annual report 2010 - tasek corporation berhad - … report 2010 1 content 2 corporate profile ......

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RT 2010

Annual Report 2010 1

C O N T E N T

2 Corporate Profile

3 Financial Highlights

4 Profile of Directors

6 Chairman’s Statement

8 5-Year Financial Summary

10 Board Audit and Risk Management Committee Report

12 Statement on Corporate Governance

16 Statement on Internal Control

18 Financial Statements

87 List of Properties Held

91 Analysis of Shareholdings

94 Schedule of Share Buy-back

95 Notice of 50th Annual General Meeting

98 Statement Accompanying Notice of the 50th Annual General Meeting

Proxy Form

Tasek Corporation Berhad (4698-W)

Tasek Corporation Berhad (4698-W)2

CORPORATE PROFILE

BOARD OF DIRECTORS Kwek Leng Peck (Chairman)Ting Sii Tien @ Yao Sik TienDato’ Khoo Peng LaiDato’ Chong Pah AungWan Mohd Shukri bin AriffinKwek Kon ChunLim Eng Khoon

BOARD AUDIT & RISK MANAGEMENT COMMITTEELim Eng Khoon (Chairman)Dato’ Chong Pah AungWan Mohd Shukri bin Ariffin

REMUNERATION & NOMINATION COMMITTEEKwek Leng Peck (Chairman)Lim Eng KhoonDato’ Chong Pah Aung

DOMICILE AND LEGAL FORMDomiciled in Malaysia as a public limitedliability company and listed on the Main Market of Bursa Malaysia Securities Berhad

SECRETARIESVincent Chow Poh JinGo Hooi Koon

REGISTRARHong Leong Share Registration Services Sdn Bhd Level 5, Wisma Hong Leong18, Jalan Perak50450 Kuala LumpurTel: 603-2164 1818Fax: 603-2164 3703

AUDITORS Ernst & Young

CORPORATE OFFICE & REGISTERED OFFICE6th Floor, Office Block,Grand Millennium Kuala Lumpur160, Jalan Bukit Bintang55100 Kuala LumpurTel: 603-2144 6868Fax: 603-2144 6828Email: [email protected]: www.tasekcement.com

FACTORY Persiaran TasekTasek Industrial Estate31400 IpohTel: 605-291 1011Fax: 605-291 9932

DISTRIBUTION TERMINALLot 1552 Kg Jaya Industrial AreaOff Jalan Hospital47000 Sungai BulohSelangorTel: 603-6156 6818Fax: 603-6156 6828


FINANCIAL HIGHLIGHTS

Year Ended Year Ended 31.12.2010 31.12.2009 (Restated) % RM’000 RM’000 Change

FINANCIAL DATA

Revenue 553,038 526,770 5.0 Profit before Taxation 156,272 87,160 79.3 Net Assets 936,070 908,082 3.1 Total Assets 1,033,560 982,604 5.2 Capital Expenditure 35,419 37,412 -5.3 Depreciation and Amortisation 43,245 47,563 -8.9 Profit before Taxation as a percentage of Revenue 28.3% 16.5% 70.8 Net Return on Capital Employed 14.1% 7.4% 91.4 Earnings per Share (sen) 83.0 36.2 129.1 Total Dividends (incl. Preference Dividend) 41,695 13,945 199.0 Dividend Rate (excl. Preference Dividend) 30.0% 10.0% 200.0

Net Asset per Share RM7.55 RM4.90 54.1

FINANCIAL CALENDAR

Financial Year End 31 December

Announcement of 1st Quarter Results 27 April 2010

Announcement of 2nd Quarter Results 27 July 2010

Announcement of 3rd Quarter Results 26 October 2010

Announcement of 4th Quarter Results 18 February 2011

Issue of Annual Report for the Year Ended 31.12.2010 1 April 2011

Annual General Meeting 25 April 2011

Closing of Record of Depositors for Final and Special Dividend 20 May 2011

Date of Payment of Final and Special Dividend 17 June 2011


PROFILE OF DIRECTORS

KWEK LENG PECK (54 years of age – Singaporean) – Non-Independent Non-Executive Director (Chairman)

Mr. Kwek was appointed to the Board on 4 June 1984. He was elected as Chairman of the Board of Directors on 28 April 2009. He holds a Diploma in Accountancy. He is also Chairman of the Remuneration and Nomination Committee.

Other Directorships:Director of City Developments Limited, Hong Leong Asia Ltd., Hong Leong Finance Limited, Millennium & Copthorne Hotels plc, China Yuchai International Limited, Hong Leong Company (Malaysia) Berhad and Tasek Property Holdings Sdn. Bhd. (wholly-owned subsidiary of Tasek Corporation Berhad).

Mr. Kwek attended all the four Board Meetings held during the financial year.

TING SII TIEN @ YAO SIK TIEN (56 years of age – Malaysian/Permanent Resident of Singapore) – Executive Director / Acting Group Chief Executive Officer

Mr. Ting was appointed to the Board on 10 June 2005 and re-designated as Executive Director on 18 November 2010. He assumed the position of Acting Group Chief Executive Officer of Tasek Corporation Bhd on 7 January 2011. He is a Chartered Accountant by training and an associate member of the Institute of Chartered Accountants in England and Wales. Presently he is the Group General Manager of Hong Leong Corporation Holdings Pte Ltd. He was previously the Group Chief Financial Officer of Hong Leong Asia Ltd. Mr. Ting has over 25 years of experience as a financial controller in various companies including Deutsche Bank AG (Singapore) and Bank of Montreal, Singapore.

Other Directorships:He holds directorships within Tasek Corporation Berhad’s group and is also director of several companies within Hong Leong Asia Ltd.

Mr. Ting attended all the four Board Meetings held during the financial year.

DATO’ KHOO PENG LAI (57 years of age – Malaysian) – Independent Non-Executive Director

Dato’ Khoo Peng Lai was appointed to the Board of Directors of Tasek on 3 June 2008. He was Chairman and member of the Board Audit and Risk Management Committee until 28 January 2011. He is a Chartered Accountant by profession under his own firm, Khoo & Co. (AF 0008). He is a member of the Malaysian Institute of Accountants, Malaysian Institute of Certified Public Accountants and Chartered Tax Institute of Malaysia and was a fellow member of the Association of Chartered Certified Accountants.

Dato’ Khoo also sits on the board of several private limited companies and was an Independent Director in Stone Master Corporation Berhad and Wing Tiek Holdings Berhad.

Other Directorships:Dato’ Khoo does not have any directorship in public companies.

Dato’ Khoo attended all the four Board Meetings held during the financial year.

DATO’ CHONG PAH AUNG (56 years of age – Malaysian) – Independent Non-Executive Director

Dato’ Chong was appointed to the Board of Directors of Tasek on 28 April 2009. He holds B. Sc degree in Estate Management. He is also a Fellow of The Royal Institution of Chartered Surveyors (FRICS); a Fellow of The Malaysia Institute of Surveyors (FISM) and a Registered Valuation Surveyor. He is a member of the Board Audit and Risk Management Committee and a member of the Remuneration and Nomination Committee.

He joined C H Williams Talhar & Wong in 1981 and was appointed as Partner and Director in June 1989, and subsequently appointed as Senior Executive Director in January 2004 until his retirement in April 2009. Currently, he is Consultant with C H Williams Talhar & Wong Sdn Bhd.

Other Directorships:Dato’ Chong does not have any directorship in public companies.

Dato’ Chong attended all the four Board Meetings held during the financial year.


WAN MOHD SHUKRI BIN ARIFFIN (54 years of age – Malaysian) – Independent Non-Executive Director

Mr. Wan Mohd Shukri was appointed to the Board of Directors of Tasek on 28 April 2009. He has a Diploma in Business Studies from UiTM; a B. Sc in Marketing from Syracuse University, New York and an MBA in International Management from Golden Gate University, San Francisco. He is a member of the Board Audit and Risk Management Committee.

He was previously a Manager in Bumiputra Merchant Bankers Berhad; a Director of Corporate Affairs in Bescorp Industries Berhad and a Director and Audit Committee Member/Chairman of the Remuneration Committee in Bintai Kinden Corporation Berhad. Currently, he is the Chief Executive Officer of PMCare Sdn Bhd.

Other Directorships:Mr. Wan Mohd Shukri is a director of BIB Insurance Brokers Sdn Bhd (a subsidiary of a public company).

Mr. Wan attended all the four Board Meetings held during the financial year.

KWEK KON CHUN (32 years of age – Singaporean) – Non-Independent Non-Executive Director

Mr. Kwek Kon Chun was appointed to the Board of Directors of Tasek on 11 November 2009. He holds a Master of Engineering in Electrical and Electronics Engineering with Management.

Mr. Kwek had internship with Salomon Smith Barney, Singapore and with Credit Suisse First Boston, Singapore in investment banking and in global foreign exchange. He joined Hong Leong Asia Ltd as Vice President – Corporate Management in the Chief Executive Officer’s office. He was later seconded to assist the Chief Operating Officer of the packaging division and later seconded to assist the Chief Operating Officer of the building materials division while still attached to the Chief Executive Officer’s office assisting in corporate management and corporate finance.

He is the nephew of Mr. Kwek Leng Peck.

Other Directorships:Mr. Kwek does not have any directorship in public companies.

Mr. Kwek attended all the four Board Meetings held during the financial year.

LIM ENG KHOON (68 years of age – Malaysian) – Independent Non-Executive Director

Mr. Lim, a Chartered Accountant and Chartered Secretary was appointed to the Board on 13 December 2010. He was admitted to memberships of The Institute of Chartered Accountants in Australia and The Institute of Chartered Secretaries Australia in 1971, The Institute of Certified Public Accountants of Singapore in 1972 and The Malaysian Institute of Certified Public Accountants in 1973. He was appointed Chairman of the Board Audit and Risk Management Committee on 28 January 2011 and a member of the Remuneration and Nomination Committee.

Mr. Lim have extensive experience in Australia, Singapore and Malaysia in the public accounting sector, and in commerce and industries in the following areas - hospitality, automobile assembly sales and service and the cement and building materials manufacturing industries. He was a Senior Manager with KPMG Peat Marwick in 1973, Financial Controller and Company Secretary of Cycle & Carriage Bintang Berhad in 1978 and an Executive Director of Tasek Corporation Berhad from 1995 until his retirement in 2004 and re-designated a Non Executive Director. He resigned from the Board of Tasek Corporation Berhad in 2005.

Mr. Lim was Council Member of The Malaysian Institute of Certified Public Accountants from 1979 to 1982, and Examiner of The Institute’s professional examinations from 1976 to 1979.

Other Directorships:Mr. Lim does not have any directorship in public companies.

After Mr. Lim was appointed on 13 December 2010, there were no Board Meetings held during the financial year.

Note:Except as otherwise stated in the individual Directors’ Profile, none of the Directors have interest in the securities of Tasek Corporation Berhad or its subsidiaries nor have any family relationship with any director and/or major shareholder of the company and have no conflict of interest with the company and no convictions for offences (other than traffic offences) within the past 10 years.

PROFILE OF DIRECTORS (Cont’d)


CHAIRMAN’S STATEMENT

INDUSTRY TREND AND DEVELOPMENTThe domestic consumption for cement in Peninsular Malaysia for the year reported an estimated increase of about 1.2% from consumption in 2009. In East Malaysia, the consumption of cement for the year increased by about 8% from the previous year. The demand for cement and concrete products in Peninsular Malaysia largely depends on activities in the construction sector, in particular activities on infrastructures. Under the 10th Malaysia Plan (10MP), it was announced that 5% of new roads would be built in concrete. In addition, the announcement by the Government of various projects such as the 100-storey Warisan Merdeka building, the RM36.6 billion Mass Rapid Transit system and other infrastructure projects to be implemented under the Economic Transformation Programme (ETP) augurs well for the construction sector. These initiatives by the Government when implemented would stimulate the increase in demand for the use of cement. It is estimated that demand for cement in Peninsular Malaysia would likely see a growth of about 2% to 3% for the year 2011 while in East Malaysia, consumption of cement would see a growth of about 8%.

The Government’s 2011 Budget has projected the Malaysian economy to grow between 5% and 6% for year 2011 to be driven significantly by the private sector. Supported by the implementation of construction projects under the Ninth Malaysia Plan (9MP) and stimulus packages by the Government during the first half of year 2010, the construction sector strengthened 6.3% and for the whole year grew 4.9%. For the year 2011, the construction sector has been projected by the 2011 Budget to grow by 4.4% driven by the ongoing projects such as the KLIA 2, the Second Penang Bridge, SKVE Package 3, the Sabah-Sarawak gas pipeline and the LRT extensions. In addition, the growth will be supported by the implementation of the development projects under the 10MP and the ETP.

FINANCIAL PERFORMANCEThe financial year ended 31 December 2010 saw the Group achieving a profit after tax of RM132.408 million on total revenue of RM553.038 million compared with profit after tax of RM67.125 million on total revenue of RM526.770 million the last financial year. Shareholders’ funds for the financial year increased to RM936.070 million compared with RM908.082 million previously. The profit after tax at Company level for the financial year increased to RM89.137 million on revenue of RM442.523 million from RM62.449 million on revenue of RM421.848 million compared with the previous year.

The Group achieved higher profit after tax attributable to shareholders for the financial year compared with the previous year mainly due to better margins from its local sales of cement and the exceptional gain from disposal of its properties by the Company’s subsidiaries. At Company level, the contributing factors for a higher profit after tax was also due to lower cost of production and higher interest income.

On behalf of the Board of Directors, I am pleased to present the Annual Report and Audited Accounts of Tasek Corporation Berhad (“the Company”) and its Group for the financial year ended 31 December 2010.


CHAIRMAN’S STATEMENT (cont’d)

During the year, the Company paid a special dividend of 20 sen per share in addition to its final dividend of 10 sen per share. The Company also completed its capital repayment of 33 sen per share to its shareholders and share consolidation exercise which consolidated a total of its 184,509,300 Ordinary Shares of RM0.67 each and 500,000 6% Cumulative Participating Preference Shares of RM0.67 each into a maximum of 123,621,231 Ordinary Shares of RM1.00 each and 335,000 6% Cumulative Participating Preference Shares of RM1.00 each on the basis of one Ordinary Share of RM0.67 each into 0.67 Ordinary Share of RM1.00 each and 0.67 6% Cumulative Participating Preference Share of RM1.00 each respectively. The exercise was to achieve an efficient capital structure for the Company and to reward shareholders for their support. Further, shareholders are expected to benefit from this value enhancement and improvement to the Company’s long term rate of return.

DIVIDENDSThere were no interim dividends declared and paid during the financial year. For the financial year ended 31 December, 2010, the Board has recommended a final dividend of 30 sen per share less Malaysian income tax of 25% and a special dividend of 50 sen per share less Malaysian income tax of 25%. Subject to approval of shareholders at the forthcoming Annual General Meeting, such dividends will be payable on 17 June 2011.

CHALLENGES AND PROSPECTSThe Board foresees 2011 as yet another challenging year for the Group in view of higher costs of materials and energy. However, the Board is optimistic that with the implementation of the various development and infrastructure projects under the Government’s 10MP and ETP, the construction sector will benefit the most from such activities which in turn will increase the demand and consumption of cement and concrete products. The strong balance sheet and cash flow of the Group will put us in a position to take advantage of the anticipated increase in construction activities resulting from such implementation of projects under the 10MP and ETP. The Board will also continue to look for opportunities to further increase shareholders’ return.

Certified under ISO 14001, OHSAS 18001 and ISO 9001; and ISO 9001:2008 for its ready-mixed concrete subsidiary Tasek Concrete Sdn Bhd, the Group is committed to a quality management system and committed to its efforts to step up responsibility in its manufacturing footprints and to minimise any adverse impact on the environment and safety in its operations.

The 12th Collective Agreement with the Cement Industry Employees Union had expired on 30 June, 2010. The 13th Collective Agreement has been negotiated, concluded and signed for the next three years to expire on 30 June 2013. The Management continues to enjoy good and cordial working relationship with the Union and arising from this, look forward to a mutually beneficial year.

CHANGES IN BOARD OF DIRECTORSOn behalf of the Board, I welcome Mr. Lim Eng Khoon who joined the Board as Independent Non-Executive Director during the year. The Board had also appointed Mr. Lim Eng Khoon as member and Chairman of the Board Audit and Risk Management Committee replacing Dato’ Khoo Peng Lai who resigned as member and Chairman of the Committee in January 2011. Dato’ Khoo has also indicated that he will not be standing for re-election as Director of the Company at the forthcoming Annual General Meeting. In November 2010, Dato’ Teo Tong Kooi resigned as Executive Director and as Director of the Company. Together with the Board, I wish Dato’ Teo Tong Kooi and Dato’ Khoo Peng Lai all the best in their future endeavours.

ACKNOWLEDGEMENTOn behalf of the Board of Directors, I would like to thank our shareholders, investors, distributors, business partners, transporters, management and staff, bankers and the Union for their support to the Company and the Group. We continue to look forward to your support for the challenging year ahead.

KWEK LENG PECKChairman18 March 2011


5-YEAR FINANCIAL SUMMARY

6-month Year ended Year ended Year ended period ended Year ended 31.12.2010 31.12.2009 31.12.2008 31.12.2007 30.6.2007 (Restated) (Restated) RM’000 RM’000 RM’000 RM’000 RM’000

Share Capital 123,956 185,407 185,088 184,935 184,747

Reserves 812,114 722,675 669,123 593,791 565,577

Shareholders’ Funds 936,070 908,082 854,211 778,726 750,324

Provision 908 - - - -

Deferred Taxation Liabilities/(Assets) 28,516 16,116 7,285 (4,404) (10,305)

965,494 924,198 861,496 774,322 740,019

Property, Plant & Equipment 350,861 366,922 376,968 384,807 389,296

Intangibles 898 755 827 1,080 1,248

Prepaid Lease Payments 32 37 42 5,891 5,943

Investment in associates - - 41,036 33,903 76,857

Investment in Joint Venture 6 6 - - -

Other Investment - - 3,936 3,936 4,005

Development Expenditure - 37 37 37 37

Other Receivables - - 38,829 48,729 2,300

Total Non-Current Assets 351,797 367,757 461,675 478,383 479,686

Current Assets 681,763 614,847 470,227 340,497 307,036

Current Liabilities (68,066) (58,406) (70,406) (44,558) (46,703)

Net Current Assets 613,697 556,441 399,821 295,939 260,333 Total Net Assets 965,494 924,198 861,496 774,322 740,019

Revenue *553,038 526,770 509,798 203,000 320,847

Profit before Tax *156,272 87,160 98,612 45,603 87,797

Attributable Profits *132,408 67,125 75,052 37,451 76,211

Total Dividends 41,695 13,945 - 9,602 10,698

* Combination of both continuing and discontinued operations’ results.


5-YEAR FINANCIAL SUMMARY (Cont’d)

600

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0

100

80

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40

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1200

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FY 30.6.07 FY 31.12.08 FY 31.12.09 FY 31.12.106-month Period Ended31.12.07

FY 30.6.07 6-month Period as at31.12.07

FY 31.12.08 FY 31.12.09 FY 31.12.10

REVENUE & PROFIT BEFORE TAX (RM Million)

EARNINGS & DIVIDEND PER SHARE

(Sen)

TOTAL ASSETS & SHAREHOLDERS’ FUND

(RM Million)

CAPITAL EXPENDITURE & DEPRECIATION

(RM Million)

1,034936

983

88

321

8.0

41.3

7.0

20.210.0

36.230.0

83.0

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40.6

46

203

99

510

87

527

156

553

908932854819779787750

41.0

31.0

21.019.0

45.0

31.5

47.2

37.443.1

35.4

Dividend Per Share(Gross)

Earnings Per Share

Shareholders’ Fund Total Assets

Capital Expenditure Depreciation

6-month Period Ended31.12.07

FY 31.12.09FY 31.12.08FY 30.06.07 FY 31.12.10

6-month Period Ended31.12.07

FY 31.12.09FY 31.12.08FY 30.06.07 FY 31.12.10

Profit Before Tax Revenue


BOARD AUDIT AND RISK MANAGEMENT COMMITTEE’S REPORT

The Board Audit and Risk Management Committee of Tasek Corporation Berhad (“Committee”) comprises three members who are independent non-executive Directors. The members of the Committee are as follows:

1) Mr. Lim Eng Khoon (Chairman w.e.f. 28 January 2011) (Independent Non-Executive Director) (Appointed as member on 13 December 2010)

2) Dato’ Chong Pah Aung (Independent Non-Executive Director)

3) Mr. Wan Mohd Shukri bin Ariffin (Independent Non-Executive Director)

4) Dato’ Khoo Peng Lai (Chairman, Independent Non-Executive Director) (Resigned as Chairman and member on 28 January 2011)

5) Mr. Ting Sii Tien @ Yao Sik Tien (Non-Independent Non-Executive Director) (Appointed 27 July 2010 and resigned as member on 18 November 2010 when re-designated as Executive Director)

The Terms of Reference of the Committee are:

I. The Committee shall consist of at least three Directors, the majority of whom shall be independent. The Chairman of the Committee shall be an independent non-executive Director. No alternate director shall be appointed as a member of the Committee. All members shall be non-executive Directors. The composition of the Committee shall fulfill the requirements of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad as from time to time amended. The Committee shall meet at least four times a year and any two independent Directors present at a meeting shall form a quorum. The Company Secretary shall be the Secretary to the Committee.

II. The duties of the Committee shall include the following:

(a) To nominate and recommend for the approval of the Board, a person or persons as external auditor(s) and to review the audit fees and any question of resignation or dismissal.

(b) To discuss with the external auditor before the audit commences, the nature and scope of the audit and audit plan.

(c) To review the quarterly and year-end financial statements of the Company, focusing particularly on:-

• Any change in or implementation of major accounting policies and practices; • Significant changes and unusual events; • The going concern assumption; and • Compliance with accounting standards and other legal requirements.

(d) To review, with the external auditors, the audit report and audit findings, the evaluation of the system of internal controls, management letter and management’s response thereto.

(e) To review the assistance given by the employees of the Company to the external auditors.

(f) To do the following in respect of the Company’s internal audit function:-

• Review the adequacy of the scope, functions and resources of the internal audit function, and that it has the necessary authority to carry out its work; • Review the internal audit programme and results of the internal audit process and, where necessary, ensure that appropriate actions are taken on the recommendation of the internal audit function; • Review the report and findings of the internal audit department including any major findings of internal investigations and the management’s response thereto; • Review any appraisal or assessment of the performance of members of the internal audit function; • Approve any appointment or termination of senior staff members of 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/her reasons for resigning.


BOARD AUDIT AND RISK MANAGEMENT COMMITTEE’S REPORT (cont’d)

The Terms of Reference of the Committee are: (cont’d)

II. The duties of the Committee shall include the following: (cont’d)

(g) To review any related party transaction and conflict-of-interest situation that may arise within the Company or Group.

(h) Other functions as may be agreed to by the Committee and Board of Directors.

(i) To do the following in respect of the Company’s Risk Management function:-

• Oversee and monitor the implementation of the Risk Management framework and activities adopted by the Company;

• Evaluate and recommend to the Board on risk management policies and strategies proposed by the management; and

• Review and report to the Board on measures taken to identify and examine principal risks faced by the Company and to implement appropriate systems and internal controls to manage these risks.

III. The Committee shall have explicit authority to investigate any matter within its terms of reference; the resources which it needs to do so and full access to information. The Committee should be able to obtain independent legal or other external professional advice if it considers necessary.

IV. After each meeting, the Committee shall report and update the Board of Directors on significant issues and concerns discussed during the meeting and where appropriate, make necessary recommendations to the Board.

During the financial year ended 31 December 2010, the Committee held four meetings. Details on the attendance of the meetings by Members of the Committee were as follows:

Members Total

1) Mr. Lim Eng Khoon (Appointed 13 December 2010) 0/02) Dato’ Chong Pah Aung 4/43) Mr. Wan Mohd Shukri bin Ariffin 4/44) Dato’ Khoo Peng Lai (Resigned 28 January 2011) 4/45) Mr. Ting Sii Tien @ Yao Sik Tien 1/1 (Appointed 27 July 2010 and resigned 18 November 2010)

The Committee has carried out its duties as set out in its Terms of Reference during the financial year ended 31 December 2010. The adequacy of the Company’s existing risk management framework, system of internal controls and compliance with the Malaysian Code on Corporate Governance was discussed. The Committee also met with the Company’s external auditors twice during the financial year without the presence of the executive management.

The Internal Audit Department which is performed in-house reports to the Committee and conducts regular audits on the internal controls, operations and processes with follow-up audits at the end of the financial year. Other main activities performed by Internal Audit Department were review and monitoring of the Company’s risk management framework and corporate governance. Reports were issued to the Committee on a timely basis for appraisal at Committee’s meetings. The cost incurred for the in-house internal audit function in respect of the financial year ended 31 December 2010 was RM212,559.


INTRODUCTIONThe Board of Directors (‘Board’) is responsible for the corporate governance of the Company. Corporate Governance is a matter of high importance and is undertaken with due regards to not only the Company’s shareholders but its stakeholders as well. The Board encourages and supports good corporate governance to become a fundamental part of the culture and business practices of the Company. The Board considers that the Company has, throughout the financial year, complied with the Malaysian Code on Corporate Governance (‘Code’).

BOARD STRUCTURE The Company is headed by the Board that focuses, leads, strategise and controls the direction of the Company. The Board is also responsible for the Company’s system of internal controls and risk management framework and for reviewing the effectiveness of these systems.

The Board operates as a single team, with a balanced mix of executive, non-executive and independent non-executive directors, so that there is no domination by a group or an individual in decision-making. The seven members of the Board comprise four independent non-executive directors, an executive director and two non-independent non-executive directors. The Chairman of the Board, Mr. Kwek Leng Peck is a non-independent non-executive director. The Independent Non-Executive Directors of the Board meets the criteria of the Code and the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (‘Bursa Securities’). More than half of the Board is made up of independent non-executive directors who provide and bring with them experience and independent judgement gained at the most senior levels.

There is a clear division of responsibilities between the Non-Independent Non-Executive Chairman and the Executive Director to ensure a balance of power and authority. The Chairman heads the Board while the senior management members reports to the Executive Director/ Acting Group Chief Executive Officer and takes on the primary responsibility of executive management as authorised by the Board and to oversee the operations of the Company. During the financial year, one member of the Board has resigned as Executive Director and one new member has been appointed to the Board subsequently as an Independent Non-Executive Director. Dato’ Khoo Peng Lai is also the Senior Independent Non-Executive Director to whom concerns on issues affecting the Company may be conveyed.

Together, the Board brings with them a wide range of experience in international business operations and strategy, marketing, financial, technical and international affairs necessary to ensure effective Board processes. A brief profile of each member of the Board is listed on pages 4 to 5 of the Annual Report.

The process of any appointment to the Board is fundamental towards enhancing governance. The Board’s Remuneration and Nomination Committee, comprising a majority of independent non-executive directors, is responsible for proposing, assessing and recommending candidates for all directorships to the Board. Under the Company’s Articles of Association, all members of the Board are required to retire, by rotation, once every three years. The members to retire in each year are the members who have been the longest in office since their appointment or re-appointment.

The individual members of the Board have attended various seminars, forums, talks and other programmes to keep abreast with relevant developments in the business environment as well as new regulatory requirements in their capacity as a director on the Board of the Company or as a director of other companies or listed issuers, both local and foreign. In addition, the Board is kept updated through internal circulars by the Company Secretary of relevant changes in regulatory requirements.

During the financial year ended 31 December 2010, the directors of the Company attended various training programmes and seminars which cover the following topics and newly appointed Directors have attended the Mandatory Accreditation Programme:

• The Irish Chamber of Commerce Talk on “What Future for Europe and the Euro?”

• 12th International Surveyors’ Congress – Reaching 50 and Surviving Ahead

• 18th World Congress of Accountants 2010

• Global outlook 2010 “Changing tides: Navigating the next wave”

• Global outlook 2010 “The global economy: balancing risks and opportunities”

• SID-KPMG luncheon talk on “Dos and Don’ts for M&A in China”

• Latest developments in corporate governance and new rules and regulations

• Stephen King luncheon presentation “Wrestling with Debt”

• SGX-SID listed company Directors Programme “LCD Module 3: Risk Management Essentials”

STATEMENT ON CORPORATE GOVERNANCE


STATEMENT ON CORPORATE GOVERNANCE (cont’d)

MEETINGSThe Board ordinarily meets four times per calendar year at quarterly intervals, with additional meetings convened when necessary. The meetings are scheduled in advance at the beginning of the year. During the financial year ended 31 December 2010, four meetings were convened and held. The attendance of each member of the Board is listed on the Director’s Profile on pages 4 and 5 of the Annual Report.

The Directors are supplied with information for each meeting in a timely manner in order to discharge their duties. Together with the agenda and notice of meeting, a set of board papers is issued to all members of the Board prior to and in advance of each meeting. All members of the Board have access to all information of the Company and to the advice and services of the Company Secretary and, if need be, the Board can obtain independent professional or other advice from external resources at the cost of the Company.

BOARD COMMITTEESTo assist in the execution of the Board’s responsibilities, the Board Audit and Risk Management Committee and the Remuneration and Nomination Committee have been established by the Board. The Remuneration and Nomination Committee, which is made up of a majority of independent non-executive directors, takes on the task of proposing, assessing and recommending candidates for directorships. The Board Audit and Risk Management Committee are made up wholly of independent non-executive directors and its Chairman is an Independent Non-Executive Director who is a member of the Institute of Chartered Accountants in Australia.

DIRECTORS’ REMUNERATIONThe Remuneration and Nomination Committee was formed by the Board to evaluate and recommend to the Board the remuneration of the Executive Director and senior management members. Determination on remuneration of Non-Executive Directors is a matter for the Board as a whole with the member of the Board concerned abstaining from deliberations and voting in respect of his own remuneration.

The aggregate remuneration of directors for the financial year is disclosed on page 53 of the financial statements in the Annual Report.

SHAREHOLDERS The Board acknowledges the need for shareholders and investors to be informed in a timely manner of all material information in relation to the Company. Various corporate announcements and timely release of quarterly financial results, the annual audited financial statements and annual report keep shareholders and investors fully informed about the performance and operations of the Company. The public, shareholders and investors can also access the Company’s website at www.tasekcement.com through the Internet for information on the Company and current and past records of its financial performance and its announcements.

The Company’s Annual General Meeting is an open forum for the Board and shareholders to communicate with each other. This presents an opportunity for shareholders to ask questions or seek clarification on the performance of the Company. The Notice of Meeting is circulated to all shareholders at least 21 clear days before the Meeting and shareholders are encouraged to attend the meeting. The Company, where it deems it practicable to do so, will enter into a dialogue with its institutional shareholders based on mutual understanding of objectives and entertains visits from shareholders, other fund managers or analysts.

ACCOUNTABILITY AND AUDITResponsibility statement by Directors on the preparation of the financial statements

The Board is required by law to prepare financial statements for each accounting period according to prescribed accounting standards, where applicable, that gives a true and fair view of the state of affairs of the Group and of the Company at the end of the financial year and of the results of the Group and of the Company for the period then ended.

In preparing the financial statements, the Board has:

• adopted and consistently applied suitable accounting policies and any new prescribed standards;• made judgements and estimates that are prudent and reasonable;• followed applicable accounting standards, subject to any material departures disclosed and explained in the notes to the financial statements; and• prepared the financial statements on a going concern basis, unless it is inappropriate to presume that the Group and the Company will continue in business.


ACCOUNTABILITY AND AUDIT (cont’d)The Board is responsible for ensuring proper accounting records are kept, which disclose with reasonable accuracy at any time, the financial position of the Group and of the Company and to enable them to ensure that the financial statements comply with the relevant laws and regulations. The Board is further responsible for taking reasonable steps to safeguard the assets of the Group and of the Company, and for taking reasonable steps for the prevention and detection of fraud and other irregularities.

RELATIONSHIP WITH THE AUDITORSA summary of the activities of the Board Audit and Risk Management Committee during the financial year are set out in the Board Audit and Risk Management Committee’s Report on pages 10 to 11 of the Annual Report.

The Committee maintains an appropriate relationship with the external auditors that is formal and transparent. Key features underlying the relationship of the Board Audit and Risk Management Committee with the Company’s external auditors are included in the Committee’s terms of reference on pages 10 to 11 of the Annual Report. The Committee meets with the external auditors at least twice a year without the presence of executive management. From time to time, the external auditors highlight matters that require attention to the Board Audit and Risk Management Committee and the Board.

STATEMENT ON INTERNAL CONTROLThe Statement on Internal Control, set out on pages 16 to 17 of the Annual Report, provides an overview of the Company’s state of internal control. The Company’s system of internal controls and risk management framework are designed to manage, rather than eliminate, the risk of failure to achieve business objectives; any system can provide only reasonable and not absolute assurance against material misstatement or loss.

MATERIAL CONTRACTSSave for the following, the Company has not entered into any contract which is or may be material, not being contracts entered into in the ordinary course of business, during the financial year.

On 10 August 2010, the Company’s wholly-owned subsidiary, Posek Pembangunan Sdn. Bhd. entered into a Sale and Purchase Agreement with Steven Shanker A/L Chawapati (NRIC No. 740515-07-5305) for the sale of a piece of land in Seberang Prai for a consideration of RM2.64 million upon the terms and conditions of the Sale and Purchase Agreement.

On 13 July 2010, the Company’s wholly-owned subsidiary, Tasek Plantation Sdn. Bhd. entered into a Conditional Sale and Purchase Agreement with Ngan Yin Groundnut Factory Sdn. Bhd. (Company No. 24765-P) of No. 11A, Jalan Lasam, Ipoh, Perak to sell its oil palm estate known as Gunong Kuang Estate comprising Lot Nos. 12397, 15474, 36233, 17286, 34582, 34057 & 34059, all in the Mukim of Hulu Kinta, District of Kinta, Perak for a total cash consideration of RM53,888,999-00 only upon the terms and conditions of the Conditional Sale and Purchase Agreement.

On 27 May 2010, the Company announced the termination of the conditional Sale and Purchase Agreement with Loo An Swee and Tan Swee Tiang relating to the sale and purchase of the whole of the issued capital of Gridland Sdn. Bhd. (“GSB”), and proposed the acquisition of the whole issued share capital of PR Engineering Sdn Bhd (“PRE”) comprising 500,000 ordinary shares of RM1.00 each for a cash consideration of RM14.2 million by entering into a Sale and Purchase Agreement with Loo An Swee and Tan Swee Tiang (collectively the “Guarantors”) and GSB (“Seller”). PRE is a private limited company incorporated in Malaysia under the Companies Act, 1965 and a wholly-owned subsidiary of GSB with an issued and paid-up share capital of 500,000 ordinary shares of RM1.00 each. PRE is the sole legal and beneficial owner of a limestone hill held under HS (D) 180252 PT 21302 Mukim Sungai Raya, Daerah Kinta, Negeri Perak and HS (D) 180253 PT 21303 Mukim Sungai Raya, Daerah Kinta, Negeri Perak.



STATEMENT ON CORPORATE RESPONSIBILITYThe Company has and is practising corporate responsibility towards its employees and workers, the community and to the environment. The Company continues to maintain its ISO 14001 and OHSAS 18001 certifications in its efforts to systematically address its responsibility for health, safety and environment. In its effort to minimise any adverse impact on the environment, it is continuously exploring and procuring suitable waste products from various companies for use as alternative fuel or raw material in its manufacturing processes. It is also constantly upgrading its plant to reduce carbon footprints, heat generation and dust emissions. Additionally, the Company has produced, sold and encourage customers to use bagged blended cement in order to reduce carbon emissions. During the year, the Company also conducted charity event and visits to old folks’ homes, orphanages, welfare homes, handicapped and disabled children’s homes.



STATEMENT ON INTERNAL CONTROL

INTRODUCTIONThe Malaysian Code on Corporate Governance requires public listed companies to maintain a sound system of internal controls to safeguard shareholders’ investments and the Company’s assets. Equally, under paragraph 15.26 (b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (‘Bursa Securities’), the Board of Directors of public listed companies is required to include in its annual report, a statement on the Company’s state of internal control. The Board of Directors (‘Board’) recognises its responsibilities for and the importance of sound internal controls. Set out below is the Board’s Statement on Internal Control, which provides an overview of the Company’s state of internal control.

BOARD RESPONSIBILITYThe Board has ultimate responsibility for the system of internal controls. Overall, the Board has established a risk management framework with the objective of setting clear guidelines in relation to the levels of risk acceptable to the Company. The system of internal controls is designed to meet the Company’s particular needs and the risks to which it is exposed. This system covers not only financial controls but risk management, operational and compliance controls. It should be appreciated that, however effective a system is, it can only provide reasonable, not absolute, assurance against material misstatement, loss or irregularities. It should be further noted that such a system is designed to manage, rather than eliminate, the risks of failure to achieve its business objectives.

The Company has in place an on-going process for identifying, evaluating and managing the significant risks affecting the achievement of its business objectives for the year and up to the date of approval of the annual report and financial statements. This process is on-going and reviewed by the Board on a quarterly basis and in accordance with Bursa Securities’ Statement on Internal Control: Guidance for Directors of Public Listed Companies. The risk management process was also extended to its significant subsidiary company and significant associate company.

RISK MANAGEMENT FRAMEWORKPart 2 of the Best Practices in the Malaysian Code on Corporate Governance states that the Board should identify principal risks and ensure the implementation of appropriate systems to manage these risks. The Board, in fulfilling its stewardship responsibilities, has established an organisation structure with clearly defined lines of accountability and delegated authority. The risk management functions and effectiveness of such controls were first formalised in May 2002. Each financial year, with the assistance of the Internal Audit Department, the Board undertook a review of its existing risk management processes and key components of its internal controls that were in place within the various operating business units.

The Company took the following initiatives:

• The Risk Management Policy was issued in August 2002, which outlines the risk management framework for the Company and offers practical guidance to all employees on risk management issues;• A database of all risks and controls had been formed, and the information organised to produce detailed risk registers for the major business units, that have been categorised into strategic, operations, financial and knowledge risks;• Key risks to each of the Company’s business unit’s objectives, aligned with the Company’s strategic objectives, had been identified and assessed for likelihood of the risks occurring and the magnitude of impact using a self-assessment approach;• Management’s risk assessments had been moderated and re-confirmed; with the corresponding action plans for the significant risks prepared by the key members of management to address those risks;• A risk profile of the Company had been developed, which together with a summary of the key findings and corresponding action plans, were presented and discussed with the Board Audit and Risk Management Committee before submitting to the Board for consideration;• Quarterly risk management reports were updated and submitted to the Enterprise Risk Management Committee before being tabled to the Board Audit and Risk Management Committee and ultimately the Board for consideration; and• The processes adopted to monitor and review the adequacy and integrity of the system of internal controls are continuously reviewed and improved upon by the Board Audit and Risk Management Committee.


Statement on Internal Control (cont’d)

INTERNAL AUDIT FUNCTIONThe Company has its own internal audit function, which provides reports to the Board Audit and Risk Management Committee on a quarterly basis and provides the Board with much of the assurance it requires regarding the adequacy and integrity of the system of internal controls. The Board Audit and Risk Management Committee reviews and approves the internal audit plan on an annual basis. The Internal Audit Department independently reviews the internal controls in the key activities of the Company’s businesses implemented by the management.

OTHER RISKS AND CONTROL PROCESSESApart from risk management and internal audit, the other key elements of the Group’s internal control systems are as follows:

• An organisational structure with clearly defined delegation of responsibilities to Committees of the Board and to Management that promotes accountability for appropriate risk management and control procedures. The procedures include the establishment of authority limits for all aspects of the business, which is subject to periodic review throughout the year as to their implementation and for their continuing suitability;• Regular internal audit reviews to monitor compliance with procedures and assess the integrity of financial information provided;• Regular and comprehensive information provided to Management, covering financial performance and key business indicators, such as sales, production volumes, staff turnover and cash flow performance;• Regular internal quality inspection to monitor compliance with ISO and OHSAS requirements;• A detailed budgeting process, whereby operating units prepare budgets for the coming year which are then approved both at the operating unit level and by the Board;• Monthly monitoring of results against budget, with major variances being followed up and management action taken (where necessary); and• Regular visits to operating units by the Executive Director and key members of management.

WEAKNESSES IN INTERNAL CONTROLS THAT RESULT IN MATERIAL LOSSESDuring the year, no weaknesses in internal control that have resulted in any material losses, contingencies or uncertainties that would require disclosure in the Company’s annual report were noted. Management continues to review and take measures to ensure the ongoing effectiveness and adequacy of internal controls, so as to safeguard shareholders’ investments and the Company’s assets.


DIRECTORS’ REPORTThe directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2010.

PRINCIPAL ACTIVITIESThe principal activity of the Company consist of the manufacture and sale of cement and related products. The principal activities of the subsidiaries are described in Note 15 to the financial statements.

There have been no significant changes in the nature of the principal activities during the financial year except for the discontinuance of land cultivation, plantation and estate management as discussed in Note 10 to the financial statements.

RESULTS Group Company RM’000 RM’000

Profit from continuing operations, net of tax 129,316 89,137Profit from discontinued operation, net of tax 3,092 -Profit net of tax 132,408 89,137

Profit attributable to:Owners of the parent 132,408 89,137

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

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

DIVIDENDSThe amounts of dividends paid by the Company since 31 December 2009 were as follows:

RM’000In respect of the financial year ended 31 December 2009 as reported in the directors’ report of that year.

Final dividend of 10 sen per share less 25% taxation, on 184,907,200 ordinary shares paid on 18 June 2010. 13,838

Special dividend of 20 sen per share less 25% taxation, on 184,907,200 ordinary shares paid on 18 June 2010. 27,677

Single tier preference dividend of 6 sen per share and single tier ordinary dividend of 10 sen per share, on 500,000 6% Cumulative Participating Preference Shares paid on 18 June 2010. 80

Single tier special dividend of 20 sen per share, on 500,000 6% Cumulative Participating Preference Shares paid on 18 June 2010. 100 41,695

DIRECTORS’ REPORT


DIVIDENDS (cont’d)At the forthcoming Annual General Meeting, the following dividend payments will be proposed for shareholders’ approval: RM’000In respect of the financial year ended 31 December 2010Final dividend of 30 sen per share less 25% taxation, on 123,621,231 ordinary shares 27,815Special dividend of 50 sen per share less 25% taxation on 123,621,231 ordinary shares 46,358Single tier preference dividend of 6 sen per share and single tier ordinary dividend of 30 sen per share, on 335,000 6% Cumulative Participating Preference Shares 121Single tier special dividend of 50 sen per share, on 335,000 6% Cumulative Participating Preference Shares 168

The financial statements for the current financial year do not reflect these proposed dividends. Such dividends, if approved by the shareholders, will be accounted for in equity as an appropriation of retained profits for the financial year ending 31 December 2011.

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

Kwek Leng PeckTing Sii Tien @ Yao Sik TienDato’ Khoo Peng LaiDato’ Chong Pah AungWan Mohd Shukri bin AriffinKwek Kon ChunLim Eng Khoon - appointed on 13 December 2010Dato’ Teo Tong Kooi - resigned on 18 November 2010

DIRECTORS’ BENEFITSNeither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the Company was a party, whereby the directors might acquire benefits by means of the acquisition of shares in the Company or any other body corporate.

Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by the directors or the fixed salary of a full-time employee of the Company as shown in Note 8 to the financial statements) by reason of a contract made by the Company or a related corporation with any director or with a firm of which he is a member, or with a company in which he has a substantial financial interest, except as disclosed in Note 29 to the financial statements.

TREASURY SHARESDuring the financial year, the Company repurchased 341,500 of its issued ordinary shares from the open market at an average price of RM4.73 per share. The total consideration paid for the repurchase including transaction costs were RM1,615,000. The shares repurchased were held as treasury shares in accordance with Section 67A of the Companies Act, 1965.

On 24 June 2010, the Company cancelled all the 397,900 treasury shares held pursuant to Section 67A of the Companies Act 1965.

As at 31 December 2010, there were no treasury shares held.

DIRECTORS’ REPORT (cont’d)


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

I-------Number of ordinary shares--------I As at As at 1.1.2010 Acquired 31.12.2010

Name of directors

Interest of Kwek Leng Peck in :Hong Leong Asia Ltd 1,430,000 - 1,430,000City Developments Limited 43,758 - 43,758Hong Leong Finance Limited 517,359 - 517,359Hong Leong Investment Holdings Pte Ltd 10,921 - 10,921City e-Solutions Limited # 2,082,200 - 2,082,200Hong Leong Holdings Limited 381,428 - 381,428Hong Realty (Private) Limited 150 - 150

Interest of Ting Sii Tien @ Yao Sik Tien in :Hong Leong Asia Ltd 120,000 160,000 280,000

Interest of Kwek Kon Chun in :Hong Leong Asia Ltd 33,000 17,000 50,000

All related corporations except City e-Solutions Limited are incorporated and domiciled in the Republic of Singapore. On the date of commencement of the Republic of Singapore’s Companies (Amendment) Act 2005 on 30 January 2006, the shares of the related corporations ceased to have par value.

# Incorporated in the Cayman Islands and domiciled in Hong Kong. The par value of its ordinary shares is HKD1.00 each.

Options granted and exercised over ordinary shares of a related corporation, Hong Leong Asia Ltd (“HLA”) under the Share Option Scheme of HLA are as follow :-

Option Number of options over ordinary shares Date of price As at As at offer SGD 1.1.2010 Exercised 31.12.2010

Kwek Leng Peck 10.1.2007 1.88 85,000 - 85,000 15.5.2008 2.36 335,000 - 335,000

Ting Sii Tien @ Yao Sik Tien 10.1.2007 1.88 160,000 (160,000) - 15.5.2008 2.36 300,000 - 300,000

Kwek Kon Chun 10.1.2007 1.88 17,000 (17,000) -

Other than as disclosed above, none of the other directors in office had any interest in the Company or its related corporations during the financial year.




OTHER STATUTORY INFORMATION(a) Before the statements of comprehensive income and statements of financial position of the Group and of the Company were made out, the directors took reasonable steps:

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts; and

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

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

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

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

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

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

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

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

(f) In the opinion of the directors:

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

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

SIGNIFICANT EVENTSIn addition to the significant events disclosed elsewhere in this report, other significant events are disclosed in Note 32 to the financial statements.

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

Signed on behalf of the Board in accordance with a resolution of the directors dated 18 February 2011.

Kwek Leng Peck Ting Sii Tien @ Yao Sik Tien

Kuala Lumpur, Malaysia


We, Kwek Leng Peck and Ting Sii Tien @ Yao Sik Tien, being two of the directors of Tasek Corporation Berhad, do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 25 to 85 are drawn up in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2010 and of their financial performance and cash flows for the year then ended.

The information set out in Note 38 to the financial statements have been prepared in accordance with the Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad.

Signed on behalf of the Board in accordance with a resolution of the directors dated 18 February 2011.

Kwek Leng Peck Ting Sii Tien @ Yao Sik Tien


I, Lian Ka Siew, being the officer primarily responsible for the financial management of Tasek Corporation Berhad, do solemnly and sincerely declare that the accompanying financial statements set out on pages 25 to 85 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 declaredby the abovenamed Lian Ka Siewat Kuala Lumpur in the Federal Territoryon 18 February 2011. Lian Ka Siew

Before me,TAN SEOK KETT (W530)Commissioner for OathsKuala Lumpur, Malaysia

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

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


REPORT ON THE FINANCIAL STATEMENTSWe have audited the financial statements of Tasek Corporation Berhad, which comprise the statements of financial position as at 31 December 2010 of the Group and of the Company, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 25 to 85.

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

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

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

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

OPINIONIn our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2010 and of their financial performance and cash flows for the year then ended.

INDEPENDENT AUDITORS’ REPORTTO THE MEMBERS OF TASEK CORPORATION BERHAD


INDEPENDENT AUDITORS’ REPORTTO THE MEMBERS OF TASEK CORPORATION BERHAD (cont’d)

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTSIn 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 financial statements of the subsidiary of which we have not acted as auditors, which are indicated in Note 15 to the financial statements, being financial statements that have been included in the consolidated financial statements of the Group.

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

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

OTHER MATTERSThe supplementary information set out in Note 38 on page 86 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Content of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

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

Ernst & Young Lee Seng HuatAF: 0039 No. 2518/12/11(J)Chartered Accountants Chartered Accountant

Kuala Lumpur, Malaysia18 February 2011


Group Company 2010 2009 2010 2009 (restated) Note RM’000 RM’000 RM’000 RM’000

Continuing operations

Revenue 4 546,762 520,785 442,523 421,848Cost of sales (350,514) (356,227) (276,913) (287,999)

Gross profit 196,248 164,558 165,610 133,849

Other items of income- Interest income 5 9,214 6,378 9,083 6,138- Dividend income 34 - 4,906 3,840- Gain on disposal of property, plant and equipment 43,914 131 180 55- Other income 2,716 2,341 672 2,046

Other items of expense- Marketing and distribution (80,264) (73,908) (55,180) (52,643)- Administrative expenses (19,414) (17,011) (13,560) (12,224)- Finance costs (178) (98) - -Share of results of jointly controlled entity - 6 - -Share of results of associates - 1,366 - -

Profit before tax from continuing operations 6 152,270 83,763 111,711 81,061Income tax expense 9 (22,954) (19,213) (22,574) (18,612)

Profit from continuing operations, net of tax 129,316 64,550 89,137 62,449

Discontinued operationProfit from discontinued operation, net of tax 10 3,092 2,575 - -

Profit net of tax, representing total comprehensive income for the year 132,408 67,125 89,137 62,449

STATEMENTS OF COMPREHENSIVE INCOMEFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010


Group Company 2010 2009 2010 2009 (restated) Note RM’000 RM’000 RM’000 RM’000

Profit attributable to:Equity holders of the Company 132,408 67,125 89,137 62,449

Total comprehensive income attributable to:Equity holders of the Company 132,408 67,125 89,137 62,449

Earnings per share attributable to equity holders of the Company (sen per share)- Basic 11 82.95 36.20- Diluted 11 - -

Earnings per share from continuing operation attributable to equity holders of the Company (sen per share)- Basic 11 81.01 34.81- Diluted 11 - -

Earnings per share from discontinued operation attributable to equity holders of the Company (sen per share)- Basic 11 1.94 1.39- Diluted 11 - -

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

STATEMENTS OF COMPREHENSIVE INCOMEFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010 (cont’d)


STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2010

Group Company As at As at 2010 2009 1.1.2009 2010 2009 1.1.2009 (restated) (restated) (restated) (restated) Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Assets

Non-current assetsProperty, plant and equipment 12 350,861 366,922 376,968 319,023 339,033 349,053Prepaid lease payments 13 32 37 42 32 37 42Intangible assets 14 898 755 827 509 364 436Investment in subsidiaries 15 - - - 47,484 33,284 33,284Investment in joint venture 16 6 6 - - - -Investment in associates - - 41,036 - - 20,392Other investment - - 3,936 - - 3,936Other receivables - - 38,829 - - 38,829Development expenditure - 37 37 - - -Total non-current assets 351,797 367,757 461,675 367,048 372,718 445,972

Current assetsInventories 17 115,222 112,542 120,799 114,270 111,247 118,906Trade and other receivables 18 73,322 69,951 85,678 43,012 48,595 67,546Derivatives 19 61 - - 61 - -Cash and bank balances 20 436,904 355,726 261,115 429,414 346,930 251,720Tax recoverable 349 319 58 - 280 -Assets classified as held for sale 21 55,905 76,309 2,577 33,895 51,896 174Total current assets 681,763 614,847 470,227 620,652 558,948 438,346

Total assets 1,033,560 982,604 931,902 987,700 931,666 884,318


STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2010 (cont’d)

Group Company As at As at 2010 2009 1.1.2009 2010 2009 1.1.2009 (restated) (restated) (restated) (restated) Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Equity and liabilities

Current liabilitiesProvision 22 210 - - - - -Income tax payable 2,117 222 154 1,973 - -Loans and borrowings 23 4,127 3,747 4,587 - - -Trade and other payables 24 61,612 54,437 65,665 99,810 42,787 52,767Total current liabilities 68,066 58,406 70,406 101,783 42,787 52,767

Non-current liabilitiesProvision 22 908 - - - - -Deferred tax liabilities 25 28,516 16,116 7,285 26,314 13,993 5,860Total non-current liabilities 29,424 16,116 7,285 26,314 13,993 5,860Total liabilities 97,490 74,522 77,691 128,097 56,780 58,627

Equity attributable to equity holders of the CompanyShare capital 26 123,956 185,407 185,088 123,956 185,407 185,088Share premium 26 133,946 135,784 135,117 133,946 135,784 135,117Treasury shares 26 - (223) - - (223) -Reserves 27 678,168 587,114 534,006 601,701 553,918 505,486Total equity 936,070 908,082 854,211 859,603 874,886 825,691

Total equity and liabilities 1,033,560 982,604 931,902 987,700 931,666 884,318

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


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STATEMENTS OF CASH FLOW AS AT 31 DECEMBER 2010

Group Company 2010 2009 2010 2009 (restated) RM’000 RM’000 RM’000 RM’000

Operating activitiesProfit before tax from continuing operations 152,270 83,763 111,711 81,061Profit before tax from discontinued operation (Note 10) 4,002 3,397 - -Profit before tax, total 156,272 87,160 111,711 81,061Adjustments for: Interest income (9,214) (6,378) (9,083) (6,138) Dividend income (34) - (4,906) (3,840) Finance costs 178 98 - - Depreciation of property, plant and equipment 43,051 47,270 38,426 44,134 Net gain on disposal of property, plant and equipment (43,914) (131) (180) (55) Net gain on disposal of assets held for sales (1,538) - - - Property, plant and equipment written off 57 38 45 38 Impairment loss on receivables 751 209 385 - Amortisation of intangible assets 189 288 189 288 Amortisation of prepaid land lease payments 5 5 5 5 Net fair value gain on derivatives (61) - (61) - Share of results of jointly controlled entity - (6) - - Share of results of associates - (1,366) - - Unrealised foreign exchange gain (9) - (9) -Total adjustments (10,539) 40,027 24,811 34,432Operating cash flows before changes in working capital 145,733 127,187 136,522 115,493Changes in working capital - inventories (2,680) 8,257 (3,023) 7,659 - trade and other receivables 13,837 23,168 23,151 26,450 - trade and other payables 8,287 (11,228) 57,023 (9,980)Total changes in working capital 19,444 20,197 77,151 24,129Cash flows from operations 165,177 147,384 213,673 139,622Interest received 9,214 6,378 9,083 6,138Interest paid (178) (98) - -Income taxes paid (9,599) (11,398) (8,000) (9,799)Net cash flows generated fromoperating activities 164,614 142,266 214,756 135,961


STATEMENTS OF CASH FLOW AS AT 31 DECEMBER 2010 (cont’d)

2010 2009 2010 2009 (restated) RM’000 RM’000 RM’000 RM’000

Investing activitiesPurchase of property, plant and equipment (35,419) (37,412) (18,454) (34,152)Net proceeds from disposal of property, plant and equipment 53,750 131 180 55Net cash outflow on acquisition of a subsidiary (Note 15) - - (14,200) -Dividend income 34 - 4,906 2,880Proceeds from disposal of investment securities - 3,936 - 3,936Net proceeds from disposal of assets held for sales 2,521 - - -Purchase of intangible assets (339) (216) (341) (216)Net cash flows generated from/ (used in) investing activities 20,547 (33,561) (27,909) (27,497)

Financing activitiesDividends paid (41,695) (13,945) (41,695) (13,945)Purchase of treasury shares (Note 26(d)) (1,615) (223) (1,615) (223)Share capital repayment (Note 26(c)) (61,053) - (61,053) -Net proceeds/(repayment) from loans and borrowings 380 (840) - -Proceeds from issuance of shares - 914 - 914Net cash flows used in financing activities (103,983) (14,094) (104,363) (13,254)

Net increase in cash and cash equivalents 81,178 94,611 82,484 95,210Cash and cash equivalents at 1 January 355,726 261,115 346,930 251,720Cash and cash equivalents at31 December (Note 20) 436,904 355,726 429,414 346,930

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


NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2010

1. CORPORATE INFORMATIONTasek Corporation Berhad (“the Company”) is a public limited liability company incorporated and domiciled in Malaysia, and is listed on the Main Market of Bursa Malaysia Securities Berhad. The registered office of the Company is situated at 6th Floor, Office Block, Grand Millennium Kuala Lumpur, 160 Jalan Bukit Bintang, 55100 Kuala Lumpur, Malaysia.

Its factory is located at Persiaran Tasek, Tasek Industrial Estate, 31400 Ipoh, Perak, Malaysia and its distribution terminal is at Lot 1552 Kg Jaya Industrial Area, Off Jalan Hospital, 47000 Sungai Buloh, Selangor, Malaysia.

The immediate and ultimate holding companies are HL Cement (Malaysia) Sdn Bhd (“HLCM”) and Hong Leong Investment Holdings Pte Ltd (“HLIH”) respectively. HLCM is incorporated in Malaysia while HLIH is incorporated in the Republic of Singapore.

The principal activity of the Company is the manufacture and sale of cement and related products.

The principal activities of the subsidiaries are described in Note 15.

There have been no significant changes in the nature of the principal activities during the financial year except for the discontinuance of land cultivation, plantation and estate management as disclosed in Note 10 to the financial statements.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 18 February 2011.

2. SIGNIFICANT ACCOUNTING POLICIES 2.1 Basis of preparation

The financial statements of the Group and of the Company have been prepared in accordance with Financial Reporting Standards (“FRS”) and the Companies Act, 1965 in Malaysia. At the beginning of the current financial year, the Group and the Company adopted new and revised FRS which are mandatory for financial periods beginning on or after 1 January 2010 as described fully in Note 2.2.

The financial statements have been prepared on the historical cost basis except as disclosed in the accounting policies below.

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

2.2 Changes in accounting policiesThe accounting policies adopted are consistent with those of the previous financial year except as follows:

On 1 January 2010, the Group and the Company adopted the following new and amended FRS and IC Interpretations mandatory for annual financial periods beginning on or after 1 January 2010.

• FRS 7 Financial Instruments: Disclosures • FRS 8 Operating Segments • FRS 101 Presentation of Financial Statements (Revised) • FRS 123 Borrowing Costs • FRS 139 Financial Instruments: Recognition and Measurement • Amendments to FRS 1 First-time Adoption of Financial Reporting Standards and FRS 127 Consolidated and Separate Financial Statements: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate • Amendments to FRS 2 Share-based Payment – Vesting Conditions and Cancellations • Amendments to FRS 132 Financial Instruments: Presentation • Amendments to FRS 139 Financial Instruments: Recognition and Measurement, FRS 7 Financial Instruments: Disclosures and IC Interpretation 9 Reassessment of Embedded Derivatives • Improvements to FRS issued in 2009 • IC Interpretation 9 Reassessment of Embedded Derivatives • IC Interpretation 10 Interim Financial Reporting and Impairment • IC Interpretation 11 FRS 2 – Group and Treasury Share Transactions • IC Interpretation 13 Customer Loyalty Programmes • IC Interpretation 14 FRS119 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction


2. SIGNIFICANT ACCOUNTING POLICIES (cont’d) 2.2 Changes in accounting policies (cont’d)

FRS 4 Insurance Contracts and TR i-3 Presentation of Financial Statements of Islamic Financial Institutions will also be effective for annual periods beginning on or after 1 January 2010. FRS 4, TR i-3, Amendments to FRS 2, IC Interpretation 13 and 14 are not applicable to the Group or the Company.

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

FRS 7 Financial statements : Disclosures

Prior to 1 January 2010, information about financial statements was disclosed in accordance with the requirements of FRS 132 Financial Instruments: Disclosures and Presentation. FRS 7 introduces new disclosures to improve the information about financial instruments. It requires the disclosure of qualitative and quantitative information about exposure to risks arising from financial instruments, including specified minimum disclosures about credit risk, liquidity risk and market risk, including sensitivity analysis to market risk.

The Group and the Company have applied FRS 7 prospectively in accordance with the transitional provisions. Hence, the new disclosures have not been applied to the comparatives. The new disclosures are included throughout the Group’s and the Company’s financial statements for the year ended 31 December 2010.

FRS 8 Operating Segments

FRS 8, which replaces FRS 114 Segment Reporting, specifies how an entity should report information about its operating segments, based on information about the components of the entity that is available to the chief operating decision maker for the purposes of allocating resources to the segments and assessing their performance. The Standard also requires the disclosure of information about the products and services provided by the segments, the geographical areas in which the Group operates, and revenue from the Group’s major customers. The Group concluded that the reportable operating segments determined in accordance with FRS 8 are the same as the business segments previously identified under FRS 114. The Group has adopted FRS 8 retrospectively. These revised disclosures, including the related revised comparative information, are shown in Note 35 to the financial statements.

FRS 101 Presentation of Financial Statements (Revised)

The revised FRS 101 introduces changes in the presentation and disclosures of financial statements. The revised Standard separates owner and non-owner changes in equity. The statement of changes in equity includes only details of transactions with owners, with all non-owner changes in equity presented as a single line. The Standard also introduces the statement of comprehensive income, with all items of income and expense recognised in profit or loss, together with all other items of income and expense recognised directly in equity, either in one single statement, or in two linked statements. The Group and the Company have elected to present this statement as one single statement.

In addition, a statement of financial position is required at the beginning of the earliest comparative period following a change in accounting policy, the correction of an error or the classification of items in the financial statements.

The revised FRS 101 also requires the Group to make new disclosures to enable users of the financial statements to evaluate the Group’s objectives, policies and processes for managing capital (see Note 36).

The revised FRS 101 was adopted retrospectively by the Group and the Company.

FRS 139 Financial Instruments: Recognition and Measurement

FRS 139 establishes principles for recognising and measuring financial assets, financial liabilities and some contracts to buy and sell non-financial items. The Group and the Company have adopted FRS 139 prospectively on 1 January 2010 in accordance with the transitional provisions. The effects arising from the adoption of this Standard has been accounted for by adjusting the opening balance of retained profits as at 1 January 2010. Comparatives are not restated. The details of the changes in accounting policies and the effects arising from the adoption of FRS 139 are discussed below:

NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2010 (cont’d)




FRS 139 Financial Instruments: Recognition and Measurement (cont’d)

- Non-hedging derivatives

Prior to 1 January 2010, all derivative financial instruments were recognised in the financial statements only upon settlement. These instruments do not qualify for hedge accounting under FRS 139. Hence, upon the adoptions of FRS 139, all derivatives held by the Group are classified as financial assets or liabilities at fair value through profit or loss.

- Impairment of trade receivables

Prior to 1 January 2010, provision for doubtful debts was recognised when it was considered uncollectible. Upon the adoption of FRS 139, an impairment loss is recognised when there is objective evidence that an impairment loss has been incurred. The amount of the loss is measured as the difference between the receivable’s carrying amount and the present value of the estimated future cash flows discounted at the receivable’s original effective interest rate. As at 1 January 2010, the Group has remeasured the allowance for impairment losses as at that date in accordance with FRS 139 and no differences have been identified that would render adjustments to the opening balance of retained profits as at that date to be made.

The application of the above new policies has the following effects :

Group Company Retained profits Retained profits 2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000

At 1 January, as previously stated 460,568 407,388 427,372 378,868

- Fair value adjustment on other derivative financial instruments (57) - (57) -At 1 January, as restated 460,511 407,388 427,315 407,388

Amendments to FRS 117 Leases

Prior to 1 January 2010, for all leases of land and buildings, where title is not expected to pass to the lessee by the end of the lease term and the lessee normally does not receive substantially all of the risks and rewards incidental to ownership, will be classified by the Group as operating lease and where necessary, the minimum lease payments or the up- front payments made were allocated between the land and the buildings elements in proportion to the relative fair values for leasehold interests in the land element and buildings element of the lease at the inception of the lease. The up-front payment represented prepaid lease payments and were amortised on a straight-line basis over the lease term.

The amendments to FRS 117 Leases clarify that leases of land and buildings are classified as operating or finance leases in the same way as leases of other assets. They also clarify that the present value of the residual value of the property in a lease with a term of several decades would be negligible and accounting for the land element as a finance lease in such circumstances would be consistent with the economic position of the lessee. Hence, the adoption of the amendments to FRS 117 has resulted in certain unexpired land leases to be reclassified as finance leases. The Group has applied this change in accounting policy retrospectively and certain comparatives have been restated. The following are effects to the statements of financial position as at 31 December 2010 arising from the above change in accounting policy.



Amendments to FRS 117 Leases (cont’d)

Group and Company RM’000

Increase/(decrease) in: Property, plant and equipment 5,548 Prepaid lease payment (5,548)

The following comparatives have been restated: As previously stated Adjustment As restated RM’000 RM’000 RM’000

Statements of financial positionGroup

31 December 2009

Property, plant and equipment 361,276 5,646 366,922 Prepaid lease payment 5,683 (5,646) 37

1 January 2009


Company

31 December 2009


1 January 2009


Statements of cash flow for the financial year ended 31 December 2009

Group

Adjustment for:

Depreciation of property, plant and equipment 47,169 101 47,270 Amortisation of prepaid lease payment 106 (101) 5

Company

Adjustment for:

Depreciation of property, plant and equipment 44,033 101 44,134 Amortisation of prepaid lease payment 106 (101) 5




2. SIGNIFICANT ACCOUNTING POLICIES (cont’d) 2.3 Standards issued but not yet effective

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

Effective for annual periods beginning on

Description or after

FRS 1 First-time Adoption of Financial Reporting Standards 1 July 2010 FRS 3 Business Combinations (revised) 1 July 2010 Amendments to FRS 2 Share-based Payment 1 July 2010 Amendments to FRS 5 Non-current Assets Held for Sale and Discontinued Operations 1 July 2010 Amendments to FRS 127 Consolidated and Separate Financial Statements 1 July 2010 Amendments to FRS 138 Intangible Assets 1 July 2010 Amendments to IC Interpretation 9 Reassessment of Embedded Derivatives 1 July 2010IC Interpretation 12 Service Concession Arrangements 1 July 2010 IC Interpretation 16 Hedges of a Net Investment in a Foreign Operation 1 July 2010 IC Interpretation 17 Distributions of Non-cash Assets to Owners 1 July 2010 Amendments to FRS 132: Classification of Rights Issues 1 March 2010 Amendments to FRS 1: Limited Exemption from Comparative FRS 7 Disclosures for First-time Adopters 1 January 2011IC Interpretation 18 Transfers of Assets from Customers 1 January 2011 Amendments to FRS 7 Improving Disclosures about Financial Instruments 1 January 2011 Amendments to FRSs contained in the document entitled “Improvements to FRSs (2010)” 1 January 2011 IC Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments 1 July 2011 Prepayments of a Minimum Funding Requirement (Amendments to IC Interpretation 14) 1 July 2011 IC Interpretation 15 Agreements for the construction of Real Estate 1 January 2012 FRS 124 Related Party Disclosures 1 January 2012

Except for the changes in accounting policies arising from the adoption of the revised FRS 3, the amendments to FRS 127 and revised FRS 124, the above FRSs, Amendments to FRSs and IC Interpretations are not expected to have any significant impact on the financial statements of the Group and of the Company upon their initial application. The nature of the impending changes in accounting policy on adoption of the revised FRS 3, the amendments to FRS 127 and FRS 124 are described 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 the accounting for business combinations occuring after 1 July 2010. These changes will impact the amounts of goodwill recognised, the reported results in the period that an acquisition occurs, and future reported results. 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 given 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. Other consequential amendments have been made to FRS 107 Statement of Cash Flows, FRS 112 Income Taxes, FRS 121 The Effects of Changes in Foreign Exchange Rates, FRS 128 Investments in Associates and FRS 131 Interests in Joint Ventures. The changes from revised FRS 3 and Amendments to FRS 127 will affect future acquisitions or loss of control and transactions with minority interests. The standards may be early adopted. However, the Group does not intend to early adopt.


2. SIGNIFICANT ACCOUNTING POLICIES (cont’d) 2.3 Standards issued but not yet effective (cont’d)

Revised FRS 124 : Related Party DisclosuresThe revised FRS 124 clarifies the definition of a related party to simplify the identification of such relationships and to eliminate inconsistencies in its application. The revised FRS 124 expands the definition of a related party and would treat two entities as related to each other whenever a person (or a close member of that person’s family) or a third party has control or joint control over the entity, or has significant influence over the entity. The revised standard also introduces a partial exemption of disclosure requirements for government related entities. The Group and the Company are currently determining the impact of the changes that the definition of a related party has on the disclosure of related party transaction. As this is a disclosure standard, it will have no impact on the financial position or financial performance of the Group and of the Company when implemented.

2.4 Basis of consolidationThe consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparation of the consolidated financial statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied to like transactions and events in similar circumstances.

All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated in full.

Acquisitions of subsidiaries are accounted for by applying the purchase method. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Adjustments to those fair values relating to previously held interests are treated as a revaluation and recognised in other comprehensive income. The cost of a business combination is measured as the aggregate of the fair values, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity instruments issued, plus any costs directly attributable to the business combination. Any excess of the cost of business combination over the Group’s share in the net fair value of the acquired subsidiary’s identifiable assets, liabilities and contingent liabilities is recorded as goodwill on the statement of financial position. The accounting policy for goodwill is set out in Note 2.7(a). Any excess of the Group’s share in the net fair value of the acquired subsidiary’s identifiable assets, liabilities and contingent liabilities over the cost of business combination is recognised as income in profit or loss on the date of acquisition. When the Group acquires a business, embedded derivatives separated from the host contract by the acquiree are reassessed on acquisition unless the business combination results in a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required under the contract.

Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases.

2.5 Foreign currencya) Functional and presentation currency

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

b) 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.




2. SIGNIFICANT ACCOUNTING POLICIES (cont’d) 2.5 Foreign currency (cont’d)

b) Foreign currency transactions (cont’d)

Exchange differences arising on the settlement of monetary items or on translating monetary items at the reporting date are recognised in profit 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 reclassified from equity to profit 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 profit 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.

2.6 Property, plant and equipmentAll 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 benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

Subsequent to recognition, property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. When significant parts of property, plant and equipment are required to be replaced in intervals, the Group recognises such parts as individual assets with specific useful lives and depreciation, respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the property, plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.

Freehold land, leasehold land and building at directors’ valuation are based on an opinion of open market value expressed by a professional firm of Chartered Surveyors on 30 June 1985. Subsequent additions are shown at cost while deletions are at valuation, or cost, as appropriate.

The Group’s policy is to state its property, plant and equipment at cost. Revaluation of leasehold land in 1985 was carried out primarily for the purpose of issuing bonus shares then and was not intended to effect a change in accounting policy to one of revaluation. As permitted under the transitional provisions of IAS 16 (Revised) Property, Plant and Equipment, these assets continue to be stated at their 1985 valuation less accumulated depreciation.

Freehold land has an unlimited useful life and therefore is not depreciated. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets as follows:

- Leasehold land - Amortised by equal annual instalments over the remaining life of the leases which vary between 21 and 73 years

- Buildings: 4% - 5% per annum

- Plant and machinery: 6% - 33% per annum

- Motor vehicles, furniture and equipment: 20% per annum

Capital work-in progress are not depreciated as these assets are not yet available for use.

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 financial year-end, and adjusted prospectively, if appropriate.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in the profit or loss in the year the asset is derecognised.


2. SIGNIFICANT ACCOUNTING POLICIES (cont’d) 2.7 Intangible assets

a) GoodwillGoodwill represents the excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree.

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 that are expected to benefit from the synergies of the combination.

The cash-generating unit to which goodwill has been allocated is tested for impairment annually and whenever there is an indication that the cash-generating unit may be impaired, by comparing the carrying amount of the cash-generating unit, including the allocated goodwill, with the recoverable amount of the cash-generating unit and where the recoverable amount is less than the carrying amount, an impairment loss is recognised in the profit or loss. Impairment losses recognised for goodwill are not reversed in subsequent periods.

Where goodwill forms part of a cash-generating unit and part of the operation within the cash-generating unit 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 cash-generating unit retained.

b) Other intangible assetsIntangible assets acquired separately are measured initially at cost. The cost of intangible assets acquired in a business combination is their value as at the date of acquisition. Following initial acquisition, intangible assets are measured at cost less any accumulated amortisation and accumulated impairment losses.

Intangible assets with finite useful lives are amortised over the estimated 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 are reviewed at least at each financial year-end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits 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 finite lives is recognised in profit or loss.

Intangible assets with indefinite useful lives or not yet available for use are tested for impairment annually, or more frequently if the events and circumstances indicate that the carrying value may be impaired either individually or at the cash-generating unit level. Such intangible assets are not amortised. The useful life of an intangible asset with an indefinite useful life is reviewed annually to determine whether the useful life assessment continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in profit or loss when the asset is derecognised.

Computer Software

Computer software costs have a finite useful life and are amortised over the period of estimated useful lives of 5 years on a straight line basis.

2.8 Impairment of non-financial assetsThe 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 identifiable cash flows (cash-generating units (“CGU”)).




2. SIGNIFICANT ACCOUNTING POLICIES (cont’d) 2.8 Impairment of non-financial assets (cont’d)

In assessing value in use, the estimated future cash flows expected to be generated by the asset are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to those units or groups of units and then, to reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis.

Impairment losses are recognised in profit 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 profit 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.

2.9 SubsidiariesA subsidiary is an entity over which the Group has the power to govern the financial and operating policies so as to obtain benefits from its activities.

In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost less impairment losses.

2.10 Associates An associate is an entity, not being a subsidiary or a joint venture, in which the Group has significant influence. An associate is equity accounted for from the date the Group obtains significant influence until the date the Group ceases to have significant influence over the associate.

The Group’s investments in associates are accounted for using the equity method. Under the equity method, the investment in associates is measured in the statement of financial position at cost plus post-acquisition changes in the Group’s share of net assets of the associates. Goodwill relating to associates is included in the carrying amount of the investment. Any excess of the Group’s share of the net fair value of the associate’s identifiable assets, liabilities and contingent liabilities over the cost of the investment is excluded from the carrying amount of the investment and is instead included as income in the determination of the Group’s share of the associate’s profit or loss for the period in which the investment is acquired.

When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on the Group’s investment in its associates. The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount in profit or loss.

The financial statements of the associates are prepared as of the same reporting date as the Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.

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


2. SIGNIFICANT ACCOUNTING POLICIES (cont’d) 2.11 Joint venture

A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control, where the strategic financial and operating decisions relating to the activity require the unanimous consent of the parties sharing control. The Group recognises its interest in joint venture using equity method. Under the equity method, the investment in joint venture is measured in the statement of financial position at cost plus post-acquisition changes in the Group’s share of net assets of the joint venture.

When the Group’s share of losses in a joint venture equals or exceeds its interest in the joint venture, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the joint venture.

After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on the Group’s investment in its joint venture. The Group determines at each reporting date whether there is any objective evidence that the investment in the joint venture is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the joint venture and its carrying value and recognises the amount in profit or loss.

The financial statements of the joint venture are prepared as of the same reporting date as the Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.

In the Company’s separate financial statements, its investment in joint venture is stated at cost less impairment losses. On disposal of such investment, the difference between net disposal proceeds and the carrying amount is included in profit or loss.

2.12 Financial assetsFinancial assets are recognised in the statements of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument.

When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs.

The Group and the Company determine the classification of their financial assets at initial recognition, and the categories include financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments and available-for-sale financial assets.

a) Financial assets at fair value through profit or loss

Financial assets are classified as financial assets at fair value through profit or loss if they are held for trading or are designated as such upon initial recognition. Financial assets held for trading are derivatives (including separated embedded derivatives) or financial assets acquired principally for the purpose of selling in the near term.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in fair value are recognised in profit or loss. Net gains or net losses on financial assets at fair value through profit or loss do not include exchange differences, interest and dividend income. Exchange differences, interest and dividend income on financial assets at fair value through profit or loss are recognised separately in profit or loss as part of other losses or other income.

Financial assets at fair value through profit or loss could be presented as current or non-current. Financial assets that is held primarily for trading purposes are presented as current whereas financial assets that is not held primarily for trading purposes are presented as current or non-current based on the settlement date.

b) Loans and receivables

Financial assets with fixed or determinable payments that are not quoted in an active market are classified 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 profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.

Loans and receivables are classified as current assets, except for those having maturity dates later than 12 months after the reporting date which are classified as non-current.




2. SIGNIFICANT ACCOUNTING POLICIES (cont’d) 2.12 Financial assets (cont’d)

c) Held-to-maturity investments

Financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when the Group has the positive intention and ability to hold the investment to maturity.

Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the held-to-maturity investments are derecognised or impaired, and through the amortisation process.

Held-to-maturity investments are classified as non-current assets, except for those having maturity within 12 months after the reporting date which are classified as current.

d) Available-for-sale financial assets

Available-for-sale are financial assets that are designated as available for sale or are not classified in any of the three preceding categories.

After initial recognition, available-for-sale financial assets are measured at fair value. Any gains or losses from changes in fair value of the financial asset 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 profit or loss. The cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment when the financial asset is derecognised. Interest income calculated using the effective interest method is recognised in profit or loss. Dividends on an available-for-sale equity instrument are recognised in profit 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 financial assets are classified as non-current assets unless they are expected to be realised within 12 months after the reporting date.

A financial asset is derecognised where the contractual right to receive cash flows from the asset has expired. On derecognition of a financial 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 profit or loss.

Regular way purchases or sales are purchases or sales of financial 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 financial assets are recognised or derecognised on the trade date such as the date that the Group and the Company commit to purchase or sell the asset.

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

a) Trade and other receivables and other financial assets carried at amortised cost

To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Group and the Company consider factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. For certain categories of financial assets, such as trade receivables, receivables 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.


2. SIGNIFICANT ACCOUNTING POLICIES (cont’d) 2.13 Impairment of financial assets (cont’d)

a) Trade and other receivables and other financial assets carried at amortised cost (cont’d)

If any such evidence exists, the amount of impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable becomes uncollectible, it is written off against the allowance account.

If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.

b) Unquoted equity securities carried at cost

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

2.14 Cash and cash equivalentsCash and cash equivalents comprise cash at bank and on hand, and deposits with licensed banks.

2.15 InventoriesInventories are measured at the lower of cost and net realisable value. Cost is determined on a weighted average basis, and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. In the case of finished goods and work-in-progress, cost includes direct materials, direct labour and relevant fixed and variable factory overheads which include depreciation charges.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

2.16 ProvisionsProvisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be estimated reliably.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

2.17 Financial liabilitiesFinancial liabilities are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability.

Financial liabilities, within the scope of FRS 139, are recognised in the statements of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument. Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities.




2. SIGNIFICANT ACCOUNTING POLICIES (cont’d) 2.17 Financial liabilities (cont’d)

a) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition at fair value through profit or loss.

Financial liabilities held for trading include derivatives entered into by the Group and the Company that do not meet the hedge accounting criteria. Derivative liabilities are initially measured at fair value and subsequently stated at fair value, with any resultant gains or losses recognised in profit or loss. Net gains or losses on derivatives include exchange differences.

The Group and the Company have not designated any financial liabilities at fair value through profit or loss.

b) Other financial liabilities

The Group’s and the Company’s other financial liabilities include trade payables, 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.

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 classified 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 financial liabilities, gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.

A financial liability is derecognised when the obligation under the liability is extinguished. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification 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 profit or loss.

2.18 Employee benefitsa) Short term benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which the associated services are rendered by employees. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absence. Short term non-accumulating compensated balances such as sick leave are recognised when the absences occur.

b) Defined contribution plans

The Group participates in the national pension schemes as defined by the laws of the countries in which it has operations. The Malaysian companies in the Group make contributions to the Employee Provident Fund in Malaysia, a defined contribution pension scheme. Contributions to defined contribution pension schemes are recognised as an expense in the period in which the related service is performed.

2.19 Leasesa) 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 finance 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 profit or loss. Contingent rents, if any, are charged as expenses in the periods in which they are incurred.


2. SIGNIFICANT ACCOUNTING POLICIES (cont’d) 2.19 Leases (cont’d)

a) As lessee (cont’d)

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 profit or loss on a straight-line basis over the lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.

b) As lessor

Leases where the Group retains substantially all the risks and rewards of ownership of the asset are classified 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 2.21(d).

2.20 Discontinued operationA component of the Group is classified as a ‘discontinued operation’ when the criteria to be classified as held fo sale have been met or it has been disposed of and such a component represents a separate major line of business or geographical area of operations or is part of a single coordinated major line of business or geographical area of operations. A component is deemed to be held for sale if its carrying amounts will be recovered principally through a sale transaction rather than through continue use.

Upon classification as held for sale, non-current assets and disposal groups are not depreciated and are measured at the lower of carrying amount and fair value less costs to sell. Any differences are recognised in profit or loss.

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

a) Sale of goods

Revenue from sale of goods is measured at the fair value of the consideration received or receivable, net of returns and commission, trade discounts and rebates. Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods terms.

b) Dividend income

Dividend income is recognised when the right to receive payment is established.

c) Interest Income

Interest income is recognised using the effective interest method.

d) Rental Income

Rental income is accounted for on a straight line basis over the lease terms.




2. SIGNIFICANT ACCOUNTING POLICIES (cont’d) 2.22 Income taxes

a) 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 profit or loss except to the extent that the tax relates to items recognised outside profit or loss, either in other comprehensive income or directly in equity.

b) 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 financial 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 profit nor taxable profit or loss; and

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

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

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

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

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.

Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax assets to be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.


2. SIGNIFICANT ACCOUNTING POLICIES (cont’d) 2.23 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 in each of these segments are shown in Note 35, including the factors used to identify the reportable segments and the measurement basis of segment information.

2.24 Borrowing costsAll borrowing costs are recognised in profit or loss in the period they are incurred. Borrowing costs consist of interest and other costs that the Group and the Company incurred in connection with the borrowing of funds.

2.25 Share Capital and share issuance expensesAn equity instrument is any contract that evidences a residual interest in the assets of the Group and of the Company after deducting all its liabilities. Ordinary shares are equity instruments.

Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction costs. Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in which they are declared.

2.26 Treasury sharesWhen shares of the Company, that have not been cancelled, recognised as equity are reacquired, the amount of consideration paid is recognised directly in equity. Reacquired shares are classified as treasury shares and presented as a deduction from total equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of treasury shares. When treasury shares are reissued by resale, the difference between the sales consideration and the carrying amount is recognised in equity.

3. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATESThe preparation of the Group’s financial 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 outcome that could require a material adjustment to the carrying amount of the asset or liability affected in the future.

3.1 Judgements made in applying accounting policiesIn the process of applying the Group’s accounting policies, management has made the following judgements, apart from those involving estimations, which have the most significant effect on the amounts recognised in the financial statements :

Non-current assets held for sale

On 27 February 2009, the Board of Directors announced its decision to dispose of the investments in Cement Industries (Sabah) Sdn Bhd (“CIS”) and Padu-Wangsa Sdn Bhd (“PWSB”), and, therefore classified these investments as non-current assets held for sale. The Group considered that these investments meet the criteria to be classified as held for sale at that date for the following reasons:

- Investments in CIS and PWSB are available for immediate sale and can be sold to potential buyers in their current condition.

- The Group’s intention to divest its investment in their current condition has not changed.

Further details on the non-current assets held for sale are disclosed in Note 21.

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




3. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES (cont’d) 3.2 Key sources of estimation uncertainty (cont’d)

a) Useful lives of plant and equipment

The cost of plant and equipment for the manufacture of cement and ready-mixed concrete is depreciated on a straight-line basis over the assets estimated economics useful lives. Management estimates the useful life of these plant and equipment to be within 3 to 20 years. 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. The carrying amount of the Group’s plant and equipment at the reporting date is disclosed in Note 12.

b) Impairment of goodwill

Goodwill and other indefinite life intangibles are tested for impairment annually and at other times when such indicators exists. This requires an estimation of the value in use of the cash-generating units to which goodwill are allocated.

When value in use calculations are undertaken, management must estimate the expected future cash flows from the asset or cash-generating unit and choose a suitable discount rate in order to calculate the present value of those cash flows. Further details of the carrying value, the key assumptions applied in the impairment assessment of goodwill and sensitivity analysis to changes in the assumptions are disclosed in Note 14.

c) Impairment of loans and receivables

The Group assesses at each reporting date whether there is any objective evidence that a financial asset is impaired. To determine whether there is objective evidence of impairment, the Group considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default of significant delay in payments. Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. The carrying amount of the Group’s loans and receivables at the reporting date is disclosed in Note 18.

d) Provision for restoration costs

The Group has recognised a provision for restoration cost associated with the obligations to restore the lands at the end of the tenancy period. In determining the amount of the provision, assumptions and estimates are made in relation to the expected cost to dismantle and remove the plants from the site and the cost of restoring the land to its original state. The amount of the provision provided for as at 31 December 2010 was RM1,118,000 (2009 : RM Nil).

4. REVENUERevenue represents the net invoiced value of cement and related products, net of returns and commission, trade discounts and rebates.

5. INTEREST INCOME Group Company 2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000

Interest income from:Deposits placed with licensed banks 9,214 6,378 9,083 6,138


6. PROFIT BEFORE TAX FROM CONTINUING OPERATIONSThe following items have been included in arriving at profit before tax from continuing operations:

Group Company 2010 2009 2010 2009 (restated) (restated) RM’000 RM’000 RM’000 RM’000

After charging:Auditors’ remunerations- Statutory audit - current year 86 93 64 64- Other services by others 5 85 - 85Advances written off - 204 - -Amortisation of intangible assets 189 288 189 288Amortisation of prepaid lease payments 5 5 5 5Depreciation of property, plant and equipment 43,023 47,212 38,426 44,134Impairment loss on receivables 751 209 385 -Interest expense 178 98 - -Employee benefits expense (Note 7) 32,966 31,456 25,513 23,113Property, plant and equipment written off 57 38 45 38Realised foreign exchange loss 231 - 231 -Rental of premises 1,632 1,366 185 195Unwinding of discount (Note 22) 67 - - -Waiver of advances receivable - - - 346Waiver of interest receivable - - - 161

and after crediting:Bad debts recovered - 656 - 656Gain on disposal of property, plant and equipment 43,914 131 180 55Net gain on disposal of assets held for sales 1,538 - - -Gross dividends received from investments - subsidiaries - - 4,872 3,840 - quoted outside Malaysia 34 - 34 -Fair value gain on derivatives 61 - 61 -Interest income 9,214 6,378 9,083 6,138Unrealised foreign exchange gain 9 - 9 -Rental income 1,100 1,017 1,100 1,017Rental of equipment - 3 - -

7. EMPLOYEE BENEFITS EXPENSE Group Company 2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000

Wages and salaries 30,094 28,830 23,285 20,945Contributions to defined contribution plan 2,872 2,626 2,228 2,168 32,966 31,456 25,513 23,113

Included in employee benefits expense of the Group and of the Company are executive directors’ remuneration as disclosed in Note 8.




8. DIRECTORS’ REMUNERATIONThe details of remuneration receivable by directors of the Company during the year are as follows:

Group and Company 2010 2009 RM’000 RM’000

Executive:Salaries and other emoluments 211 1,496Fees 80 40Total executive directors’ remuneration (excluding benefits-in-kind) 291 1,536 Estimated money value of benefits in kind - -Total executive directors’ remuneration (including benefits-in-kind) 291 1,536

Non-Executive: Fees 336 343 Other emoluments 110 200Total non-executive directors’ remuneration 446 543Total directors’ remuneration 737 2,079

The number of directors of the Company whose total remuneration during the financial year fall within the following bands are analysed below:

Number of Directors 2010 2009

Executive directors:RM100,001 - RM150,000 1 -RM150,001 - RM200,000 1 -RM450,001 - RM500,000 - 1RM1,050,001 - RM1,110,000 - 1

Non-Executive directors:Below RM50,000 1 5RM50,001 - RM100,000 4 2RM100,001 - RM150,000 1 2

9. INCOME TAX EXPENSEMajor components of income tax expense

Group Company 2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000

Statement of comprehensive income:Current income tax - continuing operations: - Malaysian income tax 11,176 10,323 10,875 10,479 - (Over)/under provision in respect of prior years (622) 59 (622) - 10,554 10,382 10,253 10,479


9. INCOME TAX EXPENSE (cont’d)Major components of income tax expense (cont’d)


Deferred income tax - continuing operations (Note 25): - Origination and reversal of temporary differences 16,312 8,831 16,233 8,133 - Overprovision in respect of prior years (3,912) - (3,912) - 12,400 8,831 12,321 8,133

Income tax attributable to continuing operations 22,954 19,213 22,574 18,612Income tax attributable to discontinued operation (Note 10) 910 822 - -

Income tax expense recognised in profit or loss 23,864 20,035 22,574 18,612

Reconciliation between tax expense and accounting profit

The reconciliation between tax expense and the product of accounting profit multiplied by the applicable corporate tax rate for the years ended 31 December 2010 and 2009 are as follows:


Profit before tax from continuing operations 152,270 83,763 111,711 81,061Profit before tax from discontinued operation (Note 10) 4,002 3,397 - -Accounting profit before tax 156,272 87,160 111,711 81,061

Tax at Malaysian statutory tax rate of 25% (2009: 25%) 39,068 21,790 27,928 20,265Adjustments: Non-deductible expenses 1,046 368 774 336 Income not subject to taxation (11,175) - (1,226) - Utilisation of current year reinvestment allowances (368) (2,851) (368) (2,851) Other items (173) 669 - 862 (Over)/under provision of income tax in respect of previous years (622) 59 (622) - Overprovision of deferred taxation in respect of prior years (3,912) - (3,912) -Income tax expense recognised in profit or loss 23,864 20,035 22,574 18,612

Domestic income tax is calculated at the Malaysian statutory tax rate of 25% (2009: 25%) of the estimated assessable profit for the year.




10. DISCONTINUED OPERATIONOn 13 July 2010, Tasek Plantation Sdn Bhd (“TPSB”), a wholly-owned subsidiary, entered into a Sales and Purchase Agreement with Ngan Yin Groundnut Factory Sdn Bhd to dispose of the plantation property known as “Gunong Kuang Estate” for a total cash consideration of RM53,889,000.

On 15 December 2010, the disposal of Gunong Kuang Estate was completed and accordingly, TPSB has ceased operation on the land cultivation, plantation and estate management. The results from the operation of Gunong Kuang Estate has been presented separately on the statement of comprehensive income of the Group as discountinued operation. As required byFRS 5 - Non Current Assets Held for Sale and Discontinued Operations, certain comparatives of the Group have been reclassified due to the current financial year’s discontinued operation. The effects on the consolidated statement of comprehensive income for the year ended 31 December 2010 and 2009 are set out below:

Statement of comprehensive income disclosures

The result of Gunong Kuang Estate for years ended 31 December are as follows :

Group 2010 2009 RM’000 RM’000

Revenue 6,276 5,985Expenses (2,274) (2,588)Profit before tax from discontinued operation 4,002 3,397Taxation (910) (822)Profit from discontinued operation, net of tax 3,092 2,575

The profit before tax from discontinued operation is stated after charging depreciation of RM28,000 (2009 : RM58,000).

Statement of cash flow disclosures

The cash flows attributable to Tasek Plantation Sdn Bhd are as follow :- Group 2010 2009 RM’000 RM’000

Operating 2,661 2,697Investing (76) (110)Net cash inflow 2,585 2,587



11. EARNINGS PER SHARE(i) Basic

The basic earnings per share amounts are calculated by dividing profit for the year from continuing operations and discontinuing operation, net of tax, attributable to owners of the parent by the weighted average number of ordinary shares outstanding during the financial year.

The following tables reflect the profit and share data used in the computation of basic earnings per share for the years ended 31 December:

Group 2010 2009 (restated) RM’000 RM’000

Profit net of tax attributable to equity holders of the Company 132,408 67,125Less : Profit from discontinued operation, net of tax attributable to equity holders of the Company used in the computation of basic earnings per share (3,092) (2,575) 6% Preference dividend (20) (23)

Proportion of profit attributable to preference shareholders (358) (181) Profit net of tax from continuing operations attributable to equity holders of the Company used in the computation of basic earnings per share 128,938 64,346

Weighted average number of ordinary shares in issue * 159,169 184,874

* The weighted average number of shares takes into account the weighted average effect of changes in treasury shares transactions during the year.

Basic earnings per share (sen) for Profit from continuing operations 81.01 34.81

Profit from discontinued operation 1.94 1.39 Profit for the year 82.95 36.20

(ii) Diluted

There is no dilutive effects on earning per share as the Company has no potential issue of ordinary shares.



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0

191,

851

59

6,56

2

8,48

0

30,0

44

18,8

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879,

764

At 1

Jan

uary

201

0:A

s pr

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25

,928

-

191,

851

59

6,56

2

8,48

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30,0

44

18,8

39

871,

704

Effe

cts

of a

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ing

the

amen

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ts

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FRS

117

-

8,06

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- -

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- 8,

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25

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8,

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19

1,85

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596,

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8,

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87

9,76

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Tran

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26,9

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8,06

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192,

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2,25

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8,71

7

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41

5,28

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894,

604

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8,06

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81,2

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26,9

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8,06

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192,

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62

2,25

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7

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5,28

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894,

604



12. P

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RM

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At 1

Jan

uary

200

9A

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usly

sta

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-

- 10

6,31

0

367,

720

6,

282

16

,199

-

496,

511

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cts

of a

dopt

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the

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to

FRS

117

-

2,31

3

- -

- -

- 2,

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106,

310

36

7,72

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101

7,

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5

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9 (r

esta

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2,41

4

113,

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39

7,79

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6,67

5

19,9

74

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0,73

1

At 1

Jan

uary

201

0:A

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sta

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-

- 11

3,87

6

397,

792

6,

675

19

,974

-

538,

317

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cts

of a

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the

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117

-

2,41

4

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- -

- 2,

414

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120,

411

42

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5,58

1

Net

car

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g am

ount

:

At 1

Jan

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200

9 (r

esta

ted)

25

,617

5,

747

85

,183

20

8,33

9

2,06

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349,

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At 3

1 D

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(res

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5,64

6

77,9

75

198,

770

1,

805

10

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18

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33

9,03

3

At 3

1 D

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010

26

,941

5,

548

71

,893

19

9,55

1

1,71

3

8,09

4

5,28

3

319,

023



12. PROPERTY, PLANT AND EQUIPMENT (cont’d)Revaluation

Land and buildings are stated at Directors’ valuation based on professional valuations made by a Chartered Surveyor, on the open market basis conducted in June 1985.

Had the land and buildings been carried at historical cost less accumulated depreciation, the carrying amount of the revalued assets that would have been included in the financial statements at the end of the year would be as follows:


Freehold land 15,522 20,302 15,522 15,522Leasehold land 1,034 1,050 1,034 1,050Buildings 24,594 25,598 24,594 25,598 41,150 46,950 41,150 42,170

13. PREPAID LEASE PAYMENTSLeasehold land with unexpired period less than 50 years:

Group and Company 2010 2009 (restated) RM’000 RM’000

CostAt 1 January:As previously stated 147 8,207Effects of adopting the amendments to FRS 117 - (8,060)As restated and at 31 December 147 147

Accumulated amortisationAt 1 January:As previously stated 110 2,418Effects of adopting the amendments to FRS 117 - (2,313)As restated 110 105Amortisation for the year 5 5At 31 December 115 110

Net carrying amount 32 37


Amount to be amortised- Not later than one year 5 5- Later than one year but not later than five years 20 20- Later than five years 7 12



14. INTANGIBLE ASSETS Group Company Computer Computer software Goodwill Total software RM’000 RM’000 RM’000 RM’000

Cost:At 1 January 2009 3,721 389 4,110 3,719Additions 216 - 216 216At 31 December 2009 and 1 January 2010 3,937 389 4,326 3,935Additions 339 - 339 341Write off (1,308) - (1,308) (1,308)At 31 December 2010 2,968 389 3,357 2,968

Accumulated amortisation and impairment:At 1 January 2009 3,283 - 3,283 3,283Amortisation (Note 6) 288 - 288 288At 31 December 2009 and 1 January 2010 3,571 - 3,571 3,571Amortisation (Note 6) 189 - 189 189Write off (1,308) - (1,308) (1,308)Reclassification 7 - 7 7At 31 December 2010 2,459 - 2,459 2,459

Net carrying amount:

At 1 January 2009 438 389 827 436

At 31 December 2009 366 389 755 364

At 31 December 2010 509 389 898 509

The recoverable amount of the investment in subsidiary and goodwill was determined by discounting the future cash flows projected based on actual operating results and management’s assessment of future trends in the ready-mix concrete industry. No impairment loss is recognised during the year as the recoverable amount is higher than the carrying amount.

15. INVESTMENT IN SUBSIDIARIES Company 2010 2009 RM’000 RM’000

Unquoted shares, at cost In Malaysia 47,484 33,284 Outside Malaysia * - - 47,484 33,284

* Negligible

Country of Principal Proportion (%) ofName incorporation activities ownership interest

2010 2009Held by the Company

Posek Pembangunan Sdn Bhd Malaysia Dormant 100 100Tasek Property Holdings Sdn Bhd Malaysia Investment holding 100 100Tasek Plantation Sdn Bhd (Note 32(ii)) Malaysia Land cultivation, plantation 100 100 and estate managementTasek Concrete Sdn Bhd Malaysia Manufacture and trading 100 100 of ready-mixed concreteTasek Industries Sdn Bhd Malaysia Dormant 100 100PR Engineering Sdn Bhd (Note 32(i)) Malaysia Dormant 100 -Tasek Holdings Pte Ltd ** Singapore Dormant 100 100



15. INVESTMENT IN SUBSIDIARIES (cont’d)** Not audited by Ernst & Young. The Group’s consolidated financial statements have been consolidated based on the unaudited management financial statements of this subsidiary.

Acquisition of subsidiaryOn 15 June 2010, the Company completed the acquisition of 100% equity interest in PR Engineering Sdn Bhd (“PR”), a company incorporated in Malaysia for a total cash consideration of RM14,200,000. Upon completion of the acquisition, PR became a wholly owned subsidiary of the Company.

The fair values of the identifiable assets and liabilities of PR as at the date of acquisition were :

Carrying Fair value amount RM’000 RM’000

Property, plant and equiptment 14,200 173

Net identifiable assets 14,200 173

The effects of the above acquisition on the financial results have not been disclosed as it was not material to the Group.

16. INVESTMENT IN JOINT VENTURE Group 2010 2009 RM’000 RM’000

Unquoted shares at cost * *Group’s share of post acquisition reserves 6 6 6 6

* RM150

A subsidiary has an investment in a joint controlled entity, North Plaza Sdn Bhd (“NPSB”). The Group has an effective ownership interest of 15% (2009 : 15%) in NPSB. The intended principal activity of NPSB is property development. The Group’s share of post acquisition reserves of the jointly controlled entity is included in the consolidated financial statements and is based on unaudited management accounts.

Group 2010 2009 RM’000 RM’000

Assets and liabilities Current assets 9,139 8,807 Non-current assets - -Total assets 9,139 8,807

Current liabilities 8,764 8,760Non-current liabilities - -Total liabilities 8,764 8,760

Income and expenses:Income 329 39

Expenses - -



17. INVENTORIES Group Company 2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000

Raw materials 7,544 6,855 6,592 6,855Work-in-progress 12,033 12,868 12,033 12,868Finished goods 4,561 4,312 4,561 4,312Consumable stores 91,084 88,507 91,084 87,212

115,222 112,542 114,270 111,247

18. TRADE AND OTHER RECEIVABLES Group Company 2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000

CurrentTrade receivablesThird parties 65,922 64,597 19,044 19,983Amounts due from :- Subsidiaries - - 17,094 18,552 Associates 3,305 4 3,305 4 Related companies 515 283 515 283 69,742 64,884 39,958 38,822Less: Allowance for impairment third parties (1,276) (910) (701) (701)Trade receivables, net 68,466 63,974 39,257 38,121

Other receivablesAmounts due from :- Subsidiaries - - 1,519 6,873 Immediate holding company - 1,936 - 1,936Other receivables 4,133 3,025 2,516 1,554Deposits 777 597 26 18Prepayments 331 419 79 93 5,241 5,977 4,140 10,474Less: Allowance for impairment third parties (385) - (385) -Other receivables, net 4,856 5,977 3,755 10,474

73,322 69,951 43,012 48,595

Non-currentOther receivablesAmounts due from associate - 31,330 - 31,330Reclassified to assets classified as held for sale (Note 21) - (31,330) - (31,330) - - - -

Total trade and other receivables (current and non-current) 73,322 69,951 43,012 48,595Add: Cash and bank balances (Note 20) 436,904 355,726 429,414 346,930Total loans and receivables 510,226 425,677 472,426 395,525



18. TRADE AND OTHER RECEIVABLES (cont’d)Trade receivables are non-interest bearing and are generally on 30 to 90 days (2009 : 30 to 90 days) terms. They are initially recognised at their cost when the contractual right to receive cash or another financial asset from another entity is established.

Subsequent to initial recognition, receivables are stated at cost less allowance for doubtful debts. Receivables are not held for the purpose of trading.

(a) Trade receivablesAgeing analysis of trade receivables

The ageing analysis of the Group’s and of the Company’s trade receivables is as follows: Group Company 2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000

Neither past due nor impaired 68,130 63,887 39,244 38,1181 to 30 days past due not impaired 275 87 6 231 to 60 days past due not impaired 61 - 7 -61 to 90 days past due not impaired - - - 191 to 120 days past due not impaired - - - - 336 87 13 3Impaired 1,276 910 701 701 69,742 64,884 39,958 38,822

During the financial year, the Group and the Company took possession of collateral it held as security as follow:


Nature of assetsSecurity deposits received 1,200 700

At reporting date, the Group and the Company also accepted bankers’ guarantee issued by reputable banks from their customers amounting to RM12,150,000 (2009 : RM13,090,000) and RM11,920,000 (2009 : RM12,860,000) respectively to secure against trade credit facilities extended to customers.

Receivables that are neither past due nor impaired

Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group. More than 50% (2009: 30%) of the Group’s trade receivables arise from customers with more than three years of experience with the Group and losses have occurred infrequently.

None of the Group’s trade receivables that are neither past due nor impaired have been renegotiated during the financial year.

Receivables that are past due but not impaired

The Group has trade receivables amounting to RM336,000 (2009 : RM87,000) that are past due at the reporting date but not impaired.

At the reporting date, trade receivables arising from export sales amounting to RM1,184,000 (2009 : RM584,000) have been arranged to be settled via letters of credit issued by reputable banks in countries where the customers are based.

The remaining balance of receivables that are past due but not impaired are unsecured in nature.



18. TRADE AND OTHER RECEIVABLES (cont’d) (a) Trade receivables (cont’d)

Receivables that are impaired

The Group’s and the Company’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:

Group Collectively Individually impaired impaired Total 2010 2009 2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Trade receivables -nominal amounts - - 1,276 910 1,276 910

Other receivables -nominal amounts - - 385 - 385 -

Less: Allowance for impairment - - (1,661) (910) (1,661) (910) - - - - - -

Company Collectively Individually impaired impaired Total 2010 2009 2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Trade receivables -nominal amounts - - 701 701 701 701

Other receivables -nominal amounts - - 385 - 385 -

Less:Allowanceforimpairment - - (1,086) (701) (1,086) (701) - - - - - -



18. TRADE AND OTHER RECEIVABLES (cont’d) (a) Trade receivables (cont’d)

Movement in allowance accounts:


At 1 January 910 1,357 701 1,357Charge for the year (Note 6) 751 209 385 -Bad debts recovered (Note 6) - (656) - (656)At 31 December 1,661 910 1,086 701

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

(b) Related party balancesAmounts due from subsidiaries (trade and non-trade)

The trade balance with subsidiaries is subject to normal trade credit terms. The non-trade balances with subsidiaries are unsecured, non-interest bearing and are repayable upon demand.

Amounts due from related companies

Amounts due from related companies are unsecured and non-interest bearing and are repayable upon demand.

(c) Other receivablesIncluded in other receivables of the Group is an advance by a subsidiary to a jointly controlled entity of RM1,357,000 (2009 : RM1,323,000) as initial expenditure for a proposed future development of approximately 7.4 acres of a commercial site. The advances is interest free, unsecured and has no fixed terms of repayment.

(d) Amount due from immediate holding company (non-trade)The amount due from immediate holding company in the previous financial year was unsecured, non-interest bearing and repayable on demand. This amount has been fully settled during the financial year.

19. DERIVATIVES Group and Company 2010 2009 RM’000 RM’000 Contract/ Contract/ notional notional amount Assets Liabilities amount Assets Liabilities

Non-hedging derivatives:CurrentForward currency contracts 1,909 61 - - - -

The Group and the Company use forward currency contracts to manage some of the transaction exposure. These contracts are not designated as cash flow or fair value hedges and are entered into for periods consistent with currency transaction exposure and fair value changes exposure. Such derivatives do not qualify for hedge accounting.

Forward currency contracts are used for the Group’s sales and purchases denominated in EURO for which firm commitments existed at the reporting date, extending to January 2011 (2009 : Nil).

During the financial year, the Group recognised a gain of RM61,000 (2009 : RM Nil) arising from fair value changes of derivative assets. The fair value changes are attributable to changes in foreign exchange spot and forward rate. The method and assumptions applied in determining the fair values of derivatives are disclosed in Note 33.



20. CASH AND BANK BALANCES Group Company 2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000

Cash at banks and on hand 24,887 15,556 19,397 13,760Short term deposits with:Licensed banks 412,017 340,170 410,017 333,170Cash and cash equivalents 436,904 355,726 429,414 346,930

Short-term deposits are made for varying periods of between one month and three months depending on the immediate cash requirements of the Group and of the Company, and earn interests at the respective short-term deposit rates. The effective interest rates for the year ended 31 December 2010 for the Group and of the Company are 1.72% - 3.10% (2009 : 1.90% - 2.30%) per annum.

Short term deposits with licensed banks of the Group and of the Company included amounts of RM1,200,000 (2009 : RM700,000) representing security deposits received from customers to secure against trade credit facilities granted.

21. ASSETS CLASSIFIED AS HELD FOR SALE Group Company 2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000

Property 174 2,577 174 174Investment in associates 42,402 42,402 20,392 20,392Amount due from an associate 13,329 31,330 13,329 31,330 55,905 76,309 33,895 51,896

(a) Property held for sale comprise: Group Company 2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000

Investment property 174 174 174 174Freehold land * - 2,403 - - 174 2,577 174 174

* On 10 May 2010, a wholly-owned subsidiary entered into a sale and purchase agreement with an individual, to dispose off its land for a total cash consideration of RM2,640,000.

On 11 August 2010, the disposal has been completed and resulted in a gain of disposal of RM81,000 for the current financial year.

(b) Investment in associates and amount due from an associateThe amount due from associate of RM13,329,000 (2009 : RM31,329,600) is in respect of dividend receivable from Cement Industries (Sabah) Sdn Bhd. The amount is interest free, unsecured and has no fixed term of repayment. The dividend was declared by the associate on 31 December 2007 so as to utilise its available 108 tax credit balance before the change to the single tier tax system.

The Group has equity accounted its share of the associates’ profits up to the date of 19 February 2009, when the Board of Directors accepted the proposal from an existing shareholder of the associates to buy the Company’s equity investment in the associates.

On 9 February 2010, the Company announced that the proposal has been terminated as the said existing shareholder of Cement Industries (Sabah) Sdn Bhd (“CIS”) and Padu-Wangsa Sdn Bhd (“PWSB”) had not completed the execution of the share sale agreements within the required date.

However, the Company is still pursuing plans to dispose of its investments in CIS and PWSB.



22. PROVISION Group Restoration cost 2010 2009 RM’000 RM’000

At 1 January - -Arosed during the year 1,051 -Unwinding of discount (Note 6) 67 -At 31 December 1,118 -

At 31 December

Current 210 -Non-current: Later than 1 year but not later than 2 years 509 - Later than 2 year but not later than 5 years 399 - 908 - 1,118 -

Provision for restoration costs

A provision is recognised for restoration cost associated with the obligations to restore the lands at the end of the tenancy period. It is expected that most of these costs will be incurred in the next two financial years and all will have been incurred within three years from the reporting date. Assumptions used to calculate the expected cost to dismantle and remove the plants from the site and the cost of restoring the land to its original state were based on the management’s best estimates.

23. LOANS AND BORROWINGS Group 2010 2009 RM’000 RM’000

CurrentUnsecured:Bankers’ acceptance 4,127 3,747

Bankers’ acceptance

The bank facilities of a subsidiary are subject to the fulfillment of the following significant covenants:

(i) No dilution or divestment in the present 100% shareholding of the Company in the subsidiary without the lender bank’s prior consent.

(ii) Gearing and minimum interest cover ratio of 2:1 at all times

(iii) The subsidiary must be technically solvent at all times.

The bankers’ acceptance bears interest ranging from 2.60% to 3.25% (2009 : 2.60% to 3.50%) per annum.


24. TRADE AND OTHER PAYABLES Group Company 2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000

CurrentTrade payablesThird parties 32,164 24,270 14,108 11,672

Other payablesAccrued operating expenses 13,048 13,313 7,936 5,752Other payables 15,200 16,154 16,312 15,993Security deposits received 1,200 700 1,200 700Amounts due to subsidiaries - - 60,254 8,670 29,448 30,167 85,702 31,115 61,612 54,437 99,810 42,787

Total trade and other payables 61,612 54,437 99,810 42,787Add: Loans and borrowings (Note 23) 4,127 3,747 - -Total financial liabilities carried at amortised cost 65,739 58,184 99,810 42,787

(a) Trade payables These amounts are non-interest bearing. Trade payables are normally settled on 30 - 90 days (2009 : 30 - 90 days) terms.

(b) Other payables These amounts are non-interest bearing. Other payables are normally settled on an average term of three months (2009: average term of three months).

(c) Amounts due to subsidiaries These amounts are unsecured, non-interest bearing and are repayable on demand.

25. DEFERRED TAXDeferred income tax as at 31 December relates to the following:

Group As at As at As at Recognised in 31 December Recognised in 31 December 1 January 2009 profit or loss 2009 profit or loss 2010 RM’000 RM’000 RM’000 RM’000 RM’000

Deferred tax liabilities:Property, plant and equipment (45,540) 4,065 (41,475) 3,753 (37,722)

Deferred tax assets:Derivative assets - - - (15) (15)Impairment loss on receivables 188 143 331 (60) 271Others - - - 1,449 1,449Unabsorbed reinvestment allowances 38,067 (13,039) 25,028 (17,527) 7,501 38,255 (12,896) 25,359 (16,153) 9,206

(7,285) (8,831) (16,116) (12,400) (28,516)




25. DEFERRED TAX (cont’d)Deferred income tax as at 31 December relates to the following:

Company As at As at As at Recognised in 31 December Recognised in 31 December 1 January 2009 profit or loss 2009 profit or loss 2010 RM’000 RM’000 RM’000 RM’000 RM’000

Deferred tax liabilities:Property, plant and equipment (44,102) 4,750 (39,352) 3,832 (35,520)

Deferred tax assets:Derivative assets - - - (15) (15)Impairment loss on receivables 175 156 331 (60) 271Others - - - 1,449 1,449Unabsorbed reinvestment allowances 38,067 (13,039) 25,028 (17,527) 7,501 38,242 (12,883) 25,359 (16,153) 9,206

(5,860) (8,133) (13,993) (12,321) (26,314)


Presented after appropriate offsetting as follows:

Deferred tax assets 9,206 25,359 9,206 25,359Deferred tax liabilities (37,722) (41,475) (35,520) (39,352) (28,516) (16,116) (26,314) (13,993)

Tax consequences of proposed dividendsThere are no income tax consequences (2009 : Nil) attached to the dividends to the shareholders proposed by the Company but not recognised as a liability in the financial statements.

26. SHARE CAPITAL, SHARE PREMIUM AND TREASURY SHARES Group and Company Number of shares of RM1 each Amount 2010 2009 2010 2009 ’000 ’000 RM’000 RM’000

Share capital

Authorised: 6% cumulative participating preference shares of RM1 each 500 500 500 500Ordinary shares of RM1 each 299,500 299,500 299,500 299,500 300,000 300,000 300,000 300,000


26. SHARE CAPITAL, SHARE PREMIUM AND TREASURY SHARES (cont’d) Group and Company Number of shares of RM1 each Amount 2010 2009 2010 2009 ’000 ’000 RM’000 RM’000

Issued and fully paid: 6% cumulative participating preference sharesAt 1 January 500 500 500 500Reduction pursuant to capital repayment scheme (165) - (165) -At 31 December 335 500 335 500

Ordinary sharesAt 1 January 184,907 184,588 184,907 184,588Reduction pursuant to capital repayment scheme (60,888) - (60,888) -Cancellation of treasury shares (398) - (398) -Issued during the year pursuant to Executive Shares Option Scheme - 319 - 319At 31 December 123,621 184,907 123,621 184,907

Total 123,956 185,407 123,956 185,407


Share premium

At 1 January 135,784 135,117Cancellation of treasury shares (1,838) -Issue of shares: Exercise of options - 595Transfer to share premium for share options exercised - 72At 31 December 133,946 135,784

Treasury shares

At 1 January (223) -Cancellation of treasury shares 1,838 -Purchase of treasury shares (1,615) (223)At 31 December - (223)

a) Share capital

The holders of ordinary shares (except treasury shares) are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restrictions and rank equally with regard to the Company’s residual assets.

b) 6% cumulative participating preference shares

The salient features of the 6% cumulative participating preference shares issued by the Company are as follows :-

a) The right to a fixed cumulative preference dividend of 6% per annum;

b) The right to further participation in the profits and in the assets in case of liquidation with the ordinary shares;

c) Entitled to a return of capital in preference to holders of ordinary shares when the Company is wound up;

d) Have the same rights as ordinary shareholders as regards receiving notices, reports and statements of financial position and attending general meetings of the Company; and




26. SHARE CAPITAL, SHARE PREMIUM AND TREASURY SHARES (cont’d)b) 6% cumulative participating preference shares (cont’d)

(e) Has the right to vote in each of the following circumstances :

(i) When the dividend or part of the dividend on the share is in arrear for more than 6 months; (ii) On a proposal to reduce the Company’s share capital; (iii) On a proposal for the disposal of the whole of the Company’s property, business and undertaking; (iv) On a proposal that affects rights attached to the share; (v) On a proposal to wind up the Company and (vi) During the winding up of the Company.

c) Capital repayment and consolidation

During the financial year, the Company undertook the following:

(i) Capital repayment by way of cash distribution of approximately RM61.05 million on the basis of RM0.33 per ordinary shares of RM1.00 each and RM0.33 per 6% cumulative participating prefence shares of RM1.00 each via a reduction of the share capital of the Company pursuant to Section 64 of the Companies Act 1965 resulting in the reduction of the par value of the ordinary shares and the 6% cumulative preference shares from RM1.00 to RM0.67 respectively (“Capital Repayment”); and

(ii) Share consolidation of 184,509,300 ordinary shares of RM0.67 each and 500,000 6% cumulative participating preference shares of RM0.67 each in the Company after the Capital Repayment into a maximum of 123,621,231 ordinary shares of RM1.00 each and 335,000 6% cumulative participating preference shares of RM1.00 each on the basis of approximately 1.49 ordinary shares of RM0.67 each and 1.49 6% cumulative participating preference shares of RM0.67 each in the Company into one (1) ordinary share of RM1.00 each and one (1) 6% cumulative participating preference share of RM1.00 each in the Company (“Share Consolidation”), (colletively referred to as the “Capital Repayment and Share Consolidation”)

On 18 March 2010, the Company’s application for the proposed consolidation was approved by Bursa Malaysia Securities Berhad.

On 2 July 2010, the Company announced that the High Court of Malaya, Kuala Lumpur, had granted an order confirming the Capital Repayment scheme by the Company pursuant to Section 64 of the Companies Act, 1965.

On 3 August 2010, the Company announced confirmation of the Capital Repayment with effect from 3 August 2010, being the date of lodgement of the office copy of the order of the High Court of Malaya with the Registrar of Companies.

On 6 August 2010, the Capital Repayment and Share Consolidation scheme of the Company was completed.

d) Treasury shares

During the financial year, the Company repurchased 341,500 of its issued ordinary shares of RM1 each fully paid from the open market at an average price of RM4.73 per share for a total consideration of RM1,615,000. The purchases were financed by internally generated funds.

On 24 June 2010, the Company cancelled all its 397,900 ordinary shares held as treasury shares.

At reporting date, no treasury shares were held by the Company.


27. RESERVES Group Company 2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000

Non distributable:Capital redemption reserve 398 - 398 -Asset revaluation reserve 11,199 11,199 11,199 11,199 11,597 11,199 11,597 11,199

Distributable:General reserve 115,347 115,347 115,347 115,347Retained profits 551,224 460,568 474,757 427,372 666,571 575,915 590,104 542,719

Total 678,168 587,114 601,701 553,918

(a) Capital redemption reserve

The capital redemption reserve arises from the cancellation of treasury shares in accordance with Section 67A of the Companies Act 1965.

(b) Asset revaluation reserve

The revaluation reserve relates to the revaluation of property, plant and equipment.

(c) General reserve

General reserve was transferred from retained profits in previous years.

(d) Retained profits

As at 31 December 2010, the Company has tax exempt profits available for distribution of RM205,209,000 (2009 : RM345,116,000).

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

The Company did not elect for the irrevocable option to disregard the 108 balance. Accordingly during the transitional period, the Company may utilise the credit in the 108 balance as at 31 December 2007 to distribute cash dividend payments to ordinary shareholders as defined under the Finance Act 2007. As at 31 December 2010 and 2009, the Company has sufficient credit in the 108 balance and tax-exempt income account to pay dividends out of its entire retained profits.




28. DIVIDENDS Group and Company 2010 2009 RM’000 RM’000

Recognised during the financial year:Dividends on ordinary shares:- Final net dividend for 2009 : 7.5 sen (2008 : 7.5 sen) per share 13,838 13,865- Special net dividend for 2009 : 15 sen (2008 : Nil) per share 27,677 -

Dividends on preference shares:- Final dividend for 2009 : 6 sen (2008 : 6 sen) per share 30 30- Cumulative participating dividend for 2009 : 10 sen (2008 : 10 sen) per share 50 50- Special cumulative participating dividend for 2009 : 20 sen (2008 : Nil) per share 100 - 41,695 13,945

Proposed but not recognised as a liability as at 31 December:

At the forthcoming Annual General Meeting, the following dividend payment will be proposed for shareholders’ approval:


Dividends on ordinary shares:- Final net dividend for 2010 : 22.5 sen (2009 : 7.5 sen) per share 27,815 13,864- Special net dividend for 2010 : 37.5 sen (2009 : 15 sen) per share 46,358 27,728

Dividends on preference shares:- Final dividend for 2010 : 6 sen (2009 : 6 sen) per share 20 30- Cumulative participating dividend for 2010 : 30 sen (2009 : 10 sen) per share 101 50- Special cumulative participating dividend for 2010 : 50 sen (2009 : 20 sen) per share 168 100

The financial statements for the current financial year do not reflect the proposed dividends. Such dividends, if approved by the shareholders, will be accounted for in equity as an appropriation of retained profits for the financial year ending 31 December 2011.

29. RELATED PARTY DISCLOSURESa) Sale and purchase of goods and services

In addition to the related party information disclosed elsewhere in the financial statements, the following significant transactions between the Group and related parties took place at terms agreed between the parties during the financial year:


Sale of finished goods to:- Companies in which major shareholders have interests 47,932 52,546 47,209 49,593- Associates 19,805 21,618 19,805 21,618- A subsidiary - - 78,305 72,084Dividends received from- A subsidiary - - 4,872 3,840


29. RELATED PARTY DISCLOSURES (cont’d)a) Sale and purchase of goods and services (cont’d)


Rental of premises received from/(paid to):- A subsidiary - - 48 48- Related companies (496) (489) (179) (172)Registrar fees and expenses paid to a related company (18) (26) (18) (26)Interest income received from a subsidiary - - - 51Purchase of equipment from a subsidiary - - 5 -Waiver of interest receivable a subsidiary - - - 161Waiver of advance receivable a subsidiary - - - 346

b) Account balances with related parties

Account balances with related parties of the Group and of the Company at year end are as follows:


Amount due from/(to)

Account balances with immediate holding companyHL Cement (Malaysia) Sdn Bhd - 1,936 - 1,936

Account balances with companies in which major shareholders have interestsHong Leong Share Registration Services Sdn Bhd (2) (3) (2) (3)Hong Leong Marketing Co Berhad 4,089 4,781 4,089 4,781Kimsik Company Sdn Bhd 477 507 477 507

Account balances with a company in which a director has interestsIsyoda Marketing Sdn Bhd - 213 - -

Account balances with related companyHL-Manufacturing Industries Sdn Bhd 515 283 515 283

Account balances with associatesCement Industries (Sabah) Sdn Bhd 16,634 31,334 16,634 31,334

Account balances with jointly controlled entityNorth Plaza Sdn Bhd 1,357 1,323 - -

Account balances with subsidiariesTasek Concrete Sdn Bhd - - 17,144 24,088Tasek Plantation Sdn Bhd - - (53,246) (2,362)Posek Pembangunan Sdn Bhd - - (7,008) (6,308)Tasek Property Holdings Sdn Bhd - - 1,469 1,337




29. RELATED PARTY DISCLOSURES (cont’d)c) Compensation of key management personnel


Short-term employee benefits 2,268 2,074 2,030 1,674

30. COMMITMENTS(a) Capital commitments

Capital expenditure as at the reporting date is as follows: Group Company 2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000

Capital expenditureApproved but not contracted for: Property, plant and equipment 4,078 1,636 1,463 850

Approved but not provided for: Property, plant and equipment 5,835 2,545 5,835 2,416 9,913 4,181 7,298 3,266

b) Operating lease commitments – as lessee

Future minimum rentals payable under non-cancellable operating leases at the reporting date are as follows:

Group 2010 2009 RM’000 RM’000

Not later than 1 year 1,081 638Later than 1 year but not later than 5 years 1,195 217 2,276 855

The Company leases plant site under operating leases. The leases typically run for a period of one to three years, with an option to renew the lease after that date. None of the lease includes contingent rentals.

31. CONTINGENT LIABILITIESThe Group is providing continuing financial support to NPSB, a joint venture company up to the percentage of shareholding the Group holds in NPSB so as to enable NPSB to meet its liabilities as and when they fall due and to carry on its business without a significant curtailment of operation.

32. SIGNIFICANT EVENTS(i) Acquisition of PR Engineering Sdn Bhd (“PRE”)

On 15 June 2010, the Company acquired the entire issued and paid-up share capital comprising 500,000 ordinary shares of RM 1.00 each in PRE, a company incorporated in Malaysia, with the intention of carrying out quarry operations, for a total cash consideration of RM14,200,000.

PRE is the sole legal and beneficial owner of the lands held under HS (D) 180252 PT 21302 Mukim Sungai Raya, Daerah Kinta, Negeri Perak and HS (D) 180253 PT 21303 Mukim Sungai Raya, Daerah Kinta, Negeri Perak (“the Lands”). On 23 August 2010, an external valuation has been carried out noting that the fair value of the Lands was RM13,000,000.


32. SIGNIFICANT EVENTS (cont’d)(i) Acquisition of PR Engineering Sdn Bhd (“PRE”) (cont’d)

The difference of the consideration paid of RM1,200,000 as compared with the fair value of the lands has not been written down as the management has concluded that the difference represents rock reserves beneath the subsurface of the lands which will be extracted upon commencement of the quarrying activities on the said lands.

(ii) Disposal of Gunong Kuang Estate by Tasek Plantation Sdn Bhd (“TPSB”)

On 13 July 2010, TPSB entered into a conditional sale and purchase agreement with Ngan Yin Groundnut Factory Sdn Bhd, a company incorporated in Malaysia, to dispose off its property known as “Gunong Kuang Estate” for a total cash consideration of RM53,889,000.

On 15 December 2010, the disposal has been completed and resulted in a gains on disposal of RM43,545,000 for the Group in the current financial year. TPSB remains dormant after the disposal.

33. FAIR VALUE OF FINANCIAL INSTRUMENTSDetermination of fair value

Financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value

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

NoteTrade and other receivables (current) 18Loans and borrowings (current) 23Trade and other payables (current) 24

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

Derivatives

The fair value of forward currency contracts are calculated by reference to marked-to-market (“MTM”) rates as supplied by banks.

34. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIESExposure to credit, market and liquidity risks arises in the normal course of the Group’s and of the Company’s business. The Group and the Company have written risk management policies and guidelines which sets out their overall business strategies, their tolerance to risk and their general risk management philosophy. Such written policies are reviewed annually by the Board of Directors, and quarterly reviews are undertaken to ensure that the Group and the Company’s policy guidelines are adhered to.

a) Credit risk

Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on all customers requiring credit term.

Exposure to credit risk

At reporting date, there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the statements of financial position.

Information regarding credit enhancements for trade and receivables is disclosed in Note 18(a).




34. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont’d)a) Credit risk (cont’d)

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 18.

Financial assets that are either past due or impaired

Information regarding financial assets that are either past due or impaired is disclosed in Note 18.

b) Market risk

(i) Foreign exchange risk

The Group and the Company incur foreign currency risk on sales and purchases that are denominated in a currency other than Ringgit Malaysia. The currencies giving rise to this risk are primarily United States Dollar and Euro.

Material foreign currency transaction exposures are hedged, mainly with derivative financial instruments such as forward foreign exchange contracts, on a case by case basis.

(ii) Interest rate risk

The Group and the Company are exposed to interest rate risk in respect of their short term deposits with licensed banks and the contractual borrowing rate for banker acceptances. However, the fluctuation in interest rates, if any, is not expected to have a material impact on the financial performance of the Group and of the Company.

c) Liquidity risk

Cash flow forecasting is performed in the operating entities of the Group and aggregated by the Group finance. Group finance monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs. Surplus cash held by the operating entities over and above balance required for working capital management are transferred to the Group treasury. Group treasury invests surplus cash in short term deposits with licensed banks.

At the reporting date, the Group held short term deposits of RM410,817,000 (2009 : RM339,470,000) net of security deposits received from customers and cash and bank balances of RM24,887,000 (2009 : RM15,556,000) that are expected to readily generate cash inflows for managing risk.

The table below analyses the Group’s non-derivative financial liabilities and net-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the statements of financial position date to the contractual maturity date. Derivative financial liabilities are included in the analysis if their contractual maturities are essential for an understanding of the timing of the cash flows. The amounts disclosed in the table are the contractual undiscounted cash flows.

Between Between Less than 1 and 2 1 and 2 Over 5 1 year years years years RM’000 RM’000 RM’000 RM’000

GroupAt 31 December 2010Loan and borrowings 4,127 - - -Trade and other payables 61,612 - - -

At 31 December 2009Loan and borrowings 3,747 - - -Trade and other payables 54,437 - - -

CompanyAt 31 December 2010Trade and other payables 99,810 - - -

At 31 December 2009Trade and other payables 42,787 - - -


34. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont’d)c) Liquidity risk (cont’d)

Effective interest rates and repricing analysis.

In respect of interest-earning financial assets and interest-bearing financial liabilities, the following table indicates their effective interest rates at the reporting date and the periods in which they mature, or if earlier, repriced.

Effective interest Within rate Total 1 year % RM’000 RM’000

Group

2010

Fixed rate instrumentsShort term deposit with licensed banks 1.72% - 3.10% 412,017 412,017Bankers’ acceptances 2.60% - 3.25% 4,127 4,127

2009

Fixed rate instrumentsShort term deposit with licensed banks 1.90% - 2.30% 340,170 340,170Bankers’ acceptances 2.60% - 3.50% 3,747 3,747

Company

2010Fixed rate instrumentsShort term deposit with licensed banks 1.75% - 3.10% 410,017 410,017

2009Fixed rate instrumentsShort term deposit with licensed banks 1.90% - 2.30% 333,170 333,170

35. SEGMENTAL INFORMATIONFor management purposes, the Group is organised into business units based on their products and has three reportable operating segments as follows:

I. The cement segment is a supplier of cement.II. The ready mix concrete segment is a supplier of ready-mixed concrete.III. The plantation segment is land cultivation, plantation and estate management. This segment has been classified as discontinued operation during the financial year (Note 10).

Except as indicated above, no operating segments has been aggregated to form the above reportable operating segments.

Management monitors the operating results of its business unit separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which, in certain respects as explained in the table below is measured differently from operating profit or loss in the consolidated financial statements. Group financial (including finance 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.




35.

SE

GM

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35.

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EN

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INFO

RM

ATIO

N (c

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Pe

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solidated

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financial

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Cem

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Total

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35.

SE

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INFO

RM

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NOTESTOTHEFINANCIALSTATEMENTS-31DECEMBER2010(cont’d)


35. SEGMENTAL INFORMATION (cont’d)Note Nature of adjustments and eliminations to arrive at amounts reported in the consolidated financial statements. (cont’d)

D The following items are added to/(deducted from) segment profit to arrive at “Profit from continuing operations, net of tax” presented in the consolidated statement of comprehensive income.

2010 2009 Note RM’000 RM’000

Inter-segment dividends elimination B (4,872) (2,880)Share of results of associates and joint venture - 1,372Profit from discontinued segment A (3,092) (2,575)

(7,964) (4,083)

E The following items are added to/(deducted from) segment assets to arrive at total assets reported in the consolidated statement of financial position: 2010 2009

RM’000 RM’000Inter-segment assets elimination B- subsidiaries (38,995) (45,817)- associates (47,484) (33,284)Goodwill on consolidation 389 389Investment in joint venture 6 6Investment in associate included in assets held for sale 42,402 42,402

(43,682) (36,304)

F Addtions to non-current assets consist of: 2010 2009 RM’000 RM’000

Property, plant and equipment 35,419 37,412Intangible assets 341 216Inter-segment assets elimination (2) -

35,758 37,628

G The following items are added to/(deducted from) segment liabilities to arrive at total liabilities reported in the consolidated statement of financial position:

2010 2009 RM’000 RM’000

Inter-segment liabilities elimination B- subsidiaries (77,348) (8,670)

Analysis of revenue by geographical segment

The revenue information based on the geographical location of customers are as follows:

2010 2009 RM’000 RM’000

Malaysia 483,407 472,048Outside Malaysia 63,355 48,737

546,762 520,785

Major customers

There are no major customers with revenue equal or more than 10% (2009: 10%) of the Group’s total revenue.




36. CAPITAL MANAGEMENTThe Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

Consistent with others in the industry, the Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including ‘current and non-current borrowings’ as shown in the consolidated statement of financial position) less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the consolidated statement of financial position plus net debt.

The Group’s strategy was to maintain gearing ratio at very low level. There was no long term borrowing for the Group in 2010.

37. COMPARATIVESThe presentation and classification of items in the current year’s financial statements have been consistent with the previous financial year except that certain comparative amounts have been restated as a result of changes in accounting policies in Note 2.

The comparative figures have been audited by a firm of chartered accountants other than Ernst & Young.



38. SUPPLEMENTARY INFORMATION - BREAKDOWN OF RETAINED PROFIT INTO REALISED AND UNREALISED

The breakdown of the retained profits of the Group and of the Company as at 31 December 2010 into realised and unrealised profits is 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 Profits 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 RM’000 RM’000

Total retained profits of the Company and its subsidiaries - Realised 558,629 501,071 - Unrealised (28,516) (26,314) 530,113 474,757

Total share of realised retained profits from associate and jointhly controlled entity 22,016 -Retained profits as per financial statements 552,129 474,757Less: consolidation adjustments (905) -Retained profits as per financial statements 551,224 474,757


Estimated Net Book Year of Age of Description Value acquisition */ Location Tenure Area Building & Existing use RM’000 revaluation

A Owned by Tasek Corporation Berhad

1 Lot 15667 (CT.15208) Freehold 97a 2r 35p - Agricultural/ 391 1985 Chemor, Mukim Ulu Kinta Clay extraction Perak

2 Lot 44409 (CT.25294) Freehold 9a 3r 16p - Agricultural/ 857 1985 Tasek, Mukim Ulu Kinta Future Development Perak



5 Lot 44410 Geran 63913 Freehold 9a 3r 12p - Agricultural/ 1,069 1985 Tasek, Mukim Ulu Kinta Storage Yard Perak

6 Lot 9112N/601 Freehold 26.799a - Agricultural/ 3,539 1985 (Geran 8446) Storage Yard Jalan Kuala Kangsar Mukim Ulu Kinta, Perak

7 Lot 16908 (G.8447) Freehold 4a 1r 19p - Agricultural/ 177 1985 Tasek, Mukim Ulu Kinta Future Development Perak

8 Lot 24863 (G.8449) Freehold 1.4085a - Agricultural/ 120 1985 Tasek, Mukim Ulu Kinta Future Development Perak

9 Lot 9114N/233 Freehold 18.1255a - Agricultural/ 2,587 1985 (PN.2306) Future Development Jalan Kuala Kangsar Mukim Ulu Kinta, Perak

10 Lot 208414 Freehold 1.81322a - Agricultural/ 196 1985 (CT.9378 Lot 15627) Future Development Tasek, Mukim Ulu Kinta Perak

11 Lot 17127 (Geran 22972) Freehold 3a 3r 29p - Quarry/Future 360 1985 Tasek, Mukim Hulu Kinta Development Perak

12 Lot 208410/208411 Freehold 3.0393a - Agricultural/ 214 1985 (CT.14706 Lot 21354) Future Development Tasek, Mukim Ulu Kinta Perak

LIST OF PROPERTIES HELD By The Group as at 31 December 2010


LIST OF PROPERTIES HELD By the Group as at 31 December 2010 (cont’d)



13 Lot 44411 (CT.25296) Freehold 20a 1r 5p - Industrial/ 3,094 1985 Tasek, Mukim Ulu Kinta Future Development Perak

14 Lot 43100 (CT.28442) Freehold 5a 0r 0p 1 to 47 Industrial/Factory Site 1,212 1985 Persiaran Tasek, Kwsn. Perindustrian Tasek Mukim Ulu Kinta, Perak Factory Building

15 Lot 43101 (CT.28443) Freehold 4a 3r 39p - Industrial/Factory Site 1,087 1985 Persiaran Tasek, Kwsn. Perindustrian Tasek Mukim Ulu Kinta, Perak Factory Building

16 Lot 22548 (Geran 8990) Freehold 2a 1r 39p 1 to 47 Industrial/Factory Site 827 1985 Persiaran Tasek, Kwsn. Perindustrian Tasek Mukim Ulu Kinta, Perak Factory Building

17 Lot 22547 (Geran 8448) Freehold 2a 1r 39p 1 to 47 Industrial/Factory Site 1,888 1985 Persiaran Tasek, Kwsn. Perindustrian Tasek Mukim Ulu Kinta, Perak Factory Building

18 Lot 14661 (CT.9236) Freehold 4a 3r 33p - Industrial/Factory Site 1,402 1985 Persiaran Tasek, Kwsn. Perindustrian Tasek Mukim Ulu Kinta, Perak

19 Lot 14662 (G.9002) Freehold 8a 1r 36p 1 to 47 Industrial/Factory Site 2,246 1985 Persiaran Tasek, Kwsn. Perindustrian Tasek Mukim Ulu Kinta, Perak Factory Building

20 Lot 14870 (Geran 23165) Freehold 4a 3r 5p - Agricultural/ 576 1985 Tasek, Mukim Ulu Kinta Future Development Perak

21 Lot 15031 (G.22300) Freehold 3.9242a - Agricultural/ 366 1985 Tasek, Mukim Ulu Kinta Future Development Perak

22 Lot 21989 (G.22303) Freehold 47a 3r 35p - Agricultural/ 759 1985 Chemor, Mukim Ulu Kinta Future Development Perak





23 Lot 1552 (HS(M)21254) Freehold 2.875a 15 Bulk Terminal/ 10,645 1995* Sungai Buloh Storage Packing Mukim Gombak, Selangor Factory Building

24 Lot 47435 Leasehold 29a 0r 0p 1 to 47 Industrial/ 64,097 1985 (HS(D)KA 123/83) Expiring Factory Site Persiaran Tasek, in 2062 Kwsn. Perindustrian Tasek Mukim Ulu Kinta, Perak Factory Building

25 Lot PT.59 Leasehold 25.404a 28 Industrial/ 1,645 1985 (HS (D) 1865/83) Expiring Storage Yard & Jetty Kampung Acheh in 14/11/2082 Mukim Lumut, Perak Store 26 Lot 25065 (PT.160443 (HS(D)KA 83030)) Leasehold 38.77a - Limestone Quarry 167 1985 Batu 3 1/2 Expiring Jalan Kuala Kangsar in 2030 Mukim Ulu Kinta, Perak

27 PT.160403,160402 Leasehold 3.38a) - Limestone Quarry 19 1985 & 160404 Expiring 24.93a) HS(D)KA 83028, in 2030 17.22a) 83027 & 83029 Batu 3 1/2 Jalan Kuala Kangsar Mukim Ulu Kinta, Perak

28 Lot.22953 (Geran 50426) Freehold 1a 0r 28p - Agriculture/ 311 2009* Persiaran Tasek, Factory Site Kwsn. Perindustrian Tasek Mukim Ulu Kinta, Perak

29 P.T. 235249 Freehold 0.829 hectare - Limestone Quarry 301 2011 H.S.(D) 197392 Tasek, Mukim Hulu Kinta Perak

30 P.T. 235250 Freehold 4.9373 hectares - Limestone Quarry 1,792 2011 H.S.(D) 197393 Tasek, Mukim Hulu Kinta Perak

31 P.T. 235251 Freehold 2.165 hectares - Limestone Quarry 786 2011 H.S.(D) 197394 Tasek, Mukim Hulu Kinta Perak



Estimated Net Book Year of Age of Description Value acquisition */ Location Tenure Area Building & Existing use RM’000 revaluation B. OWNED BY PR ENGINEERING SDN BHD

1 P.T 21302 & PT21303 Leasehold 13833 m2 - Limestone Hill 13,900 2010*

H.S.(D) 180252 & 180253 Expiring in 8.873 Mukim Sungai Raya, 23-11-2038 hectares Perak

Note - The new lots P.T. 235249, P.T. 235250 & P.T. 235251 were replacement for lots 15029, 15030, 15032, 15033 and 19899.

}


ANALYSIS OF SHAREHOLDINGS AS AT 17 MARCH 2011

Share CapitalAuthorised Share Capital: RM300,000,000 comprising 299,500,000 Ordinary Shares of RM1.00 each and 500,000 6% Cumulative Participating Preference Shares of RM1.00 each

Issued and Paid-up Capital: RM123,956,231 comprising 123,621,231 Ordinary Shares of RM1.00 each and 335,000 6% Cumulative Participating Preference Shares of RM1.00 each

Class of Shares: 123,621,231 Ordinary Shares of RM1.00 each and 335,000 6% Cumulative Participating Preference Shares of RM1.00 each

Voting rights: 1 vote for every Ordinary Share 1 vote for every 6% Cumulative Participating Preference Shares

6% Cumulative Participating Preference Shares of RM1.00 each

DISTRIBUTION SCHEDULE OF SHAREHOLDERS No. of

Size of Holdings Shareholders % No. of Shares %

Less than 100 6 25.00 312 0.09100 – 1,000 7 29.17 3,959 1.181,001 – 10,000 4 16.67 8,576 2.5610,001 – less than 5% of issued shares 1 4.16 13,400 4.005% and above of issued shares 6 25.00 308,753 92.17 24 100.00 335,000 100.00

30 LARGEST 6% CUMULATIVE PARTICIPATING PREFERENCE SHAREHOLDERS AS AT 17 MARCH 2011 Name of Shareholders No. of Shares %

1. Cimsec Nominees (Tempatan) Sdn Bhd - CIMB Investment Bank Berhad for HL Cement (Malaysia) Sdn Bhd (SSA) 211,050 63.00 2. Mayban Securities Nominees (Asing) Sdn Bhd - UOB-Kay Hian Pte Ltd for Chua Geok Choo 23,450 7.00 3. Yeoh Ghim Cheow Holding Sdn Bhd 20,100 6.00 4. Tan Eng Han 18,129 5.41 5. Tan Seck Yeow 18,047 5.39 6. Chon Moi 17,977 5.36 7. Ewe Poh Kim 13,400 4.00 8. Tan Seck Chuan 2,144 0.64 9. Tan Seck Kang 2,144 0.64 10. Tan Sek Thong 2,144 0.64 11. Tan Siak Hai 2,144 0.64 12. Peh Choon Leong 858 0.26 13. Tan Bee Choo 858 0.26 14. Tan Lay Hoon 858 0.26 15. Tan Poh Choo 858 0.26 16. Goh Geok Eng @ Tan Geok Eng 259 0.08 17. Koh Boon Yoke 134 0.04 18. Ng Chan Fai 134 0.04 19. Sasitharan A/L A Mathavan 67 0.02 20. Wong Gek Keong 62 0.02 21. Chew Lee Hwa 50 0.01 22. Chin Kok Yee 50 0.01 23. Chang Ai Ching 43 0.01 24. Low Jau Li 40 0.01 335,000 100.00


ANALYSIS OF SHAREHOLDINGS AS AT 17 MARCH 2011 (cont’d)

Ordinary Shares of RM1.00 each

DISTRIBUTION SCHEDULE OF SHAREHOLDERS No. of

Size of Holdings Shareholders % No. of Shares %

Less than 100 185 14.75 4,591 0.00100 – 1,000 432 34.45 261,418 0.211,001 – 10,000 506 40.35 1,600,089 1.3010,001 – less than 5% of issued shares 113 9.01 2,966,277 2.405% and above of issued shares 2 0.16 100,579,603 81.36 1,254 100.00 123,621,231 100.00

30 LARGEST ORDINARY SHAREHOLDERS AS AT 17 MARCH 2011 Name of Shareholders No. of Shares %

1. Cimsec Nominees (Tempatan) Sdn Bhd - CIMB Investment Bank Berhad for HL Cement (Malaysia) Sdn Bhd (SSA) 89,982,883 72.79 2. Permodalan Nasional Berhad 10,596,720 8.57 3. HSBC Nominees (Asing) Sdn Bhd - BNP Paribas Secs Svs Lux for Aberdeen Global 5,177,760 4.19 4. Malaysia Nominees (Tempatan) Sendirian Berhad - Boon Siew Sdn Berhad (00-00198-000) 4,673,688 3.78 5. Lembaga Tabung Haji 3,302,600 2.67 6. Citigroup Nominees (Tempatan) Sdn Bhd - Employees Provident Fund Board (Aberdeen) 1,185,029 0.96 7. Mayban Nominees (Tempatan) Sdn Bhd - Aberdeen Asset Management Sdn Bhd for Kumpulan Wang Persaraan (Diperbadankan) (FD 1-280305) 837,500 0.68 8. HSBC Nominees (Asing) Sdn Bhd - BNP Paribas Secs Svs Paris for Aberdeen Asian Smaller Companies Investment Trust PLC 673,400 0.54 9. HSBC Nominees (Asing) Sdn Bhd - Exempt AN for BNP Paribas Securities Services (Singapore – SGD) 643,870 0.52 10. Amsec Nominees (Tempatan) Sdn Bhd - Aberdeen Asset Management Sdn Bhd for Tenaga Nasional Berhad Retirement Benefit Trust Fund (FM-Aberdeen) 386,500 0.31 11. YBhg Tan Sri Quek Leng Chan 232,994 0.19 12. Mayban Nominees (Tempatan) Sdn Bhd- Aberdeen Asset Management Sdn Bhd for Malaysian Timber Council (Endowment Fund) 221,770 0.18 13. Mayban Securities Nominees (Asing) Sdn Bhd - UOB-Kay Hian Pte Ltd for Chua Geok Choo 201,490 0.16 14. KAF Nominees (Asing) Sdn Bhd - DBS Vickers Secs (S) Pte Ltd for Lim Sin Hoon 167,500 0.14 15. Sam Securities Sdn Berhad 136,652 0.11 16. Amsec Nominees (Tempatan) Sdn Bhd - AmFraser Securities Pte Ltd for Tan Kah Lay (1922) 123,950 0.10 17. Wong Yoon Chyuan 123,950 0.10 18. Mayban Nominees (Tempatan) Sdn Bhd - Aberdeen Asset Management Sdn Bhd for Malaysian Timber Council (Operating Fund) 120,600 0.10


ANALYSIS OF SHAREHOLDINGS AS AT 17 MARCH 2011 (cont’d)

30 LARGEST ORDINARY SHAREHOLDERS AS AT 17 MARCH 2011 (cont’d) Name of Shareholders No. of Shares %

19. Cimsec Nominees (Asing) Sdn Bhd - Exempt AN for CIMB Securities (Singapore) Pte Ltd (Retail Clients) 98,712 0.08 20. Nam San Sendirian Berhad 94,559 0.08 21. Chan Kwai Peng 90,534 0.07 22. Malaysia Nominees (Tempatan) Sendirian Berhad - Bayview Hotel Sendirian Berhad (00-00199-000) 87,519 0.07 23. Yayasan Islam Perlis 87,100 0.07 24. Ewe Poh Kim 86,480 0.07 25. Ong Swee Chan Sdn. Berhad 85,760 0.07 26. Poh Cheng Wee & Sons Sendirian Berhad 84,769 0.07 27. Wong Yoon Tet 82,410 0.07 28. Teo Xian-Hui, Amanda Marie (Zhang Xianhui, Amanda Marie) 77,050 0.06 29. Foo Yet Kai & Sons Sdn Bhd 60,343 0.05 30. HDM Nominees (Tempatan) Sdn Bhd - DYMM Tuanku Ampuan Najihah Binti Tunku Besar Burhanuddin 53,868 0.04 119,777,960 96.89

SUBSTANTIAL SHAREHOLDERSAccording to the Register of Substantial Shareholders as at 17 March 2011:

Name of Substantial Shareholders No. of Shares %

Aberdeen Asset Management Asia Limited 6,495,030 5.25Aberdeen Asset Management PLC 9,246,429 7.48Credit Suisse Group AG 9,246,429 7.48Mitsubishi UFJ Financial Group, Inc. 9,246,429 7.48Permodalan Nasional Berhad 10,596,720 8.57Yayasan Pelaburan Bumiputra 10,596,720^ 8.57HL Cement (Malaysia) Sdn Bhd 89,982,883 72.79HL Cement (Labuan) Limited 89,982,883* 72.79HL Cement (HK) Limited 89,982,883* 72.79Hong Leong Asia Ltd. 89,982,883* 72.79Hong Leong Corporation Holdings Pte Ltd 89,982,883* 72.79Hong Leong Enterprises Pte. Ltd. 89,982,883* 72.79Davos Investment Holdings Private Limited 89,982,883* 72.79Kwek Leng Kee 89,982,883* 72.79Quek Leng Chye 89,982,883* 72.79Hong Leong Investment Holdings Pte. Ltd. 89,982,883* 72.79Kwek Holdings Pte. Ltd. 89,982,883* 72.79Kwek Leng Beng 89,982,883* 72.79Salvador Pte. Ltd. 89,982,883* 72.79Tan Sri Quek Leng Chan 90,215,877# 72.97

Notes:^ Deemed interest through Permodalan Nasional Berhad by virtue of Section 6(A) of the Companies Act, 1965* Deemed interest through HL Cement (Malaysia) Sdn Bhd by virtue of Section 6(A) of the Companies Act, 1965 # Direct and deemed interest HL Cement (Malaysia) Sdn Bhd by virtue of Section 6(A) of the Companies Act, 1965


SCHEDULE OF SHARE BUY-BACK FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010

During the financial year, the Company implemented the share buy-back which was approved by the shareholders of the Company. Save as disclosed below, there were no purchases for other months during the financial year:

No. of Shares Average Purchased and Price Paid Total Cost Month Retained as Lowest Highest Per Share (RM) Treasury Shares

February 2010 324,300 4.38 4.80 4.7009 1,530,620.97 March 2010 17,200 4.88 4.90 4.8988 84,876.85 TOTAL 341,500 1,615,497.82

All the shares purchased by the Company were retained as treasury shares. As at 31 December 2010, a total of 341,500 ordinary shares were held as treasury shares. All of the treasury shares were cancelled during the financial year.

Purchase Price Per Share (RM)


NOTICE OF THE 50TH ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the 50th Annual General Meeting of the Company will be held at Millennium I, Lobby Level, Grand Millennium Kuala Lumpur, 160 Jalan Bukit Bintang, 55100 Kuala Lumpur, Malaysia on Monday, 25 April 2011 at 10:00 a.m. to transact the following business: -

AS ORDINARY BUSINESS:

1. To receive the Audited Accounts together with the Directors’ Report and Auditors’ Report for the financial year ended 31 December 2010.

2. To declare a final dividend of 30 sen per share less Malaysian income tax of 25% for the financial year ended 31 December 2010.

3. To approve a special dividend of 50 sen per share less Malaysian income tax of 25% for the financial year ended 31 December 2010.

4. To approve the payment of Directors’ fees totaling RM416,333.00 to be divided among the Directors in such manner as the Directors may determine.

5. To elect the following Director who was appointed during the year retiring under Article 85 of the Articles of Association: -

(a) Lim Eng Khoon

6. To re-elect the following Directors who retire by rotation under Article 94 of the Articles of Association: -

(a) Kwek Leng Peck

(b) Dato’ Khoo Peng Lai (Not seeking re-election)

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

AS SPECIAL BUSINESS:

8. To consider and if thought fit, to pass, the following ordinary resolutions:

Ordinary Resolution

(a) Authority to Directors to Issue Shares

“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby empowered to issue shares in the Company at any time and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit, provided that the aggregate number of shares issued pursuant to this resolution in any one financial year does not exceed 10% of the issued capital of the Company for the time being and that the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company.”

(Resolution 1 – Ordinary)









NOTICE OF THE 50TH ANNUAL GENERAL MEETING (cont’d)

Ordinary Resolution

(b) Proposed Renewal of Authority for the Purchase of Own Shares by the Company

“THAT subject to the Companies Act, 1965 (“the Act”), rules, regulations and orders made pursuant to the Act, provisions of the Company’s Memorandum and Articles of Association and requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) and any other relevant authority, the Directors of the Company be and are hereby authorised to make purchases of ordinary shares of RM1.00 each in the Company’s issued and paid-up share capital subject to the following:-1. the maximum number of shares which may be purchased and/or held by the Company shall be equivalent to ten per centum (10%) of the issued and paid-up ordinary share capital of the Company (“Ordinary Shares”);2. the maximum fund to be allocated by the Company for the purpose of purchasing the Ordinary Shares shall not exceed the retained profits and/or the share premium account of the Company. As of 31 December 2010, the audited retained profits and share premium of the Company were RM590.104 million and RM133.946 million respectively;3. the authority conferred by this resolution will commence immediately upon passing of this ordinary resolution and will expire at the conclusion of the next Annual General Meeting (“AGM”) of the Company, (unless earlier revoked or varied by ordinary resolution of the shareholders of the Company in general meeting or the expiration of the period within which the next AGM after that date is required by law to be held) in accordance with the provisions of the guidelines issued by Bursa Securities or any other relevant authority;4. upon completion of the purchase(s) of the Ordinary Shares by the Company, the Directors of the Company be and are hereby authorised to deal with the Ordinary Shares in the following manner:- (i) cancel the Ordinary Shares so purchased; or (ii) retain the Ordinary Shares so purchased in treasury; or (iii) retain part of the Ordinary Shares so purchased as treasury Ordinary Shares and cancel the remainder; the treasury Ordinary Shares may be distributed as dividends to the shareholders and/or resold and/or subsequently cancelled; and in any other manner as prescribed by the Act, rules, regulations and orders made pursuant to the Act and the Main Market Listing Requirements of Bursa Securities and any other relevant authority for the time being in force; AND THAT the Directors of the Company be and are hereby authorised to take all such steps as are necessary or expedient to implement or to effect the purchase(s) of the Ordinary Shares.”

Ordinary Resolution

(c) Proposed Shareholders’ Mandate on Recurrent Related Party Transactions

“THAT the renewal of and new general mandate for the Company and/or its subsidiaries to enter into any of the transactions falling within the types of recurrent related party transactions of a revenue or trading nature as set out in the Company’s Circular to Shareholders dated 1 April 2011 (“the Circular”) with any person who is a related party as described in the Circular be and is hereby approved and renewed provided that such transactions are undertaken in the ordinary course of business and at arm’s length basis and on normal commercial terms which are not more favourable to the related party than those generally available to the public and not to the detriment of the minority shareholders of the Company; and that such approval, unless revoked or varied by the Company in general meeting, shall continue in force until the conclusion of the next Annual General Meeting (“AGM”) of the Company or the expiration of the period within which the next AGM after that date is required to be held pursuant to Section 143(1) of the Companies Act, 1965 (“the Act”) (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Act) whichever is the earlier.”




Special Resolution

(d) Proposed Amendments to Articles of Association of the Company

“THAT the Proposed Amendments to Articles of Association of the Company as set out in Appendix III of the Company’s Circular to Shareholders dated 1 April 2011 be and are hereby approved AND THAT the Directors of the Company be and are hereby authorised to carry out all the necessary formalities in effecting the said Proposed Amendments to Articles of Association of the Company and to assent to any modification, variation, and/or amendments as may be required by Bursa Malaysia Securities Berhad.”

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

By Order of the Board

VINCENT CHOW POH JINGO HOOI KOONCompany Secretaries


1 April 2011

Notes:(1) A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and vote instead of him

and the member shall specify the proportion of his shares to be represented by each proxy. A proxy need not be a member of the Company and Section 149(1)(b) of the Companies Act, 1965 shall not apply. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one proxy in respect of each securities account it holds with shares in the Company standing to the credit of the said securities account.

(2) The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or if the appointor is a corporation, either under its common seal or under the hand of an officer or attorney duly authorised.

(3) The Form of Proxy must be deposited at the Registered Office of the Company situated at 6th Floor, Office Block, Grand Millennium Kuala Lumpur, 160 Jalan Bukit Bintang, 55100 Kuala Lumpur, Malaysia not less than 48 hours before the time appointed for holding the meeting or adjourned meeting.

(4) Resolution On Authority To Directors To Issue Shares The Company wishes to renew the previous mandate approved by shareholders at the 49th Annual General Meeting. The previous

mandate granted by the shareholders had not been utilized and hence no proceeds were raised therefrom. The renewal of this mandate is to authorise Directors to issue shares pursuant to the Section 132D of the Companies Act, 1965. The Company is continuously looking into prospective areas to broaden its operating base and earnings potential. As the expansion/diversification may involve the issue of new shares, the Directors, under present circumstances, would have to call for a general meeting to approve the issue of new shares even though the number involved is less than 10% of the issued capital. In order to avoid any delay and cost involved in convening a general meeting to approve such issue of shares, it is thus considered appropriate that the Directors be now empowered to issue shares in the Company up to an amount not exceeding in total 10% of the issued shares capital of the Company for the time being for such purposes as they consider would be in the interest of the Company. This authority, unless revoked or varied at a general meeting, will expire at the next Annual General Meeting of the Company.

(5) Resolution On Proposed Renewal of Authority for the Purchase Of Own Shares by the Company The purchase of own shares of the Company will enable the Company to utilise its financial resources not immediately required

for use to purchase its ordinary shares. The purchase of own shares is expected to have the effect of stabilising the supply and demand as well as the price of the ordinary shares. Further information on the Proposed Renewal of Authority for the Purchase of Own Shares by the Company are set out in the Circular dated 1 April 2011 which is despatched together with the Company’s Annual Report 2010.

(6) Resolution On Proposed Shareholders’ Mandate on Recurrent Related Party Transactions The approval for renewal of and new general mandate will permit the Company to enter into all recurrent related party transactions

of a revenue or trading nature which are necessary for day-to-day operations in the ordinary course of business. Further information on the Proposed Renewal of Mandate on Recurrent Related Party Transactions are set out in the Circular dated 1 April 2011 which is despatched together with the Company’s Annual Report 2010.

(7) Resolution On Proposed Amendments to Articles of Association of the Company The proposed amendments are made to update the Articles of Association of the Company to be in line with the Main Market Listing

Requirements of Bursa Malaysia Securities Berhad and to ensure a practical minimum number of directors for the Company. Further information on the Proposed Amendments to Articles of Association of the Company is set out in the Circular dated 1 April 2010 which is despatched together with the Company’s Annual Report 2010.

NOTICE OF THE 50TH ANNUAL GENERAL MEETING (cont’d)

(Resolution 11 – Special)


STATEMENT ACCOMPANYING NOTICE OF 50TH ANNUAL GENERAL MEETING

DIRECTORS STANDING FOR RE-ELECTION AT THE 50TH ANNUAL GENERAL MEETING OF THE COMPANY.Director appointed during the year and retiring under Article 85 of the Articles of Association and standing for election is :

a) Lim Eng Khoon

Directors’ retiring by rotation under Article 94 of the Articles of Association and standing for re-election are :

a) Kwek Leng Peck

b) Dato’ Khoo Peng Lai (Not seeking re-election)

Further details of Lim Eng Khoon, Kwek Leng Peck and Dato’ Khoo Peng Lai are set out in the Profile of Directors on pages 4 to 5 of the Annual Report.

TASEKCORPORATIONBERHAD (4698-W)

(Incorporated in Malaysia)

PROXY FORM

I/We, _________________________________________________________________________________________________ (BLOCK LETTERS)of ____________________________________________________________________________________________________

being a member of Tasek Corporation Berhad, hereby appoint _________________________________________________

__________________________________________________________________________________________ or failing him

______________________________________________________________________________________________ as my/our

proxy to attend and to vote for me/us on my/our behalf at the 50th Annual General Meeting of the Company to be held in Kuala Lumpur, Malaysia on Monday, 25 April 2011 at 10.00 a.m. or at any adjournment thereof.

My/Our Proxy is to vote as indicated below :-

RESOLUTIONS FOR AGAINST

OrdinaryBusiness

1 To receive the Accounts and Reports for the year ended 31 December 2010

2 To declare a Final Dividend of 30 sen per share

3 To declare a Special Dividend of 50 sen per share

4 To approve the payment of Directors’ fees

5 To elect Lim Eng Khoon, who was appointed during the year, retiring under Article 85 of the Articles of Association

To re-elect the following Directors who retire by rotation under Article 94 of the Articles of Association:

6 Kwek Leng Peck

Dato’ Khoo Peng Lai (Not seeking re-election)

7 To appoint Auditors for the ensuing year and to authorise the Directors to fix their remuneration

SpecialBusiness

To approve the following ordinary and special resolutions:-

8 Authority to Directors to Issue Shares (Ordinary)

9 Renewal of authority for the Purchase of Own Shares by the Company (Ordinary)

10 Renewal of Mandate on Recurrent Related Party Transactions (Ordinary)

11 Amendments to Articles of Association of the Company (Special)

(Please indicate with an “x” or “✓” in the appropriate space above how you wish your votes to be cast. If you do not do so, the Proxy will vote or abstain from voting at his discretion).

Signature ofDate _______________________ 2011 Shareholder _____________________________

Notes(1) A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote on his behalf. A proxy need not be a member

of the Company and Section 149(1)(b) of the Companies Act, 1965 shall not apply. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one proxy in respect of each securities account it holds with shares in the Company standing to the credit of the said securities account.

(2) The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or if the appointor is a corporation, either under its common seal or under the hand of an officer or attorney duly authorised.

(3) The Form of Proxy must be deposited at the Registered Office of the Company, 6th Floor, Office Block, Grand Millennium Kuala Lumpur, 160 Jalan Bukit Bintang, 55100 Kuala Lumpur, Malaysia not less than 48 hours before the time appointed for holding the meeting or adjourned meeting.

Number of Ordinary Shares Held

Number of Preference Shares Held

THE COMPANY SECRETARY

TASEK CORPORATION BERHAD6th Floor, Office Block

Grand Millennium Kuala Lumpur 160 Jalan Bukit Bintang

55100 Kuala Lumpur Malaysia

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