YTL C

EMEN

T BER

HA

D 31384-K

annual report 2011

www.ytlcement.comwww.ytlcommunity.com

YTL CEMENT BERHAD 31384-K

11th FloorYeoh Tiong Lay Plaza55 Jalan Bukit Bintang55100 Kuala LumpurMalaysiaTel • 603 2117 0088 603 2142 6633Fax • 603 2141 2703

annual report 2011

YTLCEMENTBERHAD 31384-K

the journey continues...

YTLCEMENTBERHAD 31384-K

annual report

2011

Table of Contents

CoRpoRATE REviEw

2 Financial Highlights4 Chairman’s Statement8 Notice of Annual General Meeting11 Statement Accompanying

Notice of Annual General Meeting12 Corporate Information13 Profile of the Board of Directors17 Statement of Directors’ Responsibilities18 Audit Committee Report22 Statement on Corporate Governance26 Statement on Internal Control29 Disclosure of Recurrent Related Party Transactions31 Analysis of Share/Irredeemable Convertible Unsecured Loan Stock (ICULS) Holdings35 Statement of Directors’ Interests40 Schedule of Share Buy-Back41 List of Properties

FiNANCiAL STATEMENTS

46 Directors’ Report58 Statement by Directors58 Statutory Declaration59 Independent Auditors’ Report61 Income Statements62 Statements of Comprehensive Income63 Statements of Financial Position65 Consolidated Statement of Changes in Equity66 Statement of Changes in Equity67 Statements of Cash Flows70 Notes to the Financial Statements

Form of Proxy

2011 2010 2009 2008 2007

Revenue (RM’000) 2,192,818 1,854,319 1,968,294 1,466,908 1,150,041

Profit Before Taxation (RM’000) 488,970 411,226 360,345 290,049 236,268

Profit After Taxation (RM’000) 354,096 311,143 264,862 212,049 177,772

Profit for the Year Attributable to Owners of the Parent (RM’000) 337,014 269,117 239,276 193,239 160,611

Total Equity Attributable to Owners of the Parent (RM’000) 2,158,330 1,813,597 1,615,739 1,445,618 1,335,489

Earnings per Share (Sen) 71.53 57.25 50.98 41.14 33.45

Dividend per Share (Sen) 13 13 15 25 15

Total Assets (RM’000) 3,803,179 3,406,117 3,123,243 2,821,760 2,567,011

Net Assets per Share (RM) 4.58 3.85 3.44 3.08 2.84

07 08 09 10 11

Revenue(RM’000)

1,15

0,04

1

1,46

6,90

8 1,9

68,2

94

1,85

4,31

9

2,1

92,8

18

07 08 09 10 1111

Profit Before Taxation(RM’000)

236,

268 29

0,04

9 360,

345

411,

226 48

8,97

0

07 08 09 10 11

Profit After Taxation(RM’000)

177,

772

212,

049 26

4,86

2 311,

143

354,

096

07 08 09 10 11

Profit for the Year Attributable toOwners of the Parent(RM’000)

160,

611

193,

239 23

9,27

6

269,

117

337,

014

07 08 09 10 11

Total Equity Attributable to Owners of the Parent(RM’000)

1,33

5,48

9

1,4

45,6

18

1,61

5,73

9

1,81

3,59

7

2,15

8,33

0

07 08 09 10 11

Earnings per Share(Sen)

33.4

5 41.1

4

50.9

8 57.2

5

71.5

3

07 08 09 10 11

Dividend per Share(Sen)

15

25

15

13 13

07 08 09 10 11

Total Assets(RM’000)

2,56

7,01

1

2,8

21,7

60

3,12

3,24

3

3,40

6,11

7

3,8

03,1

79

07 08 09 10 11

Net Assets per Share(RM)

2.84 3.

08

3.44

3.85

4.58

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Financial Highlights

07 08 09 10 11

Revenue(RM’000)

1,15

0,04

1

1,46

6,90

8 1,9

68,2

94

1,85

4,31

9

2,1

92,8

18

07 08 09 10 1111

Profit Before Taxation(RM’000)

236,

268 29

0,04

9 360,

345

411,

226 48

8,97

0

07 08 09 10 11

Profit After Taxation(RM’000)

177,

772

212,

049 26

4,86

2 311,

143

354,

096

07 08 09 10 11

Profit for the Year Attributable toOwners of the Parent(RM’000)

160,

611

193,

239 23

9,27

6

269,

117

337,

014

07 08 09 10 11

Total Equity Attributable to Owners of the Parent(RM’000)

1,33

5,48

9

1,4

45,6

18

1,61

5,73

9

1,81

3,59

7

2,15

8,33

0

07 08 09 10 11

Earnings per Share(Sen)

33.4

5 41.1

4

50.9

8 57.2

5

71.5

3

07 08 09 10 11

Dividend per Share(Sen)

15

25

15

13 13

07 08 09 10 11

Total Assets(RM’000)

2,56

7,01

1

2,8

21,7

60

3,12

3,24

3

3,40

6,11

7

3,8

03,1

79

07 08 09 10 11

Net Assets per Share(RM)

2.84 3.

08

3.44

3.85

4.58

07 08 09 10 11

Revenue(RM’000)

1,15

0,04

1

1,46

6,90

8 1,9

68,2

94

1,85

4,31

9

2,1

92,8

18

07 08 09 10 1111

Profit Before Taxation(RM’000)

236,

268 29

0,04

9 360,

345

411,

226 48

8,97

0

07 08 09 10 11

Profit After Taxation(RM’000)

177,

772

212,

049 26

4,86

2 311,

143

354,

096

07 08 09 10 11

Profit for the Year Attributable toOwners of the Parent(RM’000)

160,

611

193,

239 23

9,27

6

269,

117

337,

014

07 08 09 10 11

Total Equity Attributable to Owners of the Parent(RM’000)

1,33

5,48

9

1,4

45,6

18

1,61

5,73

9

1,81

3,59

7

2,15

8,33

0

07 08 09 10 11

Earnings per Share(Sen)

33.4

5 41.1

4

50.9

8 57.2

5

71.5

3

07 08 09 10 11

Dividend per Share(Sen)

15

25

15

13 13

07 08 09 10 11

Total Assets(RM’000)

2,56

7,01

1

2,8

21,7

60

3,12

3,24

3

3,40

6,11

7

3,8

03,1

79

07 08 09 10 11

Net Assets per Share(RM)

2.84 3.

08

3.44

3.85

4.58

3

On behalf of the Board of Directors of YTL Cement Berhad (“YTL Cement” or the “Company”), I have the pleasure of presenting to you the Annual Report and audited financial statements of the Company and its subsidiaries (the “Group”) for the financial year ended 30 June 2011.

TAN SRI DATO’ SERI (DR) YEOH TIONG LAYExecutive Chairman

ovERviEw

YTL Cement registered another strong performance for the financial year ended 30 June 2011, supported by the Group’s strategy of organic and acquisition-driven growth, coupled with an ongoing drive to improve plant and logistical efficiencies and customer service.

Following a robust growth in the Malaysian economy of 7.2% for the 2010 calendar year, gross domestic product (GDP) continued to expand by approximately 4.4% for the first half of 2011. The domestic construction sector, however, registered lower growth of 2.1% for the first half of 2011, compared to 5.1% for the 2010 calendar year, as slower implementation of infrastructure projects contributed to the contraction in the civil engineering sub-sector. The robust residential construction sub-sector continued to expand underpinned by positive sentiments amidst favourable employment and financing conditions, whilst ongoing construction of commercial properties, particularly in the office and retail spaces, continued to support the non-residential sub-sector (source: Ministry of Finance economic updates; Bank Negara Malaysia quarterly bulletins and annual reports).

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Chairman’s Statement

The Group’s operations in Malaysia and overseas, in China and Singapore, continued to perform well across the board during the year under review and, on the expansion front, YTL Cement acquired the remaining 35.16% interest in Perak-Hanjoong Simen Sdn Bhd (“PHS”) not already owned by the Company for a total cash consideration of RM200 million from Gopeng Berhad in December 2010, resulting in PHS becoming a wholly-owned subsidiary of the Group.

FiNANCiAL pERFoRMANCE

The Group recorded revenue of RM2,192.8 million for the financial year ended 30 June 2011, an 18.3% increase over RM1,854.3 million for the previous financial year ended 30 June 2010. Net profit attributable to shareholders grew 25.2% to RM337.0 million this year, compared to RM269.1 million last year. The improvements in financial performance were due mainly to higher demand for cement in the construction industry and improved performance of the division’s overseas operations during the year under review.

Dividends

During the year under review, YTL Cement delivered strong returns to shareholders with distributions of four interim dividends totalling 13.125 sen or 26.25% per share and comprising three single tier dividends of 3.75 sen or 7.5% per share each and a single tier dividend of 1.875 sen or 3.75% per share. Therefore, the Board of Directors did not recommend a final dividend for the financial year ended 30 June 2011.

The Group remains committed to its policy of creating value for shareholders through a sustainable dividend policy. This is the 17th year that the Company has declared dividends to shareholders since listing on Bursa Malaysia Securities Berhad in 1993.

REviEw oF opERATioNS

Operations in Malaysia

The Group continued to meet its operational targets across all divisions during the year under review, and improved performance by reducing costs and ensuring the comprehensiveness of its logistics network and supply chains to meet customers’ requirements. The strategic geographical locations of our plants, coupled with our fully-integrated production processes, enabled us to achieve cost savings and economies of scale derived from the Group’s annual production capacity of 6.0 million metric tonnes for clinker and 8.0 million metric tonnes for cement.

YTL Cement’s nation-wide distribution network and operations enabled the Group to maintain market share in its operating areas during the year under review, supported by strong customer loyalty and demand. YTL Cement has the proven track record and ability to manufacture and supply bespoke building materials and products of the highest quality to meet increasingly sophisticated customer requirements.

In recognition of the Group’s product standards, YTL Cement won the Bronze Award for “Best product Excellence” at the 3rd Annual Global CSR Awards 2011, which recognises corporations for their outstanding corporate social responsibility initiatives and world-class products, programmes and services. The Best Product Excellence award is given to companies that have created products that have brought positive impact to societies while contributing positively to the company’s bottom line.

Our quarry operations, which comprise 11 quarry sites across Peninsula Malaysia, substantially supply aggregates and manufactured sand used in the Group’s ready-mixed concrete manufacturing business, thereby enabling us to further streamline our production processes. During the year, the Group also entered into an agreement to operate and lease new quarry land in Seberang Perai, Penang, and will commence operations upon receipt of approvals from the relevant authorities. The Group’s quarry business also provides limestone quarrying services and undertakes the manufacture and distribution of premix products which supplement its operations. These include Asphaltic Concrete Wearing Course, Asphaltic Concrete Binder Course, Dense Bitumen Macadam, Normal Premix Wearing Course and Normal Premix Binder Course, used primarily in the construction of large-scale infrastructure, including roads, highways and airports.

We have continued to pursue the use of alternative fuels and energy sources to mitigate the effects of increases in conventional fuel costs and to reduce the Group’s overall carbon footprint.

Overseas Operations

YTL Cement’s plant in China is located in the Linan district of the Zhejiang Province in China and is one of the dominant suppliers in the wider Hangzhou market, with production capacities for 1.55 million tonnes per annum of clinker and 2.00 million tonnes per annum of cement. During the year under review, we continued to make good progress in meeting the plant’s key operational targets.

5

The Group’s Singapore operations also performed well during the year under review, supported by ongoing demand for the Group’s range of blended cement products. Singapore’s construction sector continues to register positive growth levels, moderating to 6.1% for the 2010 calendar year, compared to overall growth of 17.1% in 2009 (source: Ministry of Trade & Industry Singapore economic updates).

SuSTAiNABiLiTY

The Group is committed to conducting its operations in a sustainable manner and to reduce its carbon footprint, placing a high priority on improving existing operations and embarking on new initiatives in pursuit of these goals.

The Group has received certification for its products from the Singapore Environment Council (SEC) under the Singapore Green Labelling Scheme (SGLS) which indicates that these products are eco-friendly building materials that make an important contribution to environmental sustainability and the reduction of carbon emissions. The products that were certified included ground granulated blastfurnace slag, blastfurnace cement CEM III/A, blastfurnace cement CEM III/B and Portland composite cement CEM II/B-M.

The Group has continued to focus on reducing its total carbon dioxide emissions via the increased usage of blended cement, whilst also improving the quality and performance of its range of products through its research and development (R&D) activities.

Social responsibility and environmental sustainability are key values of the Group and YTL Cement places a high priority on acting responsibly in every aspect of its business. The Group is also part of the wider network of the YTL group of companies under the umbrella of its parent company, YTL Corporation Berhad, which has a long-standing commitment to creating successful, profitable and sustainable businesses. The sustainability of these businesses, in turn, benefits the surrounding community through the creation of sustained value for shareholders, secure and stable jobs for the Group’s employees, support for the arts and culture in Malaysia and contributions to promote education for the benefit of future generations.

The Group’s statements on corporate governance and internal control, which elaborate further on our systems and controls, can be found as a separate section in this Annual Report.

FuTuRE pRoSpECTS

The Malaysian economy is expected to continue to record moderate growth in most sectors and domestic demand is expected to remain resilient, registering GDP growth between 5-5.5% for the full 2011 calendar year, with the construction sector growing an estimated 3.4%. Growth in major international economies is expected to remain positive, although concerns over factors such as fiscal and debt conditions in several advanced economies, high commodity prices and global supply chain disruptions continue to contribute to create uncertainty and impact overall confidence (source: Ministry of Finance quarterly updates; Bank Negara Malaysia quarterly bulletins and annual reports).

The Group will continue to strengthen its market presence throughout Malaysia and in overseas markets, with an emphasis on regional expansion and leveraging on its established logistics network and operational and technological know-how to develop new products and enhance its existing products to meet our customers’ needs.

AppRECiATioN

The Board of Directors of YTL Cement wishes to thank the Group’s shareholders, investors, customers, business associates and the regulatory authorities for their ongoing support. We also extend our gratitude to the management and staff of the Group for their efforts in enabling YTL Cement to deliver another year of strong performance.

TAN SRi DATo’ SERi (DR) YEoH TioNG LAYPSM, SPMS, DPMS, KMN, PPN, PJK

YTL Cement Berhad

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Chairman’s Statement

7

AS oRDiNARY BuSiNESS

1. To lay before the meeting the Audited Financial Statements for the financial year ended 30 June 2011 together with the Reports of the Directors and Auditors thereon;

2. To re-elect the following Directors who retire pursuant to Article 84 of the Company’s Articles of Association:-

i) Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping ii) Dato’ Yeoh Seok Kian iii) Dato’ Sri Michael Yeoh Sock Siong iv) Dato’ Yeoh Soo Keng

3. To consider and if thought fit, pass the following Ordinary Resolutions in accordance with Section 129(6) of the Companies Act, 1965:-

i) “THAT Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay, retiring pursuant to Section 129(6) of the Companies Act, 1965, be and is hereby re-appointed a Director of the Company to hold office until the next Annual General Meeting.”

ii) “THAT Eu Peng Meng @ Leslie Eu, retiring pursuant to Section 129(6) of the Companies Act, 1965, be and is hereby re-appointed a Director of the Company to hold office until the next Annual General Meeting.”

iii) “THAT Joseph Benjamin Seaton, retiring pursuant to Section 129(6) of the Companies Act, 1965, be and is hereby re-appointed a Director of the Company to hold office until the next Annual General Meeting.”

4. To approve the payment of Directors’ fees amounting to RM830,000 for the financial year ended 30 June 2011;

5. To re-appoint the Auditors and to authorise the Directors to fix their remuneration.

AS SpECiAL BuSiNESS

To consider and, if thought fit, pass the following Ordinary Resolutions:-

6. pRopoSED AuTHoRiTY To ALLoT SHARES puRSuANT To SECTioN 132D oF THE CoMpANiES ACT, 1965

“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby empowered to allot and issue shares in the Company at any time until the conclusion of the next Annual General Meeting 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 to be issued does not exceed ten per centum (10%) of the issued and paid-up 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.”

please refer Explanatory

Note A

Resolution 1Resolution 2Resolution 3Resolution 4

Resolution 5

Resolution 6

Resolution 7

Resolution 8

Resolution 9

Resolution 10

NoTiCE iS HEREBY GivEN THAT the Thirty-Fourth Annual General Meeting of YTL Cement Berhad (“the Company”) will be held at Starhill 2, Level 4, JW Marriott Hotel Kuala Lumpur, 183, Jalan Bukit Bintang, 55100 Kuala Lumpur on Tuesday, the 29th day of November, 2011 at 10.00 a.m. to transact the following business:-

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Notice of Annual General Meeting

Resolution 11

7. pRopoSED RENEwAL oF SHARE BuY-BACK AuTHoRiTY

“THAT subject to the Company’s compliance with all applicable rules, regulations, orders and guidelines made pursuant to the Companies Act, 1965, the provisions of the Company’s Memorandum and Articles of Association and the Main Market Listing Requirements (“Main LR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”) and the approvals of all relevant authorities, the Company be and is hereby authorised, to the fullest extent permitted by law, to buy-back and/or hold from time to time and at any time such amount of ordinary shares of RM0.50 each in the Company as may be determined by the Directors of the Company from time to time through Bursa Securities upon such terms and conditions as the Directors may deem fit and expedient in the interests of the Company (“the Proposed Share Buy-Back”) provided that:-

i) The maximum number of shares which may be purchased and/or held by the Company at any point of time pursuant to the Proposed Share Buy-Back shall not exceed ten per centum (10%) of the total issued and paid-up share capital of the Company for the time being quoted on Bursa Securities provided always that in the event that the Company ceases to hold all or any part of such shares as a result of, amongst others, cancellation of shares, sale of shares on the market of Bursa Securities or distribution of treasury shares to shareholders as dividend in respect of shares bought back under the previous shareholder mandate for share buy-back which was obtained at the Annual General Meeting held on 30 November 2010, the Company shall be entitled to further purchase and/or hold such additional number of shares as shall (in aggregate with the shares then still held by the Company) not exceed ten per centum (10%) of the total issued and paid-up share capital of the Company for the time being quoted on Bursa Securities;

ii) The maximum amount of funds to be allocated by the Company pursuant to the Proposed Share Buy-Back shall not exceed the sum of Retained Profits and the Share Premium Account of the Company based on its latest audited financial statements available up to the date of a transaction pursuant to the Proposed Share Buy-Back. As at 30 June 2011, the audited Retained Profits and Share Premium Account of the Company were RM585,396,351 and RM125,804,208 respectively; and

iii) The shares purchased by the Company pursuant to the Proposed Share Buy-Back may be dealt with by the Directors in all or any of the following manner:-

a) the shares so purchased may be cancelled; and/or b) the shares so purchased may be retained in treasury for distribution as

dividend to the shareholders and/or resold on the market of Bursa Securities and/or subsequently cancelled; and/or

c) part of the shares so purchased may be retained as treasury shares with the remainder being cancelled.

AND THAT such authority shall commence upon the passing of this resolution, until the conclusion of the next Annual General Meeting of the Company or the expiry of the period within which the next Annual General Meeting is required by law to be held unless revoked or varied by Ordinary Resolution of the shareholders of the Company in general meeting, whichever occurs first, but so as not to prejudice the completion of a purchase made before such expiry date;

AND THAT the Directors of the Company be and are hereby authorised to take all steps as are necessary or expedient to implement or to give effect to the Proposed Share Buy-Back with full powers to amend and/or assent to any conditions, modifications, variations or amendments (if any) as may be imposed by the relevant governmental/regulatory authorities from time to time and with full power to do all such acts and things thereafter in accordance with the Companies Act, 1965, the provisions of the Company’s Memorandum and Articles of Association and the Main LR of Bursa Securities and all other relevant governmental/regulatory authorities.”

9

Resolution 12

8. pRopoSED RENEwAL oF SHAREHoLDER MANDATE AND NEw SHAREHoLDER MANDATE FoR RECuRRENT RELATED pARTY TRANSACTioNS oF A REvENuE oR TRADiNG NATuRE

“THAT the Company and/or its subsidiaries be and is/are hereby authorised to enter into recurrent related party transactions from time to time with Related Parties who may be a Director, a major shareholder of the Company and/or its subsidiaries or a person connected with such a Director or major shareholder, as specified in section 2.1.2 (a) & (b) of the Circular to Shareholders dated 4 November 2011 subject to the following:-

i) the transactions are of a revenue or trading in nature which are necessary for the day-to-day operations of the Company and/or its subsidiaries and are transacted on terms consistent or comparable with market or normal trade practices and/or based on normal commercial terms and on terms not more favourable to the Related Parties than those generally available to the public and are not to the detriment of the minority shareholders; and

ii) disclosure is made in the annual report of the aggregate value of transactions conducted during the financial year pursuant to the shareholder mandate in accordance with the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.

THAT the mandate given by the shareholders of the Company shall only continue to be in force until the conclusion of the next Annual General Meeting of the Company or the expiry of the period within which the next Annual General Meeting is required to be held pursuant to Section 143(1) of the Companies Act, 1965 (the “Act”) (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Act); unless revoked or varied by Ordinary Resolution of the shareholders of the Company in general meeting, whichever is the earlier;

AND THAT the Directors of the Company be authorised to complete and do such acts and things as they may consider expedient or necessary to give full effect to the shareholder mandate.”

By Order of the Board,

Ho SAY KENGCompany Secretary

KUALA LUMPUR4 November 2011

YTL Cement Berhad

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Notice of Annual General Meeting

Notes:-

A member entitled to attend and vote at the meeting may appoint a proxy to vote in his stead. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. A member other than an Authorised Nominee shall not be entitled to appoint more than one proxy to attend and vote at the same meeting and where such member appoints more than one proxy to attend and vote at the same meeting, such appointment shall be invalid. The instrument appointing a proxy, in the case of an individual, shall be signed by the appointer or his attorney and in the case of a corporation, either under seal or under the hand of an officer or attorney duly authorised in writing. The original instrument appointing a proxy shall be deposited at the Registered Office of the Company at least 48 hours before the appointed time for holding the meeting. For the purpose of determining a member who shall be entitled to attend the Meeting, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd, in accordance with Article 60(2) of the Company’s Articles of Association and Section 34(1) of the Securities Industry (Central Depositories) Act, 1991 to issue a General Meeting Record of Depositors as at 21 November 2011. Only a depositor whose name appears on the General Meeting Record of Depositors as at 21 November 2011 shall be entitled to attend the said meeting or appoint proxy to attend and/or vote in his stead.

Explanatory Note A

This Agenda item is meant for discussion only as under the provisions of Section 169(1) of the Companies Act, 1965, the audited financial statements do not require formal approval of shareholders and hence, the matter will not be put forward for voting.

Explanatory Notes to Special Business

Resolution pursuant to Section 132D of the Companies Act, 1965

Resolution 10 is a renewal of the general authority given to the Directors of the Company to allot and issue shares (“S132D Mandate”) as approved by the shareholders at the Thirty-Third Annual General Meeting held on 30 November 2010 (“Previous Mandate”).

As at the date of this Notice, the Company has not issued any new shares pursuant to the Previous Mandate which will lapse at the conclusion of the Thirty-Fourth Annual General Meeting to be held on 29 November 2011.

Resolution 10, if passed, will enable the Directors to allot and issue ordinary shares at any time from unissued share capital of the Company up to an amount not exceeding ten per centum (10%) of the Company’s issued share capital for the time being without convening a general meeting which will be both time and cost consuming. The S132D Mandate will provide flexibility to the Company for any possible fund raising activities, including but not limited to placement of shares, for purpose of funding future investment project(s), working capital and/or acquisitions.

Resolution pertaining to the Renewal of Authority To Buy-Back Shares of the Company

For Resolution 11, further information on the Share Buy-Back is set out in the Share Buy-Back Statement dated 4 November 2011 which is despatched together with the Company’s Annual Report 2011.

Resolution pertaining to the Recurrent Related party Transactions

For Resolution 12, further information on the Recurrent Related Party Transactions is set out in the Circular to Shareholders dated 4 November 2011 which is despatched together with the Company’s Annual Report 2011.

Statement Accompanying Notice of Annual General Meeting(Pursuant to Paragraph 8.27(2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad)

DETAiLS oF iNDiviDuALS wHo ARE STANDiNG FoR ELECTioN AS DiRECToRS

No individual is seeking election as a Director at the Thirty-Fourth Annual General Meeting of the Company.

11

BoARD oF DiRECToRS

Executive Chairman

Tan Sri Dato’ Seri (Dr) Yeoh Tiong LayPSM, SPMS, DPMS, KMN, PPN, PJKHon DEng (Heriot-Watt), DBA (Hon) (UMS), Chartered BuilderFCIOB, FAIB, FFB, FBIM, FSIET, FBGAM, FMID

Vice Chairman

Tan Sri Asmat Bin KamaludinPSM, PJN, JSM, SMJ, KMNBA (Hons) Economics

Managing Director

Tan Sri Dato’ (Dr) Francis Yeoh Sock pingPSM, CBE, FICE, SIMP, DPMS, DPMP, JMN, JP Hon DEng (Kingston), BSc (Hons) Civil Engineering, FFB, F Inst D, MBIM, RIM

Directors

Dato’ Sri Haji Abd Rahim Bin Haji AbdulSSAP, SIMP, DIMP, PJN, SMPBA (Hons), MPA, LLB (Hons)

Dato’ Kamaruddin Bin MohammedDSAP, DIMPDiploma in Business Studies, Certificate in Management, SF Fin (Aust)

Dato’ Yoogalingam A/L vyramuttuDIMP, AMN, Order of Diplomatic Service Gwanghwajang First Class (Republic of Korea) BA (Hons)

Mej Jen Dato’ Hj Abdul Shukor Bin Haji Jaafar (B)PSAT, DSDK, JSM, PAT, KMN, AMNMasters in Defense Studies

Dato’ Tan Guan CheongDSSA

Dato’ Yeoh Seok KianDSSABSc (Hons) Bldg, MCIOB, FFB

Dato’ Yeoh Seok HongDSPN, JP BE (Hons) Civil & Structural Engineering, FFB

Dato’ Sri Michael Yeoh Sock SiongDIMP, SSAPBE (Hons) Civil & Structural Engineering, FFB

Dato’ Yeoh Soo KengDIMPBSc (Hons) Civil Engineering

Dato’ Mark Yeoh Seok KahDSSALLB (Hons)

Eu peng Meng @ Leslie EuBCom, FCILT

Joseph Benjamin SeatonDiploma in Communications, Advertising and Marketing

CoMpANY SECRETARY

Ho Say Keng

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BuSiNESS oFFiCE

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REGiSTRAR

YTL Corporation Berhad11th Floor, Yeoh Tiong Lay Plaza55 Jalan Bukit Bintang55100 Kuala LumpurTel •60321170088 •60321426633Fax •60321412703

SoLiCiToRS

Lee, Perara & Tan

AuDiT CoMMiTTEE

Eu peng Meng @ Leslie Eu(Chairman and Independent Non-Executive Director)

Dato’ Yoogalingam A/L vyramuttu(Independent Non-Executive Director)

Dato’ Tan Guan Cheong(Independent Non-Executive Director)

AuDiToRS

HLB Ler Lum (AF 0276)Chartered Accountants(A member of HLB International)

pRiNCipAL BANKERS oF THE GRoup

Affin Bank BerhadBank Islam Malaysia BerhadBank of China LimitedCIMB Bank Berhad Citibank BerhadDBS Bank LtdDBS Bank (China) LimitedHong Leong Bank BerhadMalayan Banking BerhadOversea-Chinese Banking Corporation Limited

SToCK EXCHANGE LiSTiNG

Bursa Malaysia Securities BerhadMain Market (26.6.1997)

YTL Cement Berhad

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Corporate Information

TAN SRi DATo’ SERi (DR) YEoH TioNG LAY

Malaysian, aged 81, was appointed to the Board on 19 March 1992 and has been the Executive Chairman since then. His contributions are well recognised with the conferment of the title of Doctor of Engineering by Heriot-Watt University, Edinburgh and his appointment as Honorary Life President of the Master Builders Association of Malaysia in 1988. He is the co-founder and the first Chairman of the ASEAN Constructors’ Federation. On 26 October 2002, Tan Sri Yeoh Tiong Lay was conferred the Honorary Doctorate in Philosophy (Business Administration) by Universiti Malaysia Sabah. He was installed as Pro-Chancellor for Universiti Malaysia Sabah on 1 July 2005. He is the past President and Lifetime member of the International Federation of Asian and Western Pacific Contractors Association. On 19 January 2008, Tan Sri Yeoh Tiong Lay was conferred the prestigious Order of the Rising Sun, Gold Rays with Neck Ribbon by the Emperor of Japan in recognition of his outstanding contribution towards the economic co-operation and friendship between Japan and Malaysia, including his efforts as an executive member and Vice President of the Malaysia-Japan Economic Association. On 20 August 2009, Tan Sri Yeoh Tiong Lay was accorded a Lifetime Achievement Award at the Asia Pacific Entrepreneurship Awards 2009 (APEA 2009) in recognit ion of his outstanding entrepreneurial achievements and contribution towards the development of the nation. He is also the Honorary Chairman of Tung Shin Hospital and is on the Board of Governors for several schools. Tan Sri Yeoh Tiong Lay is also the Executive Chairman of YTL Corporation Berhad and YTL Power International Berhad, both listed on the Main Market of the Bursa Malaysia Securities Berhad and a board member of other public companies such as YTL Industries Berhad, YTL Foundation and Wessex Water Limited (a private utilities company in UK).

TAN SRi ASMAT BiN KAMALuDiN

Malaysian, aged 67, was appointed to the Board on 19 March 2001 as the Vice Chairman. He is an Independent Non-Executive Director of the Company. Tan Sri Asmat graduated with a BA (Hons) in Economics from the University of Malaya and also a Diploma in European Economics Integration from the University of Amsterdam. He was formerly the Secretary-General of the Ministry of International Trade and Industry and had been with the Ministry for approximately 35 years, 9 of which as the Secretary General. Tan Sri Asmat also served as Economic Counsellor for Malaysia in Brussels for matters relating to the formation of the European Community and its implications for Malaysia. Chalking up a long and distinguished career in trade, dealing with both domestic, and international trade sectors, Tan Sri Asmat has worked with several international trade bodies such as ASEAN, WTO and APEC, representing Malaysia in relevant

negotiations and agreements. He has also been actively involved in several national organisations such as Permodalan Nasional Berhad, Johore Corporation, the Small and Medium Scale Industries Corporation and the Malaysia External Trade Development Co-operation. On 21 April 2008, Tan Sri Asmat was appointed by the Minister of International Trade and Industry to represent Malaysia as Governor on the Governing Board of The Economic Research Institute for Asean and East Asia.

He is currently also a board member of UMW Holdings Berhad, Malaysian Pacific Industries Berhad, Lion Industries Corporation Berhad, Permodalan Nasional Berhad, Panasonic Manufacturing Malaysia Berhad, Symphony House Berhad, SCOMI Group Berhad, TASCO Berhad, Compugates Holdings Berhad, Scomi Marine Berhad, JACTIM Foundation and The Royal Bank of Scotland Berhad.

TAN SRi DATo’ (DR) FRANCiS YEoH SoCK piNG

Malaysian, aged 57, was appointed to the Board on 19 March 1992 as an Executive Director and has been the Managing Director since then. Tan Sri Francis studied at Kingston University, UK, where he obtained a Bachelor of Science (Hons) in Civil Engineering and was conferred an Honorary Doctorate of Engineering in 2004. He became the Managing Director of YTL Corporation Berhad Group in 1988 which under his stewardship, has grown from a single listed entity into a force comprising six listed entities ie. YTL Corporation Berhad, YTL Power International Berhad, YTL Cement Berhad, YTL Land & Development Berhad, YTL e-Solutions Berhad and Starhill Real Estate Investment Trust. He is presently Managing Director of YTL Corporation Berhad, YTL Power International Berhad and YTL Land & Development Berhad, all listed on the Main Market of Bursa Malaysia Securities Berhad. Tan Sri Francis is also the Executive Chairman and Managing Director of YTL e-Solutions Berhad which is listed on the ACE Market of Bursa Malaysia Securities Berhad, and YTL Starhill Global REIT Management Limited, which is the Manager for Starhill Global REIT, a vehicle listed on the Main Board of the Singapore Exchange Securities Trading Limited (SGX-ST). Besides the listed entities in YTL Group, Tan Sri Francis also sits on the board of several public companies such as YTL Industries Berhad, YTL Foundation and the prominent private utilities companies in United Kingdom, Wessex Water Limited and Wessex Water Services Limited. He is also a director and Chief Executive Officer of Pintar Projek Sdn Bhd, the Manager of Starhill Real Estate Investment Trust.

He is a Founder Member of the Malaysian Business Council and The Capital Markets Advisory Council. He is also a member of The Nature Conservancy Asia Pacific Council, the Asia Business Council and Trustee of the Asia Society. He is also a member of the Advisory Council of London Business School, Wharton School and INSEAD.

13profile of the Board of Directors

He was ranked by both Fortune Magazine and Business Week Magazine as Asia’s 25 Most Powerful and Influential Business Personalities. He won the inaugural Ernst & Young’s Master Entrepreneur in Malaysia in 2002 and CNBC Asia Pacific named him Malaysia CEO of the Year in 2005.

He was appointed as a member of Barclays Asia-Pacific Advisory Committee in 2005. In 2006, he was awarded the Commander of the Most Excellent Order of the British Empire (CBE) by Her Majesty Queen Elizabeth II. In 2008, he was appointed Chairman for South East Asia of the International Friends of the Louvre and he also received a prestigious professional accolade when made a Fellow of the Institute of Civil Engineers in London. He was named one of Asia’s Top Executives in 2008 by Asiamoney.

He is the Primus Inter Pares Honouree of the 2010 Oslo Business for Peace Award, for his advocacy of socially responsible business ethics and practices. The Award was conferred by a panel of Nobel Laureates in Oslo, home of the Nobel Peace Prize. He also received the Corporate Social Responsibility Award at CNBC’s 9th Asia Business Leaders Awards 2010.

DATo’ SRi HAJi ABD RAHiM BiN HAJi ABDuL

Malaysian, aged 62, was appointed to the Board as Non-Independent Non-Executive Director on 26 April 2004. He graduated from University of Malaya with a BA (Hons) degree in 1972. He obtained his Master of Public Administration from Pennsylvania State University, U.S.A. in 1983 and LLB (Hons) from University of London in 1993. Dato’ Sri Haji Abd Rahim started his career in the Malaysian Civil Service on 2 March 1973 when he was appointed as Assistant Secretary in the Federal Treasury, a post he held for 14 years. Thereafter, he held various posts in various departments, namely Ministry of Youth and Sports, Prime Minister’s Department, National Registration Department, Institute of Islamic Understanding Malaysia and the State Financial Officers of Perlis and Pahang respectively before being appointed as the State Secretary of Pahang on 16 October 2001 until 1 October 2004. His last post was as Deputy Secretary General of Treasury, Ministry of Finance till his retirement on 2 September 2005. Dato’ Sri is also a board member of ASM Investment Service Berhad and Sycal Ventures Berhad.

DATo’ KAMARuDDiN BiN MoHAMMED

Malaysian, aged 62, was appointed to the Board as Non-Independent Non-Executive Director on 26 April 2004. He is a graduate in Business Studies from Universiti Teknologi MARA and is a Senior Fellow, Financial Services Institute of Australasia; Sydney, Australia. He also holds a Certificate in Management from The Asian Institute of Management Manila, Philippines. After serving Amanah Saham MARA Berhad Group (“ASMB”) for over 38 years,

he retired as the Group Managing Director on 30 April 2008. With his wide and extensive experience in Management, Investment and Financial Management, he was appointed as Deputy Chairman of the Board cum Advisor of ASMB on 1 May 2008. He retired as a Deputy Chairman of the Board cum Advisor of ASMB on 20 April 2010. Currently, He is the Chairman of Far East Holdings Berhad and Pascorp Paper Industries Berhad and a Board member of Amanah Saham Pahang Berhad.

DATo’ YooGALiNGAM A/L vYRAMuTTu

Malaysian, aged 66, was appointed to the Board as an Independent Non-Executive Director on 26 April 2004. He is also a member of the Audit Committee. Dato’ Yoogalingam graduated from the University of Malaya with a BA (Hons) degree in 1968. He started his career with the Ministry of Foreign Affairs in October 1968 as Assistant Secretary to the Administrative and Diplomatic Service of Malaysia. Thereafter, he served at Malaysia’s embassies in Vietnam, Yugoslavia, the Republic of Turkey and the Republic of Korea. In 1986, he returned to Malaysia to take up the position of Deputy Director General (ASEAN National Secretariat). Dato’ Yoogalingam was subsequently posted as High Commissioner of Malaysia to Papua New Guinea, concurrently accredited to the Solomon Islands and Vanuatu in 1989, and then to the Republic of Zimbabwe, concurrently accredited to Angola, Botswana, Mozambique, Madagascar, Malawi, Namibia, Mauritius, Seychelles, Uganda, Tanzania and Zambia in 1994. In 1998, he was posted as Ambassador of Malaysia to the Republic of Korea where he served until retiring from the Ministry of Foreign Affairs in June 2003.

MEJ JEN DATo’ HJ ABDuL SHuKoR BiN HAJi JAAFAR (B)

Malaysian, aged 69, was appointed to the Board on 28 July 1997 as an Independent Non-Executive Director. He obtained his Masters in Defense Studies from the Indian National Defence College, New Delhi / University of Alahabad. Dato’ Hj Abdul Shukor served in the Malaysian Army from 1962 to 1996 and held various senior command, staff and training appointments covering operations, logistics and support of UN operations.

DATo’ TAN GuAN CHEoNG

Malaysian, aged 67, was appointed to the Board on 25 October 2004 as an Independent Non-Executive Director. He is also a member of the Audit Committee. Dato’ Tan graduated with a Bachelor of Commerce degree from Otago University, New Zealand. He is a Chartered Accountant and a Member of the Malaysian Institute of Accountants since 1983. He worked in international audit firms overseas and also in Malaysia. He has more than 20 years’ experience in the field of financial services. He is also a director of Box-Pak (Malaysia) Berhad.

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profile of the Board of Directors

DATo’ YEoH SEoK KiAN

Malaysian, aged 54, was appointed to the Board on 3 February 1987 as an Executive Director. He graduated from Heriot-Watt University, Edinburgh, United Kingdom in 1981 with a Bachelor of Science (Hons) Degree in Building. He attended the Advance Management Programme conducted by Wharton Business School, University of Pennsylvania in 1984. Dato’ Yeoh is a Fellow of the Faculty of Building, United Kingdom as well as a Member of the Chartered Institute of Building (UK). He is presently the Deputy Managing Director of YTL Corporation Berhad and YTL Power International Berhad and Executive Director of YTL Land & Development Berhad, all listed on the Main Market of Bursa Malaysia Securities Berhad. Dato’ Yeoh also serves on the board of several other public companies such as YTL Industries Berhad, The Kuala Lumpur Performing Arts Centre and private utilities company, Wessex Water Limited, as well as YTL Starhill Global REIT Management Limited, which is the Manager for Starhill Global REIT, a vehicle listed on the Main Board of the Singapore Exchange Securities Trading Limited (SGX-ST). He is also an Executive Director of Pintar Projek Sdn Bhd, the Manager of Starhill Real Estate Investment Trust.

DATo’ YEoH SEoK HoNG

Malaysian, aged 52, was appointed to the Board on 18 May 2007 as an Executive Director. He obtained his Bachelor of Engineering (Hons) Civil & Structural Engineering Degree from the University Bradford, United Kingdom in 1982. He is a member of the Faculty of Building, United Kingdom. In 2010, he was conferred an Honorary Doctor of Science degree by Aston University in the United Kingdom. Dato’ Yeoh Seok Hong has vast experience in the construction industry, being the Executive Director responsible for the YTL Group construction division. He was the project director responsible for the development and the construction of the two Independent Power Producer power stations owned by YTL Power Generation Sdn Bhd. His other achievements include the construction of the Express Rail Link between the Kuala Lumpur International Airport and the Kuala Lumpur Sentral Station. He is also responsible for developing the power and utility businesses of the YTL Power International Berhad Group and is currently overseeing the building of the fourth generation (4G) Worldwide Interoperability for Microwave Access (WiMAX) network by YTL Communications Sdn Bhd. He is a director of YTL Corporation Berhad, YTL Power International Berhad, YTL Land & Development Berhad, all listed on the Main Market of Bursa Malaysia Securities Berhad. Dato’ Yeoh Seok Hong also sits on the Board of YTL Industries Berhad and YTL Foundation, and utilities companies, Wessex Water Limited, Wessex Water Services Limited and PowerSeraya Limited.

DATo’ SRi MiCHAEL YEoH SoCK SioNG

Malaysian, aged 51, was appointed to the Board on 1 September 1985 as an Executive Director. He graduated from Bradford University, United Kingdom in 1983 with a Bachelor of Engineering (Hons) Civil & Structural Engineering Degree. Dato’ Sri Michael Yeoh is primarily responsible for the YTL Group Manufacturing Division which activities involve cement manufacturing and other building material industries. He is also a director of YTL Corporation Berhad, YTL Power International Berhad, YTL Land & Development Berhad, all listed on the Main Market of Bursa Malaysia Securities Berhad and YTL e-Solutions Berhad, a company listed on the ACE Market of Bursa Malaysia Securities Berhad. He also sits on the board of other public companies such as YTL Industries Berhad, Sentul Raya Golf Club Berhad and private utilities company, Wessex Water Limited.

DATo’ YEoH Soo KENG

Malaysian, aged 48, was appointed to the Board on 23 August 1995 as an Executive Director. She graduated with a Bachelor of Science (Hons) in Civil Engineering from Leeds University, United Kingdom in 1985. She was the project director for the construction of the British High Commissioner’s residence, Kuala Lumpur; the Design & Build of the National Art Gallery in Kuala Lumpur and the Selangor Medical Centre in Shah Alam. She was also in charge of a few turnkey projects such as the construction and completion of Yeoh Tiong Lay Plaza, Pahang Cement plant in Pahang and Slag Cement plants in Selangor and Johor. Dato’ Yeoh Soo Keng is the purchasing director responsible for bulk purchases of building materials and related items for the construction, hotels and resorts, and property development divisions of the YTL Group. She is instrumental in the sales and marketing of cement and related products for YTL Cement Berhad, Pahang Cement Marketing Sdn Bhd and Perak-Hanjoong Simen Sdn Bhd. She is also a director of YTL Corporation Berhad and YTL Power International Berhad, all listed on the Main Market of Bursa Malaysia Securities Berhad.

DATo’ MARK YEoH SEoK KAH

Malaysian, aged 46, was appointed to the Board on 18 May 2007 as an Executive Director. He graduated from King’s College, University of London with a LLB (Hons) and was subsequently called to the Bar at Gray’s Inn, London in 1988. Dato’ Mark Yeoh joined YTL Group in 1989 and is presently the Executive Director responsible for the YTL Hotels and Resorts Division. In addition, he is also part of YTL Power’s Mergers & Acquisitions Team and was involved in the acquisition of ElectraNet SA (Australia), Wessex Water Limited (UK), P.T. Jawa Power (Indonesia) and PowerSeraya Limited (Singapore). He serves on the Board of YTL Corporation Berhad, YTL

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Power International Berhad and YTL Land & Development Berhad, all listed on the Main Market of the Bursa Malaysia Securities Berhad. He is also a board member of YTL Vacation Club Berhad and private utilities company, Wessex Water Limited, as well as PowerSeraya Limited.

Eu pENG MENG @ LESLiE Eu

Malaysian, aged 76, was appointed to the Board on 31 March 2003 as an Independent Non-Executive Director. He is also the Chairman of the Audit Committee. Mr Leslie Eu graduated with a Bachelor of Commerce degree from the Republic of Ireland. He is a Fellow of the Chartered Institute of Logistics and Transport and was one of the founding directors of Global Maritime Ventures Berhad. He has been in the shipping business for more than 40 years. He was the first Chief Executive Officer of Malaysian International Shipping Corporation Berhad from the company’s inception in 1969 until his early retirement in 1985. Mr Leslie Eu was a board member of Lembaga Pelabuhan Kelang from 1970 to 1999 and Lloyd’s Register of Shipping (Malaysia) Bhd from 1983 to 2009. In 1995, he was presented the Straits Shipper Transport Personality award by the Minister of Transport. He was appointed by the United Nations Conference on Trade and Development as one of the 13 experts to assist the developing nations in establishing their maritime fleets. Mr Leslie Eu presently serves on the board of several public companies such as YTL Corporation Berhad and YTL Land & Development Berhad, all listed on the Main Market of Bursa Malaysia Securities Berhad. He is also a director of Pintar Projek Sdn Bhd, the Manager of Starhill Real Estate Investment Trust.

JoSEpH BENJAMiN SEAToN

Malaysian, aged 70, was appointed to the Board on 15 June 1988 as an Executive Director. Mr Seaton possesses a Diploma in Communications, Advertising and Marketing and also attended the Harvard Business School Course in Business Administration. He has more than 38 years’ management experience in the building and construction industry. His experience includes the production and marketing of cement, ready-mixed concrete and concrete related products.

DETAiLS oF ATTENDANCE oF DiRECToRS AT BoARD MEETiNGS

During the financial year, a total of 5 Board meetings were held and the details of attendance are as follows:-

Attendance

Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay 4

Tan Sri Asmat Bin Kamaludin 5

Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping 5

Dato’ Sri Haji Abd Rahim Bin Haji Abdul 5

Dato’ Kamaruddin Bin Mohammed 4

Dato’ Yoogalingam A/L Vyramuttu 5

Mej Jen Dato’ Hj Abdul Shukor Bin Haji Jaafar (B)

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Dato’ Tan Guan Cheong 5

Dato’ Yeoh Seok Kian 3

Dato’ Sri Michael Yeoh Sock Siong 4

Dato’ Yeoh Soo Keng 4

Eu Peng Meng @ Leslie Eu 5

Joseph Benjamin Seaton 5

Dato’ Yeoh Seok Hong 5

Dato’ Mark Yeoh Seok Kah 4

Notes:Family Relationship with Director and/or Major ShareholderTan Sri Dato’ Seri (Dr) Yeoh Tiong Lay who is a deemed major shareholder of the Company, is the father of Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping, Dato’ Yeoh Seok Kian, Dato’ Yeoh Seok Hong, Dato’ Sri Michael Yeoh Sock Siong, Dato’ Yeoh Soo Keng and Dato’ Mark Yeoh Seok Kah. Save as disclosed herein, none of the Directors has any family relationship with any director and/or major shareholder of the Company.

Conflict of interestNone of the Directors has any conflict of interest with the Company.

Conviction for offencesNone of the Directors has been convicted of any offences in the past ten (10) years.

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profile of the Board of Directors

The Directors are required by law to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Group and of the Company at the end of the financial year and of the results and cash flows of the Group and of the Company for the financial year then ended.

The Directors consider that, in preparing the financial statements for the financial year ended 30 June 2011, the Group has used appropriate accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent. The Directors also consider that all applicable approved accounting standards have been followed and confirm that the financial statements have been prepared on a going concern basis.

The Directors are responsible for ensuring that the Group and the Company keep accounting records which disclose with reasonable accuracy at any time the financial position of the Group and of the Company and which enable them to ensure that the financial statements comply with the Companies Act 1965 and Financial Reporting Standards in Malaysia.

17Statement of Directors’ Responsibilities

MEMBERS

Eu peng Meng @ Leslie Eu(Chairman/Independent Non-Executive Director)

Dato’ Yoogalingam A/L vyramuttu(Member/Independent Non-Executive Director)

Dato’ Tan Guan Cheong(Member/Independent Non-Executive Director)

TERMS oF REFERENCE

primary purposes

The Committee shall:

1. Provide assistance to the Board in fulfilling its fiduciary responsibilities relating to the corporate accounting and practices for YTL Cement Berhad and its subsidiaries (“Group”).

2. Assist to improve the Group’s business efficiency, the quality of the accounting function, the system of internal controls and the audit function to strengthen the confidence of the public in the Group’s reported results.

3. Maintain through regularly scheduled meetings, a direct line of communication between the Board and the external auditors as well as internal auditors.

4. Enhance the independence of both the external and internal auditors’ function through active participation in the audit process.

5. Strengthen the role of the Independent Directors by giving them a greater depth of knowledge as to the operations of the Company and of the Group through their participation in the Committee.

6. Act upon the Board of Directors’ request to investigate and report on any issues or concerns in regard to the management of the Group.

7. Review existing practices and recommend to Management to formalise an ethics code for all executives and members of the staff of the Group.

8. Create a climate of discipline and control to reduce incidence of fraud.

Membership

1. The Committee shall be appointed by the Board from amongst their number and shall comprise no fewer than three (3) members, all of whom must be non-executive directors, with a majority of them being Independent Directors.

2. At least one member of the Audit Committee:-

(a) must be a member of the Malaysian Institute of Accountants; or

(b) if he is not a member of the Malaysian Institute of Accountants, he must have at least 3 years’ working experience and:-

(i) he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act 1967; or

(ii) he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act 1967; or

(c) fulfils such other requirements as prescribed or approved by Bursa Malaysia Securities Berhad (“Bursa Securities”).

3. The Board must ensure that no alternate Director is appointed as a member of the Audit Committee.

4. The members of the Committee shall elect a Chairman from amongst their number who shall be an Independent Director.

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Audit Committee Report

Authority

The Committee shall in accordance with the procedure determined by the Board and at the cost of the Company:-

1. have authority to investigate any matter within its terms of reference;

2. have the resources which are required to perform its duties;

3. have full and unrestricted access to any information pertaining to the Company;

4 have direct communication channels with the external auditors and person(s) carrying out the internal audit function or activity;

5. be able to obtain independent professional or other advice and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary; and

6. be able to convene meetings with the external auditors, the internal auditors or both, excluding the attendance of other directors and employees of the Company, whenever deemed necessary.

Functions And Duties

The Committee shall, amongst others, discharge the following functions:-

1. Review the following and report the same to the Board of the Company:-

(a) the audit plan with the external auditors;

(b) the evaluation by the external auditors of the quality and effectiveness of the entire accounting system, the adequacy and the integrity of the internal control system and the efficiency of the Group’s operations and efforts and processes taken to reduce the Group’s operational risks;

(c) the audit report with the external auditors;

(d) the assistance given by the employees of the Company to the external auditors;

(e) the adequacy of the scope, functions, competency and resources of the internal audit functions and that it has the necessary authority to carry out its work;

(f) the internal audit programme, processes, the results of the internal audit programme, processes or investigation undertaken and whether or not appropriate action is taken on the recommendations of the internal audit function;

(g) the quarterly results and year end financial statements, prior to the approval by the Board of Directors, focussing particularly on:-

• changes in or implementation of majoraccounting policy changes

• significant and unusual events

• the accuracy and adequacy of thedisclosure of information essential to a fair and full presentation of the financial affairs of the Group

• compliance with accounting standards,other statutory and legal requirements and the going concern assumption;

(h) any related party transaction and conflict of interest situation that may arise within the Company/Group and any related parties outside the Group including any transaction, procedure or course of conduct that raises questions of management integrity;

(i) any letter of resignation from the external auditors of the Company;

(j) whether there is reason (supported by grounds) to believe that the Company’s external auditors are not suitable for re-appointment; and

(k) any significant audit findings, reservations, difficulties encountered or material weaknesses reported by the external and internal auditors.

2. Recommend the nomination of a person or persons as external auditors and the external audit fee.

3. Promptly report to the Bursa Securities on any matter reported by it to the Board of the Company which has not been satisfactorily resolved resulting in a breach of Bursa Securities Main Market Listing Requirements (“Main LR”).

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4. Carry out any other function that may be mutually agreed upon by the Committee and the Board which would be beneficial to the Company and ensure the effective discharge of the Committee’s duties and responsibilities.

Meetings

1. To form a quorum in respect of a meeting of the Committee, the majority of members present must be Independent Directors.

2. The Committee shall meet at least five (5) times a year, although additional meetings may be called at any time at the Audit Committee Chairman’s discretion. An agenda shall be sent to all members of the Committee and any other persons who may be required/invited to attend. All meetings to review the quarterly results and annual financial statements, shall be held prior to such quarterly results and annual financial statements being presented to the Board for approval.

3. Notwithstanding item 2 above, upon the request of any member of the Committee, the external auditors or the internal auditors, the Chairman of the Committee shall convene a meeting of the Committee to consider any matter which should be brought to the attention of the Directors or shareholders.

4. The external auditors have the right to appear and be heard at any meeting of the Committee and shall appear before the Committee when required to do so by the Committee.

5. The Committee may invite any Board member or any member of the Management within the Company who the Committee thinks fit to attend its meetings to assist in resolving and clarifying matters raised in audit reports.

6. The internal auditors shall be in attendance at meetings of the Committee to present and discuss the audit reports of findings and the recommendations relating thereto and to follow up on decisions made at these meetings.

7. The Committee may establish any regulations from time to time to govern its administration.

Retirement And Resignation

In the event of any vacancy in the Audit Committee resulting in the non-compliance of subparagraph 15.09(1) of the Main LR, the Company must fill the vacancy within 3 months.

Minutes

1. The Secretary shall cause minutes to be duly entered in the books provided for the purpose of all resolutions and proceedings of all meetings of the Committee. Such minutes shall be signed by the Chairman of the meeting at which the proceedings were held or by the Chairman of the next succeeding meeting and if so signed, shall be conclusive evidence without any further proof of the facts thereon stated.

2. Minutes of each meeting shall also be distributed to the members of the Committee prior to each meeting.

3. Detailed minutes of the Committee’s meetings will be made available to all Board members. A summary of significant matters and resolutions will be reported to the Board by the Committee.

4. The books containing the minutes of proceedings of any meeting of the Committee shall be kept by the Company at the registered office of the Company and shall be opened to the inspection of any member of the Committee and of the Board.

Secretary

The Secretary to the Committee shall be the Company Secretary.

ACTiviTiES

In line with the terms of reference of the Committee, the following activities were carried out by the Committee during the financial year ended 30 June 2011 in discharging its functions:-

1. Review of the external auditors’ scope of work and their audit plan.

2. Reviewing with the external auditors on the findings of their audit, the audit report and internal control recommendations in respect of control weaknesses noted in the course of their audit.

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Audit Committee Report

3. Review of audit reports presented by internal auditors on findings and recommendations and management’s responses thereto and ensure that material findings are adequately addressed by management.

4. Review of the quarterly results and annual financial statements to ensure compliance with the Main LR, applicable approved accounting standards and other statutory and regulatory requirements prior to recommending for approval by the Board of Directors.

5. Review of the related party transactions entered into by the Group.

6. Review of the adequacy and competency of the internal audit function and the profiles of the internal auditors.

7. Review of the Audit Committee Report and Statement on Internal Control and recommend to the Board for approval prior to their inclusion in the Company’s Annual Report.

iNTERNAL AuDiT ACTiviTiES

The activities of the internal audit function during the year under review include:-

1. Developing the annual internal audit plan and proposing this plan to the Audit Committee.

2. Conducting scheduled and special internal audit engagements, focusing primarily on the effectiveness of internal controls and recommending improvements where necessary.

3. Conducting follow-up reviews to assess if appropriate action has been taken to address issues highlighted in previous audit reports.

4. Presenting audit findings to the Audit Committee for consideration.

5. Conducting recurrent related party transactions reviews to assess accuracy and completeness of reporting.

Costs amounting to approximately RM176,000 were incurred in relation to the internal audit function for the financial year ended 30 June 2011.

NuMBER oF MEETiNGS HELD AND DETAiLS oF ATTENDANCE

During the financial year, a total of 5 Audit Committee Meetings were held and the details of attendance are as follows:-

Attendance

Eu Peng Meng @ Leslie Eu 5

Dato’ Yoogalingam A/L Vyramuttu 5

Dato’ Tan Guan Cheong 5

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BoARD STRuCTuRE

YTL Cement is led and managed by an experienced Board with a wide and varied range of expertise to address and manage the complexity and scale of the YTL Cement Group’s operations. This broad spectrum of skills and experience ensures the YTL Cement Group is under the guidance of an accountable and competent Board. The Directors recognise the key role they play in charting the strategic direction, development and control of the YTL Cement Group and have adopted the six primary responsibilities as listed in the Code, which facilitate the discharge of the Board’s stewardship responsibilities.

The Board currently has 15 Directors, comprising 8 executive members and 7 non-executive members, 5 of whom are independent. This provides an effective check and balance in the functioning of the Board, and complies with the Listing Requirements, which require one-third of the Board to be independent.

The positions and responsibilities of the Executive Chairman and the Managing Director are held by separate members of the Board. The Executive Chairman is primarily responsible for the orderly conduct and effectiveness of the Board, whilst the Managing Director oversees the day-to-day running of the business, implementation of Board policies and making of operational decisions, in addition to advancing relationships with regulators and all other stakeholders. The Managing Director and the Executive Directors are accountable to the Board for the profitable operation and development of the YTL Cement Group, consistent with the primary aim of enhancing long-term shareholder value.

The Board of Directors (“Board”) of YTL Cement Berhad (“YTL Cement” or “Company”) remains firmly committed to ensuring an appropriate and sound system of corporate governance throughout the Company and its subsidiaries (“YTL Cement Group”). In implementing its governance system and ensuring compliance with the Main Market Listing Requirements (“Listing Requirements”) of Bursa Malaysia Securities Berhad (“Bursa Securities”), the Board has been guided by the measures and best practices recommended in the Malaysian Code on Corporate Governance (“Code”).

The YTL Cement Group has a long-standing commitment to corporate governance and protection of shareholder value, which has been integral to the YTL Cement Group’s achievements and strong financial profile to date. The YTL Cement Group’s corporate governance structure is a fundamental part of the Board’s responsibility to protect and enhance long-term shareholder value and the financial performance of the YTL Cement Group, whilst taking into account the interests of all stakeholders.

This section of the Annual Report details the measures implemented by the YTL Cement Group to strengthen its compliance with the Principles and Best Practices of Corporate Governance as set out in Parts 1 and 2 of the Code, respectively.

The Independent Non-Executive Directors have the experience and business acumen necessary to carry sufficient weight in the Board’s decisions and the presence of these Independent Non-Executive Directors brings an additional element of balance to the Board as they do not participate in the day-to-day running of the Company. The differing roles of Executive and Non-Executive Directors are delineated, both having fiduciary duties towards shareholders. Executive Directors have a direct responsibility for business operations whereas Non-Executive Directors have the necessary skill and experience to bring an independent judgment to bear on issues of strategy, performance and resources brought before the Board.

The Executive Directors are collectively accountable for the running and management of the YTL Cement Group’s operations and for ensuring that strategies are fully discussed and examined, and take account of the long-term interests of shareholders, employees, customers, suppliers and the many communities in which the YTL Cement Group conducts its business.

Together, the Directors believe that the structure of the Board satisfactorily reflects the interests of its shareholders and is able to provide clear effective leadership to the YTL Cement Group. The composition of the Board reflects the wide range of business, commercial and financial experience essential in the management and direction of a corporation of this size. A brief description of the background of each Director is presented in the Profile of the Board of Directors in this Annual Report.

YTL Cement Berhad

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Statement on Corporate Governance for the financial year ended 30 June 2011

To date, the Board has not found it necessary to designate a senior independent non-executive to whom concerns may be conveyed, mainly because full deliberation of issues affecting the YTL Cement Group by all members of the Board and shareholders is encouraged.

DiRECToRS’ TRAiNiNG

The Directors are fully cognisant of the importance and value of attending seminars, training programmes and conferences in order to update themselves on developments and changes in the industries in which the YTL Cement Group operates, as well as wider economic, financial and governance issues to enhance their skills, knowledge and expertise in their respective fields. All Directors have attended and completed the Mandatory Accreditation Programme prescribed by Bursa Securities, and the Board will continue to evaluate and determine the training needs of its Directors on an ongoing basis.

Throughout the financial year under review, the Directors attended various briefings, conferences, seminar programmes and speaking engagements covering areas that included corporate governance, leadership, relevant industry updates and global business developments which they have collectively or individually considered as useful in discharging their stewardship responsibilities.

BoARD MEETiNGS & ACCESS To iNFoRMATioN

Board meetings are scheduled with due notice in advance at least 5 times in a year in order to review and approve the annual and interim financial results. Additional meetings may also be convened on an ad-hoc basis when significant issues arise relating to the YTL Cement Group and when necessary to review the progress of its operating subsidiaries in achieving their strategic goals. The Board met 5 times during the financial year ended 30 June 2011. Details of each Director’s attendance of the Board meetings are disclosed in the Profile of the Board of Directors in this Annual Report.

The Directors are fully apprised of the need to determine and disclose potential or actual conflicts of interest which may arise in relation to transactions or matters which come before the Board. In accordance with applicable laws and regulations, the Directors formally disclose any direct or indirect interests or conflicts of interests in such transactions or matters as and when they arise and abstain from deliberations and voting at Board meetings as required.

The Directors have full and unrestricted access to all information pertaining to the YTL Cement Group’s business and affairs to enable them to discharge their

duties. There are matters specifically reserved for the Board’s decision to ensure that the direction and control of the YTL Cement Group rests firmly with the Board.

Prior to each Board meeting, all Directors receive the agenda together with a comprehensive set of Board papers encompassing qualitative and quantitative information relevant to the business of the meeting. This allows the Directors to obtain further explanations or clarifications, where necessary, in order to be properly briefed before each meeting. A record of the Board’s deliberations of the issues discussed and conclusions reached in discharging its duties and responsibilities is captured in the minutes of each meeting, prepared by the Company Secretary, who ensures that accurate and proper records of the proceedings of Board meetings and resolutions passed are recorded and kept in the statutory register at the registered office of YTL Cement Group.

Board papers are presented in a consistent, concise and comprehensive format, and include, where relevant to the proposal put forward for the Board’s deliberation, approval or knowledge, progress reports on the YTL Cement Group’s operations and detailed information on corporate proposals, major fund-raising exercises and significant acquisitions and disposals. Where necessary or prudent, professional advisers may be on hand to provide further information and respond directly to Directors’ queries. In order to maintain confidentiality, Board papers on issues that are deemed to be price-sensitive may be handed out to Directors during the Board meeting.

All Directors have full access to the advice and services of the Company Secretary who consistently ensures that Board procedures are adhered to at all times during meetings and advises the Board on matters including corporate governance issues and the Directors’ responsibilities in complying with relevant legislation and regulations.

AppoiNTMENT & RE-ELECTioN oF DiRECToRS

The appointment of Directors is undertaken by the Board as a whole. The Managing Director recommends candidates suitable for appointment to the Board, and the final endorsement lies with the entire Board to ensure that the required mix of skills, experience and expertise of members of the Board is sufficient to address the issues affecting the YTL Cement Group. In its deliberations, the Board is required to take into account the integrity, professionalism, skill, knowledge, expertise and experience of the proposed candidate. In accordance with the Board’s procedures, deliberations and conclusions in this process reached are recorded by the Company Secretary. During the financial year under review, there were no new appointments to the Board.

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In accordance with the Company’s Articles of Association, at least one-third of the Directors are required to retire from office at each Annual General Meeting (“AGM”) and may offer themselves for re-election by rotation. Directors who are appointed by the Board during the financial year are subject to re-election by shareholders at the next AGM held following their appointments. Directors who are over seventy years of age are required to submit themselves for re-appointment by shareholders annually in accordance with Section 129 of the Companies Act 1965. The names and details of Directors seeking re-election at the forthcoming AGM are disclosed in the Notice of AGM and the Profile of the Board of Directors, respectively, in this Annual Report.

In accordance with the Listing Requirements, each member of the Board holds not more than ten directorships in public listed companies and not more than fifteen directorships in non-public listed companies. This ensures that their commitment, resources and time are focused on the affairs of the YTL Cement Group thereby enabling them to discharge their duties effectively.

DiRECToRS’ REMuNERATioN

Directors’ remuneration is decided in line with the objective recommended by the Code to determine the remuneration for Directors so as to attract, retain, motivate and incentivise Directors of the necessary calibre needed to lead the YTL Cement Group successfully. In general, the remuneration of the directors is reviewed against the performance of the individual and the YTL Cement Group. The Executive Directors’ remuneration consists of basic salary, other emoluments and other customary benefits as appropriate to a senior management member. The component parts of remuneration are structured so as to link rewards to performance. Directors do not participate in decisions regarding their own remuneration packages and Directors’ fees must be approved by shareholders at the AGM.

Details of the aggregate remuneration of Directors categorised into appropriate components and the range of remuneration for each Director can be found in Note 5 to the Financial Statements in this Annual Report. Details are not shown with reference to Directors individually, both for security reasons and because the Board believes that such information will not add significantly to the understanding and evaluation of the YTL Cement Group’s standards of corporate governance.

DiALoGuE wiTH SHAREHoLDERS & iNvESToRS

The YTL Cement Group values dialogue with investors and constantly strives to improve transparency by maintaining channels of communication with shareholders and investors that enable the Board to convey information about performance, corporate strategy and other matters affecting shareholders’ interests. The Board believes that a constructive and effective investor relationship is essential in enhancing shareholders value and recognises the importance of timely dissemination of information to shareholders. Accordingly, the Board ensures that shareholders are kept well-informed of any major developments of the YTL Cement Group. Such information is communicated through the Annual Report, the various disclosures and announcements to Bursa Securities, including quarterly and annual results, and corporate websites.

The Managing Director and the Executive Directors meet with analysts, institutional shareholders and investors throughout the year not only to promote the dissemination of the YTL Cement Group’s financial results but to provide updates on strategies and new developments to ensure mutual understanding of the YTL Cement Group’s operations and activit ies. Presentations based on permissible disclosures are made to explain the YTL Cement Group’s performance and major development programs. Whilst efforts are made to provide as much information as possible to its shareholders and stakeholders, the Directors are cognisant of the legal and regulatory framework governing the release of material and sensitive information so as to not mislead its shareholders. Therefore, information that is price-sensitive or that may be regarded as undisclosed material information about the YTL Cement Group is not disclosed to any party until after the prescribed announcement to Bursa Securities has been made.

The AGM is the principal forum for dialogue with shareholders. The Board provides opportunities for shareholders to raise questions pertaining to issues in the Annual Report, corporate developments in the YTL Cement Group, the resolutions being proposed and the business of the YTL Cement Group in general at every AGM and extraordinary general meeting of the Company. The notice of the AGM and a circular to shareholders in relation to the renewal of the Company’s share buy-back and recurrent related party transactions mandates are sent to shareholders at least 21 days prior to the AGM in accordance with the Listing Requirements and the Companies Act 1965 in order to enable shareholders to review the YTL Cement Group’s financial and operational performance for the financial year and to fully evaluate new resolutions being proposed.

YTL Cement Berhad

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Statement on Corporate Governance for the financial year ended 30 June 2011

The Managing Director and Executive Directors take the opportunity to present a comprehensive review of the progress and performance of the YTL Cement Group, and provide appropriate answers in response to shareholders’ questions during the meeting, thereby ensuring a high level of accountability, transparency and identification with the YTL Cement Group’s business operations, strategy and goals. Each item of special business included in the notice of the meeting is accompanied by an explanatory statement for the proposed resolution to facilitate full understanding and evaluation of issues involved.

During the course of each financial year, the Company ensures prompt and timely release and dissemination of quarterly results, announcements, circulars and notices to enable shareholders to keep abreast of the YTL Cement Group’s financial and operational performance and to make informed decisions with regards to significant corporate developments.

THE AuDiT CoMMiTTEE

The Company has in place an Audit Committee which comprises 3 Non-Executive Directors in compliance with the Code and the Listing Requirements which require all the members of the Audit Committee to be Non-Executive Directors.

The Audit Committee holds quarterly meetings to review matters including the YTL Cement Group’s financial reporting, the audit plans for the financial year and recurrent related party transactions, as well as to deliberate the findings of the internal and external auditors.

The Audit Committee met 5 times during the financial year ended 30 June 2011. Full details of the composition, complete terms of reference and a summary of the activities of the Audit Committee during the financial year are set out in the Audit Committee Report in this Annual Report.

FiNANCiAL REpoRTiNG

The Directors are responsible for ensuring that financial statements are drawn up in accordance with the Companies Act 1965 and Financial Reporting Standards in Malaysia. In presenting the financial statements, the Company has used appropriate accounting policies, consistently applied and supported by reasonable and prudent judgments and estimates to present a true and fair assessment of the Company’s position and prospects. Quarterly financial statements were reviewed by the Audit Committee and approved by the Board prior to release to Bursa Securities and the Securities Commission.

The Statement by Directors made pursuant to Section 169 of the Companies Act 1965 is set out in this Annual Report.

iNTERNAL CoNTRoL & iNTERNAL AuDiT

The Board acknowledges its overall responsibility for maintaining a sound system of internal control to safeguard the investment of its shareholders and the YTL Cement Group’s assets. Details of the YTL Cement Group’s system of internal control and its internal audit functions are contained in the Statement on Internal Control and the Audit Committee Report in this Annual Report.

RELATioNSHip wiTH THE AuDiToRS

The Board has established formal and professional arrangements for maintaining an appropriate relationship with the Company’s external auditors, Messrs HLB Ler Lum. The external auditors also attend each AGM in order to address clarifications sought pertaining to the audited financial statements by shareholders.

ADDiTioNAL DiSCLoSuRE

• Employee Retention Policies: YTL Cement’s employees’ share option schemes (“ESOS”) were approved by shareholders at extraordinary general meetings in October 2001 and November 2010. Details of the number of ESOS options granted during the year under review can be found in the Directors’ Report in the Financial Statements in this Annual Report.

The Board believes that maintaining the calibre of its employees is vital to ensure the continued success of the YTL Cement Group and the consequent increase in returns to shareholders. To these ends, the YTL Cement Group has implemented various staff retention and assessment practices in addition to the ESOS, including a Thirteenth Month wage supplement, annual bonuses and biannual reviews of staff performance.

• ShareBuy-BackProgramme: Details of the Company’s share buy-back exercises for the year under review have also been included in this Annual Report.

The Board is satisfied that the Company has, in all material aspects, complied with the best practices of the Code as at 30 June 2011.

This statement was approved by the Board of Directors on 25 August 2011.

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RESpoNSiBiLiTiES oF THE BoARD

The Board is ultimately responsible for maintaining a sound system of internal control which includes the establishment of an appropriate control environment framework to address the need to safeguard shareholders’ investments and the assets of the YTL Cement Group, and for reviewing the adequacy and integrity of the system. The system of internal control covers not only financial controls but operational and compliance controls and risk management. However, the Board recognises that reviewing the YTL Cement Group’s system of internal control is a concerted and continuing process, designed to minimise the likelihood of fraud and error, and to manage rather than eliminate the risk of failure to achieve business objectives. Accordingly, the system of internal control can only provide reasonable but not absolute assurance against material misstatement, fraud and loss.

The Board believes that the YTL Cement Group’s system of internal control, financial or otherwise in place for the financial year under review, should provide reasonable assurance regarding the achievement of the objectives of ensuring effectiveness and efficiency of operations, reliability and transparency of financial information and compliance with laws and regulations.

pRiNCipAL FEATuRES oF THE YTL CEMENT GRoup’S SYSTEM oF iNTERNAL CoNTRoL

The Board is committed to maintaining a sound internal control structure that includes processes for continuous monitoring and review of effectiveness of control activities, and to govern the manner in which the YTL Cement Group and its staff conduct themselves. The principal features which formed part of the YTL Cement Group’s system of internal control can be summarised as follows:-

During the financial year under review, YTL Cement Berhad (“YTL Cement” or “Company”) and its subsidiaries (“YTL Cement Group”) continued to enhance the YTL Cement Group’s system of internal control and risk management, to comply with the applicable provisions of the Malaysian Code on Corporate Governance (“Code”) and the Main Market Listing Requirements (“Listing Requirements”) of Bursa Malaysia Securities Berhad (“Bursa Securities”).

The Board of Directors (“Board”) acknowledges its overall responsibility for maintaining a sound system of internal control to safeguard the investment of its shareholders and the assets of the YTL Cement Group, and that these controls are designed to provide reasonable, but not absolute, assurance against the risk of occurrence of material errors, fraud or losses.

• Authorisation Procedures: The YTL Cement Group has a clear definition of authorisation procedures and a clear line of accountability, with strict authorisation, approval and control procedures within the Board and the senior management. Responsibility levels are communicated throughout the YTL Cement Group which set out, among others, authorisation levels, segregation of duties and other control procedures to promote effective and independent stewardship in the best interest of shareholders.

• Authority Levels: The YTL Cement Group has delegated authority levels for major tenders, capital expenditure projects, acquisitions and disposals of businesses and other significant transactions to the Executive Directors. The approval of capital and revenue proposals above certain limits is reserved for decision by the Board. Other investment decisions are delegated for approval in accordance with authority limits. Comprehensive appraisal and monitoring procedures are applied to all major investment decisions.

The authority of the Directors is required for decisions on key treasury matters including financing of corporate and investment funding requirements, foreign currency and interest rate risk management, investments, insurance and designation of authorised signatories.

• Financial Performance: Interim financial results are reviewed by the Audit Committee and approved by the Board upon recommendation of the Audit Committee before release to Bursa Securities. The full year financial results and analyses of the YTL Cement Group’s state of affairs are disclosed to shareholders after review and audit by the external auditors.

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Statement on Internal Control for the financial year ended 30 June 2011

• Internal Compliance: The YTL Cement Group monitors compliance with its internal financial controls through management reviews and reports which are internally reviewed by key personnel to enable it to gauge achievement of annual targets. Updates of internal policies and procedures are undertaken to reflect changing risks or resolve operational deficiencies, as well as changes to legal and regulatory compliance requirements relevant to the YTL Cement Group. Internal audit visits are systematically arranged over specific periods to monitor and scrutinise compliance with procedures and assess the integrity of financial information provided.

KEY pRoCESSES oF THE YTL CEMENT GRoup’S SYSTEM oF iNTERNAL CoNTRoL

The key processes that the Board has established to review the adequacy and integrity of the system of internal control are as follows:-

• Internal Audit Function: The YTL Cement Group’s internal audit function is carried out by the YTL Corporation Berhad Group Internal Audit department (“YTLIA”), which reports directly to the Audit Committee. YTLIA provides assurance on the efficiency and effectiveness of the internal control systems implemented by management, and reports directly to the Audit Committee. A description of the activities of the internal audit function can be found in the Audit Committee Report included in this Annual Report.

YTLIA provides periodic reports to the Audit Committee, reporting on the outcome of the audits conducted which highlight the effectiveness of the system of internal control and significant risks. The Audit Committee reviews and evaluates the key concerns and issues raised by YTLIA and ensures that appropriate and prompt remedial action is taken by Management.

None of the weaknesses or issues identified during the review for the financial year have resulted in non-compliance with any relevant policies or procedures, listing requirements or recommended industry practices that would require disclosure in the Company’s Annual Report.

The system of internal control will continue to be reviewed, enhanced and updated in line with changes in the operating environment. The Board will seek regular assurance on the continuity and

effectiveness of the internal control system through independent appraisals by YTLIA. The Board is of the view that the current system of internal control in place throughout the YTL Cement Group is effective to safeguard its interests.

• Senior Management Meetings: The YTL Cement Group conducts weekly meetings of the senior management which comprises Executive Directors and divisional heads. The purpose of these meetings is to deliberate and decide upon urgent company matters. Decisions can then be effectively communicated to relevant staff levels in a timely manner. From these meetings, the management is able to identify significant operational and financial risks of the business units concerned.

• Treasury Meetings: Management meetings are convened to review, identify, discuss and resolve significant financial and treasury matters and to monitor the financial standing of the YTL Cement Group. These meetings are conducted on a weekly basis to ensure that any new financial developments and/or areas of concern are highlighted early and can be dealt with promptly. The members of this meeting comprise at least the YTL Cement Group Managing Director, Executive Directors and senior managers.

• Site Visits: The Executive Directors undertake site visits to production and operating units and communicate with various levels of staff to gauge first-hand the effectiveness of strategies discussed and implemented. This is to ensure that Management and the Executive Directors maintain a transparent and open channel of communication for effective operation.

RiSK MANAGEMENT

The YTL Cement Group’s strong financial profile is the result of a system of internal control and risk management designed to mitigate risks which arise in the course of business. This is exemplified by the YTL Cement Group’s strategy of financing acquisitions on a non-recourse basis, as well as in undertaking cement plant operations, in order to reduce risk levels. The YTL Cement Group’s joint venture in 1993 with the Pahang State Government to build and operate Pahang Cement Sdn Bhd’s (“Pahang Cement”) Bukit Sagu cement plant is an example of this strategy. Pahang Cement is a wholly-owned subsidiary of YTL Cement following the acquisition of the remaining 50% stake in Pahang Cement by the Company in 2004.

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The Board acknowledges that all areas of the YTL Cement Group’s business activities involve some degree of risk. The YTL Cement Group is committed to ensuring that there is an effective risk management framework which allows management to manage risks within defined parameters and standards, and promotes profitability of the YTL Cement Group’s operations in order to enhance shareholder value.

Identifying, evaluating and managing the significant risks faced by the YTL Cement Group is an ongoing process which is undertaken at each level of operations. During the financial year under review, this function was exercised through participation of Executive Directors in management meetings to ensure the adequacy and integrity of the system of internal control. Emphasis is placed on reviewing and updating the process for identifying and evaluating the significant risks affecting the business, and policies and procedures by which these risks are managed.

Management is responsible for creating a risk-aware culture within the YTL Cement Group and for the identification and evaluation of significant risks applicable to their areas of business, together with the design and operation of suitable internal controls. These risks are assessed on a continual basis and may be associated with a variety of internal and external sources including control breakdowns, disruption in information systems, competition, natural catastrophe and regulatory requirements. Significant changes in the business and the external environment which affect significant risks will be reported by Management to the Board in developing a risk mitigation action plan. Where areas for improvement in the system are identified, the Board considers the recommendations made by the Audit Committee and the internal auditors.

The Board will pursue its ongoing process of identifying, assessing and managing key business, operational and financial risks faced by its business units as well as regularly reviewing planned strategies to determine whether risks are mitigated and well-managed, and to ensure compliance with the guidelines issued by the relevant authorities. This is to ensure the YTL Cement Group is able to respond effectively to the constantly changing business environment in order to protect and enhance stakeholders’ interests and shareholder value.

REviEw BY EXTERNAL AuDiToRS

The external auditors, Messrs HLB Ler Lum, have reviewed this Statement on Internal Control for inclusion in the Annual Report for the financial year ended 30 June 2011, in compliance with Paragraph 15.23 of the Listing Requirements, and reported to the Board that nothing has come to their attention that causes them to believe that the statement is inconsistent with their understanding of the process adopted by the Board in reviewing the adequacy and integrity of the system of internal controls.

CoNCLuSioN

The Board is of the view that the system of internal control being instituted throughout the YTL Cement Group is sound and effective. The monitoring, review and reporting arrangements in place give reasonable assurance that the structure and operation of controls are appropriate for the YTL Cement Group’s operations and that risks are at an acceptable level throughout the YTL Cement Group’s businesses. Nevertheless, reviews of all the control procedures will be continuously carried out to ensure the ongoing effectiveness and adequacy of the systems of internal control, so as to safeguard shareholders’ investments and the YTL Cement Group’s assets.

This Statement was approved by the Board of Directors on 4 October 2011.

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Statement on Internal Control for the financial year ended 30 June 2011

At the last Annual General Meeting of YTL Cement Berhad (“YTL Cement”) held on 30 November 2010, the Company had obtained a mandate from its shareholders to allow YTL Cement and/or its subsidiaries (”YTL Cement Group”) to enter into related party transactions which are recurrent, of a revenue or trading nature and which are necessary for the day-to-day operations of YTL Cement or its subsidiaries (”Recurrent Related Party Transactions”).

In accordance with Paragraph 10.09(2)(b) of Bursa Malaysia Securities Berhad Main Market Listing Requirements, details of the Recurrent Related Party Transactions conducted during the financial year ended 30 June 2011 pursuant to the said shareholder mandate are as follows:-

Companies in theYTL Cement Group involved inthe RecurrentRelated party Transactions Related party Nature of Transactions

interestedRelated parties

Nature ofRelationship

value ofTransactionsRM’000

Batu Tiga Quarry Sdn Bhd,

Jaksa Quarry Sdn Bhd,

Buildcon Concrete Sdn Bhd,

Buildcon-Cimaco Concrete Sdn Bhd,

C.I. Readymix Sdn Bhd,

Jaksa Quarry Sdn Bhd,

Kenneison Northern Quarry Sdn Bhd,

Pahang Cement Sdn Bhd,

Perak-Hanjoong Simen Sdn Bhd,

Slag Cement Sdn Bhd,

Slag Cement (Southern) Sdn Bhd,

Subsidiaries(f) of YTL Corporation(b) Group (“YTL Corporation Group”)

Sale of cement to Related Party;

Sale of aggregates, readymix concrete, concrete and construction materials to Related Party;

Maintenance cost on mixer trucks, plant and machinery paid to Related Party;

Purchase of lubricants, diesel, spare parts and equipment from Related Party;

Hiring/renting charges on machinery, mixer trucks and tankers paid to Related Party;

Ash pond management charges paid to Related Party;

Rental of factories at Kota Kemuning, Shah Alam and Larkin Industrial Estate, Johor Bahru by Related Party;

Commission on sales of concrete paid to Related Party;

(continued next page)

YTLSH(a)

YTL Corporation(b)

YTL Industries(c)

Tan Sri Yeoh Tiong Lay(d)

Yeoh Siblings(e)

^MajorShareholder/ ^Person Connected(1)

^MajorShareholder/ ^PersonConnected(2)

^MajorShareholder/ ^Person Connected(3)

Directors/^Major Shareholder/^Person Connected(1)(2)(3)(4)

Directors(1)(2)(3)(4)

54,487

29Disclosure of Recurrent Related Party Transactionsof a Revenue or Trading Nature for the financial year ended 30 June 2011

Companies in theYTL Cement Group involved inthe RecurrentRelated party Transactions Related party Nature of Transactions

interestedRelated parties

Nature ofRelationship

value ofTransactionsRM’000

YTL Cement,

YTL Cement Marketing Sdn Bhd,

YTL Premix Sdn Bhd.

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Parking fees paid to Related Party;

Provision of hotel related services by Related Party;

Provision of conditioning monitoring services by Related Party;

Charges paid for use of office space and/or residential premises;

Purchase of building/construction materials from Related Party.

Definitions:-

(a) YTLSH – Yeoh Tiong Lay & Sons Holdings Sdn Bhd

(b) YTL Corporation – YTL Corporation Berhad

(c) YTL Industries – YTL Industries Berhad

(d) Tan Sri Yeoh Tiong Lay – Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay

(e) Yeoh Siblings – Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping, Dato’ Yeoh Seok Kian, Dato’ Yeoh Seok Hong, Dato’ Sri Michael Yeoh Sock Siong, Dato’ Yeoh Soo Keng & Dato’ Mark Yeoh Seok Kah

(f) Subsidiaries of YTL Corporation – Excluding YTL e-Solutions Berhad, YTL Power International Berhad, YTL Land & Development Berhad, YTL Cement and their subsidiaries

^ Major Shareholder/ – As defined in Paragraph 1.01 of the Main LR. Person Connected

Notes:-

(1) YTLSH is a Major Shareholder of YTL Cement Group and YTL Corporation Group. YTLSH is a Person Connected with Tan Sri Yeoh Tiong Lay and the Yeoh Siblings.

(2) YTL Corporation is a Major Shareholder of YTL Cement Group and YTL Corporation Group. YTL Corporation is a Person Connected with Tan Sri Yeoh Tiong Lay and the Yeoh Siblings.

(3) YTL Industries is a Major Shareholder of YTL Cement Group and YTL Technologies Sdn Bhd, a subsidiary of YTL Corporation involved in the Recurrent Related Party Transactions. YTL Industries is a Person Connected with Tan Sri Yeoh Tiong Lay and the Yeoh Siblings.

(4) Tan Sri Yeoh Tiong Lay is a Major Shareholder of YTLSH, YTL Corporation Group, YTL Industries, and YTL Cement Group. Tan Sri Yeoh Tiong Lay is also a Person Connected with the Yeoh Siblings.

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Disclosure of Recurrent Related Party Transactions of a Revenue or Trading Naturefor the financial year ended 30 June 2011

Class of shares : Ordinary Shares of RM0.50 eachVoting rights : One vote per shareholder on a show of hands or one vote per ordinary share on a poll

DiSTRiBuTioN oF SHAREHoLDiNGS

Size of holdingNo. of

Shareholders %No. of

Shares# %#

Less than 100 1,238 25.55 25,897 0.01

100 – 1,000 1,187 24.49 645,944 0.14

1,001 – 10,000 1,661 34.28 6,901,741 1.46

10,001 – 100,000 603 12.44 17,614,888 3.72

100,001 to less than 5% of issued shares 154 3.18 167,042,729 35.31

5% and above of issued shares 3 0.06 280,751,694 59.36

Total 4,846 100.00 472,982,893 100.00

THiRTY LARGEST SHAREHoLDERS(without aggregating securities from different securities accounts belonging to the same person)

Name No. of Shares %#

1 YTL Industries Berhad 210,899,198 44.592 DB (Malaysia) Nominee (Asing) Sdn Bhd

– Exempt An for Deutsche Bank Ag Singapore (PWM Asing)44,337,833 9.37

3 State Secretary, Pahang 25,514,663 5.394 Citigroup Nominees (Tempatan) Sdn Bhd

– Employees Provident Fund Board16,973,190 3.59

5 Bara Aktif Sdn Bhd 13,966,833 2.956 YTL Corporation Berhad 12,324,103 2.617 Mayban Nominees (Tempatan) Sdn Bhd

– Mayban Trustees Berhad for Public Ittikal Fund (N14011970240)12,197,700 2.58

8 YTL Power International Berhad 10,015,304 2.129 Valuecap Sdn Bhd 9,845,900 2.0810 OSK Nominees (Tempatan) Sdn Berhad

– Pledged Securities Account for Pasdec Corporation Sdn Bhd7,574,000 1.60

11 YTL Corporation Berhad 5,259,500 1.1112 OSK Nominees (Tempatan) Sdn Berhad

– OSK Trustees Bhd for Pasdec Corporation Sdn Bhd5,135,966 1.09

13 AmanahRaya Trustees Berhad – Public Islamic Select Treasures Fund

3,694,400 0.78

14 AmanahRaya Trustees Berhad – Public Islamic Sector Select Fund

3,000,700 0.63

15 HSBC Nominees (Asing) Sdn Bhd – Exempt An for JPMorgan Chase Bank, National Association (Norges BK Lend)

2,723,100 0.58

16 Pasdec Corporation Sdn Bhd 2,669,836 0.5617 AmanahRaya Trustees Berhad

– Public Islamic Dividend Fund2,223,000 0.47

18 Citigroup Nominees (Tempatan) Sdn Bhd – Employees Provident Fund Board (Nomura)

2,038,900 0.43

31Analysis of Share/Irredeemable Convertible UnsecuredLoan Stock (ICULS) Holdings as at 30 September 2011

Name No. of Shares %#

19 BHLB Trustee Berhad – Public Focus Select Fund

1,832,200 0.39

20 Amsec Nominees (Tempatan) Sdn Bhd – Amtrustee Berhad for CIMB Islamic Dali Equity Growth Fund (UT-CIMB-DALI)

1,732,000 0.37

21 Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping, CBE, FICE 1,727,423 0.3722 Citigroup Nominees (Tempatan) Sdn Bhd

– Employees Provident Fund Board (CIMB Prin)1,718,400 0.36

23 Citigroup Nominees (Tempatan) Sdn Bhd – Employees Provident Fund Board (PHEIM)

1,707,700 0.36

24 Citigroup Nominees (Tempatan) Sdn Bhd – Exempt An for Prudential Fund Management Berhad

1,525,500 0.32

25 Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay 1,518,562 0.3226 AmanahRaya Trustees Berhad

– Public Islamic Equity Fund1,470,600 0.31

27 AmanahRaya Trustees Berhad – Public Islamic Select Enterprises Fund

1,397,400 0.30

28 Eagletron Venture Corp. 1,390,729 0.2929 HSBC Nominees (Tempatan) Sdn Bhd

– HSBC (M) Trustee Bhd for HwangDBS Select Opportunity Fund (3969)1,373,000 0.29

30 Dato’ Sri Michael Yeoh Sock Siong 1,265,634 0.27

Total 409,053,274 86.48

SuBSTANTiAL SHAREHoLDERS(as per register of substantial shareholders)

No. of Shares Held

Name Direct %# indirect %#

Yeoh Tiong Lay & Sons Holdings Sdn Bhd 19,000 – 238,498,105← 50.42

YTL Corporation Berhad 17,583,603 3.72 220,914,502↑ 46.71

YTL Industries Berhad 210,899,198 44.59 – –

Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay 1,681,634 0.36 238,517,105→ 50.43

Perbadanan Setiausaha Kerajaan Pahang 25,514,663 5.39 – –

← Deemed interests by virtue of interests held by YTL Corporation Berhad, YTL Industries Berhad & YTL Power International Berhad pursuant to Section 6A of the Companies Act, 1965.

↑ Deemed interests by virtue of interests held by YTL Industries Berhad & YTL Power International Berhad pursuant to Section 6A of the Companies Act, 1965.

→ Deemed interests by virtue of interests held by Yeoh Tiong Lay & Sons Holdings Sdn Bhd, YTL Corporation Berhad, YTL Industries Berhad & YTL Power International Berhad pursuant to Section 6A of the Companies Act, 1965.

# Based on the issued and paid-up capital of the Company of RM247,204,328.50 comprising 494,408,657 ordinary shares net of 21,425,764 treasury shares retained by the Company as per Record of Depositors.

THiRTY LARGEST SHAREHoLDERS(without aggregating securities from different securities accounts belonging to the same person) (continued)

YTL Cement Berhad

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Analysis of Share/Irredeemable Convertible Unsecured Loan Stock (ICULS) Holdingsas at 30 September 2011

Type of Securities : irredeemable Convertible unsecured Loan Stocks 2005/2015(iCuLS 2005/2015)Voting rights : One vote per ICULS 2005/2015 holder on a show of hands or one vote per ICULS 2005/2015 on a poll in respect of meeting of ICULS 2005/2015 holders

DiSTRiBuTioN oF iCuLS 2005/2015 HoLDiNGS

Size of holding

No. of iCuLS 2005/2015

Holders %No. of iCuLS

2005/2015 %

Less than 100 51 8.27 1,814 0.00

100 – 1,000 49 7.94 31,131 0.01

1,001 – 10,000 287 46.51 1,297,320 0.27

10,001 – 100,000 185 29.98 5,817,115 1.21

100,001 to less than 5% of issued ICULS 42 6.81 51,504,082 10.75

5% and above of issued ICULS 3 0.49 420,368,318 87.76

Total 617 100.00 479,019,780 100.00

THiRTY LARGEST iCuLS 2005/2015 HoLDERS(without aggregating securities from different securities accounts belonging to the same person)

NameNo. of iCuLS

2005/2015 %

1 YTL Industries Berhad 210,899,198 44.03

2 YTL Corporation Berhad 185,000,000 38.62

3 YTL Corporation Berhad 24,469,120 5.11

4 YTL Power International Berhad 14,052,945 2.93

5 YTL Power International Berhad 10,015,304 2.09

6 YTL Power International Berhad 5,042,932 1.05

7 YTL Corporation Berhad 4,721,600 0.99

8 Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping, CBE, FICE 1,727,423 0.36

9 Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay 1,518,562 0.32

10 Onn Ping Lan 1,391,900 0.29

11 Dato’ Sri Michael Yeoh Sock Siong 1,265,634 0.26

12 Datin Sri Tan Siew Bee 1,109,388 0.23

13 Goh Thong Beng 1,090,000 0.23

14 Onn Kok Puay (Weng Guopei) 832,900 0.17

15 Dato’ Yeoh Soo Keng 818,251 0.17

16 HLB Nominees (Tempatan) Sdn Bhd – Pledged Securities A/c for Lee Kwong Joo

683,600 0.14

17 HSBC Nominees (Asing) Sdn Bhd – Exempt An for JPMorgan Chase Bank, National Association (JPMINTL BK Ltd)

644,800 0.13

18 Bara Aktif Sdn Bhd 642,800 0.13

33

NameNo. of iCuLS

2005/2015 %

19 Dato’ Yeoh Seok Kian 618,754 0.13

20 Citigroup Nominees (Tempatan) Sdn Bhd– Pledged Securities A/c for Lee Kwong Joo (471898)

482,000 0.10

21 Brian Ma Kok Kin 455,000 0.09

22 Fong Siew Fang 372,000 0.08

23 Tng Keok Keow 289,523 0.06

24 Liou Wei Hau 255,000 0.05

25 Law Chin Wat 233,200 0.05

26 Dato’ Mohamed Zainal Abidin bin Abdul Kadir 225,634 0.05

27 Dato’ Yeoh Seok Hong 225,634 0.05

28 Dato’ Yeoh Soo Min 225,634 0.05

29 Kalsom binti Ahmad 208,000 0.04

30 Lee Lay Geok 202,000 0.04

Total 469,718,736 98.04

THiRTY LARGEST iCuLS 2005/2015 HoLDERSwithout aggregating securities from different securities accounts belonging to the same person) (continued)

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Analysis of Share/Irredeemable Convertible Unsecured Loan Stock (ICULS) Holdingsas at 30 September 2011

The CompanyYTL Cement Berhad

No. of Shares Held

No. of Share

options

Name Direct % indirect % Direct

Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay 1,681,634 0.36 238,832,990(1)(2) 50.50 1,400,000

Tan Sri Asmat Bin Kamaludin – – 10,400(2) * –

Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping, CBE, FICE

2,042,923 0.43 – – 1,400,000

Dato’ Kamaruddin Bin Mohammed – – 300,000(2) 0.06 –

Dato’ Yeoh Seok Kian 618,754 0.13 83,200(2) 0.02 350,000

Dato’ Yeoh Seok Hong 225,634 0.05 45,123(2) 0.01 –

Dato’ Sri Michael Yeoh Sock Siong 1,265,634 0.27 1,109,388(2) 0.24 1,000,000

Dato’ Yeoh Soo Keng 938,251 0.20 90,251(2) 0.02 700,000

Dato’ Mark Yeoh Seok Kah 187,200 0.04 135,200(2) 0.03 –

Joseph Benjamin Seaton 526,423 0.11 – – –

No. of irredeemable Convertible unsecured Loan Stocks 2005/2015 Held

Name Direct % indirect %

Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay 1,681,634 0.35 454,535,984(1)(2) 94.89

Tan Sri Asmat Bin Kamaludin – – 10,400(2) *

Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping, CBE, FICE

1,727,423 0.36 – –

Dato’ Kamaruddin Bin Mohammed – – 208,000(2) 0.04

Dato’ Yeoh Seok Kian 618,754 0.13 100,000(2) 0.02

Dato’ Yeoh Seok Hong 225,634 0.05 45,123(2) 0.01

Dato’ Sri Michael Yeoh Sock Siong 1,265,634 0.26 1,109,388(2) 0.23

Dato’ Yeoh Soo Keng 818,251 0.17 – –

Dato’ Mark Yeoh Seok Kah 187,200 0.04 135,200(2) 0.03

Holding CompanyYTL industries Berhad

No. of Shares Held

Name Direct % indirect %

Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay – – 12,980,009(3) 100

35Statement of Directors’ Interests in the Company and related corporations as at 30 September 2011

penultimate Holding CompanyYTL Corporation Berhad

No. of Shares Held

Name Direct % indirect %

Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay 47,523,040 0.53 4,786,136,490(2)(4) 53.38

Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping, CBE, FICE 84,094,530 0.94 – –

Dato’ Yoogalingam A/L Vyramuttu – – 160,000 *

Dato’ Yeoh Seok Kian 30,483,085 0.34 2,109,980(2) 0.02

Dato’ Yeoh Seok Hong 25,686,095 0.29 19,864,810(2) 0.22

Dato’ Sri Michael Yeoh Sock Siong 26,153,345 0.29 12,885,305(2) 0.14

Dato’ Yeoh Soo Keng 29,084,105 0.32 424,820(2) *

Dato’ Mark Yeoh Seok Kah 17,942,040 0.20 3,116,775(2) 0.03

No. of Share options

Name Direct indirect

Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay 25,000,000 30,000,000(2)

Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping, CBE, FICE 25,000,000 2,000,000(7)

Dato’ Yoogalingam A/L Vyramuttu – 250,000(2)

Dato’ Yeoh Seok Kian 17,500,000 –

Dato’ Yeoh Seok Hong 15,000,000 2,000,000(2)

Dato’ Sri Michael Yeoh Sock Siong 15,000,000 –

Dato’ Yeoh Soo Keng 15,000,000 –

Dato’ Mark Yeoh Seok Kah 15,000,000 –

ultimate Holding CompanyYeoh Tiong Lay & Sons Holdings Sdn Bhd

No. of Shares Held

Name Direct % indirect %

Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay 8,220,004 20.19 6,250,004(2) 15.35

Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping, CBE, FICE 5,000,000 12.28 – –

Dato’ Yeoh Seok Kian 5,000,000 12.28 – –

Dato’ Yeoh Seok Hong 5,000,000 12.28 – –

Dato’ Sri Michael Yeoh Sock Siong 5,000,000 12.28 – –

Dato’ Yeoh Soo Keng 1,250,000 3.07 – –

Dato’ Mark Yeoh Seok Kah 5,000,000 12.28 – –

YTL Cement Berhad

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Statement of Directors’ Interests in the Company and related corporations as at 30 September 2011

Related CorporationsYTL e-Solutions Berhad

No. of Shares Held

Name Direct % indirect %

Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay – – 999,172,000(5) 74.27

Tan Sri Asmat Bin Kamaludin – – 50,000(2)(8) *

Dato’ Sri Michael Yeoh Sock Siong – – 1,905,500(2) 0.14

Dato’ Yeoh Soo Keng 500,000 0.04 – –

YTL Land & Development Berhad

No. of Shares Held

Name Direct % indirect %

Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay – – 497,846,293(5) 60.06

Tan Sri Asmat Bin Kamaludin – – 20,000(2) *

Dato’ Sri Haji Abd Rahim Bin Haji Abdul 2,000 * – –

Dato’ Yeoh Seok Kian 61,538 0.01 – –

Dato’ Yeoh Soo Keng 100,000 0.01 – –

YTL power international Berhad

No. of Shares Held

Name Direct % indirect %

Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay 13,380,250 0.18 4,026,693,165(2)(6) 54.96

Tan Sri Asmat Bin Kamaludin – – 48,915(2)(8) *

Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping, CBE, FICE

14,945,040 0.20 – –

Dato’ Yoogalingam A/L Vyramuttu – – 30,000(2) *

Dato’ Yeoh Seok Kian 5,021,360 0.07 1,545,941(2) 0.02

Dato’ Yeoh Seok Hong 22,510,268 0.31 3,281,179(2) 0.04

Dato’ Sri Michael Yeoh Sock Siong 4,601,744 0.06 1,019,291(2) 0.01

Dato’ Yeoh Soo Keng 5,081,777 0.07 133,500(2) *

Dato’ Mark Yeoh Seok Kah 7,665,920 0.10 1,093,601(2) 0.01

37

No. of Share options

Name Direct indirect

Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay 14,000,000 –

Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping, CBE, FICE 14,000,000 –

Dato’ Yeoh Seok Kian 6,000,000 –

Dato’ Yeoh Seok Hong 5,000,000 –

Dato’ Sri Michael Yeoh Sock Siong 6,000,000 –

Dato’ Yeoh Soo Keng 6,000,000 –

Dato’ Mark Yeoh Seok Kah 6,000,000 –

No. of warrants 2008/2018 Held

Name Direct % indirect %

Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay – – 1,100,821,922(5) 92.92

Tan Sri Asmat Bin Kamaludin – – 18,000(2) *

Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping, CBE, FICE

4,860,175 0.41 – –

Dato’ Yeoh Seok Kian 1,632,962 0.14 450,000(2) 0.04

Dato’ Sri Michael Yeoh Sock Siong 1,496,502 0.13 298,956(2) 0.03

Dato’ Yeoh Soo Keng 1,585,944 0.13 36,507(2) *

infoscreen Networks pLC

No. of Shares Held

Name Direct %

Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping, CBE, FICE 100 *

YTL Corporation (uK) pLC

No. of Shares Held

Name Direct %

Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping, CBE, FICE 1 *

Syarikat pelancongan Seri Andalan (M) Sdn Bhd

No. of Shares Held

Name Direct %

Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay 1 *

Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping, CBE, FICE 1 *

YTL Cement Berhad

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Statement of Directors’ Interests in the Company and related corporations as at 30 September 2011

YTL Construction (Thailand) Limited

No. of Shares Held

Name Direct %

Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping, CBE, FICE 1 0.01

Dato’ Yeoh Seok Kian 1 0.01

Dato’ Yeoh Seok Hong 1 0.01

Dato’ Sri Michael Yeoh Sock Siong 1 0.01

Dato’ Mark Yeoh Seok Kah 1 0.01

Samui Hotel 2 Co. Ltd

No. of Shares Held

Name Direct %

Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping, CBE, FICE 1 *

Dato’ Mark Yeoh Seok Kah 1 *

* Negligible

(1) Deemed interests by virtue of interests held by Yeoh Tiong Lay & Sons Holdings Sdn Bhd, YTL Corporation Berhad, YTL Power International Berhad and YTL Industries Berhad pursuant to Section 6A of the Companies Act, 1965.

(2) Deemed interests by virtue of interests held by spouse and/or children pursuant to Section 134(12)(c) of the Companies Act, 1965.(3) Deemed interests by virtue of interests held by YTL Corporation Berhad pursuant to Section 6A of the Companies Act, 1965.(4) Deemed interests by virtue of interests held by Yeoh Tiong Lay & Sons Holdings Sdn Bhd pursuant to Section 6A of the Companies Act,

1965.(5) Deemed interests by virtue of interests held by Yeoh Tiong Lay & Sons Holdings Sdn Bhd and YTL Corporation Berhad pursuant to Section 6A

of the Companies Act, 1965.(6) Deemed interests by virtue of interests held by Yeoh Tiong Lay & Sons Holdings Sdn Bhd, YTL Corporation Berhad, YTL Power Services Sdn Bhd

and Cornerstone Crest Sdn Bhd pursuant to Section 6A of the Companies Act, 1965.(7) Deemed interests by virtue of interests held in the name of deceased spouse in which the director, who is the legal representative, is entitled to

exercise under the terms of the ESOS.(8) Deemed interests by virtue of interests held by Bibot Holdings Sdn Bhd pursuant to Section 6A of the Companies Act, 1965.

By virtue of Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay’s deemed interests in the shares of the Company under Section 6A of the Companies Act, 1965, he is deemed to have interests in the shares of the subsidiaries of the Company to the extent the Company has an interest.

Other than as disclosed above, none of the other Directors held any interest in shares of the company or its related corporations.

39

Save as disclosed below, there are no purchase for other months during the financial year:-

Monthly Breakdown

No. of Shares purchased and

Retained as Treasury Shares

purchase priceper Share (RM) Average Cost

per Share(RM)

Total Cost(RM)Lowest Highest

August 2010 28,100 4.11 4.14 4.12921 116,030.90

September 2010 1,100 4.00 4.06 4.08667 4,495.34

October 2010 51,500 4.51 4.70 4.61320 237,579.79

March 2011 1,000 4.80 4.80 4.84644 4,846.44

ToTAL 81,700 4.00 4.80 4.44250 362,952.47

During the financial year, all the shares purchased by the Company were retained as treasury shares. As at 30 June 2011, a total of 21,425,664 ordinary shares were held as treasury shares. None of the treasury shares were resold or cancelled during the financial year.

YTL Cement Berhad

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Schedule of Share Buy-Back for the financial year ended 30 June 2011

Location TenureLandArea

Descriptionand Existing use

Built upArea

(sq.m.)

ApproximateAge of Building

(years)

LeaseExpiryDate

Net Bookvalue as at

30 June 2011RM’000

Date ofAcquisition

HS (D) 460/88 PT 1122#

Leasehold 59.79acres

Cement plant _ _ Year 2087 30.7.1998

HS (D) 461/88 PT 1123#

Leasehold 0.9864acres

Cement plant _ _ Year 2087 30.7.1988

HS (D) 2675 PT 1327#

Leasehold 22.21acres

Cement plant _ _ Year 2095 17.4.1996

HS (D) 3705 PT 1417#

Leasehold 1.46acres

Warehouse & depot

_ _ Year 2096 29.12.1997

HS (D) 3706 PT 1418#

Leasehold 14.55acres

Cement plant _ _ Year 2096 29.12.1997

HS (D) 2676 PT 1328#

Leasehold 8.20acres

Cement plant _ – Year 2095 17.4.1996

HS (D) 2677 PT 1329#

Leasehold 30.25acres

Cement plant _ _ Year 2095 17.4.1996

HS (D) 2678 PT 1330#

Leasehold 102.33acres

Cement plant _ _ Year 2095 17.4.1996

HS (D) 2679 PT 1331#

Leasehold 130.97acres

Cement plant _ _ Year 2026 518,464 17.4.1996

HS (D) 2680 PT 1332#

Leasehold 14.41acres

Cement plant _ _ Year 2026 17.4.1996

HS (D) 2735 PT 1326#

Leasehold 28.24acres

Staff quarter building

_ _ Year 2095 29.5.1996

HS (D) 2737 PT 417#

Leasehold 28.17acres

Cement plant _ _ Year 2095 27.6.1996

HS (D) 2681 PT 1333#

Leasehold 278.24acres

Cement plant _ _ Year 2026 17.4.1996

HS (D) 4170 PT 1419#

Leasehold 30.06acres

Cement plant _ _ Year 2097 15.9.1998

HS (D) 4171 PT 1420#

Leasehold 3.54 acres

Cement plant _ _ Year 2097 15.9.1998

HS (D) 8804 PT 1421#

Leasehold 13.38acres

Cement plant _ _ Year 2102 1.10.2003

PN 00108181, Lot 2764#

Leasehold 49.57acres

Cement plant _ _ Year 2886 1.11.1996

05-08-07 Lin’an Zhejiang Province

Leasehold 178,025.4sq.m.

Cement plant _ 5 Year 2054

76,691

15.11.2007

05-08-09 Lin’an Zhejiang Province

Leasehold 72,026.6sq.m.

Cement plant _ 5 Year 2054 15.11.2007

Land title under title HS (D) 00013857, PT 000988, Mukim of Ulu Kuantan, Pahang

Leasehold 121.4 hectare

Cement plant 14 24.9.2061 25.9.1995

41List of Properties as at 30 June 2011

Location TenureLandArea

Descriptionand Existing use

Built upArea

(sq.m.)

ApproximateAge of Building

(years)

LeaseExpiryDate

Net Bookvalue as at

30 June 2011RM’000

Date ofAcquisition

Land title under title HS (D) 00015539, PT 000991, Mukim of Ulu Kuantan, Pahang

Leasehold 8.09 hectare

Cement plant

759,480

14 2.6.2062

16,768

2.6.1996

Land title under title HS (D) 00011079, PT 000980 Mukim of Ulu Kuantan, Pahang

Leasehold 81hectare

Cement plant 14 9.11.2060 9.11.1994

Sublease of part of a land held under master title HS (D) 238642, PT: D119841, Mukim of Plentong, District of Johor Bahru, Johor

Leasehold 35,810sq.m.

Slag cement plant

7,796 14 Year 2022 10,978 October 1997

Geran 31549, Lot No. 3792, Mukim & District of Klang, Selangor

Freehold 387,684sq.ft.

Land with factory building

11,603 10 _ 7,975 30.6.2004

Sublease from Port Klang Authority Selangor

Leasehold 107,888sq.m.

Slag cement plant

6,752 15 Year 2024 7,370 January 1996

8 Ubi Road 2 #06-01, Zervex, Singapore 408538

Leasehold – (strata title)

1 unit of office building

96 – Year 2070 11.06.2010

8 Ubi Road 2 #06-02, Zervex, Singapore 408538

Leasehold – (strata title)

1 unit of office building

94 – Year 2070 11.06.2010

8 Ubi Road 2 #06-03, Zervex, Singapore 408538

Leasehold – (stratatitle)

1 unit of office building

94 – Year 2070 11.06.2010

8 Ubi Road 2 #06-04, Zervex, Singapore 408538

Leasehold – (stratatitle)

1 unit of office building

72 – Year 20706,026

11.06.2010

8 Ubi Road 2 #06-05, Zervex, Singapore 408538

Leasehold – (stratatitle)

1 unit of office building

72 – Year 2070 11.06.2010

8 Ubi Road 2 #06-06, Zervex, Singapore 408538

Leasehold – (strata title)

1 unit of office building

94 _ Year 2070 11.06.2010

8 Ubi Road 2 #06-07, Zervex, Singapore 408538

Leasehold – (strata title)

1 unit of office building

94 – Year 2070 11.06.2010

YTL Cement Berhad

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List of Properties as at 30 June 2011

Location TenureLandArea

Descriptionand Existing use

Built upArea

(sq.m.)

ApproximateAge of Building

(years)

LeaseExpiryDate

Net Bookvalue as at

30 June 2011RM’000

Date ofAcquisition

HS (D) 31852/PT No. 43 – S.P.T– Mortgage for 16 years-due 31/01/2021 (185 mths) (No. Perserahan: 9749/2005– Kaveat Persendirian Atas Tanah)

Leasehold 17.4178 hectares

Quarry Land – – 31.01.2021 3,728 01.09.2005

HS(D) 34460– 34461 PT No. 1119 – 1120, Geran 45807 – 45810 Lot 1313 – 1316, Geran 45812 – 45813 Lot 1318 – 1319 and H.S. (D) 40604 PT No. 1178 Mukim of Ulu Semenyih, Daerah Ulu Langat, Negeri Selangor

Freehold 35.2623 hectares

Agriculture land and Industrial land at PT1120

– – – 2,246 28.02.2008

Lot No. 38, Section 12, Phase 1A, Pulau Indah Industrial Park, Pulau Indah, Mukim of Klang, Selangor

Leasehold 1 hectare Slag cement plant

– 9 Year 2097 2,016 16.5.2002

# Mukim Kampung Buaya, Daerah Kuala Kangsar, Negeri Perak Darul Ridzuan

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YTL Cement Berhad

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45Financial Statements

46 Directors’ Report58 Statement by Directors58 Statutory Declaration59 Independent Auditors’ Report61 Income Statements62 Statements of Comprehensive Income63 Statements of Financial Position65 Consolidated Statement of Changes in Equity66 Statement of Changes in Equity67 Statements of Cash Flows70 Notes to the Financial Statements

YTL Cement Berhad

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Directors’ Report

The Directors have pleasure in submitting their Report together with the audited financial statements of the Group and of the Company for the financial year ended 30 June 2011.

PRINCIPAL ACTIVITIES

The principal activities of the Company are those of an investment holding, management company and hiring of vehicles.

The principal activities of the subsidiaries are set out in Note 10 to the Financial Statements.

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

FINANCIAL RESULTS

Group Company RM’000 RM’000

Profit for the financial year 354,096 225,054

Attributable to:- Owners of the parent 337,014 225,054 Non-controlling interests 17,082 –

354,096 225,054

DIVIDENDS

The amount of dividends paid/declared since the end of the last financial year were as follows:-

RM’000In respect of the financial year ended 30 June 2010:-

Third interim single tier dividend of 7.5% or 3.75 sen per ordinary share of 50 sen each paid on 15 July 2010 17,655

Final single tier dividend of 3.75% or 1.875 sen per ordinary share of 50 sen each paid on 23 December 2010 8,837

In respect of the financial year ended 30 June 2011:-

First interim single tier dividend of 7.5% or 3.75 sen per ordinary share of 50 sen each paid on 21 January 2011 17,674

Second interim single tier dividend of 7.5% or 3.75 sen per ordinary share of 50 sen each paid on 31 March 2011 17,677

Third interim single tier dividend of 7.5% or 3.75 sen per ordinary share of 50 sen each paid on 15 July 2011 17,683

79,526

A fourth interim single tier dividend of 3.75% or 1.875 sen per ordinary share of 50 sen each has been declared for payment on 24 November 2011 for the financial year ended 30 June 2011.

The Board of Directors does not recommend a final dividend for the financial year ended 30 June 2011.

47

RESERVES AND PROVISIONS

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

SHARE CAPITAL

Issuance of sharesDuring the financial year, the following shares were issued by the Company:-

Class of Shares Number Term of Issue Issue price Purpose of Issue RM

Ordinary 333,000 Cash 2.08 Exercise of ESOS*Ordinary 491,034 Non-cash 2.04 Conversion of ICULS#

* Employees’ Share Option Scheme# Irredeemable Convertible Unsecured Loan Stocks

The new ordinary shares rank pari passu in all respects with the existing ordinary shares.

TREASURY SHARES

The shareholders of the Company granted a mandate to the Company to repurchase its own shares at the Annual General Meeting held on 30 November 2010.

During the financial year, the Company repurchased 81,700 (2010: 135,000) of its issued share capital from the open market. The average price paid for the shares repurchased was RM4.44 per share (2010: RM4.23 per share). The repurchase transactions were financed by internally generated funds. The shares repurchased are held as treasury shares in accordance with Section 67A of the Companies Act 1965.

As at 30 June 2011, the Company held a total of 21,425,664 (2010: 21,343,964) treasury shares out of its 492,979,657 (2010: 492,155,623) issued and paid-up ordinary shares. Such treasury shares are held at a carrying amount of RM83,765,545 (2010: RM83,402,593).

EMPLOYEES’ SHARE OPTION SCHEME

The Employees Share Option Scheme for employees and Executive Directors of the Company and its subsidiaries who meet the criteria of eligibility for participation is governed by the by-laws approved by the shareholders at an Extraordinary General Meeting (“EGM”) held on 16 October 2001 (“ESOS”).

As the ESOS will expire on 30 November 2011, a new Employees Share Option Scheme for employees and Directors of the Company and its subsidiaries who meet the criteria of eligibility for participation was established as approved by the shareholders of the Company at the EGM held on 30 November 2010 (“ESOS 2011”). The ESOS 2011 was implemented on 1 April 2011.

Since the date of the last report, no options have been granted under the ESOS and ESOS 2011.

The details of the ESOS and ESOS 2011 are disclosed in Note 23(b) and 23(c) to the Financial Statements.

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DIRECTORS

The Directors who served on the Board of the Company since the date of the last Report are:-

Tan Sri Dato’ Seri (Dr) Yeoh Tiong LayTan Sri Datuk Asmat Bin KamaludinTan Sri Dato’ (Dr) Francis Yeoh Sock Ping, CBE, FICEDato’ Sri Haji Abd. Rahim Bin Haji AbdulDato’ Kamaruddin Bin MohammedDato’ Yoogalingam A/L VyramuttuMej. Jen. Dato’ Hj Abdul Shukor Bin Haji Jaafar (B)Dato’ Tan Guan CheongDato’ Yeoh Seok KianDato’ Yeoh Seok HongDato’ Sri Michael Yeoh Sock SiongDato’ Yeoh Soo KengDato’ Mark Yeoh Seok KahEu Peng Meng @ Leslie EuJoseph Benjamin Seaton

DIRECTORS’ INTERESTS

The Directors of the Company who held office at the end of the financial year had, according to the register required to be kept under Section 134 of the Companies Act 1965, interests in the shares of the Company and related companies as follows:-

The Company <--------- Number of ordinary shares of RM0.50 each ---------> Balance Balance at 1.7.2010 Acquired Disposed at 30.6.2011

Direct interestsTan Sri Dato’ Seri (Dr) Yeoh Tiong Lay 1,681,634 – – 1,681,634Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping, CBE, FICE 2,042,923 – – 2,042,923Dato’ Yeoh Seok Kian 618,754 – – 618,754Dato’ Yeoh Seok Hong 225,634 – – 225,634Dato’ Sri Michael Yeoh Sock Siong 1,265,634 – – 1,265,634Dato’ Yeoh Soo Keng 938,251 – – 938,251Dato’ Mark Yeoh Seok Kah 187,200 – – 187,200Joseph Benjamin Seaton 276,423 – – 276,423

Deemed interestsTan Sri Dato’ Seri (Dr) Yeoh Tiong Lay 238,832,990(1)(5) – – 238,832,990(1)(5)

Tan Sri Datuk Asmat Bin Kamaludin 10,400(5) – – 10,400(5)

Dato’ Kamaruddin Bin Mohammed 300,000(5) – – 300,000(5)

Dato’ Yeoh Seok Kian 83,200(5) – – 83,200(5)

Dato’ Yeoh Seok Hong 45,123(5) – – 45,123(5)

Dato’ Sri Michael Yeoh Sock Siong 1,109,388(5) – – 1,109,388(5)

Dato’ Yeoh Soo Keng 90,251(5) – – 90,251(5)

Dato’ Mark Yeoh Seok Kah 135,200(5) – – 135,200(5)

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DIRECTORS’ INTERESTS (continued)

The Company Number of Irredeemable Convertible <---------------- Unsecured Loan Stocks 2005/2015 ----------------> Balance Converted/ Balance at 1.7.2010 Acquired Disposed at 30.6.2011

Direct interestsTan Sri Dato’ Seri (Dr) Yeoh Tiong Lay 1,681,634 – – 1,681,634Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping, CBE, FICE 1,727,423 – – 1,727,423Dato’ Yeoh Seok Kian 618,754 – – 618,754Dato’ Yeoh Seok Hong 225,634 – – 225,634Dato’ Sri Michael Yeoh Sock Siong 1,265,634 – – 1,265,634Dato’ Yeoh Soo Keng 818,251 – – 818,251Dato’ Mark Yeoh Seok Kah 187,200 – – 187,200

Deemed interestsTan Sri Dato’ Seri (Dr) Yeoh Tiong Lay 454,535,984(1)(5) – – 454,535,984(1)(5)

Tan Sri Datuk Asmat Bin Kamaludin 10,400(5) – – 10,400(5)

Dato’ Kamaruddin Bin Mohammed 208,000(5) – – 208,000(5)

Dato’ Yeoh Seok Kian 100,000(5) – – 100,000(5)

Dato’ Yeoh Seok Hong 45,123(5) – – 45,123(5)

Dato’ Sri Michael Yeoh Sock Siong 1,109,388(5) – – 1,109,388(5)

Dato’ Mark Yeoh Seok Kah 135,200(5) – – 135,200(5)

Number of share options over <------------------ ordinary shares of RM0.50 each ------------------> Balance Balance at 1.7.2010 Granted Exercised at 30.6.2011Direct interestsTan Sri Dato’ Seri (Dr) Yeoh Tiong Lay 1,400,000 – – 1,400,000Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping, CBE, FICE 1,400,000 – – 1,400,000Dato’ Yeoh Seok Kian 350,000 – – 350,000Dato’ Sri Michael Yeoh Sock Siong 1,000,000 – – 1,000,000Dato’ Yeoh Soo Keng 700,000 – – 700,000Joseph Benjamin Seaton 250,000 – – 250,000

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DIRECTORS’ INTERESTS (continued)

Penultimate holding company– YTL Corporation Berhad

<------------- Number of ordinary shares of RM0.10 each -------------> Balance Balance at 1.7.2010# Acquired Disposed at 30.6.2011Direct interestsTan Sri Dato’ Seri (Dr) Yeoh Tiong Lay 47,523,040 – – 47,523,040Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping, CBE, FICE 84,094,530 – – 84,094,530Dato’ Yeoh Seok Kian 30,483,085 – – 30,483,085Dato’ Yeoh Seok Hong 25,686,095 – – 25,686,095Dato’ Sri Michael Yeoh Sock Siong 26,153,345 – – 26,153,345Dato’ Yeoh Soo Keng 29,084,105 – – 29,084,105Dato’ Mark Yeoh Seok Kah 17,942,040 – – 17,942,040

Deemed interestsTan Sri Dato’ Seri (Dr) Yeoh Tiong Lay 4,786,136,490(2)(5) – – 4,786,136,490(2)(5)

Dato’ Yeoh Seok Kian 1,609,980(5) 500,000 – 2,109,980(5)

Dato’ Yeoh Seok Hong 19,864,810(5) 250,000 (250,000) 19,864,810(5)

Dato’ Sri Michael Yeoh Sock Siong 12,885,305(5) – – 12,885,305(5)

Dato’ Yeoh Soo Keng 424,820(5) – 424,820(5)

Dato’ Mark Yeoh Seok Kah 3,116,775(5) – – 3,116,775(5)

<- Number of share options over ordinary shares of RM0.10 each -> Balance Balance at 1.7.2010# Granted Exercised at 30.6.2011Direct interestsTan Sri Dato’ Seri (Dr) Yeoh Tiong Lay 25,000,000 – – 25,000,000Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping, CBE, FICE 25,000,000 – – 25,000,000Dato’ Yeoh Seok Kian 17,500,000 – – 17,500,000Dato’ Yeoh Seok Hong 15,000,000 – – 15,000,000Dato’ Sri Michael Yeoh Sock Siong 15,000,000 – – 15,000,000Dato’ Yeoh Soo Keng 15,000,000 – – 15,000,000Dato’ Mark Yeoh Seok Kah 15,000,000 – – 15,000,000

Deemed interestsTan Sri Dato’ Seri (Dr) Yeoh Tiong Lay 30,000,000(5) – – 30,000,000(5)

Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping, CBE, FICE 2,000,000(6) – – 2,000,000(6)

Dato’ Yoogalingam A/L Vyramuttu 500,000(5) – – 500,000(5)

Dato’ Yeoh Seok Hong 2,000,000(5) – – 2,000,000(5)

# Opening balance adjusted pursuant to the subdivision of 1 ordinary share of RM0.50 each into 5 ordinary shares of RM0.10 each on 29 April 2011.

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DIRECTORS’ INTERESTS (continued)

Ultimate holding company– Yeoh Tiong Lay & Sons Holdings Sdn. Bhd.

<---------- Number of ordinary shares of RM1.00 each ----------> Balance Balance at 1.7.2010 Acquired Disposed at 30.6.2011Direct interestsTan Sri Dato’ Seri (Dr) Yeoh Tiong Lay 8,220,004 – – 8,220,004Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping, CBE, FICE 5,000,000 – – 5,000,000Dato’ Yeoh Seok Kian 5,000,000 – – 5,000,000Dato’ Yeoh Seok Hong 5,000,000 – – 5,000,000Dato’ Sri Michael Yeoh Sock Siong 5,000,000 – – 5,000,000Dato’ Yeoh Soo Keng 1,250,000 – – 1,250,000Dato’ Mark Yeoh Seok Kah 5,000,000 – – 5,000,000

Deemed interestsTan Sri Dato’ Seri (Dr) Yeoh Tiong Lay 6,250,004(5) – – 6,250,004(5)

Related companies- YTL Power International Berhad

<---------- Number of ordinary shares of RM0.50 each ----------> Balance Balance at 1.7.2010 Acquired Disposed at 30.6.2011Direct interestsTan Sri Dato’ Seri (Dr) Yeoh Tiong Lay 13,380,250 – – 13,380,250Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping, CBE, FICE 14,945,040 – – 14,945,040Dato’ Yeoh Seok Kian 5,021,360 – – 5,021,360Dato’ Yeoh Seok Hong 22,510,268 – – 22,510,268Dato’ Sri Michael Yeoh Sock Siong 4,601,744 – – 4,601,744Dato’ Yeoh Soo Keng 5,081,777 – – 5,081,777Dato’ Mark Yeoh Seok Kah 6,665,920 1,000,000 – 7,665,920

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DIRECTORS’ INTERESTS (continued)

Related companies (continued)– YTL Power International Berhad

<----------- Number of ordinary shares of RM0.50 each -----------> Balance Balance at 1.7.2010 Acquired Disposed at 30.6.2011Deemed interestsTan Sri Dato’ Seri (Dr) Yeoh Tiong Lay 4,019,069,832(4)(5) 7,661,333 (38,000) 4,026,693,165(4)(5)

Tan Sri Datuk Asmat Bin Kamaludin 46,707(5) – – 46,707(5)

Dato’ Yoogalingam A/L Vyramuttu 30,000(5) – – 30,000(5)

Dato’ Yeoh Seok Kian 1,445,941(5) – – 1,445,941(5)

Dato’ Yeoh Seok Hong 3,281,179(5) – – 3,281,179(5)

Dato’ Sri Michael Yeoh Sock Siong 1,019,291(5) – – 1,019,291(5)

Dato’ Yeoh Soo Keng 133,500(5) – – 133,500(5)

Dato’ Mark Yeoh Seok Kah 1,093,601(5) – – 1,093,601(5)

<------------------- Number of Warrants 2008/2018 -------------------> Balance Exercised/ Balance at 1.7.2010 Acquired Disposed at 30.6.2011Direct interestsTan Sri Dato’ (Dr) Francis Yeoh Sock Ping, CBE, FICE 4,860,175 – – 4,860,175Dato’ Yeoh Seok Kian 1,632,962 – – 1,632,962Dato’ Sri Michael Yeoh Sock Siong 1,496,502 – – 1,496,502Dato’ Yeoh Soo Keng 1,585,944 – – 1,585,944Dato’ Mark Yeoh Seok Kah 1,000,000 – (1,000,000) –

Deemed interestsTan Sri Dato’ Seri (Dr) Yeoh Tiong Lay 1,102,483,255(3)(5) – (1,661,333) 1,100,821,922(3)(5)

Tan Sri Datuk Asmat Bin Kamaludin 18,000(5) – – 18,000(5)

Dato’ Yeoh Seok Kian 450,000(5) – – 450,000(5)

Dato’ Sri Michael Yeoh Sock Siong 298,956(5) – – 298,956(5)

Dato’ Yeoh Soo Keng 36,507(5) – – 36,507(5)

Number of share options over <------------------- ordinary shares of RM0.50 each -------------------> Balance Balance at 1.7.2010 Granted Exercised at 30.6.2011Direct interestsTan Sri Dato’ Seri (Dr) Yeoh Tiong Lay 14,000,000 – – 14,000,000Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping, CBE, FICE 14,000,000 – – 14,000,000Dato’ Yeoh Seok Kian 6,000,000 – – 6,000,000Dato’ Yeoh Seok Hong 5,000,000 – – 5,000,000Dato’ Sri Michael Yeoh Sock Siong 6,000,000 – – 6,000,000Dato’ Yeoh Soo Keng 6,000,000 – – 6,000,000Dato’ Mark Yeoh Seok Kah 6,000,000 – – 6,000,000

Deemed interestsTan Sri Dato’ Seri (Dr) Yeoh Tiong Lay 6,000,000(5) – (6,000,000) –

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DIRECTORS’ INTERESTS (continued)

Related companies (continued)– YTL e-Solutions Berhad

<----------- Number of ordinary shares of RM0.10 each -----------> Balance Balance at 1.7.2010 Acquired Disposed at 30.6.2011

Direct interestsDato’ Yeoh Soo Keng 500,000 – – 500,000

Deemed interestsTan Sri Dato’ Seri (Dr) Yeoh Tiong Lay 1,002,227,600(3) 1,944,400 (5,000,000) 999,172,000(3)

Dato’ Sri Michael Yeoh Sock Siong 1,905,500(5) – – 1,905,500(5)

Tan Sri Datuk Asmat Bin Kamaludin – 10,000 – 10,000(5)

– YTL Land & Development Berhad

<----------- Number of ordinary shares of RM0.50 each -----------> Balance Balance at 1.7.2010 Acquired Disposed at 30.6.2011

Direct interestsDato’ Yeoh Seok Kian – 61,538 – 61,538Dato’ Yeoh Soo Keng 100,000 – – 100,000Dato’ Sri Haji Abd. Rahim Bin Haji Abdul 2,000 – – 2,000

Deemed interestsTan Sri Dato’ Seri (Dr) Yeoh Tiong Lay 496,307,832(3) 1,538,461 – 497,846,293(3)

Tan Sri Datuk Asmat Bin Kamaludin – 20,000 – 20,000(5)

Number of Irredeemable Convertible <--------- Prefrence Shares 2001/2011 of RM0.50 each‡ ---------> Balance Converted/ Balance at 1.7.2010 Acquired Disposed at 30.6.2011

Direct interestsDato’ Yeoh Seok Kian 240,000 – (240,000) –

Deemed interestsTan Sri Dato’ Seri (Dr) Yeoh Tiong Lay – 6,000,000 (6,000,000) –

‡ Shares expired on 24 April 2011 and removed from the Official List of Bursa Malaysia Securities Berhad on 25 April 2011.

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DIRECTORS’ INTERESTS (continued)

Related companies (continued)– Infoscreen Networks PLC *

<------------ Number of ordinary shares of £0.01 each ------------> Balance Balance at 1.7.2010 Acquired Disposed at 30.6.2011Direct interestsTan Sri Dato’ (Dr) Francis Yeoh Sock Ping, CBE, FICE 100 – – 100

– YTL Corporation (UK) PLC *

<------------ Number of ordinary shares of £0.25 each ------------> Balance Balance at 1.7.2010 Acquired Disposed at 30.6.2011

Direct interestsTan Sri Dato’ (Dr) Francis Yeoh Sock Ping, CBE, FICE 1 – – 1

* Incorporated in England & Wales

– Syarikat Pelancongan Seri Andalan (M) Sdn. Bhd.

<---------- Number of ordinary shares of RM1.00 each ----------> Balance Balance at 1.7.2010 Acquired Disposed at 30.6.2011Direct interestsTan Sri Dato’ Seri (Dr) Yeoh Tiong Lay 1 – – 1Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping, CBE, FICE 1 – – 1

– YTL Construction (Thailand) Limited+

<---------- Number of ordinary shares of THB100 each ----------> Balance Balance at 1.7.2010 Acquired Disposed at 30.6.2011

Direct interestsTan Sri Dato’ (Dr) Francis Yeoh Sock Ping, CBE, FICE 1 – – 1Dato’ Yeoh Seok Kian 1 – – 1Dato’ Yeoh Seok Hong 1 – – 1Dato’ Sri Michael Yeoh Sock Siong 1 – – 1Dato’ Mark Yeoh Seok Kah 1 – – 1

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DIRECTORS’ INTERESTS (continued)

Related companies (continued)– Samui Hotel 2 Co., Ltd+

<-------------- Number of ordinary shares of THB10 each --------------> Balance Balance at 1.7.2010 Acquired Disposed at 30.6.2011Direct interestsTan Sri Dato’ (Dr) Francis Yeoh Sock Ping, CBE, FICE – 1 – 1Dato’ Mark Yeoh Seok Kah – 1 – 1

+Incorporated in Thailand

(1) Deemed interests by virtue of interests held by Yeoh Tiong Lay & Sons Holdings Sdn. Bhd., YTL Corporation Berhad, YTL Industries Berhad and YTL Power International Berhad pursuant to Section 6A of the Companies Act 1965.

(2) Deemed interests by virtue of interests held by Yeoh Tiong Lay & Sons Holdings Sdn. Bhd. pursuant to Section 6A of the Companies Act 1965.

(3) Deemed interests by virtue of interests held by Yeoh Tiong Lay & Sons Holdings Sdn. Bhd. and YTL Corporation Berhad pursuant to Section 6A of the Companies Act 1965.

(4) Deemed interests by virtue of interests held by Yeoh Tiong Lay & Sons Holdings Sdn. Bhd., YTL Corporation Berhad, YTL Power Services Sdn. Bhd. and Cornerstone Crest Sdn. Bhd. pursuant to Section 6A of the Companies Act 1965.

(5) Deemed interests by virtue of interests held by spouse and/or children pursuant to Section 134(12)(c) of the Companies Act 1965.

(6) Deemed interests by virtue of interests held in the name of deceased spouse in which the Director, who is the legal representative, is entitled to exercise under the terms of the ESOS.

By virtue of Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay’s deemed interests in the shares of the Company under Section 6A of the Companies Act 1965, he is deemed to have interests in the shares of the subsidiaries of the Company to the extent of the Company’s interests in the respective subsidiaries as disclosed under Note 10 to the Financial Statements.

Other than as disclosed above, the Directors who held office at the end of the financial year did not have interests in the shares or debentures of the Company or related companies during the financial year.

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DIRECTORS’ BENEFITS

During and at the end of the financial year, no arrangement subsisted to which the Company is a party, with the object or objects of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate, other than as may arise from the share options to be granted pursuant to the ESOS.

Since the end of the previous financial year, no Director has received or become entitled to receive any benefit (other than benefits included in the aggregate amount of remuneration received or due and receivable by the Directors as shown in the financial statements of the Group and of the Company) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which he is a member, or with a company in which he has a substantial financial interest except as disclosed in the Notes to the financial statements and certain Directors received remuneration from the Company’s related companies.

STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS

Before the financial statements of the Group and of the Company were made out, the Directors took reasonable steps:-

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

(b) to ensure that any current assets which were unlikely to realise their values as shown in the accounting records of the Group and of the Company in the ordinary course of business have been written down to an amount which they might be expected so to realise.

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

(a) which would render the amount written off for bad debts 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; or

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

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

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

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

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

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

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OTHER STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS

The Directors state that:-

At the date of this Report, they are not aware of any circumstances not otherwise dealt with in this Report or the financial statements of the Group and of the Company which would render any amount stated in the respective financial statements misleading.

In their opinion,

(a) the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature; and

(b) 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 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.

ULTIMATE HOLDING COMPANY

The Company regards Yeoh Tiong Lay & Sons Holdings Sdn. Bhd., a company incorporated in Malaysia, as its ultimate holding company.

AUDITORS

The auditors, Messrs. HLB Ler Lum, Chartered Accountants, have expressed their willingness to continue in office.

Signed on behalf of the Board in accordance with a resolution of the Directors,

Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping, CBE, FICE

Dato’ Sri Michael Yeoh Sock Siong

Dated: 4 October 2011Kuala Lumpur

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Statement by Directors

We, TAN SRI DATO’ (DR) FRANCIS YEOH SOCK PING, CBE, FICE and DATO’ SRI MICHAEL YEOH SOCK SIONG, being two of the Directors of YTL CEMENT BERHAD, do hereby state that, in the opinion of the Directors, the accompanying financial statements are drawn up in accordance with the Companies Act 1965 and Financial Reporting Standards (“FRS”) in Malaysia so as to give a true and fair view of the state of affairs of the Group and of the Company as at 30 June 2011 and of the results of the operations and cash flows of the Group and of the Company for the financial year ended on that date.

The information set out in Note 43 to the financial statements have been prepared in accordance with the Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.

Signed on behalf of the Board in accordance with a resolution of the Directors,

Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping, CBE, FICE

Dato’ Sri Michael Yeoh Sock Siong

Dated: 4 October 2011Kuala Lumpur

Statutory Declaration

I, DATO’ SRI MICHAEL YEOH SOCK SIONG, being the Director primarily responsible for the financial management of YTL CEMENT BERHAD, do solemnly and sincerely declare that to the best of my knowledge and belief the accompanying financial statements 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 1960.

Dato’ Sri Michael Yeoh Sock Siong

Subscribed and solemnly declared by the abovenamedDATO’ SRI MICHAEL YEOH SOCK SIONGat Kuala Lumpur on 4 October 2011

Before me:

Tan Seok KettCommissioner for Oaths

59Independent Auditors’ Report to the members of YTL Cement Berhad

REPORT ON THE FINANCIAL STATEMENTS

We have audited the financial statements of YTL CEMENT BERHAD, which comprise the Statements of Financial Position of the Group and of the Company as at 30 June 2011, and the Income Statements, 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 61 to 126.

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 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 controls relevant to the entity’s 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 entity’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 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 30 June 2011 and of their financial performance and cash flows for the year then ended.

REPORT ON OTHER LEGAL AND REGULATORY REqUIREMENTS

In accordance with the requirements of the Companies Act 1965 in Malaysia, we also report 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 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 subsidiaries of which we have not acted as auditors, which are indicated in Note 10 to the Financial Statements.

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REPORT ON OTHER LEGAL AND REGULATORY REqUIREMENTS (continued)

(c) We are satisfied that the financial statements of the subsidiaries 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 consolidated financial statements and we have received satisfactory information and explanations as required by us for those purposes.

(d) The auditors’ report on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act.

OTHER REPORTING RESPONSIBILITIES

The supplementary information set out in Note 43 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. 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.

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.

HLB LER LUM(Firm Number: AF 0276)Chartered Accountants

LER CHENG CHYE871/3/13(J/PH)Chartered Accountant

Dated: 4 October 2011Kuala Lumpur

Independent Auditors’ Report to the members of YTL Cement Berhad

61Income Statements for the financial year ended 30 June 2011

Group Company 2011 2010 2011 2010 Note RM’000 RM’000 RM’000 RM’000

Revenue 3 2,192,818 1,854,319 227,505 139,796Cost of sales (1,309,030) (1,127,046) – –

Gross profit 883,788 727,273 227,505 139,796Other income 47,081 47,347 17,992 23,228Selling & distribution costs (260,742) (244,171) – –Administration expenses (142,451) (86,573) (8,497) (6,518)Finance costs 4 (38,799) (32,521) (8,926) (9,959)Share of profit/(loss) of equity accounted investees, net of tax 93 (129) – –

Profit before tax 5 488,970 411,226 228,074 146,547Income tax expense 6 (134,874) (100,083) (3,020) (8,972)

Profit for the year 354,096 311,143 225,054 137,575

Profit attributable to:-

Owners of the parent 337,014 269,117 225,054 137,575Non-controlling interests 17,082 42,026 – –

Profit for the year 354,096 311,143 225,054 137,575

Earnings per share attributable to owners of the parent 7

Basic (sen) – Before mandatory conversion of ICULS 71.53 57.25

– After mandatory conversion of ICULS 48.69 39.21

Diluted (sen) 48.44 39.03

Gross dividend per share recognised as distribution to owners of the parent (sen) 8 13.125 13.125 13.125 13.125

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

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Group Company 2011 2010 2011 2010 Note RM’000 RM’000 RM’000 RM’000

Profit for the year 354,096 311,143 225,054 137,575

Other comprehensive income, net of tax Foreign currency translation differences for foreign operations 19,781 (11,111) – –

Total comprehensive income for the year 373,877 300,032 225,054 137,575

Total comprehensive income attributable to:-

Owners of the parent 356,795 258,006 225,054 137,575Non-controlling interests 17,082 42,026 – –

Total comprehensive income for the year 373,877 300,032 225,054 137,575

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

Statements of Comprehensive Income for the year ended 30 June 2011

63Statements of Financial Position as at 30 June 2011

Group Company 2011 2010 2011 2010 Note RM’000 RM’000 RM’000 RM’000

ASSETS

Non-current assets Property, plant & equipment 9 1,764,050 1,746,358 6,689 1,759 Investment in subsidiaries 10 – – 1,061,093 858,848 Investment in associated companies 11 5,284 5,191 3,600 3,600 Development expenditure 12 5,065 34,881 – – Investment properties 13 11,000 12,617 11,000 11,000 Deferred tax assets 14 – – 28,204 31,966 Amount due from subsidiary 10 – – – 212,000 Goodwill 15 142,995 142,995 – – Prepaid lease rentals 16 – 63,366 – 5,607

1,928,394 2,005,408 1,110,586 1,124,780

Current assets Inventories 17 208,519 135,924 – – Trade and other receivables 18 349,154 325,538 380 635 Income tax assets 10,254 7,003 3,595 – Amount due from penultimate holding company 20 8 – – – Amount due from subsidiaries 10 – – 341,298 318,237 Amount due from related companies 21 12,156 10,242 2 6 Amount due from associated company 11 68 25 – 25 Cash & cash equivalents 22 1,294,626 921,977 185,952 49,567

1,874,785 1,400,709 531,227 368,470

Total assets 3,803,179 3,406,117 1,641,813 1,493,250

EqUITY AND LIABILITIES Total equity attributable to owners of the parent

Share capital 23 246,490 246,078 246,490 246,078 Share premium 24 125,804 124,304 125,804 124,304 Other reserves 25 17,209 (2,440) 3,925 4,206 Retained earnings 1,483,123 1,158,763 585,396 422,213 Treasury shares, at cost 23 (83,766) (83,403) (83,766) (83,403) ICULS – equity component 26 369,470 370,295 369,470 370,295

2,158,330 1,813,597 1,247,319 1,083,693Non-controlling interests 6,093 239,735 – –

Total equity 2,164,423 2,053,332 1,247,319 1,083,693

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Statements of Financial Position as at 30 June 2011

Group Company 2011 2010 2011 2010 Note RM’000 RM’000 RM’000 RM’000

EqUITY AND LIABILITIES (continued)

Non-current liabilities

Deferred tax liabilities 14 182,152 117,970 – – Other payables 27 25,422 20,580 – – Finance lease liabilities 28 3,274 5,799 – 21 Borrowings 29 292,335 392,554 – – ICULS – liability component 26 96,031 111,254 96,031 111,254

599,214 648,157 96,031 111,275

Current liabilities

Trade and other payables 30 420,103 342,756 5,044 4,156 Finance lease liabilities 28 5,331 5,453 21 252 Short term borrowings 29 559,589 315,534 – – Amount due to ultimate holding company 20 1 1 – – Amount due to penultimate holding company 20 218 124 59 53 Amount due to subsidiaries 10 – – 275,556 275,861 Amount due to related companies 21 1,119 4,561 65 38 Amount due to associated companies 11 5,939 7,742 – – Post-employment benefit obligations 31 1,202 993 35 31 Income tax liabilities 28,357 9,809 – 236 Declared dividend 17,683 17,655 17,683 17,655

1,039,542 704,628 298,463 298,282

Total liabilities 1,638,756 1,352,785 394,494 409,557

Total equity and liabilities 3,803,179 3,406,117 1,641,813 1,493,250

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

65Consolidated Statement of Changes in Equity for the year ended 30 June 2011

<-------------------------------------- Attributable to owners of the parent --------------------------------------> <------------- Non-distributable -------------> <------ Distributable ------> Equity Non- Share Share Other component Treasury Retained controlling Totaly capital premium reserves of ICULS shares earnings Total interests equity RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000Balance at 1 July 2009 245,277 121,802 8,011 372,221 (82,832) 951,260 1,615,739 195,786 1,811,525

Profit for the year – – – – – 269,117 269,117 42,026 311,143Other comprehensive income – – (11,111) – – – (11,111) – (11,111)

Total comprehensive income for the year – – (11,111) – – 269,117 258,006 42,026 300,032Issue of shares 203 661 (35) – – – 829 – 829Treasury shares – – – – (571) – (571) – (571)Dividends paid/ declared – – – – – (61,773) (61,773) (240) (62,013)Share options expenses – – 854 – – – 854 – 854Conversion of ICULS 598 1,841 – (1,926) – – 513 – 513Acquisition of subsidiary – – – – – – – 2,163 2,163Disposal of associated company – – (159) – – 159 – – –

Balance at 30 June 2010 246,078 124,304 (2,440) 370,295 (83,403) 1,158,763 1,813,597 239,735 2,053,332

Balance at 1 July 2010 246,078 124,304 (2,440) 370,295 (83,403) 1,158,763 1,813,597 239,735 2,053,332

Profit for the year – – – – – 337,014 337,014 17,082 354,096Other comprehensive income – – 19,781 – – – 19,781 – 19,781

Total comprehensive income for the year – – 19,781 – – 337,014 356,795 17,082 373,877Issue of shares 167 744 (218) – – – 693 – 693

Treasury shares – – – – (363) – (363) – (363)Dividends paid/declared – – – – – (61,871) (61,871) (660) (62,531)Share options expenses – – (63) – – – (63) – (63)Conversion of ICULS 245 756 – (825) – – 176 – 176Acquisition of subsidiary – – – – – 49,366 49,366 (250,064) (200,698)Disposal of subsidiary – – 149 – – (149) – – –

Balance at 30 June 2011 246,490 125,804 17,209 369,470 (83,766) 1,483,123 2,158,330 6,093 2,164,423

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

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<------------------------------------- Attributable to owners of the parent -------------------------------------> <------------- Non-distributable -------------> <------ Distributable ------> Equity Share Share component Other Treasury Retained Totaly capital premium of ICULS reserves shares earnings equity RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Balance at 1 July 2009 245,277 121,802 372,221 3,387 (82,832) 346,411 1,006,266

Profit for the year – – – – – 137,575 137,575Other comprehensive income – – – – – – –

Total comprehensive income for the year – – – – – 137,575 137,575

Issue of shares 203 661 – (35) – – 829

Treasury shares – – – – (571) – (571)

Dividends paid/declared – – – – – (61,773) (61,773)

Share options expenses – – – 854 – – 854

Conversion of ICULS 598 1,841 (1,926) – – – 513

Balance at 30 June 2010 246,078 124,304 370,295 4,206 (83,403) 422,213 1,083,693

Profit for the year – – – – – 225,054 225,054Other comprehensive income – – – – – – –

Total comprehensive income for the year – – – – – 225,054 225,054

Issue of shares 167 744 – (218) – – 693

Treasury shares – – – – (363) – (363)

Dividends paid/declared – – – – – (61,871) (61,871)

Share options expenses – – – (63) – – (63)

Conversion of ICULS 245 756 (825) – – – 176

Balance at 30 June 2011 246,490 125,804 369,470 3,925 (83,766) 585,396 1,247,319

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

Statement of Changes in Equity for the year ended 30 June 2011

67Statements of Cash Flows for the year ended 30 June 2011

Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

CASH FLOWS FROM OPERATING ACTIVITIES

Profit before tax 488,970 411,226 228,074 146,547

Adjustments for:– Amortisation of prepaid lease rentals – 1,490 – 166 Bad debts written off 6,038 – – – Bad debts recovered (574) (843) – (595) Depreciation 130,763 105,046 675 327 Impairment loss on development expenditure 29,821 – – – Dividend income – – (226,027) (138,191) Gain on disposal of investment in associated company – (15,500) – – Gain on disposal of investment in subsidiary (83) – – – Gain on disposal of investment properties (31) – – – Gain on disposal of property, plant & equipment (net) (2,195) (3,959) – (699) Gain on disposal of prepaid lease rentals – (5) – – Finance costs 38,799 32,521 8,926 9,959 Impairment loss on receivables (net) 1,237 543 – – Interest income (18,571) (10,420) (14,563) (20,751) Investment in subsidiary written off – – – 531 Other payables written back – (13) – – Other receivables written off 327 894 234 – Property, plant & equipment written off 1,217 639 * 1 Share options expenses (62) 854 – 41 Share of (profit)/loss of equity accounted investees, net of tax (93) 129 – – Unrealised foreign exchange differences (net) (157) 8 26 8 Operating profit/(loss) before working capital changes 675,406 522,610 (2,654) (2,656) (Increase)/Decrease in inventories (73,027) 34,581 – – (Increase)/Decrease in receivables (40,416) 25,770 20 601 Increase in payables 94,401 5,738 898 314 Net changes in related companies (771) (3,109) 188,635 62,263 Cash generated from operations 655,593 585,590 186,899 60,522 Interest paid (55,419) (41,734) (23,979) (21,646) Interest received 18,451 10,420 14,537 20,721 Tax paid (57,098) (42,200) (1,125) (2,944) Tax refund 1,698 2,150 20 – Net cash from operating activities 563,225 514,226 176,352 56,653

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Group Company 2011 2010 2011 2010 Note RM’000 RM’000 RM’000 RM’000

CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of new subsidiaries – (116,640) (202,244) (150,743) Acquisition of additional shares in existing subsidiary (200,698) – – – Development expenditure incurred (5) 41 – – Dividends received – – 224,042 136,300 Prepaid lease rental payments made – (502) – – Proceeds from disposal of investment in associated company – 52,899 – – Proceeds from disposal of investment in subsidiary 48 – – – Proceeds from disposal of investment properties 1,680 – – – Proceeds from disposal of prepaid lease rentals – 27 – – Proceeds from disposal of property, plant & equipment 4,847 8,562 1 307 Purchase of property, plant & equipment (90,463) (73,181) (1) (1,340) Net cash (used in)/from investing activities (284,591) (128,794) 21,798 (15,476)

CASH FLOWS FROM FINANCING ACTIVITIES

Dividends paid (61,843) (61,718) (61,843) (61,718) Dividends paid to non-controlling interests (660) (240) – – Proceeds from issue of shares 693 829 693 829 Purchase of own shares (net) (363) (571) (363) (571) Proceeds from/(Repayment of) borrowings (net) 155,686 (10,594) – – Repayment of finance lease liabilities (net) (4,932) (5,846) (252) (284) Net cash from/(used in) financing activities 88,581 (78,140) (61,765) (61,744) Net changes in cash and cash equivalents 367,215 307,292 136,385 (20,567) Effects of exchange rate changes 5,434 (18,858) – – Cash and cash equivalents brought forward 921,977 633,543 49,567 70,134 Cash and cash equivalents carried forward 22 1,294,626 921,977 185,952 49,567

* Less than RM1,000

Statements of Cash Flows for the year ended 30 June 2011

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NOTES TO THE CASH FLOW STATEMENTS

(a) Analysis of acquisition of property, plant & equipment:-

Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Cash 90,463 73,181 1 1,340 Finance lease arrangement 1,863 121 – – Payables 343 – – – Related parties – 8 – 8 Receivables – 479 – – 92,669 73,789 1 1,348

(b) Summary of net assets acquired:-

Group 2011 2010 RM’000 RM’000

Property, plant & equipment – 36,863 Prepaid lease rentals – 5,310 Investment in associated companies – 883 Goodwill – 28,065 Inventories – 10,338 Receivables – 24,894 Related parties – 36,961 Cash & cash equivalents – 34,103 Payables – (41,150) Borrowings – (25,056) Current tax assets – 2,979 Deferred tax liabilities – (4,927) Non-controlling interests – (2,163) Net assets acquired – 107,100 Goodwill on acquisition – 43,643 Total purchase consideration – 150,743 Less: Cash & cash equivalents of subsidiaries acquired – (34,103) Net cash acquired – 116,640

(c) Summary of net assets disposed:- Group 2011 RM’000

Cash & cash equivalents 858 Net assets disposed 858 Total disposal proceeds 906 Less: Cash & cash equivalents of subsidiary disposed (858) Net cash inflow on disposal 48

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

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Notes to the Financial Statements

1. GENERAL INFORMATION

The principal activities of the Company are those of an investment holding, management company and hiring of vehicles. The principal activities of the subsidiaries are set out in Note 10 to the Financial Statements.

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

The address of the registered office of the Company is as follows:-

11th Floor, Yeoh Tiong Lay Plaza 55 Jalan Bukit Bintang 55100 Kuala Lumpur

The address of the principal place of business of the Company is as follows:-

6th Floor, Yeoh Tiong Lay Plaza55 Jalan Bukit Bintang55100 Kuala Lumpur.

2. SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of accounting The financial statements of the Group and of the Company have been prepared in accordance with

Financial Reporting Standards (“FRS”) and the Companies Act, 1965 in Malaysia.

The preparation of financial statements in conformity with FRS and the Companies Act 1965 in Malaysia requires the Directors to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. It also requires the Directors to exercise their judgments in the process of applying the Group’s accounting policies. These estimates and judgments are based on Directors’ best knowledge of current events and actions, 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(c) to the Financial Statements.

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

(b) Changes in accounting policies On 1 July 2010, the Group and the Company adopted the following new and amended FRS and IC

Interpretations (“IC Int”) mandatory for annual period/year beginning on or after 1 January 2010.

FRS, Amendments to FRS and IC Int

Effective for financial periods

beginning on or after

• FRS 1 First-time Adoption of Financial Reporting Standards 1 July 2010• FRS 3 Business Combinations (revised) 1 July 2010• FRS 4 Insurance Contracts 1 January 2010

• FRS 7 Financial Instruments: Disclosures 1 January 2010• FRS 101 Presentation of Financial Statements (revised) 1 January 2010• FRS 123 Borrowing Costs 1 January 2010

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FRS, Amendments to FRS and IC Int

Effective for financial periods

beginning on or after

• FRS 127 Consolidated and Separate Financial Statements (amended) 1 July 2010• FRS 139 Financial Instruments: Recognition and Measurement 1 January 2010• Amendments to FRS 1 First-time Adoption of Financial Reporting Standards

and FRS 127: Consolidated and Separate Financial Statements: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate

1 January 2010

• Amendments to FRS 2 Share-based Payment Vesting Conditions and Cancellations

1 January 2010

• Amendments to FRS 2 Share-based Payment 1 July 2010• Amendment to FRS 5 Non-current Assets Held for Saleand Discontinued

Operations1 January 2010

• Amendments to FRS 5 Non-current Assets Held for Saleand Discontinued Operations

1 July 2010

• Amendments to FRS 7 Financial Instruments: Disclosures [Compilation] 1 January 2010• Amendment to FRS 8 Operating Segments 1 January 2010• Amendment to FRS 107 Statement of Cash Flows 1 January 2010• Amendment to FRS 108 Accounting Policies, Changes in Accounting

Estimates and Errors1 January 2010

• Amendment to FRS 110 Events After the Reporting Period 1 January 2010• Amendment to FRS 116 Property, Plant and Equipment 1 January 2010• Amendment to FRS 117 Leases 1 January 2010• Amendment to FRS 118 Revenue 1 January 2010• Amendment to FRS 119 Employee Benefits 1 January 2010• Amendment to FRS 120 Accounting for Government Grants and Disclosure

of Government Assistance1 January 2010

• Amendment to FRS 123 Borrowing Costs 1 January 2010• Amendment to FRS 127 Consolidated and Separate Financial Statements 1 January 2010• Amendment to FRS 128 Investment in Associates 1 January 2010• Amendment to FRS 129 Financial Reporting in Hyperinflationary Economies 1 January 2010• Amendment to FRS 131 Interests in Joint Ventures 1 January 2010• Amendments to FRS 132 Financial Instruments: Presentation [Compilation] 1 January 2010• Amendments to FRS 132 Financial Instruments: Presentation

[Classification of Rights Issues]1 January 2010/

1 March 2010• Amendment to FRS 134 Interim Financial Reporting 1 January 2010• Amendment to FRS 136 Impairment of Assets 1 January 2010• Amendment to FRS 138 Intangible Assets 1 January 2010• Amendments to FRS 138 Intangible Assets 1 July 2010• Amendment to FRS 140 Investment Property 1 January 2010• IC Int 9 Reassessment of Embedded Derivatives 1 January 2010• IC Int 10 Interim Financial Reporting and Impairment 1 January 2010• IC Int 11 FRS 2 – Group and Treasury Share Transactions 1 January 2010• IC Int 12 Service Concession Arrangements 1 July 2010• IC Int 13 Customer Loyalty Programmes 1 January 2010• IC Int 14 FRS 119 – The Limit on a Defined Benefit Asset, Minimum Funding

Requirements and their Interaction1 January 2010

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(b) Changes in accounting policies (continued)

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FRS, Amendments to FRS and IC Int

Effective for financial periods

beginning on or after

• IC Int 16 Hedges of a Net Investment in a Foreign Operation 1 July 2010• IC Int 17 Distributions of Non-cash Assets to Owners 1 July 2010• Amendments to IC Int 9 Reassessment of Embedded Derivatives 1 January 2010• Amendments to IC Int 9 Reassessment of Embedded Derivatives 1 July 2010

The adoption of the new and revised FRS, amendments to FRS and IC Int did not have any significant financial impact on the Group and the Company other than the effects of the following FRS:-

(i) FRS 3 ‘Business Combinations’ (revised) The revised FRS 3 introduces a number of changes in the accounting for business combinations

occurring after 1 July 2010. These changes will impact the amount of goodwill recognised, the reported results in the period that an acquisition occurs, and future reported results.

The Group and the Company have applied the revised FRS 3 prospectively in accordance with the transitional provisions. Hence, assets and liabilities that arose from business combinations whose acquisition dates are before 1 July 2010 are not adjusted.

(ii) Amendment to FRS 127 Consolidated and Separate Financial Statements The Amendment to FRS 127 require that a change in the ownership interest of a subsidiary (without

loss of control) is accounted for as an equity transaction. Therefore, such transactions will no longer give rise to goodwill, nor will they give rise to a gain or loss. Furthermore, the revised standard changes the accounting for losses incurred by the subsidiary as well as the loss of control of a subsidiary.

According to its transitional provisions, the Amendment to FRS 127 has been applied prospectively and does not impact the Group’s consolidated financial statements in respect of transactions with non-controlling interest, attribution of losses to non-controlling interest, and disposal of subsidiaries before 1 July 2010. The changes will affect future transactions with non-controlling interest.

(iii) FRS 7 Financial Instruments: Disclosures Prior to 1 July 2010, information about financial instruments was disclosed in accordance with the

requirements of FRS 132 Financial Instruments: Disclosure and Presentation. FRS 7 introduces new disclosures to improve the information about financial instruments. It requires the disclosure of qualitative and quantitative information about exposure to risks arising from financial instruments, including specified minimum disclosures about credit risk, liquidity risk and market risk, including sensitivity analysis to market risk.

The Group and the Company have applied FRS 7 prospectively in accordance with the transitional provisions. Hence, the new disclosures have not been applied to the comparatives. The new disclosures are included throughout the Group’s and the Company’s financial statements for the year ended 30 June 2011.

Notes to the Financial Statements

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(b) Changes in accounting policies (continued)

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(b) Changes in accounting policies (continued)(iv) FRS 101 Presentation of Financial Statements (revised) The revised FRS 101 introduces changes in the presentation and disclosures of financial statements.

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

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

The revised FRS 101 also requires the Group to make new disclosures to enable users of the financial statements to evaluate the Group’s objectives, policies and processes for managing capital (Note 38).

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

(v) FRS 139 Financial Instruments: Recognition and Measurement FRS 139 sets out the new requirements for the recognition and measurement of the Group’s and the

Company’s financial instruments. It also sets out the requirements for the application of hedge accounting.

Financial instruments are recorded initially at fair value. Subsequent measurement of those instruments at the end of the reporting period reflects the designation of the financial instrument. The Group and the Company determine the classification at initial recognition and re-evaluates this designation at each year end except for those financial instruments measured at fair value through profit or loss.

Financial Assets

Loans and Receivables

Prior to 1 July 2010, loans and receivables were stated at gross proceeds receivables less accumulated impairment losses. Under FRS 139, loans and receivables are initially measured at fair value plus directly attributable transaction costs and subsequently at amortised cost using the effective interest rate method. Gains and losses are recognised in the profit or loss when the loans and receivables are derecognised, impaired or through the amortisation process.

Financial Liabilities

Borrowings

Prior to 1 July 2010, borrowings were stated at the proceeds received less directly attributable transaction costs. Under FRS 139, borrowings are initially measured at fair value plus directly attributable transaction costs and subsequently at amortised cost using the effective interest rate method. Gains and losses are recognised in the profit or loss when the liabilities are derecognised or through the amortisation process.

The Group and the Company have adopted FRS 139 prospectively on 1 July 2010 in accordance with the transitional provisions.

However, the adoption of FRS 139 does not have an impact on the Group’s and the Company’s opening balances.

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(c) Critical accounting estimates and judgments Estimates and judgments are continually evaluated by the Directors and are based on historical experience

and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

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

(i) Impairment of property, plant & equipment Determining whether the property, plant & equipment are impaired requires an estimation of value-

in-use of the property, plant & equipment. The value-in-use calculation requires the management to estimate the future cash flows and an appropriate discount rate in order to calculate the present value of future cash flows. The management has evaluated such estimates and is confident that no allowance for impairment is necessary.

(ii) Estimated residual values and useful lives of property, plant & equipment The Group’s and the Company’s businesses are fairly capital intensive. The depreciation charges form

a significant component of the total costs of the Income Statement. The Group and the Company review the residual values and useful lives of property, plant & equipment at each financial year end in accordance with the accounting policy. The review is based on factors such as expected level of usage, business plans and strategies and future regulatory changes. The estimation of the residual values and useful lives involves significant judgment.

(iii) Impairment test on goodwill The Group tests goodwill for impairment annually, in accordance with its accounting policy as

disclosed in Note 2(l) to the Financial Statements. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations or fair value less costs to sell calculations. These calculations require the use of estimates.

(iv) Impairment of loans and receivables The Group and the Company assess at the end of each reporting period whether there is objective

evidence that a financial asset is impaired. Impairment loss is calculated based on a review of the current status of existing receivables and historical collections experience. Such provisions are adjusted periodically to reflect the actual and anticipated impairment.

(v) Provisions The Group and the Company recognise provisions when they have present legal or constructive

obligations arising as a result of a past event, and it is probable that an outflow of future economic benefits will be required to settle the obligations and a reliable estimate can be made. The recording of provisions requires the application of judgments about the ultimate resolution of these obligations. As a result, provisions are reviewed at the end of each reporting period and adjusted to reflect the Group’s and the Company’s current best estimate.

(vi) Income tax Judgment is involved in determining the provision for income taxes. There are certain transactions and

computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group and the Company recognise liabilities for tax matters based on estimates of whether additional taxes will be due. If the final outcome of these tax matters result in a difference in the amounts initially recognised, such differences will impact the income tax and/or deferred tax provisions in the period in which such determination is made.

Notes to the Financial Statements

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(c) Significant accounting estimates and judgments (continued)(vii) Deferred tax assets Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be

available against which temporary differences can be utilised. This involves judgment regarding future financial performance of a particular entity in which the deferred tax asset has been recognised.

(viii) Share based payments Equity-settled share based payments are measured at fair value at the grant date. The Group revises

the estimated number of performance shares that participants are expected to receive based on non-market vesting conditions at each reporting date. The assumption of the Trinomial Valuation model is used to determine the fair value of options granted.

(ix) Contingent liabilities Determination of the treatment of contingent liabilities is based on Directors’ view of the expected

outcome of the contingencies after consulting legal counsel for litigation cases and experts internal and external to the Group for matters in the ordinary course of business. Please refer to Note 34 of the Financial Statements for details.

(d) Property, plant & equipment and depreciation Property, plant & equipment are stated at cost less accumulated depreciation and impairment losses. Cost

includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the profit or loss during the year in which they are incurred.

Freehold land is not depreciated as it has an infinite life.

No provision for depreciation has been made on the capital work–in–progress. Depreciation will only be provided when the assets are completed.

Depreciation on other property, plant & equipment is calculated on the straight line basis at rates required to write off the cost of the property, plant & equipment over their estimated useful lives.

The principal annual rates of depreciation used are as follows:-

% Leasehold land 1 – 4.7 Buildings 2 – 10 Plant, machinery & equipment 3.64 – 50 Motor vehicles 12.5 – 331/3

Furniture, fixtures & equipment 10 – 50 Infrastructure & site facilities 10 – 20

The carrying values of property, plant & equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(d) Property, plant & equipment and depreciation (continued) Residual value, useful life and depreciation method of assets are reviewed at the end of each reporting

period 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 & equipment.

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

(e) Impairment of non-financial assets The carrying amounts of assets, other than inventories and deferred tax assets, are reviewed at the end of

each reporting period 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.

An impairment loss is recognised for the amount by which the carrying amount of the asset exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less cost to sell and value-in-use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there is separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

An impairment loss is charged to the profit or loss immediately, unless the asset is carried at revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of previously recognised revaluation surplus for the same asset.

Impairment losses on goodwill are not reversed. In respect of other assets, any subsequent increase in the recoverable amount of an asset is treated as reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in the profit or loss immediately, unless the asset is carried at revalued amount. A reversal of an impairment loss on a revalued asset is credited directly to revaluation surplus. However, to the extent that an impairment loss on the same revalued asset was previously recognised as an expense in the profit or loss, a reversal of that impairment loss is recognised as income in the profit or loss.

(f) Basis of consolidation The consolidated financial statements comprise the financial statements of the Company and its subsidiaries

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

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

Notes to the Financial Statements

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(f) Basis of consolidation (continued) 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. Any excess of the cost of business combination over the Group’s share in the net fair value of the acquired subsidiary’s identifiable assets, liabilities and contingent liabilities is recorded as goodwill on the statement of financial position. The accounting policy for goodwill is set in Note 2(l). Any excess of the Group’s share in the net fair value of the acquired subsidiary’s identifiable assets, liabilities and contingent liabilities over the cost of business combination is recognised as income in profit or loss on the date of acquisition. When the Group acquires a business, embedded derivatives separated from the host contract by the acquiree are reassessed on acquisition unless the business combination results in a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required under the contract.

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

(g) Transactions with non-controlling interests Non-controlling 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 statement of financial position, separately from parent shareholders’ equity. Transactions with non-controlling interests are accounted for using the entity concept method, whereby, transactions with non-controlling interests are accounted for as transactions with owners. On acquisition of non-controlling 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 non-controlling interests is recognised directly in equity.

(h) Investment in subsidiaries A subsidiary is an entity over which the Group has the power to govern the financial and operating policies

so as to obtain benefits from its activities.

Investments held on long term basis are stated at cost. An impairment loss in value is made where, in the opinion of the Directors, there is a decline other than temporary in their value. Where there has been a decline other than temporary in the value of an investment, such a decline is recognised as an expense in profit or loss in which the decline is identified.

On disposal of an investment, the difference between net disposal proceeds and its carrying amount is charged or credited to profit or loss.

(i) Investment in associated companiesIn the Company’s separate financial statements, investment in associated companies is stated at cost less accumulated impairment losses.

Associated companies are entities in which the Group is in a position to exercise significant influence but which is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions, but not control over their policies.

Investment 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 losses.

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(i) Investment in associated companies (continued)The Group’s share of its associated companies’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Group’s share of losses in associated companies equals or exceeds its interest in the associated companies, 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 companies.

The most recent available audited financial statements of the associated companies are used by the Group in applying the equity method. Where the dates of the audited financial statements used are not coterminous with those of the Group, the share of results is arrived at from the last audited financial statements available and management financial statements to the end of the accounting period. Uniform accounting policies are adopted for like transactions and events in similar circumstances.

Unrealised profits arising on transactions between the Group and its associated companies which are included in the carrying amount of the related assets and liabilities are eliminated partially to the extent of the Group’s interests in the associated companies. Unrealised losses on such transactions are also eliminated partially unless cost cannot be recovered.

On disposal of investments in associated companies, the difference between the net disposal proceeds and their carrying amounts is included in profit or loss.

(j) Development expenditureDevelopment expenditure incurred is capitalised when it meets certain criteria that indicate it is probable that the costs will give rise to future economic benefits and are amortised over the period of the projects. They are written down to their recoverable amounts when there is insufficient certainty that future economic benefits will flow to the enterprise.

Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.

Capitalised development expenditure is stated at cost less accumulated amortisation and impairment losses.

(k) Investment propertiesInvestment properties, comprising principally land & buildings, are held for long term rental yield or for capital appreciation or both, and are not occupied by the Group.

Investment properties are stated at fair value, representing open-market value determined annually. Fair value is based on active market prices, adjusted, if necessary, for any difference in the nature, location or condition of the specific asset. If this information is not available, the Group uses alternative valuation methods such as recent prices on less active markets or discounted cash flow projections. Changes in fair values are recorded in profit or loss as part of other income.

On disposal of an investment property, or when it is permanently withdrawn from use and no future economic benefits are expected from its disposal, it shall be derecognised (eliminated from the statement of financial position). The difference between the net disposal proceeds and the carrying amount is recognised in profit or loss in the period of the retirement or disposal.

Notes to the Financial Statements

79

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(l) GoodwillGoodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less accumulated impairment losses.

For the purpose of impairment testing, goodwill acquired is allocated, from the acquisition date, to each of the Group’s cash-generating units that are expected to benefit from the synergies of the combination.

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

Where goodwill forms part of a cash-generating unit and part of the operation within that cash-generating unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative fair values of the operations disposed of and the portion of the cash-generating unit retained.

(m) InventoriesInventories are stated at the lower of cost and net realisable value.

Cost is determined on the weighted average method and includes the cost of purchase and other costs incurred in bringing the inventories to their present location and condition.

The cost of finished goods comprises raw materials, direct labour, other direct costs and an appropriate proportion of production overheads (based on normal operating capacity).

Net realisable value is the estimated selling price in the ordinary course of business, less the costs of completion and applicable variable selling expenses.

(n) Finance leasesLeases of property, plant & equipment where the Group assumes substantially all the benefits and risks of ownership are classified as finance leases.

The asset is treated as if they had been purchased and the corresponding capital cost is shown as an obligation. Leasing payments are treated as consisting of a capital element and finance costs, the capital element reducing the obligation to the lessor and the finance charge being written off to profit or loss over the period of the lease in reducing amounts in a constant rate in relation to the outstanding obligations.

When assets are leased out under an operating lease, the asset is included in the statement of financial position based on the nature of the asset. Lease income is recognised over the term of the lease on the straight line basis. The assets are depreciated in accordance with the relevant accounting policy for property, plant and equipment.

Leasehold land which in substance is a finance lease is classified as property, plant and equipment.

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(o) Income tax and deferred taxIncome tax on the profit or loss for the year comprises current 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 or substantively enacted at the end of the reporting period.

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

Deferred tax is recognised in full, using the liability method, on temporary differences arising between the amounts attributable to assets and liabilities for tax purposes and their carrying amounts in the financial statements. However, deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.

Deferred tax assets are recognised only to the extent that it is probable that taxable profit will be available against which the deductible temporary differences or unabsorbed tax losses or unutilised capital allowances can be utilised.

Deferred tax is determined using tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

Deferred tax is recognised in the profit or loss, 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 to equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset and the Group and the Company intend to settle either on a net basis or to realise the asset and settle the liability simultaneously.

(p) Ordinary share capitalOrdinary shares are recorded at the nominal value and proceeds in excess of the nominal value of share issued, if any, are accounted for as share premium. Both ordinary shares and share premium are classified as equity. Costs incurred directly attributable to the issuance of shares are accounted for as a deduction from share premium. Otherwise they are charged to profit or loss.

Dividends to shareholders are recognised in equity in the period in which they are declared.

Purchase of own shares

Shares repurchased by the Company are held as treasury shares and are accounted for on the cost method. The amount of the consideration paid, including directly attributable costs, is recognised as cost and set off against equity. Should such shares be cancelled, reissued or disposed of, their nominal amounts will be eliminated, and the differences between their cost and nominal amounts will be taken to reserves, as appropriate. Where the treasury shares are subsequently distributed as dividends to shareholders, the cost of the treasury shares is applied as reduction of the share premium account or the distributable retained earnings or both.

Notes to the Financial Statements

81

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(q) Irredeemable Convertible Unsecured Loan Stocks 2005/2015 (“ICULS”)ICULS is a compound instrument which contains both a liability component and an equity component. The fair value of the liability component is determined by discounting the future contractual cash flows of principal and interest payments at the prevailing market rate for equivalent non-convertible loan stocks. This amount is carried as liability on the amortised cost basis until extinguished on conversion or maturity of the instrument.

The fair value of the equity component represented by the conversion option is determined by deducting the fair value of the liability component from the notional amount of the loan stocks and is included in shareholders’ equity.

(r) Revenue recognition Revenue is recognised to the extent that it is probable that the future economic benefits will flow to the

Group and the Company and the benefits can be reliably measured. The specific recognition criteria for revenue are as follows:-

(i) Sale of goods Revenue from sale of goods is recognised when the significant risks and rewards of ownership of the

goods have passed to the buyers.

(ii) Rendering of services Revenue from rendering of services is recognised when the services are rendered.

(iii) Dividend income Revenue is recognised when the shareholders’ right to receive the payment is established.

(iv) Hiring/rental income Revenue is recognised on an accrual basis.

(v) Interest income Revenue is recognised as the interest accrues, taking into account the effective yield on the asset.

(vi) Commission income Commission income is recognised on received and receivable basis.

(s) Borrowings costs Borrowing costs are recognised as an expense in profit or loss in the period in which they are incurred.

(t) Foreign currencies(i) Functional and presentation currency Items included in the financial statements of the Group are measured using the currency of the

primary economic environment in which the entity operates (the “functional currency”). The financial statements are presented in Ringgit Malaysia, which is also the Company’s functional currency.

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(t) Foreign currencies (continued)(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 end of the reporting period. 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 end of the reporting period are recognised in profit or loss except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign operations, which are recognised initially in other comprehensive income and accumulated under foreign currency translation reserve in equity. The foreign currency translation reserve is reclassified from equity to profit or loss of the Group on disposal of the foreign operation.

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

(u) Employee benefits(i) Short term employee benefits Wages, salaries, social security contributions, paid annual leave, paid sick leave, bonuses and non-

monetary benefits are recognised as an expense in the period when employees have rendered their services to the Group and the Company.

Short term accumulating compensated absences such as paid annual leave are recognised as expenses when employees render services that increase their entitlement to future compensated absences. Short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.

Bonuses are recognised as an expense when there is a present, legal or constructive obligation to make such payments, as a result of past events and when a reliable estimate can be made of the amount of the obligation.

Notes to the Financial Statements

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(u) Employee benefits (continued)(ii) Post-employment benefits The Group and the Company have various post-employment benefit schemes in accordance with local

conditions and practices in the industries in which they operate. These benefit plans are either defined contribution or defined benefits plan.

Defined contribution plan

A defined contribution plan is a pension plan under which the Group and the Company pay fixed contributions into a separate entity (a fund) and will have no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods.

As required by law, companies in Malaysia make contributions to the state pension scheme, the Employees Provident Fund (“EPF”). Such contributions are recognised as an expense in profit or loss as incurred. Once the contributions have been paid, the Group and the Company have no further payment obligations.

(iii) Share-based compensation The Group operates an equity-settled, share-based compensation plan for the employees of the Group.

The fair value of the employee services received in exchange for the grant of the share options is recognised as an expense in profit or loss over the vesting periods of the grant with a corresponding increase in equity.

The total amount to be expensed over the vesting period is determined by reference to the fair value of the share options granted and the number of share options to be vested by vesting date. At each reporting date, the Group revises its estimates of the number of share options that are expected to vest. It recognises the impact of the revision of original estimates, if any, in profit or loss, with a corresponding adjustment to equity. For options granted to subsidiaries, the expense will be recognised in the subsidiaries’ financial statements over the vesting periods of the grant.

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

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

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

The Group and the Company determine the classification of their financial assets at initial recognition, and the categories include loans and receivables. The Group and the Company do not have any held-to-maturity financial assets, available-for-sale financial assets and financial assets at fair value through profit or loss.

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(v) Financial assets (continued)

Loans and receivables

Financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. The Group’s and the Company’s loans and receivables comprise receivables, amount due from related companies and cash & cash equivalents.

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

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

A financial asset is derecognised when the contractual right to receive cash flows from the asset has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss.

Regular way purchases or sales are purchases or sales of financial assets that require the delivery of assets within the period generally established by regulation or convention in the marketplace concerned. All regular way purchases and sales of financial assets are recognised or derecognised on the trade date i.e., the date that the Group and the Company commit to purchase or sell the asset.

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

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

To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Group and the Company consider factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis based on similar risk characteristics. Objective evidence of impairment for a portfolio of receivables could include the Group’s and the Company’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period and observable changes in national or local economic conditions that correlate with default on receivables.

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

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

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

Notes to the Financial Statements

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(x) Financial liabilities Financial liabilities are classified according to the substance of the contractual arrangement entered into and

the definitions of a financial liability.

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

The Group and the Company determine the classification of their financial liabilities at initial recognition, and the categories include other financial liabilities. The Group and the Company do not have any financial liabilities at fair value through profit or loss.

Other financial liabilities

The Group’s and the Company’s other financial liabilities include trade payables, other payables, amount due to related companies and borrowings.

Trade and other payables are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method.

Borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently measured at amortised cost using the effective interest method. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period.

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

A financial liability is derecognised when the obligation under the liability is extinguished. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

(y) Cash and cash equivalents Cash and cash equivalents consist of cash in hand, bank balances, overdrafts and deposits held at call with

financial institutions and highly liquid investments, which have an insignificant risk of changes in value. For the purpose of the Statement of Cash Flows, cash and cash equivalents are presented net of bank overdrafts.

3. REVENUE

Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Sale of goods 2,192,559 1,854,319 – – Services rendered 259 – – – Dividend income – – 226,027 138,191 Hiring income – – 1,478 1,605 2,192,818 1,854,319 227,505 139,796

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4. FINANCE COSTS

Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Bank overdraft interest * – – – Bankers’ acceptance interest 1,498 862 – 14 Finance lease interest 613 739 6 18 ICULS interest 8,920 9,927 8,920 9,927 Revolving credit/term loan interest 27,728 20,053 – – Other finance costs 40 940 – – 38,799 32,521 8,926 9,959

* Less than RM1,000

5. PROFIT BEFORE TAX

Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Profit before tax is stated after charging (except for those disclosed in Note 4):-

Amortisation of prepaid lease rentals – 1,490 – 166 Auditors’ remuneration – statutory 535 480 69 60 – under-provision in prior year 57 – 50 – – others 46 140 46 140 Bad debts written off 6,038 – – – Depreciation 130,763 105,046 675 327 Directors’ remuneration – fees 830 830 830 830 – emoluments 7,282 4,060 2,543 1,983 Hiring of plant, machinery, motor vehicles & office equipment 3,139 2,684 16 – Impairment loss on development expenditure 29,821 – – – Impairment loss on receivables 9,667 3,849 – – Investment in subsidiary written off – – – 531 Loss on foreign exchange – realised 2,440 1,588 – – – unrealised 60 8 26 8 Loss on disposal of property, plant & equipment – 156 – – Other receivables written off 327 894 234 – Property, plant & equipment written off 1,217 639 * 1 Rental of land & buildings 7,519 8,275 328 146 * Less than RM1,000

Notes to the Financial Statements

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5. PROFIT BEFORE TAX (continued)

Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

And crediting (except for those disclosed in Note 3):-

Bad debts recovered 574 843 – 595 Fixed deposit interest 18,378 10,102 733 752 Gain on disposal of investment in associated company – 15,500 – – Gain on disposal of investment in subsidiary 83 – – – Gain on disposal of property, plant & equipment 2,195 4,115 – 699 Gain on disposal of investment properties 31 – – – Gain on disposal of prepaid lease rentals – 5 – – Gain on foreign exchange – realised 122 53 – – – unrealised 217 – – – Hiring income 533 979 – – Litigation settlement 2,958 – – – Net deposits recognised 4,098 – – – Other interest income 193 318 13,830 19,999 Other payables written back – 13 – – Rental income from – investment properties 94 165 358 189 – other properties 60 77 360 360 Reversal of impairment loss on receivables 8,430 3,306 – –

Direct operating expenses from investment properties that generated rental income of the Group during the year amounted to RM147,770 (2010: RM186,342).

Direct operating expenses from investment properties that did not generate rental income of the Group during the year amounted to RM28,041 (2010: RM60,585).

The aggregate remuneration of Directors categorised into appropriate components for the year ended 30 June 2011 are as follows:-

Fees Salaries Bonus Others# Total RM’000 RM’000 RM’000 RM’000 RM’000

GroupExecutive Directors 320 4,028 2,445 746 7,539Non-Executive Directors 510 – – 63 573

CompanyExecutive Directors 320 1,300 900 280 2,800Non-Executive Directors 510 – – 63 573

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5. PROFIT BEFORE TAX (continued)

The number of Directors of the Group and of the Company whose total remuneration fall within the following bands for the financial year ended 30 June 2011 are as follows:-

Group Company No. of Directors No. of Directors Range of remuneration Executive Non-Executive Executive Non-Executive

Below RM50,000 5 3 7 3RM50,001 – RM100,000 – 3 – 3RM100,001 – RM200,000 – – – –RM200,001 – RM250,000 – 1 – 1RM250,001 – RM600,000 – – – –RM600,001 – RM650,000 1 – – –RM650,001 – RM1,450,000 – – – –RM1,450,001 – RM1,500,000 1 – – –RM1,500,001 – RM2,550,000 – – – –RM2,550,001 – RM2,600,000 – – 1 –RM2,600,001 – RM5,200,000 – – – –RM5,200,001 – RM5,250,000 1 – – –

# Included in the remuneration of Directors are the following:-

Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Defined contribution plan expense 702 363 264 204

6. INCOME TAX EXPENSE

Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000Malaysian income tax based on

profit for the year 60,964 31,366 704 4,631 Under/(Over)-provision in prior years (2,438) (2,413) (1,446) 1,250 Deferred tax (Note 14) – origination and reversal of temporary differences 64,117 69,871 3,762 3,091 Foreign tax 12,231 1,259 – – 134,874 100,083 3,020 8,972

Notes to the Financial Statements

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6. INCOME TAX EXPENSE (continued)

A reconciliation of income tax expense applicable to profit before tax at the statutory income tax rate to income tax expense at the effective income tax rate of the Group and of the Company is as follows:-

Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Profit before tax 488,970 411,226 228,074 146,547

Income tax using Malaysian tax rate of 25% (2010: 25%) 122,243 102,807 57,018 36,637 Non deductible expenses 12,432 5,601 1,488 2,156 Income not subject to tax (302) (1,201) (54,522) (31,825) (Over)/Under-provision in prior years (2,438) (2,413) (1,446) 1,250 Different tax rate in other countries (208) (2,753) – – Tax effect of under/(over)-provision of deferred tax 3,147 (1,958) 482 754 134,874 100,083 3,020 8,972

The Company has exempt income estimated at RM6,868,000 (2010: RM6,868,000) pursuant to Section 12 of the Income Tax (Amendment) Act 1999, from which tax exempt dividends can be declared. This is, however, subject to confirmation by the Inland Revenue Board.

Based on prevailing tax rate applicable to dividends and the tax exempt account balance as mentioned above, the retained earnings of RM6,868,000 (2010: RM6,868,000) of the Company as at 30 June 2011 are available for distribution by way of dividends without additional tax liabilities being incurred. This is, however, subject to confirmation by the Inland Revenue Board.

If the balance of retained earnings of RM578,528,000 (2010: RM415,345,000) were to be distributed as dividend, such distribution will be in accordance with the single tier tax system which came into effect on 1 January 2008. Under this system, companies are not required to have tax credit under Section 108 of the Income Tax Act 1967 for dividend payment purposes. Dividends paid under this single-tier system are tax exempt in the hands of shareholders.

7. EARNINGS PER SHARE (“EPS”)

(a) Basic EPS(i) Before mandatory conversion of ICULS Basic EPS before mandatory conversion of ICULS of the Group is calculated by dividing the profit

attributable to owners of the parent by the weighted average number of ordinary shares in issue during the year.

Group 2011 2010 RM’000 RM’000

Profit attributable to owners of the parent (RM’000) 337,014 269,117

Weighted average number of ordinary shares in issue (’000) 471,130 470,109

Basic EPS (sen) 71.53 57.25

YTL Cement Berhad

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7. EARNINGS PER SHARE (“EPS”) (continued)

(a) Basic EPS (continued)(ii) After mandatory conversion of ICULS For the purpose of calculating basic EPS after mandatory conversion of ICULS, profit attributable to

owners of the parent and the weighted average number of ordinary shares are adjusted for the effects of full conversion of the 10 financial years 4% stepping up to 6% ICULS.

The ICULS are assumed to have been converted into ordinary shares and the profit is adjusted to eliminate the interest expense less the tax effect.

Group 2011 2010 RM’000 RM’000

Profit attributable to owners of the parent (RM’000) 337,014 269,117 Interest expenses on ICULS (net of tax) 6,690 7,445 Profit used to determine Basic EPS after mandatory conversion of ICULS (RM’000) 343,704 276,562 Weighted average number of ordinary shares in issue for basic EPS (’000) 471,130 470,109 Adjustment for ordinary shares deemed conversion of ICULS (’000) 234,814 235,305 705,944 705,414 Basic EPS (sen) 48.69 39.21

(b) Diluted EPS For the diluted EPS calculation, the weighted average number of ordinary shares in issue after mandatory

conversion of ICULS is adjusted to assume conversion of all dilutive potential ordinary shares.

Group 2011 2010 RM’000 RM’000

Profit used to determine Basic EPS after mandatory conversion of ICULS (RM’000) 343,704 276,562 Weighted average number of ordinary shares in issue for basic EPS after mandatory conversion of ICULS (’000) 705,944 705,414Adjustment for ordinary shares deemed issued for no consideration on assumed exercise of options (’000) 3,550 3,156 709,494 708,570 Diluted EPS (sen) 48.44 39.03

Notes to the Financial Statements

91

8. DIVIDENDS

Group/Company 2011 2010 Gross Amount of Gross Amount of dividend dividend, dividend dividend, per share net of tax per share net of tax (sen) RM’000 (sen) RM’000

Dividends paid/declared in respect of year ended 30 June 2011:- – first interim, single tier 3.75 17,674 – second interim, single tier 3.75 17,677 – third interim, single tier 3.75 17,683

Dividends paid/declared in respect of year ended 30 June 2010:- – first interim, single tier 3.75 17,646 – second interim, single tier 3.75 17,651 – third interim, single tier 3.75 17,655 – final, single tier 1.875 8,837

Dividends paid in respect of year ended 30 June 2009:- – final, single tier 1.875 8,821 Dividend recognised as distribution to ordinary equity holders of the Company 13.125 61,871 13.125 61,773

A fourth interim single tier dividend of 3.75% or 1.875 sen per ordinary share of 50 sen each has been declared for payment on 24 November 2011 for the year ended 30 June 2011. The financial statements for the current year do not reflect this interim dividend. Such dividend will be accounted for in equity as an appropriation of retained earnings in the year ending 30 June 2012. The Directors do not propose any final dividend in respect of the year ended 30 June 2011.

YTL Cement Berhad

92

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9.

PRO

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Notes to the Financial Statements

939.

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YTL Cement Berhad

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9. PROPERTY, PLANT & EqUIPMENT (continued)

Securities The net book values of the Group’s property, plant & equipment that have been charged to financial institutions

for facilities granted to the Group are as follows:- Group 2011 2010 RM’000 RM’000

Long term leasehold land 32,043 32,458 Long term leasehold buildings 486,420 499,159 Plant, machinery & equipment 517,016 520,876 Motor vehicles 2,527 2,595 Furniture, fixtures & equipment 3,476 1,340 Capital work-in-progress 21,859 19,889 Total 1,063,341 1,076,317

Notes to the Financial Statements

95

9. PROPERTY, PLANT & EqUIPMENT (continued)

Long term Furniture Electrical leasehold Motor & Air- Office & water land vehicles fittings conditioners equipment Renovation installation Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000Company – 2011CostAt 1 July 2010 – 23,587 575 82 205 221 25 24,695Additions – – * – – – – *Disposals – (651) – – – – – (651)Write-off – – – (20) – – – (20)Transfer 6,713 – – – – – – 6,713

At 30 June 2011 6,713 22,936 575 62 205 221 25 30,737

Accumulated DepreciationAt 1 July 2010 – 22,121 445 80 193 72 25 22,936Charge for the year 166 383 14 * 1 111 – 675Disposals – (651) – – – – – (651)Write-off – – – (18) – – – (18)Transfer 1,106 – – – – – – 1,106

At 30 June 2011 1,272 21,853 459 62 194 183 25 24,048

Net Book Value At 30 June 2011 5,441 1,083 116 * 11 38 * 6,689

* Less than RM1,000

Furniture Electrical Motor & Air- Office & water vehicles fittings conditioners equipment Renovation installation Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000Company – 2010CostAt 1 July 2009 25,662 487 81 194 – 25 26,449Additions 975 140 1 11 221 – 1,348Disposals (3,050) – – – – – (3,050)Write-off – (52) – – – – (52)

At 30 June 2010 23,587 575 82 205 221 25 24,695

Accumulated DepreciationAt 1 July 2009 24,933 481 80 191 – 25 25,710Charge for the year 238 15 * 2 72 – 327Disposals (3,050) – – – – – (3,050)Write-off – (51) – – – – (51)

At 30 June 2010 22,121 445 80 193 72 25 22,936

Net Book Value At 30 June 2010 1,466 130 2 12 149 * 1,759

* Less than RM1,000

YTL Cement Berhad

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Notes to the Financial Statements

9. PROPERTY, PLANT & EqUIPMENT (continued)

Included in property, plant & equipment of the Group and of the Company are motor vehicles with net book value of RM12,580,448 (2010: RM11,801,736) and RM319,584 (2010: RM539,943) respectively held under finance lease arrangements.

10. SUBSIDIARIES

(a) Investment in subsidiaries Company 2011 2010 RM’000 RM’000

Unquoted shares, at cost 1,064,093 861,848 Less: Accumulated impairment losses (3,000) (3,000)

1,061,093 858,848

Details of the subsidiaries are as follows:-

Place of Effective Name of Company Incorporation Principal Activities Equity Interest 2011 2010 % %

Awan Serunding Malaysia Dormant 100.00 100.00 Sdn. Bhd.

Batu Tiga Quarry Malaysia Quarry business & trading 100.00 100.00 Sdn. Bhd. of granite aggregates

Batu Tiga Quarry Malaysia Quarry business & related services 100.00 100.00 (Sg. Buloh) Sdn. Bhd.

Buildcon-Cimaco Malaysia Manufacture & sale of 50.45 50.45 Concrete Sdn. Bhd. ready-mixed concrete

Buildcon Concrete Malaysia Manufacture & sale of 100.00 100.00 Sdn. Bhd. ready-mixed concrete

Buildcon Concrete Malaysia Investment holding 100.00 100.00 Enterprise Sdn. Bhd.

Buildcon Desa Malaysia Inactive 100.00 100.00 Sdn. Bhd.

C.I. Quarrying & Malaysia Granite quarrying 100.00 100.00 Marketing Sdn. Bhd.

C.I. Readymix Malaysia Manufacture & sale of 100.00 100.00 Sdn. Bhd. ready-mixed concrete

97

10. SUBSIDIARIES (continued)

(a) Investment in subsidiaries (continued) Details of the subsidiaries are as follows:-

Place of Effective Name of Company Incorporation Principal Activities Equity Interest 2011 2010 % %

Gemilang Pintar Malaysia Marketing & trading 70.00 70.00 Sdn. Bhd. of quarry products

Jaksa Quarry Sdn. Bhd. Malaysia Quarry operator, manufacture 100.00 100.00 of granite blocks, aggregates, chippings & crusher runs

Kenneison Construction Malaysia Inactive 100.00 100.00 Materials Sdn. Bhd.

Kenneison Northern Malaysia Manufacturing, selling & distribution 100.00 100.00 Quarry Sdn. Bhd. of premix products, construction & building materials

Mini-Mix Sdn. Bhd. Malaysia Inactive 100.00 100.00

Mutual Prospect Sdn. Bhd. Malaysia Quarry business & related services 100.00 100.00

*Pahang Cement Malaysia Manufacture & sale of ordinary 100.00 100.00 Sdn. Bhd. portland cement, clinker & related products

*Pahang Cement Malaysia Inactive 100.00 100.00 Marketing Sdn. Bhd.

Perak-Hanjoong Simen Malaysia Manufacture & sale of ordinary 100.00 64.84 Sdn. Bhd. portland cement, clinker & related products

PHS Trading Sdn. Bhd. Malaysia Marketing of cement products 100.00 64.84

Slag Cement Sdn. Bhd. Malaysia Manufacture & sale of ordinary 100.00 100.00 portland cement & blended cement

Slag Cement (Southern) Malaysia Manufacture & sale of ordinary 100.00 100.00 Sdn. Bhd. portland cement & blended cement

SMC Mix Sdn. Bhd. Malaysia Inactive 100.00 100.00

#Specialist Cement Malaysia Inactive – 85.00 Sdn. Bhd.

Straits Cement Sdn. Bhd. Malaysia Inactive 100.00 100.00

Tugas Sejahtera Sdn. Bhd. Malaysia Investment holding 100.00 100.00

YTL Cement Berhad

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10. SUBSIDIARIES (continued)

(a) Investment in subsidiaries (continued) Details of the subsidiaries are as follows:-

Place of Effective Name of Company Incorporation Principal Activities Equity Interest 2011 2010 % %

YTL Cement Enterprise Malaysia Dormant 100.00 100.00 Sdn. Bhd. (formerly known as YTL Building Products Sdn Bhd)

YTL Cement Marketing Malaysia Sale & marketing of cementitious 100.00 100.00 Sdn. Bhd. products

YTL Premix Sdn. Bhd. Malaysia Trading of building materials 100.00 100.00 & related services

YTL Quarry Sdn. Bhd. Malaysia Dormant 100.00 100.00

*Concrete Industries Singapore Dormant 100.00 100.00 Pte. Ltd.

*Industrial Procurement Cayman Dormant 100.00 100.00 Limited Islands

*Industrial Resources Cayman Investment holding & procurement – 100.00 Limited Islands of raw materials

*Linan Lu Hong China Road transport of goods, storage 100.00 100.00 Transport Co. Ltd. & associated services

*P.T. YTL Simen Indonesia Dormant 100.00 100.00 Indonesia

*YTL Cement Marketing Singapore Sale & marketing of cement, 100.00 100.00 Singapore Pte. Ltd. cementitious products & other related construction products

*YTL Cement Singapore Singapore Investment holding, sale & marketing 100.00 100.00 Pte. Ltd. of construction products

*YTL Cement Hong Kong Investment holding 100.00 100.00 (Hong Kong) Limited

*YTL Concrete (S) Singapore Manufacture & sale of ready-mixed 100.00 100.00 Pte. Ltd. concrete & related products

*Zhejiang Hangzhou China Manufacture & sale of cement 100.00 100.00 Dama Cement Co. Ltd. & cementitious products

*Zhejiang YTL Cement China Sale & marketing of cement 100.00 100.00 Marketing Co. Ltd. & cementitious products

* Subsidiaries not audited by HLB Ler Lum# Struck off during the current financial year

Notes to the Financial Statements

99

10. SUBSIDIARIES (continued)

(b) Subsidiaries’ financial statements The unaudited financial statements of Industrial Procurement Limited was consolidated in the Group’s

financial statements as this subsidiary was not required by its local legislations to have its financial statements audited.

(c) Amounts due from/to subsidiaries The amounts due from/to subsidiaries pertain mainly to advances, hiring charges and loan. The outstanding

amounts are unsecured, interest free and payable on demand (2010: RM212,000,000 which bore interest at 7% per annum).

11. ASSOCIATED COMPANIES

(a) Investment in associated companies Group Company

2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Unquoted shares, at cost 3,700 3,700 3,600 3,600Share of post-acquisition reserves 1,584 1,491 – –

5,284 5,191 3,600 3,600

The associated companies of the Company are as follows:-

Place of Effective Name of Company Incorporation Principal Activities Equity Interest 2011 2010 % %

Superb Aggregates Malaysia Extraction, removal, processing 50.00 50.00 Sdn. Bhd. & sale of sand

YTL Technologies Malaysia Servicing & hiring of equipment 40.00 40.00 Sdn. Bhd.

The financial year end of the above associated companies are coterminous with those of the Group.

(b) The summarised financial information of the associated companies are as follows:-

Group 2011 2010 RM’000 RM’000

Non-current assets 1,251 630 Current assets 21,047 23,093 Non-current liabilities (482) (39) Current liabilities (11,020) (13,104)

Net assets 10,796 10,580

Revenue 53,617 57,146 Profit for the year 222 188

YTL Cement Berhad

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11. ASSOCIATED COMPANIES (continued)

(b) The summarised financial information of the associated companies are as follows:- (continued) The details of the goodwill included within the Group’s carrying amount of investment in associated

companies are as follows:-

Group 2011 2010 RM’000 RM’000

At beginning of the year 817 732 Arising from acquisition of associated company – 85

At end of the year 817 817

(c) Amount due from/to associated company The amount due from/to associated company pertains mainly to trade receivables, trade payables, advances

and payments on behalf. The outstanding amount is unsecured, interest free and payable on demand.

12. DEVELOPMENT EXPENDITURE

Group 2011 2010 RM’000 RM’000Cost/Net book value

At beginning of the year 34,881 34,922Capitalised during the year 5 –Impairment during the year (29,821) –Adjustment during the year – (41)

At end of the financial year 5,065 34,881

13. INVESTMENT PROPERTIES

Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

At beginning of the year 12,617 12,617 11,000 11,000 Disposal during the year (1,617) – – –

At end of the year 11,000 12,617 11,000 11,000

Notes to the Financial Statements

101

14. DEFERRED TAX (LIABILITIES)/ASSETS

Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

At beginning of the year (117,970) (43,172) 31,966 35,057Recognised in profit or loss (Note 6) (64,117) (69,871) (3,762) (3,091)Arising from acquisition of subsidiaries – (4,927) – –Exchange differences (65) – – –

At end of the year (182,152) (117,970) 28,204 31,966

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off income tax assets against income tax liabilities and when the deferred taxes relate to the same tax authority. The following amounts determined after appropriate offsetting are shown in the statements of financial position:-

Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Deferred tax assets

Investment tax allowances – 17,188 – –Unabsorbed tax losses 27,941 32,509 – –Unutilised capital allowances – 36,311 – –Temporary differences – ICULS 28,380 27,813 28,380 27,813 – others 324 5,098 – 4,566

56,645 118,919 28,380 32,379

Deferred tax liabilities

Property, plant & equipment – capital allowances in excess of depreciation (238,797) (236,889) (176) (413)

At end of the year (after offsetting) (182,152) (117,970) 28,204 31,966

YTL Cement Berhad

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14. DEFERRED TAX (LIABILITIES)/ASSETS (continued)

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

Group 2011 2010 RM’000 RM’000

Unabsorbed tax losses 13,806 2,604 Unutilised capital allowances 288 84 Taxable temporary differences – Property, plant & equipment – Capital allowances in excess of depreciation (110) (131)

13,984 2,557

Potential tax benefits calculated at 25% (2010: 25%) tax rate 3,496 639

The unabsorbed tax losses and unutilised capital allowances are subject to agreement with the Inland Revenue Board.

15. GOODWILL

Group 2011 2010 RM’000 RM’000Cost

At beginning of the year 142,995 71,287Arising from acquisition of subsidiaries – 71,708

At end of the year 142,995 142,995

Impairment tests for goodwill

The Group undertakes an annual test for impairment of its cash-generating units (CGUs). Goodwill is allocated for impairment test to the individual entity which is also the CGUs identified according to the respective companies.

The following CGUs, being the lowest level of asset for which there are separately identifiable cash flow, have carrying amounts of goodwill that are considered significant in comparison with the Group’s total goodwill:

Group 2011 2010 RM’000 RM’000

Batu Tiga Quarry Sdn Bhd 71,708 71,708Zhejiang Hangzhou Dama Cement Co. Ltd. 60,451 60,451Others 10,836 10,836

Total goodwill 142,995 142,995

Notes to the Financial Statements

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15. GOODWILL (continued)

Impairment tests for goodwill (continued)

The amount of goodwill initially recognised is dependent on the allocation of the purchase price to the fair value of the identifiable assets acquired and the liabilities assumed. The determination of the fair value of the assets and liabilities is based, to a considerable extent, on management judgement.

(a) Key assumption used for value-in-use calculation 2011 2010 % %

Pre-tax discount 5 5

The recoverable amounts of the CGUs are determined based on value-in-use calculations. The value-in-use calculations apply a discounted cash flow model using cash flow projections based on financial budgets and forecasts approved by management.

The discount rates used are pre-tax and reflect specific risks relating to the CGUs. The discount rates applied to the cash flow projections are derived from the cost of capital plus a reasonable risk premium at the date of the assessment of the respective CGUs.

(b) Impact of possible change in key assumptionsWith regard to the assessment of value-in-use of the Group’s CGU, management believes that no reasonably possible change in any of the key assumptions would cause the recoverable amounts of the units to be materially below their carrying amounts.

No impairment loss was recognised for the year ended 30 June 2011 for the goodwill assessed as their recoverable values were in excess of their carrying values.

16. PREPAID LEASE RENTALS

Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

At Cost At beginning of the year 81,080 73,565 6,713 6,713 Acquisition of subsidiaries – 7,156 – – Additions – 502 – – Disposals – (27) – – Transfer/Reclassification (81,080) – (6,713) – Exchange differences – (116) – –

At end of the year – 81,080 – 6,713

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16. PREPAID LEASE RENTALS (continued)

Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Less: Accumulated amortisation At beginning of the year 17,714 14,391 1,106 940 Acquisition of subsidiaries – 1,846 – – Amortisation (Note 5) – 1,490 – 166 Disposals – (5) – – Transfer/Reclassification (17,714) – (1,106) – Exchange differences – (8) – –

At end of the year – 17,714 – 1,106

Carrying amount at end of the year – 63,366 – 5,607

Representing:-

Long term leasehold land – cost – 20,972 – – Short term leasehold land – cost – 42,394 – 5,607

– 63,366 – 5,607

17. INVENTORIES – at cost

Group 2011 2010 RM’000 RM’000

Raw materials 123,740 67,953Finished goods 42,132 26,872Work-in-progress 524 2,974Spare parts 36,151 32,535Consumable stores 5,972 5,590

208,519 135,924

The Group’s cost of inventories recognised as expenses and included in cost of sales amounted to RM872,704,590 (2010: RM815,833,827).

Notes to the Financial Statements

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18. TRADE AND OTHER RECEIVABLES

Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Trade receivables 324,651 285,187 18 18 Less: Allowance for impairment (16,674) (15,435) (18) (18)

Net trade receivables 307,977 269,752 – –

Other receivables 20,668 30,875 258 528 Deposits 5,496 3,538 122 107 Prepayments 15,013 21,373 – –

Total other receivables 41,177 55,786 380 635

Total trade and other receivables 349,154 325,538 380 635

The Group’s normal trade credit terms granted to trade receivables ranged from 14 days to 150 days (2010: 14 days to 150 days). They are recognised at their original invoiced amounts which represent their fair values on initial recognition. Other receivables are non-interest bearing and repayable on demand.

The ageing analysis of the Group’s net trade receivables is as follows: Group 2011 RM’000

Neither past due nor impaired 246,190 1 to 30 days past due not impaired 50,089 31 to 60 days past due not impaired 9,240 61 to 90 days past due not impaired 1,774 91 to 120 days past due not impaired 196 More than 120 days past due not impaired 488

307,977

Receivables that are neither past due nor impaired

Trade receivables that are neither past due nor impaired are creditworthy receivables with good payment records with the Group.

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

Receivables that are past due but not impaired

The Group has trade receivables amounting to RM61,787,000 that are past due at the reporting date but not impaired. This includes mainly trade receivables past due for technical or strategic reasons and there is no concern on the credit worthiness of the counter parties and the recoverability of these debts.

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18. TRADE AND OTHER RECEIVABLES (continued)

Movement in allowance accounts: Group 2011 RM’000

As at 1 July 2010 15,435 Impairment loss recognised 9,667 Reversal of impairment losses (8,430) Exchange difference 2

As at 30 June 2011 16,674

Trade receivables that are individually determined to be impaired at the reporting date relate to receivables that

are in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements.

The currency exposure profile of trade receivables are as follows:- Group 2011 RM’000

Ringgit Malaysia 221,447 Chinese RMB 43,365 Singapore Dollar 43,165

307,977

The Group has no significant concentration of credit risk that may arise from exposure to a single receivable or

to a group of receivables.

19. LOANS AND RECEIVABLES

Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Trade and other receivables (Note 18) 349,154 325,538 380 635 Amount due from penultimate holding company (Note 20) 8 – – – Amount due from subsidiaries (Note 10) – – 341,298 318,237 Amount due from related companies (Note 21) 12,156 10,242 2 6 Amount due from associated company (Note 11) 68 25 – 25 Cash & cash equivalents (Note 22) 1,294,626 921,977 185,952 49,567

Total loans and receivables 1,656,012 1,257,782 527,632 368,470

Notes to the Financial Statements

107

20. HOLDING COMPANIES

The Company regards YTL Industries Berhad, a company incorporated in Malaysia as its holding company. The penultimate and ultimate holding companies are YTL Corporation Berhad (a public listed company) and Yeoh Tiong Lay & Sons Holdings Sdn. Bhd. respectively; both companies are incorporated in Malaysia.

The amount due from/to the respective holding companies pertain mainly to advances and payments on behalf. The outstanding amounts are unsecured, interest free and payable on demand.

21. AMOUNT DUE FROM/TO RELATED COMPANIES

The amount due from/to related companies pertain mainly to trade receivables/payables and payments on behalf. The outstanding amounts are unsecured, interest free and payable on demand.

22. CASH & CASH EqUIVALENTS

Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000 Cash & cash equivalents comprise:-

Fixed deposits – licensed banks 1,229,493 875,895 185,525 48,949 Cash & bank balances 65,133 46,082 427 618

1,294,626 921,977 185,952 49,567

The weighted average interest rates of deposits that were effective at the reporting date were as follows:-

Group Company 2011 2010 2011 2010 % % % % Fixed deposits – licensed banks 2.04 1.56 3.32 2.67

No interest is earned on the bank balance.

Deposits of the Group and of the Company have maturities ranging from 1 day to 92 days (2010: 1 day to 41 days) and 7 days to 29 days (2010: 7 days to 31 days) respectively. Bank balances are deposits held at call with banks.

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23. SHARE CAPITAL

Group/Company 2011 2010 RM’000 RM’000Authorised:-

2,000,000,000 ordinary shares of RM0.50 each 1,000,000 1,000,000

Issued and fully paid:-

At beginning of the year – 492,155,623 (2010: 490,553,963) ordinary shares of RM0.50 each 246,078 245,277

Exercise of ESOS – 333,000 (2010: 406,000) ordinary share of RM0.50 each 167 203

Conversion of ICULS – 491,034 (2010: 1,195,660) ordinary shares of RM0.50 each 245 598

At end of the year – 492,979,657 (2010: 492,155,623) ordinary shares of RM0.50 each 246,490 246,078

The holders of ordinary shares (except treasury shares) are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share and rank equally with regard to the Company’s residual assets.

During the year, 333,000 (2010: 406,000) new ordinary shares of RM0.50 each were issued by the Company for cash by virtue of the exercise of ESOS at the exercise price of RM2.08 per share. The new ordinary shares issued ranked pari passu in all respects with the existing ordinary shares of the Company.

During the year, 491,034 (2010: 1,195,660) new ordinary shares of RM0.50 each were issued by the Company for non-cash by virtue of the conversion of ICULS at an exercise price of RM2.04 per share. The new ordinary shares issued ranked pari passu in all respects with the existing ordinary shares of the Company.

(a) Treasury shares The shareholders of the Company granted a mandate to the Company to repurchase its own shares at the

Annual General Meeting held on 30 November 2010.

During the year, the Company repurchased 81,700 (2010: 135,000) of its issued share capital from the open market. The average price paid for the shares repurchased was RM4.44 per share (2010: RM4.23 per share). The repurchase transactions were financed by internally generated funds. The shares repurchased are held as treasury shares in accordance with Section 67A of the Companies Act 1965.

As at 30 June 2011, the Company held a total of 21,425,664 (2010: 21,343,964) treasury shares out of its 492,979,657 (2010: 492,155,623) issued and paid-up ordinary shares. Such treasury shares are held at a carrying amount of RM83,765,545 (2010: RM83,402,593).

Notes to the Financial Statements

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23. SHARE CAPITAL (continued)

(b) The Existing Employees Share Option Scheme (“ESOS”) At an Extraordinary General Meeting held on 16 October 2001, the Company’s shareholders approved the

establishment of an Employees’ Share Option Scheme (“ESOS” or “Scheme”) for eligible employees and Executive Directors of the Company and of its subsidiaries.

The main features of the Scheme are as follows:-

(i) The ESOS shall be in force for a period of ten (10) years, effective from 30 November 2001.

(ii) The maximum number of shares which may be made available under the Scheme shall not exceed ten per cent (10%) of the total issued and paid-up share capital of the Company at the time of offering the share option.

(iii) Any employee (including Executive Directors) of the Group shall be eligible to participate in the Scheme if, as at the date of offer for a share option (‘‘Offer Date’’), the employee:-

(a) has attained the age of eighteen (18) years;(b) is employed by and on payroll of a company within the Group; and(c) has been in the employment of the Group for a period of at least one (1) year of continuous

service prior to and up to the Offer Date, including service during the probation period, and is confirmed in service. The options committee may, at its discretion, nominate any employee (including Executive Directors) of the Group to be an eligible employee despite the eligibility criteria under Clause 4.1(iii) of the Bye-Laws not being met, at any time and from time to time.

(iv) The price payable for shares under the Scheme shall be based on the five-day weighted average market price of the underlying shares at the time the share option is granted, with a discount of not more than ten per cent (10%), if deemed appropriate.

(v) Subject to Clause 14 of the Bye-Laws, the options committee may, at any time and from time to time, before or after a share option is granted, limit the exercise of the share option to a maximum number of new YTL Cement Shares and/or such percentage of the total YTL Cement Shares comprised in the share option during such period(s) within the share option period and impose any other terms and/or conditions deemed appropriate by the options committee in its sole discretion including amending/varying any terms and conditions imposed earlier. Notwithstanding the above, and subject to Clause 11 and 12 of the Bye-Laws, the share option can only be exercised by the grantee three (3) years after the Offer Date, by notice in writing to the Company, provided however that the options committee may at its discretion or upon the request in writing by the grantee allow the share option to be exercised at any earlier or other period.

(vi) The grantee shall be prohibited from disposing the YTL Cement Shares so allotted to him for a period of twelve (12) months from the date on which the share option is exercised. However, the options committee may at its discretion or upon request in writing by the grantee allow the disposal of such YTL Cement Shares at any earlier or other period.

(vii) The persons whom the share options have been granted have no right to participate by virtue of the share options in any share issue of any other company.

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23. SHARE CAPITAL (continued)

(b) The Existing Employees Share Option Scheme (“ESOS”) (continued) Movements in the number of share options at the end of the year and their exercise prices were as

follows:- <---------------------- Number of share options (‘000) ---------------------->

Exercise AtGrant Expiry Price beginning At endDate Date RM/share of year Granted Exercised Lapsed of year

Year ended 30 June 2011

*16.10.2002 29.11.2011 1.21 75 – – – 7521.07.2005 29.11.2011 2.08 5,644 – (94) (26) 5,52407.08.2006 29.11.2011 2.08 1,067 – (239) (8) 82016.01.2008 29.11.2011 4.64 1,493 – – (46) 1,447

8,279 – (333) (80) 7,866

Year ended 30 June 2010

*16.10.2002 29.11.2011 1.21 93 – (18) – 7521.07.2005 29.11.2011 2.08 5,726 – (50) (32) 5,64407.08.2006 29.11.2011 2.08 1,435 – (338) (30) 1,06716.01.2008 29.11.2011 4.64 1,584 – – (91) 1,493

8,838 – (406) (153) 8,279

* FRS 2 not applicable to these options.

All (2010: 6,786,000) of the outstanding options of 7,866,000 shares (2010: 8,279,000), are exercisable.

The fair value of share options granted in which FRS 2 applies, were determined using the Trinomial Valuation model. The significant inputs in the model are as follows:-

Share options Share options Share options granted on granted on granted on 21.07.2005 07.08.2006 16.01.2008Valuation assumptions:-

Expected volatility 19.5% 19.4% 26.8%Expected dividend yield 5.56% 5.70% 2.11%Expected option life 3 – 4 years 3 – 4 years 3 – 4 yearsRisk-free interest rate per annum (based on Malaysian securities bonds) 3.2% 4.2% 3.5%

The volatility is based on statistical analysis of daily share prices over the 3 to 4 years before the grant dates.

Notes to the Financial Statements

111

23. SHARE CAPITAL (continued)

(c) The New Employees Share Option Scheme (“ESOS 2011”) At an Extraordinary General Meeting held on 30 November 2010, the Company’s shareholders approved

the establishment of an employees share option scheme “ESOS 2011” for eligible employees and directors of the Company and its subsidiaries (“Group”).

The main features of the ESOS 2011 are as follows:-

(i) The ESOS 2011 shall be in force for a period of ten (10) years, effective from 1 April 2011.

(ii) The maximum number of new shares to be allotted and issued pursuant to the exercise of the options which may be granted under the ESOS 2011 shall not exceed fifteen per cent (15%) of the issued and paid-up share capital of the Company at the point of time throughout the duration of the ESOS 2011.

(iii) Any employee (including the Directors) of the Group shall be eligible to participate in the ESOS 2011 if, as at the date of offer of an option (‘‘Offer Date’’), the person:-

(a) has attained the age of eighteen (18) years;(b) is a Director or is an employee employed by and on payroll of a company within the Group; and(c) in the case of employees, has been in the employment of the Group for a period of at least one

(1) year of continuous service prior to and up to the Offer Date, including service during the probation period, and is confirmed in service. The options committee may, at its discretion, nominate any employee (including Directors) of the Group to be an eligible employee despite the eligibility criteria under Clause 3.1(iii) of the By-Laws not being met, at any time and from time to time.

(iv) The subscription price for shares under the ESOS 2011 shall be determined by the Board upon recommendation of the options committee and shall be fixed based on the higher of the following:-

(a) the weighted average market price of shares, as quoted on Bursa Securities, for the five (5) market days immediately preceding the Offer Date of the options with a discount of not more than ten per cent (10%), if deemed appropriate, or such lower or higher limit in accordance with any prevailing guidelines issued by Bursa Securities or any other relevant authorities as amended from time to time; or

(b) the par value of the shares (or such other par value as may be permitted by the provisions of the Companies Act, 1965).

(v) Subject to Clause 13 of the By-Laws, the options committee may, at any time and from time to time, before or after an option is granted, limit the exercise of the option to a maximum number of new ordinary shares of the Company and/or such percentage of the total ordinary shares of the Company comprised in the options during such period(s) within the option period and impose any other terms and/or conditions deemed appropriate by the options committee in its sole discretion including amending/varying any terms and conditions imposed earlier. Notwithstanding the above, and subject to Clauses 10 and 11 of the By-Laws, the options can only be exercised by the grantee no earlier than three (3) years after the Offer Date or such other period as may be determined by the options committee at its absolute discretion, by notice in writing to the options committee, provided however that the options committee may at its discretion or upon the request in writing by the grantee allow the options to be exercised at any earlier or other period.

(vi) A grantee shall be prohibited from disposing the new ordinary shares of the Company allotted and issued to him for a period of one (1) year from the date on which the options are exercised or such other period as may be determined by the options committee as its absolute discretion.

As at the end of the financial year, no options have been granted under the ESOS 2011.

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24. SHARE PREMIUM

Group/Company 2011 2010 RM’000 RM’000

At beginning of the year 124,304 121,802Premium arising from shares issued upon exercise of ESOS 526 626Premium arising from shares issued upon conversion of ICULS 756 1,841Transfer from share options reserve on exercise of ESOS [Note 25(i)] 218 35

At end of the year 125,804 124,304

25. OTHER RESERVES

Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Share option reserve [Note 25(i)] 3,925 4,206 3,925 4,206Translation reserve [Note 25 (ii)] 13,284 (6,646) – –Share of associated companies’ reserve fund transferred from retained earnings [Note 25(iii)] – – – –

17,209 (2,440) 3,925 4,206

The movement in each category of reserves are as follows:-

(i) Share option reserve Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000 At beginning of the year 4,206 3,387 4,206 3,387 Employees share option scheme – Value of employee services – recognised in profit or loss (63) 854 – 41 – allocated to subsidiaries – – (63) 813 Transfer to share premium on exercise of ESOS [Note 24] (218) (35) (218) (35)

At end of the year 3,925 4,206 3,925 4,206

Notes to the Financial Statements

113

25. OTHER RESERVES (continued)(ii) Translation reserve Group 2011 2010 RM’000 RM’000

At beginning of the year (6,646) 4,490 Foreign currency translation differences for foreign operations 19,781 (11,136) Disposal of subsidiary 149 –

At end of the year 13,284 (6,646)

(iii) Share of associated companies’ reserve fund transferred from retained earnings Group

2011 2010 RM’000 RM’000

At beginning of the year – 134 Disposal of associated company – (159) Foreign currency translation differences for foreign operations – 25

At end of the year – –

The Reserve Fund was set up by an associated company of the associated companies, established in the People’s Republic of China for staff welfare and future expansion. The utilisation of the fund was subject to government approval.

26. IRREDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS

On 10 November 2005, the Company issued 483,246,858 10 years 4% stepping up to 6% Irredeemable Convertible Unsecured Loan Stocks (“ICULS”) at a nominal value of RM1.00 each.

The main features of the ICULS are as follows:-

(i) The ICULS bear interest of 4% per annum from date of issue up to fourth anniversary and 5% per annum from the date after the fourth anniversary up to the seventh anniversary. Thereafter, the ICULS bear interest at 6% per annum up to the maturity date. The interest is payable semi-annually in arrears.

(ii) The ICULS are convertible at any time on or after its issuance date into new ordinary shares of the Company at the conversion price, which is fixed on a step-down basis, as follows:-

(a) For conversion at any time from the date of issue up to the fourth anniversary is RM2.72;(b) For conversion at any time after the fourth anniversary of issue up to the seventh anniversary is

RM2.04; and(c) For conversion at any time after the seventh anniversary of issue up to the maturity date is RM1.82.

(iii) The ICULS are not redeemable and any ICULS remaining immediately after the maturity date shall be automatically converted into ordinary shares at the conversion price.

(iv) The new ordinary shares issued from the conversion of ICULS will be deemed fully paid-up and rank pari passu in all respects with all existing ordinary shares of the Company.

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26. IRREDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS (continued)

The fair values of the liability component and the equity conversion component were determined at issuance of the ICULS.

The ICULS is recognised in the Statements of financial position of the Group and of the Company as follows:-

Group/Company 2011 2010 RM’000 RM’000

Face value of ICULS issued 483,247 483,247 Equity component, net of deferred tax (329,998) (329,998)

Liability component on initial recognition 153,249 153,249

Interest expenses recognised in profit or loss At beginning of the year 51,192 41,265 Recognised in profit or loss 8,920 9,927

At end of the year 60,112 51,192

Interest paid At beginning of the year (89,161) (67,549) Paid during the year (23,946) (21,612)

At end of the year (113,107) (89,161)

100,254 115,280

Accrued interest (4,047) (3,513) Conversion to ordinary shares during the year (176) (513)

Liability component at end of the year 96,031 111,254

Equity component, net of deferred tax 329,998 329,998 Deferred tax assets 42,910 42,910

Equity component on initial recognition 372,908 372,908 Conversion to ordinary shares At beginning of the year (2,613) (687) Conversion during the year (825) (1,926)

At end of the year (3,438) (2,613)

Equity component at end of the year 369,470 370,295

Interest expense on the ICULS is calculated on the effective yield basis by applying the effective interest rate of 8% for an equivalent non-convertible loan stock to the liability component of the ICULS.

Notes to the Financial Statements

115

27. OTHER PAYABLES – non-current

Group 2011 2010 RM’000 RM’000

Deposits received 25,422 20,580

The above deposits are due within one to five years from the reporting date.

28. FINANCE LEASE LIABILITIES

Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Minimum lease payments:-

Repayable not later than 1 year 5,919 5,883 21 259Repayable later than 1 year and not later than 5 years 3,596 6,606 – 21Repayable after 5 years – 17 – –

9,515 12,506 21 280Less: Finance charges (910) (1,254) (*) (7)

Present value of minimum lease payments 8,605 11,252 21 273

*Less than RM1,000

Present value of minimum lease payments:-

Repayable not later than 1 year 5,331 5,453 21 252Repayable later than 1 year and not later than 5 years 3,274 5,785 – 21Repayable after 5 years – 14 – –

8,605 11,252 21 273

The finance lease liabilities’ weighted average interest rates of the Group and of the Company at the reporting date ranged from 2.23% to 3.75% (2010: 2.23% to 3.44%) and at 2.23% (2010: 2.23%) respectively per annum.

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29. BORROWINGS

Group 2011 2010 RM’000 RM’000

Revolving credit 245,000 250,000Term loans 561,704 445,898Bankers’ acceptance 45,220 12,190

851,924 708,088

Repayable not later than 1 year 559,589 315,534Repayable later than 1 year and not later than 5 years 292,335 130,679Repayable later than 5 years – 261,875

851,924 708,088

The weighted average interest rates of bank borrowings that were effective at the reporting date were as follows:-

Group 2011 2010 % %

Revolving credit 4.02 3.48Term loans 3.96 3.55Bankers’ acceptance 3.58 2.95

The Group’s borrowings are repayable by monthly, quarterly, semi-annually, yearly instalments and lump sum repayment.

Group Securities 2011 2010 RM’000 RM’000

376,025 400,065 – Corporate guarantee by the Company 410,679 283,023 – A fixed charge over the long term leasehold land of a subsidiary – A debenture to create a fixed & floating charge over the present and

future assets of a subsidiary – A first fixed charge over all designated accounts of a subsidiary 65,220 25,000 – Clean

851,924 708,088

Notes to the Financial Statements

117

30. TRADE & OTHER PAYABLES

Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Trade payables 200,355 160,270 – –Other payables 116,506 102,107 18 33Accruals 103,242 80,379 5,026 4,123

Total trade and other payables 420,103 342,756 5,044 4,156Amount due to ultimate holding company (Note 20) 1 1 – –Amount due to penultimate holding company (Note 20) 218 124 59 53Amount due to subsidiaries (Note 10) – – 275,556 275,861Amount due to related companies (Note 21) 1,119 4,561 65 38Amount due to associated companies (Note 11) 5,939 7,742 – –Finance lease liabilities (Note 28) 8,605 11,252 21 273Borrowings (Note 29) 851,924 708,088 – –Other payables – non-current (Note 27) 25,422 20,580 – –

Total financial liabilities carried at amortised cost 1,313,331 1,095,104 280,745 280,381

The currency exposure profile of trade payables is as follows:- Group

2011 2010 RM’000 RM’000

Ringgit Malaysia 106,348 102,185US Dollar 67,694 24,932Chinese RMB 14,930 28,627Singapore Dollar 11,383 4,526

200,355 160,270

Trade payables and other payables are non-interest bearing and normally settled on 7 days to 180 days (2010: 7 days to 180 days) terms and 30 to 60 days (2010: 30 to 60 days) terms respectively.

31. POST-EMPLOYMENT BENEFIT OBLIGATIONS

Defined contribution plan

Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Current 1,202 993 35 31

Group companies incorporated in Malaysia contribute to the Employees Provident Fund, the national defined contribution plan. Once the contributions have been paid, the Group and the Company have no further payment obligations.

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32. EMPLOYEES INFORMATION

Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Staff costs (excluding Directors’ remuneration) – salaries, wages, bonus & others 95,060 75,097 1,043 822 – defined contribution plan expense 10,405 7,842 106 76 – share option expenses (62) 896 – 41

105,403 83,835 1,149 939

33. SIGNIFICANT RELATED PARTY TRANSACTIONS

(a) Related party transactions In addition to related party disclosures mentioned elsewhere in the financial statements, set out below are

other significant related party transactions. The significant related party transactions described below have been entered into in the normal course of business and have been established on terms and conditions that are not materially different from those obtainable in transactions with unrelated parties.

Group 2011 2010 Entity Relationship Type of transactions RM’000 RM’000

Dynamic Marketing Subsidiary of Sale of cement 5,002 6,837 Sdn. Bhd. penultimate holding company

Oriental Place Subsidiary of Rental of premises 1,738 292 Sdn. Bhd. ultimate holding company

Syarikat Pembenaan Subsidiary of Sale of ready-mixed 19,294 23,383 Yeoh Tiong Lay penultimate concrete and Sdn. Bhd. holding company construction materials

YTL Technologies Associated Purchase of diesel & 24,040 32,201 Sdn. Bhd. company lubricants, maintenance costs & rental of plant & equipment Hiring of plant & machinery 2,803 2,443 Rental income 300 300

Notes to the Financial Statements

119

33. SIGNIFICANT RELATED PARTY TRANSACTIONS (continued)

Company 2011 2010 Entity Relationship Type of transactions RM’000 RM’000

Buildcon Concrete Subsidiary Dividend income – 10,000 Sdn. Bhd. Hiring income 1,494 1,605 Rental income 300 300

Batu Tiga Quarry Subsidiary Dividend income – 12,000 Sdn. Bhd.

C.I. Readymix Subsidiary Dividend income – 7,000 Sdn. Bhd.

Pahang Cement Subsidiary Dividend income 126,000 84,000 Sdn. Bhd.

Perak-Hanjoong Subsidiary Interest income 13,830 19,999 Simen Sdn. Bhd. Dividend income 41,427 –

Slag Cement. Subsidiary Dividend income 33,600 6,300 Sdn. Bhd.

Slag Cement Subsidiary Dividend income 25,000 20,000 (Southern) Sdn. Bhd.

(b) Key management personnel compensation Key management personnel are those persons having authority and responsibility for planning, directing

and controlling the activities of the Group and of the Company, directly or indirectly, including any Director (whether executive or otherwise) of the Company.

Key management personnel of the Group and of the Company are the Directors of the Company.

The key management personnel compensation during the financial year was in respect of the Directors’ remuneration of the Group and of the Company as stated in Note 5 to the Financial Statements.

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34. CONTINGENT LIABILITIES – unsecured

The Company has given corporate guarantees amounting to RM376,025,000 (2010: RM528,875,000) to financial institutions for facilities granted to its subsidiaries, details as set out below:-

Total Amount Guaranteed

2011 2010 RM’000 RM’000

Revolving credit/term loans 376,025 528,875

Amount Utilised 2011 2010 RM’000 RM’000

Revolving credit/term loans 376,025 400,065

The Directors are of the opinion that provisions are not required as it is not probable that a future sacrifice of economic benefits will be required.

35. CAPITAL COMMITMENTS

Operating lease arrangements

The Group as lessee The future minimum lease payments under non-cancellable operating leases contracted for as at the reporting

date but not recognised as liabilities are analysed as follows:-

Group 2011 2010 RM’000 RM’000

Not later than 1 year 1,495 1,272Later than 1 year and not later than 5 years 4,727 4,651Later than 5 years 13,651 14,818

19,873 20,741

36. SEGMENTAL INFORMATION

The segmental information is prepared for geographical segment as the Group’s activities operate in several geographical areas although they are predominantly in one industry segment.

Revenue Total assets Capital expenditure 2011 2010 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Within Malaysia 1,766,927 1,508,438 2,949,889 2,900,316 87,549 47,126 Outside Malaysia 425,891 345,881 853,290 505,801 5,125 26,622 2,192,818 1,854,319 3,803,179 3,406,117 92,674 73,748

Notes to the Financial Statements

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37. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group’s operations are subject to a variety of financial risks, including liquidity risk, credit risk, interest rate risk and foreign currency risk. The Group’s financial risk management policy seeks to ensure that adequate resources are available to manage the above risks and to create value for its shareholders. The Board regularly reviews these risks and approves treasury policies, which covers the management of these risks. It is not the Group’s policy to engage in speculative transactions.

(a) Liquidity risk Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial

obligations due to shortage of funds. The Group’s and the Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities.

The Group and the Company maintain a level of cash and cash equivalents and bank facilities deemed adequate by the management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they fall due.

The table below summarises the maturity profile of the Group’s and the Company’s liabilities at the reporting date based on contractual undiscounted repayment obligations.

2011 On demand More or within 1 year to 2 years to than 5 one year 2 years 5 years years Total RM’000 RM’000 RM’000 RM’000 RM’000Group

Financial Liabilities

Trade and other payables 420,103 – 25,422 – 445,525Amount due to ultimate holding company 1 – – – 1Amount due to penultimate holding company 218 – – – 218Amount due to related companies 1,119 – – – 1,119Amount due to associated companies 5,939 – – – 5,939Finance lease liabilities 5,919 3,249 347 – 9,515Borrowings 588,600 123,459 193,122 – 905,181

Total 1,021,899 126,708 218,891 – 1,367,498

Company

Financial Liabilities

Trade and other payables 5,044 – – – 5,044Amount due to penultimate holding company 59 – – – 59Amount due to subsidiaries 275,556 – – – 275,556Amount due to related companies 65 – – – 65Finance lease liabilities 21 – – – 21

Total 280,745 – – – 280,745

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37. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)

(b) Credit risk Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty

default on its obligations.

The Group’s and the Company’s exposure to credit risk arises primarily from receivables, refer to Note 18. These debts are continually monitored and therefore, the Group and the Company do not expect to incur material credit losses. For other financial assets (including cash and cash equivalents) the Group and the Company minimise credit risk by dealing with high credit rating counterparties.

At the reporting date, the Group’s and the Company’s maximum exposure to credit risk is represented by the carrying amount of financial assets recognised in the Statements of Financial Position.

The Group and the Company have no significant concentration of credit risk with a single customer or a group of customers.

Financial assets that are neither past due nor impaired

Trade and other receivables that are neither past due nor impaired are credit worthy debtors with good payment record with the Group and the Company. Cash and cash equivalents that are neither past due nor impaired are placed with or entered into with reputable financial institutions or companies with high credit ratings and no history of default.

Financial assets that are either past due or impaired

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

(c) Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s

financial instruments will fluctuate because of changes in market interest rates. The Group’s and the Company’s exposure to interest rate risk arises primarily from their cash and cash equivalents and interest-bearing loans and borrowings.

The Group’s policy is to obtain the most favourable interest rates available.

Information relating to the Group’s and Company’s interest rate exposure is also disclosed in the notes to the financial statements.

As the influence of interest rate changes on the profit or loss is insignificant, no sensitivity anlaysis has been conducted.

(d) Foreign currency risk Exposure to Foreign exchange risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Group is exposed to foreign currency risk on sales, purchases and borrowings that are denominated in a currency other than the respective functional currencies of the Group entities. The currencies giving rise to this risk are primarily U.S. Dollar (USD), Chinese RMB (RMB) and Singapore Dollar (SGD).

The Group also holds cash and cash equivalents denominated in foreign currencies for working capital purposes.

The Group does not enter into any financial instrument to hedge the movement in the foreign currency exchange rates unless the risk is deemed to be significant.

Notes to the Financial Statements

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37. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)

(d) Foreign currency risk (continued) Exposure to foreign currency risk

The Group’s exposure to foreign currency (a currency which is other than the currency of the Group entities) risk, based on carrying amounts as at the end of the reporting period was:

Group 2011 Denominated in USD RMB SGD RM’000 RM’000 RM’000

Trade receivables – 43,365 43,165Borrowings (151,025) – –Trade payables (67,694) (14,930) (11,383)

Total (218,719) 28,435 31,782

Sensitivity analysis for foreign currency risk

The following table demonstrates the sensitivity of the Group’s profit net of tax to a reasonably possible change in the USD, RMB and SGD exchange rates against the respective functional currencies of the Group entities, with all other variables held constant.

Group 2011 RM’000 Profit net of taxUSD/RM – strengthened 2% 4,374 – weakened 2% (4,374)RMB/RM – strengthened 2% (569) – weakened 2% 569SGD/RM – strengthened 2% (636) – weakened 2% 636

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38. CAPITAL MANAGEMENT

The primary objective of the Group’s capital management is to ensure that it maintains healthy capital ratios in order to support its business and maximise its shareholders value.

The Group manages its capital structure and makes adjustments to it, in the light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. There were no changes in the Group’s approach to capital management during the year.

The Group monitors capital using return on equity, which is net income as percentage of average equity.

At the reporting date, the ratio was as follows: 2011 2010

Return on equity 15.6% 14.8%

The Group and its subsidiaries are not subject to any externally imposed capital requirements for the financial years ended 30 June 2011 and 30 June 2010.

Under the requirement of Bursa Malaysia Practice Note No. 17/2005 the Company is required to maintain a consolidated shareholders equity equal to or not less than 25% of the issued and paid-up capital (excluding treasury shares) and such shareholders equity is not less than RM 40 million. The Company has complied with the requirement.

39. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

(i) On 24 September 2010, Gopeng Berhad (‘Gopeng’) accepted the Company’s offer to purchase 117,742,000 ordinary shares of RM1.00 each (‘Sale Shares’), representing 35.16% of the issued and paid-up capital of Perak-Hanjoong Simen Sdn Bhd (’Perak-Hanjoong’), for a cash consideration of RM200,000,000.00 (‘Acquisition’). A sale and purchase agreement was entered into between the Company and Gopeng on 20 October 2010. The Acquisition was completed on 10 December 2010. The Sale Shares were registered in the name of the Company on 27 December 2010. Subsequently, the Company had on 18 January 2011, acquired 1 ordinary share of RM1.00 each in Perak-Hanjoong held by YTL Cement Marketing Sdn Bhd (a wholly-owned subsidiary of the Company) at cost of RM1.00. Consequent thereto, Perak-Hanjoong became a wholly-owned subsidiary of the Company.

(ii) In relation to the application by Specialist Cement Sdn Bhd (‘Specialist Cement’), an 85%-owned subsidiary of Buildcon Concrete Enterprise Sdn Bhd (a wholly-owned subsidiary of the Company), for striking off its name from the Register of Companies of the Companies Commission of Malaysia (‘CCM’) (‘Companies Register’) pursuant to the provisions of Section 308 of the Companies Act, 1965 (‘the Act’), Specialist Cement had on 28 January 2011 received the final striking off notice from the CCM dated 13 January 2011 pursuant to Section 308(4) of the Act that the name of Specialist Cement has been struck off from the list of the Companies Register. Specialist Cement thus ceased to be a subsidiary of the Company.

(iii) In relation to the proposed issuance of up to USD 200 million nominal value five-year guaranteed exchangeable bonds which are exchangeable into new ordinary shares of RM0.50 each in the Company (“the Proposed Exchangeable Bonds Issue’’), the Board has decided not to implement the Proposed Exchangeable Bonds Issue after taking into consideration the current operational requirements and the funding options available to the Company and its subsidiaries.

Notes to the Financial Statements

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40. FINANCIAL REPORTING STANDARD AND IC INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVE

At the date of authorisation of these financial statements, the following new or revised FRS, amendments to FRS and IC Interpretations (“IC Int”) have been issued but are not yet effective and have not been adopted by the Group and the Company:-

Effective for financial periods beginning on or after

• FRS 124 Related Party Disclosures 1 January 2012• Amendment to FRS 1 Limited Exemption fromComparative FRS 7 Disclosures for First-time Adopters

1 January 2011

• Amendment to FRS 1 Additional Exemption for First-time Adopters 1 January 2011• Amendment to FRS 1 First-time Adoption of Financial Reporting Standards 1 January 2011• Amendment to FRS 2 Group Cash–settled Share-based Payment Transactions 1 January 2011• Amendment to FRS 3 Business Combinations 1 January 2011• Amendment to FRS 7 ImprovingDisclosures about Financial Instruments 1 January 2011• Amendment to FRS 7 Financial Instruments: Disclosures 1 January 2011• Amendment to FRS 101 Presentation of Financial Statements 1 January 2011• Amendment to FRS 121 The Effects of Changes in Foreign Exchange Rate 1 January 2011• Amendment to FRS 128 Investment in Associates 1 January 2011• Amendment to FRS 131 Interests in Joint Ventures 1 January 2011• Amendment to FRS 132 Financial Instruments: Presentation 1 January 2011• Amendment to FRS 134 Interim Financial Reporting 1 January 2011• Amendment to FRS 139 Financial Instruments: Recognition andMeasurement 1 January 2011• IC Interpretation 4 DeterminingWhether an Arrangement contains a Lease 1 January 2011• IC Interpretation 15 Agreements for the Construction of Real Estate 1 January 2012• IC Interpretation 18 Transfer of Assets fromCustomers 1 January 2011• IC Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments 1 July 2011• Amendment to IC Interpretation 13 Customer Loyalty Programmes 1 January 2011• Amendment to IC Interpretation 14 Prepayments of a Minimum Funding Requirement

1 July 2011

• Amendment to IC Interpretation 15 Agreements for the Construction of Real Estate

30 August 2010

Amendments to FRS 1, Amendment to FRS 131, IC Interpretation 15, IC Interpretation 18, IC Interpretation 19, Amendment to IC Interpretation 13, Amendment to IC Interpretation 14 and Amendment to IC Interpretation 15 are not relevant to the Group’s and the Company’s operations.

Save for these, the new FRS, Amendments to FRSs and IC Int above are not expected to have significant impact on the financial statements of the Group and of the Company upon their initial application.

41. CORPORATE PROPOSAL

There are no corporate proposals announced and pending as at the date of this report.

42. FAIR VALUES OF FINANCIAL INSTRUMENTS

The carrying amounts of financial assets and liabilities of the Group and of the Company at the reporting date approximate their fair values.

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Notes to the Financial Statements

43. SUPPLEMENTARY INFORMATION – DISCLOSURE ON REALISED AND UNREALISED PROFITS

The breakdown of the retained earnings of the Group and of the Company as at 30 June 2011 into realised and unrealised profits is presented in accordance with the directive issued by Bursa Malaysia Securities Berhad dated 25 March 2010 and prepared in accordance with Guidance on Special Matter No.1 Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.

Group Company RM’000 RM’000

Retained earnings/(accumulated losses) of the Company and its subsidiaries – Realised 1,805,179 557,192 – Unrealised (182,152) 28,204

1,623,027 585,396Retained earnings from associated companies: – Realised 1,484 –

1,624,511 585,396Less: Consolidation adjustments (141,388) –

Total retained earnings as per financial statements 1,483,123 585,396

44. AUTHORISATION FOR ISSUE OF FINANCIAL STATEMENTS

The financial statements have been authorised for issue in accordance with a resolution of the Board of Directors on 4 October 2011.

Form of Proxy

I/We (full name as per NRIC/company name in block capitals)

NRIC/Company No. (New) (Old)

CDS Account No. (for nominee companies only)

of (full address)

being a member of YTL Cement Berhad hereby appoint (full name as per NRIC in block capitals)

NRIC/No. (New) (Old)

of (full address)

or failing him/her, the Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the 34th Annual General Meeting of the Company to be held at Starhill 2, Level 4, JW Marriott Hotel Kuala Lumpur, 183, Jalan Bukit Bintang, 55100 Kuala Lumpur on Tuesday, 29 November 2011 at 10.00 a.m. and at any adjournment thereof.

My/Our proxy is to vote as indicated below:-

NO. RESOLUTIONS FOR AGAINST

1. Re-election of Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping

2. Re-election of Dato’ Yeoh Seok Kian

3. Re-election of Dato’ Sri Michael Yeoh Sock Siong

4. Re-election of Dato’ Yeoh Soo Keng

5. Re-appointment of Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay

6. Re-appointment of Eu Peng Meng @ Leslie Eu

7. Re-appointment of Joseph Benjamin Seaton

8. Approval of the payment of Directors’ fees

9. Re-appointment of Messrs HLB Ler Lum as Company Auditors

10. Authorisation for Directors to Allot and Issue Shares

11. Proposed Renewal of Share Buy-Back Authority

12. Proposed Renewal of Shareholder Mandate and New Shareholder Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature

Number of shares held

Signed this day of , 2011 Signature

Notes:-

1. A member entitled to attend and vote at the meeting may appoint a proxy to vote in his stead. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. A member other than an Authorised Nominee shall not be entitled to appoint more than one proxy to attend and vote at the same meeting and where such member appoints more than one proxy to attend and vote at the same meeting, such appointment shall be invalid.

2. The original form of proxy and the Power of Attorney or other authority (if any) under which it is signed or notarily certified copy thereof must be lodged at the Registered Office, 11th Floor, Yeoh Tiong Lay Plaza, 55 Jalan Bukit Bintang, 55100 Kuala Lumpur not less than 48 hours before the time appointed for the Meeting. Facsimile transmission of such documents will not be accepted.

3. In the case of a corporation, this form of proxy should be executed under its Common Seal or under the hand of some officer of the corporation duly authorised in writing on its behalf.

4. Unless voting instructions are indicated in the spaces provided above, the proxy may vote as he thinks fit.

5. For the purpose of determining a member who shall be entitled to attend the Meeting, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd, in accordance with Article 60(2) of the Company’s Articles of Association and Section 34(1) of the Securities Industry (Central Depositories) Act, 1991 to issue a General Meeting Record of Depositors as at 21 November 2011. Only a depositor whose name appears on the General Meeting Record of Depositors as at 21 November 2011 shall be entitled to attend the said meeting or appoint proxy to attend and/or vote in his stead.

Fold here

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The Company Secretary

YTL CEMENT BERhAd11th Floor, Yeoh Tiong Lay Plaza55 Jalan Bukit Bintang55100 Kuala LumpurMalaysia

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