equine ar 2012(bup):layout 1 - insage (msc) sdn bhd ar 31-03-2012.pdf100% pedoman ikhtisas sdn bhd...

Contents

Our Vision andMission

Proxy Form

2

CorporateInformation

4

The Group At a Glance

5

Board ofDirectors

6

Profile ofDirectors

8

Chairman’sStatement

14

Review ofOperations

20

Five-YearPerformanceHighlights

AdditionalDisclosures

29

40

Statement onCorporateGovernance

FinancialStatements

30

41

StatementAccompanyingNotice ofAnnual GeneralMeeting

113

Appendix1

114

Audit CommitteeReport

35

Statement onInternal Control

38

Statement onDirectors’Responsibility onFinancial Statements

39

Group Properties

109

Notice of AnnualGeneral Meeting

111

Analysis of OrdinaryShareholdings

106

2Annual Report 2012

OUR VISIONAND MISSION

our

vision

Our vision is to create space andvalue, which fulfills the needs andexceeds the expectations of allSTAKEHOLDERS.

3EQUINE CAPITAL BERHAD (543867-T)

OUR VISIONAND MISSION

our mission

To provideaffordable, efficient,comfortable livingand work spacethat enables usersto achieve high livingstandards in anecologically balancedenvironment.

4Annual Report 2012

CORPORATEINFORMATION

BOARD OF DIRECTORS

YAM Datuk Seri Tengku Ahmad Shahibni Almarhum Sultan SalahuddinAbdul Aziz Shah(Independent Non-Executive Chairman)

Othman bin Mohammad(Executive Director)

Wee Beng Aun(Executive Director)

Datuk Ahmad Zabri bin Ibrahim (Independent Non-Executive Director)

Dato’ Hamzah bin Md Rus(Independent Non-Executive Director)

Wong Yuk Mou(Independent Non-Executive Director)

AUDIT COMMITTEE

Wong Yuk Mou(Chairman)

Datuk Ahmad Zabri bin Ibrahim (Member)

Dato’ Hamzah bin Md Rus(Member)

NOMINATION COMMITTEE

YAM Datuk Seri Tengku Ahmad Shahibni Almarhum Sultan SalahuddinAbdul Aziz Shah(Chairman)

Datuk Ahmad Zabri bin Ibrahim (Member)


RISK MANAGEMENT COMMITTEE

Wong Yuk Mou(Chairman)


Wee Beng Aun(Member)

Ranjeet Singh A/L Sarjit Singh(Member)

COMPANY SECRETARY

Chin Pei Fung(MAICSA 7029712)

AUDITORS

Deloitte KassimChan (AF: 0080)Level 19, Uptown 1Damansara UptownNo. 1, Jalan SS21/5847400 Petaling JayaSelangor Darul EhsanTel : (603) 7723 6500Fax : (603) 7726 3986

SHARE REGISTRAR

Symphony Share Registrars Sdn BhdLevel 6, Symphony HouseBlock D13, Pusat Dagangan Dana 1Jalan PJU 1A/4647301 Petaling JayaSelangor Darul EhsanTel : (603) 7841 8000Fax : (603) 7841 8151

REGISTERED OFFICE AND PRINCIPAL PLACE OF BUSINESS

No. 1, Jalan Putra Permai 1ATaman Equine43300 Seri KembanganSelangor Darul EhsanTel : (603) 8941 7878Fax : (603) 8941 1818Email : [email protected] : www.equine.com.my

STOCK EXCHANGE LISTING

Main Market of Bursa Malaysia Securities Berhad(Properties Sector, Stock Code : 1147)(Listed since 28 October 2003)


THE GROUPAT A GLANCE

100% Exceed Concept Sdn Bhd

100% Equine Park Stud Sdn Bhd

100% Kuala Lumpur Industries Bhd

100% Kuala Lumpur Industries Holdings Bhd

100% Kelab Taman Equine Sdn Bhd

100% Penaga Pesona Sdn Bhd

100% Syarikat Tenaga Sahabat Sdn Bhd

100% Taman Equine Riding Sdn Bhd

100% Taman Equine (M) Sdn Bhd

100% ER Concepts Sdn Bhd (formerly known as Akademi Ekuestrian Selangor Sdn Bhd)

100% Equine Park Country Resort Sdn Bhd

100% Pertanian Taman Equine Sdn Bhd

100% Permai Construction Sdn Bhd

100% Pedoman Ikhtisas Sdn Bhd

100% Taman Equine Industrial Sdn Bhd

100% Tujuan Ehsan Sdn Bhd

Dato’ Hamzah bin Md RusIndependent Non-Executive Director

Datuk Ahmad Zabri bin IbrahimIndependent Non-Executive Director

YAM Datuk Seri TengkuAhmad Shah ibniAlmarhumSultan Salahuddin AbdulAziz ShahIndependent Non-ExecutiveChairman

6Annual Report 2012

BOARD OFDIRECTORS

Othman bin MohammadExecutive Director

Wong Yuk MouIndependent Non-Executive Director

Wee Beng AunExecutive Director


BOARD OFDIRECTORS

8Annual Report 2012

PROFILE OF DIRECTORS

YAM Datuk Seri Tengku Ahmad Shah ibni Almarhum SultanSalahuddin Abdul Aziz Shah, a Malaysian aged 57, wasappointed the Independent Non-Executive Director of EquineCapital Berhad (“ECB”) on 26 August 2003 and wassubsequently re-designated as the Independent Non-ExecutiveChairman on 10 October 2008. He is also the Chairman of theNomination Committee of ECB.

He completed his Diploma in Business Administration fromUniversiti Teknologi MARA in 1974. He started his career inCharles Bradburne (1930) Sdn Bhd as a broker from 1974 to1981. He was a Director of TTDI Development Sdn Bhd from1978 to 2000 and a Director of Sime UEP Berhad from 1983 to1987. In 1987, he was appointed as Chairman of Subang JayaMedical Centre, a position which he still holds until now.Presently, he is a Director of Sime Darby Property Berhad, Sime Darby Healthcare Sdn Bhd, DutaLand Berhad, MelewarIndustrial Group Berhad and Wawasan TKH Holdings Berhad.He also sits on the Board of Directors of several private limitedcompanies involved in property development.

He has no family relationship with any other director or majorshareholder of the Company. He has no conflict of interest withthe Company and has not been convicted of any offence withinthe past ten years. He attended all the meetings of the Boardof Directors held during the financial year.

YAM Datuk Seri TengkuAhmad Shah IbniAlmarhum SultanSalahuddin AbdulAziz ShahIndependent Non-ExecutiveChairman



Othman bin Mohammad, a Malaysian aged 56, wasappointed the Executive Director of ECB on 10 October2008.

He obtained a Bachelor of Science (Hons.) in CivilEngineering from the University of Southampton, UnitedKingdom in 1980. He is a registered ProfessionalEngineer of the Institute of Engineers, Malaysia as wellas an Associate Member of the Institution of CivilEngineers, United Kingdom. He was involved in civilengineering, construction and property development forover 30 years in various companies.

He is a substantial shareholder of ECB with indirectinterest of 12.05%. He is the brother-in-law of Dato’Hamzah bin Md Rus, the Independent Non-ExecutiveDirector of ECB. Save as disclosed, he has no familyrelationship with any other director or major shareholderof the Company. He has no conflict of interest with theCompany and has not been convicted of any offencewithin the past ten years. He attended all the meetings ofthe Board of Directors held during the financial year.

Wee Beng Aun, a Malaysian aged 53, was appointed theExecutive Director of ECB on 1 July 2010. He is also aMember of the Risk Management Committee of ECB.

He obtained a Bachelor of Civil Engineering from theUniversity of Melbourne, Australia. He has more than 25years of working experience in civil engineering, buildingconstruction and property development. He held varioussenior management positions in companies in Malaysiaand prior to joining the Group, he was the ManagingDirector of a subsidiary of a public listed company inMalaysia. During his tenure with these companies, he hadbeen involved in the development and construction ofseveral prestigious projects such as The Pavilion KualaLumpur’s Mega Integrated Urban Commercial, Shopping,Entertainment Centre with Luxury Residential Towers,The Pearl @ KL City Centre high-end condominium, andMixed Development of Bukit Rimau Township in ShahAlam, Selangor Darul Ehsan.

He has no family relationship with any other director ormajor shareholder of the Company. He has no conflict ofinterest with the Company and has not been convictedof any offence within the past ten years. He attended fourout of five meetings of the Board of Directors held duringthe financial year.

Othman bin MohammadExecutive Director

Wee Beng AunExecutive Director

10Annual Report 2012


Datuk Ahmad Zabri bin Ibrahim, a Malaysian aged 69, wasappointed the Non-Independent Non-Executive Director ofECB on 26 August 2003 and was subsequently re-designatedas Independent Non-Executive Director on 10 October 2008.He is also a Member of the Audit Committee and NominationCommittee of ECB.

He obtained a Bachelor of Arts (Hons.) in History from theUniversity of Malaya, Kuala Lumpur in 1966, a Diploma inDevelopment Administration from the University of Birmingham,United Kingdom in 1972 and a Masters in Public Administrationfrom the University of Southern California, U.S.A. in 1979. Healso obtained a Certificate in Advanced ManagementProgramme from the Harvard Business School, HarvardUniversity, U.S.A. in 1996.

He started his career in the Malaysian Administrative andDiplomatic Service in 1966 and as an Assistant Secretary in theMinistry of Education until 1971. He served in the PublicService Department from 1972 to 1973 as the PrincipalAssistant Director (Establishment Division). In 1973, he joinedthe National Institute of Public Administration (INTAN), as theHead of Research Unit and became the Deputy Director(Academic) and later as the Deputy Director (Management) until1983. In 1983, he was seconded to the Institute of Strategicand International Studies (ISIS) as Company Secretary/DeputyDirector General (Management) until May 1987. He served inthe Chief Minister’s Department, Sabah as a Director ofDevelopment from 1987 to 1990. He was the Secretary Generalin the Ministry of Youth and Sports Malaysia from 1990 to 1991,the State Secretary of Selangor from 1991 to 1993 and theSecretary General, Ministry of Agriculture, Malaysia from 1993until his retirement in 1997.

He was the Chairman of Bank Pembangunan Malaysia from1997 to 1999 and the Chairman of Oriental Bank Berhad from1999 to 2000 and Independent Non-Executive Director ofBERNAS from 1997 till September, 2003. Presently he sits onthe Board of Directors of several other private limited companies.

He has no family relationship with any other director or majorshareholder of the Company. He has no conflict of interest withthe Company and has not been convicted of any offence withinthe past ten years. He attended all the meetings of the Board ofDirectors and the Audit Committee held during the financial year.

Datuk Ahmad Zabri bin IbrahimIndependent Non-ExecutiveDirector



Dato’ Hamzah bin Md Rus, a Malaysian aged 62, wasappointed the Independent Non-Executive Director ofECB on 10 April 2008. He is also a Member of the AuditCommittee, Nomination Committee and RiskManagement Committee of ECB.

He obtained his Bachelor of Arts (Hons) Degree from theUniversity of Malaya and a Professional Diploma inPurchasing and Supply Management from the Universityof North London. He has served the Government ofMalaysia throughout his career (1974 – 2006) in variousMinistries. He has held various positions, headed manyworking groups and represented the Government ofMalaysia on many international, regional and bilateralmeetings and forums. His last position in the Governmentwas the Deputy Secretary General, Ministry of InternalSecurity. For his dedication and commitment throughouthis career, he was awarded several service excellenceawards and was also conferred several Federal and StateAwards.

He is the brother-in-law of the Executive Director, Othmanbin Mohammad. Save as disclosed, he has no familyrelationship with any other director or major shareholderof the Company. He has no conflict of interest with theCompany and has not been convicted of any offencewithin the past ten years. He attended all of the meetingsof the Board of Directors and the Audit Committee heldduring the financial year.

Wong Yuk Mou, a Malaysian aged 57, was appointed theIndependent Non-Executive Director of ECB on 23November 2009. He is also the Chairman of the AuditCommittee and Risk Management Committee of ECB.

He is a Chartered Accountant and a Member of theMalaysian Institute of Accountants, a Member of theChartered Tax Institute of Malaysia, a Fellow of theAssociation of Chartered Certified Accountants (FCCA,UK) and holder of a Post Graduate Diploma in IslamicBanking and Finance (IIUM). In 2011, he was admittedas a member of the Institute of Internal Auditors Malaysiaunder Chartered Audit Committee Director (CACD).

He has extensive working experiences in audit andbanking industry. He started his career in publicaccounting firms and subsequently held variousmanagerial positions in the banking sector in Malaysia.Prior to his retirement in 2008, he was the Head of GroupRetail Banking of a local bank in Malaysia.

He has no family relationship with any other director ormajor shareholder of the Company. He has no conflict ofinterest with the Company and has not been convictedof any offence within the past ten years. He attended allthe meetings of the Board of Directors and the AuditCommittee held during the financial year.

Dato’ Hamzah bin Md RusIndependent Non-ExecutiveDirector

Wong Yuk MouIndependent Non-ExecutiveDirector

Villa Heights

EQ Residence


CHAIRMAN’SSTATEMENT

On behalf of theBoard ofDirectors,I have great pleasurein presentingthe Annual Report of the Companyand the Group for the financial year ended 31 March 2012.YAM Datuk Seri Tengku Ahmad Shahibni Almarhum Sultan SalahuddinAbdul Aziz ShahChairman



OVERVIEW

The Malaysian economy recorded a steady pace of growth of 5.1% in 2011 amid thechallenging international economic environment, compared against 7.2% registeredin 2010. The economic growth was attributable mainly to stronger domestic demandwhich was driven by household and business spending coupled with higher publicsector consumption. The overall improvement in labour market conditions and highercommodity prices contributed a broad based growth in national income.

The euro zone sovereign debt crisis has reverberated onto international financialmarkets and contributed to heightened market volatility throughout the year 2011.The on-going un-resolved crisis remains a major global concern and risk affectingthe financial markets with potential effects on economic development worldwide.

Amid the more challenging external environment, the Government forecasts thatMalaysia’s economy is projected to experience a steady pace of growth of 4-5% in2012. Domestic demand is expected to remain resilient and continue to be the anchorfor growth. Several measures announced in the 2012 Budget, such as upwardrevision of public sector wages and one-off financial assistances to low and middle-income group, are expected to provide support to private consumption. Privateinvestments are expected to be supported by domestic-oriented industries and theon-going implementation of the projects under the Economic TransformationProgramme.

The Group achieved a revenue of RM277.5million and a net profit of RM32.1 millionfor FY2012 compared against precedingfinancial year’s revenue of RM149.1 millionand net profit of RM6.4 million.



FINANCIAL REVIEW

The Group achieved a revenue ofRM277.5 million and a net profit ofRM32.1 million for FY2012 comparedagainst preceding financial year’s revenueof RM149.1 million and net profit of RM6.4million.

With the launches of new projects on itsexisting landbanks, the Group hasenhanced its revenue base. To mitigatemarket risks, the Group exercised carefulplanning of its projects launches by takinginto consideration the prevalent marketsentiments and risks.

Having secured a Joint DevelopmentAgreement with the land owner in January2011, the Group officially launched theda:men project in USJ Subang Jaya inJune 2011. This launch received a positiveresponse to its commercial and residentialproperties from the public. To-date,almost all the commercial properties have been sold while the sales of theresidential units have been encouraging.Construction works had begun sinceNovember 2011. In line with thesatisfactory construction progress in2012, this project would enhance theGroup’s revenue and profit.

In Seri Kembangan, Selangor, followingthe success of Villa Avenue’s semi-detached houses launched in March 2010(successfully completed and handed-overto purchasers in April 2012), the Grouplaunched the first phase of Villa Heightswhich comprised 99 units of semi-detached and bungalow houses. Within amonth from its launch in March 2012,majority of the units were sold. To furtherenhance the revenue base of theGroup, few high-rise apartments andcondominiums projects are being plannedfor launching in the next financial year.

The low cost housing projects in BatuKawan, Penang, were successfullycompleted at the end of 2011. In thissuccessful completion, the Group hadfulfilled its role in corporate socialresponsibility on affordable housing inBatu Kawan. Besides the role in corporatesocial responsibility, the Group canprogress towards the launches of mediumto high-end properties in Batu Kawan inthe following financial years.

While the Group’s property andconstruction segments contributed a netprofit of RM13.0 million, two major dealscontracted in prior years relating to thesale of land and an investment propertywere completed during the financial yearwhich culminated in a contribution ofapproximately RM19.0 million to theGroup’s net profit.



CORPORATE HIGHLIGHTS

In June 2011, the Group completed thedisposal of investment property, Wisma KLIH,with the handover of vacant possession to thepurchaser. The Sale and Purchase Agreementfor the property for a cash consideration up toRM58.0 million was signed in October 2010.

In September 2011, the Group completed thedisposal of a parcel of leasehold land in SeriKembangan measuring 33.37 acres for a totalconsideration of RM37.8 million. The Sale and Purchase Agreement was executed in April 2010.

The Group’s wholly-owned subsidiary, Taman Equine (M) Sdn Bhd had on 10 November 2011 entered into a Sale ofShares Agreement with a purchaser to disposeof its 51% equity interest comprising 153,000ordinary shares of RM1 each in Duta SecuritySdn Bhd for a total cash consideration of RM80,000.

PROSPECTS

Despite the developments in the euro zonesovereign debt crisis and its risks of escalation,the Malaysian economy is anticipated tocontinue to grow with an average GDP growthrate of 4.0% to 5.0% in 2012. The prospectsof economic growth is expected to be drivenprincipally through key initiatives undertakenby the Government in the EconomicTransformation Programmes which aretargeted to improve the infrastructuralrequirements to spearhead growth of theMalaysian economy. However, risks ofescalation of the eurozone crisis may slowgrowth in Malaysia’s major trade partners. As a consequence, export-oriented sectorsmay be affected by weakening externaldemand and with slower economic activityanticipated, the labour market is expected tosoften thus weakening public sector spending.



As part of the plans to increase revenuebase of the Group as well as for businessgrowth, the Group will strategically planseveral new launches in the next financialyear. Amongst the projects to be launchedare:

a. 2nd phase of Villa Heights - 83 unitsof semi-detached and bungalowhouses in Seri Kembangan withestimated GDV of RM168 million;

b. 277 units of condominiums in SeriKembangan with estimated GDV of RM119 million;

c. 590 units of service apartments/retailshops in Seri Kembangan withestimated GDV of RM130 million;

d. 269 units of 2 ½ storey terracehouses in Batu Kawan with estimatedGDV of RM113 million; and

e. 66 units of 2 storey double frontagein Batu Kawan with estimated GDV ofRM55 million.

While recognising the need to grow theGroup’s business base to a higher level toenhance investment values, the Groupacknowledges that the volatility of theoperating environment contributes toincreased business risks. The increase innumber of projects undertaken augurswell for the Group though subjecting theGroup to further business risks. Howeverthe Group will continue to exerciseprudent management vis-à-vis thechallenging scenarios. Barring anyunforeseen circumstances, with thehigher level of activity, the performance of the Group is expected to continue to beenhanced favourably in the near future.

ACKNOWLEDGEMENT

On behalf of the Board, I would like to thank all our customers,shareholders and business associates for their confidence in,and loyal support to, our Group’s businesses.

I wish to express my appreciation to the members of the Board,management and staff of the Group for their commitment anddedication to continuously improve and enhance stakeholders’value in their pursuit of excellence of our Group’s products andservices. We also look forward to their skills and expertise toenhance the prospects of future growth of the Group’sbusinesses.

YAM DATUK SERI TENGKU AHMAD SHAH IBNI ALMARHUM SULTAN SALAHUDDIN ABDUL AZIZ SHAHChairman


REVIEW OFOPERATIONS

Overview

The development known as da:men with GDV of RM1.0 billion is an integratedcommercial & residential freehold development jointly undertaken by RevenueConcept Sdn Bhd (as the Land Owner) and Equine Park Country Resort Sdn Bhd, a subsidiary of Equine Group (as the Developer). Launched in June 2011, the projectconsists of 480 units of serviced apartments in 2 building blocks, 41 units of 5 to 6-storey shop-offices and a 6-storey retail mall which will have outlets catering for awide range of interests covering F&B, beauty & fashion, travel, IT & technology, leisure,Asian gourmet village and entertainment.

The development land of 8.98 acres is strategically located beside the intersection ofPersiaran Kewajipan with Persiaran Subang Permai, and is surrounded by establishedlandmarks and education centres/universities.

The project’s site is easily accessible via a network of highways which will becomplemented by a proposed LRT Station in the surrounding of the site.

Construction works commenced in November 2011 with targeted completion in 2016.

USJSUBANG


REVIEW OFOPERATIONS

da:men


REVIEW OFOPERATIONS

Overview

The Group’s landmark property development projects, the townshipdevelopment of Taman Equine and Pusat Bandar Putra Permai, SeriKembangan, begun in the 1990s.

Taman Equine’s development commenced in 1996 covering mixedcommercial and residential properties over a total land areaof approximately 550 acres. Prominent landmarks developed in Taman Equine to date are a shopping mall and an internationalschool.

Our Group’s development in Pusat Bandar Putra Permai comprisesmixed commercial and residential properties which are spread overa total land area of approximately 239 acres. The developmentcommenced in 2000 and the Group has successfully completed abazaar, shop offices, apartments, link houses, semi-detachedhouses and bungalows in the township.

SERIKEMBANGAN

Villa Heights


REVIEW OFOPERATIONS

The projects undertaken by the Group during the financialyear are as follows:

a. Taman Equine

i. Equine Boulevard

The development comprises 118 units of 3 and4-storey shop offices with a total GDV of RM170million, is strategically located at a primecommercial area facing the main access road toTaman Equine i.e. Jalan Putra Permai, the mainroad linking Serdang/Seri Kembangan/The Mines.Tucked beside the lush greenery of a forest reservenext to the Kuala Lumpur – Putrajaya Expressway,the development spreads over a land area of approximately 13 acres.

Launched in August 2009 with 100% salesachievement, the project’s earthworkscommenced in January 2010 and completed inJune 2010. Building foundation workscommenced in July 2010 and are advancingrapidly to the project’s completion which istargeted in August 2012.

ii. Villa Avenue

A residential development, which is nestled onelevated grounds in the pristine and prime area of Taman Equine, comprises 152 units of semi-detached houses and 13 units of bungalowsin a land area of approximately 30 acres. The semi-detached houses are aestheticallypleasant and offered in conventional side-link andnew end-link designs, were launched in March2010. The bungalow units within the developmentwere launched in June 2010. Both semi-detachedhouses and bungalows have been sold out. This development has a total GDV of RM132million. The project was successfully completedand handed over to purchasers in April 2012.

iii. EQuator – joint development arrangement withlandowner

Launched in April 2011, the commercialdevelopment on a 16-acre land, formerly used for equestrian activities in Taman Equine, consistsof 74 units of 2-storey shop offices, 59 units of 3-storey shop offices and 5 units of 5-storey shopoffices together with a multi-storey car parkhousing several small shops with the project’sestimated total GDV at RM213 million. Site clearing works and earthworks commencedin April 2011 while construction workscommenced in January 2012. The entire project istargeted for completion in mid-2014.


REVIEW OFOPERATIONS

iv. Villa Heights

The whole project comprises 182 semi-detached & bungalow houses tobe launched in 2 phases. Phase 1 launched in March 2012 consists of total of 99 units made up of 82 units of semi-detached houses and 17 units of bungalow houses. Purchasers’ responses were good withsales rate exceeding 80%. Phase 2 is planned for launch by end 2012.The whole project is expected to be completed by end 2014.

b. Pusat Bandar Putra Permai (PBPP)

Suria Permai

Located within the matured township of PBPP, Suria Permai comprises300 units of medium-cost apartments and 13 units of shops in two towerblocks. The total GDV of the project was RM39 million and the apartmentunits have been fully sold. Earthworks commenced in February 2011 whileconstruction works on the buildings started in March 2011. The project is targeted for completion in mid-2013.


REVIEW OFOPERATIONS

Overview

Through its acquisition of Penaga Pesona Sdn Bhd (PPSB) in February 2007, the Group secured an opportunity toparticipate in the development of the new township of BandarCassia in Batu Kawan. To date, PPSB has secured 305 acresof land intended for mixed development of commercial andresidential properties in Crescentia Park, which forms part of Bandar Cassia, which is strategically located in the vicinityof Second Penang Bridge’s landing on the mainland.

Crescentia Park, planned as an integrated self-containedtownship, offers affordable yet contemporary homes for everystrata of society. The Group has completed the low and low-medium cost housing and is presently constructing doublestorey terrace houses on its land.

BATUKAWAN


REVIEW OFOPERATIONS

Projects completed during the financial year

i. Studio S

Comprising 330 units of low cost double storeyterrace houses handed-over in November 2011.

ii. Studio M

259 units of low medium cost double storeyterrace houses handed-over in October 2011.

iii. Studio L

72 units of two storey cluster link houses handed-over in November 2011.

iv. Clover Plus

137 units of two and half storey cluster link houseshanded-over in November 2011.

On-going Projects

i. Callisia

246 units of double storey terrace houses –construction progress is 15%; target completionfor the first phase in October 2012.


REVIEW OFOPERATIONS

Overview

Taman Mestika and Taman Mega Jaya are both mixedcommercial and residential development projects located in Cheras, Selangor Darul Ehsan on approximately 13 acres of leasehold land. The development is accessible via JalanKuari and is well supported by the catchment from surroundingestablished and matured residential neighbourhoods in thedistrict of Ampang.

On-going project: Mega Jaya shop offices

The development of the 22 units of one and half-storey shopoffices is strategically located in Taman Mega Jaya. The totalGDV of the project is RM11 million and all units sold with targetcompletion in August 2012.

Taman Mega Jaya

CHERAS

OthersThe Group’s other business segment in property letting involves one property which wasdeveloped incidental to the core business activities.

The Group’s sole investment property in Seri Kembangan comprises a parcel of leasehold landwith single storey building. The property’s location faces the main road of Jalan Putra Permaiand the main access road to Taman Equine.

The property is presently leased to two parties:

i. A local bank which fulfils all the banking needs of the residents of the surrounding commercialand residential properties in Taman Equine as well as those from nearby developmentproperties. The lease is for a period of ten years commencing March 2008; and

ii. A third party which business involves the management and upkeep of the properties forresidents in the vicinity of Taman Equine and Bandar Putra Permai.


REVIEW OFOPERATIONS


FIVE-YEARPERFORMANCE HIGHLIGHTS

Financial year ended 31 March 2012 2011 2010 2009 2008RM’000 RM’000 RM’000 RM’000 RM’000

Revenue 277,542 149,050 74,672 86,155 108,974Profit/(Loss) before tax 35,942 9,759 (41,287) (46,565) (34,916)Tax (3,812) (3,386) 4,857 1,383 6,112Net Profit/(Loss) 32,130 6,373 (36,430) (45,182) (28,804)Net Assets 221,979 189,849 182,782 219,212 264,503Total Borrowings 46,952 107,002 83,544 113,582 130,718

No. of ordinary shares (‘000) 227,338 227,338 227,338 227,338 192,404Earnings per share (sen) 14.13 2.80 (16.02) (21.18) (17.58)Net Assets per share (RM) 0.98 0.84 0.80 0.96 1.16Gearing (times) 0.21 0.56 0.46 0.52 0.49

RevenueRM’000

Profit/(Loss) before taxRM’000

Net Profit/(Loss)RM’000

2012 2011 2010 2009 2008 2012 2011 2010 2009 20082012 2011 2010 2009 2008

2012 2011 2010 2009 2008

Earnings per sharesen

2012 2011 2010 2009 2008

Net AssetsRM’000

2012 2011 2010 2009 2008

Net Assets per shareRM

149,

050

74,6

72

86,1

55

108,

974

9,75

9

35,9

42

6,37

332,1

30

277,

542

(41,

287)

(46,

565)

(34,

916)

(36,

430)

(45,

182)

(28,

804)

189,

849221,

979

182,

782

219,

212 26

4,50

3

2.8014

.13

(16.

02)

(21.

18)

(17.

58)

0.84

0.98

0.80

0.96

1.16


STATEMENT ONCORPORATE GOVERNANCE

The Board of Directors (“the Board”) of Equine Capital Berhad (“ECB” or “Company”) is fully committed to promote and achievethe highest standards of corporate governance and to ensure that the principles and best practices in corporate governance asdetailed in the Malaysian Code of Corporate Governance (“the Code”) are practised and adopted in ECB and its subsidiaries (“theGroup”).

The Board continuously evaluates the Group’s corporate governance practices and procedures with a view to adopt and implementthe principles and best practices of the Code, wherever applicable, as a fundamental part of discharging its responsibilities toprotect and enhance shareholders’ value. The Board believes that good corporate governance results in creation of long termvalue and benefits for all stakeholders.

1. THE BOARD OF DIRECTORS

The Board takes full responsibility for the performance of the Group and guides the Group towards achieving its short andlong term objectives, setting corporate strategies for growth and new business development while providing advice anddirection to the management to enable the Group to achieve its corporate goals.

1.1 Board Responsibilities

Having recognised the importance of an effective and dynamic Board, the Board’s members are guided by six (6) areasof responsibility as outlined below:

• Reviewing and adopting a strategic plan for the Group;• Overseeing the conduct of the Group’s business to evaluate whether the business is properly managed;• Identifying principal risks of the Group and ensuring that appropriate systems are implemented and/or steps are

taken to manage these risks;• Succession planning, including appointing, training, fixing the compensation of and where appropriate, replacing

senior management;• Developing and implementing an investor relations programme or shareholder communications policy for the Group;

and• Reviewing the adequacy and the integrity of the Group’s internal control systems and management information

systems, including system for compliance with applicable laws, regulations, rules, directives and guidelines.

Specifically and within the limits set by the Company’s Articles of Association (“Articles”), the Board is charged with thedevelopment of corporate objectives and the review and approval of corporate plans, annual budgets, acquisitions anddisposals of major assets, major investments and changes to the management and control structure within the Groupincluding risk management, delegation of authority and financial and operational policies and procedures.

1.2 Composition of the Board and Board Balance

The Board members are professionals from diverse disciplines, tapping on their respective qualifications and experiencesin business, construction, commercial and financial aspects. Together, they bring a wide range of experience and expertisewhich are vital towards the effective discharge of the Board’s responsibilities for the successful direction and growth ofthe Group. A brief description of the background of each Director is set out on the Profile of Board of Directors in thisAnnual Report.

The Board consists of six (6) members, comprising the Independent Non-Executive Chairman, two (2) Executive Directorsand three (3) Independent Non–Executive Directors. This is in compliance with the Main Market Listing Requirements ofBursa Malaysia Securities Berhad (“Bursa Securities”), which requires one third (1/3) of or two members of the Board,whichever is higher, to be independent directors. No individual or group of individuals dominates the Board’s decisionmaking and the number of directors fairly reflects the investment of the shareholders.

The Executive Directors together with senior executives form the senior management team (“Senior Management”) thatis responsible for developing the Group’s business strategies as well as making and implementing operational decisions.

The Board is comfortable that there are sufficient experienced Non-Executive Directors on the Board who provideunbiased and independent views, advice and judgement to take into account the interests of all stakeholders. In addition,all major decisions and key issues involving the Group are referred to the Board for consideration and approval.



The Independent Non-Executive Directors of the Company are independent of management and free from any businessor other relationships, which could interfere with the exercise of independent judgement on the Board’s deliberationsand decision-making process. The role of these Independent Non-Executive Directors is therefore important as theyprovide unbiased and independent views, advice and directions and ensure that the strategies proposed by the SeniorManagement are fully discussed and examined and take into account the long-term interests, not only of the Group andthe shareholders, but also of employees, customers, suppliers and other stakeholders.

The Board has also designated YAM Datuk Seri Tengku Ahmad Shah as the Director, to whom concerns may be conveyed.

All Directors have given their undertakings to comply with the Main Market Listing Requirements of Bursa Securities andthe Independent Directors have confirmed their independence in writing.

1.3 Appointment of Directors

The Nomination Committee is responsible for making recommendations to the Board on suitable candidates forappointment. In making these recommendations, due consideration is given to the required mix of skills, expertise,knowledge and experience that the proposed directors shall bring to complement the Board.

1.4 Re-Election of Directors

In accordance with the Articles,

• all Directors who are appointed by the Board are subject to retire, and be eligible for re-election by shareholders ofthe Company, at the first Annual General Meeting following their appointment, and

• one-third, or the number nearest one-third, of the remaining Directors shall retire from office and be eligible for re-election.

Notwithstanding the above, the Articles also provide that all the Directors of the Company shall retire from office once atleast in every three years but shall be eligible for re-election.

To aid shareholders in their decision, sufficient information such as personal profile, meetings’ attendance and theshareholdings in the Group, if any, of each Director standing for re-election are furnished in a separate statementaccompanying the Notice of Annual General Meeting.

1.5 Directors’ Training

The Group acknowledges that continuous education is vital for the Board members to keep abreast with the latestdevelopments in the industry and business environment as well as changes to statutory requirements and regulatoryguidelines. A dedicated training budget for Directors’ training is provided each year by the Company. During the financialyear ended 31 March 2012, all the Directors have attended training programmes which were conducted either in-houseor by external service providers.

The Board will continue to evaluate and determine the training needed by the Directors from time to time to enhancetheir skills and knowledge to enable them to carry out their roles effectively.

1.6 Supply of Information

The Board has a formal schedule of matters for decision-making to ensure that the direction and control of the Group isfirmly in its hands.

Board papers, together with the agenda of the Board Meeting and relevant reports, are circulated in advance of eachBoard meeting to enable the Directors to review and obtain further information, where necessary, on matters presentedin the Board papers. During Board Meetings, the Senior Management provides further details on each matter orsupplementary information, where necessary. In addition and in accordance with the Articles, the Board also ratifiesmatters previously approved through Directors’ circular resolutions.

Board proceedings, deliberations and conclusions of the Board at every Board Meeting are duly recorded in the Boardminutes and all minutes are signed by the Chairman of the meeting in compliance with Section 156 of the CompaniesAct, 1965. All Directors have the right and duty to make further enquiries where they consider necessary.



Each Director has unrestricted access to all information within the Group, the Senior Management and the CompanySecretary. The Directors, whether in capacity as the full Board or in their individual capacity, may in furtherance of theirduties, take independent professional advice at the Company’s expense, if required.

1.7 Board Meetings

The Board schedules to meet at least four times a year, with additional meetings convened as and when necessary. Duenotice is given for all scheduled meetings.

During the financial year ended 31 March 2012, five (5) Board Meetings were convened on 25 May 2011, 20 July 2011,25 August 2011, 10 November 2011 and 22 February 2012. The meeting attendance of each individual Director is setout on the Profile of Board of Directors in this Annual Report.

1.8 Committees

The Board has established the Audit Committee to assist the Board in discharging its duties and responsibilities. TheAudit Committee comprises:

• Wong Yuk Mou (Chairman)• Datuk Ahmad Zabri bin Ibrahim (Member)• Dato’ Hamzah bin Md Rus (Member)

The terms of reference of the Audit Committee have been approved by the Board and where applicable, comply with therecommendations of the Code.

In line with best practices in Corporate Governance, the Code recommends for the establishment of the followingcommittees:

1) Nomination Committee

The Nomination Committee comprises:

• YAM Datuk Seri Tengku Ahmad Shah (Chairman)• Datuk Ahmad Zabri bin Ibrahim (Member)• Dato’ Hamzah bin Md Rus (Member)

The primary function of the Nomination Committee is to propose new nominees for the Board, assess Directors’performance on an on-going basis and review the required mix of skills, experience and other qualities of the Directorsto ensure that the Board is functioning effectively and efficiently.

2) Remuneration Committee

The primary function of the Remuneration Committee is to set the policy framework for the remuneration of theDirectors to ensure that the policy on Directors’ remuneration are sufficient to attract and retain Directors of thecalibre needed to manage the Group successfully.

The remuneration packages of the Group’s Executive Directors are matters for the Board’s review and consideration.

3) Risk Management Committee

The Risk Management Committee comprises:

• Wong Yuk Mou (Chairman)• Dato’ Hamzah bin Md Rus (Member)• Wee Beng Aun (Member)• Ranjeet Singh A/L Sarjit Singh (Member)

The primary function of the Risk Management Committee is to assist the Board in fulfilling its duties and dischargingits responsibility relating to the risk management and compliance practices of the Group.



1.9 Company Secretary

The removal and replacement of the Company Secretary is a matter for the Board’s consideration.

2. DIRECTORS’ REMUNERATION

The remuneration of Directors is formulated to be competitive and realistic, emphasis being placed on performance andcalibre, with aims to attract, motivate and retain Directors with the relevant experience, expertise and quality needed to assistin managing the Group effectively.

For the Executive Directors, the remuneration package links rewards to corporate and individual performance whilst for theNon-Executive Directors, the level of remuneration is linked to their experience and level of responsibilities undertaken.

The remuneration package for the directors of ECB comprises the following elements:

a. Salaries

The salaries (inclusive of statutory employer’s contributions to the Employees’ Provident Fund) of the Executive Directorsare determined and approved by the Board annually.

b. Fees

The fees payable to the Non-Executive Directors is determined by the Board and approved by the shareholders of theCompany at each Annual General Meeting.

c. Allowances and benefits-in-kind

The allowances and other customary benefits (such as private medical insurance, company car, driver, fuel, etc) to theDirectors are determined and approved by the Board as appropriate.

The details of Directors’ remuneration during the financial year ended 31 March 2012 are as follow:

2.1 Aggregate Remuneration

Aggregate Remuneration Executive Directors Non-Executive Directors(RM) (RM)

Salaries 930,000 -Fees - 204,000Allowances - 35,000Benefits-in-kind* 72,400 -

Total 1,002,400 239,000

* Based on estimated monetary value

2.2 Range of Remuneration

No. of DirectorsRange of Remuneration Executive Non-Executive

Less than RM50,000 - 3RM50,001 – RM100,000 - 1RM150,000 – RM200,000 1 -RM800,000 – RM850,000 1 -



3. SHAREHOLDERS

3.1 Shareholders and Investor Relations

The Board recognises the importance of transparency and accountability to its shareholders and maintains an effectivecommunication policy that enables both the Board and the Senior Management to communicate effectively with itsshareholders and the public. An important aspect of an active and constructive communication policy is the timelinessin disseminating information to shareholders and investors.

Accordingly, the Board communicates information on the operations, activities and performance of the Group on a timelymanner through the following:

• The Annual Report which contains the financial and operational review of the Group’s business, corporateinformation, financial statements and information on the Board and Audit Committee;

• Various announcements made to Bursa Securities which includes the announcement of quarterly results of theGroup; and

• The Company’s website at www.equine.com.my.

3.2 Annual General Meeting (“AGM”)

The AGM serves as an important means for shareholders’ communication. Notice of the AGM and the Annual Report aresent to shareholders twenty-one (21) days prior to the AGM.

ECB will be convening its eleventh AGM on 29 August 2012. The Board encourages its shareholders to raise questionsregarding the resolutions being proposed at the AGM and also other matters pertaining to the business activities of theGroup. The Directors and Senior Management of the Company will be available at the AGM to respond to questionsposed by the shareholders.

Additionally, upon request, a press conference may be held immediately following the AGM where the Directors andSenior Management of ECB advise the press of the resolutions passed, and answer questions on the Group.

While the Group endeavours to provide as much information as possible to its shareholders and stakeholders, it is mindfulof the legal and regulatory framework governing the release of material and price-sensitive information. Any informationthat may be deemed as undisclosed material information about the Group will not be imparted to any single shareholderor group of shareholders.

4. ACCOUNTABILITY AND AUDIT

4.1 Financial Reporting

The Board aims to provide and present a clear, balanced and comprehensive assessment of the Group’s financialperformance and prospects through the quarterly announcement of results to shareholders via the Bursa Securities aswell as the Chairman’s statement, review of operations and annual financial statements in the Annual Report. The Boardis assisted by the Audit Committee to oversee the Group’s financial reporting process and the quality of its financialreporting.

The Directors are responsible to ensure that the annual financial statements are prepared in accordance with theprovisions of the Companies Act, 1965 and applicable approved accounting standards in Malaysia. A statement of theDirectors’ responsibilities in preparing the financial statements is set out separately in this Annual Report.

4.2 Internal Control and Risk Management

The Board acknowledges their responsibilities for the internal control system of the Group, covering not only financialcontrols but also controls relating to operations, compliance and risk management. Information of the Group’s internalcontrol and risk management is presented in the Statement on Internal Control set out in this Annual Report.

4.3 Relationship with the External Auditors

The Board, via the Audit Committee, established formal and transparent arrangements for maintaining an appropriaterelationship with the Group’s external auditors, Deloitte KassimChan.

A summary of the activities of the Audit Committee during the year as well as the role of the Audit Committee in relationto the external auditors is set out in the Audit Committee’s Report.


AUDIT COMMITTEEREPORT

The Audit Committee (“the Committee”) consists of the following members:

• Wong Yuk MouIndependent Non-Executive Director(Chairman)

• Datuk Ahmad Zabri bin IbrahimIndependent Non-Executive Director(Member)

• Dato’ Hamzah bin Md RusIndependent Non-Executive Director(Member)

Details of the members of the Committee are contained in the “Profile of Directors” as set out in this Annual Report.

TERMS OF REFERENCE

1. Composition

The Committee shall be appointed from amongst the members of the Board and shall comprise at least three (3) members.All the members must be non-executive directors, with a majority of them being independent directors. The Chairman, whoshall be elected by the Committee, must be an independent director.

In the event of any vacancy with the result that the number of members is reduced to below three, the vacancy must be filledwithin three (3) months.

2. Meetings

The quorum for a meeting shall be two (2) members, provided that the majority of members present at the meeting shall beindependent.

3. Rights

The Committee shall:

(a) have explicit authority to investigate any matter within its terms of reference;(b) have the necessary resources which it needs to perform its duties;(c) have full and unrestricted access to any information which it requires in the course of performing its duties;(d) have unrestricted access to the management;(e) have direct communication channels with the external auditors and internal auditors; and(f) be able to obtain independent professional or other advice in the performance of its duties at the Company’s expense.

4. Duties

The duties of the Committee shall include a review of:

(a) the nomination of external auditors;(b) the adequacy of existing external audit arrangements, with particular emphasis on the scope and quality of the audit;(c) the adequacy and effectiveness of the internal controls and management information systems;(d) the financial statements of the Company with both the external auditors and management;(e) the external auditors’ audit report;(f) any management letter sent by the external auditors to the Company and the management’s response to such letter;(g) any letter of resignation from the Company’s external auditors;(h) the assistance given by the Company’s officers to the external auditors;(i) all areas of significant financial and operational risks and the arrangements in place to contain those risks to acceptable

levels; and(j) all related-party transactions and potential conflict of interests situations.



INTERNAL AUDIT FUNCTION

In discharging its function, the Committee is supported by an internal audit function whose primary responsibility is to evaluateand report on the adequacy, integrity and effectiveness of the overall system of internal controls of ECB and its subsidiaries. Theinternal audit function of the Group has been outsourced to an external party, who reports directly to the Committee. The internalaudit function also adopts a risk-based audit methodology, which is aligned with the risks of the Group to ensure that relevantcontrols addressing those risks are reviewed on a regular basis.

MEETINGS

During the financial year ended 31 March 2012, the Committee convened a total of five (5) meetings on 25 May 2011, 18 July2011, 25 August 2011, 10 November 2011 and 22 February 2012. The meeting attendance of each individual Committee is setout on the Profile of Board of Directors in this Annual Report.

The Group’s internal and external auditors and the Senior Management attended the meetings upon the invitation of theCommittee. Minutes of the meetings of the Committee are circulated to all members of the Board and significant issues arediscussed at the Board Meetings.

SUMMARY OF ACTIVITIES OF THE COMMITTEE

During the financial year and up to the date of this Report, the Committee carried out the following activities in discharging itsduties and responsibilities:

• Internal Controls

- Evaluated the overall effectiveness of the system of internal controls through the review of the results of work performedby the internal and external auditors and discussions with Senior Management.

• Financial Results

- Reviewed the quarterly results and audited annual financial statements of the Group before recommending to the Boardfor release to Bursa Securities. The review had focused primarily on:

a) major accounting areas involving exercise of judgement, significant and unusual events;b) significant adjustments resulting from audit;c) going concern assumptions;d) compliance with applicable approved accounting standards in Malaysia; ande) compliance with Main Market Listing Requirements of Bursa Securities and other relevant regulatory requirements.

• External Audit

- Reviewed with the external auditors, their audit plan for the financial year ended 31 March 2012 to ensure that their scopeof work adequately covered the activities of the Group;

- Reviewed the results and issues arising from their audit of the annual financial statements and their resolution of suchissues as highlighted in their report to the Committee; and

- Reviewed their performance and independence before recommending to the Board their re-appointment andremuneration.



• Internal Audit

- Reviewed with the internal auditors, their audit plan for the financial year ending 31 March 2013 ensuring that principalrisk areas were adequately identified and covered in the plan;

- Reviewed the recommendations by internal auditors, representations made and corrective actions taken by managementin addressing and resolving issues as well as ensuring that all issues were adequately addressed on a timely basis;

- Reviewed the competencies of the internal auditors to execute the audit plan, the audit programs used in the executionof the internal audit work and the results of their work; and

- Reviewed the adequacy of the terms of reference of internal audit.

• Related Party Transactions

- Reviewed the related party transactions and recurrent related party transactions entered into by the Company andthe Group.


STATEMENT ONINTERNAL CONTROL

STATEMENT ON INTERNAL CONTROL

This statement on internal control by the Board is made pursuant to paragraph 15.26(b) of the Main Market Listing Requirementsof Bursa Securities with respect to the compliance of the Group with the principles and best practices for internal controls asprovided in the Malaysian Code of Corporate Governance.

BOARD RESPONSIBILITIES

The Board has the overall responsibility for the Group’s system of internal control and for reviewing its effectiveness, adequacyand integrity. The internal control system covers financial, operational and compliance controls, and risk management. However,the system of internal control is designed to manage rather than to eliminate the risk of failure to achieve business objectives andcan provide reasonable, and not absolute assurance, against material misstatement of management and financial information oragainst financial losses and fraud.

It is the Board’s view that in order to achieve a sound system of internal control, it is first necessary to provide a control environmentand framework that is conducive to this objective. This requires that the Board, Management and all levels of employees must beaware of the Group’s business objectives, the risks that could potentially impede the Group in achieving these objectives and thepolicies and control strategies that are required to manage these risks.

RISK MANAGEMENT FRAMEWORK

The Board is responsible for the on-going identification, evaluation and management of significant risks. These on-going processesare reviewed regularly by the Senior Management, Audit Committee, Risk Management Committee and the internal auditors. TheRisk Management Committee reports directly to the Board and is responsible for coordination of the overall risk managementactivities within the Group.

INTERNAL CONTROL SYSTEM

The key elements of the Group’s internal control system are as follows:

* Organisation structure with defined lines of responsibilities and delegation of authority; * Appropriate authorisation of transactions, supported by policies and procedures;* Monthly financial reporting framework for all companies within the Group whereby actual results monitored against

forecasts/budgets and variances are investigated accordingly;* Quarterly reporting of the financial results of the Group to the Audit Committee and the Board; and* Management meetings and project department meetings held fortnightly to identify, discuss, evaluate and resolve operational

and financial issues.

The internal audit function which has been outsourced to an independent external consultant, reports directly to the AuditCommittee. The role of the internal auditors is to review the adequacy, integrity and effectiveness of the Group’s system of internalcontrols to mitigate the risks of the Group including financial, operational and compliance risks. The internal audit fees paid to theindependent external consultant during the financial year ended 31 March 2012 was RM60,000.

The internal audit plan is reviewed and approved annually by the Audit Committee. The internal auditors conduct various auditassignments regularly to evaluate the adequacy and effectiveness of the internal control systems and make recommendations forimprovements to the system of internal controls. The Audit Committee reviews the internal audit reports on a regular basis andkeeps the Board informed of key audit findings.

CONCLUSION

Based on the above, the Board is of the view that system of internal control being implemented within the Group is sound andeffective. Notwithstanding this, reviews of all the control procedures will be continuously carried out to ensure the on-goingadequacy, integrity and effectiveness of the system of internal control, so as to safeguard the Group’s assets and shareholders’interests.


STATEMENT ON DIRECTORS’RESPONSIBILITY ON FINANCIAL STATEMENTS

The Directors are responsible for ensuring the financial statements of the Group are drawn up in accordance with the applicableapproved accounting standards in Malaysia and the Companies Act, 1965 which give a true and fair view of the state of affairs of the Group and of their financial performance and cash flows for the financial year.

In preparing the financial statements, the Directors have:

* adopted suitable accounting policies and applied them consistently;* made judgements and estimates that are reasonable and prudent;* ensured that all applicable approved accounting standards in Malaysia have been complied with; and* prepared financial statements on a going concern basis as the Directors have a reasonable expectation, having made

appropriate enquiries, that the Group have adequate resources to continue in operational existence for the foreseeable future.

The Directors have the responsibility for ensuring that the Group maintains such accounting and other records that will disclosewith reasonable accuracy, the financial position of the Group, and which enable them to ensure that the financial statementscomply with the Companies Act, 1965.


ADDITIONALDISCLOSURES

The following disclosures are made in compliance with Part A of Appendix 9C of the Main Market Listing Requirements of Bursa Securities:

(a) Non-Audit Fees Paid

The non-audit fees paid to the external auditors, Deloitte KassimChan, during the financial year ended 31 March 2012 wasRM5,000.

(b) Material Contracts

There was no material contract outside the ordinary course of business entered into by ECB and its subsidiaries involvingDirectors’ and major shareholders’ interest which was still subsisting as at 31 March 2012.

(c) Corporate Social Responsibility

The Group is conscious of the importance of fulfilment of corporate social responsibilities in the community. The Group, as aresponsible property developer, emphasizes the implementation of public amenities and other social obligations in its productdevelopment. The Group also recognises the importance of staff welfare and continual training to ensure development in human capital.

(d) Recurrent Related Party Transactions

The Company intends to seek its shareholders’ approval for recurrent related party transactions of a revenue or trading natureat the forthcoming Annual General Meeting to be held on 29 August 2012. The details of the shareholders’ mandate to besought will be furnished in the Circular to Shareholders dated 31 July 2012.

FINANCIAL STATEMENTS

Directors’Report

42

IndependentAuditors’ Report

46

Statements ofComprehensiveIncome

48

Statementsof FinancialPosition

49

Statements ofChanges inEquity

51

Statements ofCash Flows

52

Notes to theFinancial Statements

54

SupplementaryInformation

104

Statement byDirectors

105

Declaration by theOfficer PrimarilyResponsible for theFinancialManagement of theCompany

105


The Directors hereby submit their report and the audited financial statements of the Group and of the Company for the financialyear ended 31 March 2012.

PRINCIPAL ACTIVITIES

The Company is an investment holding company. The principal activities of the subsidiary companies are set out in Note 14 to theFinancial Statements. There have been no significant changes in the nature of these activities during the financial year.

RESULTS OF OPERATIONS

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

The Group The CompanyRM’000 RM’000

Profit/(Loss) before tax 35,942 (615)Income tax expense (3,812) -

Profit/(Loss) for the financial year 32,130 (615)

Profit attributable to:Equity holders of the Company 32,130Non-controlling interests -

32,130

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

DIVIDEND

No dividend has been paid or declared by the Company since the end of the previous financial year. The Directors do notrecommend the payment of any dividend in respect of the current financial year.

RESERVES AND PROVISIONS

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

ISSUE OF SHARES AND DEBENTURES

The Company has not issued any new shares or debentures during the financial year.

SHARE OPTIONS

No options have been granted by the Company to any parties during the financial year to take up unissued shares of the Company.

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

DIRECTORS’ REPORT


OTHER STATUTORY INFORMATION

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

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

(b) to ensure that any current assets which were unlikely to realise their book value in the ordinary course of business had beenwritten down to their estimated realisable values.

At the date of this report, the Directors are not aware of any circumstances:

(a) which would render the amount written off for bad debts and the amount of allowance for doubtful debts in the financialstatements of the Group and of the Company inadequate to any substantial extent; or

(b) which would render the values attributed to current assets in the financial statements of the Group and of the Companymisleading; or

(c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of theCompany misleading or inappropriate; or

(d) not otherwise dealt with in this report or financial statements which would render any amount stated in the financial statementsof the Group and of the Company misleading.

At the date of this report, there does not exist:

(a) any charge on the assets of the Group and of the Company which has arisen since the end of the financial year and securesthe liability of any other person; or

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

No contingent or other liability has become enforceable, or is likely to become enforceable within the period of twelve monthsafter the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Group andof the Company to meet their obligations as and when they fall due.

In the opinion of the Directors, no item, transaction or event of a material and unusual nature has arisen in the interval betweenthe end of the financial year and the date of this report which is likely to affect substantially the results of operations of the Groupand of the Company for the succeeding financial year.

DIRECTORS

The following Directors served on the Board of the Company since the date of the last report:

Y.A.M. Datuk Seri Tengku Ahmad Shah ibni Almarhum Sultan Salahuddin Abdul Aziz Shah Datuk Ahmad Zabri bin IbrahimDato’ Hamzah bin Md RusOthman bin MohammadWee Beng AunWong Yuk Mou

In accordance with Article 77 of the Company’s Articles of Association, Y.A.M. Datuk Seri Tengku Ahmad Shah ibni AlmarhumSultan Salahuddin Abdul Aziz Shah and Datuk Ahmad Zabri bin Ibrahim retire by rotation at the forthcoming Annual GeneralMeeting and, being eligible, offer themselves for re-election.

DIRECTORS’ REPORT


DIRECTORS’ INTERESTS

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

Number of ordinary shares of RM1.00 eachBalance Balance

as of as of1.4.2011 Bought Sold 31.3.2012

Shares in the Company

Indirect interestOthman bin Mohammad 17,403,936 10,000,000 - 27,403,936

By virtue of his interest in shares through Insan Mayang Sdn. Bhd., Duta Kembang Sdn. Bhd., Perharap Sdn. Bhd. and TemasyaPermai Sdn. Bhd., Encik Othman bin Mohammad is deemed to be interested in the shares of the Company and its subsidiarycompanies to the extent that the Company has an interest by virtue of Section 6A of the Companies Act, 1965.

Other than as stated above, none of the other Directors who held office at the end of the financial year had any interest in theordinary shares of the Company or its related corporations.

DIRECTORS’ BENEFITS

Since the end of the previous financial year, none of the Directors has received or become entitled to receive any benefit (otherthan a benefit included in the aggregate amount of emoluments received or due and receivable by the Directors as disclosed in Note 9 to the Financial Statements) by reason of a contract made by the Company or a related company with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest exceptfor any benefits which may be deemed to have arisen by virtue of those transactions entered into in the ordinary course of businessbetween its subsidiary company and the companies in which certain Directors are deemed to have financial interests as disclosedin Note 21 to the Financial Statements.

There were no arrangements during and at the end of the financial year, to which the Company is a party, which had the object of enabling the Directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any otherbody corporate.

DIRECTORS’ REPORT


AUDITORS

The auditors, Messrs. Deloitte KassimChan, have indicated their willingness to continue in office.

Signed on behalf of the Boardin accordance with a resolution of the Directors,

____________________________________________Y.A.M. DATUK SERI TENGKU AHMAD SHAH IBNI ALMARHUM SULTAN SALAHUDDIN ABDUL AZIZ SHAH

____________________________________________OTHMAN BIN MOHAMMAD

Selangor Darul Ehsan18 July 2012

DIRECTORS’ REPORT


Report on the Financial Statements

We have audited the financial statements of EQUINE CAPITAL BERHAD, which comprise the statements of financial position of the Group and of the Company as of 31 March 2012 and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 48 to 103.

Directors’ Responsibility for the Financial Statements

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

Auditors’ Responsibility

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

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

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

Opinion

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

Report on Other Legal and Regulatory Requirements

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

(a) in our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and thesubsidiary companies have been properly kept in accordance with the provisions of the Act;

(b) we are satisfied that the accounts of the subsidiary companies that have been consolidated with the financial statements ofthe Company are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group, and we have received satisfactory information and explanations as required by us for these purposes; and

(c) our auditors’ reports on the accounts of the subsidiary companies were not subject to any qualification and did not includeany adverse comment made under Section 174 (3) of the Act.

INDEPENDENT AUDITORS’ REPORTTO THE MEMBERS OF EQUINE CAPITAL BERHAD(Incorporated in Malaysia)


Other Reporting Responsibilities

The supplementary information set out in Note 37 to the Financial Statements is disclosed to meet the requirement of BursaMalaysia Securities Berhad and is not part of the financial statements. The Directors are responsible for the preparation of thesupplementary information in accordance with Guidance on Special Matter No. 1 “Determination of Realised and UnrealisedProfits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements” as issued bythe Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion,the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

Other Matter

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

_____________________________________________________DELOITTE KASSIMCHANAF 0080Chartered Accountants

_____________________________________________________KAMARUL BAHARIN BIN TENGKU ZAINAL ABIDIN Partner - 2903/11/13 (J)Chartered Accountant

18 July 2012

INDEPENDENT AUDITORS’ REPORTTO THE MEMBERS OF EQUINE CAPITAL BERHAD

(Incorporated in Malaysia)


The Group The Company2012 2011 2012 2011

Note RM’000 RM’000 RM’000 RM’000

Revenue 5 277,542 149,050 - -Cost of sales 7 (210,661) (110,216) - -

Gross profit 66,881 38,834 - -Other operating income 21,449 8,206 64 -Administration and marketing expenses (41,159) (24,635) (679) (691)Other operating expenses (9,491) (7,518) - -Finance costs 8 (1,738) (5,128) - -

Profit/(Loss) before tax 9 35,942 9,759 (615) (691)Income tax expense 10 (3,812) (3,386) - -

Profit/(Loss) for the financial year 32,130 6,373 (615) (691)

Other comprehensive income for the financial year - - - -

Total comprehensive income/(loss)for the financial year 32,130 6,373 (615) (691)

Profit and total comprehensive income for thefinancial year attributable to:Equity holders of the Company 32,130 6,373Non-controlling interests - -

32,130 6,373

Earnings per ordinary shareattributable to equity holdersof the Company (sen):

Basic 11 14.13 2.80

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

STATEMENTS OF COMPREHENSIVE INCOMEFOR THE FINANCIAL YEAR ENDED 31 MARCH 2012



Note RM’000 RM’000 RM’000 RM’000

ASSETS

Non-current assetsProperty, plant and equipment 12 2,298 4,488 - -Investment properties 13 4,250 4,000 - -Investment in subsidiary companies 14 - - 192,582 192,582Other investment 15 1 1 - -Land held for property development 16 185,054 179,386 - -Deferred tax assets 17 16,841 10,286 - -Trade receivables 20 1,305 2,087 - -

Total Non-current Assets 209,749 200,248 192,582 192,582

Current assetsInventories 18 16,908 17,942 - -Property development costs 19 373,922 331,262 - -Accrued billings 16,619 11,916 - -Trade receivables 20 41,637 32,447 - -Other receivables and deposits 20 19,782 18,254 57 3Amount owing by subsidiary companies 14 - - 137,811 170,829Tax recoverable 717 4,078 62 62Fixed deposits, cash and bank balances 22 31,428 20,181 1,533 3,259

501,013 436,080 139,463 174,153Assets held for sale 23 3,695 67,543 - -

Total Current Assets 504,708 503,623 139,463 174,153

TOTAL ASSETS 714,457 703,871 332,045 366,735

(Forward)

STATEMENTS OF FINANCIAL POSITIONAS OF 31 MARCH 2012



Note RM’000 RM’000 RM’000 RM’000

EQUITY AND LIABILITIES

Equity attributable to equityholders of the Company

Issued capital 24 227,338 227,338 227,338 227,338(Accumulated losses)/Reserves 25 (5,359) (37,489) 36,217 36,832

Total Equity 221,979 189,849 263,555 264,170

Liabilities

Non-current and deferred liabilitiesBorrowings – secured 26 13,757 76,925 - 50,572Deferred tax liabilities 17 23,536 31,344 - -Trade payables 30 169,340 176,878 - -

Total Non-current and Deferred Liabilities 206,633 285,147 - 50,572

Current liabilitiesProgress billings 82,026 33,864 - -Trade payables 30 81,686 47,261 - -Other payables and accruals 30 55,784 53,849 271 229Amount owing to subsidiary companies 14 - - 43,219 31,323Provisions 31 29,364 41,109 - -Borrowings – secured 26 33,195 30,077 25,000 20,441Tax liabilities 3,790 22,715 - -

Total Current Liabilities 285,845 228,875 68,490 51,993

Total Liabilities 492,478 514,022 68,490 102,565

TOTAL EQUITY AND LIABILITIES 714,457 703,871 332,045 366,735


STATEMENTS OF FINANCIAL POSITIONAS OF 31 MARCH 2012


Attributable to the equity holders of the CompanyAsset

Issued revaluation Accumulatedcapital reserve losses Total

The Group RM’000 RM’000 RM’000 RM’000

Balance as of 1 April 2010 227,338 17,808 (61,670) 183,476Total comprehensive income for the financial year - - 6,373 6,373

Balance as of 31 March 2011 227,338 17,808 (55,297) 189,849

Balance as of 1 April 2011 227,338 17,808 (55,297) 189,849Total comprehensive income for the financial year - - 32,130 32,130Transfer to retained earnings on disposal of revalued asset - (17,808) 17,808 -

Balance as of 31 March 2012 227,338 - (5,359) 221,979

Attributable to the equity holders ofthe CompanyDistributable

Issued retainedcapital earnings Total

The Company RM’000 RM’000 RM’000

Balance as of 1 April 2010 227,338 37,523 264,861Total comprehensive loss for the financial year - (691) (691)

Balance as of 31 March 2011 227,338 36,832 264,170

Balance as of 1 April 2011 227,338 36,832 264,170Total comprehensive loss for the financial year - (615) (615)

Balance as of 31 March 2012 227,338 36,217 263,555


STATEMENTS OF CHANGES IN EQUITYFOR THE FINANCIAL YEAR ENDED 31 MARCH 2012



RM’000 RM’000 RM’000 RM’000

CASH FLOWS FROM/(USED IN)OPERATING ACTIVITIES

Profit/(Loss) for the financial year 32,130 6,373 (615) (691)Adjustments for:(Reversal of)/Provision for liquidated andascertained damages (7,244) 5,720 - -

Interest expense 1,738 5,128 - -Income tax expense recognised in profit or loss 3,812 3,386 - -Provision for bumiputra quota penalties 720 2,407 - -Property, plant and equipment written off 1,350 1,099 - -Land held for property development written off 1,756 - - -Depreciation of property, plant and equipment 1,156 1,065 - -Interest income (1,070) (1,638) (64) -Gain on disposal of asset held for sale (10,000) (950) - -Increase in fair value adjustments ofinvestment properties (250) (740) - -

Interest income imputed on interest free financial asset – long term receivables (90) (254) - -

Allowance for/(Reversal of) doubtful debts – net 206 (14) - -Bad debts written off 880 - - -Gain on disposal of a subsidiary company (537) - - -Gain on disposal of property, plant and equipment (27) - - -

Operating Profit/(Loss) Before Working Capital Changes 24,530 21,582 (679) (691)

Decrease/(Increase) in:Land held for property development (7,047) 11,356 - -Inventories 1,034 6,019 - -Property development costs 8,013 (53,141) - -Accrued billings (4,703) (5,189) - -Trade and other receivables (11,231) (9,043) (54) -

Increase/(Decrease) in:Progress billings 48,162 17,328 - -Trade and other payables 20,048 (12,103) 42 9

Cash Generated From/(Used In) Operations 78,806 (23,191) (691) (682)Tax paid (33,740) (20,547) - -Interest received 1,160 1,583 64 -Interest paid (5,519) (5,411) - -Liquidated and ascertained damages paid (8,298) (1,914) - -Bumiputra quota penalties paid (5,785) (2,274) - -

Net Cash From/(Used In) Operating Activities 26,624 (51,754) (627) (682)

(Forward)

STATEMENTS OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 MARCH 2012



Note RM’000 RM’000 RM’000 RM’000

CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIESProceeds from disposal of property, plant and equipment 27 - - -Proceeds from disposal of assets held for sale 45,100 30,070 - -Cash inflow from disposal of subsidiary company,net of cash disposal (Note 14) 1 - - -

Subscription of an additional issued share capitalof a subsidiary company - - - (2,350)

Additions to property, plant and equipment* (317) (546) - -Withdrawal/(Placement) of fixed deposits 1,845 (1,339) 1,869 (66)

Net Cash From Investing Activities 46,656 28,185 1,869 (2,416)

CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIESDrawdown of bank borrowings 40,337 64,723 25,000 38,880Advances from subsidiary companies - - 44,914 6,362Repayment of bank borrowings (97,795) (49,284) (71,013) (41,967)Repayment of hire-purchase creditors (291) (555) - -

Net Cash (Used In)/From Financing Activities (57,749) 14,884 (1,099) 3,275

NET INCREASE/(DECREASE) IN CASH AND CASHEQUIVALENTS 15,531 (8,685) 143 177

CASH AND CASH EQUIVALENTS AT BEGINNING OFFINANCIAL YEAR 6,400 15,085 232 55

CASH AND CASH EQUIVALENTS AT END OFFINANCIAL YEAR 32 21,931 6,400 375 232

*Additions to property, plant and equipment consist of the following:

The Group2012 2011

RM’000 RM’000

Payment by cash 317 546Financed by hire-purchase 93 1,393

Total (Note 12) 410 1,939


STATEMENTS OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 MARCH 2012


1. GENERAL INFORMATION

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Marketof Bursa Malaysia Securities Berhad.

The Company is an investment holding company. The principal activities of the subsidiary companies are set out in Note 14.There have been no significant changes in the nature of these activities during the financial year.

The registered office and principal place of business of the Company are both located at No. 1, Jalan Putra Permai 1A, TamanEquine, 43300 Seri Kembangan, Selangor Darul Ehsan.

The financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional currency. All informationpresented in RM has been rounded to the nearest thousand (RM’000), unless otherwise stated.

The financial statements were authorised for issue in accordance with a resolution by the Board of Directors on 18 July 2012.

2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

The financial statements of the Group and of the Company have been prepared in accordance with the provisions of theCompanies Act, 1965 and Financial Reporting Standards (“FRSs”), the applicable approved accounting standards in Malaysiaissued by the Malaysian Accounting Standards Board (“MASB”).

Adoption of New and Revised Financial Reporting Standards

In the current financial year, the Group and the Company have adopted all the new and revised FRSs and Issues CommitteeInterpretations (“IC Interpretations”) and amendments to FRSs and IC Interpretations issued by MASB that are relevant totheir operations and effective for annual financial periods beginning on or after 1 April 2011.

FRS 1 First-time Adoption of Financial Reporting Standards (revised)FRS 1 First-time Adoption of Financial Reporting Standards (Amendments relating to limited exemption

from Comparative FRS 7 Disclosures for First-time Adopters) FRS 1 First-time Adoption of Financial Reporting Standards (Amendments relating to additional exemptions

for first-time adopters)FRS 2 Share-based Payment (Amendments relating to scope of FRS 2 and revised FRS 3)FRS 2 Share-based Payment (Amendments relating to group cash-settled share-based payment transactions)FRS 3 Business Combinations (revised)FRS 5 Non-current Assets held for sale and Discontinued Operations (Amendments relating to plan to sell

controlling interest in a subsidiary)FRS 7 Financial Instruments: Disclosures (Amendments relating to improving disclosures about

financial instruments)FRS 127 Consolidated and Separate Financial Statements (revised)FRS 128 Investment in Associates (revised)FRS 138 Intangible Assets (Amendments relating to additional consequential amendments arising from

revised FRS 3)FRS 139 Financial Instruments: Recognition and Measurement (Amendments relating to additional consequential

amendments arising from revised FRS 3 and revised FRS 127)Improvements to FRSs issued in 2010IC Interpretation 4 Determining whether an Arrangement contains a LeaseIC Interpretation 9 Reassessment of Embedded Derivatives (Amendments relating to additional consequential

amendments arising from revised FRS 3)IC Interpretation 9 Reassessment of Embedded Derivatives (Amendments relating to scope of 29 IC Interpretation 9

advertised FRS 3)IC Interpretation 12 Service Concession ArrangementsIC Interpretation 16 Hedges of a Net Investment in a Foreign OperationIC Interpretation 17 Distributions of Non-cash Assets to OwnersIC Interpretation 18 Transfers of Assets from Customers

NOTES TO THE FINANCIAL STATEMENTS


2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (cont

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