On behalf of the Board of Directors of AMDB Berhad, I am pleased to present the 43rd Annual Report and Audited Financial Statements of the Group and the Company for the financial year ended 31 March 2009.
  OVERVIEW AND BUSINESS OPERATING ENVIRONMENT
  The financial year ended 31 March 2009 saw the global financial turmoil that intensified in 2008. It has been a busy year as the Group executed numerous strategies to strengthen its businesses. Two significant corporate developments took place in the AMDB Group during the financial year in line with the multi-pronged business reorganization which continued from the previous years.

First was the 3-pronged strategy of the proposed business reorganisation announced on 25 August 2008 to reposition AMDB Group as a focused property, engineering and infrastructure-related player. The business reorganization represents combined proactive measures which are expected to augur well for the long term prospects of the Group and improve the Group's performance going forward.

During the financial year under review, the Group completed the disposal of Sebana Holdings Sdn Bhd and its subsidiaries (“Sebana Group”) which was in line with the Group's pursuit of disposing non-strategic and non-performing businesses.

The Group's business operating environment was challenging during the financial year ended 31 March 2009 due to the unprecedented global financial crisis that has impacted economies worldwide and Malaysia was not spared the adverse effect. These events resulted in significant reduction of availability of credit and corporate spending. The Malaysian economy weakened with the gross domestic product reduced to 4.6% in 2008 from 6.3% in 2007 as a result of decline in exports and slowdown in all other sectors with the exception of the agriculture sector.

Rising construction, building material and fuel prices coupled with the strained global financial markets brought about poor consumer/investor sentiments and confidence threatening towards a global recession were major challenges the Group had to contend with, which affected the Group's profit margin significantly.
FINANCIAL AND OPERATIONS REVIEW

Group
In the face of these challenges brought about by the global economic downturn, the Group registered a revenue of RM206.8 million for the financial year ended 31 March 2009 compared to RM374.6 million for the previous financial year. The decrease was mainly attributed to the RM130 million disposal of a piece of development land in Pulau Indah, Selangor in the previous financial year and generally lower business volume in the property division and engineering and infrastructure division during the current financial year.

Although the revenue was lower, the Group recorded a total consolidated profit for the year of RM18.5 million compared to a loss of RM14.2 million in the previous year. The marked improvement was mainly due to the gain recorded from the disposal of Sebana Group amounting to RM18.3 million coupled with improved share of results of associates of RM7.2 million during the financial year. With lower gearing, the Group’s finance costs during the financial year were lower at RM10.4 million compared to RM18.2 million in the previous year.
Property division
Revenue and profit including share of results of associates before finance costs and taxation recorded during the financial year was lower at RM50.7 million and RM10.8 million respectively with the division’s mixed development in Bukit Tengah, Seberang Prai known as Bayu Mutiara at its tail-end. The launch of Perkasa 3 project in Salak South, Kuala Lumpur comprising of a total 42 units of 2½ storey terrace houses, 3 storey semi-detached houses and 3 storey detached houses was rescheduled to the last quarter of 2009 given the cautious outlook in current market conditions.
Engineering and Infrastructure division
The division recorded a lower net loss including share of results of associates before finance costs and taxation of RM5.4 million on a revenue of RM118.2 million during the financial year.

The lower net loss was due to lower project cost overruns in the power engineering and construction sub-division during the year as compared to previous year. The share of results of associates showed improvements during the financial year due to the following reasons:
•   higher traffic volume during the current financial year and effects of change in accounting estimation of highway depreciation in the previous financial year.
• improved efficiency in manufacturing and cost savings in the manufacture of oil distribution and cast resin transformers.
• upward selling price subsequent to the government lifted cement price control, improved operating margins coupled with non-recurrence for doubtful debts in the manufacture and sale of ready-mix concrete.
Travel and Leisure division
The division recorded a revenue of RM30.3 million during the financial year with a profit including share of results of associates before finance costs and taxation of RM21.3 million compared to a loss of RM3.7 million in the previous year. This was mainly due to the gain on disposal of Sebana Group recorded during the year and deconsolidation of its results subsequent to disposal and improved share of results of associates arising from increased occupancy and average room rates in the hotel business.

During the financial year, AMDB exited from its traditional textile operations in line with the Group’s rationalization to divest non-core or non-performing businesses.
CORPORATE DEVELOPMENT
Proposed Business Reorganisation
At the Company’s Extraordinary General Meeting held on 12 May 2009, the shareholders’ approval was obtained for the Company’s three-pronged business reorganisation strategy involving a capital reconstruction, divestments of certain non-core businesses and acquisitions of landbank. Upon completion of the proposed business reorganisation, AMDB would emerge as a financially stronger group with a cleaner balance sheet, larger asset base and increased earnings visibility.

The divestment of non-core businesses namely, the restaurant operations, travel and tour agency and advertising agency will enable AMDB to realise meaningful gain of approximately RM16.5 million or RM8.8 million on a group basis on its investments.

The acquired landbank of approximately 188 acres in Shah Alam, Selangor known as “Kayangan Heights” and approximately 737 acres in Sibu Jaya, Sarawak have ready development plans and approvals with promising on-going developments. The properties acquired are located at strategic and growing areas with good potential and demand. Coupled with the current regime of low interest rates and lower constructions costs, it would be a prudent investment for the Group to undertake presently, with an advantageous position when there is an upswing in the property market.
Disposal of Sebana Group
As mentioned earlier, the Group had on 8 August 2008 completed the disposal of Sebana Group. The disposal was in line with the Company’s objectives to dispose non performing assets after taking into consideration that Sebana Group has been registering losses since its incorporation. The net proceeds from the disposal and the deconsolidation of bank borrowings of the Sebana Group was the main contributory factor towards the reduced borrowings position of the Group with a resultant reduced gearing at 0.19 times as at 31 March 2009 compared to 0.49 times in the previous year.
OPERATING OUTLOOK AND PROSPECTS
The year 2009 will indeed be a challenging period for most corporations, the Group included, with the Malaysian economy projected to grow at a lower rate in tandem with the slowdown in the global economy.

The Group hopes to benefit from the spill-over effects of the stimulus packages introduced by the Malaysian government. We will continue to be vigilant of the market changes and refine our business strategies and incorporate measures that will allow us to focus on our core strengths. Every effort would be made to mitigate risks and further increase operational efficiency in positioning our core businesses for opportunistic growth while creating and enhancing shareholders value. The Group anticipates that the operating environment for its core businesses in the coming financial year will be competitive with stricter requirement and access to financing and hence will focus on cash flow management while maintaining a reasonable gearing level. We will continue to increase our competitiveness by realigning costs and investing in human capital and capacity building towards adapting and resetting ourselves in the rapid changing market environment.

Prospects for the Group remain challenging although we are beginning to see some early signs of recovery in the economy. However, the Group is well positioned to ride through the downturn and we will continue to explore opportunities to improve its performance.
ACKNOWLEDGMENT AND APPRECIATION
On behalf of the Board, I wish to extend our heartfelt appreciation to the management team and staff of the Group for their dedication and effort. I would also like to thank our shareholders, customers, business associates, bankers and the authorities for their continuing support and confidence in the Group. Last but not least, I wish to thank my fellow Board members for their valuable insights and guidance.
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