Chairman’s Statement - malaysiastock.biz fileJAKS RESOURCES BERHAD (585648-T) Annual Report 2009 11 Chairman’s Statement (cont’d) term growth prospects in Vietnam will remain

JAKS RESOURCES BERHAD (585648-T) Annual Report 2009 11

Chairman’s Statement (cont’d)

term growth prospects in Vietnam will remain strong albeit the current weaker economic situation in Vietnam. The large stimulus packages implemented by the Vietnamese Government and Authorities have managed to steer the country from a more severe growth slowdown and supported a rebound in the construction and real estate sectors in Vietnam. The power sector in Vietnam will continue to be a growth sector as massive expansion of the power sector is needed over the next decade to meet the demand. Demand for electricity in Vietnam is expected to grow about 15% annually for the next 5 to 10 years based on its recent growth trends of 13% to 14% annually.

On the local front, the liberalization of the steel industry in August 2009 on the abolishment of certain import restrictions within the steel industry will allow fi nished steel product makers to competitively source their raw material needs. Besides enhancing competitiveness of the local steel players, it will also allow them to meet “without restrictions” the demand for domestic and export markets and in turn assist the growth of the construction industry. This augurs well for the Group as it will be able to effi ciently manage the cost of raw material for its steel pipe production.

In the 2009 Economic Report, it was stated that the construction sector expanded 2% during the fi rst six months of 2009, attributed to strong performance of residential, non-residential and special trade works sub-sectors. This was driven by implementation of various projects under the stimulus packages, which included building low and medium-cost houses, as well as upgrading and maintenance of buildings. Apart from increased government spending, improved consumer sentiment, the stabilising job market as well as the strong performance of the stock market augur well for the sector. The construction sector is projected to grow 3.5% this year, a third successive year of positive growth. The thrust of the fi scal policy in 2010 is to strengthen and sustain the recovery process of the economy by boosting domestic demand.

Overall, the Board is optimistic that the prospects of the Group will remain favourable in light of the outlook of the construction sector and the Group’s strategies.

ACKNOWLEDGEMENT

I am please to welcome Tan Sri Dato’ Seri Law Hieng Ding to the Board. His vast experience will certainly be valuable to the JAKS Group. At the same time, I

also wish to take this opportunity to send my condolences to the family of our former Chairman, Dato’ Hj. Jamian Bin Mohamad who passed away in August 2009. I wish to record my appreciation for the enormous contribution that Dato’ Jamian has made to the Group.

The Management team and staff have been resilient to the dynamic business environment in the past year and I would like to take the opportunity to offer each one of them my sincere appreciation for their continued drive, hard work and dedication. I also wish to thank my colleagues on the Board for their guidance and counsel. I am grateful that JAKS has a formidable Board with the vision, expertise and experience to provide sound counsel and corporate strategies in propelling the Group forward.

Also my sincere thanks to all our shareholders, business partners, suppliers, fi nanciers, consultants and government authorities and agencies for their continued support and confi dence shown towards us throughout these years.

Dato’ Zolkipli Bin AbdulChairman

JAKS RESOURCES BERHAD (585648-T) Annual Report 200912

TINJAUAN KEWANGAN

Bagi tahun kewangan berakhir 31 Oktober 2009 ini, Kumpulan JAKS telah mencatatkan pendapatan sebanyak RM278.1 juta. Ini merupakan peningkatan sebanyak 19% ke atas pendapatan tahun kewangan sebelumnya. Peningkatan ini disebabkan oleh hasil pendapatan yang lebih tinggi daripada projek-projek pembinaan yang sedang dijalankan.

Walaupun terdapat banyak aktiviti di bahagian pembinaan untuk meningkatkan pendapatan Kumpulan di sepanjang tahun, akan tetapi ia masih tidak dapat menampung kerugian yang dialami di bahagian pengilangan akibat daripada pasaran yang kompetitif. Tambahan pula harga pasaran yang lemah untuk produk keluli dan margin yang rendah di bahagian pengilangan telah memberi kesan kepada prestasi Kumpulan secara keseluruhannya. Justeru itu, Kumpulan telah mengalami kerugian sebelum cukai sebanyak RM2.4 juta berbanding pencapaian keuntungan sebelum cukai sebanyak RM7.2 juta pada tahun kewangan sebelumnya.

DIVIDEN

Lembaga tidak mengesyorkan sebarang dividen untuk tahun kewangan berakhir 31 Oktober 2009.

Penyata Pengerusi

Saya, bagi pihak Lembaga Pengarah dengan sukacitanya

membentangkan Laporan Tahunan dan Penyata Kewangan

untuk Kumpulan dan Syarikat JAKS Resources Berhad bagi

tahun kewangan berakhir 31 Oktober 2009.

TINJAUAN OPERASI

Meninjau operasi tahun ini, bahagian pembinaan telah menggandakan pendapatannya kepada RM153.3 juta dalam tahun kewangan ini dan berjaya mencapai keuntungan sebelum cukai sebanyak RM7.2 juta. Pencapaian ini adalah disebabkan oleh sumbangan yang lebih tinggi dari projek-projek yang sedang dijalankan dan juga untuk projek yang telah siap dalam tahun ini. Di bahagian pembinaan, Kumpulan sedang berusaha untuk menyiapkan projek bernilai RM317 juta iaitu Projek Loji Rawatan Air Beaufort dan Pemasangan Paip di Sabah di mana ia dijadualkan siap dalam tahun ini. Selain itu, bahagian pembinaan juga sedang aktif bersiap sedia untuk melaksanakan projek baru iaitu Projek Pembinaan Empangan Paya Peda Besut, Terengganu, yang bernilai RM333 juta.

Untuk bahagian pengilangan, ia telah mencatatkan pendapatan yang lebih rendah berbanding tahun sebelumnya. Ini adalah disebabkan oleh persaingan pasaran yang hebat akibat kemerosotan harga keluli di pasaran domestik dan juga pasaran ekspot. Prestasi bahagian operasi ini juga terjejas akibat harga bahan mentah dan kos operasi yang lebih tinggi.

Untuk projek loji tenaga arang batu di Hai Duong Province, Vietnam Utara, dengan sukacitanya, pihak Lembaga ingin mengumumkan bahawa progres projek ini berjalan seperti yang dijadualkan. KementerianPerdagangan dan Industri Vietnam telah meluluskan projek tersebut berdasarkan Build-Own-Transfer (“BOT”) Basis dan Memorandum Persefahaman telah ditandatangani pada 13 Mei 2009. Satu Perjanjian Prinsip yang telah dipersetujui untuk projek tersebut juga telah ditandatangani pada 10 Julai 2009.

Seterusnya, rundingan untuk Perjanjian Pembelian Kuasa (“PPA”) dan kontrak BOT telah bermula manakala Perjanjian Pembekalan Arang Batu masih dalam proses perundingan. Perjanjian tersebut tertakluk kepada keputusan akhir daripada rundingan-rundingan BOT kontrak dengan “Vietnam Coal and Minerals Group” bagi membekalkan arang batu tempatan untuk projek ini. Sementara itu, pihak Lembaga sedang mencari peluang-peluang pelaburan lain dan opsyen-opsyen pembiayaan, termasuk perjanjian usahasama untuk menjayakan projek tersebut.

Pada 3 Mac 2010, Syarikat telah mengumumkan penglibatan pertamanya dalam pembangunan


Penyata Pengerusi (sambungan)

hartanah berskala besar. JAKS Island Circle Sdn Bhd, 51% subsidiari Kumpulan telah mementerai satu perjanjian dengan Star Publications (M) Berhad untuk bersama memajukan satu projek pembangunan kediaman dan komersial di lokasi strategik di Seksyen 13, Petaling Jaya. Jumlah pendapatan dari projek pembangunan ini dianggarkan bernilai RM370 juta dan pembinaan dijadualkan bermula dalam tahun ini. Selain pendapatan dari pembangunan ini, JAKS juga dijangka akan mendapat faedah daripada kerja pembinaan untuk projek berkenaan dan ini akan meningkatkan pendapatan bahagian pembinaan.

Dengan perlaksanaan kerja pembinaan untuk projek Pemindahan Air Mentah Pahang-Selangor oleh Kerajaan Persekutuan pada pertengahan 2009, JAKS dengan ahli konsortiumnya sedang aktif membida penawaran tender untuk segmen projek paip yang akan dijalankan. Seluruh projek pemindahan air mentah antara negeri dan Projek Langat 2 dianggarkan menelan belanja lebih daripada RM8 bilion. Memandangkan Kumpulan JAKS memiliki kepakaran, pengalaman dan juga rekod yang baik dalam pembinaan infrastruktur air, pihak Lembaga yakin JAKS mempunyai peluang yang cerah dalam tawaran

tersebut. Sekiranya berjaya, ini akan meletakkan JAKS dikedudukan yang lebih baik dan kukuh untuk kerja-kerja pembinaan di Selangor bagi projek air antara negeri dan juga bagi projek-projek lain di bawah selian Pengurusan Aset Air Berhad.

PERKEMBANGAN KORPORAT

Tawaran Persendirian

Pada 11 November 2009, JAKS telah mengumumkan cadangan untuk menawarkan saham biasa baru persendirian bernilai RM1.00 sesaham sehingga 10% di atas modal saham berbayar Syarikat bersama Waran Boleh Cerai sehingga satu (1) Waran untuk setiap satu (1) Saham Penempatan yang ditawarkan (“Cadangan Tawaran Persendirian”).

Sekiranya anggaran saiz penempatan maksimum saham 48,219,717 dengan harga terbitan RM1.00 sesaham bersamaan satu (1) Waran dilanggani, maka sejumlah RM48.2 juta akan diperolehi daripada Cadangan Tawaran Persendirian tersebut. Hasil dari Cadangan Tawaran Persendirian tersebut akan digunakan untuk modal kerja, mengembangkan aktiviti perniagaan, penyelesaian pinjaman bank dan / atau pelaburan lain.

Pada 24 Disember 2009, Bursa Securities telah meluluskan permohonan untuk Cadangan Tawaran Persendirian ini dan Kementerian Perdagangan Antarabangsa dan Industri juga telah meluluskan permohonan tersebut melalui surat bertarikh 29 Disember 2009. Pemegang-pemegang saham JAKS juga telah meluluskan cadangan ini di Mesyuarat Agung Luar Biasa yang berlangsung pada 3 Februari 2010.

JAKS kini dalam perbincangan dengan pelabur-pelabur yang berminat untuk melanggani Tawaran Persendirian ini.

Status pencapaian Perakuan Kelayakan Menduduki untuk “Corporate Debt Restructuring Scheme (“CDRS”)

Sebagai memenuhi sebahagian syarat daripada CDRS untuk melaksanakan penyenaraian Syarikat dalam tahun 2004, JAKS dikehendaki oleh Suruhanjaya Sekuriti untuk mendapatkan Sijil Layak Menduduki daripada pihak berkuasa tempatan untuk premis-premis yang dimilikinya di Subang Jaya dan Meru. Dengan ini, pihak Lembaga ingin mengumumkan penerimaan Sijil Kelayakan untuk kedua-dua premis di lokasi tersebut.



PANDANGAN MASA DEPAN KUMPULAN JAKS

Walaupun mengalami ketidakpastian di pasaran ekonomi global, pihak Lembaga masih yakin dan positif bahawa Kumpulan JAKS akan maju ke hadapan dan dijangka akan mendapat manfaat daripada pakej rangsangan dan projek-projek utama yang akan dilaksanakan di Malaysia dan rantau Asia, terutamanya Vietnam, sebuah negara yang paling cepat berkembang di Asia kebelakangan ini.

Strategi penglibatan dalam pembinaan infrastruktur tenaga di Vietnam adalah untuk mencari peluang yang lebih baik selain dari aktiviti-aktiviti Kumpulan yang sedia ada terutamanya di sektor pembinaan dan pengilangan paip keluli. Pihak Lembaga yakin pertumbuhan jangka panjang di Vietnam akan kekal kukuh meskipun arus keadaan ekonomi kini agak lemah di negara itu. Pakej rangsangan besar yang dilaksanakan oleh Kerajaan dan Pihak Berkuasa di Vietnam telah berjaya membawa negara tersebut daripada pertumbuhan ekonomi yang mendatar. Sokongan dari Kerajaan Vietnam yang berterusan sedikit sebanyak dapat memulihkan ekonomi dalam sektor pembinaan dan hartanah di negara tersebut.

Sektor tenaga di Vietnam akan terus menjadi sektor pertumbuhan

terbesar di dekad yang akan datang. Permintaan untuk bekalan elektrik di Vietnam dijangka akan meningkat kira-kira 15% setiap tahun untuk 5 hingga 10 tahun yang akan datang berdasarkan pertumbuhan tren beberapa tahun sebelumnya di mana pertumbuhannya adalah 13% hingga 14% setiap tahun.

Di pasaran tempatan, sejak Ogos 2009, industri keluli telah mengamalkan liberasasi di mana kerajaan telah menarik balik sekatan impot yang diamalkan sebelum ini. Justeru itu, pengeluar- pengeluar produk keluli dibenarkan untuk membeli sumber bahan mentah yang diperlukan tanpa sekatan dengan lebih kompetitif. Selain itu juga, ia akan mempertingkatkan daya saing di kalangan pengeluar-pengeluar keluli tempatan, memenuhi permintaan domestik dan pasaran-pasaran ekspot dan ini dijangka akan dapat membantu pertumbuhan industri pembinaan. Ini secara tidak langsung telah membolehkan Kumpulan untuk menguruskan kos bahan mentah dan pengeluaran paip keluli dengan lebih efi sen.

Menurut Laporan Ekonomi 2009, sektor pembinaan akan berkembang sebanyak 2% dalam masa enam bulan pertama 2009. Perkembangan

ini adalah hasil sumbangan prestasi cemerlang dari kerja-kerja pembangunan komersil, kediaman dan sektor dagangan khas yang dijalankan. Perkembangan ini telah didorong oleh perlaksanaan pelbagai projek di bawah pakej rangsangan, iaitu pembinaan bangunan dan rumah kos sederhana dan rendah, serta kenaikan taraf dan penyelenggaraan bangunan-bangunan.

Selain daripada perbelanjaan kerajaan yang meningkat, sentimen pengguna yang lebih baik, penstabilan pasaran kerja serta prestasi pasaran saham yang kukuh telah memberi petanda yang baik untuk sektor pembinaan di negara ini. Sektor pembinaan dijangka meningkat sebanyak 3.5% tahun ini, selepas mencapai pertumbuhan tiga tahun sebelumnya. Dasar fi skal polisi tahun 2010 juga dijangka akan mengukuhkan serta mengekalkan proses pemulihan ekonomi dan juga membantu dalam peningkatan pasaran permintaan domestik.

Kesimpulannya, pihak Lembaga amat optimis bahawa prospek Kumpulan JAKS akan bertambah baik berdasarkan tinjaun positif dan strategi-strategi Kumpulan dalam sektor pembinaan.



PENGAKUAN

Saya ingin mengalu-alukan kedatangan Tan Sri Dato’ Seri Law Hieng Ding sebagai Ahli Lembaga Kumpulan JAKS. Pengalaman luas Tan Sri amat berharga dan akan memberi manfaat yang besar kepada Kumpulan JAKS. Pada masa yang sama, saya juga ingin mengambil peluang ini untuk menyampaikan ucapan takziah kepada keluarga bekas Pengerusi Kumpulan, Allahyarham Dato’ Hj. Jamian Bin Mohamad yang telah meninggal dunia pada bulan Ogos 2009 yang lalu. Di sini saya ingin merakamkan setinggi-tinggi penghargaan di atas jasa dan bakti yang telah diberikan ke arah kemajuan Kumpulan.

Saya juga ingin mengambil kesempatan ini untuk mengucapkan ribuan terima kasih kepada Pihak Pengurusan dan kakitangan yang telah berjuang bersama-sama menempuhi persekitaran perniagaan yang dinamik pada tahun lepas dengan penuh motivasi, usaha dan dedikasi mereka. Saya ingin berterima kasih kepada Ahli-Ahli Lembaga di atas visi, kepakaran dan pengalaman mereka dalam memberi bimbingan dan kaunseling serta strategi-strategi korporat untuk membawa Kumpulan terus ke mercu kejayaan.

Setinggi-tinggi penghargaan dan ucapan terima kasih kepada semua para pemegang saham, rakan-rakan perniagaan, para pembekal, para pelabur, konsultan dan pihak berkuasa kerajaan serta agensi agensi yang telah memberikan sokongan dan keyakinan mereka terhadap kami sepanjang tahun ini.

Dato’ Zolkipli Bin AbdulPengerusi


Corporate Governance Statement

The Board of Directors supports high standards of corporate governance and assume responsibility in ensuring that the Best Practices in Corporate Governance as develop in Part 1 and Part 2 of the Malaysian Code on Corporate Governance (“the Code”) is being fully applied. The Group believes that good governance will help to realize long-term shareholders’ value, whilst taking into account the interest of other stakeholders.

Set out herewith are the corporate governance principles and practices that were applied during the financial year ended 31 October 2009.

A. THE BOARD OF DIRECTORS

a. Duties of Board of Directors

The Board of Directors takes full responsibility for the performance of the Group. The Board provides stewardship to the Group’s strategic direction and operations which will ultimately maximize shareholders’ value. To fulfill this role, the Board provides advice to the Management in monitoring and achieving the Group’s goals.

The Board’s most important functions are as follows:

• ensuringthattheGroup’sgoalsareclearlyestablished,andthatstrategiesareinplaceforachievingthem;• establishingpoliciesforstrengtheningtheperformanceoftheCompanyincludingensuringthatManagement

is proactively seeking to build business through innovation, initiative, technology and the development of its business capital;

• monitoringtheperformanceofManagement;• appointingtheChiefExecutiveOfficer(CEO),settingthetermsofhisemploymentcontract;• decidingonstepswhicharedeemednecessarytoprotecttheCompany’sfinancialpositionandtheabilityto

meet its debts and other obligations when they fall due, and ensuring that such steps are taken;• ensuringthattheCompany’sfinancialstatementsaretrueandfairandconformwithlaw;• ensuringthattheCompanyadherestohighstandardsofethicsandcorporatebehaviour;and• ensuringthattheCompanyhasappropriateriskmanagement/regulatorycompliancespoliciesinplace.

In discharging its fiduciary duties, the Board has delegated specific tasks to 3 Board Committees namely Audit Committee, Nomination Committee and Remuneration Committee. All the Board Committees have its own terms of reference and has the authority to act on behalf of the Board within the authorities as lay out in the terms of reference and to report to the Board with the necessary recommendation.

b. Board Composition and Balance

The Board of JAKS Resources Berhad presently has 8 members comprising of the Managing Director/CEO, two Executive Directors and five Independent Non-Executive Directors.

The Board meetings is presided by the Chairman, whose role is clearly separated from role of the CEO to ensure a balance of power and authority.

The Executive Directors are responsible for implementing the policies and decisions of the Board, overseeing the operations as well as managing the development and implementation of business and corporate strategies. The Non-Executive Directors are independent of Management and free from any business relationship which could materially interfere with their independent judgement. Their presence ensures that issues of strategies, performance and resources proposed by the Management are objectively evaluated and thus provide a capable check and balance for the Executive Directors.


Corporate Governance Statement (cont’d)

c. Board Meetings

During the financial year ended 31 October 2009, five board meetings were held and the respective Director’s attendance record is as shown in the table below:

DirectorsMeeting Attendance

No. of meetings attended Percentage of attendance (%) Dato’ Zolkipli Bin Abdul 4/5 80

Ang Lam Poah 5/5 100

Ang Lam Aik 5/5 100

Dato’ Razali Merican Bin Naina Merican 4/5 80

Dato’ Azman Bin Mahmood 5/5 100

Liew Jee Min @ Chong Jee Min 5/5 100

Datuk Kamarulzaman Bin Zainal 5/5 100

Tan Sri Dato’ Seri Law Hieng Ding(appointed on 03/02/2010)

N/A N/A

The Board meets at least five times a year and as and when it is necessary. Due notice of matters to be discussed are provided to the Board. The proceedings, deliberations and conclusions made by the Board were properly recorded in the minutes of meetings kept by the Company Secretaries and was confirmed by the Board and signed by the Chairman of the meeting.

d. Supply of Information

The Board is provided with the agendas and board papers prior to Board Meetings with sufficient time to enable the Board to solicit further explanations and/or information, where necessary, to enable them to discharge their duties.

The board papers provided include inter alia, financial results, business plan and budget, status of major projects, minutes of meetings of Board/Committees, circulars from Bursa Malaysia Securities Berhad (“Bursa Securities”), announcements made to Bursa Securities, directors’ resolution in writing that had been passed and other major operational and financial issues for the Board’s information and/or approval.

All Directors have access to the advices and services of the Company Secretary and all information in relation to the Group whether as a full Board or in their individual capacity to assist them in furtherance of their duties. The Board or the individual Directors may seek independent advice, from independent professional advisers at the Group’s expense, if necessary, in accordance to the prescribed policy.


e. Directors’ Training

The Group acknowledges that continuous education is vital for the Board members to gain insight into the state of economy, technological advances, regulatory updates and management strategies. Directors are encouraged to attend continuous education programmes to further enhance their skills and knowledge, where relevant. New directors appointed are required to attend the Mandatory Accreditation Programme pursuant to the Listing Requirements of Bursa Securities and will be briefed by Management on the operations and policies of the Company to familiarize themselves with the Company’s business.

During the financial year 2009, the Directors attended an in-house training on the Bursa Malaysia Main Market Listing Requirement. Other than the in-house training, the following directors have also attended the following training programs:-

Director Mode of Training

Title of Training Duration of Training

Liew Jee Min @ Chong Jee Min Forum Towards Enhancing Corporate Entity – From Roots to Fruits

2 hours

Forum Strengthening the Financial Reporting Chain in Enhancing Corporate Governance

2 hours

Forum Managing and Implementing Corporate Governance in Organisations

2 hours

Dato’ Azman Bin Mahmood Seminar Project Construction Process Talk 1 day

Seminar Appraising for Self Improvement and the Company

1 day

f. Appointments and Re-election of Directors

In accordance with the Company’s Articles of Association, all Directors who are appointed by the Board shall hold office only until the next annual general meeting after their appointment and shall then be eligible for re-election. The Articles also provide that at least one-third of the remaining Directors be subject to retirement by rotation at each annual general meeting provided always that all Directors including the Managing Director shall retire from office at least once every three years but shall be eligible for re-election.

The Board has empowered the Nomination Committee to consider and make their recommendation to the Board for the continuation in service of those Directors who are due for retirement and recommendation of new Directors, if required to enhance the composition of the Board. The Nomination Committee will recommend to the Board candidates for all directorships to be filled and review the composition of the Board to ensure that the Board has the required mix of skills, expertise, attributes and core competencies to discharge their duties efficiently and effectively.

During the financial year under review, the Nomination Committee met once to review the mix of skills and experience of the Board and was satisfied that the core competencies of the Directors in varied specialised field was strategic and fundamental to the success of the Company. The Nomination Committee also assessed the effectiveness of the Board as a whole, the Board Committees and contribution of the directors.



B. DIRECTORS’ REMUNERATION

a. Level and Make-up

The Company has adopted the objective as recommended by the Code to determine the remuneration of the Directors so as to ensure that the Company attracts and retains the Directors needed to run the Group successfully. The component parts are designed to link rewards to corporate and individual performance in the case of Executive Directors. In the case of Non-Executive Directors, the level of remuneration reflects the experience and level of responsibilities undertaken by the individual Non-Executive Director concerned.

b. Procedure

The Remuneration Committee recommends for the Board’s approval on all elements of remuneration and terms of employment for Executive Directors with the Director concerned abstaining from deliberations and voting on decisions in respect of his remuneration package. The Remuneration Committee met once during the financial year ended 31 October 2009 to review the bonuses and increments of the Executive Directors.

Non-Executive Directors’ fees are determined by the Board as a whole. The fees payable to Non-Executive Directors are subject to the approval of shareholders.

c. Details of Remuneration

Details of the remuneration received by the Directors from the Group and Company for the financial year ended 31 October 2009 are set out on page 75 of the Audited Financial Statements.

The aggregate remuneration paid/payable to all Directors of the Company are further categorized into the following components:

Fees(RM)

Salaries(RM)

EPF & SOCSO(RM)

Total(RM)

Executive Directors - 1,048,000 120,419 1,168,419

Non-Executive Directors 168,000 - - 168,000

The number of Directors whose remuneration falls under the following remuneration bands:

Remuneration Bands Executive Directors Non-Executive Directors

RM50,000 and below - 4

RM250,000 – RM300,000 2 -

RM600,000 – RM650,000 1 -



C. SHAREHOLDERS

The Company recognizes the importance of transparency and accountability in disclosure of the Group’s business activities to its shareholders and investors. The Board has maintained an effective communication policy that enables both the Board and Management to communicate effectively with its stakeholders, investors and even the public.

The Company uses its annual general meeting as the main channel of communication with its shareholders where the Board of Directors and Auditors of the Company are present to answer any queries of shareholders.

D. ACCOUNTABILITY AND AUDIT

a. Financial Reporting

In presenting the annual financial statements and quarterly announcements of its results, the Board of Directors has ensured that the financial statements represent a true and fair assessment of the Company and Group’s financial position. The Responsibility Statement by the Directors pursuant to the Bursa Securities Listing Requirements is set out on page 30.

b. Internal Control and Risk Management

The Board acknowledges its responsibility for establishing a sound system of internal control to safeguard shareholders’ investment and Group’s assets and to provide assurance on the reliability of the financial statements.

While the internal control system is devised to cater for particular needs of the Group, such controls by their nature can only provide reasonable assurance but not absolute assurance against material misstatement or loss. A statement on internal control is set out on page 26.

c. Relationship with Auditors

The Company maintains a transparent relationship with the auditors in seeking their professional advice and towards ensuring compliance with the accounting standards.

E. ADDITIONAL COMPLIANCE INFORMATION

1. Share Buy-backNo share buy-back scheme was in place during the financial year 2009.

2. Options, Warrants or Convertible Securities Exercised in the Financial Year 2009There were no options, warrants or convertible securities issued during the financial year 2009.

3. American Depository Receipt (“ADR”)/Global Depository Receipt (“GDR”)During the financial year 2009, the Company did not sponsor any ADR or GDR programme.

4. Sanctions and/or Penalties Imposed on the Company & its Subsidiaries, Directors or Management by the Relevant RegulatoryThere were no sanctions or penalties imposed on the Company and its subsidiaries, Directors or Management by the relevant regulatory bodies during the financial year 2009.



5. Non-audit FeesThe amount of non-audit fees paid to the external auditors by the Company and its subsidiaries for the financial year 2009 amounting to RM16,000.00.

6. Profit Guarantee

During the financial year 2009, there was no profit guarantee received by the Company.

7. Material ContractThere is no material contract entered into by the Company and/or its subsidiary companies which involves Directors’ and/or Major Shareholders’ interest during the financial year 2009.

8. Revaluation PolicyThe properties of the Group are revalued on a periodic basis by external independent valuers at an interval of at least once in every five years.

9. Variation of Results There was no material variation between the audited financial statements for the financial year ended 31 October 2009 and the unaudited results announced.



Board Committees

A. AUDIT COMMITTEE REPORT

a. Members

The Audit Committee consists of the following members during the financial year:

Chairman Dato’ Azman Bin Mahmood (Independent Non-Executive Director)

Members Liew Jee Min @ Chong Jee Min (Independent Non-Executive Director)Dato’ Zolkipli Bin Abdul (Independent Non-Executive Director)

b. Terms of Reference

1. Composition of Audit Committee

The Audit Committee (“the Committee”) shall be appointed by the Board of Directors (“the Board”) from amongst the Directors and shall consist of not less than three members, a majority of whom shall be Independent Non-Executive Directors.

The Board shall, within three months of a vacancy occurring in the Audit committee which result in the number of members reduced to below three, appoint such number of new members as may be required to make up the minimum number of three members.

The members of the Committee shall elect a chairman from among their members who shall be an Independent Non-Executive Director. An alternate Director or Executive Director must not be appointed as a member of the Committee.

2. Membership

At least one member of the Committee:• MustbeamemberoftheMalaysianInstituteofAccountants;or• Ifnotamemberof theMalaysian InstituteofAccountants, thatmembermusthaveat least threeyears’

working experience and; must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act, 1967; or must be a member of one of the associations of the accountants specified in Part II of the 1st Schedule of the Accountants Act, 1967; or

• Musthaveadegree/masters/doctorateinaccountingorfinanceandatleastthreeyears’postqualificationin accounting or finance; or

• Musthaveat leastsevenyears’experiencebeingachieffinancialofficerofacorporationorhaving thefunction of being primarily responsible for the management of the financial affairs of a corporation.

• FulfillssuchotherrequirementsasprescribedorapprovedbytheExchange.

3. Authority

The Committee is authorised by the Board to investigate any activity of the Company and its subsidiaries within its terms of reference or otherwise directed by the Board. It shall have:

i. The authority to investigate any matter within its terms of reference;ii. The resources which are required to perform its duties; iii. Full and unrestricted access to any information pertaining to the Company; iv. Direct communication channels with the external auditors and internal auditors;v. The right to obtain independent professional or other advice;


vi. The rights to convene meetings with the external auditors, the internal auditors or both, excluding the attendance of the executive members of the committee, other directors and employees of the listed issuer, whenever deemed necessary. The Committee should meet with the external auditors without executive board members present at least twice a year.

The Committee is also authorized by the Board to obtain outside legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary and reasonable for the performance of its duties.

4. Meetings and Minutes

The Committee shall meet at least four times a year and such additional meetings as the Chairman shall decide in order to fulfill its duties.

In addition to the Committee members, the meetings will normally be attended by the representatives of the departments in the Company and of the external auditors as and when required. The Committee may invite any person to be in attendance to assist it in its deliberations.

A quorum shall consist of a majority of Independent Non-Executive Directors and shall not be less than two.

The decision of the Audit Committee shall be decided by a majority of votes. In the case of an equality of votes, the Chairman shall have a second or casting vote, provided that where two members form a quorum, the Chairman of a meeting at which only such a quorum is present, or at which only two Directors are competent to vote on the question in issue, the Chairman shall not have a casting vote.

The Committee shall be reporting to the full Board from time to time its recommendation for consideration and implementation and the actual decision shall be the responsibility of the Board of Director after considering the recommendation of the Committee.

The Company Secretary shall act as Secretary of the Committee and shall be responsible for drawing up the agenda with the concurrence of the chairman and circulating it, supported by explanatory documentation to Committee members prior to each meeting.

The Secretary shall also be responsible for recording the proceedings of the Audit Committee and the minutes of meetings tabled at Board meetings.

5. Duties

The duties of the Committee should include the following:• To consider the appointment of the External Auditor, the audit fee and any questions of resignation or

dismissal;• TodiscusswiththeExternalAuditorbeforetheauditcommences,thenatureandscopeoftheaudit,and

ensure coordination where more than one audit firm is involved;• Toreviewthequarterlyandyear-endfinancialstatementsoftheCompany,focusingparticularlyon:

- Any changes in accounting policies and practices;- Significant adjustments arising from the audit;- The going concern assumption;- Compliance with accounting standards and other legal requirements.

• Todiscussproblemsandreservationsarisingfromtheinterimandfinalaudits,andanymattertheAuditormay wish to discuss (in the absence of management where necessary).

• ToreviewtheExternalAuditor’smanagementletterandmanagement’sresponse.

Board Committees (cont’d)


• ToconsideranyrelatedpartytransactionsthatmayarisewithintheCompanyorGroup.• Toconsiderthemajorfindingsofinternalinvestigationsandmanagement’sresponse.• Todothefollowinginrelationtotheinternalauditfunction:

- Identifytheheadofinternalaudit- Reviewtheadequacyofthescope,functions,competencyandresourcesoftheinternalauditfunction,

andthenecessaryauthoritytocarryoutitswork;- Review the internal audit programme and results of the internal audit programme and the results

of the internal audit process and where necessary ensure that appropriate actions taken on therecommendationsoftheinternalauditfunction;

- Reviewanyappraisalorassessmentoftheperformanceofmembersoftheinternalauditfunctions;- Approveanyappointmentorterminationofseniorstaffmembersoftheinternalauditfunction;- InformtheCompanyontheresignationofinternalauditstaffmembersandprovidetheresigningstaff

memberanopportunitytosubmithisreasonsforresigning;- ToconsiderothertopicsasdefinedbytheBoard.

c. Summary of Activities of Audit Committee for the financial year ended 31 October 2009

TheAuditCommitteeheldfivemeetingsduringthefinancialyearended31October2009.

Theattendancerecordforthefinancialyearended31October2009ofeachmemberoftheAuditCommitteeisasshowninthetablebelow:

AuditCommitteeMembers

MeetingAttendance

No.ofmeetingsattended Percentageofattendance

Dato’AzmanBinMahmood 5/5 100

LiewJeeMin@ChongJeeMin 5/5 100

Dato’ZolkipliBinAbdul 4/5 80

Theminutesofeachmeetingheldweredistributed toeachmemberof theBoardat thesubsequentBoardMeeting.TheAuditCommitteeChairmanreportedoneachofthemeetingstomembersoftheBoard.

Forthefinancialyearended31October2009,thefollowingactivitieswerecarriedoutbytheAuditCommittee:

i. ReviewofquarterlyresultsandAuditedFinancialStatements;ii. ReviewofinternalauditreporttabledbyInternalAuditors;iii. ReviewandapprovetheAuditPlan;iv. ReviewoftheAuditReviewMemorandumanddiscussedwithExternalAuditorsontheirfindings;v. ReviewoftheStatementonInternalControlandAuditCommitteeReportpriortotheBoard’sapprovalfor

inclusionintotheAnnualReport;andvi. MaderecommendationstotheBoardforre-appointmentofExternalAuditors.

d. Summary of Activities of the Internal Audit Division for the Financial Year ended 31 October 2009

TheGroupoutsourceditsinternalauditfunctiontoexternalconsultantwhoassistinthesettingupaswellasmanageasoundsystemofinternalcontroltosafeguardtheshareholders’interestandtheGroup’sassets.

TheGroup’sStatementonInternalControlissetoutonpage26ofthisAnnualReport.

ThetotalcostincurredfortheGroup’sinternalauditfunctionamountedtoapproximatelyRM93,000.00.



B. NOMINATION COMMITTEE

The Nomination Committee comprises exclusively of Non-Executive Directors. The Managing Director (MD) & Group Chief Executive Officer (CEO) and Group General Manager, Finance attend the meeting on the invitation of the Committee.

Chairman Dato’ Azman Bin Mahmood (Independent Non-Executive Director)

Members Liew Jee Min @ Chong Jee Min (Independent Non-Executive Director)Dato’ Zolkipli Bin Abdul (Independent Non-Executive Director)

The Committee met once during the financial year ended 31 October 2009.

The Board, through the Nomination Committee implemented a process for annual assessment of the effectiveness of the Board as a whole, the committees of the Board and contribution of each director, including Independent Non-Executive Directors. The Nomination Committee also assists the Board in reviewing the board structure, size and composition of the Board. The Committee is responsible for making recommendations to the Board on new Board members and Board Committee appointment as well as the re-election of retiring directors.

C. REMUNERATION COMMITTEE

The Remuneration Committee comprises of a majority of Non-Executive Directors.

Chairman Liew Jee Min @ Chong Jee Min(Independent Non-Executive Director)

Members Ang Lam Poah(MD & Group CEO)Datuk Kamarulzaman Bin Zainal (Independent Non-Executive Director)

The Committee met once during the financial year ended 31 October 2009.

The Remuneration Committee shall ensure that the levels of remuneration are sufficient to attract and retain Directors of the quality required to manage the business of the Group. The Remuneration Committee is entrusted under its terms of reference to assist the Board, amongst others, to recommend to the Board the remuneration of the executive directors, by linking their rewards to corporate and individual performance with the Director concerned abstaining from deliberations and voting on decisions in respect of his remuneration package. In the case of non-executive directors, the level of remuneration shall reflect the experience and level of responsibilities undertaken by the non-executive directors concerned and is determined by the Board as a whole.



Statement On Internal Control

INTRODUCTION

The Board of Directors of JAKS Resources Berhad (“JAKS”) is pleased to include a statement on the state of JAKS Group’s internal controls for the financial year ended 31 October 2009 pursuant to paragraph 15.26(b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”).

BOARD RESPONSIBILITY

The Board recognizes the importance of maintaining a sound and effective system of internal controls to safeguard shareholders’ interests and the Group’s assets, and affirms its overall responsibility for reviewing the adequacy and effectiveness of the internal control system. This responsibility has been delegated to the Audit Committee, which is empowered by its terms of reference to obtain the necessary assurance on the adequacy and effectiveness of the Group’s internal controls system through independent reviews carried out by the internal audit function and the annual statutory audits carried out by the external auditors. The Audit Committee reports significant controls matters to the Board at their scheduled meetings.

Due to inherent limitations in any system of internal controls, such system can only manage rather than eliminate all possible risks that may impede the achievement of the Group’s business objectives. As such, the system can only provide reasonable and not absolute assurance against material misstatements or losses.

RISK MANAGEMENT FRAMEWORK

The respective Heads of Department are primarily responsible for managing the risks in their respective departments. During the periodic management meetings which are attended by key management staff and the Executive Directors, significant risks identified together with the relevant actions or control procedures which have been implemented to manage such risks are communicated to Senior Management. These significant risks identified are also brought to the attention of Board members at their scheduled meetings.

The above mentioned process serves as the on going process used to identify, evaluate and managed risks. The Board shall continue to evaluate the Group’s risk management process to ensure it remains relevant to the Group’s requirements.

INTERNAL AUDIT FUNCTION

The internal audit function assists the Board / Audit Committee to assess the adequacy and effectiveness of the Group’s system of internal controls. Regular internal audit reviews were carried out based on the audit plan approved by the Audit Committee and the results of which are periodically tabled at the Audit Committee meetings.


OTHERS KEY ELEMENTS OF INTERNAL CONTROL

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

• Anorganizationalstructurewithclearlydefinedlinesresponsibility,accountability,andsegregationofduties;

• Written operational policies and procedures that are regularly reviewed and updated to ensure that itmaintains itseffectiveness and continues to support the Group’s business activities as the Group’s grows;

• Human resource policies encompassing areas of recruitment, training and development, health and safety, staffperformance, appraisal and succession planning with the objective to enhance staff integrity and the development of professionalism and competency of employees in the Group;

• QualitymanagementintheformofpoliciesandobjectivesasoutlinedintheQualityManualissuedbytheManagingDirector. The Management Review Team periodically reviews this quality management process that is implemented throughout the financial year. Four subsidiary companies within the Group are accredited with ISO9001:2000, the internationally accepted quality standard and with such a certification, audits are carried out by internal and external parties regularly to ensure compliance with the terms and conditions of the certification;

• Monitoringofresultsbytheseniormanagementteamonamonthlybasiswhereappropriatemanagementactionwillbe undertaken to address deviations. The Managing Director also reviews the management accounts covering financial performance, key business indicators and cash flow performance on a weekly and monthly basis; and

• Active involvement of theExecutiveDirectors in the runningof thebusiness andoperationsof theGroupand theyreport to the Board on significant changes in the business and external environment, which affect the operations of the Group.

The Board is cognizant of the fact that the Group’s system of internal control and risk management practices must continuously evolve to support the Group’s operations and challenging business environment. As such, where necessary, the Board will put in place appropriate action plans to further enhance the system of internal controls to meet with the Group’s strategic, financial, business and operational requirements.

Statement On Internal Control (cont’d)


Corporate Social Responsibility Statement

The Group has consistently taken considerably effort in maintaining corporate social responsibility. As part of the corporate vision and mission, the Group is not only aiming at maximizing shareholders’ return but at the same time emphasizes on the importance of environmental factors as well as protecting the health and safety of our employees and communities in which we operate in.

To achieve these goals, the Group is committed to deploy and implement policies and guidelines that help to ensure the operations are conducted in compliance with applicable regulations and standards. It is always the Group’s objectives to incorporate these environmental, health and safety standards into the business operations to reduce risks, minimize the impacts and work towards an accident-free workplace.

In this regards, the Group always believes that this will build public confidence and hence strengthen the stakeholders’ relationship with all these social, economic, environmental and ethical responsibilities in place.

EMPLOYEES

Employees are always the greatest assets of the Group. Appropriate training on skills development, team building, motivation courses and internal recognition programmes are developed for employees. These employment development opportunities are structured to enhance the employees’ skills. Leadership development and succession planning are processes which are also critical to the success of the business. Leadership courses are provided to develop the leadership qualities and managerial capabilities of the employees to meet our business needs. In addition, safety measures workshops were also conducted to ensure high level of awareness of safety requirements at all levels.

The Group is committed to providing equality of opportunity to all existing and prospective employees without unlawful or unfair discrimination. The Group also incorporates diversity into its core business processes to foster an inclusive environment for all races, ethnicities, nationalities, and gender. In so doing, employees from all functional discipline, and at all levels will have the opportunity to contribute and provide input on how our business is to be managed. Suggestion box is made available for staff to contribute constructive ideas to the Management. Rewards are also provided for staffs that offer good suggestions to the Management.

In addition, activities organized by sports club such as trips, family days, badminton events, bowling competitions etc. also promotes better team spirit among the employees and also improve the work-life balance of employees.

HEALTH AND SAFETY

As part of recognizing our employees as the greatest asset, the Group makes great effort to protect the well-being of its employees through the effective and stringent implementation of good Occupational Safety and Health practices in the business operations. Guidelines are developed, implemented and continuously improved to meet the current international best practices. Safety and Healthy committee meetings are held regularly to update and improve on the business operations practices.

The Group consistently providing updated information and encouraging self consciousness of importance of the healthy and safe working environment. The Group continuously provides first aid training, fire drills and also the cardiopulmonary resuscitation courses. As for the properties and equipments, the Group continues to ensure that the equipment and building systems are functioning properly and are well maintained. All these will lead to a conducive and safe working environment to the employees.


ENVIRONMENT

In today’s world, environmental protection is a global necessity. The Group has always been concerned with this and applied through its business processes. To support this effort, all staffs are encouraged in the process to recycle papers, use electronic mail and also other energy saving practices. Employees are encouraged to be aware of the need to conserve energy and are actively encouraged to recommend alternatives methods to achieve such savings.

In addition, as part of our support for a greener environment, we have established the environment management for proper disposaloftoxicandhazardouswasteaspertheEnvironmentQuality(ScheduleWaste)Regulation2005.Thesescheduledwaste are treated and disposed-off at facility approved by the authorities. Relevant budget has been allocated for environment protection expenditure. This includes environment monitoring for noise and dust, audiometric hearing test, filtering system, internal audit, awareness training and also personnel protective equipments. We undertake measures to minimize any adverse impact of our operations on the environment.

COMMUNITY

The Group actively participates in social and community event to help the less fortunate. As a mean of serving the community, the Group elevates the standards of living and the quality of life of communities by supporting worthy causes and sponsoring educational, welfare and sports events. The Group also assists in developing fresh young talent from local universities, where industrial training are provided for students who are interested.

Employees are also encouraged to volunteer their time and talent to assist in various societies and programmes. Staff members who volunteer regularly in these community service projects have demonstrated improved personal development and also better leadership qualities. The employees also responded to the donations from various organizations for those in need.

CUSTOMERS

Being the most important partner in business, the Group has always aimed at maintaining high level of customer satisfaction. To achieve this goal, we are committed to provide cost effective, quality products and services to the customers on a timely basis. We will maintain a good relationship with all the customers and respond to any complaints immediately. We will strive to be straightforward, provide accurate information of the products and let the customers know what to expect from us.

The Board always believes that a good corporate citizen should fulfill its responsibilities owing to its shareholders, employees, communities, environment and the customers and this will bring business success to a different height. We at JAKS will continue to improve and execute policies set out regularly to address any new concerns or issues that may arise.

Corporate Social Responsibility Statement (cont’d)


Directors’ Responsibility Statement

The Board is responsible to ensure that the financial statements are properly drawn up in accordance with the provisions of the Companies Act 1965 and approved accounting standards in Malaysia so as to give a true and fair view of the state of affairs of the Group as at the end of the financial year and of the results and cash flows of the Group for the financial year then ended.

The Directors are satisfied that in preparing the financial statements of the Group for the year ended 31 October 2009, the Group has adopted suitable accounting policies and applied them consistently, prudently and reasonably. The Directors also consider that all applicable approved accounting standards have been followed in the preparation of the financial statements, subject to any material departures being disclosed and explained in the notes to the financial statements. The financial statements have been prepared on the going concern basis.

The Directors are responsible for ensuring that the Group keeps sufficient accounting records to disclose with reasonable accuracy, the financial position of the Group and which enable them to ensure that the financial statements comply with the Companies Act, 1965.

32 Directors’ Report

36 Balance Sheets

38 Income Statements

39 Statements of Changes in Equity

40 Cash Flow Statements

44 Notes to the Financial Statements

88 Statement By Directors

89 Statutory Declaration

90 Independent Auditors’ Report

Financial Statements


The directors hereby submit their report together with the audited financial statements of JAKS Resources Berhad (“the Company”) and its subsidiary companies for the financial year ended 31st October 2009.

PRINCIPAL ACTIVITIES

The principal activity of the Company is investment holding. The principal activities of the subsidiary companies are set out in Note 6 to the financial statements. There have been no significant changes to the nature of these principal activities during the financial year.

RESULTS

Group Company RM RM

Net loss for the financial year (6,387,790) (818,880)

Attributable to:Equity holders of the Company (6,746,575) (818,880)Minority interests 358,785 -

(6,387,790) (818,880)

DIVIDEND

No dividend was paid or declared by the Company since the end of the previous financial year.

The directors do not recommend the payment of any dividend in respect of the financial year ended 31st October 2009.

RESERVES AND PROVISIONS

All material transfers to and from reserves and provisions during the financial year have been disclosed in the financial statements.

BAD AND DOUBTFUL DEBTS

Before the income statements and balance sheets of the Group and of the Company were made out, the directors took reasonable steps to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts, and had satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for doubtful debts.

At the date of this report, the directors are not aware of any circumstances that would render the amount written off for bad debts, or the amount of the allowance for doubtful debts, in the financial statements of the Group and of the Company inadequate to any substantial extent.

CURRENT ASSETS

Before the income statements and balance sheets of the Group and of the Company were made out, the directors took reasonable steps to ensure that any current assets, other than debts, which were unlikely to be realised in the ordinary course of business, their values as shown in the accounting records of the Group and of the Company have been written down to an amount that they might be expected to be realised.

At the date of this report, the directors are not aware of any circumstances that would render the values attributed to the current assets in the financial statements of the Group and of the Company misleading.

Directors’ Report


Directors’ Report (cont’d)

VALUATION METHODS

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

CONTINGENT AND OTHER LIABILITIES

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

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

(ii) any contingent liability in respect of the Group and of the Company that has arisen since the end of the financial year,

In the opinion of the directors, no contingent liability or other liability of the Group and of the Company has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due.

CHANGE OF CIRCUMSTANCES

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

ITEMS OF AN UNUSUAL NATURE

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

There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report is made.

ISSUE OF SHARES AND DEBENTURES

During the financial year, the Company did not issue any shares or debentures.

EMPLOYEES’ SHARE OPTION SCHEME (“ESOS”)

At an extraordinary general meeting held on 28th April 2008, the Company’s shareholders approved the establishment of an ESOS of up to 10% of the issued and paid-up share capital of the Company, to eligible Executive and Non-Executive Directors and employees of the Company and its subsidiary companies. Bursa Malaysia Securities Berhad had approved in-principle the listing of the additional 10% of the issued and paid-up share capital of the Company to be issued pursuant to the exercise of the share options granted under ESOS.

The salient terms of the ESOS are set out in Note 19 to the financial statements.

As at the balance sheet date, no ESOS was granted by the Company.


DIRECTORS

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

Ang Lam AikAng Lam PoahDato’ Azman Bin MahmoodDato’ Razali Merican Bin Naina MericanDato’ Zolkipli Bin Abdul Datuk Kamarulzaman Bin ZainalLiew Jee Min @ Chong Jee MinTan Sri Dato’ Seri Law Hieng Ding - appointed on 3rd February 2010

DIRECTORS’ INTERESTS

According to the Register of Directors’ Shareholdings kept by the Company under Section 134 of the Companies Act, 1965, the interests of those directors who held office at the end of the financial year in shares in the Company during the financial year are as follows:-

Number of ordinary shares of RM1/- eachAt At

1.11.2008 Bought Sold 31.10.2009

Direct

Ang Lam Aik - 2,500,000 - 2,500,000Ang Lam Poah 26,800,002 - - 26,800,002

Indirect

Dato’ Razali Merican Bin Naina Merican 25,000,000 - - 25,000,000

By virtue of their interests in shares of the Company, Ang Lam Aik, Ang Lam Poah and Dato’ Razali Merican Bin Naina Merican are deemed interested in the shares of the subsidiary companies to the extent the Company has an interest.

Other than as disclosed above, according to the Register of Directors’ Shareholdings, none of the other directors in office at the end of the financial year had any other interest in shares in the Company and its subsidiary companies during the financial year.

DIRECTORS’ BENEFITS

Since the end of the previous financial year, no director of the Company has received or become entitled to receive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by the directors shown in the financial statements) by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest.

Neither during nor at the end of the financial year was the Company or any of its related corporations a party to any arrangement, whose object was to enable the directors to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.

SIGNIFICANT EVENTS

Significant events that occurred during and after the financial year are disclosed in Note 33 to the financial statements.




AUDITORS

The auditors, Messrs Baker Tilly Monteiro Heng, have expressed their willingness to continue in office.

On behalf of the Board,

......................................................................…………DATO’ RAZALI MERICAN BIN NAINA MERICANDirector

.....................................................................………….ANG LAM POAHDirector

Kuala Lumpur

Date: 11 February 2010


Group Company2009 2008 2009 2008

Note RM RM RM RM

ASSETS

Non-current assetsProperty, plant and equipment 3 99,081,557 98,888,148 8,398,303 8,209,554

Investment properties 4 - - 56,988,089 57,016,852

Prepaid land lease payments 5 1,598,004 1,633,936 - -

Investment in subsidiary companies 6 - - 237,735,604 237,735,604

Investment in an associated company 7 - 1 - -

Other investments 8 656,830 814,725 - -

Intangible asset 9 181,090,857 181,090,857 - -

Development expenditure 10 51,326,911 12,001,045 51,326,911 12,001,045

Deferred tax assets 11 10,385,709 10,410,395 - -

344,139,868 304,839,107 354,448,907 314,963,055

Current assetsInventories 12 28,424,847 86,964,348 - -

Amount due from customers for contract works 13 98,309,636 95,283,243 - -

Trade receivables 14 27,210,135 38,129,109 - -

Other receivables, deposits and prepayments 15 63,571,140 72,630,816 338,259 8,130,747

Amount owing by subsidiary companies 16 - - 25,090,958 29,791,428

Fixed deposits with licensed banks 17 3,212,706 3,158,477 - -

Tax recoverable 955,379 805,499 87,337 -

Cash and bank balances 18 16,772,733 9,198,086 182,306 110,176

238,456,576 306,169,578 25,698,860 38,032,351

TOTAL ASSETS 582,596,444 611,008,685 380,147,767 352,995,406

EQUITY AND LIABILITIES

Equity attributable to equity holders of the Company

Share capital 19 438,361,072 438,361,072 438,361,072 438,361,072

Share premium 8,368,710 8,368,710 8,368,710 8,368,710

Retained profits/(accumulated losses) 9,255,846 16,002,421 (97,712,659) (96,893,779)

Shareholders' funds 455,985,628 462,732,203 349,017,123 349,836,003

Minority interests 5,259,412 4,900,137 - -

Total Equity 461,245,040 467,632,340 349,017,123 349,836,003

Balance Sheetsas at 31st October 2009


Balance Sheets (cont’d)as at 31st October 2009

Group Company2009 2008 2009 2008

Note RM RM RM RM

Non-current liabilitiesHire purchase liabilities 20 1,248,403 1,137,044 777,055 612,546

Long term liabilities 21 325,823 1,169,867 - -

Deferred tax liabilities 11 1,194,139 810,650 582,708 694,761

2,768,365 3,117,561 1,359,763 1,307,307

Current liabilitiesTrade payables 22 8,283,219 8,976,192 - -

Other payables, deposits and accruals 23 6,242,467 5,164,521 659,860 758,892

Amount owing to subsidiary companies 16 - - 23,957,586 657,554

Hire purchase liabilities 20 590,196 454,648 245,720 192,650

Tax payable 4,285,108 1,360,250 - 243,000

Short term borrowings 24

- bank overdrafts 13,322,648 13,905,732 4,907,715 -

- other borrowings 85,859,401 110,397,441 - -

118,583,039 140,258,784 29,770,881 1,852,096

Total liabilities 121,351,404 143,376,345 31,130,644 3,159,403

TOTAL EQUITY AND LIABILITIES 582,596,444 611,008,685 380,147,767 352,995,406

The accompanying notes form an integral part of these financial statements.


Group Company2009 2008 2009 2008

Note RM RM RM RM

REVENUE 25 278,081,702 233,334,013 5,460,000 6,540,000

COST OF SALES (253,381,324) (199,854,593) - -

GROSS PROFIT 24,700,378 33,479,420 5,460,000 6,540,000

Other income 604,877 364,625 - -

Selling and distribution expenses (3,204,917) (4,555,258) - -

Administrative expenses (18,915,520) (16,031,182) (6,852,720) (6,624,161)

OPERATING PROFIT/(LOSS) 26 3,184,818 13,257,605 (1,392,720) (84,161)

Share of results in an associated company - (449) - -

Finance costs - net 27 (5,616,740) (6,075,571) 568,026 685,831

(LOSS)/PROFIT BEFORE TAXATION (2,431,922) 7,181,585 (824,694) 601,670

Taxation 28 (3,955,868) (4,142,527) 5,814 (355,231)

NET (LOSS)/PROFIT FOR THE FINANCIAL YEAR (6,387,790) 3,039,058 (818,880) 246,439

Attributable to:

Equity holders of the Company (6,746,575) 2,884,768 (818,880) 246,439

Minority interests 358,785 154,290 - -

(6,387,790) 3,039,058 (818,880) 246,439

(Loss)/earnings per share (sen) 29

- basic (1.54) 0.67

- fully diluted (1.54) 0.67

Income Statementsfor the financial year ended 31st October 2009



Attributable to equity holders of the Company Non-Distributable Distributable

Share Capital

Share Premium

RetainedProfits Total

Minority Interests

Total Equity

RM RM RM RM RM RM

Group

At 1st November 2007 398,510,072 - 13,117,653 411,627,725 4,745,847 416,373,572

Issuance of shares (Note 19) 39,851,000 8,368,710 - 48,219,710 - 48,219,710

Net profit for the financial year - - 2,884,768 2,884,768 154,290 3,039,058

At 31st October 2008 438,361,072 8,368,710 16,002,421 462,732,203 4,900,137 467,632,340

Acquisition of a subsidiary company - - - - 490 490

Net loss for the financial year - - (6,746,575) (6,746,575) 358,785 (6,387,790)

At 31st October 2009 438,361,072 8,368,710 9,255,846 455,985,628 5,259,412 461,245,040

Attributable to equity holders of the Company Non-Distributable

Share Capital

Share Premium

Accumulated Losses Total

RM RM RM RM

Company

At 1st November 2007 398,510,072 - (97,140,218) 301,369,854

Issuance of shares (Note 19) 39,851,000 8,368,710 - 48,219,710

Net profit for the financial year - - 246,439 246,439

At 31st October 2008 438,361,072 8,368,710 (96,893,779) 349,836,003

Net loss for the financial year - - (818,880) (818,880)

At 31st October 2009 438,361,072 8,368,710 (97,712,659) 349,017,123

Statements of Changes in Equityfor the financial year ended 31st October 2009



Group Company2009 2008 2009 2008

RM RM RM RM

CASH FLOWS FROM OPERATING ACTIVITIES

(Loss)/profit before taxation (2,431,922) 7,181,585 (824,694) 601,670

Adjustments for:

Allowance for doubtful debts - 7,643 - -

Amortisation of golf membership 7,895 7,895 - -

Amortisation of prepaid land lease payments 35,932 35,932 - -

Depreciation

- property, plant and equipment 3,401,084 3,110,168 354,000 276,369

- investment properties - - 358,763 352,163

Dividend income (31,999) (4,400) - -

(Gain)/loss on disposal of property, plant and equipment - (71,561) - 5,209

Gain on disposal of other investments (512,522) - - -

Impairment loss on goodwill 183 - - -

Interest expenses 5,671,450 6,228,837 306,427 317,205

Interest income (54,710) (153,266) (874,453) (1,003,036)

Share of results from an associated company - 449 - -

Operating profit/(loss) before working capital changes 6,085,391 16,343,282 (679,957) 549,580

Changes In Working Capital:

Inventories 58,539,501 (30,523,386) - -

Amounts due from customers for contract works (3,026,393) (4,386,975) - -

Development expenditure (39,325,866) (12,001,045) (39,325,866) (12,001,045)

Receivables 19,978,650 2,465,134 7,792,488 9,224,501

Payables 385,341 (3,313,022) (99,032) 259,240

Cash Generated From/(Used In) Operations 42,636,624 (31,416,012) (32,312,367) (1,967,724)

Interest received 2,293 72,773 874,453 1,003,036

Interest paid (5,471,816) (6,185,174) (150,798) (294,984)

Tax paid (772,615) (14,826,403) (436,576) (162,105)

Net Operating Cash Flow 36,394,486 (52,354,816) (32,025,288) (1,421,777)

Cash Flow Statementsfor the financial year ended 31st October 2009


Cash Flow Statements (cont’d)for the financial year ended 31st October 2009

Group Company2009 2008 2009 2008

RM RM RM RM

CASH FLOWS FROM INVESTING ACTIVITIES

Dividend received 31,899 3,249 - -

Proceeds from disposal of other investments 662,522 - - -

Proceeds from disposal of property, plant and equipment - 349,451 - 150,000

Purchase of investment properties - - (330,000) (1,929,972)

Investment in subsidiary companies - - - (8,000,000)

Interest received 52,417 80,493 - -

Purchase of property, plant and equipment* (2,770,493) (3,933,870) (62,749) (45,676)

Acquisition of a subsidiary company net of cash acquired** (60) - - -

Acquisition of an associated company - (450) - -

Net Investing Cash Flow (2,023,715) (3,501,127) (392,749) (9,825,648)

CASH FLOWS FROM FINANCING ACTIVITIES

Net advances from/(repayment to) subsidiary companies - - 28,000,502 (36,789,237)

Fixed deposits held as security value (54,229) (921,708) - -

Interest paid (199,634) (43,663) (155,629) (22,221)

Proceeds from issuance of ordinary shares - 48,219,710 - 48,219,710

Net (repayment of)/drawdown from short term borrowings (24,655,513) 14,222,414 - -

Repayments of hire purchase liabilities (577,093) (516,022) (262,421) (365,206)

Repayments of term loans (726,571) (700,362) - (46,518)

Net Financing Cash Flow (26,213,040) 60,260,369 27,582,452 10,996,528

NET CHANGE IN CASH AND CASH EQUIVALENTS 8,157,731 4,404,426 (4,835,585) (250,897)

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE FINANCIAL YEAR (4,707,646) (9,112,072) 110,176 361,073

CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR 3,450,085 (4,707,646) (4,725,409) 110,176

ANALYSIS OF CASH AND CASH EQUIVALENTS:

Fixed deposits with licensed banks 3,212,706 3,158,477 - -

Cash and bank balances 16,772,733 9,198,086 182,306 110,176

Bank overdrafts (13,322,648) (13,905,732) (4,907,715) -

6,662,791 (1,549,169) (4,725,409) 110,176

Less: Deposits held as security values (3,212,706) (3,158,477) - -

3,450,085 (4,707,646) (4,725,409) 110,176



Group* During the financial year, the Group acquired property, plant and equipment amounting to RM3,594,493/- of which

RM928,183/- were acquired under hire purchase instalment plans. Cash payments amounting to RM104,183/- were made towards the hire purchase.

Company * During the financial year, the Company acquired property, plant and equipment amounting to RM542,749/- of which

RM540,700/- were acquired under hire purchase instalment plans. Cash payments amounting to RM60,700/- were made towards the hire purchase.

** SUMMARY OF EFFECT ON ACQUISITION OF INTEREST IN A SUBSIDIARY COMPANY

The effect of the acquisition of a subsidiary company on the cash flow of the Group is as follows:-

Group 2009

RM

Assets

Other receivables 1,000

1,000

Less: Liabilities

Other payables 3,045

3,045

Net liabilities 2,045

Minority interest (490)

Portion of net tangible liabilities acquired in prior year (1,432)

Goodwill on consolidation (183)

Purchase consideration (60)

Cash of a subsidiary company acquired -

Net cash outflow from acquisition of a subsidiary company (60)

During the financial year, the Company acquired an additional 6% equity interest in JAKS Power Sdn. Bhd. (“JPSB”) for a total consideration of RM60/-. Accordingly, JPSB becomes a 51% owned subsidiary company as disclosed in Note 6 to the financial statements.




** SUMMARY OF EFFECT ON ACQUISITION OF INTEREST IN A SUBSIDIARY COMPANY (cont’d)

The effect of the acquisition of a subsidiary company on the financial results of the Group for the financial year ended 31st October 2009 is as follows:-

2009 RM

Revenue -

Cost of sales -

Gross profit -

Other income -

Selling and distribution expenses -

Administrative expenses (785,010)

Operating loss (785,010)

Finance costs -

Loss before taxation (785,010)

Taxation -

Net loss for the financial year (785,010)

The effect of the acquisition of a subsidiary company on the financial position of the Group as at 31st October 2009 is as follows:-

2009 RM

AssetsProperty, plant and equipment 24,960

Other receivables 3,650,721

Cash and bank balances 44,362

3,720,043

LiabilitiesOther payables 3,407,113

Amount owing to holding company 1,099,985

4,507,098

Net liabilities (787,055)


1. PRINCIPAL ACTIVITIES AND GENERAL INFORMATION

The principal activity of the Company is investment holding. The principal activities of the subsidiary companies are set out in Note 6 to the financial statements. There have been no significant changes to the nature of these principal activities during the financial year.

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

The registered office of the Company is located at 312, 3rd Floor, Block C, Kelana Square, 17 Jalan SS 7/26, 47301 Petaling Jaya, Selangor Darul Ehsan.

The principal place of business of the Company is located at Lot 526, Persiaran Subang Permai, Sungai Penaga Industrial Park, USJ 1, 47600 Subang Jaya, Selangor Darul Ehsan.

The financial statements of the Group and of the Company were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 11 February 2010.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of Preparation

The financial statements of the Group and of the Company have been prepared in accordance with the Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia.

The financial statements of the Group and of the Company have also been prepared under the historical cost basis.

The preparation of financial statements require the directors to make certain accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements, and reported amounts of revenue and expenses during the reported financial year. It also requires directors to exercise their judgment in the process of applying the Group’s accounting policies. Although these estimates and judgments are based on the directors’ best knowledge of current events and action, actual results may differ.

The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 2.4 to the financial statements.

2.2 Summary of Significant Accounting Policies

(a) Basis of Consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiary companies made up to the end of the financial year. The financial statements of the parent and its subsidiary companies are all drawn up to the same reporting date.

The financial statements of the subsidiary companies are consolidated from the date on which control is transferred to the Group and are no longer consolidated from the date that control ceases.

Acquisitions of subsidiary companies are accounted for using the purchase method. The cost of an acquisition is measured as the aggregate of the fair values, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity instruments issued, plus any costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest.

Notes To The Financial Statements


Notes To The Financial Statements (cont’d)

2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

2.2 Summary of Significant Accounting Policies (cont’d)

(a) Basis of Consolidation (cont’d)

Any excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities represents goodwill. The accounting policy on goodwill is set out in Note 2.2(c) to the financial statements.

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

Intra-group transactions, balances and resulting unrealised gains are eliminated on consolidation and the consolidated financial statements reflect external transactions only. Unrealised losses are eliminated on consolidation unless costs cannot be recovered. Uniform accounting policies are adopted in the consolidated financial statement for like transactions and events in similar circumstances.

The gain or loss on disposal of a subsidiary company is the difference between net disposal proceeds and the Group’s share of its assets together with any unamortised balance of goodwill.

Minority interest represents the portion of profit or loss and net assets in subsidiary companies not held by the Group. It is measured at the minorities’ share of the fair value of the subsidiary companies’ identifiable assets and liabilities at the acquisition date and the minorities’ share of changes in the subsidiary companies equity since then.

Where losses applicable to the minority exceed the minority’s interest in the equity of a subsidiary company, the excess and any further losses applicable to the minority, are charged against the Group’s interest except to the extent that the minority has a binding obligation to, and is able to, make additional investment to cover the losses. If the subsidiary company subsequently reports profits, the Group’s interest is allocated all such profit until the minority’s share of losses previously absorbed by the Group has been recovered.

(b) Subsidiaries Companies

Subsidiary companies are entities in which the Group has power to exercise control over the financial and operating policies so as to obtain benefits from its activities, generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group has such power over another entity.

An investment in subsidiary company, which is eliminated on consolidation, is stated in the Company’s separate financial statements at cost less impairment losses, if any. The policy for the recognition and measurement of impairment losses is in accordance with Note 2.2(k) to the financial statements. On disposal of such an investment, the difference between the net disposal proceeds and its carrying amount is recognised in the income statement.

(c) Intangible Asset - Goodwill

Goodwill arising on acquisition represents the excess of cost of business combination over the Group’s share of the net fair values of the identifiable assets, liabilities and contingent liabilities. Following the initial recognition, goodwill is stated at cost less impairment losses, if any. The policy for recognition and measurement of impairment losses is in accordance with Note 2.2(k) to the financial statements.

Goodwill is not amortised but is reviewed for impairment, annually or more frequently for impairment in value and is written down where it is considered necessary. Gain or losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.




(c) Intangible Asset - Goodwill (cont’d)

Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the synergies of the business combination in which the goodwill arise.

Negative goodwill represents the excess of the fair value of the Group’s share of net assets acquired over the cost of acquisition. Negative goodwill is recognised directly in the income statement.

(d) Development Expenditure

Development expenditure incurred is capitalised when it meets certain criterias indicate that it is probable that the costs will give rise to future economic benefits and is amortised over the period of the projects. It is written down to its recoverable amounts when there is insufficient certainty that future economic benefit will flow to the Company.

(e) Associated Companies

Associated companies are entities in which the Group exercises influence, but which it does not control, generally accompanying a shareholding of between 20% and 50% of the voting rights, and that is neither a subsidiary company nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the associated companies but not the power to exercise control over those policies.

Investments in associated companies are accounted for in the consolidated financial statements using the equity method of accounting and are initially recognised at cost. The Group’s investment in associated companies includes goodwill identified on acquisition, net of any accumulated impairment loss. The policy for the recognition and measurement of impairment losses is in accordance with Note 2.2(k).

Under the equity method, the investment in associated company is carried in the consolidated balance sheet at cost adjusted for post acquisition changes in the Group’s share of net assets of the associated company. The Group’s share of the net profit or loss of the associated company is recognised in the consolidated income statement. Where there has been a change that is recognised directly in the equity of the associated company, the Group recognises its share of such changes.

When the Group’s share of losses in an associated company equals or exceeds its interest in the associated company, including any other unsecured receivables, the Group’s interest is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associated company.

Goodwill relating to an associated company is included in the carrying amount of the investment and is not amortised. Any excess of the Group’s share of the net fair value of the associated company’s identifiable assets, liabilities and contingent liabilities over the cost of the investment is excluded from the carrying amount of the investment and is instead included as income in the determination of the Group’s share of the associated company’s profit or loss in the period in which the investment is acquired.

On disposal of such investment, the difference between net disposal proceed and the carrying amount of the investment in an associated company is reflected as a gain or loss on disposal in the consolidated income statement.






(f) Property, Plant and Equipment and Depreciation

Property, plant and equipment are stated at cost less accumulated depreciation and impairment loss, if any. The policy for the recognition and measurement of impairment losses is in accordance with Note 2.2(k) to the financial statements. Cost includes expenditure that are directly attributable to the acquisition of the asset. When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.

The cost of replacing part of an item of property, plant and equipment is included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in the income statement as incurred.

Freehold land is not depreciated as it has indefinite useful life. All other property, plant and equipment are depreciated on the straight line basis to write off the cost over the estimated useful lives of the assets concerned. The principal annual rates used for this purpose are as follows:-

Freehold building 2%

Leasehold buildings and factory buildings 2%

Plant and machinery 10%

Capital work-in-progress 2%

Motor vehicles 10 – 20%

Furniture, fittings, office equipment and renovation 10 – 33.3%

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

Fully depreciated assets are retained in the accounts until the assets are no longer in use.

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

(g) Investment Properties

Investment properties are landed properties which are held either to earn rental income or capital appreciation or for both. Such properties are measured initially at cost, including transaction costs. Subsequent to the initial recognition, investment properties are stated at cost less accumulated depreciation and impairment losses, if any.

Depreciation of investment properties are provided on the straight line basis to write off the cost of investment properties to their residual value over their estimated useful lives of the investment properties.

No depreciation is provided on the freehold land as it has indefinite useful life. The annual rate used to depreciate the buildings is 2%.




(g) Investment Properties (cont’d)

Investment properties are derecognised when either they have been disposed off or when the investment properties are permanently withdrawn from use and no future economic benefits is expected from their disposals. Any gains and losses on the retirement or disposal of investment properties are recognised in the income statement.

(h) Other Investments

Other investments are stated at cost less impairment losses, if any. The policy for the recognition and measurement of impairment losses is in accordance with Note 2.2(k).

On disposal of the investment, the difference between the net disposal proceeds and its carrying amount is recognised in the income statement.

(i) Construction Contract

Construction works are stated at cost plus attributable profit less progress billings. Cost comprises direct labour, material costs, sub-contract sum and an allocated proportion of directly related overheads. Administrative and general expenses are charged to the income statement as and when incurred.

When the outcome of a construction contract can be reliably estimated, contract revenue is recognised by using the stage of completion method. The stage of completion is measured by reference to the proportion that contract costs incurred for work performed to date bear to the estimated total contract costs. Costs incurred in connection with future activity on a contract is excluded from contract costs in determining the stage of completion. They are presented as inventories, prepayments or other assets, depending on their nature.

When the outcome of a construction contract cannot be reliably estimated, contract revenue is recognised only to the extent of contract costs incurred that is probable will be recoverable.

When costs incurred on construction contracts plus recognised profits (less recognised losses) exceed progress billings, the balance is shown as amounts due from customers for contract works. When progress billings exceed costs incurred plus recognised profits (less recognised losses), the balance is shown as amounts due to customers for contract works.

(j) Inventories

Inventories comprise raw materials, work-in-progress, finished goods and building materials that are stated at the lower of cost and net realisable value. Cost is determined on the weighted average basis. Net realisable value represents the estimated selling price in the ordinary course of business, less the costs of selling expenses.

The costs of raw material consist of cost of purchase and costs incurred in bringing the inventories to their present location and condition. Costs for work-in-progress and finished goods include cost of materials, direct labour and an appropriate proportion of fixed and variable production overheads.

(k) Impairment of Assets

The carrying amount of assets, other than inventories and deferred tax assets, are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated to determine the amount of impairment loss.





(k) Impairment of Assets (cont’d)

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

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

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

An impairment loss is recognised in the income statement in the period in which it arises.

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

(l) Financial Instruments Recognised on the Balance Sheet

Financial instruments are recognised on the balance sheet when the Group has become a party to the contractual provisions of the instruments. The particular recognition methods adopted are disclosed in the individual accounting policy statements associated with each item.

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

(i) Equity Instruments

Ordinary shares are recorded at the nominal value and the consideration in excess of nominal value of shares issued, if any, is accounted for as share premium. Both ordinary shares and share premium are classified as equity.





(l) Financial Instruments Recognised on the Balance Sheet (cont’d)

(i) Equity Instruments (cont’d)

Dividends on ordinary shares are recognised as liabilities when proposed or declared before the balance sheet date. A dividend proposed or declared after the balance sheet date, but before the financial statements are authorised for issue, is not recognised as a liability at the balance sheet date.

Cost incurred directly attributable to the issuance of the shares are accounted for as a deduction from share premium, if any, otherwise it is charged to the income statement. Equity transactions costs comprise only those incremental external costs directly attributable to the equity transaction which would otherwise have been avoided.

(ii) Receivables

Receivables are carried at anticipated realisable values. In estimating the realisable values, an allowance is made for doubtful receivables based on a review of all outstanding amounts as at the balance sheet date. Bad debts are written off to the income statement during the financial year when they are identified.

(iii) Payables

Payables are stated at cost which is the fair value of the consideration to be paid in the future for goods and services received.

(iv) Cash and Cash Equivalents

For the purpose of cash flow statement, cash and cash equivalents comprise cash in hand, bank balances and short term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Cash and cash equivalents are stated net of bank overdrafts which are repayable on demand.

(v) Interest Bearing Borrowings

Borrowings are initially recognised based on the proceeds received, net of transaction cost incurred. In the subsequent periods, borrowings are stated at amortised cost using the effect yield method, any difference between proceeds ( net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

(m) Revenue Recognition

(i) Contract Works

Revenue from construction contracts is recognised by using the stage of completion method where the outcome of the contracts can be reliably estimated as described in Note 2.2 (i) to the financial statements.






(m) Revenue Recognition (cont’d)

(ii) Sale of Finished Goods

Revenue from sale of finished goods is measured at the fair value of the consideration receivable and is recognised in the income statement when the significant risks and rewards of ownership have been transferred to the buyer.

(iii) Management Fee and Rental Income

Management fee is recognised upon services rendered to customers.

Rental income from investment properties are recognised on an accrual basis based on the agreed upon rental rates.

(n) Taxation

The tax expense in the income statements represents the aggregate amount of current tax and deferred tax. Current tax is the expected amount of income taxes payable in respect of the taxable profit for the year and is measured using the tax rates that have been enacted at the balance sheet date.

Deferred tax is provided for, using the liability method, on temporary differences at the balance sheet date arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Deferred tax is not recognised if the temporary difference arises from goodwill on consolidation or reserve on consolidation or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of transaction, affects neither accounting profit nor taxable profit.

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is recognised in the income statement, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also charged or credited directly in equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill on consolidation.

(o) Borrowing Costs

Borrowing costs are charged to the income statements as an expense in the period in which they are incurred.

(p) Employee Benefits

(i) Short Term Employee Benefits

Wages, salaries, bonuses and social security contribution and non-monetary benefits are recognised in the financial year in which the associated services are rendered by employees. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences. Short term non-accumulating compensated absences sick leave, maternity and paternity leave are recognised when absences occur.




(p) Employee Benefits (cont’d)

(ii) Post-Employment Benefits

The Group contributes to the Employees’ Provident Fund, the national defined contribution plan. The contributions are charged to the income statements in the period to which they are related. Once the contributions have been paid, the Group has no further payment obligations.

(iii) Share-based Compensation

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

At each balance sheet date, the Company revises its estimates of the number of options that are expected to become exercisable on the vesting date. It recognises the impact of the revision of original estimates, if any, in the income statement, and a corresponding adjustment to equity over the remaining vesting period. The equity amount is recognised in the share option reserve until the option is exercised, upon which it will be transferred to the share premium account, or until the option expires, upon which it will be transferred directly to retained earnings.

The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised.

(q) Foreign Currencies

(i) Functional and presentation currency

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

(ii) Foreign currency transactions and translations

Transactions in foreign currencies are measured in the respective functional currencies of the Company are recorded on initial recognition in the functional currencies at the exchange rate approximately those ruling at the transactions dates.

Monetary assets and liabilities in foreign currencies at the balance sheet date are translated into Ringgit Malaysia at the rates ruling at the balance sheet date. All exchange differences are taken to the income statement.

Non-monetary items are measured in term of historical cost in a foreign currency or translated using the exchange rates as at the date of the initial transaction. Non-monetary items at fair value in foreign currency are translated using the exchange rates at the date when the fair value was determined.





(r) Segmental Information

Segment reporting is presented for enhanced assessment of the Group’s risks and returns. The primary reporting segment information is in respect of business segments as the Group’s risk and rates of return are affected predominantly by the products or services it produces or provides. No segment information on the basis of geographical segments is presented as the Group operates predominantly in Malaysia.

Segment revenue and expense are those directly attributable to the segments and include any joint revenue and expense where a reasonable basis of allocation exists. Segment assets include all assets used by a segment and consist principally of cash, receivables, inventories, intangibles and property, plant and equipment, net of allowances and accumulated depreciation and amortisation. Most segment assets can be directly attributed to the segments on a reasonable basis. Segment assets and liabilities do not include income tax assets and liabilities respectively.

Segment revenue, expense and result include transfers between segments. The prices charged on intersegment transactions are the same as those charged for similar goods to parties outside of the economic entity at an arm’s length transactions. These transfers are eliminated on consolidation.

(s) Leases

(i) Classification

A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and rewards incidental to ownership. Leases of land and buildings are classified as operating or finance leases in the same way as leases of other assets and the land and buildings elements of a lease of land and buildings are considered separately for the purposes of lease classification. All leases that do not transfer substantially all the risks and rewards are classified as operating leases with the following exceptions:-

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

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

(ii) Finance Leases

Assets acquired by way of hire purchase or finance leases are stated at an amount equal to the lower of their fair values and the present value of the minimum lease payments at the inception of the leases, less accumulated depreciation and impairment losses, if any. The corresponding liability is included in the balance sheet as borrowings. In calculating the present value of the minimum lease payments, the discount factor used in the interest rate implicit in the lease, when it is practicable to determine, otherwise, the Company’s incremental borrowings rate is used. Any initial direct costs are also added to the carrying amount of such assets.

Lease payments are apportioned between the finance costs and the reduction of the outstanding liability. Finance costs, which represent the difference between the total leasing commitments and the fair value of the assets acquired, are recognised in the profit or loss over the term of the relevant lease so as to produce a constant periodic rate of charge on the remaining balance of the obligations for each accounting period.





(s) Leases (cont’d)

(ii) Finance Leases (cont’d)

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

(iii) Operating Leases

Leases of assets were a significant portion of risks and rewards of ownership are retained by the lessor are classified as operating leases. Operating lease payments are recognised as an expense on a straight-line basis over the term of the relevant lease. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.

In the case of a lease of land and buildings, the minimum lease payments or the up-front payments made are allocated, whenever necessary, between the land and the buildings elements in proportion to the relative fair values for leasehold interests in the land element and buildings element of the lease at the inception of the lease. The up-front payment represents prepaid lease payments and is amortised on a straight-line basis over the lease terms of 43 to 53 years.

2.3 New and Revised FRSs, Amendments/Improvements to FRSs and IC Interpretations (“IC Int”)

(a) Adoption of New and Revised FRSs, Amendments/Improvements to FRSs and IC Int

There are no new and revised accounting standards, amendments/improvements to FRSs and IC Int that are effective and applicable for the Group’s financial year ended 31st October 2009.

(b) New and Revised FRSs, Amendments/Improvements to FRSs and IC Int that are issued, not yet effective and have not been adopted early

The Group and the Company have not adopted the following new and revised FRSs, amendments/improvements to FRSs and IC Int that have been issued as at the date of authorisation of these financial statements but are not yet effective for the Group and the Company:

Effective for financial periods

beginning on or after

New FRSsFRS 4 Insurance Contracts 1 January 2010FRS 7 Financial Instruments : Disclosures 1 January 2010FRS 8 Operating Segments 1 July 2009FRS 139 Financial Instruments : Recognition and Measurement 1 January 2010




2.3 New and Revised FRSs, Amendments/Improvements to FRSs and IC Interpretations (“IC Int”) (cont’d)

(b) New and Revised FRSs, Amendments/Improvements to FRSs and IC Int that are issued, not yet effective and have not been adopted early (cont’d)



Revised FRSsFRS 1FRS 3FRS 101

First-time Adoption of Financial Reporting Standards Business CombinationsPresentation of Financial Statements

1 July 20101 July 2010

1 January 2010FRS 123FRS 127

Borrowing costsConsolidated and Separate Financial Statements

1 January 20101 July 2010

Amendments/Improvements to FRSsFRS 1 First-time Adoption of Financial Reporting Standards 1 January 2010FRS 2 Share-based Payment 1 January 2010

and 1 July 2010FRS 5 Non-current Assets Held for Sale and Discontinued Operations 1 January 2010

and 1 July 2010FRS 7 Financial Instruments: Disclosure 1 January 2010FRS 8 Operating Segments 1 January 2010FRS 107 Statement of Cash Flows 1 January 2010FRS 108 Accounting Policies, Changes in Accounting Estimates and Errors 1 January 2010FRS 110 Events After the Reporting Period 1 January 2010FRS 116 Property, Plant and Equipment 1 January 2010FRS 117 Leases 1 January 2010FRS 118 Revenue 1 January 2010FRS 119 Employee Benefits 1 January 2010FRS 120 Accounting for Government Grants and Disclosure of

Government Assistance1 January 2010

FRS 123 Borrowing Costs 1 January 2010

Amendments /Improvements to FRSsFRS 127 Consolidated and Separate Financial Statements : Cost of an

Investment in a Subsidiary, Jointly Controlled Entity or Associate 1 January 2010

FRS 127 FRS 128

Consolidated and Separate Financial StatementsInvestment in Associates

1 January 20101 January 2010

FRS 129 Financial Reporting in Hyperinflationary Economies 1 January 2010FRS 131 Interests in Joint Ventures 1 January 2010FRS 132 Financial Instruments: Disclosure and Presentation 1 January 2010FRS 134 Interim Financial Reporting 1 January 2010FRS 136 Impairment of Assets 1 January 2010FRS 138 Intangible Assets 1 January 2010

and 1 July 2010FRS 139 Financial Instruments : Recognition and Measurement 1 January 2010FRS 140 Investment Property 1 January 2010




2.3 New and Revised FRSs, Amendments/Improvements to FRSs and IC Interpretations (“IC Int”) (cont’d)

(b) New and Revised FRSs, Amendments/Improvements to FRSs and IC Int that are issued, not yet effective and have not been adopted early (cont’d)



IC IntIC Int 9 Reassessment of Embedded Derivatives 1 January 2010

and 1 July 2010IC Int 10 Interim Financial Reporting and Impairment 1 January 2010IC Int 11 FRS 2 – Group and Treasury Share Transactions 1 January 2010IC Int 12IC Int 13

Service Concession ArrangementsCustomer Loyalty Programmes

1 July 20101 January 2010

IC Int 14

IC Int 15 IC Int 16IC Int 17

FRS 119 – The Limit on a Defined Benefit Asset,Minimum Funding Requirements and their Interaction Agreements for the Construction of Real Estate Hedges of a Net Investment in a Foreign OperationDistributions of Non-cash Assets to Owners

1 January 2010

1 July 20101 July 20101 July 2010

Other than FRS 139, the directors do not anticipate that the application of the above new FRSs and IC Int, when they are effective, will have a material impact on the results and the financial positions of the Group and of the Company.

The impact of applying FRS 7 and FRS 139 on the financial statements upon first adoption as required by Paragraph 30(b) of FRS 108, Accounting Policies, Changes in Accounting Estimates and Errors are not disclosed by virtue of the exemptions given in the respective FRSs.

2.4 Significant Accounting Estimates and Judgments

(a) Key Sources of Estimation and Uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as stated below:-

(i) Useful lives of property, plant and equipment

The Group and the Company estimates the useful lives of property, plant and equipment based on period over which the assets are expected to be available for use. The estimated useful lives of property, plant and equipment are reviewed periodically and are updated if expectation differs from previous estimates due to physical wear and tear, technical or commercial obsolescence and legal or other limits on the use of the relevant assets. In addition, the estimation of useful lives of property, plant and equipment are based on internal technical evaluation and experience with similar assets. It is possible, however, that future results of operations could be materially affected by changes in the estimates brought about by changes in factors mentioned above. The amounts and timing of recorded expenses for any period would be affected by changes in these factors and circumstances. A reduction in estimated useful lives of the property, plant and equipment would increase the recorded expenses and decrease the non-current assets.




2.4 Significant Accounting Estimates and Judgments (cont’d)

(a) Key Sources of Estimation and Uncertainty (cont’d)

(ii) Impairment of goodwill

The Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the value-in-use of the cash generating units (“CGU”) to which goodwill is allocated. Estimating a value-in-use amount requires management to make an estimation of the expected future cash flows from the CGU and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The carrying amounts of goodwill as at 31st October 2009 was RM181,090,857/- (2008 : RM181,090,857/-).

(iii) Impairment of development expenditure

The Group and the Company carried out the impairment test on development expenditure based on a variety of estimation including the value-in-use of the cash generating unit.

Estimates the value-in-use requires the Group and the Company to make an estimate of the expected future cash flows generated by the development expenditure which involve uncertainties and are significantly affected by assumptions used and judgement made regarding estimates of future cash flows and discount rates. Changes in assumptions could significantly affect the results of the Group’s and of the Company’s test for impairment on this development expenditure.

(iv) Impairment of other investments

The Group determines whether other investments are impaired at least on annual basis. This requires the Group to determine the fair values of other investments. Should the fair values of other investments lower than its carrying amount, an impairment loss would be recognised. As at 31st October 2009, there was no further impairment loss being recognised in the balance sheet.

(v) Allowance for doubtful debts

The Group and the Company make allowance for doubtful debts based on an assessment of the recoverability of receivables. Allowances are applied to receivables where events or changes in circumstances indicate that the carrying amounts may not be recoverable. Management specifically analysed historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in customer payment terms when making a judgment to evaluate the adequacy of the allowance of doubtful debts of receivables. Where the expectation is different from the original estimate, such difference will impact the carrying value of receivables.

(vi) Allowance for inventories

Reviews are made periodically by management on damaged, obsolete and slow-moving inventories. These reviews require judgment and estimates. Possible changes in these estimates could result in revisions to the valuation of inventories.




2.4 Significant Accounting Estimates and Judgments (cont’d)

(a) Key Sources of Estimation and Uncertainty (cont’d)

(vii) Deferred tax assets

Deferred tax assets are recognised for all unutilised tax losses and unabsorbed capital allowances to the extent it is probable that taxable profit will be available against which the losses and capital allowances can be utilised. Significant management judgment is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies. The total carrying values of unrecognised tax losses and deductible temporary differences of the Group were disclosed in Note 11 to the financial statements.

(viii) Construction contracts

The Group recognises contract revenue and contract costs as revenue and expenses respectively in the income statement using the stage of completion method. The stage of completion is determined by reference to the proportion of contract costs incurred for work performed to date to the estimated total contract costs.

Significant judgment is required in determining the stage of completion, the extent of the contract costs incurred, the estimated total contract revenue and costs, as well as the recoverability of the construction contracts. In making the judgment, the Group evaluates based on past experience and by relying on the work of specialists.

(ix) Taxation

The Group and the Company recognised liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters are different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provision in the financial year in which such determination is made.

(x) Contingent liabilities

Determination of the treatment of contingent liabilities in the financial statements is based on the management’s view of the expected outcome of the applicable contingency.

(b) Critical Judgments Made In Applying Accounting Policies

There are no critical judgments made by the management in the process of applying the Group’s accounting policies that have significant effect on the amounts recognised in the financial statements.



3.

PR

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, PLA

NT

AN

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hold

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and

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Leas

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Cap

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Furn

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MR

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MR

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71,8

39,4

82

1,68

9,65

1 2,

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559

63,4

31,2

54

10,3

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91

4,61

5,17

9 1,

879,

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156,

696,

869

Ad

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-

485,

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1,40

6,13

4 -

1,

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341,

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3,59

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-

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At

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200

9 72

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,482

1,

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1,65

4 64

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938

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8 16

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1,36

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Dep

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At

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1,56

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9 15

5,46

3 64

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8 51

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18

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0 2,

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1,56

6,17

7 57

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135,

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-

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-

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At

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200

9 1,

968,

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194,

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7

15,1

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53,5

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2,77

9,89

0 1,

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616,

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11,2

57,3

04

10,1

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91

2,86

7,04

8 51

9,78

6 99

,081

,557



3.

PR

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MR

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8 71

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1,

689,

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2,84

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9 63

,431

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,395

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4,

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6,86

9

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At

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,888

,148



3. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

Company

Freeholdland and

buildingsMotor

VehiclesOffice

Equipment Total2009 RM RM RM RM

Cost

At 1st November 2008 7,552,518 1,084,629 78,608 8,715,755

Additions - 540,700 2,049 542,749

Disposals - - - -

At 31st October 2009 7,552,518 1,625,329 80,657 9,258,504

Accumulated Depreciation

At 1st November 2008 183,570 272,698 49,933 506,201

Charge for the financial year 42,362 297,576 14,062 354,000

Disposals - - - -

At 31st October 2009 225,932 570,274 63,995 860,201

Net Book Value at 31st October 2009 7,326,586 1,055,055 16,662 8,398,303

2008

Cost

At 1st November 2007 7,552,518 1,068,458 63,527 8,684,503

Additions - 792,218 15,081 807,299

Disposals - (776,047) - (776,047)

At 31st October 2008 7,552,518 1,084,629 78,608 8,715,755


At 1st November 2007 141,208 679,036 30,426 850,670

Charge for the financial year 42,362 214,500 19,507 276,369

Disposals - (620,838) - (620,838)

At 31st October 2008 183,570 272,698 49,933 506,201

Net Book Value at 31st October 2008 7,368,948 811,931 28,675 8,209,554



3. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

Property, plant and equipment of the Group that have been pledged to licensed banks to secure the credit facilities granted to the Group are as follows:-

Group2009 2008

RM RM

Net Book Value

Plant and machinery 2,500,884 2,561,349

Factory buildings 2,616,553 2,198,091

5,117,437 4,759,440

Motor vehicles of the Group and of the Company with total net book values of RM2,459,932/- (2008 : RM1,971,263/-) and RM1,055,055/- (2008 : RM811,931/-) respectively were acquired under hire purchase installment plans.

4. INVESTMENT PROPERTIES

Company2009 RM

Cost

At 1st November 2008 58,400,991

Additions 330,000

Disposals -

At 31st October 2009 58,730,991


At 1st November 2008 1,384,139

Charge for the financial year 358,763

Disposals -

At 31st October 2009 1,742,902

Net Book Value at 31st October 2009 56,988,089




4. INVESTMENT PROPERTIES (CONT’D)

Company

2008 RM

Cost

At 1st November 2007 56,471,019

Additions 1,929,972

Disposals -

At 31st October 2008 58,400,991


At 1st November 2007 1,031,976

Charge for the financial year 352,163

Disposals -

At 31st October 2008 1,384,139

Net Book Value at 31st October 2008 57,016,852

Rental income earned by the Company from the investment properties during the financial year amounted to RM2,760,000/- (2008 : RM3,360,000/-) and direct operating expenses incurred by the Company on the investment properties during the financial year amounted to RM701,014/- (2008 : RM788,856/-).

The fair values of the investment properties were estimated at RM70,700,000/- (2008 : RM67,000,000/-) at directors’ valuation which were made based on current prices in an active market for the said properties.

5. PREPAID LAND LEASE PAYMENTS

Group2009 2008

RM RM

At 1st November 2008/2007 1,633,936 1,669,868

Amortisation (35,932) (35,932)

At 31st October 2009/2008 1,598,004 1,633,936

Leasehold land with carrying amount of RM1,025,080/- (2008 : RM1,045,999/-) has been pledged for bank borrowings as disclosed in Note 24 to the financial statements.


6. INVESTMENT IN SUBSIDIARY COMPANIES

Company2009 2008

RM RM

Unquoted shares, at cost 237,735,604 237,735,604

The following information relates to the subsidiary companies which are all incorporated in Malaysia:-

GroupName of Company Effective Equity Interest Principal Activities

2009 2008 % %

Direct subsidiary companies

JAKS Sdn. Bhd. * 100.00 100.00 General contractor and supplier of building materials

Pipe Technology System Sdn. Bhd. * 70.00 70.00 Pipe manufacturer

JAKS Steel Industries Sdn. Bhd. 98.05 98.05 Manufacturing and trading of steel pipes, steel hollow section and trading of other steel related products

Surge System Sdn. Bhd. 100.00 100.00 General trading and construction

Empire Deluxe Sdn. Bhd.* 100.00 100.00 Manufacturing of ductile steel pipes and investment holding

Indirect subsidiary companies held through JAKS Sdn. Bhd.

JAKS-KDEB Consortium Sdn. Bhd. 70.00 70.00 Investment holding and supply of products for water supply industry

JAKS Marketing Sdn. Bhd. * 100.00 100.00 Providing sub-contracting activities and general trading of steel and construction related products

JAKS Power Sdn. Bhd. * 51.00 - Investment holding

Indirect subsidiary company held through JAKS-KDEB Consortium Sdn. Bhd.

Integrated Pipe Industries Sdn. Bhd. 70.00 70.00 Pipes manufacturer

Indirect subsidiary company held through Empire Deluxe Sdn. Bhd.

Wing Tiek Ductile Iron Pipe Sdn. Bhd.*

100.00 100.00 Manufacturing and trading of butt welding pipe fitting products and steel elbow joints.

* Subsidiary companies not audited by Baker Tilly Monteiro Heng.

On 21st November 2009, the subsidiary company of the Company, JAKS Sdn. Bhd. (“JSB”) acquired an additional 60 units of the ordinary shares of RM1/- each in JAKS Power Sdn. Bhd. (“JPSB”) representing 6% of percentage shareholding in JPSB at a purchase consideration of RM60/-. As such, JPSB becomes a 51% owned subsidiary company of JSB.



7. INVESTMENT IN AN ASSOCIATED COMPANY

Group2009 2008

RM RM

Unquoted shares at costs - 450

Share of post acquisition accumulated losses - (449)

- 1

Represented by:-

Share of net asssets of an associated company - 1

Unrecognised amount of share of losses in an associated company - 921

Details of the associated company which is incorporated in Malaysia are as follows:-

Name of Company Issue Share Capital Effective Equity Holdings Principal ActivityNumber of shares 2009 2008

% %

JAKS Power Sdn. Bhd. 1,000 - 45 Investment holding

The summarised financial information of the associated company is as follows:-

2008 RM

Asset and LiabilityCurrent asset 1,000

Total asset 1,000

Current liability (3,045)

Total liability (3,045)

ResultsNet loss for the financial period (3,045)



8. OTHER INVESTMENTS

Group2009 2008

RM RM

Quoted shares

At cost 102,010 102,010

Impairment loss (13,600) (13,600)

88,410 88,410

Unquoted shares

At cost - 150,000

Golf club membership

At cost 600,000 600,000

Accumulated amortisation (31,580) (23,685)

Net book value 568,420 576,315

656,830 814,725

Market value of quoted shares 124,814 59,206

Group

The investment in unquoted shares by a subsidiary company, which is incorporated in Malaysia, is as follows:-

Name of CompanyEffective Equity

Interest Principal Activity 2009 2008

% %Bright Enterprise Sdn. Bhd. - 15 Trading in steel and iron products

9. INTANGIBLE ASSET – GOODWILL ON CONSOLIDATION

Group2009 2008

RM RM

At 1st November 2008/2007 181,090,857 181,090,857

Goodwill arising from acquisition of a new subsidiary company 183 -

Impairment loss on goodwill (183) -

At 31st October 2009/2008 181,090,857 181,090,857




10. DEVELOPMENT EXPENDITURE

Group and Company2009 2008

RM RM

Balance at 1st Nov 2008/2007 12,001,045 - Capitalised during the financial year 39,325,866 12,001,045

Balance at 31st October 2009/2008 51,326,911 12,001,045

The development expenditure represents expenditure and incidental costs incurred for the development of the 2 units of 600 MW Coal Fired Power Plant in the province of Hai Doung, Vietnam (“the project”).

The development of the first unit of the 600MW power plant will take 4 years and is expected to commence operations by 2014, and the second unit of the other 600MW power plant is expected to commence operations by 2015. A company incorporated in Vietnam was appointed to facilitate the project.

On 13th May 2009, a Memorandum of Understanding was signed between the Ministry of Industry and Trade and the Company for the construction of the Power Plant under a “Build, Operate and Transfer” basis. The Principles of Project Agreement which sets out the common principles for all the project agreements was completed and signed on 10th July 2009.

After the signing of the Principles of Project Agreement, negotiations for the Build, Operate and Transfer Agreement, Power Purchase Agreement and Coal Supply Agreement as well as the other project agreements (the “Agreements”) with the respective Vietnamese Government Agencies commenced, and are expected to be completed during the financial year ending 31 October 2010. The Company is also now in consultation with various investment organisations to facilitate funding options, including joint-venture arrangements to be undertaken for the project.

The Power Purchase Agreement is currently at its final draft stage. The Build, Operate and Transfer Agreement and Coal Supply Agreement have been agreed and initialed by the Company and the respective Vietnamese Government Agencies. The directors of the Company are of the opinion that the finalisation and the signing of all the relevant agreements will be completed during the financial year ending 31st October 2010.

The directors of the Company are also of the opinion that the project will enhance the future profitability and improve the financial position of the Group.

11. DEFERRED TAX ASSETS/(LIABILITIES)

Group Company2009 2008 2009 2008

RM RM RM RM

Deferred tax assets 10,385,709 10,410,395 - - Deferred tax liabilities (1,194,139) (810,650) (582,708) (694,761)

9,191,570 9,599,745 (582,708) (694,761)

Balance at 1st November 2008/2007 9,599,745 9,899,746 (694,761) (535,835)Recognised in income statements (Note 28) (408,175) (300,001) 112,053 (158,926)

Balance at 31st October 2009/2008 9,191,570 9,599,745 (582,708) (694,761)


11. DEFERRED TAX ASSETS/(LIABILITIES) (CONT’D)

The components and movements of deferred tax assets and liabilities during the financial year prior to offsetting are as follows:-

Deferred Tax Liabilities:-

Taxable temporary difference2009 2008

RM RM

GroupBalance at 1st November 2008/2007 (810,650) (627,519)Recognised in income statements (383,489) (183,131)

Balance at 31st October 2009/2008 (1,194,139) (810,650)

CompanyBalance at 1st November 2008/2007 (694,761) (535,835)Recognised in income statements 112,053 (158,926)

Balance at 31st October 2009/2008 (582,708) (694,761)

Deferred Tax Assets:-

Unabsorbedtax losses

Deductibletemporarydifference Total

Group RM RM RM

2009Balance at 1st November 2008 10,393,645 16,750 10,410,395 Recognised in income statements (24,686) - (24,686)

Balance at 31st October 2009 10,368,959 16,750 10,385,709

2008Balance at 1st November 2007 10,510,515 16,750 10,527,265 Recognised in income statements (116,870) - (116,870)

Balance at 31st October 2008 10,393,645 16,750 10,410,395

Deferred tax assets have not been recognised in respect of the following items:-

Group2009 2008

RM RM

Unabsorbed tax losses 72,845,920 63,369,160 Deductible temporary diferrences 5,454,604 4,279,465

78,300,524 67,648,625

Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the Group can utilise the benefits.



12. INVENTORIES

Group2009 2008

RM RM

At cost :

Raw materials 10,423,413 33,115,932

Work-in-progress 4,377,046 7,709,199

Finished goods 12,903,568 45,338,397

Building materials 720,820 800,820

28,424,847 86,964,348

13. AMOUNT DUE FROM CUSTOMERS FOR CONTRACT WORKS

Group2009 2008

RM RM

Aggregate costs incurred to date 288,388,926 158,909,002

Recognised profits 20,187,740 16,124,709

308,576,666 175,033,711

Progress billings (210,267,030) (79,750,468)

Amounts due from customers for contract works 98,309,636 95,283,243

Construction contract costs recognised as contract expense during the financial year 137,445,389 67,072,055

Construction contract revenue recognised as contract revenue during the financial year 153,338,037 77,514,267

14. TRADE RECEIVABLES

Group2009 2008

RM RM

Trade receivables 31,168,482 41,888,840

Allowances for doubtful debts (1,892,376) (1,892,633)

Overdue interest in suspense (2,065,971) (1,867,098)

27,210,135 38,129,109



14. TRADE RECEIVABLES (CONT’D)

The currency exposure profile of trade receivables is as follows:-

Group2009 2008

RM RM

Ringgit Malaysia 26,790,658 34,408,988

Singapore Dollar - 134,708

US Dollar 419,477 3,585,413

27,210,135 38,129,109

Group

The Group’s normal trade credit terms range from 60 to 120 (2008 : 60 to 120) days from date on invoice. Other credit terms are assessed and approved on a case-to-case basis.

The allowance for doubtful debts of the Group is net of bad debts written off amounting to RM257/- (2008 : RM Nil).

15. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS

Group Company2009 2008 2009 2008

RM RM RM RM

Other receivables 22,588,278 38,696,845 131,520 7,917,571

Deposits 38,742,194 31,076,501 144,590 138,090

Prepayments 2,240,668 2,857,470 62,149 75,086

63,571,140 72,630,816 338,259 8,130,747

Included in other receivables of the Group and of the Company is an amount of RM3,650,085/- (2008 : RM5,007,571/-) and RMNil (2008 : RM5,007,571/-) respectively which represent advances paid to the third party for oversea project.

Included in deposits of the Group is an amount of RM17,011,091/- (2008 : RM26,304,588/-) which represents deposit paid for the purchase of raw materials.

16. AMOUNT OWING BY/(TO) SUBSIDIARY COMPANIES

Company

The amount owing by/(to) subsidiary companies is non-trade in nature. This amount is unsecured, bear interest at 6% (2008 : 6%) per annum and is repayable on demand.



17. FIXED DEPOSITS WITH LICENSED BANKS

Group

Fixed deposits with licensed banks represent amounts pledged to the banks to secure credit facilities granted to the subsidiary companies.

18. CASH AND BANK BALANCES

Group Company2009 2008 2009 2008

RM RM RM RM

The currency exposure profiles of cash and bank balances are as follows:

Ringgit Malaysia 16,642,634 9,043,350 182,306 110,176 US Dollar 97,387 107,604 - - Singapore Dollar 32,712 47,132 - -

16,772,733 9,198,086 182,306 110,176

19. SHARE CAPITAL

Group and CompanyNumber of ordinary shares

of RM1/- each Amount2009 2008 2009 2008

Unit Unit RM RM

AuthorisedAt 1st November 2008/2007 1,000,000,000 500,000,000 1,000,000,000 500,000,000 Created during the financial year - 500,000,000 - 500,000,000

At 31st October 2009/2008 1,000,000,000 1,000,000,000 1,000,000,000 1,000,000,000

Issued and fully paidAt 1st November 2008/2007 438,361,072 398,510,072 438,361,072 398,510,072 Issued during the financial year - 39,851,000 - 39,851,000

At 31st October 2009/2008 438,361,072 438,361,072 438,361,072 438,361,072

(a) Authorised ordinary share capital

In the previous financial year, the Company increased its authorised share capital from RM500,000,000/- to RM1,000,000,000/- through the creation of 500,000,000 ordinary shares of RM1/- each.

(b) Issued and fully paid

In the previous financial year, the Company increased its issued and paid-up ordinary share capital from RM398,510,072/- to RM438,361,072/- vide the issuance of 39,851,000 ordinary shares of RM1/- each through a private placement at an issue price of RM1.21/- per ordinary share for cash, for additional working capital purposes. The new ordinary shares issued during the financial year ranked pari passu in all respects with the existing ordinary shares of the Company.



19. SHARE CAPITAL (CONT’D)

Employees’ Share Option Scheme (“ESOS”)

At an extraordinary general meeting held on 28th April 2008, the Company’s shareholders approved the establishment of an ESOS of up to 10% of the issued and paid-up share capital of the Company, to eligible Executive and Non-Executive Directors and employees of the Company and its subsidiary companies. Bursa Malaysia Securities Berhad (“Bursa Securities”) had approved in-principle the listing of the additional 10% of the issued and paid-up share capital of the Company to be issued pursuant to the exercise of the share options granted under the ESOS.

The salient terms of the ESOS are as follows:-

(a) Eligible employees, Non-Executive and Executive Directors must be at least eighteen (18) years of age and must have been confirmed on that date of offer.

(b) The Eligible employees must be on full time employment basis with at least one (1) year of period of employment, save for the non-executive Directors of the Company.

(c) The exercise price shall be discounted by not more than 10% from the weighted average of the market price of the Shares as shown in the daily official list issued by Bursa Securities for the five (5) trading days immediately preceding the date of offer in writing to the grantee or at the par value of the ordinary shares of the Company, whichever is the higher.

(d) The new shares to be allotted and issued upon any exercise of the options shall rank pari passu in respect with the existing shares of the Company except that the new shares will not be entitled to any dividends, rights, allotments and other distributions in which entitlement date precedes the date of allotment of the said shares.

(e) The option granted may be exercised at any time within a period of five (5) years from the effective date provided. The Board of Directors shall have the discretion to extend the tenure of the ESOS for another five (5) years immediately or such shorter period as it deems fit from the expiry of the first five (5) years.

Other provisions are stipulated in the ESOS By-Law.

As at the balance sheet date, no ESOS was granted by the Company.

20. HIRE PURCHASE LIABILITIES

Group Company2009 2008 2009 2008

RM RM RM RM

Minimum hire purchase payments:

- not later than one year 672,052 523,011 294,532 229,371

- later than one year and not later than two years 499,380 488,030 283,488 183,663

- later than two years and not later than five years 842,947 732,413 556,698 488,762

2,014,379 1,743,454 1,134,718 901,796

Less: Future interest charges (175,780) (151,762) (111,943) (96,600)

Present value of hire-purchase liabilities 1,838,599 1,591,692 1,022,775 805,196




20. HIRE PURCHASE LIABILITIES (CONT’D)

Group Company2009 2008 2009 2008

RM RM RM RM

Represented by:

Current:- not later than one year 590,196 454,648 245,720 192,650 Non-current:- later than one year and not later than two years 432,483 433,381 248,671 156,595 - later than two years and not later than five years 815,920 703,663 528,384 455,951

1,248,403 1,137,044 777,055 612,546

1,838,599 1,591,692 1,022,775 805,196

The hire purchase liabilities of the Group and of the Company bear interest at rates ranging from 3.25% to 6.54% (2008 : 3.25% to 6.54%) and 5.01% to 6.54% (2008 : 5.01% to 6.54%) per annum respectively.

The hire purchase liabilities are effectively secured on the rights of the assets under hire purchase.

21. LONG TERM LIABILITIES

Group2009 2008

RM RM

Outstanding term loans principal 1,171,520 1,898,091 Portion due within one year (Note 24) (845,697) (728,224)

Portion due after one year 325,823 1,169,867

Group and Company

The long term loans of the Group bear interest rates at 7.07% (2008: 8.00% to 8.25%) per annum and are secured by the securities as mentioned in Note 24 to the financial statements.

The terms of repayment of the loans are as follows:-

Group2009 2008

RM RM

Portion due within one year 845,697 728,224

Portion due after one year- not later than two years 325,823 1,169,867 - later than two years and not later than five years - -

325,823 1,169,867

1,171,520 1,898,091


22. TRADE PAYABLES

Group

The normal trade credit terms granted to the Group range from 30 to 90 (2008 : 30 to 90) days from date on invoice.

23. OTHER PAYABLES, DEPOSITS AND ACCRUALS

Group Company2009 2008 2009 2008

RM RM RM RM

Other payables 2,455,259 805,951 76,486 85,866 Deposits 5,000 - 365,000 360,000 Accruals 3,782,208 4,358,570 218,374 313,026

6,242,467 5,164,521 659,860 758,892

24. SHORT TERM BORROWINGS

Group Company2009 2008 2009 2008

RM RM RM RM

Bank overdrafts 13,322,648 13,905,732 4,907,715 -

Other borrowings:Bankers acceptances 85,013,704 109,669,217 - - Term loan due within one year (Note 21) 845,697 728,224 - -

85,859,401 110,397,441 - -

99,182,049 124,303,173 4,907,715 -

Group and Company

The short term borrowings are secured by:-

(a) a registered debenture for RM6,040,000/- over the leasehold land and all fixed and floating assets charge over the present and future assets of a subsidiary company;

(b) fixed deposits of the subsidiary companies of RM3,212,706/- (2008 : RM3,158,477/-);

(c) a corporate guarantee by the Company for banking facilities granted by financial institutions to its subsidiary companies; and

(d) assignment over proceeds under the contract via irrecoverable Letter of Instruction.

The bankers acceptances of the Group bear interest at rates range from 4.35% to 6.55% (2008 : 4.35% to 6.20%) per annum. The bank overdrafts of the Group and of the Company bear interest at rates range from 6.55% to 8.75% (2008 : 7.75% to 8.75%) and 6.80% (2008: Nil) per annum respectively.




25. REVENUE

Group Company2009 2008 2009 2008

RM RM RM RM

Contract income 153,338,037 77,514,267 - - Sale of finished goods 124,743,665 155,819,746 - - Management fee - - 2,700,000 3,180,000 Rental income - - 2,760,000 3,360,000

278,081,702 233,334,013 5,460,000 6,540,000

26. OPERATING PROFIT/(LOSS)

Group Company2009 2008 2009 2008

RM RM RM RM

After charging:-Allowance for doubtful debts - 7,643 - - Amortisation of golf membership 7,895 7,895 - - Amortisation of prepaid land lease payments 35,932 35,932 - - Audit fee

- current year 120,000 106,000 13,000 13,000 - (over)/underaccrual in prior year (4,000) - - 3,000

Depreciation- property, plant and equipment 3,401,084 3,110,168 354,000 276,369 - investment properties - - 358,763 352,163

Directors' remuneration- fees 533,000 329,500 168,000 185,500 - salaries, allowances and bonuses 1,118,475 1,103,650 983,000 970,500 - Employees’ Provident Fund 127,068 125,244 110,760 109,260 - Others 2,922 2,848 1,859 1,859

Loss on disposal of property, plant and equipment - 5,209 - 5,209 Realised losses on foreign exchange 17,149 404 - - Impairment loss on goodwill 183 - - - Rental expenses

- office- current year 88,250 37,075 - - - prior years (120,000) - - -

- office equipment - 1,140 - - Staff costs- salaries, allowances and bonuses 12,510,957 12,391,684 1,334,911 1,400,856 - Employees’ Provident Fund 1,142,090 1,145,370 132,925 150,635 - other staff related costs 522,122 679,474 9,321 7,250

and crediting:-Dividend income 31,999 4,400 - - Gain on disposal of property, plant and equipment - 76,770 - - Gain on disposal of other investments 512,522 - - - Management fee - 254,874 - - Rental income - - 2,760,000 3,360,000


27. FINANCE COSTS (NET)

Group Company2009 2008 2009 2008

RM RM RM RM

Interest income- subsidiary companies - - 874,453 944,655 - fixed deposits 54,710 153,266 - 58,381

54,710 153,266 874,453 1,003,036 Less :Interest expenses

- bank overdrafts (869,380) (842,999) (96,031) - - trade finance (4,498,182) (4,819,775) - - - hire purchase (103,603) (43,394) (59,598) (21,952)- subsidiary companies - - (150,798) (294,984)- term loans (119,125) (192,122) - (269)- others (81,160) (330,547) - -

(5,671,450) (6,228,837) (306,427) (317,205)

(5,616,740) (6,075,571) 568,026 685,831

28. TAXATION

Group Company2009 2008 2009 2008

RM RM RM RM

Income tax

- current year (2,408,880) (1,757,808) (96,000) (345,000)

- (under)/over accrual in prior years (1,138,813) (2,084,718) (10,239) 148,695

Deferred tax (Note 11)

- current year (423,364) (269,843) 101,382 (106,328)

- over/(under) accrual in prior years 15,189 (30,158) 10,671 (52,598)

(408,175) (300,001) 112,053 (158,926)

(3,955,868) (4,142,527) 5,814 (355,231)




28. TAXATION (CONT’D)

The reconciliation of income tax expense applicable to (loss)/profit before taxation at the statutory income tax rate to income tax expense at the effective income tax rate of the Group and of the Company are as follows:

Group Company2009 2008 2009 2008

RM RM RM RM

(Loss)/profit before taxation (2,431,922) 7,181,585 (824,694) 601,670

Taxation at applicable tax rate of 25% (2008 : 26%) 607,981 (1,867,212) 206,173 (156,434)

Tax effects arising from- SME tax savings - 61,648 - - - non-taxable income - 545,795 - - - non-deductible expenses (777,250) (742,784) (200,791) (299,147)- double deduction - 32,954 - - - Origination of deferred tax assets not recognised in the financial statements (2,662,975) (35,502) - - - (under)/over accrual in prior years (1,123,624) (2,114,876) 432 96,097 - changes in tax rates - (22,550) - 4,253

Tax expense for the financial year (3,955,868) (4,142,527) 5,814 (355,231)

29. (LOSS)/EARNINGS PER SHARE

Group

Basic (Loss)/Earnings Per Share

The (loss)/earnings per share for the year has been calculated based on the Group’s (loss)/profit after taxation and minority interests of RM6,746,575/- (2008 : RM2,884,768/-) and on the weighted average number of 438,361,072 (2008 : 431,045,957) ordinary shares in issue during the financial year.

Diluted (Loss)/Earnings Per Share

For diluted (loss)/earnings per share calculation, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all potential ordinary shares.

The Group has no dilutive potential ordinary shares. As such, there is no dilutive effect on the (loss)/earnings per share of the Group.


30. CONTINGENT LIABILITIES

As at 31st October 2009, the Group and the Company is contingently liable for the following:-

Group Company2009 2008 2009 2008

RM RM RM RM

Unsecured

Bank guarantees issued for- execution of contracts of the subsidiary company 44,579,254 20,154,065 - - - others 383,960 383,960 383,960 383,960

Corporate guarantees given to licensed banks to secure credit facilities granted to the subsidiary companies - - 133,051,357 151,522,655

44,963,214 20,538,025 133,435,317 151,906,615

31. SIGNIFICANT RELATED PARTY TRANSACTIONS

(a) Transactions with related parties

Company2009 2008

RM RM

IncomeManagement fee from subsidiary companies 2,700,000 3,180,000 Interest income from subsidiary companies 874,453 944,655 Rental income from subsidiary companies 2,760,000 3,360,000

ExpensesInterest expense charged by subsidiary companies 150,798 294,984

The principal subsidiary companies involved in the above management fee transactions are:-

(a) JAKS Sdn. Bhd.(b) JAKS-KDEB Consortium Sdn. Bhd.(c) JAKS Marketing Sdn. Bhd.(d) JAKS Steel Industries Sdn. Bhd.(e) Integrated Pipe Industries Sdn. Bhd.(f) Pipe Technology System Sdn. Bhd.(g) Surge System Sdn. Bhd.(h) Wing Tiek Ductile Iron Pipe Sdn. Bhd.




31. SIGNIFICANT RELATED PARTY TRANSACTIONS (CONT’D)

(a) Transactions with related parties (cont’d)

The principal subsidiary companies involved in the above rental income transactions are:-

(a) JAKS Steel Industries Sdn. Bhd.(b) Integrated Pipe Industries Sdn. Bhd.

The principal subsidiary companies involved in the above interest transactions are:-

Income(a) JAKS-KDEB Consortium Sdn. Bhd.(b) Integrated Pipe Industries Sdn.Bhd.(c) Surge System Sdn. Bhd.(d) JAKS Sdn. Bhd.

Expenses(a) JAKS Steel Industries Sdn. Bhd.(b) JAKS Marketing Sdn. Bhd.(c) Pipe Technology System Sdn. Bhd.

The directors of the Company are of the opinion that the above transactions have been entered into in the normal course of business and the terms are no less favourable than those arranged with third parties.

(b) Key Management Compensation

Included in the total key management personnel (including directors) are:-

Group Company2009 2008 2009 2008

RM RM RM RM

Short term employees benefits 3,813,813 2,481,200 2,180,288 2,037,550 Contribution to defined contribution plan 328,380 253,483 218,634 215,911

32. SEGMENTAL ANALYSIS

The Group’s operating businesses are classified according to the nature of activities as follows:-

Manufacturing : Comprise mainly manufacturing of pipes, ductile steel pipes and steel hollow section.

Trading : Comprise mainly trading in sheet piles, steel bars, mild steel and special pipes, other steel related products and supply of products for water supply industry.

Construction : Comprise mainly provision of sub-contracting activities, general contractor and supplier of building materials.

Investment : Investment holding


32. SEGMENTAL ANALYSIS (CONT’D)

Primary Reporting – Business Segments

2009 Manufacturing Trading Construction Investment Elimination Total RM RM RM RM RM RM

REVENUEExternal revenue 113,442,648 11,301,017 153,338,037 - 278,081,702 Inter-company 103,797,707 - - 5,460,000 (109,257,707) -

217,240,355 11,301,017 153,338,037 5,460,000 (109,257,707) 278,081,702

RESULTSSegment results (6,792,136) 1,120,767 10,951,770 (2,700,460) - 2,579,941 Other income 604,177 - 700 - - 604,877 Finance costs - (net) (2,032,122) (428,375) (3,724,269) 568,026 - (5,616,740)

(Loss)/profit before taxation (8,220,081) 692,392 7,228,201 (2,132,434) - (2,431,922)

Taxation (575,790) (492,390) (2,893,502) 5,814 - (3,955,868)

Net (loss)/profit for the financial year (8,795,871) 200,002 4,334,699 (2,126,620) - (6,387,790)

Attributable to:Equity holders of the

Company (9,195,939) 240,795 4,334,699 (2,126,130) - (6,746,575)Minority interests 400,068 (40,793) - (490) - 358,785

(8,795,871) 200,002 4,334,699 (2,126,620) - (6,387,790)

OTHER INFORMATIONSegment assets 81,343,367 27,952,686 149,477,510 312,481,793 - 571,255,356

Total assets 92,500,686 28,049,118 149,477,510 312,569,130 - 582,596,444

Segment liabilities 48,223,485 3,234,095 56,403,616 8,010,961 - 115,872,157

Total liabilities 48,746,922 3,553,435 60,457,378 8,593,669 - 121,351,404

Capital Expenditure 2,102,441 - 591,812 900,240 - 3,594,493

Depreciation and amortisation 1,862,112 2,786 323,188 1,256,825 - 3,444,911

Non cash expenses other than depreciation and amortisation - - - 183 - 183




32. SEGMENTAL ANALYSIS (CONT’D)

2008 Manufacturing Trading Construction Investment Elimination Total RM RM RM RM RM RM

REVENUEExternal revenue 142,771,236 13,048,510 77,514,267 - - 233,334,013 Inter-company 77,685,068 - - 6,540,000 (84,225,068) -

220,456,304 13,048,510 77,514,267 6,540,000 (84,225,068) 233,334,013

RESULTSSegment results 6,167,531 479,836 6,788,281 (542,668) - 12,892,980 Other income 32,281 - 332,344 - - 364,625 Finance costs - (net) (3,101,454) (223,082) (3,436,866) 685,831 - (6,075,571)Share of resultsfrom an associatedcompany - - (449) - - (449)

Profit before taxation 3,098,358 256,754 3,683,310 143,163 - 7,181,585 Taxation (476,081) (347,994) (2,963,221) (355,231) - (4,142,527)

Net profit/(loss) for the financial year 2,622,277 (91,240) 720,089 (212,068) - 3,039,058

Attributable to:Equity holders of the Company 2,432,905 (56,158) 720,089 (212,068) - 2,884,768 Minority interests 189,372 (35,082) - - - 154,290

2,622,277 (91,240) 720,089 (212,068) - 3,039,058

OTHER INFORMATIONSegment assets 156,177,423 26,333,275 139,744,183 277,537,910 - 599,792,791

Total assets 167,317,407 26,409,185 139,744,183 277,537,910 - 611,008,685

Segment liabilities 86,073,011 3,382,666 50,469,755 1,280,013 - 141,205,445

Total liabilities 86,073,011 3,455,370 51,630,190 2,217,774 - 143,376,345

Capital Expenditure 1,547,871 - 1,340,351 2,737,271 - 5,625,493

Depreciation and amortisation 1,676,816 2,785 304,331 1,170,063 - 3,153,995

Non cash expenses other than depreciation and amortisation 7,643 - 449 - - 8,092

No geographical segment information is presented as the Group operates principally in Malaysia.


33. SIGNIFICANT EVENTS DURING AND AFTER THE FINANCIAL YEAR

(a) Corporate Debt Restructuring Scheme (“CDRS”)

Under the CDRS of Wing Tiek Holdings Berhad, the Company is required by the Securities Commission (“SC”) to obtain the Certificate of Fitness (“CF”) from the local authorities for the following remaining properties :-

1. Lot No. 536 and 537, Mukim Damansara, Daerah Petaling, Selangor2. PT No. 21884, Mukim Kapar, Daerah Kelang, Selangor.

The status on the approval for the building plans and CF for the aforesaid properties are highlighted below:

Lot No. 536 and 537, Mukim Damansara, Daerah Petaling, Selangor

On 10th September 2008, upon receiving the plan approval from Jabatan Bomba dan Penyelamat Malaysia (“JBP”), the Company has awarded the fire protection contractor to rectify and upgrade the protection system. JBP had arranged for inspection and the clearance letter of the fire protection system was obtained on 12th May 2009.

On 9th October 2008, Jabatan Pengaliran dan Saliran (“JPS”) rejected the Company application which should be in compliance with Manual Saliran Mesra Alam Malaysia requirements. On 13th November 2008, the Company made an appeal to JPS which is now pending the approval from JPS.

On 17th December 2008, the Company obtained the plan approval from Syarikat Bekalan Air Selangor Sdn. Bhd. (“SYABAS”). The Company has appointed licensed plumber to conduct the necessary test and submission for CF inspection. On 13th April 2009, SYABAS has conducted the inspection and the clearance letter was obtained on 4th June 2009.

On 18th September 2008, during the inspection, Telekom Malaysia Berhad (“TMB”) has requested the Company to indicate the primary routing of telecommunication to this lot for approval. On 15th January 2009, the Company submitted the new plan. On 17th April 2009, the Company managed to obtain the CF recommendation and approval from TMB.

On 8th July 2009, upon obtaining the clearance from the relevant authorities, the Company submitted Form F (“Perakuan Siap Dan Pematuhan” or CCC) to Majlis Perbandaran Subang Jaya (“MPSJ”) for notification and record purposes. With the submission of Form F to MPSJ, the Company has complied with the CF clearance for the properties mentioned above.

PT No. 21884, Mukim Kapar, Daerah Kelang, Selangor

On 22nd October 2008, the Company submitted the necessary documents to JPS for plan approval. However, JPS had requested that the Company to amend the submission to be in compliance with JPS request. On 18th February 2009, the amended application was submitted. On 28th April 2009, the Company obtained the approval with condition from JPS. On 29th June 2009, the Company has submitted its application for final inspection and obtained the clearance letter on 12th August 2009.

On 28th November 2008, the Company obtained the plan approval from SYABAS for the water supply. On 17th February 2009, SYABAS had conducted an on-site inspection and the Company was advised to amend and re-submit the material used to be in accordance with the existing requirement for approval. On 12th March 2009, the Company has made its re-submission to SYABAS. On 20th March 2009, the Company obtained the approval from SYABAS on the internal water supply system. On 29th July 2009, the Company obtained the approval for the water connection and subsequently on 20th August 2009 received the clearance letter from SYABAS.




33. SIGNIFICANT EVENTS DURING AND AFTER THE FINANCIAL YEAR (CONT’D)

(a) Corporate Debt Restructuring Scheme (“CDRS”) (cont’d)

PT No. 21884, Mukim Kapar, Daerah Kelang, Selangor (cont’d)

On 2nd June 2009, Jabatan Bomba carried out the inspection for CF clearance and the Company is currently awaiting the clearance letter from Jabatan Bomba.

On 9th September 2009, upon obtaining the clearance from the relevant authorities, the Company submitted the final CF application to the Building Department of Majlis Perbandaran Klang (“MPK”) for its issuance of the CF to the Company. On 18th September 2009, MPK has conducted site inspection and comment letter was issued on 8th October 2009 by MPK.

On 15th October 2009, SC had granted an extension of time of up to 30th September 2010 for the Company to obtain the CF for this property.

On 26th October 2009, the Company submitted notice of compliance to MPK requirements.

Subsequently on 9th December 2009, MPK conducted second site inspection and the Company is currently awaiting the comments from MPK.

On 10th February 2010, MPK vide its letter dated 10th December 2009 had approved the CF for this property.

(b) Material litigation

On 19th October 2006, the Company announced that its subsidiary company, JAKS-KDEB Consortium Sdn Bhd (“JKDEB”) had on 6th October 2006 filed a civil suit against Perbadanan Urus Air Selangor Berhad (“PUAS”), Syarikat Bekalan Air Selangor Sdn Bhd (“SYABAS”) and the Government of the State of Selangor Darul Ehsan (“Selangor Government”) (collectively referred as the “Defendants”) for the breach of the Supply Agreement dated 25th October 2001 (“Supply Agreement”) awarded by the Selangor Government to supply pipes and fittings in the whole State of Selangor Darul Ehsan including the Federal Territory of Kuala Lumpur and Putrajaya.

JKDEB claimed for declarations, damages and injunctions to restrain PUAS and SYABAS from purchasing pipes and fittings on all water projects being carried out in Selangor, Federal Territory of Kuala Lumpur and Putrajaya except from JKDEB and the specific performance of the Supply Agreement.

The case management in respect of the legal suit fixed on 29th May 2008, 7th August 2008 and 18th November 2008 scheduled has been postponed to 17th December 2008 to enable the parties involved to comply with the directions of the Court. On 17th December 2008, the Court had directed that the Selangor Government to file in their Bundle of Documents, Summary of Case and Issues to be tried before the next final Case Management dated fixed for 14th January 2009. Subsequently, the Court adjourned the Case Management to 25th March 2010.

(c) Proposed Placement

On 11th November 2009, the Company announced the proposal to undertake a private placement up to 10% new ordinary shares of RM1.00 each in the Company together with detachable warrants on the basis of up to one warrant for every one Placement Share subscribed. (“Proposed Private Placement”).

On 11th December 2009, the Company submitted the draft circular to shareholders in relation to the Proposed Private Placement to Bursa Malaysia Securities Berhad (“Bursa Securities”) and the application to Ministry of International Trade and Industry (“MITI”) for approval.


33. SIGNIFICANT EVENTS DURING AND AFTER THE FINANCIAL YEAR (CONT’D)

(c) Proposed Placement (cont’d)

Bursa Securities and MITI had vide their letter approved the Proposal Private Placement on 24th December 2009 and 29th December 2009 respectively.

On 3rd February 2010, the shareholders had approved the Proposal Private Placement.

(d) Investment in Gain World Trading Limited and Golden Keen Holdings Limited

On 8th December 2009, the Company subscribed for 1 ordinary shares of USD1/- each at par in the paid-up share capital of Gain World Trading Limited and Golden Keen Holdings Limited which both incorporated in the British Virgin Island representing a 100% owned subsidiaries company of the Company.

(e) Investment in JAKS Island Circle Sdn. Bhd.

On 29th December 2009, the subsidiary company of the Company, JAKS Sdn. Bhd. (“JSB”) subscribed for 510,000 ordinary shares of RM1/- each at par in the paid-up share capital of JAKS Island Circle Sdn. Bhd. (“JICSB”), representing a 51% owned subsidiary company of JSB.

34. FINANCIAL INSTRUMENTS

(a) Financial Risk Management and Objectives

The Group seeks to manage effectively various risks namely credit, foreign currency, liquidity and interest rate risks, to which the Group is exposed to in its daily operations.

(i) Credit Risk

The management has a credit policy in place to monitor and minimise the exposure of default. Trade receivables are monitored on an ongoing basis.

As at balance sheet date, there were no significant concentrations of credit risk in the Group.

(ii) Foreign Currency Risk

The Group incurs foreign exchange risk on sales and purchases that are denominated in currencies other than Ringgit Malaysia. The foreign currencies give rise to this risk is primarily US Dollar and Singapore Dollar. The Group monitors its foreign exchange exposure closely.

(iii) Liquidity Risk

The Group actively manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that all financing, repayment and funding needs are met. As part of its overall prudent liquidity management, the Group maintains flexibility of funding through adequate amounts of committed credit facilities.

(iv) Interest Rate Risk

The Group’s primary interest rate risk relates to interest-bearing debts as at 31st October 2009. The investments in financial assets are mainly short term in nature and they are not held for speculative purposes.



34. FINANCIAL INSTRUMENTS (CONT’D)

(a) Financial Risk Management and Objectives (cont’d)

(iv) Interest Rate Risk (cont’d)

Effective interest

rateWithin1 Year

1 - 5Years

More than

5 years TotalGroup % RM RM RM RM

At 31st October 2009

Financial AssetFixed deposits with

licensed banks 1.50 - 3.00 3,212,706 - - 3,212,706

Financial LiabilitiesBankers acceptances 3.35 - 6.55 85,013,704 - - 85,013,704 Bank overdrafts 6.55 - 8.75 13,322,648 - - 13,322,648 Hire purchase liabilities 3.25 - 6.54 590,196 1,248,403 - 1,838,599 Term loans 8.00 - 8.25 845,697 325,823 - 1,171,520

Group


Financial AssetFixed deposits with

licensed banks 2.60 - 3.10 3,158,477 - - 3,158,477

Financial LiabilitiesBankers acceptances 4.35 - 6.20 109,669,217 - - 109,669,217 Bank overdrafts 7.75 - 8.75 13,905,732 - - 13,905,732 Hire purchase liabilities 3.25 - 6.54 454,648 1,137,044 - 1,591,692 Term loans 8.00 - 8.25 728,224 1,169,867 - 1,898,091



34. FINANCIAL INSTRUMENTS (CONT’D)

(a) Financial Risk Management and Objectives (cont’d)

(iv) Interest Rate Risk (cont’d)

Effective interest

rate %

Within1 Year

RM

1 - 5Years

RM

More than

5 yearsRM

TotalRM

Company


Financial assetAmount owing by subsidiary

companies 6.00 25,090,958 - - 25,090,958

Financial LiabilitiesBank overdraft 6.80 4,907,715 - - 4,907,715 Hire purchase liabilities 4.22 - 5.00 245,720 777,055 1,022,775 Amount owing to

subsidiary companies 6.00 23,957,586 - - 23,957,586


Financial assetAmount owing by

subsidiary companies 6.00 29,791,428 - - 29,791,428

Financial LiabilitiesHire purchase liabilities 5.01 - 6.54 192,650 612,546 - 805,196 Amount owing to

subsidiary companies 6.00 657,554 - - 657,554

(b) Fair Values

(i) Recognised financial instruments

The fair values of financial assets and financial liabilities approximate their respective carrying values on the balance sheets of the Group and of the Company.

(ii) Unrecognised financial instruments

The nominal/notional amount and net fair value of contingent liabilities (as disclosed in Note 30 to the financial statements) are not recognised in the balance sheets as at 31st October 2009 as it is not practicable to make a reliable estimate due to the uncertainties of timing, costs and eventual outcome.

There are no financial instruments not recognised in the balance sheets as at 31st October 2009 that are required to be disclosed.




35. COMPARATIVE FIGURES

The following comparative amounts for the financial year ended 31st October 2009 have been reclassified to conform with current year’s presentation:

As Previously As Reported Reclassification Restated

RM RM RM

Balance Sheets

GroupDevelopment expenditure - 12,001,045 12,001,045 Other receivables, deposits and prepayment 85,327,083 (12,696,267) 72,630,816 Tax recoverable 110,277 695,222 805,499

CompanyDevelopment expenditure - 12,001,045 12,001,045 Other receivables, deposits and prepayment 20,131,792 (12,001,045) 8,130,747


We, DATO’ RAZALI MERICAN BIN NAINA MERICAN and ANG LAM POAH being two of the directors of JAKS RESOURCES BERHAD, do hereby state that in the opinion of the directors, the accompanying financial statements are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31st October 2009 and of the results and cash flows of the Group and of the Company for the financial year ended on that date in accordance with the Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia.

On behalf of the Board,

...................................................……………DATO’ RAZALI MERICAN BIN NAINA MERICAN Director

....................................................……………ANG LAM POAHDirector

Kuala Lumpur

Date: 11 February 2010

Statement by Directors


Statutory Declaration

I, CHEE SEONG HENG, being the officer primarily responsible for the financial management of JAKS RESOURCES BERHAD, do solemnly and sincerely declare that to the best of my knowledge and belief, the accompanying financial statements set out on pages 36 to 87 are correct, and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, l960.

........................................………CHEE SEONG HENG

Subscribed and solemnly declared by the abovenamed at Kuala Lumpur in the Federal Territory on 11 February 2010

Before me,

........................................……….Commissioner for OathsZulkifla Mohd DahlimNo. W541


REPORT ON THE FINANCIAL STATEMENTS

We have audited the financial statements of JAKS Resources Berhad, which comprise the balance sheets of the Group and of the Company as at 31st October 2009, and the income statements, statements of changes in equity and cash flow statements of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 36 to 87.

Directors’ Responsibility for the Financial Statements

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

Auditors’ Responsibility

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

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

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

Opinion

In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards and the provision of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of 31st October 2009 and of their financial performance and cash flows for the financial year then ended.

Emphasis of Matter

Without qualifying our opinion, we draw your attention to Note 10 to the financial statements which explains the current status of the Vietnam Power Plant Project (“the project”).

The Power Purchase Agreement is currently at its final draft stage. The Build, Operate and Transfer Agreement and Coal Supply Agreement have been agreed and initialed by the Company and the respective Vietnamese Government Agencies. The directors of the Company are of the opinion that the finalisation and the signing of all the relevant agreements will be completed during the financial year ending 31st October 2010.

The directors of the Company are also of the opinion that the project will enhance the future profitability and improve the financial position of the Group.

Independent Auditors’ Report to the Members of JAKS RESOURCES BERHAD


Independent Auditors’ Report (cont’d)to the Members of JAKS RESOURCES BERHAD

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

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

(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiary companies of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

(b) We have considered the financial statements and the auditors’ reports of all the subsidiary companies of which we have not acted as auditors, which are indicated in Note 6 to the financial statements.

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

(d) The audit reports on the financial statements of the subsidiary companies did not contain any qualification or any adverse comment made under Section 174(3) of the Act.

OTHER MATTERS

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

Baker Tilly Monteiro HengNo. AF 0117Chartered Accountants

M.J MonteiroNo. 828/05/10 (J/PH)

Kuala Lumpur

Date : 11 February 2010


Properties of the Group as at 31 October 2009

Location Tenure Area

Age of Building

Approximate Years

Existing Use

Net Book Value

RM'000

Date Of Company

Acquisition

JAKS RESOURCES BERHAD

PT 21884Mukim of KaparDistrict of KlangSelangor Darul Ehsan

Freehold land Land area:93,128 sq. metresGross building area:15,734 sq. metres

13 Years Factory 19,190 17/5/2004

Lot No. 536Mukim of DamansaraDistrict of PetalingSelangor Darul Ehsan


19 Years Factory 8,214 17/5/2004


Freehold land Land area:12,140 sq. metresGross floor area:8,236 sq. metres

17 Years Factory 7,819 17/5/2004



23 Years Factory 7,801 17/5/2004



23 Years Factory 7,681 17/5/2004


Freehold land Land area:12,140 sq. metresGross building area: Warehouse2,191 sq. metresOffice floor area: 3,039 sq. metres

19 Years Office warehouse & factory building

7,326 17/5/2004



15 Years Factory 6,283 17/5/2004

JAKS SDN BHD

No. 924/1F,Storey No.1st Floor,Building No. Block:Front Unit Type 3, Taman Desa Cheras,Kuala Lumpur

Freehold1st Floor of3 StoreyShophouse

Building area :64.82 sq. metres(697.72 sq. feet)

8 Years Vacant 59 23/12/2003


Properties of the Group (cont’d)as at 31 October 2009

Location Tenure Area

Age of Building

Approximate Years

Existing Use

Net Book Value

RM'000

Date Of Company

Acquisition

PIPE TECHNOLOGY SYSTEM SDN BHD

P.T. No. 12186H.S.(D) 11480Mukim and District of Bentong, State ofPahang Darul Makmur

Leasehold Land (Industrial)(Duration - 66 Years)(Exp - date 5/10/2059)

Land area:25,657 sq. metresGross Building area:5,806 sq. metres

14 Years Office cum factory

3,642 23/12/2003

EMPIRE DELUXE SDN BHD


Freehold land Land area:12,140 sq. metresGross Building area:9,863 sq. metres

17 Years Factory 5,886 5/4/2007


Authorised Share Capital : RM1,000,000,000.00Issued and Paid-up Capital : RM438,361,072.00Class of Share : Ordinary Shares of RM1.00 eachVoting Right : One Vote per Ordinary Share held

ANALYSIS OF SHAREHOLDINGSas at 1 March 2010

Size of HoldingsNo. of

Shareholders (%)No. of

Shares (%)

1 – 99 794 4.49 31,367 0.01100 – 1,000 8,045 45.50 2,562,669 0.581,001 – 10,000 5,796 32.78 32,039,925 7.3110,001 – 100,000 2,648 14.97 85,062,742 19.40100,001 – 21,918,052 (*) 397 2.25 243,664,369 55.5921,918,053 and above (**) 3 0.01 75,000,000 17.11

17,683 100.00 438,361,072 100.00

NOTES: * Less than 5% of the issued and paid-up share capital ** 5% and above of the issued and paid-up share capital

30 LARGEST SHAREHOLDERSas at 1 March 2010

Names No. of Shares (%)

1. AMSEC Nominees (Tempatan) Sdn Bhd AmBank (M) Berhad for Kumpulan Perangsang Selangor Berhad

30,000,000 6.84

2. AMSEC Nominees (Tempatan) Sdn Bhd AmBank (M) Berhad for Ang Lam Poah

23,000,000 5.25

3. AMMB Nominees (Tempatan) Sdn Bhd AmBank (M) Berhad for Original Invention Sdn Bhd

22,000,000 5.02

4. OSK Nominees (Tempatan) Sdn BerhadPledged securities account for Ang Ken Seng

13,000,000 2.97

5. Malaysia Nominees (Tempatan) Sendirian BerhadPledged securities account for Kumpulan Perangsang Selangor Bhd

13,000,000 2.97

6. Kumpulan Perangsang Selangor Berhad 11,851,000 2.70

7. AMSEC Nominees (Tempatan) Sdn BhdPledged securities account for Upper Prestige Sdn Bhd

6,638,100 1.51

8. AMSEC Nominees (Tempatan) Sdn BhdPledged securities account for Lee Ching Leng

6,000,000 1.37

9. Kenanga Nominees (Tempatan) Sdn Bhd Kenanga Capital Sdn Bhd for Jamian Bin Mohamad @ Md. Semaal

5,205,000 1.19

Analysis of Shareholdingsas at 1 March 2010


Analysis of Shareholdings (cont’d)as at 1 March 2010

Names No. of Shares (%)

10. Ang Lam Keong 5,000,000 1.14

11. AMSEC Nominees (Tempatan) Sdn BhdAmBank (M) Berhad for Ang Ken Seng

5,000,000 1.14

12. AMSEC Nominees (Tempatan) Sdn BhdPledged securities account for Jamian Bin Mohamad @ Md. Semaal

5,000,000 1.14

13. Ang Ken Seng 4,329,559 0.99

14. AMSEC Nominees (Tempatan) Sdn BhdPledged securities account for Gan Cheng See

4,000,000 0.91

15. Beh Eng Par 3,805,900 0.87

16. Ang Lam Poah 3,800,002 0.87

17. AMSEC Nominees (Tempatan) Sdn BhdPledged securities account for Jamian Bin Mohamad @ Md. Semaal

3,500,000 0.80

18. Chong Haw Shan 3,441,600 0.79

19. Citigroup Nominees (Asing) Sdn BhdCBNY for Dimensional Emerging Markets Value Fund

3,438,000 0.78

20. Sulaiman Bin Abu Bakar 3,300,000 0.75

21. Mohd Fazil Bin Shafie 3,000,000 0.68

22. OSK Nominees (Tempatan) Sdn BerhadPledged securities account for Chen Cheong Fat

2,600,000 0.59

23. Ang Chei Lee 2,580,000 0.59

24. Scotia Nominees (Tempatan) Sdn BhdThe Bank of Nova Scotia Bhd

2,570,094 0.59

25. Tan Eng 2,500,000 0.57

26. Lee Eng Han 2,500,000 0.57

27. Ang Lily 2,500,000 0.57

28. Ang Lam Aik 2,500,000 0.57

29. AMSEC Nominees (Tempatan) Sdn BhdPledged securities account for Yip Yew Kin @ Justin

2,500,000 0.57

30. Goh Theow Hiang 2,394,508 0.55

200,953,763 45.85


DIRECTORS’ SHAREHOLDINGas at 1 March 2010

Direct Interest Indirect InterestNames of Directors No. of Shares (%) No. of Shares (%)

Dato’ Zolkipli Bin Abdul - - - -

Ang Lam Poah ^26,800,002 6.11 - -

Ang Lam Aik 2,500,000 0.57 - -

Dato’ Razali Merican Bin Naina Merican - - *25,000,000 5.70

Dato’ Azman Bin Mahmood - - - -

Liew Jee Min @ Chong Jee Min - - - -

Datuk Kamarulzaman Bin Zainal - - - -

Tan Sri Dato’ Seri Law Hieng Ding - - - -

NOTES:

^ 23,000,000 shares held through AMSEC Nominees (Tempatan) Sdn Bhd* Deemed interest by virtue of his shareholdings in Original Invention Sdn Bhd

SHARES IN RELATED CORPORATION

None of the above Directors has any direct interest in shares in the related corporation as at 1 March 2010.

SUBSTANTIAL SHAREHOLDERSas at 1 March 2010

Direct Interest Indirect Interest Names of Substantial Shareholders No. of Shares (%) No. of Shares (%)

1. Kumpulan Perangsang Selangor Berhad 54,851,000 12.51 - -

2. Datuk Ang Ken Seng 22,329,559 5.09 - -

3. Ang Lam Poah ^26,800,002 6.11 - -

4. Original Invention Sdn Bhd 25,000,000 5.70 - -

5. Dato’ Razali Merican Bin Naina Merican - - *25,000,000 5.70

NOTES:

^ 23,000,000 shares held through AMSEC Nominees (Tempatan) Sdn Bhd* Deemed interest by virtue of his shareholdings in Original Invention Sdn Bhd

Analysis of Shareholdings (cont’d)as at 1 March 2010


Notice of the Eighth Annual General Meeting

NOTICE IS HEREBY GIVEN THAT the Eighth Annual General Meeting of the Company will be held at Royal Ballroom, Kelab Golf Sultan Abdul Aziz Shah, No. 1, Rumah Kelab, Jalan Kelab Golf 13/6, 40100 Shah Alam, Selangor Darul Ehsan on Tuesday, 20 April 2010 at 11.30 a.m. for the purpose of considering the following businesses:

1. To receive the Audited Financial Statements for the financial year ended 31 October 2009 together with the Reports of the Directors and Auditors thereon.

2. To re-elect the following Directors who are retiring pursuant to Article 101 of the Company’s Articles of Association:(i) Dato’ Zolkipli Bin Abdul Resolution 1(ii) Ang Lam Poah Resolution 2(iii) Liew Jee Min @ Chong Jee Min Resolution 3

3. To approve the payment of Directors’ Fees. Resolution 4

4. To re-appoint Messrs Baker Tilly Monteiro Heng as Auditors of the Company for the ensuing year and to authorise the Directors to fix their remuneration.

Resolution 5

As Special Business:To consider and if thought fit, pass the following resolutions:

5. ORDINARY RESOLUTION NO. 1Re-appointment of Tan Sri Dato’ Seri Law Hieng Ding as Director

Resolution 6

“THAT pursuant to Section 129(6) of the Companies Act, 1965, Tan Sri Dato’ Seri Law Hieng Ding be re-appointed as a Director of the Company to hold office until the conclusion of the next Annual General Meeting.”

6. ORDINARY RESOLUTION NO. 2Authority to issue shares pursuant to Section 132D of the Companies Act, 1965

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

Resolution 7

By Order of the Board

LEONG OI WAH (MAICSA 7023802)TAI LI CHING (MAICSA 7053542)Company SecretariesPetaling Jaya29 March 2010

Notes:

1. A member of the company who is entitled to attend and vote at this meeting is entitled to appoint a proxy or in the case of a corporation a duly authorised representative to attend and to vote in his stead. The proxy need not be a member of the Company and Section 149(1)(b) of the Companies Act, 1965 shall not apply.

2. When a member appoints two or more proxies, the proxies shall not be valid unless the member specifies the proportion of his shareholdings to be represented by each proxy.

3. The instrument appointing proxy shall be in writing under the hands of the appointed or of his attorney duly authorized in writing or, if such be executed appointed is a corporation under its common seal, or the hand of its attorney.

4. The instrument appointing a proxy together with the power of attorney (as the case may be) must be deposited at the Share Registrar of the Company at Level 17, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur at least 48 hours before the time appointed for holding the meeting or adjourned meeting.

NOTES ON SPECIAL BUSINESS

The proposed Ordinary Resolution 6, if passed will enable Tan Sri Dato’ Seri Law Hieng Ding to continue in office until the next annual general meeting.

The proposed Ordinary Resolution 7 will give powers to the Directors to issue up to a maximum ten per centum (10%) of the issued share capital of the Company for the time being for such purposes as the Directors would consider in the best interest of the Company. This authority, unless revoked or varied by the Company at a general meeting, will expire at the next Annual General Meeting of the Company.

The general mandate sought for issue of securities is a renewal of the mandate that was approved by the shareholders on 28 April 2009. The Company did not utilize the mandate that was approved last year. The renewal of the general mandate is to provide flexibility to the Company to issue new securities without the need to convene separate general meeting to obtain its shareholders’ approval so as to avoid incurring additional cost and time. The purpose of this general mandate is for possible fund raising exercises including but not limited to further placement of shares for purpose of funding current and/or future investment projects, working capital and/or acquisitions.

This Page is left blank intentionally

PROXY FORM

*I/We (Full Name in Block Letters) of

(Address) being a

member / members of JAKS Resources Berhad hereby appoint *Mr/Ms

of

(the next name and address should be completed where it is desired to appoint two/more proxies)

or *Mr/Ms of

or failing *him/*her/*them, the Chairman of the Meeting as *my/our *proxy/proxies to attend and vote for *me/us on *my/our behalf, and if necessary, to demand a poll, at the Eighth Annual General Meeting of the Company to be held at Royal Ballroom, Kelab Golf Sultan Abdul Aziz Shah, No. 1, Rumah Kelab, Jalan Kelab Golf 13/6, 40100 Shah Alam, Selangor Darul Ehsan on Tuesday, 20 April 2010 at 11.30 a.m. and at any adjournment thereof.

*I/We direct *my/our *proxy/proxies to vote for or against the Resolutions to be proposed at the meeting as indicated hereunder. If no specific direction as to voting is given or in the event of any item arising not summarized below, *my/our *proxy/proxies may vote or abstain from voting at his/her discretion.

No. Resolutions For# Against#

1. Re-election of Dato’ Zolkipli Bin Abdul as Director

2. Re-election of Ang Lam Poah as Director

3. Re-election of Liew Jee Min @ Chong Jee Min as Director

4. To approve Directors’ Fees

5. Re-appointment of Auditors

6. Re-appointment of Tan Sri Dato' Seri Law Hieng Ding as Director

7. Approval to issue shares pursuant to Section 132D of the Companies Act, 1965

# Please indicate your vote “For” or “Against” with an “X” within the box provided.* Delete if not applicable

Signed this day of 2010 Signature/Common Seal of Shareholder(s)

Notes: -

1. A member of the company who is entitled to attend and vote at this meeting is entitled to appoint a proxy or in the case of a corporation a duly authorised representative to attend and to vote in his stead. The proxy need not be a member of the Company and Section 149(1)(b) of the Companies Act, 1965 shall not apply.

2. When a member appoints two or more proxies, the proxies shall not be valid unless the member specifies the proportion of his shareholdings to be represented by each proxy.

3. The instrument appointing proxy shall be in writing under the hands of the appointed or of his attorney duly authorized in writing or, if such be executed appointed is a corporation under its common seal, or the hand of its attorney.

4. The instrument appointing a proxy together with the power of attorney (as the case may be) must be deposited at the Share Registrar of the Company at Level 17, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200, Kuala Lumpur at least 48 hours before the time appointed for holding the meeting or adjourned meeting.

JAKS RESOURCES BERHAD585648-T

Number of Shares Held

JAKS RESOURCES BERHAD (585648-T)

C/O TRICOR INVESTOR SERVICES SDN BHD

Level 17, The Gardens North Tower,Mid Valley City, Lingkaran Syed Putra,59200, Kuala Lumpur

affix postage

here

Fold here

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Annual Report 2009

JAKS RESO

URCES BERH

AD

(585648-T)

Annual Report

2 0 0 9

http://www.jaks.com.my

JAKS RESOURCES BERHAD (585648-T)Lot 526 Persiaran Subang Permai,Sungai Penaga Industrial Park, USJ 1,47600 Subang Jaya, Selangor Darul Ehsan,Malaysia.

Tel : 03 - 5633 1988 | Fax : 03 - 5633 3571