On behalf of the Board of Directors, I am pleased to present the Annual Report of the Company for the year ended 31 December 2010.

FINANCIAL HIGHLIGHTS

2010 was a year in which the global economy continued its fragile recovery. The countries in which the Group operates experienced resumption of economic growth thus contributed to the improvement in the Group's performance for 2010. Group revenue for 2010 was RM794.5 million, an improvement from RM671.9 million reported in the preceding year and the Group achieved a profit turnaround to RM112.9 million, compared to a loss of RM9.7 million in 2009.

Asset values recovered in the year and the consequential reversals of previous years impairments partly contributed to the rise in income for the Group.  The improved market conditions also prompted our listed associate, Mudajaya Group Berhad, to conduct a private placement of shares during the year, resulting in the Group recognising a RM 29.8 million gain on dilution of the Group's interest.

As at 31 December 2010, the Group's net assets was RM2.918 billion, boosted by the 1 for 1 RM0.50 two-call rights issue completed in March 2010. The Group's net assets position also improved on the back of better profit performance and the increasing value of the Australian Dollar, in which a significant proportion of the Group's assets are denominated. Net assets per share however fell to RM1.20 from RM1.86 per share in 2009, as a direct result of the dilution that arose from the rights issue.

Pursuant to the mandate given by the shareholders for the Company to buy back up to 10% of the issued shares, the Company has up to 30 April 2011, repurchased 15,782,900 shares costing approximately RM7.91 million at an average of RM0.50 per share. The Board of Directors will seek your approval at the forthcoming annual general meeting to renew the mandate for another year.

REVIEW OF OPERATIONS

REAL ESTATE

MALAYSIA

Leisure Farm, the Group's 1,765 acre award winning master planned residential resort development in Malaysia, located within Iskandar Malaysia, Johor, registered a pre-tax profit of RM22.9 million during the year. Leisure Farm's lush greenery, serene and secured countryside development is home not only to an amazing variety of migratory birds but also to an international community now comprising of 35 nationalities. These luxurious and expansive homes have set new benchmarks in pricing in the Iskandar Malaysia region. Leisure Farm continues to gain wide-spread recognition, with the most recent being a national landscape design award.  A new phase, Precinct 7, Bayou Creek East, with an initial 90 units of gated and guarded Semi-detached and Bungalow homes set within community parks and themed gardens along a waterfront canal is set to launch in 2011.

The Group has also commenced construction on its high-end bungalow development in Bangsar, Kuala Lumpur, with a gross development value of approximately RM75 million. This project comprises of 7 luxurious three-storey bungalows with two show bungalows ready by mid 2011 for viewing. The entire development is expected to be completed by early 2012.

AUSTRALIA

Sanctuary Cove, the Group's 474-hectare award winning development on Queensland Gold Coast, is Australia's leading lifestyle residential enclave, complemented by two championship golf courses, four harbours, restaurants, cafes, boutiques and the 5 star Hyatt Regency Sanctuary Cove hotel. Infrastructure works completed during the year included a new entry boulevard, a revitalised Marine Village, a new A$13 million golf clubhouse and a major revamp of The Palms golf course. Integrated trail system for buggies, bikes and pedestrians and increased security have also been added or enhanced. The performance of Sanctuary Cove in 2010 continued to improve with revenue increasing A$24.9 million over the previous year, as a result of improved land sales and income from joint ventures.

The Group's hotel portfolio, comprising of InterContinental Hotel Sydney, Hilton Melbourne Airport, Hyatt Regency Sanctuary Cove and Hayman Great Barrier Reef, collectively registered profit in 2010 of A$7.5 million. The Sydney and Melbourne properties' performance continued to strengthen, registering higher occupancy and room rates during the year. Hyatt Regency Sanctuary Cove performed to budget.

Hayman Great Barrier Reef unfortunately was battered by two cyclones in early 2011 which caused significant damage to the resort. As a result, the resort has been closed for 5 months for repair and remedial works.  However, the resort assets and the costs of the closure are covered by comprehensive insurance policies and as such, the resort's closure is not expected to have a material impact to the Group's financial results for 2011.

FKP Property Group ("FKP"), a 25.3% Australian listed associate of the Group, is the leading owner and operator of retirement villages in Australia and New Zealand. The global financial crisis in 2009 had resulted in FKP registering significant asset impairments but as asset values stabilised during the year, FKP returned to profitability. The rebounding operating performance of its retirement, residential and commercial businesses in 2010 resulted in the Group taking up A$14.48 million equity share of FKP's profit in 2010, compared to our share of losses of A$24.78 million in 2009.

INFRASTRUCTURE AND CONSTRUCTION

Mudajaya Group Berhad ("Mudajaya"), a 21.8% Malaysian listed associate of the Group, recorded a strong performance in 2010 with the Group's share of profit amounting to RM44.97 million.  Mudajaya has a significant construction order book of RM4.6 billion as at 31 March 2011. Some of the major on-going construction projects include: (i) Equipment Procurement contracts for the 4 x 360 MW IPP Coal-fired Power plant at Chhattisgarh, India (ii) Crest Sultan Ismail service apartments and office blocks, (iii) Batu Kawah New Township and (iv) the Kuala Lumpur-Kuala Selangor expressway (KLKSE) Package 1 -Assam Jawa to Kundang and Package 2 -Kundang to Taman Rimba Templer.

In January 2010, Mudajaya successfully placed 37,238,500 ordinary shares to local and international institutional investors (representing approximately 10% of Mudajaya's issued and paid-up share capital) at an issue price of RM4.80 per share. The gross proceeds raised from the placement was RM178.7 million.

Manta Holdings Company Limited ("Manta"), a 75% Hong Kong listed subsidiary of the Group, achieved a pre-tax profit of HK$18.9 million in 2010, its result being impacted by a once-off charge of HK$8.3 million for the listing expenses incurred. Manta is involved in the sale, rental and servicing of construction equipment, principally the market leading 'Potain' brand of tower cranes.

CORPORATE DEVELOPMENTS

The Group continues to review its capital management requirements in order to maintain an optimum level of balance sheet flexibility while continuing to pursue long term value creation for its unique set of assets across the region.

           The Company's Rights Issue

The Company in March 2010, completed a renounceable two-call rights issue exercise which was strongly supported by shareholders. This resulted in the listing of 1,177,956,579 rights shares on the Main Market of Bursa Malaysia Securities Berhad. The rights issue price was at RM0.50 per rights share and payable in two calls, the first call of RM0.40 per rights share payable in cash and the second call of RM0.10 per rights share capitalised from the Company's share premium account. This exercise raised gross proceeds of RM471.2 million which as at 30 April 2011, was utilised in the following manner:

           Listing of Manta group

The Group successfully listed Manta Holdings Company Limited ("Manta") on the Main Board of the Stock Exchange of Hong Kong on 19 July 2010.  The listing involved Manta undertaking a public issue of 50,000,000 new Manta shares, representing 25% of the enlarged issued and paid-up share capital of Manta and raised HK$50 million before listing expenses.

           Par Value Reduction and Rights Issue of Mulpha Land Berhad

(i)                    Mulpha Land Berhad ("MLB"), a 70.5% Malaysian listed subsidiary of the Group, had in 2010 undertaken a reduction of its issued and paid-up share capital via the cancellation of RM 0.90 of the par value of each existing ordinary share of RM 1.00 each. The market price of MLB's shares were trading below its par value of RM 1.00 per share for some time which made it difficult for MLB to embark on any fund raising exercise or corporate exercises involving issuance of new shares. The reduced RM 0.10 par value provides greater flexibility for funds raising when required. The par value reduction exercise was completed on 1 September 2010.

(ii)                   On 4 May 2011, MLB announced the following proposals :-

(a)   a renounceable rights issue of 456,605,000 rights shares and 273,963,000 free warrants at an indicative issue price of RM0.22 per rights shares on the basis of five (5) rights shares and three (3) warrants for every one (1) existing share held in MLB;

(b)   an increase in the authorised share capital of MLB from RM120,000,000 comprising 200,000,000 ordinary shares of RM0.10 each ("Ordinary Shares"), and 100,000,000 preference shares of RM1.00 each ("Preference Shares") to RM200,000,000 comprising 1,000,000,000 Ordinary Shares and 100,000,000 Preference Shares; and

(c)    amendments to the Memorandum and Articles of Association of MLB to effect the proposed increase in authorised share capital.    

MLB has procured an unconditional and irrevocable undertaking from its major shareholder, Mulpha International Bhd, to fully subscribe its own entitlement under the above proposed rights issue as well as an unconditional and irrevocable undertaking to fully subscribe for all the rights shares not subscribe by the other entitled shareholders and/or their renounce(s).

The proposed rights issue shall raise gross proceeds of approximately RM100.5 million based on the indicative issue price of RM0.22 per rights share.

MLB's proposed rights issue is to raise the requisite funds to finance future business investments and/or projects which may include, inter alia, acquisition of development lands, property development projects and/or companies, both locally and overseas. The increase in shareholders' funds and equity base of the MLB will also allow it to tap on sizable debt financing for future capital requirements. 

           Disposal of Hilton Melbourne Airport Hotel

The disposal of Hilton Melbourne Airport Hotel was completed on 31 March 2011 for a cash consideration of A$108.9 million, resulting in a profit of A$76.8 million. In the absence of an opportunity to redeploy the proceeds from the sale, the funds have been utilized to reduce the Group's borrowings in the interim.

The 5 star 276 room Hilton Melbourne Airport Hotel was acquired in 2004 as part of the Principal Hotel portfolio acquisition. Through active asset management, the EBITDA was increased from A$4.1 million in 2004 to A$8.6 million in 2010 resulting in a valuation increase from A$42.2 million to A$108.9 million. Management believed that it had maximised the value of this asset and consequently put the asset to the market.

           Proposed Dividend Reinvestment Plan

On 10 May 2011, the Company announced a dividend reinvestment plan that provides shareholders the option to elect to reinvest the dividend in new shares of the Company. This is part of the Company’s capital management programme aimed to enhance shareholder value while strengthening the Company's capital position via the reinvestment of the dividend by shareholders.

PROSPECTS

In the coming year, the Group should continue to outperform in tandem with the improving economic fundamentals of the global economy and rising asset values. However, the global recovery remains volatile, with ongoing structural weaknesses, evident in Europe as well as the United States. This is exacerbated by the geopolitical turmoil in North Africa as well as ongoing uncertainties as a result of the recent large scale natural disasters. Nevertheless, management is cautiously optimistic that with a solid balance sheet, a world class asset base and locked in profits from asset disposals, 2011 will be stronger than 2010.

APPRECIATION

I wish to express the Board's appreciation to the management and staff for their efforts and dedication. Their contribution and commitment to the Group are commendable. I also wish to thank our shareholders, financiers and customers for their continued support in the past year.

LEE SENG HUANG

Chairman

12 May 2011