Vision - ChartNexusir.chartnexus.com/trc/docs/ar/2014.pdf · 2015-04-30 · However, despite the...

TRC SYNERGY BERHAD (413192-D)

TRC Business Centre,

Jalan Andaman Utama,

68000 Ampang, Selangor

Tel : 03 4103 8000

Fax : 03 4108 7016

www.trc.com.my

annual report

2 0 1 4

Annual Report 2014TRC SYN

ERGY B

ERHA

D (4

1319

2-D

)

TRC SYNERGY BERHAD(413192-D)

OurVision

To become a large and diversified conglomerate with core business in construction, property development, privatization of government projects and oil and gas.

ContentsChairman’s Statement 02

Corporate In fo rmat ion 05

Prof i le o f D i rec to rs 06

Corporate St ruc tu re 08

Statement on Corporate Governance 09

Statement on R isk Management and In te rna l Cont ro l 18

Audi t Commit tee Repor t 21

F inanc ia l S ta tements 25

L is t o f P roper t ies 122

Analys is o f Shareho ld ings 123

Analys is o f War rant A Ho ld ings 126

Analys is o f War rant B Ho ld ings 128

Not ice o f S ix teenth Annua l Genera l Meet ing 130

Statement Accompany ing Not ice o f Annua l Genera l Meet ing 134

Proxy Form

Dear Shareholders,On behalf of the Board of Directors, I am pleased to present the Annual Report

and Audited Financial Statement of TRC Synergy Berhad for the financial year

ended 31 December 2014.

General (r) Tan Sri DaTo’ Seri MohD ShahroM Bin DaTo’ hj norDin

Chairman

Chairman’s Statement

TRC SYNERGY BERHAD Annual Report 2014

02

Overview

The year under review continued to be challenging for the construction industry. Entering the year, we faced a number of headwinds that have adversely effected the operating conditions and also cost structure of some of our projects. However, despite the setback we remain confident of the long term growth and prospect of the construction industry and are optimistic that with our core competency and dedicated workforce, we would be able to wheather the storms and emerge stronger in 2015 and beyond.

GrOup perfOrmance

The year 2014 has been a busy year for the Group. The Group registered a turnover of RM814.9 million for the year under review, representing a marginal decrease of 0.7% over the turnover of RM820.7 million in the preceding year. The profit before tax however saw a higher reduction of 18.5% from RM13.8 million in 2013 to RM11.3 million in 2014. This is largely due to the tougher operating conditions.

Construction remains the major revenue contributor for the period under review. This division managed to secure RM665.6 million worth of new projects in 2014. Going forward for 2015, we expect the construction industry to remain challenging and competitive. We are however, confident of better years ahead as we have a strong balance of skills, knowledgeable and experience staff which is critical to the success of our business.

The performance of the property development division was satisfactory. The project on Lot 196, Taman Ukay Tropika, Ulu Klang, Selangor comprising of 83 units of 3 storey houses and a club house was successfully delivered to the purchasers 6 months ahead of schedule, in August 2014. Meanwhile, the development Impian Senibong (Phase 2) in Permas Jaya, Johor, comprising of 243 units of apartments is progressing well and is expected to be completed by the third quarter of 2016. As for the Transit Oriented Development (TOD) at Station 2 LRT Ara Damansara, a joint land development with Syarikat Prasarana Malaysia Bhd (SPMB), the initial related infrastructure work on the 2 levels of basement Park and Ride facility has commenced, the work to secure development approvals for the proposed mixed development comprising, hotels, service apartment, offices and retail outlets shall commence once the land is registered under SPMB. The development is expected to generate a GDV of RM687 million.

Chairman’s Statement (cont’d)

Chairman’s Statement

10 11 12 13 14 10 11 12 13 14 10 11 12 13 14 10 11 12 13 14

400,

763

16,5

58

309,

575

0.66

376,

717

23,0

40

298,

235

1.56

820,

747

13,8

48

324,

525

0.68

814,

956

11,2

81

325,

995

0.68566,

102

22,8

44

312,

229

0.66

REVENUE(RM’000)

PROFIT/(LOSS) BEFORE TAXATION(RM’000)

SHAREHOLDERS’SFUND(RM’000)

NET TANGIBLE ASSETS PER SHARE(RM)

NOMINAL VALUE (RM)

year 2010 - 2011 RM 1.00year 2012 - 2014 RM 0.50


03

Chairman’s Statement (cont’d)

Going forward, the division is expected to commence preliminary works for its 27 acres land in Bandar Seri Alam, Johor soon. Besides that, the division will also be looking for new land banks and JV partners to jointly develop lands. The division will also register its interest in participating in government property development initiatives like Perumahan Rakyat 1 Malaysia, PPAIM etc. In the near future we expected this division to contribute significantly to the Group’s earnings.

ecOnOmic OutlOOk

In accordance with the economics report 2014 – 2015, the construction sector is projected to increase 10.7% in 2015 (2014 : 12.7%) supported by commencement of some O & G related projects such as RAPID as well as ongoing transportation related infrastructure projects. Meanwhile, the residential subsector is expected to remain strong in view of the increased demand for housing, particularly from the middle income group. The non-residential subsector is also expected to remain stable supported by encouraging demand for industrial and commercial buildings. Major commercial building projects such as the 118-storey Menara Warisan and Bukit Bintang City Centre are expected to contribute to the growth of the sector.

DiviDenD

The Board of Directors have recommended the payment of a first and final single tier dividend of 0.18 sen per share, for the year ended 31 December 2014, amounting to RM864,895.00.

acknOwleDGement anD appreciatiOn

On behalf of the Board, I would like to record our deepest appreciation to the Board of Directors particularly to our respected Group Managing Director for his vast experience and wisdom that proved fundamental in steering the Company’s towards success. We are also fortunate to be supported by a large pool of dedicated senior management and employees of the Group. Their continuous support and commitment are really commendable.

The Board also would like to thank our valued shareholders, business associates, clients and bankers for their support, trust and confidence in the Group.

Thank you.

General (r) tan Sri Dato’ Seri mohd Shahrom Bin Dato’ Hj nordinChairman30 April 2015


04

cOmpany SecretaryAbdul Aziz bin Mohamed(LS 007370)

reGiStereD Office /principal place Of BuSineSSTRC Business CentreJalan Andaman Utama68000 Ampang, SelangorTel No. : 603-41038000Fax No. : 603-41087016e-mail : [email protected]

BrancH OfficeLot 3626, Block 16, KCLDTaman Timberland, Lorong Rock 293200 Kuching, Sarawak

Tel No. : 082-239998Fax No. : 082-421998

weBSitewww.trc.com.my

auDitOrSAljeffriDean (AF-1366)2-5-13, 5th Floor, Menara KLHNo. 2, Jalan Kasipillay51200 Kuala Lumpur

SHare reGiStrarMega Corporate Services Sdn BhdLevel 15-2, Sheraton Imperial CourtJalan Sultan Ismail, 50774 Kuala LumpurTel : 03-26924271Fax : 03-27325388 & 03-27325399

principal BankerSHong Leong Bank BerhadAlliance Bank Malaysia BerhadHSBC Bank Malaysia BerhadAffin Bank BerhadAmBank (M) BerhadMalayan Banking BerhadUnited Overseas Bank BerhadRHB Bank BerhadCIMB Bank BerhadStandard Chartered Bank Malaysia Berhad

SOlicitOrSMessrs Noorzilan & PartnersMessrs C.C. Choo, Hazila & TeongMessrs Zain Megat & MuradMessrs Adam Bachek & Associates

StOck excHanGe liStinGBursa Malaysia Securities BerhadMain Market (Construction)Stock No.s : 5054 5054 WA 5054 WB

Corporate Information

BOarD Of DirectOrS

DaTo’ aBDul aziz Bin MohaMaD(Executive Director)

aBDul rahMan Bin ali(Independent Non-Executive Director)

General (r) Tan Sri DaTo’ Seri MohD ShahroM Bin DaTo’ hj norDinChairman (Senior Independent, Non-Executive Director)

DaTo’ Sri Sufri Bin hj MohD zin(Managing Director)

noor zilan Bin MohaMeD noor(Independent Non-Executive Director)


05

nOte:-

Save as disclosed,

1. none of the Directors have:-i. any family relationship with any director and/or

substantial shareholders of the Company;ii. any conflict of interest with the Company; andiii. any conviction for offences (other than traffic

offences) within the past ten (10) years.

2. none of the Directors holds directorship in other public companies.

General (R) Tan Sri Dato’ Seri Mohd Shahrom Bin Dato’ Hj Nordin was appointed as a Director on 25 March 2004. He then was re-designated as Chairman of the Company on 1st April 2015.

After his secondary education, he was selected for Officer Cadet training at the Royal Military College, Sungai Besi in 1966 and was commissioned as a Second Lieutenant into the Royal Malay Regiment in 1968. General (R) Tan Sri Mohd Shahrom has served in various appointments at command, staff, training and the diplomatic services levels and he was the Chief of the Malaysia Army from 1st January 2003 to 15 September 2003. Prior to that appointment he was the Chief of Staff at the Armed Forces Headquarters. Currently he is the Executive Director (Defence and Business Development) of the National Aerospace & Defence Industries Sdn Bhd (NADI). He is also a Director of SME Ordnance Sdn Bhd (SMEO) a subsidiary company of the NADI Group of Companies.

General (R) Tan Sri Dato’ Seri Mohd Shahrom is also the Chairman to the Audit Committee and the Senior Independent Non Executive Director of the Company. He is also the Chairman of Yayasan TRC.

During the financial year ended 31 December 2014 he attended all four Board of Directors Meetings held.

GENERAL (R) TAN SRI DATO’ SERI MOHD SHAHROM BIN DATO’ Hj NORDINChairman, Senior Independent, Non-Executive Director, 67 years of age – Malaysian

Dato’ Sri Sufri Bin Hj Mohd Zin is the founder of TRC Group. He was appointed as the Director of TRC Synergy Berhad (“TRC” or “the Company”) on 29 March 2002. He was the Executive Chairman of the Company on 1st April 2015 before being re-designated as Managing Director. He is also the Managing Director of the Group’s subsidiary Companies.

Dato’ Sri Sufri graduated from MARA Institute of Technology in 1982, with a Diploma in Business Studies. He began his career as a banker with Bank Bumiputera Malaysia Berhad in 1982. He later pursued a Bachelor Degree in Jurisprudence from Universiti Malaya and he also holds an MBA, which he obtained in 2007.

In August 2009, Dato’ Sri Sufri was selected as one of the winners of the Outstanding Entrepreneurship Award organized by Enterprise Asia. Dato’ Sri Sufri achieved a personal milestone when he was honored as the CEO of the Year by the Construction Industry Development Board (CIDB) in 2009.

He is also a member of the Jawatankuasa Pemandu established by the Works Minister in the implementation of the MOU between the Government of Malaysia and the Government of India on co-operation relating to the provision of Technical Assistance Services on Highway Management and Development.

Dato’ Sri is the Vice President and Council Member of Master Builder Association Malaysia (2012-2016), a member of the Road Engineering Association of Asia and Australia (REAAA) and the Corporate Advisor to Persatuan Kontraktor-Kontraktor Melayu Malaysia (Cawangan Wilayah Persekutuan). He is also a Board Member to Tun Hussein Onn University, Malaysia and a Trustee of Yayasan TRC.

During the Financial year ended 31 December 2014 he attended three out of four Board of Directors Meetings.

DATO’ SRI SUFRI BIN Hj MOHD ZINManaging Director, 59 years of age – Malaysian

Profile of DirectorsTRC SYNERGY BERHAD Annual Report 2014

06

Dato’ Abdul Aziz Bin Mohamad was appointed as an Executive Director of the Company on 29 March 2002. He joined TRC Group’s, Trans Resources Corporation Sdn Bhd as a Senior Contract Executive in 1994 and now holds the post of Chief Executive Officer (CEO) of that subsidiary company.

He had his early education in the Malay College Kuala Kangsar (MCKK) and graduated from Trent Polytechnic in Nottingham, England in 1983. He is a Quantity Surveyor by profession and a member of the Royal Institution of Surveyors, Malaysia. He started his career as an Assistant Quantity Surveyor in England with Rider Hunt and Partners in 1982 and later joined Jabatan Kerja Raya (JKR) in 1983 as a Quantity Surveyor until subsequently joining TRC. Dato’ Abdul Aziz is a Board Member to Universiti Malaysia Terengganu and a Trustee of Yayasan TRC.

YBhg Dato’ Abdul Aziz attended all four Board of Directors Meetings held during the financial year ended 31 December 2014. He does not have any personal interest in any business arrangement involving the Company.

DATO’ ABDUL AZIZ BIN MOHAMADExecutive Director, 56 years of age – Malaysian

Noor Zilan Bin Mohamed Noor was appointed as a Director of the Company on 13 May 2002. He graduated from ITM in 1983 with a Diploma in Law. He then joined United Malayan Banking Corporation as a Trainee Executive Officer before pursuing for further studies in the United Kingdom in 1984 and graduated from City of London Polytechnics with LLB (Hons) majoring in Business Law in 1987. Subsequently, he went on to read Law at Lincoln’s Inn and was called to the English Bar in 1988 and upon returning to Malaysia he was then called and admitted to the Malaysian Bar in 1989 as an Advocate & Solicitor. He then worked as a Legal Assistant before starting his own law firm in 1991 and is now a Senior Practitioner with an established law firm in Kuala Lumpur specializing in the area of Corporate Law, Banking, Building and Construction Law apart from civil & criminal litigation.

Noor Zilan is a member of the Audit Committee and the Chairman to the Nomination Committee and Remuneration Committee. He attended all four Board of Directors Meetings held during the financial year ended 31 December 2014.

Abdul Rahman Bin Ali was appointed as a Director of the Company on 13 May 2002. He graduated from University of Malaya in 1982 with a Degree in Accounting. He is currently a Chartered Accountant of the Malaysian Institute of Accountants. Upon graduated, he started his training with financial institution for a number of years before joining public accountancy practice. In 1994, he set up his own accounting firm by the name A. Rahman & Associates and later become a partner of AKN Arif in 1996. Abdul Rahman is a member of the Audit Committee, Nomination Committee and Remuneration Committee. He attended all four Board of Directors Meetings held during the financial year ended 31 December 2014.

NOOR ZILAN BIN MOHAMED NOORIndependent, Non–Executive Director, 55 years of age – Malaysian

ABDUL RAHMAN BIN ALIIndependent, Non–Executive Director, 58 years of age – Malaysian

Profile of Directors (cont’d)


07

Corporate Structure

100% TRANS RESOURCE S CORPORATION SDN BHD(120265-P)

100% TRC (SARAwAk) SDN BHD(621714-W)

100% TRC CONCRETE INDUSTRIES SDN BHD (151401-V)

100% LIPUTAN SUTERA SDN BHD(637939-H)

100% TRC DEVELOPMENT SDN BHD(309248-U)

100% SwAN SyNERGy DEVELOPMENTS PTy LTD (ACN 151511018)

26% PETROBRU (B) SDN BHD(AGO / RC / 6613 / 06)

60% PETROBRU BUILD SDN BHD(RC/00007517)

34% DELTA GARDEN LIMITED(11524/08P)

90% TRC (B) SDN BHD(RC/00008574)

100% TRC LAND (CAMBODIA) LIMITED(6234/09E)

33.33% PRETTy SALLy HOLDINGS PTy LTD(137500611)

100% TRC INTERNATIONAL PTE LTD (LL04510)

100% TRC LAND SDN BHD(444162-W)

100% TRC (AUST) PTy LTD(137500611)

100% ADS PROjEk SDN BHD(1021828-M)

100% TRC ENERGy SDN BHD (616448-K)

100% TRC INFRA SDN BHD(645178-P)


08

Statement on Corporate Governance

The Board of Directors of TRC Synergy Berhad (“the Board”) recognizes the importance of upholding and maintaining a high standard of corporate governance and committed to ensure the same are practiced throughout the Company and its subsidiaries (“TRC Group” or “the Group”). This has been accepted by the Board as the Group’s key responsibilities in order to protect and enhance long term shareholder value and the financial performance of TRC Group. The Board will continuously evaluate the Group’s corporate governance practices and procedures, and where appropriate will adopt and implement all the Principles as enshrined in the Malaysian Code on Corporate Governance 2012 (“The Code”).

The Board is pleased to present the report on how the Group has applied the Principles and the extent to which it has complied with the recommendations set out in the Code.

DIRECTORS

The Board of Directors (“the Board”)

The Company is led and governed by the Board of Directors headed by the Managing Director who has detailed knowledge and vast experience in the construction industry. The rest of the Board members possess a wide range of skill and experiences ranging from construction, finance, legal and general management discipline suitable for managing the Group businesses. A brief profile of each Director is presented in this Annual Report on pages 6 and 7.

The Board has overall responsibility in the stewardship of the Group’s direction and its performance inclusive of corporate governance, strategic planning and maintaining effective control over financial and operational matters. The Board is also primarily responsible for determining the Company’s strategic objective and policies and to monitor the progress toward achieving the objectives and policies. To ensure the effectiveness in discharging its duties and responsibilities, the Board has also delegated certain responsibilities to the Management and the committees appointed by the Board. The delegation of authority includes responsibility for developing business plans, budgets and company strategies; identifying and managing operational risks and formulating strategies for managing these risks and managing the company's financial and operational mechanisms. In this regard the Board is guided by a Board Charter which outline the roles and responsibilities of Directors and other functions as recommended by the Code.

The Board Charter shall be periodically reviewed in line with the needs of the Company and any new regulations and recommendations that may have impact on the discharge of the Board responsibilities. The Charter which was endorsed in May 2013 is available at the Company’s website for public viewing.

The Board has also recognized its role in establishing a sound corporate culture amongst the Board. To facilitate the observation and application of the desired culture, the Board had formalized a Code of Conduct in May 2013 which engenders ethical conduct that permeates throughout the Group.

Board Composition and Balance

The Board currently consists of five (5) members comprising two (2) Executive Directors and three (3) Independent Non-Executive Directors. The Company fulfills the prescribed requirement of having at least one-third (1/3) of the Board Members as Independent Non-Executive Directors as stated in Paragraph 15.02 of the Listing Requirements of Bursa Malaysia. The Independent Non-Executive Directors provide broad, unbiased and balanced assessment on proposals initiated by the Executive Directors and the senior management of the Group. They also contribute by the exercise of independent judgment and objective participation in the proceeding and decision making process of the Board. Their differing backgrounds collectively bring with them extensive experience augur well with this process.

In compliance with the Code, the Company had in 1st April 2015 re-designate General (R) Tan Sri Dato’ Seri Mohd Shahrom Bin Dato’ Hj Nordin, one of the Independent Non-Executive Directors as Chairman of the Company and therefore the role of the Chairman and the CEO are separated.

09


Statement on Corporate Governance (cont’d)

DIRECTORS (COnT’D)

Board Composition and Balance (cont’d)

The Board is fully aware and appreciate the Code’s recommendation to limit the tenure of independent directors to a cumulative term of nine (9) years and in the event the Board intends to retain those directors as independent directors, they must justify and seek shareholders’ approval thereon.

The Company does not have term limits for the independent directors as the Board believes that the independent judgment and ability to act in the best interest of the Company will not be compromised and impaired with their long tenure with the Company. Their understanding and adequate knowledge with the Group affairs coupled with their personal continuous training augur well with the effective direction and planning intended by the Company.

Further to the above, the Board has assessed the independence of General (R) Tan Sri Dato’ Seri Mohd Shahrom bin Dato’ Hj Nordin, Noor Zilan bin Mohamed Noor and Abdul Rahman bin Ali and recommended them to continue to act as Independent Non-Executive Directors of the Company based on the following justifications:-

i. They are independent of management and free from any business or other kind of relationship which could interfere with the exercise of independent judgment or the ability to act in the best interest of the Company;

ii. They do not have direct or indirect interest in the Company and its subsidiaries;

iii. They are fully complied with the criteria as independent directors as prescribed under Main Market Listing Requirements (MMLR); and

iv. They have exercise due care during their tenure as Independent Directors of the Company and carried out their duties in the interest of the Company and shareholders.

Besides, the Company will also seek its shareholders’ approval at its Eighteenth (18th) AGM to retain them as independent directors beyond the nine years tenure.

As recommended by the Nominating Committee, the Board of the view that the present members of the Board are considered sufficient in addressing the issues affecting the Group. The Board however will continuously evaluate its size and may increase it to a suitable number for the effective discharge of its roles and responsibilities.

Board Meeting

Board meetings are scheduled in advance and the Board agreed to meet at least four (4) times in a year and additional meetings are convened as and when necessary. During the financial year ended 31 December 2014, the Board met four (4) times and the attendance record for each Director is as follows:-

name no. of Meeting Attended % of Attendance General (R) Tan Sri Dato’ Seri Mohd Shahrom bin Dato’ Hj Nordin 4/4 100Dato’ Sri Sufri bin Hj Mohd Zin 3/4 75Dato’ Abdul Aziz bin Mohamad 4/4 100Noor Zilan Bin Mohamed Noor 4/4 100Abdul Rahman bin Ali 4/4 100

In the meetings, the Board deliberated and considered matters relating to the financial performance, key business and operational issues and business plans of the Group.

In the intervals between Board meetings, any matters requiring urgent Board decisions will be sought via circular resolutions which are supported with all the relevant information and explanations for an informed decision to be made.

All Directors have complied with the minimum 50% attendance requirement in respect of Board meeting as stipulated by MMLR.


10



Board Composition and Balance (cont’d)

Prior to the Board meetings, the agenda for each meeting together with detailed Board papers as well as minutes of previous meetings are circulated to all Board members for their prior review in advance of the meeting dates. The Directors will have sufficient time to deliberate on the issues to be raised at the Board Meetings.

The meetings are chaired by the Chairman while the Executive Directors lead the presentation on the Board papers and reports. Senior management staffs as well as External and Internal Auditors and independent advisors may be invited to attend the meetings and brief the Board members on relevant agenda that are tabled to the Board to enable them to make fair and well-informed decisions.

The Company Secretary attends all Board meetings and the meetings of the committees appointed by the Board. He will advise the Board and the committee members on procedures of the meeting and other relevant rules and regulations. All proceedings of the Board are minuted and signed by the Chairman of the meetings in accordance with the provision of Section 156 of the Companies Act 1965.

Besides attending Board meetings, the Directors also would have special sessions with the Group’s operation unit whereby the necessary briefing and updates on issues and progress of the projects undertaken by the Group will be discussed and disseminated.

Supply of Information to the Board.

In performing their duties, all Directors have unrestricted and timely access to all information pertaining the Group’s business and affairs whether as a full Board or in their individual capacity in carrying out their duties and responsibilities effectively. The Chairman undertakes primary responsibility for organizing information to be distributed to the Board. They also have direct access to the advice and services of the Company Secretary, senior management, internal and external auditors and other independent professional at all times and at the Company’s expense.

On quarterly basis, the Company Secretary notify the Directors and Principal Officers of the Company of the close period for trading the Company’s shares pursuant to Chapter 14 of the MMLR. The Company Secretary also circulate relevant guidelines and updates on statutory and regulatory requirements from time to time to the Board and if necessary table it to the Board meetings.

Appointment and Re-election of the Board

The Company has a formal and transparent procedure for the appointment of new Directors and re-election of Directors. These aspects are spelt out clearly in the Company’s Articles of Association. Besides, The Nomination Committee reviews and recommends any proposed appointments before the same are approved by the Board.

All the newly appointed Directors are subject to election by shareholders at the Annual General Meeting subsequent to their appointment.

As for the re-election of Directors, the Articles of Association of the Company provides at least one-third (1/3) of the Directors are required to retire by rotation at each financial year and are eligible to offer themselves for re-election at the Annual General Meeting. All Directors shall retire from office once at least in each three (3) years.

At the last Annual General Meeting held on 26 June 2014, Noor Zilan bin Mohamed Noor and Abdul Rahman bin Ali retired and were elected to the Board. At this AGM, Dato’ Sri Sufri bin Hj Mohd Zin shall retire from office and be eligible for re-election pursuant to Article 84 of the Company’s Article of Association.

11



Directors’ Training

All Directors have successfully attended the Mandatory Accreditation Programme prescribed by Bursa Malaysia.

The Board believes that continuous training is essential to the Board members to ensure that they are updated with appropriate skills and knowledge to enable them to discharge their duties effectively. Therefore, they are encouraged to attend training programmes to supplement their knowledge in various fields relevant to them.

During the financial year ended 31 December 2014, the Directors have attended among others the following training programmes and seminars:-

Directors Training Programme

General (R) Tan Sri Dato’ Seri Mohd Shahrom Bin Dato’ Hj Nordin

i) Round Table on Financial Reporting by Securities Commissionii) Seminar on Goods and Services Tax (GST)

Dato’ Sri Sufri Bin Hj Mohd Zin i) 6th Malaysian Construction Summit (CIDB) ii) International Federation of Asian and Western Pacific Contractors’

Association Convention iii) Seminar on Goods and Services Tax (GST)

Dato’ Abdul Aziz Bin Mohamad i) Advocacy Session on Corporate Disclosure for Directors (Bursa Malaysia)

ii) Seminar on Goods and Services Tax (GST)Noor Zilan Bin Mohamed Noor Seminar on Goods and Services Tax (GST)Abdul Rahman Bin Ali i) Persidangan Cukai Malaysia 2014

ii) MIA International Accountant Conference 2014iii) Public Practitioners Forum 2014 iv) Kursus Khas Cukai Barang dan Perkhidmatan (GST) untuk ejen

cukai v) Seminar on Goods and Services Tax (GST)

Apart from that, frequent visit to the operational projects sites and occasional trips to meet overseas suppliers and consultants and active participation on the relevant association have equipped the Executive Directors with the latest information and technologies in the industry.

Board Committees

The Board has set up the following four (4) committees as recommended by the Code to assist the Board in the execution of its roles and functions effectivelly:-

i) Audit Committee

The details of the Audit Committee are mentioned in the Audit Committee Report on page 21 of this Annual Report.

ii) nominating Committee

The Company has established its Nominating Committee in May 2002 which currently comprises of two (2) members all of whom are Independent Non-Executive Directors. The members of the Nominating Committee are as follows:-

a) Noor Zilan Bin Mohamed Noorb) Abdul Rahman Bin Ali

During the year 2014, the Committee has convened one (1) meeting to review the performance of the Board for the year 2014.



12


Board Committees (cont’d)

ii) nominating Committee (cont’d)

The Nominating Committee which has been appointed by the Board, is primarily empowered by its terms of reference in carrying out the function amongst others, to review annually the required mixed of skills, experience and other qualities of the Directors and to recommend new appointments, if any, to the Board. The Committee is also set for assessing the effectiveness and continually seek ways to upgrade the effectiveness of the Board as a whole, the committees of the Board and the contribution of each existing individual Director.

iii) Remuneration Committee

The Company has also established the Remuneration Committee in May 2002 which currently comprises of two (2) members, all of whom are Independent Non-Executive Directors. The members of the Remuneration Committee are as follows:-

a) Noor Zilan Bin Mohamed Noorb) Abdul Rahman Bin Ali

The Committee is primarily responsible in the development, review and recommendation of fair remuneration package for Executive Directors in all its forms, drawing from outside advice as necessary.

The duties of the Remuneration Committee are among others, to review the remuneration package of each individual Executive Directors in order to attract and retain competent executives who can add value to the Company. The determination of remuneration packages of non-executive directors, should be a matter of the Board. The individuals concerned should abstain from discussion of their own remuneration.

iv) Employees’ and Directors’ Share Option Scheme (ESOS) Committee

The Company has established ESOS Committee pursuant to ESOS By-Laws approved by the Shareholders at the Extraordinary General Meeting in April 2004. The Committee which comprises of the following members shall administer the ESOS Scheme in such manner as it shall in its discretion deem fit and within such powers and duties as are conferred upon it by the Board pursuant to the provisions of Bye-Laws:-

a) Dato’ Sri Sufri bin Hj Mohd Zinb) Dato’ Abdul Aziz bin Mohamadc) Dato’ Richard Khoo Teng Sand) Mr Yeoh Sook Keng

The Employees’ and Directors’ Share Option Scheme (ESOS) Committee was dissolved in 20 June 2014 upon the expiry of the Scheme.

DIRECTORS’ REMUnERATIOn

The Board acknowledges that the level or remuneration of the Directors and senior management should reflect the level of responsibility and contributions toward the successful and efficient running of the Group’s activities.

To assist the Board in the discharge of its duties, the Board has established a Remuneration Committee. The affairs of the Committee inclusive of its duties and responsibilities are spelt out on page 13 if this Annual Report.


13


DIRECTORS’ REMUnERATIOn (COnT’D)

Disclosure

The aggregate remuneration of the Directors received and receivable from the Company and its subsidiaries during the financial year ended 31 December 2014 are as follows:-

Category Fees (RM) Salaries (RM) EPF & SOCSO (RM) BonusExecutive Directors - 2,139,000 317,448 480,000Non-Executive Director 84,000 - - -Total 84,000 2,139,000 317,448 480,000

The remuneration paid to the Directors, analysed into the following bands, is as follows:-

Range of remuneration number of Executive Directors number of non-Executive DirectorsLess than RM 50,000 - 3RM50,001 – RM1,050,000* - -RM1,050,001 – RM1,100,000 1 -RM1,150,001 - RM1,850,000* - -RM1,850,001 – RM1,900,000 1 -

* No Directors within this range of remuneration.

RELATIOnSHIP WITH SHAREHOLDERS AnD InVESTORS COMMUnICATIOn

Effective Communication

The Board is fully aware that the key element of good corporate governance is the effective communication and proper dissemination of all important issues and major development concerning the Company to all shareholders and investors. Effective communication channels with the Company’s shareholders, investors and the public are maintained through the dissemination of press releases, timely announcements and disclosures made to Bursa Malaysia.

During the financial year ended 31 December 2014, the Company organized a number of meetings and briefings with financial analysts to establish better understanding of the Company’s objective and performance and to convey other information that may affect shareholders interest.

The Company also has a cordial relationship with reporters who have been playing a very effective role in conveying the Group’s information to the public, shareholders and investors. Press releases are also occasionally organized to clarify on certain matters related to the Company and its operating unit.

The Board has also appointed General (R) Tan Sri Dato’ Seri Mohd Shahrom Bin Dato’ Hj Nordin as the Senior Independent Non-Executive Director whom investors and shareholders may direct their concern on any matters pertaining to the Group activities.

Besides the above, shareholders, investors and members of the public may also obtain updated information on the Group by accessing to the Company’s website at www.trc.com.my.

General Meeting

The Company’s Annual general Meeting (“AGM”) remains the primary channel of communication with the Company’s shareholders in particular private investors. At each AGM and Extraordinary General Meeting shareholders are encouraged and given sufficient time and opportunity to participate in the proceedings, to raise questions and participate in discussions pertaining the operation and financial aspects of the Group. They may seek clarifications on the Group’s performance, major development as well as on the resolutions being proposed. All Board members, senior management as well as the Company’s external auditors are available to respond to shareholders relevant questions raised at the meeting.



14

RELATIOnSHIP WITH SHAREHOLDERS AnD InVESTORS COMMUnICATIOn (COnT’D)

Annual Report

A key channel of communication used to provide the Company’s shareholders and investors with information which include its business, financials and other key activities is the Annual Report. The Company’s Annual Report, the content of which are prescribed by the MMLR surely will provide its shareholders and investors with the overview of the Company’s performance and will be the basis of further communication and dialogue between the Company and the shareholders during the AGM.

ACCOUnTABILITY AnD AUDIT

Financial Reporting

In presenting the Company’s financial statements and quarterly results to shareholders and other interested parties, the Board aims to present a balanced and understandable assessment of the Group’s financial position and prospects.

The Board is responsible for ensuring that the financial statements give a true and fair view of the financial position of the Group and of the Company as at the accounting period. In preparing the financial statements, the Directors have ensured that financial statements have been drawn up in accordance with Financial Reporting Standard and the Companies Act 1965.

The Audit Committee assists the Board by reviewing the Group’s annual financial statements and quarterly results to ensure completeness, accuracy and adequacy prior to release to Bursa Malaysia and Securities Commission. The Committee also reviews the suitability and independence of the external auditors and recommends their re-appointment to the Board. In this regard, the Board is guided by the policies and procedures for the selection and appointment of external auditors which was approved by the Board in May 2013.

The Statement explaining the Directors’ responsibilities for preparing the annual audited financial statements pursuant to paragraph 15.27(a) of the Listing Requirements is set out on page 17 of the Annual Report.

Internal Control

The Board acknowledges and placed strong emphasis in maintaining a sound system of internal control which provides reasonable assurance of effective and efficient operations and compliance with regulations as well as with internal procedures and guidelines. Details of the Group’s internal control system is presented in the Statement on Internal Control and Audit Committee Report set out on pages 18 to 20 and pages 21 to 24 respectively.

Relationship with External Auditors

Through the Audit Committee, the Board has established a transparent and appropriate relationship with the Group’s internal and external auditors in seeking their advice and towards ensuring compliance with the applicable Approved Accounting Standards. The external auditors are invited to attend the Audit Committee meeting and to the Board meeting on a need basis as and when deemed appropriate.

Corporate Social Responsibility (“CSR”)

The Board recognizes the importance of the CSR the framework of which has been launched by the Bursa Malaysia in 2006. The move by Bursa Malaysia is seems to be in line with the decent intention of the Government to inculcate the culture of corporate social responsibility among the public listed companies. Therefore, the Board has agreed to beef up the Company’s social activities with an intention to share the company’s profitability with the public in forms of contribution on social responsibility activities.


15


ACCOUnTABILITY AnD AUDIT (COnT’D)

Corporate Social Responsibility (“CSR”) (cont’d)

During the financial year ended 31 December 2014, the Group continued to support worthy causes which involve the society, welfare and charitable organization as well the Group’s staffs by donating various amounts to various parties and bodies within the country. These include a number of contributions to Master Builder Association Malaysia (MBAM) for its activities such as MBAM Drive Flood Donation, Surau Renovation, Annual Golf Tournament and its 60th Anniversary Dinner. The Company also contributed to Tentera Laut Diraja Malaysia (TLDM) for activities in conjunction with TLDM 80th Anniversary and also contributed to repair works at SMK(P) Methodist Jalan Cenderawasih Kuala Lumpur.

As a continuous effort to strive for better, convenient and conducive working environment for the staffs, the Company provided free daily meals for its headquarter staffs. This practice has been ongoing since September 2009. Recently the Company established a Center of Excellence at its Head Quarters which will provide a conducive well-equipped in-house training center for all staffs.

During the year under review, the Group had also organized Safety Day programme at Kelana Jaya LRT Line Extension Project site. Among the objectives of the programme was to enhance safety awareness and to promote safety culture among the workers.

In addition to that, the Company also offered opportunity to undergraduate and diploma students of various public and private university and colleges especially those who are from construction related courses to undergo practical training at the Group headquarters and site offices with the prospect of employment with the Group upon completion of their studies. During 2014, 65 practical trainees had been attached to the Group and RM74,747 had been paid to them in form of allowances.

Besides all the above, Yayasan TRC which was established by the Company in 2011 undertook the following activities pursuant to its rules of establishment:-

i) Staff education aid to two eligible TRC staffs in pursuing their out campus studies in Master in Business Administration and Bachelor Degree in Human Resource Management.

ii) Excellent Education Achievement Awards were given to five students who excel with straight A in their Sijil Pelajaran Malaysia, Peniliaian Menengah Rendah and Ujian Peniliaian Sekolah Rendah.

iii) Financial assistance to TRC staff who suffer for health problem and to the heirs of a deceased staff.

ADDITIOnAL COMPLIAnCE InFORMATIOn

In compliance with the Listing Requirements, the following information is provided:-

Utilization of proceeds

For the financial year ended 31 December 2014, there was no proceed raised from any exercise.

Share buybacks

The Company has not undertaken any share buyback exercise during the financial year ended 31 December 2014.

Option, Warrants or Convertible Securities.

During the financial year ended 31 December 2014, the Company issued 3,421,620 ordinary shares of RM0.50 each pursuant to the exercise of options under the Employees Share Option Scheme which was implemented in June 2004. The Scheme was expired on 20 June 2014.



16

ADDITIOnAL COMPLIAnCE InFORMATIOn (COnT’D)

American Depository Receipt (ADR) / Global Depository Receipt (GDR).

The Company has not sponsored any ADR or GDR Programme.

Sanctions and / or penalties

There were no sanction and/or penalty imposed on the Company and its subsidiaries, Directors or Management by the relevant regulatory bodies during the financial year ended 31 December 2014.

Non-Audit Fees

The non-audit fees paid to external auditors amounting to RM7,000.00 for the financial year ended 31 December 2014.

Variation of Results

There was no material variation between the audited results for the financial year ended 31 December 2014 with the unaudited results announced.

Profit Guarantee

There was no profit guarantee given by the Company during the financial year ended 31 December 2014.

Material Contracts

There was no material contracts between the Company and its subsidiaries involving Directors and major shareholders’ interests during the financial year ended 31 December 2014.

Recurrent Related Party Transaction

The Company did not enter into any recurrent related party transaction which requires the shareholders’ mandate during the financial year ended 31 December 2014.

STATEMEnT OF DIRECTORS’ RESPOnSIBILITY In RELATIOn TO THE FInAnCIAL STATEMEnTS

The Board is responsible to ensure that the financial statements are prepared in accordance with the provision of the Companies Act, 1965 and applicable approved accounting standards in Malaysia so as to ensure a true and fair view of the state of affairs of the Group and the Company as at the end of each financial year and of their results and their cash flows for that financial year then ended. The Board is also responsible to maintain accounting records that disclose with reasonable accuracy the financial position of the Group and the Company, and which enable them to ensure that the financial statements comply with the Companies Act, 1965.

The Directors have general responsibilities for taking such steps that are reasonably available to them to safeguard the assets of the Group, and to prevent and detect fraud and other irregularities.

The Directors are satisfied that in preparing the financial statements of the Group for the financial year ended 31 December 2014, the Group has adopted appropriate accounting policies and applied them prudently and consistently. They are also satisfied that reasonable and prudent judgments and estimates were made and all applicable Approved Accounting Standards in Malaysia have been followed accordingly.


17


Statement on Risk Management and Internal Control

The Board of Directors of the Company (“the Board”) is pleased to provide the following statement, which outline the nature and scope of risk management and system of internal control of the Company’s Group (“the Group”) during the financial year 2014.

BOARD RESPOnSIBILITY

The Board is responsible for maintaining the effectiveness and adequacy of the Group’s system of Internal Control and risk management which involved reviewing and monitoring the adequacy and integrity of these systems. The internal control system involves the core business and its key management, including the Board, and is designed to safeguard the Group’s business objectives and to manage the risk to which it is exposed. The system of Internal Control aims to :-

i) safeguard shareholders’ interest and the assets of the Group;ii) ensure that proper documentation and accounting records are maintained; andiii) ensure that the documentation and financial information generated by the system is reliable.

The Board is fully aware that this system, by its nature, can only provide reasonable and not absolute assurance against the risk of material misstatement of financial information and records or against financial losses due to fraud and error. These systems are designed to manage and mitigate, rather than eliminate, the risk of failure to achieve business objectives of the Group.

The Board’s responsibility for internal control does not cover those of the associated companies which are separately managed.

RISK MAnAGEMEnT

The Board views risk management as an important process in the pursuit of the group’s corporate governance agenda. It is an ongoing process which involves different levels of management to identify, evaluate, monitor, manage and mitigate the risks that may affect the achievement of its business and corporate objectives.

The Group has in place an on-going process for identifying, evaluating, monitoring and managing the significant risks affecting the achievement of its business objectives. This is an on-going process, subject to regular review by the Board, and accords with the “Statement on Internal Control: Guidance for Directors of Public Listed Companies”.

The Group adopts a decentralised approach to risk management by encouraging participation of all employees in such a manner that the employees take ownership and responsibility for risks at their respective levels. The process of risk management and policy implementation is overseen by the senior management and report to the Board through the Audit Committee. The risk management framework is also embodied in the Quality Policy in accordance with ISO 9001 : 2008 practised by a wholly-owned subsidiary of the Company which is the major revenue contributor to the Group.

InTERnAL COnTROL

The key elements of the Group’s internal control system are described below:-

Internal Audit Function

The Board is fully aware of the importance of the internal audit function and has established the Internal Audit Department for the Group in 2004. The main objective of this department is to review the key business processes and controls and to assists the Audit Committee in the discharge of its duties and responsibilities. Its role is to provide independent and objective reports on the organization, management, accounting and other records, accounting policies and internal controls to the Audit Committee and the Board. As required by the Listing Requirements, the Internal Auditors report directly to the Audit Committee and is independent of the activities its audits. They provide periodic reports to the Audit Committee on the outcome of the audit works conducted by them which would be reviewed and evaluated by the Audit Committee.


18

Statement on Risk Management and Internal Control (cont’d)

InTERnAL AUDIT FUnCTIOn (COnT’D)

Internal Audit Function (cont’d)

Internal audit works are carried out pursuant to the annual audit plan approved by the Audit Committee as well as the Board. The internal audit process provides an assessment of the adequacy, efficiency and effectiveness of the Group’s existing internal control system and recommends improvements in control. The results of the audit reviews are reported periodically to the Audit Committee. In addition, the internal auditors also carried out follow-up visits to ensure recommendations for improving control systems are implemented. The presence of the internal audit function has provided the necessary level of assurance as to the effectiveness and credibility of the Group’s system of internal control.

Throughout the financial year ended 31 December 2014, the Internal Audit Department has undertaken several independent audit assignments pursuant the approved audit plan. The details of the internal audit activities are reported on page 24 of this Annual report.

None of the weaknesses or issues identified during the review for the financial year ended 31 December 2014 has resulted in non-compliance with any relevant policies or procedures, listing requirements and other recommended industry practices that require disclosure in the Company’s Annual Report.

Quality Policy

The main revenue contributor of the Group has a clear and well documented Quality Policy in accordance with ISO 9001 : 2008. This policy and the related procedures are communicated to the respective staff members. Amongst the salient features of the Quality Policy are as follows:-

i) Internal Quality Audits are conducted at planned intervals to determine whether the Quality Management System is effectively implemented and maintained and conforms to the established system requirements of Internal Standard, ISO 9001:2008.

ii) On an annual basis, an overall Internal Quality Audit Plan is devised encompassing every departments and projects, taking into consideration the status and importance of relevant process, areas to be audited as well as results of previous audits.

iii) Qualified Internal Quality Auditors will be assigned with audit works in accordance with the Internal Quality Audit Plan where the reports shall be examined and analyzed and reported to the management during Management Review Board Meeting.

iv) As part of the Quality Management System, the management shall meet on monthly basis to discuss and deliberate all issues relating to the business of the Group.

v) The Audit Committee is accessible to the relevant reports produced in relation to the Quality Management and if the need arise, the matter shall be further discussed in the Board Meeting.

Line of Reporting

Clear definition to the terms of reference including functions, authorities and responsibilities of the committees established by the Board for all aspects of the business have been established within the Group. This also includes detailed job description and specification provided to each employee of the Group which is further reiterated through a well-defined organizational structure.

Dissemination of Information within the Group

Regular and comprehensive information is provided to management covering financial performance and key business indicators, key operating statistics/ indicators, key business risks, legal, environmental and regulatory matters. Key matters affecting the Group are brought to the attention of the Audit Committee and are reported to the Board on a regular basis.

Detail Budgeting Process

A detailed budgeting process has been implemented where operating units prepare budgets for their project which will be deliberated in the management meeting. A monthly monitoring of results against budget, with major variances being explained and deliberated. If necessary, management action and follow up would be initiated.

19


InTERnAL AUDIT FUnCTIOn (COnT’D)

Audit Committee

The Audit Committee, on behalf of the Board, regularly reviews and holds discussions with the management and external auditors on the matters relating to internal control and corporate governance of the Group.

The Report on the Audit Committee set out on pages 21 to 24 of this Annual Report contains further details on the activities undertaken by the Audit Committee in 2014.

Board

The Board holds regular discussions with the Audit Committee, management and external auditors and reads their reports on matters relating to internal controls and deliberates on their recommendations for implementation.

The Directors have taken the necessary steps, as are reasonably open to them, to ensure that adequate systems of internal controls are in place to adequately safeguard the assets of the Group through the prevention and detection of fraud and other irregularities and material misstatements in the financial statements.

The Directors believe that the system of internal control is operating effectively and considered adequate to safeguard the Group business operations, and that the risks taken are at an acceptable level within the context of the business environment of the Group.

The Board is not aware of significant weaknesses in the internal control system that will substantially affect the business operations which could result in material losses to the Group.

Managing Director and Chief Financial Officer Assurance

The Managing Director and the Chief Financial Officer of the Group had provided assurance to the Board that the Group’s risk management and internal control system in all material aspects are operating adequately and effectively.

Compliance

Pursuant to paragraph 15.23 of the Listing Requirements the external auditors have reviewed this statement for inclusion in the Annual Report.

This statement is made in accordance with the Malaysian Code on Corporate Governance 2012, Paragraph 15.26(b) of the Main Market Listing Requirements and Practice Note 9 issued by Bursa Malaysia Securities Berhad. It is also made in accordance with the resolution given by the Board of Directors on 15 April 2015.

Statement on Risk Management and Internal Control (cont’d)


20

Audit Committee Report

The Board of Directors of TRC Synergy Berhad is pleased to present the report of the Audit Committee for the financial year ended 31 December 2014.

1. MEMBERS OF THE AUDIT COMMITTEE

The Audit Committee of the Company comprises of the following members. All of them are Independent Non Executive Directors.

Chairman: General (R) Tan Sri Dato’ Seri Mohd Shahrom Bin Dato’ Hj Nordin (Senior Independent Non-Executive Director)

Member: i) noor Zilan bin Mohamed noor (Independent Non-Executive Director)

ii) Abdul Rahman Bin Ali (Independent Non-Executive Director) (Member of the Malaysian Institute of Accountants)

Secretary : Abdul Aziz Bin Mohamed(Company Secretary)

2. TERMS OF REFEREnCE

i. Composition

The Board of Directors shall elect an Audit Committee from amongst themselves (pursuant to a resolution of the Board of Directors) and must be comprised of not less than three (3) members all of them must be Non-Executive Directors with a majority of them being Independent Directors. An alternate Director (if any) shall not be appointed as a member of the Audit Committee.

The members of the Audit Committee shall elect a Chairman from amongst themselves. All members of the Audit Committee, including the Chairman, will hold office only so long as they serve as Directors of the Company. Should any member of the Audit Committee cease to be a Director of the Company, his membership in the Audit Committee would cease forthwith.

If the members of the Audit Committee for any reason be reduced to below three (3), the Board of Directors shall within three (3) months of that event, appoint such number of the new members as may be required to make up the minimum number of three (3) members.

All members of the Audit Committee are Independent Non-Executive Directors and one of them namely Abdul Rahman Ali is a member of the Malaysian Institute of Accountants (MIA).

ii. Objectives

The primary objectives of the Audit Committee are:

a. To provide assistance to the Board in fulfilling its fiduciary responsibilities particularly relating to business ethics, policies and practices and financial management and control.

b. To provide greater emphasis on the audit functions by increasing the objectivity and independence of external and internal auditors and providing a forum for discussion that is independent of the management.

c. To maintain through regularly scheduled meetings a direct line of communication between the Board and the external auditors, internal auditors and financial management.

21


2. TERMS OF REFEREnCE (COnT’D)

iii. Duties and responsibilities

The duties and responsibilities of the Audit Committee shall be:

a. To consider the appointment of the external auditors, audit fee and any questions of resignation or dismissal.

b. To discuss with the external auditor before the audit commences the nature and scope of the audit, and ensure co-ordination where more than one audit firm is involved.

c. To review the quarterly results and year end financial statements before submission to the board, focusing particularly on:

i. any changes in accounting policies and practices

ii. major judgmental areas

iii. significant adjustments resulting from the audit

iv. the going concern assumption

v. compliance with accounting standards

vi. compliance with the stock exchange and legal requirements

d. To discuss problems and reservations arising from the interim and final audits, and any matters the auditor may wish to discuss (in the absence of management where necessary).

e. To review the internal audit programme, consider the major findings of internal audit investigations and management’s response, and ensure co-ordination between the internal and external auditors.

f. To keep under review the effectiveness of the internal control systems and in particular review the external auditor’s management letter and management’s response.

g. to review any related party transactions and conflict of interest situations that may arise within the Group including any transactions, procedure or course of conduct that raises questions of management integrity.

h. To carry out such other functions as stipulated in the Bursa Securities Listing Requirements and other functions as may be agreed to by the Audit Committee and the Board of Directors.

iv. Authority

The Committee is authorised by the Board to investigate any activity within the terms of reference. It is authorized to seek any information it requires from any employee and all employees are directed to co-operate with any request made by the Committee.

The Committee is empowered by the Board to retain persons having special competence as necessary to assist the Committee in fulfilling its responsibilities.

v. Meeting and Minutes

The Audit Committee shall not hold less than three (3) meetings a year and the quorum for each meeting shall be two (2) members.

Minutes of each meeting shall be kept and distributed to each member of the Committee and also to the other members of the Board. The Committee Chairman shall report on each meeting to the Board.

Audit Committee Report (cont’d)


22

2. TERMS OF REFEREnCE (COnT’D)

v. Meeting and Minutes (cont’d)

The Company Secretary acted as the secretary for the Committee at all the meetings held. Other Directors and senior management of the Group were also present at the meeting upon invitation. The Committee also invited the representative of the External Auditors to attend the meeting whenever necessary so that private session independent of the management could be held.

3. SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE.

During the financial year ended 31 December 2014, the Audit Committee met four times. The details of the attendance of the members of the Audit Committee are as follows:-

no. Audit Committee Attendance1 General (R) Tan Sri Dato’ Seri Mohd Shahrom Bin Dato’ Hj Nordin (Chairman) 4/42 Abdul Rahman Bin Ali 4/43 Noor Zilan bin Mohamed Noor 4/4

During the financial year, the Audit Committee carried out the following review :-

- The quarterly unaudited financial results and the annual audited financial statements of the Company and Group and make recommendation to the Board of Directors for approval prior to the release of the results and audited financial statements to Bursa Malaysia. The review was to ensure compliance with statutory reporting requirements and appropriate resolution of all accounting and audit matters requiring significant judgment.

- The external auditors’ fees and to recommend their reappointment to the Board.

- Measures implemented by management with regard to risk management and internal control.

- The statement of Corporate Governance and Statement on Internal Controls which area prepared in accordance with the provisions set out under the Malaysian Code on Corporate Governance, the extent of compliance with the said Code and its recommendation to the Board of Directors for inclusion in the Annual Report.

- The Audit Committee Report and its recommendation to the Board of Directors for inclusion in the Annual Report.

- The annual internal audit plan to ensure adequate scope and comprehensiveness of the activities and coverage on auditable entities with significant high risk.

- The internal audit reports issued by internal auditors and thereafter discuss the management’s actions taken to improve the system of internal control and any outstanding matters.

- Reviewed with the external auditors their audit plan and scope of works for the year and the results of the annual audit, their audit reports and Management Letter together with Management’s responses for the findings of the external auditors.

4. InTERnAL AUDIT FUnCTIOn

The Group’s internal audit function is performed by its in house Internal Audit Department which is guided by its Audit Charter and reports directly to the Audit Committee. The principal function of the Department is to assist Management to evaluate the effectiveness and efficiency of the internal control system and according to the Malaysia Code of Corporate Governance within the business units and projects of the Group. It also ascertains that adequate internal control is maintained to safeguard the assets of the Group and the shareholders interest.


23


4. InTERnAL AUDIT FUnCTIOn (COnT’D)

Throughout the financial year, the Internal Audit Department has undertaken several independent audit assignments in accordance with the approved annual audit plan. Details of the activities performed by the Department during the financial year are as follow:-

• PreparedanddevelopedacomprehensiveannualauditplantakingintoaccounttheGroup’sbusinessexpansionplan for consideration and approval by Audit Committee.

• Examinedand reviewed theexistingcontroloverallsignificantGroupoperationsandsystemstoascertainreasonable assurance that the Group’s objective and goals are met efficiently and economically.

• Conductedoperationalauditandrecommendedappropriatecontrolmeasuresforimprovementonweaknessesor deficiencies identified.

• Reviewedtheadequacyofscope,functions,aptitudesandresourcesofInternalAuditdeemednecessarytocarry out the audit.

• Reviewedtheeffectivenessofcontrolforprocurementandhandlingofmaterialatallprojectsitesincludingmanagement and utilization of fixed assets within the Group.

• TocomplementwiththeQualityManagementSysteminaccordancewithISO9001:2008.

• Continuousfollowupofreviewsonrecommendationandoutstandingissuestoensurebothareimplementedand resolved accordingly.

From the audit conducted, Internal Audit Department will prepare reports with independent opinion accordingly to the Audit Committee on risks area, weaknesses identified and the relevant recommendations. All recommendations shall be reviewed, discussed and communicated accordingly to the Management on rectifying weaknesses identified. The Department also established follow–up reviews to monitor and ensure that the recommendations agreed by the Audit Committee have been effectively implemented.

Going forward the Internal Audit Department will strengthen its capacity and efficiency for the better contribution to the Group pursuant to the Audit Charter and Internal Audit Plan which had been approved by the Audit Committee.

Total cost incurred for the Internal Audit Department for the financial year ended 31 December 2014 was RM 194,000

5. STATEMEnT In RELATIOn TO THE ALLOCATIOn OF SHARE OPTIOn SCHEME

The Audit Committee noted that the Company had established Share Option Scheme for Employees and Directors (“The Scheme”) pursuant to the By-Laws which were approved by the shareholders at the Extraordinary General Meeting held on 30 April 2004. The Scheme shall remain in force for a duration of five (5) years commencing from 22 June 2004 and could be extended for another five (5) years at the discretion of the ESOS Committee. On 27 August 2008, the ESOS Committee had approved the extension of the Scheme for another five (5) years commencing from its expiry date of 21 June 2009. The Scheme was expired on 20 June 2014.

The option under the Scheme was initially offered to the eligible employees and Directors at an offer price of RM1.70 per option share. Subsequently, consequent to the Rights Issue exercise which was completed on 31 January 2007, the exercise price of the Scheme was adjusted to RM1.47 per option share. The exercise price was further adjusted in 2008 to RM1.23 per option share in consequence to the Bonus Issue Exercise undertaken by the Company which was completed on 11 April 2008. In 2011, the exercise price was further adjusted to RM0.52 due to share split and Bonus Issue exercise undertaken by the Company. The staff’s entitlements had also been adjusted due to the earlier-mentioned exercises.



24

FinancialStatementsDirectors ’ Repor t 26

Statement by D i rec to rs 32

Statutory Dec la ra t ion 32

I ndependent Aud i to rs ’ Repor t 33

Statements o f Comprehens ive Income 35

Conso l idated Statement o f F inanc ia l Pos i t ion 36

Company Statement o f F inanc ia l Pos i t ion 37

Statement o f Changes in Equ i ty - Group 38

Statement o f Changes in Equ i ty - Company 39

Statements o f Cash F lows 40

Notes to the F inanc ia l S ta tements 42

Supplementary F inanc ia l In fo rmat ion on the Breakdown of Rea l i sed and Unrea l i sed P ro f i t s o r Losses 121

Directors’ Report

The directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2014.

PRInCIPAL ACTIVITIES

The principal activities of the Company are investment holding, general contractors for supplying labour and provision of corporate, administrative and financial support services to its subsidiaries.

The principal activities of the subsidiaries are as disclosed in Note 17 to the financial statements.

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

RESULTS Group CompanyRM RM

Profit net of tax 2,434,883 3,286,730Profit attributable to :Equity holders of the Company 3,519,245 3,286,730Non-controlling interests (1,084,362) -

2,434,883 3,286,730

RESERVES AnD PROVISIOnS

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

In the opinion of the directors, 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.

DIVIDEnDS

The amount of dividend paid by the Company during the year in respect of the financial year ended 31 December 2013, was as follows :

RMFirst and final single tier dividend of 0.50 sen per share, on 480,497,023 ordinary shares, paid on 15 July 2014. 2,402,485

At the forthcoming Annual General Meeting, a provisional single tier dividend in respect of the financial year ended 31 December 2014, of 0.18 sen per share on 480,497,023 ordinary shares amounting to a dividend payable of RM864,895 will be proposed for shareholders’ approval. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in equity as an appropriation of retained earnings in the financial year ending 31 December 2015.


26

Directors’ Report (cont’d)

DIRECTORS

The names of the directors of the Company in office since the date of the last report and at the date of this report are :

Gen. (R) Tan Sri Dato’ Seri Mohd Shahrom Bin Dato’ Hj NordinDato’ Sri Sufri Bin Hj Mohd ZinDato’ Abdul Aziz Bin MohamadAbdul Rahman Bin AliNoor Zilan Bin Mohamed Noor

DIRECTORS’ BEnEFITS

During and at the end of the financial year, no arrangements 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.

Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by the directors as shown in Note 10 of the financial statements or the fixed salary of a full time employee) by reason of a contract made by the Company or a related corporation with any director or with a firm of which he is a member, or with a company in which he has a substantial financial interest, as required by Section 169 (8) of the Companies Act, 1965.

DIRECTORS’ InTERESTS

According to the register of directors’ shareholdings, the interests of directors in office at the end of the financial year in shares in the Company and its related corporations during the financial year were as follows :

|------------------ number of Ordinary Shares of RM0.50 -------------|The Company At 1.1.2014 Acquired Sold At 31.12.2014

Direct Interest :

Dato’ Sri Sufri Bin Hj Mohd Zin 46,371,517 1,160,000 - 47,531,517

Dato’ Abdul Aziz Bin Mohamad 14,368,681 - (710,464) 13,658,217

Deemed Interest :

Dato’ Sri Sufri Bin Hj Mohd Zin # 118,075,200 - - 118,075,200Dato’ Abdul Aziz Bin Mohamad # 118,075,200 - - 118,075,200

# Deemed interested by virtue of their substantial shareholdings in TRC Capital Sdn. Bhd. and Kolektif Aman Sdn. Bhd.

27


DIRECTORS’ InTERESTS (COnT’D)

|------------------------------------- number of ESOS Options------------------------------------|

The CompanyInitialOffer

Balance After

Share SplitAt

1.1.2014 Granted ExercisedAt

31.12.2014

Dato’ Sri Sufri Bin Hj Mohd Zin 900,000 2,160,000 1,160,000 - (1,160,000) -

Dato’ Abdul Aziz Bin Mohamad 850,000 840,000 - - - -

|----------- number of Warrants A (2007/2017) ----------|

The CompanyAt

1.1.2014 Acquired Exercised At

31.12.2014

Dato’ Sri Sufri Bin Hj Mohd Zin 12,114,237 - - 12,114,237

Dato’ Abdul Aziz Bin Mohamad 2,349,014 - - 2,349,014

|------------ number of Warrants B (2011/2016)----------|

The CompanyAt

1.1.2014 Acquired ExercisedAt

31.12.2014

Dato’ Sri Sufri Bin Hj Mohd Zin 9,074,303 - - 9,074,303

Dato’ Abdul Aziz Bin Mohamad 2,563,643 - - 2,563,643

Dato’ Sri Sufri Bin Hj Mohd Zin and Dato’ Abdul Aziz Bin Mohamad by virtue of their interest in shares in the Company are also deemed interested in shares of all the Company’s subsidiaries to the extent the Company has an interest.

None of the other directors in office at the end of the financial year had any interest in shares in the Company or its related corporations during the financial year.

ISSUE OF SHARES

During the financial year, the Company increased its issued and paid-up ordinary share capital from RM238,537,702 to RM240,248,512 by the issuance of 3,421,620 ordinary shares of RM0.50 each for cash pursuant to the Company’s Employee Share Options Scheme (“ESOS”) at an exercise price of RM0.52 per ordinary share.

The new ordinary shares issued during the financial year shall rank pari passu in all respect with the existing ordinary shares of the Company.



28

WARRAnTS A 2007/2017

A total of 30,800,000 free warrants were issued by the Company in conjunction with the Rights Issue in 2007. Each warrant is convertible into one new ordinary share of RM1.00 each at the exercise price of RM1.00 per ordinary share.

Consequential to the Bonus Issue in 2008, the Company had issued an additional 6,101,520 new Warrants 2007/2017 pursuant to the adjustments in accordance with the provision under the Deed Poll executed by the Company on 15 November 2006 constituting the Warrants (“Deed Poll”). The warrants are valid for a period of ten years and shall expire on 21 January 2017.

The exercise price of the existing Warrants A 2007/2017 were adjusted to RM0.50 each pursuant to the Share Split and Bonus Issue of shares in 2011. No Warrants A were exercised during the financial year and a total of 86,738,717 warrants remained outstanding as at 31 December 2014.

WARRAnTS B 2011/2016

Consequential to the Share Split and Bonus Issue Exercise in 2011, the shareholders gave their approval for the Company to issue a bonus issue of warrants (Warrants B). Pursuant to the Deed Poll executed by the Company on 12 July 2011, 93,495,995 warrants were issued, and the said warrants are valid for a period of five years and shall expire on 25 July 2016.

Each warrants is exercisable into one new ordinary share of RM0.50 each at the exercise price of RM0.61 per ordinary share. No Warrants B 2011/2016 were exercised during the financial year and a total of 93,495,074 warrants remained outstanding as at 31 December 2014.

TREASURY SHARES

The Board obtained shareholders’ approval to undertake the purchase of up to 10% of the issued and paid up share capital of the Company. The shareholders of the Company, by a special resolution passed in a general meeting held on 26 June 2014, renewed their approval for the Company’s plan to repurchase its own ordinary shares. The directors of the Company are committed to enhancing the value of the Company for its shareholders and believe that the repurchase plan can be applied in the best interests of the Company and its shareholders.

EMPLOYEE SHARE OPTIOnS SCHEME

The TRC Synergy Berhad Employee Share Options Scheme (“ESOS”) is governed by the by-laws approved by the shareholders at an Extraordinary General Meeting held on 30 April 2004. The ESOS was implemented on 22 June 2004 and is to be in force for a period of 5 years from the date of implementation. The Board of Directors has approved the extension of the duration of ESOS for another five years from the expiry date of the initial ESOS period (21 June 2009), until 21 June 2014. The duration of ESOS was not extended and therefore expired on 21 June 2014.

Consequential to the Share Split and Bonus Issue in 2011, the holder of each ESOS Option is entitled to subscribe for 2.40 New Subdivided Shares for the exercise of each ESOS Option at the Exercise Price of RM0.52 each.

The Company issued 3,421,620 ordinary shares of RM0.50 each for cash pursuant to the Company’s ESOS at the exercise price of RM0.52 per ordinary share during the financial year.

As at 31 December 2014, the total number of ordinary shares issued by the Company pursuant to the ESOS Scheme were 19,683,400.

The salient features and other terms of the ESOS are disclosed in Note 34 to the financial statements.


29


OTHER STATUTORY InFORMATIOn

(a) Before the statements of comprehensive income and statements of financial position of the Group and of the Company were made out, the directors took reasonable steps:

(i) to ascertain that proper action had 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 had been written off and that adequate allowance had been made for doubtful debts; and

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

(b) At the date of this report, the directors are not aware of any circumstances which would render:

(i) the amount written off for bad debts or the amount of the allowance for doubtful debts inadequate to any substantial extent; and

(ii) the values attributed to the current assets in the financial statements of the Group and of the Company misleading.

(c) At the date of this report, the directors are not aware of any circumstances which have arisen which would render adherence to the existing methods of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

(d) At the date of this report, the directors 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 financial statements misleading.

(e) As at the date of this report, there does not exist :

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

(ii) any contingent liability of the Group or of the Company which has arisen since the end of the financial year, except as disclosed in Note 37 to the financial statements.

(f) In the opinion of the directors:

(i) no contingent liability 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 will or may affect the ability of the Group or of the Company to meet their obligations when they fall due; and

(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is 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.



30

SUBSEQUEnT EVEnTS

The subsequent events are disclosed in Note 43 to the financial statements.

AUDITORS

The retiring auditors, Messrs AljeffriDean, have expressed their willingness to be re-appointed in accordance with Section 172(2) of the Companies Act, 1965.

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

……………….....………………………….DATO’ SRI SUFRI BIn HJ MOHD ZIn

……………….....………………………….DATO’ ABDUL AZIZ BIn MOHAMAD

Kuala Lumpur, Malaysia.

Date : 15 April 2015


31


We, DATO’ SRI SUFRI BIn HJ MOHD ZIn and DATO’ ABDUL AZIZ BIn MOHAMAD, being two of the directors of TRC SYnERGY BERHAD, state that in the opinion of the directors, the accompanying financial statements set out on pages 35 to 121 are drawn up in accordance with Malaysian Financial Reporting Standards, International 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 at 31 December 2014 and of the results and the cash flows of the Group and of the Company for the year then ended.

The supplementary information set out on page 121 has been presented in accordance with the directive issued by Bursa Malaysia Securities Berhad 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 and presented based on the format prescribed by Bursa Malaysia Securities Berhad.

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

………………………….....…………..……… ………………………….....…………..………DATO’ SRI SUFRI BIn HJ MOHD ZIn DATO’ ABDUL AZIZ BIn MOHAMAD

Kuala Lumpur, Malaysia. Date : 15 April 2015

Statutory DeclarationPursuant to Section 169(16) of the Companies Act, 1965

I, YEOH SOOK KEnG, being the officer primarily responsible for the financial management of TRC SYnERGY BERHAD, do solemnly and sincerely declare that the accompanying financial statements set out on pages 35 to 121 are in my opinion 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, l960.

Subscribed and solemnly declared by the abovenamed YEOH SOOK KEnG at Kuala Lumpur in the Federal ………………………….....…………..………Territory on 15 April 2015 YEOH SOOK KEnG

Before me,

………………………….....…………..………Commissioner for Oath

Statement by DirectorsPursuant to Section 169(15) of the Companies Act, 1965


32

Report On The Financial Statements

We have audited the financial statements of TRC Synergy Berhad which comprise the statements of financial position as at 31 December 2014 of the Group and of the Company, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 35 to 121.

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 Malaysian Financial Reporting Standards, International 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 judgement, 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 control relevant to the Company’s preparation of the 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 Company’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 Malaysian Financial Reporting Standards, International Financial Reporting Standards in Malaysia and the Companies Act, 1965 so as to give a true and fair view of the financial position of the Group and of the Company as of 31 December 2014 and of their financial performance and cash flows for the financial year then ended.

Independent Auditors’ Reportto the members of TRC Synergy Berhad

33


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 of which we have acted as auditors 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 17 to the financial statements.

(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 financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes.

(d) The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification or any adverse comment required to be made under Section 174(3) of the Act.

Other Reporting Responsibilities

The supplementary information set out on page 121 disclosed to meet the requirement of Bursa Malaysia Securities Berhad. 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.

………………………….....…………..……… ………………………….....…………..………AljeffriDean T. nagarajan KMnA.F. No. 1366 No: 824/04/16 (J) Chartered Accountants Chartered Accountant

Kuala Lumpur, Malaysia

Date : 15 April 2015

Independent Auditors’ Report (cont’d)to the members of TRC Synergy Berhad


34

Group Companynote 2014 2013 2014 2013

RM RM RM RM

Revenue 3 814,955,887 820,747,471 13,255,349 18,600,478Cost of sales 4 (774,925,857) (788,390,505) (3,505,937) (4,890,707)Gross profit 40,030,030 32,356,966 9,749,412 13,709,771

Other income 5 2,564,973 10,059,547 925,836 925,726Administrative expenses (29,847,531) (28,674,134) (10,100,349) (12,534,105)Operating profit 12,747,472 13,742,379 574,899 2,101,392

Finance income 6 4,936,209 5,290,941 2,638,319 2,727,107Finance costs 7 (6,219,695) (5,151,106) (2,556) (2,183)Share of loss of associates (182,730) (33,834) - -Profit before tax 8 11,281,256 13,848,380 3,210,662 4,826,316

Income tax expense 11 (8,846,373) (3,893,301) 76,068 (359,715)Profit net of tax 2,434,883 9,955,079 3,286,730 4,466,601

Other comprehensive income, net of taxItems that will not be reclassified

subsequently to profit or loss :

Revaluation of property, plant and equipment - 3,164,105 - - - 3,164,105 - -

Items that are or may be reclassified subsequently to profit or loss :

Foreign currency translation differences for foreign operations (341,550) (784,832) - -

(341,550) (784,832) - -Other comprehensive (loss)/income for

the year, net of tax (341,550) 2,379,273 - -

Total comprehensive income for the year 2,093,333 12,334,352 3,286,730 4,466,601

Profit attributable to :Equity holders of the Company 3,519,245 9,536,272 3,286,730 4,466,601Non - controlling interests (1,084,362) 418,807 - -Profit for the year 2,434,883 9,955,079 3,286,730 4,466,601

Total comprehensive income attributable to :Equity holders of the Company 3,181,319 11,886,719 3,286,730 4,466,601Non - controlling interests (1,087,986) 447,633 - -Total comprehensive income for the year 2,093,333 12,334,352 3,286,730 4,466,601

Earning per share attributable to equity holders of the Company (sen)

- Basic 12 0.73 2.00

- Diluted 12 0.73 1.97

The accompanying notes form an integral part of the financial statements.

Statements of Comprehensive Income for the year ended 31 December 2014

35


2014 2013note RM RM

ASSETS

nOn-CURREnT ASSETSInvestment properties 13 24,453,891 18,024,146Property, plant and equipment 14 68,950,717 67,199,289Properties held for development 15 46,770,899 47,583,950Intangible assets 16 9,177 9,177Investment in Subsidiaries 17 - -Investment in Associates 18 11,865,075 11,864,550Other investments 19 25,831,892 26,494,115Other receivables 20 - -Deferred tax assets 21 84,024 36,934

177,965,675 171,212,161

CURREnT ASSETSProperty development costs 15 18,893,514 26,442,842Inventories 22 698,851 1,316,796Trade and other receivables 20 332,376,661 310,239,896Other current assets 24 65,493,854 136,246,333Cash and bank balances 25 173,497,282 152,948,353

590,960,162 627,194,220TOTAL ASSETS 768,925,837 798,406,381

EQUITY AnD LIABILITIES

Equity attributable to equity holders of the CompanyShare capital 26 240,248,512 238,537,702Share premium 26 208,109 139,677Other reserves 27 2,429,692 2,767,618Retained earnings 28 83,499,086 82,382,326

326,385,399 323,827,323

Non-controlling interest (390,723) 697,263Total equity 325,994,676 324,524,586

nOn-CURREnT LIABILITIES

Borrowings 29 20,749,887 39,837,675Deferred tax liabilities 21 2,407,552 2,461,540

23,157,439 42,299,215CURREnT LIABILITIES

Borrowings 29 155,527,481 168,611,699Trade and other payables 30 211,454,993 206,608,670Other current liabilities 31 51,898,456 54,945,989Taxation 892,792 1,416,222

419,773,722 431,582,580

Total liabilities 442,931,161 473,881,795TOTAL EQUITY AnD LIABILITIES 768,925,837 798,406,381


Consolidated Statement of Financial Positionas at 31 December 2014


36

2014 2013note RM RM

ASSETS

nOn-CURREnT ASSETSInvestment properties 13 - -Property, plant and equipment 14 2,056,524 2,551,925Properties held for development 15 - -Intangible assets 16 - -Investment in Subsidiaries 17 102,412,304 98,607,086Investment in Associates 18 - -Other investments 19 - -Other receivables 20 138,766,588 140,424,908Deferred tax assets 21 84,024 7,956

243,319,440 241,591,875

CURREnT ASSETSProperty development costs 15 - -Inventories 22 - -Trade and other receivables 20 886,233 374,452Other current assets 24 - -Cash and bank balances 25 6,766,355 6,383,888

7,652,588 6,758,340TOTAL ASSETS 250,972,028 248,350,215

EQUITY AnD LIABILITIES

Equity attributable to equity holders of the CompanyShare capital 26 240,248,512 238,537,702Share premium 26 208,109 139,677Other reserves 27 - -Retained earnings 28 10,102,621 9,218,376Total equity 250,559,242 247,895,755

nOn-CURREnT LIABILITIESBorrowings 29 - -Deferred tax liabilities 21 - -

- -

CURREnT LIABILITIESBorrowings 29 - -Trade and other payables 30 412,786 454,460Other current liabilities 31 - -Taxation - -

412,786 454,460

Total liabilities 412,786 454,460TOTAL EQUITY AnD LIABILITIES 250,972,028 248,350,215


Company Statement of Financial Position as at 31 December 2014

37


Attributable to Equity Holders of the Company non-Distributable Distributable

Share Capital

Share Premium

Other Reserves

Retained Earnings Total

non Controlling

Interests Total

Equity RM RM RM RM RM RM RM

note (note 26) (note 26) (note 27) (note 28)

At 1 January 2014 238,537,702 139,677 2,767,618 82,382,326 323,827,323 697,263 324,524,586

ESOS 1,710,810 68,432 - - 1,779,242 - 1,779,242Warrants A - - - - - - -Warrants B - - - - - - -Dividends 35 - - - (2,402,485) (2,402,485) - (2,402,485)Issuance of shares to

non-controlling interest - - - - - - -Foreign currency

translation difference for foreign operations - - (337,926) - (337,926) (3,624) (341,550)

Other comprehensive income for the year

Profit for the year - - - 3,519,245 3,519,245 (1,084,362) 2,434,883

Total comprehensive income for the year - - (337,926) 3,519,245 3,181,319 (1,087,986) 2,093,333

At 31 December 2014 240,248,512 208,109 2,429,692 83,499,086 326,385,399 (390,723) 325,994,676

Attributable to Equity Holders of the Company non-Distributable Distributable

Share Capital

Share Premium

Other Reserves

Retained Earnings Total

non Controlling

Interests Total

Equity RM RM RM RM RM RM RM

note (note 26) (note 26) (note 27) (note 28)

At 1 January 2013 238,125,452 123,187 417,171 74,563,048 313,228,858 - 313,228,858

ESOS 412,250 16,490 - - 428,740 - 428,740Warrants A - - - - - - -Warrants B - - - - - - -Dividends 35 - - - (1,716,994) (1,716,994) - (1,716,994)Issuance of shares to

non-controlling interest - - - - - 249,630 249,630Revaluation during the

year - - 3,164,105 - 3,164,105 - 3,164,105Foreign currency

translation difference for foreign operations - - (813,658) - (813,658) 28,826 (784,832)

Other comprehensive income for the year

Profit for the year - - - 9,536,272 9,536,272 418,807 9,955,079

Total comprehensive income for the year - - 2,350,447 9,536,272 11,886,719 447,633 12,334,352

At 31 December 2013 238,537,702 139,677 2,767,618 82,382,326 323,827,323 697,263 324,524,586


Statement of Changes in Equity - Groupfor the year ended 31 December 2014


38

non - distributable Distributable Share Share Retained Total

Capital Premium Earnings Equity RM RM RM RM

note (note 26) (note 26) (note 28)

At 1 January 2014 238,537,702 139,677 9,218,376 247,895,755 Total comprehensive income - - 3,286,730 3,286,730 Dividends 35 - - (2,402,485) (2,402,485)Issue of ordinary shares pursuant to : ESOS 1,710,810 68,432 - 1,779,242 Warrants A - - - - Warrants B - - - -At 31 December 2014 240,248,512 208,109 10,102,621 250,559,242

non - distributable Distributable Share Share Retained Total

Capital Premium Earnings Equity RM RM RM RM

note (note 26) (note 26) (note 28)

At 1 January 2013 238,125,452 123,187 6,468,769 244,717,408Total comprehensive income - - 4,466,601 4,466,601Dividends 35 - - (1,716,994) (1,716,994)Issue of ordinary shares pursuant to : ESOS 412,250 16,490 - 428,740 Warrants A - - - - Warrants B - - - -At 31 December 2013 238,537,702 139,677 9,218,376 247,895,755


Statement of Changes in Equity - Companyfor the year ended 31 December 2014

39



RM RM RM RMCASH FLOWS FROM OPERATInG

ACTIVITIES

Profit before taxation 11,281,256 13,848,380 3,210,662 4,826,316

Adjustments for :- Doubtful advances written off 3,010 - - -(Gain)/Loss on disposal of investment

properties - (1,642,388) - -Unrealised (gain)/loss on foreign exchange (608,935) 2,279,917 2,084,717 7,286,826Dividend income (649) - (6,000,000) (10,000,000)Gain on fair value of investment properties - (5,587,472) - -Unrealised foreign exchange difference arising

due to retranslation of financial statements in foreign currency 1,390,516 (813,658) - -

Depreciation of property, plant and equipment 13,353,590 8,312,532 495,401 550,834Amortisation of leasehold land 5,891 5,891 - -(Gain)/Loss on disposal of property, plant and

equipment (405,486) 10,160 - -Share of results of associates 182,730 33,834 - -Interest expense 5,845,356 4,893,645 - -Interest income (4,936,209) (5,290,941) (2,638,319) (2,727,107)Property, plant and equipment written off 21,696 28 - -Bargain purchase gain on acquisition of

subsidiary company - (63) - -Preliminary expenses written off 2,910 - - -

OPERATInG PROFIT/(LOSS) BEFORE WORKInG CAPITAL CHAnGES 26,135,676 16,049,865 (2,847,539) (63,131)

Inventories 617,945 597,624 - -Receivables 48,945,497 (101,445,571) (325) (3,778)Payables 1,817,553 59,953,798 (41,674) 86,429Property development project costs 7,511,836 (3,506,022) - -Cash generated from/(used in) operations 85,028,507 (28,350,306) (2,889,538) 19,520

Taxation paid (9,431,471) (10,876,436) (511,456) (620,632)Interest paid (5,845,356) (4,893,645) - -Interest received 4,936,209 5,290,941 2,638,319 2,727,107Net cash generated from/(used in) operating

activities 74,687,889 (38,829,446) (762,675) 2,125,995

Statements of Cash Flowsfor the year ended 31 December 2014


40


RM RM RM RMCASH FLOWS FROM InVESTInG ACTIVITIES

Dividend received 649 - 6,000,000 10,000,000Associate company (183,255) (52,451) - -Additional investment in subsidiaries - - (3,805,218) (21,888,852)Proceeds from disposal of investment

properties - 6,295,388 - -Proceeds from disposal of investment 58,845 2,494,819 - -Purchase of property, plant and equipment 33 (10,290,582) (28,453,121) - -Proceeds from disposal of property, plant and

equipment 614,427 3,063,454 - -Land held for development - 4,401,878 - -Other receivables - 33,985,664 (426,275) 10,652,057Net cash out flow from acquisition of subsidiary

company 17 - (20,376,597) - -Investment in non-controlling interest - 249,630 - -Additional investment properties (6,429,745) - - -Net cash (used in)/generated from investing

activities (16,229,661) 1,608,664 1,768,507 (1,236,795)

CASH FLOWS FROM FInAnCInG ACTIVITIES

Proceeds on share premium from ESOS and warrants exercised 68,432 16,490 68,432 16,490

Proceeds from ESOS exercised 1,710,810 412,250 1,710,810 412,250Fixed deposits 4,846,351 (18,329,982) (150,959) 81,151(Repayment)/Proceeds of short term

borrowings (11,958,606) 41,026,016 - -(Repayment)/Proceeds of long term borrowings (19,087,788) 11,917,683 - -Dividend paid (2,402,485) (1,716,994) (2,402,485) (1,716,994)Net cash (used in)/generated from financing

activities (26,823,286) 33,325,463 (774,202) (1,207,103)

net increase/(decrease) in cash and cash equivalents 31,634,942 (3,895,319) 231,630 (317,903)

Effects of foreign exchange rate changes (135,837) 169,464 (122) (530)Cash and cash equivalents at the beginning

of the year 38,262,565 41,988,420 1,195,536 1,513,969Cash and cash equivalents at the end of the

year 25 69,761,670 38,262,565 1,427,044 1,195,536


Statements of Cash Flows (cont’d)for the year ended 31 December 2014

41


1. CORPORATE InFORMATIOn

The principal activities of the Company are investment holding, general contractors for supplying labour and provision of corporate, administrative and financial support services to its subsidiaries. The principal activities of the subsidiaries are disclosed in Note 17 to the financial statements.

The number of employees of the Company as at year end is 68 (2013: 76). The number of employees of the Group as at year end is 1,116 (2013: 1,200).

The Company is a public limited liability company, incorporated and domiciled in Malaysia. The Company is listed on the Main Market of Bursa Malaysia Securities Berhad and produces financial statements available for the public use.

The registered office and principal place of business of the Company is located at TRC Business Centre, Jalan Andaman Utama, 68000 Ampang, Selangor Darul Ehsan.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 15 April 2015.

2. SIGnIFICAnT ACCOUnTInG POLICIES

2.1. Basis of Preparation

The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards (“IFRSs”) and the Companies Act, 1965 in Malaysia. At the beginning of the current financial year, the Group and the Company adopted Amendments to MFRSs and Issues Committee (“IC”) Interpretations which are mandatory for the financial periods beginning on or after 1 January 2014 as disclosed in Note 2.2(a).

The financial statements have been prepared based on the historical cost basis other than disclosed in Note 2.3.

The financial statements are presented in Ringgit Malaysia (RM) which is the Company’s functional currency.

Notes to the Financial Statements31 December 2014


42

Notes to the Financial Statements (cont’d)31 December 2014

2. SIGnIFICAnT ACCOUnTInG POLICIES (COnT’D)

2.2. Statement of Compliance

(a) The accounting policies adopted by the Group and the Company are consistent with those adopted in the previous year, except as follows :-

Amendments to MFRS 10 Consolidated Financial statements: Investment Entities

Amendments to MFRS 12 Disclosure of Interests in Other entities : Investment Entities

Amendments to MFRS 127 Separate Financial Statements: Investment Entities

Amendments to MFRS 132 Financial Instruments: Presentation - Offsetting Financial Assets and Financial Liabilities

Amendments to MFRS 136 Impairment of Assets - Recoverable Amount Disclosures for Non-Financial Assets

Amendments to MFRS 139 Novation of Derivatives and Continuation of Hedge Accounting

IC Interpretation 21 Levies

The adoption of the above pronouncements did not have any impact on the financial statements of the Group and of the Company.

(b) Standards issued but not yet effective

The following are accounting standards, amendments and interpretations of the MFRS framework that have been issued by the Malaysian Accounting Standards Board (“MASB”) but have not been adopted by the Group and the Company.

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 July 2014

* Amendments to MFRS 119, Employee Benefits - Defined Benefit Plans : Employee Contributions

* Annual Improvements to MFRS 2010-2012 Cycle

* Annual Improvements to MFRS 2011-2013 Cycle

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2.2. Statement of Compliance (Cont’d)

(b) Standards issued but not yet effective (Cont’d)

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2016

* Amendments to MFRS 10, Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

* Amendments to MFRS 10, Consolidated Financial Statements - Investment Entities : Applying the Consolidation Exception

* Amendments to MFRS 11, Joint Arrangements - Accounting for Acquisitions of Interests in Joint Operations

* Amendments to MFRS 12, Disclosure of Interest in Other Entities - Investment Entities : Applying the Consolidation Exception

* MFRS 14, Regulatory Deferral Accounts

* Amendments to MFRS 101, Presentation of Financial Statements - Disclosure Initiative

* Amendments to MFRS 116, Property, Plant and Equipment and MFRS 138, Intangible Assets - Clarification of Acceptable Methods of Depreciation and Amortisation

* Amendments to MFRS 116, Property, Plant and Equipment and MFRS 141, Agriculture - Bearer Plants

* Amendments to MFRS 127, Equity Method in Separate Financial Statements

* Amendments to MFRS 128, Investment in Associates - Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

* Amendments to MFRS 128, Investment in Associates - Investment Entities : Applying the Consolidation Exception

* Annual Improvements to MFRS 2012 - 2014 Cycle


* MFRS 15, Revenue from Contracts with Customers


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2.2. Statement of Compliance (Cont’d)

(b) Standards issued but not yet effective (Cont’d)


* MFRS 9, Financial Instruments (2014)

The initial application of the abovementioned accounting standards, amendments and interpretations are not expected to have any material impacts to the financial statements of the Group and the Company except as mentioned below:

MFRS 9, Financial Instruments

In November 2014, the MASB issued the final version of MFRS 9 Financial Instruments, replacing MFRS 139. This Standards made changes to the requirements for classification and measurement, impairment, and hedge accounting. The adoption of this Standard will have an effect on the classification and measurement of the Group’s financial assets, but no impact on the classification and measurement of the Group’s financial liabilities.

MFRS 9 Financial Instruments also requires impairments assessments to be based on an expected loss model, replacing the MFRS 139 incurred loss model. Finally, MFRS 9 Financial Instruments aligns hedge accounting more closely with risk management, establish a more principal-based approach to hedge accounting and address inconsistencies and weaknesses in the previous model.

This Standards will come into effect on or after 1 January 2018 with early adoption permitted. Retrospective application is required, but comparative information is not compulsory. The Group is currently assesing the impact of the adoption of this Standard in relation to the new requirements for classification and measurement and impairment, but the requirements for hedge accounting is not relevant to the Group.

MFRS 15, Revenue from Contracts with Customers

MFRS 15 Revenue from Contracts with Customers was issued in September 2014 and established a new five-step model that will apply to recognition of revenue arising from contracts with customers. Under this Standards, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The principal of this Standard is to provide a more structured approach to measuring and recognising revenue.

This Standards is applicable to all entities and will supersede all current revenue recognition requirements under MFRS. Either a full or modified retrospective application is required for annual periods beginning on or after 1 January 2017 with early adoption permitted. The Group is currently assessing the impact of this Standards and plan to adopt this Standards on the required effective date.

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2.3 Summary of Significant Accounting Policies

(a) Basis of Consolidation

(i) Subsidiaries

Subsidiaries are entities, including unincorporated entities, controlled by the Group. Control exists when the Group has the ability to exercise its power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account.

The Group controls an entity when;

* the Group is expose, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

* Potential voting rights are considered when assessing control only when such rights are substantive.

* The Group considers it has de facto power over an investee when, despite not having the majority of voting rights , its has the current ability to direct the activities of the investee that significantly affect the investee’s return.

Investments in subsidiaries are measured in the Company’s statement of financial position at cost less any impairment losses. The cost of investments includes transaction costs.

The accounting policies of subsidiaries are changed when necessary to align them with the policies adopted by the Group.

(ii) Business combinations

Business combinations are accounted for using the acquisition method from the acquisition date, which is the date on which control is transferred to the Group.

For new acquisition, the Group measures the cost of goodwill at the acquisition date as :

* the fair value of the consideration transferred; plus

* the recognised amount of any non-controlling interests in the acquiree; plus

* if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less

* the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.

When the exceed is negative, a bargain purchase gain is recognised immediately in profit or loss.


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2.3 Summary of Significant Accounting Policies (Cont’d)

(a) Basis of Consolidation (Cont’d)

(ii) Business combinations (Cont’d)

For each business combination, the Group elects whether it measures the non- controlling interests in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets at the acquisition date.

Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred.

(iii) Accounting for acquisitions of non-controlling interests

The Group treats all changes in its ownership interest in a subsidiary that do not result in a loss of control as equity transactions between the Group and its non- controlling interest holders. Any differences between the Group’s share of net assets before and after the change, and any consideration received or paid, is adjusted to or against Group reserves.

(iv) Loss of control

Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted for as an equity-accounted investee or as an available-for-sale financial asset depending on the level of influence retained.

(v) Non-controlling interests

Non-controlling interests at the end of the reporting period, being the equity in a subsidiary not attributable directly or indirectly to the equity holders of the Company, are presented in the consolidated statement of financial position and statement of changes in equity within equity, separately from equity attributable to the owners of the Company. Non-controlling interests in the results of the Group is presented in the consolidated statement of comprehensive income as an allocation of the profit or loss and the comprehensive income for the year between non-controlling interests and the owners of the Company.

Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance.

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(vi) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.

Unrealised gains arising from transactions with associates are eliminated against the investment to the extent of the Group’s interest in the associates. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

(vii) Joint arrangements

Joint arrangements are arrangements of which the group has joint control, established by contracts requiring unanimous consent for decisions about the activities that significantly affect the arrangements’ returns.

Joint arrangements are classified and accounted for as follows :

* A joint arrangement is classified as “joint operation” when the Group or the Company has rights to the assets and obligations for the liabilities relating to an arrangement. The Group and the Company account for each of its share of the assets, liabilities and transactions, including its share of those held or incurred jointly with the other investors, in relation to the joint operation.

* A joint arrangement is classified as “joint venture” when the Group has rights only to the net assets of the arrangements. The Group accounts for its interest in the joint venture using the equity method. Investments in joint venture are measured in the Group’s statement of financial position at cost less any impairment losses, unless the investment is classified as held for sale or distribution. The cost of investment includes transaction costs.

(viii) Associates

An associate is an entity, not being a subsidiary or a joint venture, in which the Group has significant influence. An associate is equity accounted for from the date the Group obtains significant influence until the date the Group ceases to have significant influence over the associate.

The Group’s investments in associates are accounted for using the equity method. Under the equity method, the investment in associates is measured in the statement of financial position at cost plus post -acquisition changes in the Group’s share of net assets of the associates. Goodwill relating to associates is included in the carrying amount of the investment. Any excess of the Group’s share of the net fair value of the associate’s identifiable assets, liabilities and contingent liabilities over the cost of the investment is excluded from the carrying amount of the investment and is instead included as income in the determination of the Group’s share of the associate’s profit or loss for the period in which the investment is acquired.


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(viii) Associates (Cont’d)

When the Group’s share of losses in an associate equals or exceeds its interest in the associates, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

When the Group ceases to have significant influence over an associate, any retained interest in the former associate at the date when significant influence is lost is measured at fair value and this amount is regarded as the initial carrying amount of a financial asset. The difference between the fair value of any retained interest plus proceeds from the interest disposed of and the carrying amount of the investment at the date when equity method is discontinued is recognised in the profit or loss.

When the Group’s interest in an associate decrease but does not result in a loss of significant influence, any retained interest is not re-measured. Any gain or loss arising from the decrease in interest is recognised in profit or loss. Any gains or losses previously recognised in other comprehensive income are also reclassified proportionately to the profit or loss if that gain or loss would be required to be reclassified to profit or loss on the disposal of the related assets or liabilities.

After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on the Group’s investment in its associates. The Group determines at each reporting date whether there is any objective evidence that the investment in associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount in profit or loss.

The financial statements of the associates are prepared as of the same reporting date as the Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.

In the Company’s separate financial statements, investment in associates are stated at cost less impairment losses. On disposal of such investment, the difference between net disposal proceeds and their carrying amounts is included in profit or loss.

(b) Goodwill

Goodwill 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 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.

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(b) Goodwill (Cont’d)

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

(c) Inventories

Inventories are stated at lower of cost and net realisable value.

Cost is determined using the first in, first out method. The cost of raw materials comprises costs of purchase. The costs of finished goods and work-in-progress comprise costs of raw materials, direct labour, other direct costs and appropriate proportions of manufacturing overheads based on normal operating capacity. The cost of unsold properties comprises cost associated with the acquisition of land, direct costs and appropriate proportions of common costs.

Net realisable value represents the estimated selling price in the ordinary course of business, less all estimated costs of completion and applicable variable selling expenses. In arriving at the net realisable value, due allowances is made for all obsolete and slow moving items.

(d) Property, Plant and Equipment and Depreciation

All items of property, plant and equipment are initially recorded at cost. 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 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 income statement during the financial period in which they are incurred.

Subsequent to recognition, property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any. The policy for recognition and measurement of impairment losses is in accordance with No. 2.3 (i).

Certain freehold and leasehold land and buildings are stated at revalued amount, which is the fair value at the date of the revaluation less any accumulated impairment losses. Fair value is determined from market-based evidence by appraisal that is undertaken by professionally qualified valuers. Revaluations are performed with sufficient regularity to ensure that the fair value of a revalued asset does not differ materially from that which would be determined using fair values at the statement of financial position date. Any revaluation surplus is credited to the revaluation reserve included within equity, except to the extent that it reverses a revaluation decrease for the same asset previously recognised in profit or loss, in which case the increase is recognised in profit or loss to the extent of the decrease previously recognised. A revaluation deficit is first offset against unutilised previously recognised revaluation surplus in respect of the same asset and the balance is thereafter recognised in profit or loss. Upon disposal or retirement of an asset, any revaluation reserve relating to the particular asset is transferred directly to retained earnings.


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(d) Property, Plant and Equipment and Depreciation (Cont’d)

Freehold land is not depreciated as it has an infinite life. Leasehold land is amortised over the maximum period of 99 years. Building under construction are not depreciated as these assets are not yet available for use. Other property, plant and equipment are depreciated on a straight line basis to write off the cost of the assets to their residual values over their estimated useful lives, at the following annual rates :

Renovation - 10% Buildings - 2% Plant, machinery and tools - 10% Furniture and fittings - 10% Motor vehicles - 20% Office equipment and computers - 20% Telecommunication equipment - 20%

The residual values, useful life and depreciation method are reviewed at each financial year end 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 and equipment.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Gains or losses on disposal are determined by comparing the proceeds with the carrying amount of the related asset and are included in the profit or loss.

(e) Leases

Assets acquired by way of hire purchase or finance leases are stated at an amount equal to the lower of their fair values and the present value of the minimum lease payments at the inception of the leases, less accumulated depreciation and impairment losses. The corresponding liability is included in the balance sheet as borrowings.

In calculating the present value of the minimum lease payments, the discount factor used is the interest rate implicit in the lease, when it is practicable to determine; otherwise, the Group’s incremental borrowing rate is used. Any initial direct costs are also added to the carrying amount of such assets.

Lease payments are apportioned between the finance costs and the reduction of the outstanding liability. Finance costs, which represent the difference between the total leasing commitments and the fair value of the assets acquired, are recognised in the profit or loss over the term of the relevant lease so as to produce a constant periodic rate of charge on the remaining balance of the obligations for each accounting period.

The depreciation policy for leased assets is in accordance with that for depreciable property, plant and equipment as described in Note 2.3(d).

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(f) Investment Properties

(i) Investment property carried at fair value

Investment properties are properties which are owned or held under a leasehold interest to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes.

Investment properties are measured initially at cost and subsequently at fair value with any change therein recognised in profit or loss for the period in which they arise. Where the fair value of the investment property under construction is not reliably determinable, the investment property under construction is measured at cost until either its fair value becomes reliably determinable or construction is complete, whichever is earlier.

Cost includes expenditure that is directly attributable to the acquisition of the investment property. The cost of self-constructed investment property includes the cost of materials and direct labour, any other costs directly attributable to bringing the investment property to a working condition for their intended use and capitalised borrowings costs.

An investment property is derecognised on its disposal, or when it is permanently withdrawn from use and no future economic benefits are expected from its disposal. The difference between the net disposal proceeds and the carrying amount is recognised in profit or loss in the period in which the item is derecognised.

(ii) Reclassification to/from investment property

When an item of property, plant and equipment is transferred to investment property following a change in its use, any difference arising at the date of transfer between the carrying amount of the item immediately prior to transfer and its fair value is recognised directly in equity as a revaluation of property, plant and equipment. However, if a fair value gain reverses a previous impairment loss, the gain is recognised in profit or loss. Upon disposal of an investment property, any surplus previously recorded in equity is transferred to retained earnings; the transfer is not made through profit or loss.

When the use of a property changes such that it is reclassified as property, plant and equipment or inventories, its fair value at the date reclassification becomes its cost for subsequent accounting.

(g) Foreign Currencies

(i) Functional and Presentation Currency

The individual financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in Ringgit Malaysia (“RM”), which is also the Company’s functional currency.


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(g) Foreign Currencies (Cont’d)

(ii) Foreign Currency Transactions

In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency (foreign currencies) are recorded in the functional currencies using the exchange rates prevailing at the dates of the transactions. At each statement of financial position date, monetary items denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in profit or loss for the period except for exchange differences arising on monetary items that form part of the Group’s and the Company’s net investment in foreign operation. Exchange differences arising on monetary items that form part of the Group’s and the Company’s net investment in foreign operation, where that monetary item is denominated in either the functional currency of the reporting entity or the foreign operation, are initially taken directly to the foreign currency translation reserve within equity until the disposal of the foreign operations, at which time they are recognised in profit or loss. Exchange differences arising on monetary items that form part of the Group’s and the Company’s net investment in foreign operation, where that monetary item is denominated in a currency other than the functional currency of either the reporting entity or the foreign operation, are recognised in profit or loss for the period. Exchange differences arising on monetary items that form part of the Group’s and the Company’s net investment in foreign operation, regardless of the currency of the monetary item, are recognised in profit or loss in the Group’s and the Company’s financial statements or the individual financial statements of the foreign operation, as appropriate.

Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit or loss for the period except for the differences arising on the retranslation 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.

The principal exchange rates for every unit of foreign currency ruling at statement of financial position date are as follows :-

2014 2013RM RM

United States Dollar 3.50 3.28Euro Dollar 4.25 4.53Australian Dollar 2.85 2.92Brunei Dollar 2.64 2.59Singapore Dollar 2.64 2.59

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(g) Foreign Currencies (Cont’d)

(ii) Foreign Currency Transactions (Cont’d)

The assets and liabilities of foreign operations are translated into RM at the rate of exchange ruling at the reporting date and income and expenses are translated at exchange rates at the dates of the transactions. The exchange differences arising on the translation are taken directly to other comprehensive income. On disposal of a foreign operations, the cumulative amount recognised on other comprehensive income and accumulated in equity under foreign currency translation reserve relating to that particular foreign operation is recognised in the profit or loss.

(h) Borrowing Costs

Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those assets.

The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure for the asset is being incurred, borrowing costs are being incurred and activities that are necessary to prepare the asset for its intended use or sale are in progress. Capitalisation of borrowing costs is suspended or ceased when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are interrupted or completed.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

(i) Impairment of non - financial assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when an annual impairment assessment for an asset is required, the Group makes an estimate of the assets’s recoverable amount.

An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units (“CGU”)).

In assessing value in use, the estimated future cash flows expected to be generated by the asset are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to those units of groups or units and then, to reduce the carrying amount of the other assets in the unit or groups of units on a pro-rate basis.


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(i) Impairment of non - financial assets (Cont’d)

Impairment losses are recognised in profit or loss except for assets that are previously revalued where the revaluation was taken to other comprehensive income. In this case the impairment is also recognised in other comprehensive income up to the amount of any previous revaluation.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the assets’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in profit or loss unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase. Impairment loss on goodwill is not reversed in a subsequent period.

(j) Financial Assets

Financial 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 instrument.

When 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 financial assets at fair value through profit or loss, loans and receivables, held to maturity investments and available for- sale financial assets.

(i) Financial assets at fair value through profit or loss

Financial assets are classified as financial assets at fair value through profit or loss if they are held for trading or are designated as such upon initial recognition. Financial assets held for trading are derivatives (including separated embedded derivatives) or financial assets acquired principally for the purpose of selling in the near term.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in fair value are recognised in profit or loss. Net gains or net losses on financial assets at fair value through profit or loss do not include exchange differences, interest and dividend income. Exchange difference, interest and dividend income on financial assets at fair value through profit or loss are recognised separately in profit or loss as part of other losses or other income.

Financial assets at fair value through profit or loss could be presented as current or non-current. Financial assets that is held primarily for trading purposes are presented as current whereas financial assets that is not held primarily for trading purposes are presented as current or non-current based on the settlement date.

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(j) Financial Assets (Cont’d)

(ii) Loans and receivables

Financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables.

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.

(iii) Held-to-maturity investments

Held-to-maturity investments category comprises debt instruments that are quoted in an active market and the Group and the Company has the positive intention and ability to hold them to maturity.

Financial assets categorised as held-to-maturity investments are subsequently measured at amortised cost using the effective interest method.

(iv) Available-for-sale financial assets

Available-for-sale category comprises investment in equity and debt securities instruments that are not held for trading.

Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost. Other financial assets categorised as available-for-sale are subsequently measured at their fair values with the gain or loss recognised in other comprehensive income, except for impairment losses, foreign exchange gains and losses arising from monetary items and gains and losses of hedged items attributable to hedge risks of fair value hedges which are recognised in profit or loss. On derecognition, the cumulative gain or loss recognised in other comprehensive income is reclassified from equity into profit or loss. Interest calculated for a debt instrument using the effective interest method is recognised in profit or loss.

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 delivery of assets within the period generally established by regulation or convention in the market place 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.


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(k) Impairment of financial assets

The Group and the Company assess at each reporting date whether there is any objective evidence that a financial asset is impaired.

(i) 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.

(ii) Unquoted equity securities carried at cost

If there is objective evidence (such as significant adverse changes in the business environment where the issuer operates, probability of insolvency or significant financial difficulties of the issuer) that an impairment loss on financial assets carried at cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment losses are not reversed in subsequent periods.

(l) Cash and Cash Equivalents

Cash and cash equivalents comprise cash at bank and on hand, demand deposits, and short-term, highly liquid investments that are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value. These also include bank overdraft that form an integral part of the Group’s cash management.

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(m) Construction Contract

Where the outcome of a contract can be reliably estimated, contract revenue and contract costs are recognised as revenue and expenses respectively by using the stage of completion method. The stage of completion is measured by reference to the proportion of contract costs incurred for work performed to date to the estimated total contract costs.

Where the outcome of a construction contract cannot be reliably estimated, contract revenue is recognised to the extent of contract costs incurred that it is probable will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred.

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.

Contract revenue comprises the initial amount of revenue agreed in the contract and variations in contract work, claims and incentive payments to the extent that it is probable that they will result in revenue and they are capable of being reliably measured.

When the total of costs incurred on construction contracts plus, recognised profits (less recognised losses), exceeds progress billings, the balance is classified as amount due from customers on contracts. When progress billings exceed costs incurred plus, recognised profits (less recognised losses), the balance is classified as amount due to customers on contracts.

(n) Land Held For Property Development and Property Development Costs

(i) Land Held For Property Development

Land held for property development consists of land where no development activities have been carried out or where development activities are not expected to be completed within the normal operating cycle. Such land is classified within non-current assets and is stated at cost less any accumulated impairment losses, if any.

Land held for property development is reclassified as property development costs at the point when development activities have commenced and where it can be demonstrated that the development activities can be completed within the normal operating cycle.

(ii) Property Development Costs

Property development costs comprise all costs that are directly attributable to development activities or that can be allocated on a reasonable basis to such activities.

When the financial outcome of a development activity can be reliably estimated, property development revenue and expenses are recognised in the profit or loss for the development units sold and determined by reference to the stage of completion of the development activity at the statement of financial position date. The stage of completion is determined by the proportion that property development costs incurred for work performed to date bear to the estimated total property development costs.


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(n) Land Held For Property Development and Property Development Costs (Cont’d)

(ii) Property Development Costs (Cont’d)

Where the financial outcome of a development activity cannot be reliably estimated, property development revenue is recognised only to the extent of property development costs incurred that is probable will be recoverable, and property development costs on properties sold are recognised as an expense in the period in which they are incurred.

Any expected loss on a development project, including costs to be incurred over the defects liability period, is recognised as an expense immediately.

Property development costs not recognised as an expense are recognised as an asset, which is measured at the lower of cost and net realisable value.

The excess of revenue recognised in the profit or loss over billings to purchasers is classified as accrued billings within trade receivables and the excess of billings to purchasers over revenue recognised in profit or loss is classified as progress billings within trade payables.

(o) Financial Liabilities

Financial liabilities are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability.

Financial liabilities, are recognised in the statement 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.

(i) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.

Financial liabilities held for trading include derivatives entered into by the Group and the Company that do not meet the hedge accounting criteria. Derivative liabilities are initially measured at fair value and subsequently stated at fair value, with any resultant gains or losses recognised in profit or loss. Net gains or losses on derivatives include exchange differences.

The Group and the Company have not designated any financial liabilities as at fair value through profit or loss.

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(o) Financial Liabilities (Cont’d)

(ii) Other financial liabilities

The Group’s and the Company’s other financial liabilities include trade payables, other payables and loans 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.

Loans and 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 reporting date.

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 new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

(p) Equity Instruments

Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared.

The transaction costs of an equity transaction are accounted for as a deduction from equity, net of tax. Equity transaction costs comprise only those incremental external costs directly attributable to the equity transaction which would otherwise have been avoided.

(q) Warrants

Issue of ordinary shares upon exercise of the warrant are treated as new subscription of ordinary shares for the consideration equivalent to the exercise price of the warrants.

(r) Provision for Liabilities

Provision for liabilities are recognised when the Group has a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. Where the effect of the time value of money is material, the amount of a provision is the present value of the expenditure expected to be required to settle the obligation. Provision are discounted using a current pre-tax rate that reflects, where appropriate the risks specific to the liability. When discounting is used, the increase in provision due to passage of time is recognised as finance cost.


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(s) Share Based Payments

The Group and the Company recognised an increase in share capital and share premium when the options were exercised as the ESOS Scheme was implemented in 2004 before the effective date of implementation of MFRS 2, Share-based Payment.

(t) Employee Benefits

(i) Short Term Benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which the associated services are rendered by employees of the Group and the Company. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences, and short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.

(ii) Defined Contribution Plans

Defined contribution plans are post-employment benefit plans under which the Group and the Company pays fixed contributions into separate entities or funds and will have no legal or constructive obligation to pay further contributions if any of the funds do not hold sufficient assets to pay all employee benefits relating to employee services in the current and preceding financial years. Such contributions are recognised as and expense in the statement of comprehensive income as incurred. As required by law, companies in Malaysia make such contributions to the Employees Provident Fund (“EPF”).

(u) Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of consideration received or receivable.

(i) Sale of goods

Revenue from sale of goods is recognised upon the transfer of significant risk and rewards of ownership of the goods to the customer. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.

(ii) Construction contracts

Revenue from construction contracts is accounted for using the stage of completion method as described in Note 2.3(m).

(iii) Sale of development properties

Revenue from sale of properties is accounted for using the stage of completion method as described in Note 2.3(n)(ii).

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(u) Revenue (Cont’d)

(iv) Interest income

Interest income is accrued on a time basis, by reference to the principal outstanding and at effective interest rate applicable, which is the rate that exactly discount estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount.

(v) Rental income

Rental income is accounted for on a straight-line basis over the lease terms. The aggregate cost of incentives provided to lessees are recognised as a reduction of rental income over the lease term on a staright-line basis.

(vi) Dividend income

Dividend income is recognised when the right to receive payment is established.

(vii) Management fees

Management fees are recognised when services are rendered.

(viii) Rendering of services

Revenue from services rendered is recognised in profit or loss in proportion to the stage of completion of the transaction at the end of the reporting period. The stage of completion is assessed by reference to surveys of work performed.

(v) Income Taxes

(i) Current tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.

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

(ii) Deferred tax

Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all temporary differences, except :

- where deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither accounting profit nor taxable profit or loss.


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(v) Income Taxes (Cont’d)

(ii) Deferred tax (Cont’d)

- in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised except :

- where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

- in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax assets to be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax relate to the same taxable entity and the same taxation authority.

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(w) Contingencies

(i) Contingent liabilities

Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is not recognised in the statements of financial position and is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non- occurrence of one more future events, are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.

(ii) Contingent assets

Where it is not probable that is an inflow of economic benefits, or the amount cannot be estimated reliably, the asset is not recognised in the statements of financial position and is disclosed as contingent assets, unless the probability of inflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events, are also disclosed as contingent assets unless the probability of inflow of economic benefits is remote.

(x) Financial Guarantee Contracts

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due.

Financial guarantee contracts are recognised initially as a liability at fair value, net of transaction costs. Subsequent to initial recognition, financial guarantee contracts are recognised as income in profit or loss over the period of the guarantee. If the debtor fails to make payment relating to financial guarantee contract when it is due and the Group, as the issuer, is required to reimburse the holder for the associated loss, the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the reporting date and the amount initially recognised less cumulative amortisation.

As at reporting date, no values are placed on corporate guarantees provided by the Group to secure bank loans and other banking facilities granted to its subsidiaries where such loans and banking facilities are fully collateralised by fixed and floating charges over the property, plant and equipment and other assets of the subsidiaries and where the directors regard the value of the credit enhancement provided by the corporate guarantees is minimal.

(y) Fair Value Measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability or in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Group.


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(y) Fair Value Measurements (Cont’d)

The fair value of an asset or a liability is measured using the assumption that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

The Group use valuation techniques that are appropriate in the circumstances and for which sufficient date available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement as a whole.

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determine whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the financial year end.

(z) Earning Per Ordinary Share

The Group presents basic and diluted earnings per share data for its ordinary shares (“EPS”).

Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held.

Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares, which comprise convertible notes.

(zi) Operating Segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. All operating segments’ operating results are reviewed regularly by the chief operating decision maker, which in this case is the Chief Executive Officer of the Group, to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available.

(zii) Offsetting Financial Instruments

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.

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2.4 Significant Accounting Estimates and Judgements

Estimates, assumptions concerning the future and judgements are made in the preparation of the financial statements. They affect the application of the Group’s accounting policies, reported amounts of assets, liabilities, income and expenses, and disclosures made. They are assessed on an on-going basis and are based on historical experience and other relevant factors, including expectations of future events that are believed to be reasonable under the circumstances.

The key assumptions concerning the future and other key source of estimation or uncertainty at the date of statement of financial position, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are set out below.

(i) Depreciation of property, plant and equipment

The costs of property, plant and equipment of the Group and of the Company are depreciated on a straight-line basis over the useful lives of the assets. Management estimates the useful lives of the plant and equipment as disclosed in Note 2.3(d). These are common life expectancies applied in the industry. Changes in the expected level of usage could have impact the useful lives and the residual values of these assets, therefore future depreciation charges could be revised. The carrying amounts of the Group’s and of the Company’s property, plant and equipment at 31 December 2014 are disclosed in Note 14 to the financial statements.

(ii) Estimation of fair value of properties

In the absence of current prices in an active market for similar properties, the Group considers information from a variety of sources, including :

(a) current prices in an active market for properties of a different nature, condition or location (or subject to different lease or other contracts), adjusted to reflect differences; or

(b) recent prices of similar properties based on less active market, with adjustments to reflect any changes in economic conditions since the date of the transactions that occurred at those prices.

(iii) Impairment of goodwill on consolidation

The Group determines whether goodwill is impaired at least on an annual basis, in accordance with the accounting policy disclosed in Note 2.3(i). This requires an estimation of the value in use of the cash-generating units to which the goodwill is allocated. Estimating the value in use requires the Group to make an estimate of the expected future cash flows from the cash-generating unit and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The carrying amount of the Group’s goodwill on consolidation at 31 December 2014 is disclosed in Note 16 to the financial statements.


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2.4 Significant Accounting Estimates and Judgements (Cont’d)

(iv) Income taxes/Deferred tax liabilities

Significant judgement is involved in determining the Group 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 recognised tax liabilities based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

(v) Property development

The Group recognises property development revenue and expenses in the statement of comprehensive income for the development units sold by using the stage of completion method. The stage of completion is determined by the proportion that property development costs incurred for work performed to date bear to the estimated total property development costs.

Significant judgment is required in determining the stage of completion, the extent of the property development costs incurred, the estimated total property development revenue and costs, as well the recoverability of the property development costs. In making the judgement, the Group evaluates based on past experience and by relying on the work of specialists.

(vi) Impairment of property development cost and investment properties

The Group and the Company carried out the impairment test based on a variety of estimation including the value-in-use of the investment properties and property development costs. Estimating the value-in-use required the Group and the Company to make an estimate of the expected future cash flows from these assets and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The carrying amount of investment properties and property development costs of the Group and the Company as at 31 December 2014 were disclosed in Note 13 and 15 to the financial statements respectively.

(vii) Deferred tax assets

Deferred tax assets are recognised for all unabsorbed tax losses and deductible temporary differences to the extent it is probable that taxable profit will be available against which the losses and deductible temporary differences can be utilised. Significant management judgment is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies. The total carrying values of unrecognised tax losses and deductible temporary differences of the Group were disclosed in Note 21 to the financial statements.

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2.4 Significant Accounting Estimates and Judgements (Cont’d)

(viii) Construction contracts

The Group and the Company recognises contract revenue and contract costs as revenue and expenses respectively in the income statement using the stage of completion method. The stage of completion is determined by reference to the proportion of contract costs incurred for work performed to date to the estimated total contract costs.

Significant judgment is required in determining the stage of completion, the extent of the contract costs incurred, the estimated total contract revenue and costs, as well as the recoverability of the construction contracts. In making the judgment, the Group evaluate based on past experience and by relying on the work of specialists.

(x) Contingent liabilities

Determination of the treatment of contingent liabilities in the financial statements is based on the management’s view of the expected outcome of the applicable contingency.

(xi) Impairment of loans and receivables

The Group assesses at each reporting date whether there is any objective evidence that a financial asset is impaired. To determine whether there is objective evidence of impairment, the Group considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments.

Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. The carrying amount of the Group’s loans and receivable at the reporting date is disclosed in Note 20.

(xii) Impairment of investment in subsidiaries and plant and equipment

The management determines whether the carrying amount of its investments in subsidiaries and plant and equipment are impaired at each reporting date. This involves measuring the recoverable amounts which includes fair value less costs to sell. Based on the opinion of the directors, adequate impairment loss has been recognised in profit or loss of the Group.


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3. REVEnUE

Group Company 2014 2013 2014 2013

RM RM RM RM

Construction contracts 680,799,870 692,061,090 - -Sales of construction materials and others 88,471,222 97,406,471 - -Development revenue 36,910,402 26,018,029 - -Rental of motor vehicle and machinery 8,127,805 4,569,169 - -Servicing of motor vehicle 646,588 692,712 - -Rendering of services - - 3,715,349 5,060,478Dividend income from subsidiaries - - 6,000,000 10,000,000Management fees from subsidiaries - - 3,540,000 3,540,000

814,955,887 820,747,471 13,255,349 18,600,478

4. COST OF SALES

Group Company 2014 2013 2014 2013

RM RM RM RM

Construction contract costs 657,026,940 664,425,248 - -Sales of construction materials and others 105,114,857 113,826,281 - -Property development costs 9,278,123 5,248,269 - -Cost of services rendered 3,505,937 4,890,707 3,505,937 4,890,707

774,925,857 788,390,505 3,505,937 4,890,707

Included in the property development costs are finance costs amounting RM1,230,862 (2013: RM1,003,007).

5. OTHER InCOME

Group Company 2014 2013 2014 2013

RM RM RM RM

Unrealized gain on foreign exchange 608,935 - - -Dividend income from quoted investment 649 - - -Gain on disposal of property, plant and equipment 405,486 - - -Rental of premises 1,062,968 2,295,743 925,596 925,596Miscellaneous 486,935 533,944 240 130Gain on fair value of investment properties - 5,587,472 - -Gain on disposal of investment properties - 1,642,388 - -

2,564,973 10,059,547 925,836 925,726

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6. FInAnCE InCOME

Group Company 2014 2013 2014 2013

RM RM RM RM

Interest from subsidiary company - - 2,456,535 2,527,318Short term deposit 517,657 206,052 - -Fixed deposit 2,507,935 2,295,763 181,784 199,789Interest overdue account 1,906,767 2,563,068 - -Loan interest from associate - 225,336 - -Others 3,850 722 - -

4,936,209 5,290,941 2,638,319 2,727,107

7. FInAnCE COSTS

Group Company 2014 2013 2014 2013

RM RM RM RM

Bank overdraft interest 1,678,001 838,868 - -Banker acceptance interest 32,625 62,537 - -Hire purchase interest 683,672 523,571 - -Term loan interest 2,287,820 2,304,665 - -Loan interest - others 1,163,238 1,164,004 - -Others 374,339 257,461 2,556 2,183

6,219,695 5,151,106 2,556 2,183


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8. PROFIT BEFORE TAXATIOn

Profit before tax has been arrived at after charging/(crediting) :

Group Company 2014 2013 2014 2013

RM RM RM RM

Directors’ remuneration 3,865,694 4,097,899 717,802 722,500Auditors’ remuneration - statutory audit 226,000 209,000 20,000 20,000- other services 7,000 7,000 7,000 7,000- over provision (6,600) (4,000) - -Depreciation of property, plant and equipment 13,353,590 8,312,532 495,401 550,834Property, plant and equipment written off 21,696 28 - -Rental of premises 5,070,036 3,073,903 394,368 394,368Rental of vehicle, heavy machinery and equipment 5,866,708 9,171,245 48,000 48,000Loss on disposal of property, plant and equipment - 10,160 - -Distribution of loss from partnership 58,845 254,844 - -Doubtful advance written off 3,010 - - -Preliminary expenses written of 2,910 - - -Amortisation of leasehold land 5,891 5,891 - -Unrealised loss on foreign exchange - 2,279,917 2,084,717 7,286,826Employee benefits expenses 68,143,687 65,938,099 9,851,329 8,484,838Non - executive directors’ remuneration 84,000 84,000 84,000 84,000Incorporation fee - 122,219 - -Rental income (1,062,968) (2,295,743) (925,596) (925,596)Gain on disposal of property, plant and equipment (405,486) - - -Gain on fair value of investment properties - (5,587,472) - -Gain on disposal of investment properties - (1,642,388) - -Urealised gain on foreign exchange (608,935) - - -Dividend income from quoted investment (649) - - -

9. EMPLOYEE BEnEFITS EXPEnSES

Group Company 2014 2013 2014 2013

RM RM RM RM

Wages and salaries 62,610,688 60,957,256 8,792,132 7,594,316 Social security contributions 344,877 305,748 32,332 21,728 Contributions to defined contribution plan 5,188,122 4,675,095 1,026,865 868,794

68,143,687 65,938,099 9,851,329 8,484,838

Included in employee benefits expenses of the Group and of the Company are executive directors’ remuneration amounting to RM3,865,694 (2013: RM4,097,899) and RM717,802 (2013: RM722,500) respectively as further disclosed in Note 10.

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10. DIRECTORS’ REMUnERATIOn

Group Company 2014 2013 2014 2013

RM RM RM RM

Executive directors’ remuneration (Note 9):Salary 3,041,231 3,213,984 520,000 520,000 Other emoluments 824,463 883,915 197,802 202,500

3,865,694 4,097,899 717,802 722,500

Non-executive directors’ remuneration (Note 8) :Fees 84,000 84,000 84,000 84,000 Other emoluments - Bonus - - - -

84,000 84,000 84,000 84,000

The number of directors of the Company whose total salary during the year fell within the following bands is analysed below :

number of Directors 2014 2013

Executive directors :RM1,000,001 - RM1,500,000 1 1 RM1,500,001 - RM2,000,000 1 1

non-executive directors :RM20,001 - RM30,000 2 2 RM30,001 - RM40,000 1 1

11. InCOME TAX EXPEnSE

Group Company 2014 2013 2014 2013

RM RM RM RM

Current income tax 8,499,743 2,067,896 - 379,817 Foreign taxation 471,018 526,206 - -Transferred to deferred taxation (Note 21) (107,135) 1,015,166 (75,760) (20,102)Under/(Over) provision in prior years:Deferred taxation (Note 21) (308) - (308) -Malaysian income tax (16,945) 284,033 - -Total income tax expense 8,846,373 3,893,301 (76,068) 359,715

Current income tax is calculated at the statutory tax rate of 25% (2013: 25%) of the estimated assessable profit for the year. Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions. During the current financial year, the income tax rate applicable to subsidiaries in Australia is at 30% (2013 : 30%) and subsidiaries in Cambodia and Brunei is at 20% and 18.50% (2013 : 20%), respectivelly.


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11. InCOME TAX EXPEnSE (COnT’D)

The Company has unabsorbed tax losses and unabsorbed capital allowances of approximately RM78,758 (2013: RM78,758) and RM477,992 (2013 : RM205,617) respectively as at 31 December 2014 for offsetting against future taxable income.

A reconciliation of income tax expense applicable to profit before taxation 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:

2014 2013 Group RM RM

Profit before taxation 11,281,256 13,848,380

Taxation at Malaysian statutory tax rate of 25% (2013: 25%) 3,520,078 3,484,730Under/(Over) provision in prior years (16,945) 284,033 Income not subject to tax (1,056,869) (5,493,321)Expenses not deductible for tax purposes 3,798,680 5,936,418 Under/(Over) provision of deferred tax (308) -Deferred tax asset not recognised in respect of current year’s tax losses 3,257,544 217,338 Effect of changes in tax rate in foreign jurisdictions (655,807) (91,082)Utilisation of tax losses and capital allowances - (444,815)Income tax expense for the year 8,846,373 3,893,301

Company

Profit before taxation 3,210,662 4,826,316

Taxation at Malaysian statutory tax rate of 25% (2013: 25%) 802,666 1,206,579 Income not subject to tax (1,500,000) (2,500,000)Expenses not deductible for tax purposes 621,574 1,653,136 Over provision of deferred tax (308) - Income tax expense for the year (76,068) 359,715

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12. EARnInGS PER SHARE

(a) Basic

Basic earnings per share amounts are calculated by dividing profit for the year attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares in issue during the financial year.

2014 2013 RM RM

Profit attributable to ordinary equity holders of the Company 3,519,245 9,536,272

Weighted average number of ordinary shares in issue 478,977,274 476,735,525

2014 2013 sen sen

Basic earning per share for:Profit for the year 0.73 2.00

(b) Diluted

For the purposes of calculating diluted earnings per share, the profit for the year attributable to ordinary equity holders of the Company and the weighted average number of ordinary shares in issue during the financial year have been adjusted for the dilutive effects of all potential ordinary shares, i.e. warrants and share options granted to employees and directors.

2014 2013 RM RM

Profit attributable to ordinary equity holders of the Company 3,519,245 9,536,272

Weighted average number of ordinary shares in issue 478,977,274 476,735,525

Effects of dilution : Share options - 337,423 Warrants - 6,425,090

Adjusted weighted average number of ordinary shares in issue and issuable 478,977,274 483,498,038

The average market value of the Company’s shares for purpose of calculating the dilutive effect of share options and warrants was based on quoted market prices for the period during which the share options and warrants were outstanding.

2014 2013 sen sen

Diluted earnings per share for :Profit for the year 0.73 1.97


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13. InVESTMEnT PROPERTIES

Group 2014 2013

RM RM

At 1 January 18,024,146 17,089,674 Net gain from fair value adjustments - 5,587,472 Additions 6,429,745 -Disposal - (4,653,000)At 31 December 24,453,891 18,024,146

Investment properties comprise a number of commercial properties that are leased to the Company, subsidiary companies and third parties, and residential properties that are leased to third parties. The subsequent renewal of the leases are negotiated with the lessee and on average renewal period of 3 years.

Valuation of investment properties

Investment properties are stated at fair value which is based on comparison approach whereby the value of the property is determined by comparing it with recent sales and/or listings of similar properties in the vicinity, or if not available, within similar localities. However, there has been no valuation performed by an independent valuer during the financial year.

2014 2013 RM RM

At fair value :

Freehold land 6,429,745 -Freehold land and building 17,461,146 17,461,146 Leasehold land and building with unexpired lease period of more than 50 years 563,000 563,000

24,453,891 18,024,146

The freehold land of RM6,429,745 (2013: RM Nil) has been charged to financial institution as security for the bank facilities granted to the subsidiary company.

The following are recognised in profit or loss in respect of investment properties :

2014 2013RM RM

Rental income 616,103 751,268

Direct operating expenses :- income generating properties 109,998 149,873- non income generating properties 9,353 -

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13. InVESTMEnT PROPERTIES (COnT’D)

Fair Value Information

Fair value of investment properties are categorised as follows :

2014 RM

Level 1 Level 2 Level 3 Total

Group

Land - 6,429,745 - 6,429,745 Land and buildings - 18,024,146 - 18,024,146

- 24,453,891 - 24,453,891

2013 RM

Level 1 Level 2 Level 3 Total

Group

Land and buildings - 18,024,146 - 18,024,146 - 18,024,146 - 18,024,146

Policy on transfer between levels

The fair value of an asset to be transferred between levels is determined as of the date of the event or change in circumstances that caused the transfer.

Level 1 fair value

Level 1 fair value is derived from quoted price (unadjusted) in active markets for identical investment properties that the entity can access at the measurement date.

Level 2 fair value

Level 2 fair value is estimated using inputs other than quoted prices included within Level 1 that are observable for the investment property, either directly or indirectly.

Level 2 fair values of land and buildings have been generally derived using the sales comparison approach. Sales price of comparable properties in close proximity are adjusted for differences in key attributes such as property size. The most significant input into this valuation approach is price per square foot of comparable properties.

Level 3 fair value

Level 3 fair value is estimated using unobservable inputs for the investment property.

Transfer between Level 1 and 2 fair value

There is no transfer between Level 1 and 2 fair values during the financial year.


76


14.

PR

OP

ER

TY

, PLA

nT

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D E

QU

IPM

En

T

At

31 D

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2014

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R

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R

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RM

R

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RM

R

M

RM

R

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RM

R

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RM

At 1

Jan

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201

4 1,

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156

1,15

0,00

057

0,00

07,

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81,9

78,8

1125

,389

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3,72

7,73

62,

585,

419

829,

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2,37

3,81

938

0,18

221

,055

1,24

7,21

412

8,43

1,81

7

Addi

tions

-

--

-8,

932,

837

3,55

1,27

573

,104

54,2

002,

558,

903

-89

,386

-9,

090

15,2

68,7

95

Writ

ten

off

--

--

(7,5

79)

(64,

090)

(128

,327

)(6

1,29

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-(4

,603

)-

-(2

65,8

97)

Exch

ange

diff

eren

ce

--

--

36,3

1045

,866

4,44

212

6-

2,49

63,

958

107

25,8

2211

9,12

7

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--

--

--

--

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Dis

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ls

--

--

(736

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)-

--

-(2

5,00

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-(1

,867

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)

At 3

1 D

ecem

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014

1,08

0,15

61,

150,

000

570,

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7,09

8,85

490

,204

,320

27,8

15,9

703,

676,

955

2,57

8,44

73,

388,

379

2,37

6,31

544

3,92

321

,162

1,28

2,12

614

1,68

6,60

7

Accu

mul

ated

D

epre

ciat

ion

At 1

Jan

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201

4 -

95,0

2493

,563

106,

908

39,5

28,1

5415

,933

,861

2,89

5,70

91,

133,

320

-1,

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192

192,

274

14,9

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0,56

761

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Dep

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n ch

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r the

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23,2

715,

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160,

721

8,68

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03,

465,

916

390,

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234,

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9,71

266

,134

1,43

312

1,35

713

,359

,481

Writ

ten

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--

--

(7,5

78)

(46,

124)

(127

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1,04

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-(1

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-(2

44,2

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Exch

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diff

eren

ce

--

--

9,69

224

,956

2,46

837

-78

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163

446,

235

46,3

76

Dis

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--

--

(527

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-(1

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At 3

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-11

8,29

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267,

629

47,6

83,2

9218

,272

,440

3,16

1,24

41,

306,

365

-1,

288,

685

233,

894

16,4

3328

8,15

972

,735

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Net

Car

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g Am

ount

At 3

1 D

ecem

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014

1,08

0,15

61,

031,

705

470,

546

6,83

1,22

542

,521

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9,54

3,53

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5,71

11,

272,

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3,38

8,37

91,

087,

630

210,

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4,72

999

3,96

768

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,717

77



14.

PR

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4,82

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812,

650

94,7

87,9

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Addi

tions

-

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32,5

53,3

243,

215,

518

212,

541

2,25

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,693

4,85

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,306

7,17

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3,20

336

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--

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--

--

58,5

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6,82

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4,48

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176,

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1,08

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61,

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7,09

8,85

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953,

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736

2,58

5,41

982

9,47

62,

373,

819

380,

182

21,0

551,

247,

214

128,

431,

817

Accu

mul

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D

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ciat

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At 1

Jan

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201

3 -

71,7

5387

,672

268,

136

36,1

52,4

0615

,018

,911

2,48

3,78

689

9,72

9-

870,

916

138,

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13,8

7237

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4,06

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557

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--

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--

--

7,93

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2,09

334

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244,

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37,8

69

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--

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64,9

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--

--

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--

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(698

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--

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At 3

1 D

ecem

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013

-95

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93,5

6310

6,90

839

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15,9

33,8

612,

895,

709

1,13

3,32

0-

1,07

8,19

219

2,27

414

,956

160,

567

61,2

32,5

28

Net

Car

ryin

g Am

ount

At 3

1 D

ecem

ber 2

013

1,08

0,15

61,

054,

976

476,

437

6,99

1,94

642

,450

,657

9,45

5,23

483

2,02

71,

452,

099

829,

476

1,29

5,62

718

7,90

86,

099

1,08

6,64

767

,199

,289


78


14. PROPERTY, PLAnT AnD EQUIPMEnT (COnT’D)

At 31 December 2014 - Company

Furniture Office and fittings equipment Renovation Total

RM RM RM RM

At 1 January 2014 2,055,408 757,959 1,937,019 4,750,386 Additions - - - - At 31 December 2014 2,055,408 757,959 1,937,019 4,750,386

Accumulated Depreciation

At 1 January 2014 786,204 654,697 757,560 2,198,461 Charge for the year 205,541 96,158 193,702 495,401 At 31 December 2014 991,745 750,855 951,262 2,693,862

Net Carrying Amount

At 31 December 2014 1,063,663 7,104 985,757 2,056,524

At 31 December 2013 - Company

Furniture Office and fittings equipment Renovation Total

RM RM RM RM

At 1 January 2013 2,055,408 757,959 1,937,019 4,750,386 Additions - - - - At 31 December 2013 2,055,408 757,959 1,937,019 4,750,386

Accumulated Depreciation

At 1 January 2013 580,663 503,106 563,858 1,647,627 Charge for the year 205,541 151,591 193,702 550,834 At 31 December 2013 786,204 654,697 757,560 2,198,461

Net Carrying Amount

At 31 December 2013 1,269,204 103,262 1,179,459 2,551,925

79



14. PROPERTY, PLAnT AnD EQUIPMEnT (COnT’D)

(a) Revaluation

Certain freehold and leasehold land and buildings of the subsidiary company were revalued by an independent professional valuer, KGV - International Property Consultants (M) Sdn. Bhd., using the open market valuation basis. The valuers adopted two approaches which are comparison approach and cost approach to arrive at their opinion of the present market value.

Under comparison approach, the value of the property is determined by comparing it with recent sales and/or listings of similar properties in the vicinity, or if not available, within similar localities. Under cost approach, an indication of value is obtained by adding to the estimated value of the land, taken as vacant, the depreciated reproduction or replacement cost of the building and other improvements.

The carrying amount of land and buildings were adjusted to reflect the revaluations and the resultant surpluses were credited to revaluation reserve.

There have been no valuation performed by an independent valuer during the financial year.

Had the land and building affected been carried at their historical costs less accumulated depreciation, the carrying amounts of the revalued assets that would have been included in the financial statements at the end of the year are as follows :-

2014 2013RM RM

Leasehold land 418,351 429,839Freehold land and buildings 3,427,372 3,504,866Leasehold land and buildings 453,397 467,897

4,299,120 4,402,602

(b) Security

Certain land and buildings of a subsidiary company with a net carrying value of RM1,269,936 (2013:RM1,301,422) have been charged to financial institutions as security for various credit facilities granted to the subsidiary company.

(c) Assets acquired under hire purchase arrangements

The net carrying amounts of property, plant and equipment of the Group acquired under hire purchase arrangements are as follows :-

2014 2013RM RM

Plant and machinery 17,528,672 15,244,585Motor vehicles 6,430,606 5,519,869Tools and equipments 469,925 525,775

24,429,203 21,290,229


80


15. PROPERTIES HELD FOR DEVELOPMEnT AnD PROPERTY DEVELOPMEnT COSTS

(a) Land Held for Property Development

Freehold Freehold land land and building Total

Group RM RM RM

Cost

At 1 January 2014 11,816,945 35,767,005 47,583,950 Reclassifications - - -Additions - - -Transfer to property development costs - - -Transfer to property, plant and equipment - - -Effect of movements in exchange rates - (813,051) (813,051)At 31 December 2014 11,816,945 34,953,954 46,770,899

Cost

At 1 January 2013 11,816,945 251,658 12,068,603 Reclassifications - - -Additions - 35,515,347 35,515,347 Transfer to property development costs - - -Transfer to property, plant and equipment - - -At 31 December 2013 11,816,945 35,767,005 47,583,950

Included in the land held for property development is a land and building amounting to RM34,702,296 (2013: RM35,515,347) being charged as security for borrowing facility granted by a financial institution as disclosed in Note 29 to the financial statements.

(b) Property Development Costs

Group 2014 2013

RM RMBrought forward - Land 16,301,696 16,259,839 - Development costs 152,239,573 129,952,324

168,541,269 146,212,163 Incurred during the year - Development costs 17,363,131 22,287,249 - Additional cost incurred in respect of acquisition of land - 41,857

185,904,400 168,541,269 Recognised in income statement Brought forward (142,098,427) (123,275,343)Current year (24,874,967) (18,823,084)

(166,973,394) (142,098,427)

Effect of movements in exchange rates (37,492) -Total 18,893,514 26,442,842

81



15. PROPERTIES HELD FOR DEVELOPMEnT AnD PROPERTY DEVELOPMEnT COSTS (COnT’D)

(b) Property Development Costs (Cont’d)

Included in property developments cost incurred during the financial year is finance cost amounting to RM1,230,862 (2013 : RM973,578).

Included in property developments cost is a land under development amounting to RM Nil (2013 : RM10,289,744) being charged as security for borrowing facility granted by a financial institution as disclosed in Note 29 to the financial statements.

16. InTAnGIBLE ASSETS

GroupGoodwill Total

RM RM

At 1 January 2014 9,177 9,177Amortisation - -At 31 December 2014 9,177 9,177

At 1 January 2013 9,177 9,177Amortisation - -At 31 December 2013 9,177 9,177

(a) Impairment test for goodwill on consolidation

Goodwill on consolidation has been allocated for impairment testing purposes to the individual entities which is also the cash-generating units (“CGUs”) identified.

(b) Key assumptions used to determine recoverable amount

The recoverable amount of a CGU is determined based on value-in-use calculations using cash flow projections based on financial budgets approved by the Directors covering a five-year term. Cash flows beyond five year are projected based on assumptions that the fifth year cash flow will be generated by the respective CGUs perpetually. Discounts rate used is based on the pre-tax weighted average cost of capital.


82


17. InVESTMEnT In SUBSIDIARIES

Group Company 2014 2013 2014 2013

RM RM RM RM

Unquoted shares, at cost - - 81,748,107 81,748,107 Amounts due from subsidiaries - - 20,664,197 16,858,979

- - 102,412,304 98,607,086

Amounts due from subsidiary companies are unsecured, interest free and are repayable on demand.

(a) The details of the subsidiary companies are as follows :-

Country of Incorporation

EffectiveInterest (%) Principal Activities

2014 2013

Held by the Company :

Trans Resources Corporation Sdn. Bhd.

Malaysia 100 100 Construction

TRC Land Sdn. Bhd. Malaysia 100 100 Property development

TRC Energy Sdn. Bhd. Malaysia 100 100 Oil and gas

TRC Infra Sdn. Bhd. Malaysia 100 100 Dormant

* TRC (Aust) Pty Ltd Australia 100 100 Construction and property development

ADS Projek Sdn. Bhd. Malaysia 100 100 Property development

* Swan Synergy Developments Pty Ltd

Australia 100 100 Construction and property development

** TRC International Pte Ltd Malaysia 100 100 Investment holding

83



17. InVESTMEnT In SUBSIDIARIES (COnT’D)

(a) The details of the subsidiary companies are as follows :- (Cont’d)

Country of Incorporation

EffectiveInterest (%) Principal Activities

2014 2013

Held through subsidiaries :

TRC Development Sdn. Bhd. Malaysia 100 100 Property development and project management

* TRC Land (Cambodia) Limited Kingdom of Combodia

100 100 Commercial and trading operations, property investment and construction

Liputan Sutera Sdn. Bhd. Malaysia 100 100 Dormant

TRC Concrete Industries Sdn. Bhd.

Malaysia 100 100 Manufacture of ready mixed concrete

** TRC (B) Sdn. Bhd. Brunei Darussalam

90 90 Construction and property development

** Petrobru Build Sdn. Bhd. Brunei Darussalam

60 60 Dormant

** TRC (Sarawak) Sdn. Bhd. Malaysia 100 100 Construction

* The Swan Synergy Unit Trust Australia 100 100 Property development

* The financial statements of TRC (Aust) Pty Ltd, Swan Synergy Developments Pty Ltd, The Swan Synergy Unit Trust and TRC Land (Cambodia) Limited have not been audited due to certain exemptions given by the respective countries.

** Audited by another firm of auditors.

*** The financial statements of TRC International Pte Ltd, and Petrobru Build Sdn. Bhd. have not been consolidated with the financial statements of the Group as the Directors are of the opinion that there will be of no real value in view of the insignificant effect on the financial statements of the Group.


84



(b) Acquisition of subsidiary

The Company wholly - owned subsidiary, TRC (Aust) Pty Ltd had acquired one hundred thousand (100,000) ordinary unit trust in The Swan Synergy Unit Trust (“SSUT”), a trust incorporated in Australia from Swan Synergy Developments Pty Ltd for a cash consideration of AUD Nil. SSUT is a wholly- owned trust of the Company and the acquisition was primarily to undertake property development activities in Australia.

The fair values of the identifiable assets and liabilities of SSUT as at the date of acquisition were as follows:

Carrying amount

RM

Land held for development 39,917,225 Trade and other receivables 305,583 Cash and bank balances 13,609,067 Taxation 66,641

53,898,516

Trade and other payables 1,715,189 Loan owing to holding company 33,985,664 Bank borrowing 18,197,600

53,898,453

Net identifiable assets 63

Goodwill arising on acquisition

Fair value of net identifiable assets 63 Less : Non-controlling interests -Group’s interest in fair value of net identifiable assets 63 Bargain purchase gain on acquisition (63)Cost of business combination -

The effect of the acquisition on cash flows is as follows :

Total cost of the business combination -Less: Cash and cash equivalents of subsidiary acquired (13,609,067)Add : Loan owing to holding company 33,985,664 Net cash outflow on acquisition 20,376,597

85




(c) non-controlling interest in subsidiary

The Group’s subsidiary that has material non-controlling interest (“NCI”) is as follows :

TRC (B) Sdn. Bhd. In RM

Year ended 31 December 2014

NCI percentage of ownership interest and voting interest 10% Carrying amount of NCI (390,723)

Year ended 31 December 2013

NCI percentage of ownership interest and voting interest 10% Carrying amount of NCI 697,263

Summarised financial information on subsidiaries with materials NCI :

i) Summarised statement of comprehensive income

TRC (B) Sdn. Bhd. For the financial

year ended 31 December 2014 2013

RM RM

Revenue 76,391,569 192,743,809

(Loss)/Profit before tax (11,341,898) 4,675,785 Income tax expense 498,275 (103,164)(Loss)/Profit for the financial year (10,843,623) 4,572,621

Other comprehensive income - -Foreign currency translation - -Total comprehensive income (10,843,623) 4,572,621

Total comprehensive income allocated to NCI (1,087,986) 447,633


86



(c) non-controlling interest in subsidiary

ii) Summarised statement of financial position



RM RM Current

Assets 62,133,995 112,260,828 Liabilities (67,927,271) (107,323,528)Total current net (liabilities)/assets (5,793,276) 4,937,300

Non - current

Assets 3,744,160 4,473,168 Liabilities - (579,718)Total non-current net assets 3,744,160 3,893,450

Net (liabilities)/assets (2,049,116) 8,830,750

iii) Summarised statement of cash flows



RM RM Cash flows from operating activities

Cash generated from/(used in) operations 9,855,390 (20,371,419)Tax paid - -Interest paid (789,042) (198,760)Interest received 4,676 -Net cash generated from/(used in) operating activities 9,071,024 (20,570,179)

Net cash used in investing activities (38,042) (1,012,462)

Net cash (used in)/generated from financing activities (367,416) 158,143

Net increase/(decrease) in cash and cash equivalent 8,665,566 (21,424,498)

Foreign currency translation (557,628) 116,424 Cash and cash equivalents at beginning of the financial

year 2,295,638 23,603,712 Cash and cash equivalents at end of the financial year 10,403,576 2,295,638

87



18. InVESTMEnT In ASSOCIATES

Group Company 2014 2013 2014 2013

RM RM RM RM

Unquoted shares, at cost 14,902,148 14,428,490 - -Share of post - acquisition reserves : Share of loss of associates (2,242,425) (2,059,692) - - Share of exchange reserve (794,648) (504,248) - -

11,865,075 11,864,550 - -

Details of the associates of the Group are as follows :-

name of CompanyCountry of

Incorporation Principal Activity Equity Interest2014 2013

Pretty Sally Holdings Pty Ltd Australia Property development 33.33% 33.33%

Delta Garden Limited Kingdom of Cambodia

Property development 34% 34%

PetroBru (B) Sdn. Bhd. Brunei Darussalam

Dormant 26% 26%

PSH Investment Pty Ltd Australia Dormant 33.33% 33.33%

Under the Australian Standards, Pretty Sally Holdings Pty Ltd is not required to prepare a group consolidated financial statements because it is a proprietary limited company in Australia.

The financial year end of PetroBru (B) Sdn. Bhd. and Pretty Sally Holdings Pty Ltd is on 30 September and 30 June respectively. For the purpose of applying the equity method of accounting, the unaudited financial statements of the associates have been used and appropriate adjustments have been made for the effects of significant transaction between their financial years to 31 December 2014. All the associates except those incorporated in Australia, and Delta Garden Limited (exempted from being audit by the respective countries law) are audited by other firm of auditors.

The summarised financial information of the associates, not adjusted for the proportion of ownership interest held by the Group, is as follows :

Group 2014 2013

RM RMAssets and liabilities: Total assets 98,083,080 99,397,190 Total liabilities (96,198,919) (96,112,848)

Results : Revenue 9,127,832 12,679,265 Profit/(loss) for the year (486,322) 179,147


88


19. OTHER InVESTMEnTS

Group Company 2014 2013 2014 2013

RM RM RM RM

Investment in partnership 25,687,892 26,350,115 - -Corporate membership, at cost 144,000 144,000 - -

25,831,892 26,494,115 - -

20. TRADE AnD OTHER RECEIVABLES

Group Company 2014 2013 2014 2013

RM RM RM RMCurrent

Trade receivables

Third parties 178,783,604 169,844,241 - -

Construction contracts : Retention sums (Note 23) 115,891,907 96,400,631 - -

294,675,511 266,244,872 - -

Other receivables

Deposits 3,837,800 5,734,601 2,000 2,000 Prepayments 2,247,886 2,016,863 3,000 3,000 Tax recoverable 8,641,435 9,050,504 870,633 359,177 Loans to associates 11,458,586 12,512,322 - - Other receivables 11,515,443 14,680,734 10,600 10,275 Other receivables, net 37,701,150 43,995,024 886,233 374,452

Total 332,376,661 310,239,896 886,233 374,452

non-current

Other receivables

Subsidiaries - - 138,766,588 140,424,908 - - 138,766,588 140,424,908

89



20. TRADE AnD OTHER RECEIVABLES (COnT’D)

(a) Trade receivables

Trade receivables are non-interest bearing except for an amount of RM44,932,289 (2013: RM42,177,538) which is subject to 5% (2013: 7%) interest per annum and are payable generally on 30 to 90 days (2013: 30 to 90 days) terms. They are recognised at their original invoice amounts which represent their fair values on initial recognition.

Ageing analysis of trade receivables

The ageing analysis of the Group’s trade receivables is as follows :-

2014 2013 RM RM

Neither past due nor impaired 124,156,082 96,339,430 1 to 30 days past due not impaired 83,939,651 40,777,216 31 to 60 days past due not impaired 30,474,544 53,531,578 61 to 90 days past due not impaired 44,932,288 62,099,186 Over 90 days past due not impaired 11,172,946 13,497,462

294,675,511 266,244,872 Impaired - -

294,675,511 266,244,872

Receivables that are past due but not impaired

The Group has trade receivables amounting to RM170,519,429 (2013: RM169,905,442) that are past due at the reporting date but not impaired.

(b) Amounts due from subsidiaries (non - current)

Amount due from subsidiaries are unsecured, repayable on demand and are subject to interest of 1% - 3% (2013: 1% - 3%) per annum.

(c) Amount due from associates

Amount due from associates are unsecured, non-interest bearing and are repayable on demand except for the amount due from Pretty Sally Holdings which is subject to interest of Nil (2013: 7%) per annum, and Delta Garden Limited which is subject to interest of 11% (2013: 11%) per annum and is repayable within five years.

(d) Deposits

Included in deposits is an amount of RM Nil (2013: RM249,642) being deposit paid for the acquisition of two freehold buildings.


90


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91



22. InVEnTORIES

Group 2014 2013

RM RMCost

Raw materials 379,407 771,929 Completed properties 319,444 544,867

698,851 1,316,796

During the year, the amount of inventories recognised as an expense in cost of sales of the Group was RM225,423 (2013: RM Nil). Included in cost of sales of the Group is finance cost amounting to RM4,484 (2013: RM Nil).

23. DUE FROM/(TO) CUSTOMERS On COnTRACTS

Group 2014 2013

RM RM

Construction costs incurred to date 3,686,723,160 3,151,557,788Attributable profits 301,948,587 292,061,454

3,988,671,747 3,443,619,242

Less: Provision for foreseeable losses - -3,988,671,747 3,443,619,242

Less : Progress billings (3,972,167,000) (3,408,087,061)16,504,747 35,532,181

Due from customers on contract (Note 24) 65,493,854 90,478,170Due to customers on contract (Note 31) (48,989,107) (54,945,989)

16,504,747 35,532,181

Advances received on contracts, included within trade payables (Note 30) 34,238,184 29,553,307

Retention sums on contract, included within trade receivables (Note 20) 115,891,907 96,400,631


92


23. DUE FROM/(TO) CUSTOMERS On COnTRACTS (COnT’D)

The cost incurred to date on construction contracts include the following charges made during the financial year.

Group 2014 2013

RM RM

Depreciation of property, plant and equipment 6,385,531 3,746,501 Project finance charges 4,081,392 2,824,315 Rental of premises 4,873,260 2,826,634 Hiring and transport charges 19,217,290 6,336,018

24. OTHER CURREnT ASSETS

Group Company 2014 2013 2014 2013

RM RM RM RM

Amount due from customers on contract (Note 23) 65,493,854 90,478,170 - -

Accrued billings in respect of property development costs - 45,768,163 - -

65,493,854 136,246,333 - -

25. CASH AnD CASH EQUIVALEnTS

Group Company 2014 2013 2014 2013

RM RM RM RM

Cash on hand and at banks 69,970,650 48,847,598 427,044 195,536

Deposits :

Short term deposits with licensed banks 15,278,900 11,000,000 - -Fixed deposits with licensed banks 88,247,732 93,100,755 6,339,311 6,188,352 Total cash and cash equivalents 173,497,282 152,948,353 6,766,355 6,383,888

93



25. CASH AnD CASH EQUIVALEnTS (COnT’D)

Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term deposits are placed for varying periods of between one day and two weeks depending on the immediate cash requirements of the Group, and earn interests at the respective short-term deposit rates. The weighted average effective interest rate as at 31 December 2014 for the Group was 0.28% - 3.00% (2013: 2.60%) per annum.

Fixed deposits are placed for varying periods of between one month and twelve months (2013: one month and twelve months) depending on the immediate cash requirements of the Group and the Company, and earn interests at the respective fixed deposit rates. The weighted average effective interest rate as at 31 December 2014 for the Group and the Company ranges from 0.10% - 3.45% (2013: 0.10% - 3.30%) per annum.

Included in cash at banks of the Group are amounts of RM2,835,922 (2013: RM1,030,423) held pursuant to Section 7A of the Housing Developers (Control and Licensing) Act, 1966 and are restricted from use in other operations.

Deposits with other financial institutions of the Group and the Company amounting to RM83,932,223 (2013: RM88,778,574) and RM5,339,311 (2013: RM5,188,352) respectively are pledged as securities for borrowings (Note 29).

For the purpose of the cash flow statements, cash and cash equivalents comprise the following as at the statement of financial position date :

Group Company 2014 2013 2014 2013

RM RM RM RM

Cash and bank balances 69,970,650 48,847,598 427,044 195,536

Fixed deposits with licensed banks 4,315,509 4,322,181 1,000,000 1,000,000

Short term deposit with licensed bank 15,278,900 11,000,000 - -

Bank overdrafts (19,803,389) (25,907,214) - -

Total cash and cash equivalents 69,761,670 38,262,565 1,427,044 1,195,536


94


26. SHARE CAPITAL AnD SHARE PREMIUM

number of ordinaryshares of Amount

RM0.50 each RM0.50 each 2014 2013 2014 2013

RM RM Authorised share capital

At 1 January/31 December 1,000,000,000 1,000,000,000 500,000,000 500,000,000

number of ordinaryShares of RM0.50 each Amount

Share Share Total share capital capital capital

(issued and (issued and Share and share fully paid) fully paid) premium premium

RM RM RM

1 January 2014 477,075,403 238,537,702 139,677 238,677,379

Ordinary shares issued during the year : Pursuant to Warrant A - - - - Pursuant to Warrant B - - - - Pursuant to ESOS 3,421,620 1,710,810 68,432 1,779,242 At 31 December 2014 480,497,023 240,248,512 208,109 240,456,621

1 January 2013 476,250,903 238,125,452 123,187 238,248,639

Ordinary shares issued during the year : Pursuant to Warrant A - - - - Pursuant to Warrant B - - - - Pursuant to ESOS 824,500 412,250 16,490 428,740 At 31 December 2013 477,075,403 238,537,702 139,677 238,677,379

During the financial year, the Company increased its issued and paid-up ordinary share capital from RM238,537,702 to RM240,248,512 by the issuance of 3,421,620 ordinary shares of RM0.50 each for cash pursuant to the Company’s Employee Share Options Scheme (“ESOS”) at an exercise price of RM0.52 per ordinary share.

The new ordinary shares issued during the financial year shall rank pari passu in all respect with the existing ordinary shares of the Company.

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All ordinary shares rank equally with regard to the Company’s residual assets.

95



26. SHARE CAPITAL AnD SHARE PREMIUM (COnT’D)

Warrants A 2007/2017

A total of 30,800,000 free warrants were issued by the Company in conjunction with the Rights Issue in 2007. Each warrant is exercisable into one new ordinary share of RM1.00 each at the exercise price of RM1.00 per ordinary share.

Consequential to the Bonus Issue in 2008, the Company had issued an additional 6,101,520 new Warrants 2007/2017 pursuant to the adjustments in accordance with the provision under the Deed Poll executed by the Company on 15 November 2006 constituting the Warrants (“Deed Poll”).

The exercise price of the existing Warrants A 2007/2017 were adjusted to RM0.50 each pursuant to the Share Split and Bonus Issue of shares in 2011. No Warrants A were exercised during the financial year and a total of 86,738,717 warrants remained outstanding as at 31 December 2014.

The warrants are valid for a period of ten years and shall expire on 21 January 2017.

The salient features of the Warrants 2007/2017 are as follows :-

(i) 30,800,000 free Warrants are issued in conjunction with the Rights Issue to the Entitled Shareholders on the basis of 1 free Warrant attached to every 1 Rights Share and RM1.00 nominal value of ICULS subscribed. The warrants are immediately detached upon issuance and traded on Bursa Malaysia Securities Berhad separately. The warrants are traded in board lots of 100 units each carrying the right to subscribe for 100 new TRCS shares;

(ii) each Warrants entitles the registered holders at any time during the exercise period of ten (10) years from the date of first issue of the Warrants to subscribe for one (1) ordinary share of RM1.00 at an exercise price of RM1.00. Subsequent to the Share Split and Bonus Issue of shares in 2011, each Warrants is exercisable into one new ordinary share of RM0.50 each at the exercise price of RM0.50;

(iii) the exercise price and/or the number of the Warrants outstanding may be adjusted in accordance with the provisions set out in the Deed Poll;

(iv) upon expiry of the exercise period, any unexercised rights will lapse and cease to be valid for any purposes; and

(v) The new ordinary shares to be allotted and issued upon exercise of the Warrants shall rank pari passu in all respects with the existing ordinary shares of the Company except that they will not be entitled to any dividends, rights, allotments and other distributions the entitlement date of which precedes or falls on the relevant conversion date.

Set out below are details of the free warrants issued by the Company :

number of warrants A 2007/2017 Issuance Expiry Exercise At At date date price 1.1.2014 Exercised 31.12.2014

RM/share

20.1.2007 21.1.2017 0.50 86,738,717 - 86,738,717


96


26. SHARE CAPITAL AnD SHARE PREMIUM (COnT’D)

Warrants B 2011/2016

Consequential to the Share Split and Bonus Issue Exercise in 2011, the shareholders gave their approval for the Company to issue a bonus issue of warrants (Warrants B). Pursuant to the Deed Poll executed by the Company on 12 July 2011, 93,495,995 warrants were issued, and the said warrants are valid for a period of five years and shall expire on 25 July 2016.

Each warrants is exercisable into one new ordinary share of RM0.50 each at the exercise price of RM0.61 per ordinary share. During the financial year, no Warrants B 2011/2016 were exercised and a total of 93,495,074 warrants remained outstanding as at 31 December 2014.

The salient features of the Warrants B 2011/2016 are as follows :-

(i) 93,495,995 free Warrants are issued in registered form and constituted by a Deed Poll dated 12 July 2011 executed by the Company (“Deed Poll”). Each Warrant carries the entitlement, at any time during the Exercise Period, to subscribe for one (1) new Subdivided Shares at the Exercise Price of RM0.61, subject to adjustment in accordance with the provisions of the Deed Poll;

For the purpose of trading on the Bursa Securities, one (1) board lot of Warrants shall comprise 100 Warrants carrying the right to subscribe for 100 new Subdivided Shares at any time during the Exercise Period;

(ii) each Warrants entitles the registered holders at any time during the exercise period of five (5) years from the date of first issue of the Warrants to subscribe for one (1) new subdivided share of RM0.50 at an exercise price of RM0.61;

(iii) the exercise price and/or the number of the Warrants outstanding may be adjusted in accordance with the provisions set out in the Deed Poll;

(iv) upon expiry of the exercise period, any unexercised rights will lapse and cease to be valid for any purposes; and

(v) The new ordinary shares to be allotted and issued upon exercise of the Warrants shall rank pari passu in all respects with the existing ordinary shares of the Company except that they will not be entitled to any dividends, rights, allotments and other distributions the entitlement date of which precedes or falls on the relevant conversion date.

Set out below are details of the bonus issue of warrants issued by the Company :

number of warrants 2011/2016 Issuance Expiry Exercise At At date date price 1.1.2014 Exercised 31.12.2014

RM/share

25.7.2011 25.7.2016 0.61 93,495,074 - 93,495,074

97



27. OTHER RESERVES

Group Foreign

Currency Asset Translation Revaluation

Reserve Reserve Total RM RM RM

At 1 January 2014 (1,044,510) 3,812,128 2,767,618

Other comprehensive income :

Group (44,268) - (44,268)Associates (293,658) - (293,658)At 31 December 2014 (1,382,436) 3,812,128 2,429,692

At 1 January 2013 (230,852) 648,023 417,171

Other comprehensive income :

Group (315,925) 3,164,105 2,848,180 Associates (497,733) - (497,733)At 31 December 2013 (1,044,510) 3,812,128 2,767,618

(a) Asset revaluation reserve

The asset revaluation reserve is used to record increases in the fair value of the asset and decreases to the extent that the such decrease relates to an increase on the same asset previously recognised in equity.

(b) Foreign currency translation reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency. It is also used to record the exchange differences arising from monetary items which form part of the Group’s net investment in foreign operations, where the monetary item is denominated in either the functional currency of the reporting entity or the foreign operation.

28. RETAInED EARnInGS

The Company is able to distribute dividends out of its entire retained earnings under the single-tier system.


98


29. BORROWInGS

Group Company 2014 2013 2014 2013

RM RM RM RMSecured :

Short term borrowings

Bankers’ acceptance 25,465,000 35,214,146 - - Bank overdrafts 19,803,389 25,907,214 - - Revolving credit 12,232,363 23,484,363 - - Revolving loan 20,000,000 15,000,000 - - Invoice financing 33,504,363 39,627,989 - - Term loan 6,324,000 4,800,000 - - Business bill facility - 16,803,225 - - Promissory note financing 3,733,560 - - - Trust receipt 9,044,410 - - - Market rate loan 16,418,550 - - - Hire purchase payables (Note 32) 9,001,846 7,774,762 - -

155,527,481 168,611,699 - -

Long term borrowings

Revolving credit - 15,000,000 - - Term loan 16,241,000 19,000,000 - - Hire purchase payables (Note 32) 4,508,887 5,837,675 - -

20,749,887 39,837,675 - - Total borrowings 176,277,368 208,449,374 - -

(i) Bank overdrafts

The bank overdrafts of the subsidiary companies are subject to interest at rates ranging from 1.0% to 2.0% (2013: 1.0% to 2.0%) per annum above the banks’ base lending rates.

(ii) Bankers’ acceptance

The bankers’ acceptance are subject to commissions at rates of approximately 0.75% to 1.0% (2013: 0.75% to 2.0%) per annum and interest rates of 0.70% - 2.0% (2013: 1.5%) per annum above the banks’ base lending rate.

(iii) Obligations under finance leases

These obligations are secured by a charge over the leased assets (Note 14). The average discount rate implicit in the leases ranges from 2.10% to 4.00% (2013: 2.3% to 4.0%) per annum.

99



29. BORROWInGS (COnT’D)

(iv) Other short term trade facilities

The domestic factoring facility is subject to a flat charge of RM10,000 (2013: RM10,000).

The above facilities are secured by :-

(a) Existing Open All Monies Facilities Agreement; (b) Legal Deed of Assignment of Contract Proceeds; (c) Letter of Irrevocable Instruction by the subsidiary ; (d) Certain fixed deposits of the subsidiary;(e) A freehold land and building and a leasehold land and building belonging to the subsidiary; (f) A corporate guarantee by the Company; and(g) Jointly and personal guarantee by the directors of the subsidiary.

(v) Term loan

The term loan is subject to interest rates of 1.50% to 2.20% (2013: 2.20% to 3.30%) per annum above the banks’ base lending rates. The term loan is secured by :-

(a) Facilities Agreement;(b) Charge over Cash Deposit of RM5,800,000;(c) All Monies Corporate Guaratee from the Company; (d) Letter of Negative Pledge;(e) Letter of Undertaking from the Company; (f) A corporate guarantee by the Company; (g) Sale and Purchase Agreement; and(h) All Monies Legal Charge or All Monies Deed of Assignment and Power of Attorney (in the interim

pending issuance of individual/strata title) over a piece of vacant land identified as Lot 73971 forming part of land held under Master Title Geran 44504, Lot 2286, Mukim Sungai Buloh, District of Petaling, Selangor located in Kwasa Damansara Township.

(vi) Business bill facility

The business bill facility is subject to a bill rate of Nil (2013: 2.85%) per annum. The facility is secured by :-

(a) an unlimited guarantee on general security interest by a subsidiary company; (b) term deposit of a subsidiary;(c) a first registered mortgage over non-residential real property located at 588, Swan Street

Richmond VIC 3121; and(d) first ranking charge over all present and after acquired property of certain subsidiary companies.


100



(vii) Revolving loan

The revolving loan is subject to interest rate of 0.75% (2013: 0.75%) per annum above the bank’s base lending rates.

The revolving loan is secured by :-

(a) Corporate Guarantee from the Company;(b) Blanket Counter Indemnity from the subsidiary;(c) Third Party Blanket Counter Indemnity from a subsidiary;(d) Letter of Negative Pledge from the subsidiary; and(e) Letter of Undertaking from the Company.

(viii) Revolving credit

The revolving credit is subject to interest rate of 1.00% - 1.50% (2013: 1.00% - 1.50%) per annum above the bank’s base lending rates and 1.00% (2013: 1.00%) per annum above the effective cost of funds rate.

The revolving credit is secured by :-

(a) Corporate Guarantee from the Company;(b) Trade finance general agreement; (c) Master trust receipt agreement;(d) Irrevocable and unconditional letter of instruction;(e) Irrevocable letter of payment notification; (f) Certain fixed deposits of the subsidiary; (g) Assignment of performance bonds; (h) Facilities Agreement;(i) First party first legal charge over the freehold land with buildings erected thereon held under Title

No. GRN 311987, Lot No. 126267, Seksyen 2 (formerly HSD 71665, PT No. 4920) Town of Ulu Kelang, District of Gombak, State of Selangor; and

(j) Deed of subordination from shareholders, directors and related company.

(ix) Promissory Note Financing

The promissory note financing is subject to interest rate of 0.70% (2013: Nil) per annum above the bank’s effective cost of fund.

The promissory note financing is secured by :-

(a) Existing Open All Monies Facilities Agreement; (b) Corporate guarantee from the Company;(c) Existing letter of set off over 1st party fixed deposits;(d) Upfront placement of fixed deposits of the subsidiary; and(e) Two parties Deed of Assignment of Contract Proceeds.

101




(x) Invoice Financing

The invoice financing is subject to interest rates of 0.85% to 1.50% (2013: 0.85% to 1.50%) per annum plus bank’s cost of funds.

The invoice financing is secured by :-

(a) Existing Letter of Set - Off;(b) Existing All Monies Corporate Guarantee; and(c) Existing Letter of Negative Pledge.

(xi) Trust Receipt

The trust receipt is subject to interest rate currently at 0.10% (2013: Nil) for each month or part thereof.

The trust receipt is secured by :-

(a) Corporate guarantee from the Company; (b) Blanket counter Indemnity;(c) Third party Blanket counter Indemnity; (d) Letter of negative pledge;(e) Facilities agreement;(f) The deposit of 10% of facilities amount; (g) Letter of set off;(h) Legal assignment of contract proceeds; (i) Letter of undertaking;(j) Irrevocable Letter of Instruction; and(k) Irrevocable Letter of Authorisation;

(xii) Market Rate Loan

The market rate loan is subject to interest rate of 2.71% (2013: Nil) per annum. However, the rates are indicative and subject to change for a reset period of three months. The facility is secured by :

(a) an unlimited guarantee on general security interest by a subsidiary company;(b) term deposit of a subsidiary;(c) a first registered mortgage over non-residential real property located at 588, Swan Street

Richmond VIC 3121; and(d) first ranking charge over all present and after acquired property of certain subsidiary companies.


102


30. TRADE AnD OTHER PAYABLES

Group Company 2014 2013 2014 2013

RM RM RM RMTrade payables

Third parties 161,629,783 163,965,810 - -

Advances received (Note 23) 34,238,184 29,553,307 - -

Trade payables, net 195,867,967 193,519,117 - -

Other payables

Vendor - associate acquired 5,865,000 5,865,000 - -

Accruals 1,278,978 1,527,993 155,120 170,582 Other payables 8,443,048 5,696,560 257,666 283,878

15,587,026 13,089,553 412,786 454,460 Total trade and other payables 211,454,993 206,608,670 412,786 454,460

Trade payables are non - interest bearing and the normal trade credit terms granted to the Group range from one month to three months.

31. OTHER CURREnT LIABILITIES

Group 2014 2013

RM RM

Amount due to customers for contract (Note 23) 48,989,107 54,945,989

Progress billings in respect of property development 2,909,349 -51,898,456 54,945,989

103



32. HIRE PURCHASE PAYABLES

Future minimum lease payments under finance leases together with the present value of the net minimum lease payments are as follows :

Group 2014 2013

RM RMFuture minimum lease payments :

Not later than one year 9,453,205 8,309,084

Later than one year and not later than two years 3,529,445 4,781,983 Later than two years and not later than five years 1,129,984 1,231,204 Total future minimum lease payments 14,112,634 14,322,271 Less : Future finance charges (601,901) (709,834)Present value of finance lease liabilities 13,510,733 13,612,437 Analysis of present value of finance lease liabilities : Not later than one year 9,001,846 7,774,762 Later than one year and not later than two years 3,400,760 4,612,828 Later than two years and not later than five years 1,108,127 1,224,847

13,510,733 13,612,437

Amount due within 12 months (9,001,846) (7,774,762)

Amount due after 12 months 4,508,887 5,837,675

33. CASH PURCHASE OF PROPERTY, PLAnT AnD EQUIPMEnT

Group Company 2014 2013 2014 2013

RM RM RM RM

Purchase of property, plant and equipment 15,268,795 36,543,863 - -Less : Financed by hire purchase arrangement (4,978,213) (8,090,742) - -

10,290,582 28,453,121 - -


104


34. EMPLOYEE BEnEFITS

Employee Share Options Scheme

The Company has established a Share Options Scheme for Employees and Directors (“The Scheme”) pursuant to the By-Laws which was approved by the shareholders at the Extraordinary General Meeting held on 30 April 2004. The Scheme shall remain in force for a duration of five (5) years commencing from 22 June 2004. The Board of Directors has approved the extension of the duration of ESOS for another five years from the expiry of the initial ESOS period (21 June 2009), until 21 June 2014. The duration of ESOS was not extended and therefore expired on 21 June 2014.

The salient features and other terms of the Scheme are as follows :

(i) the maximum number of the Company’s new shares to be made available under the Scheme shall not exceed fifteen percent (15%) of the issued and paid up capital of the Company;

(ii) not more than fifty percent (50%) of the Company’s shares available under the Scheme shall be allocated to Directors and senior management;

(iii) not more than ten percent (10%) of the Company’s shares available under the Scheme shall be allocated to individual Director or eligible employees, who either singly or collectively through person connected to them holds twenty percent (20%) or more of the issued and paid-up capital of the Company.

(iv) The eligible participants shall include eligible employees and Directors who as at the offer date have satisfied the following criteria :-

a) is a confirmed employee or appointed director within the Group;b) has attained at least age of eighteen (18);c) is employed full time and on the payroll of the Group;d) is under such category and of such criteria that the option committee may from time to time

decide.

(v) The option price for each share shall be based on the weighted average market price (WAMP) of the Company’s share traded on Main Market of Bursa Malaysia Securities Berhad for the five (5) trading days preceding the date of offer with a discount if any, that does not exceed ten percent (10%) from the five (5) day of the Company’s share price.

(vi) Upon exercise of the options, the new ordinary shares of the Company to be issued pursuant to the Scheme will, upon allotment and issue, rank pari passu in all respects with the existing ordinary shares of the Company; and

(vii) The persons to whom the options have been granted have no right to participate by virtue of the option in any share issue of any other company.

105



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106


34. EMPLOYEE BEnEFITS (COnT’D)

Employee Share Options Scheme (Cont’d)

Consequent to the Bonus Issue exercise completed in 2008, the exercise price of the Company’s Employees and Directors’ Share Option Scheme had been adjusted from RM1.47 per share to RM1.23 per share.

Consequent to the Share Split and Bonus Issue exercise on 15 July 2011, the exercise price of the Company’s Employees and Directors’ Share Option Scheme had been adjusted from RM1.23 per share to RM0.52 per share.

Options exercisable in a particular year but not exercised can be carried forward to the subsequent years provided they are exercised prior to the expiry date of the Scheme on 21 June 2014

Details relating to options exercised during the period are as follows :

Exercise period

Fair value of shares at share

issue date Exercise

price number of shares issuedRM/share RM/share 2014 2013

1 January 2014 to 21 June 2014 0.53 - 0.60 0.52 3,421,620 824,500

Group/Company2014 2013

RM RM

Ordinary share capital - at par 1,710,810 412,250Share premium 68,432 16,490Proceeds received on exercise of options 1,779,242 428,740

Fair value at exercise date of shares issued 1,916,107 486,455

The fair value of shares issued on the exercise of options is the mean market price at which the Company’s shares were traded on the Main Market of Bursa Malaysia Securities Berhad on the day prior to the exercise of the options.

107



35. DIVIDEnDS

Dividends in respect of Year

Dividends Recognised in Year

2014 2013 2014 2013 RM RM RM RM

Recognised during the year :

First and final single tier dividend for 2013: 0.50 sen per share on 480,497,023 ordinary shares - 2,402,485 2,402,485 1,716,994

At the forthcoming Annual General Meeting, a provisional single tier dividend in respect of the financial year ended 31 December 2014, of 0.18 sen per share on 480,497,023 ordinary shares amounting to a dividend payable of RM864,895 will be proposed for shareholders’ approval. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in equity as an appropriation of retained earnings in the financial year ending 31 December 2015.

36. CAPITAL COMMITMEnTS

Group Company 2014 2013 2014 2013

RM RM RM RMApproved and contracted for :

Freehold land - 5,520,068 - -

37. COnTInGEnCIES

a) Contingent liabilities

Group Company 2014 2013 2014 2013

RM RM RM RMSecured

Bank guarantees

Performance bond 166,607,446 163,182,730 47,500,000 47,500,000 Advance bond 45,620,900 35,620,900 - -Tender bond 250,000 1,405,000 - -Supplier/Maintenance/Securities 937,850 1,304,850 - -

213,416,196 201,513,480 47,500,000 47,500,000

The bank guarantees are secured by fixed deposits of the Group and the Company and a corporate guarantee by the Company and a subsidiary company.

As at the date of the statements of financial position, the Group and the Company has unutilised bank guarantees facilities amounting to RM228,174,183 (2013: RM234,876,899) and RM2,500,000 (2013: RM2,500,000) respectively.


108


37. COnTInGEnCIES (COnT’D)

a) Contingent liabilities (Cont’d)

Group Company 2014 2013 2014 2013

RM RM RM RMUnsecured :

Corporate guarantees given to banks for credit facilities 159,769,192 191,320,994 159,262,344 189,414,813

The total corporate guarantee facilities given to the Group and the Company amounting to RM334,020,960 (2013:RM364,858,606) and RM332,020,960 (2013: RM362,858,606) respectively.

The corporate guarantee does not have a determinable effect on the terms of the credit facilities due to the bank requiring parent guarantee as a pre-condition for approving the credit facilities granted to the subsidiaries. The actual terms of the credit facilities are likely to be the best indicator of “at market” terms and hence the fair value of the credit facilities amount received by the subsidiaries. As such, there is no value on the corporate guarantee to be recognised in the financial statements.

b) Contingent asset

This represents the award granted by the Arbitrator to the Group amounting RM2,209,335 against Carmichael Asia Sdn. Bhd. as mentioned in Note 44 of the financial statements. This amount has not been recognised in the financial statements.

38. RELATED PARTY TRAnSACTIOnS

For the purposes of these financial statements, parties are considered to be related to the Group if the Group or the Company has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group or the Company and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.

Related parties also include key management personnel defined as those persons having authority and responsibility for planning, directing and controlling the activities of the Group either directly or indirectly. The key management personnel include all the directors of the Group, and certain members of senior management of the Group.

The Group has related party relationship with its significant investors, subsidiaries and associates, directors and key management personnel.

109



38. RELATED PARTY TRAnSACTIOnS (COnT’D)

In addition to the related party information disclosed elsewhere in the financial statements, the following significant transactions between the Group and related parties took place at terms agreed between the parties during the financial year.

Group Company 2014 2013 2014 2013

RM RM RM RMa) Subsidiaries :

Sale of finished goods and services 25,218,148 28,520,753 - -

Infrastructural and external work 16,980,367 13,601,032 - -

Sub-contractors costs - 120,153 - -

Supply of labour 4,004,504 5,966,459 3,715,349 5,060,478

Management fees received 3,540,000 3,541,202 3,540,000 3,540,000

Rental charges 3,480,081 3,630,465 1,319,964 925,596

Food allowance 23,299 17,818 - -

Interest charges 4,414,876 4,236,404 2,456,535 2,527,318

Dividend 6,000,000 10,000,000 6,000,000 10,000,000

b) Associates :

Interest charges 1,884,767 2,767,855 - -

The directors are of the opinion that all the transactions above 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.


110


38. RELATED PARTY TRAnSACTIOnS (COnT’D)

c) Compensation of key management personnel :

Group Company 2014 2013 2014 2013

RM RM RM RMi) Directors

Salary 3,041,231 3,213,984 520,000 520,000 Other emoluments 824,463 883,915 197,802 202,500

Directors’ interest in employee share options scheme

During the financial year, one of the directors have exercised the options for 1,160,000 (2013: Nil) ordinary shares of the Company at a price of RM0.52 (2013: RM0.52) with a total consideration of RM603,200 (2013:RM Nil) paid to the Company.

At the financial year end, the total number of outstanding balance of share options granted by the Company to the above-mentioned directors amounted to Nil (2013: 1,160,000) units. No share options have been granted to the Company’s non-executive directors

Group Company 2014 2013 2014 2013

RM RM RM RMii) Other key management personnel

Salary 2,127,000 2,055,500 542,500 500,500 Other emoluments 766,616 744,658 191,835 184,383

Other key management personnel comprise persons other than the directors of Group entities, having authority and responsibility for planning, directing and controlling the activities of the Group entities either directly or indirectly.

For salaried key management personnel, the Group also make such contributions to the Employee Provident Fund (“EPF”) as required by law.

Executive officers also participate in the Group’s share option programme. During the financial year, the executive officers have exercised the options for 960,000 (2013: 580,000) ordinary shares of the Company at a price of RM0.52 (2013: RM0.52) with a total consideration of RM499,200 (2013: RM301,600) paid to the Company.

At financial year end, the total number of outstanding balance of share options granted by the above-mentioned executive officers amounted to Nil (2013: 1,272,000).

111



39. FInAnCIAL RISK MAnAGEMEnT OBJECTIVES AnD POLICIES

The Group and the Company are exposed to financial risks arising from their operations and the use of financial instruments. The key financial risks include credit risk, liquidity risk, market risk and foreign currency risk.

The Board of Directors reviews and agrees policies and procedures for the management of these risks, which are executed by the Chief Financial Officer. The audit committee provides independent oversight to the effectiveness of the risk management process.

The following section provides details regarding the Group and the Company’s exposure to the above-mentioned financial risks and the objectives, policies and process for the management of these risks.

(a) Market Risk

i) Interest Rate Risk

Interest rate risk is the risk that fair value or future cash flows of the Group and the Company’s financial instruments will fluctuate because of changes in market interest rates.

The Group exposures to interest rate risk arises primarily from its loans and borrowings. The loans and borrowings are subject to fluctuation in the bank base lending rate.

The interest rate profile of the Group and the Company’s interest bearing financial instruments based on the carrying amounts as at the end of the reporting period is as follows :

Group Company 2014 2013 2014 2013

RM RM RM RMFixed rate instruments

Financial assets 153,944,244 151,528,629 6,339,311 6,188,352 Financial liabilities 13,510,733 13,612,437 - -

Floating rate instruments

Financial liabilities 162,766,635 178,033,712 - -

Fair value sensitivity analysis for fixed rate instruments

The Group and the Company do not account for any fixed rate financial assets and liabilities at fair value through profit or loss, and the Company do not designate derivatives as hedging instruments under a fair value hedge accounting model. Therefore, a change in interest rates at the end of the reporting period would not affect profit or loss.

Cash flow sensitivity analysis for variable rate instruments

An increase of 25 basis point at the end of the reporting period would have decreased profit before tax by the amount shown below and a decrease would have an equal but opposite effect. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.

2014 2013RM RM

Decrease in profit before taxation 406,917 445,084


112


39. FInAnCIAL RISK MAnAGEMEnT OBJECTIVES AnD POLICIES (COnT’D)

(a) Market Risk (Cont’d)

ii) Equity Price Risk

Market price is the risk that the fair value future cash flows of the Group and the Company financial instruments will fluctuate because of changes in market prices (other than interest or exchange rates).

The Group and the Company do not have any quoted equity investments and hence is not exposed to equity price risk.

(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 and the Company’s exposure to credit risk arises primarily from trade and other receivables. For other financial assets (including investment securities and cash and bank balances) the Group and the Company minimises credit risk by dealing exclusively with high credit rating counterparties.

The Group and the Company’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. The Group and the Company trades only with recognised and creditworthy third parties. It is the Group and the Company’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the Group and the Company’s exposure to bad debts is not significant.

Exposure to credit risk

At the reporting date, the Group and the Company’s maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statements of financial position with positive fair values.

Information regarding credit enhancements for trade and other receivables is disclosed in Note 20.

Financial assets that are neither past due nor impaired

Information regarding trade and other receivables that are neither past due nor impaired is disclosed in Note 20. Deposits with banks and other financial institutions and investments securities 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 either past due or impaired is disclosed in Note 20

Financial guarantees

The Group provides unsecured financial guarantees to banks in respect of borrowing facilities granted to certain subsidiaries. The Group monitors on an ongoing basis the results of the subsidiaries and repayments made by the subsidiaries.

113



39. FInAnCIAL RISK MAnAGEMEnT OBJECTIVE AnD POLICIES (COnT’D)

(b) Credit risk (Cont’d)

Intercompany balances

The Company provides advances to its subsidiaries. The Company monitors the results of the subsidiaries regularly.

The maximum exposure to credit risk is represented by its carrying amount in the Company’s statement of financial position.

As at the end of the reporting period, there was no indication that the advances to those subsidiaries are not recoverable. The Company does not specifically monitor the ageing of the advances to its subsidiaries.

(c) Liquidity risk

Liquidity risk is the risk that the Group and the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Group 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’s objective is to maintain a balance between continuity of funding and flexibility through the financial support from related and holding company.

Analysis of financial instruments by remaining contractual maturities

The table below summarises the maturity profile of the Group and the Company’s liabilities at the reporting date based on contractual undiscounted repayment obligations.

2014 RM

On demand or within One to Over five one year five years years Total

RM RM RM RM Group

Financial liabilities :Trade and other payables 211,454,993 - - 211,454,993 Other current liabilities 51,898,456 - - 51,898,456 Loans and borrowings 155,527,481 20,749,887 - 176,277,368 Total undiscounted financial liabilities 418,880,930 20,749,887 - 439,630,817

Company

Financial liabilities :Trade and other payables 412,786 412,786Other current liabilities - - - -Loans and borrowings - - - -Total undiscounted financial liabilities 208,680, - - 412,786


114



(c) Liquidity risk (Cont’d)

2013 RM

On demand or within One to Over five one year five years years Total

RM RM RM RM Group

Financial liabilities :Trade and other payables 206,608,670 - - 206,608,670 Other current liabilities 54,945,989 - - 54,945,989 Loans and borrowings 168,611,699 39,837,675 - 208,449,374 Total undiscounted financial liabilities 430,166,358 39,837,675 - 470,004,033

Company

Financial liabilities :Trade and other payables 454,460 - - 454,460 Other current liabilities - - - -Loans and borrowings - - - -Total undiscounted financial liabilities 454,460 - - 454,460

(d) Foreign currency risk

Foreign currency risk is the risk that the fair value of future cash flows of a financial instruments will fluctuate because of changes in foreign exchange rates.

The Company has transactional currency exposure arising from advances to subsidiary that are denominated in a currency other than the respective functional currency of Company. The Group and Company also hold cash and cash equivalents denominated in foreign currencies for working capital purposes. The currencies giving rise to this risk are primarily USD Dollar (“USD”), Euro Dollar (“EURO”), Australian Dollar (“AUD”) and “SGD”

--------------------Denominated in ---------------- Denominated inGROUP COMPAnY

USD EURO SGD AUD RM RM RM RM

2014 Other receivables - - - 88,295,543 Cash and bank balances 7,144 782,866 255,855 5,487 Net exposure 7,144 782,866 255,855 88,301,030

2013 Other receivables - - - 88,672,512 Cash and bank balances 121,608 833,445 1,310,513 6,142 Net exposure 121,608 833,445 1,310,513 88,678,654

115




(d) Foreign currency risk (Cont’d)

Sensitivity analysis for foreign currency risk

Below demonstrates the sensitivity to a reasonably possible change in the foreign currency exchange rates against Ringgit Malaysia, with all other variables held constant, of the Group’s and Company’s profit before taxation. A 10% strengthening of the RM against the following currencies at the end of the reporting period would have increased profit before taxation by the amount shown below and a corresponding decrease would have an equal but opposite effect.

Group Company 2014 2013 2014 2013

RM RM RM RM

AUD 549 614 8,830,103 8,867,865 USD 714 12,160 - -EURO 78,287 83,345 - -SGD 25,586 131,051 - -Increase in profit before taxation 105,136 227,170 8,830,103 8,867,865

40. FAIR VALUE OF FInAnCIAL InSTRUMEnTS

Group Company 2014 2013 2014 2013

RM RM RM RMFinancial assets

Investment in associates 11,865,075 11,864,550 - -Investment in subsidiaries - - 102,412,304 98,607,086 Other investments 25,831,892 26,494,115 - -Other receivables - - 138,766,588 140,424,908 Trade and other receivables 323,735,226 301,189,392 15,600 15,275 Other current assets 65,493,854 136,246,333 - -Cash and bank balances 173,497,282 152,948,353 6,766,355 6,383,888

Financial liabilities

Trade and other payables 211,454,993 206,608,670 412,786 454,460 Other current liabilities 51,898,456 54,945,989 - -Loans and borrowings 176,277,368 208,449,374 - -

Determination of fair value

Fair value is defined as the amount for which the financial instrument could be exchanged in a current transaction between knowledgeable willing parties in an arm’s length transaction, other than in a forced sale or liquidation.

The carrying amounts of financial instruments reported in the financial statements approximate their fair values.


116


41. CAPITAL MAnAGEMEnT

The primary objective of the Group’s and the Company’s capital management is to ensure that they maintain a strong credit rating and healthy capital ratios in order to support their business and maximise shareholders’ value.

The Group and the Company manage their capital structure and make adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group and the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the years ended 31 December 2014 and 31 December 2013.

The Group and the Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group and the Company did not maintain specific policy on the capital management.The Group and the Company includes within net debt/cash, loans and borrowings less cash and bank balances. Capital includes equity attributable to the owners of the Group and the Company less the fair value adjustment reserve.

Group Company 2014 2013 2014 2013

RM RM RM RM

Loans and borrowings 176,277,368 208,449,374 - -Less : Cash and bank balances (173,497,282) (152,948,353) (6,766,355) (6,383,888)Net debt/(cash) 2,780,086 55,501,021 (6,766,355) (6,383,888)

Total equity 325,994,676 324,524,586 250,559,242 247,895,755 Less : - Fair value adjustment reserve (2,429,692) (2,767,618) - -Total capital employed 323,564,984 321,756,968 250,559,242 247,895,755

Capital and net debt/cash 326,345,070 377,257,989 257,325,597 254,279,643

Gearing ratio 0.85% 15% - -

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 the 25% of the issued and paid up capital (excluding treasury shares) and such shareholders’ equity is not less than RM40 million. The Company has complied with this requirement.

42. SEGMEnTAL InFORMATIOn

The Group’s reportable segments, as described below, are the Group’s strategic business units. The strategic business units offer different services and are managed separately because they require different marketing strategies. For each of the strategic business units, the Group’s Chief Executive Officer reviews internal management reports on at least a quarterly basis. Other business units are reported as ‘others’. The following summary describes the operations in each of the Group’s reportable segments :

* Construction activity* Property development

Performance is measured based on segment profit before tax, interest, depreciation and amortisation. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries.

117



42. SEGMEnTAL InFORMATIOn (COnT’D)

Segment assets

Segment asset is measured based on all assets (including goodwill) of a segment and is used to measure the return of assets of each segment.

Operating segment information for the current financial year is as follows :

Construction Property Consolidated activity development Others adjustments Total

2014 RM RM RM RM RM

REVEnUE 706,833,597 36,910,402 137,798,675 (66,586,787) 814,955,887

PROFIT BEFORE TAX 12,022,958 7,223,888 7,182,111 (15,147,701) 11,281,256

SEGMEnT ASSETS 566,770,357 125,674,734 76,480,746 - 768,925,837

2013

REVEnUE 708,132,609 26,518,029 152,254,196 (66,157,363) 820,747,471

PROFIT BEFORE TAX 11,903,262 5,707,499 7,948,837 (11,711,218) 13,848,380

SEGMEnT ASSETS 569,712,035 149,841,154 78,853,192 - 798,406,381

Geographical Segments

Malaysia Australia Brunei Cambodia Total RM RM RM RM RM

2014Revenue 737,160,989 1,403,329 76,391,569 - 814,955,887 Non Current Assets 101,738,228 34,702,296 3,744,160 - 140,184,684

2013Revenue 626,971,963 1,031,699 192,743,809 - 820,747,471 Non Current Assets 92,828,047 35,515,347 4,473,168 - 132,816,562

Non current assets information presented above consist of the following items as presented in the consolidated statement of financial position.

2014 2013 RM RM

Property, plant and equipment 68,950,717 67,199,289 Properties held for development 46,770,899 47,583,950 Investment properties 24,453,891 18,024,146 Intangible assets 9,177 9,177

140,184,684 132,816,562


118


42. SEGMEnTAL InFORMATIOn (COnT’D)

Geographical Segments (Cont’d)

The construction activity and property development segments are managed on a worldwide basis. In presenting information on the basis of geographical segments, segment revenue is based on geographical location of customers. Segment assets are based on the geographical location of the assets. The amounts of non-current assets do not include financial instruments (including investments in associates) and deferred tax assets.

43. SUBSEQUEnT EVEnTS

(a) Reorganisation of the Group Structure

TRC (Aust) Pty Ltd, a wholly-owned subsidiary of the Company has on 30 January 2015 completed the acquisition of 600 shares, representing 100% of the total issued and paid-up share capital of Swan Synergy Developments Pty Ltd which is also a wholly-owned subsidiary of the Company, for a total cash consideration of AUD600.00.

(b) New Project Secured

(i) SBSB 4

The wholly owned subsidiary of the Company, Trans Resources Corporation Sdn. Bhd. (“TRC”) had on 13 February 2015 executed a Contract Agreement with DCNS Societe Anonyme in relation to Design and Build Contract for the Proposed Malaysian Scorpene Refit Infrastructure Works at The Royal Malaysian Navy Submarine Base at Sapangar Bay, Kota Kinabalu, Sabah for a contract sum of RM60,000,000.

The project will not have any effect on the issued and paid up share capital, substantial shareholders’ shareholdings, net assets per share and gearing of the Company and its subsidiaries.

The board of directors is of the opinion that the project will contribute positively to the earnings and earnings per share of the Group in the future.

(ii) Plot 8R7, Precint 8, Putrajaya

TRC also had on 25 March 2015 accepted the award from Putrajaya Homes Sdn. Bhd., in relation to the contract known “The Proposed Construction and Completion of the Remaining and Rectification Works of 50 units of 3-storey Semi Detached Houses, 10 units of 2-storey Semi Detached Houses and Associated Works at Plot 8R7, Precint 8, Putrajaya for a contract sum of RM53,935,000.

The project will not have any effect on the issued and paid up share capital, substantial shareholders’ shareholdings, net assets per share and gearing of the Company and its subsidiaries.

The board of directors is of the opinion that the project will contribute positively to the earnings and earnings per share of the Group in the future.

119



44. LITIGATIOnS

Save as disclosed below, the Company and its subsidiary companies are not involved in any material litigation, either as plaintiff or defendant, claims or arbitration and the Board does not have knowledge of any proceedings, pending or threatened against the Company and its subsidiary companies, or of any facts likely to give rise to any proceedings which might materially and adverse affect the financial position and business of the Company and/or its subsidiaries companies:-

(i) Arbitration between the Company’s subsidiary, Trans Resources Corporation Sdn. Bhd. (“TRC”) and Carmichael Asia Sdn. Bhd. (“Carmichael”)

On 18 August 2008, TRC, the wholly owned subsidiary of the Company, entered into a contract with Carmichael whereby TRC employed Carmichael for the manufacturer/procurement of two (2) units of fire-fighting engines (“Fire Fighting Units”) for the Sultan Mahmud Airport situated in Kuala Terengganu (“the Agreement”). Carmichael was to deliver the Fire Fighting Units by January 2009. However, they were only able to supply one (1) Fire Fighting Units. This has caused TRC to sources and obtain supply from another supplier, CME Edaran Sdn. Bhd., at a higher cost. TRC is claiming an amount of RM2,209,335 from Carmichael for breach of contract due to Carmichael’s failure to deliver the remaining Fire Fighting Unit within the prescribed date, resulting in TRC incurring additional cost for engaging another supplier. Carmichael is disputing the amount and both parties have agreed to proceed with the matter by way of arbitration as provided for in clause 25 of the Agreement.

The Arbitration process has just been completed whereby the Arbitrator has handed down an award in favour of TRC. Charmichael was requested to pay TRC RM2,209,335 together with cost of RM46,552.

In relation thereto, the necessary legal actions have been initiated in the High Court of Kuala Lumpur since early 2013 against Carmichael for the recovery of the abovementioned outstanding amount. The proceedings are ongoing.


120

The breakdown of the retained earnings of the Group and of the Company as at 31 December 2014 into realised and unrealised earnings is presented as follows, in accordance with the directive issued by Bursa Malaysia Securities Berhad 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 2014 2013 2014 2013

RM RM RM RM

Total retained earnings of the Company and its subsidiaries :

Realised 139,880,220 131,351,285 17,007,186 14,114,292 Unrealised 5,624,935 4,973,769 (6,904,565) (4,895,916)

Total share of retained earnings from associates :

Realised (1,300,299) (3,022,879) - - Unrealised (134,998) 38,565 - -

144,069,858 133,340,740 10,102,621 9,218,376

Less : Consolidation adjustments (60,570,772) (50,958,414) - -Retained earnings as per financial statements 83,499,086 82,382,326 10,102,621 9,218,376

Supplementary Financial Information on the Breakdown of Realised and Unrealised

Profits or Losses

121


no Location TenureDescription/existing use

Approx ageof

buildingsLand area/

build up area

net book value

31 December 2014

Date ofvaluation

RM

1 Lot No.3626Section 16Kuching Central Land DistrictSarawak

60-year leaseholdexpiring

18/4/2059

4-storeyshop/office

16 years 2,214.2 sq ft/8,856.8 sq ft

1,031,704 30/11/2009

2 Lot No.PT19447Mukim of AmpanganDistrict of SerembanNegeri Sembilan

99-yearleaseholdexpiring

18/9/2095

Agriculture Land - 9.516 acres 470,541 21/9/2000

3 Developer's Parcel No. 47(218)First and Second Floors of anIntermediate 4-storey shop/office buildingTaman Melawati Metro 1Phase 4 Town CentreSelangor

Freehold First and SecondFloors of 4-storey

shop/office

24 years 1,760.0 sq fteach

531,013 30/11/2009

4 5 Units of ApartmentsIdaman Senibong ApartmentTaman Bayu SenibongJohor Bahru, Johor

Leaseholdexpiring

21/1/2097

Apartments 9 1/2 years Varying from808.0 sq ft, 815.0 sq ft

& 868.0 sq ft

563,000 20/07/2011

5 HS(D) 346773 PTD 166642Mukim of Plentung, District ofJohor Bahru, State of Johor(together with a double storeyterrace house erected thereon)

Freehold Double storeyterrace

11 years 239.6606 sq metres

251,658 -

6 A part of HS(D) 310780 PTD 158256Mukim of Plentong, District ofJohor Bahru, State of Johor

Freehold Residentialland

- 27.636 acres 11,816,945 -

7 Mukim 2908, Lot 2265Mukim Dengkil, Daerah SepangSelangor Darul Ehsan

Freehold Agricultureland

- 2.6052 hectares 1,080,155 -

8 Shop Office & Corporate BuildingTRC Business CentreJalan Andaman Utama68000 AmpangSelangor Darul Ehsan

Freehold Shop Office 6 years Varying from1121sq ft,1209 sq ft, 1319 sq ft,1344 sq ft, 1370 sq ft,

1469 sq ft,1533 sq ft,1775sq ft& 2922.71 sq ft

23,761,358 10/14/2013

9 Geran 314188,Lot 73971Mukim Sungai BulohDaerah PetalingNegeri Selangor

Freehold Agricultureland

1 year 0.6946 hectares 6,429,745 -

10 Three Single & Double Storey Buildings588,Swan StreetRichmond,MelbourneAustralia

Freehold Three single & double

storey buildigs

2 years Varying from 481 sq meters

to 1814 sq meters

34,702,296 -

List of Properties 2014


122

Analysis of Shareholdings as at 31 March 2015

Authorised Share Capital : RM 500,000,000.00 divided into 1,000,000,000 shares of RM0.50 eachFully Paid-Up Capital : RM 240,248,511.50Issued Share Capital : 480,497,023 sharesClass of Shares : Ordinary Shares of RM0.50 eachVoting Rights : One Vote Per ordinary ShareNo. of Shareholders : 4,059

DISTRIBUTIOn OF SHAREHOLDInGS

Category no.of Holders % no.of Shares %

Less than 100 76 1.87 3,271 0.00100 - 1,000 172 4.24 92,228 0.021,001 - 10,000 1,881 46.34 11,800,122 2.4610,001 - 100,000 1,717 42.30 53,846,891 11.21100,001 and less than 5% of issued shares 208 5.12 179,756,558 37.415% and above of the issued shares 5 0.12 234,997,953 48.91

Total 4,059 100.00 480,497,023 100.00

LIST OF SUBSTAnTIAL SHAREHOLDERS

Direct Indirectno. name no. of Shares % no. of Shares %

1 TRC Capital Sdn Bhd 59,553,600 12.39 - -2 Kolektif Aman Sdn Bhd 58,521,600 12.18 - -3 Dato’ Sri Sufri Bin Hj Mohd Zin 47,531,517 9.89 118,075,200* 24.574 Leong Kam Heng 45,371,947 9.44 - -5 Lembaga Tabung Haji 44,849,952 9.33 - -6 Khoo Tew Choon 32,374,372 6.74 - -

Deemed interested by virtue of his shareholdings in Kolektif Aman Sdn Bhd and TRC Capital Sdn Bhd

DIRECTORS’ InTEREST In SHARES

Direct Indirectno. name no. of Shares % no. of Shares %

1 Dato’ Sri Sufri Bin Hj Mohd Zin 47,531,517 9.89 118,075,200* 24.572 Dato’ Abdul Aziz Bin Mohamad 13,658,217 2.84 118,075,200* 24.57

Deemed interested by virtue of his shareholdings in Kolektif Aman Sdn Bhd and TRC Capital Sdn Bhd

123


LIST OF 30 LARGEST SHAREHOLDERS

no name of Shareholder Shares %

1. KENANGA NOMINEES (TEMPATAN) SDN BHD 59,553,600 12.39PLEDGED SECURITIES ACCOUNT FOR TRC CAPITAL SDN BHD

2. KENANGA NOMINEES (TEMPATAN) SDN BHD 58,521,600 12.18PLEDGED SECURITIES ACCOUNT FOR KOLEKTIF AMAN SDN BHD

3. LEMBAGA TABUNG HAJI 44,849,952 9.33

4. KENANGA NOMINEES (TEMPATAN) SDN BHD 42,638,397 8.87PLEDGED SECURITIES ACCOUNT FOR SUFRI BIN MHD ZIN

5. KENANGA NOMINEES (TEMPATAN) SDN BHD 29,434,404 6.13PLEDGED SECURITIES ACCOUNT FOR KHOO TEW CHOON

6. KENANGA NOMINEES (TEMPATAN) SDN BHD 20,946,715 4.36PLEDGED SECURITIES ACCOUNT FOR LEONG KAM HENG

7. KENANGA NOMINEES (TEMPATAN) SDN BHD 18,941,336 3.94PLEDGED SECURITIES ACCOUNT FOR YAP YON TAI

8. RHB CAPITAL NOMINEES (TEMPATAN) SDN BHD 17,376,800 3.62PLEDGED SECURITIES ACCOUNT FOR LEONG KAM HENG

9. MUHAMAD SHAHAIZI BIN ABDUL HAI 16,320,000 3.40

10. ABDUL AZIZ BIN MOHAMAD 10,789,536 2.25

11. AMANAHRAYA TRUSTEES BERHAD 7,161,800 1.49PUBLIC ISLAMIC SELECT TREASURES FUND

12. KHOO TENG SAN 5,165,147 1.07

13. NGIAM BUEY BUEY 4,620,297 0.96

14. AMANAHRAYA TRUSTEES BERHAD 2,982,500 0.62PUBLIC ISLAMIC TREASURES GROWTH FUND


16. CITIGROUP NOMINEES (TEMPATAN) SDN BHD 2,733,120 0.57PLEDGED SECURITIES ACCOUNT FOR SUFRI BIN MHD ZIN (473402)

17. CITIGROUP NOMINEES (TEMPATAN) SDN BHD 2,407,968 0.50PLEDGED SECURITIES ACCOUNT FOR LEONG KAM HENG (473525)

18. HLB NOMINEES (TEMPATAN) SDN BHD 2,289,680 0.48PLEDGED SECURITIES ACCOUNT FOR KHOO TEW CHOON

19. OOI CHENG HUAT @ OOI PENG HUAT 2,236,820 0.47

20. SUFRI BIN MHD ZIN 2,160,000 0.45

Analysis of Shareholdings (cont’d)as at 31 December 2014


124

LIST OF 30 LARGEST SHAREHOLDERS (COnT’D)

no name of Shareholder Shares %

21. HLB NOMINEES (TEMPATAN) SDN BHD 2,103,344 0.44PLEDGED SECURITIES ACCOUNT FOR LEONG KAM HENG

22. HLB NOMINEES (TEMPATAN) SDN BHD 2,028,000 0.42PLEDGED SECURITIES ACCOUNT FOR LEE CHIAH CHEANG

23. CIMSEC NOMINEES (TEMPATAN) SDN BHD 1,887,120 0.39CIMB BANK FOR LEONG KAM HENG (M28001)

24. OON SOO SEE 1,850,000 0.39

25. LIM CHIN SENG 1,650,000 0.34

26. CHIN YU NOMINEES PTY LTD 1,515,744 0.32

27. TEOH EU CHENG 1,287,000 0.27

28. OOI CHIN SENG 1,100,040 0.23

29. CIMSEC NOMINEES (TEMPATAN) SDN BHD 944,000 0.20PLEDGED SECURITIES ACCOUNT FOR LU YIENG LUNG (KUCHING-CL)

30. MOHD ANUAR CHOON BIN ABDULLAH 885,000 0.18

TOTAL 369,248,601 76.85

Analysis of Shareholdings (cont’d)as at 31 December 2014

125


Analysis of Warrant A Holdingsas at 31 March 2015

Number of Warrant : 86,738,717 10 years free detachable warrantsExercise Price : RM0.50 per the Company’s ShareVoting Rights : NilNo. of Warrants Holders : 626

DISTRIBUTIOn OF WARRAnT HOLDInGS

Category no.of Holders % no.of Warrant %

Less than 100 49 7.83 2,629 0.00100 - 1,000 22 3.51 7,777 0.011,001 - 10,000 165 26.36 864,175 1.0010,001 - 100,000 315 50.32 11,858,190 13.67100,001 and less than 5% of issued Warrants 71 11.34 33,659,952 38.815% and above of the issued Warrants 4 0.64 40,345,994 46.51

Total 626 100.00 86,738,717 100.00

LIST OF 30 LARGEST WARRAnT HOLDERS

no name of Warrant Holder Warrants %

1. KOLEKTIF AMAN SDN. BHD. 17,510,400 20.19

2. SUFRI BIN MHD ZIN 11,059,200 12.75

3. TRC CAPITAL SDN. BHD. 7,430,400 8.57



6. LEONG KAM HENG 2,852,253 3.29

7. KHOO TENG SAN 2,759,609 3.18



10. CHAN THYE THIAN 1,393,500 1.61

11. KHOO TAT WAI 1,172,420 1.35

12. KHOO SHIAU HOON 1,082,818 1.25

13. MAYBANK NOMINEES (TEMPATAN) SDN BHD 1,063,800 1.23PLEDGED SECURITIES ACCOUNT FOR ANG PIANG KOK


126

LIST OF 30 LARGEST WARRAnT HOLDERS (COnT’D)



15. CIMSEC NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR CHAN THYE THIAN (J DEDAP-CL) 741,800 0.86

16. CHIN YU NOMINEES PTY LTD 703,872 0.81

17. JF APEX NOMINEES (TEMPATAN) SDN BHD 693,400 0.80PLEDGED SECURITIES ACCOUNT FOR CHIA YONG FEI (STA 1)

18. TAN KHOON KIAN 610,000 0.70

19. MAYBANK SECURITIES NOMINEES (TEMPATAN) SDN BHD 513,700 0.59PLEDGED SECURITIES ACCOUNT FOR TAN LAM AN (MARGIN)

20. LOH LEONG KONG 484,900 0.56

21. YEOH SOOK KENG 424,572 0.49

22. MAYBANK SECURITIES NOMINESS (ASING) SDN BHD 380,000 0.44MAYBANK KIM ENG SECURITIES PTE LTD FOR YEO THONG HIANG

23. NGIAM BUEY BUEY 366,278 0.42

24. PUBLIC NOMINEES (TEMPATAN) SDN BHD 355,000 0.41PLEDGED SECURITIES ACCOUNT FOR TAN SIEW CHENG (E-IMO)

25. NG KOK CHENG @ NG KEE SENG 336,960 0.39

26. HLIB NOMINEES (TEMPATAN) SDN BHD 313,000 0.36PLEDGED SECURITIES ACCOUNT FOR BOON KIM YU (CCTS)

27. ADRIAN GOH SIM HAN 296,600 0.34

28. TIEW SHWU PING 270,000 0.31

29. CIMSEC NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR LEN BOOK LEARN (M66002) 268,160 0.31

30. ANG HIOH 259,200 0.30

TOTAL 66,815,370 77.03

Analysis of Warrant A Holdings (cont’d)as at 31 March 2015

127


Analysis of Warrant B Holdings as at 31 March 2015

Number of Warrant : 93,495,074 5 years free detachable warrantsExercise Price : RM0.61 per the Company’s ShareVoting Rights : NilNo. of Warrants Holders : 1,995

DISTRIBUTIOn OF WARRAnT HOLDInGS

Category no.of Holders % no.of Warrant %

Less than 100 297 14.89 14,278 0.02100 - 1,000 378 18.95 248,439 0.271,001 - 10,000 927 46.47 3,462,839 3.7010,001 - 100,000 327 16.39 11,383,912 12.18100,001 and less than 5% of issued Warrants 60 3.01 26,096,674 27.915% and above of the issued Warrants 6 0.30 52,288,932 55.93

Total 1,995 100.00 93,495,074 100.00

LIST OF 30 LARGEST WARRAnT HOLDERS


1. KENANGA NOMINEES (TEMPATAN) SDN BHD 11,910,720 12.74PLEDGED SECURITIES ACCOUNT FOR TRC CAPITAL SDN BHD

2. KENANGA NOMINEES (TEMPATAN) SDN BHD 11,704,320 12.52PLEDGED SECURITIES ACCOUNT FOR KOLEKTIF AMAN SDN BHD

3. LEMBAGA TABUNG HAJI 8,969,990 9.59




7. MUHAMAD SHAHAIZI BIN ABDUL HAI 4,080,000 4.36


9. RHB CAPITAL NOMINEES (TEMPATAN) SDN BHD 2,775,360 2.97PLEDGED SECURITIES ACCOUNT FOR LEONG KAM HENG


11. RHB CAPITAL NOMINEES (TEMPATAN) SDN BHD 1,056,700 1.13PLEDGED SECURITIES ACCOUNT FOR LOW BEE KIEW (CEB)


128

LIST OF 30 LARGEST WARRAnT HOLDERS (COnT’D)


12. NGIAM BUEY BUEY 924,059 0.99

13. CITIGROUP NOMINEES (TEMPATAN) SDN BHD 546,624 0.58PLEDGED SECURITIES ACCOUNT FOR SUFRI BIN MHD ZIN (473402))

14. CITIGROUP NOMINEES(TEMPATAN) SDN BHD 477,100 0.51PLEDGED SECURITIES ACCOUNT FOR LEONG KAM HENG (473525)

15. ABDUL AZIZ BIN MOHAMAD 405,736 0.43

16. HLB NOMINEES (TEMPATAN) SDN BHD 405,600 0.43PLEDGED SECURITIES ACCOUNT FOR LEE CHIAH CHEANG

17. HLB NOMINEES (TEMPATAN) SDN BHD 387,936 0.41PLEDGED SECURITIES ACCOUNT FOR KHOO TEW CHOON

18. CIMSEC NOMINEES (TEMPATAN) SDN BHD 377,424 0.40CIMB BANK FOR LEON KAM HENG(M28001)

19. HLB NOMINEES (TEMPATAN) SDN BHD 350,668 0.38PLEDGED SECURITIES ACCOUNT FOR LEONG KAM HENG

20. LEE CHOON HONG 349,100 0.37

21. TAN KHOON KIAN 340,201 0.36

22. YOUNG PEY FEEI 313,000 0.33

23. CHIN YU NOMINEES PTY LTD 303,148 0.32

24. CIMSEC NOMINEES (TEMPATAN) SDN BHD 285,400 0.31CIMB BANK FOR LEN BOOK LEARN (M66002)

25. GAN HOCK AUN 260,000 0.28

26. TAY MOOI NGEN 250,700 0.27

27. KTC HOLDINGS SDN BHD 245,337 0.26

28. LEE ENG MIN 222,300 0.24

29. KEAN THONG ENTERPRISE SDN BHD 212,000 0.23

30. POON MEI CHEE 200,000 0.21

TOTAL 73,053,499 78.14

Analysis of Warrant B Holdings (cont’d)as at 31 March 2015

129


Notice of Eighteenth Annual General Meeting

NOTICE IS HEREBY GIVEN that the Eighteenth Annual General Meeting of the Company will be held at Indah Ballroom, Flamingo Hotel, 5, Tasik Ampang, Hulu Kelang, 68000 Ampang, Selangor on Tuesday, the 26th day of May, 2015 at 10.30 a.m. for the purpose of transacting the following businesses:-

AGEnDA

1 To receive and adopt the Audited Financial Statements, Report of the Directors and Report of the Auditors thereon for the year ended 31 December 2014

(Please refer to Note 1)

2 To approve the payment of first and final single tier dividend of 0.18 sen per share for the year ended 31 December 2014

Ordinary Resolution 1

3 To approve the payment of Directors’ Fees in respect of the financial year ended 31 December 2014 Ordinary Resolution 2

4 To re-elect YBhg Dato’ Sri Sufri bin Mohd Zin who shall retire as Director of the Company pursuant to Articles 84 of the Company's Articles of Association.


5 To re-appoint Messrs AljeffriDean as Auditors of the Company to hold office until the conclusion of the next Annual General Meeting and to authorise the Directors to fix their remuneration.


SPECIAL BUSInESS

To consider and if thought fit, to pass the following ordinary resolution, with or without modification:-

6 Authority to issue shares

“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby authorised to 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 ordinary share capital of the Company for the time being, subject always to the approvals of the relevant regulatory authorities.”

Ordinary Resolution 5(Please refer

to Note 3)

7 Proposed renewal of authority for the company to purchase its own shares

“THAT subject to compliance with all applicable rules, regulations and orders made pursuant to the Companies Act, 1965 (“Act”), provisions in the Company’s Memorandum and Articles of Association, the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) and any other relevant authorities, the Company be and is hereby authorised to purchase such number of ordinary shares of 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 interest of the Company PROVIDED THAT:-

Ordinary Resolution 6(Please refer

to Note 4)

(1) the aggregate number of shares purchased does not exceed ten per centum (10%) of the issued and paid-up share capital of the Company as quoted on Bursa Securities as at the point of purchase;

(2) the maximum fund to be allocated by the Company for the purpose of purchasing such number of ordinary shares shall not exceed the retained profit and share premium account of the Company. As at the financial year ended 31 December 2014, the audited retained profit and share premium of the Company stood at RM10,102,621 and RM208,109 respectively;


130

Notice of Eighteenth Annual General Meeting (cont’d)

(3) The renewal of authority conferred by this resolution will commence immediately upon passing of this resolution and will continue to be in force until:-

(a) at the conclusion of the next AGM of the Company following the general meeting in which the authorization is obtained, at which time it shall lapse unless by ordinary resolution passed at that meeting, the authority is renewed either unconditionally or subject to conditions; or

(b) the expiration of the period within which the next AGM of the Company is required by law to be held; or

(c) revoked or varied by ordinary resolution passed by the shareholders of the Company in a general meeting.

whichever occurs first;

AND THAT upon completion of the purchase(s) of the ordinary shares of the Company, the Directors of the Company be and are hereby authorised to deal with the ordinary shares so purchased in the following manners:-

(a) to cancel the ordinary shares so purchased; or

(b) to retain the ordinary shares so purchased as treasury shares for distribution as dividend to shareholders and/or resell on Bursa Securities or subsequently cancelled; or

(c) to retain part of the ordinary shares so purchased as treasury shares and cancel the remainder; and

(d) in any other manner prescribed by the Act, rules, regulations and orders made pursuant to the Act, the Listing Requirements of Bursa Securities and any other relevant authorities for the time being in force.

AND THAT the Directors of the Company be and are hereby authorised to act and to take all such steps as they may deem necessary or expedient in order to implement, finalise and give full effect to the aforesaid share buy-back with full powers to assent to any conditions, modifications, variations, and/or amendments as may be required or imposed by the relevant authorities and to do all such acts and things (including executing all documents) as the Board may deem fit and expedient in the best interest of the Company.”

8 Continuing in office as Independent Directors

“That, approval be and is hereby given for General (R) Tan Sri Dato’ Seri Mohd Shahrom Bin Dato’ Hj Nordin who was served as an Independent Non-Executive Director of the Company since 25 March 2004 to continue to act as an Independent Non-Executive Director of the Company”


“That, approval be and is hereby given for Noor Zilan Bin Mohamed Noor who was served as an Independent Non-Executive Director of the Company since 13 May 2002 to continue to act as an Independent Non-Executive Director of the Company”


“That, approval be and is hereby given for Abdul Rahman Bin Ali who was served as an Independent Non-Executive Director of the Company since 13 May 2002 to continue to act as an Independent Non-Executive Director of the Company”


(Please refer to Note 5)

9 To transact any other business of which due notice shall be given in accordance with the Articles of Association of the Company and the Companies Act, 1965.

131


nOTICE OF DIVIDEnD EnTITLEMEnT AnD PAYMEnT

NOTICE IS HEREBY GIVEN, that a first and final single tier dividend of 0.18 sen per share in respect of the financial year ended 31 December 2014 will be paid on 15 June 2015 to shareholders whose names appear on the Company’s Register of Depositors on 29 May 2015.

A Depositor shall qualify for entitlement to the dividend only in respect:-

a) Shares transferred into the Depositor’s Securities Account before 4.00pm on 29 May 2015 in respect of ordinary transfers; and

b) Shares bought on the Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of the Bursa Malaysia Securities Berhad.

BY ORDER OF THE BOARD

ABDUL AZIZ MOHAMED (LS 007370)Secretary

Selangor Darul Ehsan30 April 2015

notes:

1. Audited Financial Statements for the Year Ended 31 December 2014 The Audited Financial Statements is meant for discussion only as an approval from shareholders is not requited pursuant to Section

169(1) of the Companies Act, 1965. Hence, this item of the Agenda is not put forward for voting by shareholders of the Company.

2. Appointment of Proxies

a. A proxy may but need not be a member of the Company and the provision of section 149 (1) (b) of the Act shall not apply to the Company.

b. To be valid the proxy form duly completed must be deposited at the registered office of the Company not less than forty-eight (48) hours before the time for holding the meeting or any adjournment thereof.

c. A member holding one thousand (1,000) ordinary shares or less may appoint only one (1) proxy to attend and vote at the meeting.

d. A member holding more than one thousand (1,000) ordinary shares may appoint up to two (2) proxies to attend and vote at the meeting.

e. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy.

f. Where a member is an authorised nominee as defined under the Central Depositories Act, it may appoint at least one (1) proxy in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account.

g. If the appointer is a corporation, the proxy form must be executed under its Common Seal or under the hand of its attorney.h. Only members whose names appears in the Record of Depositors as at 19 May 2015 will be entitled to attend and vote at

the meeting.

3. Authority for allotment of shares (Ordinary Resolution no.5)

The proposed Ordinary Resolution 6 is a renewal of the General Mandate for the Directors to issue shares pursuant to Section 132D of the Companies Act, 1965.

The proposed Ordinary Resolution 6, if passed, will authorize the Directors of the Company, from the date of the above Annual General Meeting, to issue shares up to ten per centum (10%) of the issued and paid-up capital of the Company for the time being for such purposes as the Directors consider would be in the best interest of the Company. This authority, unless revoked or varied by the Company in general meeting, will expire at the conclusion of the next Annual General Meeting of the Company.



132

3. Authority for allotment of shares (Ordinary Resolution no.5) (cont’d)

As at the date of this Notice, no new shares in the Company were issued pursuant to the authority granted to the Directors at the Seventeenth Annual General Meeting held on 26 June 2014 and which will lapse at the conclusion of the Eighteenth Annual General Meeting to be held on 26 May 2015.

The authority will provide flexibility to the Company for any possible fund raising activities, including but not limited to further placing of shares, for purpose of funding future investment project(s), working capital and/or acquisitions.

The rationale for this resolution is to eliminate the need to convene separate general meeting(s) from time to time to seek Shareholder approval as and when the Company issues new shares and thereby reducing administrative time and costs associated with the convening of such meeting(s).

4. Proposed renewal of authority for the Company to purchase its own shares (Ordinary Resolution no. 6)

The proposed adoption of the Ordinary Resolution 6 is to renew the authority granted by the shareholders of the Company at the Annual General Meeting held on 26 June 2014 to empower the Directors of the Company to purchase not more than 10% of the issued and paid-up share capital of the Company for the time being, for such purposes as they consider would be in the best interest of the Company. This authority, unless revoked or varied at a general meeting will expire at the conclusion of the next Annual General Meeting of the Company. Further information is set out in the Share Buy-Back Statement dated 30 April 2015 which is dispatched together with the Company’s 2014 Annual Report.

5. Continuing in office as Independents Directors (Ordinary Resolution no. 7, 8 and 9)

Pursuant to Malaysian Code on Corporate Governance 2012, it is recommended that approval of shareholders be sought in the event the Company intends to retain an Independent Director who has served in that capacity for more than nine (9) years.

The Board of Directors of the Company has assessed the independence of General (R) Tan Sri Dato’ Seri Mohd Shahrom Bin Dato’ Hj Nordin, Noor Zilan Bin Mohamed Noor and Abdul Rahman Bin Ali and recommended them to continue to act as Independent Non-Executive Directors of the Company based on the justification explained in page 10 of this Annual Report.

The proposed Resolution 7, Resolution 8 and Resolution 9, if passed will enable General (R) Tan Sri Dato’ Seri Mohd Shahrom Bin Dato’ Hj Nordin, Noor Zilan Bin Mohamed Noor and Abdul Rahman Bin Ali to continue in office as Independent Non-Executive Directors of the Company.


133


Statement Accompanying Notice of Annual General Meeting

1. Directors who are standing for re-election at the 18th Annual General Meeting of TRC Synergy Berhad is Dato’ Sri Sufri bin Hj Mohd Zin.

2. Details of Board of Directors’ Meeting:–

Four (4) Board Meetings were held during the financial year ended 31 December 2014, details of which are set out in the Statement on Corporate Governance.

3. Particulars of Director standing for re-election at the 18th Annual General Meeting of TRC Synergy Berhad:-

Name Dato’ Sri Sufri bin Hj Mohd Zin

Age 59

Nationality Malaysian

Position in the Company Managing Director

Working experience/ Qualification/Occupation

Dato’ Sri Sufri Bin Hj Mohd Zin is the founder of TRC Group. He was appointed as the Director of TRC Synergy Berhad (“TRC” or “the Company”) on 29 March 2002. He graduated from Institute of Teknologi MARA (“ITM”) in 1982 with a Diploma in Business Studies. He also holds Bachelor Degree in Jurisprudence International Law (External) at Universiti Malaya and Master in Business Lay from Universiti Kebangsaan Malaysia.

Please refer to page 6 for the details of his working experience.

Other directorship of public companies Nil

Securities holdings in the Company and its subsidiaries as at 31 March 2015

47,531,517 (9.89%) (Direct Interest)118,075,200 (24.57%) (Indirect Interest)

Family relationship with any director and/or substantial shareholder of the Company

Nil

Any conflict of interest with the Company Nil

List of convictions for offences (other than traffic offences) within the past 10 years

Nil


134

TRC SYnERGY BERHAD(413192-D)(Incorporated in Malaysia)

I/We,_______________________________________of_____________________________________________________________

being a member/members of the above-named Company, hereby appoint __________________________________of_____

____________________________________________________or failing whom, _________________________________of_____

____________________________________________________ as my/our proxy to vote for me/us and on my/our behalf at the Eighteenth Annual General Meeting of the Company, to be held at Indah Ballroom, Flamingo Hotel, 5, Tasik Ampang, Hulu Kelang, 68000 Ampang, Selangor on Tuesday, 26 May 2015 at 10.30 a.m and at every adjournment thereof.

I/We direct my/our proxy to vote for or against the resolutions to be tabled at the Eighteenth Annual General Meeting as hereunder indicated.

RESOLUTIOnS FOR AGAInSTORDINARY RESOLUTION 1

To approve the payment of first and final single tier dividend of 0.18 sen per share for the year ended 31 December 2014.

ORDINARY RESOLUTION 2

To approve the payment of Directors’ Fees in respect of the financial year ended 31 December 2014.


To re-elect YBhg Dato’ Sri Sufri bin Mohd Zin who shall retire as Director of the Company pursuant to Articles 84 of the Company's Articles of Association.


To re-appoint Messrs AljeffriDean as Auditors of the Company to hold office until the conclusion of the next Annual General Meeting and to authorise the Directors to fix their remuneration.


To grant authority to the Directors to allot and issue shares pursuant to Section 132D of the Companies Act, 1965.


To approve the Proposed Renewal of Authority for Share Buy-Back.


To approve General (R) Tan Sri Dato’ Seri Mohd Shahrom Bin Dato’ Hj Nordin to continue to act as an Independent Non-Executive Director.


To approve Noor Zilan Bin Mohamed Noor to continue to act as an Independent Non-Executive Director.


To approve Abdul Rahman Bin Ali to continue to act as an Independent Non-Executive Director.

(Please indicate with an X in the space provided how you wish your vote to be cast on the resolution specified in the Notice of the Eighteenth Annual General Meeting. If this form of proxy is returned without any indication as to how the proxy shall vote, the proxy will vote or abstain from voting at his/her discretion.)

Dated this _______ day of May 2015.

………………………………………………..Signature(s)/Common Seal of Member

notes:1. A proxy may but need not be a member of the Company and the provision of section 149 (1) (b) of the Act shall not apply to the

Company.2. To be valid the proxy form duly completed must be deposited at the registered office of the Company not less than forty-eight (48)

hours before the time for holding the meeting or any adjournment thereof.3. A member holding one thousand (1,000) ordinary shares or less may appoint only one (1) proxy to attend and vote at the meeting.4. A member holding more than one thousand (1,000) ordinary shares may appoint up to two (2) proxies to attend and vote at the

meeting.5. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportions of his

holdings to be represented by each proxy.6. Where a member is an authorised nominee as defined under the Central Depositories Act, it may appoint at least one (1) proxy in

respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account.7. If the appointer is a corporation, the proxy form must be executed under its Common Seal or under the hand of its attorney.8. Only members whose names appears in the Record of Depositors as at 19 May 2015 will be entitled to attend and vote at the meeting.

No. of Ordinary Shares held

Proxy Form

The Company Secretary

TRC SYnER GY BERHA D (413192-D)

TRC Business Centre

Jalan Andaman Utama


Postage

Please fold here

Please fold here

TRC SYNERGY BERHAD (413192-D)

TRC Business Centre,

Jalan Andaman Utama,


Tel : 03 4103 8000

Fax : 03 4108 7016

www.trc.com.my

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TRC SYNERGY BERHAD(413192-D)

Vision - ChartNexusir.chartnexus.com/trc/docs/ar/2014.pdf · 2015-04-30 · However, despite the...

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Transcript of Vision - ChartNexusir.chartnexus.com/trc/docs/ar/2014.pdf · 2015-04-30 · However, despite the...