TRC Synergy Berhadir.chartnexus.com/trc/docs/ar/AR_2002.pdf · · 2011-09-23Tel: 603-4108 0105 (12 lines) Fax: 603-4108 0104, 4105 8268 Website: . TRC Synergy Berhad (413192-D)

TRC Synergy Berhad(413192-D)

Annual Report 2002

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TRC Synergy Berhad (413192-D)

Wisma TRC, 217 & 218,

Jalan Negara 2, Taman Melawati,

53100 Ulu Klang, Selangor Darul Ehsan.

Tel: 603-4108 0105 (12 lines)

Fax: 603-4108 0104, 4105 8268

Website: www.trc.com.my

TRC Synergy Berhad(413192-D)

Annual Report 2002

The Building Blocks Of The Nation

Bricks are used to signify TRC Synergy Berhad’s core involvement in the building and construction industry. Each interlaying brick, being strong and sturdy depicts the company’s endeavour to become the nation’s largest and most successful corporation, achieved through synergistic effort and combined calibre of all its members.

Meanwhile pictures placed strategically in each brick further elaborate on the company’s ability to undertake specialized nation building projects like the construction of airport, stadium, hospital and road constructions which all contribute to the benefit of the people of Malaysia.

Table of Contents

Corporate Profile 1

Notice of Annual General Meeting 2

Statement Accompanying Notice of Annual General Meeting 3

Corporate Information 4

Financial Highlights 5

Financial Calendar 5

Corporate Diary 6

Board of Directors’ Profile 7

Chairman’s Statement 9

Group Structure 12

Statement on Corporate Governance 13

Statement of Directors’ Responsibility 18

Statement of Internal Control 19

Audit Committee Report 21

Financial Statements 24

List of Properties 58

Analysis of Shareholdings 59

Proxy Form

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TRC SYNERGY BERHAD (413192-D)

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T R C S Y N E R G Y B E R H A D A N N U A L R E P O R T 2 0 0 2 T R C S Y N E R G Y B E R H A D A N N U A L R E P O R T 2 0 0 2

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One of the development projects in Kuala Pilah, Negeri Sembilan.

Discussion at site office, Gua Musang, Kelantan

Maktab Perguruan Tun Abdul Razak Sarawak

Construction of road from Pos Blau to Kg. Kuala Betis, Gua Musang, Kelantan.

East Malaysia Hospital,Keningau, Sabah.

CORPORATE PROFILE

The company was incorporated as a private limited

company in Malaysia under the Companies Act, 1965 on

11 December 1996 under the name TRC Synergy Sdn Bhd.

On 8 January 1997, the company changed its status from a

private limited company to a public company and assumed

the name TRC Synergy Berhad (TRCS). TRCS was listed

on the Main Board of the Kuala Lumpur Stock Exchange

on 6 August 2002 where it offered Public Issue

and Offer For Sale of 16,000,000 and 3,500,000

ordinary shares respectively.

TRCS is principally an investment holding

company while the principal activities of its

subsidiary companies and associated company

are relating to general contracting works.

This includes building and infrastructure

construction, turnkey design and build

contracts, hiring and servicing of vehicles and

construction equipment, manufacturing and

dealing in concrete products, property development

and project management services.

The TRCS group of companies employs over 800

personnels of which more than 15% are in the sub-

professional and professional group. It not only

has the ability to undertake common projects

like roads and building construction but also

specialized mega projects like airports, railway

trackworks, stadium, hospitals and large property

development ventures.

The company’s motto “As one with the nation”

sums up the company’s aspiration to progress in

tandem with the nation’s vision.

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2

NOTICE IS HEREBY GIVEN that the Sixth Annual General Meeting of the Company will be held at Damai Utama Function Hall, Kelab Century Paradise, Jalan Melawati 3, Taman Melawati, 53100 Ulu Klang, Selangor on Wednesday, 18 June 2003 at 10.00 a.m. for the purpose of transacting the following businesses:-

AGENDA

ORDINARY BUSINESS

1. To receive and adopt the Audited Financial Statements, Report of the Directors and Report of the Auditors thereon for the year ended 31 December 2002. Resolution 1

2. To approve the payment of a fi rst and fi nal tax-exempt dividend of 2.5 sen per share for the year ended 31 December 2002. Resolution 2

3. To approve the payment of Directors’ Remuneration in respect of the year ended 31 December 2002. Resolution 3

4. To re-elect Dato’ Hj Sufri bin Hj Mohd Zin who shall retire as Director of the Company pursuant to Articles 84 of the Company’s Articles of Association. Resolution 4

5. To re-appoint Messrs Kumpulan Naga as the Auditors of the Company to hold offi ce until the conclusion of the next Annual General Meeting and to authorize the Directors to fi x their remuneration. Resolution 5

SPECIAL BUSINESSTo consider and if thought fi t, to pass the following resolution, with or without modifi cation as Ordinary Resolution:-

6. AUTHORITY FOR ALLOTMENT OF SHARES

“THAT subject always to the Companies Act, 1965, the Articles of Association of the Company and the approvals of the Kuala Lumpur Stock Exchange and other relevant governmental/regulatory authorities, where such approvals are necessary, the Directors be and are hereby empowered, pursuant to section 132D of the Companies Act, 1965, to issue shares in the Company from time to time at such price, upon such terms and conditions, for such purposes and to such person whomsoever as the Directors may deem fi t provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the issued share capital of the Company for the time being and that the Director be also empowered to obtain the approval for the listing and the quotation of the additional shares so issued on the Kuala Lumpur Stock Exchange and that such authority shall continue to be in force until the conclusion of the next Annual General Meeting.” Resolution 6

To transact any other business of which due notice shall be given in accordance with the Articles of Association of the Company and the Companies Act, 1965.

NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT

NOTICE IS ALSO GIVEN, that a fi rst and fi nal tax-exempt dividend of 2.5 sen per share for the year ended 31 December 2002, if approved by the shareholders at the forthcoming Sixth Annual General Meeting will be paid on 30 July 2003.

The entitlement date shall be fi xed on 3 July 2003 and a Depositor shall qualify for entitlement only in respect of:-

a) Shares transferred into the Depositor’s Securities Account before 4.00 p.m. on 3 July 2003 in respect of ordinary transfers; and

b) Shares bought on the Kuala Lumpur Stock Exchange on a cum entitlement basis according to the Rules of the Kuala Lumpur Stock Exchange.

BY ORDER OF THE BOARDABDUL AZIZ MOHAMED (LS 007370)TANG SWEE GUAN (MIA No. 5393)Company Secretaries

Selangor Darul Ehsan23 May 2003

NOTICE OF SIXTH ANNUAL GENERAL MEETING

Notes:1. A proxy may but need not be a member of the Company and the previous of section 149 (1) (b)

of the Act shall not apply to the Company.2. To be valid the proxy form duly completed must be deposited at the registered offi ce of the

Company not less than forty-eight (48) hours before the time for holding the meeting or any adjournment thereof.

3. A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meetings.

4. Where a member appoints more than one (1) proxy the appointment shall be invalid unless he specifi es the proportions of his holdings to be represented by each proxy.

5. Where a member is an authorized nominee as defi ned under the Central Depositories Act, it may appoint at least one proxy in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account.

6. If the appointer is a corporation, the proxy form must be executed under its Common Seal or under the hand of its attorney.

EXPLANATORY NOTES TO THE SPECIAL BUSINESS Ordinary Resolution No. 6 – Authority for allotment of shares Ordinary Resolution proposed under item 6, if passed, will give power to the Directors of the Company to issue shares up to a maximum 10% of the issued share capital of the Company for the time being for such purposes as the Directors consider would be in the interest of the Company. This would avoid any delay and cost involved in convening general meeting to specifi cally approve such an issue of shares. This authority, unless revoked or varied at a general meeting, will expire at the next Annual General Meeting of the Company.

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1. Director who is standing for re-election at the 6th Annual General Meeting of TRC Synergy Berhad:-i) Dato’ Hj Sufri bin Hj Mohd Zin

2. Details of Board of Directors’ Meeting:–

Four (4) Board Meetings were held during the financial year ended 31 December 2002, details of which are set out in the Statement on Corporate Governance.

3. Particulars of Director standing for re-election at the 6th Annual General Meeting of TRC Synergy Berhad:-

Name Dato’ Hj Sufri bin Hj Mohd Zin

Age 46

NationalityMalaysian

Position in the Company Executive Chairman/Managing Director

Working experience/

Qualification/Occupation

Dato’ Hj Sufri is a graduate of Insititute Teknologi MARA

with a Diploma in Business Studies. He started his career as a

banker with Bank Bumiputera Malaysia Berhad in 1982 before

participating in the building and construction industry in

1984 by incorporating Trans Resources Corporation Sdn Bhd,

presently a wholly-owned subsidiary of TRC Synergy Berhad.

For details, please refer to his profile on page 7 of the Annual

Report.

Other directorship of public companies Nil

Securities holdings in the

Company and its subsidiaries as at

28 April 2003

10,575,000 (15.11%) Direct and 32,400,000 (46.29%) Indirect

shares in the Company.

Family relationship with any director

and/or substantial shareholder of the

Company.

Nil

Any conflict of interest with the Company

None except that he is a substantial shareholder of Andaman

Budi Sdn. Bhd. which is an associated company of Trans

Resources Corporation Sdn. Bhd., a wholly owned subsidiary

of the Company.

List of convictions for offences (other than

traffic offences) within the past 10 yearsNil

STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING

43


Board of DirectorsDato’ Hj Sufri bin Hj Mohd Zin(Executive Chairman/Managing Director)

Abdul Aziz bin Mohamad(Executive Director)

Rahman bin Ali(Independent Non-Executive Director)

Noor Zilan bin Mohamed Noor(Independent Non-Executive Director)

Noor Asiah bte Dato’ Mahmood(Independent Non-Executive Director)(Resigned on 24 February 2003)

Company SecretariesAbdul Aziz bin Mohamed (LS 007370)

Tang Swee Guan (MIA No. 5393)

Registered Offi ce / Principal Place of Business

Wisma TRC, No. 217 & 218, Jalan Negara 2, Taman Melawati, 53100 Ulu Klang, Selangor.Tel No. : 603-41080105 / 603-41080106Fax No : 603-41080104e-mail : [email protected]

Branch Offi ce Lot 3626, Block 16, KCLD, Taman Timberland, Lorong Rock 2, 93200 Kuching, SarawakTel No. : 082-239998Fax No. : 082-421998

CORPORATE INFORMATION

Website www.trc.com.my

AuditorsMessrs Kumpulan Naga25 Jalan Thamby Abdullah Satu, Off Jalan Tun Sambanthan, 50470 Kuala Lumpur

Share RegistrarMalaysian Share Registration Services Sdn. Bhd. 7th Floor, Exchange Square, Bukit Kewangan50200 Kuala LumpurTel No. : 603- 20268099Fax No : 603-20263736

Principal BankersEON Bank BerhadMalayan Banking BerhadArab-Malaysian Merchant Bank BerhadAffi n Bank Berhad

SolicitorsMessrs Noorzilan & PartnersMessrs C.C. Choo & Co.

Stock Exchange ListingKuala Lumpur Stock Exchange(Main Board)(Stock No. : 5054)

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FINANCIAL HIGHLIGHTSAS AT 31 DECEMBER 2002

Balance Sheet (Group) In RM’ 000

Property, plant and equipment 56,421

Other non-current assets 399

Currents assets 231,716

Total tangible assets 288,536

Issued and paid up capital

Share capital 70,000

Reserve 42,658

Shareholders’ fund 112,658

Net tangible assets per share (RM) 1.61

Ratios and statistic

Turnover 303,225

Net profit for the year 17,786

In sen

Earnings per share 37.88

In % of turnover

Operating profit 11

In RM’ 000

No. of ordinary shares 70,000

In times

Gearing ratio (net) 0.71

Current ratio 1.40

Financial year end 31 December 2002

Admission to the Main Board of the KLSE 6 August 2002

Announcement of results

2nd quarter results ended 30 June 2002 1 August 2002

3rd quarter results ended 30 September 2002 22 November 2002

4th quarter results ended 31 December 2002 28 February 2003

Audited Financial Statements for the financial year ended 31 December 2002 21 April 2003

Published Annual Report 23 May 2003

Annual General Meeting 18 June 2003

FINANCIAL CALENDAR

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6

12,000

12,000

12,000

12,000

12,000

REVENUE

( R M M i l l i o n )

SHAREHOLDERS’ FUNDS ( R M M i l l i o n )

EARNINGS PER SHARE ( S e n )

DIVIDEND PER SHARE ( S e n )

NET TANGIBLE

( R M )

CORPORATE DIARY

29 March

Appointment of YBhg. Dato’ Hj Sufri Bin Hj Mohd Zin and En. Abdul Aziz Bin Mohamad as Managing Director and Executive Director respectively.

13 May

Appointment of Puan Noor Asiah Binti Mahmood, En. Noor Zilan Bin Mohamed Noor and En. Rahman Bin Ali as Directors of the Company.

24 June

The ceremony on ISO 9001:2000 certifi cate presentation to Trans Resources Corporation Sdn Bhd, a wholly-owned subsidiary of the Company was held at Nikko Hotel, Kuala Lumpur.

6 June

The signing of the Underwriting Agreement in conjunction with the listing of the Company on the Main Board of the KLSE was held at Renaissance Hotel, Kuala Lumpur.

18 July

The Public Balloting Ceremony in relation to the listing of the Company on the Main Board of the KLSE was held at MIDF Consultancy and Corporate Services Sdn. Bhd. offi ce premises.

1 August

Announcement of the 2nd quarterly unaudited fi nancial result for the period ended 30 June 2002.

6 August

Listing of the Company on the Main Board of the KLSE.

22 November

Announcement of the 3rd quarterly unaudited fi nancial result for the period ended 30 September 2002.

2 0 0 2

21 February

Submission of Semi-Annual Returns as at 31 December 2002 to the KLSE.

24 February

i) Resignation of Pn. Noor Asiah Binti Mahmood as Director of the Company and also as Chairman of the Audit Committee.

ii) Appointment of En. Noor Zilan Bin Mohamed Noor as Chairman of Audit Committee.

28 February

Announcement of the 4th quarterly unaudited fi nancial result for the year ended 31 December 2002.

2 0 0 3

Executive Chairman delivering his speech during ISO 9001:2000 certificate presentation.

Gong hitting during Listing Ceremony

The signing of the Underwriting Agreement, 6 June 2002


7 8

BOARD OF DIRECTORS’ PROFILE

Dato’ Hj Sufri Bin Hj Mohd Zin (Executive Chairman/ Managing Director)

Dato’ Hj Sufri Bin Hj Mohd Zin, Malaysian, aged 46, was

appointed as the Managing Director of TRC Synergy

Berhad (“TRC” or “the Company”) on 29 March 2002

and subsequently redesignated as Executive Chairman /

Managing Director on 13 May 2002. He is also currently

the Managing Director of the TRC Group of Companies. He

graduated from Institute of Teknologi MARA (“ITM”)in 1982

with a Diploma in Business Studies. He started his career as

a banker with Bank Bumiputera Malaysia Bhd in 1982. His

inherent perseverance and unique business acumen led him

into the building and construction industry in 1984. YBhg

Dato’ Hj Sufri is a member of the Audit Committee. During

the Financial year ended 31 December 2002, he attended all

of the four (4) Board Meetings.

He does not have any personal interest in any business

arrangement involving the Company, except that he is a

substantial shareholder of Andaman Budi Sdn Bhd which is

an associated company of Trans Resources Corporation Sdn. an associated company of Trans Resources Corporation Sdn. an associated company of Trans Resources Corporation Sdn. an associated company of Trans Resources Corporation Sdn.

Bhd., a wholly owned subsidiary of the Company.

Encik Abdul Aziz Bin Mohamad(Executive Director)

Encik Abdul Aziz Bin Mohamad, Malaysian, aged 44, was

appointed as an Executive Director of the Company on

29 March 2002. He joined TRC Group as a Senior Contract

Executive in 1994 and was later promoted to Deputy

General Manager (Contracts) in 1997. He graduated from

Trent Polytechnic in Nottingham, England in 1983. He is

a Quantity Surveyor by profession and a member of the

Institution of Surveyors, Malaysia. He started his career as

an Assistant Quantity Surveyor in England with Rider Hunt

and Partners in 1982. He later joined Jabatan Kerja Raya

(JKR) Kuala Lumpur in 1983 as a Quantity Surveyor where

he administered the contractual aspects of projects. En.

Aziz attended all of the four (4) Board Meetings held

during the fi nancial year ended 31 December 2002.

He does not have any personal interest in any business

arrangement involving the Company, except that he is

a shareholder of Andaman Budi Sdn. Bhd. which is an

associated company of Trans Resources Corporation Sdn.

Bhd., a wholly owned subsidiary of the Company.


7

Encik Noor Zilan Bin Mohamed Noor(Independent, Non–Executive Director)

Encik Noor Zilan Bin Mohamed Noor, Malaysian, aged 43, was

appointed as a Director of the Company on 13 May 2002. He

graduated from ITM in 1983 with a Diploma in Law. He then

joined United Malayan Banking Corporation as a Trainee

Executive Offi cer before pursuing for further studies in the

United Kingdom in 1984 and graduated from City of London

Polytechnics with LLB (Hons) majoring in Business Law in 1987.

Subsequently, he went on to read Law at Lincoln’s Inn and

was called to the English Bar in 1988 and upon returning to

Malaysia he was then called and admitted to the Malaysian Bar

in 1989 as an Advocate & Solicitor. He then worked as a Legal

Assistant before starting his own law fi rm in 1991 and is now

a Senior Partner with an established law fi rm in Kuala Lumpur

specializing in the area of Corporate Law, Banking, Building

and Construction Law apart from civil & criminal litigation. En.

Noor Zilan is the Chairman to the Audit Committee, Nomination

Committee and Remuneration Committee. He attended all of

the four (4) Board Meeting held during the fi nancial year ended

31 December 2002.

T R C S Y N E R G Y B E R H A D A N N U A L R E P O R T 2 0 0 2

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Encik Noor Zilan Bin Mohamed Noor(Independent, Non–Executive Director)Encik Noor Zilan Bin Mohamed Noor(Independent, Non–Executive Director)

Encik Noor Zilan Bin Mohamed Noor, Malaysian, aged 43, was

appointed as a Director of the Company on 13 May 2002. He

graduated from ITM in 1983 with a Diploma in Law. He then

joined United Malayan Banking Corporation as a Trainee

Executive Offi cer before pursuing for further studies in the

United Kingdom in 1984 and graduated from City of London

Polytechnics with LLB (Hons) majoring in Business Law in 1987.

Subsequently, he went on to read Law at Lincoln’s Inn and

was called to the English Bar in 1988 and upon returning to

Malaysia he was then called and admitted to the Malaysian Bar

in 1989 as an Advocate & Solicitor. He then worked as a Legal

Assistant before starting his own law fi rm in 1991 and is now

a Senior Partner with an established law fi rm in Kuala Lumpur

specializing in the area of Corporate Law, Banking, Building

and Construction Law apart from civil & criminal litigation. En.

Noor Zilan is the Chairman to the Audit Committee, Nomination

Committee and Remuneration Committee. He attended all of

the four (4) Board Meeting held during the fi nancial year ended

31 December 2002.

Note:-Save as disclosed above, 1) none of the Directors have:-

i) any family relationship with any director and/or substantial shareholders of the Company;ii) any confl ict of interest with the Company; andiii) any conviction for offences (other than traffi c offences) within the past ten (10) years.

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

En. Rahman Bin Ali(Independent, Non–Executive Director)

En. Rahman Bin Ali, Malaysian, aged 46, was appointed as a

Director of the Company on 13 May 2002. He graduated from

University of Malaya in 1982 with a Degree in Accounting. He is

currently a Chartered Accountant of the Malaysian Institute of

Accountants. He started his career as a credit offi cer with Bank

Bumiputera Malaysia Berhad in 1982. He left the bank in 1986

to set up his own management consultancy company under

the name of Advance Management Services in 1986 before

becoming a Branch Manager with a public accounting fi rm,

Sahir and Co. in 1990. In 1994, he set up his own accounting

fi rm by the name A. Rahman & Associates and later became

a partner of Omar Arif, A.Rahman & Associates in 1996. En.

Rahman is a member of the Audit Committee, Nomination

Committee and Remuneration Committee. He attended all the

four (4) Board Meeting held during the fi nancial year ended 31

December 2002.

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To OurSHAREHOLDERS,

CHAIRMAN’S STATEMENT

On behalf of the Board of Directors of TRC Synergy Berhad, I am pleased to present the Annual Report and Audited Financial Statements of the Company and the Group for the financial year ended 31 December 2002 for the very first time upon its listing on the Kuala Lumpur Stock Exchange (KLSE).

The successful listing of TRC Synergy Berhad on the Main Board of the KLSE on 6th August 2002 was indeed a historic milestone for the Company and the Group. The Group has since not only witnessed commendable growth, but also has proven its ability to operate profitably during this uncertain global economic conditions.

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Review of Operations

During the period under review, the Group’s main focus was to manage its projects effectively and efficiently within the parameters of quality, cost and time. The year 2002 was indeed a very challenging year for the Group. It was also a year where the country experienced acute labour shortage and this had to a certain extent affected the performance of the Group.

Construction Division

For the period under review, this division was the major revenue contributor for the Group. Despite the competitive environment, this division managed to secure approximately RM236 million worth of contracts both from the government and private sectors. Amongst the bigger packages were the Construction and Completion of Jalan Pantai Baru from Tanjung Kidurong – Suai – Bakam, Sarawak, Section A1, the East Malaysia Hospital : Kuala Penyu Package KP4 and Upgrading of Existing Kuching Polytechnic, Kuching, Sarawak. The Group’s business was started in West Malaysia and later expanded to East Malaysia with the setting up of its branch office in Kuching, Sarawak. Now, with its own local workforce exceeding 200, the East Malaysia operation contributed significantly to the Group’s revenue.

With its construction arm having been accredited with the ISO 9001 : 2000 Quality System the Group has attained the necessary credentials and is set to explore international ventures in the near future.

Property Division

The Group, through its property division, has successfully launched 122 units of semi-detached and terrace houses in Ulu Klang known as Andaman Ukay in the second half of 2002. The gross development value of the project is RM56 million and to date it has achieved commendable sales of more than 90%. The project is expected to be completed in 2004.

The associated company of the Group is currently developing two parcels of land with a total area of 163 acres in Permas Jaya, Johor Bahru. To date, Phase A and B comprising medium cost apartments have been launched. The sales for the 2 phases have not been very encouraging due to the current soft property market in Johor and economic uncertainties.

Manufacturing Division

The Group’s concrete manufacturing arm was set up to compliment the Group’s activities. The Group plans to expand this division to cater for supplies of ready mixed concrete and precast concrete products to third parties in the near future.

Upgrading of existing Kuching Polytechnic, Sarawak.

Apartments at Bayu Senibong, Johor Bahru.

One of the semi-detached units at Andaman Ukay, Ulu Klang, Selangor.

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Financial Performance

The Group recorded a turnover of RM303.23 million and a pre-tax profit of RM25.73 million, for the financial year ended 31 December 2002. The earnings per share is 37.88 sen whilst the shareholders’ fund stands at RM112.7 million.

The acute labour shortage in the construction industry had a negative impact on several projects undertaken by the Group which in turn had an effect in the Group’s efforts of achieving a higher revenue. In addition, the results of the associated company have also been impacted by the prevailing soft property market in Johor.

Future Outlook

The Malaysian government has projected to achieve the status of a developed nation by the year 2020. The ongoing infrastructure projects and those in the pipeline will ensure that our nation moves to the next level of development.

The Government has projected an economic growth of 4.5% for 2003. This projection together with the soon-to-be-announced Government economic stimulus package is expected to have a positive impact on the performance of the Group and the construction industry as a whole.

Although there are opportunities for the Group, there are also unforeseen circumstances beyond its control. Malaysia, being relatively open, is inextricably linked to the world economy. Barring any major economical and financial upheavals in the world, the future of the Malaysia construction is set for sustainable growth.

Dividend

In view of the current global economic and financial uncertainties, the Board of Directors is recommending first and final tax exempt dividend of 2.5 sen per share to be paid in respect of the financial year ended 31 December 2002 amounting to RM1.75 million. The final dividend is subject to shareholders’ approval at the forthcoming Annual General Meeting. Upon approval, the final dividend would be paid on 30 July 2003.

Acknowledgement and Appreciation

On behalf of the Board, I would like to express my heartfelt gratitude to my fellow colleagues on the Board for their invaluable guidance and council. I would also like to extend my appreciation to the entire management and staff for their deep sense of dedication, hard work, patience, commitment and enthusiasm for the continued advancement of the Group.

Finally, we would like to thank our shareholders, financiers and business associates for their continued support and the Government authorities for their guidance and advice.

Kind regards,

DATO’ HAJI SUFRI BIN HAJI MOHD. ZINExecutive Chairman23 May 2003

East Malaysia Hospital, Keningau, Sabah.

New Control Tower at Kota Bahru Airport, Kelantan.

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GROUP STRUCTUREas at 28 April 2003

TRC SYNERGY BERHAD (413192-D)Investment Holding & Provision of Management Services

TRANS RESOURCES CORPORATION SDN BHD

(120265-P)

(100%)Construction

TRC DEVELOPMENT SDN BHD (309248-U)

(100%)Property Development &

Project Management Services

TRC CONCRETE INDUSTRIES SDN BHD

(151401-V)

(100%)Manufacturing & Trading in Concrete Piles

& Ready-Mixed Concrete

ANDAMAN BUDI SDN BHD (444162-W)

(40%)Property Development

East Malaysia Hospital, Keningau, Sabah.

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The Malaysian Code on Corporate Governance essentially set out principles and best practices on structures and processes that corporations may use in their operations in achieving the optimal governance framework.

The Board of Directors (“the Board”) are fully committed to maintaining high standards of corporate governance within TRC group. Good corporate governance is a fundamental part of the Group’s responsibility to protect and enhance long term shareholder value and financial performance, whilst taking into account the interests of other stakeholders.

The Board will continuously evaluate the Group’s Corporate governance practices and procedures, and where appropriate will adopt and implement the best practices as enshrined in the Malaysian Code of Corporate Governance (“code”). In accordance with paragraph 15.26 of the KLSE Listing Requirements (“Listing Requirements”), the Board is pleased to provide the following statement detailing the manner the Group has applied the Principles and the extent of compliance with the Best Practices.

A) DIRECTORS

a) The Board of Directors

The Group is led by an effective Board of Directors headed by the Executive Chairman which leads and control the activities of the Group. The Board of Directors has overall responsibility for the performance of the Group inclusive of corporate governance, strategic planning and maintaining effective control over financial and operational matters.

b) Board Balance

The Board consists of four members comprising two Executive Directors and two Independent Non-Executive Directors. The profiles of the Directors are presented in this Annual Report on pages 7 and 8.

In the Board’s opinion, the Directors possess the skills, experience and industry – specific knowledge necessary to effectively discharge their duties and responsibilities as members of the Board. The Board has two Executive Directors who have detailed knowledge and broad business and commercial experience as regards to the Group’s core business.

Half of the Board members are Independent Non-Executive Directors who provide broad, unbiased and balanced assessment on proposals initiated by the Executive Directors and the senior management of the Group.

c) Board Meeting

The Board met four times for the financial year ended to 31 December 2002. In the meetings, the Board deliberated and considered matters relating to the Group’s financial performance, key business and operational issues and business plans. Attendance at the Board Meetings are as follows:-

No Meeting Date/Time Attendance Place

1 1st BOD Meeting 22/05/02(10.30 a.m.)

All Directors Meeting Room, Wisma TRC, 217 & 218, Jalan Negara 2, Taman Melawati, 53100 Ulu Klang, Selangor

2 Special BOD Meeting 18/07/02(9.30 a.m.)

All Directors Meeting Room, MIDF Consultancy & Corporate Services Sdn. Bhd., Ting 12, Bangunan MIDF, 195A Jln Tun Razak, 50400 Kuala Lumpur

3 2nd BOD Meeting 1/08/02(11.15 a.m.)


4 3rd BOD Meeting 19/11/02(11.15 a.m.)


Note : “BOD” means Board of Directors

Going forward, the Board plans to meet quarterly with a view to have additional meeting as and when the need arises.

d) Supply of Information to the Board.

All Directors have access to all information within the Group and to the advice and services of the Company Secretaries in carrying out their duties and responsibilities.

The Board members are provided with adequate information in the form of complete set of Board file two weeks prior to each Board meeting.

STATEMENT ON CORPORATE GOVERNANCE

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e) Appointment and Re-election of Directors

The Company has a formal and transparent procedures for the appointment of new directors and re-election of directors. These aspects are spelt out clearly in the Company’s Articles of Association.

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

As for the re-election of Directors, the Articles of Association of the Company provides at least one-third of the Directors are required to retire by rotation at each fi nancial year and are eligible to offer themselves for re-election at the Annual General Meting. All Directors shall retire from offi ce once at least in each three years.

f) Directors’ Training All Directors have attended and completed the KLSE’s Mandatory Accreditation Programme (“MAP”) conducted

by the Research Institute of Investment Analysis Malaysia, an affi liate of the KLSE in accordance with the KLSE Listing Requirements. As part of the education and orientation programme for the new Directors, management will brief the new Directors on the business aspects of the Group while the Company Secretary will provide relevant guidelines on the statutory and regulatory matters to the new Directors. From time to time the Board members are encouraged to attend external training to further enhance their knowledge and skill.

g) Board Committees

i. Audit Committee

The matters relating to the Audit Committee are set out in the Audit Committee Report.

ii. Nomination Committee

The Committee which was established on 22 May 2002 comprises exclusively of Independent Non-Executive Directors. As at 21 May 2003, the committee members are: -

i) En. Noor Zilan Bin Mohamed Noor (Independent Non-Executive Director) – Chairman

ii) En. Rahman Ali (Independent Non-Executive Director)

The Committee will carry out its duties in accordance with the approved terms of reference. The primary responsibility, among others, is to consider suitable person for appointment as Directors of the Company and its subsidiaries and to assess directors on an on-going basis.

iii. Remuneration Committee

The Board established a Remuneration Committee on 22 May 2002. Presently the Committee comprises of two (2) Independent Non-Executive Directors. As at 21 May 2003 the Committee are:-

i) En. Noor Zilan Bin Mohamed Noor (Independent Non-Executive Director) – Chairman

ii) En. Rahman Ali (Independent Non-Executive Director)

The Committee that has been set up by the Board will carry out its duties in accordance with the approved terms of reference. Their primary responsibility among others is to recommend to the Board on the remuneration of the Executive Directors in all its forms, drawing from outside advice where necessary. Nevertheless, the determination of remuneration packages of Directors is a matter for the Board as a whole and individuals are required to abstain from discussion of their own remuneration.

B) DIRECTORS’ REMUNERATION

The remuneration of each Director is determined by the Board as a whole. Their remuneration refl ects the experience and level of responsibility which goes with the Board membership.

For the Financial year ended 31 December 2002, the Company started paying Directors’ remuneration to Non-Executive Directors from June 2002 as they were appointed as Directors in the middle of May 2002.

Teachers’ Training College at Kota Samarahan, Sarawak.


15 16

The aggregate remuneration of the Directors received and receivable from the Company and its subsidiaries during the fi nancial year are as follows:-

Category Fees (RM) Salaries (RM) Benefi t-in-kind (RM)

Executive Directors – 252,960 42,000

Non-Executive Director – 42,000 –

Total – 294,960 42,000

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

Range of remuneration Number of Director Executive Non-Executive

Less than RM 50,000 – 3

RM 100,000 – RM 200,000 2 –

C) RELATIONSHIP WITH INVESTORS AND SHAREHOLDER COMMUNICATION

Before the listing of the Company on the Main Board of the KLSE in August 2002, there were a number of dialogues and analysts briefi ngs organized by the Company. These sessions were held either at the request of the analysts or initiated by the Company. During the discussions which were attended by the Executive Directors and Senior Management staff, relevant information pertaining to the Group was disseminated to the public.

The Company also has a cordial relationship with reporters who have been playing a very effective role in conveying the Group’s information to the public, shareholders and investors.

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

D) ACCOUNTABILITY AND AUDIT

i. Financial Reporting

In presenting the Company’s fi nancial statements and quarterly results to shareholders and other interested parties, the Board is mindful of the necessity to present a balanced assessment of the Group’s fi nancial position and prospects.

The fi nancial statements of the Company and of the Group are prepared in accordance with the requirements of the applicable Approved Accounting Standards in Malaysia and the provision of the Companies Act, 1965.

The Group’s annual fi nancial statements and quarterly results are reviewed by the Audit Committee and approved by the Board before announcement to the KLSE for public release.

The Statement explaining the Directors’ responsibilities for preparing the annual audited fi nancial statements pursuant to paragraph 15.27(a) of the KLSE Listing Requirements is set out on page 18 of the Annual report.

ii. Internal Control.

The Board acknowledges and placed strong emphasis in maintaining a sound system of internal control which is necessary to safeguard the Group’s assets and shareholders’ investment. Details of the Group’s internal control system is presented in the Statement on Internal Control set out on pages 19 to 20 of the Annual Report.

iii. Relationship with Auditors

Through the Audit Committee, the Group has established a transparent and appropriate relationship with the Group’s external auditors in seeking their advice and towards ensuring compliance with the applicable Approved Accounting Standards.

These sessions were held either at the request of the analysts or initiated by the Company. During the discussions which were attended by the Executive Directors and Senior Management staff, relevant information pertaining to the Group was disseminated to the public.

The Company also has a cordial relationship with reporters who have been playing a very effective role in conveying the Group’s information to the public, shareholders and investors.

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

Press conference during the signing of the Underwriting Agreement.


15 16

STATEMENT OF COMPLIANCE WITH THE BEST PRACTICE OF THE MALAYSIAN CODE ON CORPORATE GOVERNANCE (THE CODE)

Save as disclosed below, the group has substantially complied with the Best Practices in Corporate Governance set out in Part 2 of the Code:-

Provision of the Code

Details Explanation

Part 2,AA II

Chairman and Chief Executive

The Company is headed by an Executive Chairman who is also the Managing Director of the Company and therefore, the roles of the Chairman and the Chief Executive Offi cer are not separate. The Board is of the opinion that the check and balance of power is undertaken by the strong presence of Independent Non-Executive Director which is currently representing 50% in number of the Directors. Furthermore, the Chairman encourages all Directors to participate actively in all deliberation of issues that concern the Group. The Board is also considering to appoint a new Independent Non-Executive Director to assume the role of Chairman. The appointment is expected to be done when a suitable candidate is identifi ed.

Part 2,AA III & VI

Independent Non-Executive Director

The Company complies with the criteria of having at least one-third of the Board Members as Independent Non-Executive Directors.

Part 2,AA VII

Senior Independent Non-Executive Director to whom concerns may be conveyed

Presently all Board Members are accessible by the shareholders and public investors where they can relay their concerns over company’s matter. Therefore, the appointment of Senior Independent Non-Executive Director to assume such responsibilities is not timely necessary.

Construction of road from Pos Blau to Kg. Kuala Betis, Gua Musang, Kelantan.

Construction of East Malaysia Hospital, Kuala Penyu, Sabah.

This statement on Corporate Governance is made in accordance with the resolution of Board of Director dated 17 April 2003.

17


18

PARTICULARS OF MATERIAL CONTRACTS INVOLVING DIRECTORS AND SHAREHOLDERS

On 16 April 2001, Andaman Budi Sdn. Bhd. (ABSB) which is an associated company of Trans Resources Corporation Sdn. Bhd. (TRC) a wholly owned subsidiary of the Company executed a Letter of Acceptance in favour of TRC to undertake the project knows as “construction and completion of 2 blocks of medium cost apartments 11 and 12 storey (352 units) phase A on Lot LTD 148136, Mukim Plentong, Johor Bahru, Johor Darul Takzim” for the contract sum of RM 24,932,484.97.

On 10 September 2001, ABSB executed a Letter of Acceptance in favour of TRC to undetake the project known as “construction and completion of 5 block of apartments (827 units) including piling works, common facilities and covered car park for phase B or Lot No. PTD 163200, Mukim Plentong, Johor Darul Takzim” for the contract sum of RM 72,637,000.00.

Dato’ Hj Sufri Bin Hj Mohd Zin, the Executive Chairman / Managing Director of the Company is a substantial shareholder of ABSB, holding 51% equity interest whereas En. Abdul Aziz Bin Mohamad, the Executive Director of the Company is a shareholder of ABSB, holding 9% equity interest.

ADDITIONAL CORPORATE INFORMATIONIn compliance with the KLSE Listing Requirements, the following information is provided:-

i) Utilization of proceedsThe status of utilization of proceeds from the public issue during the financial year were as follows:-

Approved by Securities Commission Time frame for utilazation

Financial year ending 31

December 2002

Financial year ending 31

December 2003

Amount Utilized Balance

RM RM RM RM

a. Repayment of Short Term Loans 18,847,746 - 16,067,936 2,779,810

b. Redemption of Property 8,000,000 2,176,465 5,823,535

c. Working Capital 1,500,000 - 1,500,000 -

d. Listing Expenses 2,200,000 - 2,200,000 -

22,547,746 8,000,000 21,944,401 8,603,345

ii) Share buybacks There was no share buyback by the Company during

the financial year ended 31 December 2002.

iii) Option, Warrants or Convertible Securities. The Company has neither offered any options nor

issued any warrants or convertible securities.

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

The Company has not sponsored any ADR or GDR Programme.

v) Sanctions and / or penalties There were no sanction and/or penalty imposed

on the Company and its subsidiaries, Directors or Management by the relevant regulatory bodies during the financial year ended 31 December 2002.

vi) Non-Audit Fees The non-audit fees paid to external auditors

amounting to RM42,780 for the financial year ended 31 December 2002.

vi) Variation of Results There was no material variation between the

audited results for the financial year ended 31 December 2002 with the projected figure reported in our prospectus dated 28 June 2002.

vii) Profit Guarantee There was no profit guarantee given by the

Company during the financial year ended 31 December 2002.

xi) Material Contracts There was no material contract on the company

and its subsidiaries involving Directors and major shareholders’ interests during the financial year.

ix) Revaluation of landed properties The Company does not adopt a policy of regular

revaluation of its properties.

x) Recurrent Related Party Transaction The Company did not enter into any recurrent

related party transaction which requires the shareholders’ mandate during the financial year ended 31 December 2002.

17


18

Labuan Airport, Labuan.

Resettlement project at Sg. Pau, Sik, Kedah.

STATEMENT OF DIRECTORS’ RESPONSIBILITY IN RELATION TO THE FINANCIAL STATEMENTS

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

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

The Directors are satisfi ed that in preparing the fi nancial statements of the Group for the fi nancial year ended 31 December 2002, the Group has adopted appropriate accounting policies and applied them prudently and consistently. They are also satisfied that reasonable and prudent judgments and estimates were made and allapplicable Approved Accounting Standards in Malaysia have been followed accordingly.


19 20

INTRODUCTION

Pursuant to paragraph 15.27 (b) of the Kuala Lumpur Stock Exchange Listing Requirements the Board of Directors of TRC Synergy Berhad (“the Group”) is pleased to provide this statement on the internal control which outlines the nature and scope of internal control of the Group during the fi nancial year ended 31 December 2002.

RESPONSIBILITY

The Board is committed to the continuous improvement to internal controls and risk management practices within the Group to meet its business objectives. The Board affi rms its overall responsibility for the effectiveness of the Group’s systems of internal controls and risk management, and for reviewing the adequacy and integrity of these systems. The internal control system involves the core business and its key management, including the Board, and is designed to meet the Group’s particular needs and to manage the risks to which it is exposed. This system, by its nature, can only provide reasonable, and not absolute, assurance against material misstatement, loss and fraud. These systems are designed to manage, rather than eliminate, the risk of failure to achieve business objectives of the Group.

For the purposes of this statement, the Group refers to the Company and its subsidiaries, excluding associated company.

INTERNAL CONTROL

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

• Clearly defi ned delegation of responsibilities to committees of the Board and to operating units, including authorisation levels for all aspects of the business. This also includes detailed job description and specifi cation provided to each employee of the Group which is further reiterated through a well defi ned organizational structure.

• Documented internal procedures set out in a series of Operating Manuals.

• Regular and comprehensive information provided to management, covering fi nancial performance and key business indicators.

• A detailed budgeting process where operating units prepare budgets for the coming year which are approved both at operating unit level and by the full Board.

• A monthly monitoring of results against budget, with major variances being followed up and management action taken, where necessary.

• Review and holding of discussions by the Audit Committee on signifi cant internal control matters relating to the Group.

• There is clear and well documented Quality Policy in accordance with ISO 9001 : 2000 by a wholly-owned subsidiary of the Company which is undertaking the core business of the Group. This policy and procedures are communicated to the respective staff members.

RISK MANAGEMENT FRAMEWORK

The Group has in place an on-going process for identifying, evaluating, monitoring and managing the signifi cant risks affecting the achievement of

its business objectives. This is an on-going process, subject to regular review by the Board, and accords with the “Statement on Internal Control: Guidance for Directors of Public Listed Companies”. The key elements of the Group’s Risk Management Framework are described below :-

The Group adopts a decentralised approach to risk management by encouraging participation of all employees in such a manner that the employees take ownership and responsibility for risks at their respective levels. The process of risk management and treatment is overseen by the senior management.

STATEMENT ON INTERNAL CONTROL

ISO 9001:2000 Certificate Presentation


19 20

Construction of Sekolah Men. Tengku Indera Petra (2), Gua Musang, Kelantan.

Road construction undertaken by the Group.

INTERNAL AUDIT

The Group is currently undertaking the relevant measures to have an internal audit function so that regular and systematic reviews of the system of internal control can be undertaken so as to provide reasonable assurance that such systems operate satisfactorily and effectively in the Group.

AUDIT COMMITTEE

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

The Report on the Audit Committee set out on pages 21 to 23 of this Annual Report contains further details on the activities undertaken by the Audit Committee in 2002.

BOARD

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

OTHER CONTROL PROCESSES

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

The Directors have taken the necessary steps, as are reasonably open to them, to ensure that appropriate systems are in place for the assets of the Group to be adequately safeguarded through the prevention and detection of fraud and other irregularities and material misstatements.

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

During the year, a number of improvements to internal controls were identifi ed and addressed. There has been no signifi cant weakness noted which would result in any material loss.

This statement is made in accordance with a resolution of the Board of Directors dated 17 April 2003.

Road construction undertaken by the Group.


21 22

The Board of TRC Synergy Berhad is pleased to present the Audit Committee Report for the fi nancial year ended 31 December 2002.

1. Composition of the Audit Committee

Chairman: En Noor Zilan bin Mohamed Noor(Independent Non-Executive Director)(Appointed on 24 February 2003)

Puan Noor Asiah Binti Mahmood(Independent Non-Executive Director)(Resigned on 24 February 2003)

Member: i) YBhg. Dato’ Hj Sufri Bin Hj Mohd Zin (Executive Chairman / Managing

Director)

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

Accountants)

Secretary: En. Abdul Aziz Bin Mohamed(Company Secretary)

2. Terms of Reference

i. Composition

The Board of Directors shall elect an Audit Committee from amongst themselves (pursuant to a resolution of the Board of Directors) comprising not less than three (3) members where the majority of them shall be independent non-executive members of the Board.

The members of the Audit Committee shall elect a Chairman from amongst themselves.

All members of the Audit Committee, including the Chairman, will hold offi ce only so long as they serve as Directors of the Company. Should any members of the Audit Committee cease to be a Director of the Company, his membership in the Audit Committee would cease forthwith.

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

ii. Objectives

The primary objectives of the Audit Committee are:

a. To provide assistance to the Board in fulfi lling its fi duciary responsibilities particularly relating to business ethics, policies and practices and fi nancial management and control.

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

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

iii. Duties and responsibilities

The duties and responsibilities of the Audit Committee shall be:

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

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

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

i. Any changes in accounting policies and practices

ii. Major judgmental areasiii. Signifi cant adjustments resulting from the

audit

AUDIT COMMITTEE REPORT

Hockey Stadium Bukit Jalil - one of the mega projects by the Group.


21 22

Construction of road from Simpang Pulai-Lojing-Gua Musang-Kuala Berang

Casting precast concrete piles by TRC Concrete Industries Sdn. Bhd.

iv. The going concern assumptionv. Compliance with accounting standardsvi. Compliance with the stock exchange and legal

requirements

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

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

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

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

h. To carry out such other functions as may be agreed to by the Audit Committee and the Board of Directors.

iv) Authority

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

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

v) Meeting and Minutes

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

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

The Company Secretary shall act as the Secretary to the Audit Committee.

23


3. Summary of Activities of the Audit Committee.

During the fi nancial year ended 31 December 2002, the Audit Committee met two (2) times. The details of the attendance of the members of the Audit Committee are as follows:-

No

.

Audit Committee

Att

en

dan

ce

Perc

en

tag

e

1

En Noor Zilan bin Mohamed Noor(Appointed on 24 February 2003)

n/a n/a

2

Pn. Noor Asiah Binti Mahmood(Resigned on 24 February 2003)

2/2 100%

3Dato’ Hj Sufri Bin Hj Mohd Zin

1/2 50%

4 En. Rahman Bin Ali 2/2 100%

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

- The quarterly management and annual audited fi nancial statements to ensure compliance with statutory reporting requirements and appropriate resolution of all accounting and audit matters requiring signifi cant judgment and where appropriate, made recommendations to the Board.

- The external auditor’s audit plan and scope for the Company and the Group, the audit report, signifi cant issues raised and management responses in relation thereto.

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

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

- The statement of Corporate Governance and Statement on Internal Controls which are prepared in accordance with the provisions set out under the Malaysian Code On Corporate Governance, the extent of compliance with the said Code and recommend to the Board action plan to address further compliance matters.

4) Internal Audit Function

The Board have taken necessary steps, as are reasonably open to them, to ensure that appropriate systems in place for the assets of the Group to be adequately safe guarded through the prevention and detection of fraud and other irregularity and material misstatements.

In this context, the Board is currently, undertaking relevant measures to have an internal audit function so that regular and systematic reviews of the system of internal control can be undertaken.

Concrete batching plant operated by TRC Concrete Industries Sdn. Bhd.

Construction of bridge in Gua Musang, Kelantan.


TRC SYNERGY BERHAD(Incorporated in Malaysia, Company No. 413192 - D)

DIRECTORS’ REPORTS AND AUDITED FINANCIAL STATEMENTS

31 December

2002

Index Pages No.

Corporate Information 25

Directors’ Report 20 - 29

Statement by Directors 30

Statutory Declaration 31

Auditors’ Report 32

Balance Sheets 33 - 34

Income Statements 35

Statement of Changes in Equity - Group 36

Statement of Changes in Equity - Company 36

Cash Flow Statement - Group 37 - 38

Cash Flow Statement - Company 39

Notes to the Financial Statements 40 - 57

24


Board of Directors : Dato’ Haji Sufri Bin Haji Mohd Zin

: Abdul Aziz Bin Mohamad

: Noor Asiah Binti Mahmood

Rahman Bin Ali

Noor Zilan Bin Mohamed Noor

Secretaries : Tang Swee Guan

Abdul Aziz Bin Mohamed

Auditors : Kumpulan Naga

Chartered Accountants (M)

Bankers : EON Bank Berhad

Affin Bank Berhad

AmMerchant Berhad

Maybank Berhad

Aseambankers Malaysia Berhad

Registered Office/

Principal Place of Busi-ness : Wisma TRC

217 & 218, Jalan Negara 2,

Taman Melawati ,

53100 Ulu Klang,

Selangor Darul Ehsan.

Corporate Information for the year ended 31 December 2002

25 26


The directors have pleasure in presenting their report together with the audited financial statements of the Group and the Company for the financial year ended 31 December 2002.

PRINCIPAL ACTIVITIES

The principal activities of the Company are investment holding and the provision of corporate, administrative and financial support services to the subsidiaries.

The principal activities of the subsidiaries are construction, manufacturing and trading of building materials, hiring and servicing of machineries and vehicles, general contractors supplying labour and property development.

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

Results

Group Company

RM RM

Net profit/(loss) for the year 17,785,609 (204,877)

DIVIDENDS

No dividends were paid or declared by the Company during the financial year. The Directors now propose the payment of a first and final tax-exempt dividend of 2.5 sen per share amounting to RM1,750,000 for the current financial year. The dividend is subject to the approval of members at the forthcoming Annual General Meeting of the Company. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in the shareholders’ equity as an appropriation of retained profit in the next financial year ending 31 December 2003.

Share Capital

During the financial year the Company increased its :-

i) authorised share capital from RM100,000 to RM100,000,000 through the creation of 99,900,000 ordinary shares of RM1 each; and

ii) the issued and paid up capital from RM2 to RM70,000,000 by way of issuance of 69,999,998 ordinary shares as follows:-

a) issue of 49,052,252 new ordinary shares of RM1.00 each in settlement of the purchase consideration upon its acquisition of the entire equity interest of 15,000,000 ordinary shares of RM1.00 each in Trans Resources Corporation Sdn. Bhd.

b) Issue of 16,000,000 new ordinary shares of RM1.00 each to the public at an issue price of RM1.60 per share.

c) Issue of 4,947,746 new ordinary shares upon completion of a rights issue where the rights were granted in the proportion of 101 new ordinary shares for every 1,000 ordinary shares held by the existing shareholders as at 22 May 2002.

Reserves and Provisions

There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the Statements of Changes In Equity.

Current Assets

Before the income statements and balance sheets of the Group and the Company were made out, the directors took reasonable steps to ascertain whether any current assets which were unlikely to realise in the ordinary course of business their value as shown in the accounting records of the Group and the Company and the extent so ascertained, were written down to an amount that they might be expected to realise.

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

Directors’ Reportfor the year ended 31 December 2002

25 26


Valuation Methods

At the date of this report, the directors are not aware of any circumstances which have arisen which render adherence to the existing methods of valuation of assets or liabilities in the Group and the Company’s financial statements 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 the Company that has arisen since the end of the financial year which secures the liabilities of any other person, or

ii) any contigent liability in respect of the Group and the Company that has arisen since the end of the financial year.

No contingent liability or other liability of the Company has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the directors, will or may substantially affect the ability of the Company to meet its 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 financial statements of the Group and the Company, that would render any amount stated in the financial statements misleading.

Items of an Unusual Nature

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

There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect substantially the results of the operations of the Group and the Company for the current financial year.

Directors of the Company

The Directors who have held office during the year since the date of the last report are :-

Dato’ Haji Sufri Bin Haji Mohd Zin(appointed on 29.3.2002)Abdul Aziz Bin Mohamad(appointed on 29.3.2002)Noor Asiah Binti Mahmood(appointed on 13.5.2002)(resigned on 24.2.2003)Rahman Bin Ali(appointed on 13.5.2002)Noor Zilan Bin Mohamed Noor(appointed on 13.5.2002)Muhamad Shahaizi Bin Abdul Hai(resigned on 29.3.2002)Mohd Fozi Bin Matori(resigned on 29.3.2002)

In accordance with Article 84 of the Company’s Articles of Association, Dato’ Haji Sufri Bin Haji Mohd Zin retires from the Board at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-election.


27 28


According to the register of directors shareholding required to be kept under Section 134 of the Companies Act, 1965, the directors who held office at the end of the financial year and having interest in shares of the Company and related corporations during the year were as follows :-

Directors’ shareholdings in the Company

Atbeginning

of the year

Number of Shares

Acquired DisposedAt end of

the year

Dato’ Haji Sufri Bin Haji Mohd Zain

- direct - 15,575,000 (5,000,000) 10,575,000

- deemed interest # - 32,400,000 - 32,400,000

Abdul Aziz Bin Mohamad

- direct - 100,000 - 100,000

Noor Asiah Binti Mahmood

- direct - 500,000 (110,000) 390,000

Noor Zilan Bin Mohamad Noor

- direct - 200,000 - 200,000

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

Directors’ benefits

Since the end of the previous financial year, no director of the Company has received or become entitled to receive any benefits (except as disclosed in the notes to the financial statements) by reason of a contract made by the Company or a related corporation with the director or with a firm of which 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 is to enable the directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

Signifinant Events

The Company entered into a Conditional Sale and Purchase Agreement on 21 December 2000 and a Supplementary Agreement dated 27 March 2002 with the former shareholders of Trans Resources Corporation Sdn. Bhd. (“TRC”) pursuant to which the company acquired the entire issued and paid-up share capital of TRC comprising 15,000,000 ordinary shares of RM1 each for a purchase consideration of RM54,448,781 which was satisfied by the issue of 49,052,252 new ordinary shares of RM1 each at an issue price of RM1.11 per share.

Following the completion of the acquisition of TRC, the Company made a Rights Issue of 4,947,746 new ordinary shares of RM1.00 at par to the shareholders of the Company on the basis of 101 new ordinary shares for every 1,000 existing ordinary shares held then in accordance with their shareholding as at 22 May 2002. The Rights Issue was completed on 6 June 2002.

Subsequently, the Company undertook a public issue of 16,000,000 new ordinary shares of RM1.00 each at an issue price of RM1.60 per share.

The Company’s shares were listed on the Main Board of the Kuala Lumpur Stock Exchange on 6 August 2002 upon successful completion of the public issue exercise.

Ultimate Holding Company

The Company was not a subsidiary of another corporation during the financial year and as at the end of the financial year.


27 28


Auditors

The auditors, Kumpulan Naga, Chartered Accountants (M), have expressed their willingness to continue in office.

The Board of Directors,

DATO’ HAJI SUFRI BIN HAJI MOHD ZINDirector

ABDUL AZIZ BIN MOHAMADDirector

Kuala LumpurDate: 21 April 2003


29 30


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

We, DATO’ HAJI SUFRI BIN HAJI MOHD ZIN and ABDUL AZIZ BIN MOHAMAD, being two of the directors of TRC Synergy Bhd., do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 10 to 40 are drawn up in accordance with applicable Approved Accounting Standards in Malaysia and the provisions of the Companies Act, 1965 so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2002 and of the results of and the cash flows of the Group and of the Company for the year then ended.

The Board of Directors,

DATO’ HAJI SUFRI BIN HAJI MOHD ZIN

ABDUL AZIZ BIN MOHAMAD

Kuala Lumpur, MalaysiaDate: 21 April 2003

29 30


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

I, DATO’ HAJI SUFRI BIN HAJI MOHD ZIN, being the director primarily responsible for the financial management of TRC Synergy Bhd., do solemnly and sincerely declare that the financial statements set out on pages 10 to 40 are, in my opinion correct, and I make this solemn declaration conscientiously believing the same to be true by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the abovenamed,DATO’ HAJI SUFRI BIN HAJI MOHD ZIN at Petaling Jayain the State of Selangor Darul Ehsan on 21 April 2003

}} DATO’ HAJI SUFRI BIN HAJI MOHD ZIN}

Before me,

S.Arokiasamy (No. B003)Commissioner for Oaths Kuala Lumpur, Malaysia

31 32


Report of the Auditorsto the members of TRC Synergy Berhad.

We have audited the accompanying financial statements set out on pages 33 to 57.

These financial statements are the responsibility of the Company’s directors. Our responsibility is to express an opinion on the financial statements based on our audit.

We conducted our audit in accordance with applicable Approved Standards on Auditing in Malaysia. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the directors as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion :-

(a) the financial statements are properly drawn up in accordance with the provisions of the Companies Act, 1965 and applicable Approved Accounting Standards in Malaysia so as to give a true and fair view of :-

(i) the financial position of the Group and of the Company as at 31 December 2002 and of the results and the cash flows of the Group and the Company for the year then ended and

(ii) the matters required by Section 169 of the Companies Act, 1965, to be dealt with in the financial statements of the Group and the Company;

(b) the accounting and other records and the registers required by the Companies Act, 1965 to be kept by the Company and by its subsidiaries have been properly kept in accordance with the provisions of the said Act.

We are satisfied that the financial statements of the subsidiaries that have consolidated with the financial statements of the company are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information and explanations required by us for those purposes.

The Auditors’ Reports on the financial statements of the subsidiaries were not subject to any qualification and did not include any comment to be made under section 174(3) of the Act.

Kumpulan NagaA.F. No. 0024Chartered Accountants (M)

T. Nagarajan C.A.(M), FCCA, AICANo: 824/04/04 (J)

Kuala LumpurDate: 21 April 2003

31 32


Balance Sheetsas at 31 December 2002

Group Company 2002 2002 2001

Notes RM RM RM

SHARE CAPITAL 3 70,000,000 70,000,000 2

SHARE PREMIUM 4 12,885,471 12,885,471 -

RESERVE ON CONSOLIDATION 16,540,657 - -

UNAPPROPRIATED PROFITS / (ACCUMULATED LOSSES) 13,231,911 (217,575) (12,698)

SHAREHOLDERS’ EQUITY 112,658,039 82,667,896 (12,696)

DEFERRED TAXATION 5 3,101,830 - -

HIRE PURCHASE AND LEASE CREDITORS 6 6,911,166 - -

TERM LOANS 7 702,375 - -

123,373,410 82,667,896 (12,696)

PROPERTY, PLANT AND EQUIPMENT 8 56,421,220 - -

INVESTMENTS 9 255,394 - -

SUBSIDIARY COMPANIES 10 - 82,678,401 -

ASSOCIATED COMPANY 11 143,946 - -

DEFERRED EXPENDITURE 12 - - 696,477

CURRENT ASSETS

Property development project costs 13 11,072,951 - -

Inventories 14 533,942 - -

Trade receivables 15 81,802,824 - -

Other receivables 4,207,054 2,000 -

Gross amount due from customers 16 91,891,767 - -

Deposits with licensed banks 17 34,720,963 - -

Cash and bank balances 18 7,486,321 20,081 2

231,715,822 22,081 2

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

33 34


Group Company2002 2002 2001

Notes RM RM RM

CURRENT LIABILITIES

Trade payables 46,346,358 - -

Other payables 5,728,878 23,386 709,175

Hire purchase creditors - net 6 8,781,586 - -

Short term borrowings 19 98,369,403 - -

Taxation 5,922,100 9,200 -

Due to a director 20 14,647 - -

165,162,972 32,586 709,175

NET CURRENT ASSETS/(LIABILITIES) 66,552,850 (10,505) (709,173)

123,373,410 82,667,896 (12,696)


Balance Sheetsas at 31 December 2002 (cont’d.)

33 34


Income Statementsfor the year ended 31 December 2002

Group Company

2002 2002 2001

Notes RM RM RM

REVENUE 21 303,225,466 - -

COST OF SALES 21 (264,862,365) - -

GROSS PROFIT 38,363,101 - -

OTHER OPERATING INCOME 6,873,156 34,525 -

ADMINISTRATION EXPENSES (12,067,251) - -

SELLING EXPENSES (109,693) - -

OTHER OPERATING EXPENSES - (230,202) (4,100)

OPERATING PROFIT 33,059,313 (195,677) (4,100)

FINANCE COST (7,996,619) - -

SHARES OF RESULTS OF ASSOCIATED COMPANY 195,615 - -

PROFIT ON DISPOSAL OF PROPERTY, PLANT AND EQUIPMENT 474,841 - -

NET PROFIT/(LOSS) BEFORE TAXATION 22 25,733,150 (195,677) (4,100)

TAXATION 23 (5,552,080) (9,200) -

NET PROFIT/(LOSS) AFTER TAXATION 20,181,070 (204,877) (4,100)

Pre-acquisition profit of subsidiary acquired (2,395,461) - -

Net profit/(loss) for the year 17,785,609 (204,877) (4,100)

EARNINGS PER SHARE ( sen )

- Basic/diluted 24 37.88 - -


35 36


Non-Distributable Distributable Share

CapitalShare

Premium Capital

ReservesUnappropriated

Profits Total

Note RM RM RM RM RM

Balance at 1 January 2002 2 - - (12,698) (12,696)

Net profit for the year - - - 17,785,609 17,785,609

Prior year adjustment 25 - - - (4,541,000) (4,541,000)

Issue of shares 69,999,998 12,885,471 16,540,657 - 99,426,126

Balance at 31 December 2002 70,000,000 12,885,471 16,540,657 13,231,911 112,658,039


Statement of Changes in Equity - Groupfor the year ended 31 December 2002

Share Capital

Share Premium

AccumulatedLosses Total

RM RM RM RM

Balance at 1 January 2001 2 - (8,598) (8,596)

Net loss for the year - - (4,100) (4,100)

Balance at 1 January 2002 2 - (12,698) (12,696)

Net loss for the year - - (204,877) (204,877)

Issue of shares 69,999,998 12,885,471 - 82,885,469

Balance at 31 December 2002 70,000,000 12,885,471 (217,575) 82,667,896


Statement of Changes in Equity - Companyfor the year ended 31 December 2002

35 36


2002

Note RM

CASH FLOWS FROM OPERATING ACTIVITIES

Net profit before taxation 25,733,150

Adjustments for :-

Deferred expenditure written off 13,563

Depreciation 7,232,285

Gain on disposal of property, plant and equipment (474,841)

Share of profit of an associated company (155,952)

Interest expense 7,083,726

Interest income (1,215,652)

Provision for bad debts written back (5,500,000)

Pre-acquisition profit before tax (3,335,573)

OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 29,380,706

Gross amount due from customers (34,681,872)

Decrease in associated company’s account 5,255,456

Increase in stocks (108,464)

Increase in receivables (19,119,021)

Increase in payables 13,791,173

Increase in directors’ account 14,647

Increase in property development project costs (16,816,145)

Cash used in operations (22,283,520)

Taxation paid (8,121,261)

Interest paid (7,083,726)

Interest received 1,215,652

Net cash used in operating activities (36,272,855)

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property, plant and equipment (12,353,763)

Proceeds from disposal of property, plant and equipment 23,044,267

Acquisition of subsidiary net of cash acquired 26 (58,829,668)

Net cash used in investing activities (48,139,164)


Cash Flow Statement - Groupfor the year ended 31 December 2002

37 38


Consolidated Cash Flow Statement for the year ended 31 December 2002 ( Cont’d )

2002

Note RM

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issue of shares 30,547,746

Repayment of term loans (241,037)

Repayment of hire purchase creditors (276,263)

Deferred expenditure (1,428,144)

Net cash from financing activities 28,602,302

Net decrease in cash and cash equivalents (55,809,717)

Cash and cash equivalents at the beginning of the year 2

Cash and cash equivalents at the end of the year (55,809,715)

Breakdown of cash and cash equivalents

at the end of the year :-

Cash and bank balances 7,486,321

Deposits with licensed banks 34,720,963

Bank overdrafts (27,150,080)

Bankers acceptance (41,215,000)

Revolving credit (5,000,000)

Bridging loan (1,440,450)

Medium term credit (4,370,692)

Overdraft - non chequeing (18,840,777)

(55,809,715)


37 38


2002 2001

Note RM RM

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss before taxation (195,677) (4,100)

OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES

Increase in receivables (2,000) -

(Decrease)/increase in payables (685,789) 372,346

Increase in subsidiary companies’ accounts (28,229,620) -

Decrease/(increase) in deferred expenditure 696,477 (368,246)

Net cash used in operating activities (28,416,609) -

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from share issue 30,547,746 -

Deferred expenditure (2,111,058) -

Net cash from financing activities 28,436,688 -

Net increase in cash and cash equivalents 20,079 -

Cash and cash equivalents at the beginning of the year 2 2

Cash and cash equivalents at the end of the year 20,081 2


Cash Flow Statement - CompanyFor the year ended 31 December 2002

39 40


Notes to the Financial Statements31 December 2002

1 CORPORATE INFORMATION

The principal activities of the Company are that of investment holding and the provision of full corporate, administrative and financial support services to the subsidiaries.

The principal activities of the subsidiaries are disclosed in note 10 to the financial statements.

The number of employees of the group as at year end is 874.

The number of employees of the Company as at year end is 8 (2001: Nil).

The Company is a public limited liability company incorporated and domiciled in Malaysia and listed on the Main Board of the Kuala Lumpur Stock Exchange.

The registered office and the principal place of business of the Company are located at :- Wisma TRC 217 & 218, Jalan Negara 2, Taman Melawati, 53100 Ulu Klang, Selangor Darul Ehsan.

2 PRINCIPAL ACCOUNTING POLICIES

The financial statements of the Group and of the Company have been prepared in accordance with applicable Approved Accounting Standards issued by the Malaysian Accounting Standards Board (MASB). The principal accounting policies of the Group are as follows :-

(a) Basis of Preparation of Financial Statements

The financial statements of the Group and of the Company are prepared under the historical cost convention modified to include the revaluation of certain property, plant and equipment and comply with applicable Approved Accounting Standards issued by the MASB.

In the preparation of the financial statements, the Group and the Company have adopted the Approved Accounting Standards MASB Standard No. 20, ‘ Provision, Contingent Liabilities and Contingent Assets’, MASB Standard No. 22, ‘Segment Reporting’, MASB Standard No. 23 ‘Impairment of Assets’, and MASB Standard No. 24 ‘Financial Instruments: Disclosure and Presentation’ that became applicable during the year.

The Group and the Company had also exercised early adoption of MASB Standard No.25 “Income Taxes” the financial effects of which are disclosed in the Statement of Changes in Equity in respect of the Group and in Note 25 to the financial statements.

(b) Basis of Consolidation

The consolidated financial statements include the financial statements of the Company and all its subsidiaries made up to 31 December. Subsidiaries are those companies in which the Group has the power to exercise control over the financial and operating policies so as to obtain benefits from their activities. Subsidiaries are consolidated using the acquisition method of accounting under which the results of subsidiaries acquired or disposed of are included in the consolidated financial statements from the date of acquisition or up to the date of disposal. Goodwill or reserve on consolidation represents the difference between the consideration paid for the shares in the subsidiaries and the fair value of attributable net assets acquired, as applicable.

Goodwill arising on consolidation is reflected in the consolidated balance sheet. The carrying amount of such goodwill is assessed in the year it arises, and periodically, including when economic conditions indicate that the carrying amount may be impaired. To the extent deemed impaired, such goodwill is written off by a charge to the income statement. All intercompany transactions, balances and unrealised gains or transactions between the companies within the Group are eliminated. The reserve on consolidation represents the excess of the share of assets of subsidiary companies on acquisition date over the consideration paid for their acquisition.

39 40



(c) Subsidiaries

Shares in the subsidiaries are revalued by the Directors at the balance sheet date on the basis of the net asset value of the subsidiaries. Any resulting surplus is taken to a non-distributable revaluation reserve in respect of the Company. A deficit to the extent that it exceeds the amount standing in such reserve is taken to the Income Statement of the Company.

(d) Associated Companies

An associated company is defined as a company, not being a subsidiary, in which the Group has a long term interest of at least 20% but not more than 50% of the equity and in whose financial and operating policy decisions the Group exercises significant influence. Significance influence is the power to participate in the financial and operating policy decisions of the associated companies but not control over those policies.

Investments in associated companies are accounted for in the consolidated financial statements by the equity method of accounting. Equity accounting involves recognising in the income statement the group’s share of results of associated companies for the period. The Group’s share of results and reserves of associated companies acquired or disposed of are included in the consolidated financial statements from the date of acquisition or up to the date of disposal. The Group’s share of post-acquisition reserves of associated companies is added to the initial cost of these investments in the Consolidated Balance Sheet.The carrying amount of investments in associated companies is assessed periodically and when there are indications of impairment, and any impairment is provided for.

(e) Investments

Investments in subsidiary companies, associated companies and other non-current investments are shown at cost and provision is only made where, in the opinion of the directors, there is permanent diminution in value. Permanent diminution in the value of an investment is recognised as an expense in the period in which the diminution is identified. Other investments held on a long-term basis are shown at cost unless in the opinion of the directors there has been an impairment in value in which case an appropriate provision is made.

On disposal of an investment, the difference between net disposal proceeds and its carrying amount is charged or credited to the income statement.

(f) Property, Plant and Equipment

Property, plant and equipment are stated at cost or valuation less accumulated depreciation and impairment losses. The cost of property, plant and equipment comprises their purchase prices and any directly attributable costs including interest cost capitalised in bringing the property, plant and equipment to working condition. When property, plant and equipment are sold or retired, their cost or valuation and accumulated depreciation are removed from the financial statements and any gain or loss resulting from their disposal is included in the income statement.

Freehold lands are not amortised as it has infinite life. Leasehold land is amortised in equal instalments over the periods of the respective leases that range from 55 to 99 years. Other leasehold lands are depreciated over the remaining period of the respective leases.

All other property, plant and equipment are depreciated on a straight line basis to write off the cost of each asset to their estimated useful lives at the following annual rates:

Building 2%

Motor vehicles 20%

Plant and machinery 10%

Office equipment 20%

Furniture and fittings 10%

Renovation 10%

Fully depreciated property, plant and equipment are retained in the financial statements until they are no longer in use.

41 42



(g) Leases

Operating leases

Operating leases are leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item. The payments are recognised as an expense in the income statement based on their contractual commitments over the period of the respective leases.

Finance leases

Leases of property, plant and equipment where the Group assumes substantially all the benefits and risks of ownership are classified as finance leases.

Finance leases are capitalised at the estimated present value of the underlying lease payments at the date of inception. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the balance outstanding. The corresponding rental obligations, net of finance charges, are included in borrowings. The interest element of the finance charge is charged to the income statement over the lease period.

Property, plant and equipment acquired under finance lease contracts are depreciated over the useful lives of the assets concerned.

(h) Inventories

Inventories comprising raw materials and finished goods are stated at the lower of cost and net realisable value. Cost of finished goods produced by the Group include costs of direct materials, labour and a proportion of production overheads

Net realisable value is the estimated selling price in the ordinary course of business, less estimated cost of completion and the estimated costs necessary to make the sales, and provisions for obsolete and slow moving items, where applicable.

(i) Development properties

Development properties include all expenditure directly related to development together with an appropriate portion of other indirect expenses and are stated at the lower of cost and net realisable value.

(j) Land held for development

Land held for development include all expenditure directly related to development together with an appropriate portion of other indirect expenses and are stated at cost.

(k) Receivables

Specific provision for doubtful debts is based on an individual evaluation of receivables or group of receivables.

(l) Payables

Payables are carried at cost which is the fair value of the consideration to be paid in the future for goods and services received, whether or not billed to the Group.

(m)Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

(n) Foreign Currencies

Transactions in foreign currencies :-

Transactions in foreign currencies are recorded in Ringgit Malaysia at the approximate rates of exchange ruling at the dates of the transactions or at contracted rates where applicable and where settlement has not taken place at the balance sheet date, at the approximate rates ruling at that date or at contracted rates as applicable. All exchange gains and losses are recognised in the Income Statement.

41 42



(o) Deferred Taxation

Deferred taxation is provided for, using the liability method, on all material temporary differences except to the extent that it can be demonstrated, with reasonable probability, that the temporary differences will continue in the foreseeable future. When such temporary differences give rise to net deferred tax benefits, these benefits are not recognised except when there is reasonable expectation of realisation.

(p) Cash and Cash Equivalents

The statements of cash flows, prepared using the indirect method, classify changes in cash and cash equivalents according to operating, investing and financing activities. For the purpose of the cash flow statements, cash and cash equivalents comprise cash and bank balances, deposits with licensed financial institutions, and other short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to insignificant risk of changes in value, against which short term bank borrowings are deducted.

(q) Revenue Recognition

(a) Dividend income from long-term investments and, in respect of the Company, from subsidiaries and associated companies, is recognised in the income statement upon the right to receipt of such dividends being established.

(b) Interest income is recognised on an accrual basis.

(c) Revenue on sales of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer.

(d) Rental income is derived from letting out of properties and hire of machineries and recognised as it accrues.

(r) Impairment

At each balance sheet date, the Group reviews the carrying amounts of its assets (other than inventories, deferred tax assets, assets arising from employee benefits and financial assets which are reviewed pursuant to the relevant accounting policies) to determine whether there are any indications that those assets have suffered an impairment loss. If any such indication exists, impairment is measured by comparing the carrying values of the assets with their recoverable amounts. Recoverable amount is the higher of net selling price and value in use, which is measured by reference to discounted future cash flows. Recoverable amounts are estimated for individual assets or, if it is possible, for the cash-generating unit to which the asset belongs.

An impairment loss is charged to the income statement immediately, unless the asset is carried at revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of any available previously recognised revaluation surplus for the same asset.

Reversal of impairment losses recognised in prior years is recorded when there is an indication that the impairment losses recognised for the asset no longer exist or have decreased. The reversal is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in the income statement immediately, unless the asset is stated at revaluation, in which case it is taken to revaluation surplus. However, to the extent that an impairment loss on the same revalued asset was previously recognised as an expense in the income statement, a reversal of that impairment loss is recognised in the income statement.

43 44



(s) Financial Instruments

Financial instruments carried in the balance sheet include cash and bank balances, investments, debtors, creditors, leases and borrowings. The particular recognition methods adopted are disclosed in the individual policy statements for the relevant item. The financial instruments are recognised in the balance sheet when the Group has become a party to the contractual provisions of the instrument.

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends, gains and losses relating to a financial instrument classified as a liability, are reported as expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity. Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle either on a net basis or to realise the assets and settle the liability simultaneously.

(t) Construction Contracts

When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised only to the extent of contract costs incurred that it is probable will be recoverable and contract costs are recognised as expenses.

When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs are recognised over the period of the contract as revenue and expenses respectively. The Group uses the percentage of completion method to determine the appropriate amount of revenue and costs to recognise in a given period. The stage of completion is measured by reference to the proportion of contract costs incurred for work performed to date to the estimated total contract costs.

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

The aggregate of the costs incurred and the profit/loss recognised on each contract is compared against the progress billings up to the year end. Where costs incurred and recognised profits (less recognised losses) exceed progress billings, the balance is shown as amounts due from customers on construction contracts. Where progress billings exceed costs incurred plus recognised profits (less recognised losses), the balance is shown as amounts due to customers on construction contracts.

(u) Cash and Cash Equivalents

Cash and cash equivalents are cash in hand, balances with banks and highly liquid investments with original maturities of three months or less. For purposes of the cash flow statement, cash and cash equivalents are presented net of bank overdrafts.

3 SHARE CAPITAL

Group and Company 2002 2001

RM RM

Authorised:-

Ordinary shares of RM1.00 each

At 1 January 100,000 100,000

Created during the year 99,900,000 -

At 31 December 100,000,000 100,000

Issued and fully paid :-

Ordinary shares of RM1.00 each

At 1 January 2 2

Issued during the year 69,999,998 -

At 31 December 70,000,000 2

43 44



During the financial year, the Company increased its :-

i) authorised share capital from RM100,000 to RM100,000,000 through the creation of 99,900,000 ordinary shares of RM1 each, and

ii) issued and paid up share capital from RM2 to RM70,000,000 by way of issuance of 69,999,998 ordinary shares as follows :-

a) issue of 49,052,252 new ordinary shares of RM1.00 each in settlement of the purchase consideration upon its acquisition of the entire equity interest of 15,000,000 ordinary shares of RM1.00 each in Trans Resources Corporation Sdn. Bhd.,

b) Issue of 16,000,000 new ordinary shares of RM1.00 each to the public at an issue price of RM1.60 per share.

c) Issue of 4,947,746 new ordinary shares upon completion of a rights issue where the rights were granted in the proportion of 101 new ordinary shares for every 1,000 ordinary shares held by the existing shareholders as at 22 May 2002.

4 SHARE PREMIUM

Group and Company 2002 2001

RM RM

Balance as at 1 January - -

Arising during the year 12,885,471 -

Balance as at 31 December 12,885,471 -

Arising from :

Share premium arising from the issue of shares in settlement of the purchase consideration on the acquisition of the entire equity interest in TRC 5,396,529 -

Issue of 16,000,000 ordinary shares to the public of RM1.00 each at the issue price of RM1.60 per ordinary share (16,000,000 shares at RM0.60 per share) 9,600,000 -

Less: Written - off against Listing expenditure (2,111,058) -

12,885,471 -

5 DEFERRED TAXATION

Group 2002

RM

At 1 January -

Prior year adjustment 4,541,000

Transfer to income statement (1,439,170)

At 31 December 3,101,830

Deferred taxation is in respect of the following temporary difference Depreciation and capital allowances 11,077,964

45 46



6 HIRE PURCHASE AND LEASE CREDITORS

Group 2002

RM

Portion repayable not later than 1 year 8,781,586

Portion repayable later than 1 year and not later than 5 years 6,911,166

15,692,752

7 TERM LOANS

Group 2002

RM

Term Loans - secured 1,054,779

Less: Due within 12 months included in short term borrowings (Note 19) (352,404)

702,375

The term loans bear :-

i) interest at a rate of approximately 1.5% above the bank’s base lending rate and is secured by freehold land and building belonging to the subsidiary company and is jointly and severally guaranteed by the directors of the subsidiary company. The term loan is repayable by way of 60 equal monthly installments of RM24,367.

ii) interest at the rate of 6.5% per annum on a monthly rest basis as prescribed under the “Tabung Industri Kecil dan Serderhana” and is repayable by way of equal monthly instalments. The facility is secured by fixed deposits placed with licensed banks as disclosed in note (17) to the financial statements, a joint and several guarantee by the directors of the subsidiary company and a legal charge over leasehold land belonging to the Holding Company.

45 46



8 FIXED ASSETS

The Group

At cost/ valuation At date

of acquisition Additions Disposals/

Adjustments At

31.12.2002

RM RM RM RM

Freehold land 17,860,200 - (13,025,000) 4,835,200

Leasehold land & building 3,995,368 - (145,368) 3,850,000

Buildings 3,127,300 - - 3,127,300

Plant and machinery 66,503,517 8,419,628 (3,187,319) 71,735,826

Motor vehicles 15,558,209 3,378,326 (980,725) 17,955,810

Office equipment 3,468,762 357,328 (13,292) 3,812,798

Furniture and fittings 742,521 26,233 (3,570) 765,184

Renovation 1,229,975 167,058 (65,427) 1,331,606

Computer 64,594 3,940 - 68,534

Telecommunications equipment - 1,250 - 1,250

112,550,446 12,353,763 (17,420,701) 107,483,508

Accumulated Amortisation/ Depreciation

At date of acquisition

Charge for the year

Disposals/ Adjustments

At 31.12.2002

RM RM RM RM

Freehold land - - - -

Leasehold land & building 82,170 59,297 70,013 211,480

Buildings 169,029 45,484 - 214,513

Plant and machinery 29,813,715 5,516,001 (502,619) 34,827,097

Motor vehicles 11,270,971 1,235,451 (782,434) 11,723,988

Office equipment 2,636,858 225,225 (11,236) 2,850,847

Furniture and fittings 426,509 53,937 - 480,446

Renovation 600,999 94,305 - 695,304

Computer 56,028 2,397 - 58,425

Telecommunications equipment - 188 - 188

45,056,279 7,232,285 (1,226,276) 51,062,288

47 48



Net Book Value At date

of acquisition At

31.12.2002

RM RM

Freehold land 17,860,200 4,835,200

Leasehold land & building 3,913,198 3,638,520

Buildings 2,958,271 2,912,787

Plant and machinery 36,689,802 36,908,729

Motor vehicles 4,287,238 6,231,822

Office equipment 831,904 961,951

Furniture and fittings 316,012 28 4,738

Renovation 628,976 636,302

Computer 8,566 10,109

Telecommunications equipment - 1,062

67,494,167 56,421,220

(a) Revaluation

Certain freehold and leasehold land and buildings of a subsidiary company were revalued by independent professional valuers using the open market valuation basis. However in 2001, a proportion of this revaluation was deemed to be in excess of market values and was consequently subject to a downward revaluation during that year. The properties acquired subsequent to the said revaluation are however stated at cost, as the directors are of the opinion that the purchase consideration for the properties approximate their market values. Had the land and building affected been carried at their historical costs less accumulated depreciation, the carrying amounts of the revalued assets that would have been included in the financial statements at the end of the year are as follows :-

Group 2002

RM

Freehold land 1,730,490

Buildings 1,435,200

Leasehold land and buildings 4,431,943

7,597,633

(b) Security

Certain land and buildings with a net carrying value of RM9,797,072 have been charged to financial institutions as security for various credit facilities granted to a subsidiary company.

(c) Assets acquired under hire purchase and lease arrangements

The net book value of fixed assets of the subsidiary company acquired under hire purchase and lease arrangements are as follows :-

2002

RM

Plant and machinery 10,922,459

Motor vehicle 5,707,521

16,629,980

47 48



9 OTHER INVESTMENTS

Group 2002

RM

At Cost:

- Shares quoted in Malaysia 111,394

- Corporate membership 144,000

255,394

Market value

- Shares quoted in Malaysia 7,000

No provision for diminution in value of investment in respect of the quoted shares have been made as the investment is held for long term purposes.

10 INVESTMENT IN SUBSIDIARY COMPANIES

Company 2002 2001

RM RM

Unquoted shares, at cost 54,448,781 -

Amount due from subsidiary companies 28,229,620 -

82,678,401 -

The details of the subsidiary companies are as follows :-

Country of Incorporation

EffectiveInterest (%)

Principal Activities

2002 2001

Trans Resources Corporation Sdn. Bhd. Malaysia 100 - Construction

activities.

TRC Development Sdn. Bhd. Malaysia 100 - Property

development.

TRC Concrete Industries Sdn. Bhd. Malaysia 100 - Manufacture

of ready mixed concrete.

49 50



11 INVESTMENT IN ASSOCIATED COMPANY

Details of Associated Company are :

Name Principal

Activity Country of

Incorporation Percentage of equity

2002 2001

% %

Andaman Budi Sdn. Bhd. Property

development Malaysia 40 40

Group

2002

RM

Unquoted shares, at cost 200,000

Share of post - acquisition losses (200,000)

-

Amount due from Associated Company 143,946

143,946

The amount due from Associated Company is unsecured, interest free and has no fixed terms of repayment.

The following amounts represent the Group’s share of the assets, liabilities, revenue and expenses of the Associated Company:

Group 2002

RM

Property, plant and equipment 54,590

Current assets 8,483,790

Current liabilities (8,408,842)

Long term liabilities (205,963)

Net liabilities (76,425)

Share of net liabilities in excess of cost 76,425

-

Amount due from Associated Company 143,946

143,946

Revenue 2,412,005

Profit before taxation 195,615

Taxation -

Profit after taxation 195,615

49 50



12 DEFERRED EXPENDITURE

Company 2002 2001

RM RM

Preliminary expenses - 2,500

Pre-operating expenses - 693,977

- 696,477

The main composition of deferred expenditure are professional costs incurred for the proposed listing of the Company on the Main Board of the Kuala Lumpur Stock Exchange (“KLSE”). An additional amount of RM1,414,581 was incurred during the current financial year for this exercise. The total sum of these expenditures have been written off against the share premium account upon the listing of the Company on the KLSE.

13 PROPERTY DEVELOPMENT PROJECT COSTS

Group 2002

RM

Brought forward

- Land -

- Development costs 276,134

276,134

Incurred during the year

- Land 13,384,152

- Development costs 5,180,461

18,840,747

Recognised in income statement (7,767,796)

11,072,951

Sold portion 8,737,321

Unsold portion 2,335,630

14 INVENTORIES

Group 2002

RM

At Cost

Construction materials 352,569

Raw materials 181,373

533,942

51 52



15 TRADE RECEIVABLES

Included in the trade receivables of the Group are amounts of retentions for contract works of RM11,356,367 (2001: RM8,674,831) which are receivable subject to satisfactory completion of the respective project defect liability periods.

16 GROSS AMOUNT DUE FROM CUSTOMERS

Group 2002

RM

Costs incurred to date 597,305,057

Add: Attributable profits 4,335,332

601,640,389

Less: Progress billings received and receivable (509,748,622)

91,891,767

17 FIXED DEPOSITS

The fixed deposits are placed with licenced financial institutions and have been charged to secure credit facilities granted to the subsidiary company by the financial institutions concerned.

18 CASH AND BANK BALANCES

Included in the cash and bank balances of the Group are monies kept in separate trust accounts in accordance with Regulation 12 of the Housing Developers (Housing Development Account) Regulations 1991, amounting to RM701,812 (2001:Nil).

51 52



19 SHORT TERM BORROWINGS

Group 2002

RM

Secured:

Bankers acceptance 41,215,000

Bank overdrafts 27,150,081

Revolving credit facility 5,000,000

Medium term credit 4,370,692

Bridging loan 1,440,450

Overdraft non chequing 18,840,776

98,016,999

Term loan repayable not later than one year 352,404

98,369,403

(a) Bank Overdrafts

The bank overdrafts of the subsidiary companies are subject to interest at rates ranging from 1.25% to 2.5% per annum above the banks’ base lending rates and are secured by fixed and floating charges over the subsidiary companies present and future assets, certain fixed deposits, freehold land and assignment of certain contract receipts of the subsidiary companies and a joint and several guarantee by the directors of the subsidiary companies and a corporate guarantee by a subsidiary company.

(b) Revolving Credit Facility

The revolving credit facility is subject to interest at the rate of 1.25% above the Kuala Lumpur Inter-Bank Offer Rates (KLIBOR) and is secured by certain fixed deposits of the subsidiary company placed with licensed financial institutions.

(c) Bankers Acceptance

The bankers acceptances are subject to commission at rates of approximately 1.0% to 2.0% over the B.A. rate and are secured by fixed and floating charges over the subsidiary companies present and future assets, certain fixed deposits, freehold land and leasehold properties belonging to the subsidiary company, a joint and several guarantee by the directors’ of the subsidiary companies and a corporate guarantee by a subsidiary company.

(d) Bridging Loan

The bridging loan is subject to interest at the rate of 1.5 % per annum above the bank’s base lending rate and is secured by a property belonging to a subsidiary Company and a personal guarantee by a director of the subsidiary Company.

(e) Other Short Term Trade Facilities

The domestic factoring facility is subject to charges at a rate of 9.9% per annum. The medium term credit is subject to interest at a rate of 1.75% above the financial institution cost of fund while the non chequing overdraft facility bears interest at a rate of 8.3% per annum. The facilities are jointly and severally guaranteed by the directors of the subsidiary company.

20 AMOUNT DUE TO A DIRECTOR

The amount due to a director is unsecured, interest free and has no fixed terms of repayments.

53 54



21 REVENUE AND COST OF SALES

Revenue of the Group represents recognised contract revenue, billings for sale of construction materials, hiring of machineries and motor vehicles, property development and supply of labour.

Cost of sales consists of direct materials, direct labour, direct overhead, sub-contract charges and other directly attributable expenses.

22 NET PROFIT BEFORE TAXATION

Group Company These are stated after charging/(crediting) :- 2002 2002 2001

RM RM RM

After charging :-

Directors’ remuneration 294,960 42,000 -

Auditors’ remuneration

- current year 76,000 12,000 1,300

- prior year overprovision (2,500) - -

Bank overdraft interest 3,148,441 - -

Term loan interest 95,134 - -

Hire purchase interest 1,432,130 - -

BA interest 1,327,405 - -

Other loan interest 1,080,616 - -

Depreciation of fixed assets 9,252,226 - -

Rental of premises 597,788 - -

After crediting :-

Provision for doubtful debts written back (5,500,000) - -

Fixed deposit interest (1,215,652) - -

Gain on disposal of fixed assets (474,841) - -

23 TAXATION


RM RM RM

Malaysian taxation based on results for the year:-

Provision for the year 7,386,600 9,200 -

Overprovision in prior years (395,350) - -

Transfer from deferred taxation (Note 5) (1,439,170) - -

5,552,080 9,200 -

24 EARNINGS PER SHARE

The calculation of earnings per share is based on the Group’s net profit for the year of RM17,785,609 and weighted average number of ordinary shares in issue during the year amounting to 46,949,891. There are no diluted shares in issue.

53 54



25 PRIOR YEAR ADJUSTMENT

During the year, the Group had exercised early adoption of MASB Standard No. 25 “Income Taxes” the financial effect of which has been accounted for restropectively resulting in an adjustment to the retained earnings brought forward of RM4,541,000.

26 ACQUISITION OF A SUBSIDIARY COMPANY

During the financial year, the Company acquired Trans Resources Corporation Sdn. Bhd. The fair value of the assets acquired and liabilities assumed are as follows:

RM

Fixed assets 67,494,167

Inventories 425,478

Quoted and unquoted investments 5,498,843

Project costs 281,134

Trade receivables 54,259,927

Other receivables, deposits and prepayments 7,131,221

Amount due from customers 57,209,895

Fixed deposit 37,464,074

Cash and bank balances 5,537,280

Trade payables (34,742,521)

Other payables (2,832,367)

Factoring creditors (11,754)

Hire purchase creditors (15,969,015)

Bankers acceptance (43,713,000)

Term loan (1,061,221)

SMI loan (234,595)

Bank borrowings (58,106,268)

Taxation (7,641,840)

Net assets acquired 70,989,438

Capital reserve on consolidation (16,540,657)

Total purchase consideration 54,448,781

Discharge by issuance of company shares (49,052,252)

Share premium (5,396,529)

Add: Cash and cash equivalents of subsidiaries 58,829,668

Net cash on acquisition of subsidiaries 58,829,668

55 56



27 FINANCIAL INSTRUMENTS

Financial Risk Management Objectives and Policies

The Group’s financial risk management policies seek to ensure that adequate financial resources are available for the development of the Group’s business whilst managing its credit risks. The Group operates within clearly defined guidelines that are approved by the Board and the Group’s policy is not to engage in speculative transactions.

(a) Foreign Exchange Risks

The objective of the Group’s foreign exchange policies is to enable the Group to manage exposures that arise from transactional activities within a framework of controls that does not expose the Group to unnecessary foreign exchange risks. The Group’s exposure to foreign exchange risk is substantially minimal.

(b) Credit Risks

Credit risk, or the risk of counter parties defaulting, are controlled by the application of credit approval, limits and monitoring procedures. Trade receivables are monitored on an ongoing basis via Group management reporting procedures.

The Group does not have any significant exposure to any individual customer or counter party nor does it have any major concentration of credit risk related to any financial instrument.

(c) Fair Values

The aggregate value of financial assets and financial liabilities which are not carried at fair value on the balance sheets of the Group and of the Company are represented as follows :-

GroupCarryingAmount

FairValue

Note RM RM

Financial Assets

Marketable securities 9 111,000 7,000

The following methods and assumptions are used to estimate the fair value of each class of financial instruments, where applicable, for which it is practical to estimate that value:

(i) Bank Balances and Deposits, Trade and Other Receivables, Hire Purchase and lease creditors Gross amount due from customers, Payables, Short term borrowings.

The carrying amounts approximate fair values due to the relatively short-term maturity of these financial instruments.

Marketable Securities

The fair value of quoted shares is determined by reference to stock exchange quoted market prices at the close of business on the balance sheet date.

55 56



28 SEGMENTAL INFORMATION

Revenue 2002

Profit / (Loss) Before

Taxation 2002

Total Assets

Employed 2002

RM RM RM

Analysis by Activity

Management services - (195,677) 22,081

Construction activity 252,619,020 26,747,654 231,861,958

Property development 8,743,307 417,668 9,681,147

Hiring of motor vehicle and machinery 4,473,048 308,589 2,862,397

Manufacturing and retailing in ready mixed concrete 4,871,433 (38,066) 2,605,801

Retailing of construction materials 36,020,358 3,732,231 32,352,831

Supply of labour 5,915,948 278,445 6,454,098

Others 1,662,682 311,019 2,696,069

Group’s share of profit of an associated company - 195,615 -

314,305,796 31,757,478 288,536,382

Consolidated adjustments (11,080,330) (6,024,328) -

303,225,466 25,733,150 288,536,382

No segmental reporting has been prepared in respect of geographical location as the Group’s activities are predominantly carried out in Malaysia.

29 CONTINGENT LIABILITIES

A corporate guarantee was provided by a subsidiary company for credit facilities of RM22,000,000 granted to the Associated Company. As at the balance sheet date, the credit utilised by the Associated Company amounted to RM6,046,880.

30 STAFF COSTS


RM RM RM

Staff costs 18,809,682 126,839 -

Staff costs of the Group and the Company include directors’ remuneration, salaries, bonus, contributions to Employees’ Provident Fund and all other staff related expenses.

31 COMPARATIVES

No comparative figures are available in respect of the Group as this is the first financial year of the Group’s existence.

57 58


The following are the properties owned by the TRCS Group:-

No Location TenureDescription /Existing use

Approx age of

buildingsLand area/build

up area

Net Book Value 31 December

2002RM

Date of Valuation

1 Developer’s Shoplot Lot No. 27 Commerce SquareBintulu Park City Off Jalan Tun Ahmad Zaidi,Bintulu Town District Sarawak

57-year leaseholdexpiring 30.3.2055

3-storey shop/office

5 years 1,319.8 sq ft / 3,959.6 sq.ft

406,700 16/9/2000

2 Lot No.3626 Section 16Kuching Central Land District Sarawak

60-yearleasehold expiring18.4.2059

4-storeyshop/office

4 years 2,214.2 sq/ ft8,856.8 sq ft

914,800.70 15/9/2000

3 Lot No. PT 60849 to PT 60860Mukim and District of Klang Selangor

Freehold Industrial land - 154,587.00sq.ft

4,640,000 18/9/2000

4 Lot No. PT 19447 Mukim of AmpanganDistrict of Seremban Negeri Sembilan

99-yearleasehold expiringon 18.9.2095

Residentialland

- 9.516 acres 543,488.37 21/9/2000

5 Lot No. PT 9259Mukim of Setapak District of GombakSelangor

Freehold 4-storeyshop/office

12 years 1,760.0 sq ft/ 7,040.0 sq.ft

841,955.84 23/9/2000

6 Lot Nos. PT 8904 and Part of PT 8905Mukim and District of Klang Selangor

99-yearleasehold expiring on25.8.2068 and23.8.2069 respectively

Unconvertedland

- 5,469 acres 1,853,991.52 15/9/2000

7 Developer’s Parcel No 47 (218)First and Second Floors of anIntermediate 4-storey shop/office building Taman Melawati Metro 1Phase 4 Town Centre, Selangor

Freehold First andsecond floors

of4-storey

shop/office

12 years 1,760.0 sq.ft 419,300 26/8/2000

8 Kondominium KiranaJalan PinangKuala Lumpur

Freehold Apartment 2 years 3,681.3 sq.ft 1,766,270.77 -

LIST OF PROPERTIES57 58


List of Thirty (30) Largest Shareholdersas at 28 April 2003

NAME NO. OF SHARES %

1 KOLEKTIF AMAN SDN BHD 15,750,000 22.50

2 TRC CAPITAL SDN BHD 15,750,000 22.50

3 SUFRI BIN MHD ZIN 2,995,000 4.28

4 ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD 2,500,000 3.57<ACCOUNT FOR SUFRI BIN MHD ZIN>

5 HONG LEONG FINANCE BERHAD 2,500,000 3.57<ACCOUNT FOR SUFRI BIN MHD ZIN>

6 FAR FRONTIER (M) SDN BHD 2,172,000 3.10

7 MOHD RAFFEE BIN JALIL 2,073,000 2.96

8 HONG LEONG FINANCE BERHAD 1,851,000 2.64<ACCOUNT FOR KHOO TEW CHOON>

9 BANK KERJASAMA RAKYAT MALAYSIA BERHAD 1,580,000 2.26<ACCOUNT FOR HJ SUFRI BIN MHD ZIN>

10 HONG LEONG FINANCE BERHAD 1,535,000 2.19<ACCOUNT FOR LEONG KAM HENG>

11 HSBC NOMINEES (TEMPATAN) SDN BHD 1,356,000 1.94<HSBC (M) TRUSTEE BHD FOR OSK-UOB SMALL CAP OPPORTUNITY UNIT TRUST>

12 ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD 1,236,000 1.77<ACCOUNT FOR LEONG KAM HENG>

13 CITICORP NOMINEES (TEMPATAN) SDN BHD 1,000,000 <ACCOUNT FOR SUFRI BIN MHD ZIN>

14 ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD 859,000 1.23<ACCOUNT FOR KHOO TEW CHOON>

15 ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD 700,000 1.00<ACCOUNT FOR YAP YON TAI>

59 60


List of Thirty (30) Largest Shareholders (Cont’d.)as at 28 April 2003


16 AMANAH RAYA NOMINEES (TEMPATAN) SDN BHD 691,000 0.99<DANA AL-AIMAN>

17 PERBADANAN NASIONAL BERHAD 637,000 0.91

18 HONG LEONG FINANCE BERHAD 605,000 0.86<ACCOUNT FOR YAP YON TAI>

19 EMPLOYEES PROVIDENT FUND BOARD 539,000 0.77

20 AMSEC NOMINEES (TEMPATAN) SDN BHD 504,000 0.72<ACCOUNT FOR LEONG KAM HENG>

21 BANK KERJASAMA RAKYAT MALAYSIA BERHAD 450,000 0.64<ACCOUNT FOR KOLEKTIF AMAN SDN BHD>

22 BANK KERJASAMA RAKYAT MALAYSIA BERHAD 450,000 0.64<ACCOUNT FOR TRC CAPITAL SDN BHD

23 UNIVERSAL TRUSTEE (MALAYSIA) BERHAD 406,000 0.58<KL CITY SAPPHIRE FUND>

24 PERBADANAN NASIONAL BERHAD 394,000 0.56

25 AMFINANCE BERHAD 390,000 0.56<ACCOUNT FOR NOOR ASIAH BINTI MAHMOOD>

26 RUSNIYAH BINTI HJ AHMAD 375,000 0.54

27 OOI CHENG HUAT @ OOI PENG HUAT 360,000 0.51

28 AMANAH SAHAM MARA BERHAD 329,000 0.47

29 AHMAD FAUZI BIN GHAZALI 300,000 0.43

30 KHOO TENG SAN 270,000 0.39

59 60


List of Director’s Shareholding as at 28 April 2003


1 DATO’ HAJI SUFRI BIN HAJI MOHD ZIN 2,995,000 10,575,000 15.11

<Acc - Bank Kerjasama Rakyat Malaysia Berhad> 1,580,000

<Acc - Alliancegroup Nominees (Tempatan) Sdn Bhd> 2,500,000

<Acc - Hong Leong Finance Berhad > 2,500,000

<Acc - Citicorp Nominees (Tempatan) Sdn Bhd> 1,000,000

2 ABDUL AZIZ BIN MOHAMAD 100,000 0.14

3 RAHMAN BIN ALI – 0.00

4 NOOR ZILAN BIN MOHAMED NOOR 200,000 0.29

<Acc - EB Nominees (Tempatan) Sendirian Berhad> 200,000

List of Substantial Shareholdersas at 28 April 2003

1 Kolektif Aman Sdn. Bhd. - 16,200,000 (23.14%)

2 TRC Capital Sdn.Bhd. - 16,200,000 (23.14%)

3 Dato’ Hj Sufri bin Hj Mohd Zin - 10,575,000 (15.11%)

61 62


Analysis by Size of Shareholdingsas at 28 April 2003

CATEGORY NO OF HOLDERS % NO OF SHARES %

Less than 1, 000 0 0 0 0

1,000 - 10, 000 1,139 87.48 2,634,000 3.76

10, 001 - 100,000 115 8.83 3,829,000 5.47

100,001 to less than 5% of issued shares 46 3.53 32,037,000 45.77

5% and above of issued shares 2 0.16 31,500,000 45.00

TOTAL 1,302 100.00 70,000,000 100.00

Bumiputra Shareholdingsas at 28 April 2003

Type Of Ownership Shareholders % Shareholdings %

1 Government Agency 0 0 0 0.00

2 Bumiputra

a. Individuals 263 20.20 7,179,000 10.26

b. Companies 18 1.38 38,921,000 55.60

c. Nominees Company 126 9.68 2,781,000 3.97

3 Non-Bumputra

a. Individuals 782 60.05 4,649,000 6.64

b. Companies 44 3.38 7,276,000 10.39

c. Nominees Company 58 4.45 9,112,000 13.02

MALAYSIAN TOTAL 1,291 99.14 69,918,000 99.88

4 Foreign

a. Individuals 5 0.39 38,000 0.05

b. Companies 1 0.08 10,000 0.02

c. Nominees Company 5 0.39 34,000 0.05

FOREIGN TOTAL 11 0.86 82,000 0.12

GRAND TOTAL 1,302 100.00 70,000,000 100.00

61 62

This page has been intentionally left blank.

Proxy Form

I/We,

of

Being a member/members of TRC Synergy Berhad, hereby appoint

of

or failing whom,

of

as my/or proxy to vote for me/us and on my/our behalf at the 6th Annual General Meeting of the Company, to be

held at Damai Utama Function Hall, Kelab Century Paradise, Jalan Melawati 3, Taman Melawati, 53100 Ulu Klang,

Selangor on Wednesday, 18 June 2003 at 10.00 a.m. and, at every adjournment thereof.

I/we direct my/our proxy to vote for or against the resolutions to be tabled at the sixth Annual General Meeting as hereunder indicated.

RESOLUTIONS FOR AGAINST

ORDINARY RESOLUTION 1

Receive and adoption of Audited Financial Statements and Reports of Directors and Auditors for the year ended 31 December 2002


Declaration of first and final tax exempt dividend.


Approve Directors Remuneration.

ORDINARY RESOLUITION 4

Re-election of Dato’ Hj Sufri bin Hj Mohd Zin as Director of the Company


Re-appointment of Messrs Kumpulan Naga as Auditors of the Company and to authorize the Directors to fix their remuneration.


Authority to Directors to allot and issue shares pursuant to Section 132D of the Companies Act, 1965

(Please indicate with an “X” in the space provided how you wish your vote to be cast on the resolution specified in the Notice of the Sixth Annual General Meeting. If this form of proxy is returned without any indication as to how the proxy shall vote, the proxy will vote or abstain from voting at his/her discretion.)

Dated this 23 May 2003.

…………………………………………..(Signature(s)/Common Seal of Members)

Notes:

1. A proxy may but need not be a member of the Company and the previous of section 149 (1) (b) of the Act shall not apply to the Company.2. To be valid this form duly completed must be deposited at the registered office of the Company not less than forty-eight (48) hours before the

time for holding the meeting or any adjournment thereof.3. A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meetings.4. Where a member appoints more than one (1) proxy the appointment shall be invalid unless he specifies the proportions of his holdings to be

represented by each proxy.5. Where a member is an authorized nominee as defined under the Central Depositories Act, it may appoint at least one proxy in respect of each

Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account.6. If the appointer is a corporation, this form must be executed under its Common Seal or under the hand of its attorney.

No Of Shares Held

Fold here

Fold here

POSTAGE

Company SecretaryTRC Synergy Berhad (413192-D)

Wisma TRC, 217 & 218, Jalan Negara 2,Taman Melawati, 53100 Ulu Klang,Selangor Darul Ehsan.

Documents

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