TRC SYNERGY BERHAD - ChartNexusir.chartnexus.com/trc/website_HTML/attachments/attachment_24898_1339516319.pdf · Accounts of TRC Synergy Berhad and its subsidiaries for the year ended

a n n u a l r e p o r t 2 0 1 1

TRC SYNERGY BERHAD (413192-D)

TRC Business Centre,

Jalan Andaman Utama,

68000 Ampang, Selangor

Tel : 03 4103 8000

Fax : 03 4108 7016

www.trc.com.my

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

Our Vision

Chairman’s Statement

Corporate Information

Profile of Directors

Corporate Structure

Statement on Corporate Governance

Statement on Internal Control

Audit Committee Report

Financial Statements

List of Properties

Analysis of Shareholdings

Analysis of Warrant A Holdings

Analysis of Warrant B Holdings

Notice of Fifteenth Annual General Meeting

Statement Accompanying Notice of Annual General Meeting

Proxy Form

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Contents

Overview

The year 2011 has proven to be another challenging year for the group. Recently, the construction industry has seen an increase in competition and pricing pressure and to cope with this difficult circumstance, we have taken increased measures to better manage our costs, improve efficiency and intensify our management processes. We remain confident that our strategies are sound and our market capitalization going forward, will fully reflect and vindicate the success of our measures and vision.

Financial review

For the period under review, the group revenue increased by 6.4% to RM400.7m (year 2010 : RM376.7m) but the operating profit was reduced to RM10.3m (year 2010 : RM19.3m), resulting in an operating margin of 2.6%, compared with the previous year of 5.1%. Likewise, the profit after tax also registered a reduction from RM16.2m in 2010 to RM13.0m in 2011 representing a reduction of 19.8%.

Dear Shareholders,

On behalf of the Board of Directors, I am pleased to present the Annual Report and the Group Audited Accounts of TRC Synergy Berhad and its subsidiaries for the year ended 31 December 2011.

Chairman’s statement

Dato’ Sri Sufri Bin Hj MoHD ZinExecutive Chairman

The lower operating margin and profit after tax was largely due to additional material and labour costs incurred during the defect liability period for completed projects.

The above results reflect the tough market conditions which remained very challenging throughout the year 2011 and the over capacity in the construction industry thus maintaining pressure on margins. Whilst the market conditions in 2012 will remain challenging, our order books in the construction division is at a healthy level of RM1.5billion, giving good forward visibility of workload which coupled with a strong pipeline of further opportunities from the Mass Rapid Transit (MRT) works and Economic Transformation Programme (ETP) will translate into revenue growth for the group in the years to come.

cOnStructiOn

In 2011 this division achieved its target of securing at least RM500 million of projects per year. It also set another milestone by successfully procuring its first significant project overseas ie The Modernisation of Brunei International Airport. Further to this, the group has incorporated its fully owned subsidiary TRC (B) Sdn Bhd, with its mission of exploring more opportunities in Brunei.

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TRC SYNERGY BERHAD Annual Report 2011

Chairman’s statement (Cont’d)

cOnStructiOn (cOnt’D)

Progress on its biggest project, the RM950 million Kelana Jaya Line Extension Project (Package A) is about 30% slower than anticipated due to site problems which is expected to be fully resolved in 2012. The slow progress has affected out turnover in 2011 but this will be balanced with increase turnover in 2012 once the site issues are resolved.

The outcome of tenders participated in a few significant projects in SCORE and the KVMRT, among others, are still pending. We anticipate the outcome to be known in 2012 and we hope to secure some of these packages.

This division still remains the main revenue earner with a profit contribution of about RM9.7 million out of the group’s total of RM13.2 million.

PrOPerty

The development on lot 196, Taman Ukay Tropika, Ulu Klang, Selangor was launched in the fourth quarter of 2011. This development which consists of 83 units of 3-storey houses and a club house will generate a Gross Development Value of approximately RM87 million to the company. The demand for these houses has surpassed our expectation as we managed to secure sales exceeding 50% within 3 months of soft launch. The construction work has now reached 20% completion and we expect to deliver the units much earlier than the contractual obligation date of March 2015.

The development of Impian Senibong – Phase 2 in Johor Bahru will comprise 243 units of apartments and SOHOs with an anticipated Gross Development Value of approaximately RM60million. We expect to launch this development in the fourth quarter of 2012. We also projected a similar strong demand for this development as the Johor Bahru East Coast Highway

and the Eastern Dispersal Link (EDL) have been completed and this will reduce travelling time to the Causeway and Pasir Gudang significantly. Besides this, other land bank which will be developed in the medium term is the 27 acres piece of land in Bandar Seri Alam, Johor Bahru.

This division is aggressively on the lookout for good land banks throughout the country with the main focus in KL, Selangor and Johor to ensure continual growth and sustainable earnings.

The overseas property division, TRC Land (Cambodia) Ltd. through its purchase of 34% equity stake in Delta Garden Ltd. In Cambodia is currently developing 40 units of double storey villas in Phnom Penh, Cambodia. TRC Land (Cambodia) Ltd. is also the main contractor to this development.

Once the above plans and projects materialized in the near future, we expect this division to be one of the main contributors to the Group’s revenue.

trc (auSt) Pty ltD.

The year 2011 saw the group’s emphasis in investment in this subsidiary with its second purchase of a property in Melbourne ie the 588 Swan Street property. This property is presently tenanted but the group has plan to redeveloped it in the future.

It also marked the year that significant contribution is shown from this subsidiary. The subsidiary recorded a RM6.4million profit contribution, mainly from it’s property development in Springridge, Wallan through it’s 33% stake in Pretty Sally Pty Ltd.

Going forward, we see income contribution to be more forthcoming from the Springridge Development and on a longer term the Swan Street redevelopment.

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REVENUE(RM’000)

SHAREHOLDERS’SFUND(RM’000)

NET TANGIBLE ASSETS PER SHARE(sen)

PROFIT/(LOSS) BEFORE TAXATION(RM’000)

energy

Our associate company, PetroBru (B) Sdn. Bhd. which was incorporated to venture into an oil refinery and storage facility in Brunei Darussalam, has submitted a detailed feasibility study proposal to the Brunei Government to seek its final approval for the proposed venture. To date we are still awaiting its approval.

ManuFacturing

This division was incorporated to complement the group’s construction activities. We do not foresee its revenue to have an impact on the group’s performance.

DiviDenD

Through the bracing environment of 2011, we have emerged stronger and we are confident of our ability to create long-term value with our stakeholders. In view of this, the Board has recommended a first and final dividend of 2 sen less income tax of 25% for the financial year ended 31 December 2011.

Future PrOSPectS

In accordance with the Economic Report 2011/2012, the construction sector is projected to grow strongly by 7% in 2012 (2011 : 3.4%) driven by the commencement of large infrastructure projects and vibrant housing construction

Chairman’s statement (Cont’d)

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400,

763

376,

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activities. The civil engineering sub-sector will be supported by the implementation of development projects to enhance the long-term potential growth of the economy. These include the construction of Sungai Buloh-Kajang MRT line, and the integrated transport terminal in Gombak. In addition, the development of Sabah gas and oil terminal will further support the growth of this sub-sector. Other notable projects which will support this sub-sector include the ongoing KLIA2, expansion of clean water supply and electrification projects to rural areas, especially in Sabah and Sarawak as well as construction of 430.7km rural roads under the NKRA on rural infrastructure.

With the anticipated strong growth in the construction sector, we believe that our integrated business model will continue to provide a good breath of opportunities and with our track record of delivery, the group is well positioned to make further progress in the new financial year.

acknOwleDgeMent

I would like to take this opportunity to thank the Board for their invaluable contribution and outstanding services to the group. I would also like to thank our management and staff for their dedication and commitment and also our shareholders, bankers and business associates for their continuous support. Together we shall steer the group towards greater growth and profitability.

Dato’ Sri Sufri B. Mhd. ZinExecutive Chairman

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Corporate information

BOarD OF DirectOrS

DatO’ Sri SuFri Bin Hj MOHD Zin(Executive Chairman)

DatO’ aBDul aZiZ Bin MOHaMaD(Executive Director)

cOMPany SecretaryAbdul Aziz bin Mohamed(LS 007370)

regiStereD OFFice /PrinciPal Place OF BuSineSSTRC Business CentreJalan Andaman Utama68000 Ampang, SelangorTel No. : 603-41038000Fax No. : 603-41087016e-mail : [email protected]

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

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

weBSitewww.trc.com.my

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

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

PrinciPal BankerSEON Bank BerhadAffin Bank BerhadAmBank (M) BerhadMalayan Banking BerhadUnited Overseas Bank BerhadRHB Bank BerhadCIMB Bank BerhadStandard Chartered Bank Malaysia Berhad

SOlicitOrSMessrs Noorzilan & PartnersMessrs C.C. Choo, Hazila & TeongMessrs Zain Megat & Murad

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

general (r) tan Sri MOHD SHaHrOM Bin DatO’ Hj nOrDin(Senior Independent, Non-Executive Director)

nOOr Zilan Bin MOHaMeD nOOr(Independent Non-Executive Director)

aBDul raHMan Bin ali(Independent Non-Executive Director)

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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 conflict of interest with the Company; and

iii. any conviction for offences (other than traffic offences) within the past ten (10) years.

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

profile of direCtor’s

DatO’ aBDul aZiZ Bin MOHaMaDExecutive Director, 53 years of age – Malaysian

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

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

YBhg Dato’ Abdul Aziz attended all five Board of Directors Meetings held during the financial year ended 31 December 2011. He does not have any personal interest in any business arrangement involving the Company.

DatO’ Sri SuFri Bin Hj MOHD ZinExecutive Chairman, 56 years of age – Malaysian

Dato’ Sri Sufri Bin Hj Mohd Zin is the founder of TRC Group. He was appointed as the Managing Director of TRC Synergy Berhad (“TRC” or “the Company”) on 29 March 2002 and presently he is the Executive Chairman of the Company and the Managing Director of its subsidiary Companies.

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

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

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

Dato’ Sri is the Vice President and Council Member of Master Builder Association Malaysia (2010-2012), a member of the Road Engineering Association of Asia and Australia (REAAA) and Persatuan Kontraktor-Kontraktor Melayu Malaysia (Cawangan Wilayah Persekutuan). Recently he was appointed as a Board Member to Tun Hussein Onn University, Malaysia.

During the Financial year ended 31 December 2011 he attended all five Board of Directors Meetings.

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profile of direCtor’s (Cont’d)

general (r) tan Sri MOHD SHaHrOM Bin DatO’ Hj nOrDinSenior Independent, Non-Executive Director, 64 years of age – Malaysian

General (R) Tan Sri Mohd Shahrom Bin Dato’ Hj Nordin was appointed as a Director of the Company on 25 March 2004. After his secondary education, he was selected for Officer Cadet training at the Royal Military College, Sungai Besi in 1966 before being commissioned as a Second Lieutenant into the Royal Malay Regiment in 1968 and assigned as a Platoon Commander with the 2nd Battalion, Royal Malay Regiment. General (R) Tan Sri Mohd Shahrom has served in various appointments at command, staff, training and the diplomatic services levels and he was the Chief of the Malaysia Army from 1st January 2003 to 15 September 2003. Prior to that appointment he was the Chief of staff at the Armed Forces Headquarters. Currently he is the Executive Director (Defence and Business Development) of the National Aerospace & Defence Industries Sdn Bhd (NADI). He is also a Director of SME Ordnance Sdn Bhd (SMEO) a subsidiary company of the NADI Group of Companies.

General (R) Tan Sri Mohd Shahrom is the Chairman to the Audit Committee and the Senior Independent Non Executive Director of the Company. During the financial year ended 31 December 2011 he attended four out of five Board of Directors Meetings held.

nOOr Zilan Bin MOHaMeD nOOrIndependent, Non–Executive Director, 52 years of age – Malaysian

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

Noor Zilan is a member of the Audit Committee and the Chairman to the Nomination Committee and Remuneration Committee. He attended all five Board of Directors Meetings held during the financial year ended 31 December 2011.

aBDul raHMan Bin aliIndependent, Non–Executive Director, 55 years of age – Malaysian

Abdul Rahman Bin Ali was appointed as a Director of the Company on 13 May 2002. He graduated from University of Malaya in 1982 with a Degree in Accounting. He is currently a Chartered Accountant of the Malaysian Institute of Accountants. Upon graduated, he started his training with financial institution for a number of years before joining public accountancy practice. In 1994, he set up his own accounting firm by the name A. Rahman & Associates and later become a partner of AKN Arif in 1996. Abdul Rahman is a member of the Audit Committee, Nomination Committee and Remuneration Committee. He attended all five Board of Directors Meetings held during the financial year ended 31 December 2011.

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Trans resources corporaTion sdn Bhd(120265 P)

Trc energy sdn Bhd (616448 K)

Trc infra sdn Bhd(645178 P)

Trc (ausT) pTy LTd(137500611)

Trc inTernaTionaL pTe LTd (LL04510)

swan synergy hoLdings pTy LTd(151511018)

Trc (sarawak) sdn Bhd(621714 W)

Trc concreTe indusTries sdn Bhd (151401 V)

Trc (B) sdn Bhd(RC/00008574)

peTroBru (B) sdn Bhd(AGO / RC / 6613 / 06)

preTTy saLLy hoLdings pTy LTd(137500611)

LipuTan suTera sdn Bhd(637939-H)

peTroBru BuiLd sdn Bhd(RC/00007517)

100%

100%

100%

100%

100%

100%

100%

100%

100%

26%

33.33%

100% 60%

Trc Land sdn Bhd(444162 W)

Trc deveLopmenT sdn Bhd(309248 U)

Trc Land (camBodia) LimiTed(6234/09E)

deLTa garden LimiTed(11524/08P)

100%

100%

100% 34%

Corporate struCture

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Statement on Corporate GovernanCe

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

The Board is pleased to disclose below how the Group has applied the principles set out in the Code and the extent to which it has complied with the best practices as set out in Part 1 and Part 2 of the Code respectively.

DIRECTORS

The Board of Directors (“the Board”)

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

The Board has overall responsibility in the stewardship of the Group’s direction and its performance inclusive of corporate governance, strategic planning and maintaining effective control over financial and operational matters.

Board Composition and Balance

The Board currently consists of five (5) members comprising two (2) Executive Directors and three (3) Independent Non-Executive Directors. The Company fulfills the prescribed requirement of having at least one-third (1/3) of the Board Members as Independent Non-Executive Directors as stated in Paragraph 15.02 of the Listing Requirements of Bursa Malaysia.

The Independent Non-Executive Directors provide broad, unbiased and balanced assessment on proposals initiated by the Executive Directors and the senior management of the Group. They also contribute by the exercise of independent judgment and objective participation in the proceeding and decision making process of the Board. Their differing backgrounds collectively bring with them extensive experience augur well with this process. In compliance with Part 2, AA VII of the Code, the Company has appointed General (R) Tan Sri Mohd Shahrom Bin Dato’ Hj Nordin to resume the role as Senior Independent Non Executive Director to whom concern from the public may be conveyed.

In view of this composition, the Board of the view that the present members of the Board are considered sufficient in addressing the issues affecting the Group.

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Statement on Corporate GovernanCe (Cont’d)

DIRECTORS (COnT’D)

Board Meeting

The Board meets at least four (4) times in a year and additional meetings are convened as and when necessary. During the financial year ended 31 December 2011, the Board met five (5) times and the attendance record for each Director is as follows:-

Name No. of Meeting Attended % of Attendance Dato’ Sri Sufri Bin Hj Mohd Zin 5/5 100Dato’ Abdul Aziz Bin Mohamad 5/5 100Jen (B) Tan Sri Mohd Shahrom Bin Dato’ Hj Nordin 4/5 80Noor Zilan Bin Mohamed Noor 5/5 100Abdul Rahman bin Ali 5/5 100

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

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

Supply of Information to the Board

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

As for the Board meeting, all Directors are provided with the agenda and Board papers in sufficient time prior to the meetings to enable them to obtain further information and explanation, where necessary in order to be adequately informed before the meeting. Senior officers of the Group are invited to clarify and explain the relevant matters tabled to the Board.

Appointment and Re-election of the Board

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

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

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

At the last Annual General Meeting held on 29 June 2011, Noor Zilan Bin Mohamed Noor and Abdul Rahman Bin Ali retired and were elected to the Board.

Directors’ Training

All Directors have attended the Mandatory Accreditation Programme prescribed by Bursa Malaysia Securities Berhad. They believes that continuous training is essential to the Board members to ensure that they are updated with appropriate skills and knowledge to enable them to discharge their duties effectively.

During the financial year ended 31 December 2011, majority of the Directors have attended the relevant training programmes and seminars to further broaden their knowledge and skills in the Group core business and on matters concerning their skills and professional fields as well as to keep abreast with development in the market place.

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DIRECTORS (COnT’D)

Directors’ Training (cont’d)

Amongst the training programmes attended by the Directors are as follows:-

Directors Training Programme1 Dato’ Sri Sufri Bin Hj Mohd Zin i) Seminar on Plantation, Construction, Property & Hotel

ii) OHSAS 18001 – Awareness & Implementation Trainingiii) Malaysian Alliance of Corporate Directos (MACD) Corporate Directors

Conferenceiv) International Seminar on Asset and Facility Management

2 Dato’ Abdul Aziz Bin Mohamad i) OHSAS 18001 – Awareness & Implementation Training3 General (R) Tan Sri Mohd Shahrom Bin

Dato’ Hj Nordini) Diners Club - Management Philosophy and Best Practice of Military

Commanders Experience In Business Worldii) Aerospace Conference - The Equilibrium in South China Sea – Air & Space

Perspectives4 Noor Zilan Bin Mohamed Noor Nil5 Abdul Rahman Bin Ali i) Malaysian Tax Conference 2011

ii) Persidangan Zakat dan Cukai Kebangsaan Ke 5- “Memartabatkan Zakat dalam Arus Perdana Negara”

iii) Workshop on New Public Rulings in 2011iv) 2012 Budget Seminarv) MIA-AFA Conference 2011

- Converge, Transform, Sustain : Towards World Class Excellence Noor Zilan bin Mohamed Noor did not attend any training programme during the year due to work commitments.

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

Board Committees

As recommended by the Code, the following committees have been established to assist the Board in the execution of its duties:-

i) Audit Committeeii) Nomination Committeeiii) Remuneration Committeeiv) Employees’ and Directors’ Share Option Scheme (ESOS) Committee

Each of this committee has its own functions and responsibilities and they report to the Board.

DIRECTORS’ REMUnERATIOn

The Group has adopted the principle recommended by the Code whereby the level or remuneration of the Directors and senior management should reflect the level of responsibility and contributions toward the successful and efficient running of the Group’s activities.

Procedure

To assist the Board in the discharge of its duties, the Board has established a Remuneration Committee. As at the date of the Annual Report, the composition of the Remuneration Committee is as follows:-

i) Noor Zilan Bin Mohamed Noorii) Abdul Rahman bin Ali

The Committee will review and recommend to the Board the remuneration package of the executive directors and senior management of the Group with the main aim of providing level of remuneration sufficient to attract and retain competent executives who can manage the Group effectively.

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DIRECTORS’ REMUnERATIOn (COnT’D)

Disclosure

The aggregate remuneration of the Directors received and receivable from the Company and its subsidiaries during the financial year ended 31 December 2011 are as follows:-

Category Fees (RM) Salaries (RM) EPF & SOCSO (RM) BonusExecutive Directors - 2,187,200.00 339,883.80 640,000.00Non-Executive Director 91,000.00 - - -Total 91,000.00 2,187,200.00 339,883.80 640,000.00

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

Range of Remuneration Number of Executive Directors Number of Non-Executive DirectorsLess than RM 50,000 - 3RM50,001 – RM1,100,000* - -RM1,100,001 – RM1,150,000 1 -RM1,150,001-RM1,900,000* - -RM1,900,001-RM1,950,000 1 -

* No Directors within this range of remuneration.

RELATIOnSHIP WITH InVESTORS AnD SHAREHOLDER COMMUnICATIOn

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

During the financial year ended 31 December 2011, the Company organized a number of meetings and briefings with financial analysts to establish better understanding of the Company’s objective and performance and to convey other information that may affect shareholders interest.

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

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.

THE AnnUAL GEnERAL MEETInG (“AGM”)

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

A press conference is held after AGM where the Executive Chairman with other Directors as well as the Senior Management of the Company will answer questions posed by the media on various issues convening the Group.


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ACCOUnTABILITY AnD AUDIT

Financial Reporting

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

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

The Audit Committee assists the Board by reviewing the Group’s annual financial statements and quarterly results to ensure completeness, accuracy and adequacy prior to release to Bursa Malaysia and Securities Commission.

The Statement explaining the Directors’ responsibilities for preparing the annual audited financial statements pursuant to paragraph 15.27(a) of the Listing Requirements is set out on page 16 of the Annual Report.

Internal Control

The Board acknowledges and placed strong emphasis in maintaining a sound system of internal control which provides reasonable assurance of effective and efficient operations and compliance with regulations as well as with internal procedures and guidelines. Details of the Group’s internal control system is presented in the Statement on Internal Control and Audit Committee Report set out on pages 17 to 18 and pages 19 to 22 respectively.

Relationship with External Auditors

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

Corporate Social Responsibility (“CSR”)

The Board recognizes the importance of the CSR the framework of which has been launched by the Bursa Malaysia on 15 September 2006. The move by Bursa Malaysia is seems to be in line with the decent intention of the Government to inculcate the culture of corporate social responsibility among the public listed companies. Therefore, the Board has agreed to beef up the Company’s social activities with an intention to share the company’s profitability with the public in forms of contribution on social responsibility activities.

During the financial year ended 31 December 2011, the Company had incorporated a foundation which is known as Yayasan TRC. The primary objective of Yayasan TRC is to encourage TRC Group’s employees where education is concerned to continuously upgrade themselves and to give better educational opportunity to their family members as well as to assist them in form of monetary such as donation, scholarship and/or educational tools and equipment to their eligible family members. Besides providing immediate assistance and relief to the employees who suffer losses from any sort of misfortune, the Yayasan would also assist members of society particularly those from areas in which the TRC Group has business activities, in form of providing contribution and donation to educational institutions, orphanage, local association/clubs and other suitable bodies in upholding their activities and objectives. In December 2011, the Yayasan had assisted a Company’s staff whose house was caught on fire.

Besides channeling its philanthropic activities through the Yayasan, the Company had also make direct contributions to associations, NGOs and school for activities such as “Save and Clean Hulu Kelang Campaign”, and sponsorship for Sekolah Menengah Taman Melawati F1 Team. The Company had also made monetary contribution to Persatuan Keluarga Polis (PERKEP), Persatuan Diabetes Malaysia and few other organizations.


13


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 ExplanationPart 2, AA II Chairman and Chief Executive The Company is headed by an Executive Chairman and therefore,

the roles of the Chairman and the Chief Executive Officer 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 Directors in the Board. Furthermore, the Chairman encourages all Directors to participate actively in all deliberation of issues that concern the Group.

Hence, the Board maintains the view that this combined arrangement will not hamper the Board from making fair decisions for the best interest of the Group.

ADDITIOnAL COMPLIAnCE InFORMATIOn

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

Utilization of Proceeds

For the financial year ended 31 December 2011, there was no proceed raised from any exercise.

Share Buybacks

The Company has not undertaken any share buyback exercise during the financial year ended 31 December 2011.

Option, Warrants or Convertible Securities

During the financial year ended 31 December 2011, the Company issued 3,942,000 ordinary shares of RM1.00 each and 261,000 ordinary shares of RM0.50 each pursuant to the exercise of options under the Employees Share Option Scheme which was implemented in June 2004.

126,300 ordinary shares of RM1.00 each were issued by virtue of the conversion of Irredeemable Convertible Unsecured Loan Stocks 2007/2012 (ICULS). Pursuant to the Trust Deed dated 15 November 2006, the ICULS had attained its maturity on 20 February 2012. 467,500 ordinary shares of RM1.00 each were issued through the exercise of 2007/2017 Warrants at an exercise price of RM1.00 each.

Consequential to the Share Split and Bonus Issue Exercise undertaken by the Company during the financial year 2011, 93,495,995 bonus issue of warrants were issued, the exercise price of which was RM0.61. None of those warrants were exercised during the financial year.

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

The Company has not sponsored any ADR or GDR Programme.

Sanctions and / or Penalties

There were no sanction and/or penalty imposed on the Company and its subsidiaries, Directors or Management by the relevant regulatory bodies during the financial year ended 31 December 2011.


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ADDITIOnAL COMPLIAnCE InFORMATIOn (COnT’D)

Non-Audit Fees

The non-audit fees paid to external auditors amounting to RM7,000 for the financial year ended 31 December 2011.

Variation of Results

There was no material variation between the audited results for the financial year ended 31 December 2011 with the unaudited results announced.

Profit Guarantee

There was no profit guarantee given by the Company during the financial year ended 31 December 2011.

Material Contracts

There was no material contracts between the Company and its subsidiaries involving Directors and major shareholders’ interests during the financial year ended 31 December 2011.

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 2011.

Information in Relation to the Company’s Share Option Scheme for Employees and Directors (ESOS)

Further to the statement by the Audit Committee in relation to the allocation of share option scheme as reported in the Audit Committee Report, explained below are the additional information on ESOS.

The Company only has one share option scheme during the financial year ended 31 December 2011, the details of which are as follows:-

i) Total number of ESOS granted 15,981,000ii) Total number of ESOS exercised before Adjustment due to share split and bonus issue exercise

(“Adjustment”)9,273,000

iii) Total outstanding ESOS before Adjustment 6,708,000

In consequences to the share split and bonus issue exercise which was completed in July 2011, the employees’ and directors’ entitlements had been adjusted pursuant to the ESOS By-Laws. Highlighted below are the information on ESOS after Adjustment.

i) Total number of ESOS after Adjustment 16,099,200ii) Total number of ESOS exercised after Adjustment (As at 26 April 2012) 5,894,460iii) Total outstanding ESOS after Adjustment (As at 26 April 2012) 10,204,740

ESOS Granted to Directors

i) Total number of ESOS granted to Directors 1,750,000ii) Total number of ESOS exercised by Directors before Adjustment 500,000iii) Balance number of ESOS held by Directors after Adjustment 3,000,000iv) Total number of ESOS exercised by Directors after Adjustment (As at 26 April 2012) 1,840,000v) Outstanding ESOS yet to be exercise by the Directors after Adjustment (As at 26 April 2012) 1,160,000


15


ESOS Granted to Directors and Senior Management

Pursuant to the Company’s ESOS By-Laws, not more than fifty percent (50%) of the Company’s shares available under the scheme shall be allocated to Directors and senior management. As at 26 April 2012, the Company has granted 32.9% of ESOS to its Directors and senior management staffs.

STATEMEnT OF DIRECTORS’ RESPOnSIBILITY In RELATIOn TO THE FInAnCIAL STATEMEnTS

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

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

The Directors are satisfied that in preparing the financial statements of the Group for the financial year ended 31 December 2011, the Group has adopted appropriate accounting policies and applied them prudently and consistently. They are also satisfied that reasonable and prudent judgments and estimates were made and all applicable Approved Accounting Standards in Malaysia have been followed accordingly.


16


Statement on InternaL ControL

The Board of Directors (“the Board”) is committed to maintaining a sound and effective System of Internal Control in TRC Synergy Berhad (“the Group”). The Board is pleased to provide the following Statement on Internal Control which outlines the nature and scope of internal control of the Group during the financial year ended 31 December 2011.

BOARD RESPOnSIBILITY

The Board acknowledges its responsibility for maintaining a sound system of internal control 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 business objectives and to manage the risks to which it is exposed. The system of Internal Control aims to :-

i) Safeguard shareholders’ interest and the assets of the Group;ii) Ensure that proper accounting records are maintained; andiii) Ensure that the financial information used within the business and the publication to the public is reliable.

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

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

InTERnAL COnTROL

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

Internal Audit Function

The Board is fully aware of the importance of the internal audit function and has established the Internal Audit Department for the Group on 20 August 2004. The main objective of this department is to review the key business processes and controls and to assists the Audit Committee in the discharge of its duties and responsibilities. Its role is to provide independent and objective reports on the organization, management, accounting and other records, accounting policies and internal controls to the Audit Committee and the Board. As required by the Listing Requirements, the Internal Auditors report directly to the Audit Committee and is independent of activities its audits. They provide periodic reports to the Audit Committee on the outcome of the audit works conducted by them which would be reviewed and evaluated by the Audit Committee.

None of the weaknesses or issues identified during the review for the financial year ended 31 December 2011 has resulted in non compliance with any relevant policies or procedures, listing requirements and other recommended industry practices that require disclosure in the Company’s Annual Report.

The presence of the internal audit function has provided the level of assurance as to the effectiveness of the operation and validity of the Group’s internal control system. The details of the Internal Audit activities are mentioned on page 21 of this Annual Report.

Quality Policy The construction arm of the Group has a clear and well documented Quality Policy in accordance with ISO 9001 : 2000. This policy and the related procedures are communicated to the respective staff members. Amongst the salient features of the Quality Policy are as follows:-

i) Internal Quality Audits are conducted at planned intervals to determine whether the Quality Management System is effectively implemented and maintained and conforms to the established system requirements of Internal Standard, ISO 9001:2000.

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

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

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

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Statement on InternaL ControL (Cont’d)

InTERnAL COnTROL (COnT’D)

Quality Policy (cont’d)

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

Line of Reporting

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

Dissemination of Information within the Group

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

Detail Budgeting Process

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

Risk Management Framework

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

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

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 19 to 22 of this Annual Report contains further details on the activities undertaken by the Audit Committee in 2011.

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.

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

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

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

This statement is made in accordance with a resolution of the Board of Directors dated 23 May 2012.

18


aUdIt CommIttee report

The Board of Directors of TRC Synergy Berhad is pleased to present the Audit Committee Report for the financial year ended 31 December 2011.

1. COMPOSITIOn OF THE AUDIT COMMITTEE

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

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

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

ii) Abdul Rahman Bin Ali (Independent Non-Executive Director) (Member of the Malaysian Institute of Accountants) Secretary : Abdul Aziz Bin Mohamed (Company Secretary)

2. TERMS OF REFEREnCE

i. Composition

The Board of Directors shall elect an Audit Committee from amongst themselves (pursuant to a resolution of the Board of Directors) comprising of not less than three (3) members all of them must be Non-Executive Directors with a majority of them being Independent Directors.

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

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

ii. Objectives

The primary objectives of the Audit Committee are:

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

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

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

19


aUdIt CommIttee report (Cont’d)

2. TERMS OF REFEREnCE (COnT’D)

iii. Duties and Responsibilities

The duties and responsibilities of the Audit Committee shall be:

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

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

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

i. any changes in accounting policies and practicesii. major judgmental areasiii. significant adjustments resulting from the auditiv. 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 final audits, and any matters the auditor may wish to discuss (in the absence of management where necessary).

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

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

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

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

iv. Authority

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

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

v. Meeting and Minutes

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

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

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

20


3. SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE.

During the financial year ended 31 December 2011, the Audit Committee met five times. The Company Secretary acted as the secretary for the Committee at all the meetings held. Other Directors and senior management of the Group were also present at the meeting upon invitation. The details of the attendance of the members of the Audit Committee are as follows:-

No. Audit Committee Attendance1 Noor Zilan bin Mohamed Noor 5/52 Abdul Rahman Bin Ali 5/53 General (R) Tan Sri Mohd Shahrom Bin Dato’ Hj Nordin 4/5

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

• ThequarterlyunauditedfinancialresultsandtheannualauditedfinancialstatementsoftheCompanyandGroup.Thereview was to ensure compliance with statutory reporting requirements and appropriate resolution of all accounting and audit matters requiring significant judgment and where appropriate, made recommendations to the Board.

• Theexternalauditors’feesandtorecommendtheirreappointmenttotheBoard.

• Measuresimplementedbymanagementwithregardtoriskmanagementandinternalcontrol.

• ThestatementofCorporateGovernanceandStatementonInternalControlswhicharepreparedinaccordancewith 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.

• Theannualinternalauditplantoensureadequatescopeandcomprehensivenessoftheactivitiesandcoverageonauditable entities with significant high risk.

• The internalaudit reports issuedby internalauditorsandthereafterdiscussthemanagement’sactionstakentoimprove the system of internal control and any outstanding matters.

• Reviewedwiththeexternalauditorstheirauditplanandscopeofworksfortheyearandtheresultsoftheannualaudit, their audit reports and Management Letter together with Management’s responses for the findings of the external auditors.

4. InTERnAL AUDIT FUnCTIOn

The Group’s internal audit function is performed in house by its Internal Audit Department. The Internal Audit Department reports directly to the Audit Committee. The principal objective of the Department is to provide independent and objective reports on the effectiveness of the system of internal control within the business units and projects of the Group. It also to ascertain that adequate internal control is maintained to safeguard the assets of the Group and the shareholders interest.

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

• ExamineandreviewedtheexistingcontroloverallsignificantGroupoperationandsystemstoascertainreasonableassurance that the Group’s objective and goals are met efficiently and economically.

• Carryoutoperationalauditandrecommendappropriatecontrolmeasuresforimprovementwhereweaknessesordeficiencies are found.

• Reviewedtheadequacyofscope,functions,competencesandresourcesofInternalAuditwhichisnecessarytocarried out the audit.

• Reviewedtheadequacyofcontrolforprocurementandmaterialhandlingatallprojectsites.

• ReviewedtheeffectivenessofmanagementandutilizationoffixedassetswithintheGroup.


21


4. InTERnAL AUDIT FUnCTIOn (COnT’D)

• PreparedtheannualauditplanforconsiderationbyAuditCommittee.

• TocomplementwiththeQualityManagementSysteminaccordancewithISO9001:2008.

• Continuousfollowupofreviewsonrecommendationandoutstandingissuestoensurebothareimplementedandresolved accordingly.

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

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

Total cost incurred for the Internal Audit Department for the financial year ended 31 December 2011 was RM138,667.

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

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

The salient terms of the Scheme are as follows:-

i) the maximum number of the Company’s new shares to be made available under the Scheme shall not exceed fifteen percent (15%) of the issued and paid up capital of the Company;

ii) not more than fifty percent (50%) of the Company’s shares available under the Scheme shall be allocated to Directors and senior management;

iii) not more than ten percent (10%) of the Company’s shares available under the Scheme shall be allocated to individual Director or eligible employees, who either singly or collectively through person connected to them holds twenty percent (20%) or more of the issued and paid up capital of the Company;

iv) The eligible participants shall include eligible employees and Directors who as at the offer date have satisfied the following criteria :-

a) is a confirmed employee or appointed director within the Group;b) has attained at least age of eighteen (18);c) is employed full time and on the payroll of the Group;d) is under such category and of such criteria that the option committee may from time to time decide.v) The Scheme shall remain in force for a duration of five (5) years from the effective date of the launch and could be

extended for another five (5) years at the discretion of the ESOS Committee.vi) The option price for each share shall be based on the weighted average market price (WAMP) of the Company’s

share traded on the Exchange for the five (5) trading days preceding the date of offer with a discount if any, that does not exceed ten percent (10%) from the five (5) day of the Company’s shares.

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


22


Directors’ Report

Statement by Directors

Statutory Declaration

Independent Auditors’ Report

Statements of Comprehensive Income

Statements of Financial Position

Statement of Changes in Equity - Group

Statement of Changes in Equity - Company

Statements of Cash Flows

Notes to the Financial Statements

24

31

31

32

34

35

36

37

38

40

FInanCIaL HIGHtLIGHt

dIreCtorS’ report

The directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2011.

PRInCIPAL ACTIVITIES

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

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

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

RESULTS

Group Company RM RM

Profit net of tax 12,981,495 46,789,378

Profit attributable to :Equity holders of the Company 12,981,495 46,789,378 Non-controlling interests - -

12,981,495 46,789,378

RESERVES AnD PROVISIOnS

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

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

DIVIDEnDS The amount of dividend paid by the Company during the year, was as follows:

RM

In respect of the financial year ended 31 December 2010 as reported in the directors’ report of that year:

First and final dividend of 5 sen per share less 25% taxation, on 194,739,439 ordinary shares, paid on 14 July 2011. 7,302,730

At the forthcoming Annual General Meeting, a provisional dividend in respect of the financial year ended 31 December 2011, of 2 sen per share less 25% taxation on 475,502,723 ordinary shares amounting to a dividend payable of RM7,132,541 (1.5 sen net per ordinary share) will be proposed for shareholders’ approval. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in equity as an appropriation of retained earnings in the financial year ending 31 December 2012.

24


dIreCtorS’ report (Cont’d)

DIRECTORS

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

Dato' Sri Sufri Bin Hj Mohd Zin Dato' Abdul Aziz Bin Mohamad Gen. (R) Tan Sri Mohd Shahrom Bin Dato' Hj Nordin Abdul Rahman Bin Ali Noor Zilan Bin Mohamed Noor

DIRECTORS' BEnEFITS

During and at the end of the financial year, no arrangements subsisted to which the Company is a party, with the object or objects of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate, other than those share options granted pursuant to the Employee Share Options Scheme.

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

DIRECTORS’ InTERESTS

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

Number of Ordinary Shares of RM1.00 Each

Number of Ordinary Shares of RM0.50

After ShareAt At Split and At

The Company 1.1.2011 Acquired Sold 15.7.2011 Bonus Issue 31.12.2011

Direct Interest:

Dato' Sri Sufri Bin Hj Mohd Zin 18,904,799 - - 18,904,799 45,371,517 45,371,517 Dato' Abdul Aziz Bin Mohamad 5,529,284 500,000 (184,000) 5,845,284 14,028,681 14,028,681

Deemed Interest:

Dato' Sri Sufri Bin Hj Mohd Zin # 49,198,000 - - 49,198,000 118,075,200 118,075,200

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

25



DIRECTORS’ InTERESTS (COnT’D)

Number of ESOS Options After Share

At At Split and At The Company 1.1.2011 Granted Exercised 15.7.2011 Bonus Issue 31.12.2011

Dato' Sri Sufri Bin Hj Mohd Zin 900,000 - - 900,000 2,160,000 2,160,000

Dato' Abdul Aziz Bin Mohamad 850,000 - (500,000) 350,000 840,000 840,000

Number of Warrants (2007/2017) After Share


Dato' Sri Sufri Bin Hj Mohd Zin 5,047,599 - - 5,047,599 12,114,237 12,114,237

Dato' Abdul Aziz Bin Mohamad 1,335,856 - (357,100) 978,756 2,349,014 2,349,014

Number of Warrants (2011/2016) After Share


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

Dato' Abdul Aziz Bin Mohamad - - - - 2,805,736 2,805,736

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

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

ISSUE OF SHARES

During the financial year, the Company increased its issued and paid-up ordinary share capital from RM190,247,839 to RM233,870,851 by way of :

(i) the issuance of 126,300 ordinary shares of RM1.00 each at par arising from conversion of Irredeemable Convertible Unsecured Loan Stocks (“ICULS”);

(ii) the issuance of 3,942,000 ordinary shares of RM1.00 each and 261,000 ordinary shares of RM0.50 each for cash pursuant to the Company’s Employee Share Options Scheme (“ESOS”) at an exercise price of RM1.23 and RM0.52 per ordinary share respectively;

(iii) the issuance of 467,500 ordinary shares of RM1.00 each through the exercise of 2007/2017 Warrants at an exercise price of RM1.00 per share for cash.

(iv) subdividing its existing 194,783,639 ordinary shares of RM1.00 each into 389,567,278 ordinary shares of RM0.50 each (“Share Split”);

(v) after the Share Split, the Company issued bonus shares of up to 77,913,423 new ordinary shares of RM0.50 each, which were credited as fully paid up by the Company, on the basis of one (1) Bonus Shares for every five (5) shares held by the entitled shareholders of the Company after the Share Split (“Bonus Issue”); and

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

26


WARRAnTS 2007/2017

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

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

A total of 467,500 warrants were exercised before the Share Split and Bonus Issue Exercise.

After the Share Split and Bonus Issue of shares, the exercise price of the existing Warrants 2007/2017 (Warrants A) of 36,141,620 and 50,598,249 additional Warrants A were adjusted to RM0.50 each. No Warrants A were exercised during the period and a total of 86,739,869 warrants remained outstanding as at 31 December 2011.

WARRAnTS 2011/2016

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

Each warrants is exercisable into one new ordinary share of RM0.50 each at the exercise price of RM0.61 per ordinary share. No Warrants B were exercised during the financial year.

IRREDEEMABLE COnVERTIBLE UnSECURED LOAn STOCKS

On 22 January 2007, the Company issued RM30,800,000 nominal value of 5 - year 5% Irredeemable Convertible Unsecured Loan Stocks (“ICULS”) at a nominal value of RM1.00 each for additional working capital purposes.

Consequential to the Bonus Issue in 2008, an additional 247,433 new TRC ordinary shares would be issued by the Company upon the full conversion of the existing ICULS pursuant to the adjustments in accordance with the provision under the Trust Deed executed by the Company on 15 November 2006 constituting the ICULS (“Trust Deed”).

Consequential to the Share Split and Bonus Issue during the financial year, the conversion ratio for every RM1.00 nominal value of ICULS was adjusted from 1.20 to 2.88. The ICULS holders shall be entitled to the issuance of 1.44 new Subdivided Shares upon conversion of every RM1.00 nominal value of ICULS at the revised conversion price of RM0.50. Based on the outstanding nominal value of the ICULS of RM904,117, a total of 2,603,849 new Subdivided Shares, including an additional 1,518,916 new shares, would be issued by the Company upon the full conversion of the existing ICULS.

As at 31 December 2011, 29,962,493 ordinary shares have been issued pursuant to the conversion of RM29,895,883 nominal amount of ICULS issued at 100% of its nominal value. There are RM904,117 nominal amount of ICULS still not converted as at 31 December 2011.

The terms of the ICULS are disclosed in Note 27 to the financial statements.

TREASURY SHARES

The Board obtained shareholders’ approval to undertake the purchase of up to 10% of the issued and paid up share capital of the Company. The shareholders of the Company, by a special resolution passed in a general meeting held on 29 June 2011, renewed their approval for the Company’s plan to repurchase its own ordinary shares. The directors of the Company are committed to enhancing the value of the Company for its shareholders and believe that the repurchase plan can be applied in the best interests of the Company and its shareholders.


27


EMPLOYEE SHARE OPTIOnS SCHEME

The TRC Synergy Berhad Employee Share Options Scheme (“ESOS”) is governed by the by-laws approved by the shareholders at an Extraordinary General Meeting held on 30 April 2004. The ESOS was implemented on 22 June 2004 and is to be in force for a period of 5 years from the date of implementation. The Board of Directors has approved the extension of the duration of ESOS for another five years from the expiry date of the initial ESOS period (21 June 2009).

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

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

The Company has been granted exemption by the Companies Commission of Malaysia from having to disclose the names of option holders, including directors, who have been granted option to subscribe for less than 480,000 ordinary shares. The names of option holders granted option to subscribe for 480,000 or more ordinary shares during the financial year are as follows :-

Number of ESOS Options

Name Grant Date

Expiry Date

Exercise Price Granted Exercised 15.7.2011

AfterShare

Split and Bonus Issue Exercised 31.12.2011

RM

Abdul Aziz Bin Mohamed 22.06.2004 21.06.2014 0.52 990,000 283,000 707,000 1,696,800 - 1,696,800

Dato’ Khoo Teng San 22.06.2004 21.06.2014 0.52 850,000 (450,000) 400,000 960,000 - 960,000

Loh Leh Wong 22.06.2004 21.06.2014 0.52 850,000 (410,000) 440,000 1,056,000 (200,000) 856,000

Yeoh Sook Keng 22.06.2004 21.06.2014 0.52 850,000 (400,000) 450,000 1,080,000 - 1,080,000

Muhamad Shahaizi Bin Abdul Hai 22.06.2004 21.06.2014 0.52 480,000 (100,000) 380,000 912,000 - 912,000

Tan Khoon Kian 22.06.2004 21.06.2014 0.52 480,000 (480,000) - - - -

Details of options granted to directors are disclosed in the section on Directors’ Interests in this report.

STATUS OF CORPORATE PROPOSAL

Kenanga Investment Bank Berhad (“KIBB”), on behalf of the Board, had on 12 May 2011 announced that the Company proposes to implement the following:

(i) A Share Split involving the subdivision of every one (1) Share into two (2) Subdivided Shares on the Entitlement Date. The Share Split is implemented via the reduction of each Share’s existing par value of RM1.00 each to RM0.50 each per Subdivided Share;

(ii) A Bonus Issue of new ordinary shares of RM0.50 each in the Company, after the Share Split on the basis of one (1)

Bonus Share for every five (5) Subdivided Shares held on the Entitlement Date;


28


STATUS OF CORPORATE PROPOSAL (COnT’D)

(iii) A Bonus Issue of free Warrants B on the basis of one (1) free Warrant B for every five (5) Subdivided Shares held after the Share Split and the Bonus Issue of Shares on the Entitlement Date; and

(iv) Amendments to the Memorandum and Articles of Association of the Company to facilitate the Share Split and to

accomodate the exercise of the Warrants B pursuant to the Bonus Issue of Warrants.

The approval of Bursa Securities for the (i) Share Split, (ii) Bonus Issue of Shares, (iii) listing and quotation of the Additional Warrants A and the new Subdivided Shares to be issued pursuant to the exercise of the Additional Warrants A, (iv) Bonus Issue of Warrants, and (v) listing and quotation of the new Subdivided Shares to be issued pursuant to the exercise of the Warrants B had been obtained vide Bursa Securities’ letter dated 13 June 2011.

At the Extraordinary General Meeting held on 29 June 2011, the Company had also obtained the Shareholders’ approval for the Proposals.

On 1 July 2011, KIBB on behalf of the Company, announced the Entitlement Date for, amongst others, the Subdivided Shares, the Bonus Shares and the Additional Warrants A has been fixed at 5.00 p.m. on 15 July 2011.

Following the announced Entitlement Date, the Subdivided Shares, the Bonus Shares and the Additional Warrants A have been listed and quoted on the Main Market of Bursa Securities with effect from 9.00 a.m on 18 July 2011. Whereas, 93,495,995 Warrants B issued pursuant to the Bonus Issue of Warrants were listed and quoted on the Main Market of Bursa Malaysia Securities Berhad with effect from 9.00 a.m. on Monday, 25 July 2011, marking the completion of the Bonus Issue of Warrants.

Consequential to the above exercise, the necessary adjustments have been made to the existing convertibles and ESOS. The details are as follows :-

(i) ESOS

The Holder of each ESOS Option is entitled to subscribe for 2.40 New Subdivided Shares for the exercise of each ESOS Option at the Exercise Price of RM0.52 each.

(ii) ICULS

The conversion ratio for every RM1.00 nominal value of ICULS was adjusted from 1.20 to 2.88. (iii) Warrants A

After the share split and bonus issue of shares, the exercise price of the existing Warrants A of 36,141,620 and 50,598,249 additional Warrants A were adjusted to RM0.50 each.

The Notice of Adjustments to the respective holders had been issued on 8 August 2011.

The balance of Warrants B issued pursuant to the Bonus Issue of Warrants remained outstanding at a total of 93,495,995 as at 31 December 2011. Each warrants is exercisable into one new ordinary share of RM0.50 each at the exercise price of RM0.61 per ordinary share.

OTHER STATUTORY InFORMATIOn (a) Before the statements of comprehensive income and statements of financial position of the Group and of the Company

were made out, the directors took reasonable steps:

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for doubtful debts; and

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


29


OTHER STATUTORY InFORMATIOn (COnT’D)

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

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

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

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

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

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

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

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

(f) In the opinion of the directors:

(i) no contingent liability or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which will or may affect the ability of the Group or of the Company to meet their obligations when they fall due; and

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

SIGnIFICAnT AnD SUBSEQUEnT EVEnTS

The significant and subsequent events are disclosed in Note 43 and 44 to the financial statements.

AUDITORS

The auditors, Messrs AljeffriDean, have expressed their willingness to continue in office.

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

DATO’ SRI SUFRI BIN HJ MOHD ZIN

DATO’ ABDUL AZIZ BIN MOHAMAD

Kuala Lumpur, Malaysia.Date : 30 March 2012


30


Statement BY dIreCtorSpUrSUant to SeCtIon 169(15) oF tHe CompanIeS aCt, 1965

We, DATO' SRI SUFRI BIN HJ MOHD ZIN and DATO' ABDUL AZIZ BIN MOHAMAD, being two of the directors of TRC SYNERGY BERHAD, state that in the opinion of the directors, the accompanying financial statements set out on pages 34 to 100 are drawn up in accordance with the provisions of the Companies Act, 1965 and the Financial Reporting Standards in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2011 and of the results and the cash flows of the Group and of the Company for the year then ended.

The information set out in Note 29 of the financial statements have been presented in accordance with the directive issued by Bursa Malaysia Securities Berhad and prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.

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

DATO’ SRI SUFRI BIN HJ MOHD ZIN DATO’ ABDUL AZIZ BIN MOHAMAD

Kuala Lumpur, Malaysia.Date : 30 March 2012

StatUtorY deCLaratIon pUrSUant to SeCtIon 169(16) oF tHe CompanIeS aCt, 1965

I, YEOH SOOK KENG, being the officer primarily responsible for the financial management of TRC SYNERGY BERHAD, do solemnly and sincerely declare that the accompanying financial statements set out on pages 34 to 100 are in my opinion correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, l960.

Subscribed and solemnly declared by the abovenamed YEOH SOOK KENG at Kuala Lumpur in the Federal Territory on 30 March 2012 YEOH SOOK KENG

Before me,

Commissioner for Oath

31


Independent aUdItorS’ reportto tHe memBerS oF trC SYnerGY BerHad

REPORT On THE FInAnCIAL STATEMEnTS

We have audited the financial statements of TRC Synergy Berhad which comprise the statements of financial position as at 31 December 2011 of the Group and of the Company, and the comprehensive income statements, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 34 to 100.

Directors' Responsibility for the Financial Statements

The directors of the Company are responsible for the preparation of these financial statements that give a true and fair view in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards in Malaysia and the Companies Act, 1965 so as to give a true and fair view of the financial position of the Group and of the Company as of 31 December 2011 and of their financial performance and cash flows for the financial year then ended.

REPORT On OTHER LEGAL AnD REGULATORY REQUIREMEnTS

In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:

(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

(b) We have considered the financial statements and the auditors’ reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 17 to the financial statements.

(c) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes.

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

32


OTHER REPORTInG RESPOnSIBILITIES

The supplementary information set out in Note 29 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad. The Directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

OTHER MATTERS

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

ALJEFFRIDEAN MOHD NEEZAL NOORDIN A.F. No. 1366 No: 2162/06/13 (J)Chartered Accountants (M)

Kuala Lumpur, MalaysiaDate: 30 March 2012

Independent aUdItorS’ report (Cont’d)to tHe memBerS oF trC SYnerGY BerHad

33


StatementS oF CompreHenSIve InCome For tHe Year ended 31 deCemBer 2011

Group CompanyNote 2011 2010 2011 2010

RM RM RM RM

Revenue 3 400,763,258 376,717,815 50,580,438 12,232,043Cost of sales 4 (371,086,121) (332,012,107) (3,101,382) (3,051,188)

Gross profit 29,677,137 44,705,708 47,479,056 9,180,855

Other income 5 8,596,346 4,544,015 2,691,318 2,772,122Administrative expenses (28,011,337) (29,961,384) (5,807,171) (4,625,200)

Operating profit 10,262,146 19,288,339 44,363,203 7,327,777

Finance income 6 6,994,857 4,431,189 2,811,533 2,037,888Finance costs 7 (404,998) (312,363) (16,517) (34,567)Share of loss of associate (293,832) (367,269) - -

Profit before tax 8 16,558,173 23,039,896 47,158,219 9,331,098

Income tax expense 11 (3,576,678) (6,848,240) (368,841) (1,946,648)

Profit net of tax 12,981,495 16,191,656 46,789,378 7,384,450

Other comprehensive income, net of tax Foreign currency translation differences for

foreign operations 207,491 154,093 - -Fair value of available-for-sale financial asset 362,611 303,128 - -

Other comprehensive income for the year, net of tax 570,102 457,221 - -

Total comprehensive income for the year 13,551,597 16,648,877 46,789,378 7,384,450

Profit attributable to:Equity holders of the Company 12,981,495 16,191,656 46,789,378 7,384,450Minority interests - - - -

Profit for the year 12,981,495 16,191,656 46,789,378 7,384,450

Total comprehensive income attributable to:

Equity holders of the Company 13,551,597 16,648,877 46,789,378 7,384,450Minority interests - - - -

Total comprehensive income for the year 13,551,597 16,648,877 46,789,378 7,384,450

Earning per share attributable to equity holders of the Company (sen)- Basic 12 2.79 3.50

- Diluted 12 2.64 3.41

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

34


StatementS oF FInanCIaL poSItIon

aS at 31 deCemBer 2011


RM RM RM RMASSETS

Non-current assets Investment properties 13 17,791,674 18,563,332 - -Property, plant and equipment 14 23,350,226 21,639,998 3,653,593 4,172,758Properties held for development 15 20,043,169 20,032,709 - -Intangible assets 16 9,177 9,177 - -Investment in Subsidiaries 17 - - 75,155,098 74,946,519Investment in Associates 18 12,034,750 11,749,188 - -Other investments 19 53,369,583 40,508,127 - -Other receivables 20 - - 160,240,598 124,160,475Deferred tax assets 21 1,191,505 843,658 168,445 83,521

127,790,084 113,346,189 239,217,734 203,363,273

Current assets Property development costs 15 10,351,571 10,228,616 - -Inventories 22 1,943,621 1,215,490 - -Trade and other receivables 20 121,765,485 113,064,099 108,805 11,578Other current assets 24 53,807,806 19,547,248 - -Cash and bank balances 25 129,273,428 200,680,081 9,319,839 702,608

317,141,911 344,735,534 9,428,644 714,186

TOTAL ASSETS 444,931,995 458,081,723 248,646,378 204,077,459

EQUITY AND LIABILITIES

Equity attributable to equity holders of the Company

Share capital 26 233,870,851 190,247,839 233,870,851 190,247,839Share premium 26 5,020 102,350 5,020 102,350ICULS - equity component 27 736,554 862,317 736,554 862,317Other reserves 28 2,089,556 1,519,454 - -Retained earnings 29 72,873,126 105,503,517 13,706,153 12,528,661

Total equity 309,575,107 298,235,477 248,318,578 203,741,167

Non-current liabilities ICULS - liability component 27 3,840 13,512 3,840 13,512Deferred tax liabilities 21 1,255,735 1,192,041 - -

1,259,575 1,205,553 3,840 13,512

Current liabilities Borrowings 30 4,595,053 366,519 - -Trade and other payables 31 91,808,159 75,115,430 323,960 300,172Other current liabilities 32 37,694,101 83,158,744 - -Current tax payable - - - 22,608

134,097,313 158,640,693 323,960 322,780Total liabilities 135,356,888 159,846,246 327,800 336,292

TOTAL EQUITY AND LIABILITIES 444,931,995 458,081,723 248,646,378 204,077,459


35


Statement oF CHanGeS In eQUItY - GroUpFor tHe Year ended 31 deCemBer 2011

Attributable to Equity Holders of the Company Non-Distributable Distributable

ICULS Share Share (Equity Other Retained Minority Total

Capital Premium Component) Reserves Earnings Total Interest Equity RM RM RM RM RM RM RM RM

Note (Note 26) (Note 26) (Note 27) (Note 28) (Note 29)

At 1 January 2011 190,247,839 102,350 862,317 1,519,454 105,503,517 298,235,477 - 298,235,477

Issue of ordinary shares pursuant to:Bonus issue 38,956,712 (668,606) - - (38,288,106) - - -ESOS 4,072,500 911,880 - - - 4,984,380 - 4,984,380ICULS 105,250 - - - - 105,250 - 105,250

ICULS adjustment 21,050 - - - (21,050) - - -Warrants 467,500 - - - - 467,500 - 467,500Equity component of

ICULS - - (125,763) - - (125,763) - (125,763)Expenditure written off - (340,604) - - - (340,604) - (340,604)Total comprehensive

income - - - 570,102 12,981,495 13,551,597 - 13,551,597Dividends 35 - - - - (7,302,730) (7,302,730) - (7,302,730)

At 31 December 2011 233,870,851 5,020 736,554 2,089,556 72,873,126 309,575,107 - 309,575,107

Attributable to Equity Holders of the Company Non-Distributable Distributable

ICULS Share Share (Equity Other Retained Minority Total

Capital Premium Component) Reserves Earnings Total Interest Equity RM RM RM RM RM RM RM RM

Note (Note 26) (Note 26) (Note 27) (Note 28) (Note 29)

At 1 January 2010, as previously stated

189,623,439

10,350

1,022,017

649,064

95,038,051

286,342,921 - 286,342,921

Effects arising from adoption of FRS 139 - - - 413,169 - 413,169 - 413,169

189,623,439 10,350 1,022,017 1,062,233 95,038,051 286,756,090 - 286,756,090Issue of ordinary shares

pursuant to:ESOS 400,000 92,000 - - - 492,000 - 492,000ICULS 187,000 - - - - 187,000 - 187,000

ICULS adjustment 37,400 - - - (37,400) - - -Equity component of

ICULS - - (159,700) - - (159,700) - (159,700)Total comprehensive

income - - - 457,221 16,191,656 16,648,877 - 16,648,877Dividends 35 - - - - (5,688,790) (5,688,790) - (5,688,790)

At 31 December 2010 190,247,839 102,350 862,317 1,519,454 105,503,517 298,235,477 - 298,235,477


36


Statement oF CHanGeS In eQUItY - CompanYFor tHe Year ended 31 deCemBer 2011

Non-distributable Distributable ICULS

Share Share (Equity Retained Total Capital Premium component) Earnings Equity

RM RM RM RM RM Note (Note 26) (Note 26) (Note 27) (Note 29)

At 1 January 2011 190,247,839 102,350 862,317 12,528,661 203,741,167

Total comprehensive income - - - 46,789,378 46,789,378Dividends 35 - - - (7,302,730) (7,302,730)Issue of ordinary shares

pursuant to:Bonus Issue 38,956,712 (668,606) - (38,288,106) -ESOS 4,072,500 911,880 - - 4,984,380ICULS 105,250 - - - 105,250

ICULS Adjustment 21,050 - - (21,050) -Warrants 467,500 - - - 467,500Equity component of ICULS - - (125,763) - (125,763)Expenditure written off - (340,604) - - (340,604)

At 31 December 2011 233,870,851 5,020 736,554 13,706,153 248,318,578

Non-distributable Distributable ICULS

Share Share (Equity Retained Total Capital Premium component) Earnings Equity

RM RM RM RM RM Note (Note 26) (Note 26) (Note 27) (Note 29)

At 1 January 2010 189,623,439 10,350 1,022,017 10,870,401 201,526,207

Total comprehensive income - - - 7,384,450 7,384,450Dividends 35 - - - (5,688,790) (5,688,790)Issue of ordinary shares

pursuant to :ESOS 400,000 92,000 - - 492,000ICULS 187,000 - - - 187,000

ICULS Adjustment 37,400 - - (37,400) -Equity component of ICULS - - (159,700) - (159,700)

At 31 December 2010 190,247,839 102,350 862,317 12,528,661 203,741,167


37


StatementS oF CaSH FLoWS For tHe Year ended 31 deCemBer 2011


RM RM RM RM

CASH FLOWS FROM OPERATING ACTIVITIES

Profit before taxation 16,558,173 23,039,896 47,158,219 9,331,098

Adjustments for:- Bad debts written off - 2,053,813 - -Inventory written off - 74,346 - -

Unrealised loss/(gain) on foreign exchange (2,636,165) 316,335 (1,764,742) (1,846,396)Share of loss from joint venture - 279,165 - -Dividend income (942,599) (384) (45,000,000) (6,666,667)Finance cost on ICULS 15,751 21,405 15,751 21,405Impairment on revaluation of investment

properties 888,731 - - -Exchange reserve arising due to retranslation of

financial statements in foreign currency 207,491 154,093 - -Depreciation of property, plant and equipment 5,348,434 5,110,006 549,447 486,340Amortisation of leasehold land 5,891 5,891 - -Gain on disposal of property, plant and

equipment (72,971) (933,630) - -Share of results of associates 293,832 367,269 - -Interest expense 142,243 52,866 - -Interest income (6,052,258) (3,343,600) (2,811,533) (2,037,888)Property, plant and equipment written off 175,653 111,706 - -

OPERATING PROFIT/(LOSS) BEFORE WORKING CAPITAL CHANGES 13,932,206 27,309,177 (1,852,858) (712,108)

Inventories (728,131) 1,344,588 - -Receivables (35,865,207) 13,622,684 9,078 410Payables (28,817,202) (5,696,981) (21,500) (20,137)Property development project costs (122,955) (1,056,242) - -Asset held for sale - 10,711,723 - -

Cash (used in)/generated from operations (51,601,289) 46,234,949 (1,865,280) (731,835)

Taxation paid (8,606,418) (11,515,494) (583,326) (2,058,399)Interest paid (142,243) (52,866) - -Interest received 6,052,258 3,343,600 2,811,533 2,037,888

Net cash (used in)/generated from operating activities (54,297,692) 38,010,189 362,927 (752,346)

38



RM RM RM RM

CASH FLOWS FROM INVESTING ACTIVITIES

Dividend received 942,482 288 45,000,000 5,000,000Associate company (579,394) 563,024 - -Additional investment in subsidiaries - - (208,579) (5,525,879)Purchase of investment properties (117,073) (7,862,832) - -Purchase of investment (12,498,845) (8,493,146) - -Purchase of property, plant and equipment (8,157,859) (8,633,179) (30,282) (4,659,098)Proceeds from disposal of property, plant and

equipment 990,624 1,038,714 - -Land held for development (10,460) (74,785) - -Other receivables - - (34,350,381) 11,515,859

Net cash (used in)/generated from investing activities (19,430,525) (23,461,916) 10,410,758 6,330,882

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds on share premium from ESOS exercised 571,276 92,000 571,276 92,000

Proceeds from ESOS exercised 4,072,500 400,000 4,072,500 400,000Proceeds from warrants exercised 467,500 - 467,500 -Fixed deposits (16,022,274) 6,667,695 (5,120,259) -Proceeds/(Repayment) of short term borrowings 1,846,481 (2,327,894) - -Repayment of long term borrowings - (6,376,841) - -Dividend paid (7,302,730) (5,688,790) (7,302,730) (5,688,790)

Net cash (used in)/generated from financing activities (16,367,247) (7,233,830) (7,311,713) (5,196,790)

Net increase/(decrease) in cash and cash equivalents (90,095,464) 7,314,443 3,461,972 381,746

Effects of foreign exchange rate changes 284,484 (914,146) 35,000 -

Cash and cash equivalents at the beginning of the year 151,834,780 145,434,483 702,608 320,862

Cash and cash equivalents at the end of the year 25 62,023,800 151,834,780 4,199,580 702,608


StatementS oF CaSH FLoWS (Cont’d)For tHe Year ended 31 deCemBer 2011

39


noteS to tHe FInanCIaL StatementS 31 deCemBer 2011

1. CORPORATE InFORMATIOn

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

The number of employees of the Company as at year end is 46 (2010: 54). The number of employees of the Group as at year end is 509 (2010: 509).

The Company is a public limited liability company, incorporated and domiciled in Malaysia.

The Company is listed on the Main Market of Bursa Malaysia Securities Berhad and produces financial statements available for the public use.

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

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 30 March 2012.

2. SIGnIFICAnT ACCOUnTInG POLICIES

2.1. Basis of Preparation

The financial statements of the Group and of the Company has been prepared in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia. At the beginning of the current financial year, the Group and the Company adopted new and revised FRS which are mandatory for financial periods beginning on or after 1 January 2011 as described fully in Note 2.2.

The financial statements have been prepared on the historical cost basis except as disclosed in the accounting policies below.

The financial statements are presented in Ringgit Malaysia (RM).

2.2. Changes in Accounting Policies

The accounting policies adopted are consistent with those of the previous financial year except as follows:

On 1 January 2011, the Group and the Company adopted the following FRSs, Amendments to FRSs and IC Interpretations mandatory for annual financial periods beginning on or after 1 January 2011.

FRS 1 : First-time Adoption of Financial Reporting Standards

FRS 3 : Business Combinations (Revised)

FRS 127 : Consolidated and Separate Financial Statements

Amendments to FRS 1 : Limited Exemption from Comparative FRS 7 Disclosures for First-time Adopters

Amendments to FRS 1: Additional Exemptions for First - time Adopters

Amendments to FRS 2: Share-based Payment

Amendments to FRS 2: Group Cash-settled Share-based Payment Transactions

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

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NOTES TO THE FINANCIAL STATEMENTS (CONT’d)31 dECEMBER 2011

2. SIGnIFICAnT ACCOUnTInG POLICIES (COnT’D)

2.2. Changes in Accounting Policies (cont’d)

Amendments to FRS 7: Improving Disclosures about Financial Instruments

Amendments to FRS 132: Financial Instrument: Presentation

Amendments to FRS 138: Intangible Assets

IC Interpretation 4: Determining Whether An Arrangement Contains a Lease

IC Interpretation 12: Service Concession Arrangements

IC Interpretation 16: Hedges of a Net Investment in a Foreign Operation

IC Interpretation 17: Distributions of Non - cash Assets to Owners

IC Interpretation 18: Transfers of Assets from Customers

Amendments to IC Interpretation 9:

Reassessment of Embedded Derivatives

Adoption of the above FRSs, Amendments to FRSs and Interpretations, and “Improvements to FRSs issued in 2010” did not have any effect on the financial performance, position or presentation of financial statements of the Group and the Company.

2.3 Summary of Significant Accounting Policies

(a) Basis of Consolidation

(i) Subsidiaries

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

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

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

(ii) Accounting for business combinations

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

The Group has changed its accounting policy with respect to accounting for business combinations.

From 1 January 2011 the Group has applied FRS 3, Business Combinations (revised) in accounting for business combinations. The change in accounting policy has been applied prospectively in accordance with the transitional provisions provided by the standard and does not have impact on earning per share.

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2.3 Summary of Significant Accounting Policies (cont’d)

(a) Basis of Consolidation (cont’d)

(ii) Accounting for business combinations (cont’d)

Acquisitions on or after 1 January 2011

For acquisitions on or after 1 January 2011, the Group measures goodwill at the acquisition date as:

• thefairvalueoftheconsiderationtransferred;plus• therecognisedamountofanynon-controllinginterestsintheacquiree;plus• ifthebusinesscombinationisachievedinstages,thefairvalueoftheexistingequityinterestin

the acquiree; less• thenetrecognisedamount(generallyfairvalue)oftheidentifiableassetsacquiredandliabilities

assumed.

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

The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss.

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

Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit or loss.

When share-based payment awards (replacement awards) are required to be exchanged for awards held by the acquiree’s employees (acquiree’s awards ) and relate to past services, then all or a portion of the amount of the acquirer’s replacement awards is included in measuring the consideration transferred in the business combination. This determination is based on the market-based value of the replacement awards compared with the market-based value of the acquiree’s awards and the extent to which the replacement awards relate to past and/or future service.

Acquisitions between 1 January 2006 and 1 January 2011

For acquisitions between 1 January 2006 and 1 January 2011, goodwill represents the excess of the cost of the acquisition over the Group’s interest in the recognised amount (generally fair value) of the identifiable assets, liabilities and contingent liabilities of the acquiree. When the excess was negative, a bargain purchase gain was recognised immediately in profit or loss.

Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurred in connection with business combinations were capitalised as part of the cost of the acquisition.

Acquisitions prior to 1 January 2006

For acquisitions prior to 1 January 2006, goodwill represents the excess of the cost of the acquisition over the Group’s interest in the fair values of the net identifiable assets and liabilities.

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(a) Basis of Consolidation (cont’d)

(iii) Accounting for acquisitions of non-controlling interests

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

(iv) Loss of control

The Group applied FRS 127, Consolidated and Separate Financial Statements (revised) since the beginning of the reporting period in accordance with the transitional provisions provided by the standards and does not have impact on earnings per share. Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted for as an equity-accounted investee or as an available-for-sale financial asset depending on the level of influence retained.

In the previous financial years, if the Group retained any interest in the previous subsidiary, such interest was measured at the carrying amount at the date that control was lost and this carrying amount would be regarded as cost on initial measurement of the investment.

(v) Non-controlling interests

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

Since the beginning of the reporting period, the Group has applied FRS 127, Consolidated and Separate Financial Statements (revised) where losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance. This change in accounting policy is applied prospectively in accordance with the transitional provisions of the standard and does not have impact on earnings per share.

In the previous financial years, where losses applicable to the non-controlling interests exceed their interests in the equity of a subsidiary, the excess, and any further losses applicable to the non-controlling interests, were charged against the Group’s interest except to the extent that the non-controlling interests had a binding obligation to, and was able to, make additional investment to cover the losses. If the subsidiary subsequently reported profits, the Group’s interest was allocated with all such profits until the non-controlling interests’ share of losses previously absorbed by the Group had been recovered.

(vi) Transactions eliminated on consolidation

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

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(b) Associates

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

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

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

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

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

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

(c) Goodwill

Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less accumulated impairment losses.

For the purpose of impairment testing, goodwill acquired is allocated, from the acquisition date, to each of the Group’s cash-generating units that are expected to benefit from the synergies of the combination.

The cash-generating unit to which goodwill has been allocated is tested for impairment annually and whenever there is an indication that the cash-generating unit be impaired, by comparing the carrying amount of the cash-generating unit, including the allocated goodwill, with the recoverable amount of the cash-generating unit. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised in the profit or loss. Impairment losses recognised for goodwill are not reversed in subsequent periods.

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

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(d) Inventories

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

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

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

(e) Property, Plant and Equipment and Depreciation

All items of property, plant and equipment are initially recorded at cost. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

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

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

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

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

The residual values, useful life and depreciation method are reviewed at each financial year end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment.

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(e) Property, Plant and Equipment and Depreciation (cont’d)

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

(f) Leases

Finance leases - as lessee

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

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

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

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

(g) Investment Properties

Investment properties principally comprise buildings, are held for long term rental yields or for capital appreciation or both, and are not occupied by the Group.

Investment properties are initially measured at its cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at fair value, representing open-market value determined by external valuers. Fair value is based on active market prices, adjusted, if necessary, for any differences in the nature, location or condition of the specific asset. Gains or losses arising from change in fair value of investment properties are recognised in profit or loss in the period in which they arise.

A property interest under an operating lease is classified and accounted for as an investment property on a property-by-property basis when the Group holds it to earn rentals or for capital appreciation or both. Any such property interest under an operating lease classified as an investment property is carried at fair value.

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

Transfers are made to or from investment property only when there is a change in use. For a transfer from investment property to owner-occupied property, the deemed cost for subsequent accounting is the fair value at the date of change in use. For a transfer from owner-occupied property to investment property, the property is accounted for in accordance with the accounting policy for property, plant and equipment set out in Note 2.3(e) up to date of change in use.

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(h) Foreign Currencies

(i) Functional and presentation currency

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

(ii) Foreign currency transactions

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

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

Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit or loss for the period except for the differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in equity. Exchange differences arising from such non-monetary items are also recognised directly in equity.

The principal exchange rates for every unit of foreign currency ruling at balance sheet date are as follows :-

2011 2010 RM RM

United States Dollar 3.18 3.08Euro Dollar 4.11 4.08Australian Dollar 3.23 3.14Brunei Dollar 2.44 2.43

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(h) Foreign Currencies

(iii) Foreign operations

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

(i) Borrowing Costs

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

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

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

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

(j) Impairment of Non-financial Assets

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

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

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

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

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(j) Impairment of Non-financial Assets (cont’d)

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

(k) Financial Assets

Financial assets are recognised in the statements of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument.

When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs.

The Group and the Company determine the classification of their financial assets at initial recognition, and the categories include financial assets at fair value through profit or loss, loans and receivables, held to-maturity investments and available-for-sale financial assets.

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

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

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

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

(ii) Loans and receivables

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

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.

Loans and receivables are classified as current assets, except for those having maturity dates later than 12 months after the reporting date which are classified as non-current.

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(k) Financial Assets (cont’d)

(iii) Available-for-sale financial assets

Available-for-sale financial assets are financial assets that are designated as available for sale or are not classified as financial assets at fair value through profit or loss, loans and receivables or held to maturity.

After initial recognition, available-for-sale financial assets are measured at fair value. Any gains or losses from changes in fair value of the financial assets are recognised in other comprehensive income, except that impairment losses, foreign exchange gains and losses on monetary instruments and interest calculated using the effective interest method are recognised in profit or loss. The cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment when the financial asset is derecognised. Interest income calculated using the effective interest method is recognised in profit or loss. Dividends on an available-for-sale equity instrument are recognised in profit or loss when the Group and the Company’s right to receive payment is established.

Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less impairment loss.

Available-for-sale financial assets are classified as non-current assets unless they are expected to be realised within 12 months after the reporting date.

(iv) Held-to-maturity investment

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

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

A financial asset is derecognised when the contractual right to receive cash flows from the asset has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss.

Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace concerned. All regular way purchases and sales of financial assets are recognised or derecognised on the trade date i.e the date that the Group and the Company commit to purchase or sell the asset.

(l) Impairment of Financial Assets

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

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(l) Impairment of Financial Assets (cont’d)

(i) Trade and other receivables and other financial assets carried at amortised cost

To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Group and the Company consider factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis based on similar risk characteristics. Objective evidence of impairment for a portfolio of receivables could include the Group’s and the Company’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period and observable changes in national or local economic conditions that correlate with default on receivables.

If any such evidence exists, the amount of impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets. If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.

(ii) Unquoted equity securities carried at cost

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

(m) Cash and Cash Equivalents

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

(n) Construction Contract

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

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

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

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(n) Construction Contract (cont’d)

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

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

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

(i) Land held for property development

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

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

(ii) Property development costs

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

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

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

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

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

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

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(p) Financial Liabilities

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

Financial liabilities, within the scope of FRS 139, are recognised in the statement of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument. Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities.

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

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

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

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

(ii) Other financial liabilities

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

Trade and other payables are recognised initially at fair value, plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method.

Loans and borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently measured at amortised cost using the effective interest method. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.

A financial liability is derecognised when the obligation under the liability is extinguished. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

(q) Equity Instruments

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

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

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(r) Irredeemable Convertible Unsecured Loan Stocks ("ICULS")

The ICULS are regarded as compound financial instruments, consisting of a liability component and an equity component. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar non-convertible borrowings. The difference between the proceeds of issue of the ICULS and the fair value assigned to the liability component, representing the conversion option is included in equity. The liability component is subsequently stated at amortised cost using the effective interest rate method until extinguished on conversion, whilst the value of the equity component is not adjusted in subsequent periods.

Under the effective interest rate method, the interest expense on the liability component is calculated by applying the prevailing market interest rate for a similar non-convertible borrowings to the instrument at the date of issue. The difference between this amount and the interest paid is added to the carrying amount of the ICULS.

(s) Warrants

Warrants issued in conjunction with the Share Split and Bonus Issue during the financial year are not recognised on the date of issue.

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

(t) Share Based Payments

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

(u) Employee Benefits

(i) Short term benefits

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

(ii) Defined contribution plans

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

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(u) Employee Benefits (cont’d)

(iii) Termination benefits

Termination benefits are payable when employment is terminated before the normal retirement date or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group and the Company recognises termination benefits as liability and an expense when is demonstrably committed to either terminate the employment of current employees according to a detailed plan without possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary redundancy. In the case of an offer made to encourage voluntary redundancy, the measurement of termination benefits is based on the number of employees expected to accept the offer. Benefits falling due more than twelve month after balance sheet date are discounted to present value.

(v) Revenue

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

(i) Sale of goods

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

(ii) Construction contracts

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

(iii) Sale of properties

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

(iv) Interest income

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

(v) Rental income

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

(vi) Dividend income

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

(vii) Management fees

Management fees are recognised when services are rendered.

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(w) Income Taxes

(i) Current tax

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

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

(ii) Deferred tax

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

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

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

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

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

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

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

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

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

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

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(w) Income Taxes (cont’d)

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

(x) Contingencies

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

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

Provision for Liabilities

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

Financial Guarantee Contracts

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

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

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

2.4 Significant Accounting Estimates and Judgements

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

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

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2.4 Significant Accounting Estimates and Judgements (cont’d)

(i) Depreciation of property, plant and equipment

The costs of property, plant and equipment of the Group and of the Company are depreciated on a straight-line basis over the useful lives of the assets. Management estimates the useful lives of the plant and equipment as disclosed in Note 2.3(e). These are common life expectancies applied in the industry. Changes in the expected level of usage could have impact the useful lives and the residual values of these assets, therefore future depreciation charges could be revised. The carrying amounts of the Group’s and of the Company’s property, plant and equipment at 31 December 2011 are disclosed in Note 14 to the financial statements.

(ii) Estimation of fair value of properties

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

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

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

(iii) Impairment of goodwill on consolidation

The Group determines whether goodwill is impaired at least on an annual basis, in accordance with the accounting policy disclosed in Note 2(j). This requires an estimation of the value in use of the cash-generating units to which the goodwill is allocated. Estimating the value in use requires the Group to make an estimate of the expected future cash flows from the cash-generating unit and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The carrying amount of the Group’s goodwill on consolidation at 31 December 2011 is disclosed in Note 16 to the financial statements.

(iv) Income taxes

The Group has exposure to income taxes in numerous jurisdictions. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. Significant judgement is involved especially in determining tax base allowances and deductibility of certain expenses in determining the Group-wide provision for income taxes. The Group recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

(v) Employees' share option scheme

The fair value of share options granted during the financial year was estimated by the management pursuant to the By-Laws approved by the shareholders, taking into account the terms and conditions upon which the options were granted. The fair value of share options was measured at Grant Date. The principal assumption used in the fair value estimations is disclosed in Note 34 to the financial statements.

(vi) Impairment of property development cost and investment properties

The Group and the Company carried out the impairment test based on a variety of estimation including the value-in-use of the investment properties and property development costs. Estimating the value-in-use required the Group to make an estimate of the expected future cash flows from these assets and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The carrying amount of investment properties and property development costs of the Group and the Company as at 31 December 2011 were disclosed in Note 13 and 15 to the financial statements respectively.

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2.4 Significant Accounting Estimates and Judgements (cont’d)

(vii) Deferred tax assets

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

(viii) Construction contracts

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

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

(ix) Contingent liabilities

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

2.5. Malaysian Financial Reporting Standards ("MFRS")

On 19 November 2011, the Malaysian Accounting Standards Board (“MASB”) issued a new MASB approved accounting framework, the MFRS Framework.

The MFRS Framework is to be applied by all Entities Other Than Private Entities for annual periods beginning on or after 1 January 2012, with the exception of entities that are within the scope of MFRS 141 Agriculture (“MFRS 141”) and IC Interpretation 15 Agreements for Construction of Real Estate (“IC 15”), including its parent, significant investor and venturer.

The Group will be required to prepare financial statements using the MFRS Framework in its first MFRS financial statements for the year ending 31 December 2012. In presenting its first MFRS financial statements, the Group will be required to restate the financial position as at 1 January 2012 to amounts reflecting the application of MFRS Framework.

The Group has started a preliminary assessment of the differences between FRS and accounting standards under the MFRS Framework and are in the process of assessing the financial effects of the differences. Accordingly, the financial performance and financial position as disclosed in these financial statements for the year ended 31 December 2011 could be different if prepared under the MFRS Framework.

The Group expects to be in a position to fully comply with the requirements of the MFRS Framework for the financial year ending 31 December 2012.

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3. REVEnUE

Group Company 2011 2010 2011 2010

RM RM RM RM

Construction contracts 337,469,145 337,757,948 - -Sales of construction materials and others 41,746,083 35,147,688 - -Development revenue 18,948,866 1,131,208 - -Rental of motor vehicle and machinery 1,975,682 2,035,678 - -Servicing of motor vehicle 623,482 645,293 - -Rendering of services - - 3,240,438 3,225,376 Dividend income from subsidiaries - - 45,000,000 6,666,667 Management fees from subsidiaries - - 2,340,000 2,340,000

400,763,258 376,717,815 50,580,438 12,232,043

4. COST OF SALES

Group Company 2011 2010 2011 2010

RM RM RM RM

Construction contract costs 302,909,577 294,084,601 - -Sales of construction materials and others 47,056,977 34,020,979 - -Property development costs 18,018,185 855,339 - -Cost of services rendered 3,101,382 3,051,188 3,101,382 3,051,188

371,086,121 332,012,107 3,101,382 3,051,188

Included in the property development costs is interest on bridging loan amounting RM Nil (2010: RM17,493).

5. OTHER InCOME

Group Company 2011 2010 2011 2010

RM RM RM RM

Unrealised gain on foreign exchange 2,636,165 1,850,532 1,764,742 1,846,396 Gain on disposal of property, plant and

equipment 72,971 933,630 - -Rental income 581,660 447,658 925,596 925,596 Miscellaneous 609,918 1,312,195 980 130 Distribution from partnership 4,695,632 - - -

8,596,346 4,544,015 2,691,318 2,772,122

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6. FInAnCE InCOME

Group Company 2011 2010 2011 2010

RM RM RM RM

Interest from subsidiary company - - 2,671,601 2,035,061 AmCash interest 172,442 246,976 - - Short term deposit 793,984 139,780 - - Fixed deposit 2,710,429 2,686,226 139,932 2,827 Unit trust interest 273,703 184,460 - - Dividend income on equity investment, quoted

in Malaysia 467 384 - -Interest overdue account 1,296,165 868,583 - -Loan interest from associate 805,535 - - -Dividend from associate 942,132 304,780 - -

6,994,857 4,431,189 2,811,533 2,037,888

7. FInAnCE COSTS

Group Company 2011 2010 2011 2010

RM RM RM RM

Interest on irredeemable convertible unsecured loan stocks (ICULS) 15,751 21,405 15,751 21,405

Bank overdraft interest 135,907 - - - Hire purchase interest 3,665 43,939 - - Bankers acceptance interest - 7,313 - - Loan interest - others 2,671 1,614 - - Others 247,004 238,092 766 13,162

404,998 312,363 16,517 34,567

8. PROFIT BEFORE TAXATIOn

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

Group Company 2011 2010 2011 2010

RM RM RM RM

Directors' remuneration 3,167,084 2,804,204 761,600 313,600 Auditors' remuneration - statutory audit 160,900 124,792 16,000 20,000 - other services 7,000 7,000 7,000 7,000 - under provision 31,500 - - - Depreciation of property, plant and equipment 5,348,434 5,110,006 549,447 486,340 Property, plant and equipment written off 175,653 111,706 - - Rental of premises 1,963,908 814,740 394,368 394,368 Rental of vehicle, heavy machinery and

equipment 936,408 409,715 40,000 56,000 Inventories written off - 74,346 - - Share of loss from joint venture - 279,165 - -

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8. PROFIT BEFORE TAXATIOn (COnT'D)

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

Group Company 2011 2010 2011 2010

RM RM RM RM

Impairment on revaluation of investment properties 888,731 - - -

Distribution of loss from partnership - 1,087,206 - - Amortisation of leasehold land 5,891 5,891 - - Bad debts written off - 2,053,813 - - Unrealised loss/(gain) on foreign exchange (2,636,165) 316,335 (1,764,742) (1,846,396)Employees benefits expense 29,564,583 27,706,458 7,366,049 6,371,388 Non - executive directors' remuneration 91,000 84,000 91,000 84,000 Rental income (581,660) (447,658) (925,596) (925,596)Gain on disposal of property, plant and

equipment (72,971) (933,630) - -

9. EMPLOYEE BEnEFITS EXPEnSES

Group Company 2011 2010 2011 2010

RM RM RM RM

Wages and salaries 26,962,140 25,384,792 6,750,897 5,763,755 Social security contributions 175,383 152,838 19,997 20,808 Contributions to defined contribution plan 2,427,060 2,168,828 595,155 586,825

29,564,583 27,706,458 7,366,049 6,371,388

Included in employee benefits expense of the Group and of the Company are executive directors’ remuneration amounting to RM3,167,084 (2010: RM2,804,204) and RM761,600 (2010: RM313,600) respectively as further disclosed in Note 10.

10. DIRECTORS' REMUnERATIOn

Group Company 2011 2010 2011 2010

RM RM RM RM

Executive directors' remuneration (Note 8):Salary 2,187,200 1,712,800 520,000 280,000 Other emoluments 979,884 1,091,404 241,600 33,600

3,167,084 2,804,204 761,600 313,600

Non-executive directors' remuneration (Note 8):Fees 84,000 84,000 84,000 84,000 Other emoluments - Bonus 7,000 - 7,000 -

91,000 84,000 91,000 84,000

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10. DIRECTORS’ REMUnERATIOn (COnT’D)

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

Number of Directors 2011 2010

Executive directors:RM950,000 - RM1,500,000 1 - RM850,000 - RM900,000 - 1 RM700,000 - RM800,000 1 - RM350,000 - RM400,000 - 1 RM50,000 - RM100,000 2 -

Non-Executive directors:RM20,000 - RM30,000 2 2 RM31,000 - RM40,000 1 1

11. InCOME TAX EXPEnSE

Group Company 2011 2010 2011 2010

RM RM RM RM

Current income tax 3,060,105 7,134,174 482,311 2,012,647 Foreign taxation 1,364,220 176,623 - -Transferred to deferred taxation (Note 21) (284,801) (379,315) (85,572) (65,999)Over provision in prior years:

Malaysian income tax (562,846) (83,242) (27,898) -

Total income tax expense 3,576,678 6,848,240 368,841 1,946,648

Current income tax is calculated at the statutory tax rate of 25% (2010: 25%) of the estimated assessable profit for the year. Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions. During the current financial year, the income tax rate applicable to subsidiaries in Australia is at 30%.

The Company has unabsorbed losses and unabsorbed capital allowances of approximately RM78,758 (2010: RM78,758) and RM1,008,836 (2010 : RM709,791) respectively as at 31 December 2011 for offsetting against future taxable income.

A reconciliation of income tax expense applicable to profit before taxation at the statutory income tax rate to income tax expense at the effective income tax rate of the Group and of the Company is as follows:

2011 2010 Group RM RM

Profit before taxation 16,558,173 23,039,896

Taxation at Malaysian statutory tax rate of 20% and 25% (2010: 20% and 25%) 13,664,625 5,635,986 Foreign tax 1,364,220 176,623 Overprovision in prior years (562,846) (83,242)Income not subject to tax (12,466,638) (828,096)Expenses not deductible for tax purposes 1,579,952 1,946,321 Underprovision of deferred tax (3,445) (1,500)Deferred tax asset not recognised in respect of current year's tax losses 810 2,148

Income tax expense for the year 3,576,678 6,848,240

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11. InCOME TAX EXPEnSE (COnT'D)

2011 2010 Company RM RM

Profit before taxation 47,158,219 9,331,098

Taxation at Malaysian statutory tax rate of 25% (2010: 25%) 11,789,555 2,332,775 Group relief claim 287,558 -Income not subject to tax (11,691,186) (461,599)Over provision in prior years (27,898) -Expenses not deductible for tax purposes 10,812 75,472

Income tax expense for the year 368,841 1,946,648

12. EARnInGS PER SHARE

(a) Basic

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

2011 2010 RM RM

Profit attributable to ordinary equity holders of the Company 12,981,495 16,191,656

Weighted average number of ordinary shares in issue 465,670,518 462,471,683

2011 2010 sen sen

Basic earning per share for:Profit for the year 2.79 3.50

The comparative basic earnings per share has been restated to take into account the effect of the diluted shares during the financial year.

(b) Diluted

For the purposes of calculating diluted earnings per share, the profit for the year attributable to ordinary equity holders of the Company and the weighted average number of ordinary shares in issue during the financial year have been adjusted for the dilutive effects of all potential ordinary shares, i.e. Irredeemable Convertible Unsecured Loan Stocks (“ICULS”), Warrants, Share Split, Bonus Issue and share options granted to employees and directors.

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12. EARnInGS PER SHARE (COnT’D)

(b) Diluted (cont’d)

2011 2010 RM RM

Profit from continuing operations attributable to ordinary equity holders of the Company 12,981,495 16,191,656

After-tax effect of interest on ICULS 726 3,778

Profit attributable to ordinary equity holders of the Company 12,982,221 16,195,434

Weighted average number of ordinary shares in issue 465,670,518 462,471,683 Effects of dilution:

ICULS 2,603,849 1,211,240 Share options 2,497,210 974,140 Warrants 20,866,830 9,690,649

Adjusted weighted average number of ordinary shares in issue and issuable 491,638,407 474,347,712

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

2011 2010 sen sen

Profit for the year 2.64 3.41

13. InVESTMEnT PROPERTIES

Group 2011 2010 sen sen

At 1 January 18,563,332 10,700,500 Reclassified from assets held for sale - 7,222,206 Net loss from fair value adjustments (888,731) -Transfer from inventories - 438,300 Additions 117,073 202,326

At 31 December 17,791,674 18,563,332

Valuation of Investment Properties

Investment properties are stated at fair value, which have been determined based on valuations at the reporting date. Valuations were performed on 20 and 26 July 2011 by KGV-Lambert Smith Hampton (Johor) Sdn Bhd, accredited independent valuers with recent experience in the location and category of properties being valued. The valuations are based on the income method that makes reference to estimated market rental values and equivalent yields.

Properties Pledged as Security

Certain investment properties of the Group amounting to RM4,746,000 (2010: RM4,995,000) are pledged to secure bank facilities. The Group did not utilised any of the facilities at the end of the financial year.

65



14.

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66



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Net

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1 D

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2010

1,

080,

156

1,12

4,78

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837

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1,79

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15,

381

521

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67



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

At 31 December 2011 - Company

Furniture Office and fittings equipment Renovation Total

RM RM RM RM

At 1 January 2011 2,043,088 692,406 1,923,604 4,659,098 Additions 6,560 10,307 13,415 30,282 Reversal - - - - Disposal - - - - Reclassification 5,760 55,246 - 61,006

At 31 December 2011 2,055,408 757,959 1,937,019 4,750,386

Accumulated Depreciation

At 1 January 2011 164,040 145,192 177,108 486,340 Charge for the year 205,322 151,077 193,048 549,447 Reversal - - - - Disposal - - - - Reclassification 5,760 55,246 - 61,006

At 31 December 2011 375,122 351,515 370,156 1,096,793

Net Carrying Amount

At 31 December 2011 1,680,286 406,444 1,566,863 3,653,593

At 31 December 2010 - Company

Furniture Office and fittings equipment Renovation Total

RM RM RM RM

At 1 January 2010 - - - - Additions 2,043,088 692,406 1,923,604 4,659,098 Reversal - - - - Disposal - - - - Written off - - - -

At 31 December 2010 2,043,088 692,406 1,923,604 4,659,098

Accumulated Depreciation

At 1 January 2010 - - - - Charge for the year 164,040 145,192 177,108 486,340 Reversal - - - - Disposal - - - - Written off - - - -

At 31 December 2010 164,040 145,192 177,108 486,340

Net Carrying Amount

At 31 December 2010 1,879,048 547,214 1,746,496 4,172,758

68



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

(a) Revaluation

Certain freehold and leasehold land and buildings of a subsidiary company were revalued by an independent professional valuer using the open market valuation basis in year 2009 and 2000. The carrying amount of land and buildings were adjusted to reflect the revaluations and the resultant surpluses were credited to revaluation reserve. 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 :-

2011 2010 RM RM

Leasehold land 452,815 464,303 Freehold land and buildings 229,400 235,600 Leasehold land and buildings 496,897 511,496

1,179,112 1,211,399

(b) Security

Certain land and buildings of a subsidiary company with a net carrying value of RM1,364,394 (2010:RM1,395,885) have been charged to financial institutions as security for various credit facilities granted to the subsidiary company.

(c) Assets Acquired under Hire Purchase Arrangements

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

2011 2010 RM RM

Motor vehicles - 1,350,353

15. PROPERTIES HELD FOR DEVELOPMEnT AnD PROPERTY DEVELOPMEnT COSTS

(a) Land Held for Property Development

Freehold Freehold land Group land and Building Total

RM RM RM Cost

At 1 January 2011 19,781,051 251,658 20,032,709 Additions 10,460 - 10,460 Transfer to property development costs - - -

At 31 December 2011 19,791,511 251,658 20,043,169

Cost

At 1 January 2010 19,706,266 251,658 19,957,924 Additions 74,785 - 74,785 Transfer to property development costs - - -

At 31 December 2010 19,781,051 251,658 20,032,709

69



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

(b) Property Development Costs

Group 2011 2010

RM RM

Brought forward - Land 5,943,000 5,943,000 - Development costs 103,222,616 102,166,374

109,165,616 108,109,374 Incurred during the year

- Development costs 122,955 1,056,242

109,288,571 109,165,616 Recognised in income statement

Brought forward (98,937,000) (98,937,000)Current year - -

(98,937,000) (98,937,000)

Total 10,351,571 10,228,616

Included in property developments cost incurred during the financial year is profit sharing cost amounting to RM Nil (2010 : RM416,095).

16. InTAnGIBLE ASSETS

Group Goodwill Total RM RM

At 1 January 2011 9,177 9,177 Amortisation - -

At 31 December 2011 9,177 9,177

At 1 January 2010 9,177 9,177 Amortisation - -

At 31 December 2010 9,177 9,177

(a) Impairment Test for Goodwill on Consolidation

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

(b) Key Assumptions Used to Determine Recoverable Amount

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

70



17. InVESTMEnT In SUBSIDIARIES

Group Company 2011 2010 2011 2010

RM RM RM RM

Unquoted shares, at cost - - 69,420,640 69,420,640 Amounts due from subsidiaries - - 5,734,458 5,525,879

- - 75,155,098 74,946,519

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

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

Country of Incorporation

EffectiveInterest (%)

Principal Activities

2011 2010Held by the Company:

Trans Resources Corporation Sdn. Bhd.

Malaysia 100 100 Construction

TRC Land Sdn. Bhd. Malaysia 100 100 Property development

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

TRC Infra Sdn. Bhd. Malaysia 100 100 Dormant

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

** TRC International Pte Ltd Malaysia 100 100 Investment holding***

Held through subsidiaries:

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

** TRC Land (Cambodia) Limited Kingdom of Combodia

100 100 Commercial and trading operations, property investment and construction

Liputan Sutera Sdn. Bhd. Malaysia 100 100 Dormant

Held through subsidiaries :

TRC Concrete Industries Sdn. Bhd.

Malaysia 100 100 Manufacture of ready mixed concrete

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

100 - Construction and property development

** Petrobru Build Sdn. Bhd. ***

Brunei Darussalam

60 60 Dormant

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

71



17. InVESTMEnT In SUBSIDIARIES

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

* The financial statements of TRC (Aust) Pty Ltd have not been audited due to certain exemptions given under the Australian Corporations Act, 2001.

** Audited by another firm of auditors.*** The financial statements of TRC International Pte Ltd, Petrobru Build Sdn. Bhd. and TRC (B) Sdn. Bhd. have

not been consolidated with the financial statements of the Group as the Directors are of the opinion that there will be of no real value in view of the insignificant effect on the financial statements of the Group.

Acquisition of a subsidiary

Trans Resources Corporation Sdn. Bhd., a wholly-owned subsidiary of the Company has incorporated a new wholly-owned subsidiary company, named TRC (B) Sdn. Bhd. on 3 November 2011.

TRC (B) Sdn. Bhd. became a wholly-owned subsidiary of the Group upon the acquisition of 500,000 ordinary shares of RM2.46 each for a cash consideration of RM1,230,000 by Trans Resources Corporation Sdn. Bhd.

18. InVESTMEnT In ASSOCIATES

Group Company 2011 2010 2011 2010

RM RM RM RM

Unquoted shares, at cost 14,157,599 12,915,952 - -Share of post - acquisition reserves:

Share of loss of associates (2,201,613) (1,273,013) - -Share of exchange reserve 78,764 106,249 - -

12,034,750 11,749,188 - -

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

Name of Company Country of

Incorporation Principal Activity

Equity Interest

2011 2010

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

Delta Garden Limited Kingdom of Cambodia Property development 34% 26%

PetroBru (B) Sdn. Bhd. Brunei Darussalam Dormant 26% 26%

MAE Synergy Pty Ltd Australia Dormant 22.22% -

On 15 November 2011 a wholly owned subsidiary company of the Group, TRC Land (Cambodia) Limited has acquired additional 8% equity interest in the issued share capital of a Cambodian incorporated private limited company, Delta Garden Limited for the sum of USD 336,000 (RM1,056,048).

72



18. InVESTMEnT In ASSOCIATES (COnT’D)

During the financial year, Pretty Sally Holdings Pty Ltd (“PSH”) has acquired 66.67% equity interest in MAE Synergy Pty Ltd. Under the Australian Standards, PSH is not required to prepare a group consolidated financial statements because it is a proprietary limited company in Australia. The financial statements of MAE Synergy Pty Ltd have not been equity accounted for in the financial statements of the Group as the Directors are of the opinion that there will be no real value in view of the insignificant effect on the financial statements of the Group.

The financial year end of PetroBru (B) Sdn. Bhd. and Pretty Sally Holdings Pty Ltd is on 30 September and 30 June respectively. For the purpose of applying the equity method of accounting, the unaudited financial statements of the associates have been used and appropriate adjustments have been made for the effects of significant transaction between their financial period to 31 December 2011. All the associates are audited by another firm of auditors.

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

Group 2011 2010

RM RM

Assets and liabilities: Total assets 51,652,461 21,810,350

Total liabilities (62,728,820) (26,945,805)

Results: Revenue 25,596,789 20,173,712

Loss for the year (1,015,496) (687,574)

19. OTHER InVESTMEnTS

Group Company 2011 2010 2011 2010

RM RM RM RM

Investment in partnership, at cost 31,028,486 18,809,895 - -Corporate membership, at cost 144,000 144,000 - -

31,172,486 18,953,895 - -

Available-for-sale financial assets:Unit trust in Malaysia 22,183,657 21,542,242 - -Equity investments (quoted shares in

Malaysia) 13,440 11,990 - -

22,197,097 21,554,232 - -

53,369,583 40,508,127 - -

73



19. OTHER InVESTMEnTS (COnT’D)

Investment in partnership

The Group’s wholly-owned subsidiary, TRC (Aust) Pty Ltd had on 20 July 2009 executed a Call and Put Option Deed to acquire 133,334 equal undivided shares out of 400,000 equal undivided shares in a piece of vacant land known as Springridge Estate, 625 Northern Highway, Wallan, Melbourne, Australia for a total consideration of AUD8,000,000 (RM24,501,600). The consideration shall be satisfied by way of cash through three tranches of payment.

During the financial year, the Group had completed all the three tranches of payment amounting AUD 9,604,856 (RM31,028,486) [2010:AUD 6,000,000 (RM18,809,895)] plus Goods and Services Tax (GST) and other incidental costs.

20. TRADE AnD OTHER RECEIVABLES

Group Company 2011 2010 2011 2010

RM RM RM RM

CURRENT

Trade receivablesThird parties 66,406,451 76,279,585 - - Construction contracts:

Retention sums (Note 23) 18,066,229 11,272,509 - -

84,472,680 87,552,094 - -

Group Company 2011 2010 2011 2010

RM RM RM RM

Other receivablesDeposits 5,442,356 1,925,851 2,000 2,300 Prepayments 294,915 290,112 - 8,777 Tax recoverable 7,766,169 4,790,265 106,304 - Loans to associates 10,040,179 12,169,253 - - Other receivables 13,749,186 6,336,524 501 501 Other receivables, net 37,292,805 25,512,005 108,805 11,578

Total 121,765,485 113,064,099 108,805 11,578

NON-CURRENT

Other receivablesSubsidiaries - - 160,240,598 124,160,475

- - 160,240,598 124,160,475

(a) Trade Receivables

Trade receivables are non-interest bearing and are generally on 30 to 90 days (2010: 30 to 90 days) terms. They are recognised at their original invoice amounts which represent their fair values on initial recognition.

74



20. TRADE AnD OTHER RECEIVABLES

(a) Trade Receivables (cont’d)

Ageing analysis of trade receivables

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

2011 2010 RM RM

Neither past due nor impaired 49,665,001 29,823,934 1 to 30 days past due not impaired 12,594,351 24,963,600 31 to 60 days past due not impaired 15,146,225 793,293 61 to 90 days past due not impaired 835,511 6,051,232 Over 90 days past due not impaired 6,231,592 25,920,035

84,472,680 87,552,094 Impaired - -

84,472,680 87,552,094

Receivables that are past due but not impaired

The Group has trade receivables amounting to RM34,807,679 (2010: RM57,728,160) that are past due at the reporting date but not impaired.

(b) Amounts Due from Subsidiaries (Non-current)

Amount due from subsidiaries are unsecured, repayable on demand and are subject to interest of 2% - 3% (2010: 2% - 3%) per annum.

(c) Amount Due from Associates

Amount due from associates are unsecured, non-interest bearing and are repayable on demand except for the amount due from Delta Garden Limited which is subject to interest of 11% (2010: 11%) per annum and is repayable within five years.

(d) Other Receivables

Included in the other receivables is an amount of RM3,740,919 (2010:RM Nil) being deposit paid for a landed property acquired by the Group as disclosed in Note 36 to the financial statements.

75



21.

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76



22. InVEnTORIES

Group 2011 2010

RM RM

CostRaw materials 759,645 57,032 Completed properties 1,183,976 1,158,458

1,943,621 1,215,490

23. DUE FROM/(TO) CUSTOMERS On COnTRACTS

Group 2011 2010

RM RM

Construction costs incurred to date 2,049,120,992 1,871,462,148 Attributable profits 254,133,588 296,379,592

2,303,254,580 2,167,841,740

Less: Provision for foreseeable losses - -

2,303,254,580 2,167,841,740 Less : Progress billings (2,287,140,875) (2,231,453,236)

16,113,705 (63,611,496)

Due from customers on contract (Note 24) 53,807,806 19,547,248 Due to customers on contract (Note 32) (37,694,101) (83,158,744)

16,113,705 (63,611,496)

Advances received on contracts, included within trade payables (Note 31) - -

Retention sums on contract, included within trade receivables (Note 20) 18,066,229 11,272,509

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

Group 2011 2010

RM RM

Depreciation of property, plant and equipment 3,043,212 2,299,608 Project finance charges 1,023,282 397,759 Rental of premises 531,512 325,177 Hiring and transport charges 5,642,148 1,678,040 Property, plant and equipment written off 170,269 -

77



24. OTHER CURREnT ASSETS

Group Company 2011 2010 2011 2010

RM RM RM RM

Amount due from customers on contract (Note 23) 53,807,806 19,547,248 - -

Accrued billings in respect of property development costs - - - -

53,807,806 19,547,248 - -

25. CASH AnD CASH EQUIVALEnTS

Group Company 2011 2010 2011 2010

RM RM RM RM

Cash on hand and at banks 30,800,500 102,900,107 4,199,580 472,281 Deposits:

Short term deposits with licensed banks 11,700,000 1,400,000 - -Fixed deposits with licensed banks 86,772,928 96,379,974 5,120,259 230,327

Total cash and cash equivalents 129,273,428 200,680,081 9,319,839 702,608

Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods of between one day and one month depending on the immediate cash requirements of the Group, and earn interests at the respective short-term deposit rates. The weighted average effective interest rates as at 31 December 2011 for the Group were 2.6% (2010: 1.9% - 3.0%).

Fixed deposits are made for varying periods of between one month and twelve months (2010: one month and twelve months) depending on the immediate cash requirements of the Group and the Company, and earn interests at the respective fixed deposit rates. The weighted average effective interest rate as at 31 December 2011 for the Group and the Company ranges from 2.14% - 3.35% (2010: 1.9% - 3.00%).

Included in cash at banks of the Group are amounts of RM118,069 (2010: RM114,432) held pursuant to Section 7A of the Housing Developers (Control and Licensing) Act, 1966 and are restricted from use in other operations.

Deposits with other financial institutions of the Group and the Company amounting to RM64,867,575 (2010: RM48,845,301) and RM5,120,259 (2010: RM Nil) respectively are pledged as securities for borrowings (Note 30).

For the purpose of the cash flow statements, cash and cash equivalents comprise the following as at the balance sheet date :

Group Company 2011 2010 2011 2010

RM RM RM RM

Cash and bank balances 30,800,500 102,900,107 4,199,580 472,281 Short term deposits with licensed banks - 1,400,000 - -Fixed deposits with licensed banks 33,605,353 47,534,673 - 230,327 Bank overdraft (2,382,053) - - -

Total cash and cash equivalents 62,023,800 151,834,780 4,199,580 702,608

78



26. SHARE CAPITAL AnD SHARE PREMIUM

Number of ordinary shares of RM1 each

Amount

share capital (issued and

fully paid)

Share capital (issued and

fully paid) Share

premium

Total share capital and

share premium RM RM RM

1 January 2010 189,623,439 189,623,439 10,350 189,633,789

Ordinary shares issued during the year:Pursuant to ESOS 400,000 400,000 92,000 492,000 Pursuant to ICULS 224,400 224,400 - 224,400

At 31 December 2010 190,247,839 190,247,839 102,350 190,350,189

1 January 2011 190,247,839 190,247,839 102,350 190,350,189

Ordinary shares issued during the year:Pursuant to Warrants 467,500 467,500 - 467,500 Pursuant to ESOS 3,942,000 3,942,000 906,660 4,848,660 Pursuant to ICULS 126,300 126,300 - 126,300

Before Share Split and Bonus Issue 194,783,639 194,783,639 1,009,010 195,792,649

Number of ordinary shares of RM0.50 each

After Share Split and Bonus Issue: 389,567,278 194,783,639 1,009,010 195,792,649 Bonus Issue 77,913,423 38,956,712 (668,606) 38,288,106 Pursuant to ESOS 261,000 130,500 5,220 135,720 Expenditure written off - - (340,604) (340,604)

At 31 December 2011 467,741,701 233,870,851 5,020 233,875,871

During the financial year, the Company increased its issued and paid-up ordinary share capital from RM190,247,839 to RM233,870,851 by way of :

(i) the issuance of 126,300 ordinary shares of RM1.00 each at par arising from conversion of Irredeemable Convertible Unsecured Loan Stocks (“ICULS”);

(ii) the issuance of 3,942,000 ordinary shares of RM1.00 each and 261,000 ordinary shares of RM0.50 each for cash pursuant to the Company’s Employee Share Options Scheme (“ESOS”) at an exercise price of RM1.23 and RM0.52 per ordinary share respectively;

(iii) the issuance of 467,500 ordinary shares of RM1.00 each through the exercise of 2007/2017 Warrants at an exercise price of RM1.00 per share for cash.

(iv) subdividing its existing 194,783,639 ordinary shares of RM1.00 each into 389,567,278 ordinary shares of RM0.50 each (“Share Split”);

79



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

(v) after the Share Split, the Company issued bonus shares of up to 77,913,423 new ordinary shares of RM0.50 each, which were credited as fully paid up by the Company, on the basis of one (1) Bonus Shares for every five (5) shares held by the entitled shareholders of the Company after the Share Split (“Bonus Issue”); and

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

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

Number of ordinary shares of AmountRM0.50 each RM1 each

2011 2010 2011 2010 Authorised share capital RM RM

At 1 January 500,000,000 500,000,000 500,000,000 500,000,000 Share split during the year 500,000,000 - - -

At 31 December 1,000,000,000 500,000,000 500,000,000 500,000,000

The authorised capital of the Company which is RM500,000,000 divided into 500,000,000 ordinary shares of RM1.00 each has been altered by subdividing the 500,000,000 ordinary shares of RM1.00 each into 1,000,000,000 ordinary shares of RM0.50 each as a result of the Share Split.

Warrants 2007/2017

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

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

A total of 467,500 warrants were exercised before the Share Split and Bonus Issue Exercise.

After the Share Split and Bonus Issue of shares, the exercise price of the existing Warrants 2007/2017 (Warrants A) of 36,141,620 and 50,598,249 additional Warrants A were adjusted to RM0.50 each. No Warrants A were exercised during the period and a total of 86,739,869 warrants remained outstanding as at 31 December 2011.

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

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

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

(ii) each Warrants entitles the registered holders at any time during the exercise period of ten (10) years from the date of first issue of the Warrants to subscribe for one (1) ordinary share of RM1.00 at an exercise price of RM1.00;

(iii) the exercise price and/or the number of the Warrants outstanding may be adjusted in accordance with the provisions set out in the Deed Poll;

(iv) upon expiry of the exercise period, any unexercised rights will lapsed and ceased to be valid for any purposes; and

80




Warrants 2007/2017 (cont’d)

(v) The new ordinary shares to be allotted and issued upon exercise of the Warrants shall rank pari passu in all respects with the existing ordinary shares of the Company except that they will not be entitled to any dividends, rights, allotments and other distributions the entitlement date of which precedes or falls on the relevant conversion date.

Set out below are details of the free warrants issued by the Company:

Number of warrants 2007/2017Issuance Expiry Exercise At Share Split and At date date price 1.1.2011 Exercised Bonus Issue 31.12.2011

RM/share

20.1.2007 21.1.2017 0.50 36,609,120 (467,500) 50,598,249 86,739,869

Warrants 2011/2016

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

Each warrants is exercisable into one new ordinary share of RM0.50 each at the exercise price of RM0.61 per ordinary share. No Warrants B were exercised during the financial year.

The salient features of the Warrants 2011/2016 are as follows:-

(i) 93,495,995 free Warrants are issued in registered form and constituted by a Deed Poll dated 12 July 2011 executed by the Company (“Deed Poll”). Each Warrant carries the entitlement, at any time during the Exercise Period, to subscribe for one (1) new Subdivided Shares at the Exercise Price of RM0.61, subject to adjustment in accordance with the provisions of the Deed Poll;

For the purpose of trading on the Bursa Securities, one (1) board lot of Warrants shall comprise 100 Warrants carrying the right to subscribe for 100 new Subdivided Shares at any time during the Exercise Period;

(ii) each Warrants entitles the registered holders at any time during the exercise period of five (5) years from the date of first issue of the Warrants to subscribe for one (1) new subdivided share of RM0.50 at an exercise price of RM0.61;

(iii) the exercise price and/or the number of the Warrants outstanding may be adjusted in accordance with the provisions set out in the Deed Poll;

(iv) upon expiry of the exercise period, any unexercised rights will lapsed and ceased to be valid for any purposes; and

(v) The new ordinary shares to be allotted and issued upon exercise of the Warrants shall rank pari passu in all respects with the existing ordinary shares of the Company except that they will not be entitled to any dividends, rights, allotments and other distributions the entitlement date of which precedes or falls on the relevant conversion date.

81




Warrants 2011/2016 (cont’d)

Set out below are details of the bonus issue of warrants issued by the Company:

Number of warrants 2011/2016Issuance date Expiry date Exercise price At 1.1.2011 Exercised At 31.12.2011

RM/share

25.7.2011 25.7.2016 0.61 93,495,995 - 93,495,995

27. IRREDEEMABLE COnVERTIBLE UnSECURED LOAn STOCKS

On 22 January 2007, the Company issued RM30,800,000 nominal value of 5 - year 5% Irredeemable Convertible Unsecured Loan Stocks (“ICULS”) at a nominal value of RM1.00 each for working capital purposes.

Consequential to the Bonus Issue in 2008, an additional 247,433 new TRC ordinary shares would be issued by the Company upon the full conversion of the existing ICULS pursuant to the adjustments in accordance with the provision under the Trust Deed executed by the Company on 15 November 2006 constituting the ICULS (“Trust Deed”).

Consequential to Share Split and Bonus Issue, the conversion ratio for every RM1.00 nominal value of ICULS was adjusted from 1.20 to 2.88. The ICULS holders shall be entitled to the issuance of 1.44 new Subdivided Shares upon conversion of every RM1.00 nominal value of ICULS at the revised conversion price of RM0.50. Based on the outstanding nominal value of the ICULS of RM904,117, a total of 2,603,849 new Subdivided Shares, including an additional 1,518,916 new shares, would be issued by the Company upon the full conversion of the existing ICULS.

As at 31 December 2011, 29,962,493 ordinary shares have been issued pursuant to the conversion of RM29,895,883 nominal amount of ICULS issued at 100% of its nominal value. There are remaining RM904,117 nominal amount of ICULS still not converted as at 31 December 2011.

The principal terms of the ICULS are as follows:-

(i) Conversion rights - The registered holders will have the right at any time during the Conversion Period to convert the ICULS into fully paid new TRCS ordinary shares at the Conversion Price.

(ii) Conversion price and mode - Conversion can be done by surrendering the ICULS with an aggregate nominal value equivalent to the conversion price of RM1.00 per share. Consequential to the Share Split and Bonus Issue, the conversion price has been adjusted to RM0.50 per share. There will be no cash element involved.

(iii) Conversion period - The conversion of the ICULS into new ordinary shares of the Company may take place at the option of the holders during the tenure of the ICULS.

(iv) The ICULS shall bear a coupon rate of 5% per annum payable annually in arrears on 31 December.

(v) The ICULS is unsecured and not redeemable for cash. All remaining ICULS at the end of the 5 year tenure shall be automatically and mandatorily converted into new ordinary shares of the Company at the conversion price.

(vi) The new ordinary shares to be allotted and issued upon conversion of the ICULS shall rank pari passu in all respects with the existing ordinary shares of the Company except that they will not be entitled to any dividends, rights, allotments and other distributions the entitlement date of which precedes or falls on the relevant conversion date.

The proceeds received from the issue of the ICULS have been split between the liability component and the equity component, representing the fair value of the conversion option. The ICULS are accounted for in the balance sheets of the Group and of the Company as follows:

82



27. IRREDEEMABLE COnVERTIBLE UnSECURED LOAn STOCKS (COnT’D)

The movements of the ICULS during the year are as follows:

Group/Company Equity Liability

component component Total RM RM RM

Balance at 1 January 2010 1,022,017 131,175 1,153,192 Conversion of ICULS into ordinary shares (159,700) (70,098) (229,798)

Balance at 31 December 2010 862,317 61,077 923,394

Balance at 1 January 2011 862,317 61,077 923,394 Conversion of ICULS into ordinary shares (125,763) (14,853) (140,616)

Balance at 31 December 2011 736,554 46,224 782,778

The liability component is further analysed as follows:-

Group/Company 2011 2010

RM RM

Current (Note 31) :- not later than one year 42,384 47,565

Non-current - later than one year but not later than five years 3,840 13,512

46,224 61,077

The interest charged for the year is calculated by applying an effective interest rate of 8% (2010: 8%) to the liability component for the twelve month period since the loan stocks were issued.

Foreign Currency Asset

Translation Revaluation Fair Value Group Reserve Reserve Reserve Total

RM RM RM RM

At 1 January 2011 155,134 648,023 716,297 1,519,454

Other comprehensive income: Group 234,976 - 362,611 597,587 Associates (27,485) - - (27,485)

At 31 December 2011 362,625 648,023 1,078,908 2,089,556

83



28. OTHER RESERVES

Foreign

Currency Asset Translation Revaluation Fair Value

Group Reserve Reserve Reserve Total RM RM RM RM

At 1 January 2010, as previously stated 1,041 648,023 - 649,064 Effects of adopting FRS 139 - - 413,169 413,169

At 1 January 2010 (restated) 1,041 648,023 413,169 1,062,233

Other comprehensive income: Group 46,123 - 303,128 349,251 Associates 107,970 - - 107,970

At 31 December 2010 155,134 648,023 716,297 1,519,454

(a) Asset Revaluation Reserve

The asset revaluation reserve is used to record increases in the fair value of the asset and decreases to the extent that the such decrease relates to an increase on the same asset previously recognised in equity.

(b) Foreign Currency Translation Reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency. It is also used to record the exchange differences arising from monetary items which form part of the Group’s net investment in foreign operations, where the monetary item is denominated in either the functional currency of the reporting entity or the foreign operation.

(c) Fair Value Reserve

Fair value reserve represents the cumulative fair value changes, net of tax, of available-for-sale financial assets until they are disposed or impaired.

29. RETAInED EARnInGS

As at 31 December 2011, the Company has tax exempt profits available for distribution of approximately RM5,242,666 (2010: RM5,242,666), subject to the agreement of the Inland Revenue Board.

Effective 1 January 2008, the Company is given the option to make an irrevocable election to move to a single tier system or continue to use its credit under Section 108 of the Income Tax Act, 1967 for purpose of dividend distribution until the tax credit is fully utilised or latest by 31 December 2013. The Company has not opted to move to a single tier system and as a result, the Company can utilise the tax credit balance in the Section 108 of the Income Tax Act, 1967 as at 31 December 2011 to frank the payment of net dividends out of its retained earnings.

The breakdown of the retained earnings of the Group and of the Company as at 31 December 2011 into realised and unrealised earnings is presented as follows, in accordance with the directive issued by Bursa Malaysia Securities Berhad and prepared in accordance with Guidance on Special Matter No.1, Determination of Reliased and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants:-

84



29. RETAInED EARnInGS (COnT’D)

Group Company 2011 2010 2011 2010

RM RM RM RM

Total retained earnings of the Company and its subsidiaries: Realised 118,755,730 155,953,298 8,986,205 9,658,379 Unrealised 6,282,123 (445,096) 4,719,948 2,870,282

Total share of retained earnings from associates: Realised (2,201,613) (1,273,013) - -Unrealised - - - -

122,836,240 154,235,189 13,706,153 12,528,661 Add: Consolidation adjustments (49,963,114) (48,731,672) - -

Retained earnings as per financial statements 72,873,126 105,503,517 13,706,153 12,528,661

30. BORROWInGS

Group Company 2011 2010 2011 2010

RM RM RM RM

Secured:

Short term borrowings Bankers’ acceptance 2,213,000 - - - Bank overdrafts 2,382,053 - - - Hire purchase payables (Note 33) - 366,519 - -

Total borrowings 4,595,053 366,519 - -

(a) Bank Overdrafts

The bank overdrafts of the subsidiary companies are subject to interest at rates ranging from 1.0% to 1.25% (2010: 1.0% to 1.25%) per annum above the banks’ base lending rates.

(b) Bankers’ Acceptance

The bankers’ acceptance are subject to commissions at rates of approximately 0.75% (2010: 0.75%) per annum and interest rates of 1.5% (2010: 1.5%) per annum above the banks’ base lending rate.

(c) Other Short Term Trade Facilities

The domestic factoring facility is subject to a flat charge of RM Nil (2010: RM Nil).(i) Existing Open All Monies Facilities Agreement;(ii) Legal Deed of Assignment of Contract Proceeds;(iii) Letter of Irrevocable Instruction by the subsidiary;(iv) certain fixed deposits of the subsidiary; (v) a freehold land and building and a leasehold land and building belonging to the subsidiary;(vi) a fixed and floating charge over the subsidiary’s present and future assets;(vii) a corporate guarantee by the Company; and(viii) jointly and personally guarantee by the directors of the subsidiary.

(d) Obligations under finance leases

These obligations are secured by a charge over the leased assets (Note 14). The average discount rate implicit in the leases ranges from 2.20% - 3.75% (2010:2.20% -3.75%) per annum.

85



31. TRADE AnD OTHER PAYABLES

Group Company 2011 2010 2011 2010

RM RM RM RM

Trade payablesThird parties 76,847,736 63,546,287 - -Advances received (Note 23) - - - -

Trade payables, net 76,847,736 63,546,287 - -

Other payablesVendor - associate acquired 5,865,000 5,865,000 - -ICULS

- liability component (Note 27) 42,384 47,565 42,384 47,565 Accruals 542,709 2,060,309 95,397 78,931 Other payables 8,510,330 3,596,269 186,179 173,676

14,960,423 11,569,143 323,960 300,172

Total trade and other payables 91,808,159 75,115,430 323,960 300,172

Trade payables are non - interest bearing and the normal trade credit terms granted to the Group range from one month to three months.

32. OTHER CURREnT LIABILITIES

Group 2011 2010

RM RM

Amount due to customers on for contract (Note 23) 37,694,101 83,158,744 Progress billings in respect of property development - -

37,694,101 83,158,744

33. HIRE PURCHASE PAYABLES

Future minimum lease payments under finance leases together with the present value of the net minimum lease payments are as follows:

Group 2011 2010

RM RM

Future minimum lease payments: Not later than one year - 371,229Later than one year and not later than two years - -

Total future minimum lease payments - 371,229 Less : Future finance charges - (4,710)

Present value of finance lease liabilities - 366,519

86



33. HIRE PURCHASE PAYABLES (COnT’D)

Group 2011 2010

RM RM

Analysis of present value of finance lease liabilities: Not later than one year - 366,519 Later than one year and not later than two years - -

Amount due within 12 months - 366,519 Amount due after 12 months - -

- 366,519

34. EMPLOYEE BEnEFITS

Employee Share Options Scheme

The Company has established a Share Options Scheme for Employees and Directors (“The Scheme”) pursuant to the By-Laws which was approved by the shareholders at the Extraordinary General Meeting held on 30 April 2004. The Scheme shall remain in force for a duration of five (5) years commencing from 22 June 2004. The Board of Directors has approved the extension of the duration of ESOS for another five years from the expiry of the initial ESOS period (21 June 2009).

The salient features and other terms of the Scheme are as follows:

(i) the maximum number of the Company’s new shares to be made available under the Scheme shall not exceed fifteen percent (15%) of the issued and paid up capital of the Company;

(ii) not more than fifty percent (50%) of the Company’s shares available under the Scheme shall be allocated to Directors and senior management;

(iii) not more than ten percent (10%) of the Company’s shares available under the Scheme shall be allocated to individual Director or eligible employees, who either singly or collectively through person connected to them holds twenty percent (20%) or more of the issued and paid-up capital of the Company.

(iv) The eligible participants shall include eligible employees and Directors who as at the offer date have satisfied the following criteria :-a) is a confirmed employee or appointed director within the Group;b) has attained at least age of eighteen (18);c) is employed full time and on the payroll of the Group;d) is under such category and of such criteria that the option committee may from time to time decide.

(v) The option price for each share shall be based on the weighted average market price (WAMP) of the Company’s share traded on Main Market of Bursa Malaysia Securities Berhad for the five (5) trading days preceding the date of offer with a discount if any, that does not exceed ten percent (10%) from the five (5) day of the Company’s share price.

(vi) Upon exercise of the options, the new ordinary shares of the Company to be issued pursuant to the Scheme will, upon allotment and issue, rank pari passu in all respects with the existing ordinary shares of the Company; and

(vii) The persons to whom the options have been granted have no right to participate by virtue of the option in any share issue of any other company.

87



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88



34. EMPLOYEE BEnEFITS (COnT’D)

Employee Share Options Scheme (cont’d)

Number of share options Granted After

before share adjustment duesplit and to share split

No. Name of options holders bonus issue and bonus issue

1. Dato’ Sri Sufri Bin Hj Mohd Zin 900,000 2,160,000 2. Dato’ Abdul Aziz Bin Mohamad 850,000 840,000 3. Dato’ Khoo Teng San 850,000 960,000 4. Loh Leh Wong 850,000 1,056,000 5. Yeoh Sook Keng 850,000 1,080,000 6. Abdul Aziz Bin Mohamed 990,000 1,696,800 7. Muhamad Shahaizi Bin Abdul Hai 480,000 912,000 8. Tan Khoon Kian 480,000 -

Details relating to options exercised during the period are as follows :

Fair value of shares Exercise Number of shares issuedExercise period at share issue date price

RM/share RM/share 2011 2010

1 January 2011 to 14 July 2011 1.24 - 1.83 1.23 3,942,000 400,000

15 July 2011 to 31 December 2011 0.54 - 0.71 0.52 261,000 -

Group/Company 2011 2010

RM RM

Ordinary share capital - at par 4,072,500 400,000 Share premium 911,880 92,000

Proceeds received on exercise of options 4,984,380 492,000

Fair value at exercise date of shares issued 6,235,110 556,550

The fair value of shares issued on the exercise of options is the mean market price at which the Company’s shares were traded on the Main Market of Bursa Malaysia Securities Berhad on the day prior to the exercise of the options.

35. DIVIDEnDS

Dividends in respect of year Dividends recognised in year2011 2010 2011 2010

RM RM RM RM Recognised during the year:First and final dividend for 2010: 5 sen per

share less 25% taxation on 194,739,439 ordinary shares (3.75 sen net per ordinary share) - 7,302,730 7,302,730 5,688,790

89



35. DIVIDEnDS (COnT’D)

At the forthcoming Annual General Meeting, a provisional dividend in respect of the financial year ended 31 December 2011, of 2 sen per share less 25% taxation on 475,502,723 ordinary shares amounting to a dividend payable of RM7,132,541 (1.5 sen net per ordinary share) will be proposed for shareholders’ approval. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in equity as an appropriation of retained earnings in the financial year ending 31 December 2012.

36. CAPITAL COMMITMEnTS

Group Company 2011 2010 2011 2010

RM RM RM RM

Approved and contracted for:Purchase of landed property in Australia 33,435,675 - - -Investment in partnership - 6,270,800 - -

The Group had acquired a landed property known as 588 Swan Street, Richmond, Melbourne, Australia for a total purchase consideration of AUD 11,500,000 (RM36,886,250) to be satisfied by cash.

The above investment in partnership is in respect of Call and Put Option Deed contracted by the Group on 20 July 2009 as disclosed under Note 19.

During the financial year, the Group had completed all the three tranches of payment amounting AUD 9,604,856 (RM31,028,486) [2010:AUD 6,000,000 (RM18,809,895)] plus Goods and Services Tax (GST).

37. COnTInGEnT LIABILITIES

Group Company 2011 2010 2011 2010

RM RM RM RM

Secured:Bank guarantees Performance bond 195,399,623 109,721,929 195,399,623 109,721,929 Advance bond - 10,000,000 - 10,000,000 Tender bond 1,000,000 - 1,000,000 -Supplier / Maintenance / Security 372,500 644,000 372,500 644,000

196,772,123 120,365,929 196,772,123 120,365,929

The bank guarantees are secured by fixed deposits of the Group and the Company and a corporate guarantee by the Company and a subsidiary company.

As at the balance sheet date, the Group has unutilised bank guarantees amounting to RM124,941,456 (2010: RM142,649,071).

90



37. COnTInGEnT LIABILITIES (COnT’D)

Group Company 2011 2010 2011 2010

RM RM RM RM

Unsecured :Corporate guarantees given to banks for credit

facilities granted to subsidiaries - - 146,997,123 118,090,929

Corporate guarantees given to banks for credit facilities granted to holding company 50,000,000 50,000,000 - -

As of 31 December 2011, the Group had available RM283,600,000 (2010: RM267,485,000) of undrawn committed borrowing facilities in respect of which all conditions precedent had been met.

38. RELATED PARTY TRAnSACTIOnS

(a) Sale and Purchase of Goods and Services

In addition to the related party information disclosed elsewhere in the financial statements, the following significant transactions between the Group and related parties took place at terms agreed between the parties during the financial year.

Group Company 2011 2010 2011 2010

RM RM RM RM

Subsidiaries: Sale of finished goods and services 7,858,431 5,492,092 - -Sub-contractors costs 442,690 6,042,500 - -Supply of labour 1,055,755 358,644 3,240,438 3,225,376 Management fees received 2,354,641 2,394,908 2,340,000 2,340,000 Rental charges 1,319,964 499,731 925,596 925,596 Hiring cost 302,378 218,392 - -Share of joint venture losses - 279,165 - -Interest charges 2,688,050 2,386,153 2,671,601 2,035,061 Dividend 45,000,000 6,666,667 45,000,000 6,666,667

Associates: Sub-contractors costs - 834,123 - -Management fees received 396,958 186,074 - -Interest charges - 122,970 - -Dividend paid by associate 942,132 304,780 - -

The directors are of the opinion that all the transactions above have been entered into in the normal course of business and have been established on terms and conditions that are not materially different from those obtainable in transactions with unrelated parties.

91



38. RELATED PARTY TRAnSACTIOnS (COnT’D)

(b) Compensation of Key Management Personnel

Group Company 2011 2010 2011 2010

RM RM RM RM

Salary 2,187,200 1,712,800 520,000 280,000 Other emoluments 979,884 1,091,404 241,600 33,600

Directors’ interest in employee share options scheme

During the financial year before the Share Split and Bonus Issue Exercise, one of the directors has exercised the options for 500,000 (2010: Nil) ordinary shares of the Company at a price of RM1.23 with a total consideration of RM615,000 (2010:RM Nil) paid to the Company. There was no further exercise of the options by the directors after the Share Split and Bonus Issue Exercise.

Consequential to the Share Split and Bonus Issue Exercise, the balance outstanding of the share options granted to the two executive directors of the Company is 3,000,000 units at the exercise price of RM0.52.

At the financial year end, the total number of outstanding balance of share options granted by the Company to the above-mentioned directors amounts to 3,000,000 units. No share options have been granted to the Company’s non-executive directors.

39. FInAnCIAL RISK MAnAGEMEnT OBJECTIVES AnD POLICIES

The Group and the Company are exposed to financial risks arising from their operations and the use of financial instruments. The key financial risks include credit risk, liquidity risk, market risk and foreign currency risk.

The Board of Directors reviews and agrees policies and procedures for the management of these risks, which are executed by the Chief Financial Officer. The audit committee provides independent oversight to the effectiveness of the risk management process.

The following section provides details regarding the Group and the Company’s exposure to the above-mentioned financial risks and the objectives, policies and process for the management of these risks.

(a) Market Risk

(i) Interest rate risk

Interest rate risk is the risk that fair value or future cash flows of the Group and the Company’s financial instruments will fluctuate because of changes in market interest rates.

The Group’s exposure to interest rate risk arises primarily from its loans and borrowings. The loans and borrowings are subject to fluctuation in the bank base lending rate.

The interest rate profile of the Group and the Company’s interest bearing financial instruments based on the carrying amounts as at the end of the reporting period is as follows:

Group Company 2011 2010 2011 2010

RM RM RM RM

Fixed rate instruments Financial assets 103,059,130 105,382,191 5,120,259 230,327 Financial liabilities 3,840 366,519 - -

Floating rate instruments Financial liabilities 4,595,053 - - -

92



39. FInAnCIAL RISK MAnAGEMEnT OBJECTIVES AnD POLICIES (COnT’D)

(a) Market Risk (cont’d)

(i) Interest rate risk (cont’d)

Fair value sensitivity analysis for fixed rate instruments

The Group and the Company do not account for any fixed rate financial assets and liabilities at fair value through profit or loss, and the company do not designate derivatives as hedging instruments under a fair value hedge accounting model. Therefore, a change in interest rates at the end of the reporting period would not affect profit or loss.

Cash flow sensitivity analysis for variable rate instruments

An increase of 25 basis point at the end of the reporting period would have decreased profit before tax by the amount shown below and a decrease would have an equal but opposite effect. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.

2011 2010 RM RM

Decrease in profit before taxation 11,488 -

(ii) Equity price risk

Market price is the risk that the fair value future cash flows of the Group and the Company financial instruments will fluctuate because of changes in market prices (other than interest or exchange rates).

The Group and the Company is exposed to equity price risk arising from its investment in quoted equity instruments. The quoted equity instruments in Malaysia are listed on the Bursa Malaysia. These instruments are classified available-for-sale financial assets. The Group and the Company does not have exposure to commodity price risk.

Management of the Group and the Company monitors the equity investments on a portfolio basis. Material investments within the portfolio are managed on an individual basis and all buy and sell decisions are approved by the management.

(b) Credit Risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Group and the Company’s exposure to credit risk arises primarily from trade and other receivables. For other financial assets (including investment securities and cash and bank balances) the Group and the Company minimises credit risk by dealing exclusively with high credit rating counterparties.

The Group and the Company’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. The Group and the Company trades only with recognised and creditworthy third parties. It is the Group and the Company’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the Group and the Company’s exposure to bad debts is not significant.

Exposure to credit risk

At the reporting date, the Group and the Company’s maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statements of financial position with positive fair values.

Information regarding credit enhancements for trade and other receivables is disclosed in Note 20.

93



39. FInAnCIAL RISK MAnAGEMEnT OBJECTIVE AnD POLICIES (COnT’D)

(b) Credit risk (cont’d)

Financial assets that are neither past due nor impaired

Information regarding trade and other receivables that are neither past due nor impaired is disclosed in Note 20. Deposits with banks and other financial institutions and investments securities that are neither past due nor impaired are placed with or entered into with reputable financial institutions or companies with high credit ratings and no history of default.

Financial assets that are either past due or impaired

Information regarding financial assets that either past due or impaired is disclosed in Note 20.

Financial guarantees

The Group provides unsecured financial guarantees to banks in respect of borrowing facilities granted to certain subsidiaries. The Group monitors on an ongoing basis the results of the subsidiaries and repayments made by the subsidiaries.

Intercompany balances

The Company provides advances to its subsidiaries. The Company monitors the results of the subsidiaries regularly.

The maximum exposure to credit risk is represented by its carrying amount in the Company’s statement of financial position.

As at the end of the reporting period, there was no indication that the advances to those subsidiaries are not recoverable. The Company does not specifically monitor the ageing of the advances to its subsidiaries.

(c) Liquidity Risk

Liquidity risk is the risk that the Group and the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Group and the Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Group and the Company’s objective is to maintain a balance between continuity of funding and flexibility through the financial support from related and holding company.

Analysis of financial instruments by remaining contractual maturities

The table below summarises the maturity profile of the Group and the Company’s liabilities at the reporting date based on contractual undiscounted repayment obligations.

2011 RM

On demand or

within one year One to

five years Over five

years Total RM RM RM RM

Group

Financial liabilities Trade and other payables 91,808,159 - - 91,808,159 Other current liabilities 37,694,101 - - 37,694,101 Loans and borrowings 4,598,893 - - 4,598,893

Total undiscounted financial liabilities 134,101,153 - - 134,101,153

94



39. FInAnCIAL RISK MAnAGEMEnT OBJECTIVE AnD POLICIES (COnT’D)

(c) Liquidity Risk (cont’d)

Analysis of financial instruments by remaining contractual maturities (cont’d)

2011 RM

On demand or

within one year One to

five years Over five

years Total RM RM RM RM

Company

Financial liabilitiesTrade and other payables 323,960 - - 323,960 Other current liabilities - - - -Loans and borrowings 3,840 - - 3,840

Total undiscounted financial liabilities 327,800 - - 327,800

(d) Foreign Currency Risk

Foreign currency risk is the risk that the fair value of future cash flows of a financial instruments will fluctuate because of changes in foreign exchange rates.

The Company has transactional currency exposure arising from advances to subsidiary that are denominated in a currency other than the respective functional currency of Company. The Group and Company also hold cash and cash equivalents denominated in foreign currencies for working capital purposes. The currencies giving rise to this risk are primarily USD Dollar (“USD”), Euro Dollar (“EURO”) and Australian Dollar (“AUD”).

Denominated in Denominated inGroup Company

USD EURO AUD RM RM RM

2011Other receivables - - 55,690,755 Cash and bank balances 12,661 3,566,791 3,230,500

Net exposure 12,661 3,566,791 58,921,255

2010 Other receivables - - 34,695,819 Cash and bank balances 12,327 4,449,298 -

Net exposure 12,327 4,449,298 34,695,819

Sensitivity analysis for foreign currency risk

Below demonstrates the sensitivity to a reasonably possible change in the foreign currency exchange rates against Ringgit Malaysia, with all other variables held constant, of the Group’s and Company’s profit before taxation. A 10% strengthening of the RM against the following currencies at the end of the reporting period would have increased profit before taxation by the amount shown below and a corresponding decrease would have an equal but opposite effect.

95



39. FInAnCIAL RISK MAnAGEMEnT OBJECTIVES AnD POLICIES (COnT’D)

(d) Foreign Currency Risk (Cont’d)

Group Company 2011 2010 2011 2010

RM RM RM RM

AUD 5,892,125 3,469,582 5,892,125 3,469,582 USD 1,266 1,233 - -EURO 356,679 444,930 - -

Increase in profit before taxation 6,250,070 3,915,745 5,892,125 3,469,582

40. FAIR VALUE OF FInAnCIAL InSTRUMEnTS

Group Company 2011 2010 2011 2010

RM RM RM RM

Financial assets Investment in Associates 12,034,750 11,749,188 - -Investment in subsidiaries - - 75,155,098 74,946,519 Other investments 53,369,583 40,508,127 - -Trade and other receivables 121,765,485 113,064,099 108,805 11,578 Other current assets 53,807,806 19,547,248 - -Cash and bank balances 129,273,428 200,680,081 9,319,839 702,608

Financial liabilities Trade and other payables 91,808,159 75,115,430 323,960 300,172 Other current liabilities 37,694,101 83,158,744 - -Loans and borrowings 4,598,893 380,013 3,840 13,512

Determination of Fair Value

Fair value is defined as the amount for which the financial instrument could be exchanged in a current transaction between knowledgeable willing parties in an arm’s length transaction, other than in a forced sale or liquidation.

The carrying amounts of financial instruments reported in the financial statements approximate their fair values.

41. CAPITAL MAnAGEMEnT

The primary objective of the Group’s and the Company’s capital management is to ensure that they maintain a strong credit rating and healthy capital ratios in order to support their business and maximise shareholder value.

The Group and the Company manages their capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group and the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the years ended 31 December 2011 and 31 December 2010.

The Group and the Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group and the Company did not maintain specific policy on the capital management because the Group and the Company is currently in net cash position. Furthermore, in the event that there is any shortfall in working capital requirement, the Group and the Company could rely on funding from other subsidiaries which are in net cash position. The Group and the Company includes within net cash, loans and borrowings less cash and bank balances. Capital includes equity attributable to the owners of the Group and the Company less the fair value adjustment reserve.

96



41. CAPITAL MAnAGEMEnT (COnT’D)

Group Company 2011 2010 2011 2010

RM RM RM RM

Loans and borrowings 4,598,893 380,013 3,840 13,512 Less: Cash and bank balances (129,273,428) (200,680,081) (9,319,839) (702,608)

Net cash (124,674,535) (200,300,068) (9,315,999) (689,096)

Equity attributable to the owners of the Company 309,575,107 298,235,477 248,318,578 203,741,167 Less: - Fair value adjustment reserve (2,089,556) (1,519,454) - -

Total capital 307,485,551 296,716,023 248,318,578 203,741,167

Capital and net cash 432,160,086 497,016,091 257,634,577 204,430,263

Gearing ratio - - - -

42. SEGMEnTAL InFORMATIOn

The Group’s reportable segments, as described below, are the Group’s strategic business units. The strategic business units offer different services and are managed separately because they require different marketing strategies. For each of the strategic business units, the Group’s Chief Executive Officer reviews internal management reports on at least a quarterly basis. Other business units are reported as ‘others’. The following summary describes the operations in each of the Group’s reportable segments:

* Construction activity * Property development

Performance is measured based on segment profit before tax, interest, depreciation and amortisation. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries.

Segment asset is measured based on all assets (including goodwill) of a segment and is used to measure the return of assets of each segment.

Operating segment information for the current financial year ended 31 December 2011 is as follows:

Construction Property Consolidated2011 activity development Others adjustments Total

RM RM RM RM RM

REVENUE 339,296,862 18,948,866 103,676,146 (61,158,616) 400,763,258

PROFIT BEFORE TAX 9,394,915 7,051,665 47,291,135 (47,179,542) 16,558,173

SEGMENT ASSETS 228,337,432 89,714,996 126,879,567 - 444,931,995

2010

REVENUE 344,129,539 1,131,208 55,771,185 (24,314,117) 376,717,815

PROFIT BEFORE TAX 19,690,771 (1,962,287) 11,911,316 (6,599,904) 23,039,896

SEGMENT ASSETS 340,207,812 38,127,300 79,746,611 - 458,081,723

97



42. SEGMEnTAL InFORMATIOn (COnT’D)

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

43. SIGnIFICAnT EVEnTS

(a) The wholly owned subsidiary company of the Group, Trans Resources Corporations Sdn. Bhd. (“TRC’), had on 29 April 2011 received the Letter of Award from Putrajaya Holdings Sdn. Bhd., in relation to the contract for the following packages:-

i) Proposed Construction and Completion of 40 units 3 Storey Semi Detached Public Housing at PT7365, Parcel 8-4H, Precint 8, (Phase 1), Putrajaya.

ii) Proposed Construction and Completion of 4 units 2 1/2 Storey Semi Detached Public Housing at PT7385 to PT7388 and PT7389, Parcel 2B3, Precinct 8, (Phase 1), Putrajaya.

iii) Proposed Construction and Completion of 2 Mock Up Units at Parcel 8R7, Precinct 8, Putrajaya.

for a contract sum of RM43,803,960.

(b) TRC had also on 29 April 2011 received the Letter of Award from Boustead Shipyard Sdn. Bhd. in relation to the contract known “Design, Construction, Outfitting, Integration, Testing and Commissioning of Submarine Safety Conditioning Facilities, Submarine Hangar and Workshop Facilities in relation to the Royal Malaysian Navy (RMN) Contract of the In-Service Support for Two (2) Units Scorpene Class Submarines” for a contract sum of RM45,000,000.

(c) TRC had on 14 October 2011 received the Letter of Acceptance dated 10 October 2011 from the Brunei Economic Development Board, in relation to the Tender for the contract known ‘Modernisation of Brunei International Airport Terminal’ jointly participated by TRC and Swee Sdn. Bhd. for a contract sum of BND 130,000,000 (approximately RM318,903,000).

(d) TRC had also on 31 October 2011 received the Letter of Acceptance dated 28 October 2011 from Jabatan Kerja Raya, in relation to the Tender for the contract known ‘Projek Peningkatan Kemudahan Infrastruktur Jeti Operasi Lumut, Perak’ for a contract sum of RM51,389,000.

(e) TRC has incorporated a new wholly-owned subsidiary company, named TRC (B) Sdn Bhd under the Companies Act of the State of Brunei Darussalam.

The certificate of incorporation dated 3 November 2011 was received by the Company on 10 November 2011.

TRC (B) Sdn Bhd was primarily incorporated to undertake construction and property development projects in the State of Brunei Darussalam.

(f) TRC had on 25 November 2011 received the Letter of Award dated 22 November 2011 from Putrajaya Holdings Sdn. Bhd., in relation to the contract for the following packages:-

i) Proposed development of 14 units 2 storey terrace house and 14 units 2 storey semi-detached house at Sub-Precint 14-3, Precint 14, Putrajaya;

ii) Proposed development of 72 units 2 storey teracce house at sub-Precint 14-6A, Precint 14, Putrajaya;

for a contract sum of RM38,080,069.88

The performance of the Group shall continue to be encouraging for the coming financial year due to the positive contribution from the new and on-going projects which are currently being undertaken by the Group.

98



44. SUBSEQUEnT EVEnTS

(a) New Projects Secured

TRC had on 12 March 2012 received the Letter of Award from Kompleks Dayabumi Sdn. Bhd., in relation to the contract known “The Construction and Completion of the Main Contract and Associated Works for the Proposed Alteration and Addition Works to Existing Kompleks Dayabumi (Phase 2)”, on Lot 45, Jalan Sultan Hishamuddin, Kuala Lumpur for Kompleks Dayabumi Sdn. Bhd. for a contract sum of RM36,000,000.00.

(b) Irredeemable Convertible Unsecured Loan Stocks (‘ICULS’)

Pursuant to the conditions stipulated in the Trust Deed dated 15 November 2006 constituting the ICULS, the ICULS had matured on 20 January 2012.

The notice of expiry and last date for conversion of ICULS had been issued on 8 December 2011 to the ICULS holders.

The ICULS Holders will be entitled to a last interest payment at the rate of five per cent (5%) per annum for the period from 21 January 2011 to 20 January 2012.

After the maturity date, the ICULS shall cease to bear interest and all outstanding ICULS shall be automatically converted into new ordinary shares of RM0.50 each in the Company (“TRC Stock Units”) at the conversion price of RM1.00 for 2.88 new TRC Stock Unit.

With respect to this 2,603,849 ordinary shares of RM0.50 each were allotted on 26 January 2012.

(c) Employee Share Options Scheme

After the financial year end, the Company issued 5,183,100 ordinary shares of RM0.50 each for cash pursuant to the Company’s ESOS at exercise price of RM0.52 per ordinary share.

(d) Acquisition of new subsidiary

The Company had on 8 February 2012 acquired six (6) ordinary shares in WWCC Holdings Pty Ltd (“WWCCH”) a company incorporated in Australia from Majestic Way Pty Ltd for a cash consideration of AUD1.00. WWCCH will be a wholly-owned subsidiary of the Company and WWCCH is currently dormant.

Subject to the approval from Australian Securities and Investment Commission, the Company intends to change WWCCH’s name to Swan Synergy Holdings Pty Ltd. The acquisition of WWCCH was primarily to undertake construction and property development activities in Australia. None of the directors and substantial shareholders of the Company have any direct or indirect interest in respect of the investment in WWCCH.

45. LITIGATIOnS

The Group has the following litigation cases during the financial year:

(a) On 18 August 2008, Trans Resources Corporation Sdn Bhd (“TRC”), the wholly-owned subsidiary of the Company entered into a contract with Carmichael Sdn Bhd (”Carmichael”) whereby the Company employed Carmichael for the manufacturer/procurement of two (2) units of fire-fighting engines (“Fire Fighting Units”) for the Sultan Mahmud Airport situated in Kuala Terengganu (“the Agreement”). Carmichael was to deliver the Fire Fighting Units by January 2009. However, they were only able to supply one (1) Fire Fighting Units.

This has caused TRC to source and obtain supply from another supplier, CME Edaran Sdn Bhd, at a higher cost. TRC is claiming an amount of RM2,209,335.05 from Carmichael for breach of contract due to Carmichael’s failure to deliver the remaining Fire Fighting Unit within the prescribed date, resulting in TRC incurring additional cost for engaging another supplier. Carmichael is disputing the amount and both parties have agreed to proceed with the matter by way of arbitration as provided for in clause 25 of the contract.

A notice of Arbitration dated 10 November 2010 was issued to the Kuala Lumpur Regional Centre for Arbitration by both parties stating their intention to proceed with an arbitration process and an arbitrator, Philip Koh Tong Ngee, was appointed on 28 March 2011.

99



45. LITIGATIOnS (COnT’D)

(b) Mohamad Subahan Bin Mohd. Nasir and twelve others, (“the plaintiffs”) had sued TRC for damages in respect of a Dang Wangi Police HQ Project. The first action was dismissed with costs and damages to be assessed. In the assessment of damages, the court awarded TRC RM130,800.00 as damages and costs to be assessed against the plaintiffs.

(c) The plaintiffs again brought a second action against TRC to stop the latter from commencing construction of the Dang Wangi Police HQ Project. The case was struck off.

(d) On July 2006, TRC entered into a contract with Syarikat Elektrik RBA Sdn Bhd (the “Sub Contractor”) whereby the Sub-Contractor was to design, construct, install, test, commission and maintain the Kompleks Penjara Baru Bentong in Pahang Darul Makmur (the “Contract”). The Sub-Contractor has provided the Company with a performance bond dated 7 July 2006 from Al-Hidayah Investment Bank (Labuan) Limited (the “Bank”) (“Performance Bond”) whereby the Bank will pay TRC an amount of RM2,321,850.00 if the Sub-Contractor is unable to perform the contract. Due to the non-performance of the contract on the part of the Sub-Contractor, TRC has called on the Performance Bond of an amount of RM2,321,850.00. The Bank disputes liability.

TRC is now finalizing the account with the Government of Malaysia before a formal/final demand is made against the Bank.

In view that the Sub-Contractor has performance of a substantive portion of the contract, the final amount from the Performance Bond is likely to be substantially lower.

46. COMPARATIVES

The following comparatives as at 31 December 2010 have been reclassified to conform with current year’s presentation.

Group As previously

Statements of comprehensive income As restated stated RM RM

Administrative expenses (29,961,384) (28,874,179)Finance income 4,431,189 3,343,984

100


LISt oF propertIeS

No Location TenureDescription/Existing Use

Approx AgeOf Buildings

Land Area/Build Up Area

Net Book Value

31 December 2011

Date OfValuation

RM

1 Lot No.3626Section 16Kuching Central Land District, Sarawak

60-year leaseholdexpiring

18/4/2059

4-storeyshop/office

13 years 2,214.2 sq ft/8,856.8 sq ft

1,101,517.84 30/11/2009

2 Lot No.PT19447Mukim of AmpanganDistrict of SerembanNegeri Sembilan

99-yearleaseholdexpiring

18/9/2095

Agricultural Land

- 9.516 acres 488,215.96 21/9/2000

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

Freehold First and SecondFloors of 4-storey

shop/office

21 years 1,760.0 sq fteach

592,382.48 30/11/2009

4 52 Units of ApartmentsIdaman Senibong ApartmentTaman Bayu SenibongJohor Bahru, Johor

Leaseholdexpiring

21/1/2097

Apartments 6 1/2 years Varying from808.0 sq ft,

815.0 sq ft &868.0 sq ft

5,918,000.00 20/07/2011

5 HS(D) 346773 PTD 166642Mukim of Plentung, District ofJohor Bahru, State of Johor(together with a double storeyterrace house erected thereon)

Freehold Double storeyterrace

8 years 239.6606 sq metres

251,658.00 -

6 A part of HS(D) 310780 PTD 158256, Mukim of Plentong, District of Johor Bahru, State of Johor

Freehold Residentialland

- 27.636 acres 11,805,245.05 -

7 Lot No.196, Bandar Ulu Klang71/2 Mile, Ulu KlangGombak, Selangor

Freehold Residentialland

- 3.5132 hectares 7,986,266.00 -

8 Mukim 2908, Lot 2265Mukim Dengkil, Daerah SepangSelangor Darul Ehsan

Freehold Agricultureland

- 2.6052 hectares 1,080,156.00 -

9 Shop Office & Corporate BuildingTRC Business CentreJalan Andaman Utama68000 AmpangSelangor Darul Ehsan

Freehold Shop Office 3 years Varying from1121sq ft,1209 sq ft, 1319 sq ft,1344 sq ft, 1370 sq ft,

1469 sq ft,1533 sq ft,1775sq ft& 2922.71 sq ft

15,127,361.59 26/07/2011

101


anaLYSIS oF SHareHoLdInGS aS at 26 aprIL 2012

Authorised Share Capital : RM 1,000,000,000.00Fully Paid-Up Capital : RM 237,916,161.50Issued Share Capital : 475,832,323 sharesClass of Shares : Ordinary Shares of RM0.50 eachVoting Rights : One Vote Per ordinary ShareNo. of Shareholders : 3,788

DISTRIBUTIOn OF SHAREHOLDInGS

Category No.of Holders % No.of Shares %

Less than 100 48 1.27 1,987 0.00100 - 1,000 167 4.41 91,195 0.021,001 - 10,000 1,780 46.99 10,613,640 2.2310,001 - 100,000 1,596 42.13 47,325,493 9.95100,001 and less than 5% of issued shares 192 5.07 199,701,252 41.975% and above of the issued shares 5 0.13 218,098,756 45.84

Total 3,788 100.00 475,832,323 100.00

LIST OF SUBSTAnTIAL SHAREHOLDERS

No. Name Direct IndirectNo. of Shares % No. of Shares %

1 TRC Capital Sdn Bhd 59,553,600 12.52 118,075,200* 24.822 Kolektif Aman Sdn Bhd 58,521,600 12.30 - -3 Dato’ Sri Sufri Bin Hj Mohd Zin 46,371,517 9.75 - -4 Leong Kam Heng 45,377,707 9.54 - -5 Lembaga Tabung Haji 44,849,952 9.43 - -6 Khoo Tew Choon 32,374,372 6.80 - -

* Deemed interested by virtue of his shareholdings in Kolektif Aman Sdn Bhd and TRC Capital Sdn Bhd

DIRECTORS’ InTEREST In SHARES

No. Name Direct IndirectNo. of Shares % No. of Shares %

1 Dato’ Sri Sufri Bin Hj Mohd Zin 46,371,517 9.75 118,075,200* 24.822 Dato’ Abdul Aziz Bin Mohamad 14,868,681 3.12 - -

* Deemed interested by virtue of his shareholdings in Kolektif Aman Sdn Bhd and TRC Capital Sdn Bhd

102


anaLYSIS oF SHareHoLdInGS (Cont’d)aS at 26 aprIL 2012

LIST OF 30 LARGEST SHAREHOLDERS

No Name of Shareholder Shares %

1. Kenanga Nominees (Tempatan) Sdn Bhd 59,553,600 12.52 Pledged Securities Account For TRC Capital Sdn Bhd

2. Kenanga Nominees (Tempatan) Sdn Bhd 58,521,600 12.30 Pledged Securities Account For Kolektif Aman Sdn Bhd

3. Lembaga Tabung Haji 44,849,952 9.43

4. Kenanga Nominees (Tempatan) Sdn Bhd 30,434,404 6.40 Pledged Securities Account For Khoo Tew Choon

5. Kenanga Nominees (Tempatan) Sdn Bhd 24,739,200 5.20 Pledged Securities Account For Sufri Bin Mhd Zin

6. Kenanga Nominees (Tempatan) Sdn Bhd 21,946,715 4.61 Pledged Securities Account For Leong Kam Heng

7. Muhamad Shahaizi Bin Abdul Hai 20,400,000 4.29

8. Kenanga Nominees (Tempatan) Sdn Bhd 19,191,336 4.03 Pledged Securities Account For Yap Yon Tai

9. Cimsec Nominees (Tempatan) Sdn Bhd 17,899,197 3.76 Cimb Bank For Sufri Bin Mhd Zin (M28002)

10. Rhb Capital Nominees (Tempatan) Sdn Bhd 12,500,000 2.63 Pledged Securities Account For Leong Kam Heng

11. Abdul Aziz Bin Mohamad 12,000,000 2.52

12. Amanahraya Trustees Berhad 7,161,800 1.51 Public Islamic Select Treasures Fund


14. AIBB Nominees (Tempatan) Sdn Bhd 4,830,000 1.02 Chua Sai Men

15. Ngiam Buey Buey 4,614,537 0.97

16. Khoo Teng San 3,747,647 0.79

17. Cimb Commerce Trustees Berhad 3,101,220 0.65 Exempt An For Philip Capital Management Sdn Bhd (2)


19. Citigroup Nominees (Tempatan) Sdn Bhd 2,733,120 0.57 Pledges Securities Account For Sufri Bin Mhd Zin (473402)

103


LIST OF 30 LARGEST SHAREHOLDERS (COnT’D)

No Name of Shareholder Shares %

20. Citigroup Nominess (Tempatan) Sdn Bhd 2,719,040 0.57Employees Provident Fund Board (Pheim)

21. Citigroup Nominees (Tempatan) Sdn Bhd 2,407,968 0.51Pledged Securities Account For Leong Kam Heng (473525)

22. Hlb Nominees (Tempatan) Sdn Bhd 2,028,000 0.43 Pledged Securities Account For Lee Chiah Cheang

23. Eb Nominees (Tempatan) Sendirian Berhad 1,939,680 0.41 Pledged Securities Account For Khoo Tew Choon (SFC)

24. Amanahraya Trustees Berhad 1,912,500 0.40 Public Islamic Treasures Growth Fund

25. Cimsec Nominees (Tempatan) Sdn Bhd 1,887,120 0.40 Cimb Bank For Leong Kam Heng (M28001)

26. Eb Nominees (Tempatan) Sendirian Berhad 1,753,344 0.37 Pledged Securities Account For Leong Kam Heng (Sfc)

27. Ooi Cheng Huat @ Ooi Peng Huat 1,654,420 0.35

28. Chin Yu Nominees Pty Ltd 1,515,744 0.32

29. Kong Kim Sing 1,361,800 0.29

30. Citigroup Nominees (Tempatan) Sdn Bhd 1,143,000 0.24Pledged Securities Account For Wong Chong Che (471772)

Total 376,292,425 79.08

anaLYSIS oF SHareHoLdInGS (Cont’d)aS at 26 aprIL 2012

104


anaLYSIS oF Warrant a HoLdInGS aS at 26 aprIL 2012

Number of Warrant : 86,739,869 10 years free detachable warrantsExercise Price : RM0.50 per the Company’s ShareVoting Rights : NilNo. of Warrants Holders : 719

DISTRIBUTIOn OF WARRAnT HOLDInGS

CategoryNo. of

Holders %No. of

Warrant %

Less than 100 35 4.87 1,885 0.00100 - 1,000 20 2.78 8,129 0.011,001 - 10,000 207 28.79 1,106,803 1.2810,001 - 100,000 373 51.88 12,595,186 14.52100,001 and less than 5% of issued Warrants 80 11.13 32,680,720 37.685% and above of the issued Warrants 4 0.56 40,345,994 46.51

Total 719 100.00 86,738,717 100.00

LIST OF 30 LARGEST WARRAnT HOLDERS

No Name of Warrant Holder Warrants %

1. Kolektif Aman Sdn. Bhd. 17,510,400 20.19

2. Sufri Bin Mhd Zin 11,059,200 12.75

3. TRC Capital Sdn. Bhd. 7,430,400 8.57



6. Leong Kam Heng 2,852,253 3.28

7. Khoo Teng San 2,759,609 3.18


9. Kenanga Nominees (Tempatan) Sdn Bhd 1,804,420 2.08Pledged Securities Account For Yap Yon Tai

10. Yeoh Sook Keng 1,161,172 1.34

11. CIMSEC Nominees (Tempatan) Sdn Bhd 1,055,037 1.22 CIMB Bank For Sufri Bin Mhd Zin (M28002)

12. Loh Choong Wai 763,440 0.88

13. Chin Yu Nominees Pty Ltd 703,872 0.81

105


LIST OF 30 LARGEST WARRAnT HOLDERS (COnT’D)


14. Public Nominees (Tempatan) Sdn Bhd 636,200 0.73 Pledged Securities Account For Tan Siew Cheng (E-IMo)

15. Khoo Tat Wai 532,880 0.61

16. Maybank Secrities Nominees (Tempatan) Sdn Bhd 513,700 0.59Pledged Securities Account For Tan Lam An (Margin)

17. Khoo Shiau Hoon 495,670 0.57

18. Loh Leong Kong 484,900 0.56

19. Jf Apex Nominees (Tempatan) Sdn Bhd 466,500 0.54 Pledged Securities Account For Chia Yong Fei (Sta 1)

20. Amsec Nominees (Tempatan) Sdn Bhd 415,300 0.48 Pledged Securities Account For ooi Khoon Im

21. Ngiam Buey Buey 365,126 0.42

22. Rhb Capital Nominees (Tempatan) Sdn Bhd 345,000 0.40 Pledged Securities Account For Ngu Ting Tong (LBu)

23. Ta Nominees (Tempatan) Sdn Bhd 344,000 0.40Pledged Securities Account For Chua Kian Lam

24. Ng Kok Cheng @ Ng Kee Seng 336,960 0.39

25. Ta Nominees (Tempatan) Sdn Bhd 310,000 0.36Pledged Securities Account For Ngu Ting Tong

26. Ta Nominees (Asing) Sdn Bhd 300,100 0.35 Pledged Securities Account Charles Ross Mackinnon

27. Christina Loh Yoke Lin 300,000 0.35

28. Maybank Securities Nominees (Asing) Sdn Bhd 300,000 0.35 Kim Eng Securities Pte Ltd For Yeo Tong Hiang

29. Khoo Shiau Hoon 297,548 0.34

30. Koh Wei Thai 275,000 0.32

Total 64,432,758 74.28

anaLYSIS oF Warrant a HoLdInGS (Cont’d)aS at 26 aprIL 2012

106


anaLYSIS oF Warrant B HoLdInGS aS at 26 aprIL 2012

Number of Warrant : 93,495,995 5 years free detachable warrantsExercise Price : RM0.61 per the Company’s ShareVoting Rights : NilNo. of Warrants Holders : 2,360

DISTRIBUTIOn OF WARRAnT HOLDInGS

CategoryNo. of

Holders %No. of

Warrant %

Less than 100 230 9.75 11,138 0.01100 - 1,000 459 19.45 308,079 0.331,001 - 10,000 1,229 52.08 4,567,275 4.8910,001 - 100,000 391 16.57 13,226,649 14.15100,001 and less than 5% of issued Warrants 45 1.91 26,672,840 28.535% and above of the issued Warrants 6 0.25 48,709,093 52.10

Total 2,360 100.00 93,495,074 100.00

LIST OF 30 LARGEST WARRAnT HOLDERS


1. Kenanga Nominees (Tempatan) Sdn Bhd 11,910,720 12.74 Pledged Securities Account For TRC Capital Sdn Bhd

2. Kenanga Nominees (Tempatan) Sdn Bhd 11,704,320 12.52 Pledged Securities Account For Kolektif Aman Sdn Bhd

3. Lembaga Tabung Haji 8,969,990 9.59


5. Kenanga Nominees (Tempatan) Sdn Bhd 5,089,343 5.44Pledged Securities Account For Leong Kam Heng

6. Kenanga Nominees (Tempatan) Sdn Bhd 4,947,840 5.29 Pledged Securities Account For Sufri Bin Mhd Zin

7. Muhamad Shahaizi Bin Abdul Hai 4,080,000 4.36

8. Kenanga Nominees (Tempatan) Sdn Bhd 3,838,267 4.11 Pledged Securities Account For Yap Yon Tai

9. Cimsec Nominees (Tempatan) Sdn Bhd 3,579,839 3.83CIMB Bank For Sufri Bin Mhd Zin (M28002)



107


LIST OF 30 LARGEST WARRAnT HOLDERS (COnT’D)


12. Ngiam Buey Buey 922,907 0.99

13. Citigroup Nominees (Tempatan) Sdn Bhd 546,624 0.58 Pledged Securities Account For Sufri Bin Mhd Zin (473402)

14. Citigroup Nominees (Tempatan) Sdn Bhd 477,100 0.51 Pledged Securities Account For Leong Kam Heng (473525)

15. Cimsec Nominees (Tempatan) Sdn Bhd 458,700 0.49 CIMB Bank For Len Book Learn (M66002)

16. Rhb Capital Nominees (Tempatan) Sdn Bhd 430,300 0.46Pledged Securities Account For Low Bee Kiew (CEB)

17. Abdul Aziz Bin Mohamad 405,736 0.43

18. HLB Nominees (Tempatan) Sdn Bhd 405,600 0.43 Pledged Securities Account For Lee Chiah Cheang

19. EB Nominees (Tempatan) Sendirian Berhad 387,936 0.41Pledged Securities Account For Khoo Tew Choon (SFC)

20. CIMSEC Nominees (Tempatan) Sdn Bhd 377,424 0.40CIMB Bank For Leon Kam Heng (M28001)

21. EB Nominees (Tempatan) Sendirian Berhad 350,668 0.38 Pledged Securities Account For Leong Kam Heng (SFC)

22. Chin Yu Nominees Pty Ltd 303,148 0.32

23. ECML Nominees (Tempatan) Sdn. Bhd 260,000 0.28Pledged Securities Account For Lim Ai Leng

24. Tan Gim Guan 250,000 0.27

25. Public Nominees (Tempatan) Sdn Bhd 248,960 0.27 Pledged Securities Account For Hew Choong Hee (E-TSA/uTM)

26. KTC Holdings Sdn Bhd 245,337 0.26

27. Public Nominees (Tempatan) Sdn Bhd 217,500 0.23Pledged Securities Account For Lee Bui Chiung (E-PLT/CST)

28. Kean Thong Enterprise Sdn Bhd 212,000 0.23

29. Gan Hock Aun 210,000 0.22

30. RHB Capital Nominees (Tempatan) Sdn Bhd 207,900 0.22 Pledged Securities Account For Ngu Ting Tong (LBu)

Total 72,300,399 77.33

anaLYSIS oF Warrant B HoLdInGS (Cont’d)aS at 26 aprIL 2012

108


notICe oF FIFteentH annUaL GeneraL meetInG

NOTICE IS HEREBY GIVEN that the Fifteenth Annual General Meeting of the Company will be held at Indah Ballroom, Flamingo Hotel, 5, Tasik Ampang, Hulu Kelang, 68000 Ampang, Selangor on Wednesday, the 27th day of June, 2012 at 10.30 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 2011 Resolution 1

2 To approve the payment of first and final gross dividend of 2 sen per share less 25% tax for the year ended 31 December 2011 Resolution 2

3 To approve the payment of Directors’ Fees in respect of the financial year ended 31 December 2011 Resolution 3

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

5 To re-appoint Messrs AljeffriDean as Auditors of the Company to hold office until the conclusion of the next Annual General Meeting and to authorise the Directors to fix their remuneration. Resolution 5

SPECIAL BUSINESS

To consider and if thought fit, to pass the following ordinary resolution, with or without modification:-

6 AUTHORITY TO ISSUE SHARES“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby authorised to issue shares in the Company at any time until the conclusion of the next Annual General Meeting and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit provided that the aggregate number of shares to be issued does not exceed ten per centum (10%) of the issued and paid-up ordinary share capital of the Company for the time being, subject always to the approvals of the relevant regulatory authorities.” Resolution 6

7 PROPOSED RENEWAL OF AUTHORITY FOR THE COMPANY TO PURCHASE ITS OWN SHARES“THAT subject to compliance with all applicable rules, regulations and orders made pursuant to the Companies Act, 1965 (“Act”), provisions in the Company’s Memorandum and Articles of Association, the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) and any other relevant authorities, the Company be and is hereby authorised to purchase such number of ordinary shares of the company as may be determined by the Directors of the Company from time to time through Bursa Securities upon such terms and conditions as the Directors may deem fit and expedient in the interest of the Company PROVIDED THAT:-

(1) the aggregate number of shares purchased does not exceed ten per centum (10%) of the issued and paid-up share capital of the Company as quoted on Bursa Securities as at the point of purchase;

(2) the maximum fund to be allocated by the Company for the purpose of purchasing such number of ordinary shares shall not exceed the retained profit and share premium account of the Company. As at the financial year ended 31 December 2011, the audited retained profit and share premium of the Company stood at RM13,706,153 and RM5,020 respectively;

(3) The renewal of authority conferred by this resolution will commence immediately upon passing of this resolution and will continue to be in force until:-

(a) at the conclusion of the next AGM of the Company following the general meeting in which the authorization is obtained, at which time it shall lapse unless by ordinary resolution passed at that meeting, the authority is renewed either unconditionally or subject to conditions; or

109


notICe oF FIFteentH annUaL GeneraL meetInG (Cont’d)

(b) the expiration of the period within which the next AGM of the Company is required by law to be held; or

(c) revoked or varied by ordinary resolution passed by the shareholders of the Company in a general meeting.

whichever occurs first;

AND THAT upon completion of the purchase(s) of the ordinary shares of the Company, the Directors of the Company be and are hereby authorised to deal with the ordinary shares so purchased in the following manners:-

(a) to cancel the ordinary shares so purchased; or

(b) to retain the ordinary shares so purchased as treasury shares for distribution as dividend to shareholders and/or resell on Bursa Securities or subsequently cancelled; or

(c) to retain part of the ordinary shares so purchased as treasury shares and cancel the remainder; and

(d) in any other manner prescribed by the Act, rules, regulations and orders made pursuant to the Act, the Listing Requirements of Bursa Securities and any other relevant authorities for the time being in force.

AND THAT the Directors of the Company be and are hereby authorised to act and to take all such steps as they may deem necessary or expedient in order to implement, finalise and give full effect to the aforesaid share buy-back with full powers to assent to any conditions, modifications, variations, and/or amendments as may be required or imposed by the relevant authorities and to do all such acts and things (including executing all documents) as the Board may deem fit and expedient in the best interest of the Company.” Resolution 7

8 SPECIAL RESOLUTIONPROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION“THAT the proposed amendments to the Company’s Articles of Association as set out in Part 1 of the Circular to Shareholders dated 5 June 2012, be and are hereby approved and THAT the Directors and Secretary be and are hereby authorized to take all steps as are necessary and expedient in order to implement, finalise and give full effect to the Proposed Amendments of the Company’s Articles of Association. Resolution 8

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

NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT

NOTICE IS HEREBY GIVEN, that a first and final gross dividend of 2 sen per share less 25% tax in respect of the financial year ended 31 December 2011 will be paid on 13 July 2012 to shareholders whose names appear on the Company’s Register of Depositors on 29 June 2012.

A Depositor shall qualify for entitlement to the dividend only in respect:-

a) Shares transferred into the Depositor’s Securities Account before 4.00pm on 29 June 2012 in respect of ordinary transfers; and

b) Shares bought on the Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of the Bursa Malaysia Securities Berhad.

110


BY ORDER OF THE BOARD

ABDUL AZIZ MOHAMED (LS 007370)Secretary

Selangor Darul Ehsan5th June 2012

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

before the time for holding the meeting or any adjournment thereof.3. A member holding one thousand (1,000) ordinary shares or less may appoint only one (1) proxy to attend and vote at the meeting.4. A member holding more than one thousand (1,000) ordinary shares may appoint up to two (2) proxies to attend and vote at the meeting.5. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportions of his holdings to

be represented by each proxy.6. Where a member is an authorised nominee as defined under the Central Depositories Act, it may appoint at least one (1) proxy in respect

of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account.7. If the appointer is a corporation, the proxy form must be executed under its Common Seal or under the hand of its attorney.8. Only members whose names appears in the Record of Depositors as at 19 June 2012 will be entitled to attend and vote at the meeting.

EXPLANATORY NOTES TO THE SPECIAL BUSINESS

Ordinary Resolution No. 6 – Authority for allotment of shares

The proposed Ordinary Resolution 6 is a renewal of the General Mandate for the Directors to issue shares pursuant to Section 132D of the Companies Act, 1965.

The proposed Ordinary Resolution 6, if passed, will authorize the Directors of the Company, from the date of the above Annual General Meeting, to issue shares up to ten per centum (10%) of the issued and paid-up capital of the Company for the time being for such purposes as the Directors consider would be in the best interest of the Company. This authority, unless revoked or varied by the Company in general meeting, will expire at the conclusion of the next Annual General Meeting of the Company.

As at the date of this Notice, no new shares in the Company were issued pursuant to the authority granted to the Directors at the Fourteenth Annual General Meeting held on 29 June 2011 and which will lapse at the conclusion of the Fifteenth Annual General Meeting to be held on 27 June 2012.

The authority will provide flexibility to the Company for any possible fund raising activities, including but not limited to further placing of shares, for purpose of funding future investment project(s), working capital and/or acquisitions.

The rationale for this resolution is to eliminate the need to convene separate general meeting(s) from time to time to seek Shareholder approval as and when the Company issues new shares and thereby reducing administrative time and costs associated with the convening of such meeting(s).

Ordinary Resolution No. 7 - Proposed renewal of authority for the Company to purchase its own shares

The proposed adoption of the Ordinary Resolution 7 is to renew the authority granted by the shareholders of the Company at the Annual General Meeting held on 29 June 2011 to empower the Directors of the Company to purchase not more than 10% of the issued and paid-up share capital of the Company for the time being, for such purposes as they consider would be in the best interest of the Company. This authority, unless revoked or varied at a general meeting will expire at the conclusion of the next Annual General Meeting of the Company. Further information is set out in the Circular to Shareholders dated 5th June 2012 which is dispatched together with the Company’s 2011 Annual Report.

Special Resolution No. 8 – Proposed Amendments to Articles of Association

The Proposed Amendments of Articles of Association are to streamline the Company’s Articles of Association with the recent amendments to the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.

notICe oF FIFteentH annUaL GeneraL meetInG (Cont’d)

111


Statement aCCompanYInG notICe oF annUaL GeneraL meetInG

1. Directors who are standing for re-election at the 15th Annual General Meeting of TRC Synergy Berhad is Dato’ Sri Sufri bin Hj Mohd Zin.

2. Details of Board of Directors’ Meeting:–

Five (5) Board Meetings were held during the financial year ended 31 December 2011, details of which are set out in the Statement on Corporate Governance.

3. Particulars of Directors standing for re-election at the 15th Annual General Meeting of TRC Synergy Berhad:-

Name Dato’ Sri Sufri bin Hj Mohd Zin

Age 56

Nationality Malaysian

Position in the Company Executive Chairman

Working experience/ Qualification/Occupation

Dato’ Sri Sufri Bin Hj Mohd Zin is the founder of TRC Group. He was appointed as the Managing Director of TRC Synergy Berhad (“TRC” or “the Company”) on 29 March 2002 and presently he is the Executive Chairman of the Company and the Managing Director of its subsidiary Companies. He graduated from Institute of Teknologi MARA (“ITM”) in 1982 with a Diploma in Business Studies. Besides, he is a master degree holder in Business Administration in Construction Management from Harvey International University, United States. Presently he is pursuing a bachelor degree in Jurisprudence International Law (External) at Universiti Malaya.

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.

Other directorship of public companies Nil

Securities holdings in the Company and its subsidiaries as at 26 April 2012

46,371,517 (9.75%) (Direct Interest)118,075,200 (24.81%) (Indirect Interest)

Family relationship with any director and/or substantial shareholder of the Company.

Nil

Any conflict of interest with the Company Nil

List of convictions for offences (other than traffic offences) within the past 10 years

Nil

112


No. of Ordinary Shares held

I/We, of

being a member/members of the above-named Company, hereby appoint

of or failing whom,

of as my/our proxy to vote for me/us and on my/our behalf

at the Fifteenth Annual General Meeting of the Company, to be held at Indah Ballroom, Flamingo Hotel, 5, Tasik Ampang, Hulu Kelang, 68000 Ampang, Selangor on Wednesday, 27 June 2012 at 10.30 a.m and at every adjournment thereof.

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

RESOLUTIONS FOR AGAINSTORDINARY RESOLUTION 1

Receive and adopt the Audited Financial Statements for the year ended 31 December 2011

ORDINARY RESOLUTION 2

Payment of first and final dividend for the year ended 31 December 2011


payment of Directors’ Fees


re-election of Dato’ Sri Sufri Bin Hj Mohd Zin as Director of the Company


Reappointment of Messrs AljeffriDean as the Auditors of the Company and to authorise the Directors to fix their remuneration


Authority to Issue Shares


Renewal of authority for the Company to purchase its own shares

SPECIAL RESOLUTION

Proposed amendments to Articles of Association

(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 Fifteenth Annual General Meeting. If this form of proxy is returned without any indication as to how the proxy shall vote, the proxy will vote or abstain from voting at his/her discretion.)

……………………………………………….. Dated this _______ day of June 2012.Signature(s)/Common Seal of Member

Notes:

1. A proxy may but need not be a member of the Company and the provision of section 149 (1) (b) of the Act shall not apply to the Company.

2. To be valid the proxy form duly completed must be deposited at the registered office of the Company not less than forty-eight (48) hours before the time for holding the meeting or any adjournment thereof.

3. A member holding one thousand (1,000) ordinary shares or less may appoint only one (1) proxy to attend and vote at the meeting.

4. A member holding more than one thousand (1,000) ordinary shares may appoint up to two (2) proxies to attend and vote at the meeting.

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

6. Where a member is an authorised nominee as defined under the Central Depositories Act, it may appoint at least one (1) proxy in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account.

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

8. Only members whose names appears in the Record of Depositors as at 19 June 2012 will be entitled to attend and vote at the meeting.

Incorporated in MalaysiaproXY Form

postage

The Company Secretary


TRC Business CentreJalan Andaman Utama 68000 AmpangSelangor

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a n n u a l r e p o r t 2 0 1 1


TRC Business Centre,

Jalan Andaman Utama,

68000 Ampang, Selangor

Tel : 03 4103 8000

Fax : 03 4108 7016

www.trc.com.my

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Documents

TRC SYNERGY BERHAD - ChartNexusir.chartnexus.com/trc/website_HTML/attachments/attachment_24898_1339516319.pdf · Accounts of TRC Synergy Berhad and its subsidiaries for the year ended