annual report 2010 - mmc · annual report 2010. 1911 • malayan tin dredging limited ... •...

ANNUAL REPORT 2010

1911• MalayanTinDredgingLimited(MTDL)

wasincorporatedinLondonwithanominal

capitalof£100,000.

1912• MTDL’s first bucket dredge was

successfullyinstalledinthecompany’sfirst

miningfield inBatuGajah,Perak.Thistin

dredgewasthefirstevertobeinstalledin

Malaya.

1913 -1915• MTDL had commissioned 3more bucket

dredgesbytheyear1915.

1915 - 1920• TheoutbreakofWorldWar1resultedintin

miningindustrycomingtoastandstill.

• International shipping ceased and there

was no transportation of tin exports or

importsofmachinepartstobuildmoretin

dredges.

• Large stocks of tin accumulated had

causedapostwarpriceslumpandaffected

MTDLoperationsinMalaya.

1920 - 1921• Tinpricecontinuedtofalltoalowof£145

pertonneduetooversupplysituation.

• This led FederatedMalay States and the

Netherlands East Indies to cooperate to

regulatesupplyoftinandhencecontroltin

prices.

1924• Tinprice reboundedto£259per tonne in

1924.

• MTDL became the largest tin dredging

company in the world with a total of 6

operatingdredges.

1925 •LondonTinCorporationLimited(LTCL)was

establishedintheUnitedKingdom,which

wouldeventuallymergewithMTDL.

1926• The Southern Malayan Tin Dredging Ltd

(34.9% held by MTDL) was formed and

operatedatotalof5dredgesoveranarea

of3,661acresofminingfieldinPerak.

1930s• The Great Depression had affected tin

miningindustrysignificantly.

• Between1930and1933,thenumberoftin

minesoperatinginMalayafellfrom1,322to

994oradropof25%.

Early 1940s• DuringtheJapaneseOccupationofMalaya

(1942–1945),dredgesbelongingtoMTDL

weretakenoverbyaJapanesecompany,

MitsuiKosanKabushikiKaisha(Mitsui).

• Mitsui began to repair and restore the

dredges as most of the mine machinery

wasdismantledbyBritisharmyduringthe

war.

1945 - 1949• Post-Japanese occupation, British has

undertaken a rehabilitation programme to

restoreMTD’sdredges.

• Mitsuihadonlyconcentratedontherichest

fieldsandthishasresultedinimproperuse,

lackofmechanicalsupervisionandroutine

maintenanceandexcessivelooting.

1950s & 1960s• 1950ssaw thestartof theglorydays for

tinminingindustry.Between1954to1964,

there were 35 tin dredging companies

controlling75dredgesandresponsiblefor

45%ofworldtotaltinoutput.

• MTDL’s Ayer Hitam Tin (AHT) Dredging

enteredtheGuinnessBookofRecordsfor

producing the largest quantity of tin by a

singledredge–13,249piculs(801tonnes)

oftinconcentratesinasinglemonth.

• Anotherofitsdredge,AHTNo.2holdsthe

record for reaching the greatest depth of

247feetbelowthesurfacelevel.

1976 - 1978• MTDL and LTCL were targeted by the

Governmentaspartof“Malaysianisation”.

• Pernas set up a special purpose vehicle

namedNewTradewindsSdnBhd (NTSB)

toacquirebothMTDLandLTCL.

• NTSB acquired LTCL in 1976 and

transferreditsdomiciletoMalaysia.

• NTSB acquired MTDL in 1977 and

transferreditsdomiciletoMalaysia.

• In1978,NTSBwasrenamedandlistedas

MalaysiaMiningCorporation.

1981 - 1982• Permodalan Nasional Berhad acquired

MalaysianMiningCorporationfromPernas.

• Merger between Malaysia Mining

CorporationandMTDL tocreatea single

listedentity.

• The enlargedmerged entity assumed the

nameMalaysianMiningCorporation.

1984• MMCventured into theoil&gas industry

via a joint-venture with McDermott

International, a leading engineering,

procurement,constructionand installation

(“EPCI”)company.

1985• AshtonMiningLtd’sArgyleAK-1diamond

mine began commercial production.

The Melbourne-based company was an

associateofMMC.

• MMC-McDermottJVstarteditsfirstproject

forPetronasCarigaliatDulangOilfield.

• Secured railway engineering contract for

thelocalassemblyandfabricationofrolling

stockforKTM.

1987• The year saw tin price collapsed from

$29.91perkgto$13.99perkg.

• Embarked on a planned programme

to streamline operations and pursue

diversificationactivities.

• MMC’s engineering division was fully

operationalandinvolvedinvariousprivate

and public projects namely Teluk Intan

Stabilization and Kuala Langat Mining

Project.

• Ventured into marketing and trading

businesses which include industrial

minerals, ferrous and non-ferrousmetals,

petroleum,timberandcoalproducts.

1988• Beganexplorationofgoldandplatinumin

WestKalimantan,China,Canadaand the

USA.

• MMC Marketing saw sales of tin and

limenitereachedrecordhighs.

• MMC-McDermott completed the

engineeringdesignworkonDulangOilfield

project.

1990• MMCacquired30%interestinAustralian-

basedPlutonicResourcesLtd,acompany

involvedingoldmining.

• MMCrankedasmajorproducersforgold

and diamond via its interests in Plutonic

ResourcesLtdandAshtonMiningLtd.

1992• Ceasedtinminingbusinessentirelydueto

theailingtinindustry.

• FormationofGasMalaysiatodevelopand

implement the Natural Gas Distribution

SysteminPeninsularMalaysia.

1993• The new era for MMCGroup without its

traditionalbusinessoftinmining.

• Identified core business activities post

tinmining era namely gold and diamond

mining, engineering and construction,

marketing and trading and industrial

manufacturing.

1996• Konsortium Lebuhraya Butterworth –

Kulim (KLBK) started operation with the

commencementoftollingandmaintenance

operationfora30-yearconcessionperiod.

2000• MMC was reorganised into three main

divisions - Mining, Engineering and

Infrastructure&Utilities.

• Acquired 50.1% stake in Pelabuhan

TanjungPelepas(PTP).

• Emergence of Impian Teladan as new

shareholder.

2001• DisposalofAshtonMiningLtd.

• Acquired22.7%equityinMalakoff

CorporationBerhad.

2002• The Group business was repositioned

to focus on infrastructure, utilities and

engineering.

2005• Renamed from Malaysia Mining

CorporationBerhad toMMCCorporation

Berhad.

• MMC’snewlogowasunveiled.

• IncreasedstakeinPTPto70%.

2006• Acquisition and privatisation of equity in

JohorPort.

• Announced plans to acquireMalakoff for

RM9.3billionwhichisthelargestleveraged

buy-outinMalaysiacorporatehistory.

• Securedtherightstodevelopandmanage

theUS$30billJazanEconomyCityinSaudi

ArabiawithSaudiBinLadinGroup.

• CompletionoftheSMARTTunnel.

2007• PrivatisationofMalakoffwascompleted.

• Awarded the RM12.5bn Electrified Double

TrackingProjectfromIpohtoPadangBesar.

• DivestmentofentirestakeinKBLKtoPLUS.

• Acquired20%inRedSeaGatewayTerminal

(RSGT) to develop a container terminal in

SaudiArabia.

2008• Secured Vitol Group as an investor at

TanjungBinlandtobuildoilterminalfacility.

• Acquisition of 74% in Aliran Ihsan

ResourcesBerhad.

• SMARTwon the “Engineering Excellence

Award”forwaterandlargeprojectsfromthe

UKAssociationofConsultingEngineers.

2009• Acquisition of Senai Airport Terminal

Services.

• First berth of RSGT terminal began

operation.

•Malakoff’sfirstoverseasproject,Shuaibah

independent water and power plant in

SaudiArabia,receivedprojectcommercial

operationdate.

•PTPandJohorPortachieveda44%market

shareinMalaysia’scontainerbusiness,the

highestto-date.

•PetronasandGasMalaysiasignedanew

long-termnaturalgassupplyagreementof

300mmscfd.

2010• Senai Internaional Airport’s Aeromall was

officiallyopened.

• Breakthroughofthe3.3kmBerapitTunnel

ofthedoubletrackingproject,thelongest

inSouthEastAsia.

• SMART won the Institute of Engineers

Malaysia “Outstanding Engineering

AchievementAward”.

• Senai Airport Terminal Services’ wholly-

owned Senai High Tech Park, signed

two MOU to mark the beginning of

a comprehensive and integrated

development of the 2,718-acres Senai

AirportCity.

2011• MMC-Gamuda Joint Venture was

appointed as theProjectDeliveryPartner

for the Klang Valley Mass Rapid Transit

project.

CONTENTSVision,Mission&CorporateProfile 8

NoticeOfAnnualGeneralMeeting 16

CorporateInformation,FinancialCalendar&MMContheinternet 19

PerformanceataGlance 20

ConsolidatedOperations 22

Chairman’sLetter 24

Management’sDiscussion&Analysis 28

BoardofDirectors 42

ProfileofDirectors 44

ManagementTeam 48

CorporateSocialResponsibility 50

HighlightsOf2010 54

StatementonCorporateGovernance 60

InternalControlStatement 66

AuditCommitteeReport 68

RiskManagementReport 72

AdditionalComplianceInformation 74

FinancialStatements 76

ListOfProperties 212

ShareholdingStatistics 214

ThirtyLargestShareholders 215

ProxyForm -

8

CORPORATEPROFILEWeareautilitiesand infrastructuregroupwith interests inTransport&

Logistics,Energy&Utilities,andEngineering&Construction.Ourkey

businesses include Malaysia’s largest container terminal and leading

multi-purposeport,largestindependentpowerproducerandPeninsular

Malaysia’ssolesupplierofnaturalgastothenon-powersector.

Wearealsoundertaking theelectrifieddouble trackingrailwayproject

between Ipoh and Padang Besar and been appointed the Project

DeliveryPartnerfortheKlangValleyMassRapidTransitProject.Onthe

internationalfront,ourfocusisontheutilitiesandlogisticssectors,where

weownequity interests incompaniesnamely inSaudiArabia,Jordan

andAlgeria.

VISIONTobeapremierglobalutilities&infrastructuregroup.

MISSIONExcellenceinourcorebusinesssegments

Strategicobjectives:

• MaximiseShareholdersValue

• ServiceExcellencetoStakeholders

• LeadinValueInnovation

• BethePreferredEmployer

1110

TRANSPORT&LOGISTICS

1312

ENERGY&UTILITIES

1514

ENGINEERING&CONSTRUCTION

1716

NOTICEOFANNUALGENERALMEETING

NOTICE IS HEREBY GIVEN THAT the Thirty-Fifth Annual General Meeting (“AGM”) of members of MMC Corporation Berhad will be held

at the Nirwana Ballroom, Lower Lobby, Crowne Plaza Mutiara Kuala Lumpur, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia on

Monday, 16 May 2011 at 11.00 a.m. for the purpose of considering and, if thought fit, passing the following resolutions:

ORDINARY BUSINESS

1. “THATtheAuditedFinancialStatementsoftheCompanyforthe

financialyearended31December2010andtheDirectors’Report

andAuditors’Reportthereonbeandareherebyreceived.”

Please refer to Note A.

2. “THAT thefinal single-tierdividendof 3.5 senper share for the

financialyearended31December2010beandisherebyapproved

anddeclaredpayableon15 June2011 to themembersof the

Companyregisteredatthecloseofbusinesson31May2011.”

Ordinary Resolution 1

3. “THATthefollowingDirectors,whoretireinaccordancewithArticle

78oftheCompany’sArticlesofAssociation,beandareherebyre-

electedDirectorsoftheCompany:

a)EncikOoiTeikHuat


b)DatukHjHasniHarun”


4. “THATDato’Wira SyedAbdul Jabbar SyedHassan, aDirector

whoseofficeshallbecomevacantattheconclusionofthisAGM

pursuanttoSection129(2)oftheCompaniesAct,1965(“Act”),be

andisherebyre-appointedasaDirectoroftheCompanypursuant

toSection129(6)oftheAct,toholdofficeuntiltheconclusionof

thenextAGM.”


5. “THATDato’AbdullahMohdYusof,aDirectorwhoseofficeshall

becomevacantattheconclusionofthisAGMpursuanttoSection

129(2)oftheAct,beandisherebyre-appointedasaDirectorofthe

CompanypursuanttoSection129(6)oftheAct,toholdofficeuntil

theconclusionofthenextAGM.”


6. “THATPricewaterhouseCoopers,whoareeligibleandhavegiven

theirconsentforre-appointment,beandareherebyre-appointed

AuditorsoftheCompanyuntiltheconclusionofthenextAGMand

thattheremunerationtobepaidtothembefixedbytheBoard.”


NOTICE OF BOOK CLOSURE AND NOTICE OF

DIVIDEND ENTITLEMENT AND PAYMENT:

NOTICEISALSOHEREBYGIVENTHATshareholderswhoareregisteredintheRegisterofMembersandRecordofDepositorsatthecloseof

businesson31May2011shallbeentitledtothefinaldividendwhichwillbepaidon15June2011.

Adepositorshallqualifyfordividendentitlementonlyinrespectof:

a) SharestransferredintotheDepositor’ssecuritiesaccountbefore4.00p.mon31May2011inrespectofordinarytransfers,and

b) SharesboughtonBursaSecuritiesonacumentitlementbasisaccordingtotheRulesofBursaSecurities.

BYORDEROFTHEBOARD

AhmadAznanMohdNawawi

SazlinAyeshabintiAbdulSamat

CompanySecretaries

KualaLumpur

25April2011

Notes:

A. ThisAgendaitemismeantfordiscussiononlyasundertheprovisionsofSection169(1)oftheCompaniesAct,1965(“Act”)andtheCompany’s

ArticlesofAssociation,theauditedaccountsdonotrequiretheformalapprovalofshareholdersandhence,thematterwillnotbeputforward

forvoting.

Proxy

1. Amemberentitledtoattendandvoteatthemeetingisentitledtoappointuptotwo(2)proxiestoattendandvoteinhisstead.Aproxyneed

notbeamemberoftheCompany.

2. Aproxyform,tobevalid,mustreachtheRegistrar’soffice,SymphonyShareRegistrarsSdnBhdatLevel6,SymphonyHouse,BlokD13,

PusatDaganganDana1,JalanPJU1A/46,47301PetalingJaya,Selangor,Malaysianotlessthanforty-eight(48)hoursbeforethemeeting.

1918

CORPORATEINFORMATION

FINANCIALCALENDAR

MMCONTHENET

Company Secretaries

AhmadAznanMohdNawawi

SazlinAyeshaAbdulSamat

Registered Office

Level8,KompleksAntarabangsa

JalanSultanIsmail

50250KualaLumpur

Malaysia

Tel (603)21424777

Fax (603)21489887

[email protected]

Auditors

PricewaterhouseCoopers

CharteredAccountants

Share Registrar

SymphonyShareRegistrarsSdn.Bhd.

Level6,SymphonyHouse

BlockD13,PusatDaganganDana1

JalanPJU1A/46

47301PetalingJaya

Selangor

Malaysia

Tel (603)78418000

Fax (603)78418008

Principal Bankers

CIMBBankBerhad

MalayanBankingBerhad

Stock Exchange Listing

MainBoard

BursaMalaysiaSecuritiesBerhad

Dividend Service Provider

BursaMalaysiaDepositorySdn.Bhd.

2ndFloor,ExchangeSquare

BukitKewangan

50200KualaLumpur

Tel (603)20347751

Fax (603)20263712

AnnualGeneralMeeting

16 May 2011

Entitlementto2010finaldividend

31 May 2011

Paymentof2010finaldividend

15 June 2011

Financialyearending31December2011

*Announcementofresults:

1stquarter 31/05/2011

2ndquarter 23/08/2011

3rdquarter 30/11/2011

4thquarter 27/02/2012

*Thesedatesaresubjecttochange

TheCompany’swebsiteatwww.mmc.com.myoffersusefulinformationthatinterestedpersons,investorsandanalystswhowouldliketoknow

abouttheCompany’sbusiness,managementandcorporateinformation.

Thiswebsitealsooffersanemailalertservicethatwillnotifysubscribersofquarterlyreportannouncementsandotherimportantpressreleasesand

stockexchangeannouncements.ThereisalsoanFAQsectionthatdealswithfrequently-askedquestionsonbusiness,investmentandmedia-

relatedmatters.

Downloadableversionsofthisannualreport,previousyears’annualreportsandquarterlyreportsareavailableatourwebsite.

2120

PERFORMANCE

0 2250 4500 6750 9000

8,864

8,444

8,545

5,7222,839

2010

2009

2008

2007

2006

0 275 550 825 1100

856

682

1,041

1,018581

2010

2009

2008

2007

2006

0 1000 2000 3000 4000

3,503

3,215

3,446

2,785983

2010

2009

2008

2007

2006

0 150 300 450 600

345

234

553

552341

2010

2009

2008

2007

2006

ATAGLANCE0 10000 20000 30000 40000

36,018

37,086

34,449

32,95610,093

2010

2009

2008

2007

2006

0 5 10 15 20

11.3

7.7

18.2

18.111.2

2010

2009

2008

2007

2006

0 55 110 165 220

217

207

202

192136

2010

2009

2008

2007

2006

0 1750 3500 5250 7000

6,594

6,299

6,139

5,858

4,143

2010

2009

2008

2007

2006

0 1 32 4 5

3.5

3.0

2.5

5.0

4.5

2010

2009

2008

2007

2006

0 2.5 5 7.5 10

5.2%

3.7%

9.0%

9.4%

8.2%

2010

2009

2008

2007

2006

Profit before tax(RMmillion) Profit after tax and minority interests

(RMmillion)

Revenue(RMmillion) EBITDA(RMmillion)Earnings per share(sen) Dividend per share(sen)

Gross assets(RMmillion) Shareholders’ funds(RMmillion)

Net assets per share(sen) Return on equity(%)

2322

BORROWINGS

As at 31 December 2010, the Group had total borrowings of

RM19.97billion,comparedtoRM20.92billionattheendof2009

–adeclineof5%year-on-year. Taking intoaccountGroupcash

ofRM4.1billion,thisrepresentedanetgearinglevelof2.4times,a

reductionfrom2.6timesin2009.

TheGroup’sborrowingscomprisethefollowing:

• RM3.5billionattheHoldingCompany(MMCB)

• RM13.3billionatMalakoff

• RM2.5billionatPelabuhanTanjungPelepas(PTP)

• RM445millionatSenaiAirportTerminalServices(SATS)

• RM63millionatJohorPort

• RM104millionatotheroperatingcompanies

OPERATIONS

MMC Group’s Borrowings(RMbillion)

RM19.97 bil

Malakoff13.3

Others0.7

MMCB3.5

PTP2.5

Group revenue rose by 5% from RM8.44 billion in 2009 to RM8.86 billion in 2010, due mainly to better contributions from Gas Malaysia and both ports, Johor Port and the Port of Tanjung Pelepas. The improvement in business climate also saw a corresponding 35% increase in Group’s profit after tax and minority interests (PATMI) to RM345 million, compared to RM234 million in the previous year.

The higher PATMI in 2010 was attributable to the higher profits achieved by our key subsidiaries, namely Malakoff, Gas Malaysia and Johor Port. These subsidiaries benefited from the improvement in Malaysia’s GDP growth of 7.2% last year, which resulted in better demand for their products and services, as well as measures undertaken to improve operating margins.

CONSOLIDATED

Revenue(RMmillion)by subsidiary

Profit before tax (RMmillion)by subsidiary

0 2250 4500 67509000

2010

2009

1,753 498 679

75170

5,269

5,474

1,807 541 725

72245

Malakoff Gas Msia Johor PortPTP AIRB Others

2010

2009

0375 750 1125

380 326

133 50 42 (249)

436 388

155 52 43 (218)

Malakoff Gas Msia Johor PortPTP AIRB Others

2524

CHAIRMAN’SLETTER

MMC’S 100TH ANNIVERSARY (May 1911-May 2011)Incorporated in London exactly a century ago,MMC’s predecessor

Malayan Tin Dredging Limited (MTDL) was a global tin mining

powerhouse. Tin mining, a highly lucrative industry then, was the

country’sprimaryindustrialisationforcethatledtotheopeningupof

someofthemajortownsandcities,includingKualaLumpur.

However, by the mid-1980’s, tin mining was a sunset industry. It

precipitatedinMMCceasingitstinminingbusinessin1992inthewake

oftheprecipitousdeclineintindemandandprices,alongwithsoaring

operationalcostsandlabourshortage.

The collapse of tinminingmeantwe had to reinvent ourselves.We

believe we have done that and continue to do so. Through eight

decadesoftinminingthough,wewereabletogeneratethewealththat

laterenabledustoacquirenewbusinesses.

Between1992and2000,MMChadcarriedonmining,albeit,ofother

minerals.WeacquiredAustraliancompaniesinvolvedintheminingof

diamondandgold,namelyAshtonMiningLimitedandPlutonicGold

Mine. Notably, Ashton Mining owned a substantial stake in Argyle

DiamondMine,whichwastheworld’slargestdiamondmine.

It was also during this period that MMC had diversified into new

sectors, namely oil & gas (via Gas Malaysia), toll expressway (via

Kulim-Butterworth Expressway), engineering & construction and

manufacturing.

In2000, thesubstantialchangeofownership inMMCheralded ina

“new”MMC.Wesubsequentlyexited theminingbusiness,changed

our name from Malaysia Mining Corporation Berhad to MMC

Corporation Berhad. It marked the beginning of our journey as a

premierinfrastructureandutilitiesgroup.

Embarkingonourjourney,wehaveacquiredanddevelopedindustry

leaderssuchasMalakoff,JohorPortandPortofTanjungPelepas(PTP)

–eachadistinctivebrandintheirownright.

“MMC’s first eight decades were defined by tin mining and a global powerhouse in that. The latter part of our first century marked the beginning of our journey as a premier infrastructure and utilities group.

We will constantly build our capabilities and create platforms for innovation for our future growth as we enter the next 100 years, with the continuous support of our shareholders.”

2726

BUILDING CAPABILITIES FOR THE NEXT CENTURYGiventhevariousmeasurestobeundertakenbytheGovernmentto

transform Malaysia into a high-income economy through the New

Economic Model and Economic Transformation Programme, we

seemanyopportunities forMMCtoparticipate in thecountry’snew

infrastructureprojects.

TheappointmentofMGJVastheProjectDeliveryPartnerfortheKlang

ValleyMassRapidTransit(MRT)developmentdemonstratesthetrust

thegovernmenthasinourcapabilities.TheMRTproject isexpected

to enhance our construction order book for the next six years, at

theveryleast.Althoughthegovernmenthasagreedtoaninitial line

comprising51kminlength,thereisastronglikelihoodthatanothertwo

MRTlineswillbeawardedtocomplementthefirstline.TheMRTwill

notonlyincreaseourorderbook,butalsopresentuswithanimmense

opportunitytoharnessourcorecompetenciesintheengineeringand

constructionfield.

InEnergy&Utilities,theEnergyCommissionhascalledforproposals

fromMalakoffandanotherindependentpowerplantoperatortobuild

and operate a 1,000-megawatt coal-fired power plant. Given our

experience inrunningtheTanjungBincoal-firedpowerplant,weare

wellpositionedtobeverycompetitiveinthebiddingforthisproject.

Further,withthedevelopmentofIskandarMalaysiagainingmomentum

andtheimprovementineconomicandbusinessconditions,weseean

enormouspotentialforustounlockthevalueofourdevelopmentland

inJohor.

AliranIhsanResourcesBhd(AIRB),ourJohor-basedwatertreatment

company,continuestobeanimportantsupplierofwaterforthestate.

AIRB’sassociatedcompanyEquiventure’swaterconcessionwiththe

Johorstategovernmentwillexpirein2012.However,withalmost20

yearsofexperienceinwatermanagement,ahealthyfinancialposition

andbackedbyMMC’sstrengthintheutilitiessector,AIRBisactively

pursuingnewinvestmentsinwater-relatedareas.

Meanwhile,forourbalancesheet,weareconsideringvariousoptionsto

paredownourdebt,whichincludeunlockingthevalueofsomeofour

assets.Thiswilladdresssomeconcernsraisedaboutourgearinglevel

andalsoputusinabetterpositiontoexpandouroperationsorinvest

innewbusinesses,givenalltheopportunitiesavailabletotheGroup.

Going forward, we hope to leverage on our capabilities and deep

understandingofourmarketstoimproveourcompanies’performance,

aswellaslookatnewlocalandinternationalventureswithinourcore

areas. Wewillalsocontinuewith thesuccessfulpartnershipmodel,

which we have developed with some of the strong names in the

business,namelyinport,construction,andutilities.

APPRECIATION & RECOGNITIONThecontinuedimprovementintheGroup’sperformancelastyearwas

madepossiblebytheeffortsofallMMCstaff,aswellastheunwavering

supportofourclients,financiersandbusinesspartners.Iwouldliketo

takethisopportunitytothankeveryonefortheirroleinmaking2010a

goodyearforMMC.Myappreciationalsogoestomyfellowcolleagues

ontheBoardfortheircontributionsandwisdom.

IwouldalsoliketothankEncikAhmadJauhariYahya,whoretiredas

DirectorofMMCinDecember2010,forhisinvaluablecontributionto

theGroup.

By reaching 100 years, MMC has achieved an illustrious milestone that few companies in Malaysia can lay claim to. The next 100 years is likely to be more challenging than the one past, as the business environment becomes even more competitive. Companies need to evolve and be dynamic to withstand the test of time. We hope, with the sound foundation created and talent in place, MMC will continue to excel and our future generations will be able to celebrate another century of excellence.

A centenarian now we may be, our history is still ahead of us, our greater legacy yet defined as we strive to better ourselves in delivering better shareholder value each and every passing year – for the next 100 years.

Dato’ Wira Syed Abdul Jabbar bin Syed HassanChairman

April2011

Our transformation has proven to

be highly successful as revenue has

soared 12-fold, from RM673 million in

2000 to RM8,864 million in 2010. Profit

before tax has jumped nearly three

times, to RM856 million in 2010 from

RM259 million in 2000.

Our financial performance in 2010

bears testimony to the strategy of

owning a diverse portfolio of assets.

2010 PERFORMANCE AT A GLANCELastyear,theMalaysianeconomyregisteredahealthyrealGDPgrowth

of7.2%,comparedtoacontractionof1.7%in2009.

Iampleasedtoreportthatinlinewiththeimprovedbusinessconditions,

theGrouprevenuefor2010roseby5%toRM8.86billionfromRM8.44

billionin2009,withacorresponding35%jumpinprofitaftertaxand

minority interests (PATMI) toRM345million.Thestrengthening in the

core earnings of several subsidiaries contributed to the increase in

profit.

For 2010, the Board is recommending a final dividend of 3.5 sen

pershare,higherthan lastyear’sdividendpershareof3.0sen.This

representsatotaldividendpayoutofRM106.6milliontoshareholders.

Bysegments,theEnergy&Utilitiesdivisionremainsasthemainsource

of revenueandearnings for theGroup. Malakoff recordedastrong

performancein2010onthebackofanimprovedcombinedaverage

dispatchfactor,from50%in2009to54%in2010.GasMalaysiaalso

postedagood set of results,with a 10% increase in sales volume.

Revenuefromthisdivisionaloneconstituted83%ofGroupturnover,

whileitsprofitbeforetax(PBT)accountedfor91%ofGroupPBT.

Our two ports, PTP and Johor Port, recorded a higher throughput

performance in2010. PTP’svolume improvedby8% to6.5million

twenty-footequivalentunits(“TEUs”)ofcontainerscomparedto2009,

whileJohorPortposteda9%annualgrowthinconventionalcargoand

a4%riseincontainervolume.

BothPTPandJohorPortcollectivelycommandedthelargestmarket

shareofcontainervolumeamongdomesticports in2010,estimated

at40%.Weremainoptimisticthatourportswillrecordanevenhigher

volumein2011.

Our construction & engineering division, via MMC-Gamuda Joint

Venture (MGJV), is undertaking theRM12.5 billion electrified double

trackingproject(EDTP).TheEDTP,thecountry’slargestinfrastructure

project, is progressing well after having achieved 55% overall

completionattheendof2010.Theproject,whichhasnowentered

its fourth year of construction, is not only an essential contributor

to theGroup’scashflowandprofitability,butalsoadds toour listof

engineeringachievements.

Therewere setbacks in 2010.Zelan, our 39%associatedcompany,

continued toexperienceadifficultyeargiven itswidening losses,of

whichRM136millionwasrecognised inMMC,comparedwithanet

lossofRM91millionin2009.

On the international front, the Jazan Economic City (JEC) project

ismovingahead,butprogresshasnotbeenwhatwehadoriginally

anticipatedduetotheglobalfinancialcrisisthathaddelayedourplans

todevelopseveral infrastructurecomponentsof theproject. Wewill

continuouslyreviewourstrategyontheJECsoastocreatevaluefor

ourshareholders.

Zelan’simpactonMMCGroup’sbottomlinehasbeenquiteprofound

overthelasttwofinancialyears,andeffortshavebeenmadetoensure

its projects are completed without incurring additional huge losses.

Kapar Energy Ventures, a 40%associate ofMalakoff,went through

anotheryearofloss.Measurestoimproveitsperformancehavebeen

putinplace,andweareconfidentofmuchbetterresultsthisyear.

Inlinewithourcommitmenttogivebacktothesocietyandpromotethe

educationalcause,theBoardmadeaspecialconsiderationtodonate

RM100 million for the construction of the AlBukhary International

University (AIU). The Minister of Finance had on 12 March 2009

approved the AIU as a community project in relation to education.

Pursuanttothis,MMCwillbeabletoenjoyfulltaxdeductionsonthe

entiredonationunderSection34(6)(h)oftheIncomeTaxAct1967.The

universitycampuswasdevelopedinphasesoveraperiodoffouryears

andthecampusbuildingsandfacilitiesforstudentswerecompleted

mid-2010.

Furtherdetailsofour2010financialresultsandbusinessperformance

areincludedintheManagement’sDiscussionandAnalysissection.

28

“The improvement in economic conditions last year was promising compared to the immediate aftermath of the global financial crisis in 2009. We were able to transform adversities into opportunities, and our perseverance has paid dividends. We should pride ourselves in having achieved the 100 years’ milestone, but the MMC story does not end here. We have to continue working even harder to sustain our performance and create another century of legacy for future generations.”

MANAGEMENT’SDISCUSSION&ANALYSIS

I am pleased to report the performance of MMC and its group of companies for the financial year ended 31 December 2010. On the back of the improvement in our core businesses, MMC Group’s revenue rose by 5% to RM8.86 billion while profit after tax and minority interests (PATMI) increased by 35% to RM345 million, compared to the previous year.

3130

Malakoff’sprofitcouldhavebeenhigherin2010ifnotforthecontinued

poor performance of Kapar Energy Ventures (KEV) and the costs

incurred for the rotor refurbishment of Prai Power. KEV recorded

anotherdisappointingyearwithalossaftertaxationofRM84.2million

onthebackofapooraveragedispatchrateofonly18%andadebt

provisionfordispute.

Effortswereundertaken in2010 topursuecost-leadershipstrategies

primarily to optimise the costs associatedwith the running of those

power plants. These include optimisation of the cost structure

associatedwithmajor inspectionsaswellasastrategy tomake the

powerplantslessdependentonoriginalequipmentmanufacturers.

In the year under review, Malakoff received the prestigious Prime

Minister’sCSRAwards2010forthe“Environment”category.Thisaward

has served to further strengthenMalakoff’s commitment to continue

championingeffectiveenvironmentalinitiativesthatwillstrengthenthe

company’s position as a proactive, sustainable and environmentally-

conscious Malaysian company. Building on this, Malakoff has

incorporatedawholly-ownedsubsidiarynamedMalakoffR&DSdnBhd

tospearheadtheresearchanddevelopmentactivities in thefieldsof

energy,water,greentechnologyandrenewableenergy.

Goingforward,Malakoffwillpursuenewinvestmentsbothlocallyand

internationally,andisnowreadytotakeupnewchallengesandgrabthe

opportunitiesingreentechnologyandrenewableenergy.

ENERGY&UTILITIES

MALAKOFF CORPORATION (Malakoff)

Malakoffcontinuedtoachievegoodresultsinthefinancialyear2010.Its

turnoverregisteredacommendableincreaseof4%toRM5,474million

fromRM5,269millionrecordedin2009.

Malakoff’sprofitbeforetax(PBT)in2010rose15%toRM436million

from RM380million achieved in the previous year. This was largely

duetoabetteroperationalperformanceofmostofourpowerplants,

especiallytheTanjungBinpowerplant,andalsoahighercontribution

fromourassociateinSaudiArabia.

In terms of generation performance, the Lumut, GB3, Prai Power

andTanjungBinpowerplantscontinuedtoprovidereliablesupplyto

theNationalGridduring the financial year under review. TheLumut,

GB3,PraiPowerandTanjungBinpowerplantsachievedanaverage

availabilityofapproximately95%,83%,88%and86%, respectively.

The2,100-megawatt(MW)coal-firedTanjungBinpowerplantenjoyeda

highaveragedispatchrateof71%duringtheyearunderreview,versus

59%in2009,whichresultedinahigherdailyutilisationpayment.Our

SaudiArabiaassociate,ShuaibahWater&ElectricityCompany,madea

positivemaidencontributiontotheGroupin2010withaprofitaftertax

(PAT)ofRM44.8million.

2010

2009 380

436

Profit before tax (RM Million)

2010

2009 5,269

5,474

Revenue (RM Million)

Malakoff

3332

ALIRAN IHSAN RESOURCES (AIRB)

AIRB recorded consolidated revenue of RM72.4million for the year

ended31December2010,aslightdecreaseofRM3.2millioncompared

tothepreviousfinancialyear.AIRB’sPATrosefromRM28.2millionin

2009toRM31.7millionintheyearunderreview.

AIRB group of companies, Southern Water Corporation (SWC) and

Equiventures(ESB),recordedatotalproductionofapproximately342

millioncubicmetres(m3)oftreatedwater,whichis1%lowercompared

tothepreviousyear’svolumeof346millionm3.Thedeclinewasdue

totheeffectofdroughtincertainareasofJohorwhichhadanegative

impactontheproductionoftreatedwater.

Duringtheyearunderreview, thewater treatmentplantsunderSWC

operatedat80%ofcapacity,processingover131millionm3ofwater

perday.InthecaseofESB,thewatertreatmentplantswereoptimised

atfullcapacityandmanagedtoprocessover211millionm3ofwaterper

day.BothSWCandESBarethedominantsuppliersoftreatedwaterfor

Johor,supplyingapproximately70%ofthestate’swaterneeds.

AIRBhasembarkedonanexercisetofurtherenhanceitsperformance

managementsystem.Theobjectiveofthisexerciseistofurthernurture

ahighperformanceculture,attractandretaintalents,andstrengthen

ourstaffcompetencies.

Business continuity, resource management issues, and changes in

weatherpatternwhichinterruptrainfalls,areamongthemanychallenges

facingAIRB. Indeed, thecompany recognises thesechallengesand

willstrivetoovercomethem.Theexpertise,knowledgeandyearsof

cumulativeexperienceinthewaterconcessionbusinesswillassistAIRB

toriseabovetheseobstacles.

AIRB

2010

2009 42

43


2010

2009 75

72


GAS MALAYSIA

GasMalaysia rebounded from a challenging 2009 to register a 3%

growthinrevenuetoRM1,807millionin2010.Thehigherrevenuewas

derivedfroma10%increaseinsalesvolumeasaresultof improved

demand and increased gas allocation by the Government. Gas

Malaysia’sPBTincreasedby19%in2010toRM388millionfromRM326

millionachievedin2009,whilePATrosetoRM298million,anincreaseof

23%abovethepreviousyear’sRM243million.AsatDecember2010,

GasMalaysia’snetworkofgaspipelinescoversatotalof1,727kmand

isconstantlybeingexpandedtoreachalargerpopulation.

In 2010, Gas Malaysia signed a supplementary agreement with

Petronasforanadditionalsupplyof82millionstandardcubicfeetper

day(mmscfd)ofgasthatwasreallocatedbytheGovernmentfromthe

power to the industrial sector. This agreementwill be effective until

31December2011. The industriestargetedtoreceivetheadditional

supply from this allocation have been approved by the Malaysian

IndustrialDevelopmentAuthority(MIDA).

Todate,GasMalaysiahassuppliedthisadditionalgasvolumeto143

industrialcustomers,involvingsupplyto51newonesandtheexpansion

ofsupplyto92existingcustomers.Asaresult,GasMalaysia’ssales

volume for 2010 increased by 10% to 117.8millionmmBtu (million

BritishThermalUnit) fromthepreviousyear’svolumeof107.5million

mmBtu.

Thebenefitsoftheadditionalgasvolumewillbefullyrealisedin2011

whenthecustomerswhichweregiventheadditionalsupplyfullyutilise

their allocated volume. Thus, we expect GasMalaysia to achieve a

healthygrowthinsalesvolumein2011.

2010

2009 326

388


2010

2009 1,753

1,807


Gas Malaysia

3534

However,breakbulkcargothroughputfellby16%duetoalowerhandling

of almost all cargo namely timber, wood pulp, bagged fertilizer, scrap

ironandgeneralcargo.Thereductionwasmainlyduetosignificantlylow

demandfromoverseasandanunstablemarketconditioninEurope.The

lowerhandlingofbreakbulkcargothroughputwasalsocontributedby

lowerlocalcargohandledinpallets,loosebagsanddrums.

Duringtheyear,JohorPortlaunchedtheMultiPurposeTerminalSystem

(MPTS) which completed the integration of all online applications for

terminal operation andwarehouse planning, thus allowing a seamless

onlineworkingenvironment.

Meanwhile, JPLogisticsSdnBhdcommenced itsEnterpriseLogistics

ManagementSystem(ELMS)withtheobjectiveofhavingafullyintegrated

logisticsmanagement system that provides seamless information flow

andvisibilitythroughouttheentireoperationalprocess.Thisisadecision-

makingtoolforJPLogisticstomaximisethedeploymentandutilisation

ofresources.

PELABUHAN TANJUNG PELEPAS (PTP)

PTPcontinueditsimpressivegrowthtrackrecordbyhandlingathroughput

of6.5millionTEUsin2010,whichis9%higherthanthepreviousyear’s.It

consolidateditspositionasthe17thbusiestcontainerportintheworld.The

highervolumewasachievedonthebackoftheon-goingglobaleconomic

recovery,whichhasgenerallyimprovedglobaltrade.Thevolumesonlong

haulroutescontinuetobestrong;thenewbuildcontainershipsdelivery

markethasbeenveryactiveandoceanfreightrateshavenearlyrecovered

topre-crisislevels,pointingtowardsasustainablegrowthinworldtrade

ahead.

Revenueincreasedby7%toRM725millionin2010asaresultofahigher

throughputand increasedsales fromnon-containeractivitiesaswellas

new revenue sources. Despite handling more volume, additional port

equipmentandhigherfuelcosts,PTPstillmanagedtorecordalowerunit

costcomparedtothepreviousyearmainlyduetoitson-goingcostsavings

initiatives. Operationally, PTP continued to maintain its world-class 35

grossmovesperhourandrecordedexcellentsafetystatisticsthroughout

theyear.

TRANSPORT&LOGISTICS

JOHOR PORT

JohorPortrecordedaturnoverofRM541million in2010,which is9%

highercomparedtoRM498millionachievedin2009.PBTincreasedby

acommendable17%toRM155million in2010 fromRM133million in

2009. The larger increase inprofit isattributabletoan improvement in

profitmarginsasthevolumehandledbyJohorPortincreasedintandem

withbettereconomicconditionsduringtheyear.

In 2010, Johor Port handled 15.7million free weight tonnes (FWT) of

conventionalcargo,anincreaseof9%comparedto2009,consistingof

drybulk,breakbulkandliquidbulkcargo.JohorPort’scontainerterminal

recordeda4%growthinthroughputto876,268twenty-footequivalent

units(TEUs)drivenbyhigherimportandexportvolumes.Asaresult,the

totalcombinedcargothroughputhandledatJohorPortin2010amounted

to 25.6 million FWT, an increase of 7% against that achieved in the

previousyear.

Dissectingtheperformancebyindividualcargosegments,totalliquidbulk

cargothroughputincreasedby14%comparedto2009duetotheincrease

inbothedibleandnon-ediblecargo,of8%and20%,respectively.The

significantimprovementinnon-ediblecargothroughput,whichrose36%

fromthepreviousyear,stemmedfromafavourablemarketforpetroleum

products.

Totaldrybulkcargothroughputrecordedanincreaseof7%compared

to 2009. The increase was mainly due to the rise in handling of dry

edible cargo and dry non-edible cargo of 6% and 8%, respectively.

The increase indrynon-ediblecargowasdue toasignificantsurge in

feldsparforceramictilesproductionandhigherdemandforfertilizerdue

tothegrowingdemandbylocalfertilizercompaniestomeettheon-going

expansionofpalmoilrelatedactivities.

2010

2009 133

155


2010

2009 498

541


Johor Port

3736

SENAI AIRPORT TERMINAL SERVICES (SATS)

SATS recordedan increase in revenue fromRM26.7million in2009 to

RM114.2millionin2010.ThecompanyrecordedaPATofRM63.2million,

duetotherecognitionofasubstantialdeferredtaxincomeduringtheyear.

Thecompanywillcontinuewithitseffortstoobtaingreateryieldsfromthe

airportandcreatevaluefromthedevelopmentofitsfreeholdlandinorder

toimproveitsoperatingperformancethisyear.

Theairporthandledatotal1.24millionpassengers,which is5%lower

comparedto2009.Only1%ofthesecompriseinternationalpassengers

duetoAirAsia’sreducedinternationalflightsatSenaiInternationalAirport.

However, this is set to improve in 2011asFireflyhasannounced that

itwouldmakeSenaiAirport its regionalhubtoflytonewdestinations,

namelyBandung,JakartaandSurabaya,fromthethirdquarterof2011

andBangkokfromthefourthquarter.Itscargotonnageduring2010grew

stronglyto6,702tonnes,anincreaseof30%comparedto2009.

TheAeroMallwasofficiallyopenedinMay2010andtodate,90%ofthe

retailspacehasbeentenanted.Wehavecreatedacalendarofevents

forAeroMall toattractcrowds fromthenewhousingcommunitiesand

therapidlyexpandingbusinesscommunityoftheSenai–Skudaiflagship

developmentzoneofIskandarMalaysia.IskandarMalaysiaisestimatedto

have1.35millionpeoplecurrently,representing43%ofJohor’spopulation

of3.17million.Thepopulationsizeforthisregionisprojectedtomorethan

doubleto3.0millionby2025.

SATS hasmanaged to attract an international company to set up an

engine refurbishment centre which is currently under construction.

Anothercompanyhasalsobeenroped in to takeup2.5acresof land

withanoptionforanother2acrestobuildafixed-basedoperator(FBO)

facilitieshangarwithaninitialinvestmentofRM50million.

TheSenaiAirportCity(SAC)developmentiscurrentlyunderway.SACis

destinedtobethefirstcompleteaerotropolis inMalaysia,servicingthe

businesscommunityandthesurroundingpopulation.Itislocatedatthe

southerntipoftheSenaiAirportwithatotalgrossdevelopmentareaof

2,718acres. This exclusivedevelopment offers sizeable high-tech and

industrial lotsthatwillcatertomostoftherequirementsoftheaviation

andrelatedservicesindustries,cargoandfreightactivitiesandhigh-tech

manufacturers. For other downstream and service-related industries,

therearealsocommercialplotsandshop-officesthatcanreadilybemade

available to support commercial activities. Site Clearing, Earthworks,

DetentionPondandAncillaryworksarecurrentlyprogressingaheadof

schedule.

With the existing 12 berths and 44 quay cranes, PTP has an annual

terminalhandlingcapacityofapproximately8.5millionTEUs.Whilstour

strategyistohaveanexcesscapacityatalltimestoensureacongestion-

freeand“berth-on-arrival”environmentforourcustomersandportusers,

there must be a good balance between excess capacity and actual

utilisationinordertofullyoptimisetheuseofourberthsandequipment.

Stringentcontrolsareputinplacetoensurethatonlynecessarycapital

and operational expenditure are spent in line with specific business

requirements.

For2010,PTPmanagedtomarginallyimproveitsPBTtoRM52millionfrom

RM50millioninthepreviousyear.However,asaresultofthedeferment

of various expansionary capital expenditure programmes, there was a

significantdropindeferredtaxincomewhichresultedinacorresponding

dropinnetprofit,fromRM173millionin2009toRM66millionin2010.

Oneofthekeydriversforgrowthin2011willbethedeliveryofnewvessels,

eachwith a capacity of over 12,000 TEUs,whichwill needportswith

deepdraftandthatarehighlyefficientinhandlingcontainers.Duetoits

strengthinthesetwoareas,PTPiswell-positionedtoaccommodatethese

largevessels. PTPwill continue its focusondeliveringcostefficiency,

andprovidingworldclassserviceswithamplecapacitythatwouldallow

its existing and potential customers to extract greater valuewhichwill

ultimatelyimprovetheirprofitability.

2010

2009 50

52


2010

2009 679

725


PTP

3938

Red Sea Gateway Terminal (RSGT), our 20% associate, registered

a significant growth in volume with the phased completion of the

physicalconstructionoftheberthsbytheendof2010.RSGThandled

approximately511,000TEUsin2010andthisrepresentedanestimated

15%marketshareofcargohandledatJeddahIslamicPort(JIP).Volume

handledatJIPin2010hadincreasedsubstantiallyfromapproximately

3.02millionTEUsin2009to3.74millionTEUsin2010duetotheglobal

economicrecovery.Weareoptimisticthat,goingforward,RSGTwill

continuetocaptureincreasingvolumeandmarketsharewithapositive

impactonitsfinancialperformance.

TheJazanEconomicCity(JEC)projecthasbeenprogressing,despite

thedepressedstateoftheglobaleconomyin2009thathadaffected

ourplanstodevelopseveralinfrastructurecomponentsoftheproject.

FurtherprogressoftheJECprojectisdependentontheconstruction

scheduleandthecompletiondateoftheoilrefinerytobeundertaken

byARAMCO,theSaudinationaloilcompany.Therefineryiscriticalto

thedeliveryofthesupplyofoiltoJEC.

Althoughdevelopmentworksareon-going, theoil refinery isa long-

gestation project, the construction of which is only expected to

commenceinthefirstquarterof2013. TheUSD10billion,250,000-

400,000 barrels per day project is expected to takemore than two

yearstoconstruct,withthecompletiondatescheduledforthefourth

quarterof2015.Meanwhile,JECisworkingcloselywithARAMCOto

ascertaintheinfrastructureandutilitiesrequirementsfortheoilrefinery

suchasport,waterandpowerduringconstructionaswellasduring

theiroperation.

WehavedecidedthatfutureinvestmentconsiderationsbyMMCforthe

JECshallbesubjectedtotheconstructionprogressoftheoilrefinery.

However,weshallevaluatetheinvestmentswithinourcorebusinesses,

namelytheportandpowerplant,arisingfromtheJECproject.

In2010,constructionworksvaluedatSAR1.1billion(USD293million),

comprising the steel billets and rebars plant, the substations and

transmissionlines,wereundertakenatJEC.Theseworksareon-going

asscheduledandtargetedtobecompletedbythe fourthquarterof

2011.

Corporate Structure

INTERNATIONALOPERATIONS

ELECTRIFIED DOUBLE TRACKING PROJECT (EDTP)

Progressof theEDTPduring2010wassatisfactory. TheEDTP,which is

undertaken by MMC-Gamuda Joint Venture (MGJV), achieved actual

cumulative overall progress of 55% at the end of 2010. The project is

expectedtobecompletedby2014.

Most of the critical andmajor structures, such as land viaducts, marine

viaducts, and the 3.3km-long Berapit Tunnel, have nearly reached full

completion, while the 300-metre Larut Tunnel is progressing ahead of

schedule.Oncefullycompleted,theBerapitTunnelwillbethelongestrailway

tunnelinSouth-EastAsia.

The implementationofEDTP for the remainingdurationof thecontract is

expectedtoproceedsmoothly.Systemsandpermanenttrackworkshave

commencedandareexpectedtopickupspeedin2011.Theoperational

strategy for thisyearwillbe focusedonensuringasmooth interfaceand

integrationbetweencivil/buildingworksandtrackandsystemsworks.

TheimpactoftheEDTPontheconstructionindustryhasbeenfarreaching.

AtotalofRM10billionworthofcontractshavebeenawardedtomorethan

600contractors,63%ofwhomareBumiputras.Localcontractorsfromthe

fournorthernstatesofPerak,Penang,KedahandPerlishavebeengiven

priorityforthevarioussub-contractingjobsinvolvingearthworks,dredging,

structuralworks,systems,communications,electrificationandsupplyingof

rawandconstructionmaterials.AnotherimportantaspectoftheEDTPisa

newstandardofexpertisebeingtransferredfromMGJVtolocalcontractors.

TheEDTPwilltransformKTMB’sservices,allowingittocompeteinterms

oftraveltime,frequency,fares,reliability,qualityofserviceandsafety.Once

completed, the Kuala Lumpur-Butterworth train service (390km) can be

increasedtohourlytraintripstakingjust3hourseachway,comparedwith

onlytwotripsperdaycurrentlytaking9hourseachway.

ENGINEERING&CONSTRUCTION

TRANSPORT & LOGISTICS

70% Port of Tanjung Pelepas Sdn. Bhd.ContainerPortandLogisticsHub

100% Johor Port BerhadMulti-purposePortandLogisticsOperations

100% Senai Airport Terminal Services Sdn. Bhd.Airportoperations&FreezoneDevelopment

50% Syarikat Mengurus Air Banjir dan Terowong Sdn. Bhd. (SMART)TollRoadOperationsoftheSMARTTunnelMotorway

ENGINEERING & CONSTRUCTION

50% MMC - Gamuda Joint Venture Sdn. Bhd.• ElectrifiedDoubleTrackingProject(EDTP)

• PDPforKlangValley MRTproject

39.2% ZELAN BERHADInvestmentholding

20% Red Sea Gateway TerminalDeveloperofnewTusdeercontainerterminalatJeddahport,SaudiArabia

100% MMC Utilities LtdPowerandWaterprojectsinMiddleEastandNorthAfrica

100% MMC Saudi Arabia Ltd

50% JAZAN Economic City LtdDeveloperofnewJazanEconomicCity,SaudiArabia

InterestsinAluminiumSmelterPowerPlantandPorts

ENERGY & UTILITIES

51% Malakoff Corporation BerhadPower&WaterGeneration

41.8% Gas Malaysia Sdn. Bhd.NaturalGasDistribution

69.7% Aliran Ihsan Resources BerhadWaterTreatment

INTERNATIONAL OPERATIONS

100% MMC - International Holdings

100% Zelan Construction Sdn. Bhd.PowerPlantConstruction

4.88% IJM Corporation BerhadMajorInfrastructureWorks

% FiguredenotespercentageofGroup’sinterest,exceptinthecaseofZelanConstructionandIJM

Asat15March2011

4140

We have come a long way from being a tin mining company known as Malayan Tin Dredging Limited 100 years ago, to be a major infrastructure and utilities Group. Our unique long-standing history provides us with a sound knowledge and a strong platform for future growth.

As we celebrate our first centenary on 9 May 2011, we acknowledge that the MMC Group owes its successes and achievements over the last century to the commitment of all the staff and support from the government and business associates. The company has also undergone trials and triumphs which have made us stronger and wiser. MMC strives to be a partner in nation-building, by harnessing greater strength in our core competencies and producing consistently higher performance for all its stakeholders. Our diverse portfolio of assets offers great opportunities for growth and is strategically positioned to provide long-term sustainable returns to our shareholders. We intend to build and develop an MMC that will last another 100 years.

Datuk Hj Hasni HarunGroupManagingDirector

April2011

OUTLOOK

42

BOARDOFDIRECTORS1 DATO’ WIRA SYED ABDUL JABBAR BIN SYED HASSAN2 DATUK HJ HASNI HARUN3 TAN SRI DATO’ IR. (DR.) WAN ABDUL RAHMAN BIN HAJI WAN YAACOB4 DATO’ ABDULLAH BIN MOHD YUSOF5 DATUK MOHD SIDIK SHAIK OSMAN6 OOI TEIK HUAT7 ABDUL HAMID SH MOHAMED

12 3475 6

2

7

13

4

45

Dato’ Abdullah Mohd Yusof, Malaysian,

aged 71, was appointed on the board on

31 October 2001. He is the Chairman of

the Audit Committee and a member of

Nomination Committee, and is the Senior

Independent Director of the Board.

Dato’Abdullah isapartner inthe legalfirm

of Abdullah & Zainuddin. He is also the

ChairmanofAeonCo.(M)BerhadandAeonCreditService(M)Berhad,

and a boardmember of TradewindsCorporation Berhad and Zelan

Berhad.

Dato’AbdullahholdsaLLB (Honours)degree from theUniversityof

Singapore.

Dato’Abdullahattendedallsix(6)Boardmeetingsforthefinancialyear

ended31December2010.

Dato’ Abdullah does not hold any interests in the securities of the

Companyoritssubsidiariesnorhasheanyfamilyrelationshipwithany

Directorand/ormajorshareholderoftheCompanynoranyconflictof

interestwiththeCompany.

Datuk Hj Hasni Harun, Malaysian, aged 53,

was appointed as a board member on 1

March 2008 and assumed the position of

the Group Managing Director (“GMD”) of

MMC on 3 May 2010. He is also a member

of the Executive Committee.

DatukHjHasniheldseveralseniorpositions

intheAccountantGeneral’sOfficefrom1980

to1994.HewastheSeniorGeneralManager

oftheInvestmentDepartmentattheEmployeesProvidentFundfrom

1994to2001,andtheManagingDirectorofRHBAssetManagement

SdnBhd from2001until2006.He then joinedDRB-HICOMBerhad

asGroupChiefFinancialOfficerandjoinedMMCastheGroupChief

OperatingOfficerinJanuary2007untilFebruary2008.InMarch2008,

hewasappointedastheChiefExecutiveOfficerMalaysiapriortohis

appointmentastheGMDinMay2010.

DatukHjHasniisamemberoftheMalaysianInstituteofAccountants.

He holds aMasters degree in Business Administration fromUnited

StatesInternationalUniversity,SanDiego,CaliforniaandaBachelorof

Accounting(Honours)degreefromUniversityofMalaya.

DatukHjHasni also sits on the boards of IJMCorporationBerhad,

ZelanBerhad,Aliran IhsanResourcesBerhad,MalakoffCorporation

Berhad, Johor Port Berhad, MMC Engineering Group Berhad and

severalprivatelimitedcompanies.

DatukHjHasniHarunattendedfive(5)outofthesix(6)Boardmeetings

forthefinancialyearended31December2010.

Datuk Hj Hasni does not hold any interests in the securities of the




DATUK HJ HASNI HARUNGroup Managing Director

DATO’ ABDULLAH MOHD YUSOFSenior Independent Director

PROFILEOFDIRECTORS

Dato’ Wira Syed Abdul Jabbar Syed Hassan, Malaysian, aged 71,

was appointed as a non-independent Chairman of the Company

on 7 July 2000. He also chairs the Nomination, Remuneration and

Executive Committees of the Board.

Dato’WiraSyedAbdulJabbarwastheChiefExecutiveOfficerofthe

KualaLumpurCommodityExchangefrom1980to1996,theExecutive

ChairmanoftheMalaysiaMonetaryExchangefrom1996to1998and

theExecutiveChairmanoftheCommodityandMonetaryExchangeof

Malaysiafrom1998to2000.

With a Bachelor of Economics degree from University of Western

AustraliaandaMastersofSciencedegreeinMarketingfromUniversity

of Newcastle-Upon-Tyne, United Kingdom, Dato’ Wira Syed Abdul

Jabbar is also theChairman of Tradewinds (M)Berhad, Tradewinds

PlantationBerhad,AliranIhsanResourcesBerhad,MARDECBerhad

andaboardmemberofStarPublications(Malaysia)BerhadandKAF

DiscountsBerhad.

Dato’WiraSyedAbdulJabbarattendedallsix(6)Boardmeetingsfor

thefinancialyearended31December2010.

Dato’ Wira Syed Abdul Jabbar does not hold any interests in the

securities of theCompany or its subsidiaries nor has he any family

relationshipwithanyDirectorand/ormajorshareholderoftheCompany

noranyconflictofinterestwiththeCompany.

DATO’ WIRA SYED ABDUL JABBAR SYED HASSAN

Chairman, Non-Independent Non-Executive Director

44

4746

Datuk Mohd Sidik Shaik Osman, Malaysian,

aged 62, was appointed to the board as a

non-independent director on 23 January

2003 and is a member of the Remuneration

and Executive Committees.

Upongraduation in 1974,DatukMohdSidik

servedasAssistantSecretary,MinistryofTrade

& Industry until 1979 and was subsequently

appointed Principal Assistant Secretary,

MinistryofTransport(PortDivision)in1979,apositionheserveduntil1987.

WhilstservingtheMinistryofTransport,hetookstudyleaveandobtained

aMastersofScience(Maritime)degreefromtheWorldMaritimeUniversity,

Sweden.

UponobtaininghisMastersDegree in1988,heservedasSecretary to

theNationalMaritimeCouncil,NationalSecurityCounciland thePrime

Minister’sDepartment.Between1992and1996,hewasappointedasthe

TeamLeader,StraitsofMalaccaRadarProject inthesamedepartment

andlaterbecameDeputyDirectorGeneraloftheNationalSecurityDivision,

PrimeMinister’sDepartment.

Datuk Mohd Sidik left Government service to join Pelabuhan Tanjung

PelepasSdnBhd(PTP)in1997asitsChiefOperatingOfficer.In1998,he

wasappointedasDirectorofPTPandinthefollowingyearwaspromoted

toExecutiveDirector.HewasappointedastheChiefExecutiveOfficerof

PTPinJanuary2000andassumedthepostofChairmaninOctober2005.

DatukMohdSidikisalsotheChairmanofJohorPortBerhadandSenai

AirportTerminalServicesSdn.Bhd.

Datuk Mohd Sidik holds a Bachelor of Social Science (Honours)

(Economics)degreefromUniversitiSainsMalaysia.

DatukMohdSidikattendedallsix(6)Boardmeetingsforthefinancialyear


DatukMohd Sidik does not hold any interests in the securities of the


Director and/ormajor shareholder of theCompany nor any conflict of


DATUK MOHD SIDIK SHAIK OSMANNon-Independent Non-Executive Director

Tan Sri Dato’ Ir. (Dr.) Wan Abdul Rahman

Haji Wan Yaacob, Malaysian, aged 69,

joined the board on 26 August 1999 as

a non-independent director and is a

member of the Audit and Remuneration

Committees.

Tan Sri Dato’ Ir. (Dr.)Wan Abdul Rahman

served in the Public Works Department

since1964andbecameitsDirectorGeneral

from1990untilhisretirementin1996.

TanSriDato’Ir.(Dr.)WanAbdulRahmanholdsaDiplomainCivil&

StructuralEngineeringfromBrightonCollegeofTechnology,United

Kingdom. He is a Fellow of the following institutions: Chartered

InstituteofBuildings(U.K.), InstituteofHighways&Transportation

(U.K.), Institute of Civil Engineers (U.K.), Institute of Engineers,

MalaysiaandAcademyofSciences,Malaysia.

TanSriDato’Ir.(Dr.)WanAbdulRahmanisalsotheChairmanofIJM

CorporationBerhad,LingkaranTransKotaHoldingsBerhad,Lysaght

GalvanisedSteelBerhadandNorthport(Malaysia)Bhdandaboard

memberofMalaysianIndustrialDevelopmentFinanceBerhad,NCB

HoldingsBerhadandBankofAmericaMalaysiaBerhad.

TanSriDato’Ir.(Dr.)WanAbdulRahmanattendedallsix(6)Board

meetingsforthefinancialyearended31December2010.

TanSriDato’Ir.(Dr.)WanAbdulRahmandoesnotholdanyinterests

inthesecuritiesoftheCompanyoritssubsidiariesnorhasheany

familyrelationshipwithanyDirectorand/ormajorshareholderofthe

CompanynoranyconflictofinterestwiththeCompany.

TAN SRI DATO’ IR. (DR.) WAN ABDUL RAHMAN HAJI WAN YAACOBNon-Independent Non-Executive Director

Encik Ooi Teik Huat, Malaysian, aged

51, was appointed to the board as an

independent director on 22 May 2008.

He is also a member of the Audit and

Nomination Committees.

Encik Ooi began his career with Messrs

Hew & Co. (now known as Messrs

Mazars), Chartered Accountants, before

joining Malaysian International Merchant

BankersBerhad(nowknownasMIMBInvestmentBankBerhad).He

subsequentlyjoinedPengkalenSecuritiesSdn.Bhd.(nowknownas

PMSecuritiesSdn.Bhd.)asHeadofCorporateFinance,beforeleaving

tosetupMeridianSolutionsSdn.Bhd.whereheispresentlyadirector.

EncikOoiisamemberofMalaysianInstituteofAccountantsandCPA

Australia, and holds aBachelorDegree in Economics fromMonash

University,Australia.

EncikOoialsositsontheBoardsofTradewinds(M)Berhad,Tradewinds

PlantationBerhad,DRB-HicomBerhad,ZelanBerhadandJohorPort

Berhad.

Encik Ooi attended all six (6) Boardmeetings for the financial year


EncikOoidoesnotholdanyinterestsinthesecuritiesoftheCompany

oritssubsidiariesnorhasheanyfamilyrelationshipwithanyDirector

and/ormajorshareholderoftheCompanynoranyconflictofinterest

withtheCompany.

OOI TEIK HUATIndependent Non-Executive Director

Encik Abdul Hamid SH Mohamed,

Malaysian, aged 45, was appointed to the

board as an independent director on 10

August 2009. He is also a member of the

Audit Committee.

EncikAbdulHamidiscurrentlyanExecutive

Director of Symphony House Berhad, a

public listedBusinessProcessOutsourcing

company. He started his career in the

accountingfirmMessrsLimAli&Co./ArthurYoung,beforemovingon

tomerchantbankingwithBumiputraMerchantBankersBerhad.Helater

movedtotheAmanahCapitalMalaysiaBerhadGroup,aninvestment

bankingandfinancegroup,whereheledthecorporateplanningand

financefunctionsuntil1998,whenhejoinedtheKualaLumpurStock

Exchange(KLSE),nowknownasBursaMalaysiaBerhad.Duringhisfive

yearswiththeKLSE,heledKLSE’sacquisitionsofKLOFFE,COMMEX

andtheirmergertoformMDEX,andtheacquisitionofMESDAQ.He

alsoledKLSE’sdemutualisationexercise.

EncikAbdulHamidalsositsontheboardsofSymphonyHouseBerhad,

Pos Malaysia Berhad, Hartalega Holdings Berhad, SILK Holdings

Berhad(formerlyknownasSunwayInfrastructureBerhad)andScomi

EngineeringBerhad.

EncikAbdulHamidisaFellowoftheAssociationofCharteredCertified

Accountants.Heattendedfive(5)outofthesix(6)Boardmeetingsfor

thefinancialyearended31December2010.

EncikAbdulHamiddoesnotholdanyinterestsinthesecuritiesofthe




ABDUL HAMID SH MOHAMEDIndependent Non-Executive Director

48

MANAGEMENTTEAM1 DATUK HJ HASNI HARUN - Group Managing Director

2 ANWAR SYAHRIN ABDUL AJIB - Director, Finance

3 SHAHRIR SHARIFF - Director, Project Development

4 DR. MABEL LEE KHUAN EOI- Director, Corporate Strategy

5 AHMAD AZNAN MOHD NAWAWI - General Manager, Group Corporate Secretarial

6 AHMAD ZAKI - General Manager, Corporate Finance

7 ELINA MOHAMED - General Manager, Corporate Services

8 VINCENT CHIU HUO SIONG - General Manager, Contracts & Procurement

9 AZHARUDDIN NORDIN - General Manager, Group Managing Director’s Office

1 234 5

678 295 6

4

8

1 2

7

3

51

As a caring and responsible company, we strongly uphold our tradition in making a positive difference to the communities where we do business. Our focus is to provide the utmost support to future generations – socially, economically and environmentally. At MMC, it is not purely about business but equally important is our philosophy of creating a sustained relationship with our stakeholders.

CORPORATESOCIALRESPONSIBILITY

Itisourkeyresponsibilitytoensurethateachofthecommunityinitiativeachieves

its broad objectives that are in line with our long term business perspectives

andbringingvalue to thesociety.Throughout theMMCGroup,corporatesocial

responsibility(CSR)isapproachedholistically.Ourcommitmentisfocusedonthe

fourpillars;education communitydevelopment,environmentandhumancapital

development.Eachofthispillarhasinternalandexternalelementstoensurethey

arebalancedwithourbusinessobjective,aswellasmeetingtheneedsofourkey

stakeholders.

Our CSR initiatives are designed to be aligned with our core value of integrity,

innovation,teamwork,excellenceandcommitment.Thesearethefoundationsthat

areinherentinthestrategicplanningofallourCSRinitiatives.

50

5352

ENVIRONMENT

MMC commits itself towards conservation and protection as well as assuring the health and safety in the course of doing business. We recognise that our activities must be carried out responsibly to preserve the environment as we see ourselves as part of the local community in which our business operates in.

Tous,health,safetyandenvironment(HSE)havebecomeanintegral

part of our daily operations. Various HSE programs have been

organisedforourstaffatall levelstoaddresstheimpactofbusiness

activitiestotheenvironmentandpersonalhealth.Itisimperativeforus

toensure thatourbusinessoperates incompliancewith thehighest

environmental standards and relevant regulators within the local

communitiesimpactedbyourpresence.

We conducted an environmental awareness campaign such as the

Malakoff ‘Penjanabebas’ Green School Project. The solar panel

whichhasbeenfundedbyMalakoffhaswonusthePrimeMinister’s

CSRAward forEnvironment2010.Theobjectiveof thisproject is to

raise awareness of energy efficiency and to broaden acceptance of

the importance of green energy amongst students through on-the

groundawarenessandeducationprograms.Asanextensionof this

effort, our environment awareness initiative continues with Malakoff

InterstateFellowshipRide.Theprogramwhichwaswidelycoveredby

themedia,wasaimedatraisingRM50,000tobedistributedtowelfare

organisations.Theride,whichattractedmorethan1,000participantsis

alsoaimedatcreatingawarenessonlivingahealthylife-style.

Our participation in conserving the environment extends with the

initiativeof“ProgramKesedaranAlamSekitar”whichwassuccessfully

carried out by Pelabuhan Tanjung Pelepas. The program which

targetedprimaryschools,wasaimedtoeducateyoungstudentsonthe

importanceofcaringfortheenvironment.

MMC’s other environmental community initiatives include “Program

Kesedaran & Kepentingan Hutan Dan Tanaman Pokok Bakau” at

Tanjung Bin and the release of little sea bass or “Ikan Siakap” to

rehabilitate theecosystemaswellas toassist the localfishermen in

theirlivelihood.

HUMAN CAPITAL DEVELOPMENT

A strong company requires human capital with the right skills, competencies and motivation to maintain its competitive advantage. We believe MMC is as good as our people.

Ouremployeesarethetrueassetsofourgroup.Tous,itisouremployees

thatpropelthejourneyofourcompanythroughtheorganisational’score

value.Thus,wefocusontheprofessionalandpersonaldevelopment

ofMMCmembers todevelopacultureofhardwork,disciplineand

innovation.ItisimperativeforMMCtoretainourmosttalentedpeople

aswestronglybelievethatahighlyskilledworkforceisindispensable.

We take thewellbeingofouremployeesseriouslyaswewant them

togrowwiththecompanyandthereforearealwayssensitivetotheir

careerdevelopmentrequirements.Thiswouldrequirecarefulplanning

and implementationofhumancapitalprograms.Skillsdevelopment,

succession planning and talent development initiatives are key.

Therefore,ouremployeesaregivenampleopportunitiestoimprovetheir

skillsetsviatrainingthatgivethemexposuretothelatesttechniques

and maximise their potential as they work towards achieving the

organisationalobjectives.

EDUCATION AND COMMUNITY DEVELOPMENT

The MMC Group is committed to education and thus has worked with numerous government and non-government organisations to give back to the society. We have always been sensitive towards the plight of the less fortunate and the needy.

WithintheMMCGroupweareactivelyinvolvedinsponsoringschool

equipment to Orang Asli children, organising motivational talks,

organising English tuition programs to selected schools and other

programs that encourage the development of young talents and

provideeducationalopportunitiestothecommunity.Inlinewiththese

efforts,wehavedonatedto11adoptedschoolstoassistinupgrading

academic facilities, tuition revisionclassesand rewardingUPSR top

achievers.Inrecognisingtheiracademicachievements,wehavealso

awarded cash to top engineering students at Universiti Technology

Malaysia,UniversityTenagaMalaysia aswellas toppublic relations

studentsfromUniversityScienceMalaysia.

Wehavealsocontinuedwithourannual traditionof recognisingand

rewarding our employees’ children who excel in key examinations

throughthe“AnugerahPelajarCemerlang”.

Ourgivingbackprogramtothecommunityunderthispillardoesnot

stophere,aswecontinuouslyengageinhumanitarianandcommunity

projects.We have sponsored a fund raising event called ‘Sparks of

Broadway’,performedby localprofessionalandaspiringperformers.

The sellout event raised significant funds to improve the facilities at

Persatuan Sindrom DownMalaysia (PSDM) centre located in Kuala

Lumpur.MMChasalsobeenorganisingblooddonationcampaignsin

cooperationwithPusatDarahNegaraatourofficepremise.Thisannual

programistoeducatethevalueofbloodinsavingthelifeofothersand

hasreceivedgoodresponsefromourstaffaswellas tenantsofour

officebuilding.

As a symbol of giving and sharing, we held a series of community

activitiesintheeffortofreachingtheneedyanddisadvantaged,suchas

the“EmpowerForLife”program.Theprogram,whichwasconducted

incollaborationwithWomen’sAidOrganization,hasprovidedessential

skills, training, andmedical assistance to singleparents.Webelieve

thisprogramwouldhelpbridgethegapbetweentherichandthepoor,

thestrongandtheweak,andmostimportantlyourpositionasacaring

corporatecitizen.

5554

Career FairJohor Port Berhad

(JPB) had the honour

to support the career

fair thatwasorganized

by JobsMalaysia and

sponsoredby Iskandar

Development Region

Authority (IRDA).

OfficiatedbytheJohor

BahruCityMayor,Tuan

Haji Mohd Jaffar bin

Awang, the exhibition

that also showcased

current IRDA

developmentswasheld

on24–25Apriland3-4JulyatDangaCityMall,JohorBahruand

KompleksPusatBandar,PasirGudangrespectively.

The event lasted for twodays at each venue andwas attendedby

thirtycompaniesfromaroundJohorBahruandPasirGudangindustrial

estatewhoarealsoJPB’scustomers.Amongthepurposeof joining

thiseventwastopromoteJPB’sjobvacancieswhileatthesametime

showingoursupportespeciallybeingtheonlymulti-purposeportinthe

IskandarRegion.

Apart fromcollecting resumes for new recruitments, anon the spot

interview was also held for the shortlisted candidates during the

exhibition.Attheendoftheevent,wemanagedtocollectanumberof

resumesforvacanciesandforfuturereferences.

—————————————————————————————————————————

Visit by Queensland MinisterOn 28 April 2010, the Hon.

Stephen Robertson MP,

Queensland’s Minister for

Natural Resources, Mines

and Energy and Minister for

Trade, and his delegation of

government representatives

and business leaders visited

the MMC office. During the

visitthedelegationweregiven

abriefingontheMMCgroup’s

activities and discussed

opportunities where both

partiesmayworktogetherinthefuture.

8th ASEAN Port and Shipping Conference & Exhibition

TogetherwiththeJohorPortAuthority(JPA),PTPparticipatedinthe8th

ASEANPortandShippingConference&ExhibitionheldinHoChiMinh

City,Vietnambetween20to21May2010.

TheeventwhichwashostedbyVietnam’sMinistryofTransportwas

oneofthelargestannualeventsthroughouttheSouthEastAsiaregion

focusingonport,shipping,transportandlogistics.Theeventsawthe

gathering of the world’s leading companies from over 25 countries

under one roof comprising port operators, shippers, cargo owners,

importers/exporters, freight forwarders, logisticscompaniesandport

serviceproviders.

—————————————————————————————————————————

Launching of the Aeromall at Senai International Airport

On22May2010, thePrimeMinister,YABDato’SriMohdNajibTun

AbdulRazakofficiatedtheopeningofthe50,047sqftAeromallatSenai

InternationalAirport.TheYABPrimeMinisteralsowitnessedthesigning

ofmemorandaofunderstandingbetweenSHTPandUTM,USMand

UNIMAPandbetweenSHTPandSTXCorporation.

—————————————————————————————————————————

HIGHLIGHTSOF2010

Visit to NSTP BerhadOn 11 January

2010, the senior

managementofMMC

visitedtheBalaiBerita

in Kuala Lumpur.

During the visit, the

teamwasmetby the

senior management

andeditorialteamofpublicationsintheNewStraitsTimesPressgroup.

Attheevent,bothpartieswerebriefedontheirrespectiveoperations

and performance and discussed enhancing their relationship and

mutualco-operationmovingforward.

—————————————————————————————————————————

Senai High Tech Park (SHTP) inks memorandum of understanding with EQ Solar and MOX-Linde Gases

On 12 February 2010, Senai High Tech Park Sdn Bhd, a wholly-

ownedsubsidiaryofSenaiAirportTerminalServicesSdnBhdsigneda

MemorandumofUnderstandingwithEQSolarTechnologyInternational

SdnBhdandMOX-LindeGasesSdnBhdforthepurposeofleasingan

industriallandinSenaiHi-TechPark.

Analyst briefing for FY2009 results

On1March2010,themanagementofMMCheldabriefingforanalysts

andfundmanagerstodiscussits2009full-yearfinancialresults.

—————————————————————————————————————————

Datuk Hj Hasni Harun appointed as Group Managing Director

On 22March 2010,MMC announced the appointment of DatukHj

HasniHarunasGroupManagingDirector,whichtookeffecton3May

2010.AsGroupMD,DatukHjHasniassumesresponsibilityoverthe

managementofboththedomesticandinternationaloperationsofthe

MMCgroupofcompanies.ThisisfollowingfromthedepartureofChief

ExecutiveOfficer International,FeizalAliwhich tookeffecton3May

2010.

—————————————————————————————————————————

SMART wins Institute of Engineers Malaysia Outstanding Engineering Achievement Award 2010

On17April2010,theInstitutionofEngineersMalaysiaawardedSMART

withthe“IEMOutstandingEngineeringAchievementAward2010”for

theconstructionanddesignoftheSMARTtunnel.

Minggu Saham Amanah Malaysia 2010MMCparticipatedintheMingguSahamAmanahMalaysia2010,whichwas

heldfrom20-26April2010inKuching.Theweekisaimedatcreating

awarenessoffinancialplanningandintendedtobeaneducationalplatform

forthoseplanningtoinvestinunittrustfunds.

5756

Malakoff wins Prime Minister’s CSR Awards 2010On 1 December 2010, Malakoff was the

recipient of the prestigious Prime Minister’s

CSR Award 2010 for the “Environment”

category.TheAwardwasgiveninrecognition

ofMalakoff’scommitmenttoitsenvironmental

initiatives and its position as a proactive,

sustainable and environmentally-conscious

Malaysiancompany.

————————————————————————————————————————————

MMC-Gamuda Joint Venture announced as Project Delivery Partner for the MRT Project

On18December2010,Prime

Minister YAB Dato’ Sri Najib

Tun Razak announced that

theMassRapidTransit(MRT)

project, aimed at solving

Greater KL/ Klang Valley’s

transportation woes, has

been approved andwill start

rollingoutinJuly.Theproject

will be managed by MMC-

Gamuda Joint Venture as

the Project Delivery Partner.

TheprojectisestimatedtocostapproximatelyRM36billionandwillbethe

largestinfrastructureprojecteverundertakenbythecountry.

————————————————————————————————————————————

PTP closes 2010 with 6.5 million TEUWithatotalthroughputof

6.5 million TEU handled

in 2010, PTP retained

its status as Malaysia’s

busiestcontainerport.The

6.5millionTEUhandledby

theportin2010accounted

foran8%growthoverthe

6million TEUhandled by

theportin2009.

Seri Alam Community PolicingTheCommunityPolicing,organizedbyIPDSeriAlamwasheldonNovember13th,2010

atDataranAlhamara,MenaraAqabah,PusatBandarPasirGudang.Itwasofficiatedby

YBDato’SeriMohamedKhaledbinHjNordinandJohorPortwashonouredtobeinvited

tojointhisevent.Inadditiontoenhancingthepoliceforce–residentrelationship,the

eventwasheldtofamiliarizethesocietywiththedutiesofthePDRMandtoencourage

vigilanceandcooperationfromthesocietytohelpthepolicefightrampantcrimes.

AmongtheactivitiesthatwereheldduringtheCommunityPolicingwascrimefightinggimmick,performancebytheTrafficPolicebranch,brass

bandperformancebythePDRMandmanymore.

Excellent Achievement in the World Standing of Top Container Port of The World by Ministry of Transport

In recognition of PTP’s position

asthe17thbusiestcontainerport

intheworld,andinrecognitionof

PTP’ssuccessofbeingoneofonly

three (amongst the world’s top

twentyports)torecordapositive

growth in its throughput volume

despite the global economy

recession in 2009, the Ministry

of Transport Malaysia awarded

PTPwithanAchievementAward

on 21st July 2010. The award

ceremonywasheldattheGrand

DorsettHotel,SubangJaya.

————————————————————————————————————------------------------------------

6th Asia Maritime and Logistics Conference & Exhibition 2010

PTP participated at the

6th Asia Maritime and

Logistics Conference &

Exhibition2010between

10to12October2010.

The event which was

heldinPutraWorldTrade

Centre, Kuala Lumpur

also saw the participation of local manufacturers, cargo owners,

importers, exporters, shipping agents, port operators and other

logisticsserviceproviders.

Electrified Double Tracking Railway Project: Berapit Tunnel Breakthrough Ceremony

On 1 November 2010,

Transport Minister

Datuk Seri Kong Cho

Ha launched the

breakthrough ceremony

of the Berapit Tunnel.

Located at Padang

Rengas,Perak.The tunnel is3.3km in length, throughasolid300m

granitehillandisthelongestrailtunnelinSouthEastAsia.

————————————————————————————————————------------------------------------

SMART Tunnel Project wins FIABCI Award 2010 for National Contribution

On11November2010atthe18thMalaysiaPropertyAwards,SMART

won the Special Award for the National Contribution category. The

winningprojectwillrepresentMalaysiatocompeteintheinternational

awardcompetitionFIABCIPrixd’Excellenceaward,whichwillbeheld

inCyprusinMay2011.

59

StatementonCorporateGovernance 60

InternalControlStatement 66

AuditCommitteeReport 68

RiskManagementReport 72

AdditionalComplianceInformation 74

CORPORATEGOVERNANCE

6160

TheboardplaysanimportantroleinthedevelopmentofGrouppolicy

and its six non-executive directors oversee the Company and the

management.Theboard’s fourcommittees,comprisenon-executive

directors,exceptfortheexecutivecommittee,whichincludestheGMD.

Thereisanadequatedegreeofindependence,anddirectorsmeetand

activelyexchangeviewstoensurethattheboardcaneffectivelyassess

thedirectionoftheCompanyandtheperformanceofitsmanagement.

Supply of Information

Theboardmeetsatleastfourtimesayear,andasandwhennecessary

foranymattersarisingbetweenregularboardmeetings.Theboardis

suppliedwith information in a timelymanner and in the appropriate

qualitytoenablethedirectorstodischargetheirdutieseffectively,and

duenoticeisgiventodirectorswithregardtoissuestobediscussed.

The quality and manner in which information is provided to the

boardisreviewedannuallyaspartoftheboard’sevaluationprocess.

Resolutions are properly recorded and minutes of proceedings of

meetings are circulated to directors for comments before they are

confirmed.Directorsarealsonotifiedofanycorporateannouncements

releasedtotheBursaMalaysia.

DirectorsaregivenaccesstoanyinformationwithintheCompanyand

are free to seek independent professional advice at theCompany’s

expense, if necessary, in the furtherance of their duties. There is

an agreed procedure in place for directors to acquire independent

professional advice to ensure that the board functions effectively.

All directors have access to the advice and services of company

secretarieswhoseappointmentandremovalisamatterfortheboard

asawhole.Thecompanysecretariesadviseboth, thedirectorsand

management,onstatutory,regulatoryandcorporatedevelopment,the

implementationofcorporategovernancemeasuresandcomplianceas

applicable to theGroup.Theyarealso responsible forensuring that

boardproceduresarefollowed.

Appointments to the Board

Theappointmentofnewdirectorstotheboardismadebythefullboard

upontherecommendationofthenominationcommittee.Lastyear,no

newappointmentswererecommendedbythenominationcommittee

totheboard.

DIRECTORS’ TRAINING

Alldirectorshaveattended theMandatoryAccreditationProgramme

prescribedbyBursaMalaysia.Lastyear,withtheexceptionofEncik

FeizalAliwho resigned fromtheBoardon3May2010,alldirectors

attendedatleastonetrainingsession,eitherorganisedinternallybythe

Companyorexternally,includingthefollowing:

Dato’ Wira Syed Abdul Jabbar Syed Hassan

• Audit Committee Institute Roundtable Discussion on Going

Forward : Risk & Reform – Implications for Audit Committee

Oversight:KPMG

• CorporateGovernanceandTheMedia:Tradewinds(M)Berhad&

BursatraSdnBhd

• The MPH Power-Packed Seminar - Investment Opportunities

For2010AndBeyondForAsianCompaniesAndInvestors:Jim

Rogers

• Seminaron“RecentTaxCases&Developments” :MessrsLee

HishamuddinAllen&Gledhill/MMCCorporationBerhad

• Financial Institutions Directors’ Education Programme -

DevelopingHighImpactBoards

: Module 1 / Bank Negara Malaysia & Perbadanan Insurans

Deposit Malaysia Financial Institutions Directors’ Education

Programme-DevelopingHighImpactBoards








DepositMalaysia

Datuk Hj Hasni Harun

• KPMGMalaysiaGSTSeminar2010 :KPMGTaxServicesSdn

Bhd

• GettingUptoSpeedwithGovernance:Part2/TheInstituteof

InternalAuditorsMalaysia

• 18th World Congress of Accountants 2010 : International

FederationofAccountantsandMalaysianInstituteofAccountants

STATEMENTONCORPORATEGOVERNANCE

Sound corporate governance ensures the Company’s continued high performance and integrity while retaining the trust of stakeholders. Maintaining effective corporate governance is therefore a key priority for the board, and is achieved through implementing the principles and best practices of the Malaysian Code on Corporate Governance (“the Code”).

DIRECTORS

The Board

TheCompany is ledbyaboardofdirectorswhich is responsible to

theshareholdersforthemanagementoftheCompany.Theboardhas

theultimateandoverallresponsibilityforcorporategovernanceandthe

Company’soverallstrategicdirectionandobjectives,itsacquisitionand

divestmentpolicies,majorcapitalexpenditureandtheconsiderationof

significantfinancialmatters.Itmonitorstheexposuretokeybusiness

risksandreviewsthedirectionofindividualbusinessunits,theirannual

budgets,andtheirprogresscomparedagainstthosebudgets.Atotal

of six (6) boardmeetingswere held during the financial year ended

31December2010andalldirectorsattendedmorethanhalfofthese

meetings.

There is a distinct and clear division of responsibility between the

ChairmanandtheGroupManagingDirector(“GMD”)toensurethere

isabalanceofpowerandauthority.The rolesof theChairmanand

the GMD are kept separate where the Chairman is responsible for

ensuringboardeffectivenessandconductandtheGMDhastheoverall

responsibilityfortheday-to-daymanagementofCompany.TheGMD

isalsoresponsiblefortheimplementationoftheboard’spoliciesand

decisions.Theboardcontinuestocarryouttheprincipalstewardship

responsibilitieswhich itexplicitlyassumed in2002,asprescribedby

theCode.

Board balance

Thereisoptimumboardbalanceandcompliancewiththeindependent

directors criteria set out under the requirements of Bursa Malaysia

SecuritiesBerhad (“BursaMalaysia”).At leastone thirdof theboard

consistsofindependentdirectorswithexpertiseandskillsfromvarious

fields.

Duringthecourseoftheyear,EncikFeizalAliandEncikAhmadJauhari

YahyavacatedtheirofficesasdirectorsoftheCompanyeffective3May

2010and15December2010,respectively.

Currently,threeoutofsevenboardmembersareindependentdirectors

whoareabletobringanindependentjudgmentonissuesofstrategy,

performance and resources of the Group. The presence of these

independentdirectorsfulfillsapivotalroleofcorporateaccountability.

Theyprovideunbiasedandindependentviews,adviceandjudgment

totakeaccountoftheinterestsoftheGroup,shareholders,employees

andanypartywithwhomtheGroupconductsbusiness.

Overall, the board comprises a goodmix of members with diverse

academicbackgroundstoprovideacollectiverangeofskills,expertise

andexperiencerelevanttosupportthegrowthofourbusinesses.

The interests of major shareholders are reflected fairly by the

representation of their nominees on the board. The Chairman

encourageshealthydebateonimportantissuesandpromotesactive

participationbyboardmembers.Dato’AbdullahbinMohdYusofisthe

senior independentdirector towhom theboardmembers’concerns

maybeconveyed.

6362

DIRECTORS’ REMUNERATION

The Level and Make-up of Remuneration

Theboardasawholereviewsthelevelofremunerationofdirectorstoensurethatitissufficienttoattractandretainthedirectorsneededtolead

theCompanytosuccess.Thelevelofremunerationalsoneedstoreflecttheexperienceandlevelofresponsibilitiesundertakenbythedirectors.

Procedure

Theboard,throughitsremunerationcommittee,annuallyreviewstheperformanceoftheexecutivedirectorsasapreludetodeterminingtheirannual

remuneration,bonusandotherbenefits. Indischargingthisduty,theremunerationcommitteeevaluatestheexecutivedirectors’performance

againsttheobjectivessetbytheboard,therebylinkingtheirremunerationtoperformance.Theremunerationofnon-executivedirectorsisreviewed

bytheboardasawhole,toensurethatitisalignedtomarketandtotheirdutiesandresponsibilities.

Disclosure

Thefeespayabletonon-executivedirectorsareapprovedbyshareholdersattheAGMbasedontherecommendationoftheboard.Theaggregate

remunerationofthedirectorscategorisedintotheappropriatecomponentsareasfollows:

Theremunerationpaidtothedirectorswithinthefollowingbandsisasfollows:

*onedirectorresignedwitheffectfrom15December2010

**onedirectorresignedwitheffectfrom3May2010.

Category Fees(RM)

Salaries andemoluments

(RM)

Meeting & other allowances and defined contribution plan (RM) Benefits in kind (RM)

ExecutiveDirectors - 4,689,480 780,400 165,332

Non-ExecutiveDirectors 482,370 - 417,880 124,789

Amount of Remuneration Number of Executive Directors Number of Non-Executive Directors

RM50,000toRM100,000 - 3*

RM100,001toRM150,000 - 2

RM150,001toRM200,000 - 1

RM300,000toRM350,000 - 1

RM2,000,000toRM2,500,000 1** -

RM3,000,000toRM3,500,000 1 -

Tan Sri Dato’ Dr. (Ir.) Wan Abdul Rahman Haji Wan Yaacob

• Directors Duties & Conference 2010 “Towards Boardroom

Excellence&CorporateGovernanceBestPractices”:MICGand

FederationofPublicListedCompaniesBerhad

• Implications of the Companies (Amendment) Act 2007 on

CompaniesandDirectors:CompaniesCommissionofMalaysia

• EnhancingProtectionforDirectorsOfficersinanEscalatingRisk

Environment/IJMCorporationBerhad

• Directors’ Training on “Enterprise RiskManagement in Today’s

Economy & “Red Flags & Landmines in Financial Accounts” :

ColumbusCircle/GamudaBerhad

• Banking Insights Programme : Financial Institutions Directors’

EducationProgramme

• SeminaronImprovingtheDesignandInstallationofTrafficSafety

BarriersalongMajorRoadsinMalaysia:REAM


HishamuddinAllen&Goldhill/MMCCorporationBerhad

• SeminaronTheCompetitionBill2010:RahmatLim&Partners

• StrategicIslamicFinance:PNBInvestmentInstituteSdnBerhad

• “AContrarianViewofCorporateGovernance”:IJMCorporation

Berhad

• SeminaronBudget2011:PriceWaterhouseCoopers

• DirectorsTrainingon“CorporateProblems-LessonsfromToyota,

SimeDarby, Transmile & BP andHow the Board can input to

Strategy Development & Implementation” : ColumbusCircle/

GamudaBerhad

• 2010PLCDirectorsTrainingon“TheDebtRecoveryProcess”:

RockwillsBusinessSolutionsSdnBhd/Lysaght

Datuk Mohd Sidik Shaik Osman

• CorporateSocialResponsibilityforMalaysianBusiness:MAICSA

Datuk Abdullah Mohd Yusof

• TheChallengesofImplementingFRS139:BursaMalaysia

Encik Ooi Teik Huat

• Forum on FRS 139 – Financial Instruments Standard : Bursa

Malaysia

• SeminaronCorporateGovernanceAndTheMedia:Tradewinds

(M)Berhad&BursatraSdnBhd

• SeminaronInvestmentOpportunitiesFor2010andBeyondFor

AsianCompaniesAndInvestors:MPHGroup



• Seminar on Preventing Corporate Misdeeds: Principal roles,

responsibilities and accountabilities of Directors andCorporate

Management:Tradewinds(M)Berhad

Encik Abdul Hamid Sh Mohamed

• GovernmentTransformationPlanbyProf.DannyQuah:London

SchoolofEconomics



• DinnerTalkontheEconomicCrisisbyProf.NabilHaque:Harvard

BusinessClub

• MSC-ICM/IAP 2010: Economic Transformation Programme

Briefing for IAP Members : PEMANDU under Prime Minister’s

Department

• SeniorManagersOffsiteTeambuilding:SymphonyHouseBerhad

• UBSGlobalEconomicOutlook:UBS

• LegalWorkshop –PersonalDataProtectionAct (PDPA) 2010 :

SymphonyHouseBerhad

Encik Ahmad Jauhari Yahya (resignedw.e.f15December2010)

• WorkshopinCoalPricing:IBCAsia(S)PteLtd

EnergyForumonsecuringasustainableenergyfutureforMalaysia

:MGAECOMandSuruhanjayaTenaga

DirectorsalsomadesitevisitstotheGroup’soperationstohaveabetter

perspectiveandunderstandingoftheGroup’svariousbusinesses.

Re-election

TheCompany’sArticlesofAssociationprovidesthatalldirectorsshould

submit themselves for re-electionat leastonceevery threeyears, in

compliancewith the requirementsofBursaMalaysia.TheArticlesof

Associationalsoprovide thatone-thirdof theboardshall retire from

officeeveryyearandshallbeeligibleforre-electionateveryAGM.At

theCompany’sThirty-FifthAGM,EncikOoiTeikHuat,anIndependent

DirectoroftheCompanyandYBhg.DatukHjHasnibinHarun,theGMD,

shallretireandbeingeligible,willofferthemselvesforre-elections.

Additionally, Directors of or over the age of seventy are to be re-

appointedannuallyattheAGM,arequirementtobefollowedpursuant

toSection129of theCompaniesAct1965.YBhg.Dato’WiraSyed

AbdulJabbarbinSyedHassanandYBhg.Dato’AbdullahbinMohd

Yusofwillbeseekingre-appointmentunderthesaidprovisionatthis

AGM.

This affords shareholders the opportunity to review directors’

performance,therebypromotinganeffectiveboard.

6564

BOARD AND COMMITTEE MEETINGSAttendance Record of Board Members

Setoutbelowistheattendancerecordofmembersforboardandcommitteemeetingsforfinancialyearended2010.

Notes:

Alldirectorsattendedmorethan50%ofthemeetingsheldinthefinancialyearended31December2010.

Name BoardAudit

CommitteeNomination Committee

Remuneration Committee

Executive Committee

1.Dato’WiraSyedAbdulJabbarbinSyedHassan

6/6 - 2/2 3/3 1/1

2. DatukHjHasniHarun 5/6 - - - 1/1

3.TanSriDato’Ir.(Dr.)WanAbdulRahmanbinHajiWanYaacob

6/6 4/5 - 3/3 -

4. Dato’AbdullahbinMohd.Yusof 6/6 5/5 2/2 - -

5. DatukMohdSidikShaikOsman 6/6 - - 3/3 1/1

6. EncikOoiTeikHuat 6/6 4/5 2/2 - -

7. EncikAbdulHamidShMohamed 5/6 4/5 - - -

8. EncikFeizalAli(resignedw.e.f.3May2010) 1/3 - - - -

9.EncikAhmadJauharibinYahya(resignedw.e.f.15December2010)

5/6 - - - -

Inaddition,thenominationcommitteeevaluatestheboard’seffectivenessandsuggestsopportunitiesforimprovement.Thecommitteesolicits

commentsfromeachboardmember,viaaprescribedevaluationform,onhowtheboard,theboard’scommitteesandeachindividualdirector’s

performancecanbeimproved.CommentsaretreatedinstrictconfidenceandareaddresseddirectlytotheChairmanoftheboard,whoisalso

theChairmanofthenominationcommittee.

Theremunerationcommitteecomprisesthreenon-executivedirectorsandconsiderstheremunerationoftheGMD.Thecommitteemeetsatleast

onceayeartodiscusstheGMD’scurrentyearperformanceagainsttheperformanceobjectivesapprovedbytheboardearlierintheyear.Once

theGMD’sperformanceisevaluatedandcompensationdetermined,thecommitteeconsiderstheGroup’sproposedbonusandincrementforthe

yearandmakesthenecessaryrecommendationstotheboardconcerningtheappropriatecompensationfortheCompany’sofficers.

Detailsontheauditcommitteeappearintheauditcommitteereportwhichappearsonpages68to71ofthisannualreport.

SHAREHOLDERS

Dialogue between the Company and Investors

TheCompanycontinuestomeetwithresearchanalysts,fundmanagers,

membersofthemedia/businesseditorsandinstitutionalinvestors,from

boththelocalandinternationalinvestmentcommunity.Lastyear,senior

managementalsowentonan internationalnon-deal roadshowand

participated in investorconferencestoprovideupdatesonthe latest

developmentswithintheGroup.

MMC’s objective is to give investors the best information possible

so that they can accurately apply it to evaluate the Company.

Relationships with the investment community are built on integrity,

qualitativeandtimelyinformationandmanagement’sabilitytoperform

anddelivereffectively.Communicationisatwo-wayprocess-weseek

to understand the attitudes of investors towards theCompany, and

relaythisfeedbacktomanagementforanyfollowupaction.

The Company’s website continues to be an integral source of

informationforinvestorsandisupdatedconstantlytoincorporatethe

latestnewsaboutMMC.

The Annual General Meeting

TheCompanyvaluesfeedbackfromitsshareholdersandencourages

them to actively participate in discussions and deliberations. AGMs

areheldeachyeartoconsidertheordinarybusinessoftheCompany

andanyotherspecialbusiness.Eachitemofspecialbusinessincluded

in thenotice isaccompaniedbyanexplanationof theeffectsof the

proposed resolution.During the annual and other generalmeetings,

shareholdershavedirectaccesstoboardmemberswhoareonhand

to answer their questions, either on specific resolutions or on the

Companygenerally.TheChairmanensuresthatareasonabletime is

providedtotheshareholdersfordiscussionatthemeetingbeforeeach

resolutionisproposed.

ACCOUNTABILITY AND AUDIT

Financial Reporting

The board subscribes to the philosophy of transparent, fair, reliable

and easily comprehensible reporting to stakeholders. The board

acknowledgesandacceptsfullresponsibilityforpreparingabalanced

and comprehensive assessment of the Group’s operations and

prospects each time it releases its quarterly and annual financial

statementstoshareholders.

Inpreparinglastyear’sfinancialstatements,thedirectorshave:

• used appropriate accounting policies and applied them

consistently;

• ensured that all the requirements of Malaysian Accounting

Standards Board’s approved accounting standards have been

followed;and

• preparedfinancial statementsonagoingconcernbasisas the

directorshaveareasonableexpectation,havingmadeenquiries,

that the Company has adequate resources to continue in

operationalexistencefortheforeseeablefuture.

The directors are also responsible for taking such steps as are

reasonablyopentothemtosafeguardtheassetsoftheCompanyto

preventanddetectfraudandotherirregularities.

Internal Control

Theboard is responsible for reviewingtheadequacyand integrityof

the Company’s internal control system. The board ensures that the

Companyhasappropriatepoliciesandprocedures,ariskmanagement

system,financialauthoritylimits,aswellasinternalaudittosafeguard

the shareholders’ investment and theCompany’s assets. Theboard

reviewstheeffectivenessofthesystemofinternalcontrolsthroughthe

auditcommitteewhichoverseestheworkoftheinternalauditdivision

and commentsmade by the external auditors in theirmanagement

letterandinternalauditreports.

Relationship with Auditors

The board, on its own and through the audit committee, has a

formal and transparent arrangement for maintaining an appropriate

relationshipwiththeCompany’sauditors.Theauditcommitteeseeks

regularassuranceontheeffectivenessof the internalcontrolsystem

throughindependentappraisalbytheauditors.Liaisonandunrestricted

communicationexistsbetweentheauditcommitteeandtheexternal

auditors.

BOARD COMMITTEES

Theboardhasfourstandingcommittees,eachoperatingwithindefined

termsofreference,toassisttheboardindischargingitsresponsibilities.

Theminutesofproceedingsofeachcommitteemeetingarecirculatedto

allboardmemberssothatalldirectorsareawareofthedeliberationsand

resolutionsmade.Whereapplicable,committeesreporttheirdecisionsto

theboardandpresenttheirrecommendationsfortheboard’sapproval.

Theexecutivecommitteecomprisestwonon-executivesdirectorsand

theGMD. The committee is responsible for strategic andoperational

plans which fall within their level of authority. This will allowmatters

thatfallwithinthecommittee’stermsofreferencetobedeliberatedand

decidedbythecommittee,thusreducingtheboard’sagenda.

Thenomination committee comprises three non-executivedirectors,

twoofwhomareindependent.Thecommitteemakesrecommendations

to the board on new board appointments, taking into account the

size,balanceandstructureoftheboard.Italsoreviewsthesizeand

compositionoftheboardtoensurethatitconsistsofthebestmixof

talentsmosteffectivetorunthecompany.

6766

Group Risk Management Framework

TheGroup’sriskmanagementframeworkisconstantlymonitoredand

reviewed to ensure risksandcontrols areupdated to reflect current

situations and ensure relevance at any given time.Management, in

keepingwithgoodgovernance,takesaseriousviewofensuringthat

theGroupisalwaysalerttoanysituationthatmightaffectitsassets,

incomeandultimately,profits.

Enterprise Risk Management Framework

TheGroup’s riskaremonitoredandupdatedconstantlyby their risk

owners via the Enterprise Risk Management (“ERM”) risk register.

ThedatacontainedintheERMriskregisterwillthenbecheckedand

reviewedby themanagementof individual subsidiaries, theultimate

riskowners.

TheRiskManagementUnitextracts fromtheERMriskregister risks

thatarerated‘high’,reviewsthecorrectivemeasuresandifrequired,

discusses them with the risk owners. The risks are then compiled

into theGroup riskmanagement quarterly reports and submitted to

theEnterpriseRiskManagementCommittee (ERMC) chairedby the

Director of Finance. The report will then be reviewed by theGroup

ManagingDirectorandtabledto theEXCOandsubsequently to the

boardofdirectorsateachquarterlymeetingsothattheboardisaware

ofmajor riskswithin theGroupand toensurepromptactionby the

managementtomitigatetherisks.

Business Continuity Plan

MMC’s Business Continuity Plan (“BCP”) is a pro-active crisis

managementprogrammethataddresseshowtheorganizationshould

react to unexpected business interruptions. It identifies the critical

elementswhicharerequiredsothatessentialbusinessfunctionsare

abletocontinueintheeventofunforeseenordifficultcircumstances.

MMCiscommittedtoemployappropriatestrategiesinanticipatingand

controlling crisis situations and to establish an emergency response

team,whowouldexecutetheplantoensureminimaldisruption.

TheCompanyalsohasa tested ITDisasterRecoveryPlandirecting

the computer system recovery process. The plan focuses on the

requirements necessary to restore the processing of the critical

business system applications at an alternate facility for an interim

periodfollowingthelossofcomputingservices.

Other Key Elements of Internal Control

The other key elements of the Group’s internal control system are

describedbelow:

• Clearlydefineddelegationofresponsibilitiestoboardcommittees

andtothemanagementofheadofficeandcompanieswithinthe

Group,includingfinancialauthoritylimits.

• Where appropriate, certain companies have ISO 9001:2000 and

ISO14001accreditationsforoperationalprocesses.

• Reviewofproposalsformaterialcapitalandinvestmentacquisitions

by the executive committee before review and approval by the

board.

• A budgeting process where companies prepare budgets every

year,forapprovalatcompanylevel,beforebeingreviewedbythe

executivecommitteeand/ortheboard.

• Quarterlyperformancereports,benchmarkedagainstbudgetsand

objectives,areprovidedtodirectorsanddiscussedattheexecutive

committeeand/orboardmeetings.

• Monitoringofperformance,includingdiscussionofanysignificant

issuesatregularmeetingswithheadsofbusinessunits.

• BoardrepresentationincompaniesinwhichMMChasamaterial

interest,tofacilitatetheperformancereviewofthesecompanies.

• Periodic reviews by the internal audit consultant, providing an

independent assurance on the effectiveness of the Group’s

systemoninternalcontrolandadvisingmanagementonareasof

improvement.

• The audit committee, on behalf of the board, considers the

effectiveness of the operation of the Group’s internal control

procedures.

• TheriskmanagementframeworkoftheGroupisinplacetogether

withtheERMriskregistertoassistintheGroup’sriskmanagement

process.

• TheimplementationofanEnterpriseResourcePlanningSystemfor

theGrouphasalsoincreasedthequalityofcontrolsoveritsgeneral

operations.Thesystemwillalsohelptoensurethatworkprocesses

aremoreefficientandtimely.

The board believes that the development of the system of internal

controlsisanongoingprocessandcontinuestotakestepstoimprove

theinternalcontrolsystem.Anumberof internalcontrolweaknesses

identifiedduringtheperiodhavebeenaddressed.

INTERNALCONTROLSTATEMENT

The board of directors recognizes the importance

of sound internal control and risk management

practices and its responsibility for the Group’s

system of internal controls and risk management,

and for reviewing the adequacy and integrity of

those systems.

6968

Meetings

Meetingsare scheduledat least four timesayear, andarenormally

attended by the GroupManaging Director, the Director of Finance,

InternalAuditManageranduponinvitation,theexternalauditorsand

internal audit consultants. Other board members may also attend

meetingsupontheinvitationoftheauditcommittee.Lastyear,theaudit

committeemettwicewiththeexternalauditorswithoutthepresenceof

themanagement.Theauditors,bothinternalauditconsultant(Ernst&

Young)andexternalauditors(PwC),mayrequestadditionalmeetingsif

andwhenconsiderednecessary.

The Company Secretary acts as secretary to the audit committee.

Minutesofeachmeetingaredistributedtoeachboardmemberand

theChairmanof theaudit committee reportskeymattersdiscussed

ateachmeetingtotheboard.Theauditcommitteehadfivemeetings

duringthelastfinancialyearandtheexternalauditorsattendedfourof

thesemeetings.Theinternalauditconsultant,Ernst&Young,tabledto

theauditcommitteereportsonoperationalauditswhichwerecarried

outduringtheyear.

Authority

Theauditcommitteehasthefollowingauthorityasempoweredbythe

board:

• Theauthoritytoinvestigateanymatterswithinitstermsofreference;

• Theauthoritytoutiliseresourceswhicharerequiredtoperformits

duties;

• Full, free and unrestricted access to any information, records,

propertiesandpersonnelofanycompanywithintheGroup;

• Direct communication channels with the external and internal

auditors;

• Theabilitytoobtainindependent,professionaloranyotheradvice;

and

• The ability to convene meetings with the external and internal

auditors or both, without the presence of other directors and

employeesofthecompany,wheneverdeemednecessary.

Duties and Terms of Reference

1. Consider the appointment of the external auditor, the audit fee

andanyquestionsofresignationordismissal,andinquireintothe

staffingandcompetenceoftheexternalauditorsinperformingtheir

work.

2. Discussthenatureandscopeoftheauditingeneraltermsandany

significantproblemsthatmaybeforeseenwiththeexternalauditors

before the audit commences and ensure that adequate tests to

verifytheaccountsandproceduresoftheGroupasperformed.

3. Discuss the impact of any proposed changes in accounting

principlesonfuturefinancialstatements.

4. Reviewtheresultsoftheoperationalauditreportsandmonitorthe

implementationofanyrecommendationsmadetherein.

5. Reviewthequarterlyresultsandannualfinancialstatementsbefore

submissiontotheboard,focusingparticularlyon:

- anychangesinaccountingpoliciesandpractices;

- significantadjustmentsresultingfromtheaudit;

- thegoingconcernassumptions;

- compliancewithaccountingstandards;and

- compliancewithregulatoryrequirements.

6. Discuss problems and reservations arising from the interim and

finalaudits,andanyothermatterstheexternalauditorsmaywish

todiscuss(intheabsenceofmanagementwherenecessary).

7. Reviewtheexternalauditor’smanagementletterandmanagement’s

response.

8. Reviewtheadequacyofthescope,functionsandresourcesofthe

internalaudit function,andthat ithas thenecessaryauthority to

carryoutitswork.

9. Review the internal audit plan, consider the major findings of

internal audit investigations and management’s response and

ensureco-ordinationbetweentheinternalandexternalauditors.

The audit committee comprises four non-executive directors, three of whom are independent, and is chaired by Dato’ Abdullah Mohd Yusof, an independent director.

AUDITCOMMITTEEREPORT

Audit Committee serves as a bridge in

the communication network between

internal and external auditors and the

Board of Directors. The existence of an

Audit Committee would provide a critical

oversight of the company’s financial

reporting and auditing processes.

7170

Internal Audit Activities

AsummaryoftheGroup’sinternalauditfunctionduringthelastfinancial

yearisasfollows:

• ExaminethecontrolsoverallsignificantGroupoperationsandsystems

to ascertain whether they provide reasonable assurance that the

Group’sobjectivesandgoalswillbemetefficientlyandeconomically;

• Preparetheannualauditplanfordeliberationbytheauditcommittee;

• Act on suggestions made by external auditors and/or senior

managementonconcernsoveroperationsorcontrol;

• Carry out operational audits and make recommendations for

improvement,whereweaknessesexist;and

• Reportonwhethercorrectiveactionhasbeentakenandisachieving

thedesiredresults.

Summary of Activities

Asummaryofthemainactivitiesperformedbytheauditcommitteelast

yearisasfollows:

• Reviewedandapprovedtheproposaltorenewtheengagementofthe

internalauditconsultants(Ernst&Young)fortheperiod2010to2012.

• Reviewedandapprovedtheinternalauditplanfor2011.Initsreview,

theauditcommitteereviewedthescopeandcoverageoftheactivities

of the respectivebusinessunitsof theGroupandErnst&Young’s

basisofassessmentandriskratingoftheproposedauditareas.

• Noted the minutes of audit committee meetings of Malakoff

CorporationBerhad,GasMalaysiaSdnBhd,AliranIhsanResources

Berhad,PelabuhanTanjungPelepasSdnBhd,SenaiAirportTerminal

ServicesandJohorPortBerhad.

• Reviewed the audit strategy and scope for statutory audits of the

Groupaccountswiththeexternalauditors.

• Reviewedtheunauditedquarterlyfinancialstatementsandtheaudited

accounts of the Company and the Group and recommended the

sametotheboard.

• Reviewedthefindingsoftheexternalauditorsandfolloweduponthe

recommendations.

• Reviewed the performance / operations audit of subsidiaries and

madeappropriaterecommendations.

• Reviewed and appraised the adequacy and effectiveness of

managementresponseinresolvingtheauditissuesreported.

• Reviewedtheadequacyofthescope,functions,competencesand

resourcesoftheinternalauditfunctionsandthatithasthenecessary

authoritytocarryoutitswork.

• CarriedouttheperformanceappraisaloftheInternalAuditManager.

• Helddiscussionswiththeexternalauditorswithoutthepresenceof

managementtoensureanadequatelevelofcooperationbetweenthe

externalauditorsandmanagement.

• Reviewedandapprovedtheprocessesandinvestigationsundertaken

byErnst&Youngandtheinternalauditor,theauditfindingsandrisk

analysis on each audit assignment and emphasised on follow-up

auditstoensurethatappropriatecorrectiveactionistakenandaudit

recommendationsareimplemented.

• Reviewedrelatedpartytransactionstoensurethattheyarefairand

reasonableto,andarenottothedetrimentof,minorityshareholders.

• ReviewedthedraftAnnualReportfor2010inrespectofthefollowing:

– AuditCommitteeReport;

– CorporateGovernanceStatement;and

– StatementonInternalControl.

• Considered and recommended to theBoardofDirectors thedraft

reportsandstatutoryfinancialstatementsforthefinancialyearended

31December2010.

• Reviewed and recommended actions on specific internal audit

investigations.

Employees’ Share Option Scheme

Thereisnoemployees’shareoptionschemefortheauditcommitteeto

reviewandverify.

10.Review any appraisal or assessment of the performance of

membersoftheinternalauditfunction.

11.Approveanyappointmentorterminationofseniorstaffmembersof

theinternalauditfunctions.

12. Takecognisanceofresignationsofinternalauditstaffmembersand

provide the resigningstaffmemberanopportunity tosubmithis

reasonsforresigning.

13.Keepunderreviewtheeffectivenessofinternalcontrolsystemsand

inparticular reviewtheexternalauditor’smanagement letterand

management’sresponse.

14.Review any related party transactions thatmay arise within the

Group.

15.Where theauditcommittee isof theviewthatamatter reported

byittotheBoardofDirectorshasnotbeensatisfactorilyresolved

resultinginabreachofthelistingrequirements,theauditcommittee

mustpromptlyreportsuchmattertoBursaMalaysia.

16.Reviewauditreportsofsubsidiariesaftertheyhavebeenreviewed

bytheauditcommitteeorBoardofDirectorsofthosesubsidiaries.

17.Reviewarrangementsestablishedbymanagementforcompliance

withany regulatoryorotherexternal reporting requirements,by-

lawsandregulationsrelatedtotheGroup’soperations.

18.Disclosedetailsoftheactivitiesoftheauditcommittee,thenumber

of audit meetings held in a year, details of attendance of each

director in respect of meetings and details of relevant training

attendedbyeachdirector.

19.Carryoutsuchotherassignmentsasdefinedbytheboard.

Internal Audit Function

Theinternalaudit function iscarriedoutbyErnst&Young,towhom

the functionhasbeenoutsourcedsinceFebruary2004.The internal

auditdepartmentoverseestheoverallGroupinternalauditfunctionand

coordinatescommunicationbetweentheGroupandErnst&Young,and

istaskedtoensurethattheconsultantcarriesoutitsdutiesdiligentlyin

accordancewiththeagreedtermsbetweentheparties.

Thisdepartmentalsoassists theboard inmonitoringandmanaging

risksand internalcontrolsandprovides independentassessment for

adequate,efficientandeffectiveinternalcontrolsystemsinanticipating

potentialriskexposuresoverkeybusinessprocesses.

The audit committee approves the internal audit plan submitted by

Ernst&Youngpriortothecommencementofanewfinancialyear.The

scopeoftheinternalauditcoverstheauditsofallbusinessunitsand

operations,includingheadofficefunctions.TheGrouppracticesarisk-

basedapproachintheimplementationandmonitoringofcontrols.The

monitoringprocessalsoformsthebasisforcontinuallyimprovingthe

riskmanagementculturewithintheGroup,whichassistsinachieving

theGroup’soverallgoals.

Throughout the last financial year, audit assignments and follow-

up reviewswerecarriedoutonunitsofoperationsandsubsidiaries,

in accordance with the annual audit plan or as special audits. The

resultingreportsoftheauditsundertakenwereforwardedtotheparties

concernedfortheirattention.

Themanagementofeachauditedunitisresponsibleforensuringthat

correctiveactionistakenonreportedweaknesseswithintherequired

timeframe. The same management is also responsible for ensuring

astatus reportofactionplans takenonauditfindings issent to the

internal auditor for review and subsequent presentation to the audit

committee.

Forthefinancialyear2010,thetotalcostoftheinternalauditfunction

wasRM1,024,841.

AUDITCOMMITTEEREPORT(CONTINUED)

7372

Monitoring and Reporting Process

Regularmonitoringandreportingisessentialinmanagingrisksasfewrisksremainstatic.AnoverviewoftheGroup’smonitoringandreporting

processisprovidedinthediagrambelow:

Board of Directors • Reviewandapprovequarterlyreports

EXCO Committee • ReviewandapprovequarterlyreportstotheBoardofDirectors

Group Managing Director • PerformquarterlycomplianceandassessmentintheERMriskregisterandreviewassessmentsdonein

theGroup

• PresentriskmanagementreporttotheBoardquarterly

Director of Finance • Reviewforexceptions:non-compliancewithcontrols,changesinapplicabilityofrisksandcontrols,and

delaysintheimplementationofactionplansfortheGroup

Enterprise Risk

Management Committee

• Review,assessandensurethatthereisadequateframeworkforriskidentification,riskmeasurementand

riskmonitoringandtheextenttowhichthesesubsidiariesareoperatingeffectively

• Ensurethattheriskpoliciesandproceduresofsubsidiariesarealignedandintegratedtothebusiness

strategiesandplans

• ReviewthedevelopmentoftheEnterpriseRiskManagementpoliciestoensurethatthekeybusinessrisks

atsubsidiariesareeffectivelyaddressedbythemanagement

• Reviewtheriskassessmentsandimplementationofactionplanseffectively

• Ensurethatinfrastructure,resourcesand/orsystemsareinplaceforEnterpriseRiskManagement

• Report to theBoardofDirectorsofMMCCorporationBerhadonthekeyrisksof theGroupandthe

subsidiariesandtherespectivemanagementactionplanstomitigatetheserisks

Business Unit Heads • PerformmonthlycomplianceandassessmentintheERMriskregisterandreviewassessmentsdonein

thebusinessunits

• Reviewforexceptions:non-compliancewithcontrols,changesinapplicabilityofrisksandcontrols,and

delaysintheimplementationofactionplansforthebusinessunit

• Submitriskmanagementreportforthebusinessunittothecorporateofficequarterly

Department Heads • PerformmonthlycomplianceandassessmentintheERMriskregister

• Reviewforexceptions:non-compliancewithcontrolschangesinapplicabilityofrisksandcontrols,and

delaysintheimplementationofactionplansforthedepartment

Managers / Executives • PerformmonthlycomplianceandassessmentintheERMriskregisterandreviewprimaryandsecondary

risks

RISKMANAGEMENTREPORT

Group Risk Management Policy

TheGroup’spolicy is toadoptacommon riskmanagement frameworkwhichcreates

a consistent consideration for risk and reward in day-to-day planning, execution and

monitoringofthestrategyandachievementofcorporategoals.

Risk Identification Process and Analysis

TheGroupdefines riskasanyeventwhichmay impactupon itsobjectives, including

economic, reputationandcomplianceobjectives. It ismeasured in termsof likelihood

andconsequences.Businessrisksariseasmuchfromthelikelihoodoflossopportunities

asitdoesfromuncertaintiesandhazards.Ourpolicyistoidentify,evaluateandrespond

appropriatelytorisksidentifiedsoastoprotecttheGroupfromloss,uncertaintyandlost

opportunity.

High

LIKE

LIH

OO

D

IMPACTHighLow

LOW HIGH

INSIGNIFICANT MEDIUM

Board of DirectorsOversightresponsibilitiesoverallrisks

Reporting Structure

Directors (Executive)ResponsibleformanagementofstrategicrisksforMMCwithoversightresponsibilitiesovertherisks

inMMCandkeyrisksinallbusinessunits

Business UnitResponsibleformanagementofstrategicrisksforMMCwithoversightresponsibilitiesovertherisks

inMMCandkeyrisksinallbusinessunits

Corporate Office

Business Unit HeadsResponsibleformanagementofstrategicrisksforthebusinessunitwithoversightresponsibilitiesoveroperationalrisks

Department/Division HeadsResponsibleformanagementofselectedstrategicrisksforthebusinessunitand

relevantoperationalrisks

Managers/ ExecutivesResponsibleformanagementofrelevant

operationalrisks

Department/Division Heads Managers/ Executives

Risk management is an integral part of the Group’s management process. The process for managing risks is therefore embedded into the

operational processes of the Group. In pursuing our vision, we recognise that we will face risks associated with our business strategy,

operations and our people, assets and reputation. The effective management of the entire spectrum of these risks is the purpose of the

Group risk management policy.

7574

Material Contracts

Saveasdisclosedbelow,therewerenomaterialcontractsbetweentheCompanyanditssubsidiariesinvolvingdirectors’andmajorshareholders’

interesteitherstillsubsistingattheendofthefinancialyearor,ifnotthensubsisting,enteredintosincetheendofthepreviousfinancialyear:

(i) Operations and Maintenance Agreement between Rangkai Positif Sdn Bhd (“RP”) and Tanjung Bin Power Sdn Bhd (“Tanjung Bin”) dated 25 July 2003 supplemented by supplemental agreements dated 4 August 2003 and 17 October 2003 (“O&M Agreement”)

PursuanttotheO&MAgreement,RPistoprovideoperationandmaintenanceservices(“Services”)tothepowerplantownedbyTanjungBin

comprisingthree(3)coal-firedgeneratingunitswithatotalcapacityof2,100megawatts,locatedintheStateofJohor(“TanjungBinPowerPlant”)

whichgenerateselectricitytobesoldtoTenagaNasionalBerhadbasedonaconcessionperiodoftwentyfive(25)years(“Term”).Fortheperiod

from1January2010to31December2010,theServicesrenderedbyRPfortheTanjungBinPowerPlanthadamountedtoRM277,258,000.

TanjungBinisa90%-ownedsubsidiaryofMalakoffCorporationBerhad(“MCB”),whichisinturna51%-ownedsubsidiaryofMMC.

(ii) Subcontract of Operations and Maintenance Agreement between Teknik Janakuasa Sdn Bhd (“TJSB”) and RP dated 12 October 2004

(“the Subcontract O&M Agreement”)

Pursuant totheSubcontractO&MAgreement,RPhassubcontractedapartof itsscopeofworksunder theO&MAgreement (“Subcontract

Services”)toTJSB.Fortheperiodfrom1January2010to31December2010,theSubcontractServicesrenderedbyTJSBtoRPfortheTanjung

BinPowerPlanthadamountedtoRM128,188,000.

TJSBisawholly-ownedsubsidiaryofMCB.

TanSriDato’SeriSyedMokhtarShahSyedNor(“TSSM”),whoisamajorshareholderofMMC,hadacquired100%equityinterestinRPfrom

MotivasiAsiaSdnBhdon20September2007.TSSMsubsequentlyon11October2007enteredintoaSaleandPurchaseAgreementwithDRB-

HICOMBerhad(“DRB-HICOM”)tosellhis100%beneficialequityinterestinRPtoDRB-HICOM.TSSMalsoholds90%equityinterestinEtika

StrategiSdnBhdwhichisamajorshareholderofDRB-HICOM.

Contracts Relating to Loan

TherewerenocontractsrelatingtoloansbytheCompanyinvolvingdirectorsandmajorshareholders.

Revaluation of Landed Property

TheCompanydoesnothavearevaluationpolicyonlandedproperties.

Convictions for Offences

Noneofthedirectorshasbeenconvictedforoffenceswithinthepast10yearsotherthantrafficoffences,ifany.

Utilisation of Proceeds

NoproceedswereraisedbytheCompanyfromanycorporateproposal.

Share Buybacks

Duringthefinancialyear,therewerenosharebuybacksbytheCompany.

Options, Warrants of Convertible Securities

Duringthefinancialyear,nooptions,warrantsorconvertiblesecuritieswereissuedbytheCompany.

American Depository Receipt (“ADR”) or Global Depository Receipt (“GDR”) Programme

Duringthefinancialyear,theCompanydidnotsponsoranyADRorGDRprogramme.

Impositions of Material Sanctions/Penalties

TherewerenomaterialsanctionsorpenaltiesimposedontheCompanyanditssubsidiaries,directorsormanagementbytherelevantregulatory

bodies.

Non-audit fees

Apartfromtheannualauditfeespayabletotheexternalauditors,theCompanydidnotincuranynon-auditfeesforthefinancialyear.

Profit Estimate, Forecast or Projection

TheCompanydidnotmakeanyreleaseontheprofitestimate,forecastorprojectionforthefinancialyear.

Profit Guarantee

Duringtheyear,therewasnoprofitguaranteegivenbytheCompany.

ADDITIONALCOMPLIANCEINFORMATION

77

FINANCIALSTATEMENTSDirectors’Report 78

StatementbyDirectors 82

StatutoryDeclaration 82

IndependentAuditors’Report 83

StatementofComprehensiveIncome 85

ConsolidatedStatementofFinancialPosition 87

CompanyStatementofFinancialPosition 89

ConsolidatedStatementofChangesInEquity 90

CompanyStatementofChangesInEquity 94

StatementofCashFlows 95

SummaryofSignificantAccountingPolicies 99

NotestoTheFinancialStatements 128

7978

TheDirectorshavepleasureinpresentingtheirreporttogetherwiththeauditedfinancialstatementsoftheGroupandCompanyforthefinancial

yearended31December2010.

PRINCIPAL ACTIVITIES

TheprincipalactivitiesoftheCompanyareinvestmentholding,construction,miningandmineralexploration.

TheprincipalactivitiesofthesubsidiariesareshowninNote47tothefinancialstatements.

TherearenosignificantchangesinthenatureoftheactivitiesoftheGroupandCompanyduringthefinancialyear.

DIRECTORS’REPORTFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010

FINANCIAL RESULTS Group Company

RM’000 RM’000

Netprofitforthefinancialyear 802,412 414,998

Attributableto:

OwnersoftheParent 344,940 414,998

Non-controllinginterest 457,472 -

802,412 414,998

RESERVES AND PROVISIONS

Allmaterialtransferstoorfromreservesandprovisionsduringthefinancialyearareshowninthefinancialstatements.

DIVIDENDS

ThedividendspaidordeclaredbytheCompanysince31December2009areasfollows:

TheDirectorsrecommendthepaymentofafinalsingle-tierdividendof3.5senpershareonthe3,045,058,552ordinaryshares,amountingto

RM106,577,049whichissubjecttotheapprovalofmembersattheforthcomingAnnualGeneralMeetingoftheCompany,willbepaidon15June

2011toshareholdersregisteredontheCompany’sRegisterofMembersatthecloseofbusinesson31May2011.

RM’000

Inrespectofthefinancialyearended31December2009,asshown

in the Directors’ report of that financial year, a final single-tier

dividendof3.0senperordinaryshare,werepaidon27May2010 91,352

DIRECTORS

TheDirectorswhohaveheldofficeduringtheperiodsincethedateofthelastreportareasfollows:

Dato’WiraSyedAbdulJabbarbinSyedHassan,Chairman

DatukHjHasniHarun

TanSriDato’Ir.(Dr.)WanAbdulRahmanbinHajiWanYaacob

Dato’AbdullahbinMohdYusof

DatukMohdSidikShaikOsman

EncikOoiTeikHuat

EncikAbdulHamidShMohamed

EncikFeizalAli(resignedeffective3May2010)

EncikAhmadJauharibinYahya(resignedeffective15December2010)

InaccordancewithArticle78oftheCompany’sArticlesofAssociation,EncikOoiTeikHuatandDatukHjHasniHarunwillretirebyrotationand,

beingeligible,offerthemselvesforre-election.

Dato’WiraSyedAbdulJabbarbinSyedHassanandDato’AbdullahbinMohdYusofwillretirepursuanttoSection129(2)oftheCompaniesAct,

1965attheforthcomingAnnualGeneralMeetingandthataseparateresolutionwillbeproposedfortheirre-appointmentasDirectorsattheAnnual

GeneralMeetingundertheprovisionofSection129(6)ofthesaidAct,toholdofficeuntilthenextAnnualGeneralMeetingoftheCompany.

DIRECTORS’ BENEFITS

Duringandattheendofthefinancialyear,noarrangementssubsistedtowhichtheCompanyisaparty,beingarrangementswiththeobjector

objectsofenablingDirectorsoftheCompanytoacquirebenefitsbymeansoftheacquisitionofsharesin,ordebenturesof,theCompanyorany

otherbodycorporate.

Sincetheendofthepreviousfinancialyear,noDirectoroftheCompanyhasreceivedorbecomeentitledtoreceiveabenefit(otherthanbenefits

includedintheaggregateamountofemolumentsandbenefit-in-kindreceivedordueandreceivablebyDirectorsorthefixedsalaryofafulltime

employeeoftheCompanyanditsrelatedcorporationsasdisclosedinNote9(ii)tothefinancialstatements)byreasonofacontractmadebythe

CompanyorarelatedcorporationwiththeDirectororwithafirmofwhichtheDirectorisamember,orwithacompanyinwhichtheDirectorhas

asubstantialfinancialinterest.

8180

DIRECTORS’ INTERESTS

AccordingtotheregisterofDirectors’shareholdings,noneoftheDirectorsinofficeattheendofthefinancialyearheldanyinterestinsharesin,or

debenturesof,theCompanyanditsrelatedcorporationsduringthefinancialyear.

STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS

Beforethefinancialstatementsweremadeout,theDirectorstookreasonablesteps:

(a) toascertainthatproperactionhadbeentakeninrelationtothewritingoffofimpairedreceivablesandthemakingofallowanceforimpaired

receivablesandsatisfiedthemselvesthatallknownimpairedreceivableshadbeenwrittenoffandthatadequateallowancehadbeenmadefor

impairedreceivables;and

(b) toensurethatanycurrentassets,otherthandebts,whichwereunlikelytorealiseintheordinarycourseofbusiness,theirvaluesasshownin

theaccountingrecordsoftheGroupandCompanyhadbeenwrittendowntoanamountwhichtheymightbeexpectedsotorealise.

Atthedateofthisreport,theDirectorsarenotawareofanycircumstances:

(a) whichwouldrendertheamountswrittenoffforimpairedreceivablesortheamountoftheallowanceforimpairedreceivablesinthefinancial

statementsoftheGroupandCompanyinadequatetoanysubstantialextent;or

(b) whichwouldrenderthevaluesattributedtocurrentassetsinthefinancialstatementsoftheGroupandCompanymisleading;or

(c) whichhavearisenwhichrenderadherencetotheexistingmethodofvaluationofassetsorliabilitiesoftheGroupandCompanymisleadingor

inappropriate.

Nocontingentorotherliabilityhasbecomeenforceableorislikelytobecomeenforceablewithintheperiodoftwelvemonthsaftertheendofthe

financialyearwhich,intheopinionoftheDirectors,willormayaffecttheabilityoftheGrouporCompanytomeettheirobligationswhentheyfall

due.

Atthedateofthisreport,theredoesnotexist:

(a) anychargeontheassetsoftheGrouporCompanywhichhasarisensincetheendofthefinancialyearwhichsecurestheliabilityofanyother

person;or

(b) anycontingentliabilityoftheGrouporCompanywhichhasarisensincetheendofthefinancialyear.

DIRECTORS’REPORTFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010 (CONTINUED)

Atthedateofthisreport,theDirectorsarenotawareofanycircumstancesnototherwisedealtwithinthisreportorthefinancialstatementswhich

wouldrenderanyamountstatedinthefinancialstatementsmisleading.

IntheopinionoftheDirectors:

(a) theresultsof theGroup’sandCompany’soperationsduringthefinancialyearwerenotsubstantiallyaffectedbyany item,transactionor

eventofamaterialandunusualnatureotherthanimpairmentlossesofproperty,plantandequipmendandintangibleassetinanassociateas

disclosedinNote9(i)tothefinancialstatements;

(b) therehasnotarisenintheintervalbetweentheendofthefinancialyearandthedateofthisreportanyitem,transactionoreventofamaterial

andunusualnaturelikelytoaffectsubstantiallytheresultsoftheoperationsoftheGrouporCompanyforthefinancialyearinwhichthisreport

ismade.

ULTIMATE HOLDING COMPANY

TheDirectorsregardIndraCitaSdnBhd,acompanyincorporatedinMalaysiaastheultimateholdingcompany.

AUDITORS

Theauditors,PricewaterhouseCoopers,haveexpressedtheirwillingnesstocontinueinoffice.

SignedonbehalfoftheBoardofDirectorsinaccordancewiththeirresolutiondated21March2011.

DATO’ WIRA SYED ABDUL JABBAR BIN SYED HASSAN

CHAIRMAN

KualaLumpur

DATUK HJ HASNI HARUN

GROUPMANAGINGDIRECTOR

8382

INDEPENDENTAUDITORS’REPORTTO THE MEMBERS OF MMC CORPORATION BERHAD (Incorporated in Malaysia) (Company No. 30245 H)

REPORT ON THE FINANCIAL STATEMENTS

WehaveauditedthefinancialstatementsofMMCCorporationBerhadonpages85to210whichcomprisethestatementsoffinancialpositionas

at31December2010oftheGroupandoftheCompany,andthestatementsofcomprehensiveincome,changesinequityandcashflowsofthe

GroupandoftheCompanyforthefinancialyearthenended,andasummaryofsignificantaccountingpoliciesandotherexplanatorynotes,as

setoutonNotes1to51.

Directors’ Responsibility for the Financial Statements

TheDirectorsoftheCompanyareresponsibleforthepreparationofthefinancialstatementsthatgiveatrueandfairviewinaccordancewiththe

FinancialReportingStandardsinMalaysia,theMASBApprovedAccountingStandardsinMalaysiaforEntitiesOtherthanPrivateEntitiesandthe

CompaniesAct,1965,andforsuchinternalcontrolastheDirectorsdeterminearenecessarytoenablethepreparationoffinancialstatementsthat

arefreefrommaterialmisstatement,whetherduetofraudorerror.

Auditors’ Responsibility

Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.Weconductedourauditinaccordancewithapproved

standardsonauditinginMalaysia.Thosestandardsrequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtain

reasonableassurancewhetherthefinancialstatementsarefreefrommaterialmisstatement.

Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresinthefinancialstatements.Theprocedures

selecteddependonourjudgement,includingtheassessmentofrisksofmaterialmisstatementofthefinancialstatements,whetherduetofraud

orerror.Inmakingthoseriskassessments,weconsiderinternalcontrolrelevanttotheentity’spreparationoffinancialstatementsthatgivea

trueandfairviewinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinion

ontheeffectivenessoftheentity’sinternalcontrol.Anauditalsoincludesevaluatingtheappropriatenessofaccountingpoliciesusedandthe

reasonablenessofaccountingestimatesmadebythedirectors,aswellasevaluatingtheoverallpresentationofthefinancialstatements.

Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.

Opinion

Inouropinion,thefinancialstatementshavebeenproperlydrawnupinaccordancewiththeFinancialReportingStandards,theMASBApproved

AccountingStandardsinMalaysiaforEntitiesOtherthanPrivateEntitiesandtheCompaniesAct,1965soastogiveatrueandfairviewofthe

financialpositionoftheGroupandoftheCompanyasof31December2010andoftheirfinancialperformanceandcashflowsforthefinancial

yearthenended.

STATEMENTBYDIRECTORSPURSUANT TO SECTION 169(15) OF THE COMPANIES ACT, 1965

We,Dato’WiraSyedAbdulJabbarbinSyedHassanandDatukHjHasniHarun,twooftheDirectorsofMMCCorporationBerhad,statethat,inthe

opinionoftheDirectors,thefinancialstatementssetoutonpages85to210aredrawnupsoastogiveatrueandfairviewofthestateofaffairsof

theGroupandCompanyasat31December2010andoftheresultsandcashflowsoftheGroupandCompanyforthefinancialyearendedonthat

dateinaccordancewiththeFinancialReportingStandards,theMASBApprovedAccountingStandardsinMalaysiaforEntitiesOtherthanPrivate

EntitiesandtheprovisionsoftheCompaniesAct,1965.

TheinformationsetoutinNote52onpage211tothefinancialstatementhavebeenpreparedinaccordancewiththeGuidanceonSpecialMatter

No.1,DeterminationofRealisedandUnrealisedProfitsorLossesintheContextofDisclosurePursuanttoBursaMalaysiaSecuritiesBerhadListing

Requirements,asissuedbytheMalaysianInstituteofAccountants.

SignedonbehalfoftheBoardofDirectorsinaccordancewiththeirresolutiondated21March2011.

DATO’ WIRA SYED ABDUL JABBAR BIN SYED HASSAN

CHAIRMAN

KualaLumpur

DATUK HJ HASNI HARUN

GROUPMANAGINGDIRECTOR

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

I,AnwarSyahrinbinAbdulAjib,theofficerprimarilyresponsibleforthefinancialmanagementofMMCCorporationBerhad,dosolemnlyand

sincerelydeclarethatthefinancialstatementssetoutonpages85to210andthesupplementarydisclosureonpage211are,inmyopinion,correct

andImakethissolemndeclarationconscientiouslybelievingthesametobetrue,andbyvirtueoftheprovisionsoftheStatutoryDeclarationsAct,

1960.

ANWAR SYAHRIN BIN ABDUL AJIB

SubscribedandsolemnlydeclaredbytheabovenamedAnwarSyahrinbinAbdulAjib

At:KualaLumpur

On:21March2011

Beforeme:

COMMISSIONERFOROATHS

8584

STATEMENTOFCOMPREHENSIVEINCOMEFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010

Thenotesonpages99to210areanintegralpartofthesefinancialstatements

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

InaccordancewiththerequirementsoftheCompaniesAct,1965inMalaysia,wealsoreportthefollowing:

(a) Inouropinion,theaccountingandotherrecordsandtheregistersrequiredbytheActtobekeptbytheCompanyanditssubsidiariesofwhich

wehaveactedasauditorshavebeenproperlykeptinaccordancewiththeprovisionsoftheAct.

(b) Wehaveconsideredthefinancialstatementsandtheauditors’reportsofallthesubsidiariesofwhichwehavenotactedasauditors,whichare

indicatedinNote47tothefinancialstatements.

(c) WearesatisfiedthatthefinancialstatementsofthesubsidiariesthathavebeenconsolidatedwiththeCompany’sfinancialstatementsarein

formandcontentappropriateandproperforthepurposesofthepreparationofthefinancialstatementsoftheGroupandwehavereceived

satisfactoryinformationandexplanationsrequiredbyusforthosepurposes.

(d) OurauditreportsonthefinancialstatementsofthesubsidiariesdidnotcontainanyqualificationoranyadversecommentmadeunderSection

174(3)oftheAct.

OTHER REPORTING RESPONSIBILITIES

ThesupplementaryinformationsetoutinNote52onpage211isdisclosedtomeettherequirementofBursaMalaysiaSecuritiesBerhadandisnot

partofthefinancialstatements.ThedirectorsareresponsibleforthepreparationofthesupplementaryinformationinaccordancewithGuidance

onSpecialMatterNo.1,DeterminationofRealisedandUnrealisedProfitsorLossesintheContextofDisclosurePursuanttoBursaMalaysia

SecuritiesBerhadListingRequirements,asissuedbytheMalaysianInstituteofAccountants(“MIAGuidance”)andthedirectiveofBursaMalaysia

SecuritiesBerhad.Inouropinion,thesupplementaryinformationisprepared,inallmaterialrespects,inaccordancewiththeMIAGuidanceand

thedirectiveofBursaMalaysiaSecuritiesBerhad.

OTHER MATTERS

ThisreportismadesolelytothemembersoftheCompany,asabody,inaccordancewithSection174oftheCompaniesAct,1965inMalaysiaand

fornootherpurpose.Wedonotassumeresponsibilitytoanyotherpersonforthecontentofthisreport.

KualaLumpur

21March2011

INDEPENDENTAUDITORS’REPORTTO THE MEMBERS OF MMC CORPORATION BERHAD (Incorporated in Malaysia) (Company No. 30245 H) (CONTINUED)

PRICEWATERHOUSECOOPERS

(No.AF:1146)

CharteredAccountants

YEE WAI YIN

(No.2081/08/12(J))

CharteredAccountant

Group Company

Note 2010

RM’000

2009

RM’000

(Restated)

2010

RM’000

2009

RM’000

Revenue 6 8,863,649 8,444,321 694,217 559,628

Costofsales 7 (5,756,735) (5,451,414) - (4,771)

Grossprofit 3,106,914 2,992,907 694,217 554,857

Otheroperatingincome

-itemsrelatingtoinvestments 225,354 280 39,546 -

-others 224,105 340,432 3,631 2,196

Administrativeexpenses 7 (686,455) (698,683) (75,760) (56,503)

Otheroperatingexpenses 7 (506,493) (444,821) (70,038) (2,643)

Financecosts 8 (1,455,336) (1,398,507) (161,359) (119,186)

Shareofresultsof:

-associates (119,264) (150,969) - -

-jointlycontrolledentities 66,923 40,987 - -

Profitbeforezakatandtaxation 9 855,748 681,626 430,237 378,721

Zakatexpense 10 (1,236) - (1,236) -

Taxexpense 11 (52,100) (58,362) (14,003) (30,435)

Netprofitforthefinancialyear 802,412 623,264 414,998 348,286

Othercomprehensiveincome:

Available-for-salefinancialassets

-fairvaluegains 24,131 51,706 - -

-disposals (196,698) - - -

Movementinassociate’scapitalreserve 14,615 4,162 - -

Currencytranslationdifferences (31,557) 668 - -

Disposalofasubsidiary (4,649) - - -

Othercomprehensiveincome

forthefinancialyear(netoftax) (194,158) 56,536 - -

Totalcomprehensiveincome

forthefinancialyear 608,254 679,800 414,998 348,286

8786

STATEMENTOFCOMPREHENSIVEINCOMEFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010 (CONTINUED)

Group Company

Note 2010

RM’000

2009

RM’000

(Restated)

2010

RM’000

2009

RM’000

Profitattributableto:

-OwnersoftheParent 344,940 233,614 414,998 348,286

-Non-controllinginterest 457,472 389,650 - -

802,412 623,264 414,998 348,286

Totalcomprehensiveincomeattributableto:

-OwnersoftheParent 155,187 290,150 414,998 348,286

-Non-controllinginterest 453,067 389,650 - -

608,254 679,800 414,998 348,286

Earningsperordinaryshareattributabletothe

equityholdersoftheCompany(sen):

-Basic 12 11.3 7.7

-Diluted 12 11.3 7.7

Dividendperordinaryshare(sen):

-Proposedfinal 13 3.5 3.0 3.5 3.0


CONSOLIDATEDSTATEMENTOFFINANCIALPOSITIONAS AT 31 DECEMBER 2010


Note 2010

RM’000

2009

RM’000

(Restated)

2008

RM’000

(Restated)

NON-CURRENT ASSETS

Property,plantandequipment 14 16,705,775 17,051,145 16,324,318

Prepaidleasepayments 19,238 19,638 18,731

Investmentproperties 15 30,778 31,319 32,492

Investmentsinassociates 17 1,163,040 1,615,285 1,970,415

Investmentsinjointlycontrolledentities 18 219,281 265,911 346,953

Otherinvestments 19 - - -

Available-for-salefinancialassets 20 8,412 - -

Propertydevelopmentexpenditure 21 1,917,196 1,940,028 40,648

Otherreceivables 23 4,214 6,792 8,244

Intangibleassets 24 7,979,958 8,375,604 8,415,862

Deferredexpenditure 25 - 17,533 -

Deferredtaxassets 26 670,503 542,011 417,315

28,718,395 29,865,266 27,574,978

CURRENT ASSETS

Inventories 27 585,289 638,416 674,426

Non-currentassetsheldforsale 28 103 541 -

Tradeandotherreceivables 29 2,227,814 1,813,263 2,217,978

Taxrecoverable 337,014 206,914 140,783

Amountduefromholdingcompany 30 5,518 7,518 13,780

Available-for-salefinancialassets 20 81,868 - -

Marketablesecurities 31 - 61,237 61,237

Deposits,bankandcashbalances 32 4,062,543 4,492,832 3,766,281

7,300,149 7,220,721 6,874,485

TOTAL ASSETS 36,018,544 37,085,987 34,449,463

8988

CONSOLIDATEDSTATEMENTOFFINANCIALPOSITIONAS AT 31 DECEMBER 2010 (CONTINUED)


Note 2010 2009 2008

RM’000 RM’000 RM’000

(Restated) (Restated)

EQUITY AND LIABILITIES

EQUITY ATTRIBUTABLE TO OWNERS OF PARENT

Sharecapital 33 304,506 304,506 304,506

Reserves 34 6,289,766 5,994,176 5,834,792

6,594,272 6,298,682 6,139,298

Non-controllinginterests 3,808,956 3,460,519 3,221,439

Totalequity 10,403,228 9,759,201 9,360,737

NON-CURRENT LIABILITIES

Redeemablepreferenceshares 35 136,467 134,563 128,774

Redeemableconvertiblesubordinatedloans 36 - 158,355 158,355

Redeemableconvertibleunsecuredloanstocks 37 - 36,930 38,419

Borrowings 38 15,974,676 18,359,545 17,202,997

Landleasereceivedinadvance 39 162,264 171,851 198,204

Provisionforretirementbenefits 40(c) 53,748 48,063 44,327

Deferredincome 41 99,439 56,739 -

Deferredtaxliabilities 26 3,511,746 3,537,840 3,106,555

Tradeandotherpayables 40 24,654 133,326 -

19,962,994 22,637,212 20,877,631

CURRENT LIABILITIES

Borrowings 38 3,991,739 2,559,153 2,278,454

Tradeandotherpayables 40 1,594,123 2,084,469 1,895,443

Taxation 40,409 45,952 37,198

Redeemableconvertibleunsecuredloanstocks 37 26,051 - -

5,652,322 4,689,574 4,211,095

TOTAL LIABILITIES 25,615,316 27,326,786 25,088,726

TOTAL EQUITY AND LIABILITIES 36,018,544 37,085,987 34,449,463

COMPANYSTATEMENTOFFINANCIALPOSITIONAS AT 31 DECEMBER 2010

Note 2010 2009 2008

RM’000 RM’000 RM’000

(Restated) (Restated)

NON-CURRENT ASSETS

Property,plantandequipment 14 8,260 8,469 10,206

Investmentsinsubsidiaries 16 7,581,403 7,632,141 6,228,260

Investmentsinassociates 17 139,037 156,637 156,637

Investmentsinjointlycontrolledentities 18 5,001 5,001 5,001

Amountsduefromsubsidiaries 22 - 959,010 658,313

7,733,701 8,761,258 7,058,417

CURRENT ASSETS

Tradeandotherreceivables 29 90,571 108,313 458,879

Taxrecoverable 67,404 27,098 7,057

Amountsduefromsubsidiaries 22 1,089,347 - -

Amountduefromholdingcompany 30 5,518 7,518 13,780

Deposits,bankandcashbalances 32 95,405 127,416 64,971

1,348,245 270,345 544,687

TOTAL ASSETS 9,081,946 9,031,603 7,603,104

EQUITY AND LIABILITIES

Sharecapital 33 304,506 304,506 304,506

Reserves 34 4,710,293 4,386,647 4,114,487

Totalequity 5,014,799 4,691,153 4,418,993

NON-CURRENT LIABILITIES

Amountsduetosubsidiaries 22 535,668 896,529 1,327,482

Borrowings 38 1,496,750 2,686,665 1,556,772

2,032,418 3,583,194 2,884,254

CURRENT LIABILITIES

Borrowings 38 2,012,788 737,127 275,365

Tradeandotherpayables 40 21,941 20,129 24,492

2,034,729 757,256 299,857

TOTAL LIABILITIES 4,067,147 4,340,450 3,184,111

TOTAL EQUITY AND LIABILITIES 9,081,946 9,031,603 7,603,104


9190

Attributable to owners of the Parent

Non-distributable


Non-distributable Distributable

Non-controlling

interests

Total

equity

Note

Share

capital

Share

premium

Foreign

exchange

reserve

Revaluation

reserve

Available-for-

sale financial

assets

Capital

reserves

*Capital

reserves

Retained

earnings Total

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At1January2010 304,506 2,039,770 506 1,219,271 16,104 68,649 370,876 2,282,097 6,301,779 3,460,519 9,762,298

Effectsofchangesinaccountingpolicies

-FRS139 4(i) - - - - 264,440 - - (37,790) 226,650 (37,717) 188,933

Prioryearadjustments 5(a)(ii) - - - - - - - (3,097) (3,097) - (3,097)

Asrestated 304,506 2,039,770 506 1,219,271 280,544 68,649 370,876 2,241,210 6,525,332 3,422,802 9,948,134

Netprofitforthefinancialyear - - - - - - - 344,940 344,940 457,472 802,412


Disposalofasubsidiary - - - - - - (244) - (244) (4,405) (4,649)

Disposalofinvestments - - - - (196,698) - - - (196,698) - (196,698)

Shareofmovementinassociates’reserves - - - - 17,300 14,615 - - 31,915 - 31,915

Movementinvalueofinvestment - - - - 6,831 - - - 6,831 - 6,831

Currencytranslationdifferences - - (31,557) - - - - - (31,557) - (31,557)

Totalothercomprehensiveincome - - (31,557) - (172,567) 14,615 (244) - (189,753) (4,405) (194,158)

Totalcomprehensiveincomefortheyear 304,506 2,039,770 (31,051) 1,219,271 107,977 83,264 370,632 2,586,150 6,680,519 3,875,869 10,556,388

Transactionswithowners:

Transfertocapitalreserve - - - - - - 2,300 (2,300) - - -

Issuanceofsharesbyasubsidiaryupon

conversionofredeemableconvertible

subordinatedloans - - - - - - - - - 158,355 158,355



unsecuredloanstocks - - - - - - 2,932 2,173 5,105 6,459 11,564

Investmentinasubsidiary - - - - - - - - - 10 10

Dividendforfinancialyearended

31December2009 13 - - - - - - - (91,352) (91,352) - (91,352)

Dividendpaidtonon-controllingshareholders - - - - - - - - - (231,737) (231,737)

Totaltransactionswithowners - - - - - - 5,232 (91,479) (86,247) (66,913) (153,160)

At31December2010 304,506 2,039,770 (31,051) 1,219,271 107,977 83,264 375,864 2,494,671 6,594,272 3,808,956 10,403,228

CONSOLIDATEDSTATEMENTOFCHANGESINEQUITYFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010

*Thedistributablecapitalreservesrepresentmainlythenetgainfromdisposalsofinvestments.


9392


Non-distributable



Non-controlling

interests

Total

equity

Note

Share

capital

Share

premium

Foreign

exchange

reserve

Revaluation

reserve

Available-for-

sale financial

assets

Capital

reserves

*Capital

reserves

Retained

earnings Total

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At1January2009 304,506 2,039,770 139 1,219,271 (34,444) 63,329 422,783 2,098,675 6,114,029 3,245,997 9,360,026

Prioryearadjustments - - (301) - - - - 25,570 25,269 (24,558) 711

Asrestated 304,506 2,039,770 (162) 1,219,271 (34,444) 63,329 422,783 2,124,245 6,139,298 3,221,439 9,360,737

Netprofitforthefinancialyear - - - - - - - 233,614 233,614 389,650 623,264


Shareofmovementinassociates’reserves - - - - 51,706 4,162 - - 55,868 - 55,868

Currencytranslationdifferences - - 668 - - - - - 668 - 668

Totalothercomprehensiveincome - - 668 - 51,706 4,162 - - 56,536 - 56,536

Totalcomprehensiveincomefortheyear 304,506 2,039,770 506 1,219,271 17,262 67,491 422,783 2,357,859 6,429,448 3,611,089 10,040,537

Transactionswithowners:

Transfertocapitalreserve - - - - - - 3,140 (3,140) - - -

Redemptionofsubsidiary’sredeemable

convertiblepreferenceshares - - - - - - (41,160) - (41,160) - (41,160)



unsecuredloanstocks - - - - - - (726) 407 (319) 2,687 2,368

Acquisitionthroughbusinesscombination - - - - - - (13,161) - (13,161) 17,226 4,065

Dividendforfinancialyearended31

December2008 13 - - - - - - - (76,126) (76,126) - (76,126)

Dividendpaidtonon-controllingshareholders - - - - - - - - - (170,483) (170,483)

Totaltransactionswithowners - - - - - - (51,907) (78,859) (130,766) (150,570) (281,336)

At31December2009 304,506 2,039,770 506 1,219,271 17,262 67,491 370,876 2,279,000 6,298,682 3,460,519 9,759,201

CONSOLIDATEDSTATEMENTOFCHANGESINEQUITYFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010 (CONTINUED)

*Thedistributablecapitalreservesrepresentmainlythenetgainfromdisposalsofinvestments.


9594

COMPANYSTATEMENTOFCHANGESINEQUITYFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010

* - Thedistributablecapitalreservesrepresentmainlythenetgainfromdisposalsofinvestments.

** - Thenon-distributablecapitalreservesmainlyconsistofsharepremiumofanothercompanythatmergedwiththeGroupin1976.

* - Thedistributablecapitalreservesrepresentmainlythenetgainfromdisposalsofinvestments.

** - Thenon-distributablecapitalreservesmainlyconsistofsharepremiumofanothercompanythatmergedwiththeGroupin1976.



Note

Share

capital

Share

premium

**Capital

reserves

*Capital

reserves

Retained

earnings Total

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At1January2009 304,506 2,039,770 59,710 243,074 1,771,933 4,418,993

Netprofitfor

thefinancialyear - - - - 348,286 348,286

Dividendforthefinancialyear

ended31December2008 13 - - - - (76,126) (76,126)

At31December2009 304,506 2,039,770 59,710 243,074 2,044,093 4,691,153

STATEMENTOFCASHFLOWSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010

Group Company

2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

(Restated)

OPERATING ACTIVITIES

Profitbeforezakatandtaxation 855,748 681,626 430,237 378,721

Adjustmentsfor:

Depreciationofproperty,plantandequipment 788,529 734,763 1,617 1,837

Depreciationofinvestmentproperties 504 202 - -

Amortisationofprepaidleasepayments 403 393 - -

Amortisationoflandleasereceivedinadvance (11,400) (9,950) - -

Impairmentlossofproperty,plantandequipment 60,143 447 - -

Impairmentlossofinvestmentproperties - 332 - -

Impairmentlossofintelectualproperty 6,399 - - -

Impairmentlossongoodwillonconsolidation 3,458 - - -

Impairmentlossonmarketablesecurities 31 - - -

Impairmentlossonintangibleassetsinanassociate 197,929 123,221 - -

Impairmentincostofinvestmentinassociates 4,353 14,972 - -

AmortisationofRightsonPowerPurchaseAgreementandOperationsandMaintenanceAgreementarisingthroughbusinesscombinations:

-subsidiaries 395,327 393,343 - -

-associate 38,746 38,247 - -

Amortisationofdevelopmentexpenditureandintellectualproperty

267 267 - -

Amortisationofrightsforwatertreatmentbusiness 3,532 3,532 - -

Amortisationofrightsforairportbusiness 4,196 2,530 - -

Allowanceforimpairedreceivables 19,933 37,784 - -

Allowanceforimpairedreceivablesforamountsduefromsubsidiaries

- - 38 764

Loss/(gain)ondisposalof:

-subsidiaries(Notes16(a)&(b)) 1,764 - (714) -

-associatedcompanies (45,891) (439) (38,832) -

Gainonliquidationofsubsidiaries - (280) - -

Gainondisposalofproperty,plantandequipment (781) (28,540) (51) (30)

Gainondisposalofavailable-for-salefinancialassets (181,227) - - -

Gainondisposalofothernon-currentassets (15,432) (87) - -

Write-offofproperty,plantandequipment 223 10,941 - -

Write-backofallowanceforimpairedreceivables (45,657) (48,219) - -



Note

Share

capital

Share

premium

**Capital

reserves

*Capital

reserves

Retained

earnings Total

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At1January2010 304,506 2,039,770 59,710 243,074 2,044,093 4,691,153

Netprofitfor

thefinancialyear - - - - 414,998 414,998

Dividendforthefinancialyear

ended31December2009 13 - - - - (91,352) (91,352)

At31December2010 304,506 2,039,770 59,710 243,074 2,367,739 5,014,799

9796


STATEMENTOFCASHFLOWSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010 (CONTINUED)

Group Company

2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

(Restated)

INVESTING ACTIVITIES

Additionalinvestmentinjointlycontrolledentity - (32,218) - -

Acquisitionthroughbusinesscombination - (1,278,137) - (1,369,917)

Newinvestmentinsubsidiary/proceedsreceivedfrom

non-controllinginterestonincorporationofasubsidiary 10 - (15) -

RedemptionofRedeemableUnquoted

LoanStocksinasubsidiary 12,500 8,000 - -

Dividendsreceivedfrom:

-subsidiaries - - 548,968 370,134

-associates 94,575 91,132 - -

-others 3,448 7,368 - -

Distributionreceivedfromjointlycontrolledentities 113,750 154,247 113,750 154,247

Interestreceived 172,836 158,667 3,448 1,232

Proceedsfromsaleof:

-asubsidiary(Notes16(a)&(b)) 10,126 - 822 -

-associates 60,113 52,908 56,432 -

-available-for-salefinancialassets 226,726 - - -

Purchasesofsharesinsubsidiaries - - - (42,500)

RedemptionofRedeemableConvertible

PreferenceSharesinasubsidiary - - - 42,840

Proceedsfromsaleof:

-property,plantandequipment 1,229 36,196 84 400

-othernon-currentassets 43,795 8,342 - -

Purchasesof:

-property,plantandequipment(Note14) (504,188) (725,225) (1,441) (470)

-investmentproperties(Note15) (66) (30) - -

Additionalpropertydevelopmentexpenditure(Note21) (46,180) (19,647) - -

Additionalprepaidleasepayments (3) (1,300) - -

Repaymentofleasereceivedinadvance - (20,725) - -

Netcashflowgeneratedfrom/(usedin)investingactivities 188,671 (1,560,422) 722,048 (844,034)


Group Company

2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

(Restated)

Write-offofprojectcost - - - 1,863

Write-offofamountduefromasubsidiary - - 70,000 -

AmortisationofRedeemableConvertible UnsecuredLoanStocks

486 833 - -

Amortisationofdeferredincome (33,276) (14,616) - -

Amortisationofdeferredexpenditure - 2,467 - -

Dividendincome (3,448) (7,368) (580,467) (402,510)

Distributionfromjointlycontrolledentities - - (113,750) (154,247)

Interestincome (172,836) (158,667) (3,448) (1,232)

Interestexpense 1,455,336 1,398,507 161,359 119,186

Shareofresultsin:

-associates 119,264 150,969 - -

-jointlycontrolledentities (66,923) (40,987) - -

Netunrealisedlossonforeignexchange 2,734 1,348 457 10

Provisionforretirementbenefits 8,565 5,440 - -

Fairvaluegainonfinancialinstruments (68,377) - - -

3,322,622 3,293,011 (73,554) (55,638)

Changesinworkingcapital:

Inventories 53,127 36,010 - -

Tradeandotherreceivables (386,624) 24,603 (662) 8,690

Tradeandotherpayables (523,325) (158,583) 1,812 (4,363)

Cashgeneratedfrom/(usedin)operations 2,465,800 3,195,041 (72,404) (51,311)

Designatedaccountsandpledgeddepositswithdrawn 1,793 148 - -

Incometaxpaid (329,640) (300,798) (24,308) (18,102)

Zakatpaid (1,236) - (1,236) -

Landleasereceivedinadvance 13,218 13,895 - -

Retirementbenefitspaid(Note40(c)) (3,102) (3,719) - -

Oneoffpaymentinlieuofwindfallprofitlevypaid (86,930) (86,932) - -

Netcashflowgeneratedfrom/(usedin)operatingactivities 2,059,903 2,817,635 (97,948) (69,413)


9998


Group Company

Note 2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

(Restated)

FINANCING ACTIVITIES

Dividendspaid (91,352) (76,126) (91,352) (76,126)

Dividendspaidtonon-controllinginterestsof

subsidiaries(231,737) (170,483) - -

Interestpaid (1,455,336) (1,398,507) (161,359) (119,186)

Repaymentfromholdingcompany - - 2,000 6,262

Advancestosubsidiaries - - (491,146) (426,713)

Borrowings:

-newdrawdown 1,812,033 2,890,308 1,104,124 1,882,521

-repayment (2,770,527) (1,805,349) (1,018,378) (290,866)

Redemptionofpreferencesharesinasubsidiary - (41,160) - -

Governmentgrantreceived 41 84,635 71,355 - -

Netcashflow(usedin)/generatedfromfinancing

activities(2,652,284) (529,962) (656,111) 975,892

Netchangeincashandcashequivalents (403,710) 727,251 (32,011) 62,445

Foreignexchangedifferences (31,557) 668 - -

Cashandcashequivalentsatbeginningof

financialyear4,474,357 3,746,438 127,416 64,971

Cashandcashequivalentsatendoffinancialyear 4,039,090 4,474,357 95,405 127,416

Cashandcashequivalentscomprise:

Cashandbankbalances 32 191,069 420,448 2,170 764

Deposits 32 3,871,474 4,072,384 93,235 126,652

Bankoverdrafts 38 (7,487) (716) - -

4,055,056 4,492,116 95,405 127,416

Less:

Designatedaccounts 38(ii) (1) (1) - -

Depositspledgedforbankingfacilities (15,965) (17,758) - -

4,039,090 4,474,357 95,405 127,416

IncludedinthedepositsoftheGroupare:

(a) anamountofRM1,000(2009:RM1,000)beingassignedasDesignatedAccountsfortheloansasdisclosedinNote38(ii);and

(b) depositsofRM16.0million(2009:RM17.8million)whicharepledgedforcertainbankingfacilities.


ThefollowingaccountingpoliciesareadoptedbytheGroupandCompanyandareconsistentwiththoseadoptedinpreviousfinancialyears,

unlessotherwisestated.

(a) Basis of preparation

ThefinancialstatementsoftheGroupandCompanyhavebeenpreparedinaccordancewiththeprovisionsoftheCompaniesAct,1965

andFinancialReportingStandards,theMASBApprovedAccountingStandardsinMalaysiaforEntitiesOtherthanPrivateEntities.

Thefinancialstatementshavebeenpreparedunderthehistoricalcostconvention,asmodifiedbytheavailable-for-salefinancialassets,

andfinancialassetsandfinancialliabilities(includingderivativeinstruments)atfairvaluethroughprofitorloss,exceptasdisclosedinthis

summaryofsignificantaccountingpolicies.

ThepreparationoffinancialstatementsinconformitywiththeFinancialReportingStandardsrequirestheuseofcertaincriticalaccounting

estimatesandassumptionsthataffectthereportedamountsofassetsandliabilitiesanddisclosureofcontingentassetsandliabilities

atthedateofthefinancialstatements,andthereportedamountsofrevenuesandexpensesduringthereportedperiod.Italsorequires

DirectorstoexercisetheirjudgementintheprocessofapplyingtheGroup’saccountingpolicies.Althoughtheseestimatesandjudgement

arebasedontheDirectors’bestknowledgeofcurrenteventsandactions,actualresultsmaydiffer.Theareasinvolvingahigherdegreeof

judgementorcomplexity,orareaswhereassumptionsandestimatesaresignificanttothefinancialstatementsaredisclosedinNote3.

(i) Standards, amendments to published standards and interpretations that are applicable to the Group and are effective

Thenewaccountingstandards,amendmentsandimprovementstopublishedstandardsandinterpretationsthatareapplicableand

effectivefortheGroup’sandfortheCompany’sfinancialyearbeginningonorafter1January2010areasfollows:

• FRS8“OperatingSegment”(effectivefrom1July2009)replacesFRS1142004SegmentReporting.Thenewstandardrequiresa

‘managementapproach’,underwhichsegmentinformationisreportedinamannerthatisconsistentwiththeinternalreporting

providedtothechiefoperatingdecision-maker.

• TherevisedFRS101“Presentationoffinancialstatements”(effectivefrom1January2010)prohibitsthepresentationofitems

ofincomeandexpenses(thatis,‘non-ownerchangesinequity’)inthestatementofchangesinequity.‘Non-ownerchanges

inequity’aretobepresentedseparatelyfromownerchangesinequity.Allnon-ownerchangesinequitywillberequiredtobe

showninaperformancestatement,butentitiescanchoosewhethertopresentoneperformancestatement(thestatementof

comprehensiveincome)ortwostatements(theincomestatementandstatementofcomprehensiveincome).

SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010

101100


(continued)

TheGroupandCompanyhaveelectedtopresentthisstatementinonesinglestatement.

Whereentitiesrestateorreclassifycomparativeinformation,theywillberequiredtopresentarestatedstatementoffinancial

positionasatthebeginningcomparativeperiodinadditiontothecurrentrequirementtopresentthestatementofcomprehensive

incomeattheendofthecurrentperiodandcomparativeperiod.

• FRS123“Borrowingcosts”(effectivefrom1January2010)whichreplacesFRS1232004,requiresanentitytocapitaliseborrowing

costsdirectlyattributabletotheacquisition,constructionorproductionofaqualifyingasset(onethattakesasubstantialperiod

oftimetogetreadyforuseorsale)aspartofthecostofthatasset.Theoptionofimmediatelyexpensingthoseborrowingcosts

isremoved.TheimprovementtoFRS123clarifiesthatthedefinitionofborrowingcostsincludesinterestexpensecalculated

usingtheeffectiveinterestmethoddefinedinFRS139.

• FRS132“FinancialInstruments:Presentation”–“Puttablefinancialinstrumentsandobligationsarisingonliquidation”(effective

from1January2010)requireentitiestoclassifyputtablefinancialinstrumentsandinstrumentsthatimposeontheentityan

obligationtodelivertoanotherpartyaproratashareofthenetassetsoftheentityonlyonliquidationasequity,iftheyhave

particularfeaturesandmeetspecificconditions.

• Theamendment toFRS132“Financial Instruments:Presentation” (effective from1January2010) removes the transitional

provisionthatexemptedentitiesfromapplyingthecomponentpartclassificationforacompoundinstrumentissuedbefore1

January2003.UponadoptionofFRS139,entitiesarerequiredtoclassifythecompoundfinancialinstrumentintoitsliabilityand

equityelements.

• FRS139 “Financial Instruments:RecognitionandMeasurement” (effective from1January2010) establishesprinciples for

recognisingandmeasuringfinancialassets,financialliabilitiesandsomecontractstobuyandsellnon-financialitems.Hedge

accountingispermittedunderstrictcircumstances.TheamendmentstoFRS139providefurtherguidanceoneligiblehedged

items.Theamendmentprovidesguidancefortwosituations.Onthedesignationofaone-sidedriskinahedgeditem,the

amendmentconcludesthatapurchasedoptiondesignatedinitsentiretyasthehedginginstrumentofaone-sidedriskwillnot

beperfectlyeffective.Thedesignationofinflationasahedgedriskorportionisnotpermittedunlessinparticularsituations.

TheimprovementtoFRS139clarifiesthatthescopeexemptioninFRS139onlyappliestoforwardcontractsbutnotoptionsfor

businesscombinationsthatarefirmlycommittedtobeingcompletedwithinareasonabletimeframe.

• IC Interpretation 9 “Reassessment of EmbeddedDerivatives” (effective from1 January 2010) requires an entity to assess

whetheranembeddedderivativeisrequiredtobeseparatedfromthehostcontractandaccountedforasaderivativewhen

theentityfirstbecomesapartytothecontract.Subsequentreassessmentisprohibitedunlessthereisachangeintheterms

ofthecontractthatsignificantlymodifiesthecashflowsthatotherwisewouldberequiredunderthecontract,inwhichcase

reassessmentisrequired.

SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010 (CONTINUED)


(continued)

• FRS7“Financialinstruments:Disclosures”(effectivefrom1January2010)providesinformationtousersoffinancialstatements

aboutanentity’sexposuretorisksandhowtheentitymanagesthoserisks. TheimprovementFRS7clarifiesthatentities

mustnotpresent total interest incomeandexpenseasanetamountwithinfinancecostson the faceof thestatementof

comprehensiveincome.

The Group and Company has applied the transitional provision in the respective standards which exempts entities from

disclosingthepossibleimpactarisingfromtheinitialapplicationofthefollowingstandardsandinterpretationsonthefinancial

statementsoftheGroupandCompany.

- FRS139,AmendmentstoFRS139oneligiblehedgeditems,ImprovementtoFRS139andICInterpretation9- FRS7,amendmentandimprovementforFRS7

• ICInterpretation10“InterimFinancialReportingandImpairment”(effectivefrom1January2010)prohibitstheimpairmentlosses

recognisedinaninterimperiodongoodwillandinvestmentsinequityinstrumentsandinfinancialassetscarriedatcosttobe

reversedatasubsequentendofreportingperiod.

• ICInterpretation14“FRS119Thelimitonadefinedbenefitasset,minimumfundingrequirementsandtheirinteraction”(effective

from1January2010)providesguidanceonassessingthelimitinFRS119ontheamountofthesurplusthatcanberecognized

asanasset.

ThefollowingamendmentswerepartoftheMalaysianAccountingStandardsBoard’s(“MASB”)improvementsproject:

• FRS5“Non-currentassetsheldforsaleanddiscontinuedoperations”.Improvementeffectivefrom1January2010clarifies

thatFRS5disclosuresapplytonon-currentassetsordisposalgroupsthatareclassifiedasheldforsaleanddiscontinued

operations.

• FRS107“Statementofcashflows”(effectivefrom1January2010)clarifiesthatonlyexpenditureresultinginarecognisedasset

canbecategorisedasacashflowfrominvestingactivities.

• FRS110“Eventsafterthebalancesheetdate”(effectivefrom1January2010)reinforcesexistingguidancethatadividend

declaredafterthereportingdateisnotaliabilityofanentityatthatdategiventhatthereisnoobligationatthattime.

(a) Basis of preparation (continued)(a) Basis of preparation (continued)

103102


(continued)

• FRS116“Property,plantandequipments”(consequentialamendmenttoFRS107“Statementofcashflows”)(effectivefrom

1January2010) requiresentitieswhoseordinaryactivitiescompriseof rentingandsubsequently sellingassets topresent

proceedsfromthesaleofthoseassetsasrevenueandshouldtransferthecarryingamountoftheassettoinventorieswhenthe

assetbecomesheldforsale.AconsequentialamendmenttoFRS107statesthatcashflowsarisingfrompurchase,rentaland

saleofthoseassetsareclassifiedascashflowsfromoperatingactivities.

• FRS117“Leases”(effectivefrom1January2010)clarifiesthatthedefaultclassificationofthelandelementinalandandbuilding

leaseisnolongeranoperatinglease.Asaresult,leasesoflandshouldbeclassifiedaseitherfinanceoroperating,usingthe

generalprinciplesofFRS117.

ThelandportionofthelandandbuildingsleaseshavebeenreclassifiedfromPrepaidLeasePaymentstoProperty,plantand

equipment.

• FRS118“Revenue”(effectivefrom1January2010)providesmoreguidancewhendeterminingwhetheranentityisactingasa

‘principal’orasan‘agent’.

• FRS119“Employeebenefits”(effectivefrom1January2010)clarifiesthataplanamendmentthatresultsinachangeinthe

extenttowhichbenefitpromisesareaffectedbyfuturesalaryincreasesisacurtailment,whileanamendmentthatchanges

benefitsattributabletopastservicegivesrisetoanegativepastservicecostifitresultsinareductioninthepresentvalueofthe

definedbenefitobligation.Thedefinitionofreturnonplanassetshasbeenamendedtostatethatplanadministrationcostsare

deductedinthecalculationofreturnonplanassetsonlytotheextentthatsuchcostshavebeenexcludedfrommeasurement

ofthedefinedbenefitobligation.

• FRS120“Accountingforgovernmentgrants”(effectivefrom1January2010)clarifiesthatthebenefitofabelowmarketrate

governmentloanisaccountedforinaccordancewithFRS120.

• FRS127“Consolidated&separatefinancialstatements”(effectivefrom1January2010)clarifiesthatwhereaninvestmentina

subsidiarythatisaccountedforunderFRS139isclassifiedasheldforsaleunderFRS5,FRS139wouldcontinuetobeapplied.

• FRS128“Investmentsinassociates”(effectivefrom1January2010)clarifiesthataninvestmentinanassociateistreatedasa

singleassetforimpairmenttestingpurposes.Reversalsofimpairmentarerecordedasanadjustmenttothecarryingamountof

theinvestmenttotheextentthattherecoverableamountoftheassociateincreases.



(continued)

• FRS 128 “Investments in associates” and FRS 131 “Interests in joint ventures” (consequential amendments to FRS 132

“Financialinstruments:Presentation”andFRS7“Financialinstruments:Disclosure”(effectivefrom1January2010))clarify

thatwhereaninvestmentinassociateorjointventureisaccountedforinaccordancewithFRS139,onlycertain,ratherthanall

disclosurerequirementsinFRS128orFRS131needtobemadeinadditiontodisclosuresrequiredbyFRS132andFRS7.

• FRS134“Interimfinancialreporting”(effectivefrom1January2010)clarifiesthatbasicanddilutedearningspershare(“EPS”)

mustbepresentedinaninterimreportonlyinthecasewhentheentityisrequiredtodiscloseEPSinitsannualreport.

• FRS136“Impairmentofassets”(effectivefrom1January2010)clarifiesthatthelargestcash-generatingunit(orgroupofunits)

towhichgoodwillshouldbeallocatedforthepurposesofimpairmenttestingisanoperatingsegmentbeforetheaggregation

ofsegmentswithsimilareconomiccharacteristics.Theimprovementalsoclarifiesthatwherefairvaluelesscoststosell is

calculatedonthebasisofdiscountedcashflows,disclosuresequivalenttothoseforvalueinuseshouldbemade.

• FRS138“IntangibleAssets”.Improvementeffectivefrom1January2010clarifiesthataprepaymentmayonlyberecognisedin

theeventthatpaymenthasbeenmadeinadvanceofobtainingrightofaccesstogoodsorreceiptofservices.

• FRS140“Investmentproperty”(effectivefrom1January2010)requiresassetsunderconstruction/developmentforfutureuse

asinvestmentpropertytobeaccountedasinvestmentpropertyratherthanproperty,plantandequipment.Wherethefairvalue

modelisapplied,suchpropertyismeasuredatfairvalue.However,wherefairvalueisnotreliablymeasurable,theproperty

ismeasuredatcostuntiltheearlierofthedateconstructioniscompletedandfairvaluebecomesreliablymeasurable.Italso

clarifiesthatifavaluationobtainedforaninvestmentpropertyheldunderleaseisnetofallexpectedpayments,anyrecognised

leaseliabilityisaddedbackinordertodeterminethecarryingamountoftheinvestmentpropertyunderthefairvaluemodel.

OtherthanasdisclosedinNote4,theadoptionoftheabovedonothavesignificantimpacttotheGroup’sandCompany’s

financialstatements.

(ii) Standards early adopted by the Group and Company

TherewerenostandardsearlyadoptedbytheGroupandCompany.


105104

(iii) Standards, amendments to published standards and interpretations to existing standards that are applicable to the Group

and Company but not yet effective

TheGroupwillapplythefollowingnewstandards,amendmentstostandardsandinterpretationsfromannualperiodbeginningonor

after1January2011andbeyond:

• TherevisedFRS3“Businesscombinations”(effectiveprospectivelyfrom1July2010).Therevisedstandardcontinuestoapply

theacquisitionmethodtobusinesscombinations,withsomesignificantchanges.Forexample,allpaymentstopurchasea

businessaretoberecordedatfairvalueattheacquisitiondate,withcontingentpaymentsclassifiedasdebtsubsequently

re-measured through thestatementofcomprehensive income.There isachoiceonanacquisition-by-acquisitionbasis to

measurethenon-controllinginterestintheacquireeeitheratfairvalueoratthenon-controllinginterest’sproportionateshareof

theacquiree’snetassets.Allacquisition-relatedcostsshouldbeexpensed.

• TherevisedFRS124“Relatedpartydisclosures”(effectivefrom1January2012)removestheexemptiontodisclosetransactions

betweengovernment-relatedentitiesandthegovernment,andallothergovernment-relatedentities.

• The revisedFRS127“Consolidatedandseparatefinancial statements” (effectiveprospectively from1July2010) requires

theeffectsofalltransactionswithnon-controllingintereststoberecordedinequityifthereisnochangeincontrolandthese

transactionswillnolongerresultingoodwillorgainsandlosses.Thestandardalsospecifiestheaccountingwhencontrolislost.

Anyremaininginterestintheentityisre-measuredtofairvalue,andagainorlossisrecognisedinprofitorloss.

• AmendmentstoFRS7“Financialinstruments:Disclosures”andFRS1“First-timeadoptionoffinancialreportingstandards”

(effectivefrom1January2011)requireenhanceddisclosuresaboutfairvaluemeasurementandliquidityrisk.Inparticular,the

amendmentrequiresdisclosureoffairvaluemeasurementsbylevelofafairvaluemeasurementhierarchy.

• TheamendmenttoFRS132“FinancialInstruments:Presentation”onclassificationofrightsissues(effective1March2010)

addressesaccountingforrights issuesthataredenominatedinacurrencyotherthanthefunctionalcurrencyofthe issuer.

Providedcertainconditionsaremet,suchrightsissuesarenowclassifiedasequityinstrumentsinsteadofasderivativeliabilities,

regardlessofthecurrencyinwhichtheexercisepriceisdenominated.



and Company but not yet effective (continued)

• ICInterpretation4“Determiningwhetheranarrangementcontainsalease”(effectivefrom1January2011)requirestheGroupto

identifyanyarrangementthatdoesnottakethelegalformofalease,butconveysarighttouseanassetinreturnforapayment

orseriesofpayments.Thisinterpretationprovidesguidancefordeterminingwhethersucharrangementsare,orcontain,leases.

Theassessment isbasedon the substanceof thearrangementand requiresassessmentofwhether the fulfillmentof the

arrangementisdependentontheuseofaspecificassetandthearrangementconveysarighttousetheasset.Ifthearrangement

containsalease,therequirementsofFRS117“Leases”shouldbeappliedtotheleaseelementofthearrangement.

• TheimprovementtoICInterpretation9(effectivefrom1July2010)clarifiesthatthisinterpretationdoesnotapplytoembedded

derivatives incontractsacquired inabusinesscombination,businessesundercommoncontrolor the formationofa joint

venture.

• IC Interpretation 12 “Service concession arrangements” (effective from 1 July 2010) applies to contractual arrangements

wherebyaprivatesectoroperatorparticipatesinthedevelopment,financing,operationandmaintenanceofinfrastructurefor

publicsectorservices.Dependingonthecontractualterms,thisinterpretationrequirestheoperatortorecogniseafinancialasset

ifithasanunconditionalcontractualrighttoreceivecashoranintangibleassetifitreceivesaright(license)tochargeusersof

thepublicservice.Somecontractualtermsmaygiverisetobothafinancialassetandanintangibleasset.

• ICInterpretation15“Agreementsforconstructionofrealestates”(effectivefrom1January2012)clarifieswhetherFRS118

“Revenue”orFRS111“ConstructionContracts”shouldbeappliedtoparticulartransactions.ItislikelytoresultinFRS118

beingappliedtoawiderrangeoftransactions.

• ICInterpretation18“Transfersofassetsfromcustomers”(effectiveprospectivelyforassetsreceivedonorafter1January2011)

providesguidancewhereanentityreceivesfromacustomeranitemofproperty,plantandequipment(orcashtoacquiresuch

anasset)thattheentitymustthenusetoconnectthecustomertoanetworkortoprovidethecustomerwithservices.Where

thetransferreditemmeetsthedefinitionofanasset,theassetisrecognisedasanitemofproperty,plantandequipmentatits

fairvalue.Anycorrespondingcreditisallocatedtoeachseparateservicetobeperformedundertheagreement.Revenueis

recognisedforeachserviceinaccordancewiththerecognitioncriteriaofFRS118“Revenue”.Thisinterpretationistobeapplied

prospectivelytoassetsreceivedfromcustomeronorafter1January2011.


107106


and Company but not yet effective (continued)

• ICInterpretation19“Extinguishingfinancialliabilitieswithequityinstruments”(effectivefrom1July2011)providesclarification

whenanentityrenegotiatesthetermsofafinancialliabilitywithitscreditorandthecreditoragreestoaccepttheentity’sshares

orotherequityinstrumentstosettlethefinancialliabilityfullyorpartially.Againorloss,beingthedifferencebetweenthecarrying

valueofthefinancialliabilityandthefairvalueoftheequityinstrumentsissued,shallberecognisedinprofitorloss.Entitiesare

nolongerpermittedtoreclassifythecarryingvalueoftheexistingfinancialliabilityintoequitywithnogainorlossrecognisedin

profitorloss.

ImprovementstoFRS:

• FRS3(effectivefrom1January2011)

- Clarifiesthatthechoiceofmeasuringnon-controllinginterestsatfairvalueorattheproportionateshareoftheacquiree’s

netassetsappliesonlytoinstrumentsthatrepresentpresentownershipinterestsandentitletheirholderstoaproportionate

shareofthenetassetsintheeventofliquidation.Allothercomponentsofnon-controllinginterestaremeasuredatfairvalues

unlessanothermeasurementbasisisrequiredbyFRS.

- ClarifiesthattheamendmentstoFRS7,FRS132andFRS139thateliminatetheexemptionforcontingentconsideration,

donotapply tocontingentconsideration thatarose frombusinesscombinationswhoseacquisitiondatesprecede the

applicationofFRS3(2010).Thosecontingentconsiderationarrangementsaretobeaccountedforinaccordancewiththe

guidanceinFRS3(2005).

• FRS5“Non-currentassetsheldforsaleanddiscontinuedoperations”.Improvementeffectivefrom1July2010clarifiesthatallof

asubsidiary’sassetsandliabilitiesareclassifiedasheldforsaleifapartialdisposalsaleplanresultsinlossofcontrol.Relevant

disclosureshouldbemadeforthissubsidiaryifthedefinitionofadiscontinuedoperationismet.

• FRS101“Presentationoffinancialstatements”(effectivefrom1January2011)clarifiesthatanentityshallpresentananalysis

ofothercomprehensiveincomeforeachcomponentofequity,eitherinthestatementofchangesinequityorinthenotestothe


• FRS138“IntangibleAssets”.Improvementeffectivefrom1July2010clarifiesthatagroupofcomplementaryintangibleassets

acquiredinabusinesscombinationisrecognisedasasingleassetiftheindividualassethassimilarusefullives.

OtherthanICinterpretation4and12,theadoptionoftheabovewouldnothaveanymaterialimpacttotheGroupandCompany.

ManagementisinthemidstofassessingtheimpactofICinterpretation4and12onthefinancialstatementsoftheGroupand

Company.


(b) Subsidiaries

SubsidiariesarethoseenterprisescontrolledbytheCompany.ControlexistswhentheCompanyhasthepower,directlyorindirectlyto

exercisecontrolofthefinancialandoperatingpoliciesofanenterprisesoastoobtainbenefitsfromitsactivities.

Undertheacquisitionmethodofaccounting,subsidiariesareconsolidatedfromthedateonwhichcontrolistransferredtotheGroup

andarenolongerconsolidatedfromthedatethatcontrolceases.Thecostofanacquisitionistheamountofcashpaidandthefair

valueatthedateofacquisitionofotherpurchaseconsiderationgivenbytheacquirer,togetherwithdirectlyattributableexpensesofthe

acquisition.Atthedateofacquisition,thefairvaluesofthesubsidiary’snetassetsaredeterminedandthesevaluesarereflectedinthe

consolidatedfinancialstatements.TheexcessofthecostofacquisitionovertheGroup’sshareofthefairvalueofthenetidentifiable

assets, liabilitiesandcontingent liabilitiesofthesubsidiaryacquiredatthedateofacquisitionisreflectedasgoodwill. Ifthecostof

acquisitionislessthanfairvalueofthenetidentifiableassets,liabilitiesandcontingentliabilitiesofthesubsidiaryacquired,thedifference

isrecogniseddirectlytothestatementofcomprehensiveincome.

Non-controllinginterestrepresentsthatportionoftheprofitorlossandnetassetsofasubsidiaryattributabletoequityintereststhat

arenotowned,directlyorindirectlythroughsubsidiaries,bytheparent.Itismeasuredatthenon-controllingshareofthefairvalueof

thesubsidiaries’identifiableassetsandliabilitiesattheacquisitiondateandthenon-controllingshareholders’shareofchangesinthe

subsidiaries’equitysincethatdate.

ThegainorlossondisposalofasubsidiaryisthedifferencebetweennetdisposalproceedsandtheGroup’sshareofitsnetassetsas

ofthedateofdisposalincludingthecumulativeamountofanyexchangedifferencesthatrelatetothesubsidiaryisrecognisedinthe

consolidatedstatementofcomprehensiveincome.

Intra group transactions, balances and unrealised gains on transactions are eliminated. Unrealised losses are also eliminated but

consideredanimpairmentindicatoroftheassettransferred.Accountingpoliciesofsubsidiarieshavebeenchangedwherenecessaryto

ensureconsistencywiththepoliciesadoptedbytheGroup.

(c) Transactions with non-controlling shareholders

Priorto1January2007,transactionswithnon-controllingshareholderswereaccountedforinaccordancewithMASB11(FRS1272004).

FortheaccretionoftheGroup’sinterestsinthesubsidiaryforcashandpurchasepriceestablishedatfairvalue,excessofpurchase

consideration over the fair value of assets acquired are recognised as goodwill or negative goodwill. Disposals to non-controlling

shareholdersforcashconsiderationandatfairvalue,thegainsorlossesarisingarerecordedinthestatementofcomprehensiveincome.

Fortransactionswithnon-controllingshareholdersforconsiderationotherthancashandnotatfairvalue,differenceintheGroup’sshare

ofnetassetsandtheconsiderationisadjustedagainsttheGroup’sreserves.

(a) Basis of preparation (continued)

109108

UponadoptionoftheEconomicEntityModeltoprovidemorereliableandrelevantinformationthatadherestotheFRSframework,the

Groupappliesapolicyoftreatingtransactionswithnon-controllingshareholdersastransactionswithequityownersoftheGroup.For

purchasesfromnon-controllingshareholders,thedifferencebetweenanyconsiderationpaidandtherelevantshareacquiredonthe

carryingvalueofnetassetsofthesubsidiaryisdeductedfromequity.Gainsorlossesondisposalstonon-controllingshareholdersare

alsorecordedinequity.Fordisposalstonon-controllingshareholders,differencesbetweenanyproceedsreceivedandtherelevantshare

ofnon-controllingshareholdersarealsorecordedinequity.

(d) Associates

AssociatesareenterprisesinwhichtheGroupexercisessignificantinfluence,butwhichitdoesnotcontrol.Significantinfluenceisthe

powertoparticipateinthefinancialandoperatingpolicydecisionsoftheassociatesbutnotthepowertoexercisecontroloverthose

policies.Investmentsinassociatesareaccountedforbyusingtheequitymethodofaccountingandareinitiallyrecognisedatcost.The

Group’sinvestmentsinassociatesincludegoodwillidentifiedonacquisition,netofanyaccumulatedimpairment.

EquityaccountinginvolvesrecognisingtheGroup’sshareofthepostacquisitionresultsofassociatesanditsshareofpostacquisition

movementswithinreservesinreserves.Wheretheassociatesarepubliclistedcompanies,theGrouphasequityaccountedforthe

associatesresultsbasedon12-monthfinancialinformationuptothedateoflatestpubliclyavailableinterimreport.

Unrealisedgainson transactionsbetween theGroupand itsassociatesareeliminated to theextentof theGroup’s interest in the

associates;unrealisedlossesarealsoeliminatedunlessthetransactionprovidesevidenceonimpairmentoftheassettransferred.Where

necessary, inapplyingtheequitymethod,adjustmentsaremadetothefinancialstatementsofassociatestoensureconsistencyof

accountingpolicieswiththoseoftheGroup.

WhentheGroup’sshareoflossesinanassociateequalsorexceedsitsinterestintheassociate,includinganylongterminterestthat,in

substance,formpartoftheGroup’snetinvestmentintheassociates,theGroupdoesnotrecognisefurtherlosses.

(e) Jointly controlled entities

Jointlycontrolledentitiesarecorporations,partnershipsorotherentitiesoverwhichthereiscontractuallyagreedsharingofcontrolby

theGroupwithoneormoreparties.TheGroup’sinterestsinjointlycontrolledentitiesareaccountedforintheconsolidatedfinancial

statementsbytheequitymethodofaccounting.

EquityaccountinginvolvesrecognisingtheGroup’sshareofthepostacquisitionresultsofjointlycontrolledentitiesanditsshareofpost

acquisitionmovementswithinreservesinreserves.Thecumulativepost-acquisitionmovementsareadjustedagainstthecarryingvalue

oftheinvestment.

UnrealisedgainsontransactionsbetweentheGroupanditsjointlycontrolledentitiesareeliminatedtotheextentoftheGroup’sinterest

inthejointlycontrolledentities;unrealisedlossesarealsoeliminatedunlessthetransactionprovidesevidenceonimpairmentoftheasset

transferred.Wherenecessary,inapplyingtheequitymethod,adjustmentsaremadetothefinancialstatementsofjointlycontrolled

entitiestoensureconsistencyofaccountingpolicieswiththoseoftheGroup.


(f) Property, plant and equipment

Property,plantandequipmentarestatedatcostorrevaluedamountlessaccumulateddepreciationandaccumulatedimpairmentlosses.

Subsequentcostsareincludedintheasset’scarryingamountorrecognisedasaseparateasset,asappropriate,onlywhenitisprobable

thatfutureeconomicbenefitsassociatedwiththeitemwillflowtotheGroupandthecostoftheitemcanbemeasuredreliably.The

carryingamountofthereplacedpartisderecognised.Allotherrepairsandmaintenancearechargedtothestatementofcomprehensive

incomeduringthefinancialperiodinwhichtheyareincurred.

Revaluationsofcertainpropertieswerecarriedoutprimarilyasaone-offexerciseandwerenot intendedtoeffectachange in the

accountingpolicytooneofrevaluationofpropertiesandthesevaluationshavenotbeenupdated.Surplusesarisingonrevaluationare

creditedtorevaluationreserve.Anydeficitarisingfromrevaluationischargedagainsttherevaluationreservetotheextentofaprevious

surplusheldintherevaluationreserveforthesameasset.Inallothercases,adecreaseincarryingamountischargedtostatementof


C-inspectioncostrepresentscostincurredatthescheduledmajorinspectiondatesforpowerplants.

Atendofeachreportingperiod,theGroupassesseswhetherthereisanyindicationofimpairment.Ifsuchindicationsexist,ananalysisis

performedtoassesswhetherthecarryingamountoftheassetisfullyrecoverable.Awritedownismadeifthecarryingamountexceeds

therecoverableamount.RefertoaccountingpolicyNote(j)onimpairmentofassets.

Gainsandlossesondisposalsaredeterminedbycomparingnetproceedswithcarryingamountandareincludedinprofit/(loss)from

operations.Ondisposalofrevaluedassets,amountsinrevaluationreserverelatingtothoseassetsaretransferredtoretainedearnings.

Property,plantandequipmentarederecognisedupondisposalorwhennofutureeconomicbenefitsareexpectedfromitsuse.Anygain

orlossonderecognitionisrecognisedinthestatementofcomprehensiveincome.

(c) Transactions with non-controlling shareholders (continued)

111110

(g) Leases

Aleaseisanagreementwherebythelessorconveystothelesseeinreturnforapayment,orseriesofpayments,therighttouseanasset

foranagreedperiodoftime.

Accounting by lessee

(i) Finance leases

Leasesofproperty,plantandequipmentwheretheGrouphassubstantiallyalltherisksandrewardsofownershipareclassifiedas

financeleases.Financeleasesarecapitalisedatthelease’scommencementatthelowerofthefairvalueoftheleasedpropertyand

thepresentvalueoftheminimumleasepayments.

Eachleasepaymentisallocatedbetweentheliabilityandfinancechargessoastoachieveaconstantrateofinterestontheremaining

balanceoftheliability.Thecorrespondingrentalobligations,netoffinancecharges,areincludedinotherlong-termpayables.The

interestelementofthefinancecostischargedtostatementofcomprehensiveincomeovertheleaseperiodsoastoproducea

constantperiodicrateofinterestontheremainingbalanceoftheliabilityforeachperiod.Theproperty,plantandequipmentacquired

underfinanceleasesisdepreciatedovertheshorteroftheusefullifeoftheassetandtheleaseterm.

InitialdirectcostsincurredbytheGroupinnegotiatingandarrangingfinanceleasesareaddedtothecarryingamountoftheleased

assetsandrecognisedasanexpenseinstatementofcomprehensiveincomeovertheleasetermonthesamebasisasthelease

expense.

(ii) Operating leases

Leasesofassetswhereasignificantportionof the risksand rewardsofownershipare retainedby the lessorareclassifiedas

operatingleases.Paymentsmadeunderoperatingleases(netofanyincentivesreceivedfromthelessor)arechargedtostatement

ofcomprehensiveincomeonthestraightlinebasisovertheleaseperiod.

FollowingtheadoptionoftheimprovementtoFRS117“Leases”,leaseholdlandinwhichtheGrouphassubstantiallyalltherisks

andrewardsincidentaltoownershiphasbeenreclassifiedretrospectivelyfromoperatingleasetofinancelease.Previously,leasehold

landwasclassifiedasanoperatingleaseunlesstitleisexpectedtopasstothelesseeattheendoftheleaseterm.RefertoNote4

fortheimpactofthischangeinaccountingpolicy.

(iii) Prepaid Lease payments

Paymentsmadeunderoperatingleasesarerecognisedinthestatementofcomprehensiveincomeonastraight-linebasisoverthe

termofthelease.Leaseincentivesreceivedarerecognisedinthestatementofcomprehensiveincomeasanintegralpartofthetotal

leasepaymentsmade.

Inthecaseofaleaseoflandandbuildings,theminimumleasepaymentsortheup-frontpaymentsmadeareallocated,whenever

necessary,betweenthelandandthebuildingselementsinproportiontotherelativefairvaluesforleaseholdinterestsinlandelement

andbuildingselementoftheleaseattheinceptionofthelease.Theup-frontpaymentrepresentsprepaidleasepaymentsandare

amortisedonastraight-linebasisovertheleaseterm.


(h) Depreciation

Depreciationisprovidedatrates,whichareconsideredadequatetowrite-offthecost/revaluedamountofproperty,plantandequipment

lessestimatedresidualvalueovertheirestimatedusefullives.Nodepreciationisprovidedonfreeholdland.Depreciationoncapitalwork-

in-progresscommenceswhentheassetsarereadyfortheirintendeduse.

Expressway development expenditure comprises development and upgrading expenditure (including interest charges relating to

financingofthedevelopmentpriortoitscompletion)incurredinconnectionwithaprivatisedhighwayproject.Thecumulativeactual

expenditureincurredisamortisedattheendofeachreportingperioduntiltheendoftheconcessionperiodon27June2026.

Thestraight-linemethodisusedtowrite-offthecostlessestimatedresidualvalueoftheotherassetsoverthetermoftheirestimated

usefullivesaresummarisedasfollows:

Residualvalues,usefullivesanddepreciationmethodofassetsarereviewed,andadjustedifappropriateattheendofeachreporting

periodtoensurethattheamount,periodandmethodofdepreciationareconsistentwithpreviousestimatesandtheexpectedpatternof

consumptionofthefutureeconomicbenefitsembodiedintheitemsofproperty,plantandequipment.

(i) Investment properties

InvestmentpropertiesareheldforlongtermrentalyieldsorforcapitalappreciationorbothandarenotoccupiedbytheGroup.

Investmentpropertiesarestatedatcostlessanyaccumulateddepreciationandimpairmentlosses.Investmentpropertiesaredepreciated

onthestraightlinebasisoveritsestimatedusefullife.

Investmentpropertiesarederecognisedwhenitispermanentlywithdrawnfromuseandnofurthereconomicbenefitisexpectedfromits

disposalorwhentheyhavebeendisposed.Anygainorlossesontheretirementordisposalofaninvestmentpropertyarerecognisedin

thestatementofcomprehensiveincomeintheyearinwhichtheyarise.

Investmentpropertyalsoincludespropertiesthatareunderconstructionforfutureuseasinvestmentproperties.Thesearealsocarried

atfairvalueunlessthefairvaluehasyettobereliablydetermined.Wherethatisthecase,thepropertywillbeaccountedforatcostuntil

eitherthefairvaluebecomesreliablydeterminableorconstructioniscomplete.

Freeholdproperties/miningleaseproperties 50years

Buildingandportstructures 20-50years

Powerplant 21years

C-inspectioncosts 3years

Plant,machinery,dredgesandotherminingequipment 3to30years

Pipelinesystem 30years

Leaseholdproperties 20-101years

113112

Thisisdifferenttopreviousyearswherepropertiesunderconstructionwereaccountedforatcostandclassifiedasproperty,plantand

equipmentuntilconstructionwascomplete.FollowingtheadoptionofimprovementstoFRS140inthecurrentfinancialyear,investment

propertiesunderconstructionat1January2010isreclassifiedfromproperty,plantandequipmenttoinvestmentpropertiesattheir

carryingamount.Allfairvaluegainsorlosses,includingthoseunrecognisedfairvaluegainsandlosses(ifthelosseshavenotalready

beenrecognisedthroughimpairment)thatarosepriorto1January2010,havebeenrecognisedintheprofitorlossfortheyearasfair

valuegainsorlosses.

(j) Impairment of assets

Property,plantandequipmentandothernon-currentassets(exceptforamountsduefromsubsidiaries,associatesanddeferredtax

assets)arereviewedforimpairmentlosseswhenevereventsorchangesincircumstances(fordepreciablenon-currentassets)indicate

thatthecarryingamountmaynotberecoverable.Impairmentlossisrecognisedfortheamountbywhichthecarryingamountofthe

assetexceedsitsrecoverableamount.Therecoverableamountisthehigherofanasset’snetsellingpriceandvalueinuse.

Forthepurposesofassessingimpairment,therecoverableamountisdeterminedonanidentifiedassetbasisoronthecashgenerating

unit(“CGU”)towhichtheassetbelongs.Anasset’srecoverableamountisthehigherofanasset’sorCGU’sfairvaluelesscosttosellor

itsvalueinuse.Inassessingvalueinuse,theestimatedfuturecashflowsarediscountedtotheirpresentvalueusingapre-taxweighted

averagecostofcapital.Wherethecarryingamountofanassetexceedsitsrecoverableamount,theassetisconsideredimpairedand

iswrittendowntoitsrecoverableamount.

Theimpairmentlossischargedtothestatementofcomprehensiveincomeunlessitreversesapreviousrevaluationinwhichcaseitis

chargedtotherevaluationsurplus.Anysubsequentincreaseinrecoverableamountisrecognisedinthestatementofcomprehensive

incomeunlessitreversesanimpairmentlossonarevaluedassetinwhichcaseitistakentorevaluationsurplus.

Impairmentlossongoodwillisnotreversedinasubsequentperiod.Animpairmentlossforanassetotherthangoodwillisreversedif,

andonlyif,therehasbeenachangeintheestimatesusedtodeterminetheasset’srecoverableamountsincethelastimpairmentloss

wasrecognised.Thecarryingamountofanassetotherthangoodwillisincreasedtoitsrevisedrecoverableamount,providedthatthis

amountdoesnotexceedthecarryingamountthatwouldhavebeendetermined(netofamortisationordepreciation)hadnoimpairment

lossbeenrecognisedfortheassetinprioryears.Areversalofimpairmentlossforanassetotherthangoodwillisrecognisedinprofitor

loss,unlesstheassetiscarriedatrevaluedamount,inwhichcase,suchreversalistreatedasarevaluationincrease.


(k) Investments

Investmentsinsubsidiaries,jointlycontrolledentitiesandassociatesarestatedatcost.Whereanindicationofimpairmentexists,the

carryingamountoftheinvestmentisassessedandwrittendownimmediatelytoitsrecoverableamount.RefertoaccountingpolicyNote

(j)onimpairmentofassets.

Ondisposalofaninvestment,thedifferencebetweennetdisposalproceedsanditscarryingamountischarged/creditedtothestatement

ofcomprehensiveincome.

(l) Property development expenditure

Propertydevelopmentexpenditurecompriseallcoststhataredirectlyattributabletodevelopmentactivitiesorthatcanbeallocatedon

areasonablebasistosuchactivities.

When thefinancialoutcomeofadevelopmentactivitycanbe reliablyestimated,propertydevelopment revenueandexpensesare

recognisedinthestatementofcomprehensiveincomebyusingthestageofcompletionmethod.Thestageofcompletionisdetermined

bytheproportionthatpropertydevelopmentcostsincurredforworkperformedtodatebeartotheestimatedtotalpropertydevelopment

costs.

Wherethefinancialoutcomeofadevelopmentactivitycannotbereliablyestimated,propertydevelopmentrevenueisrecognisedonly

totheextentofpropertydevelopmentcostsincurredthatisprobablewillberecoverable,andpropertydevelopmentcostsonproperties

soldarerecognisedasanexpenseintheperiodinwhichtheyareincurred.

Anyexpectedlossonadevelopmentproject,includingcoststobeincurredoverthedefectsliabilityperiod,isrecognisedasanexpense

immediately.

Propertydevelopmentexpenditurenotrecognisedasanexpensearerecognisedasanasset,whichismeasuredatthelowerofcost

andnetrealisablevalue.

Theexcessofrevenuerecognisedinthestatementofcomprehensiveincomeoverbillingstopurchasersisclassifiedasaccruedbillings

withintradereceivablesandtheexcessofbillingstopurchasersoverrevenuerecognisedinthestatementofcomprehensiveincomeis

classifiedasprogressbillingswithintradepayables.

(m) Deferred expenditure

ThedeferredexpenditurerelatestoconcessionfeepayablebyasubsidiarytotheGovernmentofMalaysiafortherightstooperate,

manage,andundertakefuturedevelopmentoftheSultanIsmailAirportinSenai,JohorDarulTakzim.Itisamortisedonastraightline

basisoveritsconcessionperiodof50yearsandassessedforimpairmentwheneverthereisanindicationthatitmaybeimpaired.The

amortisationperiodandtheamortisationmethodforthedeferredexpenditurearereviewedattheendofeachreportingperiod.

(i) Investment properties (continued)

115114

(n) Goodwill

Goodwillarisingonanacquisitionrepresentstheexcessofthecostofacquisitionofsubsidiariesandassociatesoverthefairvalueof

theGroup’ssharesoftheirnetidentifiableassetsatthedateofacquisition.Goodwillonacquisitionofsubsidiariesandassociatesare

statedatcostlessaccumulatedimpairmentlosses.Goodwillistestedforimpairmentonanannualbasisormorefrequentlyifeventsor

changesincircumstancesindicatethatthecarryingvaluemaybeimpaired.

Goodwillisallocatedtocash-generatingunitsforthepurposeofimpairmenttesting.Theallocationismadetothosecash-generating

unitsorgroupsofcash-generatingunits thatareexpected tobenefit fromthesynergiesof thebusinesscombination inwhich the

goodwillarose.

(o) Rights on Power Purchase Agreement and Operation & Maintenance Agreement

RightsonPowerPurchaseAgreementandOperation&MaintenanceAgreement(“Rights”)thatareacquiredbytheGrouparestated

atcost lessanyaccumulatedamortisationandaccumulated impairment losses. TheRightsareamortisedfromthedate that they

areavailableforuse.AmortisationoftheseRightsischargedtothestatementofcomprehensiveincomebasedontheestimatednet

electricaloutputandfixedoperationandmaintenanceincomeoverthefiniteusefullivesoftheRightsofapproximately12to24years.

(p) Intellectual property

Theintellectualpropertyisstatedatcostlessaccumulatedamortisationandanyaccumulatedimpairmentlossesandrepresentsthe

costofacquiringtherightstousetheRefuseDerivedFueltechnologycomprisingtechnicalinformation,copyrightandpatent.This

expenditureiscapitalisedasitisabletogeneratefutureeconomicbenefitstotheGroupandisamortisedovertheestimatedusefullife

oftherelatedassetof30years.

The intellectualproperty isreviewedfor impairment losseswhenevereventsorchanges incircumstances indicatethatthecarrying

amountmaynotberecoverable. Impairment loss is recognisedfor theamountbywhichthecarryingamountof therelatedasset

exceedsitsrecoverableamount.

(q) Rights on Water Treatment Business

TheRightsonWaterTreatmentBusinessarebasedonthefairvalueoftheremainingusefullivesoftheconcessionagreemententered

byasubsidiaryfortheprivatisationoftheoperations,maintenanceandrehabilitationofwatertreatmentplantsinJohorDarulTakzim,

lessaccumulatedamortisationandanyaccumulatedimpairmentlosses.Therightsareamortisedovertheremainingusefullivesofthe

concessionperiodattheendofeachreportingperioduntiltheendofconcessionon31May2014.


(r) Rights on Airport Business

TheRightsonAirportBusinessrepresenttherightofasubsidiarytoprovideairportservicesandtochargeusersoftheservices.It

encapsulatedconcessionagreement,licenseandotheragreementsrelatingtotheusageoftheairportastheseassetscontributeto

earningsonlyinconcertwithotherassetsand/oreconomicfactorsofthebusiness.Therightsareamortisedovertheremaininguseful

livesoftheconcessionperiodattheendofeachreportingperioduntiltheendofconcessionon30October2053.

(s) Construction, engineering and fabrication contracts

Whentheoutcomeofaconstructionorengineeringandfabricationcontractcanbeestimatedreliably,contractrevenueandcontract

costsarerecognisedbyusingthestageofcompletionmethod.

TheGroupusesthepercentageofcompletionmethodtodeterminetheappropriateamountofrevenueandcoststorecogniseinagiven

period;thestageofcompletionismeasuredbyreferencetotheproportionthatcontractcostsincurredforworkperformedtodatebear

totheestimatedtotalcostsforthecontract.

Whentheoutcomeofsuchcontractcannotbeestimatedreliably,contractrevenueisrecognisedonlytotheextentofcontractcosts

incurredthatisprobablewillberecoverable;contractcostsarerecognisedwhenincurred.

Whenitisprobablethattotalcontractcostswillexceedtotalcontractrevenue,theexpectedlossisrecognisedasanexpenseimmediately.

Theaggregateofthecostsincurredandtheprofit/lossrecognisedoneachcontractarecomparedagainsttheprogressbillingsupto

theperiodend.Wherecostincurredandrecognisedprofit(lessrecognisedlosses)exceedprogressbillings,thebalanceisshownas

amountsduefromcontractcustomersundertradeandotherreceivables(withincurrentassets).Whereprogressbillingsexceedcost

incurredplusrecognisedprofit(lessrecognisedlosses),thebalanceisshownasamountsduetocontractcustomersundertradeand

otherpayables(withincurrentliabilities).

(t) Inventories

Inventoriesarestatedatthelowerofcostandnetrealisablevaluewithcostbeingdeterminedeitheronthefirst-in,first-outorweighted

averagecostbasisdependingonthetypeofinventories.Costincludesexpenditureincurredinbringingtheinventoriestotheirpresent

formandlocation.Forworkinprogressandmanufacturedinventories,costconsistsofmaterials,directlabour,otherdirectcostandan

appropriateproportionoffixedandvariableproductionoverheads(basedonnormaloperatingcapacity)butexcludesborrowingcosts.

Netrealisablevalueistheestimatedsellingpriceintheordinarycourseofbusiness,lessthecostofcompletionandsellingexpenses.

117116

(u) Trade and other receivables

Tradereceivablesareamountsduefromcustomersarisingfrombillingsintheordinarycourseofbusiness.Ifcollectionisexpectedin

oneyearorless(orinthenormaloperatingcycleofthebusinessiflonger),theyareclassifiedascurrentassets.Ifnot,theyarepresented

asnon-currentassets.

Tradereceivablesarerecognisedinitiallyatfairvalueandsubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod,

lessprovisionforimpairment.

(v) Cash and cash equivalents

Cashandcashequivalentsconsistofcashinhand,balancesanddepositsheldatcallwithbanksandothershortterm,highlyliquid

investmentsthatarereadilyconvertibletoknownamountsofcashwhicharesubjecttoaninsignificantriskofchangesinvalue.Forthe

purposeofthecashflowstatement,cashandcashequivalentsarepresentednetofbankoverdraftsandpledgeddeposits.

(w) Borrowings

Borrowingsarerecognisedinitiallyatfairvalue,netoftransactioncostsincurred.

Borrowingsaresubsequentlycarriedatamortisedcost;anydifferencebetweeninitalrecognisedamountandtheredemptionvalueis

recognisedinprofitorlossovertheperiodoftheborrowingsusingtheeffectiveinterestmethod,exceptforborrowingcostsincurredfor

theconstructionofanyqualifyingasset.

Preferenceshares,whicharemandatorilyredeemableonaspecificdate,areclassifiedasliabilities.Thedividendsonthesepreference

sharesarerecognisedasfinancecostinprofitorloss.

Borrowingcostsincurredfortheconstructionofanyqualifyingassetarecapitalisedduringtheperiodoftimethatisrequiredtocomplete

andpreparetheassetforitsintendeduseorsale.

(x) Government grants

Governmentgrantsarerecognisedinitiallyattheirfairvalueinthestatementoffinancialpositionasdeferredincomewherethereis

reasonableassurancethatthegrantwillbereceivedandallattachingconditionswillbecompliedwith.

Governmentgrantsshallberecognisedasincomeovertheperiodsnecessarytomatchthemwiththerelatedcostswhichtheyare

intendedtocompensate,onasystematicbasis.


(y) Redeemable Convertible Unsecured Loan Stocks (“RCULS”)

RCULSareregardedascompoundinstruments,consistingofaliabilitycomponentandanequitycomponent.Atthedateofissue,

thefairvalueoftheliabilitycomponentisestimatedusingtheprevailingmarketinterestrateforasimilarnon-convertiblebond.The

differencebetweentheproceedsofissueoftheconvertiblebondsandthefairvalueassignedtotheliabilitycomponent,representing

theconversionoptionisincludedinshareholder’sequity.Theliabilitycomponentissubsequentlystatedatamortisedcostusingthe

effectiveinterestratemethoduntilextinguishedonconversionorredemptionwhilstthevalueoftheequitycomponentisnotadjusted

insubsequentperiods.

Undertheeffectiveinterestratemethod,theinterestexpenseontheliabilitycomponentiscalculatedbyapplyingtheprevailingmarket

interestrateforasimilarnon-convertiblebondtotheinstrument.Thedifferencesbetweenthisamountandtheinterestpaidareadded

tothecarryingvalueofRCULS.

(z) Taxation

CurrenttaxexpenseisdeterminedaccordingtothetaxlawsofeachjurisdictioninwhichtheGroupoperatesandincludealltaxesbased

uponthetaxableprofits,includingwithholdingtaxespayablebyaforeignsubsidiaryondistributionsofretainedearningstocompanies

intheGroup,andrealpropertygainstaxespayableondisposalofproperties.

Deferredtaxliabilitiesand/orassetsarerecognised,usingtheliabilitymethod,foralltemporarydifferencesarisingbetweentheamounts

attributedtoassetsandliabilitiesfortaxpurposesandtheircarryingamountsinthefinancialstatements.

Deferredtaxassetsarerecognisedtotheextentthatitisprobablethatfuturetaxableprofitwillbeavailableagainstwhichthedeductible

temporarydifferencesorunusedtaxlossescanbeutilised.Deferredtaxliabilityinrespectofassetrevaluationsisalsorecognised.

Deferredtaxisrecognisedontemporarydifferencesarisingoninvestmentsinsubsidiaries,associatesandjointventuresexceptwhere

thetimingofthereversalofthetemporarydifferencecanbecontrolledanditisprobablethatthetemporarydifferencewillnotreverse

intheforeseeablefuture.

DeferredtaxisnotrecognisedifthetemporarydifferencesarisefromgoodwillorexcessoftheGroup’sinterestinthenetfairvalueof

acquiree’sidentifiableassets,liabilitiesandcontingentliabilitiesovercostofbusinesscombinationsorfromtheinitialrecognitionofan

assetorliabilityinatransactionwhichisnotabusinesscombinationandatthetimeofthetransaction,affectsneitheraccountingprofit

nortaxableprofit.

Taxrateenactedorsubstantivelyenactedbytheendofthereportingperiodareusedtodeterminedeferredtax.

(aa) Land lease received in advance

Landleasereceivedinadvancerelatestodeferredincomefromsub-leaselandandisrecognisedtothestatementofcomprehensive

incomeequallyovertheperiodoftheleaserangingfrom17to60years.

119118

(ab) Employee benefits

(i) Short-term employee benefits

Short-termemployeebenefitobligationsinrespectofsalaries,annualbonuses,paidannualleaveandsickleavearemeasuredon

anundiscountedbasisandareexpensedastherelatedserviceisprovided.

Aprovisionisrecognisedfortheamountexpectedtobepaidundershort-termcashbonusorprofit-sharingplansiftheGrouphas

apresentlegalorconstructiveobligationtopaythisamountasaresultofpastserviceprovidedbytheemployeeandtheobligation

canbeestimatedreliably.

TheGroup’scontributiontostatutorypensionfundischargedtothestatementofcomprehensiveincomeintheperiodtowhichthey

relate.Oncethecontributionshavebeenpaid,theGrouphasnofurtherpaymentobligations.

(ii) Defined benefit plans

TheGroup’snetobligationinrespectofadefinedbenefitplaniscalculatedbyestimatingtheamountoffuturebenefitthatemployees

haveearnedinreturnfortheirserviceinthecurrentandpriorperiodsandthatbenefitisdiscountedtodeterminethepresentvalue.

Thediscountrateisthemarketyieldattheendofthereportingperiodonhighqualitycorporatebondsorgovernmentbonds.The

calculationisperformedbyanactuaryusingtheprojectedunitcreditmethod.

Whenthebenefitsofaplanareimproved,theportionoftheincreasedbenefitrelatingtopastservicebyemployeesisrecognised

asanexpenseinthestatementofcomprehensiveincomeonastraight-linebasisovertheaverageperioduntilthebenefitsbecome

vested.Totheextentthatthebenefitsvestimmediately,theexpenseisrecognisedimmediatelyinthestatementofcomprehensive

income.

Incalculating theGroup’sobligation in respectofaplan, to theextent thatanycumulativeunrecognisedactuarialgainor loss

exceedstenpercent(10%)ofthegreaterofthepresentvalueofthedefinedbenefitobligation,thatportionisrecognisedinthe

statementofcomprehensiveincomeovertheexpectedaverageremainingworkinglivesoftheemployeesparticipatingintheplan.

Otherwise,theactuarialgainorlossisnotrecognised.

Where thecalculationresults inabenefit to theCompany, therecognisedasset is limited to thenet totalofanyunrecognised

actuariallossesandpastservicecostsandthepresentvalueofanyfuturerefundsfromtheplanorreductionsinfuturecontributions

totheplan.

Anactuarialvaluationisconductedbyanindependentactuaryatregularintervals.Thelastvaluationperformedwason31December

2008forMalakoffCorporationBerhad,(byTowersWatsonMalaysia(formerlyknownasWatsonWyatt(Malaysia)SdnBhd))and8

December2010forJohorPortBerhad(byMercerZainalConsultingSdnBhd).


(ac) Revenue recognition

(i) Sales of goods and services

Salesarerecognisedupondeliveryofproductsandcustomeracceptance,ifany,orperformanceofservices,netofsalestaxand

discountandaftereliminatingsaleswithintheGroup.

(ii) Capacity and energy payments, operation and maintenance charges, project management and engineering consultancy

fees

Revenueismeasuredatthefairvalueoftheconsiderationreceivableandisrecognisedinthestatementofcomprehensiveincome

asitaccrues.

(iii) Construction contracts

(a) Fixed price contracts

Revenuefromfixedpricecontractswhereafixedcontractpriceisagreeduponisrecognisedunderthepercentageof

completionmethod.

(b) Cost plus contracts

Costpluscontractswherereimbursementsaremadeoncostsincurredforworkscarriedoutonanagreedcontractrate,are

recognisedasrevenueattributedtotheproportionofworkdoneprogressivelyoverthedurationofthecontracts.

(c) Profit guarantee contracts

Revenuefromprofitguaranteecontractsarerecognisedbasedonfixedpercentageonthebillingsmadebythemain

contractortotheclient.

(iv) Port operations, repairing and cleaning containers

Income from port operations, repair, preparation and trade of containers and containerisation system are recognised upon

performanceofservices.

(v) Sales of gas

Revenuefromsaleofgasrepresentsgasconsumptionbycustomersandismeasuredatthenetvalueinvoicedtocustomersduring

theperiod.

(vi) Toll operations

Revenueisrecogniseduponreceiptoftollcollections.Tollcompensationisrecognisedwhenreceiptisprobableandtheamount

thatisreceivablecanbemeasuredreliably.

121120

(vii) Water treatment activity

Revenue fromwater treatment activity ismeasured at the fair value of the consideration recoverable in accordancewith the

ConcessionAgreement(“CA”)dated31May1994enteredintobetweenasubsidiarycompany,SouthernWaterCorporationSdn

Bhd(“SWC”)andSyarikatAirJohorSdnBhd(“SAJ”)anditisrecognisedinthestatementofcomprehensiveincomewhensaleof

treatedwaterhasbeenreceivedbythebuyeranditisprobablethattheeconomicbenefitsassociatedwiththetransactionwillflow

tothecompaniesintheGroup.

(viii) Airport activity

Incomefromairportoperationsandaviationrelatedservicesintheairportarerecognisedwhenservicesarerendered.

(ix) Income from land reclamation, shore protection, dredging, associated works and construction contract

Income from land reclamation,shoreprotection,dredging,associatedworksandconstructioncontracts is recognisedon the

percentageofcompletionmethod,measuredbyreferencetosurveysofworkperformed.

Whentheoutcomeofaconstructioncontractcannotbeestimatedreliably,revenueisrecognisedonlytotheextentofcontract

costsincurredthatisprobablewillberecoverableandcontractcostsarerecognisedasanexpenseintheperiodinwhichtheyare

incurred.

(x) Dividend income

Dividendincomeisrecognisedwhentherighttoreceivepaymentisestablished.

(xi) Interest income

Interestincomeisrecognisedinthestatementofcomprehensiveincomeasitaccrues,takingintoaccounttheeffectiveyieldon

theasset.

(xii) Rental income

Rentalincomeisrecognisedonanaccrualsbasis.


(ad) Accounting for zakat

TheGrouprecognisesitsobligationstowardsthepaymentofzakatonbusiness.Zakatforthecurrentperiodisrecognisedasandwhen

theGrouphasacurrentzakatobligationasaresultofazakatassessment.Theamountofzakatexpenseshallbeassessedwhena

subsidiaryhasbeeninoperationforatleast12months,i.e.fortheperiodknownas“haul”.

Zakatratesenactedorsubstantivelyenactedbytheendofeachreportingperiodareusedtodeterminethezakatexpense.Therate

ofzakatonbusiness,asdeterminedbyNationalFatwaCouncil for2010 is2.5%of thezakatbase.Thezakatbaseof theGroup

isdeterminedbasedontheprofitaftertaxofeligiblecompanieswithintheGroupafterdeductingdividendincomeandcertainnon

operatingincomeandexpenses.Zakatonbusinessiscalculatedbymultiplyingthezakatratewithzakatbase.Theamountofzakat

assessedisrecognisedasanexpenseintheyearinwhichitisincurred.

(ae) Foreign currencies

(i) Functional and presentation currency

ItemsincludedinthefinancialstatementsofeachoftheGroup’sentitiesaremeasuredusingthecurrencyoftheprimaryeconomic

environmentinwhichtheentityoperates.ThefinancialstatementsarepresentedinRinggitMalaysia,whichistheGroup’sfunctional

andpresentationcurrency.

(ii) Transactions and balances

Foreigncurrencytransactionsaretranslatedintothefunctionalcurrencyusingtheexchangeratesprevailingatthedatesofthe

transactions.Foreignexchangegainsand losses resulting fromthesettlementofsuch transactionsand fromthe translationat

yearendexchangeratesofmonetaryassetsandliabilitiesdenominatedinforeigncurrenciesarerecognisedinthestatementof


(iii) Group companies

On consolidation, exchange differences arising from the translation of the net investment in foreign operations are taken to

shareholders’equity.Whenaforeignoperationispartiallydisposedoforsold,exchangedifferencesthatwererecordedinequityare

recognisedinthestatementofcomprehensiveincomeaspartofthegainorlossonsale.

(ac) Revenue recognition (continued)

123122

(af) Financial instruments

(i) Description

Afinancial instrument isanycontractthatgivesrisetobothafinancialassetofoneenterpriseandafinancial liabilityorequity

instrumentofanotherenterprise.

Afinancialassetisanyassetthatiscash,acontractualrighttoreceivecashorotherfinancialassetsfromanotherenterprise,a

contractualrighttoexchangefinancialinstrumentswithanotherenterpriseunderconditionsthatarepotentiallyfavourable,oran

equityinstrumentofanotherenterprise.

Afinancialliabilityisanyliabilitythatisacontractualobligationtodelivercashoranotherfinancialassettoanotherenterprise,orto

exchangefinancialinstrumentswithanotherenterpriseunderconditionsthatarepotentiallyunfavourable.

(ii) Classification

TheGrouphaschanged itsaccountingpolicy for recognitionandmeasurementoffinancialassetsuponadoptionofFRS139

“FinancialInstruments:RecognitionandMeasurement”on1January2010.Previously,investmentinnon-currentinvestmentsare

shownatcost;marketablesecurities(withincurrentassets)arecarriedatthelowerofcostandmarketvalue;andtradereceivables

arecarriedat invoiceamount.TheGrouphasappliedthenewpolicyaccordingto thetransitionalprovisionofFRS139byre-

measuringallfinancialassets,asappropriate,andrecordinganyadjustmentstothepreviouscarryingamountstoopeningretained

earningsor,ifappropriate,anothercategoryofequity,inthecurrentfinancialyear.RefertoNote4fortheimpactofthischangein

accountingpolicy.

TheGroupclassifiesitsfinancialassetsinthefollowingcategories:atfairvaluethroughprofitorloss,loansandreceivables,available-

for-saleandheld-to-maturity.Theclassificationdependsonthepurposeforwhichthefinancialassetswereacquired.Management

determinestheclassificationatinitialrecognition.

Financial assets at fair value through profit or loss

Financialassetsatfairvaluethroughprofitorlossarefinancialassetsheldfortrading.Afinancialassetisclassifiedinthiscategoryif

itisacquiredorincurredprincipallyforthepurposeofsellingorrepurchasingitinthenearterm.Derivativesarealsocategorizedas

heldfortradingunlesstheyaredesignatedashedges.

Loans and receivables

Loansandreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenotquoted inanactive

market.Theyareincludedincurrentassets,exceptformaturitiesgreaterthan12monthsaftertheendofthereportingperiod.These

areclassifiedasnon-currentassets.TheGroup’sloansandreceivablescomprise‘tradeandotherreceivables’and‘cashandbank

balances’inthestatementoffinancialposition(Note29and32respectively).


(ii) Classification (continued)

Available-for-sale financial assets

Available-for-salefinancialassetsarenon-derivativesthatareeitherdesignatedinthiscategoryornotclassifiedinanyoftheother

categories.Theyareincludedinnon-currentassetsunlesstheinvestmentmaturesormanagementintendstodisposeofitwithin12

monthsoftheendofthereportingperiod.

Held-to-maturity financial assets

Held-to-maturityfinancialassetsarenon-derivativefinancialassetswithfixedordeterminablepaymentsandfixedmaturitiesthat

theGroup’smanagementhasthepositiveintentionandabilitytoholdtomaturity.IftheGroupweretosellotherthananinsignificant

amountofheld-to-maturityfinancialassets,thewholecategorywouldbetaintedandreclassifiedasavailable-for-sale.Held-to-

maturityfinancialassetsareincludedinnon-currentassets,exceptforthosewithmaturitieslessthan12monthsfromtheendofthe

reportingperiod,whichareclassifiedascurrentassets.

(iii) Recognition and initial measurement

Regularpurchasesandsalesoffinancialassetsarerecognisedonthetrade-date,thedateonwhichtheGroupcommitstopurchase

orselltheasset.

Financialassetsareinitiallyrecognisedatfairvalueplustransactioncostsforallfinancialassetsnotcarriedatfairvaluethrough

profitorloss.Financialassetscarriedatfairvaluethroughprofitorlossareinitiallyrecognisedatfairvalue,andtransactioncostsare

expensedinprofitorloss.

(iv) Subsequent measurement – gains and losses

Available-for-salefinancialassetsandfinancialassetsatfairvaluethroughprofitorlossaresubsequentlycarriedatfairvalue.Loans

andreceivablesandheld-to-maturityfinancialassetsaresubsequentlycarriedatamortisedcostusingtheeffectiveinterestmethod.

Changesinthefairvaluesoffinancialassetsatfairvaluethroughprofitorloss,includingtheeffectsofcurrencytranslation,interest

anddividendincomearerecognizedinprofitorlossintheperiodinwhichchangesarise.

Changesinthefairvalueofavailable-for-salefinancialassetsarerecognisedinothercomprehensiveincome,exceptforimpairment

lossesandforeignexchangegainsandlossesonmonetaryassets.Theexchangedifferencesonmonetaryassetsarerecognised

inprofitorloss,whereasexchangedifferencesonnon-monetaryassetsarerecognisedinothercomprehensiveincomeaspartof

fairvaluechange.

Interestanddividendincomeonavailable-for-salefinancialassetsarerecognisedseparatelyinprofitorloss.Interestonavailable-

for-saledebtsecuritiescalculatedusingtheeffectiveinterestmethodisrecognisedinprofitorloss.Dividendincomeonavailable-

for-saleequityinstrumentsarerecognisedinprofitorlosswhentheGroup’srighttoreceivepaymentsisestablished.

(af) Financial instruments (continued)

125124

(v) Subsequent measurement – Impairment on financial assets

Assets carried at amortised cost

TheGroupassessesattheendofthereportingperiodwhetherthereisobjectiveevidencethatafinancialassetorgroupoffinancial

assetsisimpaired.Afinancialassetoragroupoffinancialassetsisimpairedandimpairmentlossesareincurredonlyifthereis

objectiveevidenceofimpairmentasaresultofoneormoreeventsthatoccurredaftertheinitialrecognitionoftheasset(a‘loss’

event)andthatlossevent(orevents)hasanimpactontheestimatedfuturecashflowsofthefinancialassetorgroupoffinancial

assetsthatcanbereliablyestimated.

Theamountofthelossismeasuredasthedifferencebetweentheasset’scarryingamountandthepresentvalueofestimatedfuture

cashflows(excludingfuturecreditlossesthathavenotbeenincurred)discountedatthefinancialasset’soriginaleffectiveinterest

rate.Theasset’scarryingamountoftheassetsisreducedandtheamountofthelossisrecognizedinprofitorloss.If‘loansand

receivables’ora‘held-to-maturityinvestment’hasavariableinterestrate,thediscountrateformeasuringanyimpairmentlossisthe

currenteffectiveinterestratedeterminedunderthecontract.Asapracticalexpedient,theGroupmaymeasureimpairmentonthe

basisofaninstrument’sfairvalueusinganobservablemarketprice.

If,inasubsequentperiod,theamountoftheimpairmentlossdecreasesandthedecreasecanberelatedobjectivelytoanevent

occurringaftertheimpairmentwasrecognised,thereversalofthepreviouslyrecognisedimpairmentlossisrecognisedinprofitor

loss.

Whenanasset is uncollectible, it iswrittenoff against the relatedallowanceaccount.Suchassetsarewrittenoff after all the

necessaryprocedureshavebeencompletedandtheamountofthelosshasbeendetermined.

Assets classified as available-for-sale

TheGroupassessesattheendofthereportingperiodwhetherthereisobjectiveevidencethatafinancialassetoragroupoffinancial

assetsisimpaired.

Fordebtsecurities,theGroupusescriteriaandmeasurementofimpairmentlossapplicablefor‘assetscarriedatamortisedcost’

above.If,inasubsequentperiod,thefairvalueofadebtinstrumentclassifiedasavailable-for-saleincreasesandtheincreasecanbe

objectivelyrelatedtoaneventoccurringaftertheimpairmentlosswasrecognizedinprofitorloss,theimpairmentlossisreversed

throughprofitorloss.


(v) Subsequent measurement – Impairment on financial assets (continued)

Assets classified as available-for-sale (continued)

Inthecaseofequitysecuritiesclassifiedasavailable-for-sale,inadditiontothecriteriafor‘assetscarriedatamortisedcost’above,

asignificantorprolongeddeclineinthefairvalueofthesecuritybelowitscostisalsoconsideredasanindicatorthattheassetsare

impaired.Ifanysuchevidenceexistsforavailable-for-salefinancialassets,thecumulativelossthathadbeenrecogniseddirectly

inequityisremovedfromequityandrecognisedinprofitorloss.Theamountofcumulativelossthatisreclassifiedtoprofitorloss

isthedifferencebetweentheacquisitioncostandthecurrentfairvalue,lessanyimpairmentlossonthatfinancialassetpreviously

recognisedinprofitorloss.Impairmentlossesrecognisedinprofitorlossonequityinstrumentsclassifiedasavailable-for-saleare

notreversedthroughprofitorloss.

TheGrouphaschangeditsaccountingpolicyforimpairmentforinvestmentsuponadoptionofFRS139“FinancialInstruments:

RecognitionandMeasurement”on1January2010.

Previously,forinvestmentsinnon-currentinvestments,allowancefordiminutioninvaluewasmadewhere,intheopinionofthe

Directors,therewasadeclineotherthantemporaryinthevalueofsuchinvestments.Wheretherehadbeenadeclineotherthan

temporaryinthevalueofaninvestment,suchadeclinewasrecognisedinprofitorlossintheperiodinwhichthedeclinewas

identified.Marketablesecurities(withincurrentassets)andotherinvestmentswerecarriedatthelowerofcostandmarketvalue,

determinedonanaggregateportfoliobasisbycategoryofinvestment.Costisderivedatontheweightedaveragebasis.Market

valueiscalculatedbyreferencetostockexchangequotedsellingpricesatthecloseofbusinessattheendofthereportingperiod.

Changesinthecarryingamountofmarketablesecuritieswerecredited/chargedtoprofitorloss.

TheGrouphasappliedthenewpolicyaccordingtothetransitionalprovisionbyre-measuringallfinancialassets,asappropriate,

andrecordinganyadjustmentstothepreviouscarryingamountstoopeningretainedearningsor,ifappropriate,anothercategoryof

equity,ofthecurrentfinancialyear.RefertoNote4fortheimpactofthischangeinaccountingpolicy.

(af) Financial instruments (continued) (af) Financial instruments (continued)

127126

(v) Subsequent measurement – Impairment on financial assets (continued)

De-recognition

Financialassetsarede-recognisedwhentherightstoreceivecashflowsfromtheinvestmentshaveexpiredorhavebeentransferred

andtheGrouphastransferredsubstantiallyallrisksandrewardsofownership.

ReceivablesthatarefactoredouttobanksandotherfinancialinstitutionswithrecoursetotheGrouparenotderecogniseduntil

therecourseperiodhasexpiredandtherisksandrewardsofthereceivableshavebeenfullytransferred.Thecorrespondingcash

receivedfromthefinancialinstitutionsisrecordedasborrowings.

Whenavailable-for-salefinancialassetsaresold,theaccumulatedfairvalueadjustmentsrecognisedinothercomprehensiveincome

arereclassifiedtoprofitorloss.

(ag) Contingent liabilities

TheGroupdoesnotrecogniseacontingentliabilitybutdisclosesitsexistenceinthenotestothefinancialstatements.Acontingent

liabilityisapossibleobligationthatarisesfrompasteventswhoseexistencewillbeconfirmedbyuncertainfutureeventsbeyondthe

controloftheGrouporapresentobligationthatisnotrecognisedbecauseitisnotprobablethatanoutflowofresourceswillberequired

tosettletheobligation.

IntheacquisitionofsubsidiariesbytheGroupunderbusinesscombinations,thecontingentliabilitiesassumedaremeasuredinitiallyat

theirfairvalueattheacquisitiondate,irrespectiveoftheextentofanynon-controllinginterest.

TheGrouprecognisesseparatelythecontingentliabilitiesoftheacquireesaspartofallocatingthecostofabusinesscombinationwhere

theirfairvaluescanbemeasuredreliably.Wherethefairvaluescannotbemeasuredreliably,theresultingeffectwillbereflectedinthe

goodwillarisingfromtheacquisition.

(ah) Segment reporting

Operatingsegmentsarereportedinamannerconsistentwiththeinternalreportingprovidedtothechiefoperatingdecision-maker.The

chiefoperatingdecision-maker,whoisresponsibleforallocatingresourcesandassessingperformanceoftheoperatingsegments,has

beenidentifiedastheBoardofDirectorsandtheworkinggroupconsistingofHeadsofDepartmentsthatmakesstrategicdecisions.

TheGrouphasadoptedFRS8“Operatingsegments”from1January2010.FRS8replacesFRS114“Segmentreporting”andisapplied

retrospectively.TheadoptionofFRS8hasresultedinfurtheranalysistotheGroup’searningsbeforeinterest,tax,depreciationand

amortisation(“EBITDA”).TherehasbeennoimpactonthemeasurementoftheGroup’sassetsandliabilities.


(ai) Mining exploration expenditure

Expenditureonexplorationandevaluationofminingareasofinterestischargedtothestatementofcomprehensiveincomeasincurred

untilsuchtimeasanareaofinterestreachesthestagewheresuchexpenditureisconsideredtobecapableofbeingrecoupedthrough

developmentorsale.

Whereaminingareaofinterestisexpectedtoproceedtocommercialdevelopmentorwhereitsvalueiscapableofrecoupmentthrough

sale,thedeferredexpenditurerelatingtotheexpenditureincurrediscreditedtothestatementofcomprehensiveincometotheextentit

reflectsthepresentestimateoftherecoverablevalueoftheareaofinterestconcerned.Theaccumulatedexpenditureattributabletoan

areaofinterestthatisnolongerconsideredtohaveanycommercialvalueiswrittenoffagainstthedeferredexpenditure.

(aj) Non-current assets classified as assets held for sale and discontinued operation

Non-currentassets(ordisposalgroups)areclassifiedasheldforsaleiftheircarryingamountwillberecoveredprincipallythroughasale

transactionratherthanthroughcontinuinguse.Thisconditionisregardedasmetonlywhenthesaleishighlyprobableandtheasset(or

disposalgroup)isavailableforimmediatesaleinitspresentconditionsubjectonlytotermsthatareusualandcustomary.

Immediatelybeforeclassificationasheldforsale,themeasurementofthenon-currentassets(oralltheassetsandliabilitiesinadisposal

group)isbroughtup-to-dateinaccordancewithapplicableFRSs.Then,oninitialclassificationasheldforsale,non-currentassetsor

disposalgroups(otherthaninvestmentproperties,deferredtaxassets,employeebenefitsassets,financialassetsandinventories)are

measuredinaccordancewithFRS5thatisatthelowerofcarryingamountandfairvaluelesscoststosell.Anydifferencesareincluded

instatementofcomprehensiveincome.

AcomponentoftheGroupisclassifiedasadiscontinuedoperationwhenthecriteriatobeclassifiedasheldforsalehavebeenmetor

ithasbeendisposedoffandsuchacomponentrepresentsaseparatemajorlineofbusinessorgeographicalareaofoperations,ispart

ofasingleco-ordinatedmajorlineofbusinessorgeographicalareaofoperationsorisasubsidiaryacquiredexclusivelywithaviewfor

resale.

(af) Financial instruments (continued)

129128

1 CORPORATE INFORMATION

TheprincipalactivitiesoftheCompanyareinvestmentholding,construction,miningandmineralexploration.

TheprincipalactivitiesofthesubsidiariesareshowninNote47tothefinancialstatements.

Thereisnosignificantchangeinthenatureoftheseactivitiesduringthefinancialyear,exceptasfurtherdisclosedinNote16tothe


TheultimateholdingcompanyisIndraCitaSdnBhd,acompanyincorporatedinMalaysia.

TheCompanyisapubliclimitedliabilitycompany,incorporatedanddomiciledinMalaysia,andislistedontheMainBoardofBursa

MalaysiaSecuritiesBerhad.TheregisteredofficeoftheCompanyislocatedatLevel8,KompleksAntarabangsa,JalanSultanIsmail,

50250KualaLumpur.

ThefinancialstatementsareexpressedinthousandsofRinggitMalaysiaunlessotherwisestated.

ThefinancialstatementshavebeenapprovedforissueinaccordancewitharesolutionoftheBoardofDirectorson21March2011.

2 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

(a) Financial risk factors

TheGroup’sactivitiesexposeittoavarietyoffinancialrisks,includingforeigncurrencyexchangerisk,interestraterisk,marketrisk,

creditrisk,liquidityandcashflowrisk.TheGroup’soverallfinancialriskmanagementobjectiveistoensurethattheGroupcreates

valueforitsshareholders.TheGroupfocusesontheunpredictabilityoffinancialmarketsandseekstominimisepotentialadverse

effectsonthefinancialperformanceoftheGroup.Financialriskmanagementiscarriedoutthroughriskreviews,internalcontrol

systems,insuranceprogrammesandadherencetoGroupfinancialriskmanagementpolicies.TheBoardregularlyreviewsthese

risksandapprovesthetreasurypolicies,whichcoversthemanagementoftheserisks.

TheGroupusesinstrumentssuchasforeignexchangecontractstocovercertainexposures.Itdoesnottradeinfinancialinstruments.

(i) Foreign currency exchange risk

TheGroupisexposedtominimalforeigncurrencyriskasthemajorityoftheGroup’stransactions,assetsandliabilitiesare

denominatedinRinggitMalaysia.

TheGroupalsomaintainsanaturalhedgebymaintainingforeigncurrencydenominatedcashreservesinanoffshorelicensed

bank account to fund any potential future cash outflows arising from its business operations in foreign countries and by

borrowinginthecurrencyofthecountryinwhichtheinvestmentislocatedorbyborrowingincurrenciesthatmatchthefuture

revenuestreamtobegeneratedbytheinvestment.

NOTESTOTHEFINANCIALSTATEMENTSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010

(ii) Interest rate risk

TheGroup’s interest rate risk arises from theGroup’sborrowingsanddepositsdenominated inRinggitMalaysia, andare

managedthroughtheuseoffixedandfloatingrates.

Theinformationonmaturitydatesandeffectiveinterestratesoffinancialassetsandliabilitiesaredisclosedintheirrespective

notes.

TheGroupanalysesitsinterestrateexposureonadynamicbasis.Variousscenariosaresimulatedtakingintoconsideration

refinancing,renewalofexistingpositionsandalternativefinancing.Basedonthesescenarios,theGroupcalculatestheimpact

onprofitandlossofadefinedinterestrateshift.

Theimpactonprofitaftertaxattributabletoshareholderofa0.25%increaseinweightedaverageinterestratewouldbean

increaseofRM55millioninfinancecosts.

(iii) Market risk

TheGroup’soperationsaresubjecttomarketriskfactorsinherentwithintheindustrieswhichincludeabilitytoprocurenew

projectsandtomaintainitsexistingmarketshareinthefuture.Theseareprevalentforalleconomicentitiesandanychangein

thesewilladverselyaffecttheoverallperformanceofGroup’sbusiness.Formajorpurchasesofmaterialsforprojects,theGroup

establishesfloatingandfixedpricelevelsinaccordancewithabudgetthattheGroupconsidersacceptableandentersintoa

physicalsupplyagreement,wherenecessary,toachievetheselevels.

(iv) Credit risk

Creditriskariseswhensalesaremadeondeferredcreditterms.TheGroupseekstocontrolcreditriskbyensuringitscustomers

havesoundfinancialstanding,credithistoryandrequirementofcollateralwherenecessary.

(v) Liquidity and cash flow risk

Prudentliquidityriskmanagementimpliesmaintainingsufficientcash,theavailabilityoffundingthroughanadequateamountof

committedcreditfacilitiesandtheabilitytocloseoutmarketpositions.Duetothedynamicnatureoftheunderlyingbusiness,

theGroupaimsatmaintainingflexibilityinfundingbykeepingcommittedcreditlinesavailable.

The following tableanalyses theGroup’snon-derivative financial liabilitiesandnet-settledderivative financial liabilities into

relevantmaturitygroupingsbasedon the remainingperiodat theendof reportingperiod to thecontractualmaturitydate.

Derivativefinancialliabilitiesareincludedintheanalysisiftheircontractualmaturitiesareessentialforanunderstandingofthe

timingofthecashflows.Theamountsdisclosedinthetablearethecontractualundiscountedcashflows.

2 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

(a) Financial risk factors (continued)

131130

2 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

(a) Financial risk factors (continued)

(v) Liquidity and cash flow risk (continued)

At 31 December 2010

(b) Capital risk management

TheprimaryobjectiveoftheGroup’scapitalmanagementistoensurethattheGroupwouldbeabletocontinueasagoingconcern

whilemaximisingreturnstoshareholders.

No changesweremade in the objectives, policies or processes during the financial years ended 31December 2010 and 31

December2009.

Inordertomaintainoradjustthecapitalstructure,thegroupmayadjusttheamountofdividendspaidtoshareholders,returncapital

toshareholders,issuenewsharesorsellassetstoreducedebt.

3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

EstimatesandjudgementsarecontinuallyevaluatedbytheDirectorsandarebasedonhistoricalexperienceandotherfactors,including

expectationsoffutureeventsthatarebelievedtobereasonableunderthecircumstances.

TheGroupmakesestimatesandassumptionsconcerningthefuture.Theresultingaccountingestimateswill,bydefinition,rarelyequal

therelatedactualresults.Toenhancetheinformationcontentoftheestimates,certainkeyvariablesthatareanticipatedtohavematerial

impactontheGroup’sresultsandfinancialpositionaretestedforsensitivitytochangesintheunderlyingparameters.Theestimatesand

assumptionsthathaveasignificantriskofcausingamaterialadjustmenttothecarryingamountoftheassetsandliabilitieswithinthe

nextfinancialyearareasfollows:

NOTESTOTHEFINANCIALSTATEMENTSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010 (CONTINUED)

3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)

(a) Goodwill impairment assessment

TheGrouptestsgoodwillforimpairmentannuallyinaccordancewithitsaccountingpolicy.Moreregularreviewsareperformedif

eventsindicatethatthisisnecessary.

The recoverableamountsof thePortBusiness,ElectricityGenerationBusinessandAirportOperations;CashGeneratingUnits

(“CGUs”)respectively,weredeterminedbasedonthevalueinusecalculations.Thecalculationsrequiretheuseofestimatesand

judgementsassetoutinNote24(A)PortBusiness,Note24(B)ElectricityGenerationBusinessandNote24(C)(i)AirportOperations;

tothefinancialstatements.

(b) Residual value of power plants

TheGroupchargesdepreciationonitsdepreciableproperty,plantandequipmentbasedontheusefullifeandresidualvaluesofthe

assets.Estimatingtheusefullifeandresidualvaluesofproperty,plantandequipmentinvolvessignificantjudgement,selectionof

varietyofmethodsandassumptionsthatarenormallybasedonmarketconditionsexistingattheendofeachreportingperiod.The

actualusefullifeandresidualvalueoftheassetshowever,maybedifferentfromexpected.

ThePowerPurchaseAgreements(“PPA”)providesforthedisposalofthepowerplantsattheendoftheinitialconcessionperiod,

in theevent it isnotextended. Inassessing theappropriatenessof the residual valuesadopted,managementconsidered the

recoverablevaluesoftheassetsbasedonDiscountedCashFlowmethod(“DCF”).Thediscountedcashflowarederivedusingthe

followingcriticalassumptions:

(1) MinimumextensionoffiveyearsofthePPAattheendoftheinitialconcessionperiod,inviewof:

(i) limitednewpowerplantsbeingconstructed;

(ii) increaseindemandforpower;and

(iii) TNB’scontinuedrelianceonIndependentPowerProducers(“IPPs”).

(2) AnestimatedVariableOperatingRate(“VOR”)duringtheextensionperiodwhichmanagementdeemstobereasonablebased

ontheexpecteddemandandtheVORrateattheendofthePPA;

(3) Anaveragedespatchfactorof72%and75%toreflectthefuturedemandforpowerbytheindustry;and

(4) Thediscountrateusedis7.5%.

Iftherecoverableamountattheendoftheconcessionperiodisnil,therewillbeadditionaldepreciationchargeandimpairmentto

property,plantandequipmentoftheGroup.Inaddition,therewillalsobeimpairmenttothegoodwillandintangibleassets.Referto

Note24(B)ontheimpairmentassessmentofgoodwillarisingfromtheelectricitygenerationbusiness.

AtCompanylevel,theimpact,hadtheresidualvaluebeennil,willbeimpairmentonthecostofinvestmentinthesubsidiary,Malakoff

CorporationBerhad.

Within 1 yearFrom 1 to 2

yearsFrom 2 to 5

years After 5 years Total

Group RM’000 RM’000 RM’000 RM’000 RM’000

Tradeandotherpayables 1,594,123 6,841 6,400 11,413 1,618,777

Redeemableconvertible

unsecuredloanstocks 26,051 - - - 26,051

Redeemablepreferenceshares - - 68,431 68,036 136,467

ThematurityprofileofborrowingsarestatedunderNote38

133132

4 IMPACT OF CHANGES IN ACCOUNTING POLICIES

Thesignificantaccountingpolicies,methodofcomputationandbasisofconsolidationappliedinthefinancialstatementsareconsistent

with thoseadopted in theauditedfinancialstatements for thefinancialyearended31December2009except for theadoptionof

thefollowingnewandrevisedFinancialReportingStandards(“FRS”)andIssuesCommitteeInterpretations(“ICInt.”)effectiveforthe

financialperiodbeginningon1January2010:

FRS3 - BusinessCombinations(revised)

FRS7 - FinancialInstruments:Disclosures

FRS8 - OperatingSegments

FRS101 - PresentationofFinancialStatements(revised)

FRS123 - BorrowingCosts

FRS139 - FinancialInstruments:RecognitionandMeasurement

ICInt.9 - ReassessmentofEmbeddedDerivatives

ICInt.10 - InterimFinancialReportingandImpairment

ICInt.14 - FRS119–TheLimitonaDefinedBenefitAsset,MinimumFundingRequirementsandtheirinteraction

TheadoptionsoftheaboveFRSsdonothavesignificantfinancialimpacttotheGroupexceptfortheadoptionofthefollowingstandards

assetoutbelow:

(a) FRS 101(revised): Presentation of Financial Statements

PriortotheadoptionoftherevisedFRS101,thecomponentsofthefinancialstatementspresentedconsistedofabalancesheet,

an incomestatement,astatementofchanges inequity,acashflowstatementandnotestothefinancialstatements.Withthe

adoptionoftherevisedFRS101,thecomponentsofthefinancialstatementspresentedconsistofastatementoffinancialposition,

astatementofcomprehensive income,astatementofchanges inequity,astatementofcashflowsandnotes to thefinancial

statements.

Theeffectsofthechangeinpresentationareasfollows:

• Thegainsthatwererecogniseddirectlyinequityintheprecedingyearcorrespondingperiodarepresentedascomponentsin

othercomprehensivegaininthestatementofcomprehensiveincome.

• Thetotalcomprehensivegainforprecedingyearcorrespondingperiodispresentedseparatelyandallocationismadetoshow

theamountattributabletoownersoftheparentandtonon-controllinginterests.


4 IMPACT OF CHANGES IN ACCOUNTING POLICIES (CONTINUED)

(b) Amendment to FRS 117, Leases

PriortotheadoptionoftheAmendmenttoFRS117,leaseholdlandandbuildingweretreatedasoperatingleases.Theconsiderations

paidwereclassifiedandpresentedasprepaidlandandbuildingleasepaymentsinthestatementoffinancialposition.

WiththeadoptionoftheAmendmenttoFRS117,theclassificationofaleaseholdlandandbuildingasafinanceleaseoranoperating

leaseisbasedontheextenttowhichrisksandrewardsincidenttoownershiplie.Inmakingthisjudgement,themanagementhas

concludedthatlandandbuildingwithaninitialleaseperiodof50yearsormorearefinanceleasesbecausethepresentvalueof

theminimumleasepayments(i.e.theconsiderationpaidorpayable)issubstantiallyequaltothefairvalueofthelandandbuilding.

(c) FRS 139 Financial Instruments: Recognition and Measurement

FRS139establishesprinciplesforrecognisingandmeasuringfinancialassets,financialliabilitiesandsomecontractstobuyand

sellnon-financialitems.TheGroupandtheCompanyhaveadoptedFRS139prospectivelyon1January2010inaccordancewith

thetransitionalprovisions.TheeffectsarisingfromtheadoptionofthisStandardhavebeenaccountedforbyadjustingtheopening

balanceofretainedearningsasat1January2010.Comparativesarenotrestated.Thedetailsofthechangesinaccountingpolicies

andtheeffectsarisingfromadoptionofFRS139areasfollows:

(1) Available-For-Sale Financial Assets

Equityinstruments

Available-for-salefinancialassetsaremeasuredatfairvalueinitiallyandsubsequentlycarriedatfairvalue.

Changes in the fair value of available-for-sale financial assets are recognised in other comprehensive income, except for

impairmentlossesandforeignexchangegainsandlossesonmonetaryassets.Theexchangedifferencesonmonetaryassets

arerecognisedinprofitorloss,whereasexchangedifferencesonnon-monetaryassetsarerecognisedinothercomprehensive

incomeaspartoffairvaluechange.

Priorto1January2010,theGroupclassifieditsinvestmentsinmarketablesecuritiesandotherinvestmentswhichwereheldfor

non-tradingpurposes.Suchinvestmentswerecarriedatcostlessimpairmentlosses.

(2) Borrowings

Borrowingsareinitiallymeasuredatfairvalueincludingdirectlyattributabletransactioncostsandsubsequentlyatamortised

costusingtheeffectiveinterestratemethod.Gainandlossesarerecognisedintheconsolidatedstatementofcomprehensive

incomewhentheliabilitiesarederecognisedorthroughtheamortisationprocess.

Priorto1January2010,borrowingsarestatedatcostafterdeductingtransactioncosts.

InaccordancewiththetransitionalprovisionsforthefirsttimeadoptionofFRS139,theabovechangesinaccountingpolicyhave

beenaccountedforprospectivelyandthecomparativesarenotrestated.Theeffectsofthechangeson1January2010havebeen

accountedforbyadjustingtheopeningbalancesinthestatementoffinancialposition.

135134


ThefollowingNotes(i)to(iii)disclosetheimpactsofsuchchangesonthefinancialstatementsoftheGroupandCompany.

(i) Impact on the Group’s statements of financial position Increase/(decrease) to balances as at 31 December 2010

FRS 139

RM’000

Otherassets (1,600)

Available-for-salefinancialassets(Note20) 90,280

Marketablesecurities(Note31) (61,237)

Redeemablepreferenceshares (2,128)

Borrowings 67,817


Balances as at 31 Dec 2009 Balances as at 1 January 2010

As previously

reported FRS 117 As restated FRS 139 As adjusted

RM’000 RM’000 RM’000 RM’000 RM’000

Property,plantand

equipment(Note5(a)(ii)) 16,223,530 1,113,990 17,337,520 - 17,337,520

Prepaidleasepayments 1,133,628 (1,113,990) 19,638 - 19,638

Otherassets 6,792 - 6,792 (1,600) 5,192

Available-for-salefinancial

assets - - - 325,677 325,677

Marketablesecurities

(Note31) 61,237 - 61,237 (61,237) -

Tradeandotherpayables 2,104,981 - 2,104,981 8,218 2,113,199

Redeemablepreference

shares(Note35) 114,051 - 114,051 (2,128) 111,923

Borrowings 20,918,698 - 20,918,698 67,817 20,986,515

Reserves(Note5(a)(ii)) 5,997,273 - 5,997,273 226,650 6,223,923

Non-controllinginterests 3,460,519 - 3,460,519 (37,717) 3,422,802

Balances as at 31 December 2008

As previously

reported FRS 117 As restated

RM’000 RM’000 RM’000

Property,plantandequipment 15,692,290 632,028 16,324,318

Prepaidleasepayments 650,759 (632,028) 18,731


(i) Impact on the Group’s statements of financial position (continued)

(iii) Impact on the Company’s statements of financial position

(ii) Impact on the Group’s statement of comprehensive income

Increase/(decrease) for the financial year ended 31 December 2010

FRS 139

RM’000

Available-for-salefinancialassets

-Fairvaluegain 24,131

-Disposals (196,698)


As previously


RM’000 RM’000 RM’000

Property,plantandequipment 5,650 4,556 10,206

Prepaidleasepayments 4,556 (4,556) -


As previously


RM’000 RM’000 RM’000

Property,plantandequipment 3,970 4,499 8,469

Prepaidleasepayments 4,499 (4,499) -

137136

Increase/(Decrease)

As previously

reported PPA finalisation As restated

RM’000 RM’000 RM’000

Group

Statement of financial position

Property,plantandequipment(Note4(i)) 17,337,520 (286,375) 17,051,145

Propertydevelopmentexpenditure 2,052,166 (112,138) 1,940,028

Intangibleassets 8,070,414 305,190 8,375,604

Reserves(Note4(i)) 5,997,273 (3,097) 5,994,176

Deferredtaxliabilities 3,628,066 (90,226) 3,537,840

Statement of comprehensive income

Otheroperatingexpenses (440,692) (4,129) (444,821)

Profitbeforetaxation 685,755 (4,129) 681,626

Taxexpense (59,394) 1,032 (58,362)

Netprofitforthefinancialyear 626,361 (3,097) 623,264

Profitattributabletoequity

holdersoftheCompany 236,711 (3,097) 233,614

Earningsperordinaryshares(sen):

-Basic 7.8 (0.1) 7.7

-Diluted 7.8 (0.1) 7.7

Statement of changes in equity

Retainedearnings 2,282,097 (3,097) 2,279,000

5 PRIOR YEAR ADJUSTMENTS

TheGrouphasadjustedthecomparativefiguresinaccordancewiththefollowing:

(a) Finalisation of the Purchase Price Allocation (“PPA”) on the acquisition of Senai Airport Terminal Services Sdn Bhd (“SATS”)

Subsequenttothepreliminaryassessmentmadeinthefinancialyearended31December2009,theGrouphasfinalisedthePPAon

theacquisitionofSATSwithinthepermitted12monthsperiodfromthedateofcompletionoftheacquisitionunderFRS3“Business

Combination”.

Thedifferencebetweenthepreliminaryassessment,aspreviouslyreportedinthefinancialstatementsforthefinancialyearended

31December2009,andthefinalassessmentinrespectofthefairvalueofthenetassetsacquired,goodwillandcashflowarising

fromtheacquisitionisasfollows:

Thefollowingtablesdisclosetheadjustmentsthathavebeenmadearisingfromthefinalassessmentabove:

(i) SummaryofsignificanteffectstoStatementofcomprehensiveincomeforthefinancialyearended31December2010.

RM’000

Increase/(Decrease)

Group

Otheroperatingexpenses (6,195)

Profitbeforetaxation (6,195)

Taxexpense 1,549

Netprofitforthefinancialyear (4,646)

Earningsperordinaryshare(sen):

-Basic (0.2)


Preliminary

assessment Adjustment

Final

Assessment

RM’000 RM’000 RM’000

Group

Property,plantandequipment 546,762 (91,847) 454,915

Prepaidleasepayments 498,282 (192,929) 305,353

Propertydevelopmentexpenditure 1,995,138 (112,138) 1,883,000

Intangibleassets - 168,909 168,909

Tradeandotherreceivables 14,672 - 14,672

Cashandcashequivalents 91,780 - 91,780

Tradeandotherpayables (535,874) - (535,874)

Borrowings (371,871) - (371,871)

Deferredtaxliabilities (580,666) 89,194 (491,472)

Fairvalueofnetassetsacquired 1,658,223 (138,811) 1,519,412

Goodwillonacquisition 51,694 138,811 190,505

Netconsideration 1,709,917 - 1,709,917

5 PRIOR YEAR ADJUSTMENTS (CONTINUED)

Thefollowingtablesdisclosetheadjustmentsthathavebeenmadearisingfromthefinalassessmentabove:(continued)

(ii) Restatementofcomparatives

139138

Group Company

2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Administrative and other operating expenses

Consultantandprofessionalfee 43,591 58,343 19,148 31,831

Depreciation,amortisationandimpairment 554,944 384,790 1,617 1,837

Donations 100,000 75,000 30,000 -

Officeadministrative 65,803 60,872 - -

Repairandmaintenance 29,503 82,717 - -

Rentalexpenses 11,446 7,467 - -

Staffrelatedcosts 183,104 173,856 16,829 13,828

Utilities 6,565 6,950 - -

Insurance,Cessfundandlicenses 103,116 161,677 188 155

Writeoffamountduefromasubsidiary - - 70,000 -

Others 94,876 131,832 8,016 11,495

1,192,948 1,143,504 145,798 59,146

Total 6,949,683 6,594,918 145,798 63,917


7 EXPENSES BY NATURE (CONTINUED)

7 EXPENSES BY NATURE

IncludedinthecostofelectricitygenerationistheamortisationofintangibleassetsrelatingtoRightsonPowerPurchaseAgreement

andOperationandMaintenanceAgreementamountingtoRM434million(2009:RM432million).

Group Company

2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Cost of sales

Costofelectricitygeneration 3,333,869 3,367,100 - -

Costofgoodsandgassold 1,372,116 1,367,790 - -

Costofportoperations 563,581 530,635 - -

Costofairportoperations 1,070 15,231 - -

Contractcostrecognisedasanexpense 72,351 82,003 - 4,771

Costofservices 340,809 88,655 - -

Costofpropertylease 72,939 - - -

5,756,735 5,451,414 - 4,771

6 REVENUE

Group Company

2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Electricitygeneration 5,345,760 5,138,359 - -

Saleofgoodsandgas 1,873,160 1,818,162 - -

Portoperations 1,214,450 1,117,587 - -

Airportoperations 26,874 16,486 - -

Contractrevenue 115,106 126,777 - 2,871

Services 197,499 209,348 - -

Propertylease 87,352 10,234 - -

Dividends(Note9(i)) 3,448 7,368 580,467 402,510

Distributionsfromjointlycontrolledentities - - 113,750 154,247

8,863,649 8,444,321 694,217 559,628

141140


9 PROFIT BEFORE ZAKAT AND TAXATION

Group Company

2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

(Restated)

(i) Profitbeforezakatandtaxationisarrivedat:

Aftercharging:

Auditors’remuneration

-Statutoryaudit

-currentyear 561 540 110 100

-underaccrualinprioryear - 8 - 8

-Otherauditrelatedservices 443 561 366 364

-Non-auditservices - 709 - 269

Otherauditors’remuneration

-Statutoryaudit 565 478 - -

-Non-auditservices 1,511 1,686 - -

Directors’fees(Note9(ii)) 937 928 482 628

Depreciationofproperty,plantand

equipment(Note14) 788,529 734,763 1,617 1,837

Depreciationofinvestmentproperties 504 202 - -

Amortisationofprepaidleasepayments 403 393 - -

Allowanceforimpairedreceivables 19,933 37,784 - -

Allowanceforimpairedreceivablesforamount

duefromsubsidiaries - - 38 764

Writeoffamountduefromasubsidiary - - 70,000 -

Realisedlossonforeignexchange 8 236 3 -

Unrealisedlossonforeignexchange 2,927 1,605 457 10

Impairmentlossofproperty,plantand

equipment 60,143 447 - -

Impairmentlossonintellectualproperty 6,399 - - -

Impairmentlossongoodwillonconsolidation 3,458 - - -

Impairmentlossofinvestmentproperties - 332 - -

Provisionforretirementbenefits(Note40(c)) 8,565 5,440 - -

Hireofplantandmachinery 83,691 71,545 - -

Rentoflandandbuildings 67,044 70,665 1,653 1,581

8 FINANCE COST

Group Company

2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Al-IstisnaBonds 408,425 447,289 - -

MediumTermsNotes 446,307 396,855 - -

TermLoans 290,556 226,655 146,230 109,928

JuniorSukuk 171,256 153,000 - -

Bai’BithamanAjilIslamicDebtSecurities 46,085 53,807 - -

SukukIjarahBonds 34,876 43,243 - -

RedeemableUnsecuredLoanStocks 17,954 25,292 - -

CommercialPapers 17,144 24,908 - -

Others 22,733 27,458 15,129 9,258

1,455,336 1,398,507 161,359 119,186

143142


9 PROFIT BEFORE ZAKAT AND TAXATION (CONTINUED)

Group Company

2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

(Restated)

(i) Profitbeforetaxationisarrivedat:(continued)

Aftercrediting:

Realisedgainonforeignexchange 197 1,023 - -

Unrealisedgainonforeignexchange 193 257 - -

Amortisationoflandleasereceivedin

advance(Note39) 11,400 9,950 - -

Gainondisposalofproperty,plantand

equipment 781 28,540 51 30

Gainondisposalofothernon-currentassets 15,432 87 - -

Gainondisposalofavailable-for-salefinancial

assets 181,227 - - -

Rentalincome 1,817 2,539 85 79

Write-backofallowanceforimpaired

receivables(Note29) 45,657 48,219 - -

Amortisationofdeferredincome(Note41) 33,276 14,616 - -

Impairedreceivablesrecovered 715 2,359 - -

Interestincome 172,836 158,667 3,448 1,232

Gainondisposalof:

-asubsidiary - - 714 -

-associate 45,891 439 38,832 -

Gainonliquidationofsubsidiaries - 280 - -

Grossdividendincome:

-Subsidiaries:UnquotedinMalaysia - 534,197 360,618

-Subsidiaries:QuotedinMalaysia - - 46,270 41,892

-Otherinvestments:QuotedinMalaysia 3,448 7,368 - -

Distributionsfromjointlycontrolledentities - - 113,750 154,247

Group Company

2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

(Restated)

(i) Profitbeforezakatandtaxationisarrivedat:

(continued)

Aftercharging:(continued)

Impairmentlossonintangibleassetsinan

associate 197,929 123,221 - -

Impairmentincostofinvestmentinassociates 4,353 14,972 - -

AmortisationofRightsonPowerPurchase

AgreementandOperationsand

MaintenanceAgreementarisingthrough

businesscombinations:

-subsidiaries(Note24) 395,327 393,343 - -

-associate 38,746 38,247 - -

Write-offofproperty,plantandequipment 223 10,941 - -

Amortisationofdevelopmentexpenditureand

intellectualproperty(Note24) 267 267 - -

Write-offofprojectcost - - - 1,863

Amortisationofrightsforwatertreatment

business(Note24) 3,532 3,532 - -

Amortisationofrightsforairportbusiness

(Note24) 4,196 2,530 - -

Managementfeespaidtoasubsidiary - - 480 480

Amortisationofdeferredexpenditure(Note25) - 2,467 - -

AmortisationofRedeemableConvertible

UnsecuredLoanStocks(Note37(b)) 486 833 - -

ContributionforAlbukharyInternational

University 100,000 75,000 30,000 -

Lossondisposalofsubdiaries(Note16(a)&(b)) 1,764 - - -

Staffcosts(includingExecutiveDirectors’

remuneration(Note9(ii)):

-Wages,salariesandbonus 332,652 301,422 10,356 10,772

-Definedcontributionplan 36,046 32,596 1,345 1,267

-Otheremployeebenefits 29,861 26,881 1,084 941


145144


10 ZAKAT EXPENSES

11 TAX EXPENSE

Group and Company

2010 2009

RM’000 RM’000

Movementinzakatliability:

Atthebeginningofthefinancialyear - -

Currentfinancialyear’sexpense 1,236 -

Paidduringthefinancialyear (1,236) -

Atendoffinancialyear - -

Group Company

2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

(Restated)

Currenttax:

- CurrentyearMalaysiantax 239,286 264,563 1,971 25,419

- (Over)/Underaccrualinprioryears(net) (20,950) (21,365) 12,032 5,016

218,336 243,198 14,003 30,435

Deferredtax:

- Originationandreversaloftemporary

differences(Note26)(86,509) (125,783) - -

- Overaccrualinprioryears(Note26) (79,727) (59,053) - -

52,100 58,362 14,003 30,435


(ii) Directors’remuneration:

TheaggregateamountofemolumentsreceivedbyDirectorsoftheCompanyduringthefinancialyearwasasfollows:

IncludedintheNon-ExecutiveDirectors’otheremolumentsareamountsreceivedbyNon-ExecutiveDirectorsintheircapacityas

ExecutiveDirectorsinsubsidiaries.

Group Company

2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

(Restated)

Directors of the Company

Non-ExecutiveDirectors:

-fees 937 928 482 628

-otheremoluments 4,757 3,320 411 182

-definedcontributionplan 347 481 7 16

-estimatedmoneyvalueof

benefits-in-kind126 105 125 79

ExecutiveDirectors:

-salariesandotheremoluments 4,883 4,534 4,689 4,402

-definedcontributionplan 785 262 780 262

-estimatedmoneyvalueof

benefits-in-kind192 298 165 298

12,027 9,928 6,659 5,867

147146


12 EARNINGS PER ORDINARY SHARE

Basicearningsperordinaryshareanddilutedearningspersharearecalculatedbydividingthenetprofitforthefinancialyearattributable

toequityholdersoftheCompanybytheweightedaveragenumberofordinarysharesinissueduringthefinancialyear.

13 DIVIDENDS

TheRedeemableConvertibleSubordinatedLoansissuedbyasubsidiarydonothaveamaterialimpacttothedilutionoftheGroup’s

earningspershare.

AttheforthcomingAnnualGeneralMeeting,afinalsingle-tierdividendof3.5senperordinaryshareinrespectofthefinancialyearended

31December2010on3,045,058,552ordinaryshares,amountingtoRM106,577,049willbeproposedforshareholders’approval.The

financialstatementsforthecurrentfinancialyeardonotreflectthisproposeddividend.Suchdividends,ifapprovedbytheshareholders,

willbeaccountedforinshareholders’equityasanappropriationofretainedearningsinthefinancialyearending31December2011.

Group

2010 2009

(Restated)

Netprofitforthefinancialyearattributabletoordinaryequityholdersofthe

Company(RM’000) 344,940 233,614

Weightedaveragenumberofordinaryshares(‘000) 3,045,058 3,045,058

Basicearningspershare(sen) 11.3 7.7

Dilutedearningspershare(sen) 11.3 7.7

Group and Company

2010 2009

RM'000 RM'000

Finalproposed:

3.5sen(2009:3.0sen)perordinaryshare,single-tier 106,577 91,352

11 TAX EXPENSE (CONTINUED)

Theexplanationoftherelationshipbetweentaxexpenseandprofitbeforetaxationisasfollows:

Group Company

2010 2009 2010 2009

RM’000 RM’000

(Restated)

RM’000 RM’000

Numericalreconciliationbetweentaxexpenseand

theproductofaccountingprofitmultipliedby

theMalaysiantaxrate

Profitbeforetaxationandafterzakat 854,512 681,626 429,001 378,721

TaxcalculatedattheMalaysiantaxrateof25% 213,628 170,407 107,250 94,680

Taxeffectsof:

- expensesnotdeductiblefortaxpurposes 178,168 79,348 35,628 20,269

- incomeexemptedfromtax - - (143,412) (107,532)

- incomenotsubjecttotax (198,115) (23,183) (9,886) -

- differencesinSMEtaxrateof20%and

corporatetaxrateof25% 74 (327) - -

- temporarydifferencesnotrecognised 7,992 7,076 521 545

- utilisationofpreviouslyunrecognised

temporarydifferencesandtaxlosses (1,864) 4,835 - -

- investmenttaxallowance (72,060) (153,321) - -

- shareofresultsofassociatesandjointly

controlledentitiesnetoftax 24,954 44,952 - -

- shareoftaxinanunincorporatedjointly

controlledentity - - 11,870 17,457

(Over)/Underaccrualinprioryears(net) (100,677) (71,425) 12,032 5,016

Taxexpense 52,100 58,362 14,003 30,435

149148

14 PROPERTY, PLANT AND EQUIPMENT


Freehold

properties

Leasehold

properties

Building

and Port

structures

Mining leases

properties Power plants

Plant, machinery,

dredges and other

mining equipment

Pipeline

system

Capital work in

progress C-inspection cost Total

Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Cost/valuation

At1January2009

-Cost 53,179 - 2,931,587 347 10,589,184 2,444,025 1,045,341 654,515 353,981 18,072,159

-Valuation 25,981 - 280 - - - - - - 26,261

Aspreviouslystated 79,160 - 2,931,867 347 10,589,184 2,444,025 1,045,341 654,515 353,981 18,098,420

Deconsolidationofasubsidiary - - - - - (284,390) - (34,177) - (318,567)

EffectofamendmenttoFRS117 - 650,681 - - - - - - - 650,681

79,160 650,681 2,931,867 347 10,589,184 2,159,635 1,045,341 620,338 353,981 18,430,534

Asrestated

-Cost 53,179 650,681 2,931,587 347 10,589,184 2,159,635 1,045,341 620,338 353,981 18,404,273

-Valuation 25,981 - 280 - - - - - - 26,261

79,160 650,681 2,931,867 347 10,589,184 2,159,635 1,045,341 620,338 353,981 18,430,534

Acquisitionthroughbusinesscombination - 305,353 271,181 - - 1,017 - 182,717 - 760,268

Disposals (84) (4,734) (316) - - (33,841) - (1,955) - (40,930)

Additions 15 - 42,077 - 37,564 106,468 (18,308) 523,266 34,143 725,225

Reclassification - - 168,771 - 22,581 452,857 52,932 (697,141) - -

Transfertonon-currentassetsheldfor

sale(Note28) - - - - - (173) - - - (173)

Write-offs (105) - - - (10,079) (2,988) - - - (13,172)

At31December2009/1January2010 78,986 951,300 3,413,580 347 10,639,250 2,682,975 1,079,965 627,225 388,124 19,861,752

Disposalofasubsidiary - - - - - (3,523) - - - (3,523)

Disposals - - - - - (12,925) - - - (12,925)

Additions 2,234 - 122,963 - 11,508 30,270 4,407 220,805 112,001 504,188

Reclassification - - 339,887 - 1,985 67,816 60,167 (469,855) - -

Write-offs - - - - - (2,768) - - - (2,768)

At31December2010 81,220 951,300 3,876,430 347 10,652,743 2,761,845 1,144,539 378,175 500,125 20,346,724

151150

14 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)


^ ThebalancesconsistofadditionsofRMnil(2009:RM706,443)offsetagainstthecapitalcontributionsreceivedfromcustomersof

RMnil(2009:RM19,014,574).

Group

Freehold

properties

Leasehold

properties

Building

and Port

structures

Mining

leases

properties Power plants

Plant, machinery,

dredges and other

mining equipment

Pipeline

system

Capital work in

progress

C-inspection

cost Total

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Accumulated depreciation

At1January2009 (3,699) - (338,724) - (619,337) (691,549) (242,449) - (173,688) (2,069,446)

EffectofamendmenttoFRS117 - (18,653) - - - - - - - (18,653)

Depreciation(Note9(i)) (2,041) (12,674) (74,629) - (343,692) (167,498) (35,809) - (98,420) (734,763)

Disposals - - - - - 28,541 - - - 28,541

Transfertonon-currentassetsheldforsale(Note28) - - - - - 47 - - - 47

Write-offs - - - - 2,037 194 - - - 2,231

At31December2009/1January2010 (5,740) (31,327) (413,353) - (960,992) (830,265) (278,258) - (272,108) (2,792,043)

Disposalofasubsidiary - - - - - 3,308 - - - 3,308

Depreciation(Note9(i)) (3,109) (16,869) (88,751) - (352,266) (189,172) (37,927) - (100,435) (788,529)

Disposals - - - - - 12,477 - - - 12,477

Write-offs - - - - - 2,545 - - - 2,545

At31December2010 (8,849) (48,196) (502,104) - (1,313,258) (1,001,107) (316,185) - (372,543) (3,562,242)

Accumulated impairment losses

At1January2009 (10,810) - (1,348) - - (3,633) (2,326) - - (18,117)

Impairmentloss (447) - - - - - - - - (447)

At31December2009/1January2010 (11,257) - (1,348) - - (3,633) (2,326) - - (18,564)

Impairmentloss - - - - - (60,143) - - - (60,143)

At31December2010 (11,257) - (1,348) - - (63,776) (2,326) - - (78,707)

Net book value

At31December2008 64,651 632,028 2,591,795 347 9,969,847 1,464,453 800,566 620,338 180,293 16,324,318

At31December2009 61,989 919,973 2,998,879 347 9,678,258 1,849,077 799,381 627,225 116,016 17,051,145

At31December2010 61,114 903,104 3,372,978 347 9,339,485 1,696,962 826,028 378,175 127,582 16,705,775^

^

153152

14 PROPERTY, PLANT AND EQUIPMENT (CONTINUED) 14 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)


Freehold

properties

Leasehold

properties

Mining leases

properties

Plant,

machinery and

equipment Total

RM'000 RM'000 RM'000 RM'000 RM'000

Company

Cost

At1January2009

Aspreviouslyreported 826 - 347 26,708 27,881

Additions - - - 470 470

Disposals - - - (3,923) (3,923)

EffectofamendmenttoFRS117 - 5,620 - - 5,620

At31December2009/

1January2010 826 5,620 347 23,255 30,048

Additions - - - 1,441 1,441

Disposals - - - (5,961) (5,961)

At31December2010 826 5,620 347 18,735 25,528


At1January2009 - - - (22,231) (22,231)

EffectofamendmenttoFRS117 - (1,064) - - (1,064)

Depreciation(Note9(i)) - (57) - (1,780) (1,837)

Disposals - - - 3,553 3,553

At31December2009/

1January2010 - (1,121) - (20,458) (21,579)

Depreciation(Note9(i)) - (57) - (1,560) (1,617)

Disposals - - - 5,928 5,928

At31December2010 - (1,178) - (16,090) (17,268)

Net book value

At31December2008 826 4,556 347 4,477 10,206

At31December2009 826 4,499 347 2,797 8,469

At31December2010 826 4,442 347 2,645 8,260

Group

2010 2009

RM’000 RM’000

Restated

Netbookvalueofproperty,plantandequipmentpledgedassecurityfor

borrowings(Note38) 14,141,555 14,480,186

Group

2010 2009

RM’000 RM’000

Freeholdproperties 9,943 10,503

Included in theproperty,plantandequipmentof theGroup is interestcapitalisedata rate ranging from4%to8.5%perannum

amountingtoRM21.2million(2009:RM48.9million).

CertainoftheGroup’spropertiesinMalaysiaarestatedatvaluationbasedonaprofessionalvaluationconductedinFebruary1988

usingtheopen-marketbasis.Thevaluationwasaone-offexerciseandwasnotintendedtoeffectachangeintheaccountingpolicy

tooneofrevaluationofproperties.

Hadtherevaluedpropertiesbeencarriedathistoricalcostlessaccumulateddepreciation,thecarryingamountoftherevaluedassets

thatwouldhavebeenincludedinthefinancialstatementsattheendofthefinancialyearwouldbeasfollows:

TheimpairmentofRM60.1millioninproperty,plantandequipment(“PPE”),RM6.4millioninintellectualproperty(“IP”)andRM3.5

millioningoodwillonconsolidation(“GOC”),relatestotheRefuseDerivedFuel(“RDF”)plantofasubsidiary.Therecoverableamounts

orvalueinuseofthePPE,IPandGOCweredeterminedbydiscountingthefuturecashflowstobegeneratedfromthecontinuinguse

oftheRDFplant.Theprojectedcashflowspreparedbymanagementcoveraperiodof25years,overtheremainingusefullifeofthe

RDFplant.

Keyassumptionsusedinthevalueinusecalculationsareasfollows:

(i) Inflationaryrateis3.5%perannumandsalaryincrementrateis5%perannum.

(ii) TippingfeesofRM46pertonneforthefirst15yearsandexpectedtoincreasetoRM60pertonnesubsequently.

(iii) Recyclablesextractionrateisat2%in2010andexpectedtoincreaseto3%from2014and5%from2028.

(iv) Theaveragerecyclablessellingpricepertonneincreaseat3.5%perannum.

(v) ElectricitytariffchargedtocustomersisatRM0.21/kwhin2010andisprojectedtoincreasetoRM0.42/kwhfrom2013onwards.

(vi) MSWdisposalrateisassumedat25%ofincomingwaste.

(vii) Dailygasusageisestimatedat240mmBtu.

(viii)Powerplantcapacityfactorisat90%from2014onwards.

(ix) Pre-taxdiscountrateof10.4%.

155154

15 INVESTMENT PROPERTIES


Group

2010 2009

RM’000 RM’000

Cost

At1January 35,477 36,290

Additions 66 30

Disposals - (341)

Transfertonon-currentassetsheldforsale(Note28) (132) (502)

At31December 35,411 35,477


At1January (3,270) (3,242)

Depreciation(Note9(i)) (504) (202)

Disposals - 87

Transfertonon-currentassetsheldforsale(Note28) 29 87

At31December (3,745) (3,270)

Accumulated impairment losses

At1January (888) (556)

Impairmentloss(Note9(i)) - (332)

At31December (888) (888)

Net book value 30,778 31,319

Fair value 129,889 120,357

Group

2010 2009

RM’000 RM’000

Rentalincome 1,660 2,456

Directoperatingexpenses 1,332 1,913

Allinvestmentpropertiesarefreeholdproperties.

Rentalincomegeneratedfromanddirectoperatingexpensesincurredoninvestmentpropertiesareasfollows:

16 INVESTMENTS IN SUBSIDIARIES

Company

2010 2009

RM’000 RM’000

SharesquotedinMalaysia 150,774 150,774

Unquotedshares 7,177,475 7,539,396

7,328,249 7,690,170

Add:ConversionofRedeemableConvertibleSubordinatedLoanstounquotedshares 264,445 -

Less:Accumulatedimpairmentlossesofunquotedshares (11,291) (15,189)

Less:Redemptionofsubsidiary’sRedeemableConvertible

PreferenceShares - (42,840)

7,581,403 7,632,141

Marketvalueofquotedinvestments:

QuotedinMalaysia 289,194 214,830

2010

RM'000

Property,plant&equipment 215

Tradeandotherreceivables 30,273

Cashandcashequivalents 345

Deferredtaxation 47

Tradeandotherpayables (13,950)

Fairvalueofnetassetsdisposed 16,930

Less:Non-controllinginterest (3,410)

13,520

Totaldisposalproceed (11,760)

LossondisposaltotheGroup(Note9(i)) 1,760

(a) On31May2010,JohorPortBerhad,a100.0%ownedsubsidiary,disposedof12,000,000ordinarysharesofRM1.00eachinBernas

LogisticsSdnBhd(“BernasLogistics”),representing75.0%oftheequityinterestinBernasLogisticsforatotalcashconsideration

ofRM11.8millionresultinginalossofRM1.8million.

ThedisposalhadthefollowingeffectsonthefinancialpositionoftheGroupasattheendoftheyear:

157156

16 INVESTMENTS IN SUBSIDIARIES (CONTINUED)

(a) 2010

RM'000

Cashinflowarisingfromdisposal:

Cashconsideration 11,760

Cashandcashequivalentsofsubsidiarydisposed (345)

NetcashinflowoftheGroup 11,415

2010

RM’000

Tradeandotherreceivables 18

Cashandcashequivalents 2,111

Tradeandotherpayables (65)

Fairvalueofnetassetsdisposed 2,064

Less:Non-controllinginterest (1,238)

826

Totaldisposalproceed (822)

LossondisposaltotheGroup(Note9(i)) 4

Cashoutflowondisposal:

Cashconsideration 822

Cashandcashequivalentsofsubsidiarydisposed (2,111)

NetcashoutflowoftheGroup (1,289)

(b) On27December2010,theCompanydisposedof4,000,000ordinarysharesofRM1.00eachinTimahDermawanSdnBhd(“TDSB”),

representing51.8%oftheequityinterestinTDSBforatotalcashconsiderationofRM822,063resultinginalossofRM3,582.

ThedisposalshadthefollowingeffectsonthefinancialpositionoftheGroupasattheendoftheyear:

(c) On29December2010,Anglo-Oriental(Annuities)SdnBhd,a100.0%ownedsubsidiary,commencedliquidationonthe16,786,332

ordinarysharesofRM1.00eachinMMCExploration&Production(Thailand)Limited(“MMCThailand”),representing100.0%ofthe

equityinterestinMMCThailand.

DetailsofthesubsidiariesareshowninNote47.


17 INVESTMENTS IN ASSOCIATES

Group

2010 2009

RM’000 RM’000

Representedby:

Group’sshareofnetassetsotherthangoodwill 795,253 1,011,261

Group’sshareofgoodwillinassociates’ownconsolidatedfinancialstatements 18,561 18,561

Intangibleassetsarisingfromacquisitionthroughbusinesscombinations 349,226 585,463

1,163,040 1,615,285

Group Company

2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

SharesquotedinMalaysia,atcost 139,037 165,031 139,037 163,046

Unquotedshares,atcost 1,582,392 1,660,011 - -

Shareofpost-acquisition(loss)/reserves (102,339) 52,376 - -

1,619,090 1,877,418 139,037 163,046

Less:Accumulatedimpairmentlosses (456,050) (262,133) - (6,409)

1,163,040 1,615,285 139,037 156,637

Group Company

2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Marketvalueofquotedassociates:

SharesquotedinMalaysia 132,632 184,039 132,632 181,556

Noimpairmenthasbeenmadeforthedifferencesbetweenthemarketvalueofquotedinvestmentsandthecarryingamountofshares

quotedinMalaysiaastheeffectofthelowmarketvalueofquotedinvestmentsisexpectedtobetemporary.

KaparEnergyVenturesSdnBhd(“KEV”),anassociateinwhichtheGrouphas20.4%effectiveinterest,reduceditslossesincurredfor

thefinancialyearended31August2010toRM152millioncomparedtotheRM188millionlossesincurredinthepreviousfinancialyear.

DespiteKEV’simprovedperformance,theGroupmaintainsaprudentoutlookofitsinvestmentsanddecidedtoperformanimpairment

assessment.AnimpairmenttestwascarriedouttodeterminetherecoverablevalueoftheGroup’sinvestmentinKEV,asasinglecash

generatingunitbasedontheexpectedcashflowsdiscountedtoitspresentvaluebasedonthekeyassumptionsassetoutinNote

24(B).TherecoverableamountisestimatedtobebelowthecarryingamountofinvestmentinKEV,andaccordingly,anallowancefor

impairmentofRM198million(2009:RM123million)wasrecognisedduringthefinancialyear.

159158

17 INVESTMENTS IN ASSOCIATES (CONTINUED)

18 INVESTMENTS IN JOINTLY CONTROLLED ENTITIES


SummarisedfinancialinformationinrespectoftheGroup’sassociatesareasfollows:

DetailsoftheGroup’sassociatesandtheaccountingperiodsusedforapplyingtheequitymethodofaccountingfortheassociates’

resultsareshowninNote47.

TheGrouphasdiscontinuedtherecognitionofitsshareoflossesofitsinactiveassociatesastheshareoflossesoftheseassociateshas

exceededtheGroup’sinterestinthoseassociates.Theunrecognisedshareoflossesoftheseassociatesforthecurrentfinancialyear

andcumulativelywereimmaterialtotheGroup.ThedetailsofinactiveassociatesaredisclosedinNote47.

Group

2010 2009

RM'000 RM'000

Revenue 1,839,929 1,933,220

Lossforthefinancialyear (119,264) (150,969)

Totalassets 5,057,767 4,500,141

Totalliabilities (3,894,727) (2,884,856)

1,163,040 1,615,285

Company

2010 2009

RM'000 RM'000

At cost:

Unquotedshares 5,001 5,001

18 INVESTMENTS IN JOINTLY CONTROLLED ENTITIES (CONTINUED)

TheGroup’sshareofincomeandexpenses,assetsandliabilitiesofthejointlycontrolledentitiesareasfollows:

TheGroup’sshareofcapitalcommitmentandcontingentliabilitiesinthejointlycontrolledentitiesareassetoutbelow:

DetailsoftheGroup’sjointlycontrolledentitiesareshowninNote47.

Group

2010 2009

RM'000 RM'000

Income 1,041,343 1,033,052

Expenses (974,420) (992,065)

66,923 40,987

Non-currentassets 677,415 630,801

Currentassets 794,781 451,093

Currentliabilities (1,252,915) (815,983)

Netassets 219,281 265,911

Group

2010 2009

RM'000 RM'000

Capital commitment:

Propertyplantandequipment

Authorisedandcontractedfor 3,534 4,047

Contingent liabilities:

PerformancebondtoGovernmentofMalaysiainrelationtothedoubletrackingproject 312,125 312,125

161160


19 OTHER INVESTMENTS

Group Company

2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

At cost:

SharesquotedoutsideMalaysia 13,172 13,172 - -

Unquotedshares 2,000 2,000 2,000 2,000

Transfertoavailable-for-sale

financialassets(Note20) (13,172) - - -

2,000 15,172 2,000 2,000

Less: Accumulated impairment losses

-SharesquotedoutsideMalaysia (13,172) (13,172) - -

-Unquotedshares (2,000) (2,000) (2,000) (2,000)

-Transfertoavailable-for-sale

financialassets(Note20) 13,172 - - -

- - - -

Market value of quoted investments:

-SharesquotedoutsideMalaysia - 9,670

20 AVAILABLE-FOR-SALE FINANCIAL ASSETS

Group

2010

RM’000

At1January2010:

-Transferfrommarketablesecurities(Notes4(i)&31) 61,237

-EffectofFRS139 264,440

Disposals (227,358)

Netlossestransferredtoequity (8,039)

At31December2010 90,280

Less:Non–currentportion (8,412)

Currentportion 81,868

Available-for-salefinancialassetscomprisethefollowing:

Listedequitysecurities:

-InMalaysia 81,832

-OutsideMalaysia 8,412

90,244

Unlistedequitysecurities

-InMalaysia 36

90,280

Available-for-salefinancialassetsaredenominatedinthefollowingcurrencies:

MalaysianRinggit 81,868

AustralianDollar 8,412

90,280

163162

Group

Freehold land Development

expenditure

Total

RM’000 RM’000 RM’000

At1January2010 1,883,000 57,028 1,940,028

Additions - 46,180 46,180

Disposal (69,012) - (69,012)

At31December2010 1,813,988 103,208 1,917,196

At1January2009 3,267 37,381 40,648

Acquisitionthroughbusinesscombination 1,883,000 - 1,883,000

Additions - 19,647 19,647

Disposal (3,267) - (3,267)

At31December2009-restated 1,883,000 57,028 1,940,028 Group

2010 2009

RM’000 RM’000

Staffloanstoeligiblestaff 4,868 7,700

Repaymentsduewithinthenexttwelvemonths (654) (908)

4,214 6,792

Analysisofrepaymentschedule:

Within1year 654 908

From1to2years 496 772

From2to5years 882 2,232

After5years 2,836 3,788

4,868 7,700

Freehold Land

On25August2006,asubsidiaryofMMCCorporationBerhadenteredintoaJointLandDevelopmentAgreement(“JLDA”)withExquisite

SkylineSdnBhd(“ESSB”),asubsidiaryofUnitedMalayanLandBerhad.ThepurposeofJLDAistodevelopapieceoffreeholdland

locatedatPesiaranRajaChulan,KualaLumpurintoacommercialdevelopmentof310unitsofserviceresidences.UptoNovember

2009,thesubsidiaryreceivedadepositofRM3,000,000fromESSB.Thesubsidiary’sparticipationintheJLDAisviatheinjectionofthe

land.

InconsiderationofthedevelopmentrightgrantedbythesubsidiarytoESSB,ESSBshallpayandthesubsidiaryagreestoacceptasum

of50%ofthedevelopmentprofitbeforetaxandbeforelandcostorRM20,000,000whicheverishigher.

However,ESSBandthesubsidiaryhadmutuallyagreedviaaSupplementalAgreementdated21December2009 thatESSBshall

purchasethefreeholdlandatRM20milliononan‘as-is-where-is’basis.On31December2009,ESSBpaidthebalanceofRM17.0

milliontothesubsidiary.

Freeholdlandacquiredthroughbusinesscombinationin2009compriseseveralcontiguouspiecesoflandwithatotalareaofapproximately

2,718.68acres,earmarkedforthedevelopmentofacargoandlogisticshub,high-techindustriesparkandmixeddevelopment.

Development Expenditure

Developmentexpenditurerepresentsthecostincurredinrelationtothedevelopmentinasubsidiary’sleaseholdpropertiesasstatedin

Note14tothefinancialstatements.

21 PROPERTY DEVELOPMENT EXPENDITURE


22 AMOUNTS DUE FROM/TO SUBSIDIARIES

Theamountsduefrom/tosubsidiariesarenon-tradeinnature,unsecured,interestfree,denominatedinRinggitMalaysiaandarenot

repayableduring thenext twelvemonthsexcept inso farassuch repaymentwill notadverselyaffect theabilityof the respective

subsidiariestomeettheirliabilitieswhendue.IncludedintheamountduefromsubsidiariesareRedeemableConvertibleSubordinated

LoansofRMnil(2009:RM264.5million).ThetermsoftheRedeemableConvertibleSubordinatedLoansareasdisclosedinNote36.

Company

2010 2009

RM'000 RM'000

Fairvaluesofamountsduefrom/tosubsidiariesareasfollows:

Amountsduefromsubsidiaries 1,089,347 895,852

Amountsduetosubsidiaries 535,668 837,486

23 OTHER RECEIVABLES

Group and Company

2010 2009

RM’000 RM’000

Miningexplorationexpenditure,atcost

Less:Accumulatedimpairmentlosses

9,962 9,962

At1January/31December (9,962) (9,962)

Carryingvalue - -

165164


24 INTANGIBLE ASSETS

Rights on

Power

Purchase

Agreement

and

Operations

Maintenance

Agreement

Goodwill on

consolidation

Intellectual

property

Rights

on water

treatment

business

Rights on

airport

business Total

RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Group

Cost

At1January2010 7,103,796 2,046,721 8,000 21,193 168,909 9,348,619

Reclassfromdeferred

expenditure(Note25) - - - - 20,000 20,000

At31December2010 7,103,796 2,046,721 8,000 21,193 188,909 9,368,619

Amortisation/Impairment

losses

At1January2010 (965,619) - (1,334) (3,532) (2,530) (973,015)

Reclassfromdeferred

expenditure(Note25) - - - - (2,467) (2,467)

Amortisationcharge(Note9(i)) (395,327) - (267) (3,532) (4,196) (403,322)

Impairment(Note9(i)) - (3,458) (6,399) - - (9,857)

At31December2010 (1,360,946) (3,458) (8,000) (7,064) (9,193) (1,388,661)

Net book value

At31December2010 5,742,850 2,043,263 - 14,129 179,716 7,979,958

At31December2009

-restated 6,138,177 2,046,721 6,666 17,661 166,379 8,375,604

Amortisationchargefor2009 (393,343) - (267) (3,532) (2,530) (399,672)

24 INTANGIBLE ASSETS (CONTINUED)

Goodwill on consolidation

ThecarryingamountsofgoodwillarisingfromtheacquisitionoftherespectivesubsidiariesallocatedtotheGroup’sCashGenerating

Units(“CGUs”)areasfollows:

2010 2009

RM’000 RM’000

PelabuhanTanjungPelepasSdnBhd

- PortBusiness 1,512,366 1,512,366

MalakoffCorporationBerhad

- ElectricityGenerationBusiness 340,392 340,392

RecycleEnergySdnBhd

- Managementandtreatmentofmunicipalsolidwasteandproductionofrenewable

energy - 3,458

SenaiAirportTerminalServicesSdnBhd

- Manage,operate,maintainanddeveloptheSultanIsmailAirportinSenai,JohorDarul

Takzimandtoprovideairportandaviationrelatedservices 166,382 166,382

- Propertydevelopment 24,123 24,123

2,043,263 2,046,721

(A) Port Business

TherecoverableamountofPortBusinessisdeterminedbasedona“valueinuse”calculation.The“valueinuse”ofPortBusiness

wasdeterminedbydiscountingthefuturecashflowstobegeneratedfromthecontinuinguseoftheunitandexceedsthecarrying

amountoftheCGUincludinggoodwillbyRM1.2billion.

The“valueinuse”isderivedbasedonmanagement’scashflowprojectionsfor5financialyearsfrom2011to2015andthekey

assumptionsusedinthecalculationof“valueinuse”areasfollows:

(a) Basedonthebusinessplan,theprojectedannualTwenty-FootEquivalentUnit(“TEU”)overtheprojectionperiodfrom2011to

2015,willbeintheregionof7.4millionto8.5millionTEU;

(b) Thecashflowprojectionsafter2015areextrapolatedtotheendoftheconcessionperiodusinganominallong-termgrowthrate

of3.5%perannumwhichtakesintoconsiderationthelongtermaverageglobalGDP,inflationandaveragegrowthrateforthe

industry;and

(c) Apre-taxdiscountrate9.0%perannum.

167166


(A) Port Business (continued)

Management’sjudgementisinvolvedinestimatingthefuturecashflowsofPortBusiness.The“valueinuse”issensitiveto,amongst

others, theprojectedcashflowsduring theexplicitprojectionperiodand theassumptions regarding the long termsustainable

patternofcashflowsthereafter.

Thecircumstanceswhereareasonablypossiblechangeinthekeyassumptionswillcauseanimpairmentlosstoberecognised

includethefollowing:

(i) Adecreaseofmorethan10.0%perannuminthetotalprojectedannualTEUineachfinancialyearovertheprojectionperiod;or

(ii) Longtermgrowthratebeyondtheexplicitprojectionperiodislowerthan2.2%perannum;or

(iii) Pre-taxdiscountrateishigherthan10.0%.

IfthetotalprojectedannualTEUineachfinancialyearovertheprojectionperiodwastoreducebyanadditional0.5%perannum

fromthebreakevenpointasmentionedin(i)above(i.e.decreaseof10.5%perannuminthetotalprojectedannualTEUineach

financialyearovertheprojectionperiod),theimpairmentchargewouldapproximatelybeRM40million.

Hadthepre-taxdiscountratebeen0.1%higherfromthebreakevenpointasmentionedinnote(iii)above(discountrateof10.1%),

theimpairmentchargewouldbeapproximatelyRM18million.

(B) Electricity Generation Business

The impairment of goodwill test on theElectricityGenerationBusiness (“EGB”)was conductedusing its “value in use” as its

recoverableamount.The“valueinuse”forEGBwasdeterminedbydiscountingthefuturecashflowsgeneratedfromthecontinuing

useofitspowerplantsbasedonmanagement’scashflowprojectionsfor21financialyearsfrom2011to2031.

Thekeyassumptionsusedinthecalculationof“valueinuse”asextractedfromtherespectivePPAsareasfollows:

(a) ThetermsofthePPAswillremainunchangedthroughouttheconcessionperiod.

(b) RemainingusefullifeofPPA/OMA 7–21years

(c) Dependablecapacity 350MW–2,420MW

(d) Capacityfactor 25%to75%ofdependablecapacity

(e) Netelectricaloutput(millionkW/hour) 1,997–15,805

(f) CapacityRate(RM/kW/month) 16.98–50.00

(g) FixedOperatingRateunderRevenue(RM/kW/month) 4.40–9.49

(h) VariableOperatingRateunderRevenue(RM/kW/month) 0.005–0.031

(i) Fuelprice(RM/mBtu) 10.14–13.50

(j) VariableOperatingRateunderCost(RM/kWh) 0.013–0.031

(k) FixedOperatingRateunderCost(RM/kW/month) 2.08–10.63

(l) Itisassumedthattheresidualvalueoftherespectivepowerplantsisbasedonafive(5)yearsextensiondiscountedcashflows

asdescribedinNote3(b)CriticalAccountingEstimateandJudgements.

Managementbelievesthataperiodgreaterthan5yearsusedinthecashflowprojectionsisjustifiedastheincomederivedduring

theextendedperiodcanbesupportedbyitsPowerPurchaseAgreement(“PPA”)andOperation&MaintenanceAgreement(“OMA”)

whichhasaremainingusefulliferangingfrom7to21years.

Iftheresidualvalueofthepowerplantdoesnotmaterialise,therewillbeimpairmenttothegoodwillandintangibleassets.

(C) (i) Airport Operations

TherecoverableamountoftheAirportOperationsisdeterminedbasedona“valueinuse”(“VIU”)approach.TheVIUofthe

AirportOperationswasdeterminedbydiscountingthefuturecashflowstobegeneratedfromthecontinuinguseoftheunit.

TheVIUisderivedbasedonmanagement’scashflowprojectionsfortheconcessionperiodfrom2011to2057andthekey

assumptionsusedinthecalculationoftheVIUareasfollows:

(a) Discountrateof9.5%perannum;

(b) Totalpassengersareforecastedtogrowwitha20yearsCompoundAnnualAverageGrowthRate(“CAAGR”)of7.7%

beyondwhichapproximately5%growthisestimatedyear-on-year;and

(c) Cargotonnageisforecastedtogrowwitha20yearsCAAGRof16.1%beyondwhichapproximately5%growthisestimated

year-on-year.

Management’sjudgementisinvolvedinestimatingthefuturecashflowsoftheAirportOperations.TheVIUissensitivetothe

discountrateappliedonthediscountedcashflows.Goodwillwillbeimpairedifthediscountrateweretogobeyond11%.

(ii) Property Development Land

TherecoverableamountofthepropertydevelopmentlandisdeterminedbasedonthemarketvalueofthelandwhichasofJune

2010,hasbeenvaluedatapricehigherthanthefairvalueuponacquisition.

25 DEFERRED EXPENDITUREGroup

2010 2009

RM’000 RM’000

Cost

At1January 20,000 -

Additions - 20,000

Reclasstointangibleassets(Note24) (20,000) -

At31December - 20,000

Amortisation

At1January (2,467) -

Amortisationcharge(Note9(i)) - (2,467)

Reclasstointangibleassets(Note24) 2,467 -

At31December - (2,467)

Net book value - 17,533

Thedeferredexpenditureisinrelationtotherightstooperate,manageandundertakefuturedevelopmentoftheSultanIsmailAirport

inSenai,JohorDarulTakzim.

24 INTANGIBLE ASSETS (CONTINUED) 24 INTANGIBLE ASSETS (CONTINUED)

169168


26 DEFERRED TAXATION

Deferredtaxassetsandliabilitiesareoffsetwhenthereisalegallyenforceablerighttosetoffcurrenttaxassetsagainstcurrenttax

liabilitiesandwhenthedeferredtaxesrelatetothesametaxauthority.Thefollowingamounts,determinedafterappropriateoffsetting,

areshowninthestatementoffinancialposition:

Group Company

2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

(Restated)

Deferredtaxassets 670,503 542,011 - -

Deferredtaxliabilities:

-subjecttoincometax (3,511,746) (3,537,840) - -

(2,841,243) (2,995,829) - -

At1January (2,995,829) (2,689,240) - -

(Charged)/creditedtostatementofcomprehensive

income(Note11):

-property,plantandequipment (129,858) (116,066) (9) (34)

-receivables - (4,695) - -

-payables 11,849 (32) - -

-taxlosses 24,080 - - -

-provisions 10,532 35,451 6 6

-intangibles 160,883 143,771 - -

-investmenttaxallowance 91,047 126,159 - -

-others (2,297) 248 3 28

166,236 184,836 - -

RecognisedinequityuponconversionofRCULS 199 47 - -

Acquisitionthroughbusinesscombination - (491,472) - -

EffectsontheadoptionofFRS139 (11,849) - - -

At31December (2,841,243) (2,995,829) - -

26 DEFERRED TAXATION (CONTINUED)

Group Company

2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

(Restated)

Subjecttoincometax:

Deferredtaxassets(beforeoffsetting)

Property,plantandequipment 119,661 128 - -

Taxlosses 24,080 - - -

Provisions 42,416 31,884 91 85

Investmenttaxallowances 636,091 545,044 - -

Others 759 3,177 6 3

823,007 580,233 97 88

Offsetting (152,504) (38,222) (97) (88)

Deferredtaxassets(afteroffsetting) 670,503 542,011 - -

Deferredtaxliabilities(beforeoffsetting)

Property,plantandequipment (2,144,873) (1,895,482) (97) (88)

Intangibles (1,519,131) (1,680,014) - -

Others (246) (566) - -

(3,664,250) (3,576,062) (97) (88)

Offsetting 152,504 38,222 97 88

Deferredtaxliabilities(afteroffsetting) (3,511,746) (3,537,840) - -

Theamountofdeductibletemporarydifferencesandunusedtaxlosses(bothofwhichhavenoexpirydates)forwhichnodeferredtax

assetisrecognisedinthestatementoffinancialpositionareasfollows:

Group

2010 2009

RM’000 RM’000

Deductibletemporarydifferences 113,367 107,963

Taxlosses 321,463 302,355

434,830 410,318

171170

27 INVENTORIES

28 NON-CURRENT ASSETS HELD FOR SALE


InNovember2010,theCompanyenteredintoasaleandpurchaseagreementtodisposethepropertiesforsalesconsiderationof

RM1.0million.ThedisposalisexpectedtobecompletedbyearlyMay2011.

InventoriesoftheGroupofRM39.1million(2009:RM39.5million)comprisingspareparts,consumablesandcontainerrepairmaterials

arepledgedassecurityforborrowingsasdisclosedinNote38.

Group

2010 2009

RM’000 RM’000

Spares,consumablesandcontainerrepairmaterials 450,276 461,570

DieselsandFuels 44,875 50,478

Coals 89,472 125,685

Chemicals 527 520

Rawmaterials 139 163

585,289 638,416

Group

2010 2009

RM’000 RM’000

Property,plantandequipment(Note14) - 126

Investmentproperties(Note15) 103 415

103 541

29 TRADE AND OTHER RECEIVABLES

Group Company

2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Tradereceivables 1,515,868 1,091,736 8 8

Less:Allowanceforimpairedreceivables (138,995) (168,978) (8) (8)

1,376,873 922,758 - -

Otherreceivables 358,290 374,083 34,770 46,070

Less:Allowanceforimpairedreceivables (1,809) (1,809) (505) (505)

356,481 372,274 34,265 45,565

Deposits 39,129 41,403 4,624 1,121

Prepayments 110,379 175,496 - -

505,989 589,173 38,889 46,686

Amountsduefromcontract

customers(Note42) 20,548 31,832 - -

Amountsduefromassociates 272,763 207,914 41 41

Amountsduefromjointlycontrolledentities 51,641 61,586 51,641 61,586

2,227,814 1,813,263 90,571 108,313

CredittermsoftradereceivablesoftheGroupandCompanyvaryfrom30to60days(2009:30to60days).Othercredittermsare

assessedandapprovedonacase-by-casebasis.

173172


Group Company

2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Upto3months 4,013 50,683 - -

3to6months 463 60 - -

Morethan6months 136,328 120,044 513 513

140,804 170,787 513 513

As at 31December 2010, trade and other receivables amounting to RM140.8million (2009: RM170.8million) for theGroup and

RM513,000(2009:RM513,000)fortheCompanywereimpairedandprovidedfor.Theindividuallyimpairedreceivablesmainlyrelateto

customers,whichhavedefaultedinpayment.Theaginganalysisofthesetradeandotherreceivablesareasfollows:

Asat31December2010,tradeandotherreceivablesofRM433.6million(2009:RM117.1million)fortheGroupwerepastduebutnot

impaired.Theserelatetoanumberofindependentcustomersforwhomthereisnohistoryofdefault.Theaginganalysisoftradeand

otherreceivables(excludingdepositsandprepaymentsareasfollows:

29 TRADE AND OTHER RECEIVABLES (CONTINUED)

Group Company

2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Neitherpastduenorimpaired 1,644,740 1,479,310 85,947 107,192

Pastduenotimpaired:

Upto3months 405,670 53,245 - -

3to6months 9,472 21,122 - -

Morethan6months 18,424 42,687 - -

433,566 117,054 - -

Impaired 140,804 170,787 513 513

2,219,110 1,767,151 86,460 107,705

29 TRADE AND OTHER RECEIVABLES (CONTINUED)

Group Company

2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

-RinggitMalaysia 1,872,851 1,401,686 85,947 107,192

-USDollar 205,322 194,168 - -

-AustralianDollar 3 31 - -

-Others 130 479 - -

2,078,306 1,596,364 85,947 107,192

ConcentrationofcreditriskinrespectofthereceivablebalancesislimitedtotheGroup’slargenumberofcustomers,whoarenationally

dispersed,coveraspectrumofindustrieswithvarietyendmarkets.TheGroup’shistoricalexperienceshowsthattheallowancesfor

impairedreceivableshavebeenadequateandduetothesefactors,managementbelievesthatnoadditionalcreditriskbeyondamounts

providedforcollectionlossesisinherentintheGroup’sreceivables.

Thecurrencyexposureprofileoftradeandotherreceivables(excludingdepositsandprepayments)areasfollows:

Movementsontheprovisionforimpairedtradeandotherreceivablesareasfollows:

Theallowanceandthereleaseofallowanceforimpairedtradeandotherreceivableshavebeenincludedin“administrativeexpenses”

inthestatementofcomprehensiveincome.

Theamountsduefromjointlycontrolledentitiesinotherreceivablesareunsecured,interestfree,havenofixedtermsofrepaymentand

denominatedinRinggitMalaysia.

Group Company

2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

At1January 170,787 215,839 513 513

Allowanceforimpairedtradeandother

receivablesduringthefinancialyear 19,933 37,784 - -

Write-off (4,259) (34,617) - -

Allowanceforimpairedtradeandother

receivablesnolongerrequired(Note9(i)) (45,657) (48,219) - -

At31December 140,804 170,787 513 513

175174


30 AMOUNT DUE FROM HOLDING COMPANY

31 MARKETABLE SECURITIES

Theamountduefromholdingcompanyisnon-tradeinnature,unsecured,interestfree,hasnofixedtermsofrepaymentanddenominated

inRinggitMalaysia.

MarketablesecuritiesamountingtoRM35.8millionin2009werepledgedassecurityforborrowingsasdisclosedinNote38.

Group and Company

2010 2009

RM’000 RM’000

Amountduefromholdingcompany 5,518 7,518

Group

2010 2009

RM’000 RM’000

SharesinacorporationquotedinMalaysia,atcost 62,151 62,151

Less:Accumulatedimpairmentlosses (914) (914)

Transfertoavailable-for-salefinancialassets(Note20) (61,237) -

- 61,237

Marketvalue:

-quotedinMalaysia - 325,637

32 DEPOSITS , BANK AND CASH BALANCES

Theweightedaverageinterestratesofdeposits,bankandcashbalancesthatwereeffectiveasatendofreportingperiodareasfollows:

DepositsoftheGrouphaveanaveragematurityof159days(2009:55days).

Group Company

2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Depositswith:

Licensedbanks 2,462,125 2,632,632 93,235 72,652

Investmentbanks 804,988 710,320 - 16,000

Otherfinancialinstitutions 604,361 729,432 - 38,000

3,871,474 4,072,384 93,235 126,652

Cashandbankbalances 191,069 420,448 2,170 764

4,062,543 4,492,832 95,405 127,416

Thecurrencyexposureprofileofthedeposits,

bankandcashbalancesareasfollows:


-USDollar 21,855 26,853 - -

-AustralianDollar 1,951 1,727 1,951 1,727

-PoundSterling 538 618 538 618

-IRDIndonesian - 2,094 - -

4,062,543 4,492,832 95,405 127,416

Group Company

2010 2009 2010 2009

% per annum % per annum % per annum % per annum

Depositsplacedwith:

Licensedbanks 3.00 2.19 2.84 2.20

Investmentbanks 3.09 2.25 - 2.36

Otherfinancialinstitutions 3.26 2.74 - 2.49

177176

Group and Company

Number of ordinary shares Amount

2010 2009 2010 2009

’000 ’000 RM'000 RM'000

Authorised:

OrdinarysharesofRM0.10each:

At31December 10,000,000 10,000,000 1,000,000 1,000,000

Issuedandfullypaid:

OrdinarysharesofRM0.10each:

At31December 3,045,058 3,045,058 304,506 304,506


33 SHARE CAPITAL

34 RESERVES

Asat31December2010,theCompanydoesnothaveanySection108accountandhasthereforeautomaticallymovedtothesingle-

tiertaxsystem,whichcameintoeffectfromtheyearofassessment2009,underwhichcompaniesarenotrequiredtohavetaxcredits

underSection108oftheIncomeTaxAct,1967fordividendpaymentpurposes.Dividendspaidunderthissystemaretaxexemptinthe

handsofshareholders.

35 REDEEMABLE PREFERENCE SHARES

Group

2010 2009

RM’000 RM’000

RedeemablePreferenceSharesofRM0.01each:

At1January/31December 1,140 1,140

PremiumonRedeemablePreferenceShares:

At1January/31December 112,911 112,911

114,051 114,051

Dividendonredeemablepreferenceshares 22,416 20,512

Classifiedasliabilities 136,467 134,563

35 REDEEMABLE PREFERENCE SHARES (CONTINUED)

DetailsoftheRedeemablePreferenceShares(“RPS”)areasfollows:

(i) TheRPSshallbefullyredeemableinfiveequalinstalmentsatthetotalamountofRM114.1milliontobepayableon30September

ofeveryyearstartingfrom30September2013to30September2017.

(ii) TheholdersoftheRPSshallhavetherighttoreceiveafixedcumulativepreferentialdividendofRM50.0millionforalltheRPSbased

onparvalueofRM0.01pershareandwhichshallbepayableinthreeequalinstalmentson30September2018,30September2019

and30September2020.

(iii) TheRPSshallnotconferanyvotingrightexceptwheretherightsoftheRPSareaffected.

(iv) Intheeventofliquidation,theholdersoftheRPSshallrankparipassuwiththeholdersofordinarysharesandshallrankinpriority

totheotherholdersofpreferenceshares,savefortheSpecialShareinrespectofanydistributionorrepaymentofcapital.

36 REDEEMABLE CONVERTIBLE SUBORDINATED LOANS

TheRedeemableConvertibleSubordinatedLoans(“RCSL”)areissuedbyasubsidiarytoitsshareholders,asfollows:

Group

2010 2009

Unsecured RM’000 RM’000

Company - 369,494

Othercorporateshareholders - 158,355

TotalRCSLissued - 527,849

On25February2010, thesubsidiaryconverted itsoutstandingRCSLofRM527,848,644 into527,848,644newOrdinarySharesof

RM1.00eachinaccordancewiththeRCSLholders’ratio.ThereisnoimpactontheGroup’sinterestinthesubsidiary.

179178

37 REDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS (“RCULS”)

(a)ThemovementoftheRCULSduringthefinancialyearareasfollows:

(b)TheRCULSisaccountedforinthestatementoffinancialpositionoftheGroupasfollows:

(c)InterestexpenseontheRCULSiscalculatedontheeffectiveyieldbasisbyapplyingthecouponinterestof7.545%perannumfor

anequivalentnon-convertiblebondtotheliabilitycomponentoftheRCULS.

(d)Thesalienttermsofthe7-year,5%RCULS2004/2011atnominalvalueofRM1.00areasfollows:

(i) Status

TheRCULSconstitutedirect,unsubordinatedandunsecuredobligationsofthesubsidiary.

(ii) Redeemability

ConversionbeforematurityoftheRCULSisattheoptionoftheRCULSholders.Unlessotherwiseconverted,theRCULSwillbe

redeemedforcashatitsnominalvalueonmaturity.

(iii) Couponrate

ThesubsidiaryshalluntilthematuritydateoftheRCULSpaytheRCULSholdersinterestincashontheRCULSattherateof

5%oneachinterestpaymentdateinarrears.

Balance at Balance at

01.01.2010 Issued Conversion 31.12.2010

RM’000 RM’000 RM’000 RM’000

PrincipalamountofRCULSofRM1.00each 40,412 - (12,158) 28,254

Group

2010 2009

RM’000 RM’000

ThemovementoftheliabilitycomponentofRCULSduringtheyearisasfollows:

At1January 36,930 38,419

Convertedtoordinarysharesinasubsidiary (11,365) (2,322)

Interestrecognisedinthestatementofcomprehensiveincome(Note9(i)) 486 833

At31December 26,051 36,930


37 REDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS (“RCULS”) (CONTINUED)

(d)Thesalienttermsofthe7-year,5%RCULS2004/2011atnominalvalueofRM1.00areasfollows:(continued)

(iv) Maturity

Thedatefallingontheseventh(7th)anniversaryofthedateofissuanceoftheRCULS.

(v) Tenure

TheRCULShasatenureofseven(7th)yearsfromandincludingthedateofissue.

(vi) Conversionprice

Theconversionpricefor theRCULSisfixedatRM1.00perone (1)newshare inthesubsidiarybytenderingRM1.00

nominalvalueofRCULSforcancellation.

(vii) Conversionperiod

TheRCULSisconvertibleintonewsubsidiary’sshareatanytimebeforematurity.

(viii) Formanddenomination

TheRCULSisissuedinglobalbearerformandconstitutedbytrustdeed.TheRCULSisindenominationsofRM1.00each.

(ix) Rankingofnewshares

ThenewsharestobeissueduponconversionoftheRCULSshallrankparipassuinallrespectswiththethenexistingshares

exceptthatsuchnewshareswillnotrankforfinaldividendsinrespectofanyparticularfinancialyeariftheconversiondate

oftheRCULSisafterthecloseofthefinancialyearirrespectiveofthedatewhensuchfinaldividendisdeclared,madeor

paid.Additionally,thenewsharesallottedandissuedupontheexerciseoftheconversionrightshallnotrankforanyrights,

dividends,allotmentsorotherdistributioniftheconversiondateoftheRCULSisaftertherecorddateforsuchrights,

allotmentsordistributions.

(x) RightsofRCULSholdersonliquidation

Intheeventofliquidationofthesubsidiary(exceptforthepurposeofareconstructionoramalgamationthetermsofwhich

havebeenapprovedinwritingbythetrusteeandbyaspecialresolution),whethervoluntaryorbyorderofcourt,thenthe

amountwhichisdueandpayablebythesubsidiarytotheRCULSholdersshallbeRM1.00foreachRCULSofRM1.00

nominalvalueheldtogetherwithanyinterestaccruedthereon,ifany.TheRCULSholdersshallrankparipassuwithallother

unsecuredandunsubordinatedcreditorsofthesubsidiary.

181180


37 REDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS (“RCULS”) (CONTINUED)

(d)Thesalienttermsofthe7-year,5%RCULS2004/2011atnominalvalueofRM1.00areasfollows:(continued)

(xi) Restrictionondividends

Nodividendsshallbepayabletotheshareholdersofthesubsidiaryunlessanaggregateof14.3%perannum(being100%divided

bythetenureoftheRCULS)ofthenominalvalueoftheRCULSisconvertedintonewshares,repurchased,cancelledorotherwise

satisfiedbythesubsidiaryeachfinancialyearduringthetenureoftheRCULS.Shouldtherebeanyshortfallintheconversion

oftheRCULSinanyonefinancialyearorprioryears,thesubsidiarymayonlypaydividendsifitdepositsanamountincash

equivalenttotheshortfallinconversionintosinkingfund.

(xii) TrustDeed

TheRCULSwasconstitutedbyatrustdeedexecutedbetweenthesubsidiaryandatrustee,whoactsforthebenefitoftheRCULS

holders.

(xiii) SinkingFund

Thesubsidiaryshallcreateasinkingfundaccounttobeoperatedandmaintainedbythetrusteeforthedepositbythesubsidiary

ofanyshortfallintheconversionamountpursuanttotheRestrictiononDividendsasdisclosedinNote37(d)(xi).Anyamounts

depositedinthesinkingfundaccountshallbeusedtoredeemtheRCULSuponmaturity.

(xiv)Publicquotation

TheRCULSwaslistedontheBursaMalaysiaSecuritiesBerhadon15March2005.

38 BORROWINGS

Group Company

2010 2009 2010 2009

RM‘000 RM‘000 RM‘000 RM‘000

Current

Secured:

Al-Murabahah:

-CommercialPapers 494,140 594,199 - -

Termloans 1,971,965 728,889 1,557,788 448,127


Al-Bai’BithamanAjilBonds 120,000 120,000 - -


IstisnaMediumTermNotes 560,000 510,000 - -

Unsecured:

Termloans 2,625 2,362 - -

RevolvingCredits 492,000 299,000 455,000 255,000

StructuredCommodity - 34,000 - 34,000

Bankoverdrafts 7,487 716 - -

Multi-optionline - 14,899 - -

RedeemableConvertibleLoanStock - 1,817 - -

GovernmentLoan 21,667 11,667 - -

3,991,739 2,559,153 2,012,788 737,127

Non-current

Secured:

Termloans 4,079,716 5,448,738 1,496,750 2,636,665


Al-Bai’BithamanAjilBonds 370,000 490,000 - -


IstisnaMediumTermNotes 3,730,000 4,290,000 - -

SukukMediumTermNotes 5,258,089 5,249,384 - -

JuniorSukuk 1,749,111 1,700,000 - -

Unsecured:

Termloans - 3,938 - -

StructuredCommodity - 50,000 - 50,000

RedeemableConvertibleLoanStock 149,762 156,017 - -

GovernmentLoan 78,333 88,333 - -

15,974,676 18,359,545 1,496,750 2,686,665

Total 19,966,415 20,918,698 3,509,538 3,423,792

Fair values of borrowings 20,946,683 21,803,701 3,509,538 3,423,792

183182


38 BORROWINGS (CONTINUED)

Analysisofrepaymentschedule:

(i) The short-termStructuredCommodity carries a profit rate at 2.5% above EffectiveCost of Funds. The long-termStructured

Commoditycarriesaprofitrateof0.25%belowthebank’sBaseFinancingRateandisrepayablein3instalmentscommencingfrom

theendofthe3rdyearfromthefirstdisbursementdate.

(ii) Interestontermloansofasubsidiaryarechargedatafixedratewhichrangesfrom4.0%to6.5%(2009:4.0%to6.5%)perannum.

Twoofthebankloanswillbechargedatarateof1.5%abovetheeffectivecostoffundsofthelenderfromNovember2010onwards.

ASecondNewFacilityAgreementwasexecutedon17August2006withafixedinterestrateof1.0%perannumabovetheeffective

costoffundsofthelendertobefixedateachdrawdowndateuntil31December2016andfloatinginterestrateof1.0%abovethe

costoffundsofthelenderfrom1January2017onwards.

Thebankloansarerepayableinequalsemi-annualinstalmentsrangingfrom14to26instalments.

Theunsecuredtermloanfacilityobtainedbyasubsidiarycarriesafixedinterestrateof7.0%perannum.Theloanisrepayableinfive

equalquarterlyinstalmentsofRM350,000andtheremainingfourquarterlyinstalmentsofRM1,313,000.

Thebankloansaresecuredby:

(i) afixedandfloatingchargebywayofdebentureoveralltheassetsandundertakingofthesubsidiary.

(ii) achargeonthespecificDesignatedAccountsandallmoniesstandingtothecreditofthesubsidiary.

(iii) assignmentofcertainrightsandbenefitsofthesubsidiary.

Othertermloansarerepayablein13annualinstalmentsof2.5%perannumoftheprincipalrepayableandafinalbulletrepayment.

(iii) ThesecuredlongtermloanonSyariahprinciplescarriesaprofitrateof4.6%(2009:4.6%)perannumandisrepayableby19

quarterlyinstalmentscommencingNovember2007.Thefacilitywassecuredbyfixeddepositsandbywayofafloatingchargeover

asubsidiary’sproperty,plantandequipment.

Group Company

2010 2009 2010 2009

RM'000 RM'000 RM'000 RM'000

Within1year 3,991,739 2,559,153 2,012,788 737,127

From1to2years 2,343,149 3,933,534 770,500 2,539,415

From2to5years 5,859,181 5,691,940 726,250 147,250

After5years 7,772,346 8,734,071 - -

19,966,415 20,918,698 3,509,538 3,423,792


(iv)ThesecuredlongtermloanonAl-IjarahMuntahiahBilamikofasubsidiarycarriesaprofitrateof5.1%to8.5%(2009:5.1%to8.5%)

perannumandisrepayablein18quarterlyinstalmentsfrom20March2012.ItcarriesEffectiveIslamicCostofFundsrateplus

2.25%perannum.

Thetermloanissecuredasfollows:

(i) adebenturecomprisingfixedandfloatingchargesovertheexistingandfutureassetsofthesubsidiary.

(ii) assignmentoveralltherevenuespursuanttotheoperationsoftheairportmanagedbythesubsidiary(includingbutnotlimited

totheaeronauticalandnon-aeronauticalrevenues).

(iii) firstpartyfirstlegalchargeovertheairportlandviaassignmentovertheleaseagreementontheairportland,totheextentthat

thesameareassignableandnofurtherconsentisrequiredforsuchassignment.

(iv) memorandumofdepositovertheordinarysharesofthesubsidiaryrepresentingtheentireissuedandfullypaid-upcapitalofthe

subsidiary.

PursuanttotheIslamicFinancingFacilityAgreementbasedonIslamicprincipleofAl-IjarahMuntahiahBitmalik:-

(i) thesubsidiaryisrequiredtomaintainafinanceservicecoverratioofatleast1.50timesthroughoutthetenureofthefacility.

(ii) throughoutthetenureofthefacility,thesubsidiaryshallmaintainmaximumtotalDebt/EquityRatioofnohigherthan80:20.

TheIjarahfacility2issecuredbyfirstpartylegalchargeovercertainpropertydevelopmentlandandisrepayableinsixmonthsfrom

19May2011.ItcarriesEffectiveIslamicCostofFundsrateplus2.25%perannum.

(v) Thegovernmentloanisrepayablestartingonthesixthconcessionyearfrom2009intenequalinstalmentsandeachpaymentshall

bemadewithinthefirstmonthoftheparticularconcessionyear.

185184


(vi)ThetermloansoftheCompanyaresecuredbycertainassetsoftheCompanyandasubsidiarycompany.Interestratesonthe

termloansoftheCompanyrangefrom4.11%to6.10%(2009:3.15%to4.56%)perannum.Thetenureoftheloansrangesfrom

1-5yearswithbulletrepaymentsonmaturityfromthedatesofdrawdownand3to7semi-annualinstalments.Therevolvingcredit

facilityoftheCompanyisunsecuredandbearsinterestrangingfrom3.95%to5.25%(2009:2.95%to3.36%)perannum.

(vii)TheCommercialPapers,bonds,MediumTermandLoanNotes,andJuniorSukukofsubsidiariesaresecuredoverproperty,plant

andequipmentwithacarryingamountofRM9,484million(2009:RM9,828million)andprepaidleasepaymentswithacarrying

amountofRM6.0million(2009:RM6.1million).Theseborrowingsaresubjecttothefulfilmentofthefollowingsignificantcovenants:

SukukIjarah:MaintaintheDebt/EquityRatioofnotmorethan4:1andaFinanceServiceCoverRatioofatleast1.15times.

Al-Bai’BithamanAjilbondsandCommercialPapers:MaintaintheDebt/EquityRatiotobenogreaterthan9:1duringpost-completion

(ofpowerplant)periodandensurethattheDebtServiceCoverRatioisnotlessthan1.25:1commencingfromcommercialoperations

date.

Al–Istisnabonds:MaintainaDebt/EquityRatioofnothigherthan4:1atalltimesandmaintainanAnnualFinanceServiceratioofnot

lessthan1.4:1commencingfromthethirdyearofthefirstissueofthebonds.

IstisnaMediumTermNotes:MaintainaminimumDebtServiceCoverRatioof1.25timescommencingfromthesecondsemi-annual

profitpaymentsdateandtheDebt/EquityRatioofnomorethan4:1.

SukukMediumTermNotes,JuniorSukukandCommercialPapers:MaintainaDebt/EquityRatioofnogreaterthan1.25:1andGroup

Debt/EquityRatiotobenogreaterthan7:1atalltimes.

Theprofitratesandinterestratesperannumfortheabovebankfacilitiesrangefrom3.5%to9.6%(2009:2.9%to9.0%)andat

12.0%(2009:from12.0%to16.0%)respectively.

(viii)Thesecuredtermloansofasubsidiaryarechargedatinterestratesrangingfrom4.0%to5.0%perannum(2009:3.86%to6.0%).

Thefacilitywassecuredbydebentureovertheentirefixedandfloatingassetsofthesubsidiary.ThetermloanofPhase1isrepayable

in24quarterlyinstalmentsofRM1.8millioneachandafinalinstalmentofRM1.4million.ThetermloanofPhase1instalmentisto

commence12monthsafterthedateofthecompletionoftheconstructionoftheRefuseDerivedFuel(“RDF”)plantofthesubsidiary.

ThetermloanofPhase2isrepayablein20quarterlyinstalmentsofRM600,000and20quarterlyinstalmentsofRM1.0millioneach.

ThetermloanofPhase2instalmentistocommence24monthsafterthedateofthecompletionoftheconstructionoftheRDFplant.


Group Company

2010 2009 2010 2009

Current RM'000 RM'000 RM'000 RM'000

Tradepayables 581,496 774,444 4,363 4,373

Otherpayables 377,122 245,766 10,726 11,377

Accruals 586,088 739,096 6,852 4,379

Landleaseliabilities(Note40(a)) 4,165 6,487 - -

Concessionfeepayable(Note40(b)) 12,000 8,000 - -

Amountduetoformercorporateshareholders 223 277,223 - -

Advancesreceivedoncontracts(Note42) 13,016 11,622 - -

Amountsduetocontractcustomers(Note42) 7,651 6,961 - -

Amountsduetoassociatedcompany 11,290 13,569 - -

Provisionforretirementbenefits(Note40(c)) 1,072 1,301 - -

1,594,123 2,084,469 21,941 20,129

Non-current

Otherpayables 2,156 106,552 - -

Concessionfeepayables(Note40(b)) 8,000 12,000 - -

Landleaseliabilities(Note40(a)) 14,498 14,774 - -

24,654 133,326 - -

Total 1,618,777 2,217,795 21,941 20,129

39 LAND LEASE RECEIVED IN ADVANCE

Group

2010 2009

RM’000 RM’000

At cost:

At1January 171,851 198,204

Additionsduringthefinancialyear 13,218 13,895

Repaymentonterminationofagreement - (20,725)

Recognisedasincomeduringthefinancialyear(Note9(i)) (11,400) (9,950)

Recognisablewithinnext12months

(includedunderotherpayables)(11,405) (9,573)

At31December 162,264 171,851

40 TRADE AND OTHER PAYABLES

187186

40 TRADE AND OTHER PAYABLES (CONTINUED)


(a) Land lease liabilities

(b) Concession fee payable

LandleaseliabilitiesareinrespectoftheairportlandwhichwasleasedbyasubsidiaryfromtheFederalLandCommissionerfor

aperiodof30yearscommencing1November2003withanoptiontoextendforafurtherperiodof20yearsupontermsand

conditionsasmaybemutuallyagreed.

AConcessionAgreementwasenteredbyasubsidiarycompanywiththeFederalGovernmentforacumulativeperiodof50years

commencing1November2003tooperate,manageanddeveloptheSultanIsmailAirportinSenai,JohorDarulTakzim.Thesaid

agreementissubjecttothecontinuedexistenceoftheoperatinglicensegrantedbytheFederalGovernmentwhichwasforaperiod

of50yearscommencingonthesamedatewithanoptiontoextendforafurtherperiodupontermsandconditionsasmaybe

mutuallyagreed.

Group

2010 2009

RM’000 RM’000

Notlaterthan1year 4,165 6,487

Laterthan1yearandnotlaterthan5years 2,220 1,698

Laterthan5years 12,278 13,076

18,663 21,261

Group

2010 2009

RM’000 RM’000



20,000 20,000

Group Company

2010 2009 2010 2009

RM'000 RM'000 RM'000 RM'000

Thecurrencyexposureprofileofthetradeand

otherpayablesareasfollows:


-USDollar 22,319 19,050 - -

-Others 1,461 2,633 - -

1,618,777 2,217,795 21,941 20,129

CredittermsoftradepayablesgrantedtotheGroupandCompanyvaryfromimmediatepaymentto90days(2009:immediatepayment

to90days).

40 TRADE AND OTHER PAYABLES (CONTINUED)

(c) Provision for retirement benefits

Group

2010 2009

RM’000 RM’000

At1January 49,364 46,459

Acquisitionthroughbusinesscombination - 1,184

Disposalofasubsidiary (7) -

Chargedtostatementofcomprehensiveincome(Note9(i)) 8,565 5,440

Utilisedduringthefinancialyear (3,102) (3,719)

At31December 54,820 49,364

Analysedas:

Current 1,072 1,301

Non-current 53,748 48,063

54,820 49,364

Non-current

Presentvalueofunfundedobligations 60,431 55,222

Theamountrecognisedinthestatementoffinancialpositionmaybeanalysedasfollows:

Presentvalueofunfundedobligations 60,431 55,222

Unrealisedactuariallosses (5,611) (5,858)

Netliabilityrecognisedinthestatementoffinancialposition 54,820 49,364

Theexpenserecognisedinthestatementofcomprehensiveincomeisanalysedasfollows:

Currentservicecost 5,914 4,840

Realisedactuarialloss/(gain) 96 (1,822)

Interestcost 2,555 2,422

Expenserecognisedinthestatementofcomprehensiveincome 8,565 5,440

Theprincipalactuarialassumptionsusedinrespectofthesubsidiaries’definedbenefitplanareasfollows:

2010 2009

% %

Discountrate 5.3to5.8 5.3to5.8

Interestcost 5.0to6.7 5.0to6.7

189188

41 DEFERRED INCOME

Group

2010 2009

RM’000 RM’000

At1January 56,739 -

Fundsreceivedduringthefinancialyear 84,635 71,355

Recognisedasincomeduringthefinancialyear(Note9(i)) (33,276) (14,616)

Recognisablewithinnext12months

(includedunderotherpayables)(8,659) -

At31December 99,439 56,739

DeferredincomeisinrespectoffundsreceivedbysubsidiariestopromotethedevelopmentoftheGroup’slogisticsbusiness.

DeferredincomeofasubsidiarydisposedofinthepreviousfinancialyearrelatedtothecompensationfromtheGovernmentofMalaysia

forlossesinrevenue.Thecompensationwasinitiallyrecordedasdeferredincomeandsubsequentlyrecognisedasrevenueoverthe

remainingconcessionperiod.

42 CONSTRUCTION CONTRACTS

Group

2010 2009

RM’000 RM’000

Aggregatecostsincurredandrecognisedprofits

(lesslosses)todate 871,040 821,810

Progressbillings (858,143) (796,939)

12,897 24,871

Amountsduefromcontractcustomers(Note29) 20,548 31,832

Amountsduetocontractcustomers(Note40) (7,651) (6,961)

12,897 24,871

Advancesreceivedoncontracts(Note40) (13,016) (11,622)

Retentionsoncontracts 8,674 8,123

Thefollowingcostsarepartofcontractcostincurredduringthefinancialyear:

Group

2010 2009

RM’000 RM’000

Officerental 934 2,344

Hireofplantandmachinery 351 798

Staffcosts 50,725 34,246

Staffcostsconsistsofthefollowing:

Salaries,wagesandbonuses 49,619 33,985

Definedcontributionplan 885 260

Otheremployeebenefits 221 1

50,725 34,246

TheamountsduefromandtocontractcustomersaredenominatedinRinggitMalaysia.


191190

43 SEGMENTAL INFORMATION

ManagementhasdeterminedtheoperatingsegmentsbasedonreportsreviewedbytheBoardofDirectorsandtheworkinggroup

consistingofHeadsofDepartmentsthatmakesstrategicdecisions.

Thereportablesegmentsoftransportandlogisticsmainlyderivetheirrevenuefromportsandairportswhileenergyandutilitiesderive

their revenuemainly fromelectricitygeneration,supplyofnaturalgasandwater treatmentbusiness;engineeringandconstruction

segmentderivetheirrevenuefrominfrastructureandconstructionprojects.

SegmentalinformationispresentedinrespectoftheGroup’sbusinessandgeographicalsegments.Inter-segmentpricingisdetermined

basedonnegotiatedterms.Segmentresults,assetsandliabilitiesincludeitemsdirectlyattributabletoasegmentaswellasthosethat

canbeallocatedonareasonablebasis.

a) Primary reporting format - Business segments

Transport and

logistics

Energy and

utilities

Engineering

and

construction Others Total

RM’000 RM’000 RM’000 RM’000 RM’000

2010

Revenue

Total 1,392,233 7,500,347 49,881 5,051 8,947,512

Inter-segment (8,727) (28,378) (46,758) - (83,863)

External 1,383,506 7,471,969 3,123 5,051 8,863,649

Results

Profit/(Loss)beforezakatand

taxation 180,620 761,623 (67,833) (18,662) 855,748

Financecosts 145,354 1,148,069 75 161,838 1,455,336

Depreciationandamortisation 256,763 930,718 241 4,636 1,192,358

Earnings/(Loss)beforeinterest,

taxation,depreciationand

amortisation 582,737 2,840,410 (67,517) 147,812 3,503,442

43 SEGMENTAL INFORMATION (CONTINUED)

a) Primary reporting format - Business segments (continued)

Transport and

logistics

Energy and

utilities

Engineering

and


RM’000 RM’000 RM’000 RM’000 RM’000

2010

Other information

Segmentassets 10,590,910 19,442,975 20,006 519,789 30,573,680

Jointlycontrolledentities 2,170 64,118 157,621 (4,628) 219,281

Associates - 938,919 139,965 84,156 1,163,040

Interest-bearinginstruments 383,890 3,564,731 4,842 109,080 4,062,543

Totalassets 36,018,544

Segmentliabilities 1,395,412 4,020,597 25,120 45,254 5,486,383

Interest-bearinginstruments 3,175,885 13,409,510 19,000 3,524,538 20,128,933

Totalliabilities 25,615,316

Other disclosures

Capitalexpenditure 279,458 222,615 125 2,059 504,257

Depreciation 252,967 531,178 241 4,143 788,529

Amortisationof:

- RightsonPowerPurchase

AgreementandOperations

andMaintenance

Agreement - 434,073 - - 434,073

- Prepaidleasepayments - 403 - - 403

- Investmentproperties - 11 - 493 504

- Developmentexpenditure

andintellectualproperty - 267 - - 267

- Rightsonwatertreatment

business - 3,532 - - 3,532

- Rightsonairportbusiness 3,796 - - - 3,796

Impairmentloss - 272,313 - - 272,313


193192



Transport and

logistics

Energy and

utilities

Engineering

and


RM’000 RM’000 RM’000 RM’000 RM’000)

(Restated)

2009

Revenue

Total 1,207,481 7,234,620 10,889 12,638 8,465,628

Inter-segment (3,580) (14,515) (3,212) - (21,307)

External 1,203,901 7,220,105 7,677 12,638 8,444,321

Results

Profit/(Loss)beforetaxation 174,815 731,079 (59,094) (165,174) 681,626

Financecosts 120,269 1,158,344 810 119,084 1,398,507

Depreciationandamortisation 222,070 910,003 351 2,606 1,135,030

Earnings/(Loss)beforeinterest,

taxation,depreciationand

amortisation 517,154 2,799,426 (57,933) (43,484) 3,215,163



Transport and

logistics

Energy and

utilities

Engineering

and


RM’000 RM’000 RM’000 RM’000 RM’000

(Restated)

2009

Other information

Segmentassets 10,431,254 19,812,206 54,376 414,123 30,711,959

Jointlycontrolledentities 2,021 64,118 199,758 14 265,911

Associates - 1,266,212 244,195 104,878 1,615,285

Interest-bearinginstruments 427,154 3,921,731 890 143,057 4,492,832

Totalassets 37,085,987

Segmentliabilities 1,685,994 4,328,649 22,182 41,415 6,078,240

Interest-bearinginstruments 3,414,291 14,358,163 37,300 3,438,792 21,248,546

Totalliabilities 27,326,786

Other disclosures

Capitalexpenditure 543,857 181,881 - 817 726,555

Depreciation 219,540 512,457 351 2,415 734,763

Amortisationof:

- RightsonPowerPurchase

AgreementandOperations

andMaintenance

Agreement - 431,590 - - 431,590

- Prepaidleasepayments - 393 - - 393

- Investmentproperties - 11 - 191 202

- Developmentexpenditure

andintellectualproperty - 267 - - 267

- Rightsonwatertreatment

business - 3,532 - - 3,532

- Rightsonairportbusiness 2,530 - - - 2,530

Impairmentloss - 138,640 - 332 138,972


195194

Group Company

2010 2009 2010 2009

RM'000 RM'000 RM'000 RM'000

(a) Capital commitments:

Property,plantandequipment

Authorisedbutnotcontractedfor 190,256 167,372 102 710

Authorisedandcontractedfor 418,753 348,177 - -

Total 609,009 515,549 102 710


(b) Secondary reporting format – Geographical segments

The Group’s operations are principally based in Malaysia. The foreign-based entities’ revenue, results, assets and liabilities

incomparison to theGroup’sfiguresarenegligible. Accordingly,nosegmental informationbasedongeographicalsegment is

disclosed.

44 SIGNIFICANT CONTINGENT LIABILITIES AND CONTINGENT ASSETS

(a) JuruteraPerundingDayaSdnBhdandPengurusanProjekDayaSdnBhd(collectivelyknownas“DayaGroup”)haveinstituted

legalproceedingsagainsttheCompanyandasubsidiary,ProjekLebuhrayaTimurSdnBhd(“Pelita”)for,amongothers,paymentof

RM49.9million,forallegedworkundertaken,inrespectoftheprivatizationoftheEastCoastExpressway.

TheDirectorsareoftheview,basedonadvicebythesolicitorsactingfortheCompanyandPelita,thattheCompanyandPelitahave

goodchancesofdefendingtheaforesaidclaimbytheDayaGroup.

(b) On13November2008,Wayss&Freytag (Malaysia)SdnBhd(“Wayss&Freytag”)servedonMMCEngineeringGroupBerhad

(“MMCEG”),asubsidiaryofMMC,aWritofSummonsandaStatementofClaim(“theCourtAction”).TheCourtActionisforinter-alia,

adeclarationthattheMMCEG-GamudaBerhadJointVenture(“theJV”)isinbreachoftheSub-Contractdated16April2003(“the

Sub-Contract”)awardedtoWayss&FreytagtoconstructandcompletetheNorthTunnelDriveoftheStormwaterManagementand

RoadTunnelProject(“theSMARTProject”),byfailingtomakepaymentofRM102,366,880.42awardedbytheDisputeAdjudication

Board(“DAB”)toWayss&FreytaginrespectofvariousclaimsarisingoutoftheSub-Contractandfordamagesofthesameamount

subsequenttotheJVterminatingtheSub-Contracton23January2006duetoWayss&Freytag’sinordinatedelayintheprogress

ofitswork.UndertheSub-ContractanypartywhoisdissatisfiedwiththedecisionoftheDABmayissueaNoticeofDissatisfaction

andrequirethemattertobereferredtoarbitrationforfinaladjudication.TheJVwillaccordinglyresisttheCourtAction.

On1June2009,theJVobtainedanordertostaytheproceedingsoftheCourtActionfromtheSeniorAssistantRegistrarofthe

Court.Onthesameday,Wayss&FreytagfiledanappealtotheHighCourtJudgeagainsttheordergrantedbytheSeniorAssistant

Registrar.On30October2009,theHighCourtdismissedwithcostsWayss&Freytag’sappeal.

TheCourtActionisthereforestayedpendingresolutionofthedisputethrougharbitration.

(c)Furthertoitem(b)above,MMCEGandGamudaBerhad,haveon17December2008,issuedaNoticeofArbitrationtocommence

arbitrationproceedingsagainstWayss&FreytaginrespectoftheirclaimsforRM154,774,949.83againstWayss&Freytagforbreach

oftheSub-Contract.

Similarly,Wayss&Freytaghadon15January2009issuedaNoticeofArbitrationtocommencearbitrationproceedingsagainst

MMCEGandGamudaBerhadinrespectoftheirclaimsforapproximatelyRM151,279,445.58againstMMCEGandGamudaBerhad

forbreachoftheSub-Contract.

AsadvisedbythesolicitorsactingfortheJVinthearbitrationproceedings,theCompanyisoftheviewthatMMCEG,asapartyto

theJV,hasagoodchanceofsucceedinginthearbitrationproceedings.

44 SIGNIFICANT CONTINGENT LIABILITIES AND CONTINGENT ASSETS (CONTINUED)

(d) On3November2010,PraiPowerSdnBhd(“PPSB”),awholly-ownedsubsidiaryofMalakoffCorporationBerhad,theCompany’s

51%ownedsubsidiary,commenced2 legalproceedings in theHighCourtagainstGEEnergyParts Inc (“GE Inc”),GEPower

Systems(M)SdnBhd(“GEPowerSystem”)andGeneralElectricInternational,Inc.(“GEII”)(collectivelyreferredtoas“GE”),forGE’s

breachofdutyofcareowedtowardsPPSB,initscapacityasthedesigners/manufacturers/suppliersofpowerplantequipment.

Inthefirstlegalsuit,PPSBisclaimingthesumofRM83,608,019fromGE,beingthecostsforthereplacementofdamagedrotorand

thecommerciallossesarisingfromthereductionincapacitypayments.

Inthesecondlegalsuit,PPSBisclaimingthesumofRM29,740,009beingthecostsofthereplacementofanotherdamagedrotor

andotherconsequentiallosses.

Basedonsolicitors’advice,PPSBbelievesthatithasrelativelystronggroundsforbothclaims.

(e) At31December2010,thecontingentliabilitiesinrespectofguaranteesissuedareasfollows:

Bankguaranteesissuedtothirdpartiesmainlycomprisecustomersandutilitiessuppliers.Thesearemainlyinrespectofperformance

bondsandpaymentguaranteeforutilitiesfacilities.

Therearenoothermaterialcontingentliabilities,litigationsorguaranteesotherthanthosearisingintheordinarycourseofthebusiness

oftheGroupandCompanyandtheDirectorsareoftheopinionthattheiroutcomewillnothaveamaterialadverseeffectonthefinancial

positionsoftheGroupandCompany.

Group Company

2010 2009 2010 2009

RM'000 RM'000 RM'000 RM'000

Bankguaranteesissuedtothirdpartiesfor

performance(secured/unsecured) 406,775 425,895 23 8


45 COMMITMENTS

Capitalexpenditurenotprovidedforinthefinancialstatementsisasfollows:

197196

Group Company

2010 2009 2010 2009

RM'000 RM'000 RM'000 RM'000

(a) Transactions (continued)

Subsidiaries:(continued)

Purchaseofnaturalgasfromthe

holdingcompanyofasubsidiary’s

shareholder,PetroliamNasionalBerhad

(“PETRONAS”) 1,304,406 1,303,684 - -

PurchaseofLPGfromacompanywhich

sharesacommonholdingcompanywith

oneofthesubsidiary’sshareholder

- PetronasDaganganBerhad 15,372 11,168 - -

Associatedcompanies:

Interestincomeonunsecured

subordinatedloannotes 67,943 66,883 - -

Companiessubjecttocommonsignificant

influence:

Operationandmaintenancefeeexpense 277,258 269,216 - -

Operationandmaintenancesubcontractfee

income 128,188 129,654 - -

Dredgingworks - 2,898 - -

Rentalexpense 1,610 1,447 1,610 1,447

Thesetransactionshavebeenenteredintointhenormalcourseofbusinessandhavebeenestablishedundernegotiatedterms.

(b) Key management compensation

Group Company

2010 2009 2010 2009

RM'000 RM'000 RM'000 RM'000

Fees 999 985 482 628

Salariesandbonus 8,608 8,176 8,414 8,044

Definedcontributionplan 1,629 1,184 1,284 719

Otheremployeebenefits 5,201 3,939 827 775

16,437 14,284 11,007 10,166

KeymanagementincludesDirectors(executiveandnon-executive)andheadofdepartmentsoftheGroupsandCompany.

Group Company

2010 2009 2010 2009

RM'000 RM'000 RM'000 RM'000

(a) Transactions

Subsidiaries:

Transferofequityinterestinasubsidiary

company - - 315,089 305,701

Managementfeespaidtoasubsidiary - - 480 480

Group

2010 2009

RM'000 RM'000

(i) Forcomputerhardware



6,001 10,241

(ii) Fortheportarea



Laterthan5years 1,767,968 1,799,269

1,918,327 1,946,782

(iii) Forrentalofofficebuildingandequipment



4,928 8,933

(iv) Forrentalofaircraft

Notlaterthan1year 6,996 -

Total 1,936,252 1,965,956

45 COMMITMENTS (CONTINUED)

Capitalexpenditurenotprovidedforinthefinancialstatementsisasfollows:(continued)

46 SIGNIFICANT RELATED PARTY DISCLOSURES (CONTINUED)

Significantrelatedpartytransactionsotherthanthosedisclosedelsewhereinthefinancialstatementsareasfollows:(continued)

46 SIGNIFICANT RELATED PARTY DISCLOSURES

Significantrelatedpartytransactionsotherthanthosedisclosedelsewhereinthefinancialstatementsareasfollows:

(b) Non-cancellable operating lease commitments


199198

47 COMPANIES IN THE GROUP

TheprincipalactivitiesofthecompaniesintheGroup,theirplacesofincorporationandtheinterestoftheGroupareshownbelow:

Subsidiaries (continued)

Name of company

Country of

incorporation Group’s effective interest Principal activities

2010 2009

% %

Anglo-Oriental(Annuities)SdnBhd Malaysia 100.0 100.0 Investmentholding

Anglo-Oriental(Malaya)SdnBhd Malaysia 100.0 100.0 Propertyandinvestment

holding

Anglo-Oriental(Malaya)TrusteesSdnBhd Malaysia 100.0 100.0 Trustmanagement

LabohanDagangGalianSdnBhd Malaysia 100.0 100.0 Investmentholding

PernasCharterManagementSdnBhd Malaysia 100.0 100.0 Provisionofmanagement

servicestoholdingcompany

andfellowsubsidiaries

MMCFrigstadOffshoreSdnBhd Malaysia 100.0 100.0 Propertyinvestment

MMCMarketingSdnBhd Malaysia 100.0 100.0 Propertyinvestment

TimahSecuritiesBerhad Malaysia 100.0 100.0 Propertyinvestment

TronohHoldings(Selangor)SdnBhd Malaysia 100.0 100.0 Propertyinvestment

MMCEngineeringGroupBerhad Malaysia 100.0 100.0 Engineering,management

servicesandinvestment

holding

MMCEngineering&ConstructionSdnBhd Malaysia 100.0 100.0 Civilengineeringconstruction

works

MMCEngineeringServicesSdnBhd Malaysia 100.0 100.0 Specialisedengineering

constructionworks

MMCOil&GasEngineeringSdnBhd Malaysia 100.0 100.0 Specialisedengineeringdesign

services

MMCPowerSdnBhd Malaysia 100.0 100.0 Erectionofpowertransmission

linesandinstallationof

electricalandgassystem

MMCTransportEngineeringSdnBhd Malaysia 100.0 100.0 Specialisedengineeringworks

MMC-GTMBinaSamaSdnBhd Malaysia 100.0 100.0 Contractorforcivilengineering

andconstructionworks

MMC-Shapadu(Holdings)SdnBhd Malaysia 76.0 76.0 Investmentholding

47 COMPANIES IN THE GROUP (CONTINUED)


Name of company

Country of


2010 2009

% %

Pelepas-BrigantineServicesSdnBhd Malaysia 49.0 49.0 Repair,prepareandtradeof

containers,containerisation

systemandotherrelated

works

TepatTeknikSdnBhd Malaysia 70.0 70.0 Constructionandfabrication

TepatTeknik(Kejuruteraan)SdnBhd Malaysia 70.0 70.0 Constructionandfabrication

PelabuhanTanjungPelepasSdnBhd Malaysia 70.0 70.0 Portoperations

GasMalaysiaSdnBhd Malaysia 41.8 41.8 Constructionandoperationof

naturalgasdistributionsystem

* JohorPortBerhad Malaysia 100.0 100.0 Portoperations

* MMCZelanSdnBhd Malaysia 60.0 - Undertake,construct,

maintain,manage/executeany

LightRailTransit(LRT)project

inMalaysiaorelsewhereand

tocarryoutallrelatedworks

thereto

PelantarTeknik(M)SdnBhd Malaysia 41.8 41.8 Propertyholding

GasMalaysia(LPG)SdnBhd Malaysia 41.8 41.8 Supplyofliquefiedpetroleum

gasviareticulationsystem

RecycleEnergySdnBhd Malaysia 77.2 77.2 Conversionofmunicipalsolid

wastetoenergy

MMC-VMESdnBhd Malaysia 61.0 61.0 Naturalgasseparationworks

* JPLogisticsSdnBhd Malaysia 100.0 100.0 Providinglogisticsservices

* JPLogisticsPteLtd Singapore 100.0 - Providinglogisticsservices

* BernasLogisticsSdnBhd Malaysia - 75.0 Providinglogisticsservices

* SeaportWorldwideSdnBhd Malaysia 100.0 100.0 Investmentholdingand

propertydevelopment

# MMCInternationalHoldingsLtd BritishVirgin

Islands

100.0 100.0 Investmentholding

# MMCSaudiHoldingsLtd BritishVirgin

Islands



201200



Name of company

Country of


2010 2009

% %

# CityIslandHoldingsLimited BritishVirgin

Islands


# MMCUtilitiesLimited BritishVirgin

Islands

100.0 100.0 Investmentholdingand

provisionofproject

managementservices

* MMCSaudiArabiaLtd Kingdomof

SaudiArabia


* MalakoffCorporationBerhad Malaysia 51.0 51.0 Investmentholdingand

provisionofmanagement

servicestoitssubsidiaries

* MalakoffPowerBerhad(formerly

knownasMalakoffPowerSdnBhd)

Malaysia 51.0 - Operationandmaintenanceof

powerplants

* SegariEnergyVenturesSdnBhd Malaysia 47.8 47.8 Design,construction,

operationandmaintenance

ofacombinedcyclepower

plant,generationandsale

ofelectricalenergyand

generatingcapacityofpower

plant

* TeknikJanakuasaSdnBhd Malaysia 51.0 51.0 Operationandmaintenanceof

powerplants

* GB3SdnBhd Malaysia 38.3 38.3 Design,construction,





generatingcapacityofthe

powerplant

* PraiPowerSdnBhd Malaysia 51.0 51.0 Design,construction,






powerplant



Name of company

Country of


2010 2009

% %

* TanjungBinPowerSdnBhd Malaysia 45.9 45.9 Design,engineering,

procurement,construction,

installationand

commissioning,testing,

operationandmaintenanceof

2,100MWcoalfiredelectricity

generatingfacilitiesand

saleofelectricalenergyand


powerplant

* MalakoffEngineeringSdnBhd Malaysia 51.0 51.0 Provisionofengineeringand

projectmanagementservices

* MESBProjectManagementSdnBhd Malaysia 51.0 51.0 Provisionofengineeringand

projectmanagementservices

* WirazoneSdnBhd Malaysia 51.0 51.0 Build,ownandoperatean

electricitydistributionsystem

andacentralisedchilledwater

plantsystem

* HyperganticSdnBhd Malaysia 51.0 51.0 Investmentholding

* DesaKilatSdnBhd Malaysia 27.5 27.5 Landreclamation,

developmentand/orsaleof

reclaimedland

* MalakoffAlDjazairDesalSdnBhd Malaysia 51.0 51.0 Investmentholding

* TJSBGlobalSdnBhd Malaysia 51.0 51.0 Investmentholding

* TuahUtamaSdnBhd Malaysia 51.0 51.0 Investmentholding

* NaturalAnalysisSdnBhd Malaysia 51.0 51.0 Operationandmaintenanceof

powerplant

# MalakoffInternationalLimited Cayman

Islands


# MalakoffGulfLimited BritishVirgin

Islands



203202


Name of company

Country of


2010 2009

% %

# MalakoffTechnical(Dhofar)Limited BritishVirgin

Islands


# MalakoffJordanGenerationLimited BritishVirgin

Islands


* TlemcenDesalinationInvestment

CompanySAS

France 35.7 35.7 Investmentholding

# TJSBInternationalLimited Cayman

Islands


# TJSBInternational(Shoaiba)Limited BritishVirgin

Islands


# TJSBMiddleEastLimited BritishVirgin

Islands


MMCAMECSdnBhd Malaysia 51.0 51.0 Engineeringanddesign

serviceforupstreamand

downstreamoilandgas

industry

++* AliranIhsanResourcesBerhad Malaysia 69.8 73.5 Investmentholding

* SouthernWaterCorporationSdnBhd Malaysia 69.8 73.5 Investmentholding,water

treatmentandrehabilitation

ofwatertreatmentplants,

constructionofwaterworks

* SouthernWaterTechnologySdnBhd Malaysia 69.8 73.5 Constructionofwaterwork

andwatertreatmentplant

* SouthernWaterEngineeringSdnBhd Malaysia 69.8 73.5 Watertreatmentspecialistand

theoperation,maintenance

andprovisionofservices

relatedtowatertreatmentand

equipment

* SenaiAirportTerminalServicesSdnBhd Malaysia 100.0 100.0 Operationandmaintenanceof

airportterminal

* SenaiHighTechParkSdnBhd Malaysia 100.0 100.0 Propertydeveloper


Inactive Subsidiaries

Name of company

Country of

incorporation Group’s effective interest

2010

%

2009

%

* Anglo-OrientaldoBrasilLtda Brazil 100.0 100.0

BidorMalayaTinSdnBhd Malaysia 100.0 100.0

DanaVisionSdnBhd Malaysia 100.0 100.0

KramatTinDredgingBerhad Malaysia 52.9 52.9

* MMCBelgiumNV(undermembers’voluntaryliquidation) Belgium 100.0 100.0

* MMCExploration&Production(Thailand)Ltd

(undergoingdissolution)

Thailand - 100.0

* MMCExploration&Production(BV) Netherlands 100.0 100.0

* MMCExploration&Production(Philippines)PteLtd Samoa 100.0 100.0

MMCPortsSdnBhd Malaysia 100.0 100.0

MMCUtilitiesBerhad Malaysia 100.0 100.0

ProjekLebuhrayaTimurSdnBhd Malaysia 100.0 100.0

SouthernKintaConsolidated(M)Berhad Malaysia 100.0 100.0

SouthernMalayanTinDredging(M)Berhad Malaysia 100.0 100.0

* MMCEGCo.Ltd Mongolia 90.0 90.0

MMCGasSdnBhd(undercreditors’liquidation) Malaysia 55.0 55.0

TimahDermawanSdnBhd Malaysia - 51.8

* TepatTeknik(Labuan)Ltd Malaysia 70.0 70.0

TepatTeknik(Sarawak)SdnBhd Malaysia 70.0 70.0

PrentisSdnBhd Malaysia 100.0 100.0

# MMCPortsLimited BritishVirginIslands 100.0 100.0

* TranspoolSdnBhd Malaysia 51.0 51.0

# SpringAssetsLimited BritishVirginIslands 51.0 51.0

* MalakoffCapital(L)Ltd Malaysia 51.0 51.0

# MalakoffRasAzzourLimited BritishVirginIslands 51.0 51.0

* RNCCorporationsBerhad(inliquidation) Malaysia 73.5 73.5

* EnigmaHarmoniSdnBhd Malaysia 100.0 100.0

* AturanJernihSdnBhd Malaysia 100.0 100.0

* SenaiAirportSdnBhd Malaysia 100.0 100.0

PTP–MISCTerminalSdnBhd

(undermembers’voluntaryliquidation)

Malaysia 49.0 49.0



205204


Associates

Name of company

Country of


Accounting

date for

inclusion of

company

results Principal activities

2010 2009

% %

++* IntegratedRubberCorporation

Berhad

Malaysia - 20.1 Notapplicable Manufactureandtradingof

naturalrubberlatexgloves

++ ZelanBerhad Malaysia 39.2 39.2 31.12.2010 Investmentholding,

civilengineeringand

constructionofpowerplant

andbuildings

KaparEnergyVenturesSdn

Bhd

Malaysia 20.4 20.4 31.08.2010 Generationandsaleof

electricity

PortDicksonPowerBerhad Malaysia 12.8 12.8 30.06.2010 Generationandsaleof

electricity

* LekirBulkTerminalSdnBhd Malaysia 10.2 10.2 31.12.2010 Bulkterminaljettyandcoal

handlingservices

* MalaysianShoaibaConsortium

SdnBhd

Malaysia 20.4 20.4 31.12.2010 Investmentholding

* Saudi-MalaysiaWater&

ElectricityCompany

Limited

Kingdomof

SaudiArabia

10.2 10.2 31.12.2010 Investmentholding

* ShuaibahWater&Electricity

CompanyLimited

Kingdomof

SaudiArabia

6.1 6.1 31.12.2010 Design,construction,

commissioning,testing,

ownership,operationand

maintenanceofoilfired

powergenerationand

waterdesalinationplant

* ShuaibahExpansionHolding

CompanyLimited

Kingdomof

SaudiArabia

6.1 6.1 31.12.2010 Drinkingwaterproduction


Associates (continued)

Name of company

Country of


Accounting

date for

inclusion of

company


2010 2009

% %

* ShuaibahExpansionProject

CompanyLimited

Kingdomof

SaudiArabia

6.0 6.0 31.12.2010 Development,construction,

possession,operationand

maintenanceofShuaibah

expansionproject3for

waterproductatShuaibah

region,watertransportand

saleandallrelevantworks

andactivities

# OmanTechnicalPartners

Limited

BritishVirgin

Islands

22.1 22.1 31.12.2010 Investmentholding

# SalalahPowerHoldings

Limited

Bermuda 22.1 22.1 31.12.2010 Investmentholding

* EnaraEnergyInvestment

Company

Jordan 12.7 12.7 31.12.2010 Investmentholding

* CentralElectricityGenerating

CompanyLimited

Jordan 6.5 6.5 31.12.2010 Generateelectricalenergy

indifferentregionsof

Jordan

* Al-ImtiazOperationand

MaintenanceCompany

Limited

Kingdomof

SaudiArabia

10.2 10.2 31.12.2010 Implementationof


contractsforstationsof

electricalpowergeneration

andwaterdesalination

* SaudiMalaysiaOperation&

MaintenanceServices

CompanyLimited

Kingdomof

SaudiArabia

10.2 10.2 31.12.2010 Operationand

maintenanceofpowerand

waterdesalinationplant

* RedSeaGatewayTerminal

CompanyLimited

Kingdomof

SaudiArabia

20.0 20.0 31.12.2010 Operationand

maintenanceofcontainer

terminals


207206

Name of company

Country of


Accounting

date for

inclusion of

company


2010 2009

% %

* JazanEconomicCityLand

Company

Kingdomof

SaudiArabia

50.0 50.0 31.12.2010 DevelopmentofJazan

EconomicCityinthe

KingdomofSaudiArabia

* EquiventuresSdnBhd Malaysia 34.2 36.0 31.12.2010 Watertreatmentand

supply

* StrategiTegas(M)SdnBhd Malaysia 20.9 22.1 31.12.2010 Operate,maintainand

managewatertreatment

works

* Hyflux-TJSBAlgeriaSPA Algeria 24.9 24.9 31.12.2010 Operationand

maintenanceofseawater

desalinationplant

Inactive associates

Name of company

Country of


2010 2009

% %

* AjilMineralsSdnBhd Malaysia 49.0 49.0

* TepatTeknik-VMESdnBhd Malaysia 34.9 34.9

MMCMetrailSdnBhd Malaysia 20.0 20.0

* M.O.S.T.PowerJVSdnBhd Malaysia 30.0 30.0

* GoldenSolitaire(Australia)B.V(undermembers’

voluntaryliquidation)

Netherlands 59.5 59.5


Associates (continued) Jointly controlled entities

Name of company Principal activities

Proportion of ownership

interest

2010 2009

% %

* MMCE-FrankyConsortiumJointVenture Constructionandcompletionof

Kuantan-KertihRailwayProjectCivil

WorksPackage2 60.0 60.0

* MMC-GamudaJointVenture Design,engineering,procurement,

construction,installation,testing

andcommissioningofStormwater

ManagementandRoadTunnelproject 50.0 50.0

* ProjekSmartHoldingsSdnBhd Investmentholding 50.0 50.0

* SyarikatMengurusAirBanjirdanTerowongSdnBhd UndertakestheStormwaterManagement

andRoadTunnelproject 50.0 50.0

* WhaleSharkMaritimeSdnBhd Transportationofopenmarketcargoes 20.0 20.0

* MMC-GamudaJointVentureSdnBhd UndertakesDoubleTrackingproject 50.0 50.0

* AlmiyahAttilemcaniaSPA Construction,operationandmanagement

ofaseawaterdesalinationplant&

marketingthedesalinationwaterproduced 18.2 18.2


Thekeystothesymbolsusedareasfollows:

* AuditedbyfirmsotherthanPricewaterhouseCoopers,Malaysia

++ Quotedcompanies

# Nolegalrequirementtoappointauditors


209208


48 SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

(a) On24February2010,PelabuhanTanjungPelepasSdnBhd(“PTP”)increaseditsauthorisedsharecapitalfromRM250,000,000

toRM1,060,000,000by thecreationofanadditional810,000,000ordinarysharesofRM1.00each.On25February2010,PTP

converteditsoutstandingRedeemableConvertibleSubordinatedLoans(“RCSL”)ofRM527,848,644into527,848,644newOrdinary

SharesofRM1.00eachinaccordancewiththeRCSLholders’ratio.ThereisnoimpactontheGroup’sinterestinPTPwhichremains

at70.0%.

(b) Duringtheyear,theCompanyanditswholly-ownedsubsidiary,AngloOriental(Malaya)SdnBhd,disposed47,497,154ordinary

sharesofRM0.50eachinIntegratedRubberCorporationBerhad(“IRCB”)representing20.1%oftheequityinterestinIRCBfora

totalcashconsiderationofRM60.1millionresultinginagainondisposalofRM45.9milliontotheGroup.

(c) On31May2010,JohorPortBerhad,a100.0%ownedsubsidiary,disposedof12,000,000ordinarysharesofRM1.00eachinBernas

LogisticsSdnBhd(“BernasLogistics”),representing75.0%oftheequityinterestinBernasLogisticsforatotalcashconsideration

ofRM11.8millionresultinginalossofRM1.8milliontotheGroup.

(d) Effective23August2010,PTP-MISCTerminalSdnBhd(“PTP-MISC”),a49.0%ownedsemi-dormantsubsidiarythroughPelabuhan

TanjungPelepasSdnBhd(“PTP”),hasbeenputunderliquidation.PTP-MISChasthereforeceaseditsbusinessoperations.Theloss

resultingfromtheliquidationisnotexpectedtobematerial.

(e) Anglo-Oriental(Annuities)SdnBhd,awholly-ownedsubsidiary,hadduringtheyeardisposedof27,000,000ordinarysharesofSime

DarbyBerhad(“Sime”)representing0.45%oftheequityinterestinSimeforatotalcashconsiderationofRM226.7millionresulting

inagainondisposalofRM181.2milliontotheGroup.

(f) On27December2010,theCompanydisposedof4,000,000ordinarysharesofRM1.00eachinTimahDermawanSdnBhd(“TDSB”),

representing51.8%oftheequityinterestinTDSBforatotalcashconsiderationofRM822,063resultinginalossofRM3,582tothe

Group.

(g) On29December2010,Anglo-Oriental(Annuities)SdnBhd,a100.0%ownedsubsidiary,commencedliquidationonthe16,786,332

ordinarysharesofRM1.00eachinMMCExploration&Production(Thailand)Limited(“MMCThailand”),representing100.0%ofthe

equityinterestinMMCThailand.

49 SIGNIFICANT POST BALANCE SHEET EVENT

On31January2011,atrippingincidentoccurredattheTanjungBinpowerplantandcausedatemporaryfailureofpartofthepower

plant.

Asatthedateofsigningthisreport,thepreliminaryestimateonthepotential impactbytheManagement,afterdiscussionwiththe

originalequipmentmanufacturerontherecoveryplan,isnotexpectedtobematerial.

50 FINANCIAL INSTRUMENTS

Forward foreign currency exchange contracts

TheGroupisexposedtominimalforeigncurrencyriskasthemajorityoftheGroup’stransactions,assetsandliabilitiesaredenominated

inRinggitMalaysia.

Wherethereisexposuretoforeigncurrencytransactionrisk,suchtransactionswhichmateriallyimpactthefinancialpositionofthe

subsidiary,forwardforeigncurrencyexchangecontractsareenteredintotolimitthesubsidiary’sexposureonforeigncurrencywitha

valuehigherthanRM100,000.

Asat31December2010,thesettlementdatesonopenforwardcontractsare3months (2009:3months).Theforeigncurrency

amountstobereceivedandcontractualexchangeratesoftheGroup’soutstandingcontractswereasfollows:

Hedged item

Currency to be

received

RM’000

equivalent Contractual rate

At31December2010

Tradereceivables:

- USD7,525 USD 23 1USD=RM3.0950

- SGD44,478 SGD 106 1SGD=RM2.3890

Futuresalesoverthefollowing6months:

- USD199,000 USD 622 1USD=RM3.1269

- EURO57,186 EURO 231 1EURO=RM4.1550

- SGD55,500 SGD 137 1SGD=RM2.4030

At31December2009

Tradereceivables:

- USD1,849,212 USD 6,343 1USD=RM3.4299

Futuresalesoverthefollowing6months:

- USD113,956 USD 400 1USD=RM3.5129

- EURO333,000 EURO 1,685 1EURO=RM5.0604

Futurecostofsalesoverthefollowing6months:

- USD93,501 USD 319 1USD=RM3.4120

ThenetunrecognisedprofitonopencontractswhichhedgeanticipatedfutureforeigncurrencysalesamountedtoRM5,484(2009:

RM29,476).Thenetexchangegainisdeferreduntiltherelatedsalesaretransacted,atwhichtimeitisincludedinthemeasurement

ofsuchtransactions.

The fair valueofoutstanding forwardcontractsof theGroupat theendof reportingperiodwasata favourablenetpositionof

RM19,614(2009:FavourablenetpositionofRM26,439).

211210


50 FINANCIAL INSTRUMENTS (CONTINUED)

Fair value

ThecarryingamountsofrecognisedfinancialassetsandliabilitiesoftheGroupandCompanyattheendofreportingperiodapproximated

theirfairvaluesotherthanasdisclosedintherespectivenotes.

51 COMPARATIVE FIGURES

ThefollowingcomparativefiguresonthefaceofthefinancialstatementshavebeenreclassifiedastheDirectorsareoftheviewitwould

betterreflectthenatureofthebalancesinvolved.

Group’sconsolidatedstatementoffinancialposition


As previously

reported

Reclass of

dividend

accrued

As restated

RM’000 RM’000 RM’000

Tradeandotherpayable 1,910,166 (14,723) 1,895,443

Redeemablepreferenceshares 114,051 14,723 128,774


As previously

reported

Reclass of

dividend

accrued

As restated

RM’000 RM’000 RM’000

Tradeandotherpayable 2,104,981 (20,512) 2,084,469

Redeemablepreferenceshares 114,051 20,512 134,563

Theabovereclassificationshavenoimpactonthenetprofitattributabletoshareholders.

52 SUPPLEMENTARY INFORMATION DISCLOSED PURSUANT TO BURSA MALAYSIA SECURITIES BERHAD LISTING

REQUIREMENTS

With the purpose of improving transparency, BursaMalaysia Securities Berhad has on 25March 2010, and subsequently on 20

December2010,issueddirectiveswhichrequirealllistedcorporationstodisclosethebreakdownofunappropriatedretainedearningsor

accumulatedlossesintorealisedandunrealisedonGroupandCompanybasis,intheannualauditedfinancialstatements.

Theretainedearningsasatreportingdateareanalysedasfollows:


Group Company

RM’000 RM’000

TotalretainedearningsoftheCompanyanditssubsidiarycompanies:

-Realisedprofits 2,660,981 2,368,196

-Unrealisedprofits/(losses) 86,960 (457)

2,747,941 2,367,739

Totalaccumulatedlossesfromassociatedcompanies:

-Realisedlosses (143,117) -

-Unrealisedlosses (28,371) -

(171,488) -

Totalaccumulatedlossesfromjointlycontrolledentities:

-Realisedlosses (25,787) -

-Unrealisedlosses (24,794) -

(50,581) -

2,525,872 2,367,739

Less:Consolidationadjustments (31,201) -

2,494,671 2,367,739

Comparativefiguresarenotrequiredinthefirstfinancialyearofcomplyingwiththerealisedandunrealisedprofit/lossesdisclosureby

BursaMalaysiaSecuritiesBerhad.

213212

LISTOFPROPERTIESPursuant to Appendix 9C Part A (25) of the Listing Requirements of Bursa Malaysia Securities Berhad

Location Tenure

Area

(hectares)

Description/

existing use

Year of

expiry

Net book

value

(RM’000)

Age of

building

(years)

Year of

acquisition

PTDNo.2423,TanjungKupang,

DistrictofJohorBahru,Johor

DarulTakzim

Leasehold 349.04 Portterminal,

officebuildings,

commercial&

industrialland

2099 )

)

)

)

11 2000

PTDNos.2424-2504,2514,

2516,2517,2520,2521,Tanjung

Kupang,DistrictofJohorBahru

Leasehold 726.52 Commercial&

industrialland

2099 )

)

)

)

1,947,005 - 2000

PTDNo.1586,Serkat,Districtof

Pontian,JohorDarulTakzim

Grantin

perpetuity

114.92 Landforport

terminal&

buildings

- )

)

)

- 2001


DistrictofJohorBahru

Leasehold 0.22 Commercial&

Industrialland

2033 )

)

- 2000


DistrictofJohorBahru

Leasehold 2.80 Building 2107 )

)

- 2008

H.S.(D)23569,PTD8797,Mukim

ofSenai,DistrictofKulaijaya,

StateofJohorDarulTakzim

Leasehold 495.98 SenaiInternational

Airport

2033 858,500 7 2003

PTDNos.1836-1838,1851&

1357,Serkat/Sg.Karang,District

ofPontian,JohorDarulTakzim

Leasehold 912.78 Industrial/vacant 2103 513,719 5 2005

Plentong,DistrictofJohorBahru,

JohorDarulTakzim

Leasehold 112.10 Berths7-11 2052 137,954 13 1997


JohorDarulTakzim

Leasehold 13.44 Containerberths

1&2

2052 89,708 18 1992

MukimofSerkat,Districtof

Pontian,JohorDarulTakzim

Leasehold 362.43 Industriallandwith

powerplant

2048 77,614 4 2003

Plentong,DistrictofJohor

Bahru,JohorDarulTakzim

Leasehold - Dangerouscargo

jetty4

2052 34,246 11 1999


JohorDarulTakzim

Leasehold - Dangerouscargo

jetty

2052 23,372 18 1992

MukimUluSepetang,Taiping,

PerakDarulRidzuan

Freehold 737.90 Oilpalmplantation - 21,516 - 1994

LotNos.762&763,Setul,District

ofSeremban

Leasehold 5.56 Factorybuilding 2089 20,952 19 1992

Location Tenure

Area

(hectares)

Description/

existing use

Year of

expiry

Net book

value

(RM’000)

Age of

building

(years)

Year of

acquisition

Lot84,No.HakmilikGM12;

Lot85,No.HakmilikGM13;Lot

87,No.HakmilikGM14;Lot

89,No.HakmilikGM16;Lot

90,No.HakmilikGM17;Lot91,

No.HakmilikGM18;Lot92,




No.HakmilikGM22;Lot97,No.

HakmilikGM24;Lot98,No.



HakmilikGRN237425;Lot1877,

No.HakmilikGRN237289;Lot

3590,No.HakmilikGRN237420;

H.S.(D)50570,PTD102255,;

H.S.(D)50571,PTD102256,;

H.S.(D)50574,PTD102259,;

H.S.(D)50575,PTD102260,;

H.S.(D)50576,PTD102261and

H.S.(D)50577,PTD102262,

MukimofSenai,Districtof

Kulaijaya,JohorDarulTakzim

Freehold 439.52 Currently,partof

thelandwhich

waspreviously

plantedwith

maturedoilpalm

isbeingdeveloped

asSenaiAirport

City

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

- - 2008

Lot86,No.HakmilikGM36,

MukimofKulai,Districtof

Kulaijaya,JohorDarulTakzim


thelandwhichwas

previouslyplanted

withmaturedoil

palmisbeing

developedasSenai

AirportCity

)

)

)

)

)

)

)

1,813,988 - 2008

H.S.(D)457199,PTD151375,;

H.S.(D)457200,PTD151376,;

H.S.(D)457196,PTD151379and

H.S.(D)457197,PTD151380,

MukimofTebrau,DistrictofJohor

Bahru,JohorDarulTakzim


thelandwhichwas

previouslyplanted

withmaturedoil

palmisbeing

developedasSenai

AirportCity

)

)

)

)

)

)

)

- - 2008

215214

THIRTYLARGESTSHAREHOLDERS

No Name

No. of shares

held

% of issued

capital

1 SeaportTerminal(Johore)Sdn.Bhd. 1,493,108,840 49.03

2 AmanahrayaTrusteesBerhad

-SkimAmanahSahamBumiputera

507,686,300 16.67

3 CitigroupNominees(Tempatan)Sdn.Bhd.

-Employees’ProvidentFundBoard

262,428,900 8.62

4 PermodalanNasionalBerhad 137,368,200 4.51

5 PublicNominees(Tempatan)Sdn.Bhd.

-PledgedsecuritiesaccountforSeaportTerminal(Johore)Sdn.Bhd.(PBL)

83,000,000 2.73

6 KumpulanWangPersaraan(Diperbadankan) 63,755,400 2.09


-AmanahSahamWawasan2020

52,473,400 1.72

8 CartabanNominees(Asing)Sdn.Bhd.

-ExemptANforStateStreetBank&TrustCompany(WestCLTOD67)

23,173,792 0.76

9 ValuecapSdn.Bhd. 19,477,000 0.64

10 LembagaTabungHaji 19,208,900 0.63


-AmanahSahamDidik

18,296,800 0.60


-PublicIslamicDividendFund

12,373,200 0.41

13 HSBCNominees(Asing)Sdn.Bhd.

-BBHandCoBostonforVanguardEmergingMarketsStockIndexFund

11,691,500 0.38

14 CitigroupNominees(Asing)Sdn.Bhd.

-CBNYforDimensionalEmergingMarketsValueFund

10,879,779 0.36


-AmanahSahamMalaysia

10,050,000 0.33


-ExemptANforAmericanInternationalAssuranceBerhad

8,801,500 0.29

SHAREHOLDINGSTATISTICSas at 15 March 2011

SUBSTANTIAL SHAREHOLDERS

No. of Shares

Direct % Indirect %

AmanahrayaTrusteesBerhad (SkimAmanahSahamBumiputera) 507,686,300 16.67 - -

CitigroupNominees(Tempatan)Sdn.Bhd. (Employees’ProvidentFundBoard) 279,600,300 9.18 - -

SeaportTerminal(Johore)Sdn.Bhd. 1,576,108,840 51.76 - -

IndraCitaSdn.Bhd. - - *1,576,108,840 51.76

TanSriDato’SeriSyedMokhtarShahbinSyedNor - - @1,576,108,840 51.76

Notes: *deemedinterestedthroughSeaportTerminal(Johore)Sdn.Bhd.

@deemedinterestedthroughIndraCitaSdn.Bhd.

ANALYSIS BY SIZE OF SHAREHOLDING

Size of Holdings No. of

Shareholders

% of

Shareholders

No. of Shares

Held

% of Issued

Capital

Lessthan100shares 225 2.43 6,825 0.00

100-1,000 1,266 13.65 1,017,903 0.03

1,001-10,000 5,841 62.98 26,190,578 0.86

10,001–100,000 1,607 17.33 46,375,196 1.52

100,001tolessthan5%ofissuedshares 333 3.59 708,244,010 23.26

5%andaboveofissuedshares 3 0.03 2,263,224,040 74.32

TOTAL 9,275 100.00 3,045,058,552 100.00

DIRECTORS’ INTEREST AS PER THE REGISTER OF DIRECTORS’ SHAREHOLDINGS

NoneofthedirectorshaveanydirectorindirectinterestintheCompanyorinarelatedcorporation.

Classofsecurities : OrdinarySharesofRM0.10each

AuthorisedShareCapital : RM1,000,000,000.00

Issuedpaid-upCapital : RM304,505,855.20

Votingrights : 1voteperOrdinaryShare

No.ofshareholders : 9,275

216

No Name

No. of shares

held

% of issued

capital


-ExemptANforJPMorganChaseBank,NationalAssociation(U.A.E.)

7,275,834 0.24


-ExemptANforJPMorganChaseBank,NationalAssociation(NorgesBKNLend)

6,382,500 0.21

19 CitigroupNominees(Asing)Sdn.Bhd.

-CBHKPBGSGPforSunnyvaleHoldingsLtd

6,362,100 0.21

20 CartabanNominees(Asing)Sdn.Bhd.

-StateStreetLuxembourgFundAD69forAllianzGlobalInvestors

Fund-AllianzRCMOrientalIncome

6,321,000 0.21


-ExemptANforHongkongandShanghaiBankingCorporationLimited(HBFS-BCLT500)

5,770,900 0.19


-BNYMSA/NVforInvescoAseanEquityFund

5,750,000 0.19


-PublicIslamicEquityFund

5,444,100 0.18


-SekimAmanahSahamNasional

5,000,000 0.16


-PublicIslamicAsiaDividendFund

4,739,600 0.16


-EmployeesProvidentFundBoard(AMInv)

4,000,000 0.13


-EmployeesProvidentFundBoard(RHBInv)

3,500,000 0.11


-ExemptANforJPMorganChaseBank,NationalAssociation(U.S.A.)

3,398,100 0.11


-ExemptANforJPMorganChaseBank,NationalAssociation(BVI)

3,315,400 0.11

30 AmsecNominees(Tempatan)Sdn.Bhd.

-AmTrusteeBerhadforCIMBIslamicDali,EquityGrowthFund(UT-CIMB-DALI)

3,217,300 0.11

TOTAL 2,804,250,345 92.09

I/We,

(blockletters)

of

beingamember/membersofMMCCORPORATIONBERHADherebyappoint

of

orfailinghim,theChairmanofthemeetingtovoteforme/usonmy/ourbehalfattheAnnualGeneralMeetingoftheCompany

tobeheldattheNirwanaBallroom,LowerLobby,CrownePlazaMutiaraKualaLumpur,JalanSultanIsmail,50250Kuala

LumpuronMonday,16May2011at11.00a.m.,andatanyadjournmentsthereof,onthefollowingresolutionsreferredtoin

thenoticeoftheAnnualGeneralMeeting:

(Pleaseindicate“X”intheappropriateboxagainsteachResolutionastohowyouwishyourproxy/proxiestovote)

NOTES:

1 ThisproxyformmustbedepositedattheRegistrar’soffice,SymphonyShareRegistrarsSdn.Bhd.atLevel6,SymphonyHouse,BlokD13,PusatDaganganDana1,JalanPJU1A/46,

47301PetalingJaya,Selangor,Malaysianotlessthanforty-eight(48)hoursbeforethemeeting.

2 AmemberoftheCompanymayappointuptotwo(2)proxiestoattendthesamemeeting.WherethememberoftheCompanyappointstwo(2)proxies,theappointmentshallbe

invalidunlessthememberspecifiestheproportionofhisshareholdingtobepresentedbyeachproxy.

3 Inthecaseofacorporation,thisproxyformshouldbeunderitscommonsealorunderthehandofanofficerorattorneydulyauthorisedonitsbehalf.Aproxyneednotbeamemberofthe

Companyandamembermayappointanypersontobehisproxy.Theinstrumentappointingaproxyshallbedeemedtoconferauthoritytodemandorjoinindemandingapoll.

4 AcorporationmaybyresolutionofitsDirectorsorothergoverningbody,ifitisamemberoftheCompany,authorisesuchpersonasitthinksfittoactasitsrepresentativeanda

personsoauthorisedshallbeentitledtoexercisethesamepowersonbehalfofthecorporationasthecorporationcouldexerciseifitwereanindividualmemberofthecompany.

5 Inthecaseofjointholders,thevoteoftheseniormemberwhotendersavote,whetherinpersonorbyproxy,shallbeacceptedtotheexclusionofthevotesoftheotherjointholders,

andforthispurposeseniorityshallbedeterminedbytheorderinwhichthenamesstandintheregister.

6 Unlessvotinginstructionsareindicatedinthespacesprovidedabove,theproxymayvoteashe/shethinksfit.

Totalnumberofproxy(ies)appointed

Proportionofhisholdingstoberepresentedbyeachproxy

Proxy1 Proxy2

Totalnumberofordinarysharesheld

CDSAccountNo.PROXYFORM

% %

Signature:

Date:

1. ToconsidertheAuditedFinancialStatementsandtheReportsoftheDirectorsandAuditorsthereon.

ORDINARY RESOLUTIONS FOR AGAINST

2. DeclarationofDividend (Resolution1)

3. Re-electionofDirectorspursuanttoArticle78:(a) EncikOoiTeikHuat (Resolution2)(b) DatukHjHasniHarun (Resolution3)

4. Re-appointmentofDato’WiraSyedAbdulJabbarSyedHassanpursuanttoSection129(2)oftheCompaniesAct,1965. (Resolution4)

5. Re-appointmentofDato’AbdullahMohdYusofpursuanttoSection129(2)oftheCompaniesAct,1965. (Resolution5)

6. Re-appointmentofAuditors (Resolution6)

ToThe RegistrarSymphonyShareRegistrarsSdnBhdLevel6,SymphonyHouse,BlockD13PusatDaganganDana1,JalanPJU1A/4647301PetalingJayaSelangor,Malaysia

Affix

Stamp

foldhere

foldhere

MM

C C

OR

PO

RATIO

N B

ER

HA

DA

NN

UA

L RE

PO

RT 2010

MMC Corporation Berhad 30245-H

Level8,KompleksAntarabangsaJalanSultanIsmail50250KualaLumpurMalaysiaTel: (603)21424777Fax:(603)21489887

www.mmc.com.my

annual report 2010 - mmc · annual report 2010. 1911 • malayan tin dredging limited ... •...

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