Group Financial Performance

In February 2009, the Group implemented its corporate and debts restructuring scheme ("ACB Scheme") and disposed of its core business comprising the entire local property development and related businesses. The discontinued business contributed eight months’ revenue and operating profit to the Group amounting to RM58 million and RM16 million respectively. The Group’s remaining on-going businesses involved in the plantation, hotel, provision of security services and investment holding sectors recorded a revenue of RM176 million and operating profit of RM83 million. After accounting for a net gain arising from the debts restructuring exercise, a loss from the divestment of property development and related businesses, finance costs and share of profit in associated companies, the Group posted a net loss of RM116 million for the financial year.

Corporate Developments

1. On 27 February 2009, the Company implemented a corporate and debts restructuring scheme to address its debt repayment obligations which involved, inter alia, the following: (i) Disposal of RM900.0 million nominal value of Lion Corporation Berhad ("LCB") Class B(b) Bonds with a present value of RM804.5 million for a cash consideration of RM400.0 million to Lion Diversified Holdings Berhad ("LDHB") and Teraju Varia Sdn Bhd, a wholly-owned subsidiary of LDHB. (ii) Conversion of: (a) RM1.3 million nominal value of LCB Class B(a) Bonds with a present value of RM1.2 million into RM1.2 million nominal value of LCB Class B(a) redeemable convertible secured loan stocks ("RCSLS"); and (b) RM200.0 million nominal value of LCB Class B(b) Bonds with a present value of RM178.8 million into RM178.8 million LCB Class B(b) RCSLS. (iii) Proposed disposal of shares in Akurjaya Sdn Bhd, Ayer Keroh Resort Sdn Bhd, Bungawang Sdn Berhad, Visionwell Sdn Bhd, Lion Metal Industries Sdn Bhd and Inverfin Sdn Bhd for a total cash consideration of approximately RM818.4 million. 2. On 6 February 2009, the Company received a Notice of Conditional Voluntary Take-over Offer ("Offer") from LCB and its wholly-owned subsidiary, Limpahjaya Sdn Bhd (collectively the "Joint Offerors") to acquire the remaining 797.8 million ordinary shares of RM1.00 each in the Company not already held by the Joint Offerors, representing approximately 59.9% of the Company’s existing issued and paid-up share capital, to be satisfied by the issue and allotment of one (1) LCB B Warrant for every ten (10) existing shares held in the Company. Upon the completion of the Offer on 21 April 2009, the LCB Group held 67.7% of the total issued and paid-up share capital of the Company. The Company then became a subsidiary of LCB. LCB had subsequently on 26 June 2009 completed the disposal of 20% equity interest in the Company, reducing LCB Group’s holding in the Company to 47.7% and the Company ceased to be a subsidiary of LCB.   Full details of the above are set out on pages 83 and 84 of this Annual Report.

Property Division

For the financial year under review, the property projects under the Group performed moderately for the year. The economic downturn saw the property market dampening since October 2008. Many developers were cautious and selective with their launches and some even deferred their launches due to the weak market situation. The Group implemented its ACB Scheme during the financial year which resulted in the property development and hotel businesses in Malaysia being disposed of. As such, the Division posted a lower revenue and operating profit of RM65 million and RM8 million respectively, compared to a revenue of RM137 million and operating profit of RM38 million in the previous year. The property development projects disposed of under the ACB Scheme, amongst others, are projects at Bandar Bukit Mahkota Bangi, Bandar Akademia Lenggeng, and One Residency Kuala Lumpur. The Group had also disposed of its investment in Mahkota Hotel and Tiara Melaka Golf & Country Club under the same scheme. Our hotel operation in China, namely Swiss-Belhotel Changchun, is located in close proximity to the City Centre and in the heart of the renowned First Automobile Works. Changchun is now the hub of international exhibitions and cultural activities in Northeast China. For the financial year under review, the 206-room hotel recorded an average occupancy rate in excess of 60%.

Plantation Division

The Plantation Division recorded a much lower revenue for the financial year under review mainly due to lower crude palm oil prices and lower rubber prices as compared to the preceding financial year. The Group disposed of its plantation operations in Malaysia pursuant to the ACB Scheme during the financial year. Meanwhile, the remaining plantation operations located at West Kalimantan, Indonesia comprised an oil palm plantation with a planted area of 4,800 hectares. This plantation recorded a slightly higher loss of RM3.4 million as compared to RM3.3 million a year ago. Continuous measures and efforts are being carried out to enhance yield and cost effectiveness.

Other Operations

Other operations are mainly involved in the provision of security services and security related equipment. Secom (Malaysia) Sdn Bhd ("Secom"), the Group’s joint-venture with Secom Co. Ltd, Japan and the Malaysian Police Co-operative Society, provides total integrated 24-hour security services under the SECOM brand. The security services and equipment provided by Secom include computerised central monitoring system for emergency response, CCTV, audio/video intercom, security audit and the supply of guards for residential and commercial properties. For the year under review, Secom recorded a higher revenue of RM39 million as compared to RM37 million a year ago. However, Secom posted a slightly lower profit of RM8 million as compared to RM9 million the previous year due mainly to lower margins and higher head count. Secom will continue with its aggressive strategies to improve sales services and expand its market presence in order to remain competitive.