MINDA Breakfast Talk. “Innovate or MINDA Stagnate – How Innovation Ensure Businesses Keep Thriving”

24 March 2011 Assessing the Risk and Control Bursa Securities Environment

5 May 2011 Board’s Responsibility On Corporate Bursa Securities Culture

6 May 2011 MINDA, GE and TalentCorp. “Driving Co-Hosted by General Electric Sustainability Leadership & Innovation” (“GE”), MINDA and Talent Corporation Malaysia (“TalentCorp”)

10 – 12 October 2011 FGB: Directors & Management Retreat FGB

6 December 2011 MINDA Breakfast Talk – “War of Talent : MINDA A Battle Malaysia Cannot Afford to Lose”

FABER GROUP BERHAD ANNUAL REPORT 2011 80 TRANSPARENCY

STATEMENT ON CORPORATE GOVERNANCE (CONTINUED)

DIRECTOR DATE DESCRIPTION TRAINER/ ORGANISER

Suhaimi bin Halim 13 January 2011 Oil & Gas Site Exposure Petronas Penapisan (Melaka) Sdn Bhd

10-12 October 2011 FGB: Directors & Management Retreat FGB

19-21 October 2011 UEM Group Directors Gathering 2011 UEM Group Berhad

Annuar Marzuki bin 25 January 2011 MINDA Luncheon Talk with Dr. Stephen B MINDA Abdul Aziz Young –“It’s People Who Create Value, Not Money”

10 March 2011 Group Tax Seminar – Tax implication of FRS Group Tax, UEM Group Berhad

15 March 2011 AM-CEO Circle Talk with YB Senator Dato’ RAM Ratings Bhd Sri Idris Jala

12-13 April 2011 Invest Seminar 2011 Bursa Securities

25 May 2011 IBM Finance Forum IBM Malaysia

23 June 2011 Treasury Knowledge Seminar by Group UEM Group Berhad Treasury

19-20 July 2011 2011 National Tax Conference Lembaga Hasil Dalam Negeri

26-27 September 2011 Khazanah Megatrends Forum 2011 Khazanah

10-12 October 2011 FGB: Directors & Management Retreat FGB

24 October 2011 Budget Seminar UEM Group Tax

Adnan bin Mohammad 13 January 2011 Oil & Gas Site Exposure Petronas Penapisan (Melaka) Sdn Bhd

19-20 April 2011 FGB Brand Training FGB

27-29 April 2011 Employment Value Proposition Boot Camp UEM Group Berhad

10-12 October 2011 FGB: Directors & Management Retreat FGB

19-21 October 2011 UEM Group Directors Gathering 2011 UEM Group Berhad

FABER GROUP BERHAD ANNUAL REPORT 2011 81 TRANSPARENCY

BOARD COMMITTEES

The Board has set up the Board Committees, namely, the Audit and Risk Committee; Nomination and Remuneration Committee; and Investment Committee and will periodically review their terms of reference and operating procedures.

The Board has delegated certain specifi c responsibilities to the Board Committees, which operate with clearly defi ned terms of reference primarily to assist the Board in the execution of its duties and responsibilities. The minutes of the respective Committee Meetings are submitted to the Board for deliberations and notation by the Board. The Chairman of the various committees will report to the Board the outcome of the Committee Meetings and are incorporated in the minutes of the full Board meeting. Although the Board has granted authority to the Committees to deliberate and decide on certain operational matters, the ultimate responsibility for fi nal decision on all matters lies with the entire Board.

Audit and Risk Committee

The full Audit and Risk Committee report including its membership, composition, roles and responsibilities are laid down on pages 95 to 103 of the Annual Report.

Nomination and Remuneration Committee (“NRC”)

The NRC comprises of 3 Non-Executive Directors, a majority of whom are Independent.

The NRC met 6 times during the fi nancial year ended 31 December 2011. The members and the details of their attendance are as follows:-

NRC MEMBERS STATUS OF DIRECTORSHIP NO. OF MEETINGS ATTENDED

Datuk Mohamed Zain bin Mohamed Yusuf Independent Non-Executive Director 6/6 (Chairman)

Datuk Zainal Abidin bin Alias Senior Independent Non-Executive Director 6/6

Annuar Marzuki bin Abdul Aziz Non-Independent Non-Executive Director 6/6

FABER GROUP BERHAD ANNUAL REPORT 2011 82 TRANSPARENCY

STATEMENT ON CORPORATE GOVERNANCE (CONTINUED)

The objectives of the NRC are as follows:-

• To lead the process for Board appointments and make recommendations to the Board, candidates for all directorships for the Board of companies within the Faber Group of Companies (Faber Group Berhad, operating subsidiary companies and where possible, associate companies) for the purpose of reasonably achieving fair and adequate Board representation by the shareholders of the respective companies.

• To consider, in making its recommendations, candidates for directorships proposed by the Managing Director and within the bounds of practicability, by any other senior executive or any director or shareholder and to recommend to the Board candidates for appointment to the Board and/or to fi ll the Board committees.

• To recommend to the Board, candidates for key senior personnel of the Faber Group of Companies (Faber Group Berhad, operating subsidiary companies and where possible, associate companies) and ensure the candidates satisfy the relevant requirements on skills and core competencies.

• To set the remuneration framework and to make recommendations to the Board on all elements of the remuneration, terms of employment, reward structure and fringe benefi ts for Executive Directors, the Chief Executive and other senior management with the aim to attract, retain and motivate individuals of requisite quality. The remuneration of Executive Directors shall link rewards to corporate and individual performance.

• To carry out any other purpose as directed and approved by the Board of FGB from time to time.

The duties and responsibilities of the NRC include the following:-

• Recommends to the Board, candidates for all directorships to be fi lled by the shareholders or Board. In making the recommendations, the NRC should consider the candidates’

- skills, knowledge, expertise and experience;

- professionalism;

- background;

- integrity; and

- in the case of candidates for the position of Independent Non-Executive Directors, the NRC should also evaluate the candidates’ ability to discharge such responsibilities/functions as expected from Independent Non-Executive Directors.

Furthermore, the NRC should also review and recommend to the Board the fee structure to refl ect the skills and competencies as well as general practice in the market place.

FABER GROUP BERHAD ANNUAL REPORT 2011 83 TRANSPARENCY

• Regularly examines the structure, size and composition of the Board with a view to determine the number of Directors on the Board in relation to its effectiveness and ensure that at every annual general meeting, one-third (1/3) of the Directors for the time being shall retire from offi ce.

• Assists the Managing Director to identify and subsequently recommend to the Board the potential candidates for both Executive and Non-Executive Directors and to recommend to the Board the candidates for all directorships for the Board of companies within the Faber Group of Companies (Faber Group Berhad, major operating subsidiary companies and where possible, associate companies).

• Reviews annually the required mix of skills and experience and other qualities, including core competencies which Non-Executive Directors should bring to the Board.

• Assesses annually the effectiveness of the Board as a whole, the Board committees and the contribution each individual director’s, including Independent Non-Executive Directors, as well as Managing Director, based on the process implemented by the Board. All assessments and evaluations carried out by the NRC in discharging all its functions should be properly and adequately documented.

• Recommends suitable orientation, educational and training programmes to continuously train and equip existing and new Directors.

• Reviews mix of Directors to ensure high standard of Board performance and succession for both Executive and Non-Executive Directors in the event of any defi ciency.

• Recommends the re-election/re-appointment of Directors under the retirement by rotation provisions of the Articles of Association of FGB and the Companies Act, 1965.

• To review the structure and framework of FGB’s succession planning so as:-

(i) To ensure adequate candidates are emplaced for the different positions within the organisation;

(ii) To ensure appropriate training and development programmes are in place;

(iii) To motivate staff to improve themselves in order that they can achieve their full potential; and

(iv) To ensure retention of highly skilled and capable staff within the organisation.

• To carry out all other functions to accomplish the objectives for which the NRC was formed.

FABER GROUP BERHAD ANNUAL REPORT 2011 84 TRANSPARENCY

STATEMENT ON CORPORATE GOVERNANCE (CONTINUED)

Investment Committee (“IC”)

The IC comprises a minimum of 3 Directors of FGB, one of whom shall be from the majority/substantial shareholder of FGB.

The IC met 5 times during the fi nancial year ended 31 December 2011. The members and the details of their attendance are as follows:-

IC MEMBERS STATUS OF DIRECTORSHIP NO. OF MEETINGS ATTENDED

Dato’ Ikmal Hijaz bin Hashim (Chairman) Chairman/Independent Non-Executive Director 5/5

Datuk Mohamed Zain bin Mohamed Yusuf Independent Non-Executive Director 5/5

Annuar Marzuki bin Abdul Aziz Non-Independent Non-Executive Director 5/5

Adnan bin Mohammad Managing Director 5/5

The objectives of the IC are as follows:-

• To assist the Board in evaluating all investment proposals including acquisitions and disposals of assets, or investments into new businesses including venture capital, locally and abroad;

• To review the viability of proposals/projects/investments at the Initial Project Assessment Stage and provide appropriate directions to the Management, so as to enable management to proceed or otherwise with the basic investment concept proposal; and

• To review, recommend and act on any other investment proposals and matters related thereto, as mandated by the Board.

The duties and responsibilities of the IC include the following:-

• To develop, review and recommend to the Board the investment policies and strategies.

• To perform the duties that are assigned to it by the Board including, without limitation, the review of all investment proposals.

• To receive quarterly reports from the management, deliberate and decide on the compliance with the overall investment policies and strategies, and to report the fi ndings to the Board.

• At the Initial Project Assessment/prequalifi cation/tender bid stage:-

(i) To review and give approval for FGB to proceed with the prequalifi cation/tender bid submission or project/investment initiation activities, which meet the pre-determined criteria, and for overseas ventures.

(ii) To authorise FGB to enter into any agreements, memorandum of understanding and/or contracts with potential partners for the prequalifi cation/tender stage and approve such terms in relation to the said agreement, memorandum of understanding and/or contracts. Notwithstanding, any agreement, memorandum of understanding or contracts which may include equity participation of FGB is reserved for deliberation by the Board.

FABER GROUP BERHAD ANNUAL REPORT 2011 85 TRANSPARENCY

• Following the Detailed Appraisal/Evaluation or if the tender is successful:-

(i) To review and approve on behalf of the Board the investment proposals, if these fall within the approving authority limits delegated to the IC by the Board.

(ii) To review and recommend to the Board for fi nal decision, the investment proposals, which are beyond the authority limits of the IC.

• To review the terms of reference of the IC and recommend the relevant changes to the Board.

• Investment matters relating to wholly owned subsidiaries of FGB would be referred directly to the IC for review and recommendation to the respective Board of the wholly owned subsidiaries. The Board of the wholly owned subsidiaries would subsequently deliberate and recommend the investment matters to FGB’s Board for approval.

• Investment matters relating to non-wholly owned subsidiary companies are submitted to the respective Board of the subsidiary companies for deliberation and approval. In this respect, the Board of the subsidiary companies will then provide an update to the IC and FGB’s Board in which the IC and FGB’s Board would raise the appropriate observations and/or comments as a measure of check and balance.

DIRECTORS’ REMUNERATION

Directors’ remuneration is determined at levels which enable Faber Group to attract and retain Directors with the relevant experience and expertise needed to manage Faber Group effectively.

The breakdown of the remuneration of the Directors of FGB payable as well as subsidiary companies of FGB where they are a Board member for the fi nancial year ended 31 December 2011, by category are shown below:-

NON- EXECUTIVE EXECUTIVE DIRECTOR DIRECTORS TOTAL (RM’000) (RM’000) (RM’000)

Fees 90* 644 734 Allowance 11* 140 151 Salaries and other emoluments 528 - 528 Bonus 218 - 218 Employees Provident Fund 110 - 110 Estimated Value - Benefi t-in-kind 69 60 129

Total 1,026 844 1,870

Note: * These fees and allowances are Directors’ fees and meeting allowances payable by the subsidiary companies of FGB. Based on Faber Group’s policy, Directors’ fees and meeting allowances receivable by employees of FGB from its subsidiary companies have to be paid directly to FGB that employed them.

FABER GROUP BERHAD ANNUAL REPORT 2011 86 TRANSPARENCY

STATEMENT ON CORPORATE GOVERNANCE (CONTINUED)

The number of Directors whose total remuneration during the year fall within the following bands are as follows:-

NON- RANGE OF DIRECTORS’ EXECUTIVE EXECUTIVE REMUNERATION DIRECTOR DIRECTORS TOTAL

Below RM50,000 - 2 2

RM50,001 – RM100,000 - 4 4

RM100,001 – RM150,000 - 2 2

RM150,001 – RM200,000 - 1 1

RM900,001 – RM950,000 1 - 1

Note: Successive bands of RM50,000 are not shown entirely as they are not represented.

The details of the remuneration of each Director are not disclosed as the Board is of the view that the disclosure of the remuneration bands of the Directors of the Company is suffi cient to meet the objective of the Code.

WHISTLE BLOWER POLICY

FGB’s Code of Conduct, which incorporates a Code of Ethics, requires all offi cers and employees to observe high standards of business and personal ethics in carrying out duties and responsibilities. As employers and representatives of FGB, or any of its subsidiaries, they must practice honesty and integrity in fulfi lling their duties and responsibilities, and comply with all applicable laws and regulations.

It is thus the responsibility of all offi cers and employees to comply with the Code of Conduct and to report violations or suspected violations thereto. Accordingly, this Whistle Blower Policy has been formulated with a view to provide a mechanism for offi cers and employees of FGB to report instances of unethical behaviour, actual or suspected fraud or dishonesty or violation of FGB’s Code of Conduct or ethics policy.

The implementation of the Whistle Blower Policy is in line with Section 368B of the Companies Act, 1965 (“the Act”) where provisions have been made to protect FGB’s offi cers who make disclosures on breach or non-observance of any requirement or provision of the Act or on any serious offence involving fraud and dishonesty.

CORPORATE DISCLOSURE POLICY

FGB is committed to providing equal access to material information in an accurate, clear, timely and complete manner and to avoid an individual or selective disclosure to the shareholders, stakeholders, analysts, journalists, the investing public or other persons of FGB’s performance and operations and in conformity with any and all applicable legal and regulatory requirements.

This Disclosure Policy applies to all directors, management and employees of FGB and its operating subsidiaries. It outlines FGB’s approach toward the determination and dissemination of material information, the circumstances under which the confi dentiality of information will be maintained, and restrictions on insider trading. It also provides guidelines in order to achieve consistent disclosure practices across FGB.

FABER GROUP BERHAD ANNUAL REPORT 2011 87 TRANSPARENCY

RELATIONSHIP WITH SHAREHOLDERS AND INVESTORS

The Board acknowledges the need for shareholders to be informed of all material matters affecting Faber Group. It recognises and practices transparency and accountability to its shareholders and investors through formal channels of communication. In addition to various announcements made during the year, the timely release of quarterly fi nancial reports provides shareholders with an overview of the Faber Group’s performance and operations.

The Annual Report communicates comprehensive and adequate details of the fi nancial results and activities undertaken by Faber Group.

AGMs and Extraordinary General Meetings (“EGMs”) provide a means of communicating with shareholders where they are at liberty to seek clarifi cation. The Chairman and the Board members of FGB and the Management of Faber Group are prepared to answer any queries and undertake to provide suffi cient clarifi cation on issues and concerns raised by the shareholders. The External Auditors and independent advisors are also present to provide their professional and independent clarifi cations, if required. A press conference is normally held immediately after AGMs/EGMs to allow the Directors and the Management to meet members of the media to provide information and updates on Faber Group, as well as address any further queries.

Faber Group also recognises the need for an independent third party assessment. Towards achieving this end, the Management conducts timely dialogues and briefi ngs with the fi nancial analysts, brokers and institutional fund managers and investors on the FGB’s fi nancial results, performance and business development.

This is to ensure that the investing public receives a balanced and complete view of the FGB’s performance and the relevant updates. These briefi ngs enable a direct dialogue to be established on the affairs of the FGB with the investing community.

Presentations are made, as appropriate, to explain the FGB’s strategy, performance and major developments. However, any information that may reasonably expect to have material effect on the price, value or market activity of FGB’s shares will not be disclosed.

A key element of effective communication with shareholders and investors is the prompt and timely dissemination of information. Disclosures of information requiring immediate release as specifi ed by Bursa Securities have always been complied with. FGB has consistently released its quarterly fi nancial results well in advance before the Bursa Securities’ deadlines.

FGB views the timeliness, accuracy and reliability of information disseminated to the shareholders, stakeholders and investment community as crucial. In this regard and for the purpose of maintaining better control over disclosure, the Managing Director of FGB has been designated as the spokesperson of the Faber Group.

The FGB’s website at www.fabergroup.com.my also provides an avenue for shareholders and members of the public to access information pertaining to the Faber Group. The website is updated regularly. Further to the website, timely announcements are also made to Bursa Securities on corporate proposals, meetings, announcements, fi nancial reporting and all other announcements that are required pursuant to the Main Market Listing Requirements of Bursa Securities.

Primary contact person for Investor Relations Matters:

Puan Juliza Jalil Chief Financial Offi cer Faber Group Berhad

Contact Details: Telephone No : 03-76282888 Email : [email protected] Fax No : 03-76282867

FABER GROUP BERHAD ANNUAL REPORT 2011 88 TRANSPARENCY

STATEMENT ON CORPORATE GOVERNANCE (CONTINUED)

CORPORATE RESPONSIBILITY (“CR”)

FGB is committed to the communities in the environment it operates. It recognises that for long-term sustainability, its strategic orientation will need to look beyond the fi nancial parameters. Over the years, FGB seeks to strengthen its CR initiatives that focus on the Workplace, Marketplace, Environment and Community and aligned these initiatives with our strategic business priorities, vision and mission.

FGB acknowledged the increasing importance of CR and Sustainability and continuously taking proactive steps in enhancing its CR framework. For a start, FGB has integrated Global practices to produce its inaugural stand-alone Sustainability Report 2011 based on the Global Reporting Initiatives (“GRI”) Guidelines G3. This initiative demonstrates FGB’s commitment towards transparent reporting on social, economic and environmental initiatives and over time to instill and integrate sustainability in our daily operations towards becoming a sustainable organisation. As FGB grow, it strives to strategically integrate sustainability into the business operations with key focus on Education and Human Capital Development, Health & Safety, Community, Green Environment and Value Creation.

The Sustainability Report will complement the Annual Report 2011 and will be uploaded onto FGB’s corporate website at www.fabergroup. com.my by 30 June 2012.

FGB’s commitment in CR initiatives has gained recognition in the marketplace. FGB was announced the winner of the Starbiz-ICR Corporate Responsibility Awards 2010 for Marketplace category for companies below RM1 billion market capitalisation and shortlisted as fi nalists for Workplace and Environment categories during the award ceremony held on 29 March 2011.

FGB had previously won the Starbiz-ICR Corporate Responsibility Awards for the Workplace category in 2008 and as fi nalist in similar category in 2009. The award jointly organised by the STAR publications (M) Bhd and the Institute of Corporate Responsibility Malaysia is to honour companies that demonstrate outstanding CR practices that go beyond community and philanthropic activities.

At FGB, it fi rmly believes in managing the businesses in a responsible, balanced and ethical manner. These guiding principles ensure that the FGB’s CR initiatives will continue to contribute positively to social, economic and environmental development of the communities that we serve.

ACCOUNTABILITY AND AUDIT

The Board is committed to providing a clear, balanced and comprehensive account on the fi nancial position of Faber Group through quarterly and half yearly announcements of its results as well as through the Chairman’s review and statement of operations in FGB’s Annual Report.

DIRECTORS’ RESPONSIBILITY IN RESPECT OF THE PREPARATION OF THE ANNUAL FINANCIAL STATEMENTS

The Directors are required under the provisions of the Companies Act, 1965 to ensure that the fi nancial statements are prepared in accordance with the Financial Reporting Standards requirements. The Board is responsible for ensuring that the fi nancial statements gives a true and fair view of the state of affairs of FGB and the Faber Group at the end of the fi nancial year 31 December 2011 and the profi t and loss and cash fl ow for the period.

In preparing the fi nancial statements, the Directors have applied suitable accounting policies and applied them consistently. The Directors have also ensured that all applicable accounting standards have been followed and prepare the fi nancial statements on a going concern basis.

The Audit and Risk Committee assists the Board in overseeing the fi nancial reporting process and reviews the quarterly results and annual accounts before it is approved by the Board and released to Bursa Securities.

FABER GROUP BERHAD ANNUAL REPORT 2011 89 TRANSPARENCY

STATEMENT ON INTERNAL CONTROL

The Board has overall responsibility for the system of internal control which includes fi nancial controls, operational and compliance controls and risk management to ensure that shareholders’ investments, customers’ interests and FGB Group’s assets are safeguarded.

The Directors’ Statement on Internal Control set out on pages 90 to 94 of this Annual Report provides an overview of the state of internal controls within the Faber Group.

RELATIONSHIP WITH THE AUDITORS

The Board, through the Audit and Risk Committee maintains a transparent and professional relationship with the Internal and External Auditors. The Audit and Risk Committee has been explicitly accorded the authority to communicate directly with both the Internal and External Auditors. Currently, Messrs Ernst & Young provides independent and professional external auditing services to the Faber Group.

The full report of the Audit and Risk Committee outlining its role in relation to the Internal and External Auditors is set out on pages 95 to 103 of this Annual Report.

COMPLIANCE WITH BEST PRACTICES OF THE CODE

The Board considers that it has complied with the principles and best practices outlined in the Code.

This Statement on Corporate Governance was approved by the Board on 20 April 2012.

FABER GROUP BERHAD ANNUAL REPORT 2011 90 TRANSPARENCY

STATEMENT ON INTERNAL CONTROL

RESPONSIBILITY OF THE BOARD

The Board of Directors (“Board”) is responsible for Faber Group Berhad (“FGB”) and its subsidiary companies’ (“Faber Group”) system of internal control to safeguard stakeholders’ interests and Faber Group’s assets as prescribed by the Malaysian Code on Corporate Governance.

The Board acknowledges that the system of internal controls is designed to help manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable and not absolute assurance against material misstatement, loss and fraud.

The Board has established an on-going process for identifying, evaluating and managing the signifi cant risks faced by Faber Group. This process includes updating the system of internal controls when there are changes to business environment or regulatory requirements. The Board has established procedures to implement the recommendations of the ‘Statement on Internal Control: Guidance for Directors of Public Listed Companies’ for the Faber Group.

INTERNAL CONTROL ENVIRONMENT ELEMENTS

The Board recognises the importance of key internal control environment elements that set the tone of Faber Group. It is the foundation of all other components of internal control, providing the discipline and structure. It infl uences the control consciousness of the people in Faber Group. In recognising the importance of control environment in the overall governance process, the Board of FGB has instituted the following:-

Board and Board Committees

• Appointment of 5 Independent Directors who are to ensure that strategies proposed are fully discussed and evaluated.

• Appointment of Board Committees, including the Audit and Risk Committee (“ARC”) to assist the Board in overseeing the overall management of principal areas of risk and evaluate the adequacy and effectiveness of the Risk Management and internal control systems. Whilst the Investment Committee; and Nomination and Remuneration Committee have been delegated with specifi c responsibilities with terms of reference, these Committees have the authority to examine all matters within their scope of responsibility and report back to the Board with their recommendations for the Board’s decision.

Organisational Structure

• The organisational structure of Faber Group is clear and detailed, defi ning the roles and responsibilities of the various Committees of the Board, Management of the Corporate Offi ce and subsidiary companies.

• Appointment of Managing Director (“MD”)/ Chief Executive Offi cer (“CEO”) on the Board of the operating subsidiary companies within Faber Group. The MD/CEO’s appointment, roles and responsibilities, and authority limits are set by the respective Board.

• The structure is reviewed regularly to monitor its effectiveness and to provide support to changing business requirements. The organisation structure was last revised in 2010 in line with the business expansion efforts of the Group.

FABER GROUP BERHAD ANNUAL REPORT 2011 91 TRANSPARENCY

Risk Management

Risk Management is regarded as an integral part of management process and iterative process of continual improvement. The key objectives of Faber Group’s risk management are as follows:-

• Optimise return to shareholders and protect the interests of other stakeholders. • Safeguard Faber Group’s assets (property & investment) and maintain its reputation. • Improve Faber Group’s operating performance. • Fulfi ll Faber Group’s strategic objectives. • Ensure appropriate and timely responses to changes in the environment that affect Faber Group’s ability to achieve its objectives. • Reduce risks of material misstatement in offi cial announcements and fi nancial statements. • Comply with the Malaysian Code of Corporate Governance, the relevant laws and requirements.

The Risk Management Framework had been revised as of 20 April 2012.

Strategic Planning, Budgetary System and Performance Monitoring

• Establishment of a clear Faber Group’s vision, mission, short and long-term strategic and action plan.

• A detailed budgeting process is established requiring all key operating companies in Faber Group to prepare budgets annually, which are discussed and approved by the Board. An effective reporting system on actual performance against approved budgets is in place and signifi cant variances are followed up by Management.

• Establishment of performance monitoring as tool for Management to monitor performance and measure against the corporate objectives approved by the Board, covering all key fi nancial, customer, operational, people, system and processes and organisational indicators.

Discretionary Authority Limits

• Clear delegation of authority is defi ned in the Discretionary Authority Limits (“DAL”), which sets the limit for strategic, operating and capital decision and expenditure as well as decision authority for each level of Management within Faber Group, and also the Board’s authority.

• The DAL is reviewed from time to time to ensure effectiveness of strategic and operational executions and approved by the Board.

Management Systems, Policies and Procedures

• Faber Group established several management systems to improve its management and operational effi ciency. The management systems have been certifi ed to international standards such as ISO 9001 for Quality Management System, ISO 14001 for Environmental Management System, OHSAS 18001 for Occupational Safety and Health Management System; ISO 13485 for Medical Devices Quality Management System both at the corporate offi ce and business units. The Group is also working on other management system and expanding the current management systems to other sites for implementation and certifi cation purposes.

• Written Policies and Procedures are established at all levels within Faber Group as part of the various management systems. These policies and procedures are reviewed regularly and updated when necessary. Briefi ngs or trainings are provided to stakeholders such as employees, contractors and customers.

FABER GROUP BERHAD ANNUAL REPORT 2011 92 TRANSPARENCY

STATEMENT ON INTERNAL CONTROL (CONTINUED)

Code of Ethics and Conduct

• Faber Group has a Code of Ethics and Conduct (“Code”) that sets out the policies and guidelines relating to standard of ethics that all employees are expected to adhere to in the course of their work while employed by the Company. It also contains principles and standards of good practice relating to lawful and ethical dealings in the conduct of its business.

• Employees are required to uphold the highest integrity in discharging their duties and in their dealings with stakeholders, comprises of customers, employees and regulators in the communities in which the Group operates. This Code is communicated to all employees upon recruitment. Each employee is a given a booklet of the Code and a softcopy version is available in the shared Human Resource electronic portal.

Insurance on Assets

• Faber Group purchases insurance for all its assets, including its human resources. Coverage typically includes damage to or theft of assets; liability coverage for the legal responsibility to others for accidents, bodily injury or property damage; and medical coverage for the cost of treating injuries and illness, rehabilitation and death.

• Insurance coverage is reviewed regularly to ensure comprehensive coverage in view of changing business environment or assets.

Control Self-Assessment (“CSA”)

• The CSA process has been established to create increased appreciation of risks and control towards achieving Faber Group’s business and departmental objectives. This is achieved by empowering the employees to take full ownership and accountability of the respective controls within their area of responsibility.

• More CSAs are being planned to be implemented at various levels of operation as part of operational improvement.

Business Continuity Management

• Faber Group has identifi ed potential events that threaten its organisation and established a framework for building resilience and the capability for an effective response which safeguards the interests of its key stake holders, reputation, brand and value creating activities in the event of disaster.

• The framework is inclusive of disaster recovery, business recovery, crisis management, incident management, emergency management, contingency planning and business continuity plan.

• The Business Continuity Plan and Computer Disaster Recovery Plan are tested annually to ensure the continuity requirements within the organisation’s business and services covering processes, facilities, personnel, information technology, suppliers work in concert and appropriate to Faber Group’s vision and objectives.

FABER GROUP BERHAD ANNUAL REPORT 2011 93 TRANSPARENCY

Human Resources Management

• Faber Group places great importance on its human resources management and has established strong policies and procedures on Human Resource planning, recruitment, employees’ retention and succession planning.

• Formal appraisals are conducted periodically, guided by the Performance Management System using the Balance Scorecard module where strategy is translated into operational terms and Key Performance Indicators (KPIs) and is used as a Performance Measurement and Recognition Tool.

• Equal emphasis is also given on education, remunerations, employee welfare and organisational development, training and development including leadership development to enhance the quality, ability and competencies of the employees of Faber Group.

• The Group has also established leadership development programme to develop suitable employees for future leadership roles as part of its strategic action for succession planning and to ensure business continuity and prepare for business expansion.

• Faber has its own talent management framework that links to succession plan to ensure the Company has continuous pool of talent at all levels in line with company growth.

• Faber Group provides a conducive working environment to its employees and encourages employees’ involvement towards the betterment of the Group. In the recent Employee Satisfaction Survey, Faber garnered a score of 81%, the highest overall score in the UEM Group of Companies.

Management Information System (“MIS”)

• Availability of a computerised MIS for a more effi cient and effective management and operation of budget, fi nancial, human resource, maintenance, procurement, and corporate, operational as well as employees performance. The system produces reports and other analytical tools used for planning, monitoring and continual improvement.

• The MIS is available on real-time basis and accessible via internet and intranet.

Internal Audit

• Reviews of the internal control system are carried out on a regular basis by UEM Group Management Sdn Bhd, the outsourced party which undertakes the internal audit function of Faber Group since 2009. The reviews are based on the Annual Audit Plan approved by the ARC. The results of such reviews are reported regularly to the ARC. The ARC holds regular meetings to deliberate on fi ndings and recommendations for improvements by both the Internal and External Auditors on the state of the internal control system, and report back to the Board.

• Internal control weaknesses identifi ed during the fi nancial period under review have been or are being addressed by Management. None of the weaknesses has resulted in any material loss that would require disclosure in Faber Group’s fi nancial statements.

FABER GROUP BERHAD ANNUAL REPORT 2011 94 TRANSPARENCY

STATEMENT ON INTERNAL CONTROL (CONTINUED)

GLC Transformation Programme

• In addition to enhancing stakeholders’ value through improved fi nancial and operational performance, Faber Group has religiously embraced the GLC Transformation Programme and guided by the following colour-coded books:-

• Blue Book – Intensifying Performance Management • Green Book – Enhancing Board Effectiveness • Orange Book – Strengthening Leadership Development • Purple Book – Optimising Capital Management Practices • Red Book – Procurement Guidelines & Best Practices • Silver Book – Achieving Value Through Social Responsibility • Yellow Book – Enhancing Operational Effi ciency and Effectiveness

REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS

The External Auditors, Messrs Ernst & Young have reviewed and affi rmed this Statement on Internal Control for inclusion in the annual report of the Company for the fi nancial year ended 31 December 2011.

The External Auditors conducted the review in accordance with the “Recommended Practice Guide 5: Guidance for Auditors on the Review of Director’s Statement on Internal Control” (“RPG 5”) issued by the Malaysia Institute of Accountants. The review has been conducted to assess whether the Statement on Internal Control is both supported by the documentation prepared by or for the Directors and appropriately refl ects the process the Directors had adopted in reviewing the adequacy and integrity of the system of internal controls of Faber Group.

RPG 5 does not require the External Auditors to consider whether the Directors’ Statement on Internal Control covers all risks and controls, or to form an opinion on the effectiveness of the Group’s risk and control procedures. The Guide also does not require the External Auditors to consider whether the processes described to deal with material internal control aspects of any signifi cant matter disclosed in the annual report will, in fact, mitigate the risks identifi ed or remedy the potential problems.

Based on their review, the External Auditors have reported to the Board that nothing had come to their attention that caused them to believe that the Statement on Internal Control is inconsistent with their understanding of the process the Board has adopted in the review of the adequacy and integrity of internal control of Faber Group.

This Statement on Internal Control was approved by the Board on 20 April 2012.

FABER GROUP BERHAD ANNUAL REPORT 2011 95 TRANSPARENCY

AUDIT AND RISK COMMITTEE REPORT

MEMBERSHIP

The Audit and Risk Committee (“ARC”) consists of 4 members of which 3 are Independent Non-Executive Directors and 1 is a Non- Independent Non-Executive Director. The members during the fi nancial year ended 31 December 2011 are as follows:-

Oh Kim Sun^ Chairman, Independent Non-Executive Director Datuk Zainal Abidin bin Alias Senior Independent Non-Executive Director Datuk Mohamed Zain bin Mohamed Yusuf Independent Non-Executive Director Elakumari a/p Kantilal* Non-Independent Non-Executive Director

^ Member of the Malaysian Institute of Certifi ed Public Accountants * Member of the Malaysian Institute of Accountants

Faber Group Berhad (“FGB”) has complied with Paragraph 15.09 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”), which requires all Audit Committee members to be Non-Executive Directors, with a majority of them being Independent Directors.

MEETINGS

The ARC met on a scheduled basis at least once every quarter. Minutes of each meeting are distributed to each member of the Board of Directors (“the Board”). The Chairman of the ARC reports on each meeting to the Board. During the fi nancial year ended 31 December 2011, the ARC papers for the meetings were distributed to the members with suffi cient notifi cation.

The ARC met 6 times during the fi nancial year ended 31 December 2011. The members and the details of their attendance are as follows:-

ARC MEMBERS STATUS OF DIRECTORSHIP NO. OF MEETINGS ATTENDED

Oh Kim Sun (Chairman) Independent Non-Executive Director 6/6

Datuk Zainal Abidin bin Alias Senior Independent Non-Executive Director 5/6

Datuk Mohamed Zain bin Mohamed Yusuf Independent Non-Executive Director 5/6

Elakumari a/p Kantilal Non-Independent Non-Executive Director 6/6

The Managing Director, representative of the internal audit function, Senior Management of subsidiary companies and representatives from the External Auditors attended these meetings upon invitation.

The Company Secretary shall be the Secretary of the ARC.

FABER GROUP BERHAD ANNUAL REPORT 2011 96 TRANSPARENCY

AUDIT AND RISK COMMITTEE REPORT (CONTINUED)

SUMMARY OF ACTIVITIES OF THE ARC

During the fi nancial year ended 31 December 2011, the ARC carried out the following activities in the discharge of its functions and duties:-

A. Financial Results and Corporate Governance

1. Reviewed the quarterly results announcements and year-end fi nancial statements, before the approval by the Board, focusing particularly on:-

• any changes to the accounting policies and practices;

• signifi cant adjustments arising from the audit;

• the going concern assumption; and

• compliance with fi nancial reporting standards and other legal requirements.

2. Reviewed recurrent related party transactions of a revenue or trading nature which are necessary for the day-to-day operations in the ordinary course of business of FGB and its subsidiaries (“FGB Group”) to ascertain as to whether they are undertaken on arm’s length basis on normal commercial terms not more favourable to the related parties than those generally available to the public or those extended to unrelated parties and are not detrimental to the minority shareholders.

3. Reviewed the annual report and the audited fi nancial statements of FGB prior to submission to the Board for their consideration and approval. The review on the annual report was to ensure compliance with the requirements listed in the Main Market Listing Requirements of Bursa Securities, whereas, the review on the audited fi nancial statements was to ensure that the audited fi nancial statements were drawn up in accordance with the provisions of the Companies Act, 1965 and applicable Financial Reporting Standards in Malaysia.

4. Reviewed the Circular to Shareholders in respect of the proposed shareholders’ mandate for recurrent related party transactions.

5. Reviewed and recommended the Statement on Corporate Governance, ARC Report and Statement on Internal Control, to the Board for their approval.

6. Attended the relevant briefi ng and seminars conducted internally within the UEM Group and by external parties and/or professional associations to keep abreast with the latest practice, development and updates pertaining to duties and responsibilities and functions of an ARC.

7. Reviewed the application of corporate governance principles and the FGB Group’s compliance with the best practices set out under the Malaysian Code on Corporate Governance for the purpose of preparing the Statement on Corporate Governance and Statement on Internal Control pursuant to the Listing Requirements of Bursa Securities.

FABER GROUP BERHAD ANNUAL REPORT 2011 97 TRANSPARENCY

B. Internal Audit and Risk Management

1. Reviewed the annual audit plan to ensure adequate scope and comprehensive coverage over the audit activities of the Group.

2. Reviewed the effectiveness of the audit process, resource requirements for the year and assessed the performance of the internal audit function.

3. Reviewed and deliberated on a total of 9 audit reports arising from planned and ad-hoc audit assignments.

4. Monitored the corrective actions on the outstanding audit issues to ensure that all the key risks and control lapses have been addressed.

5. Reviewed the internal audit function’s audit methodology in assessing and rating risks of auditable areas and ensure that all high and critical risk areas are audited annually.

6. Reviewed the audit performance reports to monitor the performance, progress and adequacy of coverage of the internal audit function.

7. Reviewed and recommended for implementation FGB’s Risk Management Framework for the approval of the Board and deliberated on the half-yearly FGB’s Risk Management Status Report to ensure the Board received adequate and appropriate information for decision-making or acknowledgement respectively.

8. Identifi ed and or reviewed the principal risks identifi ed by the Risk Management Steering Committee (“RMSC”) and deliberated on the risk control mechanisms proposed by the RMSC to mitigate the risks.

9. Reviewed the adequacy and effectiveness of the overall risk management process.

C. External Audit

1. Reviewed with the External Auditors:-

• Their audit plan, audit strategy and scope of work for the year.

• The results of the annual audit, their audit report and management letter together with Management’s response to the fi ndings of the External Auditors.

2. Assessed the independence and objectivity of the External Auditors during the year and prior to the appointment of the External Auditors for non-audit services.

3. Evaluated the performance and effectiveness of the External Auditors and made recommendations to the Board on their appointment and remuneration.

4. Had a minimum of two meetings annually with the External Auditors without the presence of the Management.

FABER GROUP BERHAD ANNUAL REPORT 2011 98 TRANSPARENCY

AUDIT AND RISK COMMITTEE REPORT (CONTINUED)

TERMS OF REFERENCE OF THE ARC

A. Objectives

1. The objective of the ARC is to assist the Board in discharging its responsibilities by reviewing the integrity and adequacy of the Company’s and its subsidiaries’ internal controls and management information systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines.

2. The ARC shall reinforce the independence of the External Auditors, assure that they will have free rein in the audit process and provide a line of communication between the Board and the External Auditors.

3. The ARC shall enhance the internal audit function by increasing the objectivity and independence of the Internal Auditors and provide a forum for discussion that is independent of the Management. The quality of the audits conducted by the Internal and External Auditors of the Company shall be reviewed by the ARC.

4. The ARC shall encourage high standards of corporate disclosure and transparency. The ARC will endeavour to adopt certain practices aimed at maintaining appropriate standards of corporate responsibility, integrity and accountability to the Company’s shareholders.

B. Composition

1. The ARC shall be appointed by the Board and shall consist of not less than three (3) members, all of whom shall be Non- Executive Directors, with a majority of the ARC members being Independent Directors. No alternate Director is to be appointed as a member of the ARC.

2. At least one (1) member of the ARC:-

(i) Must be a member of the Malaysian Institute of Accountants; or

(ii) If he is not a member of the Malaysian Institute of Accountants, he must have at least 3 years’ working experience and:

(a) He must have passed the examinations specifi ed in Part I of the 1st Schedule of the Accountants Act, 1967; or

(b) He must be a member of one of the associations of accountants specifi ed in Part II of the 1st Schedule of the Accountants Act, 1967; or

(iii) Fulfi ls such other requirements as prescribed or approved by Bursa Securities.

3. The members of the ARC shall elect a Chairman from among themselves who is an Independent Director.

4. In the event of any vacancy in the ARC resulting in the number of members being reduced to below three (3), the Board shall fi ll the vacancy within three (3) months.

FABER GROUP BERHAD ANNUAL REPORT 2011 99 TRANSPARENCY

C. Meetings

1. The ARC shall meet at least four (4) times in each fi nancial year although additional meetings may be called at any time, at the discretion of the ARC Chairman.

2. The quorum for each meeting shall consist of at least two (2) members, both of whom shall be Independent Directors.

3. The secretary of the ARC shall attend each ARC meeting and record the proceedings of the meeting thereat.

4. The fi nance manager and the representative of the internal audit function shall normally attend meetings. Other Board members and employees may attend meetings upon the invitation of the ARC. However, the ARC shall meet with the External Auditors without the executive Board members and employees present at least twice a year, and whenever deemed necessary.

D. Authority

1. The ARC shall, in accordance with a procedure to be determined by the Board and at the expense of the Company:-

(i) Have authority to investigate any matter within its terms of reference;

(ii) Have the resources which are required to perform its duties;

(iii) Have full and unrestricted access to any information pertaining to the Company;

(iv) Have direct communication channels with the External Auditors and person(s) carrying out the internal audit function or activity;

(v) Be able to obtain independent professional or other advice and to invite outsiders with relevant experience to attend the ARC meetings (if necessary) and to brief the ARC thereof; and

(vi) Be able to convene meetings with the External Auditors, the Internal Auditors or both, excluding the attendance of other directors and employees of the Company, whenever deemed necessary.

2. Where the ARC is of the view that a matter reported by it to the Board has not been satisfactorily resolved resulting in a breach of the Listing Requirements of Bursa Securities, the ARC shall promptly report such matter to Bursa Securities.

FABER GROUP BERHAD ANNUAL REPORT 2011 100 TRANSPARENCY

AUDIT AND RISK COMMITTEE REPORT (CONTINUED)

E. Duties And Responsibilities

The following are the main duties and responsibilities of the ARC:-

(i) Oversees the Company’s internal control structure to ensure operational effectiveness and effi ciency, reduce the risk of unreliable fi nancial reporting, protect the Company’s assets from misappropriation and encourage legal and regulatory compliance;

(ii) Assists the Board of Directors in identifying the principal risks in the achievement of the Company’s objectives and ensuring the implementation of appropriate systems to manage these risks;

(iii) Reviews and recommends the risk management policy, procedures and risk management framework for the approval and acknowledgment of the Board and provide guidance on the overall risk strategy and directives for implementation and ensure that the principles and requirements of managing risk are consistently adopted throughout the Group;

(iv) Reviews periodically the risk management report and risk profi le and to be satisfi ed that the methodology employed allows the identifi cation, analysis, assessment, monitoring and communication of risks in a regular and timely manner that will allow the Group to minimise losses and maximise opportunities;

(v) Commissions, where required, special projects to investigate, develop or report on specifi c aspects of the risk management processes of the Company;

(vi) Recommends to the Board, for it to put to the shareholders for their approval in general meeting, in relation to the appointment, re-appointment and removal of the External Auditors and to approve the remuneration and terms of engagement of the External Auditors;

(vii) Reviews and monitors the External Auditors’ independence and objectivity and the effectiveness of the audit process;

(viii) Discusses with the External Auditors before the audit commences, the nature and scope of the audit, ensure co-ordination where more than one (1) audit fi rm is involved;

(ix) Reviews with the External Auditors, their evaluation of the system of internal controls and their audit report;

(x) Reviews the audit representation letters, management letter and management’s responsiveness to the External Auditors’ fi ndings and recommendations;

(xi) Reviews the assistance and co-operation given by the Company’s employees to the External and Internal Auditors;

(xii) Discusses problems and reservations arising from the interim and fi nal audits, and any matter the auditors may wish to discuss, in the absence of management, where necessary;

FABER GROUP BERHAD ANNUAL REPORT 2011 101 TRANSPARENCY

(xiii) Reviews the quarterly fi nancial results and year-end fi nancial statements, before the approval by the Board, focusing particularly on:-

• any changes to the accounting policies and practices;

• signifi cant adjustments arising from the audit;

• the going concern assumption; and

• compliance with fi nancial reporting standards and other legal requirements;

(xiv) In relation to the internal audit function:-

• reviews the adequacy of the scope, functions, competency and resources of the internal audit function, and that it has the necessary authority to carry out its work;

• reviews the internal audit programme, processes, the results of the internal audit programme, processes or investigation undertaken and whether or not appropriate action is taken on the recommendations of the Internal Auditors;

• reviews any appraisal or assessment of the performance of the internal audit function;

• approves any appointment or termination of the party that performs the internal audit function; and

• take cognisance of resignations of internal audit staff members and provide the resigning staff member an opportunity to submit his reasons for resigning;

(xv) Monitors the integrity of the fi nancial statements of the Company and any formal announcements relating to the Company’s fi nancial performance, reviewing signifi cant fi nancial reporting judgments contained in them;

(xvi) Reviews any related party transaction and confl ict of interest situation that may arise within the Company or the Group including any transaction, procedure or course of conduct that raises questions of management’s integrity; and

(xvii) Considers other matters as defi ned by the Board.

FABER GROUP BERHAD ANNUAL REPORT 2011 102 TRANSPARENCY

AUDIT AND RISK COMMITTEE REPORT (CONTINUED)

F. ARC Report

The Board is required to prepare an ARC Report at the end of each fi nancial year to be included and published in the annual report of the Company. The said report should include the following:-

(i) The composition of the ARC including the name, designation (indicating the Chairman) and directorship of the members (indicating whether the Directors are independent or otherwise);

(ii) The terms of reference of the ARC;

(iii) The number of ARC meetings held during the fi nancial year and details of attendance of each ARC member;

(iv) A summary of the activities carried out by the ARC in the discharge of its functions and duties for that fi nancial year of the Company; and

(v) A summary of the activities of the internal audit function or activity.

G. Chairman Of The ARC

The following are the main duties and responsibilities of the ARC Chairman:-

(i) Helps the ARC fulfi ls the goals it sets by assigning specifi c tasks to members of the ARC and identifi es guidelines for the conduct of the members and ensures that each member is making a signifi cant contribution;

(ii) Consults with the Secretary of the ARC on matters related to their responsibilities, rules and regulations under the Terms of Reference to which they are subject to and how those responsibilities should be discharged. The compliance advice should extend to embrace all laws and regulations and not merely the routine fi ling requirements and other administrative requirements of the Companies Act, 1965;

(iii) Provides a reasonable time for discussion at the meeting. Organises and presents the agenda for regular or special ARC meetings based on input from members and ensures that all relevant issues are on the agenda. In addition, the Chairman should encourage debate on the issue before the ARC;

(iv) Provides leadership to the ARC and ensures proper fl ow of information to the ARC, reviewing the adequacy and timing of documentation;

(v) Secures good corporate governance and ensures that members look beyond their ARC function and accept their full share of responsibilities of governance materials in support of Management’s proposals;

(vi) Manages the processes and workings of the ARC and ensures that the ARC discharges its responsibilities in accordance with the Terms of Reference. Appropriate procedures may involve the ARC meeting on a regular basis without the presence of Management;

(vii) Ensures that every ARC resolution is put to a vote to ensure that it is the will of the majority that prevails; and

(viii) Engages on a continuous basis with senior management, such as the chairman, chief executive offi cer, the fi nance director, the head of internal audit and the external auditors in order to be kept informed of matters affecting the Company.

FABER GROUP BERHAD ANNUAL REPORT 2011 103 TRANSPARENCY

H. ARC Members

Each ARC member will be expected to:-

(i) Provide individual external independent opinions to the fact-fi nding, analysis and decision making process of the ARC, based on their experience and knowledge;

(ii) Consider viewpoints from the other ARC members; make decisions and recommendations for the best interest of the Board collectively; and

(iii) Keep abreast of the latest corporate governance guidelines and best practices in relation to the ARC and the Board as a whole.

INTERNAL AUDIT FUNCTION

The internal audit function of Faber Group was outsourced to UEM Group Management Sdn Bhd which has adequate resources and appropriate standing to undertake its activities independently and objectively to assist the ARC in discharging its duties and responsibilities more effectively. The Head of the Internal Audit reports directly to the ARC. The activities undertaken by UEM Group Management Sdn Bhd are in conformance with the International Standards for the Professional Practice of Internal Auditing issued by the Institute of Internal Auditors.

It is the responsibility of the internal audit function to provide the ARC with independent and objective reports on the state of internal control of the various operating divisions within the Faber Group, and the extent of compliance of the divisions with the Faber Group’s established policies and procedures as well as relevant statutory requirements. During the year, the internal audit function carried out 15 audit assignments. Representatives of the internal audit function were invited to and had attended all the ARC meetings during the year.

As at 31 December 2011, the reimbursable costs incurred for the audit function was RM445,684.51.

FABER GROUP BERHAD ANNUAL REPORT 2011 104 TRANSPARENCY

STATEMENT OF DIRECTORS’ RESPONSIBILITY IN RESPECT OF AUDITED FINANCIAL STATEMENTS

The Directors are required by the Companies Act, 1965 to prepare fi nancial statements for each fi nancial year that give a true and fair view of the state of affairs of the Company and the Group as at the end of the fi nancial year, and of their results and cash fl ows for the fi nancial year then ended.

In preparing the fi nancial statements the Directors have:-

• Considered the provision of the Companies Act, 1965.

• Considered the application of applicable Financial Reporting Standards.

• Adopted and consistently applied appropriate accounting policies.

• Made judgment and estimates that are prudent and reasonable.

The Directors have the responsibilities to ensure that the Company and the Group keep accounting records which disclose with reasonable accuracy the fi nancial position of the Company and the Group and which enable them to ensure the fi nancial statements comply with the Companies Act, 1965.

The Directors have general responsibility for taking such steps that are reasonably open to them to safeguard the assets of the Company and the Group and to prevent and detect fraud and other irregularities.

FABER GROUP BERHAD ANNUAL REPORT 2011 FINANCIAL STATEMENTS

106 Directors’ Report

110 Statement by Directors

110 Statutory Declaration

111 Independent Auditors’ Report

113 Income Statements

114 Statements of Comprehensive Income

115 Statements of Financial Position

117 Statements of Changes In Equity

120 Statements of Cash Flows

122 Notes to the Financial Statements

217 Supplementary Information - Breakdown of Retained Earnings/ (Accumulated Losses) into Realised and Unrealised 106

DIRECTORS’ REPORT

The directors have pleasure in presenting their report together with the audited fi nancial statements of the Group and of the Company for the fi nancial year ended 31 December 2011.

PRINCIPAL ACTIVITIES

The principal activities of the Company are investment holding and provision of management services to its subsidiaries.

The principal activities of the subsidiaries are described in Note 45 to the fi nancial statements.

There have been no signifi cant changes in the nature of the principal activities during the fi nancial year.

RESULTS

GROUP COMPANY RM’000 RM’000

Profi t net of tax 73,215 108,239

Attributable to: Owners of the parent 61,589 108,239 Non-controlling interests 11,626 –

73,215 108,239

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

In the opinion of the directors, the results of the operations of the Group and of the Company during the fi nancial year were not substantially affected by any item, transaction or event of a material and unusual nature.

DIVIDENDS

The Company paid a fi rst and fi nal dividend in respect of the fi nancial year ended 31 December 2010, of 8% less 25% taxation on ordinary shares, amounting to a dividend payable of RM21,780,000 (6.00 sen net per ordinary share) on 23 June 2011.

At the forthcoming Annual General Meeting, a fi nal dividend in respect of the fi nancial year ended 31 December 2011, of 8.00 sen less 25% taxation on 363,001,000 ordinary shares of RM0.25 each, amounting to a dividend payable of RM21,780,000 (6.00 sen net per ordinary share) will be proposed for shareholder’s approval. The fi nancial statements for the current fi nancial year do not refl ect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in equity as an appropriation of retained earnings in the fi nancial year ending 31 December 2012.

FABER GROUP BERHAD ANNUAL REPORT 2011 107

DIRECTORS

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

Dato’ Ikmal Hijaz bin Hashim Datuk Zainal Abidin bin Alias Datuk Mohamed Zain bin Mohamed Yusuf Elakumari a/p Kantilal Puasa bin Osman Adnan bin Mohammad Oh Kim Sun Annuar Marzuki bin Abdul Aziz Dato’ Mohd Izzaddin bin Idris Suhaimi bin Halim

DIRECTORS’ BENEFITS

Neither at the end of the fi nancial year, nor at any time during that year, did there subsist any arrangement to which the Company was a party, whereby the directors might acquire benefi ts by means of acquisition of shares in or debentures (including Redeemable Secured Loan Stocks (“RSLS”)) of the Company or any other body corporate.

Since the end of the previous fi nancial year, no director has received or become entitled to receive a benefi t (other than benefi ts included in the aggregate amount of emoluments received or due and receivable by the directors as shown in Note 9 to the fi nancial statements or the fi xed salary of a full time employee) by reason of a contract made by the Company or a related corporation with any director or with a fi rm of which the director is a member, or with a company in which the director has a substantial fi nancial interest, except as disclosed in Note 40 to the fi nancial statements.

DIRECTORS’ INTERESTS

According to the register of directors’ shareholdings, the interests of directors in offi ce at the end of the fi nancial year in shares in the Group and in the Company and its related corporations during the fi nancial year were as follows:

THE COMPANY

NO. OF ORDINARY NO. OF ORDINARY SHARES OF SHARES OF RM1.00 EACH RM0.25 EACH AT 1.1.2011 ACQUIRED DISPOSED AT 31.12.2011

Adnan bin Mohammad 44,000 – – 44,000

None of the other directors in offi ce at the end of the fi nancial year had any interest in shares in the Group and in the Company or its related corporations during the fi nancial year.

FABER GROUP BERHAD ANNUAL REPORT 2011 108

DIRECTORS’ REPORT (CONTINUED)

ISSUE OF SHARES

During the year, the issued and paid-up share capital of the Company was reduced via the cancellation of RM0.75 from every par value of RM1.00 of each ordinary share pursuant to Section 64 of the Companies Act, 1965 to reduce the accumulated losses of the Company. The required amendment to the Memorandum of Association to facilitate the par value reduction was completed on 19 September 2011 as per Note 46(c).

OTHER STATUTORY INFORMATION

(a) Before the income statements, statements of comprehensive income and statements of fi nancial position 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 allowance for impairment of doubtful debts and satisfi ed themselves that all known bad debts had been written off and that adequate allowance had been made for doubtful debts; and

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

(b) At the date of this report, the directors are not aware of any circumstances which would render:

(i) the amount written off for bad debts or the amount of the allowance for impairment of doubtful debts in the fi nancial statements of the Group and the Company inadequate to any substantial extent; and

(ii) the values attributed to the current assets in the fi nancial statements 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 fi nancial statements of the Group and of the Company which would render any amount stated in the fi nancial 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 fi nancial year which secures the liabilities of any other person; or

(ii) any contingent liability in respect of the Group or of the Company which has arisen since the end of the fi nancial 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 fi nancial year which will or may affect the ability of the Group and of the Company to meet their obligations as and 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 fi nancial 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 fi nancial year in which this report is made.

FABER GROUP BERHAD ANNUAL REPORT 2011 109

SIGNIFICANT EVENTS

Signifi cant events are disclosed in Note 46 to the fi nancial statements.

SUBSEQUENT EVENTS

Subsequent events is disclosed in Note 47 to the fi nancial statements.

AUDITORS

The auditors, Ernst & Young, have expressed their willingness to continue in offi ce.

Signed on behalf of the Board in accordance with a resolution of the directors dated 20 April 2012.

Dato’ Ikmal Hijaz bin Hashim Adnan bin Mohammad

FABER GROUP BERHAD ANNUAL REPORT 2011 110

STATEMENT BY DIRECTORS PURSUANT TO SECTION 169(15) OF THE COMPANIES ACT, 1965

We, Dato’ Ikmal Hijaz bin Hashim and Adnan bin Mohammad, being two of the directors of Faber Group Berhad, do hereby state that, in the opinion of the directors, the accompanying fi nancial statements set out on pages 113 to 217 are drawn up in accordance with the provisions of the Companies Act, 1965 and applicable Financial Reporting Standards in Malaysia so as to give a true and fair view of the fi nancial position of the Group and of the Company as at 31 December 2011 and of their fi nancial performance and cash fl ows for the year then ended.

The information set out in Note 49 to the fi nancial statements have been prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profi ts or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountant.

Signed on behalf of the Board in accordance with a resolution of the directors dated 20 April 2012.

Dato’ Ikmal Hijaz bin Hashim Adnan bin Mohammad

STATUTORY DECLARATION PURSUANT TO SECTION 169(16) OF THE COMPANIES ACT, 1965

I, Juliza binti Jalil, being the offi cer primarily responsible for the fi nancial management of Faber Group Berhad, do solemnly and sincerely declare that the accompanying fi nancial statements set out on pages 113 to 217 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 Juliza binti Jalil at Kuala Lumpur in the Federal Territory on 20 April 2012. Juliza binti Jalil

Before me,

FABER GROUP BERHAD ANNUAL REPORT 2011 111

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF FABER GROUP BERHAD (INCORPORATED IN MALAYSIA)

REPORT ON THE FINANCIAL STATEMENTS

We have audited the fi nancial statements of Faber Group Berhad, which comprise the statement of fi nancial position as at 31 December 2011 of the Group and of the Company, and the income statements, statements of comprehensive income, statements of changes in equity and statements of cash fl ows of the Group and of the Company for the year then ended, and a summary of signifi cant accounting policies and other explanatory notes, as set out on pages 113 to 216.

Directors’ responsibility for the fi nancial statements

The directors of the Company are responsible for the preparation of fi nancial statements that give a true and fair view in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia, and for such internal control as the directors determine is necessary to enable the preparation of fi nancial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ responsibility

Our responsibility is to express an opinion on these fi nancial 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 about whether the fi nancial statements are free from material misstatement.

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

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

Opinion

In our opinion, the fi nancial statements have been properly drawn up in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the fi nancial position of the Group and of the Company as at 31 December 2011 and of their fi nancial performance and cash fl ows for the year then ended.

Emphasis of matter

Without qualifying our opinion, we draw attention to Note 47(a) of the fi nancial statements. The Concession Agreement between Faber Medi-Serve Sdn. Bhd. (“FMS”), a wholly owned subsidiary of the Company, and the Ministry of Health (“MOH”) has expired in October 2011. On 27 October 2011, Unit Kerjasama Awam Swasta (“UKAS”) issued a letter to FMS for an extension of the Concession Agreement for a six-month period effective from 28 October 2011, subject to the prevailing terms and conditions of the Concession Agreement. FMS has submitted its Request for Proposal to MOH to extend the Concession Agreement and is currently awaiting the decision of the extension. Due to the signifi cance of this uncertainty and its potential effects on the future operations of FMS, we consider it appropriate to bring this matter to your attention.

FABER GROUP BERHAD ANNUAL REPORT 2011 112

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF FABER GROUP BERHAD (INCORPORATED IN MALAYSIA) (CONTINUED)

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

In accordance with the requirements of the Companies Act 1965 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 of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

(b) We have considered the fi nancial statements and the auditors’ reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 45 to the fi nancial statements, being fi nancial statements that have been included in the consolidated fi nancial statements.

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

(d) The auditors’ reports on the fi nancial statements of the subsidiaries were not subject to any qualifi cation and did not include any comment required to be made under Section 174(3) of the Act.

OTHER REPORTING RESPONSIBILITIES

The supplementary information set out in Note 49 on page 217 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profi ts or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

OTHER MATTERS

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

Ernst & Young Kua Choo Kai AF: 0039 No. 2030/03/14(J) Chartered Accountants Chartered Accountant

Kuala Lumpur, Malaysia 20 April 2012

FABER GROUP BERHAD ANNUAL REPORT 2011 113

INCOME STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

GROUP COMPANY NOTE 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Revenue 3 880,070 888,846 147,226 76,877 Cost of sales 4 (652,461) (668,812) – –

Gross profi t 227,609 220,034 147,226 76,877 Other income 5 9,622 9,287 3,180 2,183 Administrative expenses (42,278) (44,993) (16,026) (16,461) Selling and marketing expenses (1,639) (942) – – Other expenses (65,202) (47,610) (16,472) (2,435)

Operating profi t 128,112 135,776 117,908 60,164 Finance costs 6 (6,398) (6,616) (5,952) (6,222)

Profi t before tax 7 121,714 129,160 111,956 53,942 Income tax expense 10 (48,499) (25,828) (3,717) (9,037)

Profi t net of tax 73,215 103,332 108,239 44,905

Profi t attributable to:

Owners of the parent 61,589 78,780 108,239 44,905 Non-controlling interests 11,626 24,552 – –

73,215 103,332 108,239 44,905

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

Basic 11 17.0 21.7

The accompanying notes form an integral part of the fi nancial statements.

FABER GROUP BERHAD ANNUAL REPORT 2011 114

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2011

GROUP COMPANY 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Profi t net of tax 73,215 103,332 108,239 44,905 Foreign currency translation representing other comprehensive income for the year, net of tax (166) (4,790) – –

Total comprehensive income for the year 73,049 98,542 108,239 44,905

Total comprehensive income attributable to:

Owners of the parent 61,580 75,219 108,239 44,905 Non-controlling interests 11,469 23,323 – –

73,049 98,542 108,239 44,905

The accompanying notes form an integral part of the fi nancial statements.

FABER GROUP BERHAD ANNUAL REPORT 2011 115

STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2011

GROUP COMPANY NOTE 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Assets Non-current assets Property, plant and equipment 13 93,117 88,434 1,643 1,195 Land held for property development 14(a) 1,102 20,247 – – Prepaid land lease payments 15 3,586 3,673 – – Intangible assets 16 27,546 36,515 57 67 Investments in subsidiaries 17 – – 148,032 148,032 Other investments 18 272 272 272 272 Trade receivables 20 144,098 – – – Deferred tax assets 31 2,676 5,471 – –

272,397 154,612 150,004 149,566

Current assets Property development costs 14(b) 80,286 70,138 – – Inventories 19 7,078 5,302 – – Trade and other receivables 20 363,306 434,082 39,041 24,833 Amounts due from customer on contracts 21 57,842 40,555 – – Short term investment 22 2,012 – – – Cash and cash equivalents 23 320,361 284,876 104,008 45,632

830,885 834,953 143,049 70,465

Total assets 1,103,282 989,565 293,053 220,031

FABER GROUP BERHAD ANNUAL REPORT 2011 116

STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2011 (CONTINUED)

GROUP COMPANY NOTE 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Equity and liabilities Equity attributable to owners of the parent Share capital 32 90,750 363,001 90,750 363,001 Share premium 32 – 115,985 – 115,985 Other reserves 33 (4,345) (4,336) – – Retained earnings/(accumulated losses) 401,571 (25,775) 52,620 (422,075)

487,976 448,875 143,370 56,911 Non-controlling interests 35 75,438 67,045 – –

Total equity 563,414 515,920 143,370 56,911

Non-current liabilities Retirement benefi t obligations 24 4,038 3,959 – – Provisions 25 99 643 – – Borrowings 26 7,089 161,172 – 154,145 Trade payables 30 33,010 – – – Deferred tax liabilities 31 3,573 795 – –

47,809 166,569 – 154,145

Current liabilities Retirement benefi t obligations 24 832 597 – – Borrowings 26 148,909 5,963 145,053 – Trade and other payables 30 333,507 293,452 2,842 7,196 Income tax payable 8,811 7,064 1,788 1,779

492,059 307,076 149,683 8,975

Total liabilities 539,868 473,645 149,683 163,120

Total equity and liabilities 1,103,282 989,565 293,053 220,031

The accompanying notes form an integral part of the fi nancial statements.

FABER GROUP BERHAD ANNUAL REPORT 2011 117

STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2011

ATTRIBUTABLE TO OWNERS OF THE PARENT NON-DISTRIBUTABLE RESERVES SHARE SHARE OTHER RETAINED NON-CONTROLLING TOTAL CAPITAL PREMIUM RESERVES EARNINGS/ TOTAL INTERESTS EQUITY (NOTE 32) (NOTE 32) (NOTE 33) (ACCUMULATED (NOTE 35) LOSSES) RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Group At 1 January 2011 363,001 115,985 (4,336) (25,775) 448,875 67,045 515,920

Total comprehensive income – – (9) 61,589 61,580 11,469 73,049

Transactions with owners Reduction in share capital (Note 32) (272,251) – – 272,251 – – – Reduction in share premium (Note 32) – (115,985) – 115,985 – – – Issue of shares by subsidiary to non–controlling shareholders – – – – – 725 725 Issue of shares by subsidiary to non-controlling shareholders through capitalisation on loan (Note 17) – – – – – 800 800 Effect arising from acquisition of non-controlling interest in a subsidiary (Note 17) – – – (699) (699) – (699) Dividends (Note 12) – – – (21,780) (21,780) – (21,780) Dividends to non-controlling shareholders of subsidiary companies – – – – – (4,601) (4,601)

At 31 December 2011 90,750 – (4,345) 401,571 487,976 75,438 563,414

The accompanying notes form an integral part of the fi nancial statements.

FABER GROUP BERHAD ANNUAL REPORT 2011 118

STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

ATTRIBUTABLE TO OWNERS OF THE PARENT NON-DISTRIBUTABLE RESERVES SHARE SHARE OTHER ACCUMULATED NON-CONTROLLING TOTAL CAPITAL PREMIUM RESERVES LOSSES TOTAL INTERESTS EQUITY (NOTE 32) (NOTE 32) (NOTE 33) (NOTE 35) RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Group At 1 January 2010 363,001 115,985 (775) (89,045) 389,166 67,186 456,352 Effects of adopting FRS 139 – – – 825 825 – 825

At 1 January 2010 (restated) 363,001 115,985 (775) (88,220) 389,991 67,186 457,177

Total comprehensive income – – (3,561) 78,780 75,219 23,323 98,542

Transactions with owners Issue of shares by subsidiary to non-controlling shareholders – – – – – 1,844 1,844 Dividends (Note 12) – – – (16,335) (16,335) – (16,335) Dividends to non-controlling shareholders of subsidiary companies – – – – – (25,308) (25,308)

At 31 December 2010 363,001 115,985 (4,336) (25,775) 448,875 67,045 515,920

The accompanying notes form an integral part of the fi nancial statements.

FABER GROUP BERHAD ANNUAL REPORT 2011 119

NON- DISTRIBUTABLE RESERVES RETAINED SHARE SHARE EARNINGS/ TOTAL CAPITAL PREMIUM (ACCUMULATED EQUITY (NOTE 32) (NOTE 32) LOSSES) RM’000 RM’000 RM’000 RM’000

Company At 1 January 2011 363,001 115,985 (422,075) 56,911

Total comprehensive income – – 108,239 108,239

Transactions with owners Reduction in share capital (Note 32) (272,251) – 272,251 – Reduction in share premium (Note 32) – (115,985) 115,985 – Dividends (Note 12) – – (21,780) (21,780)

At 31 December 2011 90,750 – 52,620 143,370

At 1 January 2010 363,001 115,985 (450,645) 28,341

Total comprehensive income – – 44,905 44,905

Transactions with owners Dividends (Note 12) – – (16,335) (16,335)

At 31 December 2010 363,001 115,985 (422,075) 56,911

The accompanying notes form an integral part of the fi nancial statements.

FABER GROUP BERHAD ANNUAL REPORT 2011 120

STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2011

GROUP COMPANY 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Cash fl ows from operating activities Cash receipts from customers 798,283 756,629 6,681 7,603 Cash payments to suppliers (424,109) (437,738) – – Cash payments to employees and for expenses (235,325) (248,801) (22,201) (18,651)

Cash generated from/(used in) operations 138,849 70,090 (15,520) (11,048) Interest paid (6,490) (6,678) (6,044) (6,284) Taxes paid (43,236) (23,515) (3,708) (5,683)

Net cash fl ow generated from/(used in) operating activities (Note 36) 89,123 39,897 (25,272) (23,015)

Cash fl ows from investing activities Proceeds from disposal of property, plant and equipment 29 50 2 33 Proceeds from disposal of land held for property development – 3,100 – – Proceeds from disposal of fi nancial assets - quoted investment – 20 – – Acquisition of non-controlling interest (699) – – – Interest received 8,376 7,519 2,366 1,032 Dividends received – – 116,218 62,772 Purchase of property, plant and equipment (25,528) (17,338) (869) (1,025) Purchase of intangible assets - software (59) (76) (30) (71) Purchase of short term investment (2,000) – – – Capital distribution from fi nancial assets - unquoted investment – 785 – – Net (payments to)/receipts from related companies balances – – (3,259) 3,500

Net cash fl ow (used in)/generated from investing activities (19,881) (5,940) 114,428 66,241

FABER GROUP BERHAD ANNUAL REPORT 2011 121

GROUP COMPANY 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Cash fl ows from fi nancing activities Proceeds from issuance of ordinary shares to non-controlling interests 725 1,844 – – Repayment of Balance Sum owed to Jeram Bintang Sdn. Bhd. (“JBSB”) – (7,806) – (7,806) Partial redemption of Redeemable Secured Loan Stock (“RSLS”) (9,000) (6,000) (9,000) (6,000) Repayment of hire purchase obligations (90) (119) – – Drawdown of other secured bank loans 16,073 2,253 – – Repayment of other secured bank loans (17,000) – – – Dividends paid (21,780) (16,335) (21,780) (16,335) Dividends paid to non-controlling shareholders of subsidiaries (3,401) (23,131) – –

Net cash fl ow used in fi nancing activities (34,473) (49,294) (30,780) (30,141)

Net increase/(decrease) in cash and cash equivalents 34,769 (15,337) 58,376 13,085 Net foreign exchange difference 716 (4,358) – – Cash and cash equivalents at beginning of year 284,876 304,571 45,632 32,547

Cash and cash equivalents at end of year (Note 23) 320,361 284,876 104,008 45,632

(a) Cash and cash equivalents

Cash on hand and at banks 113,457 93,815 731 405 Fixed deposits with licensed banks 96,106 139,686 4,217 4,118 Fixed deposits with other fi nancial institutions 110,798 51,375 99,060 41,109

320,361 284,876 104,008 45,632

As disclosed in Note 23 to the fi nancial statements, certain fi xed deposits with licensed banks of the Group and of the Company amounting to RM17,535,000 (2010: RM15,682,000) and RM991,000 (2010: RM963,000) respectively have been pledged to banks for banking facilities granted to certain subsidiaries and hence are not available for general use.

Deposits with licensed banks of the Company amounting to RM3,000,000 (2010: RM3,000,000) are pledged as securities for a bank borrowing granted to a foreign subsidiary.

The accompanying notes form an integral part of the fi nancial statements.

FABER GROUP BERHAD ANNUAL REPORT 2011 122

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

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 offi ce of the Company is located at 20th Floor, Menara 2, Faber Towers, Jalan Desa Bahagia, Taman Desa, Off Jalan Klang Lama, 58100 Kuala Lumpur.

The principal activities of the Company are investment holding and provision of management services to its subsidiaries. The principal activities of the subsidiaries are described in Note 45.

There have been no signifi cant changes in the nature of the principal activities during the fi nancial year.

The fi nancial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 20 April 2012.

2 SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation

The fi nancial statements comply with the provisions of the Companies Act, 1965 and applicable Financial Reporting Standards in Malaysia. At the beginning of the current fi nancial year, the Group and the Company adopted new and revised FRS which are mandatory for fi nancial periods beginning on or after 1 January 2011 as described fully in Note 2.2.

The fi nancial statements of the Group and of the Company have also been prepared on a historical basis except as disclosed in the accounting policies below.

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

2.2 Changes in accounting policies

The accounting policies adopted are consistent with those of the previous fi nancial year except as follows:

On 1 January 2011, the Group and the Company adopted the following new and amended FRS and IC Interpretations mandatory for annual fi nancial periods beginning on or after 1 January 2011.

• FRS 1: First-time Adoption of Financial Reporting Standards • FRS 3: Business Combinations • Amendments to FRS 127: Consolidated and Separate Financial Statements • Amendments to FRS 1: Limited Exemption for First-time Adopters • Amendments to FRS 1: Additional Exemptions for First-time Adopters • Amendments to FRS 2: Share-based Payment • Amendments to FRS 5: Non-current Assets Held for Sale and Discontinued Operations • Amendments to FRS 7: Improving Disclosures about Financial Instruments • Amendments to FRS 132: Classifi cation of Rights Issues • Amendments to FRS 138: Intangible Assets • Improvements to FRS issued in 2010

FABER GROUP BERHAD ANNUAL REPORT 2011 123

2 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.2 Changes in accounting policies (continued)

• IC Interpretation 4: Determining Whether an Arrangement contains a Lease • IC Interpretation 12: Service Concession Arrangements • IC Interpretation 16: Hedges of a Net Investment in a Foreign Operation • IC Interpretation 17: Distributions of Non-cash Assets to Owners • IC Interpretation 18: Transfers of Assets from Customers • Amendments to IC Interpretation 9: Reassessment of Embedded Derivatives

Adoption of the above standards and interpretations did not have any signifi cant effect on the fi nancial performance and position of the Group and of the Company except for those discussed below:

Revised FRS 3 Business Combinations and Amendments to FRS 127 Consolidated and Separate Financial Statements

The revised standards are effective for annual periods beginning on or after 1 July 2010. The revised FRS 3 introduces a number of changes in accounting for business combinations occurring after 1 July 2010. These changes impact the amount of goodwill recognised, the reported results in the period that an acquisition occurs, and future reported results.

The revised FRS 3 continues to apply the acquisition method to business combinations but with some signifi cant changes. All payments to purchase a business are recorded at fair value at the acquisition date, with contingent payments classifi ed as debt subsequently remeasured through the statement of comprehensive income. There is a choice on an acquisition-by-acquisition basis to measure the non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets. All acquisition-related costs are expensed.

The amendments to FRS 127 require that a change in the ownership interest of a subsidiary (without loss of control) is accounted for as an equity transaction. Therefore, such transactions will no longer give rise to goodwill, nor will they give rise to a gain or loss. Furthermore, the amended standard changes the accounting for losses incurred by the subsidiary as well as the loss of control of a subsidiary.

The Group remeasured the non-controlling interests prospectively in accordance with the transitional provisions of the revised FRS 127. During the year, Faber Facilities Sdn. Bhd., a wholly owned subsidiary of the Group, acquired 49% interest in Faber Star Facilities Management Ltd from non-controlling interest, making it a wholly owned subsidiary of the Company (Note 17(a)). The impact arising from the change in the Group’s ownership interest in this subsidiary is accounted for as an equity transaction in accordance with the revised FRS 127.

Amendments to FRS 7: Improving Disclosures about Financial Instruments

The amended standard requires enhanced disclosure about fair value measurement and liquidity risk. Fair value measurements related to items recorded at fair value are to be disclosed by source of inputs using a three level fair value hierarchy (Level 1, Level 2 and Level 3), by class, for all fi nancial instruments recognised at fair value. A reconciliation between the beginning and ending balance for Level 3 fair value measurements is required. Any signifi cant transfers between levels of the fair value hierarchy and the reasons for those transfers need to be disclosed. The amendments also clarify the requirements for liquidity risk disclosures with respect to derivative transactions and assets used for liquidity management. The fair value measurement disclosures are presented in Note 42(e). The liquidity risk disclosures are not signifi cantly impacted by the amendments and are presented in Note 42(b).

FABER GROUP BERHAD ANNUAL REPORT 2011 124

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

2 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.3 Summary of signifi cant accounting policies

(a) Subsidiaries and basis of consolidation

(i) Subsidiaries

A subsidiary is an entity over which the Group has the power to govern the fi nancial and operating policies so as to obtain benefi ts from its activities.

In the Company’s separate fi nancial statements, investments in subsidiaries are accounted for at cost less impairment losses.

(ii) Basis of consolidation

The consolidated fi nancial statements comprise the fi nancial statements of the Company and its subsidiaries as at the reporting date. The fi nancial statements of the subsidiaries are prepared for the same reporting date as the Company. Consistent accounting policies are applied to like transactions and events in similar circumstances.

All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated in full.

Acquisitions of subsidiaries are accounted for by applying the purchase method. Identifi able assets acquired and liabilities and contingent liabilities assumed in a business combination are measured at their fair values at the acquisition date. The cost of a business combination is measured as the aggregate of the fair values, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity instruments issued, plus any costs directly attributable to the business combination. Any excess of the cost of business combination over the Group’s share in the net fair value of the acquired subsidiary’s identifi able assets, liabilities and contingent liabilities is recorded as goodwill. The accounting policy for goodwill is set out in Note 2.3(c). Any excess of the Group’s share in the net fair value of the acquired subsidiary’s identifi able assets, liabilities and contingent liabilities over the cost of business combination is recognised as income in profi t or loss on the date of acquisition. When the Group acquires a business, embedded derivatives separated from the host contract by the acquiree are reassessed on acquisition unless the business combination results in a change in the terms of the contract that signifi cantly modifi es the cash fl ows that would otherwise be required under the contract.

Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases.

(b) Transactions with non-controlling interests

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

FABER GROUP BERHAD ANNUAL REPORT 2011 125

2 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.3 Summary of signifi cant accounting policies (continued)

(c) Intangible assets

(i) Goodwill

Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less accumulated impairment losses.

For the purpose of impairment testing, goodwill acquired is allocated, from the acquisition date, to each of the Group’s cash-generating units (“CGU”) that are expected to benefi t from the synergies of the combination.

The CGU to which goodwill has been allocated is tested for impairment annually and whenever there is an indication that the CGU may be impaired, by comparing the carrying amount of the CGU, including the allocated goodwill, with the recoverable amount of the CGU. Where the recoverable amount of the CGU is less than the carrying amount, an impairment loss is recognised in the profi t or loss. Impairment losses recognised for goodwill are not reversed in subsequent periods.

Where goodwill forms part of a CGU and part of the operation within that CGU is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative fair values of the operations disposed of and the portion of the CGU retained.

Goodwill and fair value adjustments arising on the acquisition of foreign operation on or after 1 January 2006 are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated in accordance with the accounting policy set out in Note 2.3(s).

Goodwill and fair value adjustments which arose on acquisitions of foreign operation before 1 January 2006 are deemed to be assets and liabilities of the Company and are recorded in RM at the rates prevailing at the date of acquisition.

(ii) Other intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair values as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. The useful lives of intangible assets are assessed to be either fi nite or indefi nite.

Intangible assets with fi nite lives are amortised on a straight-line basis over the estimated economic useful lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a fi nite useful life are reviewed at least at each fi nancial year end. Changes in the expected useful life or the expected pattern of consumption of future economic benefi ts embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with fi nite lives is recognised in profi t or loss. Intangible assets with indefi nite useful lives are not amortised but tested for impairment annually or more frequently if the events or changes in circumstances indicate that the carrying value may be impaired either individually or at the cash- generating unit level. The useful life of an intangible asset with an indefi nite life is also reviewed annually to determine whether the useful life assessment continues to be supportable. If not, the change in useful life from indefi nite to fi nite is made on a prospective basis.

FABER GROUP BERHAD ANNUAL REPORT 2011 126

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

2 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.3 Summary of signifi cant accounting policies (continued)

(c) Intangible assets (continued)

(iii) Development expenditure

Expenditure incurred on projects to design and develop the operating systems for the provision of the hospital support services is capitalised and deferred only when the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefi ts, the availability of resources to complete the project and the ability to measure reliably the expenditure during the development. Development expenditure which does not meet these criteria is expensed when incurred.

Development expenditure, considered to have fi nite useful lives, are stated at cost less any impairment losses and are amortised using the straight-line basis over the concession period of the hospital support services of fi fteen (15) years, commencing 28 October 1996. Impairment is assessed whenever there is an indication and the amortisation period and method are also reviewed at least at each reporting date. Development expenditure of the Group has been fully amortised during the year.

(iv) Software and licences

Software and licences that do not form an integral part of the related hardware have been reclassifi ed as intangible assets. Software and licences, considered to have fi nite useful lives, are stated at cost less any impairment losses and are amortised using the straight-line basis over the commercial lives of the underlying products between fi ve (5) and fi fteen (15) years. Impairment is assessed whenever there is an indication of impairment and amortisation period and method are also reviewed at least at each reporting date.

(v) Customer contracts

The customer contracts represent housekeeping businesses acquired through business combinations. Customer contracts considered to have fi nite useful lives, are stated at cost less impairment losses and are amortised using the straight-line basis over the commercial lives of 10 years, which meet the contractual legal criteria for identifi cation as intangible assets. The fair value is determined by the amount of future revenue. Impairment is assessed whenever there is an indication of impairment and amortisation period and method are also reviewed at least at each reporting date.

(d) Property, plant and equipment and depreciation

All items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefi ts associated with the item will fl ow to the Group and the cost of the item can be measured reliably.

Subsequent to recognition, property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. All other repairs and maintenance are charged to the income statements during the fi nancial period in which they are incurred.

Freehold land has an unlimited useful life and therefore is not depreciated. Capital work-in-progress is not depreciated as these assets are not available for use. Capital work-in-progress relates to the installation of new machinery.

FABER GROUP BERHAD ANNUAL REPORT 2011 127

2 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.3 Summary of signifi cant accounting policies (continued)

(d) Property, plant and equipment and depreciation (continued)

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:

Plant and equipment 5% - 20% Motor vehicles 20% Furniture and fi ttings 10% - 20%

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.

The residual value, useful life and depreciation method are reviewed at each fi nancial year-end, and adjusted prospectively, if appropriate.

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

(e) 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 classifi ed within non-current assets and is stated at cost less any accumulated impairment losses.

Land held for property development is reclassifi ed 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 fi nancial outcome of a development activity can be reliably estimated, property development revenue and expenses are recognised in the income statements 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.

Where the fi nancial 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.

FABER GROUP BERHAD ANNUAL REPORT 2011 128

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

2 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.3 Summary of signifi cant accounting policies (continued)

(e) Land held for property development and property development costs (continued)

(ii) Property development costs (continued)

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 statements over billings to purchasers is classifi ed as accrued billings within trade receivables and the excess of billings to purchasers over revenue recognised in the income statements is classifi ed as progress billings within trade payables.

(f) Impairment of non-fi nancial assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when an annual impairment assessment for an asset is required, the Group makes an estimate of the asset’s recoverable amount.

An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifi able cash fl ows (cash- generating units (“CGU”)).

In assessing value in use, the estimated future cash fl ows expected to be generated by the asset are discounted to their present value using a pre-tax discount rate that refl ects current market assessments of the time value of money and the risks specifi c to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated fi rst 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.

Impairment losses are recognised in profi t or loss except for assets that are previously revalued where the revaluation was taken to other comprehensive income. In this case the impairment is also recognised in other comprehensive income up to the amount of any previous revaluation.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. A previously recognised impairment loss is reversed 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. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in profi t or loss unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase. Impairment loss on goodwill is not reversed in a subsequent period.

FABER GROUP BERHAD ANNUAL REPORT 2011 129

2 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.3 Summary of signifi cant accounting policies (continued)

(g) Inventories

Inventories are stated at lower of cost and net realisable value.

Consumables are stated at the lower of cost (determined on the weighted average basis) and net realisable value. Cost of inventories comprise cost of purchase of inventories.

Property held for resale is stated at the lower of cost and net realisable value.Cost is determined on the specifi c identifi cation basis and include cost associated with the acquisition of land, direct costs and appropriate proportions of common costs.

Net realisable value is the estimated selling price in ordinary course of business less estimated costs of completion and the estimated costs necessary to make the sale.

(h) Financial assets

Financial assets are recognised in the statements of fi nancial position when, and only when, the Group and the Company become a party to the contractual provisions of the fi nancial instrument.

When fi nancial assets are recognised initially, they are measured at fair value, plus, in the case of fi nancial assets not at fair value through profi t or loss, directly attributable transaction costs.

The Group and the Company determine the classifi cation of their fi nancial assets at initial recognition, and the categories include fi nancial assets at fair value through profi t or loss, loans and receivables, held-to-maturity investments and available- for-sale fi nancial assets.

(i) Financial assets at fair value through profi t or loss

Financial assets at fair value through profi t or loss consist of short term unquoted unit trust.

Financial assets are classifi ed as fi nancial assets at fair value through profi t or loss if they are held for trading or are designated as such upon initial recognition. Financial assets held for trading are acquired principally for the purpose of selling in the near term.

Subsequent to initial recognition, fi nancial assets at fair value through profi t or loss are measured at fair value. Any gains or losses arising from changes in fair value are recognised in profi t or loss. Net gains or net losses on fi nancial assets at fair value through profi t or loss do not include exchange differences, interest and dividend income. Exchange differences, interest and dividend income on fi nancial assets at fair value through profi t or loss are recognised separately in profi t or loss as part of other losses or other income.

Financial assets at fair value through profi t or loss could be presented as current or non-current. Financial assets that is held primarily for trading purposes are presented as current whereas fi nancial assets that is not held primarily for trading purposes are presented as current or non-current based on the settlement date.

FABER GROUP BERHAD ANNUAL REPORT 2011 130

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

2 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.3 Summary of signifi cant accounting policies (continued)

(h) Financial assets (continued)

(ii) Loans and receivables

Financial assets with fi xed or determinable payments that are not quoted in an active market are classifi ed as loans and receivables.

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method. Gains and losses are recognised in profi t or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.

Loans and receivables are classifi ed as current assets, except for those having maturity dates later than 12 months after the reporting date which are classifi ed as non-current.

(iii) Held-to-maturity investments

The Group and Company does not have any fi nancial assets classifi ed as held-to-maturity.

(iv) Available-for-sale fi nancial assets

Available-for-sale fi nancial assets consist of non current unquoted share held for sale and marketable securities. Available-for-sale fi nancial assets are fi nancial assets that are designated as available-for-sale or are not classifi ed in any of the three preceding categories.

After initial recognition, available-for-sale fi nancial assets are measured at fair value. Any gains or losses from changes in fair value of the fi nancial assets are recognised in other comprehensive income, except that impairment losses, foreign exchange gains and losses on monetary instruments and interest calculated using the effective interest method are recognised in profi t or loss. The cumulative gain or loss previously recognised in other comprehensive income is reclassifi ed from equity to profi t or loss as a reclassifi cation adjustment when the fi nancial asset is derecognised. Interest income calculated using the effective interest method is recognised in profi t or loss. Dividends on an available-for-sale equity instrument are recognised in profi t or loss when the Group and the Company’s right to receive payment is established.

Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less impairment loss.

Available-for-sale fi nancial assets are classifi ed as non-current assets unless they are expected to be realised within 12 months after the reporting date.

The Group and the Company have not designated any fi nancial assets as available for sale.

A fi nancial asset is derecognised when the contractual right to receive cash fl ows from the asset has expired. On derecognition of a fi nancial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profi t or loss.

FABER GROUP BERHAD ANNUAL REPORT 2011 131

2 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.3 Summary of signifi cant accounting policies (continued)

(h) Financial assets (continued)

Regular way purchases or sales are purchases or sales of fi nancial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace concerned. All regular way purchases and sales of fi nancial assets are recognised or derecognised on the trade date i.e., the date that the Group and the Company commit to purchase or sell the asset.

(i) Impairment of fi nancial assets

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

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

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

If any such evidence exists, the amount of impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash fl ows discounted at the fi nancial asset’s original effective interest rate. The impairment loss is recognised in profi t or loss.

The carrying amount of the fi nancial asset is reduced by the impairment loss directly for all fi nancial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable becomes uncollectible, it is written off against the allowance account.

If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profi t or loss.

(ii) Unquoted equity securities carried at cost

If there is objective evidence (such as signifi cant adverse changes in the business environment where the issuer operates, probability of insolvency or signifi cant fi nancial diffi culties of the issuer) that an impairment loss on fi nancial assets carried at cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash fl ows discounted at the current market rate of return for a similar fi nancial asset. Such impairment losses are not reversed in subsequent periods.

FABER GROUP BERHAD ANNUAL REPORT 2011 132

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

2 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.3 Summary of signifi cant accounting policies (continued)

(j) Amounts due from customer on contracts

Amounts due from customer on contracts is stated at original cost plus attributable profi t, less provision for any anticipated losses and progress payments received and receivable. Amounts due from customer on contracts is only recognised when the outcome can be determined with reasonable certainty.

(k) Cash and cash equivalents

For the purposes of the statements of cash fl ow, cash and cash equivalents include cash on hand, bank balances, fi xed deposits pledged to licensed banks and other fi nancial institutions, bank overdrafts and deposits at call which have an insignifi cant risk of changes in value.

(l) Share capital and share issuance expenses

An equity instrument is any contract that evidences a residual interest in the assets of the Group and the Company after deducting all of its liabilities. Ordinary shares are classifi ed as equity instruments.

Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction costs. Dividends on ordinary shares are recognised in equity in the period in which they are declared.

(m) Financial liabilities

Financial liabilities are classifi ed according to the substance of the contractual arrangements entered into and the defi nitions of a fi nancial liability.

Financial liabilities, within the scope of FRS 139, are recognised in the statement of fi nancial position when, and only when, the Group and the Company become a party to the contractual provisions of the fi nancial instrument. Financial liabilities are classifi ed as either fi nancial liabilities at fair value through profi t or loss or other fi nancial liabilities.

(i) Financial liabilities at fair value through profi t or loss

Financial liabilities at fair value through profi t or loss include fi nancial liabilities held for trading and fi nancial liabilities designated upon initial recognition as at fair value through profi t or loss.

The Group and the Company have not designated any fi nancial liabilities as at fair value through profi t or loss.

(ii) Other fi nancial liabilities

The Group’s and the Company’s other fi nancial liabilities include trade and other payables and loans and borrowings.

Trade and other payables are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method.

FABER GROUP BERHAD ANNUAL REPORT 2011 133

2 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.3 Summary of signifi cant accounting policies (continued)

(m) Financial liabilities (continued)

(ii) Other fi nancial liabilities (continued)

Loans and borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently measured at amortised cost using the effective interest method. Borrowings are classifi ed as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

For other fi nancial liabilities, gains and losses are recognised in profi t or loss when the liabilities are derecognised, and through the amortisation process.

A fi nancial liability is derecognised when the obligation under the liability is extinguished. When an existing fi nancial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modifi ed, such an exchange or modifi cation is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profi t or loss.

(n) Leases

(i) As lessee

Finance leases, which transfer to the Group substantially all the risks and rewards incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Any initial direct costs are also added to the amount capitalised. Lease payments are apportioned between the fi nance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to profi t or loss. Contingent rents, if any, are charged as expenses in the periods in which they are incurred.

Leased assets are depreciated over the estimated useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life and the lease term.

Operating lease payments are recognised as an expense in profi t or loss on a straight-line basis over the lease term. The aggregate benefi t of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.

(ii) As lessor

Leases where the Group retains substantially all the risks and rewards of ownership of the asset are classifi ed as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same bases as rental income. The accounting policy for rental income is set out in Note 2.3(t).

FABER GROUP BERHAD ANNUAL REPORT 2011 134

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

2 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.3 Summary of signifi cant accounting policies (continued)

(o) Borrowing costs

Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the acquisition, construction or production of that asset. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sale are in progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their intended use or sale.

All other borrowing costs are recognised in profi t or loss in the period in which they are incurred. Borrowing costs consist of interest and other costs that the Group and Company incurred in connection with the borrowing of funds.

(p) Income tax

(i) Current tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.

Current taxes are recognised in profi t or loss except to the extent that the tax relates to items recognised outside profi t or loss, either in other comprehensive income or directly in equity.

(ii) Deferred tax

Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for fi nancial reporting purposes.

Deferred tax liabilities are recognised for all temporary differences, except:

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

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

FABER GROUP BERHAD ANNUAL REPORT 2011 135

2 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.3 Summary of signifi cant accounting policies (continued)

(p) Income tax (continued)

(ii) Deferred tax (continued)

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

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

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

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that suffi cient taxable profi t will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profi t will allow the deferred tax assets to be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profi t or loss is recognised outside profi t or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

(iii) Sales tax

Revenues, expenses and assets are recognised net of the amount of sales tax except:

- Where the sales tax incurred in a purchase of assets or services is not recoverable from the taxation authority, in which case the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

- Receivables and payables that are stated with the amount of sales tax included.

The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statements of fi nancial position.

FABER GROUP BERHAD ANNUAL REPORT 2011 136

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

2 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.3 Summary of signifi cant accounting policies (continued)

(q) Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event and it is probable that an outfl ow of resources embodying economic benefi ts will be required to settle the obligation, and a reliable estimate of the amount can be made. Provisions are reviewed at each reporting date and adjusted to refl ect the current best estimate. Where the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that refl ects, where appropriate, the risks specifi c to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as fi nance cost.

(r) Employee benefi ts

(i) Short term benefi ts

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, and short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.

(ii) Defi ned contribution plans

Defi ned contribution plans are post-employment benefi t plans under which the Group pays fi xed 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 suffi cient assets to pay all employee benefi ts relating to employee services in the current and preceding fi nancial years. Such contributions are recognised as an expense in the income statement as incurred. As required by law, companies in Malaysia make contributions to the state pension scheme, the Employees Provident Fund (“EPF”).

(iii) Defi ned benefi t plan

The Group operates an unfunded, defi ned benefi t Retirement Benefi t Scheme (“the Scheme”) for its eligible employees. The Group’s obligation under the Scheme, calculated using the Projected Unit Credit Method, is determined based on actuarial computations by independent actuaries, through which the amount of benefi t that employees have earned in return for their service in the current and prior years is estimated. That benefi t is discounted in order to determine its present value.

Actuarial gains and losses are recognised as income or expense over the expected average remaining working lives of the participating employees when the cumulative unrecognised actuarial gains or losses for the Scheme exceed 10% of the higher of the present value of the defi ned benefi t obligation and the fair value of plan assets. Past service costs are recognised immediately to the extent that the benefi ts are already vested, and otherwise are amortised on a straight-line basis over the average period until the amended benefi ts become vested.

The amount recognised in the statement of fi nancial position represents the present value of the defi ned benefi t obligations adjusted for unrecognised actuarial gains and losses and unrecognised past service costs, and reduced by the fair value of plan assets. Any asset resulting from this calculation is limited to the net total of any unrecognised actuarial losses and past service costs, and the present value of any economic benefi ts in the form of refunds or reductions in future contributions to the plan.

FABER GROUP BERHAD ANNUAL REPORT 2011 137

2 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.3 Summary of signifi cant accounting policies (continued)

(s) Foreign currencies

(i) Functional and presentation currency

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

(ii) Foreign currency transactions

Transactions in foreign currencies are measured in the respective functional currencies of the Company and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary items denominated in foreign currencies that are measured at historical cost are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items denominated in foreign currencies measured at fair value are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at the reporting date are recognised in profi t or loss except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign operations, which are recognised initially in other comprehensive income and accumulated under foreign currency translation reserve in equity. The foreign currency translation reserve is reclassifi ed from equity to profi t or loss of the Group on disposal of the foreign operation.

Exchange differences arising on the translation of non-monetary items carried at fair value are included in profi t or loss for the period except for the differences arising on the translation of non-monetary items in respect of which gains and losses are recognised directly in equity. Exchange differences arising from such non-monetary items are also recognised directly in equity.

(iii) Foreign operations

The assets and liabilities of foreign operations are translated into RM at the rate of exchange ruling at the reporting date and income and expenses are translated at exchange rates at the dates of the transactions. The exchange differences arising on the translation are taken directly to other comprehensive income. On disposal of a foreign operation, the cumulative amount recognised in other comprehensive income and accumulated in equity under foreign currency translation reserve relating to that particular foreign operation is recognised in the profi t or loss.

Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated at the closing rate at the reporting date.

FABER GROUP BERHAD ANNUAL REPORT 2011 138

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

2 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.3 Summary of signifi cant accounting policies (continued)

(s) Foreign currencies (continued)

(iii) Foreign operations (continued)

The principal exchange rates used for every unit of foreign currency ruling at the reporting date used are as follows:

2011 2010 RM RM

United States Dollars 3.17 3.08 United Arab Emirates Dirham 0.86 0.84 Indian Rupees 0.06 0.07

(t) Revenue recognition

Revenue is recognised when it is probable that the economic benefi ts associated with the transaction will fl ow to the Group and the revenue can be measured reliably. The following specifi c recognition criteria must also be met before revenue is recognised:

(i) Revenue from services rendered

Hospital support services

The Group provides hospital support services for the period of 15 years commencing 28 October 1996 in the Northern zone encompassing the states of Perlis, Kedah, Pulau Pinang and Perak, Sabah zone and Sarawak zone, respectively. The services provided are clinical waste management, cleansing, laundry and linen, facilities engineering maintenance and biomedical engineering maintenance.

These services are provided as a fi xed-priced contract.

Revenue from fi xed-price contracts is generally recognised in the period the services are provided, using a straight-line basis over the term of the contract.

Non-concession services - integrated facilities management

The Group provides facilities management services which include cleansing, laundry and linen, facilities engineering maintenance and infrastructure facilities to non-concession customers. These services are provided on a time and material basis or as a fi xed-priced contract, with contract terms generally ranging from one (1) year to three (5) years.

Revenue from time and material contracts, typically from facilities engineering maintenance and bio-medical engineering maintenance is recognised at the contractual rates as labour hours are delivered and direct expenses incurred.

Revenue from fi xed price contracts, typically for the provision of infrastructure facility services, are recognised at contractual rates when the outcome of the claims can be determined with reasonable certainty.

FABER GROUP BERHAD ANNUAL REPORT 2011 139

2 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.3 Summary of signifi cant accounting policies (continued)

(t) Revenue recognition (continued)

(ii) Sale of properties

Revenue from sale of property development is accounted for by the percentage of completion method as described in Note 2.3(e).

(iii) Management fees

Management fees for services provided to Group companies are recognised on an accrual basis.

(iv) Rental income

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

(v) Interest income

Interest income is recognised on an accrual basis using the effective interest method.

(vi) Dividend income

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

(u) Affi liated companies

Affi liated companies represents companies within the UEM Group Berhad, a corporate shareholder of Faber Group Berhad.

(v) Segment reporting

For management purposes, the Group is organised into operating segments based on their products and services which are independently managed by the respective segment managers responsible for the performance of the respective segments under their charge. The segment managers report directly to the management of the Company who regularly review the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in Note 44, including the factors used to identify the reportable segments and the measurement basis of segment information.

(w) Contingencies

A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence will be confi rmed only by the occurrence or non-occurrence of uncertain future events not wholly within the control of the Group. Contingent liabilities and assets are not recognised in the statements of fi nancial position of the Group.

FABER GROUP BERHAD ANNUAL REPORT 2011 140

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

2 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.4 Standards, amendments to FRSs and interpretations issued but not yet effective

The Group and the Company have not adopted the following standards, amendments to FRSs and interpretations that have been issued but not yet effective:

Effective for fi nancial periods beginning on or after 1 July 2011 Amendments to IC Interpretation 14: Prepayments of a Minimum Funding Requirement IC Interpretation 19: Extinguishing Financial Liabilities with Equity Instruments

Effective for fi nancial periods beginning on or after 1 January 2012 FRS 124: Related Party Disclosures Amendments to FRS 1: Severe Hyperinfl ation and Removal of Fixed Dates for First-time Adopters Amendments to FRS 7: Transfers of Financial Assets Amendments to FRS 112: Deferred tax - Recovery of Underlying Assets

Effective for fi nancial periods beginning on or after 1 July 2012 Amendments to FRS 101: Presentation of Items of Other Comprehensive Income

Effective for fi nancial periods beginning on or after 1 January 2013 FRS 9: Financial Instruments FRS 10: Consolidated Financial Statements FRS 11: Joint Arrangements FRS 12: Disclosures of Interest in Other Entities FRS 13: Fair Value Measurements FRS 119: Employee Benefi ts FRS 127: Separate Financial Statements FRS 128: Investment in Associates and Joint Ventures IC Interpretation 20: Stripping Costs in the Production Phase of a Surface Mine Amendments to FRS 7: Disclosures – Offsetting Financial Assets and Financial Liabilities Amendments to FRS 132: Offsetting Financial Assets and Financial Liabilities

The directors expect that the adoption of the above standards and interpretations above will have no material impact on the fi nancial statements in the period of initial application.

Malaysian Financial Reporting Standards (“MFRS Framework”)

On 19 November 2011, the Malaysian Accounting Standards Board (“MASB”) issued a new MASB approved accounting framework, the MFRS Framework.

The MFRS Framework is to be applied by all Entities Other Than Private Entities for annual periods beginning on or after 1 January 2012, with the exception of entities that are within the scope of MFRS 141 Agriculture (MFRS 141) and IC Interpretation 15 Agreements for Construction of Real Estate (IC 15), including its parent, signifi cant investor and venturer (herein called ‘Transitioning Entities’).

FABER GROUP BERHAD ANNUAL REPORT 2011 141

2 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.4 Standards, amendments to FRSs and interpretations issued but not yet effective (continued)

Malaysian Financial Reporting Standards (“MFRS Framework”) (continued)

Transitioning Entities will be allowed to defer adoption of the new MFRS Framework for an additional one year. Consequently, adoption of the MFRS Framework by Transitioning Entities will be mandatory for annual periods beginning on or after 1 January 2013.

The Group falls within the scope defi nition of Transitioning Entities and have opted to defer adoption of the new MFRS Framework. Accordingly, the Group will be required to prepare fi nancial statements using the MFRS Framework in its fi rst MFRS fi nancial statements for the year ending 31 December 2013. In presenting its fi rst MFRS fi nancial statements, the Group will be required to restate the comparative fi nancial statements to amounts refl ecting the application of MFRS Framework. The majority of the adjustments required on transition will be made, retrospectively, against opening retained profi ts.

The Group is in the process of assessing the fi nancial effects of the differences between the accounting standards under Financial Reporting Standards and under the MFRS Framework. At the date of these fi nancial statements, the Group has not completed its quantifi cation of the fi nancial effects of the differences between Financial Reporting Standards and accounting standards under the MFRS Framework due to the ongoing assessment by the Group.

Accordingly, the consolidated fi nancial performance and fi nancial position as disclosed in these fi nancial statements for the year ended 31 December 2011 could be different if prepared under the MFRS Framework.

The Group expects to be in a position to fully comply with the requirements of the MFRS Framework for the fi nancial year ending 31 December 2012.

2.5 Signifi cant accounting judgements and estimates

The preparation of the Group’s fi nancial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future.

(a) Judgements

In the process of applying the Group’s accounting policies, there were no signifi cant judgements made apart from those involving estimations, which have the most signifi cant effect on the amounts recognised in the fi nancial statements.

FABER GROUP BERHAD ANNUAL REPORT 2011 142

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

2 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.5 Signifi cant accounting judgements and estimates (continued)

(b) Key sources of estimation uncertainty

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

(i) Revenue recognition

Hospital support services

Within total consolidated revenue for the year ended 31 December 2011, management has estimated that RM7,746,000 (2010: RM44,022,000) is attributable to work performed on instruction from the respective hospitals under the Concession Agreement for the hospital support services. These work done are variations from the original Concession Agreement either for new hospitals, replacement hospitals, additions to existing hospitals and/or extensions of current services in the present hospitals.

The actual values of the variation orders have to be agreed by the Ministry of Health (“MOH”) following approvals from Jurutera Operasi Hospital of the respective states, the Engineering Division of MOH certifying the work done and the Director of each hospital concerned. As such, there is a signifi cant time lag between the fi nal contract from MOH and the commencement of work done by the Group.

Management estimates are based on their previous experience with MOH and the following assumptions:

(a) The rates adopted for each of the required services are the pre-approved rates from MOH;

(b) For cleansing services, management has estimated the total fl oor areas of the facilities from the fl oor plans provided for the areas, which have commenced operations;

(c) For facilities engineering maintenance and biomedical engineering maintenance services, management has estimated the respective hospital’s assets values for facilities maintenance; and

(d) The associated costs incurred for the services provided are incurred in the period and charged to the profi t and loss account.

Historically, MOH has honoured its commitment to enter into a formal agreement for these variations. It is therefore appropriate to recognise revenue on these transactions for the current fi nancial year.

FABER GROUP BERHAD ANNUAL REPORT 2011 143

2 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.5 Signifi cant accounting judgements and estimates (continued)

(b) Key sources of estimation uncertainty (continued)

(i) Revenue recognition (continued)

Non-concession services

Revenue from fi xed price contracts is typically generated from the provision of infrastructure facility services and it is recognised at contractual rates based on percentage of completion when the outcome of the work order can be determined with reasonable certainty. Upon completion of the work, the management obtains Final or Preliminary Acceptance Certifi cate for each work order. The process of certifi cation is subject to specifi c requirement of documentation.

Faber LLC, a foreign subsidiary of the Company, has sub-contracted most of the work orders for infrastructure facility services to a related party sub-contractor on a back-to-back arrangement. Faber LLC is required to pay the sub-contractor when paid. It has been the practice of Faber LLC to recognise revenue for this type of sub-contracted work only when the sub-contractor has performed the work and provided adequate documentation to the customer to obtain the required certifi cations. The associated costs incurred for the services provided by the sub-contractor are based on a percentage of the revenue recognised in accordance with the sub-contract agreement with the sub-contractor.

The revenue recognised for the current year includes RM15,556,000 (2010: RM40,115,000) that relates to work orders whereby there is some shortcomings in the supporting documentation. However, it is probable that the economic benefi ts will fl ow to Faber LLC and the revenue can be reliably measured for such work orders. Management is confi dent that the work has been performed by the sub-contractor and documentation will be completed within a reasonable time frame.

Faber LLC uses the percentage of completion method when accounting for revenue from rendering of contract services in non-concession services. Use of the stage of completion method requires Faber LLC to estimate the costs incurred to date on rendering of services as a proportion of the total costs to be incurred while rendering the services. At the reporting date, unbilled contract receivables amounted to RM57,842,000 (2010: RM40,555,000). The accuracy of this estimate has a material impact on the amount of revenue and related profi ts recognised.

Management and the subcontractor are currently working in conjunction with an engineering consultant to complete the required documentation in order to obtain the required certifi cation from the customer. However, the fi nal amount of revenue and related subcontractors costs depends on the outcome of the ongoing completion of required documentation and negotiations with the customer. Management is confi dent that, in due course, it will be able to build its case and reach a favourable result.

FABER GROUP BERHAD ANNUAL REPORT 2011 144

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

2 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.5 Signifi cant accounting judgements and estimates (continued)

(b) Key sources of estimation uncertainty (continued)

(ii) Impairment review 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 CGU to which the goodwill is allocated. Estimating a value in use amount requires management to make an estimate of the expected future cash fl ows from the CGU and also to choose a suitable discount rate in order to calculate the present value of those cash fl ows. The carrying amount of goodwill at 31 December 2011 was RM26,982,000 (2010: RM26,982,000). Further details are given in Note 16.

(iii) Impairment of loans and receivables

The Group assesses at each reporting date whether there is any objective evidence that a fi nancial asset is impaired. To determine whether there is objective evidence of impairment, the Group considers factors such as the probability of insolvency or signifi cant fi nancial diffi culties of the debtor and default or signifi cant delay in payments.

Where there is objective evidence of impairment, the amount and timing of future cash fl ows are estimated based on historical loss experience for assets with similar credit risk characteristics. The carrying amount of the Group’s loans and receivable at the reporting date is disclosed in Note 20.

An estimate of the collectible amount of contract accounts receivable is made when collection of the full amount is no longer probable. For individually signifi cant amounts, this estimation is performed on an individual basis. Amounts which are not individually signifi cant, but which are past due are assessed collectively and a provision applied according to the length of time past due, based on historical recovery rates.

(iv) Depreciation of property, plant and equipment

The cost of property, plant and equipment amounting to RM266,982,000 (2010: RM246,945,000) is depreciated on a straight-line basis over the assets’ useful lives. Management estimates the useful lives of these property, plant and equipment to be within 5 to 15 years. These are common life expectancies applied within the Group’s industry. Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.

(v) 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.

Signifi cant 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 by relying on past experience and the work of specialists.

FABER GROUP BERHAD ANNUAL REPORT 2011 145

2 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.5 Signifi cant accounting judgements and estimates (continued)

(b) Key sources of estimation uncertainty (continued)

(vi) Income taxes

Signifi cant estimation 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 recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the fi nal 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.

(vii) Deferred tax assets

Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to the extent that it is probable that taxable profi t will be available against which the losses can be utilised. Signifi cant 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 profi ts together with future tax planning strategies. The deferred tax assets amounting to RM2,676,000 are mainly related to subsidiaries of the Company, Healthtronics (M) Sdn. Bhd. and Rimbunan Melati Sdn. Bhd., which management estimates they are probable to generate future levels of taxable profi ts. Further details are contained in Note 31.

3 REVENUE

GROUP COMPANY 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Sale of properties 157,191 69,071 – – Services rendered: - integrated facilities management - concession 562,661 543,243 – – - non-concession 160,218 276,532 – – - management fees – – 5,880 5,700 Gross dividend income: - subsidiaries – – 141,346 71,177

880,070 888,846 147,226 76,877

FABER GROUP BERHAD ANNUAL REPORT 2011 146

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

4 COST OF SALES

GROUP 2011 2010 RM’000 RM’000

Property development costs (Note 14(b)) 95,257 40,258 Other cost of property development 3,083 4,251 Cost on land disposal (Note 14(a)) – 1,957 Services rendered : - integrated facilities management - concession 405,118 444,134 - non-concession 149,003 178,212

652,461 668,812

5 OTHER INCOME

Included in other income are:

GROUP COMPANY 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Interest income from : - fi xed deposits 8,376 7,519 2,366 1,032 - short term investment 12 – – – Bad debts recovered – 145 – –

6 FINANCE COSTS

GROUP COMPANY 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Interest expense on: - RSLS (Note 28) 5,952 6,222 5,952 6,222 - Loan from corporate shareholder of a subsidiary 115 130 – – - Hire purchase 11 19 – – - Bank borrowings 320 245 – –

6,398 6,616 5,952 6,222

FABER GROUP BERHAD ANNUAL REPORT 2011 147

7 PROFIT BEFORE TAX

The following amounts have been included at arriving at profi t before tax:

GROUP COMPANY 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Employee benefi ts expenses (Note 8) 182,257 172,089 10,403 10,393 Non-executive directors’ remuneration excluding benefi ts-in-kind (Note 9) 1,020 948 607 534 Auditors’ remuneration: - statutory 537 398 80 70 - underprovision in prior year 21 19 21 – - others 20 71 – – Operating leases: 5,542 5,027 710 751 - minimum lease payments of premises 4,326 3,624 631 667 - minimum lease payments of plant and machineries 1,216 1,403 79 84 Amortisation of: - prepaid land lease payment (Note 15) 87 87 – – - intangible assets (Note 16) 2,612 2,360 40 42 Net unrealised foreign exchange (gain)/loss (14) 1,465 – 1,287 Depreciation of property, plant and equipment (Note 13) 19,880 19,963 421 221 Write back of impairment of property development costs (Note 14(b)) (19) – – – Impairment of intangible assets (Note 16) 6,846 – – – Accretion of Redeemable Preference Share (“RPS”) 131 235 – – Loss/(gain) on disposal of plant and equipment 344 19 (2) 22 Provisions (Note 25) 16 12 – – Reversal of provision for sinking fund (Note 25) – (34) – – Reversal of provision for late delivery charges (Note 25) (560) – – – Property, plant and equipment written off (Note 13) 386 1,384 – – Impairment on fi nancial assets: - Trade and other receivables (Note 20) - Non-current 14,835 – – – - Current 7,045 12,806 14,987 – Reversal of impairment on fi nancial assets: - Trade and other receivables (Note 20) (18,894) (11,431) – – Surplus arising from capital distribution of fi nancial assets - unquoted investment in Malaysia – (286) – – Amounts due from subsidiaries written off – – 3 4,602 Waiver of amounts due to subsidiaries – – – (6,640) Write back of inventories (Note 19) (672) – – –

FABER GROUP BERHAD ANNUAL REPORT 2011 148

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

8 EMPLOYEE BENEFITS EXPENSES

GROUP COMPANY 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Wages and salaries 146,127 138,453 6,422 6,040 Social security contributions 1,583 1,676 47 41 Contributions to defi ned contribution plans 17,894 14,946 973 840 Increase in liability for defi ned benefi t plan (Note 24) 778 513 – – Other benefi ts 15,875 16,501 2,961 3,472

182,257 172,089 10,403 10,393

Included in employee benefi ts expense of the Group and of the Company are executive directors’ remuneration excluding benefi ts-in- kind amounting to RM2,433,000 (2010: RM2,469,000) and RM856,000 (2010: RM679,000) respectively as further disclosed in Note 9.

9 DIRECTORS’ REMUNERATION

GROUP COMPANY 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Directors of the Company Executive Salaries and other emoluments 528 489 528 489 Bonus 218 103 218 103 Contributions to defi ned contribution plan 110 87 110 87 Benefi ts-in-kind 69 71 69 71

925 750 925 750

Non-Executive Fees 644 623 482 456 Allowances 140 89 125 78 Benefi ts-in-kind 60 52 60 52

844 764 667 586

FABER GROUP BERHAD ANNUAL REPORT 2011 149

9 DIRECTORS’ REMUNERATION (CONTINUED)

GROUP COMPANY 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Other Directors of Subsidiary Companies Executive Salaries and other emoluments 1,066 1,149 – – Bonus 226 313 – – Contributions to defi ned contribution plan 200 220 – – Allowances 85 108 – – Benefi ts-in-kind 94 86 – –

1,671 1,876 – –

Non-Executive Fees 213 213 – – Allowances 23 23 – –

236 236 – –

Total 3,676 3,626 1,592 1,336

Total excluding benefi ts-in-kind 3,453 3,417 1,463 1,213

Analysis excluding benefi ts-in-kind: Total executive directors’ remuneration excluding benefi ts-in-kind (Note 8) 2,433 2,469 856 679 Total non-executive directors’ remuneration excluding benefi ts-in-kind (Note 7) 1,020 948 607 534

Total directors’ remuneration excluding benefi ts-in-kind (Note 40) 3,453 3,417 1,463 1,213

The number of directors of the Company whose total remuneration during the year fell within the following bands is analysed below:

NO. OF DIRECTORS 2011 2010

Executive directors: RM700,001 - RM750,000 – 1 RM900,001 - RM950,000 1 –

Non-executive directors: Below RM50,000 2 3 RM50,001 - RM100,000 4 4 RM100,001 - RM150,000 2 3 RM150,001 - RM200,000 1 –

FABER GROUP BERHAD ANNUAL REPORT 2011 150

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

10 INCOME TAX EXPENSE

Major components of income tax expense

Major components of income tax expense for the year ended 31 December 2011 and 2010 are:

GROUP COMPANY 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Income statements Current income tax: - Malaysian income tax 44,503 31,420 4,708 9,045 - Foreign tax 138 42 – –

44,641 31,462 4,708 9,045

Over provision of income tax in prior years: - Malaysian income tax (1,779) (2,210) (991) (8) - Foreign tax – (54) – –

42,862 29,198 3,717 9,037

Deferred tax (Note 31): - Relating to origination and reversal of temporary differences 1,100 (2,822) – – - Under/(over) provision in prior years 4,537 (548) – –

5,637 (3,370) – –

Income tax recognised in profi t or loss 48,499 25,828 3,717 9,037

Domestic statutory tax rate is calculated at the Malaysian statutory tax rate of 25% (2010: 25%) of the estimated assessable profi t for the year.

Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.

FABER GROUP BERHAD ANNUAL REPORT 2011 151

10 INCOME TAX EXPENSE (CONTINUED)

Reconciliation between tax expense and accounting profi ts

A reconciliation of income tax expense and the product of accounting profi t multiplied by the applicable corporate tax rate for the years ended 31 December 2011 and 2010 are as follows:

2011 2010 RM’000 RM’000

Group

Profi t before taxation 121,714 129,160

Taxation at Malaysian statutory tax rate of 25% (2010: 25%) 30,429 32,290 Income not subject to taxation (474) (676) Foreign loss/(income) not subject to taxation 4,582 (11,473) Non-deductible expenses 11,247 8,478 Different tax rates in other countries (47) (13) Deferred tax assets not recognised during the year - Malaysian subsidiaries 4 34 Under/(over) provision of deferred tax in prior years 4,537 (548) Over provision of income tax in prior years - Malaysian subsidiaries (1,779) (2,210) - Foreign subsidiaries – (54)

Income tax expense recognised in profi t or loss 48,499 25,828

2011 2010 RM’000 RM’000

Company

Profi t before taxation 111,956 53,942

Taxation at Malaysian statutory tax rate of 25% (2010: 25%) 27,989 13,486 Non-deductible expenses 9,142 6,566 Income not subject to taxation - tax exempt dividend (32,377) (9,280) Income not subject to taxation – (1,660) Utilisation of previously unrecognised other temporary differences (46) (67) Over provision of income tax in prior years (991) (8)

Income tax expense recognised in profi t or loss 3,717 9,037

The above reconciliation is prepared by aggregating separate reconciliations for each national jurisdiction.

FABER GROUP BERHAD ANNUAL REPORT 2011 152

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

11 EARNINGS PER SHARE

Basic

Basic earnings per share amounts are calculated by dividing profi t for the year attributable to owners of the parent by the weighted average number of ordinary shares in issue during the fi nancial year held by the Company.

GROUP 2011 2010 RM’000 RM’000

Profi t attributable to owners of the parent 61,589 78,780

‘000 ‘000

Weighted average number of ordinary shares in issue 363,001 363,001

SEN SEN

Basic earning per share 17.0 21.7

There have been no other transactions involving ordinary shares or potential ordinary share between reporting date and the date of completion of these fi nancial statements.

12 DIVIDENDS NET DIVIDENDS PER AMOUNT ORDINARY SHARE 2011 2010 2011 2010 RM’000 RM’000 SEN SEN

Recognised during the year:

Final dividend for 2009: 6% less 25% taxation on 363,001,000 ordinary shares, declared on 25 February 2010 and paid on 23 June 2010 – 16,335 – 4.50

Final dividend for 2010: 8% less 25% taxation on 363,001,000 ordinary shares, declared on 25 February 2011 and paid on 23 June 2011 21,780 – 6.00 –

21,780 16,335 6.00 4.50

At the forthcoming Annual General Meeting, a fi nal dividend in respect of the fi nancial year ended 31 December 2011, of 8.00 sen less 25% taxation on 363,001,000 ordinary shares of RM0.25 each, amounting to a dividend payable of RM21,780,000 (6.00 sen net per ordinary share) will be proposed for shareholder’s approval. The fi nancial statements for the current fi nancial year do not refl ect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in equity as an appropriation of retained earnings in the fi nancial year ending 31 December 2012.

FABER GROUP BERHAD ANNUAL REPORT 2011 153

13 PROPERTY, PLANT AND EQUIPMENT

PLANT, EQUIPMENT, FURNITURE, CAPITAL FITTINGS AND WORK-IN- LAND MOTOR VEHICLES PROGRESS TOTAL RM’000 RM’000 RM’000 RM’000

Group

At 31 December 2011

Cost At 1 January 2011 1,160 248,684 7,072 256,916 Additions – 8,101 17,427 25,528 Disposals – (948) – (948) Transfer – 20,176 (20,176) – Written off – (3,741) (124) (3,865) Exchange differences – (254) – (254)

At 31 December 2011 1,160 272,018 4,199 277,377

Accumulated depreciation At 1 January 2011 – 168,482 – 168,482 Charge for the year (Note 7) – 19,880 – 19,880 Disposals – (575) – (575) Written off – (3,479) – (3,479) Exchange differences – (48) – (48)

At 31 December 2011 – 184,260 – 184,260

Net carrying amount At 31 December 2011 1,160 87,758 4,199 93,117

At 31 December 2010

Cost At 1 January 2010 – 241,984 2,967 244,951 Additions 1,160 8,958 7,220 17,338 Disposals – (1,807) – (1,807) Transfer – 3,053 (3,053) – Written off – (3,344) (62) (3,406) Exchange differences – (160) – (160)

At 31 December 2010 1,160 248,684 7,072 256,916

FABER GROUP BERHAD ANNUAL REPORT 2011 154

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

13 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

PLANT, EQUIPMENT, FURNITURE, CAPITAL FITTINGS AND WORK-IN- LAND MOTOR VEHICLES PROGRESS TOTAL RM’000 RM’000 RM’000 RM’000

Group (continued)

At 31 December 2010 (continued)

Accumulated depreciation At 1 January 2010 – 152,305 – 152,305 Charge for the year (Note 7) – 19,963 – 19,963 Disposals – (1,738) – (1,738) Written off – (2,022) – (2,022) Exchange differences – (26) – (26)

At 31 December 2010 – 168,482 – 168,482

Net carrying amount At 31 December 2010 1,160 80,202 7,072 88,434

EQUIPMENT, FURNITURE, FITTINGS AND MOTOR VEHICLES RM’000

Company

At 31 December 2011

Cost At 1 January 2011 3,587 Additions 869 Disposal (44)

At 31 December 2011 4,412

Accumulated depreciation At 1 January 2011 2,392 Charge for the year (Note 7) 421 Disposal (44)

At 31 December 2011 2,769

Net carrying amount 1,643

FABER GROUP BERHAD ANNUAL REPORT 2011 155

13 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

EQUIPMENT, FURNITURE, FITTINGS AND MOTOR VEHICLES RM’000

Company (continued)

At 31 December 2010

Cost At 1 January 2010 4,272 Additions 1,025 Disposal (1,710)

At 31 December 2010 3,587

Accumulated depreciation At 1 January 2010 3,826 Charge for the year (Note 7) 221 Disposal (1,655)

At 31 December 2010 2,392

Net carrying amount 1,195

(a) The net carrying amount of plant and equipment of the Group charged to a bank for banking facilities (Note 26(a)) are as follows:

GROUP 2011 2010 RM’000 RM’000

Plant and equipment 83,623 75,634

(b) The cost of property, plant and equipment of the Group and of the Company amounting to RM131,850,000 (2010: RM53,867,000) and RM2,208,000 (2010: RM1,987,000) respectively have been fully depreciated and are still in use.

(c) Net carrying amounts of plant and equipment held under hire purchase are as follows:

GROUP 2011 2010 RM’000 RM’000

Equipment 143 239

Details of the terms and conditions of the hire purchase and fi nance lease arrangements are disclosed in Note 27.

FABER GROUP BERHAD ANNUAL REPORT 2011 156

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

14 LAND HELD FOR PROPERTY DEVELOPMENT AND PROPERTY DEVELOPMENT COSTS

(a) Land held for property development

DEVELOPMENT LAND EXPENDITURE TOTAL RM’000 RM’000 RM’000

Group

At 31 December 2011

At cost At 1 January 2011 19,330 7,306 26,636 Additions – 2,706 2,706 Transfer to property development costs (Note 14(b)) (18,500) (3,351) (21,851)

At 31 December 2011 830 6,661 7,491

Accumulated impairment At 1 January 2011 / at 31 December 2011 51 6,338 6,389

Carrying amount at 31 December 2011 779 323 1,102

At 31 December 2010

At cost At 1 January 2010 35,950 23,870 59,820 Additions – 259 259 Transfer to property development costs (Note 14(b)) (15,662) (15,824) (31,486) Disposal (958) (999) (1,957)

At 31 December 2010 19,330 7,306 26,636

Accumulated impairment At 1 January 2010 / at 31 December 2010 51 6,338 6,389

Carrying amount at 31 December 2010 19,279 968 20,247

FABER GROUP BERHAD ANNUAL REPORT 2011 157

14 LAND HELD FOR PROPERTY DEVELOPMENT AND PROPERTY DEVELOPMENT COSTS (CONTINUED)

(b) Property development costs

DEVELOPMENT LAND EXPENDITURE TOTAL RM’000 RM’000 RM’000

Group

At 31 December 2011

Cumulative property development costs At 1 January 2011 22,809 135,095 157,904 Costs incurred during the year 84,891 84,891 Transfer from land held for property development (Note 14(a)) 18,500 3,351 21,851 Reversal of completed projects (4,219) (747) (4,966)

At 31 December 2011 37,090 222,590 259,680

Cumulative costs recognised in income statement At 1 January 2011 (780) (86,986) (87,766) Recognised during the year (Note 4) (12,020) (83,256) (95,276) Write back of impairment of property development costs (Note 4 and Note 7) 19 – 19 Unsold unit transferred to inventory – (1,318) (1,318) Reversal of completed projects 4,200 747 4,947

At 31 December 2011 (8,581) (170,813) (179,394)

Property development costs at 31 December 2011 28,509 51,777 80,286

FABER GROUP BERHAD ANNUAL REPORT 2011 158

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

14 LAND HELD FOR PROPERTY DEVELOPMENT AND PROPERTY DEVELOPMENT COSTS (CONTINUED)

(b) Property development costs (continued)

DEVELOPMENT LAND EXPENDITURE TOTAL RM’000 RM’000 RM’000

Group

At 31 December 2010

Cumulative property development costs At 1 January 2010 14,423 83,308 97,731 Costs incurred during the year 950 39,826 40,776 Transfer from land held for property development (Note 14(a)) 15,662 15,824 31,486 Reversal of completed projects (8,226) (3,863) (12,089)

At 31 December 2010 22,809 135,095 157,904

Cumulative costs recognised in income statement At 1 January 2010 (9,006) (50,591) (59,597) Recognised during the year (Note 4) – (40,258) (40,258) Reversal of completed projects 8,226 3,863 12,089

At 31 December 2010 (780) (86,986) (87,766)

Property development costs at 31 December 2010 22,029 48,109 70,138

15 PREPAID LAND LEASE PAYMENTS

GROUP 2011 2010 RM’000 RM’000

At 1 January 3,673 3,760 Amortisation for the year (Note 7) (87) (87)

At 31 December 3,586 3,673

Long term leasehold land 3,586 3,673

Leasehold land with an aggregate carrying value of RM2,670,000 (2010: RM2,747,000) are pledged as securities for banking facilities (Note 26(a)).

Included in prepaid land lease payments were leasehold land with an aggregate carrying value of RM916,000 (2010: RM926,000) which are pledged for bank borrowings of the seller in prior year. The land title has been fully discharged to the respective subsidiary during the year.

FABER GROUP BERHAD ANNUAL REPORT 2011 159

16 INTANGIBLE ASSETS

CUSTOMER DEVELOPMENT GOODWILL CONTRACTS EXPENDITURE SOFTWARE TOTAL RM’000 RM’000 RM’000 RM’000 RM’000

Group

Cost

At 1 January 2010 26,982 6,311 12,153 10,184 55,630 Purchase of customer contracts (Note 38(a)) – 3,764 – – 3,764 Additions – – – 76 76 Exchange differences – (453) – – (453)

At 31 December 2010 and 1 January 2011 26,982 9,622 12,153 10,260 59,017 Purchase of customer contracts (Note 38(a)) – 1,472 – – 1,472 Additions – – – 59 59 Exchange differences – (1,480) – – (1,480)

At 31 December 2011 26,982 9,614 12,153 10,319 59,068

Accumulated amortisation and impairment At 1 January 2010 – 1,262 10,607 8,400 20,269 Amortisation during the year (Note 7) – 999 819 542 2,360 Exchange differences – (127) – – (127)

At 31 December 2010 and 1 January 2011 – 2,134 11,426 8,942 22,502 Amortisation during the year (Note 7) – 1,072 727 813 2,612 Impairment loss (Note 7) – 6,846 – – 6,846 Exchange differences – (438) – – (438)

At 31 December 2011 – 9,614 12,153 9,755 31,522

Net carrying amount

At 31 December 2011 26,982 – – 564 27,546

At 31 December 2010 26,982 7,488 727 1,318 36,515

The Company has assessed the recoverable amounts of the customer contracts attributed to the housekeeping business given that there are indications of impairment as the carrying amounts exceeds its recoverable value. This assessment has resulted in an impairment loss of RM6,846,000 (2010: nil) being recognized during the year.

FABER GROUP BERHAD ANNUAL REPORT 2011 160

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

16 INTANGIBLE ASSETS (CONTINUED)

SOFTWARE RM’000

Company

Cost

At 1 January 2010 302 Additions 71

At 31 December 2010 and 1 January 2011 373 Additions 30

At 31 December 2011 403

Accumulated amortisation

At 1 January 2010 264 Amortisation for the year (Note 7) 42

At 31 December 2010 and 1 January 2011 306 Amortisation for the year (Note 7) 40

At 31 December 2011 346

Net carrying amount

At 31 December 2011 57

At 31 December 2010 67

Impairment testing of goodwill

Goodwill arising from acquisition of equity interest from non-controlling interests has been allocated to the CGUs of the Integrated Facilities Management (Concession) Segment for impairment testing.

Key assumption used in value-in-use calculation

The recoverable amount of a CGU is determined based on value-in-use calculations using cash fl ow projections based on fi nancial budgets approved by management covering a two-year period to the termination of the concession and the six months interim extension of the concession.

FABER GROUP BERHAD ANNUAL REPORT 2011 161

16 INTANGIBLE ASSETS (CONTINUED)

Key assumption used in value-in-use calculation (continued)

The following describes the key assumptions used for value-in-use calculations:

(i) Budgeted gross margin

The basis used to determine the value assigned to the budgeted gross margins is the average gross margins and average growth rate achieved in the years before the budgeted year, adjusted for market and economic conditions and internal resource effi ciency.

(ii) Discount rate

The pre-tax discount rates applied to pre-tax cash fl ows, used for the Integrated Facilities Management (Concession) Segment is in the range of 12.24%.

17 INVESTMENTS IN SUBSIDIARIES

COMPANY 2011 2010 RM’000 RM’000

Unquoted shares at cost: - Malaysian subsidiaries 345,790 345,790 - Foreign subsidiaries 418 418

346,208 346,208 Less: Accumulated impairment (198,176) (198,176)

148,032 148,032

Details of the subsidiaries are listed in Note 45.

(a) Acquisition of non-controlling interest in Faber Star Facilities Management Ltd (“FSFML”)

On 4 November 2010, Faber Facilities Sdn. Bhd. (“FFSB”), a wholly owned subsidiary of FGB had entered into a conditional Share Purchase Agreement (“SPA”) with Singa Real Estates Ltd (“SREL”) and FSFML.

All the terms and conditions of the Share Purchase Agreement dated 4 November 2010 have been complied with on 20 April 2011. Pursuant to the completion, FFSB acquired an additional shareholdings of 49% in FSFML from its non-controlling shareholders for a cash consideration of RM699,000. As a result of this acquisition, FSFML became a wholly-owned subsidiary of FFSB. In turn, FSFML is an indirect wholly-owned subsidiary of FGB (Note 46(a)). This has been refl ected in the statements of changes in equity as effect arising from acquisition of non-controlling interest in a subsidiary.

FABER GROUP BERHAD ANNUAL REPORT 2011 162

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

17 INVESTMENTS IN SUBSIDIARIES (CONTINUED)

(b) Acquisition of a subsidiary - General Field Sdn. Bhd. (“GFSB”)

On 20 June 2011, FFSB, a wholly-owned subsidiary of FGB had acquired the entire issued and paid-up share capital of GFSB for a total cash consideration of RM2.00. GFSB is a private limited company incorporated in Malaysia under the Companies Act, 1965 on 12 May 2011, with an authorised share capital of RM100,000 comprising 100,000 ordinary shares of RM1.00 each, of which 2 ordinary shares of RM1.00 each have been issued and fully paid-up.

(c) Capitalisation of loan from a corporate shareholder of a subsidiary

On 1 January 2011, shareholders of Fresh Linen Services (Sabah) Sdn. Bhd. (“FLSBH”),a subsidiary of the Faber Medi-Serve Sdn. Bhd. (“FMS”), a wholly owned subsidiary of FGB, had subscribed for new ordinary shares in the FLSBH via the capitalisation of RM2,000,000 of the shareholders’ loan based on the respective shareholding ratio of 60:40 (FMS: RM1,200,000 and SMS Kg Likas (Sabah) Sdn. Bhd., the non-controlling shareholders: RM800,000). This had resulted to an increase in the investments in FLSBH at FMS level and has been refl ected in the statements of changes in equity as issue of shares by subsidiary to non- controlling shareholders through capitalisation on loan.

18 OTHER INVESTMENTS

GROUP COMPANY 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Equity instruments (unquoted shares in Malaysia) 3,825 3,825 1,200 1,200 Less: Impairment (3,825) (3,825) (1,200) (1,200)

Unquoted shares, net – – – – Club memberships 272 272 272 272

272 272 272 272

Included herein is the Company’s 40% equity interest investment in Ekovest-Faber Sdn. Bhd. (“Ekovest-Faber”) amounting to RM1,200,000 (2010: RM1,200,000), which was paid for via subscription of shares. Ekovest-Faber is the joint venture vehicle to apply to the Government of Malaysia to undertake as joint venture partners, the concession for the design, construction, completion and maintenance of an institution known as the National Institute for Natural Products, Vaccines and Biologicals.

FABER GROUP BERHAD ANNUAL REPORT 2011 163

19 INVENTORIES

GROUP 2011 2010 RM’000 RM’000

Cost Consumables 4,176 3,564 Properties held for sale 1,318 –

Net realisable value Consumables 1,584 1,738

Total 7,078 5,302

The write-back of inventories of RM672,000 (from net realisable value consumables) was made during the year when the slow moving inventories were utilised (Note 7).

During the year, the properties held for sale are in relation to completed properties of Taman Hilltop, Kota Kinabalu, Sabah.

20 TRADE AND OTHER RECEIVABLES

GROUP COMPANY 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Current

Trade receivables Third parties 288,703 394,201 – – Affi liated companies 503 7,349 – –

289,206 401,550 – – Less: Allowance for impairment: Third parties (9,259) (22,375) – –

Trade receivables, net 279,947 379,175 – –

FABER GROUP BERHAD ANNUAL REPORT 2011 164

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

20 TRADE AND OTHER RECEIVABLES (CONTINUED)

GROUP COMPANY 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Other receivables Amounts due from related parties: Subsidiaries – – 19,498 16,242 Affi liated company 9 9 – –

9 9 19,498 16,242 Deposits 3,477 5,531 176 164 Tax recoverable 4,373 2,252 599 599 Dividend receivable – – 33,533 7,937 Sundry receivables 10,193 10,324 1,674 1,343

18,052 18,116 55,480 26,285

Less: Allowance for impairment: Third parties (1,993) (2,367) (1,083) (1,083) Subsidiaries – – (15,362) (375) Affi liated company (9) (9) – –

(2,002) (2,376) (16,445) (1,458)

Other receivables, net 16,050 15,740 39,035 24,827

Other current assets Accrued billings in respect of property development costs 52,942 24,615 – – Prepayments 1,382 1,254 6 6 Prepayment - linen 12,985 13,298 – –

Other current assets 67,309 39,167 6 6

Total 363,306 434,082 39,041 24,833

FABER GROUP BERHAD ANNUAL REPORT 2011 165

20 TRADE AND OTHER RECEIVABLES (CONTINUED)

GROUP COMPANY 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Non-current

Trade receivables Third parties 152,068 – – – Affi liated company 6,865 – – –

158,933 – – –

Less: Allowance for impairment: Third parties (13,855) – – – Affi liated company (980) – – –

(14,835) – – –

Trade receivables, net 144,098 – – –

Movements in allowance accounts:

GROUP COMPANY 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

At 1 January 24,751 23,408 1,458 1,458 Charge for the year (Note 7) - Non-current 14,835 – – – - Current 7,045 12,806 14,987 – Reversal of impairment (Note 7) (18,894) (11,431) – – Written off (1,641) (32) – –

At 31 December 26,096 24,751 16,445 1,458

FABER GROUP BERHAD ANNUAL REPORT 2011 166

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

20 TRADE AND OTHER RECEIVABLES (CONTINUED)

(a) Trade receivables (current)

Trade receivables (current) are non-interest bearing and are generally on 30 to 90 days (2010: 30 to 90 days) terms. They are recognised at their original invoice amounts which represent their fair values on initial recognition.

Ageing analysis of trade receivables (current)

The ageing analysis of the Group’s trade receivables (current) is as follows:

GROUP 2011 2010 RM’000 RM’000

Neither past due nor impaired 254,836 275,154 1 to 30 days past due not impaired 6,138 12,474 31 to 60 days past due not impaired 3,349 38,284 61 to 90 days past due not impaired 7,883 32,759 91 to 120 days past due not impaired – 12,643 More than 121 days past due not impaired 7,741 7,861 25,111 104,021 Impaired 9,259 22,375

289,206 401,550

Receivables that are neither past due nor impaired

Trade receivables (current) that are neither past due nor impaired are creditworthy debtors with good payment records with the Group. More than 90% of the Group’s trade receivables arose from current receivable balances with the Ministry of Health (“MOH”) and losses have occurred infrequently. In prior year, 68% of the Group’s trade receivables were balances with the MOH and Western Region Municipality (“WRM”) of Abu Dhabi.

None of the Group’s trade receivables that are neither past due nor impaired have been renegotiated during the fi nancial year.

Receivables that are past due but not impaired

The Group has trade receivables (current) amounting to RM25,111,000 (2010: RM104,021,000) that are past due at the reporting date but not impaired. Trade receivables that are past due but not impaired mainly relate to amounts receivable for the hospital support services with the MOH and for properties under development located at Taman Danau Desa, Sabah and Kepong. In prior year, trade receivables that are past due but not impaired mainly relates to receivable for the hospital support service with MOH and the Low Cost Housing and Infrastructure contract with WRM of Abu Dhabi.

FABER GROUP BERHAD ANNUAL REPORT 2011 167

20 TRADE AND OTHER RECEIVABLES (CONTINUED)

(a) Trade receivables (current) (continued)

Receivables that are impaired

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

COLLECTIVELY IMPAIRED 2011 2010 RM’000 RM’000

Group

Trade receivables - nominal amounts 9,259 22,375 Less: Allowance for impairment (9,259) (22,375)

– –

Trade receivables that are collectively determined to be impaired at the reporting date mainly relate to balances which have been signifi cantly long outstanding. These receivables are not secured by any collateral or credit enhancements.

During the year, Faber Medi-Serve Sdn. Bhd., a subsidiary of the Company reversed an amount of impairment of trade receivables amounting to RM16,545,000, as it no longer required upon the completion of Supplemental Agreement by MOH.

(b) Trade receivables (non-current)

Approximately 96% (2010: nil) of the Group’s non-current trade receivables arose from balances with the WRM of Abu Dhabi. The amounts due are non-interest bearing, unsecured and are to be paid in cash. During the year, Faber LLC, a subsidiary of the Company has provided an impairment of RM13,855,000 (2010: nil) as WRM has not settled the outstanding balances within the contracted credit terms due to on going negotiations to close the respective contracts. The Group has determined the amount of impairment loss as the difference between the assets carrying amount and the present value of the estimated future cashfl ow discounted at the fi nancial assets original effective interest rate.

(c) Other receivables

Amounts due from related parties

Amounts due from all related parties are non-interest bearing and repayable on demand. All related parties receivables are unsecured and are to be settled in cash.

During the fi nancial year, the Company had carried out a recoverability assessment on all amounts due from related parties that resulted in the impairment of these subsidiaries debts of RM14,987,000. In the prior year, the Company had written off a subsidiary’s debts of RM4,602,000. These related party balances were non-interest bearing and non trade-related.

FABER GROUP BERHAD ANNUAL REPORT 2011 168

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

20 TRADE AND OTHER RECEIVABLES (CONTINUED)

(c) Other receivables (continued)

Other receivables that are impaired

At the reporting date, the Group and the Company have provided an allowance of RM1,993,000 (2010: RM2,367,000) and RM1,083,000 (2010: RM1,083,000) respectively. These mainly relate to balances due from third parties which have been long outstanding.

(d) Other current assets

Prepayment for Linen

A subsidiary company, Faber Medi-Serve Sdn. Bhd., is required to replenish linen as and when required under the requirement of concession contract with MOH. The linen cover all fabric materials used in the respective hospitals and is the property of the respective hospitals. Linen items are amortised over two years, which is the life span based on the subsidiary’s past experience.

Linen purchased and amortised during the year amounted to RM13,398,000 (2010: RM14,285,000) and RM13,024,000 (2010: RM13,934,000) respectively.

Further details on related party transactions are disclosed in Note 40.

21 AMOUNTS DUE FROM CUSTOMER ON CONTRACTS

GROUP 2011 2010 RM’000 RM’000

Cost incurred plus recognised profi ts 57,842 40,555

Amounts due from customer on contracts represents the work orders recognised by a foreign subsidiary of the Company whereby the balances are yet to be certifi ed by WRM as at year end. This balance has been classifi ed as amounts due from customer on contracts as it is probable that the future economic benefi t will fl ow to the Group and the revenue can be reliably measured for such work orders

22 SHORT TERM INVESTMENT

GROUP 2011 2010 RM’000 RM’000

Fair value through profi t or loss investments: Unquoted unit trust in Malaysia 2,012 –

Short term investment of a subsidiary company, Faber Union Sdn. Bhd. (“FUSB”) represents special investment funds invested with licensed fund managers in the Funds approved by the Securities Commission. The portfolio of investment authorised by the Board of Directors comprises only deposits in both Islamic and conventional instruments with fi nancial institutions.

FABER GROUP BERHAD ANNUAL REPORT 2011 169

23 CASH AND CASH EQUIVALENTS

GROUP COMPANY 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Cash on hand and at banks 113,457 93,815 731 405 Deposits with: - licensed banks 96,106 139,686 4,217 4,118 - other fi nancial institutions 110,798 51,375 99,060 41,109

Cash and cash equivalents 320,361 284,876 104,008 45,632

(a) Included in cash at bank of the Group are the amounts of RM73,175,000 (2010: RM51,566,000) held pursuant to Section 7A of the Housing Development (Control and Licensing) Act 1966 and Section 8A of the Housing Development Account (Control and Licensing) Sabah Act, 1978 and are restricted from use in other operations.

(b) Deposits with licensed banks of the Group and of the Company amounting to RM17,535,000 (2010: RM15,682,000) and RM991,000 (2010: RM963,000) respectively are on lien for bank guarantee facilities granted to certain subsidiaries. As at 31 December 2011, the subsidiaries have utilised guarantee facilities amounting to RM16,513,000 (2010: RM14,755,000).

(c) Deposits with licensed banks of the Company amounting to RM3,000,000 (2010: RM3,000,000) are pledged as securities for bank borrowing granted to a foreign subsidiary.

Short-term deposits are made for varying periods of between one to three months depending on the immediate cash requirements of the Group and the Company, and earn interests at the respective short-term deposit rates.

Other information on fi nancial risks of cash and cash equivalents are disclosed in Note 42.

24 RETIREMENT BENEFIT OBLIGATIONS

Certain subsidiaries operate an unfunded, defi ned benefi t Retirement Benefi t Scheme (“the Scheme”) for its eligible employees. Under the Scheme, eligible employees are entitled to retirement benefi ts on attainment of the retirement age of 55, on medical incapacity or on death. The present value of defi ned benefi t obligation was based on the actuarial valuation report by independent actuarist, Actuarial Partners Consulting Sdn. Bhd. (formerly known as Mercer Zainal Consulting Sdn. Bhd.) dated 4 January 2011.

FABER GROUP BERHAD ANNUAL REPORT 2011 170

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

24 RETIREMENT BENEFIT OBLIGATIONS (CONTINUED)

The amount recognised in the statements of fi nancial position is determined as follows:

GROUP 2011 2010 RM’000 RM’000

Present value of unfunded defi ned benefi t obligations 6,056 5,471 Less : Unrecognised transition liability (1,186) (915)

Net liability 4,870 4,556

Analysed as: Current 832 597 Non-current: Later than 1 year but not later than 2 years 210 123 Later than 2 years 3,828 3,836

4,038 3,959

4,870 4,556

The amount recognised in the income statement is as follows:

GROUP 2011 2010 RM’000 RM’000

Current service costs 403 299 Interest cost 324 214 Amortisation of net loss 51 –

Total 778 513

Of the Group’s charge for the year, RM778,000 (2010: RM513,000) has been included in employee benefi ts expenses (Note 8).

Movements in the net liability in the current year were as follows:

GROUP 2011 2010 RM’000 RM’000

At 1 January 4,556 4,136 Recognised in income statement (Note 8) 778 513 Contributions paid (464) (93)

At 31 December 4,870 4,556

FABER GROUP BERHAD ANNUAL REPORT 2011 171

24 RETIREMENT BENEFIT OBLIGATIONS (CONTINUED)

Principal actuarial assumptions used:

2011 2010 % %

Discount rate 6.0 6.0 Expected rate of salary increases 5.0 5.0

Assumptions regarding future mortality are based on published statistics and mortality tables.

25 PROVISIONS SINKING LATE DELIVERY FUND CHARGES TOTAL RM’000 RM’000 RM’000

Group

Non current At 31 December 2011 At 1 January 2011 83 560 643 Additional provision (Note 7) 16 – 16 Reversal of provision (Note 7) – (560) (560)

At 31 December 2011 99 – 99

At 31 December 2010 At 1 January 2010 105 560 665 Additional provision (Note 7) 12 – 12 Reversal of provision (Note 7) (34) – (34)

At 31 December 2010 83 560 643

(a) Sinking fund Under the provision of the Housing Development (Control and Licensing) Act 1966 (Act 118) & Regulations and Land (Subsidiary Title) Enactment 1972 (Sabah No. 9 of 1972), the purchasers are required to contribute to the sinking fund upon the dates they take vacant possession and all the funds accumulated into the sinking fund shall be held by the vendor in trust for the purchaser.

(b) Late delivery charges Provision for late delivery charges is in respect of certain property development 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. During the year, the subsidiary of the Group has written back the provision as it is not required due to the clearance of these claims.

FABER GROUP BERHAD ANNUAL REPORT 2011 172

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

26 BORROWINGS

GROUP COMPANY 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Short term borrowings Secured: Redeemable Secured Loan Stocks (Note 28) 145,053 – 145,053 – Hire purchase (Note 27) 69 90 – – Revolving credit: - in Malaysia (Note (a)) – 2,000 – – - foreign (Note (c)) 2,801 2,087 – –

147,923 4,177 145,053 –

Unsecured: Loan from a corporate shareholder of a subsidiary (Note (b)) 986 1,786 – –

Total short term borrowings 148,909 5,963 145,053 –

Long term borrowings Secured: Hire purchase (Note 27) 51 120 – – Redeemable Secured Loan Stocks (Note 28) – 154,145 – 154,145

51 154,265 – 154,145

Unsecured: Redeemable Preference Shares (Note 34) 7,038 6,907 – –

Total long term borrowings 7,089 161,172 – 154,145

Total borrowings Hire purchase (Note 27) 120 210 – – Revolving credit (Note (c)) 2,801 4,087 – – Redeemable Secured Loan Stocks (Note 28) 145,053 154,145 145,053 154,145 Redeemable Preference Shares (Note 34) 7,038 6,907 – – Loan from a corporate shareholder of a subsidiary (Note (b)) 986 1,786 – –

155,998 167,135 145,053 154,145

FABER GROUP BERHAD ANNUAL REPORT 2011 173

26 BORROWINGS (CONTINUED)

(a) Syndicated banking facilities (secured)

The outstanding balances for the secured Syndicated Banking Facilities of Faber Medi-Serve Sdn. Bhd. (“FMS”), a wholly owned subsidiary of the Company comprise of revolving credit, bank guarantee and combined trade facilities are as follows:

2011 2010 RM’000 RM’000

Revolving credit - in Malaysia – 2,000 Bank guarantees 1,137 766 Bank guarantees issued for Performance Bonds to Government of Malaysia (Note 38) 13,754 20,861

In prior year, FMS has drawn down its secured revolving credit facility for additional working capital amounting to RM2,000,000. During the year, FMS drawn down an additional amount of RM15,000,000. Both facilities bear interest of 4.62% per annum. The whole amount of the revolving credit outstanding was repaid during the year.

The Syndicated Banking Facilities are secured by a Debenture and a Deed of Assignment of Proceeds dated 27 December 1996 by way of the following:

(i) A fi rst fi xed charge over all sums paid or may from time to time become due and payable to the subsidiary (“the Proceeds”) by the Goverment of Malaysia pursuant to the Concession Agreement dated 28 October 1996, all its uncalled capital, its present and future goodwill, patents, trademarks, licences and concessions and all its present and future plant, equipment and machinery, motor vehicles and furniture and fi ttings; and

(ii) A fi rst fl oating charge over all the present and future lands undertakings and other properties and assets of the subsidiary both movable and immovable, not otherwise charged in (a)(i) above.

(b) Loan from a corporate shareholder of a subsidiary

The loan from a non-controlling shareholder of a subsidiary company, Fresh Linen Services (Sabah) Sdn. Bhd. is unsecured, and bears interest based on Syariah Principle from current year onwards which is at 1.75% above Base Financing Rate (“BFR”) per annum. In prior year, the interest was at 1% above the Base Lending Rate (“BLR”) per annum.

(c) Revolving credit - foreign

A subsidiary, Faber Sindoori Management Services Private Ltd.’s (“Faber Sindoori”) revolving credit facility amounting to RM2,801,000 is secured by a standby letter of credit, which is secured in turn against the Company’s fi xed deposits as disclosed in Note 23(c). It bears interest ranging from 10.5% to 12.5% per annum (2010: 9.5% to 10.5%).

FABER GROUP BERHAD ANNUAL REPORT 2011 174

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

27 HIRE PURCHASE

GROUP 2011 2010 RM’000 RM’000

Future minimum lease payments: Not later than 1 year 74 100 Later than 1 year and not later than 2 years 40 74 Later than 2 years and not later than 5 years 13 53

Total future minimum lease payments 127 227 Less: Future fi nance charges (7) (17)

Present value of fi nance lease liabilities 120 210

Analysis of present value of fi nance lease liabilities:

GROUP 2011 2010 RM’000 RM’000

Not later than 1 year 69 90 Later than 1 year and not later than 2 years 38 69 Later than 2 years and not later than 5 years 13 51

120 210 Less: Amount due within 12 months (Note 26) (69) (90)

Amount due after 12 months (Note 26) 51 120

The Group has hire purchase contracts for various items of equipment (see Note 13). These leases have terms of renewal but no purchase options and escalation clauses. Renewals are at the option of the specifi c entity that holds the lease. There are no restrictions placed upon the Group by entering into these leases and no arrangements have been entered into for contingent rental payments.

28 REDEEMABLE SECURED LOAN STOCKS (“RSLS”)

On 30 September 2004, the Company issued RM185,528,000 nominal value of RSLS of RM1 each as partial settlement to Jeram Bintang Sdn. Bhd. (“JBSB”) pursuant to its Debt Restructuring Scheme.

The RSLS comprise RM135,564,000 of RSLS issued and 4% per annum coupon compounded annually up to maturity. The total amount of the coupon payment is RM49,964,000 nominal value payable in the form of RSLS annually in arrears at each anniversary date.

FABER GROUP BERHAD ANNUAL REPORT 2011 175

28 REDEEMABLE SECURED LOAN STOCKS (“RSLS”) (CONTINUED)

On 14 September 2009, the Company had executed a Supplemental Trust Deed and Supplemental Restructuring Deed.

The following are the salient revision to the terms of the RSLS:-

(i) to allow the coupon payments to be in the form of cash payable annually in arrears at each anniversary date from the years 2010 to 2012, on such nominal amount of the RSLS for the time being outstanding. In the event, for any reason(s) whatsoever, the Company is unable to pay, fully or partially, the coupon payment in cash on the anniversary date, all of the coupon payment due and payable but not paid in cash shall be capitalised into new RSLS.

(ii) to allow that in the event that the partial redemption is made before the anniversary date of the RSLS, the accreted value of the 4% coupon per annum up to the proposed early redemption date will be added to the outstanding RSLS as of the last anniversary date or such early redemption date, whichever is the later, and such early redemption amounts will be used fi rstly to reduce the outstanding coupon and thereafter the principal outstanding RSLS. The coupon payment payable on the next anniversary date would then be adjusted to exclude the earlier coupon payment made.

However, no redemption will be carried out unless it is suffi cient to pay the outstanding coupon accrued from the last anniversary date or the date of that last early redemption payment, as the case may be, up to the proposed early redemption date and 14 days notice of such intention is given to JBSB and the Universal Trustee (Malaysia) Berhad.

Other salient terms of the RSLS are as follow:

(i) The RSLS shall be redeemed for cash on the maturity date, which is 8 years from the date of issuance of 30 September 2004, or in part or in whole on such earlier date(s) at the option of the Company.

(ii) The RSLS bear coupon at the rate of 4% per annum compounded annually on such nominal amount of the RSLS for the time being outstanding. The coupon payment shall be in the form of cash or RSLS (as the case may be) on such nominal amount of the RSLS for the time being outstanding.

(iii) The RSLS are secured by a charge over:

- 30,599,998 issued and paid-up ordinary shares of RM1 each in FMS by Faber Healthcare Management Sdn. Bhd; and

- 2 issued and paid-up ordinary shares of RM1 each in FMS by the Company.

The Security Interest created to secure the Balance Sum due to JBSB, (Note 29) shall rank in priority and security over the Security Interest to secure the RSLS. The RSLS constitute unsubordinated obligations of the Company.

During the fi nancial year ended 31 December 2011, the Company paid RM15,044,000 of which RM6,044,0000 was for payment of the 7th year coupon on RSLS and RM9,000,000 was for the partial redemption of the principal amount outstanding.

The RSLS are due for repayment on 29 September 2012 in cash. The entire amount of RSLS have been reclassifi ed to current liabilities as such.

FABER GROUP BERHAD ANNUAL REPORT 2011 176

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

29 BALANCE SUM DUE TO JERAM BINTANG SDN. BHD.

On 30 September 2004, following the completion of its Debt Restructuring, the Company acknowledged the Balance Sum of RM51,442,000 due to JBSB.

The Balance Sum was interest free and was repayable over a period of 8 years from the date of completion of the restructuring scheme. The Balance Sum was secured as follows:

(i) assignment of dividends receivable from Faber Medi-Serve Sdn. Bhd. (“FMS”) on 315,000 ordinary shares held by Intensive Quest Sdn. Bhd. (“IQSB”) in FMS amounting to RM24 million by the Company;

(ii) assignment of net profi ts from the development of Casa Palma land amounting to RM15.330 million by Faber Union Sdn. Bhd.;

(iii) assignment of a share of the Group’s portion of net profi ts from the joint venture in respect of the development of Taman Sri Desa land amounting to RM3.207 million by Faber Union Sdn. Bhd.;

(iv) assignment of net profi ts from the development of Faber Grandview land amounting to RM1.810 million by Faber Grandview Development (Sabah) Sdn. Bhd.;

(v) assignment of net profi ts from the development of Country View land amounting to RM7.093 million by Country View Development Sdn. Bhd.;

(vi) charge over 30,599,998 issued and paid-up ordinary shares of RM1.00 each in FMS by Faber Healthcare Management Sdn. Bhd.; and

(vii) charge over 2 issued and paid-up ordinary shares of RM1.00 each in FMS by the Company.

All Balance Sum due to JBSB was fully settled in prior year but the release of charges over the Balance Sum securities has yet to be fully completed as at the date of the fi nancial statements.

FABER GROUP BERHAD ANNUAL REPORT 2011 177

30 Trade and other payables

GROUP COMPANY 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Current

Trade payables Third parties 184,172 135,682 – – Affi liated companies 65,593 68,049 – –

249,765 203,731 – –

Other payables Amounts due to related parties: - Affi liated companies – 39 – – - Corporate shareholder of subsidiaries 419 419 – –

419 458 – – Accruals 45,165 61,019 2,644 6,383 Dividend payable to non-controlling shareholders of a subsidiary 3,434 2,177 – – Refundable deposits 2,995 3,255 – – Sundry payables 31,729 22,812 198 813

83,742 89,721 2,842 7,196

Total 333,507 293,452 2,842 7,196

Non-current

Trade payables Third parties 5,825 – – – Affi liated company 27,185 – – –

33,010 – – –

(a) Trade payables (current)

Trade payables are non-interest bearing and the normal trade credit terms granted to the Group range from 30 to 90 days (2010: 30 to 90 days).

Included in trade payables at 31 December 2011 are retention sums of RM12,812,000 (2010: RM7,928,000) relating to property development in progress.

Retention sums are unsecured, interest-free and are expected to be paid within the terms of construction contracts.

FABER GROUP BERHAD ANNUAL REPORT 2011 178

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

30 TRADE AND OTHER PAYABLES (CONTINUED)

(b) Trade payables (non-current)

The Group’s non-current trade payables arose from balances with the contractor of WRM of Abu Dhabi.

(c) Amounts due to related parties

Amounts due to all related parties are non-interest bearing and are repayable on demand. The amounts are unsecured and are to be settled in cash.

In prior year, certain subsidiaries of the Company had carried out a recoverability assessment on all amounts due from related parties which resulted in the waiver of RM6,640,000 owed by the Company. These related party balances were non- interest bearing and non trade-related.

Further details on related party transactions are disclosed in Note 40.

31 DEFERRED TAXATION

GROUP 2011 2010 RM’000 RM’000

At 1 January (4,676) (1,278) Recognised in income statement (Note 10) 5,637 (3,370) Exchange differences (64) (28)

At 31 December 897 (4,676)

Presented after appropriate offsetting as follows: Deferred tax assets (2,676) (5,471) Deferred tax liabilities 3,573 795

897 (4,676)

FABER GROUP BERHAD ANNUAL REPORT 2011 179

31 DEFERRED TAXATION (CONTINUED)

The components and movements of deferred tax liabilities and assets during the fi nancial year prior to offsetting are as follows:

Deferred tax liabilities of the Group:

PROPERTY, PLANT AND INTANGIBLE EQUIPMENT LINEN ASSETS TOTAL RM’000 RM’000 RM’000 RM’000

At 1 January 2011 8,018 3,324 182 11,524 Recognised in the income statement 530 (78) (182) 270 Exchange difference (64) – – (64)

8,484 3,246 – 11,730

Less: Set off of deferred tax assets (8,157)

At 31 December 2011 3,573

At 1 January 2010 8,484 3,164 387 12,035 Recognised in the income statement (438) 160 (205) (483) Exchange difference (28) – – (28)

8,018 3,324 182 11,524

Less: Set off of deferred tax assets (10,729)

At 31 December 2010 795

FABER GROUP BERHAD ANNUAL REPORT 2011 180

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

31 DEFERRED TAXATION (CONTINUED)

Deferred tax assets of the Group:

RECEIVABLES/ PAYABLES TOTAL RM’000 RM’000

At 1 January 2011 (16,200) (16,200) Recognised in the income statement 5,367 5,367

(10,833) (10,833)

Less: Set off of deferred tax liabilities 8,157

At 31 December 2011 (2,676)

At 1 January 2010 (13,313) (13,313) Recognised in the income statement (2,887) (2,887)

(16,200) (16,200)

Less: Set off of deferred tax liabilities 10,729

At 31 December 2010 (5,471)

Deferred tax assets have not been recognised in respect of the following items:

Malaysian Companies

GROUP COMPANY 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Unused tax losses 15,748 15,558 – – Unabsorbed capital allowance 45 46 – – Others 2,145 2,318 1,717 1,899

17,938 17,922 1,717 1,899

The unutilised tax losses and unabsorbed capital allowances of the Group amounting to RM15,748,000 (2010: RM15,558,000) and RM45,000 (2010: RM46,000) respectively are available indefi nitely for offsetting against future taxable profi ts of the respective entities within the Group, subject to no substantial change in shareholdings of those entities under the Income Tax Act, 1967 and guidelines issued by the tax authority.

FABER GROUP BERHAD ANNUAL REPORT 2011 181

32 SHARE CAPITAL AND SHARE PREMIUM

NUMBER OF ORDINARY SHARES AMOUNT 2011 2010 2011 2010 ’000 ’000 RM’000 RM’000

Group and Company Authorised Share Capital At 1 January 3,000,000 3,000,000 3,000,000 3,000,000 Reduction in par value of the ordinary shares – – (2,250,000) –

31 December 3,000,000 3,000,000 750,000 3,000,000

Issued And Fully Paid Up At 1 January 363,001 363,001 363,001 363,001 Reduction in par value of the ordinary shares – – (272,251) –

31 December 363,001 363,001 90,750 363,001

AMOUNT SHARE CAPITAL TOTAL SHARE (ISSUED AND SHARE CAPITAL AND FULLY PAID UP) PREMIUM SHARE PREMIUM RM’000 RM’000 RM’000

Group and Company At 1 January 2010 and 31 December 2010 363,001 115,985 478,986

At 1 January 2011 363,001 115,985 478,986 Reduction in par value of the ordinary shares (272,251) – (272,251) Reduction in share premium – (115,985) (115,985)

31 December 2011 90,750 – 90,750

(a) Ordinary shares

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All ordinary shares rank equally with regard to the Company’s residual assets.

As at the beginning of the year, the authorised share capital of the Company was RM3,000,000,000 divided into 3,000,000,000 ordinary shares of RM1.00 each while the issued and paid-up share capital was RM363,001,000 divided into 363,001,000 ordinary shares of RM1.00 each.

During the year, the issued and paid-up share capital of the Company was reduced via the cancellation of RM0.75 from every par value of RM1.00 of each ordinary share pursuant to Section 64 of the Companies Act, 1965 to reduce the accumulated losses of the Company. The required amendment to the Memorandum of Association to facilitate the par value reduction was completed on 19 September 2011 as per Note 46(c).

Resulting from the above, the authorised share capital of the Company was amended to RM750,000,000 divided into 3,000,000,000 ordinary shares of RM0.25 each while the issued and paid-up share capital was reduced to RM90,750,000 divided into 363,001,000 ordinary shares of RM0.25 each as at the end of the fi nancial year.

FABER GROUP BERHAD ANNUAL REPORT 2011 182

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

32 SHARE CAPITAL AND SHARE PREMIUM (CONTINUED)

(b) Share premium

As at the beginning of the year, the share premium of the Company was RM115,985,000. During the fi nancial year, there was reduction of the entire balance of RM115,985,000 in the Company’s share premium account pursuant to Section 64 of the Companies Act, 1965 to reduce the accumulated losses in the Company.

33 OTHER RESERVES FOREIGN CURRENCY STATUTORY TRANSLATION RESERVE RESERVE TOTAL RM’000 RM’000 RM’000

Group At 1 January 2011 279 (4,615) (4,336) Foreign currency translation – (9) (9)

At 31 December 2011 279 (4,624) (4,345)

At 1 January 2010 279 (1,054) (775) Foreign currency translation – (3,561) (3,561)

At 31 December 2010 279 (4,615) (4,336)

(a) Foreign currency translation reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of the fi nancial statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency. It is also used to record the exchange differences arising from monetary items which form part of the Group’s net investment in foreign operations, where the monetary item is denominated in either the functional currency of the reporting entity or the foreign operation.

(b) Statutory reserve

In accordance with the United Arab Emirates (“UAE”) Commercial Companies Law, 10% of profi t for each year from a Limited Liability Company incorporated in the UAE is transferred to a legal reserve until such time as the reserve equals 50% of the paid- up capital. FLLC has resolved to discontinue such annual transfers since the reserve is equal to 50% of its share capital. This reserve is not available for distribution except as stipulated by UAE law.

FABER GROUP BERHAD ANNUAL REPORT 2011 183

34 PREFERENCE SHARES GROUP NUMBER OF SHARES AMOUNT 2011 2010 2011 2010 ‘000 ‘000 RM’000 RM’000

Nominal value-issued and fully paid

RPS of RM1.00 each At 1 January/31 December (Note 26) 7,038 6,907 7,038 6,907

Redeemable Preference Shares (“RPS”)

A subsidiary, Rimbunan Melati Sdn. Bhd. had issued 16,659,091 Non-voting Non-cumulative Redeemable Preference shares of RM1.00 each to its shareholders. The above amount is attributable to the non-controlling shareholder of the subsidiary. The RPS have no voting rights and entitled to a fi xed non-cumulative preferential dividends at a rate of 5% per annum. The RPS have no fi xed term of redemption.

35 NON-CONTROLLING INTERESTS

In prior year, the non-controlling shareholders’ share of loss in the subsidiary companies was limited to their share of the paid up capital of the subsidiary companies. The balance of the loss was borne by the Group until such time that the subsidiary companies are able to generate profi ts. The non-controlling share of the loss in prior year which was borne by the Group was RM46,000.

With effect from 1 January 2011, total comprehensive income shall be attributed to the owners of the parent and to the non-controlling interests, even if this results in the non-controlling interests having a defi cit balance. The Group remeasured the non-controlling interests prospectively in accordance with the transitional provisions of the revised FRS 127.

FABER GROUP BERHAD ANNUAL REPORT 2011 184

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

36 NET CASH FLOW GENERATED FROM OPERATING ACTIVITIES

GROUP 2011 2010 RM’000 RM’000

Cash fl ows from operating activities

Profi t before tax 121,714 129,160 Adjustments for: Depreciation of property, plant and equipment 19,880 19,963 Amortisation of intangible assets 2,612 2,360 Amortisation of prepaid land lease payments 87 87 Property, plant and equipment written off 386 1,384 Increase in liability for defi ned benefi t plan (Note 8) 778 513 Bad debts recovered – (145) Provisions 16 12 Impairment on intangible assets 6,846 – Impairment on fi nancial assets: - Trade and other receivables 21,880 12,806 Reversal of impairment on fi nancial assets: - Trade and other receivables (18,894) (11,431) Write back of impairment of property development costs (19) – Interest income (8,388) (7,519) Reversal of provisions (560) (34) Write back of inventories (672) – Net unrealised foreign exchange loss (14) 1,465 Loss on disposal of plant and equipment 344 19 Interest expense on: - RSLS 5,952 6,222 - Loan from shareholder of a subsidiary 115 130 - Hire purchase 11 19 - Bank borrowings 320 245 Accretion of RPS 131 235 Surplus arising from capital distribution of available for sale fi nancial assets - unquoted investment in Malaysia – (286)

Operating profi t before working capital changes balance brought forward 152,525 155,205

FABER GROUP BERHAD ANNUAL REPORT 2011 185

36 NET CASH FLOW GENERATED FROM OPERATING ACTIVITIES (CONTINUED) GROUP 2011 2010 RM’000 RM’000

Operating profi t before working capital changes balance carried forward 152,525 155,205 Increase in property development costs (10,129) (32,004) Decrease in land held for property development 19,145 30,084 Increase in inventories (1,104) (1,112) Increase in receivables (74,173) (88,522) Increase in amount due from customer on contracts (17,287) (40,555) Decrease in retirement benefi t obligations (464) (93) Increase in payables 70,336 47,087

Cash generated from operations 138,849 70,090 Interest paid (6,490) (6,678) Taxes paid (43,236) (23,515)

Net cash fl ow generated from operating activities 89,123 39,897

COMPANY 2011 2010 RM’000 RM’000

Cash fl ows from operating activities

Profi t before tax 111,956 53,942 Adjustments for: Depreciation of property, plant and equipment 421 221 Amortisation of intangible assets 40 42 Net unrealised foreign exchange loss – 1,287 Impairment on fi nancial assets: - Trade and other receivables 14,987 – Interest income (2,366) (1,032) Amounts due from subsidiaries written off 3 4,602 Waiver of amounts due to subsidiaries – (6,640) (Gain)/loss on disposal of plant and equipment (2) 22 Dividend income received from subsidiaries (141,346) (71,177) Interest expense on RSLS 5,952 6,222

Operating loss before working capital changes (10,355) (12,511) Increase in receivables (811) (1,113) (Decrease)/increase in payables (4,354) 2,576

Cash used in operations (15,520) (11,048) Interest paid (6,044) (6,284) Taxes paid (3,708) (5,683)

Net cash fl ow used in operating activities (25,272) (23,015)

FABER GROUP BERHAD ANNUAL REPORT 2011 186

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

37 OPERATING LEASE COMMITMENTS

The Group has entered into non-cancellable operating lease agreements for the use of premises and certain plant and machineries. These leases have an average life of between 3 and 5 years with no renewal or purchase option included in the contracts.

The Group also leases various plant and machinery under cancellable operating lease agreements. The Group is required to give a six-month notice for the termination of those agreements. The future aggregate minimum lease payments under non-cancellable operating leases contracted for as at the reporting date but not recognised as liabilities and the total of future aggregate minimum sublease receipts expected to be received under non-cancellable subleases, are as follows:

GROUP COMPANY 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Future minimum rental payments of premises:

Not later than 1 year 2,731 1,926 620 548 Later than 1 year and not later than 2 years 427 412 – 43

3,158 2,338 620 591

Future minimum rental payments of equipment:

Not later than 1 year 528 720 59 59 Later than 1 year and not later than 2 years 143 244 59 59 Later than 2 years and not later than 5 years 108 194 59 83

779 1,158 177 201

38 CAPITAL COMMITMENTS

GROUP 2011 2010 RM’000 RM’000

Capital expenditure Approved and contracted for: Purchase of property, plant and equipment 4,578 14,562 Purchase of customer contract (Note (a)) – 1,739

4,578 16,301

Approved but not contracted for: Purchase of property, plant and equipment 550 627

FABER GROUP BERHAD ANNUAL REPORT 2011 187

38 CAPITAL COMMITMENTS (CONTINUED)

(a) Purchase of customer contracts

On 26 June 2007, a wholly owned subsidiary of the Company, Faber Facilities Sdn. Bhd. (“FFSB”) entered into a Joint Venture Agreement (“JVA”) with Apollo Sindoori Hotels Limited (“ASHL”) in relation to collaboration in inter-alia, bio-medical and facility engineering maintenance services, cleansing services, housekeeping services, janitorial services and hospital support services and management information services.

On 10 March 2008, FFSB had completed the subscription of shares in Faber Sindoori which became a 51% subsidiary of FFSB.

In the JVA, it has been agreed that ASHL shall transfer its existing business of housekeeping services to Faber Sindoori valued at Rs16,69,00,000 (approximately RM13,046,000).

As at reporting date, the business of housekeeping services has been fully transferred.

39 CONTINGENT LIABILITIES GROUP 2011 2010 RM’000 RM’000

Secured:

Performance bond extended to Government of Malaysia in respect of security for the due performance of the Hospital Support Services Concession Agreement dated 28 October 1996 (Note 26(a)) 13,754 20,861

Performance bond to General Authority for Health Services for the Emirate of Abu Dhabi 991 1,403

Performance bond to Western Region Municipality of Abu Dhabi for Facilities Management Services in Abu Dhabi 11,558 10,266

Bank guarantee issued to authorities 3,047 3,095

Total 29,350 35,625

(i) Arbitration between BNoble Sdn. Bhd. (“Claimant”) vs. Faber Medi-Serve Sdn. Bhd. (“FMS”) & Cermin Cahaya Sdn. Bhd. (“CCSB”) (“Respondents”) for a claim sum of RM7.32 million on a breach of Service Agreement dated 8 May 2003 for consultancy and advisory services.

The Claimant’s claim is for an outstanding incentive sum of RM2.44 million for each of the 3 contract years which total up to RM7.32 million wherein the claim is disputed by the Respondents on the fact that the profi t target was not achieved.

On 19 October 2011, the Arbitral Tribunal could still not be properly constituted as the terms of reference of appointment of the Tribunal have yet to settle in addition to the Claimant’s challenge on the appointment of Dato’ Hj. Shaik Daud Md. Ismail (“SDMI”) as one of the three independent Arbitrators, based on SDMI’s previous relationship as a Non-Executive Director of Projek Penyelenggaraan Lebuhraya Berhad (“Propel”). In furtherance, the Claimant and the Respondents are also required to agree to the terms of reference prior to the convening of the Tribunal.

FABER GROUP BERHAD ANNUAL REPORT 2011 188

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

39 CONTINGENT LIABILITIES (CONTINUED)

(i) Arbitration between BNoble Sdn. Bhd. (“Claimant”) vs. Faber Medi-Serve Sdn. Bhd. (“FMS”) & Cermin Cahaya Sdn. Bhd. (“CCSB”) (“Respondents”) for a claim sum of RM7.32 million on a breach of Service Agreement dated 8 May 2003 for consultancy and advisory services. (continued)

On 4 January 2012, the Tribunal dismissed the Claimant’s application for challenge on the appointment of SDMI as one of the three independent Arbitrators. On 31 January 2012, the Respondents fi led the Statement of Defence relating to the Respondents’ right to, inter alia, seek further and better particulars of the Statement of Claim and security for costs. On 14 February 2012, the Tribunal had allowed the Claimant’s application for an extension of time to 29 February 2012 for the Claimant to respond to the Respondents’ Application for Security for Costs and the Statement of Defence. The Solicitors also requested extension of time till 8 March 2012 for the respondent’s to respond to the claimant’s reply on the subject matter of Security for Cost which was also allowed by the Arbitral Tribunal.

On 20 March 2012 the Arbitral Tribunal awarded Security for Cost to be provided by the Claimant to the Respondent for RM100,000. The Claimants Application against the Respondent to provide for Bank Guarantee equivalent to RM7,320,000 was dismissed.

40 RELATED PARTY DISCLOSURES

(a) In addition to the transactions detailed elsewhere in the fi nancial statements, the Group and the Company had the following transactions with related parties during the fi nancial year:

GROUP COMPANY 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Management fee expense from affi liated companies - UEM Group Management Sdn. Bhd. 382 214 382 214 Property development related work - UEM Builders Berhad – 2,015 – – Interest paid/payable to non-controlling shareholder of a subsidiary 115 130 – – Management fees from subsidiaries – – (5,880) (5,700) Rendering of services - Affi liated companies 6,021 5,166 – – - non-controlling shareholder of a subsidiary 2,103 163 – – - Improvement, upgrading, development and maintenance of infrastructure facilities and projects 27,274 59,716 – – Rentals paid to a non-controlling shareholder 180 180 – – Management fees from a substantial shareholder (1,826) (1,879) – – Facilities management fees received from: - corporate shareholder of a subsidiary (24,790) (15,893) – – - affi liated companies (8,871) (7,873) – – Rental paid to a - substantial shareholder 1,929 1,991 631 619 - affi liated company – 48 – 48

FABER GROUP BERHAD ANNUAL REPORT 2011 189

40 RELATED PARTY DISCLOSURES (CONTINUED)

(i) The property development related contracts with affi liated companies were made according to the established terms and conditions offered by these related parties to their major customers, except that a longer credit period of up to six months is normally granted.

(ii) The interest expense arose from the loan from a non-controlling shareholder of a subsidiary company, Fresh Linen Services (Sabah) Sdn. Bhd.. Further details are disclosed in Note 26(b).

(iii) The rendering of services to subsidiaries and related companies were made according to the established terms and conditions offered to the major customers of the Group and the Company.

Information regarding outstanding balances arising from related party transactions as at 31 December 2011 are disclosed in Notes 20 and 30.

(b) Compensation of key management personnel

The remuneration of key management personnel during the year were as follows:

GROUP COMPANY 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Short-term employee benefi ts 4,593 4,377 1,698 1,384 Contributions to defi ned contribution plans 532 496 163 127

5,125 4,873 1,861 1,511

Included in total key management personnel are:

GROUP COMPANY 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Directors remuneration (Note 9) 3,453 3,417 1,463 1,213

FABER GROUP BERHAD ANNUAL REPORT 2011 190

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

41 FINANCIAL INSTRUMENTS

Classifi cation of fi nancial instruments

Financial assets and fi nancial liabilities are measured on an ongoing basis either at fair value or at amortised cost. The principal accounting policies in Note 2.2 describe how the classes of fi nancial instruments are measured, and how income and expenses, including fair value gains and losses, are recognised. The following table analyses the fi nancial assets and liabilities in the statements of fi nancial position by the class of fi nancial instrument to which they are assigned, and therefore by the measurement basis:

FAIR VALUE THROUGH LOANS AND PROFIT RECEIVABLES OR LOSS TOTAL RM’000 RM’000 RM’000

2011 Group

Assets Short term investment (Note 22) – 2,012 2,012 Trade receivables, net (Note 20) 424,045 – 424,045 Other receivables, net (Note 20) 16,050 – 16,050 Cash and cash equivalents (Note 23) 320,361 – 320,361

Total fi nancial assets 760,456 2,012 762,468

Total non fi nancial assets 340,814

Total assets 1,103,282

FINANCIAL LIABILITIES AT AMORTISED COST TOTAL RM’000 RM’000

Liabilities Trade and other payables (Note 30) 366,517 366,517 Income tax payable 8,811 8,811 Borrowings (Note 26) 155,998 155,998

Total fi nancial liabilities 531,326 531,326

Total non fi nancial liabilities 8,542

Total liabilities 539,868

FABER GROUP BERHAD ANNUAL REPORT 2011 191

41 FINANCIAL INSTRUMENTS (CONTINUED) LOANS AND RECEIVABLES TOTAL RM’000 RM’000

2010 Group

Assets Trade receivables, net (Note 20) 379,175 379,175 Other receivables, net (Note 20) 15,740 15,740 Cash and cash equivalents (Note 23) 284,876 284,876

Total fi nancial assets 679,791 679,791

Total non fi nancial assets 309,774

Total assets 989,565

FINANCIAL LIABILITIES AT AMORTISED COST TOTAL RM’000 RM’000

Liabilities Trade and other payables (Note 30) 293,452 293,452 Income tax payable 7,064 7,064 Borrowings (Note 26) 167,135 167,135

Total fi nancial liabilities 467,651 467,651

Total non fi nancial liabilities 5,994

Total liabilities 473,645

FABER GROUP BERHAD ANNUAL REPORT 2011 192

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

41 FINANCIAL INSTRUMENTS (CONTINUED)

LOANS AND RECEIVABLES TOTAL RM’000 RM’000

2011 Company

Assets Other receivables, net (Note 20) 39,035 39,035 Cash and cash equivalents (Note 23) 104,008 104,008

Total fi nancial assets 143,043 143,043

Total non fi nancial assets 150,010

Total assets 293,053

FINANCIAL LIABILITIES AT AMORTISED COST TOTAL RM’000 RM’000

Liabilities Trade and other payables (Note 30) 2,842 2,842 Income tax payable 1,788 1,788 Borrowings (Note 26) 145,053 145,053

Total fi nancial liabilities 149,683 149,683

Total non fi nancial liabilities –

Total liabilities 149,683

FABER GROUP BERHAD ANNUAL REPORT 2011 193

41 FINANCIAL INSTRUMENTS (CONTINUED)

LOANS AND RECEIVABLES TOTAL RM’000 RM’000

2010 Company

Assets Other receivables, net (Note 20) 24,827 24,827 Cash and cash equivalents (Note 23) 45,632 45,632

Total fi nancial assets 70,459 70,459

Total non fi nancial assets 149,572

Total assets 220,031

FINANCIAL LIABILITIES AT AMORTISED COST TOTAL RM’000 RM’000

Liabilities Trade and other payables (Note 30) 7,196 7,196 Income tax payable 1,779 1,779 Borrowings (Note 26) 154,145 154,145

Total fi nancial liabilities 163,120 163,120

Total non fi nancial liabilities –

Total liabilities 163,120

FABER GROUP BERHAD ANNUAL REPORT 2011 194

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

42 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group and the Company are exposed to fi nancial risks arising from their operations and the use of fi nancial instruments. The key fi nancial risks include credit risk, liquidity risk, interest rate risk, foreign currency risk and market price risk.

The Group’s fi nancial risk management policy seeks to ensure that adequate fi nancial resources are available for the development of the Group’s businesses whilst managing its interest rate risks (both fair value and cash fl ow), foreign currency risk, liquidity risk and credit risk. The Board of Directors reviews and agrees policies and procedures for the management of these risks. The audit committee provides independent oversight to the effectiveness of the risk management process.

It is, and has been throughout the current and previous fi nancial year, the Group’s policy that no derivatives shall be undertaken except for the use as hedging instruments where appropriate and cost-effi cient. The Group and the Company has no hedging instrument as at reporting date.

The following sections provide details regarding the Group’s and Company’s exposure to the above-mentioned fi nancial risks and the objectives, policies and processes for the management of these risks.

(a) Credit risk

Credit risk is the risk of loss that may arise on outstanding fi nancial instruments should a counterparty default on its obligations. The Group’s and the Company’s exposure to credit risk arises primarily from trade and other receivables. For other fi nancial assets (including cash and bank balances and non-current investments), the Group and the Company minimise credit risk by dealing exclusively with high credit rating counterparties.

The Group controls its credit risk by the application of credit approvals, limits and monitoring procedures. Credit evaluations are performed on all customers requiring credit over a certain amount and strictly limiting the Group’s associations to business partners with high credit worthiness. Trade receivables are monitored on an ongoing basis.

The Group’s receivables are monitored on an ongoing basis and the status of major receivables are reported to the Board of Directors.

Exposure to credit risk

At the reporting date, the Group’s and the Company’s maximum exposure to credit risk is represented by the carrying amount of each class of fi nancial assets recognised in the statements of fi nancial position.

FABER GROUP BERHAD ANNUAL REPORT 2011 195

42 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

(a) Credit risk (continued)

Credit risk concentration profi le

The Group determines concentrations of credit risk by monitoring the country sector profi le of its trade receivables on an ongoing basis. The credit risk concentration profi le of the Group’s trade receivables at the reporting date are as follows:

2011 2010 RM’000 % OF TOTAL RM’000 % OF TOTAL

By country:

Malaysia 270,397 64 272,645 65 United Arab Emirates 145,954 34 139,962 33 India 7,694 2 7,123 2

424,045 100 419,730 100

As at 31 December 2011, the concentration of credit risk in the form of outstanding balances is mainly due to two (2010: two) customers representing approximately 88% (2010: 64%) of the total Group’s trade receivables.

Financial assets that are neither past due nor impaired

Information regarding trade and other receivables that are neither past due nor impaired is disclosed in Note 20. Deposits with banks and other fi nancial institutions that are neither past due nor impaired are placed with or entered into with reputable fi nancial institutions or companies with high credit ratings and no history of default.

Financial assets that are either past due or impaired

Information regarding fi nancial assets that are either past due or impaired is disclosed in Note 20.

(b) Liquidity risk

Liquidity risk is the risk that the Group or the Company will encounter diffi culty in meeting fi nancial obligations due to shortage of funds. The Group’s and the Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of fi nancial assets and liabilities. The Group’s and the Company’s objective is to maintain a balance between continuity of funding and fl exibility through the use of stand-by credit facilities.

The Group manages its debt maturity profi le, operating cash fl ows and the availability of funding so as to ensure that refi nancing, repayment and funding needs are met. As part of its overall liquidity management, the Group maintains suffi cient 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. As far as possible, the Group raises committed funding from both capital markets and fi nancial institutions and balances its portfolio with some short term funding so as to achieve overall cost effectiveness.

FABER GROUP BERHAD ANNUAL REPORT 2011 196

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

42 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

(b) Liquidity risk (continued)

Analysis of fi nancial instruments by remaining contractual maturities

The table below summarises the maturity profi le of the Group’s and the Company’s liabilities at the reporting date based on contractual undiscounted repayment obligations.

ON DEMAND OR WITHIN ONE TO ONE YEAR FIVE YEARS TOTAL RM’000 RM’000 RM’000

2011 Group

Financial liabilities: Trade and other payables 333,507 33,010 366,517 Loans and borrowings: - RSLS 149,324 – 149,324 - RPS (Note 34) – 7,038 7,038 - Hire purchase (Note 27) 74 53 127 - Revolving credit: -foreign (Note 26(c)) 2,801 – 2,801 - Loan from a corporate shareholder of a subsidiary (Note 26(b)) 986 – 986

Total undiscounted fi nancial liabilities 486,692 40,101 526,793

2010 Group

Financial liabilities: Trade and other payables 293,452 – 293,452 Loans and borrowings: - RSLS – 165,032 165,032 - RPS (Note 34) – 6,907 6,907 - Hire purchase (Note 27) 100 127 227 - Revolving credit: -in Malaysia (Note 26(a)) 2,000 – 2,000 -foreign (Note 26(c)) 2,087 – 2,087 - Loan from a corporate shareholder of a subsidiary (Note 26(b)) 1,786 – 1,786

Total undiscounted fi nancial liabilities 299,425 172,066 471,491

FABER GROUP BERHAD ANNUAL REPORT 2011 197

42 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

(b) Liquidity risk (continued)

Analysis of fi nancial instruments by remaining contractual maturities (continued)

ON DEMAND OR WITHIN ONE TO ONE YEAR FIVE YEARS TOTAL RM’000 RM’000 RM’000

2011 Company

Financial liabilities: Trade and other payables 2,842 – 2,842 Loans and borrowings: - RSLS 149,324 – 149,324

Total undiscounted fi nancial liabilities 152,166 – 152,166

2010 Company

Financial liabilities: Trade and other payables 7,196 – 7,196 Loans and borrowings: - RSLS – 165,032 165,032

Total undiscounted fi nancial liabilities 7,196 165,032 172,228

(c) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash fl ows of a fi nancial instrument will fl uctuate because of changes in foreign exchange rates.

The Group has transactional currency exposures arising from sales or purchases that are denominated in a currency other than the respective functional currencies of Group entities. The foreign currencies in which these transactions are denominated are mainly Arab Emirates Dirham (“AED Dirham”) and Indian Rupees.

The Group’s sales and costs are denominated in the respective functional currencies of the Group entities. The Group’s trade receivable and trade payable balances at the reporting date have similar exposures.

The Group also hold cash and cash equivalents denominated in foreign currencies for working capital purposes. At the reporting date, such foreign currency balances in AED Dirham and India Rupees amount to RM16,939,000 (2010: RM15,570,000) and RM2,520,000 (2010: RM1,881,000) respectively.

The Group maintains a natural hedge, whenever possible, by borrowing in the currency of the country in which the investments are located or by borrowing in currencies that match the future revenue stream to be generated from its investments.

FABER GROUP BERHAD ANNUAL REPORT 2011 198

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

42 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

(c) Foreign currency risk (continued)

The net unhedged fi nancial assets and fi nancial liabilities of the Group companies that are not denominated in their functional currencies are as follows:

Functional Currency of Group Companies

INDIA AED RUPEES DIRHAM RM’000 RM’000

At 31 December 2011

Ringgit Malaysia Receivables 10,404 205,799 Payables 8,120 179,223

At 31 December 2010

Ringgit Malaysia Receivables 8,906 143,264 Payables 9,219 98,281

Sensitivity analysis for foreign currency risk

The following table demonstrates the sensitivity of the Group’s profi t net of tax to a reasonably possible change in the AED Dirham and India Rupees exchange rates against the respective functional currencies of the Group entities, with all other variables held constant.

GROUP 2011 RM’000 PROFIT NET OF TAX

AED Dirham/RM - strengthened 3% (397) - weakened 3% 397 India Rupees/RM - strengthened 15% (414) - weakened 15% 414

(d) Interest rate risk

Interest rate risk is the risk that the fair value or future cash fl ows of the Group’s and the Company’s fi nancial instruments will fl uctuate because of changes in market interest rates.

As the Group has no signifi cant interest-bearing fi nancial assets, the Group’s income and operating cash fl ows are substantially independent of changes in market interest rates. The Group’s interest-bearing fi nancial assets are mainly short term in nature and have been mostly placed in fi xed deposits or occasionally, in short term commercial papers.

FABER GROUP BERHAD ANNUAL REPORT 2011 199

42 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

(d) Interest rate risk (continued)

The Group’s interest rate risk arises primarily from interest-bearing borrowings. Borrowings at fl oating rates expose the Group to cash fl ow interest rate risk. Borrowings obtained at fi xed rates expose the Group to fair value interest rate risk.

The Group’s policy is to manage interest cost using a mix of fi xed and fl oating rate debts.

Sensitivity analysis for interest rate risk

No sensitivity analysis being prepared as the loans and borrowings of the Group and Company are accounted at amortised cost. Therefore, a change in interest rates at the end of the reporting period would not affect profi t or loss or on equity.

The following tables set out the carrying amounts, the weighted average effective interest rates (“WAEIR”) as at the reporting date and the remaining maturities of the Group’s and the Company’s fi nancial instruments that are exposed to interest rate risk:

NOTE WAEIR WITHIN 1 1-2 2-5 % YEAR YEARS YEARS TOTAL RM’000 RM’000 RM’000 RM’000

At 31 December 2011

Group

Fixed rate RSLS 28 4.00 (145,053) – – (145,053) RPS 34 5.00 – – (7,038) (7,038) Hire purchase liabilities 27 6.98 (69) (51) – (120)

Floating rate Deposits with licensed banks and other fi nancial institutions 23 3.35 206,904 – – 206,904 Revolving credit: - in Malaysia 26(a) – – – – – - foreign 26(c) 12.00 (2,801) – – (2,801) Loan from a corporate shareholder of a subsidiary 26(b) 8.05 – (986) – (986)

Company

Fixed rate RSLS 28 4.00 (145,053) – – (145,053)

Floating rate Deposits with licensed banks and other fi nancial institutions 23 3.35 103,277 – – 103,277

FABER GROUP BERHAD ANNUAL REPORT 2011 200

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

42 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

(d) Interest rate risk (continued)

NOTE WAEIR WITHIN 1 1-2 2-5 % YEAR YEARS YEARS TOTAL RM’000 RM’000 RM’000 RM’000

At 31 December 2010

Group

Fixed rate RSLS 28 4.00 – (154,145) – (154,145) RPS 34 5.00 – – (6,907) (6,907) Hire purchase liabilities 27 6.98 (90) (69) (51) (210)

Floating rate Deposits with licensed banks and other fi nancial institutions 23 2.20 191,061 – – 191,061 Revolving credit: - Malaysia 26(a) 4.62 (2,000) – – (2,000) - foreign 26(c) 10.50 (2,087) – – (2,087) Loan from a corporate shareholder of a subsidiary 26(b) 7.30 – (1,786) – (1,786)

Company

Fixed rate RSLS 28 4.00 – (154,145) – (154,145)

Floating rate Deposits with licensed banks and other fi nancial institutions 23 2.20 45,227 – – 45,227

Interest on fi nancial instruments subject to fl oating interest rates is contractually repriced at intervals of less than 6 months except for term loans and fl oating rate loans which are repriced annually. Interest on fi nancial instruments at fi xed rates are fi xed until the maturity of the instrument. The other fi nancial instruments of the Group and the Company that are not included in the above tables are not subject to interest rate risks.

FABER GROUP BERHAD ANNUAL REPORT 2011 201

42 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

(e) Fair value

The carrying amounts of fi nancial assets and fi nancial liabilities at the reporting date approximate fair values due to their short- term nature.

Determination of fair value

As stipulated in Amendments to FRS 7: Improving Disclosure about Financial Instruments, the Company are required to classify fair value measurement using a fair value hierarchy. The fair value hierarchy would have the following levels:

Level 1 - the fair value is measured using quoted prices (unadjusted) in active markets for identical assets or liabilities

Level 2 - the fair value is measured using inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (ie as prices) or indirectly (ie derived from prices)

Level 3 - the fair value is measured using inputs for the asset or liability that are not based on observable market data (unobservable inputs)

The following table presents the Company’s other fi nancial assets and fi nancial liabilities that are measured at fair value as 31 December 2011: LEVEL 2 RM’000

Financial assets at fair value through profi t or loss: Short term investment 2,012

(f) Market price risk

Market price risk is the risk that the fair value or future cash fl ows of the Group’s fi nancial instruments will fl uctuate because of changes in market prices (other than interest or exchange rates).

The Group is not exposed to equity price risk arising from its investment in quoted equity instruments.

43 CAPITAL MANAGEMENT

The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the years ended 31 December 2011 and 31 December 2010.

FABER GROUP BERHAD ANNUAL REPORT 2011 202

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

44 SEGMENT INFORMATION

(a) Business unit segments

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

(i) The property segment is in the business of developing residential and commercial properties.

(ii) The integrated facilities management (Concession) segment is in respect of the Concession Agreement for provision of hospital support services with the Ministry of Health of Malaysia.

(iii) The integrated facilities management (Non-Concession) segment is a provision of hospital support services with other than Ministry of Health of Malaysia, provision of facilities management and provision of infrastructure facility services.

(iv) The other segment is involved in Group-level corporate services and investment holdings.

Except as indicated above, no operating segments have been aggregated to form the above reportable operating segments.

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

Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third parties.

(b) Geographical segments

The Group’s geographical segments are based on the location of the Group’s assets. Sales to external customers disclosed in geographical segments are based on the geographical location of its customers. The Group’s two business segments operate in three geographical areas:

(i) Malaysia - the operations in this area are principally integrated facilities management, property development and investment holding.

(ii) India - the operations in this area are principally integrated facilities management which is through Faber Star Facilities Management Limited and Faber Sindoori Management Services Private Limited.

(iii) United Arab Emirates - the operation in this area are integrated facilities management which is through Faber LLC.

FABER GROUP BERHAD ANNUAL REPORT 2011 203

44 SEGMENT INFORMATION (CONTINUED)

INTEGRATED FACILITIES MANAGEMENT AT 31 DECEMBER 2011 NOTES PROPERTIES CONCESSION NON-CONCESSION OTHERS ELIMINATION GROUP RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Revenue External sales 157,191 562,661 160,218 – – 880,070 Inter-segment sales A – – – 186,088 (186,088) –

Total revenue 157,191 562,661 160,218 186,088 (186,088) 880,070

Results Segment results 48,626 105,193 (20,757) 156,783 (161,733) 128,112 Finance costs – (175) (784) (5,952) 513 (6,398)

Profi t/(loss) before taxation 48,626 105,018 (21,541) 150,831 (161,220) 121,714 Income tax expense (11,872) (33,993) (1,942) (7,712) 7,020 (48,499)

Profi t/(loss) net of tax 36,754 71,025 (23,483) 143,119 (154,200) 73,215

Assets Segment assets B 282,639 435,620 251,370 339,055 (205,402) 1,103,282

Liabilities Segment liabilities B 72,390 152,625 219,857 167,564 (72,568) 539,868

Other segment information Capital expenditure C 58 24,333 297 899 – 25,587 Depreciation (Note 7) 138 18,877 445 420 – 19,880 Amortisation D 3 1,574 1,082 40 – 2,699 Non cash expenses other than depreciation, amortisation, impairment losses and interest E 546 (10,746) 17,391 14,987 (19,146) 3,032

FABER GROUP BERHAD ANNUAL REPORT 2011 204

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

44 SEGMENT INFORMATION (CONTINUED)

INTEGRATED FACILITIES MANAGEMENT AT 31 DECEMBER 2010 NOTES PROPERTIES CONCESSION NON-CONCESSION OTHERS ELIMINATION GROUP RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Revenue External sales 69,071 543,243 276,532 – – 888,846 Inter-segment sales A – – – 109,313 (109,313) –

Total revenue 69,071 543,243 276,532 109,313 (109,313) 888,846

Results Segment results 15,419 80,798 56,296 91,305 (108,042) 135,776 Finance costs – (179) (693) (6,223) 479 (6,616)

Profi t/(loss) before taxation 15,419 80,619 55,603 85,082 (107,563) 129,160 Income tax expense (4,682) (19,650) (1,393) (16,727) 16,624 (25,828)

Profi t/(loss) net of tax 10,737 60,969 54,210 68,355 (90,939) 103,332

Assets Segment assets B 321,413 405,011 191,598 252,579 (181,036) 989,565

Liabilities Segment liabilities B 70,654 133,551 132,855 165,798 (29,213) 473,645

Other segment information Capital expenditure C 108 14,795 1,414 1,097 – 17,414 Depreciation (Note 7) 175 19,164 404 220 – 19,963 Amortisation D 2 1,389 1,013 43 – 2,447 Non cash expenses other than depreciation, amortisation, impairment losses and interest E 69 4,119 (525) 1,001 – 4,664

FABER GROUP BERHAD ANNUAL REPORT 2011 205

44 SEGMENT INFORMATION (CONTINUED)

Notes Nature of adjustments and eliminations to arrive at amounts reported in the consolidated fi nancial statements

A Inter-segment revenues are eliminated on consolidation.

B The following items are deducted from segment assets to arrive at total assets reported in the consolidated statement of fi nancial position:

2011 2010 RM’000 RM’000

Inter-segment assets (205,402) (181,036)

The following items are deducted from segment liabilities to arrive at total liabilities reported in the consolidated statement of fi nancial position:

2011 2010 RM’000 RM’000

Inter-segment liabilities (72,568) (29,213)

C Capital expenditure consist of:

2011 2010 RM’000 RM’000

Property, plant and equipment 25,528 17,338 Intangible assets - software 59 76

25,587 17,414

D Amortisation consist of:

2011 2010 NOTE RM’000 RM’000

Prepaid land lease payment 7 87 87 Intangible assets 7 2,612 2,360

2,699 2,447

FABER GROUP BERHAD ANNUAL REPORT 2011 206

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

44 SEGMENT INFORMATION (CONTINUED)

Notes Nature of adjustments and eliminations to arrive at amounts reported in the consolidated fi nancial statements

E Other material non-cash expenses consist of the following items as presented in the respective notes to the fi nancial statements:

2011 2010 NOTE RM’000 RM’000

Net unrealised foreign exchange (gain)/loss 7 (14) 1,465 Write back of impairment of property development costs 7 (19) – Accretion of RPS 7 131 235 Provisions 7 16 12 Reversal of provision for sinking fund 7 – (34) Reversal of provision for late delivery charges 7 (560) – Property, plant and equipment written off 7 386 1,384 Impairment on fi nancial assets: - Trade and other receivables 7 - Non-current 14,835 – - Current 7,045 12,806 Reversal of impairment on fi nancial assets: - Trade and other receivables 7 (18,894) (11,431) Surplus arising from capital distribution of fi nancial assets - unquoted investment in Malaysia 7 – (286) Write back of inventories 7 (672) – Increase in liability of defi ned benefi t plan 8 778 513

3,032 4,664

Geographical information

Revenue and non-current assets information based on the geographical location of customers and assets respectively are as follows:

REVENUES NON-CURRENT ASSETS 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Malaysia 742,879 635,980 129,322 138,762 United Arab Emirates 103,118 223,985 138,717 1,044 India 34,073 28,881 1,410 9,063

Consolidated 880,070 888,846 269,449 148,869

FABER GROUP BERHAD ANNUAL REPORT 2011 207

44 SEGMENT INFORMATION (CONTINUED)

Geographical information (continued)

Non-current assets information presented above consist of the followings items as presented in the consolidated statement of fi nancial position:

2011 2010 RM’000 RM’000

Property, plant and equipment 93,117 88,434 Land held for property development 1,102 20,247 Prepaid land lease payments 3,586 3,673 Intangible assets 27,546 36,515 Trade and other receivables 144,098 –

269,449 148,869

Information about major customers

Revenue from two major customers amounted to RM562,661,000 (2010: RM543,243,000) and RM86,142,000 (2010: RM206,943,000), arising from sales by the integrated facilities management - concession segment and non concession segment respectively.

45 SUBSIDIARIES

Details of subsidiaries are as follows:

PROPORTION OF OWNERSHIP ISSUED INTEREST COUNTRY OF AND PAID-UP AND VOTING POWER PRINCIPAL NAME OF SUBSIDIARIES INCORPORATION SHARE CAPITAL 2011 2010 ACTIVITIES RM % %

Held by the Company:

Faber Hotels Holdings Sdn. Bhd. Malaysia 95,279,551 100 100 Investment holding

Faber Development Holdings Sdn. Bhd. Malaysia 28,260,006 100 100 Investment holding

Faber Facilities Sdn. Bhd. Malaysia 200,000 100 100 Facilities management and investment holding

Faber Healthcare Management Sdn. Bhd. Malaysia 2 100 100 Investment holding

TC Parking Sdn. Bhd. Malaysia 20,002 100 100 Investment holding

Renown Alliance Sdn. Bhd. Malaysia 2 100 100 Investment holding

FABER GROUP BERHAD ANNUAL REPORT 2011 208

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

45 SUBSIDIARIES (CONTINUED) PROPORTION OF OWNERSHIP ISSUED INTEREST COUNTRY OF AND PAID-UP AND VOTING POWER PRINCIPAL NAME OF SUBSIDIARIES INCORPORATION SHARE CAPITAL 2011 2010 ACTIVITIES RM % %

Held by the Company (continued):

Faber Haulage Sdn. Bhd. Malaysia 610,002 100 100 In members’ liquidation

Merlion Credit Corporation Bhd. Malaysia 6,000,000 100 100 Dormant

Faber Medi-Serve Sdn. Bhd. Malaysia 54,000,010 43 43 Provision of hospital support services

Faber LLC * Emirates 600,000 75 75 Facilities management of Dubai Dirhams services in United Arab Emirates

Merlino Enterprises Sdn. Bhd. Malaysia 450,000 100 100 In members’ liquidation

Sate Yaki Sdn. Bhd. Malaysia 5,000,000 60 60 In members’ liquidation

Intensive Quest Sdn. Bhd. Malaysia 500,000 63 63 In members’ liquidation

Held by Faber Healthcare Management Sdn. Bhd.:

Sehat Technologies Sdn. Bhd. Malaysia 500,000 51 51 Dormant

Faber Medi-Serve Sdn. Bhd. Malaysia 54,000,010 57 57 Provision of hospital support services

Held by Faber Medi-Serve Sdn. Bhd.:

Cermin Cahaya Sdn. Bhd. Malaysia 2 100 100 Dormant

Healthtronics (M) Sdn. Bhd. Malaysia 3,000,000 60 60 Provision of biomedical and electronic engineering maintenance services

FABER GROUP BERHAD ANNUAL REPORT 2011 209

45 SUBSIDIARIES (CONTINUED) PROPORTION OF OWNERSHIP ISSUED INTEREST COUNTRY OF AND PAID-UP AND VOTING POWER PRINCIPAL NAME OF SUBSIDIARIES INCORPORATION SHARE CAPITAL 2011 2010 ACTIVITIES RM % %

Held by Faber Medi-Serve Sdn. Bhd. (continued):

Fresh Linen Services (Sarawak) Sdn. Bhd. Malaysia 700,000 55 55 Provision of laundry processing activities

Fresh Linen Services (Sabah) Sdn. Bhd. Malaysia 3,000,000 60 60 Provision of laundry processing activities

Held by Healthtronics (M) Sdn. Bhd.:

Healthtronics Inc * Philippines Peso 130,000 100 100 Dormant

Held by Faber Development Holdings Sdn. Bhd.:

Faber Union Sdn. Bhd. Malaysia 97,000,000 100 100 Property development

Rimbunan Melati Sdn. Bhd. Malaysia 5,000,000 55 55 Property development

Faber Grandview Development (Sabah) Sdn. Bhd. Malaysia 4,500,000 100 100 Property development

Faber Heights Management Sdn. Bhd. Malaysia 2 100 100 Property development

Country View Development Sdn. Bhd. Malaysia 11,200,000 100 100 Property development

Mont Hill Sdn. Bhd. Malaysia 2 100 100 In members’ liquidation

Mutiara Unik (M) Sdn. Bhd. Malaysia 2 100 100 In members’ liquidation

Held by Mutiara Unik (M) Sdn. Bhd.:

Jiwa Unik Sdn. Bhd. Malaysia 100,000 51 51 Dormant

FABER GROUP BERHAD ANNUAL REPORT 2011 210

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

45 SUBSIDIARIES (CONTINUED) PROPORTION OF OWNERSHIP ISSUED INTEREST COUNTRY OF AND PAID-UP AND VOTING POWER PRINCIPAL NAME OF SUBSIDIARIES INCORPORATION SHARE CAPITAL 2011 2010 ACTIVITIES RM % %

Held by Faber Facilities Sdn. Bhd.:

Faber Facilities Management Sdn. Bhd. Malaysia 1,000,000 100 100 Facilities maintenance

Faber Star Facilities Management Limited ** India Rs2,16,62,940 100 51 Facilities management in India

Faber Sindoori Management Services India Rs7,57,470 51 51 Facilities management Private Limited ** in India

General Field Sdn. Bhd. Malaysia 100,000 100 100 Provision of energy performance management services

Held by Faber Hotels Holdings Sdn. Bhd.:

Merlin Tower Hotel Sdn. Bhd. Malaysia 8,000,003 100 100 In members’ liquidation

Held by Renown Alliance Sdn. Bhd.:

Belaire Investments (Proprietary) Ltd * South Africa Rand100 100 100 Dormant

* Audited by member fi rms of Ernst & Young Global in the respective countries ** Audited by fi rms other than Ernst & Young

FABER GROUP BERHAD ANNUAL REPORT 2011 211

46 SIGNIFICANT EVENTS

(a) On 4 November 2010, Faber Facilities Sdn. Bhd. (“FFSB”), a wholly owned subsidiary of the Company had entered into a conditional Share Purchase Agreement (“SPA”) with Singa Real Estates Ltd (“SREL”) and Faber Star Facilities Management Ltd (“FSFML”).

In accordance with the terms and conditions of the SPA, SREL has agreed with FFSB to sell the following 4,90,000 (Four Hundred and Ninety Thousand) equity shares of Rs.10/- (Rupees Ten) each, representing 49% of the total issued, subscribed and paid-up equity share capital of FSFML (“SREL Shares”) which are held by SREL and its nominees to FFSB or to any person nominated by FFSB for a purchase price of Rs.1,00,00,000/- (Rupees One Crore) (equivalent to approximately RM699,000/-):-

NAME OF SHAREHOLDER NUMBER OF PERCENTAGE OF SHARES HELD SHAREHOLDING

SREL 4,89,995 48.9995 Mr. Rajat Biswas 1 0.0001 Mr. Pratap Singh 1 0.0001 Mr. Naresh Gupta 1 0.0001 Mr. Mohd Nasir 1 0.0001 Ms. Reetu Goel 1 0.0001

4,90,000 49

FFSB and/or its nominees shall credit the designated bank account of SREL with the consideration for the purchase of the SREL Shares. FFSB and SREL shall assist and cooperate with each other to complete all corporate and regulatory formalities to fully effect the transfer of the SREL Shares.

All the terms and conditions of the Share Purchase Agreement dated 4 November 2010 have been complied with on 20 April 2011. Pursuant to the completion, FFSB and/or its nominees have increased their shareholdings in FSFML from 51% to 100% and accordingly, FSFML has become a direct wholly-owned subsidiary of FFSB. In turn, FSFML is an indirect wholly-owned subsidiary of FGB.

(b) On 20 June 2011, FFSB, a wholly-owned subsidiary of FGB had acquired the entire issued and paid-up share capital of General Field Sdn. Bhd. (“GFSB”) for a total cash consideration of RM2.00.

GFSB is a private limited company incorporated in Malaysia under the Companies Act, 1965 on 12 May 2011, with an authorised share capital of RM100,000.00 comprising 100,000 ordinary shares of RM1.00 each, of which 2 ordinary shares of RM1.00 each have been issued and fully paid-up.

(c) On 17 March 2011, FGB proposed to implement the following:-

(i) Proposed capital reduction by way of cancellation of RM0.75 from the existing par value of RM1.00 of each ordinary share in FGB pursuant to Section 64 of the Companies Act, 1965 to reduce the accumulated losses of FGB (“Proposed Par Value Reduction”). Based on the total issued and paid-up share capital of the Company as at 31 December 2010 of RM363.0 million, the credit arising from the reduction of the par value of FGB shares is about RM272.3 million, which will be utilised to set-off an equivalent amount of the accumulated losses of FGB;

FABER GROUP BERHAD ANNUAL REPORT 2011 212

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

46 SIGNIFICANT EVENTS (CONTINUED)

(c) (ii) Proposed share premium reduction by way of reduction of the entire balance of about RM116.0 million in the Company’s share premium account pursuant to Section 64 of the Companies Act, 1965 to reduce the accumulated losses of FGB (“Proposed Share Premium Reduction”). The credit arising from the said reduction in share premium of the same amount will be used to set-off the accumulated losses of FGB; and

(iii) Proposed amendment to the Memorandum of Association of FGB to facilitate the Proposed Par Value Reduction (“Proposed Amendment”) as follows:-

MEMORANDUM OF ASSOCIATION - CLAUSE 5 EXISTING PROPOSED

The authorised share capital of the Company The authorised share capital of the Company is is RM3,000,000,000 divided into 3,000,000,000 RM750,000,000 divided into 3,000,000,000 ordinary ordinary shares of RM1.00 each. shares of RM0.25 each.

(Hereinafter collectively referred to as “Proposals”)

The Proposed Par Value Reduction and the Proposed Share Premium Reduction will reduce the accumulated losses of FGB thus allowing the Board of FGB to attain greater fl exibility in determining FGB’s future dividend payout, as cash dividends may only be paid out of the current year profi ts and/or retained earnings of the Company.

The Proposed Amendment is necessary to facilitate the Proposed Par Value Reduction. The certifi ed true copy of the sealed order of the High Court of Malaya at Kuala Lumpur confi rming the Par Value Reduction and Share Premium Reduction had been lodged with the Registrar of Companies of Malaysia on 19 September 2011. Accordingly, the Par Value Reduction and Share Premium Reduction had taken effect on the same day and the Proposals have therefore been completed.

(d) On 13 October 2009, Fraser’s Hill Merlin Hotel Sdn. Bhd. (“FHMH”), a 51%-owned subsidiary of Faber Hotels Holdings Sdn. Bhd., which in turn is a wholly-owned subsidiary of FGB had been placed under MVL pursuant to Section 254(1)(b) of the Companies Act, 1965. FHMH had, on 26 May 2011, held its Final Meeting to conclude the MVL. The Liquidators had subsequently lodged a Return relating to the Final Meeting and the Liquidators’ Account of Receipts and Payment with the Companies Commission of Malaysia and the Offi cial Receiver respectively on 2 June 2011.

(e) On 19 September 2008, 3 of the Company’s wholly-owned subsidiaries which are dormant and, held directly or indirectly by FGB have been placed under MVL pursuant to Section 254(1)(b) of the Companies Act, 1965 as follows:-

(i) Firstgain Holdings Sdn. Bhd.;

(ii) Hasil Lintang Sdn. Bhd.; and

(iii) Faber Facilities Solutions Sdn. Bhd..

The above companies had on 1 March 2011 held their Final Meeting to conclude the members’ voluntary winding-up. The Liquidator has subsequently lodged a Return relating to Final Meeting and the Liquidators’ Account of Receipts and Payment with the Companies Commission of Malaysia and the Offi cial Receiver on 2 March 2011.

FABER GROUP BERHAD ANNUAL REPORT 2011 213

47 SUBSEQUENT EVENTS

(a) As per the terms of the Concession Agreement (“CA”), Faber Medi-Serve Sdn. Bhd. (“FMS”) had on 26 October 2009 submitted a Letter of Intent to the Ministry of Health (“MOH”) to extend the CA which will be expiring on 28 October 2011. In the interim, FMS had attended a series of Service Level Improvement Workshops conducted by the MOH between February 2010 and March 2010 formulating new proposed scopes, standards and performance monitoring for the new Hospital Support Services (“HSS”) concession. In 2010, FMS continued its commitment in the HSS concession by continuing to invest substantial amounts of capital expenditure and human development so as to improve its service delivery. Subsequently, on 30 June 2010, FMS had submitted the fi nancial proposal to the MOH in relation to the CA extension. FMS received a letter acknowledging receipt of FMS letter dated 26 October 2009 from Unit Kerjasama Awam Swasta (“UKAS”) on 26 October 2010.

On 19 September 2011, FMS received request from UKAS for the submission of Request for Proposal (“RFP”) and FMS had submitted the RFP to UKAS on 3 October 2011, accordingly. Subsequently, on 27 October 2011, UKAS issued a letter to FMS for an extension of the Concession Agreement for a six-month period effective from 28 October 2011, subject to the prevailing terms and conditions of the Concession Agreement. Through a letter dated 13 February 2012, FMS was requested by UKAS to submit the HSS Addendum No 1 to the RFP, detailing and clarifying on the technical and commercial proposals submitted earlier. FMS had complied to the request and submitted the HSS Addendum No 1 on 23 February 2012.

The Company and FMS has taken all necessary steps and actions to ensure the success of the CA extension. The decision on the CA extension is still pending from the MOH as at the date of the fi nancial statements.

(b) On 19 September 2008, 3 of the Company’s wholly-owned subsidiaries which are dormant and, held directly or indirectly by FGB have been placed under MVL pursuant to Section 254(1)(b) of the Companies Act, 1965 as follows:-

(i) Faber Haulage Sdn. Bhd.;

(ii) Merlin Tower Hotel Sdn. Bhd.; and

(iii) Mont Hill Sdn. Bhd..

Mr. Heng Ji Keng and Mr. Michael Joseph Monteiro of Messrs Ferrier Hodgson MH Sdn. Bhd. of 22-M, Monteiro & Heng Chambers, Jalan Tun Sambanthan 3, 50470 Kuala Lumpur have been appointed as Liquidators. The MVL is undertaken to rationalise and streamline the structure of the Group.

Mont Hill Sdn. Bhd. had, on 20 January 2012, held its Final Meeting to conclude the MVL. The Liquidators had subsequently lodged a Return relating to the Final Meeting and the Liquidators’ Account of Receipts and Payment with the Companies Commission of Malaysia and the Offi cial Receiver respectively on 27 January 2012.

Faber Haulage Sdn. Bhd. and Merlin Tower Hotel Sdn. Bhd. are currently still awaiting tax clearance from the IRB and their MVL have yet to be completed.

FABER GROUP BERHAD ANNUAL REPORT 2011 214

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

47 SUBSEQUENT EVENTS (CONTINUED)

(c) On 7 October 2010, Mutiara Unik Sdn. Bhd. (“MUSB”), a wholly-owned subsidiary of Faber Development Holdings Sdn. Bhd., which in turn is a wholly-owned subsidiary of FGB had been placed under MVL pursuant to Section 254(1)(b) of the Companies Act, 1965.

Mr. Heng Ji Keng and Mr. Michael Joseph Monteiro of Messrs Ferrier Hodgson MH Sdn. Bhd. of 22-M, Monteiro & Heng Chambers, Jalan Tun Sambanthan 3, 50470 Kuala Lumpur have been appointed as Liquidators. The MVL is undertaken to rationalise and streamline the structure of the Group.

MUSB had, on 20 January 2012, held its Final Meeting to conclude the MVL. The Liquidators had subsequently lodged a Return relating to the Final Meeting and the Liquidators’ Account of Receipts and Payment with the Companies Commission of Malaysia and the Offi cial Receiver respectively on 27 January 2012.

(d) On 9 February 2012, Merlion Credit Corporation Berhad (“MCCB”), a wholly-owned subsidiary of FGB, had been placed under MVL pursuant to Section 254(1)(b) of the Companies Act, 1965.

MCCB was incorporated in Malaysia on 18 May 1973 and it has ceased operations in 1991. The authorised share capital of MCCB is RM6,000,000 comprising 6,000,000 ordinary shares of RM1.00 each of which all the shares have been issued and fully paid up.

MCCB had appointed Mr. Heng Ji Keng and Mr. Michael Joseph Monteiro of Messrs Ferrier Hodgson MH Sdn. Bhd., of 22-M, Monteiro & Heng Chambers, Jalan Tun Sambanthan 3, 50470 Kuala Lumpur, to act jointly and severally as Liquidators of MCCB for the purpose of the MVL.

The MVL is undertaken to rationalise and streamline the structure of the Group.

(e) On 7 December 2011, Baynona Group (“Claimant”) fi led a Statement of Claim dated 28 November 2011 against Faber LLC and Propel (“Defendants”) in relation to the projects at Madinat Zayed – Zone-1 awarded by Western Region Municipality, Emirate of Abu Dhabi for a net claim amount of AED35,054,000 (equivalent to approximately RM29,804,000). Propel confi rmed that the balance outstanding to the Claimant is AED3,804,000 (equivalent to approximately RM3,234,000). The Claimant had requested the Abu Dhabi Court of First Instance, Commercial Circuit – Plenary’s (“Abu Dhabi Court”) consent to register the case and notify the Defendants with the nearest hearing and before judgment, amongst others, to appoint a panel of 3 experts.

On 19 December 2011, Faber LLC had fi led a preliminary objection as to the jurisdiction of the Abu Dhabi Court and requested the Abu Dhabi Court to strike off Faber LLC from the Statement of Claim. On 10 January 2012, the Claimant had fi led the memorandum in response to the pleadings. The Abu Dhabi Court had adjourned the case to 25 January 2012 for judgment, with liberty to the Defendants to fi le their response, which Faber LLC had done on 15 January 2012.

FABER GROUP BERHAD ANNUAL REPORT 2011 215

47 SUBSEQUENT EVENTS (CONTINUED)

(e) The Abu Dhabi Court had on 25 January 2012 dismissed the case as a result of Faber LLC’s preliminary objection as to the jurisdiction of the Abu Dhabi Court and the case had been transferred to the Al Dhafra Court of First Instance, Emirate of Abu Dhabi (“Al Dhafra Court”).

On 4 April 2012, the Al Dhafra Court had fi xed the fi rst hearing date for the case on 9 April 2012 which was subsequently adjourned to 16 April 2012. On 17 April 2012, the Secretary of the Al Dhafra Court had informed that the Al Dhafra Court had appointed a panel of three experts as requested by the Claimant and had accordingly adjourned the case to 23 April 2012 for the Claimant to pay a fee of AED10,000 (equivalent to approximately RM8,000) towards the appointment of the panel of experts.

(f) On 13 December 2011, Al Femah Contracting and Transporting Establishment (“Claimant”) had fi led a Summons and Statement of Claim dated 12 December 2011 against Faber LLC and Propel (“Defendants”) in relation to the projects at Madinat Zayed – Zone-1 awarded by the Western Region Municipality, Emirate of Abu Dhabi, for a net claim amount of AED15,270,000 (equivalent to approximately RM13,101,000). Propel had confi rmed that the balance outstanding is AED6,698,000 (equivalent to approximately RM5,747,000).

On 26 December 2011, the Al Dhafra Court of First Instance, Emirate of Abu Dhabi (“Al Dhafra Court”) had appointed an expert and the Claimant had requested to exclude Propel from the Summons and Statement of Claim. On 2 January 2012, Faber LLC requested to be excluded from the Summons and Statement of Claim and on the same day, the Al Dhafra Court had subsequently cancelled the case as the Claimant had failed to appear before the court. However, the Claimant had reinstated the case on 4 January 2012. Faber LLC had responded to the said summons on 16 January 2012 and the Al Dhafra Court decided to hold back the case for judgment.

At the fi rst expert meeting on 5 February 2012, the expert directed the Claimant to produce and prove various invoices and work orders received in connection with the sub-contract work. During the expert meeting on 19 February 2012, the Claimant had fi led a bundle of documents in connection with the sub-contract work. At the subsequent expert meeting on 26 February 2012, the panel of expert had scheduled the next expert meeting to 14 March 2012.

On 13 February 2012, Faber LLC had requested the Al Dhafra Court to reinstate Propel as a defendant to the proceedings. The Al Dhafra Court had adjourned the case to 20 February 2012 for the Claimant’s reply and to pay the court fees. On 20 February 2012, the Claimant had paid the requisite court fee and on 27 February 2012, the Al Dhafra Court had reinstated Propel as a defendant and accordingly adjourned the case to 12 March 2012.

On 12 March 2012, Propel had failed to appear at the scheduled hearing and the Al Dhafra Court had adjourned the case to 2 April 2012 for the expert report. The expert meeting was held on 14 March 2012 where the expert had conducted several site visits to ascertain and physically verify the extent of the works carried out by the Claimant.

On 2 April 2012, the Al Dhafra Court had adjourned the case to 21 May 2012 for the expert report, as requested by the expert.

FABER GROUP BERHAD ANNUAL REPORT 2011 216

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

47 SUBSEQUENT EVENTS (CONTINUED)

(g) On 12 January 2012, Sweet Home Technical Works Limited Liability Company (“Claimant”) fi led a Statement of Claim dated 10 January 2012 against Faber LLC for the fi nancial claim of AED13,119,000 (equivalent to approximately RM11,211,000), which Faber LLC is disputing.

The Claimant was a sub-contractor of Faber LLC for the contracts in relation to the project at Liwa and Madinat Zayed in the Emirate of Abu Dhabi (“Contracts”). The Contracts between Faber LLC and the Claimant had ended on 15 March 2011. There is still an outstanding amount due to the Claimant for works carried out prior to the end of the Contracts’ period, which is under dispute pending the hearing of the case.

The Al Dhafra Court had fi xed the hearing of the Statement of Claim on 27 February 2012. On 27 February 2012, the Al Dhafra Court had adjourned the case to 12 March 2012 to review the expert report and the documents submitted by all the parties.

On 12 March 2012, the Al Dhafra Court had adjourned the case to 19 March 2012 for further evaluation of the documents submitted by all the parties. However, at the hearing held on 19 March 2012, the Al Dhafra Court had adjourned the case to 26 March 2012.The case was subsequently further adjourned to 9 April 2012 and 23 April 2012 respectively for further verifi cation of the court documents.

48 COMPARATIVES

The following comparative fi gures have been reclassifi ed to conform with the current year’s presentation.

GROUP AS PREVIOUSLY RECLASSIFI- STATED CATION AS RESTATED RM’000 RM’000 RM’000

Statement of fi nancial position 31 December 2010

Current assets Trade and other receivables 474,637 (40,555) 434,082

Amounts due from customer on contracts – 40,555 40,555

FABER GROUP BERHAD ANNUAL REPORT 2011 217

49 SUPPLEMENTARY INFORMATION - BREAKDOWN OF RETAINED EARNINGS/(ACCUMULATED LOSSES) INTO REALISED AND UNREALISED

The breakdown of the retained earnings/(accumulated losses) of the Group and of the Company as at 31 December 2011 and 31 December 2010 into realised and unrealised profi ts are presented in accordance with the directive issued by Bursa Malaysia Securities Berhad dated 25 March 2010 and prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profi ts or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.

GROUP COMPANY 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Total retained earnings/ (accumulated losses) of the Company and its subsidiaries - Realised 239,956 (239,012) 52,620 (420,789) - Unrealised (5,253) (1,130) – (1,286)

234,703 (240,142) 52,620 (422,075) Consolidation adjustments 166,868 214,367 – –

Retained earnings/(accumulated losses) as per fi nancial statements 401,571 (25,775) 52,620 (422,075)

FABER GROUP BERHAD ANNUAL REPORT 2011 218

ANALYSIS OF SHAREHOLDINGS

ANALYSIS OF SHAREHOLDINGS AS PER THE RECORD OF DEPOSITORS AS AT 26 APRIL 2012

Authorised Share Capital : RM750,000,000.00 comprising 3,000,000,000 ordinary shares of RM0.25 each Issued and Paid-up Share Capital : RM90,750,263.25 comprising 363,001,053 ordinary shares of RM0.25 each Class of Shares : Ordinary shares of RM0.25 each No. of Shareholders : 19,566 Voting Rights : 1 vote per ordinary share

SIZE OF HOLDINGS NO. OF % OF NO. OF % OF SHAREHOLDERS SHAREHOLDERS SHARES HELD ISSUED CAPITAL

Less than 100 1,042 5.33 41,196 0.01 100 to 1,000 13,486 68.93 4,998,473 1.38 1,001 to 10,000 4,087 20.89 16,090,646 4.43 10,001 to 100,000 794 4.06 23,772,923 6.55 100,001 to 18,150,051* 154 0.79 130,743,247 36.02 18,150,052 and above** 3 0.02 187,354,568 51.61

Total 19,566 100.00 363,001,053 100.00

* Less than 5% of issued capital ** 5% and above of issued capital

30 LARGEST SHAREHOLDERS AS PER THE RECORD OF DEPOSITORS

NO. NAME OF SHAREHOLDERS NO. OF SHARES HELD % OF ISSUED CAPITAL

1. UEM Group Berhad 116,272,268 32.03

2. Lembaga Tabung Haji 36,000,000 9.92

3. Universal Trustee (Malaysia) Berhad 35,082,300 9.66

4. AmanahRaya Trustees Berhad 12,880,100 3.55 Public Smallcap Fund

5. HSBC Nominees (Asing) Sdn Bhd 8,284,600 2.28 Exempt An For JPMorgan Chase Bank, National Association (Norges BK Lend)

6. UEM Group Berhad 8,195,657 2.26

7. AmanahRaya Trustees Berhad 8,031,700 2.21 Public Islamic Optimal Growth Fund

8. Maybank Nominees (Tempatan) Sdn Bhd 7,500,000 2.07 Mayban Trustees Berhad For Public Ittikal Fund (N14011970240)

9. HDM Nominees (Asing) Sdn Bhd 5,067,800 1.40 DBS Vickers Secs (S) Pte Ltd For Tan Ju Hong

10. AmanahRaya Trustees Berhad 4,506,700 1.24 Public Sector Select Fund

FABER GROUP BERHAD ANNUAL REPORT 2011 219

NO. NAME OF SHAREHOLDERS NO. OF SHARES HELD % OF ISSUED CAPITAL

11. Mercury Securities Sdn Bhd 3,686,400 1.02 CLR (F) For Public Mutual Berhad

12. AmanahRaya Trustees Berhad 3,663,000 1.01 Public Islamic Mixed Asset Fund

13. Citigroup Nominees (Asing) Sdn Bhd 3,161,405 0.87 Exempt An For OCBC Securities Private Limited (Client A/C-NR)

14. Gan Kim Huat 3,011,000 0.83

15. HSBC Nominees (Tempatan) Sdn Bhd 2,913,600 0.80 HSBC (M) Trustee Bhd For Hwang Select Opportunity Fund (3969)

16. CIMB Group Nominees (Tempatan) Sdn Bhd 2,598,500 0.72 AmTrustee Berhad For CIMB Islamic Dali Equity Theme Fund

17. Citigroup Nominees (Asing) Sdn Bhd 2,381,100 0.66 CBNY For Dimensional Emerging Markets Value Fund

18. AmSec Nominees (Tempatan) Sdn Bhd 2,288,000 0.63 AmTrustee Berhad For Pacifi c Pearl Fund (UT-PM-PPF)

19. Citigroup Nominees (Tempatan) Sdn Bhd 2,064,700 0.57 Kumpulan Wang Persaraan (Diperbadankan) (RHB Inv)

20. Universal Trustee (Malaysia) Berhad 1,848,900 0.51 TA Islamic Fund

21. AmSec Nominees (Tempatan) Sdn Bhd 1,693,100 0.47 AmTrustee Berhad For Pacifi c Dividend Fund (UT-PM-DIV)

22. CIMB Group Nominees (Tempatan) Sdn Bhd 1,538,400 0.42 CIMB Islamic Trustee Berhad For Pacifi c Dana Aman (3717 TRO1)

23. Lim Soon Huat 1,230,900 0.34

24. Syarikat Pemasaran Sejati Sdn Bhd 1,227,951 0.34

25. Toh Yew Keong 1,120,500 0.31

26. Maybank Nominees (Tempatan) Sdn Bhd 1,100,000 0.30 Etiqa Insurance Berhad (Growth Fund)

27. Universal Trustee (Malaysia) Berhad 1,001,500 0.28 TA Dana Fokus

28. Road Builder (M) Sdn Bhd 980,925 0.27

29. Universal Trustee (Malaysia) Berhad 969,400 0.27 CIMB Islamic Small Cap Fund

30. AmSec Nominees (Tempatan) Sdn Bhd 900,000 0.25 Pledged Securities Account For Cherie Sumana Weerasena

Total 281,200,406 77.47

FABER GROUP BERHAD ANNUAL REPORT 2011 220

ANALYSIS OF SHAREHOLDINGS (CONTINUED)

DIRECTORS’ INTERESTS IN THE COMPANY AND ITS RELATED CORPORATIONS

DIRECT INTEREST INDIRECT INTEREST NAME OF DIRECTORS NO. OF SHARES % NO. OF SHARES %

Dato’ Ikmal Hijaz bin Hashim – – – – Datuk Zainal Abidin bin Alias – – – – Datuk Mohamed Zain bin Mohamed Yusuf – – – – Dato’ Mohd Izzaddin bin Idris – – – – Oh Kim Sun – – – – Elakumari a/p Kantilal – – – – Puasa bin Osman – – – – Suhaimi bin Halim – – – – Annuar Marzuki bin Abdul Aziz – – – – Adnan bin Mohammad 44,000 0.01 – –

Save as disclosed above, none of the Directors has any direct or indirect interest, in the Company and its related corporations.

SUBSTANTIAL SHAREHOLDERS’ SHAREHOLDINGS

DIRECT INTEREST INDIRECT INTEREST NAME OF SUBSTANTIAL SHAREHOLDERS NO. OF SHARES % NO. OF SHARES %

UEM Group Berhad 124,467,925 34.29 – – Khazanah Nasional Berhad# – – 124,467,925 34.29 Lembaga Tabung Haji 36,000,000 9.92 – – Universal Trustee (Malaysia) Berhad 35,082,300 9.66 – –

# Deemed interest by virtue of its substantial interest in UEM Group Berhad.

FABER GROUP BERHAD ANNUAL REPORT 2011 221

PROPERTIES HELD BY THE GROUP

LAST DATE OF GROSS NET BOOK REVALUATION BUILT-UP TENURE APPROX. VALUE AS AT OR IF NONE; LOCATION DESCRIPTION APPROX. AREA (SQ. EXISTING (EXPIRY AGE 31.12.2011 DATE OF AND ADDRESS OF PROPERTIES LAND AREA METERS) USE DATE) (YEARS) (RM’000) ACQUISITION

FACILITIES MANAGEMENT DIVISION

FABER MEDI-SERVE SDN BHD Lot No. 65, Incineration plant 5.87 3,332.0 Incinerator Leasehold 16 1,286 30.11.2011 Kamunting Industrial with single-storey acres for clinical (7.12.2097) Estate, administration waste and Kamunting, Perak block plus laundry laundry plant

Lot No. 37, Laundry plant with 2.24 2,471.7 Laundry Leasehold 16 920 30.11.2011 Kuala Ketil 2-storey acres plant (26.3.2056) Industrial Estate, administration 60 years Mukim of Tawar, block and ancillary District of Baling, facilities Kedah

Lot No. 131 Incineration plant 0.51 1,980.7 Incinerator Leasehold 12 459 30.11.2011 (CL215359890) with double-storey acres for clinical (13.12.2042) & Lot No. 132 administration block waste (CL215359907), and ancillary facilities SEDCO Industrial Estate, Lok Kawi, Sabah

Lot 10486, Laundry plant with 1.48 5,987.0 Laundry Freehold – 1,160 9.11.2011 Seksyen 20, Serendah administration acres plant Ulu Selangor block and ancillary Selangor Darul Ehsan facilities

FRESH LINEN SERVICES (SABAH) SDN BHD Lot 34-5, Industrial Laundry plant with 0.96 2,408.0 Laundry Leasehold 5 921 30.11.2011 Zone 4 (IZ 4), 2-storey offi ce and acres plant (13.12.2105) Kota Kinabalu warehouse Industrial Park, Kota Kinabalu, Sabah

FABER GROUP BERHAD ANNUAL REPORT 2011 222

PROPERTIES HELD BY THE GROUP (CONTINUED)

LAST DATE OF GROSS NET BOOK REVALUATION BUILT-UP TENURE APPROX. VALUE AS AT OR IF NONE; LOCATION DESCRIPTION APPROX. AREA (SQ. EXISTING (EXPIRY AGE 31.12.2011 DATE OF AND ADDRESS OF PROPERTIES LAND AREA METERS) USE DATE) (YEARS) (RM’000) ACQUISITION

PROPERTY DEVELOPMENT DIVISION

COUNTRY VIEW DEVELOPMENT SDN BHD CL015027237 Vacant land for 4.78 – Vacant Leasehold – 1,102 2006 Kota Kinabalu, development of acres land 999 years Sabah condominiums known (2.12.2920) as Lucky Heights

FABER GRANDVIEW DEVELOPMENT (SABAH) SDN BHD CL075388466, Vacant land for 5.66 – Vacant Leasehold – NIL 2006 Off Mile 1.5, development acres land 999 years Jalan Utara, (4.9.2881) Sandakan, Sabah

FABER UNION SDN BHD Lot No. 4064, Vacant land for 2.55 – Vacant Freehold – 21,851 2009 Persiaran Gurney, development acres land 54000 Kuala Lumpur

FABER GROUP BERHAD ANNUAL REPORT 2011 223

ADDITIONAL COMPLIANCE INFORMATION

UTILISATION OF PROCEEDS There were no proceeds raised by the Company from corporate proposals during the fi nancial year ended 31 December 2011.

SHARE BUY-BACKS There were no share buy-backs during the fi nancial year ended 31 December 2011.

OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES No options, warrants or convertible securities were issued by the Company during the fi nancial year ended 31 December 2011.

DEPOSITORY RECEIPT PROGRAMME The Company did not sponsor any depository receipt programme for the fi nancial year ended 31 December 2011.

SANCTIONS AND/OR PENALTIES On 23 November 2011, Bursa Malaysia Securities Berhad (“Bursa Securities”) had publicly reprimanded the Company for breach of paragraph 9.03(1) read together with paragraph 9.04(b) of the Main Market Listing Requirements of Bursa Securities in respect of the Company’s failure to make an immediate announcement of the non-renewal of contracts awarded to the Company’s subsidiary, Faber Limited Liability Company, by the Department of Municipal Affairs, Western Region Municipality, Emirate of Abu Dhabi as set out in the Company’s announcement on 12 January 2011.

Save for the above, there were no other sanctions or penalties imposed on the Company and its subsidiaries, Directors or Management by the relevant regulatory bodies during the fi nancial year ended 31 December 2011.

NON-AUDIT FEES The non-audit fees paid or payable to the External Auditors by the Company and its subsidiaries for the fi nancial year ended 31 December 2011 amounted to RM20,000.00.

VARIATION IN RESULTS There is a variance of RM1,373,000 between audited profi t after taxation and minority interest of RM61,589,000 and the announced unaudited profi t after taxation and minority interest of RM60,216,000 for the fi nancial year ended 31 December 2011, representing a variance of 2.3%.

There was no profi t forecast announced during the fi nancial year.

PROFIT GUARANTEE There was no profi t guarantee given by the Company during the fi nancial year ended 31 December 2011.

MATERIAL CONTRACTS INVOLVING DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS Other than those disclosed in the fi nancial statements, there were no material contracts including contracts to any loans entered into by the Company and/or its subsidiaries involving Directors’ and major shareholders’ interests.

FABER GROUP BERHAD ANNUAL REPORT 2011 224

RECURRENT RELATED PARTY TRANSACTIONS

The shareholders of Faber Group Berhad (“FGB”) had at the 48th Annual General Meeting held on 18 May 2011 granted their approval for FGB and its subsidiary companies (“Faber Group”) to enter into recurrent related party transactions (“RRPT”) of a revenue or trading nature which are necessary for its day-to-day operations and are in the ordinary course of business, on terms not more favourable to the related parties than those generally available to the public and with those related parties as set out in the Circular to Shareholders dated 26 April 2011 (“the Shareholders’ Mandate”).

Pursuant to Paragraph 10.09(1) and Practice Note 12 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the aggregate value of RRPT conducted by FGB Group pursuant to the Shareholders’ Mandate where the aggregate value is equal to or more than RM1 million during the fi nancial year ended 31 December 2011 are disclosed as follows:-

The RRPT entered into by FGB Group whereby FGB Group received services from the related party are as follows:-

NO. FGB OR ITS SUBSIDIARIES RELATED PARTY NATURE OF RECURRENT NATURE OF RELATIONSHIP AGGREGATE VALUE OF TRANSACTION TRANSACTIONS (RM) 1 FGB Group Jeram Bintang Rental of offi ce Pursuant to conversion of 1,282,087 Sdn Bhd and space in Faber Redeemable Convertible Preference its subsidiary Towers and rental Shares issued to Jeram Bintang companies (“Jeram of ancillary facilities as part of the settlement under Bintang Group”) from Jeram Bintang the Restructuring Scheme FGB Group completed on 30 September 2004.

Jeram Bintang had exercised the conversion rights and instructed FGB to allot the shares to Universal Trustee (Malaysia) Berhad (“UTMB”) as custodian pursuant to the security arrangement in relation to Jeram Bintang’s Redeemable Secured Bonds.

UTMB holds 12.51% of the issued and paid-up share capital of FGB.

FABER GROUP BERHAD ANNUAL REPORT 2011 225

NO. FGB OR ITS SUBSIDIARIES RELATED PARTY NATURE OF RECURRENT NATURE OF RELATIONSHIP AGGREGATE VALUE OF TRANSACTION TRANSACTIONS (RM) 2 FGB Group Projek Provision of Khazanah Nasional Berhad 27,274,092 Penyelenggaraan improvement, (“Khazanah”) is the holding company Lebuhraya Berhad upgrading, of UEM Group Berhad (“UEMG”) by and its subsidiary development and virtue of its 100% interest in UEMG. companies (“Propel maintenance of Group”) infrastructure Propel is a wholly owned subsidiary facilities and of UEM Builders Berhad which in projects by Propel turn is a wholly owned subsidiary of Group UEMG.

FGB is a 34.29% associate of UEMG.

Suhaimi bin Halim and Annuar Marzuki bin Abdul Aziz are Directors of FGB and Propel.

Suhaimi bin Halim and Annuar Marzuki bin Abdul Aziz do not have any equity interest in Propel. 3 FMS Group Simfoni Dua Sdn Provision of linen Simfoni Dua is a major shareholder of 1,256,865 Bhd (“Simfoni Dua”) processing involving Fresh Linen Services (Sarawak) Sdn washing, drying Bhd (“FLSWK”) holding 45% of the and folding of linen; equity interest in FLSWK. linen transportation involving FLSWK is a 55% subsidiary of FMS. transportation of linen from the Abang Ismawi bin Abang Ali and plant to hospitals Busrah bin Bujang are Directors of and vice versa; and Simfoni Dua and FLSWK. manpower supply by Simfoni Dua 4 FMS Group SMS Kg. Likas Provision of linen SMS Likas is a major shareholder 2,228,309 (Sabah) Sdn Bhd processing, linen of Fresh Linen Services (Sabah) Sdn (“SMS Likas”) transportation and Bhd (“FLSBH”) holding 40% of the manpower supply by equity interest in FLSBH. SMS Likas FLSBH is a 60% subsidiary of FMS.

Zohari bin Mahur is a Director of SMS Likas and FLSBH.

FABER GROUP BERHAD ANNUAL REPORT 2011 226

RECURRENT RELATED PARTY TRANSACTIONS (CONTINUED)

The RRPT entered into by Faber Group whereby Faber Group provided services to the related party are as follows:-

NO. FGB OR ITS SUBSIDIARIES RELATED PARTY NATURE OF RECURRENT NATURE OF RELATIONSHIP AGGREGATE VALUE OF TRANSACTION TRANSACTIONS (RM) 1 FMS Group Jeram Bintang Provision Pursuant to conversion of 1,114,728 Group of facilities Redeemable Convertible Preference maintenance Shares issued to Jeram Bintang services to Jeram as part of the settlement under Bintang Group the Restructuring Scheme FGB completed on 30 September 2004.

Jeram Bintang had exercised the conversion rights and instructed FGB to allot the shares to UTMB as custodian pursuant to the security arrangement in relation to Jeram Bintang’s Redeemable Secured Bonds.

UTMB holds 12.51% of the issued and paid-up share capital of FGB. 2 FGB Group PLUS Expressways Provision Khazanah is the holding company of 1,490,562 Berhad and of facilities UEMG by virtue of its 100% interest its subsidiary maintenance in UEMG. companies (“PLUS services to PLUS Expressways Expressways Khazanah is a major shareholder Group”) of PLUS Expressways by virtue of its 51% indirect interest in PLUS Expressways held through UEMG.

FGB is a 34.29% associate of UEMG.

Dato’ Mohd Izzaddin bin Idris is a Director of FGB and PLUS Expressways.

Dato’ Mohd Izzaddin bin Idris does not have any equity interest in PLUS Expressways.

FABER GROUP BERHAD ANNUAL REPORT 2011 227

NO. FGB OR ITS SUBSIDIARIES RELATED PARTY NATURE OF RECURRENT NATURE OF RELATIONSHIP AGGREGATE VALUE OF TRANSACTION TRANSACTIONS (RM) 3 FGB Group UEM Land Provision Khazanah is the holding company of 3,085,953 Holdings Berhad of facilities UEMG by virtue of its 100% interest and its subsidiary maintenance in UEMG. companies (“ULHB services to ULHB Group”) Group ULHB is a 64.98% subsidiary of UEMG.

FGB is a 34.29% associate of UEMG.

Dato’ Ikmal Hijaz bin Hashim, Dato’ Mohd Izzaddin bin Idris and Oh Kim Sun are Directors of FGB and ULHB.

Dato’ Ikmal Hijaz bin Hashim, Dato’ Mohd Izzaddin bin Idris and Oh Kim Sun do not have any equity interest in ULHB. 4 Faber Sindoori Apollo Hospitals Provision of Khazanah is the holding company of 14,723,720 Management Enterprise Limited housekeeping UEMG by virtue of its 100% interest Services Private and its subsidiary services to Apollo in UEMG. Limited companies (“Apollo Hospitals Group Hospitals Group”) Apollo Hospitals is an 11.22% associate of Integrated Healthcare Holdings Limited, which in turn is a wholly owned subsidiary of Integrated Healthcare Holdings Sdn Bhd, which in turn is a 70% subsidiary of Khazanah.

FGB is a 34.29% associate of UEMG.

FABER GROUP BERHAD ANNUAL REPORT 2011 228

NOTICE OF THE 49TH ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the 49th Annual General Meeting of Faber Group Berhad (“FGB” or “the Company”) will be held at the Ballroom 1, 1st Floor, Sime Darby Convention Centre, 1A, Jalan Bukit Kiara 1, 60000 Kuala Lumpur on Wednesday, 27 June 2012 at 10.00 a.m. for the purpose of transacting the following businesses:-

AGENDA

AS ORDINARY BUSINESS

1. To receive the Audited Financial Statements of the Company for the fi nancial year ended 31 December 2011 together with the Directors’ and Auditors’ reports therein.

2. To declare a fi nal dividend of 8 sen less 25% tax per ordinary share of RM0.25 each in respect of the fi nancial year ended 31 December 2011. Ordinary Resolution 1

3. To approve the increase in Directors’ fees and the payment thereof to the Directors in respect of the fi nancial year ending 31 December 2012, to be payable on a quarterly basis, in arrears. Ordinary Resolution 2

4. To re-elect the following Directors who are retiring in accordance with Article 66 of the Company’s Articles of Association and being eligible, offer themselves for re-election:-

• Dato’ Ikmal Hijaz bin Hashim Ordinary Resolution 3

• Adnan bin Mohammad Ordinary Resolution 4

• Annuar Marzuki bin Abdul Aziz Ordinary Resolution 5

5. To re-appoint Datuk Mohamed Zain bin Mohamed Yusuf who is retiring in accordance with Section 129(6) of the Companies Act, 1965 to hold offi ce until the conclusion of the next Annual General Meeting of the Company. Ordinary Resolution 6

6. To re-appoint Messrs Ernst & Young as Auditors of the Company to hold offi ce until the conclusion of the next Annual General Meeting of the Company and to authorise the Directors to fi x their remuneration. Ordinary Resolution 7

AS SPECIAL BUSINESS

To consider and if thought fi t, to pass the following Resolutions:-

7. Authority to Issue and Allot Shares pursuant to Section 132D of the Companies Act, 1965

“THAT subject always to the Companies Act, 1965 (“Act”), the Articles of Association of the Company and the approvals of the relevant government and/or regulatory authorities, the Directors be and are hereby empowered pursuant to Section 132D of the Act to issue and allot shares in the Company at any time at such price, upon such terms and conditions, for such purposes and to such person(s) whomsoever as the Directors may in their absolute discretion deem fi t and expedient in the interest of the Company, provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the total issued share capital of the Company for the time being AND THAT the Directors be and are also empowered to obtain the approval from Bursa Malaysia Securities Berhad for the listing of and quotation for the additional shares so issued AND THAT such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.” Ordinary Resolution 8

FABER GROUP BERHAD ANNUAL REPORT 2011 229

8. Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature

“THAT subject to the provisions of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, approval be and is hereby given to the Company and/or its subsidiaries (“FGB Group”) to enter into recurrent related party transactions of a revenue or trading nature as specifi ed in Section 2.3 of the Circular to Shareholders dated 5 June 2012, which transactions are necessary for the day- to-day operations in the ordinary course of business of the FGB Group and are on terms not more favourable to the related parties than those generally available to the public and are not detrimental to the minority shareholders of the Company AND THAT such approval shall continue to be in force until:-

(a) the conclusion of the next Annual General Meeting (“AGM”) of the Company following this AGM at which such mandate is passed at which time it will lapse, unless by a resolution passed at such general meeting whereby the authority is renewed; or

(b) the expiration of the period within which the next AGM of the Company after that date is required to be held pursuant to Section 143(1) of the Companies Act, 1965 (“Act”) (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Act); or

(c) revoked or varied by resolution passed by the shareholders in a general meeting,

whichever is the earlier,

AND THAT the Directors of the Company be and are hereby authorised to complete and do all such acts and things (including executing all such documents as may be required) as they may consider expedient or necessary to give full effect to the transactions contemplated and/or authorised by this resolution.” Ordinary Resolution 9

9. Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature involving the interest of Jeram Bintang Sdn Bhd and its subsidiary companies (“Jeram Bintang Group”)

“THAT subject to the provisions of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, approval be and is hereby given to the Company and/or its subsidiaries (“FGB Group”) to enter into recurrent related party transactions of a revenue or trading nature with the Jeram Bintang Group as specifi ed in Section 2.3 of the Circular to Shareholders dated 5 June 2012, which transactions are necessary for the day-to-day operations in the ordinary course of business of the FGB Group and are on terms not more favourable to the Jeram Bintang Group than those generally available to the public and are not detrimental to the minority shareholders of the Company AND THAT such approval shall continue to be in force until:-

(a) the conclusion of the next Annual General Meeting (“AGM”) of the Company following this AGM at which such mandate is passed at which time it will lapse, unless by a resolution passed at such general meeting whereby the authority is renewed; or

(b) the expiration of the period within which the next AGM of the Company after that date is required to be held pursuant to Section 143(1) of the Companies Act, 1965 (“Act”) (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Act); or

(c) revoked or varied by resolution passed by the shareholders in a general meeting,

whichever is the earlier,

FABER GROUP BERHAD ANNUAL REPORT 2011 230

NOTICE OF THE 49TH ANNUAL GENERAL MEETING (CONTINUED)

AND THAT the Directors of the Company be and are hereby authorised to complete and do all such acts and things (including executing all such documents as may be required) as they may consider expedient or necessary to give full effect to the transactions contemplated and/or authorised by this resolution.” Ordinary Resolution 10

10. Proposed one-time ex-gratia payment for year 2011 to the Independent Non-Executive Directors of the Company

“THAT the proposed one-time ex-gratia payment of RM30,000.00 each for year 2011 to the Independent Non-Executive Directors of the Company, namely, Dato’ Ikmal Hijaz bin Hashim, Datuk Zainal Abidin bin Alias, Datuk Mohamed Zain bin Mohamed Yusuf, Oh Kim Sun and Puasa bin Osman as a token of appreciation and recognition of their services rendered to the Company and/or its subsidiaries as Independent Non-Executive Directors (“Proposed Ex-Gratia Payment”) be and is hereby approved AND THAT the Directors be and are hereby empowered to do all such acts and things to give full effect to the Proposed Ex-Gratia Payment with full powers to assent to any modifi cations, variations and/ or amendments (if any) as the Directors may deem fi t or necessary in connection with the Proposed Ex-Gratia Payment.” Ordinary Resolution 11

11. Proposed Amendments to the Articles of Association of the Company

“THAT the Proposed Amendments to the Articles of Association of the Company as set out in Appendix II of the Circular to Shareholders dated 5 June 2012, be and are hereby approved AND THAT the Directors and Secretary be and are hereby authorised to sign, do and execute all relevant documents, acts and things as may be required for or in connection with and to give full effect to the Proposed Amendments to the Articles of Association.” Special Resolution 1

12. To transact any other business for which due notice shall have been given.

FABER GROUP BERHAD ANNUAL REPORT 2011 231

NOTICE OF ENTITLEMENT AND PAYMENT OF FINAL DIVIDEND

NOTICE IS HEREBY GIVEN THAT subject to the approval of the shareholders at the 49th Annual General Meeting of the Company, a fi nal dividend of 8 sen less 25% tax per ordinary share of RM0.25 each in respect of the fi nancial year ended 31 December 2011 will be paid on 26 July 2012 to the shareholders whose names appear on the Company’s Register of Members and/or Record of Depositors at the close of business on 11 July 2012.

A Depositor shall qualify for entitlement to the fi nal dividend only in respect of:-

(a) shares transferred into the Depositor’s securities account before 4.00 p.m. on 11 July 2012 in respect of transfers.

(b) shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of Bursa Malaysia Securities Berhad.

By Order Of The Board

SURIATI BINTI ASHARI (LS0009029) Company Secretary

Kuala Lumpur 5 June 2012

NOTES: 1. A member of the Company entitled to attend and vote at the meeting, is entitled to appoint not more than two (2) proxies to attend and vote in his stead. A proxy may but need not be a member of the Company. 2. Where a member of the Company is an authorised nominee as defi ned under the Securities Industry (Central Depositories) Act 1991, it may appoint not more than two (2) proxies in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account. 3. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifi es the proportion of his shareholding to be represented by each proxy. 4. The instrument appointing a proxy, in the case of an individual, shall be signed by the appointer or by his attorney duly authorised in writing and in the case of a corporation shall be given under its common seal or signed on its behalf by an attorney or offi cer of the corporation so authorised. 5. The instrument appointing a proxy must be deposited at the offi ce of the Company’s Share Registrar, Symphony Share Registrars Sdn Bhd (378993-D) at Level 6, Symphony House, Block D13, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time set for holding the Annual General Meeting or any adjournment thereof.

GENERAL MEETING RECORD OF DEPOSITORS

For the purpose of determining a member who shall be entitled to attend the 49th Annual General Meeting, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd in accordance with Article 45A(b) of the Company’s Articles of Association and Section 34(1) of the Securities Industry (Central Depositories) Act 1991, to issue a General Meeting Record of Depositors as at 20 June 2012. Only a depositor whose name appears on the Record of Depositors as at 20 June 2012 shall be entitled to attend the said meeting or appoint proxies to attend and/or vote on his/her behalf.

EXPLANATORY NOTES ON SPECIAL BUSINESS:-

ORDINARY RESOLUTION 8 – AUTHORITY TO ISSUE AND ALLOT SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965

The existing general mandate for the authority to issue and allot shares pursuant to Section 132D of the Companies Act, 1965 (“Act”) was approved by the shareholders of the Company at the 48th Annual General Meeting (“AGM”) held on 18 May 2011. The Company did not issue any new shares pursuant to this general mandate as at the date of this notice.

FABER GROUP BERHAD ANNUAL REPORT 2011 232

NOTICE OF THE 49TH ANNUAL GENERAL MEETING (CONTINUED)

The proposed Ordinary Resolution 8 is a renewal of the general mandate for the authority to issue and allot shares pursuant to Section 132D of the Act. The Ordinary Resolution 8, if passed, will empower the Directors to allot and issue up to 10% of the issued and paid up share capital of the Company for the time being for such purposes as the Directors consider would be in the best interest of the Company. This authority, unless revoked or varied by the Company in a general meeting, will expire at the conclusion of the next AGM of the Company.

As this juncture, there is no decision to issue new shares. If there should be a decision to issue new shares after the general mandate is approved by the shareholders at the forthcoming 49th AGM, the Company will make an announcement in respect of the purpose and utilisation of proceeds arising from such issue.

The authority will provide fl exibility to the Company for any possible fund raising activities, including but not limited to further placing of shares, for purpose of funding future investment project(s), working capital and/or acquisitions as well as to avoid any delay and cost in convening the general meetings to specifi cally approve such an issuance of shares.

ORDINARY RESOLUTIONS 9 AND 10 – PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE; AND PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE INVOLVING THE INTEREST OF JERAM BINTANG SDN BHD AND ITS SUBSIDIARY COMPANIES (“JERAM BINTANG GROUP”)

The details on the Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature; and Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature involving the interest of the Jeram Bintang Group are set out in the Circular to Shareholders dated 5 June 2012, which is despatched together with the Company’s 2011 Annual Report.

ORDINARY RESOLUTION 11 – PROPOSED ONE-TIME EX-GRATIA PAYMENT FOR YEAR 2011 TO THE INDEPENDENT NON-EXECUTIVE DIRECTORS OF THE COMPANY

The proposed one-time ex-gratia payment of RM30,000.00 each for year 2011 to the Independent Non-Executive Directors of the Company, namely, Dato’ Ikmal Hijaz bin Hashim, Datuk Zainal Abidin bin Alias, Datuk Mohamed Zain bin Mohamed Yusuf, Oh Kim Sun and Puasa bin Osman is a token of appreciation and recognition of their services rendered to the Company and/or its subsidiaries as Independent Non- Executive Directors.

SPECIAL RESOLUTION 1 – PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION OF THE COMPANY

The Proposed Amendments to the Articles of Association of the Company are in respect of the following:-

(i) to amend the Articles of Association of the Company to align the Articles with the recent amendments to the Main Market Listing Requirements of Bursa Malaysia Securities Berhad; and

(ii) to enhance the administration effi ciency of the Company as well as to streamline and add clarity to the existing Articles of Association of the Company.

The details on the Proposed Amendments to the Articles of Association of the Company are set out in Appendix II of the Circular to Shareholders dated 5 June 2012, which is despatched together with the Company’s 2011 Annual Report.

FABER GROUP BERHAD ANNUAL REPORT 2011 233

STATEMENT ACCOMPANYING NOTICE OF THE 49TH ANNUAL GENERAL MEETING (“49TH AGM”)

(Pursuant to Paragraph 8.27(2) and information as set out in Appendix 8A of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad).

There is no individual seeking for election as a Director at the forthcoming 49th AGM.

FABER GROUP BERHAD ANNUAL REPORT 2011 NOTES FABER GROUP BERHAD Incorporated in Malaysia PROXY FORM (Company No. 5067-M) NO. OF SHARES HELD

*I/We (block letters) *NRIC No./Company No. CDS Account No. of (full address) being a *member/members of FABER GROUP BERHAD (“the Company”) hereby appoint

NRIC No. of (full address) or failing *him/her, NRIC No. of (full address) or failing *him/her, the Chairman of the Meeting as *my/our proxy to vote for *me/us on *my/our behalf at the 49th Annual General Meeting of the Company to be held at the Ballroom 1, 1st Floor, Sime Darby Convention Centre, 1A, Jalan Bukit Kiara 1, 60000 Kuala Lumpur on Wednesday, 27 June 2012 at 10.00 a.m. or at any adjournment thereof.

Please indicate your vote with an “X” in the respective box of each resolution. If no specifi c direction as to voting is given, the proxy will vote or abstain from voting on the resolutions at his/her discretion.

AS ORDINARY BUSINESS: FOR AGAINST Ordinary Resolution 1 To declare a fi nal dividend of 8 sen less 25% tax per ordinary share of RM0.25 each in respect of the fi nancial year ended 31 December 2011. Ordinary Resolution 2 To approve the increase in Directors’ fees and the payment thereof to the Directors in respect of the fi nancial year ending 31 December 2012, to be payable on a quarterly basis, in arrears. Ordinary Resolution 3 To re-elect Dato’ Ikmal Hijaz bin Hashim as Director of the Company. Ordinary Resolution 4 To re-elect Adnan bin Mohammad as Director of the Company. Ordinary Resolution 5 To re-elect Annuar Marzuki bin Abdul Aziz as Director of the Company. Ordinary Resolution 6 To re-appoint Datuk Mohamed Zain bin Mohamed Yusuf as Director of the Company in accordance with Section 129(6) of the Companies Act, 1965. Ordinary Resolution 7 To re-appoint Messrs Ernst & Young as Auditors of the Company to hold offi ce until the conclusion of the next Annual General Meeting of the Company and to authorise the Directors to fi x their remuneration. AS SPECIAL BUSINESS: Ordinary Resolution 8 To approve the Authority to Issue and Allot Shares pursuant to Section 132D of the Companies Act, 1965. Ordinary Resolution 9 To approve the Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature. Ordinary Resolution 10 To approve the Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature involving the interest of Jeram Bintang Group. Ordinary Resolution 11 To approve the Proposed one-time ex-gratia payment for year 2011 to the Independent Non-Executive Directors of the Company. Special Resolution 1 To approve the Proposed Amendments to the Articles of Association of the Company. * Strike out whichever not applicable

Dated this day of , 2012. COMMON SEAL

Signature of Shareholder(s)

NOTES: 1 A member of the Company entitled to attend and vote at the Meeting is entitled to appoint not more than two (2) proxies to attend and vote in his stead. A proxy may but need not be a member of the Company. 2 Where a member of the Company is an authorised nominee as defi ned under the Securities Industry (Central Depositories) Act 1991, it may appoint not more than two (2) proxies in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account. 3 Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifi es the proportion of his shareholding to be represented by each proxy. 4 The instrument appointing a proxy, in case of an individual, shall be signed by the appointer or by his attorney duly authorised in writing and in case of a corporation shall be given under its Common Seal or signed on its behalf by an attorney or offi cer of the corporation so authorised. 5 The instrument appointing a proxy must be deposited at the offi ce of the Company’s Share Registrar, Symphony Share Registrars Sdn Bhd (378993-D) at Level 6, Symphony House, Block D13, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time set for holding the Annual General Meeting or any adjournment thereof. Fold here

AFFIX STAMP

The Share Registrar of Faber Group Berhad c/o Symphony Share Registrars Sdn Bhd (378993-D) Level 6, Symphony House Block D13, Pusat Dagangan Dana 1 Jalan PJU 1A/46, 47301 Petaling Jaya Selangor Darul Ehsan

Fold here CORPORATE OFFICE

FABER GROUP BERHAD GROUP DIRECTORY 20th Floor, Menara 2, Faber Towers, Jalan Desa Bahagia, Taman Desa, Off Jalan Kelang Lama, 58100 Kuala Lumpur

t +60 3 7628 2888 | f +60 3 7628 2828 www.fabergroup.com.my

INTEGRATED FACILITIES MANAGEMENT PROPERTY DIVISION DEVELOPMENT DIVISION

CONCESSION FRESH LINEN SERVICES FABER DEVELOPMENT HOLDINGS SDN BHD (SARAWAK) SDN BHD 19th Floor, Menara 2, Faber Towers FABER MEDI-SERVE SDN BHD Kilang A, Plot 66 & 67 Jalan Desa Bahagia, Taman Desa 10th Floor, Menara 2, Faber Towers Lot 775, Blok 8 MTLD Off Jalan Kelang Lama Jalan Desa Bahagia, Taman Desa Demak Laut Industrial Park 58100 Kuala Lumpur Off Jalan Kelang Lama 93990 Kuching t +60 3 7628 2888 58100 Kuala Lumpur Sarawak f +60 3 7628 2809 t +60 3 7620 0000 t +60 82 433 034 f +60 3 7621 5549 f +60 82 433 016 FABER UNION SDN BHD 19th Floor, Menara 2, Faber Towers REGIONAL OFFICE FRESH LINEN SERVICES (SABAH) SDN BHD Jalan Desa Bahagia, Taman Desa FMS REGIONAL OFFICE Lot 34-5, Kota Kinabalu Off Jalan Kelang Lama (PERLIS/KEDAH/PENANG) Industrial Park IZ4 58100 Kuala Lumpur No. 222, Jalan Shahab 4 Jalan Sapangar t +60 3 7628 2888 Kompleks Shahab Perdana 88450 Kota Kinabalu f +60 3 7628 2809 Jalan Sultanah Sambungan Sabah 05150 Alor Setar t +60 88 499 180 RIMBUNAN MELATI SDN BHD Kedah Darul Aman f +60 88 492 499 19th Floor, Menara 2 t +60 4 734 0910 Faber Towers f +60 4 734 0912 NON-CONCESSION Jalan Desa Bahagia, Taman Desa Off Jalan Kelang Lama FMS REGIONAL OFFICE (PERAK) FABER FACILITIES SDN BHD 58100 Kuala Lumpur 1st fl oor, Bangunan KWSP Lot 113, 1st Floor, Faber Towers t +60 3 7628 2888 Jalan Greentown Jalan Desa Bahagia, Taman Desa f +60 3 7628 2809 30450 Ipoh Off Jalan Kelang Lama Perak Darul Ridzuan 58100 Kuala Lumpur COUNTRY VIEW DEVELOPMENT SDN BHD t +60 5 242 2066 t +60 3 7628 2888 Mile 31/2, Jalan Tuaran f +60 5 241 4056 f +60 3 7625 5722 Lorong Tenejal 1 Lucky Heights Condominium FMS REGIONAL OFFICE (SABAH) FABER FACILITIES MANAGEMENT SDN BHD 88450 Kota Kinabalu Lot 6 & 7, Lorong Grace Square 2 Lot 115, 1st Floor, Faber Towers Sabah Jalan Pantai Sembulan Jalan Desa Bahagia, Taman Desa t / f +60 88 423 211 88100 Kota Kinabalu Off Jalan Kelang Lama Sabah 58100 Kuala Lumpur REGIONAL OFFICE t +60 88 257 592 t +60 3 7628 2888 FABER GRANDVIEW DEVELOPMENT (SABAH) f +60 88 253 584 f +60 3 7625 5722 SDN BHD Mezzanine Floor, Lot 8, Block C FMS REGIONAL OFFICE (SARAWAK) FABER STAR FACILITIES Lorong Grandview 3A 6th Floor, Menara Grand MANAGEMENT LIMITED Taman Grandview Lot 42, Section 46 A-78, 1st Floor, Sector-65 Off Sim-Sim Highway Persiaran Lucky Noida, Uttar Pradesh - 201301 90000 Sandakan Jalan Ban Hock India Sabah 93100 Kuching t +91 120 426 2200 t / f +60 89 216 220 Sarawak t +60 82 243 006 FABER SINDOORI MANAGEMENT f +60 82 242 875 SERVICES PVT LTD Door No. 25 & 26, Prince Tower HEALTHTRONICS (M) SDN BHD 7th Floor, College Road, Suite (P3-03), Building Information Centre Nungambakkam Lot 2, Jalan 51A/243 Chennai - 600006 46100 Petaling Jaya t +91 971 090 8118 Selangor Darul Ehsan t +60 3 7625 2525 FABER L.L.C. f +60 3 7625 2828 208 and 209, 2nd Floor Al Nasriyah Building Baghdad Street Al Qusais, P.O. Box 232283 Dubai, United Arab Emirates t +971 4267 4845/258 4561 f +971 4267 4855/258 4560 FABER GROUP BERHAD Incorporated in Malaysia (COMPANY NO: 5067-M) 20th Floor, Menara 2 Faber Towers Jalan Desa Bahagia Taman Desa Off Jalan Kelang Lama 58100 Kuala Lumpur

Tel : +60 3 7628 2888 Fax : +60 3 7628 2828 www.fabergroup.com.my

FABER GROUP BERHAD (Incorporated in Malaysia) (Company No. 5067-M)

ERRATA

To all Shareholders of Faber Group Berhad,

Dear Sir/Madam,

Annual Report 2011

We refer to the Annual Report 2011 and wish to advise as follows:-

To insert the following foot notes under the Board of Directors’ Profile at the bottom of page 47:-

1. Family relationship with any Director and/or Major Shareholder of the Company: None of the Directors has any family relationship with any Director and/or Major Shareholder of the Company.

2. Conflict of interest with the Company: None of the Directors has any conflict of interest with the Company.

3. Conviction for offences: None of the Directors has been convicted for offences within the past 10 years other than traffic offences, if any.

By Order Of The Board

SURIATI BINTI ASHARI (LS0009029) Company Secretary

Kuala Lumpur 5 June 2012