TAKING ON CHALLENGES - WZ Satu · Prior to joining WZ Satu Berhad, he was with HwangDBS Investment Bank Berhad as Senior Vice President. Mr. Tan Ching Kee is the founder of WZ Satu

TAKING ON CHALLENGES

A n n u a lR e p o r t

2 0 1 6

VISION

MISSION

We aim to be outstandingin all our business activitiesas we grow to become amajor corporate entity

enforce strict requirements of producing quality products and

services

and enhance shareholders value, whilst maintaining harmony withsociety to enhance our sustainability

superior and positive cognitions through overall excellence and dedication amongst the employees

To create

To instillTo continuously

mining

civil engineering& construction

oil & Gas

manufacturing

WZsatu inner.qxp_Layout 1 12/28/16 12:22 PM Page 1

03Corporate Structure

04Corporate Information

07Directors’ Profile

14Group Key SeniorManagement

15Chairman’sStatement

19Five-Year PerformanceHighlights

21Corporate Social Responsibility

23Corporate Governance Statement

36AdditionalComplianceInformation

37Audit Committee Report

41Statement on RiskManagement andInternal Control

45FinancialStatements

142Analysis ofShareholdings

145Analysis ofWarrant Holdings

147List of Properties

148Notice of AnnualGeneral Meeting

Form of Proxy

TABLE OFCONTENTS


Civil Engineeringand Construction

WZS KENKEONGSDN BHD

100%

Oil and Gas

MISI SETIA OIL &GAS SDN BHD

100%

Mining

SE SATU SDN BHD49%

SE SATU PELANGISDN BHD

30%

Manufacturing

WZS INDUSTRIES SDN BHD

WZS TECHNOLOGIESSDN BHD

100%

20%

Others

WENG ZHENGTRADING SDN BHD

100%

WZS POWERGENSDN BHD

60%

CORPORATESTRUCTURE

3Annual Report 2016

• key operating units


CORPORATEINFORMATION

4 WZ SATU BERHAD (666098-X)

BOARD OF DIRECTORSEXECUTIVE DIRECTORS

YM Tengku Dato' Sri Uzir BinTengku Dato' UbaidillahExecutive Chairman/Chief Executive Officer

Dato' Ir. William Tan Chee KeongSenior Executive Director/Chief Operating Officer

Tan Teng HengExecutive Director/Chief Financial Officer

Tan Ching KeeSenior Executive Director

Tan Chong BoonExecutive Director

Dato' Ir. Mohd Ghazali Bin KamaruzamanExecutive Director

ALTERNATE DIRECTORS

Ng Chong TinAlternate Director to Tan Chong Boon

Choi Chee KenAlternate Director to Dato' Ir. Mohd Ghazali BinKamaruzaman

INDEPENDENT NON-EXECUTIVE DIRECTORS

Dato' Amin Rafie Bin OthmanDeputy Chairman/Senior Independent Non-Executive Director

Datuk Idris Bin Haji HashimIndependent Non-Executive Director

Dato’ Syed Kamarulzaman Bin Dato’Syed Zainol Khodki ShahabudinIndependent Non-Executive Director

Dato' Yeong Kok HeeIndependent Non-Executive Director

Rosli Bin ShafieiIndependent Non-Executive Director

Datuk Ahmad Nizam Bin SallehIndependent Non-Executive Director(Appointed on 11 April 2016)


CORPORATEINFORMATION

5Annual Report 2016

(Cont’d)

NOMINATION COMMITTEE

Dato' Amin Rafie Bin Othman(Chairman)Datuk Idris Bin Haji HashimDato' Yeong Kok Hee

SHARIAH ADVISORY COMMITTEE

Dato’ Syed Kamarulzaman Bin Dato’Syed Zainol Khodki Shahabudin(Chairman)Tan Teng HengMarizan Nor Bin BasirunTuan Haji Sabar @ Sabal Bin HajiAbdul Rahaman (Advisor)Mahamahpoyi Hj Walah (Advisor)

COMPANY SECRETARIES

Chua Siew Chuan(MAICSA 0777689)Pan Seng Wee(MAICSA 7034299)

PRINCIPAL PLACE OF BUSINESS

Lot 1890, Jalan KPB 9Kawasan Perindustrian Balakong43300 Seri KembanganSelangor Darul EhsanTel : 03-8962 2228Fax : 03-8962 2226E-mail : [email protected] : www.wzs.my

AUDIT COMMITTEE

Rosli Bin Shafiei(Chairman)Dato’ Amin Rafie Bin OthmanDato' Yeong Kok Hee

LONG TERM INCENTIVEPLAN COMMITTEE

YM Tengku Dato' Sri Uzir BinTengku Dato' Ubaidillah(Chairman)Tan Teng HengRosli Bin Shafiei

AUDITORS

Baker Tilly Monteiro Heng (AF 0117)Baker Tilly MH TowerLevel 10, Tower 1, Avenue 5Bangsar South City59200 Kuala LumpurTel : 03-2297 1000Fax : 03-2282 9980

REGISTERED OFFICE

Level 7, Menara MileniumJalan DamanlelaPusat Bandar DamansaraDamansara Heights50490 Kuala LumpurTel : 03-2084 9000Fax : 03-2094 9940

REMUNERATION COMMITTEE

Dato’ Amin Rafie Bin Othman(Chairman)Dato' Ir. William Tan Chee KeongTan Ching KeeDato' Yeong Kok HeeRosli Bin Shafiei

INVESTMENT COMMITTEE

YM Tengku Dato' Sri Uzir BinTengku Dato' Ubaidillah(Chairman)Dato' Ir. William Tan Chee KeongTan Teng Heng

PRINCIPAL BANKERS

United Overseas Bank (Malaysia) Berhad(271809-K)OCBC Al-Amin Bank Berhad(818444-T)AmBank Islamic Berhad(295576-U)

SHARE REGISTRAR

Securities Services (Holdings)Sdn Bhd (36869-T)Level 7, Menara MileniumJalan DamanlelaPusat Bandar DamansaraDamansara Heights50490 Kuala LumpurTel : 03-2084 9000Fax : 03-2094 9940

STOCK EXCHANGE

Main MarketBursa Malaysia Securities BerhadStock Name : WZSATUStock Code : 7245Warrant Name : WZSATU-WAWarrant Code : 7245WA


SOLIDFOUNDATIONOur impressive track record is proof of our ability to handlemajor infrastructural and architectural projects. Our top-notchexpertise and extensive experience enable us to turn everyproject into an achievement.



DIRECTORS’ PROFILE

7Annual Report 2016

YM Tengku Dato’ Sri Uzir Bin Tengku Dato’ Ubaidillah, aged 57,graduated from City University, UK, with a Bachelor of Science(Honours) Degree in Civil Engineering in 1983. He started hiscareer with Jabatan Kerja Raya as an engineer before joining theprivate sectors.

He was the Managing Director cum Chief Executive Officer ofMalaysian General Investment Corporation Berhad (now knownas Sumatec Resources Berhad) from 1990 to 1993. He has alsoserved on the Board of Road Builder (M) Holdings Berhad, KurniaSetia Berhad and Project Penyelenggaran Lebuhraya Berhad, allof which were public listed companies. He was appointed as anExecutive Director of Tanah Makmur Berhad in 2011 until he wasre-designated as the Alternate Director in 2013 pursuant to hisappointment as Executive Chairman cum Chief Executive Officerof the Group on 24 October 2013. He is also the Chairman of theLong Term Incentive Plan Committee and Investment Committee.

He has vast business experience in various industries, especiallyin civil engineering, construction, plantation and propertydevelopment.

Dato’ Ir. William Tan Chee Keong, aged 61, is a member ofThe Institution of Engineers Malaysia and registered ProfessionalEngineer. He graduated from The University of Nottingham withan honours degree of Bachelor of Science in Civil Engineering.He was appointed to the Board on 12 May 2014. He wasre-designated to Senior Executive Director cum Chief OperatingOfficer of the Company on 2 July 2015. He is also a member ofthe Remuneration Committee and Investment Committee.

He started his career in Jabatan Kerja Raya and worked therefrom 1980 to 1984. He was involved in numerous roadconstruction projects and bridge designing assignments. Later,he joined Ken Holdings Sdn Bhd and Dayapi Bhd as a projectmanager tasked with overseeing various road and bridgeconstruction projects.

He joined the Road Builder (M) Holdings Berhad group in 1992as a Senior Project Manager (later Project Director) and he wasinvolved in leading a team to complete several large-scaleconstruction contracts and infrastructure developments. He wassubsequently appointed as an Executive Director in Road Builder(M) Sdn Bhd and as a Director in several subsidiaries within thegroup. During that period, he was directly responsible for theengineering, procurement and implementation aspects ofconstruction projects and the management of highwayconcessions.

He founded KenKeong Sdn Bhd in 2007 after he left the RoadBuilder group of companies. Under his leadership, the companysecured several middle and large scale projects. KenKeong SdnBhd was acquired by WZ Satu Berhad in May 2014 and renamedas WZS KenKeong Sdn. Bhd.

Executive Chairman / Chief Executive Officer

YM TENGKU DATO’ SRI UZIR BINTENGKU DATO’ UBAIDILLAH

Senior Executive Director / Chief Operating Officer

DATO’ IR.WILLIAM TAN CHEE KEONG


DIRECTORS’PROFILE


(Cont’d)

Executive Director / Chief Financial Officer

Mr. Tan Teng Heng, aged 52, is a member of the The MalaysianInstitute of Certified Public Accountants. He was appointed asthe Group’s Chief Financial Officer cum Executive Director on24 October 2013. He is also a member of the Long TermIncentive Plan Committee, Investment Committee and ShariahAdvisory Committee.

He was trained in the big four audit and consultancy firms duringhis time. He was working under an articleship with a view tocomplete his professional accountancy studies to qualify as aCertified Public Accountant. His studies was under the auspicesof The Malaysian Association of Certified Public Accountants(now known as MICPA). As a student, he not only excelled andpassed all examinations in single sittings but most notably,he was a prize winner in two professional subjects i.e. FinancialAccounting and Management Accounting.

He is well exposed to the capital markets through variouscapacities in senior management positions, principally inMalaysia with a stint in Hong Kong. He was the CEO of an optionsand futures company which was then a member of KLOFFE(Kuala Lumpur Options and Financial Futures Exchange).Prior to joining WZ Satu Berhad, he was with HwangDBSInvestment Bank Berhad as Senior Vice President.

Mr. Tan Ching Kee is the founder of WZ Satu Berhad (previouslyknown as Weng Zheng Resources Berhad which was listed onBursa Malaysia Securities Berhad on 2 January 2008).

Mr. Tan Ching Kee, aged 57, was appointed to the Board on26 October 2007 and is a Senior Executive Director. He is also amember of the Remuneration Committee.

Mr. Tan commenced his career in the iron and steel industry in1978. He started his own steel company in 1985. Mr. Tanlaunched the Company into the downstream value-addedproduction of cold drawn bright steel polished shafts to servicethe engineering support industry.

Mr. Tan has accumulated extensive knowledge during his38 years of experience in the steel trading business, with anoverlap of 20 years of having been involved in the dailyoperations and management of cold drawn bright steel polishedshaft production. He is responsible for the Group’s steel division.

Mr. Tan Ching Kee is the brother of Mr. Tan Chong Boon,a Director of the Company and brother-in-law of Mr. Ng ChongTin, an Alternate Director of the Company.

TAN TENG HENGSenior Executive Director

TAN CHING KEE


DIRECTORS’PROFILE

9Annual Report 2016

(Cont’d)

Mr. Tan Chong Boon, aged 51, graduated from Universiti PutraMalaysia (UPM) with an honours degree in Civil Engineering andwas appointed to the Board on 26 October 2007.

He has experience in the areas of designing and building civiland structural works. Upon graduation in 1991, he joined a civiland structural consulting company as a Design Engineer beforejoining the Group in 1994. He successfully established theGroup’s cold drawn bright steel production plant in 1995 andlater, he managed the Group’s venture into the production ofhigh-end free cutting polished shafts for office automation.

Mr. Tan Chong Boon is the brother of Mr. Tan Ching Kee,a Director and major shareholder of the Company.

Dato’ Ir. Mohd Ghazali Bin Kamaruzaman, aged 51, is a memberof The Institution of Engineers, Malaysia and Board of Engineers,Malaysia. He holds a Bachelor’s Degree in Civil Engineering fromVictoria University of Technology, Melbourne, Australia and aMaster’s Degree in Project Management from UniversitiTeknologi Mara (UiTM). He has over 27 years of experience incivil engineering works. He was involved in the planning,designing and building of drainage, buildings and roads. He wasappointed as an Executive Director on 24 October 2013.

He started his career in 1988 with the Shire of Melton, Victoria,Australia as a design engineer in Water and Sewerage Divisionresponsible for design, tendering and construction of Water andSewerage within the Shire. Upon returning to Malaysia he joinedPATI Sdn Bhd as an engineer responsible for tendering,execution and implementation of Continuously ReinforcedConcrete Pavement (CRCP) from Bukit Raja, Klang to Tapah,Perak. He was later attached to PATI Pave Sdn Bhd, responsiblefor the tendering, execution and implementation of pavementworks. Among notable projects that he was involved includeNorth South Expressway, Second Link, Central Link, ManilaCavite Expressway, Jalan Pahang, Lebuhraya Pantai Timur(LPT), PUTRA LRT, KL - Salak Expressway, Bangi SerembanThird Lane Widening and Simpang Pulai - Blue Valley.

In 2005, he founded Prisma Simfoni Sdn Bhd, which specialisedin road construction, earthworks, building construction andwaterworks. Some of the notable projects delivered were ThirdLane Widening Tg. Malim to Slim River, Missing Link Awan Besarto KESAS Highway, UPSI infrastructure works, Batu EmbunWater Intake and Treatment Plant, Herbal Centre Phase 2 forTechnology Park Malaysia, Commercial & Office Building forUDA (North) in Seberang Prai and Non Revenue Water (NRW)for PAIP.

Executive DirectorTAN CHONG BOON

Executive Director

DATO’ IR. MOHD GHAZALIBIN KAMARUZAMAN


Deputy Chairman /Senior Independent Non-Executive Director

DATO’ AMIN RAFIEBIN OTHMAN

Independent Non-Executive Director

DATUK IDRISBIN HAJI HASHIM


(Cont’d)

Dato’ Amin Rafie Bin Othman, aged 57, was appointed to theBoard on 26 October 2007. He is the Deputy Chairman andSenior Independent Non-Executive Director of the Board. He isalso the Chairman of the Nomination Committee, RemunerationCommittee and a member of the Audit Committee. He graduatedfrom the University College of Wales, Aberystwyth, with a jointhonours degree in Economics and International Politics in 1982.He also holds a Master of Business Administration degree fromthe City University of London, United Kingdom.

Dato’ Amin is currently the Chairman of Asia Solar GenerationVentures Sdn Bhd, and the Managing Director of PlynlymonCapital Sdn Bhd and Rampai Ulltima Sdn Bhd. He is also aDirector of PDAC Formis Sdn Bhd (Brunei) and MYP Ltd.(Singapore).

In a career spanning over 29 years, Dato’ Amin has also servedas the Managing Director of Dubai Group Sdn Bhd, CEO ofMayban Investment Sdn Bhd, Managing Director of PJB CapitalSdn Bhd, Executive Director of Smith Zain Securities, SeniorGeneral Manager and a Director of Rashid Hussain AssetManagement Sdn Bhd. He is also a past President of theMalaysian Association of Asset Managers and was a member ofthe Listing Committee of Bursa Malaysia Securities Berhad.

Datuk Idris bin Haji Hashim, aged 64, was appointed as anIndependent Non-Executive Director on 20 November 2014.He is a member of the Nomination Committee. He graduatedfrom Universiti Teknologi Mara (UiTM) with a Diploma in Townand Regional Planning in 1975. Later, he furthered his studies inUnited States and graduated with a postgraduate degree ofMaster of Science, City and Regional Planning from IllinoisInstitute of Technology, Chicago in 1978.

He started his career as an assistant town planner with ArkitekBersekutu Malaysia in 1975, where he participated in projectssuch as Pusat Bandar Bukit Raden, Kompleks PerdaganganKuantan in Pahang and Bangunan Sri Mara in Kuala Lumpur.Upon completion of his postgraduate studies, he was attachedto North-Eastern Illinois Planning Commission, Chicago as aPlanner where he was involved in various large projects in theState of Illinois as well as the New Jeddah International Airport,King Abdul Aziz University and Automotive Centre for SearsRoebuck & Co. He was appointed as a lecturer in the School ofArchitecture, Planning and Surveying of UiTM in 1980. He servedas Chairman of Perbadanan Nasional Berhad from 2009 to 2015.He retired upon attaining the mandatory retirement age.

DIRECTORS’PROFILE



DATO’ SYED KAMARULZAMAN BIN DATO’SYED ZAINOL KHODKI SHAHABUDIN

Independent Non-Executive DirectorDATO’ YEONG KOK HEE

11Annual Report 2016

(Cont’d)

Dato’ Syed Kamarulzaman Bin Dato’ Syed Zainol KhodkiShahabudin, aged 51, was appointed as IndependentNon-Executive Director on 23 April 2015 and is the Chairman ofthe Shariah Advisory Committee. He is also the ManagingDirector of Perbadanan Nasional Berhad (PNS) since1 December 2007 and is also a member of PNS’s DirectorsInvestment Committee.

He is a holder of Master in Science and CorporateCommunication from School of Modern Languages &Communication, Universiti Putra Malaysia (UPM), Bachelor inBusiness Administration from School of Business, RoyalMelbourne Institute of Technology (RMIT) and Diploma inBusiness Studies from Mara Institute of Technology.

He was previously the Managing Director of Yayasan TekunNasional and prior to that, he had accumulated over 20 years ofexperience in banking operations, corporate management,property and information technology with a last attachment atBank Muamalat Malaysia Berhad as a Branch Manager. He hadalso served as a Lecturer at Universiti Tenaga Nasional(UNITEN).

Currently, he is a Director of Focus Point Holdings Berhad.

Dato’ Yeong Kok Hee, a Malaysian, aged 56, was appointed tothe Board on 26 October 2007 as an Independent Non-ExecutiveDirector. He is a member of the Audit Committee, RemunerationCommittee and Nomination Committee. Dato’ Yeong is known notonly in the information technology arena, but also in the financialservices and corporate sector.

Dato’ Yeong is currently a consultant of CSC Malaysia Sdn Bhd,a position that he has held since 1999. As the company’sconsultant, he is focused in the areas of Managed Services,Technology Consulting and Complex System Integration.

He has established and developed a significant number ofstrategic relationships and alliances with the senior managementof the financial and governmental sectors.

DIRECTORS’PROFILE



(Cont’d)

Datuk Ahmad Nizam Bin Salleh, aged 61, was appointed to theBoard on 11 April 2016 as an Independent Non-ExecutiveDirector.

Datuk Ahmad is the holder of a Bachelor’s Degree in BusinessAdministration from Ohio University, USA and attended theAdvanced Management Program at Wharton School Universityof Pennsylvania, USA.

He held various positions such as Analyst, Planner and ProjectCoordinator in Corporate Planning and Finance divisions inPetronas Corporate Head Office from the years 1981 to 1987.Subsequently, he held various senior positions in PetronasHolding Company from years 1988 to 2002, including Head ofCrude Oil Group and Group Treasury. In 2004, he assumed theposition of Managing Director/Chief Executive Officer(“MD/CEO”) of Malaysia LNG Group of Companies and waspromoted to Vice President, Corporate Services Division ofPetronas in year 2007. From July 2010 to August 2015, he wasthe MD/CEO of Engen Ltd, South Africa, which operated in20 countries in southern Africa and Indian Ocean Islands.

Encik Rosli Bin Shafiei, aged 64, was appointed an IndependentNon-Executive Director on 28 October 2014. He is the Chairmanof the Audit Committee and a member of RemunerationCommittee and Long Term Incentive Plan Committee. He holdsan Advanced Diploma in Accountancy from Universiti TeknologiMara and is a member of the Malaysian Institute of Accountants.

He has extensive experience in finance, insurance and banking,infrastructure and building construction, offshore construction,installation and oil and gas related services industries; havingheld senior positions in private and public listed companies.

Following the acquisition by UEM Group, he was appointed asthe Chief Operating Officer/Director of PATI Sdn Bhd, responsiblefor the operations of the group which was primarily involved inconstruction, quarrying and supplying construction materials.Subsequently in 2003, upon completion of acquisition of IntriaBhd and restructuring of the UEM Group, he assumed theposition of Chief Financial Officer for UEM Builders Bhd. He leftUEM Builders Bhd upon attaining the mandatory retirement agein 2007.

Thereafter, he was also appointed as Chief Financial Officer forWillis (Malaysia) Sdn Bhd, insurance brokers and consultantsfrom January 2011 to February 2013.


DATUK AHMAD NIZAMBIN SALLEH

Independent Non-Executive DirectorROSLI BIN SHAFIEI

DIRECTORS’PROFILE



(Cont’d)

Mr. Ng Chong Tin, aged 51, was appointed to the Board on26 October 2007. On 12 May 2014, he was re-designated as anAlternate Director to Mr. Tan Chong Boon. He embarked on hiscareer in the steel industry in 1985 and joined the Group in itsearly days as a co-founder and Director.

To date, Mr. Ng has 33 years of experience in the developmentof sales and marketing strategies based on customer feedbackas well as analysing changing consumer trends. Mr. Ng isprimarily in charge of the sales and marketing functions of theGroup’s steel trading business.

Mr. Ng Chong Tin is the brother-in-law of Mr. Tan Ching Kee,a Director and major shareholder of the Company.

Mr. Choi Chee Ken, aged 53, was appointed as an AlternateDirector to Dato’ Ir. Mohd Ghazali Bin Kamaruzaman on28 October 2014. He holds a Bachelor’s Degree in CivilEngineering from Ohio University, USA.

He has over 26 years of working experience in the constructionand building materials industry. He began his career as anEngineer in Associated Concrete Product Sdn Bhd in 1989. Later,he joined Sepakat Setia Perunding Sdn Bhd as a ConsultantEngineer. From 1996 until 2005, he was a Senior Project Managerin Road Builder (M) Sdn Bhd.

He teamed up with Dato’ Ir. William Tan Chee Keong to formKenKeong Sdn Bhd in 2007 which was acquired by WZ SatuBerhad in May 2014 and renamed as WZS KenKeong Sdn. Bhd.Currently, he is an Executive Director of WZS KenKeong SdnBhd.

Alternate Director to Dato’ Ir. Mohd Ghazali Bin Kamaruzaman

CHOI CHEE KENAlternate Director to Mr. Tan Chong Boon

NG CHONG TIN

DIRECTORS’PROFILE


Group key seniormanagement


He was appointed to the Board on 12 May 2014 and wasre-designated to Senior Executive Director cum Chief OperatingOfficer of the Company on 2 July 2015. His profile is listed in theProfile of Directors on page 7 of this Annual Report.

He was appointed as the Group’s Chief Financial Officer cumExecutive Director on 24 October 2013. His profile is listed in theProfile of Directors on page 8 of this Annual Report.

Encik Marizan Nor Bin Basirun was appointed as Chief TechnicalOfficer on 2 July 2015. He holds a BSc. (Hons) MechanicalEngineering from Leeds University, United Kingdom. He alsoholds a Master of Business Administration degree from SheffieldBusiness School, Sheffield Hallam University, United Kingdom.

He has accumulated over 30 years of experience in power,energy, alternative fuels, wind turbines, marine engineering andhomogenizer product systems. He was previously an ExecutiveDirector of Rohas-Euco Industries Bhd.

He was appointed as Executive Chairman cum Chief ExecutiveOfficer of the Group on 24 October 2013. His profile is listed inthe Profile of Directors on page 7 of this Annual Report.

Senior Executive Director / Chief Operating OfficerAged 61

DATO’ IR. WILLIAMTAN CHEE KEONG

Executive Chairman / Chief Executive OfficerAged 57

YM TENGKU DATO’ SRI UZIR BINTENGKU DATO’ UBAIDILLAH

Chief Technical OfficerAged 58

MARIZAN NOR BIN BASIRUNExecutive Director / Chief Financial Officer

Aged 52

TAN TENG HENG

• All Directors and members of the Key Senior Management are Malaysian and of male gender.

• Save as disclosed, none of the Directors and members of the Key Senior Management have:

1. any other directorships in public companies and listed issuers;

2. any family relationship with any Director and/or major shareholder;

3. any conflict of interest with the Company;

4. any convictions for offences within the past 5 years other than traffic offences, if any; and

5. any public sanction or penalty imposed by the relevant regulatory bodies during the financial year.



COMMENDABLE PROFIT GROWTH

The Group’s profit after tax achieved a growth of 12.7% toRM23.0 million from RM20.4 million in the previous financial year.

GROUP’S FINANCIAL PERFORMANCE

For the financial year ended 31 August 2016, the Groupgenerated RM465.9 million in turnover as compared withRM351.4 million for the preceding financial year.

The increase in turnover is principally contributed by the increasein contribution from WZS KenKeong Sdn Bhd (WZS KenKeong),the civil engineering and construction subsidiary of RM257.6million as compared with its preceding year’s turnover of onlyRM155.0 million. The oil and gas subsidiary, Misi Setia Oil & GasSdn Bhd (Misi) contributed a turnover of RM113.9 million and thebalance turnover was contributed by the manufacturing andother businesses.

The Group’s turnover did not include any contribution from themining division as the results of the associated companies wereonly equity accounted.

The major contributors to the Group’s bottom line were bauxitemining and civil engineering and construction with a contributionof RM9.7 million and RM8.7 million, respectively. Whilst the oiland gas division contributed RM3.3 million, the manufacturingand other businesses collectively turned around and posted netprofits of RM1.6 million as compared to a loss of RM6.1 million inthe preceding year.

The Group’s order book stands at RM931.8 million as at31 August 2016.

DEAR SHAREHOLDERS,ON BEHALF OF THE BOARD OF DIRECTORS OF WZ SATU BERHAD (THE

GROUP), I AM DELIGHTED TO PRESENT TO YOU OUR ANNUAL REPORT ANDAUDITED FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED

31 AUGUST 2016

This financial year tested theresilience of the Group as the

operating conditions werechallenging. The overall macroconditions have not improvedand the level of uncertainties

have impacted the operationsof key operating units

Despite the difficult operatingenvironment, the financial year

under review continued toproduce commendable results

for the Group.

CHAIRMAN’S STATEMENT



Oil and Gas Industry Division

The continued weakness in the priceof crude oil has severely affected theentire oil and gas industry. Misi, being anonshore oil and gas industry serviceprovider, was not as highly affected by therecent turmoil in oil prices as compare withthat of the offshore oil and gas players.

Misi’s investment in the Automated PipeSpooling fabrication plant in Gebeng,Kuantan has kicked off with the maidencontract to provide pipe spool pre-fabrication work to The Refinery andPetrochemical Integrated Development(RAPID) Package 4 - Amine Recovery Units,Sulfur Recovery Units, Sour WaterStripping Units, Liquid Sulfur Storage Unitsand Sulfur Solidification Units. This facilityhas enhanced Misi’s position in providinga more comprehensive suite of servicesand enabled Misi to strategically positionitself to fill the vacuum in the pipe spoolingcapacity in the local market.

Misi continued to perform well in the areasof products and services for valves andmetering for the oil and gas industry.Presently, Misi holds the agency for anextensive metering, valve and relatedmeasuring solutions from GE Sensing, IMICCI, Cameron and Scott Safety.

Given the current circumstances, Misi’sperformance is commendable and theGroup is optimistic that it will contributemeaningfully to the Group’s profitabilitygoing forward.

OPERATIONAL REVIEWS ANDPROSPECTS

Civil Engineering and ConstructionDivision

The Group’s civil engineering andconstruction arm, WZS KenKeong wasimpacted by the intense competitioninherent in this industry. After laying thefoundation with talent pool and investmentin plants and machineries, it is poised totaking on greater challenges and biggerticket items.

The existing jobs in hand will sustain WZSKenKeong for the next two to three years.Having said that, the Group is confidentthat its order book will grow well beyondthe run-off rate. Presently, all our jobs areinfrastructure related works and we are notinvolved in the construction of buildings.

The Group has entered into acollaboration agreement with UEM GroupBerhad and has also proposed theimplementation of the Central Spine Roadproject to the government. The Group isoptimistic that the collaboration with UEMGroup will be successful.

RM465,933,207Revenue

RM81,459,389Gross Profit

(Cont’d)

CHAIRMAN’SSTATEMENT




(Cont’d)

Mining Division

The Group’s mining operations through itsassociate companies were adverselyaffected by the moratorium imposed bythe regulatory authorities. The after taxcontribution from this division fell sharplyto RM9.7million from RM18.5 million in thepreceding year.

Despite the uncertainties surrounding themoratorium, the Group is optimistic thatissues resulting in the moratorium, giventime, will be resolved. Hence, the Groupis optimistic of the mining division'scontinued significant contribution to itsprofitability in the foreseeable future.

Manufacturing and Other Businesses

The Group’s bright steel manufacturingbusiness in Malaysia continued tooperate under difficult market conditions.Despite the turnaround in the results, theGroup remains cautious on the outlook ofour manufacturing operations in thecoming year.

The Group’s power generation businessunder WZS Powergen Sdn Bhd hassecured orders for supplying standbymobile diesel generators to SabahElectricity Sdn Bhd and operationallyturnaround.

The Group has realigned its businessesthat require intensive capital and longgestation period with the disposal,amongst others, of its bright steelmanufacturing operations in Indonesia.The disposals of these businesses are tooptimise the Group’s return on assetsdeployed and shareholders’ value.

““The Group has realigned its

businesses that requireintensive capital and longgestation period with the

disposal, amongst others, of itsbright steel manufacturing

operations in Indonesia.



(Cont’d)

DIVIDEND

The Group has proposed a final dividend of 2 sen per share anda special dividend of 1 sen per share to the shareholders.This final dividend of 2 sen per share represents a pay-out of30% of its profit after taxation and the special dividend of 1 senper share represents a pay-out of an additional 15% of its profitafter taxation.

Cumulatively, this is well above the dividend policy of distributing20% to 35% of the Group’s consolidated profit after taxation andnon-controlling interests in respect of any financial year to itsshareholders.

CORPORATE SOCIAL RESPONSIBILITY

During the financial year, the Group Corporate SocialResponsibility initiatives include visits to an orphanage and anorang asli settlement, namely, Pusat Jagaan Kanak-KanakYatim/Miskin Rukaiyah at Sungai Merab Kajang, Selangor andPerkampungan Orang Asli Kampung Donglai Baru, Hulu Langat,Selangor. During the visits, we conducted various activitiesincluding birthday celebrations with the orphans, “gotong-royong” to clean and spruce the orphanage and settlement andprovided basic assistance.

The Group is committed to its corporate social responsibility andgoing forward, we will continue to engage in corporate socialresponsibility initiatives.

ACKNOWLEDGEMENT

I wish to extend a warm welcome to Datuk Ahmad Nizam Bin Salleh as an Independent Non-Executive Director. The Group will standto benefit from his vast experience in the oil and gas industry. I would like to thank our stakeholders, whom comprise shareholders,bankers, customers and suppliers, for their support and trust in the Group. Lastly, I wish to express my sincere gratitude to the Boardof Directors, management and staff for their contributions, which are crucial to the Group’s continued success.

On behalf of the Board,

YM TENGKU DATO’ SRI UZIR BIN TENGKU DATO’ UBAIDILLAHExecutive Chairman/Chief Executive Officer




12 months 12 months 16 months 12 months 12 months2012 2013 2014 2015 2016

RM’000 RM’000 RM’000 RM’000 RM’000

Revenue 84,684 86,932 160,388 351,422 465,933

Gross Profit 10,133 8,907 29,294 62,486 81,459

EBITDA 6,311 7,594 22,959 42,130 46,308

Depreciation and amortisation (3,515) (2,825) (3,382) (5,072) (7,300)

Finance costs (1,524) (1,963) (2,144) (3,437) (6,026)

Share of results of an associate, net of tax - - 4,476 18,537 9,392

Profit before tax 1,272 2,806 15,373 26,734 27,996

Taxation (471) (93) (1,774) (4,101) (4,976)

Loss for the financial period/year from discontinued operation, net of tax - - (1,918) (2,207) -

Profit after tax 801 2,713 11,681 20,426 23,020

Weighted Average Number of WZ Satu shares (’000) 99,075 98,858 124,662 298,176 329,648

Gross margin (%) 11.97% 10.25% 18.26% 17.78% 17.48%

PAT margin (%) 0.95% 3.12% 7.28% 5.81% 4.94%

Basic EPS (sen) 0.81 2.74 9.37 6.95 7.00

FIVE-YEARPERFORMANCE HIGHLIGHTS


Revenue(RM’000)

2012 2013 2014 2015 2016 2012 2013 2014 2015 2016

2012 2013 2014 2015 2016 2012 2013 2014 2015 2016

EBITDA

GROSS PROFIT(RM’000)

(RM’000) (RM’000)

PROFIT AFTER TAX

+33% +30%

+10% +13%

84,684 86,932 160,388 351,422 465,933

6,311 7,594 22,959 42,130 46,308

10,133 8,907 29,294 62,486 81,459

801 2,713 11,681 20,426 23,020

FIVE-YEARPERFORMANCE HIGHLIGHTS(Cont’d)




CORPORATE SOCIAL RESPONSIBILITY

PUSAT JAGAAN KANAK-KANAK YATIM / MISKIN RUKAIYAHOn 31 October 2015, the Group visited Pusat Jagaan Kanak-Kanak Yatim / Miskin Rukaiyah at Sungai Merab, Kajang with theobjective of bringing cheer and joy to underprivileged children. The Group contributed much needed basic food items andstationeries to the children. The Group assisted in clean-up efforts of the area, planting, housekeeping, painting and giving talks tothe children on basic health, safety and environmental awareness issues. The visit not only benefited the children but also fosteredgreater camaraderie amongst the Group’s employees who volunteered in this programme.


corporatesocial responsibility(Cont’d)


ORANG ASLI KG. DONGLAI BARU, HULU LANGAT, SELANGOROn 27 August 2016, the Group visited Orang Asli Community at Kg. Donglai Baru, Hulu Langat, Selangor. This programme saw agood participation of 60 employees with 250 Orang Asli. The programme included exercises, tele-matches and gift packs to OrangAsli children. Our Group’s Health, Safety and Environment Representative promoted awareness on food nutrition and cleanlinessand a joint luncheon was held afterwards. This programme brought much warmth and cheer to the Orang Asli and our employees.


Corporate GovernanceStatement

The Board of Directors of WZ Satu Berhad (the Board) continues to uphold its commitments to the highest standard of corporategovernance and best practices that are set out in the Malaysian Code on Corporate Governance 2012 (the Code) issued by theSecurities Commission Malaysia and provisions in the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (MMLR)throughout the Group.

The Board will continue to review and enhance the Group’s corporate governance framework to ensure its relevance and ability inmeeting future challenges in its course to enhance shareholders value and establish long term sustainable value for otherstakeholders. The Board is pleased to report below on the extent to which the principles and best practices of the Code were appliedthroughout the financial year ended 31 August 2016.

PRINCIPLE 1: ESTABLISHING CLEAR ROLES AND RESPONSIBILITIES OF THE BOARD

THE BOARD OF DIRECTORS

It is the overall governance responsibilities of the Board to lead and control the Group. Amongst others, these responsibilities includecharting the strategic direction of the Group and supervising its affairs to ensure its success; implementation of suitable and effectivesystem of internal control and risk management; and ensuring compliance with the relevant laws, regulations, guidelines anddirectives.

Clear Roles and Responsibilities of the Board

The Board has established clear functions reserved for its members and those delegated to management. This allocation ofresponsibilities reflects the dynamic nature of the relationship necessary for the Group to adapt to changing circumstances.

Key matters such as approval of interim and annual financial results, acquisitions and disposals, investments, as well as materialagreements are reserved for the Board, while a capable and experienced management team is put in charge to oversee theday-to-day operations of the Group.

In line with the practice of good corporate governance, the Board has established and implemented various processes to assistmembers of the Board in the discharge of their roles and responsibilities. The Board’s roles and responsibilities include the following:

(a) reviewing and adopting strategic plans for the Group; (b) overseeing the conduct of the Group’s businesses to evaluate whether the businesses are being properly managed; (c) reviewing principal risks and ensuring the implementation of appropriate systems of internal control to manage risks and adoption

of relevant mitigation measures; (d) reviewing the adequacy and integrity of the Group’s internal control systems and management information systems, including

systems for compliance with applicable laws, regulations, rules, directives and guidelines; (e) reviewing and approving succession planning, including appointing, training, compensating and where appropriate replacing

key principal officers; and (f) developing and implementing investors’ relations programmes and shareholder communication policy for the Group.

Board Committees

To ensure effectiveness in discharging its responsibilities, the Board delegates specific powers to other Board Committees as follows:

(a) Nomination Committee; (b) Remuneration Committee; (c) Audit Committee; (d) Shariah Advisory Committee; (e) Long Term Incentive Plan Committee; and(f) Investment Committee.





(CONT’D)

Board Diversity

The Board recognises that board diversity is an essential element contributing to the sustainable development of the Group anddoes not discriminate on the basis of ethnicity, age, gender, nationality, political affiliation, religious affiliation, marital status, educationbackground or physical ability. There is no specific target in the composition in terms of gender, age or ethnic of its Board membersor members of Senior Management.

The Board acknowledges the recommendation of the Code on gender diversity but believes that the overriding factors in selectionof a Director must be based on skill, experience, competency and wealth of knowledge, while taking into consideration diversity ofthe Board. The Group had established a Board Diversity Policy to formalise its diversity approach as above.

Board Charter

The Board Charter which broadly sets out the Board’s governance process and Board-Management relationship, has been reviewedand adopted by the Board.

The Board Charter sets out, among others, the following:

(a) the principal role of the Board;(b) the functions, roles, responsibilities and powers of the Board;(c) the functions, roles, responsibilities and powers of its various committees;(d) processes and procedures for convening Board Meetings;(e) Board’s access to information and professional advice;(f) continuing development and training;(g) succession plan; (h) the role of Secretary; and(i) division of authority between the Board and the Management.

The Board Charter was last reviewed and updated on 8 December 2016 in accordance with the needs of the Group and any newregulations to ensure its relevance.

Code of Conduct

The Group established appropriate standards of business conduct and ethical behaviour to govern the exercise of the Directors’duties and responsibilities as Directors of the Company in order to uphold good corporate integrity.

The Code of Conduct sets out the general principles and standards of business conduct and ethical behaviour for the Directors inthe performance and exercise of their responsibilities as Directors of the Company or when representing the Group and includesthe expectation of professionalism and trustworthiness from the Directors.

Whistle Blowing Policy

The policy provides an avenue for any Director, officer, employee and members of the public to report instances of unethical, unlawfulor undesirable conduct on a confidential basis without fear of intimidation or reprisal. Nothing in this policy shall interfere with otherestablished operational policies and processes. All disclosures pursuant to this policy are to be made to an IndependentNon-Executive Director. The Board shall be apprised of disclosure matters which are serious in nature or of grave repercussions.

Confidential reports can be channeled online via this email address: [email protected].

Sustainability Policy

The Board has formalised the Group’s strategies on promoting sustainability. The Board and the Management are committed tocontinually improving the integration of sustainability into working environment and business processes, together with theaccountability and transparency in the sustainability performance.




(CONT’D)

In order to operate with sustainability, the key impact areas are to ensure operations and services are safe for the employees,customers and that environmental quality considerations are incorporated into the Group’s daily business activities which areundertaken and accountable by every employee; create an inspiring workplace that helps to build a diverse work force whichcontributes to highest potential and commits to a harassment free working environment, where every employee is treated fairly andwith respect; and to adhere to the requirements of all laws and regulatory requirements, standards and best practices to which theGroup subscribes and establish and adopt high ethical values and ensure these practices are upheld across the business.

The Board Diversity Policy, Board Charter, Code of Conduct, Whistle Blowing Policy and Sustainability Policy are published on theCompany’s corporate website at www.wzs.my.

Supply and Access to Information

The Board, in order to enable them to discharge their duties effectively, has full and unrestricted access to the Management andCompany Secretaries for all information pertaining to the businesses and corporate affairs of the Group. If need arises, the Boardmay also seek appropriate external independent professional advice at the Group’s expense.

Prior to Board or Board Committee meetings, the agenda, minutes of previous meeting and board papers are circulated to theDirectors to allow sufficient time to ensure that they receive the necessary information in advance so that they can review, considerand deliberate on the matters, and where necessary, obtain further information to facilitate informed decision making.

Qualified and Competent Company Secretary

The Board is supported by experienced and competent Company Secretaries in discharging its duties and responsibilities.The Board receives regular advice, updates and notices from the Company Secretaries to ensure compliance with applicable laws,regulations and corporate governance matters. The Company Secretaries attend and ensure that all Board and Board Committeemeetings are properly convened and all deliberations and decisions are properly minuted and kept. They are also responsible inensuring that Board’s policies and procedures are followed, and the applicable statutory and regulatory requirements are observed.

PRINCIPLE 2: STRENGTHENING THE BOARD’S COMPOSITION

Composition and Balance of the Board

The Board has fourteen (14) members comprising six (6) Executive Directors, six (6) Independent Non-Executive Directors and two(2) Alternate Directors. The present composition of the Board has the requisite number of Independent Non-Executive Directors asprescribed by the MMLR to facilitate effective and independent decision making and balance of power.

The Board Members have diverse backgrounds and experience in various fields. Collectively, these Board members bring theirstrength to bear on issues of oversight, strategy, performance, control, resource allocation and integrity. The Board is also wellbalanced as both the major and minority shareholders are also represented.

The Chairman of the Board is presently held by an Executive Director and in such instances, the Code recommends that the Boardcomposition should consist of a majority of Independent Directors. Despite the Chairman being an Executive member of the Board,the Board considers its current size adequate given the existing scope and nature of the Group’s operations. The Board takes comfortin the presence of Independent Non-Executive Directors with distinguished records and credentials to ensure that there areindependent views and judgments. The Independent Non-Executive Directors vocalise their concerns whenever necessary to ensureproper checks and balances are in place in Board decisions and implementation of policies.

The Board is satisfied that notwithstanding Tengku Dato’ Sri’s Executive Chairmanship, he has shown deep commitment, impartialleadership, and abilities in discharging his duties effectively. In order to ensure effective conduct of the Board, the Board conductsits proceedings in accordance with the statutory requirements and best practices. The Board has also appointed a Deputy Chairmanof the Board, who is a Senior Independent Non-Executive Director. During the financial year, the Board had also appointed anadditional Independent Non-Executive Director to reinforce independence and corporate governance.




(CONT’D)

In addition, the Board has identified Dato’ Amin Rafie Bin Othman, the Deputy Chairman cum Senior Independent Non-ExecutiveDirector to whom concerns may be conveyed by shareholders and the general public. Dato’ Amin Rafie Bin Othman is also theChairman of the Nomination Committee and Remuneration Committee and a member of the Audit Committee.

The profiles of the members of the Board, are set out on pages 7 to 13 of this Annual Report.

Criteria for Recruitment

The Nomination Committee has the responsibility of evaluating, proposing and recommending new candidates for appointment tothe Board and Committees to the Board. In reviewing and recommending to the Board any new appointment of a Director,the Nomination Committee considers:

(a) age, expertise, experience, professionalism, integrity, capability and such other factors which would contribute to the Board’scollective skills;

(b) composition requirements for the Board and Committees; and(c) the number of directorships held by the candidate in other public listed companies i.e., not more than five (5). This ensures that

their commitments, resources and time are focused on the affairs of the Group to enable them to discharge their duties effectivelyand to comply with the MMLR.

The process flow for the appointment of a new director is as follows:

At the time of appointment, the Board shall obtain the Directors’ commitment to devote sufficient time to carry out their responsibilities.Directors are required to notify the Chairman before accepting any new directorship and they are aware of this requirement. Inaddition, they are required to indicate the time expected to be spent on the new appointment.

Board Performance Evaluation and Review

The Board carried out an annual assessment on the overall effectiveness of the Board as a whole, its Board committees and individualDirectors. The objective is to improve the Board’s effectiveness by identifying gaps, addressing weaknesses and maximisingstrengths. Using a combination of self and peer assessments, Directors obtain feedback on their level of effectiveness on variousperformance aspects via a series of questions and answers. Responses from the Directors were analysed and presented to theBoard, and areas requiring improvements are addressed by the Board and Management.

Re-election and Re-appointment of Directors

All newly appointed Directors are subject to re-election by the shareholders at the next Annual General Meeting (AGM) in accordancewith the Company’s Articles of Association (the Articles).

The Articles also provide that at least one-third (1/3), or the number nearest one-third (1/3) of the remaining Directors shall retirefrom office and be eligible for re-election at each AGM provided that all Directors shall retire from office at least once in every three(3) years but shall be eligible for re-election.

Accordingly, YM Tengku Dato’ Sri Uzir Bin Tengku Dato’ Ubaidillah, Mr. Tan Teng Heng, Mr. Tan Ching Kee and Dato’ Ir. MohdGhazali Bin Kamaruzaman will be retiring in accordance with Article 84 of the Articles; whilst Datuk Ahmad Nizam Bin Salleh will beretiring in accordance with Article 91 of the Articles.

Identification ofCandidates

Evaluation ofSuitability

Deliberation byNC

Recommendationto the Board




(CONT’D)

Board Committees

To ensure the effective discharge of its fiduciary duties and responsibilities more effectively, the Board delegates specificresponsibilities to Board Committees, namely the Audit Committee, Nomination Committee, Remuneration Committee, ShariahAdvisory Committee, Long Term Incentive Plan Committee and Investment Committee.

All Committees function within and in accordance with clearly defined terms of reference that were approved by the Board.These Committees have unrestricted authority to examine issues and submit reports of their findings to the Board. As the Committeeshave no authority to make decisions on matters reserved for the Board, the recommendations would be deliberated by the Board fordecisions.

The responsibilities, compositions and activities of the abovementioned Committees are described below:

(a) Nomination Committee

The Nomination Committee is empowered by the Board among others to recommend to the Board the right candidate with thenecessary skills, experience and competencies to be filled in the Board and Board Committees, re-election and re-appointmentof Directors.

The Nomination Committee also assesses the effectiveness of the Board as a whole, the Board Committees and the contributionof each individual Director, including Independent Non-Executive Directors on an annual basis. The Directors are provided witha questionnaire to carry out the assessments with absolute anonymity and are based on their competence, capability,time commitment, integrity, participation and contribution in Board and committees. The results are then tabulated and presentedto the Nomination Committee for its review and recommendation to the Board for notation. A summarised version of the resultsis circulated to each Director for their information. The criteria that are used in the assessments of the Board/Committees includethe required mix of skills and experience and the effectiveness of the Board/Committees.

During the financial year under review, the Nomination Committee held two (2) meetings to deliberate and report to the Boardon the following:

• review of the profile and nomination of new Board member;• assessment of the independence of independent directors;• review of the Directors who were due for re-election by rotation and re-appointment; • review of the retention of independent directors whose tenure have exceeded nine (9) years;• review of the Board’s representation and the required mix of skills and experience and assessing the effectiveness of the

Board as a whole; • review of the current size and composition of the Board; • review and deliberation on the findings and outcomes of the assessments of the Board, Board Committees and Directors;

and• review of the term of office and performance of the Audit Committee and each of its members.

The terms of reference of the Nomination Committee is available for reference on the Company’s website at www.wzs.my

All members of the Nomination Committee are Independent Non-Executive Directors. The details of the members and theirattendance during the financial year are as follows:

Name Attendance

Dato’ Amin Rafie Bin Othman (Chairman) 2/2

Datuk Idris Bin Haji Hashim 2/2

Dato’ Yeong Kok Hee 2/2




(CONT’D)

(b) Remuneration Committee

This Committee is primarily responsible for reviewing and recommending the appropriate level of remuneration for the ExecutiveDirectors and the Non-Executive Directors.

The Remuneration Committee’s responsibilities include the following:

• To set, review, recommend and advise the policy framework on all elements of the remuneration such as reward structure,fringe benefits and other terms of employment of Executive Directors having regard to the overall Group policyguidelines/framework;

• To advise the Board on the performance of the Chief Executive Officer and Executive Directors, and an assessment of theirentitlements to performance related pay; and

• To review the history of and proposals for the remuneration package of the Board’s committees.

Remuneration Policy

The Board believes that appropriate and competitive remuneration is important to attract, retain and motivate Directors of thenecessary calibre, expertise and experience to lead the Group. In line with this philosophy, remuneration for the ExecutiveDirectors is aligned to individual and corporate performance. For Non-Executive Directors, the fees are set based on theresponsibilities shouldered by the respective Directors. Individual Directors do not participate in determining their ownremuneration package.

The Remuneration Committee recommends the policy for assessing the compensation package for the Executive Directors.It also reviews and recommends to the Board for approval the remuneration packages and other employment conditions for theExecutive Directors.

The remuneration of Executive Directors is made up of basic salaries, monetary incentives and fringe benefits; and is linked tothe achievement of corporate performance targets. Salaries for Executive Directors consist of both fixed (i.e. base salary) andvariable (performance-based incentive) remuneration components. The remuneration levels of Executive Directors are structuredto enable the Company to attract and retain the most qualified Executive Board members. The Company may provide competitivebenefits to Executive Directors, such as a fully expensed car or cash alternative in lieu of car, company driver, fuel expenses,private medical insurance and life insurance. Allowances relating to business expenses (i.e. entertainment and travel) incurredare reimbursed such that no additional compensation is given to the Executive Directors.

The remuneration of Non-Executive Directors is made up of Directors’ fees and meeting allowances. The level of remunerationfor Non-Executive Directors shall reflect the experience and level of responsibilities undertaken by the Non-Executive Directorconcerned. The remuneration of a Non-Executive Director shall not be based on commission, the percentage of profits,or turnover. Non-Executive Directors are not entitled to receive performance-based bonuses nor participate in short-term and/orlong-term incentive plans. The emoluments of Non-Executive Directors are reviewed by the Remuneration Committee and Boardannually.

Details of the Directors’ remuneration for the financial year ended 31 August 2016 are as follows:

Company

Amount (RM’000) Executive Non-Executive

Fee - 296Salary 1,320 -Other remuneration and emoluments 802 32Estimated value of benefits-in-kind 28 7




(CONT’D)

Group

Amount (RM’000) Executive Non-Executive

Fee - 306Salary 3,121 -Other remuneration and emoluments 1,428 32Estimated value of benefits-in-kind 37 7

The aggregate remuneration paid to Directors by the Company during the year, is analysed into the followings bands:

Company

Number of DirectorsRange of Remuneration Executive Non-Executive

RM1 to RM50,000 - 1RM50,001 to RM100,000 - 5RM650,001 to RM700,000 1 -RM700,001 to RM750,000 1 -RM750,001 to RM800,000 1 -

Group

Number of DirectorsRange of Remuneration Executive Non-Executive

RM1 to RM50,000 - 1RM50,001 to RM100,000 - 5RM350,001 to RM400,000 2 -RM450,001 to RM500,000 2 -RM500,001 to RM550,000 1 -RM700,001 to RM750,000 1 -RM750,001 to RM800,000 1 -RM800,001 to RM850,000 1 -

During the financial year, the Committee conducted one (1) meeting to review the remuneration of all Executive Directors,their performance, their terms of service agreement, bonuses and to perform a self-assessment of its performance. The detailsof the members and their attendance during the financial year are as follows:

Name Attendance

Dato’ Amin Rafie Bin Othman (Chairman) 1/1Dato’ Ir. William Tan Chee Keong 1/1Tan Ching Kee 1/1Dato’ Yeong Kok Hee 1/1Rosli Bin Shafiei 1/1




(CONT’D)

(c) Audit Committee

Composition of the Audit Committee, its function and a summary of its activities are set out on pages 37 to 40 of this AnnualReport.

(d) Shariah Advisory Committee

The Shariah Advisory Committee was established on 1 April 2016 to perform an oversight role on Shariah matters related to theGroup’s business operations and activities. The Shariah Advisory Committee shall be responsible and accountable for all itsdecisions, views and opinions related to Shariah matters. The Shariah Advisory Committee shall ensure that decisions are madeafter undergoing rigorous and robust research and deliberation exercises.

The details of the members and their attendance during the financial year are as follows:

Name Attendance

Dato’ Syed Kamarulzaman Bin Dato’ Syed Zainol Khodki Shahabudin (Chairman) 1/1Tan Teng Heng 1/1Marizan Nor Bin Basirun 1/1Tuan Haji Sabar @ Sabal Bin Haji Abdul Rahaman (Advisor) 1/1Mahamahpoyi Hj Walah (Advisor) 0/1

Main duties of the Shariah Advisory Committee shall include:

• Provide Advice to the Board

The Shariah Advisory Committee shall advise the Board and provide input to the Group on Shariah matters in order for theGroup to comply with Shariah principles at all times.

• Endorse Shariah Policies and Procedures

The Shariah Advisory Committee shall endorse Shariah policies and procedures prepared by the Company and ensure thatthe contents do not contain any elements which are not in line with Shariah principles.

• Assist Related Parties on Shariah Matters upon Request for Advice

The related parties of the Company such as its legal counsel, auditors or consultant may seek advice on Shariah mattersfrom the Shariah Advisory Committee. The Shariah Advisory Committee is expected to provide the necessary assistance tothe requesting party to ensure compliance and subscription with Shariah principles.

• Provide Written Shariah Opinion

The Shariah Advisory Committee is required to record any opinion given. In particular, the Shariah Advisory Committee shallprepare written Shariah opinions where by the Company makes reference to the Shariah Advisory Committee for furtherdeliberation.




(CONT’D)

(e) Long Term Incentive Plan Committee

The Long Term Incentive Plan Committee was established to implement and administer the Executive Share Option Schemeand Executive Share Grant Scheme.

The details of the members are as follows:

Name

YM Tengku Dato’ Sri Uzir Bin Tengku Dato’ Ubaidillah (Chairman) Tan Teng Heng Rosli Bin Shafiei

The Long Term Incentive Plan Committee’s terms of reference includes the following:

• set the criteria and determine the eligibility of any employee or any Director to participate in the Long Term Incentive PlanScheme;

• determine the number of shares to be comprised in an offer to be made to any employee or any Director; • impose condition(s), if any, on any Long Term Incentive Plan option granted, preventing its exercise unless such condition(s)

has been complied with;• determine the manner in which any employee or any Director being made an offer to participate in the Long Term Incentive

Plan Scheme may accept such an offer; • suspend, reinstate, vary or cancel the rights of a Grantee where it is deemed appropriate; • determine the rate of discount to and the subscription price of the option; and • hear any dispute raised by any employee on any matter in relation to the Long Term Incentive Plan Scheme and after due

consideration, issue its decision.

(f) Investment Committee

The Investment Committee was established on 23 September 2016 with the principle objective to make day-to-day investmentdecisions up to the pre-approved limit determined by the Board of Directors.

The details of the members are as follows:

Name

YM Tengku Dato’ Sri Uzir Bin Tengku Dato’ Ubaidillah (Chairman)Dato’ Ir. William Tan Chee Keong Tan Teng Heng

The Investment Committee’s terms of reference includes the following:

• to invest up to the prescribed amount as determined by the Board from time to time; • to evaluate and recommend to the Board, proposals on new investments and divestments of significant value for the Board’s

approval; • to conduct annual evaluations of the Group’s investment activities; • to act in line with the directions of the Board of Directors; and• to consider and examine such other matters as the Investment Committee considers appropriate.




(CONT’D)

PRINCIPLE 3: REINFORCING INDEPENDENCE

Board Independence

Independence is important for ensuring objectivity and fairness in the Board’s decision making. In order to uphold the independenceof Independent Directors, the Board has adopted the following recommendations of the Code as the Board’s policies:

(a) subject to the Board’s justification and shareholders’ approval, tenure of Independent Directors should not exceed a cumulativeyear of nine (9) years; and

(b) undertake annual assessment of independence of its Independent Directors based on a set of criteria established by theNomination Committee focusing on events that would affect the ability of Independent Directors to continue bringing independentand objective judgment for board deliberation and the regulatory definition of Independent Directors and apply these criteriaupon admission, annually and when any new interest or relationship develops.

Based on the annual assessment carried out, the Nomination Committee and the Board are satisfied that Dato’ Amin Rafie BinOthman and Dato’ Yeong Kok Hee, who have served the Board for more than nine (9) years to-date, remain objective andindependent in expressing their views and in participating in deliberations and decision makings of the Board and Board Committees.The length of their service on the Board does not in any way interfere with their exercise of independent judgment and ability to actin the best interests of the Company.

The Board concurred that the continuous contributions of Dato’ Amin Rafie Bin Othman and Dato’ Yeong Kok Hee are beneficial tothe Board and the Company as a whole. In view thereof, the Board recommends and supports their retention as IndependentDirectors of the Company which will be tabled for shareholders’ approval at the forthcoming Twelfth Annual General Meeting ofthe Company. Details of the assessments are disclosed in the Notice of the Twelfth Annual General Meeting enclosed in thisAnnual Report.

PRINCIPLE 4: FOSTERING COMMITMENT

Board Meetings

The Board meets at least once every quarter and on other occasions, as and when necessary, inter-alia, to approve quarterly financialresults, annual report, business plans and budgets as well as to review the performance of the Group, its operating subsidiaries andother business development activities. Management and external advisors (when needed) are invited to attend the Board and BoardCommittee meetings and to provide their inputs and advices on relevant matters.

The attendance record of individual Directors at the Board meetings for the financial year ended 31 August 2016 is detailed below:

Name Attendance

1. YM Tengku Dato’ Sri Uzir Bin Tengku Dato’ Ubaidillah 5/52. Dato’ Ir. William Tan Chee Keong 5/53. Tan Teng Heng 5/54. Tan Ching Kee 5/55. Tan Chong Boon 5/56. Dato’ Ir. Mohd Ghazali Bin Kamaruzaman 5/57. Dato’ Amin Rafie Bin Othman 5/58. Datuk Idris Bin Haji Hashim 5/59. Dato’ Syed Kamarulzaman Bin Dato’ Syed Zainol Khodki Shahabudin 4/510. Dato’ Yeong Kok Hee 5/511. Rosli Bin Shafiei 5/512. Datuk Ahmad Nizam Bin Salleh (Appointed on 11 April 2016) 2/2




(CONT’D)

The Board is satisfied with the level of commitment given by the Directors towards fulfilling their roles and responsibilities as Directors.This, amongst others, is evidenced by the attendance record of the Directors at Board meetings.

The minimum 50% attendance requirement as stipulated in the MMLR has been complied with.

Directors’ Training

The Board recognises the need to attend training to enable the Directors to discharge their duties effectively. Under the Code,the training needs of each Director would be identified and proposed by the individual Director and the Nomination Committeeannually upon the completion of Director performance appraisals. The Nomination Committee continues to evaluate and assess thetraining needs of the Directors to ensure professionalism in discharging their duties and recommends to the Board accordingly.

The Board encourages its members to enhance their skills and knowledge on relevant new laws, regulations and changingcommercial risks and to keep abreast with the developments in the economy, industry and technology. During the financial yearunder review, the Directors attended the following seminars, conferences and programmes:

(a) Corporate Governance (“CG”) Breakfast Series with Directors: Future of Auditor Reporting - The Game Changer for Boardroom(b) 2015 Business and Tax Seminar(c) CG Breakfast Series with Directors: “Board Reward and Recognition”(d) Corporate Seminar February 2016 Global Market Outlook(e) TS 16949 Training - Statistical Process Control (SPC) and Measurement System Analysis (MSA)(f) Risk Management & Internal Control Workshop 2015(g) Audit Committee Conference 2016(h) Risk Management Programme for Audit and Risk Committee: I Am Ready to Manage Risks(i) Bursa Malaysia's Breakfast Series: Future of Auditor Reporting - The Game Changer for Boardroom (j) Malaysian Property Seminar - Laws Critical Issues and Future Developments(k) Risk Management Assessment Overview in line with ISO 9001 requirement(l) Risk Management Review(m) Corporate Governance Breakfast Series with Directors: The Strategy, the Leadership, the Stakeholders and the Board(n) 3rd International OTEC Symposium Kuala Lumpur 2015(o) The 11th Malaysia Plan Realising Green Growth: Sustainable and Resilient Infrastructure as the Game Changer

PRINCIPLE 5: UPHOLDING INTEGRITY IN FINANCIAL REPORTING

Financial Reporting

The Board is responsible for ensuring that the quarterly financial reporting and annual audited financial statements of the Companypresent a true and fair view of the Group’s financial position, performance and prospects. The Board ensures that the Group’sfinancial statements are drawn up in accordance with the provisions of the Companies Act, 1965, MMLR and applicable financialreporting standards.

The Board is assisted by the Audit Committee in reviewing and scrutinising the information in terms of the appropriateness, accuracyand completeness of disclosure and in ensuring that the Group’s financial statements comply with applicable financial reportingstandards. The Audit Committee reviews and monitors the accuracy and integrity of the Group’s quarterly and annual financialstatements and submits these statements to the Board for the Board’s approval and release within the stipulated time frame.




(CONT’D)

Independence of External Auditors

The Board has maintained a transparent and professional relationship with the Group’s External Auditors through the Audit Committee.

The Group’s External Auditors are invited to attend the Audit Committee meetings when deemed necessary. During the year, theAudit Committee has met with the External Auditors on 22 October 2015 and 21 July 2016 without the presence of the managementto review the scope and adequacy of the audit process, the financial statements and their audit findings that may require the attentionof the Audit Committee and Board.

The Audit Committee, as part of its review processes, has obtained assurance from the External Auditors confirming that they havein place policies on rotation (every 5 years) for partners of an audit engagement to ensure objectivity, independence and integrityof the audit and declared their independence throughout the conduct of the audit engagement in accordance with the terms of allrelevant professional and regulatory requirements. Annually, the Audit Committee also reviews the appointment, performance andremuneration of the External Auditors including audit and non-audit services, to ensure that the independence and objectivity of theExternal Auditors are not compromised, before recommending them to the shareholders for re-appointment in the Annual GeneralMeeting. The Group has adopted a Policy on the Provision of Non-Audit Services by External Auditors which governs thecircumstances under which contracts for the provision of non-audit services can be entered into and procedures that must befollowed by the External Auditors. The Audit Committee has ensured that the External Auditors are a suitable service provider of thenon-audit services based on their skills and experience. The Audit Committee also considered the nature of the non-audit servicesand the related fee levels (both individually and in aggregate) relative to the audit fee to ensure independence of the External Auditors.

The Audit Committee, after due deliberations has recommended the reappointment of Messrs. Baker Tilly Monteiro Heng as ExternalAuditors for the financial year ending 31 August 2017. The Board at its meeting held on 8 December 2016 approved the AuditCommittee’s recommendation. The appointment of Messrs. Baker Tilly Monteiro Heng will be presented for shareholders’ approvalat the forthcoming Twelfth Annual General Meeting.

PRINCIPLE 6: RECOGNISING AND MANAGING RISK

The Board acknowledges that risk management is an integral part of good management practices. Risk is inherent in all businessactivities. It is not the Group’s objective to eliminate risk totally, but to review, prioritise and manage the risks involved in all theGroup’s activities and to balance between the cost of managing and treating risks, and the anticipated benefits that will be derived.Further details of the Group’s state of risk management and internal control systems are reported in the Statement on RiskManagement and Internal Control on pages 41 to 43.

The Board has established an internal audit function which is currently outsourced to a professional firm. Functionally, the InternalAuditors’ report to the Audit Committee directly and they are responsible for conducting reviews and appraisals of the effectivenessof the governance, internal controls and processes within the Group.

PRINCIPLE 7: ENSURING TIMELY AND HIGH QUALITY DISCLOSURE

The Group has in place the Corporate Disclosure Policy, which aims to assist the Board in furnishing information which iscomprehensive and accurate and is made on a timely basis and to ensure that communications to the investing public are accurate,timely, factual, informative, balanced, broadly disseminated and in compliance with applicable legal and regulatory requirements.The policy applies to all Directors, employees and authorised spokespersons of the Group on the handling and disclosing of materialinformation irrespective of their seniority or designation.

The Board maintains strict confidentiality and employs best efforts to ensure that no disclosure of material information is madeselectively to any third parties.




(CONT’D)

The Board is advised by the Management, the Company Secretaries and the External and Internal Auditors on the contents andtiming of disclosure requirements of the MMLR on the financial results and various announcements.

The Board leverages on its corporate website (www.wzs.my) to communicate, disseminate and add depth to its governance reporting.The Board Charter was formalised and published in the section dedicated for corporate governance in its present corporate website.

Other principal governance information such as the Committees’ terms of reference are published in the website to avoid the dilutionof issues in the Annual Report or various other announcements.

PRINCIPLE 8: STRENGTHENING RELATIONSHIP BETWEEN THE COMPANY AND ITS SHAREHOLDERS

The Board recognises the need for transparency and accountability to the Company’s shareholders and for regular communicationswith its shareholders, stakeholders and investors on the performance and major developments in the Group. This is achieved throughtimely releases of quarterly financial results, circulars, annual reports, corporate announcements and press releases.The Management attends meetings with institutional shareholders, analysts and members of the press to clarify informationannounced regarding the Group’s performance and strategic direction as and when needed and/or requested.

General meetings are an important avenue through which shareholders can exercise their rights. The Board will ensure suitability ofvenue and timing of meeting and undertake other measures to encourage shareholders’ participation in the meetings. At generalmeetings, shareholders are given the opportunity to seek clarification on any matter pertaining to the business activities and financialperformance of the Group.

Pursuant to the MMLR, any resolution set out in the notice of any general meeting, or in any notice of resolution which may properlybe moved and is intended to be moved at any general meeting, must be voted by poll. Hence, voting for all the resolutions as setout in the forthcoming and future general meetings will be conducted as such.

COMPLIANCE WITH THE CODE

The Board has reviewed, deliberated and approved the statement on Corporate Governance. The Board is satisfied that the CorporateGovernance Statement provides the information necessary to enable shareholders to evaluate how the Code has been applied andthat the Company has fulfilled its obligation under the Code, MMLR and all applicable laws and regulations throughout the financialyear, save for the relevant exceptions as highlighted.

DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors are responsible for ensuring that:

(a) The annual audited financial statements of the Group and the Company are drawn up in accordance with applicable approvedMalaysian Financial Reporting Standards, the provisions of the Companies Act, 1965 and the MMLR so as to give a true and fairview of the state of affairs of the Group and the Company for the financial year, and

(b) Proper accounting and other records are kept which enable the preparation of the financial statements with reasonable accuracyand by taking reasonable steps to ensure that appropriate systems are in place to safeguard the assets of the Group and toprevent and detect fraud and other irregularities.

In the preparation of the financial statements for the financial year ended 31 August 2016, the Directors have adopted appropriateaccounting policies and have applied them consistently in the financial statements with reasonable and prudent judgments andestimates. The Directors are satisfied that all relevant approved Malaysian Financial Reporting Standards have been followed in thepreparation of the financial statements.


In conformance with the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (MMLR), the following informationis provided:

Status of Utilisation of Proceeds

During the financial year, the Company has issued 25,290,900 ordinary shares of RM0.50 each at an issuance price of RM1.21 pershare by way of private placement pursuant to Section 132D of the Companies Act, 1965. The status of utilisation of the grossproceeds raised from placement as at 31 August 2016 is as follows:

Actual Proposed Utilisation Balance RM'000 RM'000 RM'000

Working capital 30,209 30,209 -Corporate exercise expenses 393 393 -

30,602 30,602 -

Audit and Non-Audit Fees

The fees payable to the External Auditors in relation to the audit and non-audit services rendered to the Company and its subsidiariesfor the financial year ended 31 August 2016 are as follows:

The Group The Company RM’000 RM’000

Audit fees 226 40Non-audit fees 28 28

Total Fees 254 68

Revaluation Policy on Landed Properties

The Group has adopted a policy to revalue its land and buildings in every five (5) years.

Material Contracts

There was no material contract involving the Directors’, chief executives’ (who are not directors) and major shareholders’ interestseither still subsisting at the end of the financial year ended 31 August 2016 or entered into since the end of the previous financialyear.

Additional ComplianceInformation



Audit CommitteeReport


The Board of Directors of WZ Satu Berhad is pleased to present the Audit Committee (“the Committee”) Report for the financial yearended 31 August 2016.

ROLE OF AUDIT COMMITTEE

The Committee is to assist the Board of Directors in discharging its statutory duties and responsibilities relating to accounting andreporting practices of the holding company and each of its subsidiaries. In addition, the Committee shall:

(a) assess the risk and control environment;

(b) oversee financial reporting;

(c) evaluate the internal and external audit process; and

(d) review conflict of interest situations and related party transactions.

COMPOSITION AND MEETINGS

Members of the Committee shall be appointed by the Board from amongst the Directors and the Committee shall fulfill the followingrequirements:

(a) membership shall consist of no fewer than three (3) members;

(b) all the members shall be Independent Non-Executive Directors (INED); and

(c) shall not comprise any Alternate Director of the Company.

The Committee meets at least four (4) times in each financial year and at least two (2) members whom must be Independent Directorsmust be present to constitute a quorum. The Company Secretary shall be the Secretary of the Committee. Other Board membersand designated members of Senior Management may also attend these meetings on the invitation of the Committee.

During the financial year ended 31 August 2016, the Committee conducted five (5) meetings. The composition of the Committeeand the attendance of the respective members at the meetings during the financial year ended 31 August 2016 are disclosed asfollows:

Name Designation Directorship Attendance

Rosli bin Shafiei Chairman INED 5/5Dato’ Amin Rafie Bin Othman Member INED 5/5Dato’ Yeong Kok Hee Member INED 5/5

The terms of reference of the Committee is available for reference on the Company’s website at www.wzs.my




SUMMARY OF WORK OF THE AUDIT COMMITTEE

A summary of the main activities carried out by the Committee during the financial year under review is as described below:

Financial Reporting

(a) reviewed and discussed the interim and year end financial statements, prior to recommendations to the Board. The key areasof focus are the following:

• change in accounting policies and practices;

• significant adjustments arising from the audit;

• going concern assumption;

• compliance with accounting standards and other legal requirements;

• significant matters highlighted in the financial statements; and

• significant judgements made by the Management.

(b) reviewed and recommended the Corporate Governance Statement, Audit Committee Report and Statement on Risk Managementand Internal Control to the Board for consideration and approval for inclusion in the Annual Report;

(c) reviewed and recommended to the Board for approval on any material related party transactions and recurrent related partytransactions arising during the financial year; and

(d) the dates the Committee met during the financial year to deliberate on financial reporting matters as detailed below:

Date of meetings Financial Reporting Statements Reviewed

22 October 2015 Fourth quarter results as well as the unaudited results of the Group for the financial year ended 31 August 2015

10 December 2015 Corporate Governance Statement, Audit Committee Report and Statement On Risk Management and Internal Control for the Board’s approval and disclosure in the Company’s Annual Report 2015

28 January 2016 First quarter results for the financial year ended 31 August 2016

21 April 2016 Second quarter results for the financial year ended 31 August 2016

21 July 2016 Third quarter results for the financial year ended 31 August 2016

(Cont’d)




(Cont’d)

External Audit

(a) reviewed, discussed and approved the External Auditors’ audit planning memorandum;

(b) reviewed, discussed and approved the External Auditors’ scope of works, key areas of audit emphasis, audit approach andtimetable;

(c) reviewed, discussed and assessed the problems and reservations arising from the interim and final audits together withcorresponding action plans and recommendations made by the External Auditors;

(d) reviewed, discussed and assessed the external auditor’s management letter and the adequacy and effectiveness ofmanagement’s response; and

(e) reviewed the performance, independence and effectiveness of the External Auditors and made recommendations to the Boardon the re-appointment and remuneration of the External Auditors.

During the financial year, the Audit Committee had two private meetings with the External Auditors on 22 October 2015 and21 July 2016 without the presence of the Executive Directors and Management of the Group.

Internal Audit

The internal audit function is essential for assisting the Audit Committee in reviewing the state of the systems of internal controlmaintained by Management. During the financial year, the Audit Committee engaged RSM Corporate Consulting (Malaysia) SdnBhd (RSM), an external professional firm to provide independent internal audit services to the Group. The internal audit team adopteda risk-based approach towards the planning and conduct of their audits and reports directly to the Committee.

The Committee reviews and approves the annual internal audit plan before the internal audit team carries out its audit functions.All audit findings are reported to the Committee and areas of improvements and audit recommendations identified are communicatedto Management for further action. The internal audit scope of work also covers the follow-up review on the status of actionsimplemented by Management.

The main internal audit activities performed are as follows:

(a) understand and evaluate business processes and related business controls from a risk perspective along the complete lifecycle;

(b) ascertain the extent of compliance with established policies and procedures;

(c) identify control inadequacies within the Group and recommend viable solutions; and

(d) provide assurance in regards to process effectiveness and efficiency in terms of integrity and process improvement opportunities.




(CONT’D)

During the financial year ended 31 August 2016, the key process controls audited were as follows:

(a) Civil Engineering and Construction Segment

• Fixed Asset Management• Procurement Management• Sales and Marketing

(b) Oil and Gas Segment

• Fixed Asset Management• Project Management• Sales and Marketing

The Audit Committee had met the Internal Auditors on 22 October 2015, 21 April 2016 and 21 July 2016 without the presence of theManagement to review the internal audit reports of the Group.

The Committee has reviewed, discussed and assessed all significant matters highlighted by the Internal Auditors on financial reportingand operating issues. The Committee noted that there were no material misstatements, frauds and deficiencies in the systems ofinternal control not addressed by the Management. The Committee has also reviewed all significant judgements made by theManagement as follows:

(a) impairment of assets and long term contracts involving significant estimates of revenue and expenses;

(b) impairment loss on receivables;

(c) write-down of inventories and

(d) depreciation method/estimation of useful lives of property, plant and equipment

The Committee is satisfied that the systems of internal controls are adequate and operating effectively.

The fee incurred during the current financial year for the internal audit function of the Group was RM36,000 (2015: RM23,000).

BOARD’S CONCLUSION

The Board is satisfied that the Committee and its members have carried out their functions, duties and responsibilities in accordancewith the terms of reference.



Statement on Risk Managementand Internal Control

INTRODUCTION

The Board of Directors (the Board) is pleased to present its Statement on Risk Management and Internal Control for the financialyear ended 31 August 2016. This Statement is prepared pursuant to paragraph 15.26(b) of the Bursa Malaysia Securities Berhad(Bursa Securities) Main Market Listing Requirements (MMLR).

The Board is also guided by the latest “Statement on Risk Management and Internal Control - Guidelines for Directors of ListedIssuers” issued by the Task Force on Internal Control with the support and endorsement of the Bursa Securities and Principle 6 ofthe Malaysian Code on Corporate Governance 2012 (the Code).

BOARD’S RESPONSIBILITIES

The Board affirms its responsibility to maintain a sound system of internal control and risk management to safeguard the Group’sinvestments and assets. The system will provide reasonable assurance in ensuring the effectiveness and efficiency of operations,reliability of financial reporting and compliance with applicable laws and regulations.

However, due to inherent limitations of any system of internal control and risk management, it should be noted that the system isdesigned to manage rather than to eliminate the risk of failure to achieve the objectives. Therefore, any system of internal control forthat matter could only provide a reasonable and not complete assurance against any material misstatement or omission.

The Board is assisted by the Internal Auditors and Management to identify, approve, and implement policies and procedures on riskmanagement and internal control. Management identifies and evaluates the risks faced by the Group and designs, implements andmonitors an appropriate system of internal control in line with the policies approved by the Board.

The Board with the assistance of the Audit Committee and Internal Auditors, RSM Corporate Consulting (Malaysia) Sdn Bhd (RSM),continuously review existing risks and identify new risks that the Group faces. In addition, the management action plans that managesuch risks are also being reviewed to ensure its adequacy.

RISK MANAGEMENT FRAMEWORK

Risk management is regarded by the Board as part of the business operation activities of the Group. It is the Board’s priority toensure that the uncertainties and investment risks in new business ventures are managed in order to safeguard the interest of theshareholders. Collectively, the Board oversees and reviews the conduct of the Group’s businesses while the Executive Directorsand Management execute measures and controls to ensure that risks are effectively managed.

The other key elements of the systems of internal control and the Board’s review mechanisms are as follows:

(a) establishment of the Nomination, Remuneration, Long Term Incentive Plan, Shariah and Investment Committees, apart from theAudit Committee;

(b) documentation of written policies and procedures for certain key operational areas;

(c) limits of Management’s approvals and authorities;

(d) periodic review of Group’s management accounts and performance analyses by Executive Directors and Management; and

(e) organisation structure with well-defined delegation of responsibilities and accountabilities for the Group’s operating units.

Besides reviewing the systems of internal control, the Audit Committee also reviews the financial information and reports producedby Management. With Management’s consultation, the Board and the Audit Committee deliberate the integrity of the financial results,Annual Report and audited financial statements before presenting these financial information to the shareholders, investors andpublic.




(CONT’D)

In accordance with the Statement on Risk Management and Internal Control - Guidelines for Directors of Listed Issuers issued byBursa Securities, the Management is responsible to the Board for:

(a) continuously reviewing the risk profile and action plan to be undertaken to manage the principle risks relevant to the businessesof the Group;

(b) designing, implementing and monitoring the risk management framework in accordance with the Group’s strategic vision andoverall risk appetite; and

(c) identifying changes to risks or emerging risks, taking actions as appropriate and promptly bringing these to the attention of theBoard.

The Board has received assurances from the Executive Chairman, Chief Operating Officer and Chief Financial Officer that, to thebest of their knowledge, the Group’s risk management and system of internal control, in all material aspects, are operating effectively.

INTERNAL AUDIT FUNCTION

The Audit Committee engaged RSM, an external professional firm to provide independent internal audit services to the Group. RSMprovides the Audit Committee with quarterly reports of their audit findings and observations together with recommendations andmanagement action plans to enhance the systems of internal control. The Audit Committee reviews the internal audit reports andreports to the Board on significant control issues noted. A follow-up audit is carried out to ascertain if management actions areeffectively implemented.

The principal roles of the Internal Auditors are to assist the Audit Committee in discharging its duties and responsibilities in respectof reviewing the adequacy and effectiveness of the internal control system, risk management framework, governance and controlprocesses.

OTHER RISK MITIGATION PROCESSES

The Board has also adopted various other processes to complement the system of internal control which include:

(a) the establishment of Board Charter and Code of Conduct which assist Directors and employees of the Group in defining theminimal ethical standards and conducts in discharging their responsibilities; and

(b) the implementation of a whistle-blowing policy and procedures to provide a channel for legitimate concerns to be raised byemployees or other stakeholders to the Senior Independent Non-Executive Director and the Audit Committee.

BOARD ASSURANCE AND LIMITATION

The Board confirms that there is an ongoing process for identifying, evaluating and managing significant risks faced by the Group.While the Board reiterates that the risk management and systems of internal control should be continuously improved in line withevolving business developments, it should also be noted that all risk management systems and systems of internal control can onlymanage rather than eliminate the risks of the failure to achieve business objectives. Therefore, these systems of internal control andrisk management in the Group can only provide reasonable but not absolute assurance against material misstatements, frauds andlosses.

The Group has invested in associated companies, SE Satu Sdn. Bhd.,SE Satu Pelangi Sdn. Bhd. and WZS Technologies Sdn.Bhd..While the Group has board representatives in the associated companies, the Group does not have management control in theiroperations. Accordingly, the associated companies have not been dealt with and considered for the purposes of this Statement.




(CONT’D)

REVIEW OF STATEMENT ON INTERNAL CONTROL BY EXTERNAL AUDITORS

Pursuant to Paragraph 15.23 of the MMLR, the External Auditors have conducted an assurance engagement on this Statement onRisk Management and Internal Control for inclusion in the Annual Report for the financial year ended 31 August 2016. Their assuranceengagement was performed pursuant to the scope set out in Recommended Practice Guide 5 (Revised) (RPG 5) : Guidance forAuditors on Engagements to Report on the Statement on Risk Management and Internal Control issued by Malaysia Institute ofAccountants.

Based on their procedures performed, the External Auditors have reported to the Board that nothing has come to their attention thatcauses them to believe that this Statement is not prepared, in all material respect, in accordance with disclosure required byparagraphs 41 and 42 of the Statement on Risk Management and Internal Control: Guidance for Directors of Listed Issuers to be setout, nor it is factually inaccurate. RPG 5 does not require the External Auditors to consider whether this Statement covers all risksand controls, or to form an opinion on the adequacy and effectiveness of the Group’s risk and control system.

BOARD’S CONCLUSION

For the financial year under review, no significant control failures, weaknesses that result in material losses and require disclosurewere identified. The Board is of the view that the systems of internal control and risk management, procedures and processes inplace are reasonable, adequate and effective in safeguarding the assets of the Group, interests of shareholders and otherstakeholders.

This Statement has been approved by the Board on 8 December 2016.



46Directors’Report

52Statements ofFinancial Position

54Statements ofProfit or Loss and OtherComprehensiveIncome

56Statements ofChanges in Equity

59Statements ofCash Flows

61Notes to theFinancialStatements

138SupplementaryInformation on theDisclosuresof Realised andUnrealised Profitsor Losses

139Statement byDirectors

139StatutoryDeclaration

140IndependentAuditors’ Report

FINANCIALSTATEMENTS


Directors’Report


The directors hereby submit their report together with the audited financial statements of WZ Satu Berhad (“the Company”) and itssubsidiaries (“the Group”) for the financial year ended 31 August 2016.

PRINCIPAL ACTIVITIES

The principal activities of the Company are investment holding and the provision of management services to its subsidiaries. Theprincipal activities of the subsidiaries are set out in Note 8 to the financial statements.

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

RESULTS

Group Company RM'000 RM'000

Profit for the financial year 23,020 5,187

Attributable to:-Owners of the Company 23,072 5,187Non-controlling interests (52) -

23,020 5,187

DIVIDENDS

The amount of dividend declared and paid by the Company since the end of the previous financial year was as follows:-

RM'000

Single tier final dividend of 2 sen per ordinary share of RM0.50 eachin respect of the financial year ended 31 August 2015 as reportedon that year, paid on 29 February 2016 5,565

The directors have yet to recommend the payment of any final dividend in respect of the financial year ended 31 August 2016.

RESERVES AND PROVISIONS

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


Directors’Report


(CONT’D)

BAD AND DOUBTFUL DEBTS

Before the statements of profit or loss and other comprehensive income and statements of financial position of the Group and of theCompany were made out, the directors took reasonable steps to ascertain that action had been taken in relation to the writing off ofbad debts and the making of allowance for doubtful debts, and had satisfied themselves that all known bad debts had been writtenoff and adequate allowance had been made for doubtful debts.

At the date of this report, the directors are not aware of any circumstances that would render the amount written off for bad debts orthe amount of the allowance for doubtful debts in the financial statements of the Group and of the Company inadequate to anysubstantial extent.

CURRENT ASSETS

Before the statements of profit or loss and other comprehensive income and statements of financial position of the Group and of theCompany were made out, the directors took reasonable steps to ensure that any current assets, other than debts, which were unlikelyto be realised in the ordinary course of business, their values as shown in the accounting records of the Group and of the Companyhad been written down to an amount that they might be expected to be realised.

At the date of this report, the directors are not aware of any circumstances that would render the values attributed to the currentassets in the financial statements of the Group and of the Company misleading.

VALUATION METHODS

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

CONTINGENT AND OTHER LIABILITIES

At the date of this report, there does not exist:-

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

(ii) any contingent liabilities in respect of the Group and of the Company that has arisen since the end of the financial year.

No contingent or other liabilities of the Group and of the Company has become enforceable, or is likely to become enforceable withinthe period of twelve months after the end of the financial year which, in the opinion of the directors, will or may substantially affectthe ability of the Group and of the Company to meet their obligations as and when they fall due.

CHANGE OF CIRCUMSTANCES

At the date of this report, the directors are not aware of any circumstances, not otherwise dealt with in this report or the financialstatements of the Group and of the Company that would render any amount stated in the financial statements misleading.


Directors’Report


(CONT’D)

ITEMS OF AN UNUSUAL NATURE

The results of the operations of the Group and of the Company for the financial year were not, in the opinion of directors, substantiallyaffected by any item, transaction or event of a material and unusual nature.

No item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and atthe date of this report which is likely to affect substantially the results of the operations of the Group and of the Company for thefinancial year in which this report is made.

ISSUE OF SHARES AND DEBENTURES

During the financial year, the Company increased its authorised share capital from 500,000,000 units to 750,000,000 units of ordinaryshares via the creation of 250,000,000 units of RM0.50 each.

During the financial year, the issued and paid-up capital of the Company increased from RM126,454,618 to RM167,933,698 by way of:

(a) Issuance of 39,300 and 1,980,080 new ordinary shares arising from the exercise of warrants at an exercise price of RM0.60 andRM0.50 respectively;

(b) Private placement of 25,290,900 new ordinary shares of RM0.50 each at an issue price of RM1.21; and

(c) Bonus issue of 55,647,880 new ordinary shares of RM0.50 each via the capitalisation of the share premium account on the basisof one (1) bonus share for every existing five (5) ordinary shares held.

The new ordinary shares issued during the financial year rank pari-passu in all respects with the existing ordinary shares of theCompany.

The Company did not issue any debentures during the financial year.

SHARE OPTION

No option is granted to any person to take up unissued shares of the Company during the financial year.


Directors’Report


(CONT’D)

WARRANTS

The Warrants issued on 29 October 2014 are constituted under a Deed Poll dated 9 October 2014 executed by the Company.The Warrants are listed on the Bursa Malaysia Securities Berhad.

The outstanding Warrants during the financial year ended 31 August 2016 are stated as below:-

Number of Warrants ('000) At Bonus At 1.9.2015 Issue Exercised 31.8.2016

Warrants 94,679 18,928 (2,019) 111,588

The salient features of the Warrants are as follows:-

(i) Each Warrants entitles the registered holder/(s) at any time prior to 28 October 2024 to subscribe for one (1) new ordinary sharesof RM0.50 each. The Warrants entitlement is subject to adjustments under the terms and conditions set out in the Deed Polldated 9 October 2014;

(ii) Pursuant to the issuance of bonus shares on the basis of one (1) bonus share for every five (5) existing shares held byshareholders whose name appeared in the record of depositors on 17 March 2016, a total of 18,927,934 additional warrantswere issued arising from the adjustment made in relation to the bonus issue and the exercise price of the outstanding warrantswere revised from RM0.60 to RM0.50. This is in accordance to the deed poll dated 9 October 2014 and Notice to Warrant Holdersdated 17 March 2016;

(iii) The exercise period is ten (10) years from the date of issuance until the maturity date. Upon the expiry of the exercise period,any unexercised rights will lapse and cease to be valid for any purposes; and

(iv) The holders of the Warrants are not entitled to vote in any general meetings or to participate in any dividends, rights, allotmentand/or other forms of distribution other than on winding-up, compromise or arrangement of the Company unless and until theholders of the Warrants becomes a shareholder of the Company by exercising his warrants into new shares or unless otherwiseresolved by the Company in general meeting.

As at the reporting date, 98,627,554 Warrants remained unexercised.

DIRECTORS

The names of the directors/alternate directors of the Company in office since the date of the last report and at the date of this reportare:-

YM Tengku Dato’ Sri Uzir Bin Tengku Dato’ UbaidillahDato’ Ir. William Tan Chee KeongTan Teng HengTan Ching KeeTan Chong BoonDato’ Ir. Mohd Ghazali Bin KamaruzamanDato’ Amin Rafie Bin OthmanDatuk Idris Bin Haji HashimDato’ Syed Kamarulzaman Bin Dato’ Syed Zainol Khodki ShahabudinDato’ Yeong Kok HeeRosli Bin ShafieiDatuk Ahmad Nizam Bin Salleh (Appointed on 11 April 2016)Ng Chong Tin (Alternate Director to Tan Chong Boon)Choi Chee Ken (Alternate Director to Dato’ Ir. Mohd Ghazali Bin Kamaruzaman)


Directors’Report


(CONT’D)

DIRECTORS’ INTERESTS

According to the Register of Directors’ shareholdings kept by the Company under Section 134 of the Companies Act, 1965 inMalaysia, the interests of those directors/alternate directors who held office at the end of the financial year in shares and warrants inthe Company and its related corporations during the financial year ended 31 August 2016 are as follows:-

Number of ordinary shares of RM0.50 each At Bought/ At 1.9.2015 Bonus Issue* Sold 31.8.2016

Direct Interest

YM Tengku Dato' Sri Uzir Bin Tengku Dato' Ubaidillah 61,231,847 27,457,089 - 88,688,936Dato' Ir. William Tan Chee Keong 11,625,000 2,325,000 - 13,950,000Tan Teng Heng 4,500,000 2,100,000 - 6,600,000Tan Ching Kee 39,382,860 7,776,572 (1,100,000) 46,059,432Tan Chong Boon 5,307,100 1,061,420 (220,000) 6,148,520Dato' Amin Rafie Bin Othman 2,000 400 - 2,400Dato' Yeong Kok Hee 71,000 14,200 - 85,200Ng Chong Tin 2,467,534 493,506 - 2,961,040Choi Chee Ken 11,625,000 2,325,000 - 13,950,000

Indirect Interest**

Dato' Ir. William Tan Chee Keong 131,500 134,300 - 265,800Tan Ching Kee 3,501,992 700,398 - 4,202,390Tan Chong Boon 103,500 20,700 - 124,200

Number of Warrants At Bought/ At 1.9.2015 Bonus Issue* Sold 31.8.2016Direct Interest

YM Tengku Dato' Sri Uzir Bin Tengku Dato' Ubaidillah 27,373,723 9,086,744 - 36,460,467Dato' Ir. William Tan Chee Keong 5,812,500 1,162,500 - 6,975,000Tan Teng Heng 2,250,000 450,000 - 2,700,000Tan Ching Kee 20,391,430 3,778,286 (13,000,000) 11,169,716Tan Chong Boon 2,843,600 568,720 - 3,412,320Dato' Amin Rafie Bin Othman 1,000 200 - 1,200Dato' Yeong Kok Hee 252,500 50,500 - 303,000Ng Chong Tin 1,383,767 276,753 - 1,660,520Choi Chee Ken 5,812,500 1,162,500 - 6,975,000

Indirect Interest**

Dato' Ir. William Tan Chee Keong 50,750 10,150 - 60,900Tan Ching Kee 1,750,996 350,199 - 2,101,195Tan Chong Boon 51,750 10,350 - 62,100

* Bonus issue on 17 March 2016** Deemed interests pursuant to Section 134(12)(c) of the Companies Act, 1965 by virtue of their spouse direct interests in the

Company


Directors’Report


(CONT’D)

By virtue of his interests in the ordinary shares of the Company and pursuant to Section 6A(4)(c) of the Companies Act, 1965,YM Tengku Dato’ Sri Uzir Bin Tengku Dato’ Ubaidillah is deemed to have an interest in the ordinary shares of all subsidiaries to theextent that the Company has an interest.

Other than as disclosed above, none of the other directors in office at the end of the financial year had any interests in shares of theCompany and its related corporations.

DIRECTORS’ BENEFITS

Since the end of the previous financial year, no director of the Company has received or become entitled to receive a benefit (otherthan benefits included in the aggregate amount of emoluments received or due and receivable by the directors shown in Note 25 tothe financial statements) by reason of a contract made by the Company or a related corporation with the director or with a firm ofwhich the director is a member, or with a company in which the director has a substantial financial interest.

Neither during, nor at the end of the financial year, was the Company a party to any arrangement whose object was to enable thedirectors to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.

SIGNIFICANT AND SUBSEQUENT EVENTS

Significant and subsequent events during the financial year are disclosed in Note 35 to the financial statements.

AUDITORS

The auditors, Messrs. Baker Tilly Monteiro Heng, have expressed their willingness to continue in office.

Signed on behalf of the Board of Directors in accordance with a resolution of the directors:-

YM TENGKU DATO’ SRI UZIR BIN TENGKU DATO’ UBAIDILLAHExecutive Chairman/Chief Executive Officer

DATO’ Ir. WILLIAM TAN CHEE KEONGSenior Executive Director/Chief Operating Officer

Kuala LumpurDate: 16 November 2016


STATEMENTS OFFINANCIAL POSITION


AS AT 31 AUGUST 2016

Group Company 2016 2015 2016 2015 Note RM'000 RM'000 RM'000 RM'000

ASSETS

Non-current assetsProperty, plant and equipment 5 81,813 85,867 771 575Goodwill on consolidation 6 41,024 41,024 - -Investment in associates 7 28,076 21,087 2,360 1,763Investment in subsidiaries 8 - - 128,692 125,013Club memberships 9 205 205 - -Trade and other receivables 10 4,416 9,737 6,116 9,737Deferred tax assets 11 211 671 - -

155,745 158,591 137,939 137,088

Current assetsInventories 12 30,186 30,372 - -Trade and other receivables 10 133,714 119,047 17,755 26,412Prepayments 2,762 4,764 5 -Amount due from contract customers 13 51,057 61,255 - -Tax recoverable 1,498 575 305 147Derivative financial assets 14 95 - - -Short term deposits, cash and bank balances 15 128,324 78,538 82,996 36,753

Total current assets 347,636 294,551 101,061 63,312

TOTAL ASSETS 503,381 453,142 239,000 200,400


STATEMENTS OFFINANCIAL POSITION


AS AT 31 AUGUST 2016 (CONT’D)


EQUITY AND LIABILITIES

Equity attributable to owners of the CompanyShare capital 16 167,934 126,455 167,934 126,455Reserves 17 127,716 120,849 61,258 71,969

295,650 247,304 229,192 198,424Non-controlling interests 1,443 2,036 - -

TOTAL EQUITY 297,093 249,340 229,192 198,424

Non-current liabilitiesDeferred tax liabilities 11 2,485 1,993 - 4Borrowings 18 15,899 13,178 229 238

Total non-current liabilities 18,384 15,171 229 242

Current liabilitiesAmount due to contract customers 13 12,793 996 - -Trade and other payables 19 94,143 127,041 9,322 1,584Borrowings 18 80,314 59,432 257 150Derivative financial liabilities 14 73 - - -Provision for liabilities 20 24 359 - -Tax payables 557 803 - -

Total current liabilities 187,904 188,631 9,579 1,734

TOTAL LIABILITIES 206,288 203,802 9,808 1,976

TOTAL EQUITY AND LIABILITIES 503,381 453,142 239,000 200,400

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


STATEMENTS OF PROFIT OR LOSSAND OTHER COMPREHENSIVE INCOME


FOR THE FINANCIAL YEAR ENDED 31 AUGUST 2016


Continuing operationsRevenue 21 465,933 351,422 6,577 6,181Cost of sales 22 (384,474) (288,936) - -

Gross profit 81,459 62,486 6,577 6,181

Other income 9,937 3,653 4,600 1,393Distribution costs (1,191) (785) - -Administrative expenses (44,237) (35,343) (4,370) (4,710)Other expenses (21,338) (18,377) (1,514) (1,025)

Results from operating activities 24,630 11,634 5,293 1,839

Finance costs 23 (6,026) (3,437) (110) (19)

Share of results of associates, net of tax 9,392 18,537 - -

Profit before taxation 24 27,996 26,734 5,183 1,820

Taxation 26 (4,976) (4,101) 4 1

Profit from continuing operations 23,020 22,633 5,187 1,821

Discontinued operation(Loss)/Profit for the financial year

from discontinued operation, net of tax 27 - (2,207) - 1,826

Profit for the financial year 23,020 20,426 5,187 3,647

Other comprehensive income, net of tax items thatmay be reclassified subsequently to profit or loss

Exchange differences on translation of foreign operations - 1,603 - -Reclassification of foreign currency translation reserveto profit or loss upon disposal of a subsidiary (213) - - -

Total comprehensive income for the financial year 22,807 22,029 5,187 3,647


STATEMENTS OF PROFIT OR LOSSAND OTHER COMPREHENSIVE INCOME


FOR THE FINANCIAL YEAR ENDED 31 AUGUST 2016 (CONT’D)


Profit/(Loss) attributable to:-Owners of the Company- Continuing operations 23,072 22,932 5,187 1,821- Discontinuing operation - (2,207) - 1,826

23,072 20,725 5,187 3,647Non-controlling interests (52) (299) - -

23,020 20,426 5,187 3,647

Total comprehensive income/(loss) attributable to:-Owners of the Company- Continuing operations 22,859 24,535 5,187 1,821- Discontinuing operation - (2,207) - 1,826

22,859 22,328 5,187 3,647Non-controlling interests (52) (299) - -

22,807 22,029 5,187 3,647

Earnings per share attributable toowners of the Company

Basic earnings per share (sen)- from continuing operations 28 7.00 7.69- from discontinued operation 28 - (0.74)

7.00 6.95

Diluted earnings per share (sen)- from continuing operations 28 5.85 6.35- from discontinued operation 28 - (0.61)

5.85 5.74



STATEMENTS OFCHANGES IN EQUITY



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Attributable to owners of the Company Non- Distributable Distributable Share Share Retained Capital Premium Earnings Total RM'000 RM'000 RM'000 RM'000Company

At 1 September 2015 126,455 67,555 4,414 198,424

Total comprehensive income for the financial year - - 5,187 5,187

Issuance of shares pursuant to:- Bonus issue 27,824 (27,824) - -- Exercise of warrants 1,010 4 - 1,014- Private placement 12,645 17,957 - 30,602Dividend paid - - (5,565) (5,565)Transaction costs of share issue - (470) - (470)

Total transactions with owners of the Company 41,479 (10,333) (5,565) 25,581

At 31 August 2016 167,934 57,222 4,036 229,192

Attributable to owners of the Company Non- Distributable Distributable Share Share Retained Capital Premium Earnings Total RM'000 RM'000 RM'000 RM'000

At 1 September 2014 95,000 14,869 767 110,636

Total comprehensive income for the financial year - - 3,647 3,647

Issuance of shares pursuant to:- Acquisition of a subsidiary 5,294 20,541 - 25,835- Exercise of warrants 161 32 - 193- Private placement 26,000 32,113 - 58,113

Total transactions with owners of the Company 31,455 52,686 - 84,141

At 31 August 2015 126,455 67,555 4,414 198,424



STATEMENTS OFCASH FLOWS




CASH FLOWS FROM OPERATING ACTIVITIES

Profit before taxation- Continuing operations 27,996 26,734 5,183 1,820- Discontinued operation - (2,207) - 1,826

27,996 24,527 5,183 3,646Adjustments for:-Impairment loss on receivables 391 959 - -Reversal of impairment loss on receivables (259) (102) - -Corporate expenses for disposal of a subsidiary company (127) (372) (127) -Depreciation of property, plant and equipment 7,300 5,249 170 74Deposit written off - 55 - -Dividend income - - (6,500) (3,430)Fair value loss on financial assets and liabilities 772 727 - -Net fair value gain on derivatives (22) - - -Property, plant and equipment written off 51 47 - -Gain on disposal of property, plant and equipment (648) (281) - -(Gain)/Loss on disposal of subsidiaries (3,013) 2,070 (39) 1,826Realised gain on translation reserves (162) - - -Interest income (2,817) (1,736) (2,434) (1,392)Interest expenses 6,026 3,455 110 19Provision for liabilities (279) 359 - -Share of results of associates (9,392) (18,537) - -Unrealised (gain)/loss on foreign exchange (160) 240 - -

Operating cash flows before changes in working capital 25,657 16,660 (3,637) 743Changes in working capital:-Inventories (1,562) 6,209 - -Trade and other receivables (12,859) (47,255) 3,220 (8,933)Trade and other payables (13,609) 81,698 24 (163)Contract customers 21,995 (48,496) - -

Net cash flows generate from/(used in) from operations 19,622 8,816 (393) (8,353)Interest paid (6,026) (3,455) (110) (19)Interest received 2,817 1,736 2,434 1,392Dividend received 6,430 - 6,430 -Net taxes paid (5,638) (5,103) (158) (206)

Net cash generated from/(used in) operating activities 17,205 1,994 8,203 (7,186)


STATEMENTS OFCASH FLOWS



Group Company 2016 2015 2016 2015 Note RM'000 RM'000 RM'000 RM'000CASH FLOWS FROM INVESTING ACTIVITIES

Investment in associates - (293) - (293)Subsciption of shares in subsidiaries - - (4,506) (17,094)Acqusition of a subsidiary, net of cash acquired - (9,345) - (16,200)Proceeds from disposal of a subsidiary, net of cash disposed 4,586 4,398 4,493 6,079Purchase of property, plant and equipment (a) (15,060) (22,325) (61) (156)Proceeds from disposal of property, plant and equipment 2,886 281 - -Repayment from subsidiaries - - 14,020 10,638Advance to associates (432) (3,098) (1,280) (3,138)Purchase of club membership - (80) - -Deposits pledged to licensed banks 3,535 122 - -

Net cash (used in)/generated from investing activities (4,485) (30,340) 12,666 (20,164)

CASH FLOWS FROM FINANCING ACTIVITIES

Net proceeds from issuance of shares to non-controlling interest 400 2,550 - -Net proceeds from conversion of warrants 1,014 193 1,014 193Shares issuance expenses (470) - (470) -Drawdown of term loan 1,061 3,983 - -Proceeds from private placement 30,602 58,113 30,602 58,113Repayment of finance lease liabilities (6,925) (1,726) (207) (72)Drawdown of bank borrowings 18,743 12,838 - -Dividend paid (5,565) - (5,565) -

Net cash generated from financing activities 38,860 75,951 25,374 58,234

NET CHANGE IN CASH AND CASH EQUIVALENTS 51,580 47,605 46,243 30,884CASH AND CASH EQUIVALENTS AT BEGINNINGOF THE FINANCIAL YEAR 52,569 4,572 36,753 5,869

Effect of the exchange rate fluctuations (545) 392 - -

CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR 15 103,604 52,569 82,996 36,753

(a) During the financial year, the Group and the Company made the following cash payments for the purchase of property, plantand equipment:-

Group Company 2016 2015 2016 2015 RM'000 RM'000 RM'000 RM'000

Purchase of property, plant and equipment 33,684 30,645 366 616Acquired by means of finance lease arrangement (18,624) (8,320) (305) (460)

Cash payments on purchase of property, plant and equipment 15,060 22,325 61 156



Notes to theFinancial Statements


1. CORPORATE INFORMATION

The Company is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market ofBursa Malaysia Securities Berhad. The Company’s registered office is at Level 7, Menara Milenium, Jalan Damanlela, PusatBandar Damansara, Damansara Heights, 50490 Kuala Lumpur. The Company’s principal place of business is at Lot 1890, JalanKPB 9, Kawasan Perindustrian Balakong, 43300 Seri Kembangan, Selangor Darul Ehsan.

The principal activities of the Company are investment holding and provision of management services to its subsidiaries. Theprincipal activities of the subsidiaries are set out in Note 8 to the financial statements.

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

The financial statements were authorised for issue by the board of directors in accordance with a resolution of the directors on16 November 2016.

2. BASIS OF PREPARATION

2.1 Statement of compliance

The financial statements of the Group and of the Company have been prepared in accordance with the Malaysian FinancialReporting Standards (“MFRSs”), International Financial Reporting Standards and the requirements of the Companies Act,1965 in Malaysia.

2.2 Basis of measurement

The financial statements of the Group and of the Company have been prepared under the historical cost basis, other thanas disclosed in the significant accounting policies in Note 3 to the financial statements.

2.3 Use of estimates and judgement

The preparation of financial statements in conformity with MFRSs requires the use of certain critical accounting estimatesand assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilitiesat the date of the financial statements, and the reported amounts of the revenue and expenses during the reported period.It also requires Directors to exercise their judgement in the process of applying the Group’s and the Company’s accountingpolicies. Although these estimates and judgement are based on the Directors’ best knowledge of current events and actions,actual results may differ.

The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significantto the financial statements are disclosed in Note 4 to the financial statements.

2.4 Functional and presentation currency

The individual financial statements of each entity in the Group are measured using the currency of the primary economicenvironment in which they operate (“the functional currency”). The consolidated financial statements are presented in RinggitMalaysia (“RM”), which is also the Company’s functional currency, and has been rounded to the nearest thousand, unlessotherwise stated.




(CONT’D)

2. BASIS OF PREPARATION (CONTINUED)

2.5 New MFRSs and amendments/improvements to MFRSs that have been issued, but yet to be effective

The Group and the Company have not adopted the following new MFRSs and amendments/improvements to MFRSs thathave been issued, but yet to be effective:-

Effective for financial periods beginning on or after

New MFRSsMFRS 9 Financial Instruments 1 January 2018MFRS 15 Revenue from Contracts with Customers 1 January 2018MFRS 16 Leases 1 January 2019

Amendments/Improvements to MFRSsMFRS 2 Share-based Payment 1 January 2018MFRS 5 Non-current Assets Held for Sale and Discontinued Operations 1 January 2016MFRS 7 Financial Instruments: Disclosures 1 January 2016MFRS 10 Consolidated Financial Statements Deferred/ 1 January 2016MFRS 11 Joint Arrangements 1 January 2016MFRS 12 Disclosure of Interests in Other Entities 1 January 2016MFRS 101 Presentation of Financial Statements 1 January 2016MFRS 107 Statement of Cash Flows 1 January 2017MFRS 112 Income Taxes 1 January 2017MFRS 116 Property, Plant and Equipment 1 January 2016MFRS 119 Employee Benefits 1 January 2016MFRS 127 Separate Financial Statements 1 January 2016MFRS 128 Investments in Associates and Joint Ventures Deferred/ 1 January 2016MFRS 138 Intangible Assets 1 January 2016MFRS 141 Agriculture 1 January 2016

A brief discussion on the above significant new MFRSs and amendments/improvements to MFRSs are summarised below.Due to the complexity of these new MFRSs and amendments/improvements to MFRSs, the financial effects of their adoptionare currently still being assessed by the Group and the Company.

MFRS 9 Financial Instruments

Key requirements of MFRS 9:-

• MFRS 9 introduces an approach for classification of financial assets which is driven by cash flow characteristics andthe business model in which an asset is held. The new model also results in a single impairment model being appliedto all financial instruments.

In essence, if a financial asset is a simple debt instrument and the objective of the entity’s business model within whichit is held is to collect its contractual cash flows, the financial asset is measured at amortised cost. In contrast, if thatasset is held in a business model the objective of which is achieved by both collecting contractual cash flows andselling financial assets, then the financial asset is measured at fair value in the statements of financial position, andamortised cost information is provided through profit or loss. If the business model is neither of these, then fair valueinformation is increasingly important, so it is provided both in the profit or loss and in the statements of financial position.




(CONT’D)


2.5 New MFRSs and amendments/improvements to MFRSs that have been issued, but yet to be effective (Continued)

MFRS 9 Financial Instruments (Continued)

• MFRS 9 introduces a new, expected-loss impairment model that will require more timely recognition of expected creditlosses. Specifically, this Standard requires entities to account for expected credit losses from when financial instrumentsare first recognised and to recognise full lifetime expected losses on a more timely basis. The model requires an entityto recognise expected credit losses at all times and to update the amount of expected credit losses recognised at eachreporting date to reflect changes in the credit risk of financial instruments. This model eliminates the threshold for therecognition of expected credit losses, so that it is no longer necessary for a trigger event to have occurred before creditlosses are recognised.

• MFRS 9 introduces a substantially-reformed model for hedge accounting, with enhanced disclosures about riskmanagement activity. The new model represents a significant overhaul of hedge accounting that aligns the accountingtreatment with risk management activities, enabling entities to better reflect these activities in their financial statements.In addition, as a result of these changes, users of the financial statements will be provided with better information aboutrisk management and the effect of hedge accounting on the financial statements.

MFRS 15 Revenue from Contracts with Customers

The core principle of MFRS 15 is that an entity recognises revenue to depict the transfer of promised goods or services tocustomers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goodsor services. An entity recognises revenue in accordance with the core principle by applying the following steps:-

(i) identify the contracts with a customer;(ii) identify the performance obligation in the contract;(iii) determine the transaction price;(iv) allocate the transaction price to the performance obligations in the contract; and(v) recognise revenue when (or as) the entity satisfies a performance obligation.

MFRS 15 also includes new disclosures that would result in an entity providing users of financial statements about the nature,amount, timing and uncertainty of revenue and cash flows from contracts with customers.

The following MFRSs and IC Interpretations will be withdrawn on the application of MFRS15:-

MFRS 111 Construction ContractsMFRS 118 RevenueIC Interpretation 13 Customer Loyalty ProgrammesIC Interpretation 15 Agreements for the Construction of Real EstateIC Interpretation 18 Transfers of Assets from CustomersIC Interpretation 131 Revenue - Barter Transactions Involving Advertising Services

MFRS 16 Leases

Currently under MFRS 117 Leases, leases are classified either as finance leases or operating leases. A lessee recogniseson its statement of financial position assets and liabilities arising from the finance leases.

MFRS 16 eliminates the distinction between finance and operating leases for lessees. All leases will be brought onto itsstatement of financial position except for short-term and low value asset leases.




(CONT’D)



Amendments to MFRS 5 Non-current Assets Held for Sale and Discontinued Operations

Amendments to MFRS 5 introduce specific guidance on when an entity reclassifies an asset (or disposal group) from heldfor sale to held for distribution to owners (or vice versa), or when held-for-distribution is discontinued.

Amendments to MFRS 7 Financial Instruments: Disclosures

Amendments to MFRS 7 provides additional guidance to clarify whether servicing contracts constitute continuing involvementfor the purposes of applying the disclosure requirements of MFRS 7.

The Amendments also clarify the applicability of Disclosure - Offsetting Financial Assets and Financial Liabilities(Amendments to MFRS 7) to condensed interim financial statements.

Amendments to MFRS 11 Joint Arrangements

Amendments to MFRS 11 clarify that when an entity acquires an interest in a joint operation in which the activity of the jointoperation constitutes a business, as defined in MFRS 3, it shall apply the relevant principles on business combinationsaccounting in MFRS 3, and other MFRSs, that do not conflict with MFRS 11. Some of the impact arising may be therecognition of goodwill, recognition of deferred tax assets/ liabilities and recognition of acquisition-related costs as expenses.The amendments do not apply to joint operations under common control and also clarify that previously held interests in ajoint operation are not re-measured if the joint operator retains joint control.

Amendments to MFRS 101 Presentation of Financial Statements

Amendments to MFRS 101 improve the effectiveness of disclosures. The amendments clarify guidance on materiality andaggregation, the presentation of subtotals, the structure of financial statements and the disclosure of accounting policies.

Amendments to MFRS 107 Statement of Cash Flows

Amendments to MFRS 107 require entities to provide disclosures that enable users of financial statements to evaluatechanges in liabilities arising from financing activities, including changes from cash flows and non-cash changes. Thedisclosure requirement could be satisfied in various ways, and one method is by providing reconciliation between theopening and closing balances in the statements of financial position for liabilities arising from financing activities.

Amendments to MFRS 112 Income Taxes

Amendments to MFRS 112 clarify that decreases in value of debt instrument measured at fair value for which the tax baseremains at its original cost give rise to a deductible temporary difference. The estimate of probable future taxable profitsmay include recovery of some of an entity’s assets for more that their carrying amounts if sufficient evidence exists that it isprobable the entity will achieve this.

The amendments also clarify that deductible temporary differences should be compared with the entity’s future taxableprofits excluding tax deductions resulting from the reversal of those deductible temporary differences when an entityevaluates whether it has sufficient future taxable profits. In addition, when an entity assesses whether taxable profits will beavailable, it should consider tax law restrictions with regards to the utilisation of the deduction.




(CONT’D)



Amendments to MFRS 116 Property, Plant and Equipment

Amendments to MFRS 116 prohibit revenue-based depreciation because revenue does not reflect the way in which an itemof property, plant and equipment is used or consumed.

Amendments to MFRS 127 Separate Financial Statements

Amendments to MFRS 127 allow a parent and investors to use the equity method in its separate financial statements toaccount for investments in subsidiaries, joint ventures and associates, in addition to the existing options.

Amendments to MFRS 138 Intangible Assets

Amendments to MFRS 138 introduce a rebuttable presumption that the revenue-based amortisation method is inappropriate.This presumption can be overcome only in the following limited circumstances:-

• when the intangible asset is expressed as a measure of revenue, i.e. in the circumstance in which the predominantlimiting factor that is inherent in an intangible asset is the achievement of a revenue threshold; or

• when it can be demonstrated that revenue and the consumption of the economic benefits of the intangible asset arehighly correlated.

Amendments to MFRS 10 Consolidated Financial Statements and MFRS 128 Investments in Associates and JointVentures

These amendments address an acknowledged inconsistency between the requirements in MFRS 10 and those in MFRS128, in dealing with the sale or contribution of assets between an investor and its associate or joint venture.

The main consequence of the amendments is that a full gain or loss is recognised when a transaction involves a business,as defined in MFRS 3. A partial gain or loss is recognised when a transaction involves assets that do not constitute abusiness.

Amendments to MFRS 10 Consolidated Financial Statements, MFRS 12 Disclosures of Interests in Other Entitiesand MFRS 128 Investments in Associates and Joint Ventures

These amendments address the following issues that have arisen in the application of the consolidation exception forinvestment entities:-

• Exemption from presenting consolidated financial statements: the amendments clarify that the exemption frompresenting consolidated financial statements applies to a parent entity that is a subsidiary of an investment entity, whenthe investment entity measures all of its subsidiaries at fair value.

• Consolidation of intermediate investment entities: the amendments clarify that only a subsidiary is not an investmententity itself and provides support services to the investment entity is consolidated. All other subsidiaries of an investmententity are measured at fair value.

• Policy choice for equity accounting for investments in associates and joint ventures: the amendments allow anon-investment entity that has an interest in an associate or joint venture that is an investment entity, when applying theequity method, to retain the fair value measurement applied by the investment entity associate or joint venture to itsinterest in subsidiaries, or to unwind the fair value measurement and instead perform a consolidation at the level of theinvestment entity associate or joint venture.




(CONT’D)



Amendments to MFRS 116 Property, Plant and Equipment and Amendments to MFRS 141 Agriculture

With the amendments, bearer plants would come under the scope of MFRS 116 and would be accounted for in the sameway as property, plant and equipment. A bearer plant is defined as a living plant that is used in the production or supply ofagricultural produce, is expected to bear produce for more than one period and has a remote likelihood of being sold asagricultural produce, except for incidental scrap sales.

Nevertheless, the produce growing on the bearer plant would remain within the scope of MFRS 141. This is because thegrowth of the produce directly increases the expected revenue from the sale of the produce. Moreover, fair valuemeasurement of the growing produce provides useful information to users of financial statements about future cash flowsthat an entity will actually realise as the produce will ultimately be detached from the bearer plants and sold separately.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Unless otherwise stated, the following accounting policies have been applied consistently to all the financial years presented inthe financial statements of the Group and of the Company.

3.1 Basis of consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries. The financialstatements of the subsidiaries, associates, and joint operators used in the preparation of the consolidated financialstatements are prepared for the same reporting date as the Company. Consistent accounting policies are applied to liketransactions and events in similar circumstances.

(i) Subsidiaries and business combination

Subsidiaries are entities (including structured entities) over which the Group is exposed, or has rights, to variable returnsfrom its involvement with the acquirees and has the ability to affect those returns through its power over the acquirees.

The financial statements of subsidiaries are included in the consolidated financial statements from the date the Groupobtains control of the acquirees until the date the Group loses control of the acquirees.

The Group applies the acquisition method to account for business combinations from the acquisition date.

For a new acquisition, goodwill is initially measured at cost, being the excess of the following:-

• the fair value of the consideration transferred, calculated as the sum of the acquisition-date fair value of assetstransferred (including contingent consideration), the liabilities incurred to former owners of the acquiree and theequity instruments issued by the Group. Any amounts that relate to pre-existing relationships or other arrangementsbefore or during the negotiations for the business combination, that are not part of the exchange for the acquiree,will be excluded from the business combination accounting and be accounted for separately; plus

• the recognised amount of any non-controlling interests in the acquiree either at fair value or at the proportionateshare of the acquiree’s identifiable net assets at the acquisition date (the choice of measurement basis is made onan acquisition-by-acquisition basis); plus




(CONT’D)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

3.1 Basis of consolidation (Continued)

(i) Subsidiaries and business combination (Continued)

• if the business combination is achieved in stages, the acquisition-date fair value of the previously held equity interestin the acquiree; less

• the net fair value of the identifiable assets acquired and the liabilities assumed at the acquisition date.

The accounting policy for goodwill is set out in Note 3.7(i).

When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss at the acquisition date.

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

If the business combination is achieved in stages, the Group remeasures the previously held equity interest in theacquiree to its acquisition-date fair value, and recognises the resulting gain or loss, if any, in profit or loss. Amountsarising from interests in the acquiree prior to the acquisition date that have been previously been recognised in othercomprehensive income are reclassified to profit or loss or transferred directly to retained earnings, on the same basisas could be required if the acquirer had disposed directly of the previously held equity interest.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the businesscombination occurs, the Group uses provisional fair value amounts for the items for which the accounting is incomplete.The provisional amounts are adjusted to reflect new information obtained about facts and circumstances that existedas of the acquisition date, including additional assets or liabilities identified in the measurement period. The measurementperiod for completion of the initial accounting ends as soon as the Group receives the information it was seeking aboutfacts and circumstances or learns that more information is not obtainable, subject to the measurement period notexceeding one year from the acquisition date.

Upon the loss of control of subsidiary, the Group derecognises the assets and liabilities of the former subsidiary, anynon-controlling interests and the other components of equity related to the former subsidiary from the consolidatedstatement of financial position. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If theGroup retains any interest in the former subsidiary, then such interest is measured at fair value at the date that controlis lost. Subsequently, it is accounted for as an associate, joint venture, an available-for-sale financial asset or a held fortrading financial asset.

Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control are accounted for asequity transactions. The difference between the Group’s share of net assets before and after the change, and the fairvalue of the consideration received or paid, is recognised directly in equity.

(ii) Non-controlling interests

Non-controlling interests represent the equity in subsidiaries not attributable, directly or indirectly, to owners of theCompany and are presented separately in the consolidated statement of financial position within equity.

Losses attributable to the non-controlling interests are allocated to the non-controlling interests even if the losses exceedthe non-controlling interests.




(CONT’D)


3.1 Basis of consolidation (Continued)

(iii) Associates

Associates are entities over which the Group has significant influence, but not control, to the financial and operatingpolicies.

Investments in associates are accounted for in the consolidated financial statements using the equity method.

Under the equity method, the investments in associates are initially recognised at cost. The cost of investment includestransaction costs. Subsequently, the carrying amount is adjusted to recognise changes in the Group’s share of netassets of the associate.

When the Group’s share of losses exceeds its interest in an associate, the carrying amount of that interest includingany long-term investments is reduced to zero, and the recognition of further losses is discontinued except to the extentthat the Group has an obligation or has 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 atthe date when significant influence is lost is measured at fair value and this amount is regarded as the initial carryingamount of a financial asset. Any difference between the carrying amount of the associate upon loss of significantinfluence and the fair value of the retained investment and proceeds from disposal is recognised in profit or loss.

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

(iv) Joint arrangements

Joint arrangements arise when the Group and another party or parties are bound by a contractual arrangement, andthe contractual arrangement gives the Group and the other party or parties, joint control of the arrangement. Joint controlexists when there is contractually agreed sharing of control of an arrangement whereby decisions about the relevantactivities require the unanimous consent of the parties sharing control.

Joint arrangements are classified and accounted for as follows:-

• A joint arrangement is classified as a “joint operation” when the Group has rights to the assets and obligations forthe liabilities relating to the arrangement. The Group accounts for its share of its assets (including its share of anyassets held jointly), its liabilities (including its share of any liabilities incurred jointly), its revenue from the sale of itsshare of the output arising from the joint operation, its share of the revenue from the sale of the output by the jointoperation and its expenses (including its share of any expenses incurred jointly).

• A joint arrangement is classified as “joint venture” when the Group has rights to the net assets of the arrangements.The Group accounts for its interest in the joint venture using the equity method in accordance with MFRS 128Investments in Associates and Joint Ventures.

The Group has assessed the nature of its joint arrangement and determined them to be joint operations and accountedfor its interest in the joint venture using the proportionate consolidation method.




(CONT’D)


3.1 Basis of consolidation (continued)

(v) Transactions eliminated on consolidation

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

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

3.2 Separate financial statements

In the Company’s statement of financial position, investments in subsidiaries and associates are measured at cost less anyimpairment losses, unless the investment is classified as held for sale or distribution. The cost of investment includestransaction costs. The policy for the recognition and measurement of impairment losses shall be applied on the same basisas could be required for impairment of non-financial assets as disclosed in Note 3.11(ii).

3.3 Foreign currency transactions and operations

(i) Translation of foreign currency transactions

Foreign currency transactions are translated to the respective functional currencies of the Group entities at the exchangerates prevailing at the dates of the transactions.

At the end of each reporting date, monetary items denominated in foreign currencies are retranslated at the exchangerates prevailing at the reporting date.

Non-monetary items denominated in foreign currencies that are carried at fair value are retranslated at the ratesprevailing at the dates the fair values were determined. Non-monetary items denominated in foreign currencies that aremeasured at historical cost are translated at the historical rates as at the dates of the initial transactions.

Foreign exchange differences arising on settlement or retranslation of monetary items are recognised in profit or lossexcept for monetary item that is designated as a hedging instrument in either a cash flow hedge or a hedge of theGroup’s net investment of a foreign operation. When settlement of a monetary item receivable from or payable to aforeign operation is neither planned nor likely to occur in the foreseeable future, exchange differences are recognisedin profit or loss in the separate financial statements of the parent company or the individual financial statements of theforeign operation. In the consolidated financial statements, the exchange differences are considered to form part of anet investment in a foreign operation and are recognised initially in other comprehensive income until its disposal, atwhich time, the cumulative amount is reclassified to profit or loss.

The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognitionof the gain or loss on the change in fair value of the item (i.e. translation differences on items whose fair value gain orloss is recognised in other comprehensive income or profit or loss are also recognised in other comprehensive incomeor profit or loss, respectively).




(CONT’D)


3.3 Foreign currency transactions and operations (Continued)

(ii) Translation of foreign operations

Exchange differences arising on the translation are recognised in other comprehensive income. However, if the foreignoperation is a non-wholly owned subsidiary, then the relevant proportionate share of the translation difference is allocatedto the non-controlling interests.

The assets and liabilities of foreign operations denominated in the functional currency different from the presentationcurrency, including goodwill and fair value adjustments arising on acquisition, are translated into the presentationcurrency at exchange rates prevailing at the reporting date. The income and expenses of foreign operations aretranslated at exchange rates at the dates of the transactions.

When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulativeamount in foreign exchange translation reserve related to that foreign operation is reclassified to profit or loss. For apartial disposal not involving loss of control of a subsidiary that includes a foreign operation, the proportionate share ofcumulative amount in foreign exchange translation reserve is reattributed to non-controlling interests. For partialdisposals of associates or joint ventures that do not result in the Group losing significant influence or joint control, theproportionate share of the cumulative amount in foreign exchange translation reserve is reclassified to profit or loss.

3.4 Financial instruments

Financial instruments are recognised in the statements of financial position when, and only when, the Group and theCompany become a party to the contract provisions of the financial instrument.

When financial instruments are recognised initially, they are measured at fair value plus, in the case of financial instrumentsnot at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financialinstruments.

(i) Subsequent measurement

The Group and the Company categorise the financial instruments as follows:-

(a) Financial assets

Financial assets at fair value through profit or loss

Financial assets are classified as fair value through profit or loss when the financial assets is either held for trading,including derivatives (except for a derivative that is a financial guarantee contract or a designated and effectivehedging instrument) or it is designated into this category upon initial recognition.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value withthe gain or loss recognised in profit or loss.

The Group has not designated any financial assets at fair value through profit or loss.




(CONT’D)


3.4 Financial instruments (Continued)

(i) Subsequent measurement (Continued)

(a) Financial assets (Continued)

Loans and receivables

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

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interestmethod less accumulated impairment losses, if any. The policy for the recognition and measurement of impairmentlosses is in accordance with Note 3.11(i). Gains and losses are recognised in profit or loss through the amortisationprocess.

Held-to-maturity investments

Financial assets with fixed or determinable payments and fixed maturities are classified as held-to-maturity whenthe Group has the positive intention and ability to hold them to maturity.

Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using the effectiveinterest method less accumulated impairment losses. The policy for the recognition and measurement of impairmentlosses is in accordance with Note 3.11(i). Gains and losses are recognised in profit or loss through the amortisationprocess.

Available-for-sale financial assets

Available-for-sale financial assets comprise investment in equity and debt securities that are designated as availablefor sale or are not classified in any of the three preceding categories.

Subsequent to initial recognition, available-for-sale financial assets are measured at fair value. Gains or losses fromchanges in fair value of the financial assets are recognised in other comprehensive income, except for impairmentlosses and foreign exchange gains and losses arising from monetary items and gains and losses of hedged itemsattributable to hedge risks of fair values hedges which are recognised in profit or loss. The cumulative gain or losspreviously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassificationadjustment when the financial asset is derecognised. Interest income calculated using the effective interest methodis recognised in profit or loss. Dividends on an available-for-sale equity instrument are recognised in profit or losswhen the Group’s and the Company’s right to receive payment is established.

Unquoted equity instruments carried at cost

Investments in equity instruments that do not have a quoted market price in an active market and whose fair valuecannot be reliably measured are measured at cost less accumulated impairment losses, if any. The policy for therecognition and measurement at impairment losses is in accordance with Note 3.11(i).




(CONT’D)



(i) Subsequent measurement (Continued)

(b) Financial liabilities

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading, including derivatives(except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument) orfinancial liabilities designated into this category upon initial recognition.

Subsequent to initial recognition, financial liabilities at fair value through profit or loss are measured at fair valuewith the gain or loss recognised in profit or loss.

Derivatives that are linked to and must be settled by delivery of equity instruments that do not have a quoted pricein an active market for identical instruments whose fair values otherwise cannot be reliably measured are measuredat cost.

The Group has not designated any financial liabilities at fair value through profit or loss.

Other financial liabilities

Subsequent to initial recognition, other financial liabilities are measured at amortised cost using the effective interestmethod. Gains and losses are recognised in profit or loss through the amortisation process.

(ii) Financial guarantee contracts

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holderfor a loss it incurs because a specified debtor fails to make payment when due in accordance with the original ormodified terms of a debt instrument.

Financial guarantee contracts are recognised initially as a liability at fair value, net of transaction costs that are directlyattributable to the issuance of the guarantee. Subsequent to initial recognition, the liability is measured at the higher ofthe best estimate of the expenditure required to settle the present obligation at the reporting date and the amount initiallyrecognised less cumulative amortisation.

(iii) Regular way purchase or sale of financial assets

A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms require deliveryof the asset within the time frame established generally by regulation or convention in the marketplace concerned.

A regular way purchase or sale of financial assets is recognised and derecognised, as applicable, using trade dateaccounting (i.e. the date the Group and the Company itself purchase or sell an asset). Trade date accounting refersto:-

(a) the recognition of an asset to be received and the liability to pay for it on the trade date; and

(b) derecognition of an asset that is sold, recognition of any gain or loss on disposal and the recognition of a receivablefrom the buyer for payment on the trade date




(CONT’D)



(iv) Derecognition

A financial asset or a part of it is derecognised when, and only when, the contractual rights to receive the cash flowsfrom the financial asset expire or control of the asset is not retained or substantially all of the risks and rewards ofownership of the financial asset are transferred to another party. On derecognition of a financial asset, the differencebetween the carrying amount and the sum of the consideration received (including any new asset obtained less anynew liability assumed) and any cumulative gain or loss that had been recognised in other comprehensive income isrecognised in profit or loss.

A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract isdischarged, cancelled or expires. On derecognition of a financial liability, the difference between the carrying amountand the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit orloss.

(v) Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is presented in the statements of financial positionif there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a netbasis, to realised the assets and settle the liabilities simultaneously.

3.5 Property, plant and equipment

Recognition and measurement

Property, plant and equipment (other than freehold land and buildings, long term leasehold land and buildings and low costapartments) are measured at cost less accumulated depreciation and accumulated impairment losses. The policy for therecognition of measurement of impairment losses is in accordance with Note 3.11(ii).

Cost of assets includes expenditures that are directly attributable to the acquisition of the asset and any other costs that aredirectly attributable to bringing the asset to working condition for its intended use, and the costs of dismantling and removingthe items and restoring the site on which they are located. The cost of self-constructed assets also includes cost of materials,direct labour, and any other direct attributable costs but excludes internal profits. For qualifying assets, borrowing costs arecapitalised in accordance with the accounting policy on borrowing costs in Note 3.16.

Freehold land and buildings, long term leasehold land and buildings and low cost apartments are measured at fair value,based on valuations by external independent valuers, less accumulated depreciation on buildings and accumulatedimpairment losses recognised after the date of revaluation. Valuations are performed with sufficient regularity to ensure thatthe fair value of the freehold land and buildings, long term leasehold land and buildings and low cost apartments do notdiffer materially from the carrying amount. Any accumulated depreciation as at the date of revaluation is eliminated againstthe gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset.

A revaluation surplus is recognised in other comprehensive income and credited to the revaluation reserve. However, theincrease shall be recognised in profit or loss to the extent that it reverses a revaluation decrease of the same asset previouslyrecognised in profit or loss. If an asset’s carrying amount is decreased as a result of a revaluation, the decrease shall berecognised in profit or loss. However, the decrease shall be recognised in other comprehensive income to the extent of anycredit balance existing in the revaluation reserve in respect of that asset.




(CONT’D)


3.5 Property, plant and equipment (Continued)

Recognition and measurement (Continued)

Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as aseparate items of property, plant and equipment.

The revaluation reserve is transferred to retained earnings as the assets are used. The amount of revaluation reservetransferred is the difference between depreciation based on the revalued carrying amount of the asset and depreciationbased on the asset’s original cost.

Subsequent costs

The cost of replacing a part of an item of property, plant and equipment is included in the asset’s carrying amount orrecognised as a separate asset, as appropriate, only when it is probable that the future economic benefits associated withthe part will flow to the Group or the Company and its cost can be measured reliably. The carrying amount of the replacedpart is derecognised. All other repairs and maintenance are charged to the profit or loss as incurred.

Depreciation

Freehold land has an unlimited useful life and therefore is not depreciated. Asset under construction included in property,plant and equipment are not depreciated as these assets are not yet available for use.

All other property, plant and equipment are depreciated on straight-line basis by allocating their depreciable amounts overtheir remaining useful lives.

%

Freehold buildings 2Long term leasehold land 67 - 81 yearsLong term leasehold buildings 67 - 81 yearsLow cost apartments 2Fabrication yard 20Plant, machinery and equipment 10 - 20Cranes 20Motor vehicles 20Furniture, fittings and office equipment 10 - 30Container/Cabin 10 - 20Renovations 10

The residual values, useful lives and depreciation methods are reviewed at the end of each reporting period and adjustedas appropriate.

Derecognition

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expectedfrom its use or disposal. Any gain or loss arising on derecognition of the asset is recognised in profit or loss.




(CONT’D)


3.6 Leases

The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at theinception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use ofa specific asset or assets and the arrangement conveys a right to use the asset or assets.

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All otherleases that do not meet this criterion are classified as operating leases.

(i) Lessee accounting

If an entity in the Group is a lessee in a finance lease, it capitalises the leased asset and recognises the related liability.The amount recognised at the inception date is the fair value of the underlying leased asset or, if lower, the presentvalue of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance withthe accounting policy applicable to that assets.

Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability.The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of intereston the remaining balance of the liability. Contingent lease payments are charged as expenses in the periods in whichthey are incurred.

The capitalised leased asset is classified by nature as property, plant and equipment.

For operating leases, the Group does not capitalise the leased asset or recognise the related liability. Instead leasepayments under an operating lease are recognised as an expense on the straight-line basis over the lease term unlessanother systematic basis is more representative of the time pattern of the user’s benefit.

(ii) Lessor accounting

If an entity in the Group is a lessor in operating lease, the underlying asset is not derecognised but is presented in thestatements of financial position according to the nature of the asset. Lease income from operating leases is recognisedin profit or loss on a straight-line basis over the lease term, unless another systematic basis is more representative ofthe time pattern in which use benefit derived from the leased asset is diminished.

3.7 Goodwill and other intangible assets

(i) Goodwill

Goodwill arises on business combinations is initially measured at cost, being the excess of the aggregate of theconsideration transferred and the amount recognised for non-controlling interests, and any previous interest held, overthe net identifiable assets acquired and liabilities assumed. After initially recognition, goodwill is measured at cost lessaccumulated impairment losses. The policy for the recognition and measurement of impairment losses is in accordancewith Note 3.11(ii).

In respect of equity-accounted associates, goodwill is included in the carrying amount of the investment and is nottested for impairment individually. Instead, the entire carrying amount of the investment is tested for impairment as asingle asset.




(CONT’D)


3.7 Goodwill and other intangible assets (Continued)

(ii) Other intangible assets

Intangible assets acquired separately are measured initially at cost. The cost of intangible assets acquired in a businesscombination is their fair value as at the date of acquisition. Following initial acquisition, intangible assets are carried atcost less any accumulated amortisation and any accumulated impairment losses.

Intangible assets with finite useful lives are amortised over the estimated useful lives and assessed for impairmentwhenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisationmethod are reviewed at least at each financial year end. Changes in the expected useful life or the expected pattern ofconsumption of future economic benefits embodied in the asset is accounted for by changing the amortisation periodor method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangibleassets with finite useful lives is recognised in profit or loss in the expense category consistent with the function of theintangible asset.

Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the netdisposal proceeds and the carrying amount of the asset and are recognised in the profit or loss when the asset isderecognised.

3.8 Inventories

Inventories are measured at the lower of cost and net realisable value.

Costs incurred in bringing the inventories to their present location and condition are accounted for as follows:-

• raw materials: purchase costs on weighted average cost basis.• finished goods and work-in-progress: costs of direct materials and labour and a proportion of manufacturing overheads

based on normal operating capacity. These costs are assigned on a weighted average cost basis.

Where necessary, allowance is provided for damaged, obsolete and slow moving items to adjust the carrying value ofinventories to the lower of cost and net realisable value.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completionand the estimated costs necessary to make the sale.

3.9 Construction contracts

The Group principally operates fixed price contracts. Contract revenue and contract costs are recognised as revenue andexpenses respectively by reference to the stage of completion of the contract activity at the end of the reporting period (thepercentage of completion method), when the outcome of a construction contract can be estimated reliably.

The outcome of a construction contract can be estimated reliably when: (i) total contract revenue can be measured reliably;(ii) it is probable that the economic benefits associated with the contract will flow to the entity; (iii) the costs to complete thecontract and the stage of completion can be measured reliably; (iv) the contract costs attributable to the contract can beclearly identified and measured reliably so that actual contract costs incurred can be compared with prior estimates.

When the outcome of a construction contract cannot be estimated reliably (principally during early stages of a contract),contract revenue is recognised only to the extent of contact costs incurred that are likely to be recoverable and contractcosts are recognised as expense in the period in which they are incurred.

An expected loss on the construction contract is recognised as an expense immediately when it is probable that total contractcosts will exceed total contract revenue.




(CONT’D)


3.9 Construction contracts (Continued)

In applying the percentage of completion method, revenue recognised corresponds to the total contract revenue multipliedby the actual completion rate based on the proportion of total contract costs incurred to date and the estimated costs tocomplete.

Construction work-in-progress is presented as part of the contract assets as amount owing by contract customers in thestatements of financial position for all contract in which costs incurred plus recognised profits exceed progress billings. Ifprogress billings exceed costs incurred plus recognised profits, then the difference is presented as amount owing tocontract customers which is part of the contract liabilities in the statements of financial position.

3.10 Cash and cash equivalents

For the purpose of the statements of cash flows, cash and cash equivalents comprise cash on hand, bank balances anddeposits with a maturity of three months or less, that are readily convertible to known amount of cash and which are subjectto an insignificant risk of changes in value. Cash and cash equivalents are presented net of bank overdrafts.

3.11 Impairment of assets

(i) Impairment and uncollectibility of financial assets

At each reporting date, all financial assets (except for financial assets categorised as fair value through profit or lossand investment in subsidiaries and associates) are assessed whether there is any objective evidence of impairmentas a result of one or more events having an impact on the estimated future cash flows of the financial asset that canbe reliably estimated. Losses expected as a result of future events, no matter how likely, are not recognised.

Evidence of impairment may include indications that the debtors or a group of debtors are experiencing significantfinancial difficulty, default or delinquency in interest or principal payments, the probability that they will enterbankruptcy or other financial reorganisation, and where observable data indicate that there is a measurable decreasein the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

Loans and receivables and held-to-maturity investments

The Group and the Company first assess whether objective evidence of impairment exists individually for financialassets that are individually significant, and individually or collectively for financial assets that are not individuallysignificant. If there is no objective evidence for impairment exists for an individually assessed financial asset, whethersignificant or not, the Group and the Company include the financial asset in a group of financial assets with similarcredit risk characteristics and collectively assess them for impairment. Financial assets that are individually assessedfor impairment for which an impairment loss is or continues to be recognised are not included in a collectiveassessment of impairment.

The amount of impairment loss is measured as the difference between the financial asset’s carrying amount and thepresent value of estimated future cash flows discounted at the financial asset’s original effective interest rate. Thecarrying amount of the financial asset is reduced through the use of an allowance account and the loss is recognisedin profit or loss.

If, in a subsequent period, the amount of the impairment loss decreases because of an event occurring after theimpairment was recognised, the previously recognised impairment loss is reversed by adjusting an allowance accountto the extent that the carrying amount of the financial asset does not exceed what the amortised cost would havebeen had the impairment not been recognised.

Loan together with the associated allowance are written off when there is no realistic prospect of future recovery andall collateral has been realised or has been transferred to the Group and the Company. If a write-off is later recovered,the recovery is credited to the profit or loss.




(CONT’D)


3.11 Impairment of assets (Continued)

(i) Impairment and uncollectibility of financial assets (Continued)

Available-for-sale financial assets

In the case of equity investments classified as available for sale, a significant or prolonged decline in the fair valuebelow its cost is considered to be objective evidence of impairment. The Group and the Company use their judgementto determine what is considered as significant or prolonged decline, evaluating past volatility experiences and currentmarket conditions.

When a decline in the fair value of an available-for-sale financial asset has been recognised in the other comprehensiveincome, the cumulative loss that has been recognised in other comprehensive income shall be reclassified from equityto profit or loss as a reclassification adjustment even though the financial asset has not been derecognised. Theamount of cumulative loss that is reclassified from equity to profit or loss shall be the difference between its cost (netof any principal repayment and amortisation) and its current fair value, less any impairment loss previously recognisedin profit or loss.

Impairment losses on available-for-sale equity investments are not reversed through profit or loss in the subsequentperiods. Increase in fair value, if any, subsequent to impairment loss is recognised in other comprehensive income.

For available-for-sale debt investments, impairment losses are subsequently reversed through profit or loss if anincrease in the fair value of the investment can be objectively related to loss event occurring after the recognition ofthe impairment loss in profit or loss.

Unquoted equity instruments carried at cost

In the case of unquoted equity instruments carried at cost, the amount of the impairment loss is measured as thedifference between the carrying amount of financial asset and the present value of estimated future cash flowsdiscounted at the current market rate of return for a similar financial asset. Such impairment shall not be reversed.

(ii) Impairment of non-financial assets

The carrying amounts of non-financial assets (except for inventories, amount due from customers for contract workand deferred tax assets) are reviewed at the end of each reporting period to determine whether there is any indicationof impairment. If any such indication exists, the Group and the Company make an estimate of the asset’s recoverableamount. For goodwill and intangible assets that have indefinite useful life and are not yet available for use, therecoverable amount is estimated at each reporting date.

For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generatescash inflows from continuing use that are largely independent of the cash inflows of non-financial assets or cash-generating units (“CGUs”). Subject to an operating segment ceiling test, for the purpose of goodwill impairmenttesting, CGUs to which goodwill has been allocated are aggregated so that the level at which impairment testing isperformed reflects the lowest level at which goodwill is monitored for internal reporting purposes. The goodwillacquired in a business combination, for the purpose of impairment testing, is allocated to a CGU or a group of CGUsthat are expected to benefit from the synergies of business combination.




(CONT’D)


3.11 Impairment of assets (Continued)

(ii) Impairment of non-financial assets (Continued)

The recoverable amount of an asset of CGU is the higher of its fair value less costs of disposal and its value in use.In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-taxdiscount rate that reflects current market assessments of the time value of money and the risks specific to the assetor CGU. In determining the fair value less costs of disposal, recent market transactions are taken into account. If nosuch transactions can be identified, an appropriate valuation model is used.

Where the carrying amount of an asset exceed its recoverable amount, the carrying amount of asset is reduced to itsrecoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first toreduce the carrying amount of any goodwill allocated to those units or groups of units and then, to reduce the carryingamount of the other assets in the unit or groups of units on a pro-rata basis.

Impairment losses are recognised in profit or loss except for assets that are previously revalued with the revaluationtaken to other comprehensive income. In this case, the impairment is recognised in other comprehensive income upto the amount of any previous revaluation.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, an assessment is made at eachreporting date as to whether there is any indication that previously recognised impairment losses may no longer existor may have decreased. An impairment loss is reversed only if there has been a change in the estimates used todetermine the assets recoverable amount since the last impairment loss was recognised. An impairment loss isreversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would havebeen determined, net of depreciation or amortisation, if no impairment loss had been recognised previously. Suchreversal is recognised in profit or loss unless the asset is measured at revalued amount, in which case the reversal istreated as a revaluation increase.

3.12 Share capital

(i) Ordinary shares

Ordinary shares are equity instruments and classified as equity. An equity instrument is a contract that evidences aresidual interest in the assets of the Company after deducting all of its liabilities. Ordinary shares are recorded at theproceeds received, net of directly attributable incremental transaction costs. Dividends on ordinary shares arerecognised in equity in the period in which they are declared.

(ii) Warrants

Warrants are classified as equity. The issue of ordinary shares upon exercise of the warrants are treated as newsubscription of ordinary shares for the consideration equivalent to the warrants exercise price.

3.13 Employee benefits

(i) Short-term employee benefits

Short-term employee benefit obligations in respect of wages, salaries, social security contributions, annual bonuses,paid annual leave, sick leave and non-monetary benefits are recognised as an expense in the financial year wherethe employees have rendered their services to the Group and the Company.




(CONT’D)


3.13 Employee benefits (Continued)

(ii) Post-employment benefits

As required by law, the Group and the Company contribute to the Employees Provident Fund (“EPF”), the nationaldefined contribution plan. Certain foreign subsidiaries make contributions to their respective countries’ statutorypension scheme. Such contributions are recognised as an expense in the profit or loss in the period in which theemployees render their services.

3.14 Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it isprobable that an outflow of economic resources will be required to settle the obligation and the amount of the obligationcan be estimated reliably.

Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current marketassessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognisedas finance cost.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer probablethat an outflow of economic resources will be required to settle the obligation, the provision is reversed.

3.15 Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenuecan be reliably measured, regardless of when payment is made. Revenue is measured at fair value of considerationreceived or receivable, taking into account contractually defined terms of payment and excluding taxes and duty. TheGroup concluded that it is acting as a principal in all of its revenue arrangement. The following specific recognition criteriamust also be met before revenue is recognised:-

Sale of goodsRevenue from sale of goods is recognised upon the transfer of significant risk and rewards of ownership of the goods tothe customer, usually on delivery of goods. Revenue is not recognised to the extent where there are significant uncertaintiesregarding recovery of the consideration due, associated costs or the possible return of goods.

Rental incomeRental income is recognised on a straight-line basis over the term of the lease. Lease incentives granted are recognisedas an integral part of the total rental income, over the term of the lease.

Interest incomeInterest income is recognised as it accrues using the effective interest method.

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

Management feeManagement fee is recognised on an accrual basis, net of taxes.




(CONT’D)


3.15 Revenue (Continued)

Construction contractsRevenue from construction contracts is accounted for by the stage of completion method. The stage of completion methodis measured by reference to the proportion of contract costs incurred for work performed to date to the estimated totalcontracts costs.

Rendering of servicesRevenue from services rendered is recognised net of taxes and discounts as and when the services are performed.

3.16 Borrowing costs

Borrowing costs are interests and other costs that the Group and the Company incur in connection with borrowing of funds.

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

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets, which areassets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the costof those assets, until such time as the assets are substantially ready for their intended use or sale.

The Group and the Company begin capitalising borrowing costs when the Group and the Company have incurred theexpenditures for the asset, incurred related borrowing costs and undertaken activities that are necessary to prepare theasset for its intended use or sale.

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

3.17 Income taxes

Income tax expense comprises current and deferred tax. Current and deferred tax are recognised in profit or loss exceptto the extent that it relates to a business combination or items recognised directly in equity or other comprehensive income.

(i) Current tax

Current tax is the expected taxes payable or receivable on the taxable income or loss for the financial year, using thetax rates that have been enacted or substantively enacted by the end of the reporting period, and any adjustment totax payable in respect of previous financial years.

(ii) Deferred tax

Deferred tax is provided using the liability method on temporary differences at the reporting date between the taxbases of assets and liabilities and their carrying amounts in the statements of financial position. Deferred tax liabilitiesare generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for alldeductible temporary differences, unused tax losses and unused tax credits, to the extent that it is probable thatfuture taxable profit will be available against which the deductible temporary differences, unused tax losses andunused tax credits can be utilised.

Deferred tax is not recognised if the temporary difference arises from the initial recognition of assets and liabilities ina transaction that is not a business combination and that affects neither the taxable profit nor the accounting profit.In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition ofgoodwill.




(CONT’D)


3.17 Income taxes (Continued)

(ii) Deferred tax (Continued)

Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiariesand associates, except where the Group is able to control the timing of the reversal of the temporary differences andit is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets arising fromdeductible temporary differences associated with such investments and interests are only recognised to the extentthat it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporarydifferences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is nolonger probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax assetto be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to theextent that it has become probable that future taxable profit will allow the deferred tax assets to be utilised.

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or theliability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reportingdate.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax itemsare recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity.

Deferred tax assets and deferred tax liabilities are offset if there is a legally enforceable right to offset current taxassets against current tax liabilities and when they relate to income taxes levied by the same taxation authority on thesame taxable entity, or on different tax entities, but they intends to settle their income tax recoverable and income taxpayable on a net basis or their tax assets and liabilities will be realised simultaneously.

(iii) Goods and services tax

Revenues, expenses and assets are recognised net of the amount of goods and services tax (“GST”) except:-

• where the GST incurred in a purchase of assets or services is not recoverable from the taxation authority, inwhich case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense itemas applicable; and

• receivables and payables that are stated with the amount of GST included.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables orpayables in the statements of financial position.

3.18 Discontinued operation

A disposal group qualifies as discontinued operation if it is a component of an entity that either has been disposed of, oris classified as held for sale, and:-

• represents a separate major line of business or geographical area of operations;• is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations;

or• is a subsidiary acquired exclusively with a view to resale.

Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classifiedas held for sale, if earlier. When an operation is classified as a discontinued operation, the comparative statements of profitor loss and other comprehensive is re-presented as if the operation has been discontinued from the start of the comparativeperiod.




(CONT’D)


3.19 Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of theoperating segments, has been identified as the Chief Executive Officer of the Group that makes strategic decisions.

3.20 Fair value measurements

Fair value of an asset or a liability, except for lease transactions, is determined as the price that would be received to sellan asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Themeasurement assumes that the transaction to sell the asset or transfer the liability takes place either in the principal marketor in the absence of a principal market, in the most advantageous market.

For non-financial asset, the fair value measurement takes into account a market participant’s ability to generate economicbenefits by using the asset in its highest and best use or by selling it to another market participant that would use the assetin its highest and best use.

When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fairvalue are categorised into different levels in a fair value hierarchy based on the input used in the valuation technique asfollows:-

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at the measurement date.Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.Level 3: Unobservable inputs for the asset or liability.

There were no transfers between levels of the fair value hierarchy as of the date of the event or change in circumstances.

3.21 Contingencies

A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence will beconfirmed only by the occurrence or non-occurrence of uncertain future event(s) not wholly within the control of the Groupand of the Company.

Contingent liability is also referred as a present obligation that arises from past events but is not recognised because:-

• it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

• the amount of the obligation cannot be measured with sufficient reliability.

Contingent liabilities and assets are not recognised in the statements of financial position.

3.22 Earnings Per Share

The Group present basic and diluted earnings per share data for its ordinary shares (“EPS”). Basic EPS is calculated bydividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinaryshares outstanding during the period, adjusted for own shares held.

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




(CONT’D)

4. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

Significant areas of estimation, uncertainty and critical judgements in applying accounting policies that have significant effectin determining the amount recognized in the financial year include the following:-

(a) Impairment of goodwill

The Group assesses at each reporting date whether there is any indication that goodwill may be impaired. For the purposeof assessing impairment, assets (including goodwill) are grouped at the lowest level where there are separately identifiablecash flows (cash-generating units). In determining the value-in-use of a cash-generating unit, management estimates thediscounted cash flows using reasonable and supportable inputs about sales, costs of sales and other expenses based onpast experience, current events and reasonably possible future developments. Cash flows that are projected based onthose inputs or assumptions and the discount rate applied in the measurement of value-in-use may have a significant effecton the Group’s financial position and results if the actual cash flows are less than the expected.

The carrying amount of the Group’s goodwill and key assumptions used to determine the recoverable amount for differentcash-generating units, including sensitivity analysis, are disclosed in Note 6.

(b) Depreciation of property, plant and equipment

The cost of an item of property, plant and equipment is depreciated on the straight-line method or another systematic methodthat reflects the consumption of the economic benefits of the asset over its useful life. Estimates are applied in the selectionof the depreciation method, the useful lives and the residual values. The actual consumption of the economic benefits of theproperty, plant and equipment may differ from the estimates applied.

The carrying amounts of the Group’s and the Company’s property, plant and equipment are disclosed in Note 5.

(c) Impairment of financial assets

The Group recognizes impairment losses for loans and receivables using the incurred loss model. Individually significantloans and receivables are tested for impairment separately by estimating the cash flows expected to be recoverable. Allothers are grouped into credit risk classes and tested for impairment collectively, using the Group’s past experience of lossstatistics, ageing of past due amounts and current economic trends. The actual eventual losses may be different from theallowance made and this may affect the Group’s financial position and results.

The carrying amounts of the Group’s and Company’s financial assets are disclosed in Note 31.

(d) Impairment of non-financial assets

The Group and the Company review the carrying amount of its property, plant and equipment, to determine whether thereis an indication that those assets have suffered an impairment loss in accordance with relevant accounting policies on theproperty, plant and equipment. Independent professional valuations to determine the carrying amount of these assets willbe procured when the need arises.

As at the end of the financial year under review, the directors are of the view that there is no indication of impairment tothese assets and therefore no independent professional valuation was procured by the Group during the financial year todetermine the carrying amount of these assets.

The carrying amounts of property, plant and equipment are disclosed in Note 5 to the financial statements.

(e) Income taxes

The Group is subject to income taxes in numerous jurisdictions. Significant judgement is required in determining the capitalallowances and deductibility of certain expenses during the estimation of the provision for income taxes. There are manytransactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business.Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences willimpact the income tax and deferred income tax provisions in the period in which such determination is made.

The income tax expense of the Group and of the Company are disclosed in Note 26.




(CONT’D)

4. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

(f) Deferred tax assets

Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unabsorbed capitalallowances to the extent that it is probable that taxable profit will be available against which the tax losses and capitalallowances can be utilised. Significant management judgment is required to determine the amount of deferred tax assetsthat can be recognised, based upon the likely timing and level of future taxable profits together with future tax planningstrategies.

The carrying amount of the Group’s recognised deferred tax assets is disclosed in Note 11.

(g) Construction contract

Significant judgement is used in determining the stage of completion, the extent of the contract costs incurred, the estimatedtotal contract revenue and costs, as well as the recoverability of the contracts. The total contract revenue also includes anestimation of the work that are recoverable from the customers. In making judgements, the Group and the Company evaluatebased on the past experience and work of specialists.

The carrying amounts of amount due from contract customers and amount due to contract customers are disclosed in Note 13.

(h) Write-down of obsolete or slow moving inventories

The Group and the Company write down their obsolete or slow moving inventories based on the assessment of theirestimated net selling price. Inventories are written down when events or changes in circumstances indicate that the carryingamounts may not be recoverable. The management specifically analyses sales trend and current economic trends whenmaking a judgement to evaluate the adequacy of the write-down of obsolete or slow moving inventories. Where expectationsdiffer from the original estimates, the differences will impact the carrying amount of inventories.

The carrying amounts of the Group’s and of the Company’s inventories are disclosed in Note 12.

(i) Classification between operating lease and finance lease for leasehold land

The Group has developed certain criteria based on MFRS 117 Leases in making judgement whether a leasehold land shouldbe classified either as operating lease or finance lease.

Finance lease is a lease that transfers substantially all the risks and rewards incidental to ownership of an assets andoperating lease is a lease that does not transfer substantially all the risks and rewards incidental to ownership. If the leaseholdland meets the criteria of the financial lease, the lease will be classified as property, plant and equipment if it is for own use.Judgements are made on the individual leasehold land to determine whether the leasehold land qualifies as operating leaseor finance lease.

The Group has classified the leases period of more than 50 years as finance leases as they have met the criteria of a financelease under MFRS 117.

(j) Provisions

The Group recognises provisions when it has a present legal or constructive obligation arising as a result of a past event,and is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can bemade. The recording of provisions requires the application of judgements about the ultimate resolutions of these obligations.As a result, provisions are reviewed at each reporting date and adjusted to reflect the Group’s current best estimate.

The carrying amounts of the Group’s provisions are disclosed in Note 20 to the financial statements.




(CONT’D)

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(CONT’D)

5. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

# Properties consist of:-

Long term Long term Freehold Freehold leasehold leasehold Low cost Fabrication land buildings land buildings apartments yard TotalGroup RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

2016Cost/ValuationAt 1 September 2015 14,244 8,234 11,788 11,146 150 2,603 48,165Additions - - - 12 - 144 156Disposal of subsidiaries (465) - (4,403) (6,042) - - (10,910)Transfer - - - - - 3,387 3,387Exchange differences 21 - 196 269 - - 486

At 31 August 2016 13,800 8,234 7,581 5,385 150 6,134 41,284

Accumulated DepreciationAt 1 September 2015 - 682 470 358 12 460 1,982Depreciation chargefor the financial year - 205 157 145 4 752 1,263

Disposal of subsidiaries - - (174) (225) - - (399)Exchange differences - - 7 9 - - 16

At 31 August 2016 - 887 460 287 16 1,212 2,862

Carrying amountAt 31 August 2016 13,800 7,347 7,121 5,098 134 4,922 38,422




(CONT’D)


# Properties consist of:-

Long term Long term Freehold Freehold leasehold leasehold Low cost Fabrication land buildings land buildings apartments yard TotalGroup RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

2015Cost/ValuationAt 1 September 2014 13,800 8,273 8,673 7,706 150 - 38,602Additions 414 - - 271 - 118 803Acquisition of a subsidiary - - 2,681 2,585 - 2,167 7,433Disposal/written-offs - (39) - - - - (39)Transfer - - - - - 318 318Exchange differences 30 - 434 584 - - 1,048

At 31 August 2015 14,244 8,234 11,788 11,146 150 2,603 48,165

Accumulated DepreciationAt 1 September 2014 - 425 284 181 8 - 898Depreciation chargefor the financial year - 259 174 165 4 460 1,062

Disposal/written-offs - (2) - - - - (2)Exchange differences - - 12 12 - - 24

At 31 August 2015 - 682 470 358 12 460 1,982

Carrying amountAt 31 August 2015 14,244 7,552 11,318 10,788 138 2,143 46,183




(CONT’D)


Motor Office vehicles equipment TotalCompany RM'000 RM'000 RM'000

2016CostAt 1 September 2015 591 60 651Additions 331 35 366

At 31 August 2016 922 95 1,017

Accumulated DepreciationAt 1 September 2015 69 7 76Depreciation charge for the financial year 162 8 170

At 31 August 2016 231 15 246

Carrying AmountAt 31 August 2016 691 80 771

2015CostAt 1 September 2014 - 35 35Additions 591 25 616

At 31 August 2015 591 60 651

Accumulated depreciationAt 1 September 2014 - 2 2Depreciation charge for the financial year 69 5 74

At 31 August 2015 69 7 76

Carrying AmountAt 31 August 2015 522 53 575




(CONT’D)


Included in property, plant and equipment of the Group and of the Company are assets acquired under finance lease instalmentplans with carrying amounts as follows:-


Plant and machinery 6,574 4,687 - -Motor vehicles 14,950 5,469 691 522

21,524 10,156 691 522

The carrying amount of property, plant and equipment pledged to financial institutions for banking facilities granted to the Groupas mentioned in Note 18 and are as follows:-

Group 2016 2015 RM'000 RM'000

Freehold land 13,800 13,800Freehold buildings 7,347 7,552Long term leasehold land 2,618 11,318Long term leasehold buildings 2,526 10,788Plant and machinery 7,243 1,326Asset under construction - 5,121

33,534 49,905

The freehold land and buildings, and low cost apartments are stated at valuation based on an independent professional valuationby Messrs. Raine & Horne International Zaki + Partners Sdn Bhd using the market value basis on 30 April 2012.

The long term leasehold land and building, are stated at valuation based on an independent professional valuation by SMYValuers & Consultants Sdn Bhd and Messrs. Raine & Horne International Zaki Partners Sdn Bhd using the market value basison 5 April 2012 and 30 April 2012 respectively.

Leasehold land consist of land with unexpired lease period of more than 50 years.




(CONT’D)


Had the revalued freehold land and buildings, long term leasehold land and buildings and low cost apartments been carried athistorical cost less accumulated depreciation, the carrying amount of each class of properties would have been as follows:-

Group 2016 2015 RM'000 RM'000

Freehold land 5,255 5,255Freehold buildings 5,361 5,507Long term leasehold land 4,795 4,875Long term leasehold buildings 4,689 4,767Low cost apartments 103 106

20,203 20,510

6. GOODWILL ON CONSOLIDATION

The principal activities of the subsidiaries are disclosed in Note 8 to the financial statements. The carrying amount of the goodwillis allocated to each of those companies (collectively known as cash generating units (“CGU”)), which represent the lowest levelwithin the Group at which the goodwill is monitored for internal management purposes.

Group 2016 2015Goodwill RM'000 RM'000

At 1 September 41,024 20,768Addition - 20,256

At 31 August 41,024 41,024

The carrying amounts of goodwill allocated to the CGUs are as follows:-

Group 2016 2015 RM'000 RM'000

WZS KenKeong Sdn. Bhd. ("CGU 1") 20,768 20,768Misi Setia Oil & Gas Sdn. Bhd. ("CGU 2") 20,256 20,256

41,024 41,024

The Group tests goodwill annually for impairment or more frequently if there are indication that the goodwill might be impaired.The recoverable amount of CGU is determined from value-in-use calculations using cash flow projections based on financialbudgets approved by management covering a three-year period.




(CONT’D)

6. GOODWILL ON CONSOLIDATION (CONTINUED)

For each of the CGUs, the value-in-use calculation is most sensitive to the following key assumptions:-

CGU 1 CGU 2

Annual growth rate 9% 7%Long-term growth rate 2% 2%Discount rate 13% 15%

The gross margin used in the value-in-use calculation range from 8% to 27%.

These key assumptions have been used for the analysis of each CGU. The values assigned to the key assumptions representmanagement’s assessment of future trends in the respective industry and are based on both external sources and internalsources (historical data).

(i) Revenue is the forecasted annual growth rate over the three-year projection period. It is based on the average growth levelsexperienced over the past four years.

(ii) Gross margin is the forecasted margin as a percentage of revenue over the three-year projection period. These are basedon the average gross margin of the existing projects.

(iii) Long-term growth rate does not exceed the long-term average growth rates for the industries relevant to the CGU. Cashflows beyond the three-year projection period are extrapolated using the long-term growth rates.

(iv) Discount rate was estimated based on the industry weighted average cost of capital. The discount rate applied to the cashflow projections is pre-tax and reflects management’s estimate of the risks specific to the CGU at the date of assessment.

Based on the sensitivity analysis performed, management believes that there is no reasonably possible change in keyassumptions that would cause the carrying values of the CGUs to exceed its recoverable amounts. The estimated recoverableamount of the CGUs exceed the carrying amount. As a result of the analysis, management did not identify an impairment for theCGUs.

7. INVESTMENT IN ASSOCIATES


Unquoted shares, at cost 2,360 1,763 2,360 1,763Share of post-acquisition profit 25,716 19,324 - -

28,076 21,087 2,360 1,763




(CONT’D)

7. INVESTMENT IN ASSOCIATES (CONTINUED)

Details of the associates are as follows:-

Principal place Group's of business/ country OwnershipName of Entities of incorporation Interest Nature of relationship 2016 2015 % %Held by the CompanySE Satu Sdn. Bhd. # ^ Malaysia 49 49 Mining operations and activities("SSSB")

SE Satu Pelangi Sdn. Bhd. # ^ Malaysia 30 30 Mining operations and activities("SSPSB")

WZS Technologies Sdn. Bhd. Malaysia 20 - Engage in precision engineering(''WZST'')

Held by SE Satu Sdn. Bhd.SE Sinaran Sdn. Bhd. # ^ Malaysia 39 - Providing port services

# Audited by firms other than Messrs. Baker Tilly Monteiro Heng.

^ The financial year end of these associates is not coterminous with the Group. As such, for the purpose of applying equitymethod of accounting, the management financial statements of these associates for the financial year ended 31 August2016 have been used.

The summarised financial information of the Group’s material associates, adjusted for any differences in accounting policies isas follows:-

WZST SSSB SSPSB Total RM'000 RM'000 RM'000 RM'000

As at 31 August 2016

Current assets 3,285 41,579 39,573 84,437Non-current assets 11,229 25,791 - 37,020

Total assets 14,514 67,370 39,573 121,457

Current liabilities 8,577 17,323 18,823 44,723Non-current liabilities 4,297 5,962 - 10,259

Total liabilities 12,874 23,285 18,823 54,982

Non-controlling interests - 162 - 162

Year ended 31 August 2016Included in total comprehensive income is:Revenue 1,569 106,068 126,303 233,940Expenses including finance costs and tax expense (2,915) (98,921) (105,773) (207,609)

(Loss)/Profit for the financial year (1,346) 7,147 20,530 26,331




(CONT’D)


The summarized financial information of the Group’s material associates, adjusted for any differences in accounting policies isas follows:- (Continued) WZST SSSB SSPSB Total RM'000 RM'000 RM'000 RM'000

Reconciliation of net assets to carrying amountShare of net assets at the acquisition date 597 1,470 293 2,360Share of post-acquisition (loss)/profit (269) 20,053 5,932 25,716

Carrying amount in statement of financial position 328 21,523 6,225 28,076

Group's share of resultsGroup's share of profit or loss (269) 3,502 6,159 9,392Group's share of other comprehensive income - - - -

Group's share of total comprehensive income (269) 3,502 6,159 9,392

Other informationDividend received by the Group - - 3,000 3,000

SSSB SSPSB Total RM'000 RM'000 RM'000

As at 31 August 2015

Current assets 47,663 37,897 85,560Non-current assets 14,595 - 14,595

Total assets 62,258 37,897 100,155

Current liabilities 23,932 27,677 51,609Non-current liabilities 1,549 - 1,549

Total liabilities 25,481 27,677 53,158

Year ended 31 August 2015Included in total comprehensive income is:Revenue 133,493 125,604 259,097Expenses including finance costs and tax expense (101,851) (104,384) (206,235)

Profit for the financial year 31,642 21,220 52,862

Reconciliation of net assets to carrying amountShare of net assets at the acquisition date 1,470 293 1,763Share of post-acquisition profit 16,551 2,773 19,324

Carrying amount in statement of financial position 18,021 3,066 21,087




(CONT’D)


SSSB SSPSB Total RM'000 RM'000 RM'000

Group's share of resultsGroup's share of profit or loss 15,764 2,773 18,537Group's share of other comprehensive income - - -

Group's share of total comprehensive income 15,764 2,773 18,537

Other informationDividend received by the Group 3,430 - 3,430

8. INVESTMENT IN SUBSIDIARIES

Company 2016 2015 RM'000 RM'000

Unquoted shares, at costAs at 1 September 125,013 73,790Additions 8,600 52,985Disposal (4,921) (1,762)

As at 31 August 128,692 125,013

(i) Details of the subsidiaries are as follows:-

Principal place Effective of business/ country Ownership Interest/Name of Entities of incorporation Voting Rights Principal Activities 2016 2015 % %

Direct subsidiariesWZS Industries Sdn. Bhd. Malaysia 100 100 Manufacturing and processing of cold drawn bright steel products and related steel products

Weng Zheng Trading Sdn. Bhd. Malaysia 100 100 Dealers in steel products

PT WZ Steel* Indonesia - 100 Manufacturing and processing of cold drawn bright steel products

WZS KenKeong Sdn. Bhd. Malaysia 100 100 Construction and civil engineering

Misi Setia Oil & Gas Sdn. Bhd. Malaysia 100 100 Contractor, subcontractor and to carry on fabrication, assembly and testing works in oil & gas industries

WZS Engineering Sdn. Bhd. Malaysia 100 100 Dormant




(CONT’D)

8. INVESTMENT IN SUBSIDIARIES (CONTINUED)

(i) Details of the subsidiaries are as follows:- (Continued)

Principal place Effective of business/ country Ownership Interest/Name of Entities of incorporation Voting Rights Principal Activities 2016 2015 % %

Direct subsidiariesWZS Prisma Sdn. Bhd. Malaysia 100 100 Civil engineering and other related works to construction

WZS Geoassets Sdn. Bhd. Malaysia 65 65 Trading in mineral resources

WZ Satu Sysbuild Sdn. Bhd. Malaysia 80 80 Dormant

WZS Technologies Sdn. Bhd. Malaysia - 70 Engage in precision engineering

WZS Powergen Sdn. Bhd. Malaysia 60 70 Engage in the provision of power generation and power solutions to oil and gas industry and power sector

WZS Land Sdn. Bhd. Malaysia 100 100 Dormant

WZS Minerals Sdn. Bhd. Malaysia 100 100 Dormant

WZS Bina Sdn. Bhd. Malaysia 100 100 Transportation agent, trading in sand and quarry products

WZS Capital Sdn. Bhd. Malaysia 100 - Dormant

* audited by firms other than Messrs. Baker Tilly Monteiro Heng.

(ii) Acquisition of subsidiaries

2016On 4 March 2016, the Company acquired 2 ordinary shares of RM1 each in the share capital of WZS Capital Sdn. Bhd.(“Capital”), representing 100% equity interest in Capital for a purchase consideration of RM2.

2015On 31 October 2014, the Company completed the acquisition of 5,000,000 ordinary shares of RM1 each in the share capitalof Misi Setia Oil & Gas Sdn. Bhd. ("MISI"), representing 100% equity interest in MISI for a purchase consideration ofRM42,035,294.

The following summarises the consideration transferred and recognised amount of assets acquired and liabilities assumedof MISI at acquisition date:-

Fair value of consideration transferred 2015 RM'000

Cash consideration 16,20010,588,235 ordinary shares of the Company 25,835

42,035




(CONT’D)


(ii) Acquisition of subsidiaries (Continued)

Fair value of consideration transferred (Continued)

Acquisition related costs of RM231,773 have been charged to administrative expenses in the consolidated statement ofprofit or loss and other comprehensive income for the financial year ended 31 August 2015.

The fair value of 10,588,235 ordinary shares issued as part of the consideration paid for MISI was determined on the basisof the closing market price of the Company’s ordinary shares of RM2.44 per share on the acquisition date.

As part of the Share Sale Agreement, the remaining vendors of MISI irrevocably and unconditionally guarantee to theCompany that the profit after tax and non-controlling interest (“PATNCI”) of MISI will not be less than RM12 million for theperiod commencing on 1 January 2015 and ending on 31 December 2017. In the event that the actual PATNCI is less thanRM12 million, the remaining vendors shall pay the Company the shortfall in cash. The Share Sale Agreement also providedthat if PATNCI is more than RM12 million, MISI will have to pay the remaining vendors an amount equivalent to 20% of theexcess amount. The profit guarantee provided by the remaining vendors is realistic and no excess profit is expected.

Fair value of identifiable assets acquired and liabilities recognised

2015 RM'000

AssetsProperty, plant and equipment (Note 5) 9,024Club memberships 125Inventories 8,180Trade and other receivables 27,040Prepayments 413Tax recoverable 23Short term deposit 9,622Cash and bank balances 6,855

61,282

LiabilitiesTrade and other payables (32,707)Borrowings (6,548)Deferred tax liabilities (248)

(39,503)

Total identifiable net assets acquired 21,779Goodwill arising from acquisition (Note 6) 20,256

Fair value of consideration transferred 42,035

Goodwill comprises the non-identifiable intangible assets which are not separately recognised.




(CONT’D)


(ii) Acquisition of subsidiaries (Continued)

Effects if acquisition on cash flows

Net cash outflow arising from acquisition of subsidiary

2015 RM'000

Fair value of consideration transferred 42,035Less: Non-cash consideration (25,835)

Consideration paid in cash 16,200Less: Cash and cash equivalents of a subsidiary acquired (6,855)

Net cash outflows on acquisition 9,345

Effects of acquisition in the statements of profit or loss and other comprehensive income

From the date of acquisition, the subsidiary’s contributed revenue and profit after tax are as follows:-

2015 RM'000

Revenue 114,017Profit for the financial year 5,012

If the acquisition had occurred on 1 September 2014, the consolidated results for the financial year ended 31 August 2015would have been as follows:-

2015 RM'000

Revenue 364,428Profit for the financial year 20,878

(iii) Disposal of subsidiaries

2016

(a) On 24 February 2016, the Company completed the disposal of the entire issued and paid-up share capital of PT WZSteel (“PTWZ”), comprising 5,000 ordinary shares of USD100 each, for a cash consideration of USD500,000 orapproximately RM2,097,430.

(b) On 29 February 2016, the Company completed the disposal of 50% interest in WZS Technologies Sdn. Bhd. (“WZST”),comprising 2,500,000 ordinary shares of RM1 each, for a cash consideration of RM2,500,000. Subsequent to thedisposal, the Group retained significant influence over 20% interest in WZST and the investment is reclassified asinvestment in associates.




(CONT’D)


(iii) Disposal of subsidiaries (Continued)

The effects of the disposal of the investment in subsidiaries on the financial position of the Group are as follows:-

2016 PTWZ WZST TOTAL RM'000 RM'000 RM'000

AssetsPlant and equipment 17,426 11,503 28,929Deferred tax assets 254 - 254Inventories 1,856 - 1,856Trade and other receivables 2,637 1,489 4,126Prepayments - 198 198Tax recoverable 67 - 67Cash and bank balances 480 108 588

22,720 13,298 36,018LiabilitiesTrade and other payables 17,652 4,430 22,082Borrowings 5,105 5,881 10,986

22,757 10,311 33,068

(37) 2,987 2,950Non controlling interest - (896) (896)Fair value of retained investment treated as an associate - (597) (597)

Net assets (37) 1,494 1,457Corporate exercise expense on disposal of subsidiaries 103 24 127Cash consideration (2,097) (2,500) (4,597)

Gain on disposal of subsidiaries (2,031) (982) (3,013)

Cash consideration 2,097 2,500 4,597Less: Cash and cash equivalents of subsidiaries *97 (108) (11)

Net cash inflows on disposal 2,194 2,392 4,586

* This represent bank overdraft balance




(CONT’D)


(iii) Disposal of subsidiaries (Continued)

2015

On 22 May 2015, the Company completed the disposal of the entire issued and paid-up share capital of Weng ZhengMarketing Sdn. Bhd., comprising 2,000,000 ordinary shares of RM1 each, for a cash consideration of RM6,079,394.

The effects of the disposal of the investment in subsidiary on the financial position of the Group are as follows:-

2015 RM'000

AssetsPlant and equipment 1,116Deferred tax assets 298Inventories 16,469Trade and other receivables 3,149Prepayments 55Tax recoverable 48Cash and bank balances 1,681

22,816

LiabilitiesTrade and other payables 14,765Borrowings 274

15,039

Net assets 7,777Corporate exercise expense on disposal of a subsidiary company 372Cash consideration (6,079)

Loss on disposal of a subsidiary company 2,070

Cash consideration 6,079Less: Cash and cash equivalents of subsidiary disposed (1,681)

Net cash inflows on disposal 4,398




(CONT’D)


(iv) Additional investment in subsidiaries

2016

During the financial year:-

(a) a subsidiary, WZS Powergen Sdn. Bhd. increased its issued and fully paid ordinary shares from 2,000,000 units to2,500,000 units of RM1 each. The Company subscribed 100,000 ordinary shares of RM1 each in WZS Powergen Sdn.Bhd.. Further to the subscription of shares, the Company’s effective ownership in WZS Powergen Sdn. Bhd. decreasedfrom 70% to 60%.;

(b) a subsidiary, WZS Prisma Sdn. Bhd. increased its issued and fully paid ordinary shares from 1,000,000 units to 2,000,000units of RM1 each and was fully subscribed by the Company;

(c) a subsidiary, WZS Engineering Sdn. Bhd. increased its issued and fully paid ordinary shares from 500,000 units to1,000,000 units of RM1 each and was fully subscribed by the Company;

(d) a subsidiary, WZS KenKeong Sdn. Bhd. increased its issued and fully paid ordinary shares from 7,000,000 units to10,500,000 units of RM1 each and was fully subscribed by the Company; and

(e) a subsidiary, WZS Bina Sdn. Bhd. increased its issued and fully paid ordinary shares from 2 units to 3,500,000 units ofRM1 each and was fully subscribed by the Company.

2015

During the previous financial year:-

(a) a subsidiary, WZS Geoassets Sdn. Bhd. increased its issued and fully paid ordinary shares from 2 units to 1,000,000units of RM1 each. The Company purchased an additional 649,998 ordinary shares of RM1 each in WZS GeoassetsSdn. Bhd.. As a result, the Company’s effective ownership in WZS Geoassets Sdn. Bhd. decreased from 100% to 65%;

(b) a subsidiary, WZS Technologies Sdn. Bhd. increased its issued and fully paid up ordinary shares from 2 units to5,000,000 units of RM1 each. The Company subscribed of an additional 3,499,998 ordinary shares of RM1 each in WZSTechnologies Sdn. Bhd.. As a result, the Company’s effective ownership in WZS Technologies Sdn. Bhd. decreasedfrom 100% to 70%;

(c) a subsidiary, WZS Powergen Sdn. Bhd. increased its issued and fully paid up ordinary shares from 2 units to 2,000,000units of RM1 each. The Company subscribed 1,399,998 ordinary shares of RM1 each in WZS Powergen Sdn. Bhd.. Asa result, the Company’s effective ownership in WZS Powergen Sdn. Bhd. decreased from 100% to 70%; and

(d) a subsidiary, WZ Satu Sysbuild Sdn. Bhd. increased its issued and fully paid up ordinary shares from 2 units to 500,000units of RM1 each. The Company subscribed for additional 399,998 ordinary shares of RM1 each in WZ Satu SysbuildSdn. Bhd.. Further to the subscription of shares, the Company’s effective ownership in WZ Satu Sysbuild Sdn. Bhd.decreased from 100% to 80%.

(v) Non-controlling interests in subsidiaries

The Group’s subsidiaries which have non-controlling interests are not material individually or in aggregate to the financialposition, financial performance and cash flows of the Group.




(CONT’D)

9. CLUB MEMBERSHIPS

Group 2016 2015 RM'000 RM'000

Club memberships, at cost 205 205

10. TRADE AND OTHER RECEIVABLES


Non-current:

Other receivablesOther receivables 4,416 9,737 6,116 9,737

Current:

Trade receivablesTrade receivables 96,068 91,235 - -Amount due from associate companies 9 - - -Retention sum 22,217 13,789 - -

118,294 105,024 - -Less: Impairment loss- Trade receivables (2,951) (2,819) - -

Trade receivables, net 115,343 102,205 - -

Other receivablesOther receivables 11,317 10,778 5,081 4,689Amount due from associate companies 3,612 3,137 3,587 3,137Amount due from subsidiaries - - 9,039 18,542Deposits 2,035 2,209 48 44Advance payment to suppliers 1,407 937 - -

18,371 17,061 17,755 26,412Less: Impairment loss- Other receivables - (219) - -

Other receivables, net 18,371 16,842 17,755 26,412

Total trade and other receivables (current) 133,714 119,047 17,755 26,412

Total trade and other receivables (non-current and current) 138,130 128,784 23,871 36,149




(CONT’D)

10. TRADE AND OTHER RECEIVABLES (CONTINUED)

Included in other receivables of the Group and of the Company is an amount owing by a former subsidiary company, WengZheng Marketing Sdn. Bhd. (“WZ Marketing”) of RM9,416,252 (2015: RM14,416,252). During the previous financial year, theGroup had entered into a settlement agreement with WZ Marketing to settle the amount of RM14,416,252 over a period of 3years with repayment amounts ranging from RM5,000,000 to RM6,535,398 annually.

Included in the other receivables of the Group and of the Company is GST refundable amounted to RM905,474 and RM76,862respectively (2015: RM145,286 and RM4,622).

Trade receivables are non-interest bearing and are generally on 30 to 120 (2015: 30 to 120) days terms. They are recognisedat their original amounts which represent their fair values on initial recognition.

The amount due from subsidiaries are unsecured, bear interest at rate of 6.85% (2015: 6.85%) per annum, repayable upondemand and are expected to be settled in cash.

The non-trade amount due from associates are unsecured, bear interest at rate of 6.85% (2015: Nil) per annum, repayable upondemand and are expected to be settled in cash.

The trade receivables of the Group in the foreign currencies are as follows:-

Group 2016 2015 RM'000 RM'000

United States Dollar 7,077 4,939Singapore Dollar - 21

Analysis of trade receivables

The Group only maintains an ageing analysis in respect of trade receivables.

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

Group 2016 2015 RM'000 RM'000

Neither past due nor impaired 78,355 68,498

1 - 30 days past due not impaired 13,082 12,93731 - 60 days past due not impaired 7,618 8,37061 - 90 days past due not impaired 2,052 3,699More than 91 days past due not impaired 14,236 8,701

36,988 33,707Impaired 2,951 2,819

118,294 105,024

Receivables that are neither past due nor impaired

Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group.Most of the Group’s trade receivables arise from long standing customers with the Group.

Included in trade receivables of the Group are amounts totalling of RM20,350,970 (2015: RM36,733,000) due from 1 (2015: 2)of its significant receivables.




(CONT’D)

10. TRADE AND OTHER RECEIVABLES (CONTINUED)

Receivables that are past due but not impaired

The Group has not made any allowance for impairment for receivables that are past due as there has not been a significantchange in the credit quality of these receivables and the amounts due are still recoverable.

In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade receivablefrom the date the credit was initially granted up to the reporting date. The Group has policies in place to ensure that credit isextended only to customers with acceptable credit history and payment track records. Allowances for impairment are made onspecific trade receivables when there is objective evidence that the Group will not be able to collect the amounts due.

Receivables that are impaired

The Group’s trade receivables that are impaired at the reporting date and the movement of the allowance accounts used torecord the impairment are as follows:-

Individually impaired Group

2016 2015 RM'000 RM'000

Trade receivables - nominal amounts 2,951 2,819Less: Impairment loss (2,951) (2,819)

- -

Movement in allowance accounts:-

Group 2016 2015 RM'000 RM'000Trade receivablesAt 1 September 2,819 2,239Impairment loss on trade receivables 391 740Reversal of impairment loss (259) (102)Disposal of a subsidiary - (58)Exchange differences - * -

At 31 August 2,951 2,819

Other receivablesAt 1 September 219 -Impairment loss on other receivables - 219Written-off (219) -

At 31 August - 219

* Less than RM1,000

Trade receivables that are individually determined to be impaired at the reporting date relate to debtors that are in significantfinancial difficulties and have defaulted on payments. These receivables are not secured by any collateral or creditenhancements.




(CONT’D)

11. DEFERRED TAX ASSETS/(LIABILITIES)

Deferred tax assets/(liabilities) relate to the following:-

At Recognised At 1 September in profit Recognised Disposal of Exchange 31 August 2015 or loss in equity subsidiary differences 2016Group RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 Deferred tax liabilities: Temporary differences between net carrying amounts and the corresponding tax written down values of property, plant and equipments (930) (1,427) - - - (2,357)

Revaluation on property, plant and equipment (1,296) 57 (139) - - (1,378)

Unabsorbed reinvestment allowance 350 884 - - - 1,234 Other temporary differences (117) 133 - - - 16 (1,993) (353) (139) - - (2,485) Deferred tax assets: Temporary differences between net carrying amounts and the corresponding tax written down values of property, plant and equipments 254 (403) - - - (149)

Unabsorbed tax losses 242 - - (254) 12 - Other deductible differences 175 185 - - - 360 671 (218) - (254) 12 211




(CONT’D)

11. DEFERRED TAX ASSETS/(LIABILITIES)

Deferred tax assets/(liabilities) relate to the following:- (Continued)

At Recognised Acquisition At 1 September in profit Recognised of Disposal of Exchange 31 August 2014 or loss in equity subsidiary subsidiary differences 2015Group RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Deferred tax liabilities:Temporary differences between net carrying amounts and the corresponding tax written down values of property, plant and equipments (1,275) 593 - (248) - - (930)

Revaluation on property, plant and equipment (1,132) 11 (175) - - - (1,296)

Unabsorbed reinvestment allowance 402 (52) - - - - 350

Other temporary differences - (117) - - - - (117) (2,005) 435 (175) (248) - - (1,993)

Deferred tax assets: Temporary differences between net carrying amounts and the corresponding tax written down values of property, plant and equipments 222 32 - - - - 254

Unabsorbed tax losses 497 18 - - (298) 25 242 Other deductible differences - 175 - - - - 175 719 225 - - (298) 25 671

Company 2016 2015 RM'000 RM'000

Property, plant and equipment At 1 September (4) (4)Recognised in profit or loss 4 - At 31 August - (4)




(CONT’D)

11. DEFERRED TAX ASSETS/(LIABILITIES) (CONTINUED)

Presented after appropriate offsetting as follows:-

Group Company 2016 2015 2016 2015 RM'000 RM'000 RM'000 RM'000 Deferred tax assets 211 671 - - Deferred tax liabilities (2,485) (1,993) - (4) (2,274) (1,322) - (4)

The estimated amounts of temporary differences for which no deferred tax assets are recognised in the financial statements areas follows:- Group 2016 2015

RM'000 RM'000 Deductible temporary differences 112 117Unutilised tax losses 2,830 2,092 2,942 2,209

Potential deferred tax assets not recognised at 24% 706 530

12. INVENTORIES

Group 2016 2015

RM'000 RM'000

At costRaw materials 11,578 8,441 Work-in-progress 3,439 451 Finished goods 14,920 21,072 29,937 29,964 At net realisable value Finished goods 249 408 30,186 30,372

The cost of inventories of the Group recognised as expense in cost of sales during the financial year is RM122,442,000 (2015:RM111,205,000).

The cost of inventories of the Group recognised as expense in cost of sales during the financial year in respect of write-down ofinventories to net realisable value was RM225,041 (2015: RM878,000).




(CONT’D)

13. AMOUNT DUE FROM/(TO) CONTRACT CUSTOMERS

Group 2016 2015

RM'000 RM'000

Aggregrate of costs incurred to date 583,814 373,082 Attributable profits 125,374 85,030 709,188 458,112 Progress billings (670,924) (397,853) 38,264 60,259 Represented by:- Amount due from contract customers 51,057 61,255 Amount due to contract customers (12,793) (996) 38,264 60,259

14. DERIVATIVE FINANCIAL ASSETS/(LIABILITIES) Group 2016 Assets Liabilities RM'000 RM'000 Derivatives used for hedging:- Forward foreign contract exchange contracts - buy contracts 95 (73)

Forward exchange contracts are used to manage the foreign exchange currency exposures arising from the Group’s receivablesand payables denominated in currencies other than the functional currencies of the Group. Most of the foreign exchangecontracts have maturities of less than one year after the end of the reporting period. When necessary, the forward contracts arerolled over at maturity. The notional principal amounts of the Group’s outstanding forward foreign exchange contracts as at 31August 2016 were RM9,495,792.

15. SHORT TERM DEPOSITS, CASH AND BANK BALANCES


Cash on hand and at banks 110,345 56,953 77,768 31,711 Deposits with licensed banks 17,979 21,585 5,228 5,042 Cash and bank balances 128,324 78,538 82,996 36,753 Less: Bank overdrafts (Note 18) (11,969) (9,426) - - 116,355 69,112 82,996 36,753 Deposits pledged to licensed bank (12,751) (16,543) - - Cash and cash equivalents 103,604 52,569 82,996 36,753




(CONT’D)

15. SHORT TERM DEPOSITS, CASH AND BANK BALANCES (CONTINUED)

The foreign currency exposure profile of cash and bank balances are as follows:-

Group 2016 2015

RM'000 RM'000

United States Dollar 1,650 2,392

The deposits with licensed banks of the Group amounting to RM12,750,887 (2015: RM16,543,211) have been pledged tolicensed banks for banking facilities granted to subsidiaries. The fixed deposits of the Group earn interest at rates ranging from2.55% to 3.35% (2015: 2.55% to 4.80%) per annum. The deposits of the Group have maturity period ranged from 30 days to365 days (2015: 30 days to 365 days).

16. SHARE CAPITAL

Group and Company 2016 2015 2016 2015 Number of shares Units('000) Units('000) RM'000 RM'000

Ordinary shares of RM0.50 each Authorised:- At 1 September 500,000 200,000 250,000 100,000 Created during the financial year 250,000 300,000 125,000 150,000

At 31 August 750,000 500,000 375,000 250,000

Issued and fully paid:- At 1 September 252,909 190,000 126,455 95,000 Issuance of ordinary shares pursuant to:- - Acquisition of a subsidiary company - 10,588 - 5,294 - Bonus issue 55,648 - 27,824 - - Exercise of warrants 2,019 321 1,010 161 - Private placement 25,291 52,000 12,645 26,000

At 31 August 335,867 252,909 167,934 126,455

During the financial year, the Company increased its authorised share capital from 500,000,000 units to 750,000,000 units ofordinary shares via the creation of 250,000,000 units of RM0.50 each.

During the financial year, the issued and paid-up capital of the Company was increased from RM126,454,618 to RM167,933,698by way of:-

(a) Issuance of 39,300 and 1,980,080 new ordinary shares arising from the exercise of warrants at exercise price of RM0.60and RM0.50 respectively;

(b) Private placement of 25,290,900 new ordinary shares of RM0.50 each at issue price RM1.21; and

(c) Bonus issue of 55,647,880 new ordinary shares of RM0.50 each by capitalisation of the share premium accounts on thebasis of one (1) bonus share for every existing five (5) ordinary shares held.




(CONT’D)

16. SHARE CAPITAL (CONTINUED)

The new ordinary shares issued during the financial year rank pari-passu in all respects with the existing ordinary shares of theCompany.

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

Warrants

The Warrants issued on 29 October 2014 are constituted under a Deed Poll dated 9 October 2014 executed by the Company.The Warrants are listed on the Bursa Malaysia Securities Berhad.

The outstanding Warrants during the financial year ended 31 August 2016 are stated as below:-

Number of Warrants ('000) At Bonus At 1.9.2015 Issue Exercised 31.8.2016 Warrants 94,679 18,928 (2,019) 111,588

The salient features of the Warrants are as follows:-

(i) Each Warrant entitles the registered holder/(s) at any time prior to 28 October 2024 to subscribe for one (1) new ordinaryshare of RM0.50 each. The Warrants entitlement is subject to adjustments under the terms and conditions as set out in theDeed Poll dated 9 October 2014;

(ii) Pursuant to the issuance of bonus shares on the basis of one (1) bonus share for every five (5) existing shares held byshareholders whose name appeared in the Record of Depositors on 17 March 2016 (“Bonus Issue”), a total of 18,927,934additional warrants were issued arising from the adjustment made in relation to the Bonus Issue and the exercise price ofthe outstanding warrants was revised from RM0.60 to RM0.50. This is in accordance to the Deed Poll dated 9 October 2014and Notice to Warrant Holders dated 17 March 2016;

(iii) The exercise period is ten (10) years from the date of issuance until the maturity date. Upon the expiry of the exercise period,any unexercised warrants will lapse and cease to be valid for any purposes; and

(iv) The holders of the Warrants are not entitled to vote in any general meetings or to participate in any dividends, rights, allotmentand/or other forms of distribution other than on winding-up, compromise or arrangement of the Company unless and untilthe holders of the Warrants become a shareholder of the Company by exercising his Warrants into new shares or unlessotherwise resolved by the Company in general meeting.




(CONT’D)

17. RESERVES


Non-distributable Share premium 57,222 67,555 57,222 67,555 Translation reserve - 213 - - Revaluation reserve 5,036 5,164 - - 62,258 72,932 57,222 67,555 Distributable Retained earnings 65,458 47,917 4,036 4,414 127,716 120,849 61,258 71,969

(i) Share premium

The share premium is arrived at after accounting for the premium received over the nominal value of the shares issued tothe public, less subsequent capitalisation for bonus issue of the Company, if any, and share issuance expenses. The sharepremium is not distributable by way of cash dividends but may be utilised in the manner set out in Section 60(3) of theCompanies Act, 1965 in Malaysia.

(ii) Foreign currency translation reserve

The foreign currency translation reserve represents exchange differences arising from the translation of the financialstatements of foreign operations whose functional currencies are different from that of the Group’s presentation currency.

(iii) Revaluation reserve

The revaluation reserve represents increases in the fair value of freehold land and buildings, long term leasehold land andbuildings and low cost apartments, net of tax, and decreases to the extent that such decrease relates to an increase on thesame asset previously recognised in other comprehensive income.

(iv) Retained earnings

The Company will be able to distribute dividends out of its entire retained earnings under the single tier system.




(CONT’D)

18. BORROWINGS


Current Secured Finance lease liabilities 5,381 4,344 257 150 Floating rate bank loan 1,820 2,061 - - Bank overdrafts 37 9,426 - - Trade financing 27,457 37,572 - - Unsecured Bank overdrafts 11,932 - - - Trade financing 33,687 6,029 - - 80,314 59,432 257 150 Non-current Secured Finance lease liabilities 13,303 8,673 229 238 Floating rate bank loan 2,596 4,505 - - 15,899 13,178 229 238 Total loans and borrowings 96,213 72,610 486 388

Floating rate bank loan of a subsidiary of RM4,415,832 (2015: RM3,141,592) bear interest at 5.5% (2015: 5.5%) per annum andis repayable by monthly instalments of RM140,000 and interest shall be calculated monthly and repaid in arrears over 5 yearscommencing from first day of the month following the month of full drawdown of the loan or the expiry of the availability period,whichever is earlier.

(a) Finance lease liabilities


Minimum lease payment On demand and within one year 6,364 4,989 272 165 Later than one year but not later than five years 14,600 9,231 235 246 Later than five years 16 155 - - 20,980 14,375 507 411 Future interest charge (2,296) (1,358) (21) (23) Present value of minimum lease payment 18,684 13,017 486 388




(CONT’D)

18. BORROWINGS (CONTINUED)

(a) Finance lease liabilities (Continued)


Represented by: Current - On demand and within one year 5,381 4,344 257 150 Non-current - Later than one year but not later than five years 13,288 8,522 229 238- Later than five years 15 151 - - 18,684 13,017 486 388

The effective interest rate ranges from 3.22% to 7.03% (2015: 3.22% to 12.66%) per annum. Interest rates are fixed at theinception of the finance lease arrangements.

The finance lease liabilities are effectively secured on the rights of the assets under finance lease.

(b) Loan and borrowings

The remaining maturities of the loans and borrowings (excluding finance lease liabilities) as at 31 August 2016 are as follows:-

Group 2016 2015

RM'000 RM'000

On demand and within one year 74,933 55,088 Later than one year but not later than two years 1,680 2,363 Later than two years but not later than five years 916 2,142 77,529 59,593

The borrowings of the Group are secured by :-

(i) Legal charges over the leasehold land and buildings and the freehold land and buildings of certain subsidiaries asmentioned in Note 5;

(ii) Corporate guarantee given by the Company and a subsidiary;

(iii) Joint and several guarantees by certain directors of the subsidiaries;

(iv) Deposits with licensed banks (Note 15); and

(v) Assignment of contract proceeds.




(CONT’D)

18. BORROWINGS (CONTINUED)

(b) Loan and borrowings (Continued)

Effective interest rates per annum:-

Group 2016 2015 % % Floating rate bank loan 5.50 5.26 to 13.00 Bank overdrafts 7.25 to 8.20 7.35 to 13.00 Trade financing 4.10 to 8.10 4.46 to 12.75

19. TRADE AND OTHER PAYABLES


Trade payables Trade payables 63,029 70,277 - - Retention sums 9,856 6,251 - - Accrued costs 3,396 4,936 - - Total trade payables 76,281 81,464 - - Other payables Accruals 2,823 2,670 73 56 Other payables 4,966 5,450 381 374 Amount due to directors - 1,826 - - Amount due to subsidiaries - - 8,868 1,154 Refundable deposits 27 213 - - Advance payment from contract customers 10,046 35,418 - -

17,862 45,577 9,322 1,584 Total trade and other payables 94,143 127,041 9,322 1,584

The trade and other payables are non-interest bearing and are normally settled on 30 to 120 (2015: 14 to 120) days terms.

During the previous financial year, the amounts due to directors were unsecured, non-interest bearing, repayable on demandand were expected to be received in cash.

The amounts due to subsidiaries are unsecured, bear interest at rate of 6.85% (2015: 6.85%) per annum, repayable upon demandand are expected to be settled in cash.

Included in other payables of the Group is GST payables amounted to RM576,667 (2015:RM763,106).

The advance payment received from contract customers represent advance which are unsecured and interest free.




(CONT’D)

19. TRADE AND OTHER PAYABLES (CONTINUED)

The foreign currency exposure profile of trade payables are as follows:-

Group 2016 2015

RM'000 RM'000

United States Dollar 4,831 4,025 Singapore Dollar 519 7,600 Euro 340 1,135 Pound Sterling 141 7 New Taiwan Dollar 41 2

20. PROVISION FOR LIABLITIES

Group 2016 2015

RM'000 RM'000

At 1 September (359) - Provision during the year - (359)Utilised during the year 56 - Reversal during the year 279 - At 31 August (24) (359)

Provision for liquidated and ascertained damages is recognised in respect of the delayed projects undertaken by a subsidiary.The provision has been recognised for the expected liquidated ascertained damages claims based on the applicable termsand conditions stated in the purchase order.

21. REVENUE


Construction revenue 320,079 225,614 - - Sale of goods 139,549 122,961 - - Services rendered 6,062 2,847 - - Dividend income - Subsidiary - - 3,500 - - Associates - - 3,000 3,430 Others 243 - 77 2,751 465,933 351,422 6,577 6,181




(CONT’D)

22. COST OF SALES


Construction costs 260,237 178,686 - - Cost of goods sold 120,987 109,556 - - Services rendered 3,250 694 - - 384,474 288,936 - -

23. FINANCE COSTS


Interest expense on: - Finance lease liabilities 1,102 632 21 10 - Trade financing 2,132 1,534 - - - Term loans 263 382 - - - Bank overdrafts 505 131 - - - Bank commission and charges 2,024 758 - - - Loan from a subsidiary - - 89 9 6,026 3,437 110 19

24. PROFIT BEFORE TAXATION

Profit before taxation has been arrived at:-


This is stated after charging:- Auditors’ remuneration - current year 226 164 40 31 - underprovision in prior year 76 2 13 3 Impairment loss on receivables 391 959 - - Depreciation of property, plant and equipment 7,300 5,072 170 74 Directors’ emoluments 4,581 5,154 2,154 3,315 Directors’ fees 306 248 296 248 Deposit written off - 55 - - Loss on foreign exchange - realised 694 - - - - unrealised - 240 - - Loss on disposal of a subsidiary - 2,070 - -




(CONT’D)

24. PROFIT BEFORE TAXATION (CONTINUED)

Profit before taxation has been arrived at:- (Continued)


This is stated after charging:- (Continued)

Property, plant and equipment written off 51 47 - - Provision for liabilities - 359 - - Rental of office equipment 152 105 - - Rental of store 26 27 - - Rental of heavy machinery 12,505 5,926 - - Rental of premises 1,018 1,262 - - Rental of house 619 108 - - Rental of land 5,900 446 - - Rental of motor vehicles 712 530 - - Net loss on financial asset measured at amortised cost 772 727 - - Staff costs (excluding directors) 42,291 33,780 1,452 846

And crediting:- Gain on disposal of subsidiaries 3,013 - 39 1,826 Net fair value gain on derivatives 22 - - - Bad debts recovered - 2 - - Rental income from: - factory/office 629 449 - - - others - 165 - - Reversal of impairment loss on receivables 259 76 - - Interest income: - subsidiary companies - - 520 362 - others 2,817 1,732 1,914 1,030 Gain on disposal of property, plant and equipment 648 281 - -

Gain on foreign exchange - realised 20 334 - - - unrealised 160 - - - Reversal of provision of liabilities 279 - - - Staff costs (excluding director) Salaries and wages 37,027 28,959 1,244 711 Contributions to defined contribution plans 3,914 3,291 153 109

Social security contribution 293 218 9 7 Other benefits 1,057 1,312 46 19 42,291 33,780 1,452 846




(CONT’D)

25. DIRECTORS’ REMUNERATION

The details of remuneration receivable by directors of the Group and of the Company during the year are as follows:-


Executive: - Salaries and other emoluments 4,070 4,530 1,898 2,896 - Defined contribution plans 479 552 224 347 Total Executive Directors' remuneration 4,549 5,082 2,122 3,243 Non-Executive: - Fees 306 248 296 248 - Other emoluments 32 72 32 72 Total Non-Executive Directors' remuneration 338 320 328 320

Total Directors' remuneration 4,887 5,402 2,450 3,563

The estimated monetary value of benefits-in-kind received by the Directors otherwise than in cash from the Group and theCompany amounted to RM44,742 (2015: RM28,333) and RM35,200 (2015: RM23,533) respectively.

26. TAXATION


Malaysian income tax expense: - current year 4,107 4,238 - - - under/(over) provision in prior years 298 523 - (1) 4,405 4,761 - (1) Deferred taxation (Note 11): - current year 648 (309) (4) - - over provision in prior years (77) (351) - - 571 (660) (4) -

Income tax expense attributable to continuing operations 4,976 4,101 (4) (1)Income tax expense attributable to discontinuing operation - - - - Income tax expense recognised in profit or loss 4,976 4,101 (4) (1)




(CONT’D)

26. TAXATION (CONTINUED)

A reconciliation of income tax expense applicable to profit before taxation at the statutory income tax rate to income tax expenseat the effective income tax rate of the Group and of the Company is as follows:-


Profit before taxation 27,996 26,734 5,183 1,820 Less : Loss before tax from discontinued operation - (2,207) - - 27,996 24,527 5,183 1,820 Tax at applicable tax rate of 24% (2015: 25%) 6,719 6,132 1,244 455 Tax effects arising from:- - Non-deductible expenses 1,911 2,538 832 228 - Non-taxable income (648) (1,117) (2,080) (858)- Different tax rates in other country - (69) - - - Share of results in associates (2,254) (4,634) - - - Effects of tax incentive

- reinvestment allowances (1,077) - - - - double deduction (45) (7) - -

- Deferred tax asset not recognised 176 1,085 - 168 - Crystallisation of deferred tax

liabilities arising from revaluation (27) (36) - - - Under/(over) provision in prior years

- income tax expense 298 523 - (1)- deferred tax (77) (351) - -

- Different tax rate - 37 - 7 Tax expense for the financial year 4,976 4,101 (4) (1)




(CONT’D)

27. DISCONTINUED OPERATION

As mentioned in Note 8(iii) above, the Company had disposed a subsidiary on 22 May 2015 and hence discontinued its tradingbusiness. The comparative consolidated statement of profit or loss and other comprehensive income has been re-presented toshow the discontinued operation separately from continuing operation.

(i) The results attributable to the discontinued operation were as follows:-

Group 2015 RM'000 Revenue 4,514 Cost of sales (3,379) Gross profit 1,135 Other income 31 Operations and administrative expenses (1,285) Loss from operations of discontinued operation (119)Finance costs (18)Loss on disposal of a subsidiary (2,070) Loss before taxation of discontinued operation (2,207)Income tax - Loss after taxation of discontinued operation (2,207)

(ii) The following items had been charged/(credited) in arriving at loss before taxation:-

Group 2015 RM'000 Auditors’ remuneration - current year 8 - underprovision in prior year 1 Depreciation of property, plant and equipment 177 Interest expenses 18 Rental of premises 495 Staff costs: - Salaries, bonus and wages 243 - Contributions to defined contribution plan 15 - Social security contribution 2 - Other benefits 11 Reversal of impairment loss on receivables (26)Interest income (4)Rental income (1)




(CONT’D)

27. DISCONTINUED OPERATION (CONTINUED)

(iii) Cash flows generated from/(used in) discontinued operation:-

Group 2015 RM'000

Operating activities 2,313 Investing activities (37)Financing activities (1,514) Net cash inflows 762

28. EARNINGS/(LOSS) PER SHARE

Basic Earnings/(Loss) Per Share

Basic earnings/(loss) per share is calculated by dividing the net profit/(loss) for the financial year attributable to owners of theCompany by the weighted average number of ordinary shares outstanding during the financial year:-

Group 2016 2015

RM'000 RM'000

Basic Profit/(loss) attributable to owners of the Company:- - from continuing operations 23,072 22,932 - from discontinued operation - (2,207) 23,072 20,725 Weighted average number of ordinary shares for basic earnings per share (units) 329,648 298,176* Basic earnings/(loss) per ordinary share (sen):- - from continuing operations 7.00 7.69 - from discontinued operation - (0.74) 7.00 6.95

Diluted Earnings/(Loss) Per Share

Diluted earnings/(loss) per share is calculated by dividing the profit/(loss) for the financial year attributable to owners of theCompany by the weighted average number of shares outstanding during the financial year plus the weighted average numberof ordinary shares that would be issued on conversion of the Warrants into ordinary shares.




(CONT’D)

28. EARNINGS/(LOSS) PER SHARE (CONTINUED)

Diluted Earnings/(Loss) Per Share (Continued)

Group 2016 2015

RM'000 RM'000

Diluted Profit/(loss) attributable to owners of the Company:- - from continuing operations 23,072 22,932 - from discontinued operation - (2,207) 23,072 20,725 Weighted average number of ordinary shares for basic earnings per share (units) 329,648 298,176*Effect from dilution from Warrants 64,791 62,875 394,439 361,051* Diluted earning/(loss) per ordinary share (sen):- - from continuing operations 5.85 6.35 - from discontinued operation - (0.61) 5.85 5.74

* Amount adjusted due to bonus issue during the year.

29. DIVIDENDS

A single tier final dividend of 2 sen per ordinary share of RM0.50 each in respect of financial year ended 31 August 2015,amounting to RM5,564,789 was paid on 29 February 2016.

The directors have yet to recommend the payment of any final dividend in respect of the financial year ended 31 August 2016.

30. RELATED PARTIES

(a) Identification of related parties

Parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the party orexercise significant influence over the party in making financial and operational decisions, or vice versa, or where the Groupand the party are subject to common control. Related parties may be individuals or other entities.

Related parties of the Group include:-

(i) subsidiaries;

(ii) associates;

(iii) joint operations;

(iv) related companies in which directors have substantial financial interest; and

(v) key management personnel of the Group’s, comprise persons (including directors) having the authority and responsibilityfor planning, directing and controlling the activities directly or indirectly.




(CONT’D)

30. RELATED PARTIES (CONTINUED)

(b) Significant related party transactions

The significant related party transactions of the Group and of the Company are as follows:-


Associates - Sales 308 173 - - - Dividend income - - 3,000 3,430 Company in which certain directors have substantial interests - Rental of premises - (495) - - - Purchases - (11) - - - Rental income 120 30 - - Subsidiaries - Management fees - - 59 2,751 - Interest income - - 520 362 - Dividend income - - 3,500 - - Interest expenses - - (89) (9)

The management fees were charged based on recovery of costs incurred on behalf of the subsidiaries and associates.

(c) Compensation of key management personnel


Short-term employee benefits 6,375 5,897 2,226 3,216 Post-employment employee benefits 701 662 224 347 7,076 6,559 2,450 3,563

31. FINANCIAL INSTRUMENTS

(a) Categories of financial instruments

The following table analyses the financial assets and liabilities in the statements of financial position by the class of financialinstruments to which they are assigned, and therefore by the measurement basis:-

(i) Loans and receivables (“L&R”)(ii) Fair value through profit or loss (“FVTPL”)(iii) Other financial liabilities (“FL”)




(CONT’D)

31. FINANCIAL INSTRUMENTS (CONTINUED)

(a) Categories of financial instruments (Continued) Carrying L&R/ Amount FL FVTPL RM'000 RM'000 RM'000

Group 31 August 2016 Financial assets Trade and other receivables 138,130 138,130 - Amount due from contract customers 51,057 51,057 - Derivative financial assets 95 - 95 Short term deposits, cash and bank balances 128,324 128,324 - 317,606 317,511 95 Financial liabilities Trade and other payables 84,097 84,097 - Borrowings 96,213 96,213 - Derivative financial liabilities 73 - 73 180,383 180,310 73

31 August 2015 Financial assets Trade and other receivables 128,784 128,784 - Amount due from contract customers 61,255 61,255 - Short term deposits, cash and bank balances 78,538 78,538 - 268,577 268,577 - Financial liabilities Trade and other payables 91,623 91,623 - Borrowings 72,610 72,610 - 164,233 164,233 -




(CONT’D)


(a) Categories of financial instruments (Continued) Carrying L&R/ Amount FL FVTPL RM'000 RM'000 RM'000Company 31 August 2016 Financial assets Trade and other receivables 23,871 23,871 - Short term deposits, cash and bank balances 82,996 82,996 - 106,867 106,867 - Financial liabilities Trade and other payables 9,322 9,322 - Borrowings 486 486 - 9,808 9,808 - 31 August 2015 Financial assets Trade and other receivables 36,149 36,149 - Short term deposits, cash and bank balances 36,753 36,753 - 72,902 72,902 - Financial liabilities Trade and other payables 1,584 1,584 - Borrowings 388 388 - 1,972 1,972 -

(b) Fair value of financial instruments

The carrying amounts of the current portion of loans and borrowings are reasonable approximations of fair values due tothe insignificant impact of discounting.

The carrying amounts of cash and cash equivalents, receivables, payables and short term borrowings are reasonableapproximation of fair values due to the relatively short term nature of these financial instruments.

There has been no transfer between Level 1 and Level 2 during the financial year (2015: no transfer in either direction).




(CONT’D)


(b) Fair value of financial instruments (Continued)

Other than those carrying amounts with reasonable approximation of fair value, the fair value of other financial assets andliabilities together with the carrying amount shown in the statements of financial position are as follows:-

2016 2015 Carrying Carrying Amount Fair Value Amount Fair Value RM'000 RM'000 RM'000 RM'000Group Derivative financial asset 22 22 - - Finance lease liabilities 18,684 18,640 13,017 12,863 Company Finance lease liabilities 486 460 388 388

The fair values of finance lease liabilities are estimated by discounting expected future cash flows at market incrementallending rate for similar types of lending, borrowing or leasing arrangements at the reporting date.

The Group classifies fair value measurements using a fair value hierarchy that reflects the significance of the inputs used inmaking the measurements. The fair value hierarchy has the following levels:-

• Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities.• Level 2 – inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either

directly (i.e. as prices) or indirectly (i.e. derived from prices).• Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The fair value of finance lease liabilities of the Group and of the Company are categorised as Level 2.

32. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group’s and the Company’s activities are exposed to a variety of financial risks arising from their operations and the use offinancial instruments. The key financial risks include interest rate risk, foreign currency risk, liquidity risk and credit risk. TheGroup’s and the Company's overall financial risk management objective is to optimise value for their shareholders. The Groupand the Company do not trade in financial instruments.

The Board of Directors reviews and agrees to policies and procedures for the management of these risks, which are executedby the Group’s senior management. The audit committee provides independent oversight to the effectiveness of the riskmanagement process.

(i) Interest rate risk

Interest rate risk arises on interest-bearing financial instruments recognised in the statement of financial position. It will affectthe Group’s income or the value of its holdings of financial instruments.

The Group’s exposures to interest rate risk for changes in interest rates mainly arise from its short term borrowings and termloans with floating interest rate. Interest rate risk is managed by the Group on an on-going basis with the primary objectiveof limiting the extent to which net interest expense could be affected by an adverse movement in interest rates.




(CONT’D)

32. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

(i) Interest rate risk (Continued)

Sensitivity analysis for interest rate risk

At the end of the financial year, if interest rates had been 25 basis points lower/ higher, with all other variables held constant,the Group’s profit after tax would have been RM193,823 (2015: RM148,982) higher/ lower, arising mainly as a result of lower/higher interest expense on floating rate loans and borrowings.

(ii) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because ofchanges in foreign exchange rates. The Group’s exposure to the risk rates relates primarily to the Group’s operating activities(when sales and purchases that are denominated in foreign currency).

Based on carrying amounts as at the end of the financial year, the material foreign currency denominated financial assetsand liabilities which expose the Group to currency risk are disclosed below:-

United States Singapore Dollar Dollar Euro Total31 August 2016 RM'000 RM'000 RM'000 RM'000 Trade receivables 7,077 - - 7,077 Cash and bank balances 1,650 - - 1,650 Trade payables (4,831) (519) (340) (5,690) Net exposure 3,896 (519) (340) 3,037 31 August 2015 Trade receivables 4,939 21 - 4,960 Cash and bank balances 2,392 - - 2,392 Trade payables (4,025) (7,600) (1,135) (12,760) Net exposure 3,306 (7,579) (1,135) (5,408)

Sensitivity analysis for foreign currency risk

The following demonstrates the sensitivity of the Group’s profit after tax to a reasonably possible change in the United StatesDollar, Singapore Dollar and Euro against the Ringgit Malaysia, with all other variables held constant.




(CONT’D)


(ii) Foreign currency risk (Continued)

2016 2015 RM'000 RM'000

United States Dollar/RM - strengthened 5% 195 165

- weakened 5% (195) (165)

Singapore Dollar/RM - strengthened 5% (26) (379) - weakened 5% 26 379

Euro/RM - strengthened 5% (17) (57) - weakened 5% 17 57

(iii) Liquidity risk

Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations when they falldue. The Group's and the Company’s exposure to liquidity risk arise primarily from mismatches of the maturities betweenfinancial assets and liabilities. The Group’s and the Company’s exposure to liquidity risk arise principally from trade andother payables, loans and borrowings.

Maturity analysis

The maturity analysis of the Group’s and the Company’s financial liabilities by their relevant maturity at the reporting dateare based on contractual undiscounted repayment obligation as follows:-

More than 1 On demand year but not

Carrying Contractual or less than later than More than Amount Cashflows 1 year 5 years 5 yearsGroup RM'000 RM'000 RM'000 RM'000 RM'000 At 31 August 2016 Trade and other payables 84,097 84,097 84,097 - - Derivative financial liabilities 73 73 73 - - Finance lease liabilities 18,684 20,980 6,364 14,600 16 Floating rate bank loan 4,416 4,659 1,920 2,739 - Short term borrowings 73,113 77,821 77,821 - - 180,383 187,630 170,275 17,339 16 At 31 August 2015 Trade and other payables 91,623 91,623 91,623 - - Finance lease liabilities 13,017 14,375 4,989 9,231 155 Floating rate bank loan 6,566 7,183 2,229 2,557 2,397 Short term borrowings 53,027 57,019 57,019 - - 164,233 170,200 155,860 11,788 2,552




(CONT’D)


(iii) Liquidity risk (Continued)

Maturity analysis (Continued)

More than 1 On demand year but not

Carrying Contractual or less than later than More than Amount Cashflows 1 year 5 years 5 yearsCompany RM'000 RM'000 RM'000 RM'000 RM'000

At 31 August 2016 Trade and other payables 9,322 9,322 9,322 - - Finance lease liabilities 486 507 272 235 - Financial guarantee - 84,495 - - - 9,808 94,324 9,594 235 - At 31 August 2015 Trade and other payables 1,584 1,584 1,584 - - Finance lease liabilities 388 411 165 246 - Financial guarantee - 93,930 - - - 1,972 95,925 1,749 246 -

(iv) Credit risk

Trade and other receivables

Credit risk is the risk of financial loss to the Group and the Company that may arise on outstanding financial instrumentsshould a counterparty default on its obligations. The Group’s and the Company’s exposure to credit risk arises primarilyfrom trade and other receivables. The Group and the Company have a credit policy in place and the exposure to credit riskis managed through the application of credit approvals, credit limits and monitoring procedures. For other financial assets,the Group and the Company minimise credit risk by dealing with high credit rating counterparties.

As at the end of the reporting period, the maximum exposure to credit risk arising from trade and other receivables isrepresented by their carrying amounts in the statements of financial position. The carrying amount of trade and otherreceivables are not secured by any collateral or supported by any other credit enhancements. In determining therecoverability of these receivables, the Group and the Company consider any change in the credit quality of the receivablesfrom the date the credit was initially granted up to the reporting date. The Group and the Company have adopted a policyof dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults.

The Group and the Company use ageing analysis to monitor the credit quality of the trade receivables. The ageing of tradereceivables as at the end of the financial year is disclosed in Note 10. Trade receivables that are neither past due norimpaired are creditworthy debtors with good payment records with the Group and the Company. A significant portion ofthese trade receivables are regular customers that have been transacting with the Group and the Company. Managementhas taken reasonable steps to ensure that trade receivables that are neither past due nor impaired are stated at theirrealisable values. Impairment are made on specific receivables when there is objective evidence that the Group and theCompany will not be able to collect all amounts due.

The Group and the Company monitor the results of the subsidiaries and associate companies in determining therecoverability of these intercompany balances.




(CONT’D)


(iv) Credit risk (Continued)

Financial guarantee

The Company is exposed to credit risk in relation to financial guarantees given to banks in respect of loans granted to certainsubsidiaries. The Company monitors the results of the subsidiaries and associates for their repayment on an on-going basis.The maximum exposure to credit risks amounts to RM84,495,000 (2015: RM93,930,000) representing the maximum amountthe Company could pay if the guarantee is called on as disclosed in Note 36.

The financial guarantee have not been recognized since the fair value on initial recognition was not material.

Credit risk concentration profile

The information on credit risk concentration is disclosed in Note 10 to the financial statements.

33. CAPITAL MANAGEMENT

The primary objective of the Group’s and of the Company’s capital management is to ensure that they maintain a strong creditrating and healthy capital ratio in order to support their business and maximise shareholder value. The Group and the Companymanage their capital structure and make adjustments to it, in light of changes in economic conditions. To maintain or adjust thecapital structure, the Group and the Company may adjust the dividend payment to shareholders, return capital to shareholdersor issue new shares. No changes were made in the objectives, policies and processes during the financial year ended 31 August2016 and 31 August 2015.

The debt-to-equity ratios at 31 August 2016 and 31 August 2015 are as follows:-

Group 2016 2015

RM'000 RM'000

Total loans and borrowings 96,213 72,610 Less : Short term deposits, cash and bank balances (128,324) (78,538)

Sub-total (32,111) (5,928)

Net debt - -

Equity attributable to the Owners of the Company,representing total capital 297,093 249,340

Debt-to-equity ratio - -




(CONT’D)

34. SEGMENTAL REPORTING

The Group prepared the following segment information in accordance with MFRS 8 Operating Segments based on the internalreports of the Group’s strategic business units which are regularly reviewed by the Group’s Chief Executive Officer (“CEO”) forthe purpose of making decisions about resource allocation and performance assessment.

The six reportable operating segments are as follows:-

Segments:- Products and services:-Civil engineering and construction Securing and carrying out construction contractsOil and gas Contractor, subcontractor, carry on fabrication & assembly and testing works, trading and after service of products for oil and gas industriesMining Mining operations and activitiesManufacturing Manufacturing of steel productsTrading Trading of steel products Investment Investment holding

Other non-reportable segments comprise mineral resources business and power generation business which are below thequantitative thresholds for determining operating segments.

The inter-segment transactions have been entered into in the normal course of business and have been established on termsand conditions that are not materially different from those obtainable in transactions with unrelated parties.

Segment profitSegment performance is used to measure performance as Group’s Chief Executive Officer believes that such information is themost relevant in evaluating the results of certain segments relative to other entities that operate within these industries.Performance is evaluated based on operating profit or loss which is measured differently from operating profit or loss in theconsolidated financial statements.

Segment assets and liabilitiesThe total of segment assets and liabilities is measured based on all assets and liabilities (excluding investment in associates) ofa segment, as included in the internal reports that are reviewed by the Group’s Chief Executive Officer.




(CONT’D)

34.

SE

GM

EN

TAL

RE

PO

RT

ING

(C

ON

TIN

UE

D)

(a)

Op

erat

ing

Seg

men

t (C

ontin

ued

)

The

follo

win

g ta

ble

pro

vid

es a

n an

alys

is o

f the

Gro

up’s

reve

nue,

resu

lts, a

sset

s, li

abili

ties

and

oth

er s

egm

ent i

nfor

mat

ion

by

bus

ines

s se

gm

ents

:-

2016

Ad

just

men

ts

Civ

il en

gin

eeri

ng

and

a

nd

co

nst

ruct

ion

Oil

& g

as

M

anu

fact

uri

ng

Tra

din

g

In

vest

men

t

O

ther

s

E

limin

atio

n

C

on

solid

atio

nR

even

ue

N

ote

R

M'0

00

RM

'000

R

M'0

00

R

M'0

00

R

M'0

00

R

M'0

00

RM

'000

RM

'000

Ext

erna

l sal

es

A

257

,643

1

13,9

43

54,

478

30

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1

8

9

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-

465,

933

Inte

r-se

gmen

t sal

es

B

-

-

22

3

6,7

21

6,

559

1,5

87

(15,

090)

-

To

tal

25

7,64

3

113,

943

54

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36

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6,57

7

11

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(1

5,09

0)

46

5,93

3

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esu

lts

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tere

st in

com

e

38

5

442

38

3

4

1,91

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4

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2

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tere

st e

xpen

se

(3,

273)

(

1,20

6)

(1,

166)

(351

)

(2

1)

(

9)

-

(6,

026)

Dep

reci

atio

n of

pro

pert

y,

plan

t and

equ

ipm

ent

(2,

597)

(

1,63

5)

(1,

836)

(397

)

(17

0)

(665

)

-

(7,

300)

Impa

irmen

t los

s on

rec

eiva

bles

-

(9

0)

-

(301

)

-

-

-

(

391)

Pro

pert

y, p

lant

and

equ

ipm

ent

writ

ten

off

(48)

(3)

-

-

-

-

-

(51)

Pro

visi

on fo

r lia

bilit

ies

-

279

-

-

-

-

-

279

F

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valu

e lo

ss o

n fin

anci

al

asse

ts a

nd fi

nanc

ial l

iabi

litie

s

(772

)

-

-

-

-

-

-

(

772)

Unr

ealis

ed g

ain/

(loss

) on

fore

ign

exch

ange

-

227

(6

7)

-

-

-

-

160

R

enta

l inc

ome

-

-

417

212

-

-

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629

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ever

sal o

f im

pairm

ent l

oss

of

rece

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les

-

-

4

2

09

-

46

-

2

59

Gai

n/(L

oss)

on

disp

osal

of

prop

erty

, pla

nt a

nd e

quip

men

t

48

(1

44)

708

3

6

-

-

-

6

48

Sha

re o

f res

ult o

f ass

ocia

tes

-

-

-

-

-

9,

392

-

9,3

92

R

esul

ts o

f seg

men

t pro

fit/(

loss

)

C

12,3

15

3

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1,08

5

7

12

5,

183

(1,0

48)

5,

944

27,

996

Taxa

tion

(3,5

92)

(520

)

(4

45)

(78)

4

(123

)

(22

2)

(

4,97

6)

P

rofit

for

the

finan

cial

yea

r

C

8,72

3

3,

285

640

63

4

5,18

7

(1

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2

2

3,02

0

O

ther

info

rmat

ion

Seg

men

t ass

ets

D

136

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96,5

15

69,

194

29

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236

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25,

689

(

117,

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305

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stm

ent i

n as

soci

ates

-

-

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2

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-

25,7

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Seg

men

t lia

bilit

ies

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1

07,7

23

61

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7

17,6

04

9,

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30

(28,

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288

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ital e

xpen

ditu

re

7,08

8

8,

674

7

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31

1

36

6

9

,363

-

33

,684




(CONT’D)

34.

SE

GM

EN

TAL

RE

PO

RT

ING

(C

ON

TIN

UE

D)

(a)

Op

erat

ing

Seg

men

t (C

ontin

ued

)

The

follo

win

g ta

ble

pro

vid

es a

n an

alys

is o

f the

Gro

up’s

reve

nue,

resu

lts, a

sset

s, li

abili

ties

and

oth

er s

egm

ent i

nfor

mat

ion

by

bus

ines

s se

gm

ents

:-(C

ontin

ued

)

2015

A

dju

stm

ents

Civ

il en

gin

eeri

ng

D

isco

nti

nu

ed

and

an

d c

on

stru

ctio

n

O

il &

gas

Man

ufa

ctu

rin

g

Tr

adin

g

In

vest

men

t

Oth

ers

o

per

atio

n

E

limin

atio

n

C

on

solid

atio

n

Rev

enu

e

N

ote

R

M'0

00

RM

'000

RM

'000

RM

'000

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M'0

00

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M'0

00

RM

'000

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00

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l sal

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1,42

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ter-

segm

ent s

ales

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5

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6,

181

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32

(11

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114,

018

49,6

50

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95

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6

(1

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ult

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rest

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me

269

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1,

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(341

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(18

)

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(3,

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reci

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n of

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pert

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ipm

ent

(1,

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(1

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(354

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(74)

(56)

(177

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(5,

249)

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irmen

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19)

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5)

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0)

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5)

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(

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ent

writ

ten

off

(9)

(2

)

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(

36)

-

-

-

-

(47)

Dep

osit

writ

ten

off

-

(

55)

-

-

-

-

-

-

(55)

Pro

visi

on fo

r lia

bilit

ies

-

(3

59)

-

-

-

-

-

-

(

359)

Fai

r va

lue

loss

on

finan

cial

as

sets

and

fina

ncia

l lia

bilit

ies

727

-

-

-

-

-

-

-

7

27

Unr

ealis

ed (

loss

)/ga

in o

n fo

reig

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chan

ge

-

(739

)

499

-

-

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-

-

(

240)

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tal i

ncom

e

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13

475

126

-

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1

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15

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l of i

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irmen

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3

8

3

8

-

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26

-

1

02

Gai

n on

dis

posa

l of p

rope

rty,

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ant a

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quip

men

t

2

163

96

20

-

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-

281

S

hare

of r

esul

t of a

ssoc

iate

s

-

-

-

-

-

18,5

37

-

-

18

,537

R

esul

ts o

f seg

men

t pro

fit/(

loss

)

C

7,2

13

7,

161

(1,4

88)

(1,6

18)

3,64

6

(1

,058

)

(42

2)

1

1,09

3

24,

527

Taxa

tion

(1,9

77)

(2,

149)

(86)

92

1

-

-

18

(4

,101

)

P

rofit

for

the

finan

cial

yea

r

C

5

,236

5,01

2

(1

,574

)

(1

,526

)

3,

647

(1,0

58)

(

422)

11

,111

20,4

26

Oth

er in

form

atio

n

S

egm

ent a

sset

s

D

128,

543

85

,300

94,

694

28,6

03

198

,637

6,

802

-

(11

0,52

4)

432,

055

Inve

stm

ent i

n as

soci

ates

-

-

-

-

1

,763

-

-

19

,324

21,0

87

Seg

men

t lia

bilit

ies

E

10

8,85

8

53,5

09

4

4,77

7

17

,802

1,

976

2,8

72

-

(25,

992)

20

3,80

2 C

apita

l exp

endi

ture

(in

clud

ing

acqu

isiti

on o

f a s

ubsi

diar

y)

9,

862

7

,549

12,

299

821

9,64

0

1

,643

3

7

(

2,18

2)

39

,669




(CONT’D)

34. SEGMENTAL REPORTING (CONTINUED)

(a) Operating Segment (Continued)

Reconciliation of reportable segment revenue, profit or loss, assets and liabilities are as follows:-

A. Revenue from external customers

2016 2015 RM'000 RM'000

Discontinued operation - 4,514

B. Inter-segment revenue

Inter-segment revenues are eliminated on consolidation.

C. Reconciliation of profit or loss

2016 2015 RM'000 RM'000

Share of results of associates 9,392 18,537 Dividend income from an associate (3,000) (3,430)Elimination of inter-segment transactions (448) (118)Discontinued operation - (3,896) 5,944 11,093 Add: Taxation (222) 18 5,722 11,111

D. Reconciliation of assets

2016 2015 RM'000 RM'000

Investment in subsidiaries (128,692) (125,013)Goodwill on consolidation 41,024 41,024 Inter-segment assets (30,235) (26,535) (117,903) (110,524)

E. Reconciliation of liabilities

2016 2015 RM'000 RM'000

Inter-segment liabilities (28,572) (25,992)




(CONT’D)

34. SEGMENTAL REPORTING (CONTINUED)

(b) Geographical Segments

The Group’s business segments are in the followings geographical areas:-

Non-current assets Revenue (excluding DTA & PPE) Capital Expenditure 2016 2015 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Domestic 461,345 345,888 73,721 72,053 33,370 35,576Overseas 4,588 5,534 - - 314 4,093

465,933 351,422 73,721 72,053 33,684 39,669

In determining the geographical segments of the Group, revenue are based on the country in which the customer is located.Total assets and capital expenditure are determined based on where the assets are located.

(c) Information about major customer

(i) For civil engineering and construction segment, revenue from two customers (2015: one customer) representedapproximately RM141,601,000 (2015: RM70,272,000) for the Group’s total revenue.

(ii) During the previous financial year, for oil and gas segment the revenue from one customer represent approximatelyRM48,805,000 for the Group’s total revenue.

35. SIGNIFICANT AND SUBSEQUENT EVENTS

(a) On 22 October 2015, the Company proposed to undertake a private placement of up to 25,290,900 new ordinary shares ofRM0.50 each in WZ Satu (“Placement Shares”), representing up to 10% of the existing issued and paid-up share capital of theCompany. The issue price of the Placement Shares was fixed at RM1.21 per share by the Board on 23 October 2015. On 6November 2015, the Company announced the successful completion of the above private placement exercise and listing ofthe Placement Shares on even date raising gross proceeds of RM30,601,989 towards working capital of the Company.

(b) On 22 October 2015, the Company further proposed to undertake a bonus issue of up to 74,575,827 new WZ Satu Shares(“Bonus Shares”) on the basis of 1 Bonus Share for every 5 existing WZ Satu Shares held; an increase in the authorisedshare capital of WZ Satu from RM250,000,000 comprising 500,000,000 to RM375,000,000 comprising 750,000,000 WZ SatuShares and amendments to the Memorandum and Articles of Association of WZ Satu to align with Bursa Malaysia SecuritiesBerhad’s Listing Requirements. The proposals were subsequently approved by the shareholders of the Company at anExtraordinary General Meeting on 28 January 2016.

(c) On 24 February 2016, the Company and WZS Industries Sdn. Bhd. (a wholly-owned subsidiary of WZ Satu Berhad), enteredinto a Share Purchase Agreement with Camellia Metal Co., Ltd. and Hsiao, Liang-Hsien for the proposed disposal of theentire issued share capital of PT WZ Steel (“PTWZ”) (“Proposed Disposal”) for a disposal consideration of USD500,000.

The Proposed Disposal was completed on 6 April 2016 and accordingly, PTWZ ceased to be a subsidiary of WZ Satu Berhadon even date.

(d) On 29 February 2016, the Company entered into a Share Sale Agreement with Titanium Triangle Sdn. Bhd. (“TT”) for thedisposal of 2,500,000 ordinary shares of RM1.00 each in WZS Technologies Sdn. Bhd. (a subsidiary company of WZ SatuBerhad at the time of disposal) (“WZST”) to TT for a cash consideration of RM2,500,000 (“Proposed Disposal”).

The Proposed Disposal was completed on the even date above and accordingly, WZST ceased to be a subsidiary ofWZ Satu Berhad and is now a 20% associate company of WZ Satu Berhad.




(CONT’D)

36. GUARANTEES

2016 2015 RM'000 RM'000

Guarantee given to financial institution in respect of credit facilitiesgranted to subsidiaries 576,414 339,222

Amount of banking facilities utilised by subsidiaries as at the financial year 78,950 93,930

Guarantee given to financial institution in respect of credit facilitiesgranted to associates 6,374 -

Amount of banking facilities utilised by associates as at the financial year 5,545 -

37. CAPITAL AND OTHER COMMITMENTS

(a) Capital commitments

The Group has made commitments for the following capital expenditure:-

Group 2016 2015

RM'000 RM'000

Authorised and contracted for 12,366 8,707Authorised and not contracted for 33,419 -

45,785 8,707

Share of associates capital commitment 1,842 777

(b) Operating lease commitment – as lessee

The Group leases a number of site office and equipment under operating leases for average lease term between five to tenyears, with option to renew the lease at the end of the lease term.

Future minimum rental payable under the non-cancellable operating lease at the reporting date is as follows:-

2016 2015 RM'000 RM'000

- Not later than one year 2,180 3,076- More than one year but not later than five years 6,575 6,598- More than five years 577 1,565

9,332 11,239


SUPPLEMENTARY INFORMATION ON THE DISCLOSURESOF REALISED AND UNREALISED PROFITS OR LOSSES


On 25 March 2010, Bursa Malaysia Securities Berhad (Bursa Malaysia) issued a directive to all listed issuers pursuant to Paragraphs2.06 and 2.23 of the Bursa Malaysia Main Market Listing Requirements. The directive requires all listed issuers to disclose thebreakdown of the unappropriated profits or accumulated losses as at the end of the reporting period, into realised and unrealisedprofits or losses.

On 20 December 2010, Bursa Malaysia further issued another directive on the disclosure and the prescribed format of presentation.

The breakdown of the retained earnings of the Group and of the Company as at 31 August 2016, into realised and unrealised profits,pursuant to the directive, is as follows:-


Total retained earnings of the Company and its subsidiaries - Realised 76,812 67,588 4,036 4,414 - Unrealised (2,114) (1,561) - - 74,698 66,027 4,036 4,414 Associates - Realised 29,043 20,219 - - - Unrealised (888) (602) - - 102,853 85,644 4,036 4,414 Less: Consolidation adjustment (37,395) (37,727) - - 65,458 47,917 4,036 4,414

The determination of realised and unrealised profits or losses is compiled based on the Guidance on Special Matter No.1,Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities BerhadListing Requirements, issued by the Malaysian Institute of Accountants on 20 December 2010.

The disclosure of realised and unrealised profits or losses above is solely for complying with the disclosure requirements stipulatedin the directive of Bursa Malaysia and should not be applied for any other purposes.


We, YM TENGKU DATO’ SRI UZIR BIN TENGKU DATO’ UBAIDILLAH and DATO’ Ir. WILLIAM TAN CHEE KEONG, being two ofthe directors of WZ Satu Berhad, do hereby state that in the opinion of the directors, the accompanying financial statements set outon pages 52 to 137 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial ReportingStandards and the requirements of Companies Act, 1965 in Malaysia so as to give a true and fair view of financial position of theGroup and of the Company as at 31 August 2016 and of their financial performance and cash flows for the financial year then ended.

The supplementary information set out on page 138 have been prepared in accordance with the Guidance on Special Matter No.1,Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities BerhadListing Requirements, as issued by the Malaysian Institute of Accountants and presented based on the format as prescribed byBursa Malaysia Securities Berhad.

Signed on behalf of the Board of Directors in accordance with a resolution of the directors:-

YM TENGKU DATO’ SRI UZIR BIN TENGKU DATO’ UBAIDILLAH DATO’ Ir. WILLIAM TAN CHEE KEONGExecutive Chairman/Chief Executive Officer Senior Executive Director/Chief Operating Officer

Kuala Lumpur

Date: 16 November 2016

STATEMENTBY DIRECTORS


PURSUANT TO SECTION 169 (15) OF THE COMPANIES ACT, 1965

STATUTORYDECLARATION

PURSUANT TO SECTION 169 (16) OF THE COMPANIES ACT, 1965

I, TAN TENG HENG, being the Executive Director cum Chief Financial Officer primarily responsible for the financial management ofWZ SATU BERHAD, do solemnly and sincerely declare that to the best of my knowledge and belief, the financial statements set outon pages 52 to 137 and supplementary information set out on pages 138 are correct, and I make this solemn declarationconscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.

TAN TENG HENG

Subscribed and solemnly declared by the abovenamed at Kuala Lumpur in the Federal Territory on 16 November 2016

Before me,

Tan Kim ChooiLicense No. W661Commissioner for Oaths


INDEPENDENTAUDITORS’ REPORT


TO THE MEMBERS OF WZ SATU BERHAD (Incorporated in Malaysia)

Report on the Financial Statements

We have audited the financial statements of WZ SATU BERHAD, which comprise the statements of financial position as at 31 August2016 of the Group and of the Company, and the statements of profit or loss and other comprehensive income, statements of changesin equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a summary ofsignificant accounting policies and other explanatory information, as set out on pages 52 to 137.

Directors’ Responsibility for the Financial Statements

The directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view inaccordance with the Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements ofthe Companies Act, 1965 in Malaysia. The directors are also responsible for such internal controls as the directors determine arenecessary 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 accordancewith approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about 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 financialstatements, whether due to fraud or error. In making those risk assessments, we consider internal controls relevant to the Company’spreparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal controls. An auditalso includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made bythe 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 give a true and fair view of the financial position of the Group and of the Company as at 31August 2016 and of their financial performance and cash flows for the financial year then ended in accordance with the MalaysianFinancial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 inMalaysia.

Report on Other Legal and Regulatory Requirements

In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the followings:-

(a) In our opinion, the accounting and other records and the registers required by the Companies Act, 1965 in Malaysia to be keptby the Company and its subsidiaries have been properly kept in accordance with the provisions of the Companies Act, 1965 inMalaysia.

(b) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’s financialstatements are in a form and content appropriate and proper for the purposes of the preparation of the financial statements ofthe Group and we have received satisfactory information and explanations required by us for those purposes.

(c) The auditors’ reports on the financial statements of the subsidiaries did not contain any qualification or any adverse commentmade under Section 174(3) of the Companies Act, 1965 in Malaysia.


INDEPENDENTAUDITORS’ REPORT


TO THE MEMBERS OF WZ SATU BERHAD (Incorporated in Malaysia)

Other Reporting Responsibilities

The supplementary information set out on page 138 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad andis not part of the financial statements. The directors are responsible for the preparation of the supplementary information inaccordance with the Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Contextof 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, 1965in Malaysia and for no other purpose. We do not assume responsibility to any other person for the contents of this report.

Baker Tilly Monteiro Heng Ong Teng YanNo. AF 0117 No. 3076/07/17 (J)Chartered Accountants Chartered Accountant

Kuala LumpurDate: 16 November 2016


ANALYSIS OFSHAREHOLDINGS


AS AT 1 DECEMBER 2016

Authorised Share Capital : RM375,000,000.00Issued and Paid-Up Share Capital : RM174,413,697.50 comprising 348,827,395 Ordinary Shares of RM0.50 eachClass of Shares : Ordinary Shares of RM0.50 eachVoting Rights : One (1) vote per Ordinary Share

ANALYSIS OF SHAREHOLDINGS

Size of Shareholdings No. of Shareholders % No. of Shares Held %

1 - 99 33 2.28 850 0.00100 - 1,000 104 7.19 40,070 0.011,001 - 10,000 693 47.89 3,051,290 0.8810,001 - 100,000 485 33.52 15,447,601 4.43100,001 - 17,441,368 (*) 127 8.77 190,157,456 54.5117,441,369 and above (**) 5 0.35 140,130,128 40.17

TOTAL 1,447 100.00 348,827,395 100.00

Remarks: * Less than 5% of Issued Shares ** 5% and above of Issued Shares

SUBSTANTIAL SHAREHOLDERS

The substantial shareholders of WZ Satu Berhad and their respective shareholdings based on the Register of SubstantialShareholders of WZ Satu Berhad as at 1 December 2016 are as follows:-

No. of SharesSubstantial Shareholders Direct % Indirect %

YM Tengku Dato’ Sri Uzir Bin Tengku Dato’ Ubaidillah 89,919,536 25.78 - -Tan Ching Kee 46,059,432 13.20 (1)4,202,390 1.20Lembaga Tabung Haji 31,516,100 9.03 - -Ong Lee Veng @ Ong Chuan Heng 25,211,300 7.23 - -

Note:

(1) Through direct holding of spouse.




AS AT 1 DECEMBER 2016 (Cont’d)

DIRECTORS’ SHAREHOLDINGS

The Directors’ Shareholdings based on the Register of Directors’ Shareholdings of WZ Satu Berhad as at 1 December 2016 are asfollows:-

Direct Interest Indirect InterestDirectors/ Alternate Directors No. of Shares Held % No. of Shares Held %

YM Tengku Dato’ Sri Uzir bin Tengku Dato’ Ubaidillah 89,919,536 25.78 - -Dato’ Ir. William Tan Chee Keong 13,950,000 4.00 (1)265,800 0.08Tan Teng Heng 6,600,000 1.89 - -Tan Ching Kee 46,059,432 13.20 (1)4,202,390 1.20Tan Chong Boon 6,148,520 1.76 (1)124,200 0.04Dato’ Ir. Mohd Ghazali bin Kamaruzaman - - - -Dato’ Amin Rafie bin Othman 2,400 * - -Datuk Idris bin Haji Hashim - - - -Dato’ Syed Kamarulzaman BinSyed Zainol Khodki Shahabudin - - - -

Dato’ Yeong Kok Hee 85,200 0.02 - -Rosli bin Shafiei - - - -Datuk Ahmad Nizam Bin Salleh - - - -Ng Chong Tin 2,961,040 0.85 - -Choi Chee Ken 13,950,000 4.00 - -

* Insignificant

Note:






THE 30 LARGEST SECURITIES ACCOUNT HOLDERS(without aggregating securities from different securities accounts belonging to the same person)

NAME NO OF HOLDINGS PERCENTAGE

1 TENGKU UZIR BIN TENGKU UBAIDILLAH 41,849,676 12.002 LEMBAGA TABUNG HAJI 31,516,100 9.033 MAYBANK NOMINEES (TEMPATAN) SDN BHD 30,111,620 8.63 PLEDGED SECURITIES ACCOUNT FOR TENGKU UZIR BIN TENGKU UBAIDILLAH4 TAN CHING KEE 18,459,432 5.295 ONG LEE VENG @ ONG CHUAN HENG 18,193,300 5.226 PACIFIC TRUSTEES BERHAD 14,400,000 4.13 TAN CHING KEE7 PACIFIC TRUSTEES BERHAD 13,950,000 4.00 WILLIAM TAN CHEE KEONG8 PACIFIC TRUSTEES BERHAD 13,950,000 4.00 CHOI CHEE KEN9 KENANGA NOMINEES (TEMPATAN) SDN BHD 13,200,000 3.78 PLEDGED SECURITIES ACCOUNT FOR TAN CHING KEE (029)10 PERBADANAN NASIONAL BERHAD 12,000,000 3.4411 KENANGA NOMINEES (TEMPATAN) SDN BHD 11,112,920 3.19 PLEDGED SECURITIES ACCOUNT FOR TENGKU ABDULLAH IBNI SULTAN HJ AHMAD SHAH12 KENANGA NOMINEES (TEMPATAN) SDN BHD 10,758,240 3.08 PLEDGED SECURITIES ACCOUNT FOR TENGKU UZIR BIN TENGKU UBAIDILLAH13 ABB NOMINEE (TEMPATAN) SDN BHD 7,200,000 2.06 PLEDGED SECURITIES ACCOUNT FOR TENGKU UZIR BIN TENGKU UBAIDILLAH14 KENANGA NOMINEES (TEMPATAN) SDN BHD 7,018,000 2.01 PLEDGED SECURITIES ACCOUNT FOR ONG LEE VENG @ ONG CHUAN HENG15 PACIFIC TRUSTEES BERHAD 6,549,411 1.88 TEOH CHEE YOONG16 TAN CHONG BOON 6,148,520 1.7617 KENANGA NOMINEES (TEMPATAN) SDN BHD 5,000,000 1.43 PLEDGED SECURITIES ACCOUNT FOR TAN TENG HENG18 MAJLIS AGAMA ISLAM SELANGOR 4,800,000 1.3819 PACIFIC TRUSTEES BERHAD 4,197,576 1.20 CHONG KIM THAM20 NG LAY HOON 4,172,390 1.2021 ONG WEE KUAN 3,250,200 0.9322 NG CHONG TIN 2,961,040 0.8523 WONG TUI WAN 2,070,600 0.5924 KAF NOMINEES (TEMPATAN) SDN.BHD. 2,001,600 0.57 PLEDGED SECURITIES ACCOUNT FOR TENGKU ABDULLAH IBNI SULTAN HJ AHMAD SHAH (TE1113)25 MAYBANK NOMINEES (TEMPATAN) SDN BHD 2,000,000 0.57 ETIQA INSURANCE BERHAD (GROWTH FUND)26 PACIFIC TRUSTEES BERHAD 1,958,894 0.56 MOHD ARIS BIN MOHD ARIF27 TAN AI CHOO 1,957,320 0.5628 CHUA CHIN HEAN 1,815,860 0.5229 ONG WEE KUAN 1,619,760 0.4630 HLB NOMINEES (TEMPATAN) SDN BHD 1,600,000 0.46 PLEDGED SECURITIES ACCOUNT FOR TAN TENG HENG

TOTAL 295,822,459 84.78


ANALYSIS OFWARRANT HOLDINGS


AS AT 1 DECEMBER 2016

Number of Outstanding Warrants Issued : 98,627,554

ANALYSIS OF WARRANT HOLDINGS

Size of Warrant Holdings No. of Warrant Holders % No. of Warrants Held %

1 - 99 40 5.14 1,962 0.00100 - 1,000 140 17.99 88,566 0.091,001 - 10,000 296 38.05 1,265,671 1.2810,001 - 100,000 235 30.21 7,870,742 7.98100,001 - 4,931,376 (*) 62 7.97 37,990,146 38.524,931,377 and above (**) 5 0.64 51,410,467 52.13

TOTAL 778 100.00 98,627,554 100.00

Remarks: * Less than 5% of Issued Warrants ** 5% and above of Issued Warrants

DIRECTORS’ WARRANT HOLDINGS

The Directors’ Warrant Holdings based on the Register of Directors’ Shareholdings of WZ Satu Berhad as at 1 December 2016 areas follows:-

Direct Interest Indirect InterestDirectors/ Alternate Directors No. of Warrants Held % No. of Warrants Held %

YM Tengku Dato’ Sri Uzir bin Tengku Dato’ Ubaidillah 36,460,467 36.97 - -Dato’ Ir. William Tan Chee Keong 6,975,000 7.07 (1)60,900 0.06Tan Teng Heng 2,700,000 2.74 - -Tan Ching Kee 9,669,716 9.80 (1)2,101,195 2.13Tan Chong Boon 3,412,320 3.46 (1)62,100 0.06Dato’ Ir. Mohd Ghazali bin Kamaruzaman - - - -Dato’ Amin Rafie bin Othman 1,200 * - -Datuk Idris bin Haji Hashim - - - -Dato’ Syed Kamarulzaman BinSyed Zainol Khodki Shahabudin - - - -

Dato’ Yeong Kok Hee 303,000 0.31 - -Rosli bin Shafiei - - - -Datuk Ahmad Nizam Bin Salleh - - - -Ng Chong Tin 1,660,520 1.68 - -Choi Chee Ken 6,975,000 7.07 - -

* Insignificant

Note:



ANALYSIS OFWARRANT HOLDINGS



THE 30 LARGEST SECURITIES ACCOUNT HOLDERS(without aggregating securities from different securities accounts belonging to the same person)

NAME NO OF HOLDINGS PERCENTAGE

1 TENGKU UZIR BIN TENGKU UBAIDILLAH 20,601,787 20.892 MAYBANK NOMINEES (TEMPATAN) SDN BHD 10,258,680 10.40 PLEDGED SECURITIES ACCOUNT FOR TENGKU UZIR BIN TENGKU UBAIDILLAH3 PACIFIC TRUSTEES BERHAD 6,975,000 7.07 WILLIAM TAN CHEE KEONG4 PACIFIC TRUSTEES BERHAD 6,975,000 7.07 CHOI CHEE KEN5 KENANGA NOMINEES (TEMPATAN) SDN BHD 6,600,000 6.69 PLEDGED SECURITIES ACCOUNT FOR TAN CHING KEE (029)6 ABB NOMINEE (TEMPATAN) SDN BHD 3,600,000 3.65 PLEDGED SECURITIES ACCOUNT FOR TENGKU UZIR BIN TENGKU UBAIDILLAH7 TAN CHONG BOON 3,412,320 3.468 TAN CHING KEE 3,069,716 3.119 KENANGA NOMINEES (TEMPATAN) SDN BHD 2,700,000 2.74 PLEDGED SECURITIES ACCOUNT FOR TAN TENG HENG10 NG LAY HOON 2,086,195 2.1211 KENANGA NOMINEES (TEMPATAN) SDN BHD 2,000,000 2.03 PLEDGED SECURITIES ACCOUNT FOR TENGKU UZIR BIN TENGKU UBAIDILLAH12 NG CHONG TIN 1,660,520 1.6813 CHUA CHIN HEAN 1,424,840 1.4414 WONG TUI WAN 1,035,300 1.0515 KAF NOMINEES (TEMPATAN) SDN.BHD. 1,000,800 1.01 PLEDGED SECURITIES ACCOUNT FOR TENGKU ABDULLAH IBNI SULTAN HJ AHMAD SHAH (TE1113)16 MOHAMED TARMIDZI BIN MAT AKHIR 979,500 0.9917 TAN AI CHOO 978,660 0.9918 RHB CAPITAL NOMINEES (TEMPATAN) SDN BHD 900,000 0.91 PLEDGED SECURITIES ACCOUNT FOR HAMZAH BIN MOHD SALLEH (BSL)19 CHUA SHIA-TSAN 882,750 0.9020 TAN PANG HONG 852,940 0.8621 PACIFIC TRUSTEES BERHAD 750,000 0.76 HO KEK YEE22 ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD 560,000 0.57 PLEDGEC SECURITIES ACCOUNT FOR NG CHEE KEONG (8122706)23 HOW CHEE SENG 523,140 0.5324 TAN AI CHOO 401,495 0.4125 YEW HIN CHAI 364,320 0.3726 LIM LEONG HOCK 360,060 0.3727 ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD 360,000 0.37 PLEDGED SECURITIES ACCOUNT FOR NG CHEE KEONG28 PHANG CHIN KHIONG 359,340 0.3629 CHONG TZE LING 316,600 0.3230 CHONG POH SAM 312,000 0.32

TOTAL 82,300,963 83.44


LIST OFPROPERTIES


AS AT 31 AUGUST 2016

Land area/ Net Date of Built-up Description Book Value Age of AcquisitionLocation Tenure Area (sq ft) /Existing Use (RM'000) Building /Revaluation

Lot 1850 Jalan KPB 10 Freehold 102,154/ Manufacturing Plant 11,273 16 years 2012Kawasan Perindustrian Balakong 79,759 cum Warehouse43300 Seri KembanganSelangor Darul Ehsan

Lot 1882 Jalan KPB 9 Leasehold 81,646/ Manufacturing Plant 7,074 9 years 2012Kawasan Perindustrian Balakong (Expires 40,860 cum Warehouse43300 Seri Kembangan 17.8.2065)Selangor Darul Ehsan

Lot 1890 Jalan KPB 9 Freehold 78,642/ Corporate office 9,873 12 years 2012Kawasan Perindustrian Balakong 59,992 cum Warehouse43300 Seri KembanganSelangor Darul Ehsan

B2-1 Block B Freehold 650 Apartment / 67 13 years 2012Jalan Damai Perdana 2/8 Staff QuartersBandar Damai Perdana56100 Kuala Lumpur

B2-2 Block B Freehold 650 Apartment / 67 13 years 2012Jalan Damai Perdana 2/8 Staff QuartersBandar Damai Perdana56100 Kuala Lumpur

No. 35, Jalan P4/6, Seksyen 4 Leasehold 50,242/ Manufacturing Plant 5,145 9 years 2011Bandar Teknologi Kajang (Expires 26,648 cum Office43500 Semenyih 17.4.2093)Selangor Darul Ehsan


NOTICE OF ANNUALGENERAL MEETING


AGENDA

1. To receive the Audited Financial Statements for the financial year ended 31 August 2016 together withthe Reports of the Directors and the Auditors thereon.

2. To declare a Single Tier final dividend of 2 sen per ordinary share of RM0.50 each and a Single Tier specialdividend of 1 sen per ordinary share of RM0.50 each for the financial year ended 31 August 2016.

3. To approve the payment of Directors’ fees for the financial year ended 31 August 2016.

4. To re-elect the following Directors who are retiring in accordance with Article 84 of the Company’s Articlesof Association and being eligible, have offered themselves for re-election:-(a) Tengku Dato’ Sri Uzir Bin Tengku Dato’ Ubaidillah;(b) Mr. Tan Teng Heng;(c) Mr. Tan Ching Kee; and(d) Dato’ Ir. Mohd Ghazali Bin Kamaruzaman.

5. To re-elect Datuk Ahmad Nizam Bin Salleh who is retiring in accordance with Article 91 of the Company’sArticles of Association and being eligible, has offered himself for re-election.

6. To re-appoint Messrs. Baker Tilly Monteiro Heng as Auditors of the Company until the conclusion of thenext Annual General Meeting and to authorise the Directors to fix their remuneration.

As Special Business

To consider and if thought fit, with or without any modification, to pass the following Ordinary Resolutions:-

7. ORDINARY RESOLUTION NO. 1

- AUTHORITY TO ISSUE SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965

“That subject to Section 132D of the Companies Act, 1965 and approvals of the relevantgovernmental/regulatory authorities, the Directors be and are hereby empowered to issue and allotshares in the Company, at any time to such persons and upon such terms and conditions and forsuch purposes as the Directors may, in their absolute discretion, deem fit, provided that the aggregatenumber of shares to be issued does not exceed ten per centum (10%) of the issued and paid-upshare capital of the Company for the time being and the Directors be and are also empowered toobtain the approval for the listing of and quotation for the additional shares so issued on BursaMalaysia Securities Berhad.

And that such authority shall commence immediately upon the passing of this Resolution and continueto be in force until conclusion of the next Annual General Meeting of the Company.”

(Resolution 1)

(Resolution 2)

(Resolution 3)(Resolution 4)(Resolution 5)(Resolution 6)

(Resolution 7)

(Resolution 8)

(Resolution 9)

NOTICE IS HEREBY GIVEN that the Twelfth Annual General Meeting (“12th AGM”) of the Company will be held at Kristal Ballroom1, Level 1, West Wing, Hilton Petaling Jaya, No. 2 Jalan Barat, 46200 Petaling Jaya, Selangor Darul Ehsan, Tuesday, 24 January2017 at 10:00 a.m. for the following purposes:-




(CONT’D)

ORDINARY RESOLUTION NO. 2

- PROPOSED RENEWAL OF AUTHORITY FOR THE COMPANY TO PURCHASE UP TO 10% OF ITSOWN SHARES IN THE ISSUED AND PAID-UP SHARE CAPITAL OF THE COMPANY (“PROPOSEDRENEWAL OF SHARE BUY-BACK AUTHORITY)

“That subject always to the Companies Act, 1965, the provisions of the Memorandum and Articles ofAssociation of the Company, the Listing Requirements of Bursa Malaysia Securities Berhad (“BursaSecurities”) and all other applicable laws, guidelines, rules and regulations, if applicable, theCompany be and is hereby authorised to purchase such amount of ordinary shares of RM0.50 eachin the Company as may be determined by the Directors of the Company from time to time throughBursa Securities as the Directors may deem fit and expedient in the interest of the Company, providedthat:-

(i) the aggregate number of shares purchased does not exceed 10% of the total issued and paid-up share capital of the Company as quoted on Bursa Securities as at the point of purchase;

(ii) the maximum funds to be allocated by the Company for the purpose of purchasing its own sharesshall not exceed the total retained profits and share premium account of the Company based onthe latest audited financial statements and/or the latest Management account of the Company(where applicable) available, upon such terms and conditions as set out in the Statement toShareholders dated 28 December 2016; and

(iii) the Directors of the Company may decide either to retain the shares purchased as treasury sharesor cancel the shares or retain part of the shares so purchased as treasury shares and cancel theremainder or to resell the shares or distribute the shares as dividends.

That authority conferred by this Resolution shall commence immediately upon the passing of thisResolution and will only continue to be in force until:

(i) the conclusion of the next Annual General Meeting of the Company, unless by ordinary resolutionpassed at that meeting, the authority is renewed, either unconditionally or subject to conditions;or

(ii) the expiration of the period within which the next Annual General Meeting after that date isrequired by law to be held; or

(iii) revoked or varied by resolution passed by the shareholders of the Company in general meeting,

whichever occurs first.

And that authority be and is hereby given to the Directors of the Company to act and take all suchsteps and do all things as are necessary or expedient to implement, finalise and give full effect to theaforesaid purchase."


- RETENTION OF DATO’ AMIN RAFIE BIN OTHMAN AS AN INDEPENDENT NON-EXECUTIVEDIRECTOR OF THE COMPANY

“That Dato’ Amin Rafie Bin Othman be and is hereby retained as an Independent Non-ExecutiveDirector of the Company and to hold office until the conclusion of the next Annual General Meetingpursuant to the Malaysian Code on Corporate Governance 2012.”

(Resolution 10)

(Resolution 11)



(CONT’D)


- RETENTION OF DATO’ YEONG KOK HEE AS AN INDEPENDENT NON-EXECUTIVE DIRECTOROF THE COMPANY

“That Dato’ Yeong Kok Hee be and is hereby retained as an Independent Non-Executive Director ofthe Company and to hold office until the conclusion of the next Annual General Meeting pursuant tothe Malaysian Code on Corporate Governance 2012.”

SPECIAL RESOLUTION

- PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION OF THE COMPANY

“That the Proposed Amendments to the Company’s Articles of Association as set out in Appendix Iwhich is circulated to the shareholders of the Company together with the Annual Report in respect ofthe financial year ended 31 August 2016 be and are hereby approved and adopted and that theDirectors and Secretaries of the Company be and are hereby authorised to take all steps as arenecessary and expedient in order to implement, finalise and give full effect to the ProposedAmendments to the Company’s Articles of Association.”

8. To transact any other ordinary business of which due notice shall have been given.

NOTICE OF BOOK CLOSURE

NOTICE IS ALSO HEREBY GIVEN that a Single Tier final dividend of 2 sen per ordinary share of RM0.50each and a Single Tier special dividend of 1 sen per ordinary share of RM0.50 each for the financial yearended 31 August 2016 will be payable on 1 March 2017 to depositors whose names appear in the Record ofDepositors at the close of business on 3 February 2017 if approved by the members at the 12th AGM.

A Depositor shall qualify for entitlement only in respect of:-

(a) Shares transferred to the Depositor’s Securities Account before 4.00 p.m. on 3 February 2017 in respectof ordinary transfers; and

(b) Shares bought on the Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rulesof the Bursa Malaysia Securities Berhad.

By Order of the Board

CHUA SIEW CHUAN (MAICSA 0777689)PAN SENG WEE (MAICSA 7034299)Company Secretaries

Kuala LumpurDated : 28 December 2016

(Resolution 12)

(Resolution 13)




(CONT’D)

Explanatory Notes to Special Business: -

1. Authority to Issue Shares Pursuant to Section 132D of the Companies Act, 1965

The Company wishes to renew the mandate on the authority to issue shares pursuant to Section 132D of the Companies Act,1965 at the 12th AGM of the Company (hereinafter referred to as the “General Mandate”).

The Company had been granted a general mandate by its shareholders at the 11th AGM of the Company held on 28 January2016 (hereinafter referred to as the “Previous Mandate”).

The Previous Mandate granted by the shareholders had not been utilised and hence no proceed was raised therefrom.

The purpose to seek the General Mandate is to enable the Directors of the Company to issue and allot shares at any time tosuch persons in their absolute discretion without convening a general meeting as it would be both time-consuming and costlyto organise a general meeting. This authority unless revoked or varied by the Company in a general meeting, will expire at thenext Annual General Meeting.

The Company is actively exploring opportunities to broaden its earnings potential. The proceeds raised from the General Mandatewill provide flexibility to the Company for any possible fund-raising activities, including but not limited to further placement ofshares for purpose of funding future investment project(s), working capital and/or acquisitions.

2. Proposed Renewal of Share Buy-back Authority

The proposed Ordinary Resolution 10, if passed, will empower the Directors to buy-back and/or hold up to a maximum of 10%of the Company’s issued and paid-up share capital at any point of time, by utilising the funds allocated which shall not exceedthe total retained profits and share premium of the Company. This authority, unless revoked or varied by the Company in generalmeeting, will expire at the conclusion of the next Annual General Meeting of the Company, or the expiration of period withinwhich the next Annual General Meeting is required by law to be held, whichever is earlier.

Please refer to the Statement to Shareholders dated 28 December 2016 for more information.

3. Approval to Continue in Office as Independent Non-Executive Director

(a) Dato’ Amin Rafie Bin Othman

Dato’ Amin Rafie Bin Othman was appointed as Independent Non-Executive Director of the Company on 26 October 2007and his tenure as an Independent Non-Executive Director of the Company had exceeded a cumulative term of nine (9)years. In accordance with the MCCG 2012, the Board of Directors of the Company, after having assessed the independenceof Dato’ Amin Rafie Bin Othman, regarded him to be independent, based amongst others, the following justifications andrecommends that Dato’ Amin Rafie Bin Othman be retained as Independent Non-Executive Director of the Company:-

(i) He has met the independence guidelines as set out in Chapter 1 of the Bursa Malaysia Securities Berhad Main MarketListing Requirements;

(ii) He does not have any conflict of interest with the Company and has not been entering/is not expected to enter intocontract(s) especially material contract(s) with the Company and/or its subsidiary companies; and

(iii) The Board of Directors is of the opinion that Dato’ Amin Rafie Bin Othman is an important Independent Non-ExecutiveDirector of the Board in view of his incumbent experience in investment/asset management, familiarity with the Group’sactivities and corporate history. He has been providing invaluable contributions to the Board in his role as anIndependent Non-Executive Director.




(CONT’D)

(b) Dato’ Yeong Kok Hee

Dato’ Yeong Kok Hee was appointed as Independent Non-Executive Director of the Company on 26 October 2007 and histenure as an Independent Non-Executive Director of the Company had exceeded a cumulative term of nine (9) years. Inaccordance with the MCCG 2012, the Board of Directors of the Company, after having assessed the independence of Dato’Yeong Kok Hee, regarded him to be independent, based amongst others, the following justifications and recommends thatDato’ Yeong Kok Hee be retained as Independent Non-Executive Director of the Company:-

(i) He has met the independence guidelines as set out in Chapter 1 of the Bursa Malaysia Securities Berhad Main MarketListing Requirements;

(ii) He does not have any conflict of interest with the Company and has not been entering/is not expected to enter intocontract(s) especially material contract(s) with the Company and/or its subsidiary companies; and

(iii) The Board of Directors is of the opinion that Dato’ Yeong Kok Hee is an important Independent Non-Executive Directorof the Board in view of his strategic relationships and alliances with the senior management of the financial andgovernment sectors, familiarity with the Group’s activities and corporate history. He has been providing invaluablecontributions to the Board in his role as an Independent Non-Executive Director.

4. Proposed Amendments to the Articles of Association of the Company (hereinafter referred to as “the ProposedAmendments”)

The Proposed Amendments are to streamline the Company’s Articles of Association to be aligned with the amendments to theBursa Securities Main Market Listing Requirements, and to incorporate the necessary amendments to ensure clarity andconsistency with the relevant regulatory provisions.

Please refer to Appendix I which is circulated to the shareholders of the Company together with the Annual Report in respect ofthe financial year ended 31 August 2016 for more information.

Notes :-

1. In respect of deposited securities, only members/shareholders whose names appear in the Record of Depositors on 17 January2017 shall be eligible to attend the Meeting.

2. A member of the Company entitled to attend and vote at the Meeting is entitled to appoint up to two (2) proxies to attend andvote in his stead. There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend and vote at theMeeting shall have the same rights as the member to speak at the Meeting.

3. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965shall not apply to the Company. Where a member appoints two (2) proxies to attend and vote at the Meeting, he shall specifythe proportion of his shareholdings to be represented by each proxy, failing which, the appointment shall be invalid.

4. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writingor, if the appointor is a corporation, either under its common seal or under the hand of an officer or attorney duly authorised.

5. Where a member of the Company is an exempt authorised nominee as defined under the Securities Industry (CentralDepositories) Act 1991 (“SICDA”) which holds ordinary shares in the Company for multiple beneficial owners in one securitiesaccount (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint inrespect of each omnibus account it holds. Where a member is an authorised nominee as defined under SICDA, it may appointat least one (1) proxy but subject to a maximum of two (2) in respect of each securities account it holds with ordinary shares ofthe Company standing to the credit of the said securities account.

6. The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed or a notary certifiedcopy of that power or authority, shall be deposited at the Registered Office of the Company at Level 7, Menara Milenium, JalanDamanlela, Pusat Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur not less than forty-eight (48) hours before thetime appointed for holding the Meeting or any adjournment thereof.



Proposed Amendments to the Articles of Association

Article Existing Articles Proposed Amendments No.

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APPENDIX I153Annual Report 2016

If at any time the share capital is divided into differentclasses of shares, the rights attached to any class (unlessotherwise provided by the terms of issue of the shares ofthat class) may, whether or not the Company is beingwound up, be varied with the consent in writing of theholders of three-fourths of the issued shares of that class,or with the sanction of a special resolution passed at aseparate general meeting of the holders of the shares ofthe class. To every such separate general meeting, theprovisions of these Articles relating to general meetingsshall mutatis mutandis apply, but so that the necessaryquorum shall be two (2) persons at least holding orrepresenting by proxy, one-third of the issued shares ofthe class and that any holder of shares of the classpresent in person or by proxy shall, on a may demand apoll, have one (1) vote in respect of every share of theclass held. To every such special resolution, theprovisions of Section 152 of the Act shall with suchadaptations as are necessary, apply.

In every notice calling a meeting of the Company thereshall appear with reasonable prominence, a statementthat a Member entitled to attend and vote may appoint upto two (2) proxies and vote in his stead, and that a proxyneed not also be a Member. Where a Member appointstwo (2) proxies, he shall specify the proportion of hisholdings to be represented by each proxy in a poll andthe proxy who shall be entitled to vote on a show of hands,failing which the appointment shall be invalid.

At any general meeting a resolution put to the vote of themeeting shall be decided on a show of hands where aholder of ordinary shares or preference shares who ispersonally present and entitled to vote shall be entitled toone (1) vote, unless a poll is (before or on the declarationof the result of the show of hands) demanded:

(d) by the chairman of the Meeting;(e) by any Member or Members present in person or by

proxy and representing not less than one-tenth of thetotal voting rights of all Members having the right tovote at the meeting; or

(f) by a Member or Members holding shares in theCompany conferring a right to vote at the meetingbeing shares on which an aggregate sum has beenpaid up equal to not less than one-tenth of the totalsum paid on all the shares conferring that right.

If at any time the share capital is divided into differentclasses of shares, the rights attached to any class (unlessotherwise provided by the terms of issue of the shares ofthat class) may, whether or not the Company is beingwound up, be varied with the consent in writing of theholders of three-fourths of the issued shares of that class,or with the sanction of a special resolution passed at aseparate general meeting of the holders of the shares ofthe class. To every such separate general meeting, theprovisions of these Articles relating to general meetingsshall mutatis mutandis apply, but so that the necessaryquorum shall be two (2) persons at least holding orrepresenting by proxy, one-third of the issued that anyholder of shares of the class present in person or by proxymay demand a poll. To every such special resolution, theprovisions of Section 152 of the Act shall with suchadaptations as are necessary, apply.

In every notice calling a meeting of the Company thereshall appear with reasonable prominence, a statementthat a Member entitled to attend and vote may appoint upto two (2) proxies and vote in his stead, and that a proxyneed not also be a Member. Where a Member appointstwo (2) proxies, he shall specify the proportion of hisholdings to be represented by each proxy in a poll andthe proxy who shall be entitled to vote on a show of hands,failing which the appointment shall be invalid.

At any general meeting a resolution put to the vote of themeeting shall be decided on a show of hands where aholder of ordinary shares or preference shares who ispersonally present and entitled to vote shall be entitled toone (1) vote, unless a poll is (before or on the declarationof the result of the show of hands) demanded:

(a) by the chairman of the Meeting;(b) by any Member or Members present in person or by

proxy and representing not less than one-tenth of thetotal voting rights of all Members having the right tovote at the meeting; or

(c) by a Member or Members holding shares in theCompany conferring a right to vote at the meetingbeing shares on which an aggregate sum has beenpaid up equal to not less than one-tenth of the totalsum paid on all the shares conferring that right.


APPENDIX I154 WZ SATU BERHAD (666098-X)

(CONT’D)


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Unless a poll is duly demanded in accordance with theforegoing provisions, a declaration by the chairman thata resolution has on a show of hands been carried orcarried unanimously, or by a particular majority, or lost,and an entry to that effect in the book containing theminutes of the proceedings of the Company, shall beconclusive evidence of the fact without proof of thenumber of proportion of the votes recorded in favour of oragainst the resolution. A proxy shall be entitled to vote ona show of hands on any resolution at any General Meeting.The demand for a poll may be withdrawn.

At any general meeting, a resolution put to the vote ofthe meeting shall be decided by poll. The Companymust appoint at least 1 scrutineer to validate the votescast at the general meeting. Such scrutineer must notbe an officer of the Company or its related corporation,and must be independent of the person undertakingthe polling process. If such scrutineer is interested ina resolution to be passed at the general meeting, thescrutineer must refrain from acting as the scrutineerfor that resolution. For this purpose, “officer” and“related corporation” shall have the meaning assignedto them in Sections 4 and 6 of the Act respectively. Nopoll shall be demanded on the election of a Chairmanof a meeting or on any question of adjournment.

If a poll is duly demanded it shall be taken in such mannerand either at once or after an interval or adjournment orotherwise as the Chairman directs, and the result of thepoll shall be the resolution of the meeting at which the pollwas demanded, but a poll demanded on the election ofChairman or on a question of adjournment shall be takenforthwith. The demand for a poll shall not prevent thecontinuance of a meeting for the transaction of anybusiness other than the question on which the poll hasbeen demanded. The Chairman of the meeting may (andif so directed by the meeting shall) appoint scrutineersand may in addition to the powers of adjourning meetingscontained in Article 67 adjourn the meeting to some placeand time fixed for the purpose of declaring the result ofthe poll.

The poll shall be taken in such manner and either atonce or after an interval or adjournment or otherwiseas the Chairman of the meeting directs, and the resultof the poll shall be the resolution of the meeting.

In the case of an equality of votes, whether on a show ofhands or on a poll, the chairman of the meeting at whichthe show of hands takes place or at which the poll isdemanded shall be entitled to a second or casting vote.

Unless a poll is duly demanded in accordance with theforegoing provisions, a declaration by the chairman thata resolution has on a show of hands been carried orcarried unanimously, or by a particular majority, or lost,and an entry to that effect in the book containing theminutes of the proceedings of the Company, shall beconclusive evidence of the fact without proof of thenumber of proportion of the votes recorded in favour of oragainst the resolution. A proxy shall be entitled to vote ona show of hands on any resolution at any General Meeting.The demand for a poll may be withdrawn.

If a poll is duly demanded it shall be taken in such mannerand either at once or after an interval or adjournment orotherwise as the Chairman directs, and the result of thepoll shall be the resolution of the meeting at which the pollwas demanded, but a poll demanded on the election ofChairman or on a question of adjournment shall be takenforthwith. The demand for a poll shall not prevent thecontinuance of a meeting for the transaction of anybusiness other than the question on which the poll hasbeen demanded. The Chairman of the meeting may (andif so directed by the meeting shall) appoint scrutineersand may in addition to the powers of adjourning meetingscontained in Article 67 adjourn the meeting to some placeand time fixed for the purpose of declaring the result ofthe poll.

In the case of an equality of votes, whether on a show ofhands or on a poll, the chairman of the meeting at whichthe show of hands takes place or at which the poll isdemanded shall be entitled to a second or casting votes.


APPENDIX I155Annual Report 2016

(CONT’D)


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Subject to any rights or restrictions for the time beingattached to any class of shares at meetings of Membersor classes of Members, each Member entitled to vote mayvote in person or by proxy or by attorney or by dulyauthorised representative. On a resolution to be decidedby show of hands, every person who is a Member or proxyor attorney or representative of a Member and eachMember who is a holder of a preference share or proxywho has a right to vote shall have one vote. However, onlyone vote by show of hand is counted if a member isrepresented by more than one proxy. On a poll, everyMember present in person or by proxy or attorney orrepresentative and each Member who is a holder of apreference share or proxy who has a right to vote shallhave one vote for each share he holds. There shall be norestriction as to the qualification of the proxy. A proxyappointed to attend and vote at a meeting of a Companyshall have the same rights as the member to speak at themeeting. A proxy shall be entitled to vote on a show ofhands on any question at any general meeting.

A Member who is of unsound mind or whose person orestate is liable to be dealt with in any way under the lawrelating to mental disorder may vote, whether in a show ofhands or on a poll, by his committee or by such otherperson as properly has the management of his estate, andany such committee or other person may vote by proxy orattorney and any person entitled under the transmissionArticle hereof to transfer any shares, may vote at anygeneral meeting in respect thereof in the same manner asif he was the registered holder of such shares providedthat forty-eight (48) hours at least before the time ofholding the meeting or adjourned meeting, as the casemay be at which he proposes to vote, he shall satisfy theDirectors of his right to transfer such shares unless theDirectors shall have previously admitted his right to voteat such meeting in respect thereof.

No person shall be entitled to be present or to vote on anyresolution either as a Member or otherwise as a proxy orattorney or representative at any general meeting ordemand a poll or be reckoned in the quorum in respectof any shares upon which calls are due and unpaid.

The instrument appointing a proxy shall be in writing underthe hand of the appointor or of his attorney duly authorisedin writing or, if the appointor is a corporation, either underthe corporation’s common seal or under the hand of anofficer or attorney duly authorised. The Directors may butshall not be bound to require evidence of the authority ofany such attorney or officer. A proxy may but need not bea Member of the Company and the provisions of Section

Subject to any rights or restrictions for the time beingattached to any class of shares at meetings of Membersor classes of Members, each Member entitled to vote mayvote in person or by proxy or by attorney or by dulyauthorised representative. On a resolution to be decidedby show of hands, every person who is a Member or proxyor attorney or representative of a Member and eachMember who is a holder of a preference share or proxywho has a right to vote shall have one vote. However, onlyone vote by show of hand is counted if a member isrepresented by more than one proxy. On a poll, everyMember present in person or by proxy or attorney orrepresentative and each Member who is a holder of apreference share or proxy who has a right to vote shallhave one vote for each share he holds. There shall be norestriction as to the qualification of the proxy. A proxyappointed to attend and vote at a meeting of a Companyshall have the same rights as the member to speak at themeeting. A proxy shall be entitled to vote on a show ofhands on any question at any general meeting.

A Member who is of unsound mind or whose person orestate is liable to be dealt with in any way under the lawrelating to mental disorder may vote, whether in a show ofhands or on a poll, by his committee or by such otherperson as properly has the management of his estate, andany such committee or other person may vote by proxy orattorney and any person entitled under the transmissionArticle hereof to transfer any shares, may vote at anygeneral meeting in respect thereof in the same manner asif he was the registered holder of such shares providedthat forty-eight (48) hours at least before the time ofholding the meeting or adjourned meeting, as the casemay be at which he proposes to vote, he shall satisfy theDirectors of his right to transfer such shares unless theDirectors shall have previously admitted his right to voteat such meeting in respect thereof.

No person shall be entitled to be present or to vote on anyresolution either as a Member or otherwise as a proxy orattorney or representative at any general meeting ordemand a poll or be reckoned in the quorum in respectof any shares upon which calls are due and unpaid.

The instrument appointing a proxy shall be in writing underthe hand of the appointor or of his attorney duly authorisedin writing or, if the appointor is a corporation, either underthe corporation’s common seal or under the hand of anofficer or attorney duly authorised. The Directors may butshall not be bound to require evidence of the authority ofany such attorney or officer. A proxy may but need not bea Member of the Company and the provisions of Section



(CONT’D)

APPENDIX I


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149(1)(b) of the Act shall not apply to the Company. Theinstrument appointing a proxy shall be deemed to conferauthority to demand or join in demanding a poll.

The instrument appointing a proxy and the power ofattorney or other authority, if any, under which it is signedor a notary certified copy of that power or authority, shallbe deposited at the Office or at such other place withinMalaysia as is specified for that purpose in the noticeconvening the meeting, not less than forty eight (48) hoursbefore the time appointed for holding the meeting oradjourned meeting, as the case may be, which the personnamed in the instrument proposes to vote or in the caseof a poll, not less than twenty-four (24) hours before thetime appointed for the taking of the poll, and in default,the instrument of proxy shall not be treated as valid.

The Directors shall from time to time in accordance withSection 169 of the Act cause to be prepared and laidbefore the Company in general meeting, such profit andloss accounts, balance sheets and reports as are referredto in the Section. The interval between the close of afinancial year of the Company and the issue of the annualaudited accounts, Directors' and auditors' reports relatingto it shall not exceed four (4) months. A copy of each suchdocument shall be in printed form or in electronicformat or in such other form of electronic mediapermitted under the Listing Requirements or anycombination thereof shall be served not less than twentyone (21) days (or such shorter period as may be agreedin any year of the receipt of notice of the meeting pursuantto Article 156) be sent to every Member of, and to everyholder of debentures of the Company under the provisionsof the Act or of these Articles. The requisite number ofcopies of each such document as may be required by theExchange upon which the Company's shares may belisted, shall at the same time be likewise sent to theExchange PROVIDED THAT This Article shall not requirea copy of these documents to be sent to any person ofwhose address the Company is not aware but anyMember to whom a copy of these documents has notbeen sent shall be entitled to receive a copy, free ofcharge on application at the Office. In the event thatthese documents are sent in CD-ROM form or in suchother form of electronic media and a member requiresa printed form of such documents, the Company shallsend such documents to the member within four (4)Market Days from the date of receipt of the member’sverbal or written request.

149(1)(b) of the Act shall not apply to the Company. Theinstrument appointing a proxy shall be deemed to conferauthority to demand or join in demanding a poll.

The instrument appointing a proxy and the power ofattorney or other authority, if any, under which it is signedor a notary certified copy of that power or authority, shallbe deposited at the Office or at such other place withinMalaysia as is specified for that purpose in the noticeconvening the meeting, not less than forty eight (48) hoursbefore the time appointed for holding the meeting oradjourned meeting, as the case may be, which the personnamed in the instrument proposes to vote, or in the caseof a poll, not less than twenty-four (24) hours before thetime appointed for the taking of the poll, and in default,the instrument of proxy shall not be treated as valid.

The Directors shall from time to time in accordance withSection 169 of the Act cause to be prepared and laidbefore the Company in general meeting, such profit andloss accounts, balance sheets and reports as are referredto in the Section. The interval between the close of afinancial year of the Company and the issue of the annualaudited accounts, Directors' and auditors' reports relatingto it shall not exceed four (4) months. A copy of each suchdocument shall not less than twenty one (21) days beforethe date of the meeting (or such shorter period as may beagreed in any year of the receipt of notice of the meetingpursuant to Article 156), be sent to every Member of, andto every holder of debentures of the Company under theprovisions of the Act or of these Articles. The requisitenumber of copies of each such document as may berequired by the Exchange upon which the Company'sshares may be listed, shall at the same time be likewisesent to the Exchange provided that this Article shall notrequire a copy of these documents to be sent to anyperson of whose address the Company is not aware butany Member to whom a copy of these documents has notbeen sent shall be entitled to receive a copy, free ofcharge on application at the Office.


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FORM OF PROXY

*I/We (full name), ______________________________________________________________________________________________________________________

bearing *NRIC No./Passport No./Company No. ___________________________________________________________________________________________

of (full address) _______________________________________________________________________________________________________________________

being a *member/members of WZ Satu Berhad (“the Company”) hereby appoint :-

First Proxy “A”

Full Name NRIC/ Passport No. Proportion of Shareholdings Represented

No. of Shares % Full Address

and/or failing *him/her, Second Proxy “B”

Full Name NRIC/ Passport No. Proportion of Shareholdings Represented

No. of Shares % Full Address

100%

or failing *him/her, the *Chairman of the Meeting as *my/our proxy to vote for *me/us and on *my/our behalf at the Twelfth Annual General Meeting ofthe Company to be held at Kristal Ballroom 1, Level 1, West Wing, Hilton Petaling Jaya, No. 2 Jalan Barat, 46200 Petaling Jaya, Selangor DarulEhsan, on Tuesday, 24 January 2017 at 10:00 a.m. and at any adjournment thereof.

Please indicate with an “X” in the spaces provided below as to how you wish your votes to be casted. If no specific direction as to voting is given,the proxy will vote or abstain from voting at *his/her discretion.

CDS Account No.

Number of ordinary shares held

No. Agenda 1. To receive the Audited Financial Statements for the financial year ended 31 August 2016 together with the Reports of the Directors and the Auditors thereon.

No. Agenda Resolution For Against

Special Business

To declare Single Tier final dividend of 2 sen per ordinary share of RM0.50 each and a Single Tier specialdividend of 1 sen per ordinary share of RM0.50 each for the financial year ended 31 August 2016.

To approve the payment of Directors’ fees for the financial year ended 31 August 2016.

To re-elect Tengku Dato’ Sri Uzir Bin Tengku Dato’ Ubaidillah who is retiring in accordance with Article84 of the Company’s Articles of Association and being eligible, has offered himself for re-election.

To re-elect Mr. Tan Teng Heng who is retiring in accordance with Article 84 of the Company’s Articlesof Association and being eligible, has offered himself for re-election.

To re-elect Mr. Tan Ching Kee who is retiring in accordance with Article 84 of the Company’s Articlesof Association and being eligible, has offered himself for re-election.

To re-elect Dato’ Ir. Mohd Ghazali Bin Kamaruzaman who is retiring in accordance with Article 84 ofthe Company’s Articles of Association and being eligible, has offered himself for re-election.

To re-elect Datuk Ahmad Nizam Bin Salleh who is retiring in accordance with Article 91 of theCompany’s Articles of Association and being eligible, has offered himself for re-election.

To re-appoint Messrs. Baker Tilly Monteiro Heng as Auditors of the Company until the conclusion ofthe next Annual General Meeting and to authorise the Directors to fix their remuneration.

Ordinary Resolution No. 1Authority to Issue Shares pursuant to Section 132D of the Companies Act, 1965

Ordinary Resolution No. 2Proposed Renewal of Share Buy-back Authority

Ordinary Resolution No. 3Approval to Continue in Office as Independent Non-Executive Director – Dato’ Amin Rafie Bin Othman

Ordinary Resolution No. 4Approval to Continue in Office as Independent Non-Executive Director – Dato’ Yeong Kok Hee

Special ResolutionProposed Amendments to the Articles of Association

As witness my/our hand(s) this day __________ of ____________________ 2017.

__________________________________ *Signature of Member /Common Seal *Strike out whichever not applicable

WZ SATU BERHAD(Company No. 666098-X)(Incorporated in Malaysia)


Notes :-1. In respect of deposited securities, only members/shareholders whose names appear in the Record of Depositors on 17 January 2017 shall be

eligible to attend the Meeting.2. A member of the Company entitled to attend and vote at the Meeting is entitled to appoint up to two (2) proxies to attend and vote in his stead.

There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend and vote at the Meeting shall have the same rightsas the member to speak at the Meeting.

3. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply tothe Company. Where a member appoints two (2) proxies to attend and vote at the Meeting, he shall specify the proportion of his shareholdingsto be represented by each proxy, failing which, the appointment shall be invalid.

4. The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly authorised in writing or, if theappointer is a corporation, either under its common seal or under the hand of an officer or attorney duly authorised.

5. Where a member of the Company is an exempt authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991(“SICDA”) which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is nolimit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds. Where a memberis an authorised nominee as defined under SICDA, it may appoint at least one (1) proxy but subject to a maximum of two (2) in respect of eachsecurities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

6. The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed or a notary certified copy of thatpower or authority, shall be deposited at the Registered Office of the Company at Level 7, Menara Milenium, Jalan Damanlela, Pusat BandarDamansara, Damansara Heights, 50490 Kuala Lumpur, Wilayah Persekutuan not less than forty-eight (48) hours before the time appointed forholding the Meeting or any adjournment thereof.

The Company Secretaries

WZ Satu Berhad (666098-X)Level 7, Menara Milenium,

Jalan Damanlela,Pusat Bandar Damansara,

Damansara Heights,50490 Kuala Lumpur.

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Documents

TAKING ON CHALLENGES - WZ Satu · Prior to joining WZ Satu Berhad, he was with HwangDBS Investment Bank Berhad as Senior Vice President. Mr. Tan Ching Kee is the founder of WZ Satu