Insas ~ Annual Report 2010

For financial year end 30 june 2010, the Group achieved profits of 54 million compared to RM 57 million for the precious year.

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The business environment was volatile last year, dominated by China and other international events, The financial year began quite favorably in July last year as financial markets appeared to be recovering well from the financial crash of October 2008 when Lehman Brothers (a major Wall Street firm) collapsed. However, at the end of November 2009, Dubai World defaulted on its loans to a consortioum of international banks. In December, the Greek Sovereign debt crisis became contagion and triggered a crisis of confidence in the stability of the European Union, and caused the Euro to drop sharply by about 21% in 5 months. This affected global investors' confidence badly, and financial and stock markets declined. Despite the recent recovery in stock markets, the US goverment just announced another round of "quantitative easing" to prevent a double dip recession.

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In terms of operations, our investment management, project finance and IT divisions were the main earners, contributing profits of RM 24 million, RM 16 million and RM 14 million respectively.

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Our stock brocking division's performance was satisfactory in light of low trading volumes on Bursa. We are trying to increase our presence and market share by opening branches in other states as a long term strategy. However, I am pleased to report that our corporate finace division was profitable in its first year of operations as it managed to to secure several advisory mandates for capital raising and initial public offerings.

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Our high fashion retail business under Melium has rebounded quite strongly and we expect next year's performance to return to almost pre-crisis level. With the recent announcement of abolition of taxes on luxury goods, Malaysis will become as competitive as Singapore and Hong Kong for luxury goods. The goverment has also allocated increased budget to the Ministry of Tourism in a serious effort to increase the number of visitors to Malaysia. We expect all these positive factors to be favourable for our business.

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Last year, we reported that we made a sizeable investment in London in Chantrey House, a residential cum commercial property in the Belgravia area, a prime property location with our UK partner, we took an equal interest in the investment amounting to 22.5 million British Pounds. Since we purchased that property, central London property prices have recovered strongly. Current prices for apartments in comparable locations are transacting at between 1,200 to 1,400 Pounds per square feet compared to our purchase price of 670 Pounds per square feet. We intend to hold on to this investment as we believe property prices should continue to rise in view of the low interest rate environment.

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We ended the financial year with a strong and liquid balance sheet. We are continueing to look for new investments that can provide the Group with sustainable earnings in the future.

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Dato' Thong Kok Khee

Executive Deputy Chairman/

Chief Executive Officer.

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