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Greener Future

PJBUMI BERHAD(141537-M)


Annual Report

2011

towards a

Tingkat 5, Lot 10, Bangunan BKA,Jalan Astaka U8/84, Seksyen U8, Bukit Jelutung,40150 Shah Alam Selangor.Tel : +603 - 78475740Fax : +603 - 78474597Website : www.pjbumi.com.my

Contents

Corporate Information 03

Corporate Structure 04

Directors and CEOs Profile 05

Financial Statistics (Group) 07

Chairmans Statement 08

2011 Operations Review 10

Corporate Social Responsibility 12

Calendar of Events 15

Statement of Corporate Governance 17

Audit Committee Report 21

Statement on Internal Control 24

Additional Compliance Statement 26

Notice of Twenty-Seventh Annual General Meeting 27

Financial Statements 30

List of Properties 80

Shareholdings Analysis 81

Proxy Form

Vision & Mission

At PJBumi we are committed to upholding a proud

tradition of being the countrys leading integrated provider

of products and services relating to the efficient and

effective management of our environment. In addition

to our aim to provide continuous and outstanding cost

effective services to our customers nationwide, we remain

steadfast in our social responsibility to contribute back to

the community in order to ensure the existence of a more

caring and responsive society.

To be a world class total environmental solution provider.

Vision

Mission

Corporate Information

AUDIT COMMITTEE

ChairmanDatuk Abdul Hamid Bin Sawal

MembersHaji Zaid Bin AbdullahIr. Haji Mohd Nor @ Ghazali Bin Omar

NOMINATION COMMITTEE

ChairmanIr. Haji Mohd Nor @ Ghazali Bin Omar

MembersDatuk Abdul Hamid Bin Sawal

REMUNERATION COMMITTEE

ChairmanHaji Johar Bin Yusof

MembersIr. Haji Mohd Nor @ Ghazali Bin Omar

AUDITORS

Messrs Ernst & YoungChartered Accountants Level 23A, Menara Millenium, Jalan Damanlela, Pusat Bandar Damansara, 50490, Kuala LumpurTel : 03-7495 8000Fax : 03-7495 8650

STOCK EXCHANGE LISTING

Main Market ofBursa Malaysia Securities BerhadSTOCK CODE: PJBUMISTOCK NUMBER: 7163

PRINCIPAL BANKERS

Affin Bank Berhad (20546 T)AmBank Berhad (8515 D)RHB Bank Berhad (6171 M)CIMB Bank Berhad (13491 P)Malayan Banking Berhad (3813 K)

BOARD Of DIRECTOR

COMPANY SECRETARIES

Lim Seck Wah(MAICSA 0799845)

Hamsiah Binti Khalid(MIA 13604)

REGISTERED OffICE

Tingkat 5, Lot 10, Bangunan BKA,Jalan Astaka U8/84, Section U8,Bukit Jelutong, 40150 Shah Alam,Selangor Darul EhsanTel : 03-7847 5740Fax : 03-7847 4597

SHARE REGISTRAR

Symphony Share Registrars Sdn Bhd(Company No.: 378993 D)Level 6, Symphony House,Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301, Petaling Jaya, Selangor Tel : 03-7841 8000Fax : 03-7840 8151

HAJI ZAID BIN ABDULLAH

HAJI JOHAR BIN YUSOf

Ir. HAJI MOHD NOR @ GHAZALI BIN OMAR

DATUK ABDUL HAMID BIN SAWAL

Non-Independent Non-Executive Chairman

Non-Independent Non-Executive Director

Independent Non-Executive Director

Independent Non-Executive Director

03PJBUMI BERHAD ANNUAL REPORT 2011


100%PJBUMI COMPOSITESSDN BHD

100%PJBUMI SERVICESSDN BHD

15.79%ALAM FLORASDN BHD

100%PJBUMI WASTE MANAGEMENTSDN BHD

Corporate Structure

04 PJBUMI BERHAD ANNUAL REPORT 2011

Haji Zaid joined the Board on 27 February 2008. He graduated with a Bachelor of Economics (Accounting) and Advanced Diploma in Accounting from the University of Malaya and is a Chartered Accountant by profession. He was the Director of Finance in Shapadu Corporation from 1978 to 1982 and was then promoted to Group Executive Director of Shapadu Group of Companies, a position he upheld until he left in 1992 and develop Progressive Impact Corporation Group.

He is also the Group Executive Chairman and major shareholder of Progressive Impact Corporation Berhad. He has an indirect interest of 15,100,000 ordinary shares via Progressive Impact Corporation Berhad in PJBumi. He has no conflict of interest with PJBumi and has no convictions of offences within the past ten (10) years except for the traffic offences.

He joined the Board on 26 March 2008 as Group Managing Director and was re-designated to Non-Independent Non-Executive Director on 7 January 2011.

He holds Bachelor in Electrical Engineering from University of Miami, Florida, USA and Master in Business Administration (Finance) from International Islamic University of Malaysia. He has vast experience in oil & gas industry especially in project management and business development.

He is also a Director of Progressive Impact Corporation Berhad. He has no family relationship with other directors or major shareholders of PJBumi. He has no conflict of interest with PJBumi and has no convictions of offences within the past ten (10) years except for the traffic offences.

HAJI ZAID BIN ABDULLAH61, MalaysianNon-Independent Non-Executive ChairmanMember of the Audit Committee

HAJI JOHAR BIN YUSOf47, Malaysian

Non-Independent Non-Executive DirectorChairman of the Remuneration Committee

Directors and CEOs Profile


He joined the Board on 25 April 2008 as Independent Non-Executive Director. He graduated with Master Engineering (Water Use Management) from University of Roorkee, India and Bachelor of Science (Civil Engineering)(Hons) from University of Glasgow, Scotland. He has wide experience in hydraulics, hydrology and water resources engineering such as flood mitigation, storm water treatment, rural and agricultural drainage. He is also involved in the planning, implementation and operation of irrigation projects through his various capacities with departments of Irrigation & Drainage Malaysia.

He does not hold any directorship in other public listed Company. He has no family relationship with other directors or major shareholders of PJBumi. He has no conflict of interest with PJBumi and has no convictions of offences within the past ten (10) years except for the traffic offences.

Mohamed Nasir joined the Company on 4 January 2012. He graduated with a Bachelor of Engineering (Mechanical) from the University of Queensland, Australia. He has wide experience in operations varies palm oil industries and manufacturing industries. He joins Perwaja Steel Sdn. Bhd in 1985 and the last position he held is as Deputy Corporate Director (Kemaman Operations). In 1998, he joins Golden Hope Plantation Berhad as General Manager (CEO). He is also involved in the planning, implementation and operation of waste collection sector when he joins Alam Flora Sdn. Bhd. as General Manager Operations in November 2007 until May 2011.

He is also a Chief Operation Officer of Progressive Impact Corporation Berhad. He has no family relationship with other directors or major shareholders of PJBumi. He has no conflict of interest with PJBumi and has no convictions of offences within the past ten (10) years except for the traffic offences.

He joined the Board on 31 May 2010 as Independent Non-Executive Director. He graduated with a Bachelor of Economics (Accounting) from the University of Malaya and MBA in Agribusiness from University of Santa Clara, California, USA. He joined the Malaysian civil service in 1971 and initially served in the Ministry of Finance (Treasury) and later was transferred to the Accountant Generals Department. In 1974, he joined the Ministry of Primary Industries and in 1989, he was transferred to the Economic Planning Unit in the Prime Ministers Department as Head of Privatization Task Force. He was appointed as Deputy Director General (Sectoral) in the Economic Planning Unit in 1997. In June 1999, he was transferred back to the Ministry of Primary Industries as Deputy Secretary General and was seconded to the Malaysian Rubber Board as the Director General in January 2000 and served until his retirement from the public service in January 2006.

He is also a Director of Progressive Impact Corporation Berhad. He has no family relationship with other directors or major shareholders of PJBumi. He has no conflict of interest with PJBumi and has no convictions of offences within the past ten (10) years except for the traffic offences.

Ir. HAJI MOHD NOR @ GHAZALI BIN OMAR63, MalaysianIndependent Non-Executive DirectorChairman of the Nomination CommitteeMember of the Audit CommitteeMember of the Remuneration Committee

MOHAMED NASIR BIN WAN IDRUS50, MalaysianChief Executive Officer

DATUK ABDUL HAMID BIN SAWAL64, Malaysian

Independent Non-Executive DirectorChairman of the Audit Committee

Member of the Nomination Committee

Directors and CEOs Profile (contd)


13,758

1,887

7,442

2011 2010 2009 2008

REVENUE (RM000) 23,087 28,853 26,601 17,420

NET PROfIT/(LOSS) fOR THE YEAR (RM000) -765 3,754 1,081 -4,342

LIQUIDITY:Current Ratio 0.29 0.33 0.54 1.24

PROfITABILITY:Operating Expenses Ratio (%) Operating Profit Margin (%) Return on Capital Employed (%)

28-313

371313

6344

61-25-18

BASIC EARNINGS PER SHARE (sen) -1.53 7.51 2.16 -8.68

NET ASSET PER SHARE ATTRIBUTABLE TO ORDINARYEQUITY HOLDERS Of THE COMPANY (RM)

0.51 0.58 0.50 0.48

SHARE PRICES AS AT 31 DECEMBER (RM) 0.21 0.21 0.32 0.40

SEGMENTAL REVENUE (RM000):Manufacturing & CompositesConstruction, Maintenance & DesignWaste Management Services

13,7581,8877,442

16,2374,5498,067

13,014 4,344 9,243

7,390

2,259 7,771

fOUR YEARS fINANCIAL STATISTICS (GROUP)

Financial Statistics (Group)

YEARLY PERFORMANCE OF GROUPS REVENUE (RM000) YEARLY PERFORMANCE OF GROUPS PROFITABILITY (RM000)

SEGMENTAL REVENUE (RM000)

30,000

25,000

20,000

15,000

10,000

5,000

-2011 2010 2009 2008

26,601

23,087

28,853

17,420

10,000

5,000

-

-5,000

-10,0002011 2010 2009 2008

1,081

-765

3,754

-4,342

18,000

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

-

-2,0002011 2010 2009 2008

13,014

16,237

7,390

4,3444,549

2,259

9,2438,076

7,771

MANUFACTURING

CONSTRUCTION, MAINTENANCE & DESIGN

WASTE MANAGEMENT SERVICES


2011 has been a challenging year for PJBUMI to sustain its market share and profitability. The major shift in the Selangor government policy on solid waste management and lesser expenditure in the public sector infrastructure development have an adverse impact on the performance of the company especially in the manufacturing segment of package sewage treatment plants.

To move forward in the competitive sewerage market PJBUMI has undertaken a bold step to provide total solution to our customer by securing many design and build contracts.

On the positive note the group will continue to focus on the business turn around strategy and accelerate its growth in the highly profitable business segment such as operation and maintenance of sewage treatment plant, and retrofitting and upgrading of existing sewage treatment plants in order to increase our revenue.

fINANCIAL PERfORMANCE

In financial year of 2011 (FY 2011), PJBUMI Groups revenue drop by 20% to RM23.67 million from RM28.85 reported in the previous year. The revenue decreased drastically during the financial year been contributed by our Composites & Manufacturing sector which covers 60% of the total revenue in 2011. As for Waste Management sector, Alam Flora continues to be our most important partner in solid waste management i.e for area cleansing and collection business.

During the year under review, PJBUMI Group recorded a net loss RM0.765 million compare to RM3.75 million in 2010. Again, decreasing in Public Sector expenditure and Solid Waste Management policy in Selangor has results the Groups net loss in FY 2011.

BUSINESS GROWTH

We believe PJBUMI could have a strong presence in the area of operation and maintenance of sewage treatment plants. PJBUMI has a large installed base of package sewage treatment plants most of them may need to be refurbished or upgraded. The Business Development and the Operation Team are focusing in this business segment to increase the revenue and profitability. The stringent effluent discharge standard by government agencies requires the sewage treatment plants to be refurbished and maintained by competent companies. This provides greater opportunity for our business growth in the years ahead.

Dear Valued Shareholders,

On behalf of the board of directors, it is my privilege and honour to present PJBumi Berhads Annual Report and Audited financial Statements at the Group and Company level for the financial year ended 31 December 2011.

Chairmans Statement


fUTURE PLAN

The Group will continue to adhere to its determinants for improvement in the financial results, cash flow as well as in the business performance which in turn can appreciate higher rates of return that our investors expected from the business. Our future plans will ensure that we continue to deliver on the expectation of all stakeholders and expect a greater demand from our customers, especially when resolving environmental issues become urgent and important.

CORPORATE SOCIAL RESPONSIBILITY

The Group believes that effective corporate responsibility can deliver benefits to its businesses and, in turn, to its shareholders, by enhancing reputation and business trust, risk management performance, relationships with regulators, staff motivation and attraction of talent, customer preference and loyalty, the goodwill of local communities and long-term shareholder value. Most importantly, the Board and management team require that all its practices give due consideration to the interest of the Groups stakeholder, ensuring all business objectives are pursued with integrity and full compliance with the law and forward thinking as possible.

CORPORATE GOVERNANCE AND INVESTOR RELATIONS

The Group remains committed to uphold and maintain its good corporate governance track record through timely objective reporting and constant communications with all its stakeholders.

DIVIDENDS

Based on our financial performance and cash flow position hereby reported, the directors do not recommend any payment of dividends in respect of the financial year ended 31 December 2011.

ACKNOWLDGEMENT

On behalf of the board, we would like to take this opportunity to express our appreciation to all our employees for their tireless & continuous dedication, support, commitment and efforts in developing the Group in 2011.

My appreciation also goes to my fellow Directors for their invaluable counsel and business insights during the year. I would also like to extend a warm welcome to Encik Mohamed Nasir bin Wan Idrus which has been appointed as Chief Executive Officer on 4 January 2012 . We look forward to his contributions and services to our Group.

We wish to thank our valued customers, suppliers, bankers, business associates and other stakeholders for their support and loyalty and look forward to their continued trust and support.

Finally, to our dear shareholders, our special thanks to all of you, for the continuous support and confidence in the Group and we assure you that we will continue to work to uphold your trust in us.

Thank you.

Haji Zaid bin AbdullahChairman

Chairmans Statement (Contd)


Since 2008 the inception of 7-paradigm strategy as a core business operation fundamental, PJBUMI has continuously enhanced these paradigms in order to sustain its business performance in the competitive market. Time and again the application of the 7-paradigm has helped us to overcome many business operation challenges we faced in 2011. We will continue to revisit the 7-paradigm strategy towards building a sustainable growth.

2011 Operations Review

THE 7-PARADIGM STRATEGY

GrowthMargin

Cash

Legal Management

Velocity

Assets disposal

Excellent Customer

Management


BUSINESS OPPORTUNITIES AND GROWTH

In PJBUMI we continuously find our business opportunities in the three main business segment which are 1) Package Sewage Treatment Plant using Hi-Kleen, SATS and Super-Sept, 2) operation and maintenance of sewage treatment plant including upgrading works, and 3) large size sewage treatment plant using SCBA/SDO technology for new and existing development.

The innovative hybrid wastewater technology of SUPER DISSOLVED OXGEN system (SDO) has given us a competitive edge to grow our business in the upgrading and retrofitting of existing sewage treatment plant segment. We have successfully installed the SDO system in a number of upgrading projects in 2011. The performance of the SDO system is fantastic and given greater value to our customer in term of cost, space and performance. And the SDO technology has yield higher profitability on the related projects. We strongly believe the SDO technology will pave the way towards profitable growth in the years ahead.

PEOPLE, PROCESS AND PERfORMANCE

Our goal to establish a brand new work culture since 2008 with the people, process and performance enhancement has going through continuous improvement in order to meet the customer needs. Teamwork has been emphasized to deliver results. We have organized various trainings and motivation programs for our people across the board in order to be optimistic and effective in a challenging time. The Design and Consultancy team were trained to explore various wastewater technology application using the SDO technology.

The Key Account Management team, Customer Satisfaction team and Peak Performance teams are the cornerstones of our growth culture to ensure we deliver on time the promises we made to our customers. We deliver our expertise and promising our quality to the customer is our new image to remaining competitive.

2011 Operations Review (Contd)


PJBUMI remains deeply committed to corporate social responsibility (CSR)to acting responsibly, operating sustainably, and contributing to the communities in which we work and live. We have witnessed the positive impact that CSR has had on our employees, communities, the environment, and also our business. That is why we believe that CSR is both our responsibility and a competitive differentiator.

At the core of our CSR efforts, we use the same expertise, technology, and partnerships that we use in working with our customers. We believe this is the best way for us to have the greatest impact, because we know that an intelligent network is not only a powerful tool for doing business, but also for transforming lives, building communities, and protecting the environment.

Corporate Social Responsibility


Environmental sustainability is enhanced through our products and solutions, which help PJBUMI and our customers, reduce energy consumption, reduce land area usage and save money. We are proud to say that our commitment to manage the social and environmental aspects of our business in our characteristically ethical and responsible way.

We are committed to protecting the health and wellbeing of all our employees. We do this by providing an essential Staff Working Gear to our staff. We provide insurance covering working accident coverage to eligible employees. We have established a Safety, Health and Workplace policy to ensure safety working environment and zero accident in work place. In ensuring the policy been adhered to a committee has been set-up. In line with company policy and objective, PJBumis employees who are required to enter various hazardous / high risk facilities have attended the relevant safety training conducted by NIOSH and CIDB.

Corporate Social Responsibility (Contd)

At PJBUMI, we promote collaborative leadership through programs such as the CEO Talk and Kursus Pencetus Perkasa DIri (KPPD). It is essential that all employees understand our goals and expectations, and we must listen to their feedback, especially in times of change. Our annual Staff Satisfaction survey is one of the most important listening tools at PJBUMI. It is a confidential, survey for all employees that help leaders pinpoint the most effective ways to improve the employee experience and satisfaction. To encourage talented employees to build their careers with PJBUMI, we promote opportunities for career progression within the company through Annual Staff Appraisal programmed.


Corporate Social Responsibility (Contd)

At PJBUMI, we also contribute to social development as a part of our responsibilities. In July 2011, we conduct a programmed Semai Kasih 2011 at Pusat Perlindungan Persatuan Kebajikan Anak-Anak Pesakit HIV and Aids Nurul Iman (Pernim) at Kampung Cheras Baru, Kuala Lumpur. During the programmed we share our time and happiness as a part of our responsibilities to the community. We are committed to extend this programmed as our annual activities to develop awareness to our staff and share our happiness with community.

This year was clearly not without its challenges. We had to take some necessary but difficult steps to streamline our business in order to remain fully focused on delivering the best to our customers, shareholders, employees, partners, and the global community. That is why we instigated a series of decisive actions that included simplifying our organizational and operating model to make PJBUMI easier to work for and do business with. We deliver our expertise and promising our quality to the customer is our new image to remaining competitive.

We believe that by integrating CSR into our business, we not only benefit the communities in which we work and the planet on which we live, but we also benefit our business. Our CSR engagements are opportunities to apply and showcase the power of the network, and the societal and environmental relevance of our products.

We also build stronger relationships with our customers and partners, government and business leaders, and our employees through our CSR activities. And more than ever, PJBUMIs genuine, long-term commitment to CSR is a key influencer on how people feel about our company and brand.

At PJBUMI, we continue to change the way the world works, lives, plays, and learns. Therein lays the challenge and our opportunity to use the network to multiply our impact on both business and society.


JanuaRy 2011

aPRIl 2011

MaRCh 2011

CalendarOf Events

PJBumi organize Family Days held at Sg. Petani, Kedah

PJBumi has participated in the IBS Exhibition 2011 at CIDB Convention Centre.

PJBumi has participated in the Malaysia Water Exhibition 2011 at PWTC.

We are the champion for the Badminton Tournament Inter PICORP Group of Companies.

PJBumi has participated in the Hari Air Sedunia 2011 held in Pekan, Pahang

Calendar Of Events

JunE 2011

auGuSt 2011

OCtObER 2011

aPPRECIatIOn

PJBumi has received a visit from IWK at Jusco Balakong Plant.

An annual event i.e Pesta Pantun Raya held in conjunction of Hari Raya Aidilfitri 2011.

PJBumi has arranged a visit to PERNIM at Kg. Baru Cheras, Kuala Lumpur

Our monthly birthday celebration from January- December 2011

SEPtEMbER 2011

PICORP Group Hari Raya Open House.

We participate in Volley Ball Inter PICORP Group of Companies.

May 2011

An annual event i.e PJBumi Outing Day at Taman Cahaya Seri Alam, Bukit Cerakah

Fruits Festival is a part of our contribution on promoting and supporting our local fruits besides gathering our people together.

Statement Of Corporate Governance

INTRODUCTION

The Board of Directors (the Board) recognizes the importance of Corporate Governance in conducting the day to day business and affairs of the Group. Thus at all times practice of good corporate governance is the main priority in safeguarding and enhancing the shareholders value and protecting the interest of other stakeholders.

In line with the Listing Requirement of Bursa Malaysia Securities Berhad, the Board wishes to report on the manner the Group has maintained the standard of corporate governance by supporting and implementing the prescriptions of the principles and best practices set out in the Malaysian Code of Corporate Governance (the Code).

BOARD OF DIRECTORS

1. Duties of Board of Directors

The Group is headed by an effective Board which leads and controls the activities of the Group. The Board provides strategic direction for the Group and regularly meets to review corporate and operational strategies as well as to ensure that the necessary financial and other resources are made available to the management to enable them to meet the Groups objectives.

2. Board Meetings

The Board meets at least four (4) times a year, with additional meetings convened as necessary. During the financial year under review, the Board meets six (6) times. The composition of the Board and individual Directors attendance of meetings during the financial year ended 31 December 2011 were as follows:-

*Meetings Attended (Out of six (6) held)

Haji Zaid Bin Abdullah Non-Independent Non-Executive Chairman 6/6Haji Johar Bin Yusof Non-Independent Non-Executive Director 6/6Ir.Haji Mohd Nor @ Ghazali Bin Omar Independent Non-Executive Director 6/6Datuk Abdul Hamid Bin Sawal Independent Non-Executive Director 6/6Hajjah Zaidah Binti Mohd Salleh Resigned w.e.f. 28.09.2011

Alternate Director to Haji Zaid Bin Abdullah -

* Meetings held on 23/02/2011, 13/04/2011, 23/05/2011, 20/07/2011, 18/08/2011 and 18/11/2011.

3. Supply of Information

The Board members are updated on the Companys activities and its operations on a regular basis. All Directors have access to all information of the Company on a timely basis in an appropriate form and quality necessary to enable them to discharge their duties and responsibilities. All Directors have access to the advice and services of the Company Secretaries and to obtain independent professional advice, whenever necessary, at the expense of the Company.

4. Board Composition

The Board is currently has four (4) members comprising of one (1) Non-Independent Non-Executive Chairman, one (1) Non-Independent Non-Executive Director and two (2) Independent Non-Executive Directors.

The Boards composition fully complies with the Listing Requirements of Bursa Malaysia Securities Berhad. The presence of Independent Non-Executive Directors provides impartial views and advice to ensure that minority shareholders interests are adequately represented. Their deliberation will take into account the long term interest of the shareholders, employees, customers and the communities in which the Group conducts its business.

There is also clear segregation of roles and responsibilities between the Chairman and the Chief Executive Officer to ensure balance of power and authority exist.

The Chief Executive Officer is primarily accountable for overseeing the day-to-day operations to ensure the smooth and effective running of the Group as well as carrying out certain responsibility delegated by the Board

The background of each Director and Chief Executive Officer is provided on pages 5 to 6 of this Annual Report


Statement of Corporate Governance (Contd)

5. Appointment to the Board

The Nomination Committee has been established by the Board comprising exclusively Non-Executive Directors, a majority of whom are Independent as follows:-

i. Ir. Haji Mohd Nor @ Ghazali Bin Omar (Chairman) ii. Datuk Abdul Hamid Bin Sawal

The Nomination Committee is primarily responsible for recommending suitable appointments to the Board taking into consideration the Board structure, size, composition and the required mix of expertise and experience, which the Director should bring to the Board. It assesses the effectiveness of the Board as a whole as well as the performance of each Director.

The Board is entitled to the services of the Company Secretary who would ensure that all appointments are properly made upon obtaining the necessary information from the Directors.

6. Re-election

In accordance with the provisions of the Articles of Association of the Company, one-third (1/3) of the Directors for the time being, or if their number is not a multiple of three (3), then the number nearest to one-third (1/3) with a minimum of one (1), shall retire from office and election of Directors shall take place provided always that each Director shall retire from office at least once in every three (3) years but shall be eligible for re-election. Directors over seventy (70) years of age are subject for re-appointment annual in accordance with Section 129(6) of the Companies Act, 1965.

7. Directors Training

All the Directors of the Company have attended the Mandatory Accreditation Programme. The Directors are encouraged to attend continuous education programmes and seminars to keep abreast of relevant changes in laws and regulations and the development in the industry.

The Board is also updated by the Company Secretary on the latest update/amendments on the Main Market Listing Requirements and other regulatory requirements relating to the discharge of the Directors duties and responsibilities.

In addition to the in-house seminars, Directors are also encouraged to attend seminars and/or conferences organized by relevant regulatory authorities and professional bodies to further enhance their skills and knowledge as well as update themselves on new developments in the business environment.

During the financial year ended 31 December 2011, the external training programmes and seminars attended by the Directors are as follows:-

Three (3) directors had attended the following courses during the financial year:

Director Date Course AttendHj Zaid bin Abdullah December Key Amendments to Listing Requirement 2011

Corporate Disclosure Guideline 2011 Hj Johar bin Yusof March CEO Talk Project Management

April CEO Talk Project CostingJune Leadership Training

Datuk Abdul Hamid bin Sawal December Key Amendments to Listing Requirement 2011Corporate Disclosure Guideline 2011

Save for the above, the Director, Ir. Haji Mohd Nor @ Ghazali Bin Omar who had not attended any formal training in 2011 had a busy schedule for 2011. However, the Directors are regularly informed of industry-specific conventions to enable them to understand the industries within which the Group operates.


Statement of Corporate Governance (Contd)

8. Directors Remuneration

In compliance with the Listing Requirements of Bursa Malaysia Securities Berhad, the Board has established a Remuneration Committee. The Committees primary responsibility is to recommend to the Board the remuneration of Directors. However, the final decision on remuneration for Directors is a matter for the Board as a whole and the respective director involved is required to abstain from discussion of his/her own remuneration.

The members of the Remuneration Committee are as follows:-

i. Haji Johar Bin Yusof (Chairman)ii. Ir. Haji Mohd Nor @ Ghazali Bin Omar

The aggregate Directors remuneration for the financial year ended 31 December 2011 are set out below:-

Remuneration (RM)Executive Directors NilNon-Executive Directors 10,000

The remuneration paid to the Directors, analysed in the following bands, is as below:-

Range of Remuneration (RM) Executive Non-Executive50,000 and below 5

SHAREHOLDERS

1. Dialogue with Investors

The Board recognizes the values of the dialogue with investors and shareholders and the importance of accountability to them. As such, the Board is disseminating proper, timely and adequate information to the investors and shareholders through annual report, announcements, circulars to shareholders and press release.

2. General Meetings

The Companys Annual General Meeting (AGM) serves as a principal forum for dialogue with shareholders. Shareholders are encouraged to meet and communicate with the Board at the AGM and to vote on all resolutions. Extraordinary General Meeting is held as and when required.

ACCOUNTABILITY AND AUDIT

1. Financial Reporting

The Directors are responsible to present a true and fair assessment of the Groups position and prospects in the annual reports and quarterly reports. The quarterly financial results were reviewed by the Audit Committee and approved by the Board of Directors prior to submission to Bursa Malaysia Securities Berhad.

A statement by the Directors of their responsibilities in the preparation of financial statements is set out in the ensuing section.

2. Statement of Directors Responsibility for Preparing Financial Statements

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 matter will be further enhanced in the forthcoming year.

During the financial years part of the Companys continuing disclosure obligations under the Listing Requirements of Bursa Malaysia Securities Berhad, the Board ensures that timely and accurate financial information relating to the Groups and Companys quarterly financial results are announced to Bursa Malaysia Securities Berhad. The shareholders and investors are therefore kept abreast of the Companys and the Groups performance throughout the financial year.


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.

3. Internal Control

The Directors are mindful of their responsibilities in relation to the maintenance of a sound system of internal controls which provides reasonable assessment and review of the Companys effectiveness to safeguard shareholders investment and Groups assets. The Board is continuously reviewing the adequacy and integrity of its system of internal controls.

Further details of the state of the system of internal control of the Group are presented on pages 24 to 25 of this Annual Report.

4. Relationship with the Auditors

The Board has established a formal and transparent arrangement for maintaining appropriate relationships with the external auditors in seeking professional advice and ensuring the compliance with the appropriate accounting standards. The Audit Committee met with the external auditors to discuss their audit plan, audit findings and the financial statements.

COMPLIANCE STATEMENT

The Company is committed in achieving high standards of corporate governance throughout the Group and to the highest level of integrity and ethical standards in all its business dealings. The Board considers that the Company has complied with the principles and best practices as set out in parts 1 and 2 respectively of the Code.


Audit Committee Report

AUDIT COMMITTEE

1. Composition

The Audit Committee presently comprises of two (2) Independent Non-Executive and one (1) Non-Independent Non-Executive members of the Board. The composition of the Committee complies with the requirements of Paragraph 15.09 of the Listing Requirements of Bursa Malaysia Securities Berhad (Bursa Securities).

Name of Committee Member DesignationDatuk Abdul Hamid Bin Sawal (Chairman) Independent Non- Executive Haji Zaid Bin Abdullah Non-Independent Non-Executive Ir. Haji Mohd Nor @ Ghazali Bin Omar Independent Non- Executive

2. Role of Audit Committee

The Audit Committee assists, supports and implements the Boards responsibility to oversee the Groups operations in the following manner:-

ProvidesmeansforreviewtheGroupsprocessesforproducingfinancialdata,itsinternalcontrolsandindependenceof the Groups Internal and External Auditors.

ReinforcestheindependentoftheGroupsExternalAuditors. ReinforcestheobjectivityoftheGroupsInternalAuditors.

3. Key Functions and Responsibilities

The key functions and responsibilities of the Audit Committee are as follows:-

Financial Reporting Toreviewthequarterlyandyear-endfinancialstatements,priortotheapprovalbytheBoardofDirectors,focusing

particularly on:- the going concern assumption, - changes in or implementation of major accounting policy changes, - significant and unusual events,- compliance with the applicable approved accounting standards and - other legal and regulatory requirements.

Related Party transaction ToreviewanyrelatedpartytransactionsandconflictofinterestsituationthatmayarisewithintheCompanyorGroup

including any transaction, procedure or course of conduct that raises questions or management integrity.

Audit Report To prepare and review the annual Audit Committee Report for the Boards approval. This includes the terms of

reference, number of meeting held and attended by members and summary of activities for inclusion in the Annual report.

External Auditor Toreviewwhetherthereisreasontobelievethattheexternalauditorsisnotsuitableforreappointment,toconsiderthe

nomination of a person or persons as external auditors and the audit fee and to consider any questions of resignation or dismissal of external auditors.

ToreviewexternalauditplanandscopefortheGroup. ToreviewtheInternalControlStatementfortheGroupfortheinclusionintheAnnualreport. To reviewmatters arising from audit finding and to be satisfiedwith appropriate action taken in response to the

findings.


Audit Committee Report (Contd)

Internal Control To review the audit plan, evaluation of the system if internal controls, audit report and management letter and

management response and any matters that the External Auditors may wish to discuss (in the absence of the management).

Toensurethatsystemofinternalcontrolaresoundlyintact,effectivelyadministeredandconstantlymonitored.

Internal Audit Toreviewtheadequacyofthescopeoftheinternalauditfunction,programme,processesorinvestigationundertaken

and whether or not appropriate action is taken on the recommendations of the internal audit findings.

Other Matters TopromptlyreportsuchmattertotheBursaSecuritiesiftheAuditCommitteeisoftheviewthatthematterreported

by it to the Board of Directors has not been satisfactorily resolved resulting in a breach of the Listing Requirements.

4. Summary of Activities Undertaken by the Audit Committee for 2011

The Audit Committee met five (5) times during the financial year ended 31 December 2011. Attendance by each member of the Audit Committee during the financial year ended 31 December 2011 are as follows:-

Committee Members Number of Meetings AttendedDatuk Abdul Hamid Bin Sawal 5/5Haji Zaid Bin Abdullah 5/5Ir. Haji Mohd Nor @ Ghazali Bin Omar 5/5

Meetings Held on 23/02/2011, 13/04/2011, 23/05/2011, 20/07/2011, 18/11/2011.

The Audit Committee Members were served with the meeting agendas and relevant board papers which were distributed earlier before the meeting. The Company Secretary is the Secretary to all Audit Committee meetings.

During the financial year, the activities of the Audit Committee were as follows:-

(a) Reviewed the audit activities (comprising risk management, control and governance evaluations) carried out and the audit reports to ensure corrective actions were taken in addressing the risk issues reported.

(b) Reviewed with the External Auditors the audit plan of the Company and the Group for the year (inclusive of audit approach, system evaluation, audit fees, issues raised and management responses) prior to the commencement of the annual audit.

(c) Reviewed the financial statements, the audit report, issues and reservations arising from statutory audit with the External Auditors.

(d) Reviewed and recommended for the Boards approval the re-appointment of External Auditors.

(e) Reviewed and recommended for the Boards approval the audit fees for the financial year ended 31 December 2011.

(f) Reviewed the unaudited quarterly results and financial statements with management for recommendation to the Board of Directors for approval and release to Bursa Malaysia Securities Berhad.

(g) Reported to the Board on significant issues and concerns discussed during the Audit Committees meetings together with applicable recommendations. Minutes of meetings were made available to all Board Members.

(h) Reviewed and approved the Audit Committee Report for inclusion in the Companys Annual Report.

(i) Reviewed the disclosure statements on compliance of the Malaysian Code of Corporate Governance and the Statement on Internal Controls for inclusion in the Companys Annual Report.


Audit Committee Report (Contd)

5. Internal Audit Function

The Audit Committee is aware of the fact that an independent and adequately resourced internal audit function is essential to assist in obtaining the assurance it requires regarding the effectiveness of the system of internal control.

The Board has outsourced its internal audit function to an independent professional service firm, Messrs Delloitte Enterprise Risk Services Sdn Bhd. The Internal Auditors report to the Audit Committee at least half yearly. Findings arising from the internal audit review together with the level of concern, the Managements response, recommendations and personnel responsible for implementing corrective actions are presented to the Audit Committee for its review. The costs incurred for the internal audit function for the financial year 2011 is RM17, 850.00.

During the period under review, the Internal Auditors carried out the following activities:-

PresentedandobtainedapprovalfromtheAuditCommitteetheannualinternalauditplan,itsauditstrategyandscopeof audit work.

Performedauditsaccordingtotheannualinternalauditplan,toreviewtheadequacyandeffectivenessoftheinternalcontrol system, compliance with policies and procedures and reported ineffective and inadequate controls and made recommendations to improve their effectiveness.

Monitoredandfollowed-uptoensureManagementimplementedtheactionplansasagreed.


Statement On Internal Control

INTRODUCTION

The Malaysian Code on Corporate Governance requires listed companies to maintain a sound system of internal control to safeguard shareholders investment and Groups assets. Pursuant to Paragraph 15.26(b) of Bursa Malaysia Securities Berhad Main Market Listing Requirements, the Board of Directors (the Board) of PJBumi Berhad and its subsidiaries (the Group) is pleased to make the following statement on the state of internal control of the Group for the financial year ended 31 December 2011.

BOARD RESPONSIBILITY

The Board recognizes that internal control is an integral part of managing risks in an effort to achieve corporate objectives. As such, the Board acknowledges the importance of sound internal controls and risk management practices to good corporate governance. The Board affirms its overall responsibility for the Groups system of internal control and for reviewing its adequacy and integrity to safeguard shareholders investment and the Groups assets.

The system of internal control is designed to manage risks in order to achieve business objectives. However, as with any internal control system, control can only provide reasonable and not absolute assurance against material misstatement or loss.

KEY ELEMENTS OF INTERNAL CONTROL

1. Audit Committee

The Audit Committee that is established by the Board performs an oversight role in maintaining the integrity of the Groups system of internal control. The Audit Committee reviews the quarterly results of the Group and recommends adoption of such results to the Board before announcement to Bursa Malaysia Securities Berhad is made.

2. Risk Management

Risk management is regarded as an integral part of the business operations. Management at all levels have a collective responsibility for creating a risk aware culture and ensuring that business risk assessment becomes an explicit part of decision making process. There is an ongoing process for identifying, evaluating and managing the significant risks faced by the Group for the financial year under review.

3. Internal Audit Functions

The internal audit function is outsourced to Messrs Deloitte Enterprise Risk Services Sdn. Bhd. which focused on principal risks affecting the key business processes of the Group.

The internal audit reports are tabled at the Audit Committee meetings. The Board, through the Audit Committee, conducted reviews of the system of internal control of the Group.

4. Other Key Elements of Internal Control

Other key elements of the system of internal control of the Group include the following:-

Thereisaformalorganizationalstructurewithdelineatedlinesofauthority,responsibilityandaccountabilitywithintheGroup.

Capitalandrevenueexpenditure,acquisitionanddisposalofinvestmentinterestsareallproperlyapprovedbeforetheyare carried out.

TheGroupsperformanceismonitoredthroughanintegratedbudgetingsystemwhichrequiresallmaterialvariancesto be identified and reviewed by management on a quarterly basis.

Monthly management accounts are prepared by Group Finance for the review by executive management whilequarterly results are presented to the Board to monitor the Groups progress towards achieving its objectives.

ExecutiveDirectorsparticipateactivelyinthedailyoperationsoftheGroupandoperationalmeetingswereheldwiththe Senior Management team.


WEAKNESSES IN INTERNAL CONTROLS THAT RESULT IN MATERIAL LOSSES

The Management continues to take measures to strengthen the controls environment. Any internal control weaknesses that were identified were rectified. None of the weaknesses have resulted in any material losses, contingencies or uncertainties that would require disclosure in the Annual Report.

The Board remains committed towards operating a sound system of internal control and have recognized that the system must continuously evolve to support the type of business and size of operations of the Group. The Board will, when necessary, put in place appropriate action plans to further enhance the Groups system of internal control.

Statement On Internal Control (Contd)


Additional Compliance Statement

1. UTILISATION OF PROCEEDS FROM CORPORATE EXERCISE PJBumi did not raise any funds nor conduct any corporate exercise during the financial year under review.

2. SHARE BUY-BACKS PJBumi has not purchase any of its own shares during the financial year under review.

3. OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES There were no options, warrants or convertible securities exercised in respect of the financial year.

4. AMERICAN DEPOSITORY RECEIPT (ADR) /GLOBAL DEPOSITORY RECEIPT (GDR) PJBumi did not sponsor and ADR or GDR programmes during the financial year.

5. IMPOSITION OF SANCTIONS / PENALTIES There were no public impositions of sanctions or penalties imposed on the Company and its subsidiaries, directors or

management by the regulatory bodies during the financial year.

6. NON-AUDIT FEES There were no non-audit fees charged to PJBumi during the financial year under review.

7. PROFIT ESTIMATE, FORECAST AND PROJECTIONS The Company did not announce any profit estimate, forecast or projections during the financial year under review.

8. VARIANCE IN RESULTS There is no significant variance between the profit after tax for the financial statement ended 31 December 2010 and the

unaudited results previously announced.

9. PROFIT GUARANTEE The Company did not give any form of profit guarantee to any parties during the financial year under review.

10. MATERIAL CONTRACTS AND CONTRACTS RELATING TO LOANS There were no contracts relating to loan and material contracts of the Company and its subsidiaries involving the Directors

and substantial shareholders since the end of the previous financial year.

11. RECURRENT RELATED PARTY TRANSACTIONS OF REVENUE AND TRADING NATURE (RRPT)

Details of RRPT conducted pursuant to shareholders mandate during the financial year ended 31 December 2011.

Nature of Relationship

Progressive Impact Corporation Berhad (PICORP) is a substantial shareholder of PJBumi. Haji Zaid, a Director of PJBumi Berhad, owns 54.41% direct and indirect interest in PICORP.

Company Involved

Transacting Parties Nature of Transactions

Interested Related Party

Actual Value Transacted

(RM000)PJBUMI PICORP Provision of waste water treatment

solutions to PJBUMI by PICORPHj Zaid bin Abdullah 3,173


Notice Of Twenty-Seventh Annual General Meeting

NOTICE IS HEREBY GIVEN THAT the Twenty-Seventh Annual General Meeting (AGM) of the Company will be held at Ground Floor, Bangunan BKA, Lot 10, Jalan Astaka U8/84, Bukit Jelutong Business and Technology Centre, 40150 Shah Alam, Selangor Darul Ehsan on Friday, 15th June 2012 at 3.00 p.m. for the following purposes:-

AGENDA 1. To receive the Audited Financial Statements of the Company for the financial year ended 31 December

2011 together with the Reports of the Directors and Auditors thereon.(Please refer

to Note A)

2. To re-elect Haji Zaid Bin Abdullah who is retiring in accordance with the Article 102 of the Companys Articles of Association, and being eligible, offers himself for re-election.

(Resolution 1)

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

(Resolution 2)

AS SPECIAL BUSINESS

To consider, and if thought fit, to pass the following Resolution:-

4. ORDINARY RESOLUTION AUTHORITY TO ISSUE SHARES BY THE COMPANY PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965

(Resolution 3)

THAT pursuant to Section 132D of the Companies Act, 1965 and subject to the approvals of the relevant governmental and/or regulatory authorities, the Directors be and are hereby empowered to issue shares in the Company from time to time and upon such terms and conditions and for such purposes as the Directors may in their absolute discretion deem fit, provided that the aggregate number of shares issued pursuant to this resolution does not exceed ten (10) per cent of the issued share capital of the Company for the time being AND THAT the Directors be and are also hereby empowered to obtain the approval from Bursa Malaysia Securities Berhad for the listing of and quotation for the additional shares so issued AND THAT such authority shall continue in force until the conclusion of the next AGM of the Company.

5. ORDINARY RESOLUTIONPROPOSED RENEWAL OF SHAREHOLDERS MANDATE AND PROPOSED NEW SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE

(Resolution 4)

THAT subject to the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, approval be and is hereby given to the Company and its subsidiaries to obtain a renewal of the proposed shareholders mandate (Proposed Renewal of RRPT Mandate) and a new shareholders mandate (Proposed New RRPT Mandate) for recurrent related party transactions of a revenue or trading nature with related parties which are necessary for the day to day operations and on terms that are not more favourable to the related parties than those generally available to the public and are not to the detriment of the minority shareholders as set out in Section 2.2 of the Circular to Shareholders dated 23 May 2012 (Proposed RRPT Mandates) and that the authority conferred by this resolution shall take effect immediately upon the passing of this resolution.


THAT such Proposed RRPT Mandate is subject to annual renewal and such approval shall continue to be in force until:

(a) the conclusion of the next Annual General Meeting (AGM) of the Company following this AGM, at which time it will lapse, unless by a resolution passed at the meeting, the authority is renewed;

(b) the expiration of the period within which the next AGM after the date is required to be held pursuant to Section 143(1) of the Companies Act, 1965 (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Companies Act, 1965); or

(c) revoked or varied by resolution passed by the shareholders in general meeting

whichever is earlier

THAT the Directors of the Company be and are hereby authorized to complete and do all such acts and things (including executing all such documents as may be required) as they may consider expedient or necessary to give effect to the renewal and the extension of the scope of the Proposed RRPT Mandate.

6. To transact any other business of which due notice shall have been given in accordance with the Companies Act, 1965.

By Order of the Board

LIM SECK WAH (MAICSA NO. 0799845)HAMSIAH BINTI KHALID (MIA 13604)Company Secretaries

SelangorDated : 23rd May 2012

Notes :-

A. This Agenda item is meant for discussion only as the provision in the Companys Articles of Association do not require a formal approval of shareholders and hence, is not put forward for voting.

1. For the purpose of determining a member who shall be entitled to attend and vote at the AGM, the Company shall be requesting the Record of Depositors as at 8 June 2012. Only a depositor whose name appears on the Record of Depositors as at 8 June 2012 shall be entitled to attend the said meeting or appoint proxies to attend and vote on his/her behalf.

2. A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies and that a proxy need not also be a Member.

3. When a member appoints two or more proxies the appointments shall be invalid unless he/she specifies the proportions of his/her shareholdings to be represented by each proxy.

4. Where a member is an authorised nominee as defined under the Central Depositories Act, 1991, it may appoint at least

one (1) proxy but not more than two (2) proxies in respect of each Securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

5. Where a member is an exempt authorised nominee, it may appoint multiple proxies for each omnibus account it holds.

6. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing, or if such an appointer is a corporation, either under its Common Seal or under the hand of an officer or attorney duly authorised in writing.

Notice Of Twenty-Seventh Annual General Meeting (Contd)


7. The instrument appointing a proxy must be deposited at the Registered Office at Tingkat 5, Lot 10, Bangunan BKA, Jalan Astaka U8/84, Section U8, Bukit Jelutong, 40150 Shah Alam, Selangor Darul Ehsan not less than forty-eight (48) hours before the time set for holding the meeting or any adjournment thereof.

8. Explanatory note on Special Business:-

Ordinary Resolution 3The proposed Resolution 3 is primarily to give flexibility to the Board of Directors to issue and allot shares at any time in their absolute discretion and for such purposes as they consider would be in the interest of the Company without convening a general meeting. This authority, unless revoked or varied at a general meeting, will expire at the next annual general meeting of the Company.

The Company continues to consider opportunities to broaden its earnings potential. If any of the expansion/diversification proposals involves the issue of new shares, the Directors, under certain circumstance when the opportunity arises, would have to convene a general meeting to approve the issue of new shares even though the number involved may be less than 10% of the issue capital.

In order to avoid any delay and costs involved in convening a general meeting to approve such issue of shares, it is thus considered appropriate that the Directors be empowered to issue shares in the Company, up to any amount not exceeding in total 10% of the issued share capital of the Company for the time being, for such purposes. The renewed authority for allotment of shares will provide flexibility to the Company for the allotment of shares for the purpose of funding future investment, working capital and/or acquisitions. This authority, unless revoked or varied at a general meeting will expire at the conclusion of the next Annual General Meeting of the Company.

No shares have been issue and allotted by the Company since obtaining the said authority from its shareholders at the last Annual General Meeting held on 23 May 2011. Ordinary Resolution 4This resolution is primarily to give flexibility to the Board of Directors to enter into recurrent related party transactions of revenue or trading nature with the Directors/Major Shareholders or persons connected with the Directors/Major Shareholders (Proposed RRPT Mandate)

Further information of the Proposed RRPT Mandate is contained in the Circular to Shareholders dated 23 May 2012.

Notice Of Twenty-Seventh Annual General Meeting (Contd)


FINANCIAlSTATeMeNT

Directors Report 31

Statement by Directors 34

Statutory Declaration 34

Independent Auditors Report 35

Statements of Comprehensive Income 37

Statements of Financial Position 38

Statements of Changes in Equity 39

Statements of Cash Flows 41

Notes to the Financial Statements 43

Directors Report

The directors hereby present their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2011.

PRINCIPAL ACTIVITIES

The principal activities of the Company are that of investment holding and the provision of management services to its subsidiaries. The principal activities of the subsidiaries are described in Note 12 to the financial statements.

There have been no significant changes in the nature of these principal activities during the financial year.

Group Company RM'000 RM'000

(Loss)/profit net of tax (765) 978

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

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

DIRECTORS

Datuk Abdul Hamid bin SawalHaji Zaid Bin AbdullahIr. Haji Mohd Nor @ Ghazali Bin OmarJohar Bin YusofHajjah Zaidah Binti Mohd Salleh (resigned on 28.09.2011 )(alternate to Haji Zaid bin Abdullah)

DIRECTORS' BENEFITS

Neither at the end of the financial year, nor at any time during the year, did there subsist any arrangement to which the Company was a party, whereby the directors might acquire benefits by means of the acquisition of shares in or debenture of the Company or any other body corporate.

Since the end of the previous financial year, no director of the Company has received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by the Directors as shown in Note 7 to 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 except for any benefits or deemed benefits which may arise from transactions entered into in the ordinary course of business as disclosed in Note 27 to the financial statements.


DIRECTORS' INTERESTS

According to the register of directors' shareholdings, the interest of directors in office at the end of the financial year in shares of the Company and its related corporation during the financial year were as follows:

Number of ordinary shares of RM1.00 each At At

1.1.2011 Acquired Sold 31.12.2011

Progressive Impact Corporation Berhad, a corporate shareholder of the Company

Haji Zaid bin Abdullah * 15,100,000 - - 15,100,000

* Deemed interest by virtue of his substantial shareholdings in Progressive Impact Corporation Berhad, a corporate shareholder of PJBumi Berhad.

Haji Zaid bin Abdullah by virtue of his interest in the Company is also deemed interested in shares of all the Company's subsidiaries to the extant the Company has interest.

None of the other directors in office at the end of the financial year had any interest in shares in the Company or its related corporations during the financial year."

OTHER STATUTORY INFORMATION

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

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

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

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

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

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

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

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

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

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

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

Directors Report (Contd)


OTHER STATUTORY INFORMATION (CONTD)

(f) In the opinion of the directors:

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

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

AUDITORS

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

Signed on behalf of the Board in accordance with a resolution of the directors dated 30 March 2012."

Haji Zaid Bin Abdullah Johar Bin Yusof

Selangor Darul Ehsan, Malaysia

Directors Report (Contd)


We, Haji Zaid bin Abdullah and Johar bin Yusof, being two of the directors of PJBumi Berhad, do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 37 to 78 are drawn up in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2011 and of their financial performance and cash flows for the year then ended.

The information set out in Note 30 to the financial statements on page 79 have been prepared in accordance with the Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.

Signed on behalf of the Board in accordance with a resolution of the directors dated 30 March 2012.

Haji Zaid Bin Abdullah Johar Bin Yusof

Selangor Darul Ehsan, Selangor

Statutory DeclarationPursuant to Section 169(16) of the Companies Act, 1965

I, Hamsiah binti Khalid, being the officer primarily responsible for the financial management of PJBumi Berhad, do solemnly and sincerely declare that the accompanying financial statements set out on pages 37 to 78 are in my opinion, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act 1960.

Subscribed and solemnly declared by the abovenamed Hamsiah binti Khalidat Kuala Lumpur in Wilayah Persekutuanon 30 March 2012. Hamsiah Binti Khalid

Before me,

Statement By DirectorsPursuant to Section 169(15) of the Companies Act, 1965


REPORT ON THE FINANCIAL STATEMENTS

We have audited the financial statements of PJBumi Berhad, which comprise the statements of financial position as at 31 December 2011 of the Group and of the Company, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 37 to 78.

Directors responsibility for the financial statements

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

Auditors responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the 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 entitys preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

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

REPORT ON OTHER LEGAL AND REGULATORY REqUIREMENTS

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

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

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

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

The supplementary information set out in Note 30 on page 79 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (MIA Guidance) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

Independent Auditors Report To The Members Of Pjbumi Berhad

(Incorporated In Malaysia)


OTHER MATTERS

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

Ernst & Young Nik Rahmat Kamarulzaman Bin Nik Ab. RahmanAF: 0039 No. 1759/02/14(J)Chartered Accountants Chartered Accountant

Kuala Lumpur, Malaysia30 March 2012

Independent Auditors Report (Contd)To The Members Of Pjbumi Berhad

(Incorporated In Malaysia)


Group Company Note 2011 2010 2011 2010

RM000 RM000 RM000 RM000

Revenue 4 23,087 28,853 2,236 2,902 Cost of sales 5 (18,456) (15,923) - -

Gross profit 4,631 12,930 2,236 2,902

Other income 6 2,540 3,973 654 2,126 Employee benefits expenses 7 (2,982) (4,293) (744) (1,180)Selling and distribution expenses (216) (397) - - Administrative expenses (2,111) (2,701) (1,030) (1,320)Other operating expenses (1,153) (3,256) (28) (240)

Profit from operations 709 6,256 1,088 2,288 Finance costs 8 (1,168) (1,982) (110) (960)

(Loss)/profit before tax 9 (459) 4,274 978 1,328 Income tax expense 10 (306) (520) - - (Loss)/profit net of tax, representing total comprehensive

(loss)/income attributable to equity holders of the of the Company (765) 3,754 978 1,328

Basic (loss)/earnings per share attributable to shareholders of the Company (sen):

Basic diluted 11 (1.53) 7.51

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

Statements Of Comprehensive IncomeFor The Financial Year ended 31 December 2011


Group CompanyNote 2011 2010 2011 2010

RM000 RM000 RM000 RM000

ASSETSNon-current assetsProperty, plant and equipment 13 16,157 16,731 70 133 Investment properties 14 10,587 10,669 10,587 10,669 Investment in subsidiaries 12 - - 29,999 29,999 Other investments 15 35,942 35,942 - - Deferred tax assets 16 - 363 - -

62,686 63,705 40,656 40,801

Current assetsTrade and other receivables 18 6,459 8,946 296 192 Inventories 19 941 1,626 - - Tax recoverable 120 32 - - Cash and bank balances 1,465 455 278 106

8,985 11,059 574 298 Properties held for sale 17 987 1,879 987 1,879

9,972 12,938 1,561 2,177

Total assets 72,658 76,643 42,217 42,978

Current liabilitiesTrade and other payables 22 24,970 24,234 11,638 10,614 Borrowings 21 2,394 3,347 1,404 1,726 Tax liabilities 6,879 7,787 2,826 3,193

34,243 35,368 15,868 15,533 Liabilities directly associated with properties classified

as held for sale 17 1,523 3,092 1,523 3,092

35,766 38,460 17,391 18,625

Net current liabilities (25,794) (25,522) (15,830) (16,448)

Non-current liabilitiesBorrowings 21 8,828 9,354 1,986 2,491

Total Liabilities 44,594 47,814 19,377 21,116

Net assets 28,064 28,829 22,840 21,862

Equity attributable to owners of the parentShare capital 20 50,000 50,000 50,000 50,000 Reserves 20 5,473 5,473 3,473 3,473 Accumulated losses (27,409) (26,644) (30,633) (31,611)

Total equity 28,064 28,829 22,840 21,862

Total equity and liabilities 72,658 76,643 42,217 42,978


Statements Of Financial PositionAs At 31 December 2011


Attributable to shareholders holders of the Company Non-distributable

Share Share Capital Accumulated Total Group capital premium reserve losses equity

RM RM RM RM RM

At 1 January 2011 50,000 3,473 2,000 (26,644) 28,829 Total comprehensive loss for the year - - - (765) (765)

At 31 December 2011 50,000 3,473 2,000 (27,409) 28,064

At 1 January 2010 50,000 3,473 2,000 (30,398) 25,075 Total comprehensive income for the year - - - 3,754 3,754

At 31 December 2010 50,000 3,473 2,000 (26,644) 28,829


Statements Of Changes In equityFor The Financial Year ended 31 December 2011


Non-distributable Share Share Accumulated Total

Company capital premium losses equity RM000 RM000 RM000 RM000

At 1 January 2011 50,000 3,473 (31,611) 21,862 Total comprehensive income for the year - - 978 978

At 31 December 2011 50,000 3,473 (30,633) 22,840

At 1 January 2010 50,000 3,473 (32,939) 20,534 Total comprehensive income for the year - - 1,328 1,328

At 31 December 2010 50,000 3,473 (31,611) 21,862


Statements Of Changes In equityFor The Financial Year ended 31 December 2011


Group Company 2011 2010 2011 2010

RM000 RM000 RM000 RM000

Cash flows from operating activities(Loss)/profit before tax (459) 4,274 978 1,328 Adjustments for:

Bad debts written off - 569 - 6Depreciation of investment properties 83 99 83 99Depreciation of property, plant and equipment 573 639 62 124Dividend income (1,522) (2,465) - -Gain on disposal of properties held for sale 6 (287) 6 (287)Gain on disposal of motor vehicle (63) (63)Property, plant and equipment written off - 175 - -Impairment loss on:

- other investment - 1,330 - -- property, plant and equipment - 829 - 208- other receivables 20 - - -- receivables 1,023 183 - -- receivables no longer required (682) (773) (586) (1,095)

Interest expense 1,169 1,982 112 960Interest income (2) (3) - -Derecognition of financial guarantee - - - (662)Unrealised gain on foreign exchange - (78) - -

Balance carried forward 146 6,474 592 681

Balance brought forward 146 6,474 592 681

Operating profit/(loss) before changes in working capital 146 6,474 592 681Working capital changes:Decrease in inventories 686 107 - -(Decrease)/Increase in receivables, deposits and prepayments 2,194 (1,336) 482 116Increase/(decrease) in payables and accruals (1,526) (3,312) (188) (1,357)Net change in intercompany balances 2,348 (120) 1,212 2,734

Cash generated from/(used in) operations 3,848 1,813 2,098 2,174Interest paid (112) (1,982) (112) (960)Tax paid (909) (137) (367) -

Cash from/ (used in) operating activities 2,827 (306) 1,619 1,214

Statements Of Cash FlowsFor The Financial Year ended 31 December 2011


Group Company 2011 2010 2011 2010

RM000 RM000 RM000 RM000

Cash flows from investing activitiesAcquisition of property, plant and equipment - (121) - (69)Dividends received 1,492 1,849 - -Interest received 2 3 - -Proceeds from disposal of properties held for sale 63 500 63 500

Net cash from investing activities 1,557 2,231 63 431

Cash flows from financing activitiesPayments of finance lease - (19) - (19)Repayments of restructured loans and term loans (2,174) (2,585) (310) (1,580)

Net cash used in financing activities (2,174) (2,604) (310) (1,599)

Net (decrease)/increase in cash and cash equivalents 2,210 (679) 1,372 46 Cash and cash equivalents at 1 January (2,268) (1,589) (2,617) (2,663)

Cash and cash equivalents at 31 December (58) (2,268) (1,245) (2,617)

Cash and cash equivalents

Cash and cash equivalents included in the statements of cash flows comprise the following amounts:

Group Company Note 2011 2010 2011 2010

RM000 RM000 RM000 RM000

Cash and bank balances 1,465 455 278 106 Bank overdrafts associated with properties classified

as held for sale 17 (1,523) (2,723) (1,523) (2,723)

(58) (2,268) (1,245) (2,617)


Statements Of Cash Flows (Contd)For The Financial Year ended 31 December 2011


1. CORPORATE INFORMATION

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Market of Bursa Malaysia Securities Berhad. The registered office of the Company is located at Tingkat 5, Lot 10, Jalan Astaka U8/84, Bukit Jelutong Business and Technology Centre, 40150 Shah Alam, Selangor Darul Ehsan.

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

The principal activities of the subsidiaries are described in Note 12 to the financial statements.

There have been no significant changes in the nature of these principal activities during the financial year.

The financial statements was authorised for issue by the Board of Directors in accordance with the resolution of the directors on 30 March 2012.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation

The financial statements of the Group and of the Company comply with Financial Reporting Standards (FRS) and the Companies Act, 1965 in Malaysia.

The financial statements of the Group and of the Company have also been prepared on a historical cost basis, except as disclosed in the notes to the financial statements.

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

During the financial year, the Group and of the Company adopted the FRSs, amendment to FRS and IC Interpretation as disclosed in note 2.3 of the financial statements.

2.2 Summary of significant accounting policies

(a) Basis of consolidation

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

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

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

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

Notes To The Financial Statements - 31 December 2011


Notes To The Financial Statements (Contd)- 31 December 2011

2. SIGNIFICANT ACCOUNTING POLICIES (CONTD)

2.2 Summary of significant accounting policies (contd)

(b) Transactions with minority interests

Minority interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group and are presented separately in profit or loss of the Group and within equity in the consolidated statements of financial position, separately from parent shareholders equity. Transactions with minority interests are accounted for using the entity concept method, whereby, transactions with minority interests are accounted for as transactions with owners. On acquisition of minority interests, the difference between the consideration and book value of the share of the net assets acquired is recognised directly in equity. Gain or loss on disposal to minority interests is recognised directly in equity.

(c) Foreign currency

(i) Functional and presentation currency

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

(ii) Foreign currency transactions

Transactions in foreign currencies are measured in the respective functional currencies of the Company and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary items denominated in foreign currencies that are measured at historical cost are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items denominated in foreign currencies measured at fair value are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at the reporting date are recognised in profit or loss except for exchange differences arising on monetary items that form part of the Groups net investment in foreign operations, which are recognised initially in other comprehensive income and accumulated under foreign currency translation reserve in equity. The foreign currency translation reserve is reclassified from equity to profit or loss of the Group on disposal of the foreign operation.

Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or loss for the period except for the differences arising on the translation of non-monetary items in respect of which gains and losses are recognised directly in equity. Exchange differences arising from such non-monetary items are also recognised directly in equity.

(d) Property, plant and equipment

All items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

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


Notes To The Financial Statements (Contd)- 31 December 2011

2. SIGNIFICANT ACCOUNTING POLICIES (CONTD)

2.2 Summary of significant accounting policies (contd)

(d) Property, plant and equipment (contd)

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

Buildings 2%Plant and machinery, office equipment and furniture and fitting

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