annual report annual report 2013 | kumpulan europlus berhad (534368-a) suite 2.12, level 2, menara...

a n n u a l r e p o r t

an

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rt 2013 | kum

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n eu

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(534368-a)

suite 2.12, level 2, menara maxisegar, Jalan pandan Indah 4/2, pandan Indah, 55100 kuala lumpur.tel : 03-4296 2000 Fax : 03-4294 5072

w w w . k e u r o . c o m . m y

2 Corporate Structure

3 Corporate Information

4 Profile of Board of Directors

7 Financial Highlights

8 Chairman’s Statement

11 Statement on Corporate Governance

21 Additional Compliance Information

23 Statement on Risk Management and Internal Control

25 Audit Committee Report

29 Financial Statements

98 List of Properties

100 Statement on Directors’ Interests

101 Analysis of Shareholdings

104 Notice of Annual General Meeting

Proxy Form

Contents

KuMPuLAN EuRoPLuS BERHAD (534368-A)

2 KuMPuLAN EuRoPLuS BERHAD (534368-A)

100%

KEURO Trading Sdn Bhd

100%

Ambang Vista Sdn Bhd

100%

KEURO Leasing Sdn Bhd

100%

Angsana Mestika Sdn Bhd

80%

West Coast Expressway Sdn Bhd

100%

Maximix Sdn Bhd

100%

Ratus Prestij Sdn Bhd

50.10%

Europlus Holdings Sdn Bhd

70%

Irama Bijak Sdn Bhd

100%

KEB Builders Sdn Bhd

100%

Perkasa Jati Holdings Sdn Bhd

70%

7%

63%

10%

40%

Tiasa Ria Sdn Bhd

50%

Radiant Pillar Sdn Bhd

50%

Ambang Usaha Sdn Bhd

Listed

Subsidiaries

Associates

100%

Bandar RimbayuSdn Bhd

0.00003%

100%

KEB Plantations Holdings Sdn Bhd

30.04%

Trinity Corporation Berhad (Listed)

100%

KEB Management Sdn Bhd

82.84%

Asian Resinated Felt Sdn Bhd

As at 10 June 2013

Corporate Structure


3A n n u a l R e p o r t 2 0 1 3

Corporate Information

Company SeCretary

raw Koon Beng (MIA 8521)

audit Committee

datuk oh Chong pengChairman dato’ abdul Hamid Bin mustaphaMember u Chin WeiMember

prinCipal BanKerS

RHB Investment Bank BerhadMalayan Banking Berhad regiStered offiCe

Suite 2.12, Level 2, Menara MaxisegarJalan Pandan Indah 4/2Pandan Indah55100 Kuala LumpurTel No. : 03 - 4296 2000Fax No. : 03 - 4294 5072Website : www.keuro.com.my

SHare regiStrar

Tricor Investor Services Sdn BhdLevel 17, The Gardens North TowerMid Valley CityLingkaran Syed Putra59200 Kuala LumpurTel No. : 03 - 2264 3883Fax No. : 03 - 2282 1886

auditorS

Baker Tilly Monteiro Heng (AF0117)Chartered AccountantsBaker Tilly MH TowerLevel 10, Tower1, Avenue 5Bangsar South City59200 Kuala LumpurTel No. : 03 - 2297 1000Fax No. : 03 - 2282 9980

StoCK exCHange liSting

Main Market of Bursa Malaysia Securities Berhad

Board of direCtorS

dato’ abdul Hamid Bin mustapha(Chairman/Independent Non-Executive Director) datuk oh Chong peng(Independent Non-Executive Director) loy Boon Chen(Executive Director)

u Chin Wei(Independent Non-Executive Director) Chee Heng tong(Non-Independent Non-Executive Director)

4 KuMPuLAN EuRoPLuS BERHAD (534368-A)KuMPuLAN EuRoPLuS BERHAD (534368-A)

Profile of Board of Directors

Dato’ Abdul Hamid bin Mustapha, a Malaysian, aged 67, Chairman/Independent Non-Executive Director, joined the Board of Kumpulan Europlus Berhad (“KEuRo”) on 27 october 2005 and was appointed as Chairman on 29 September 2009.

Dato’ Abdul Hamid is a member of the Audit Committee and also the Chairman of Nomination Committee and Remuneration Committee of KEuRo. Dato’ Abdul Hamid also sits on the Board of Edaran Berhad, online E-Club Malaysia Berhad and several other private companies.

Datuk oh Chong Peng, a Malaysian, aged 68, an Independent Non-Executive Director, joined the Board of KEuRo on 28 September 2007. Datuk oh is the Chairman of the Audit Committee and a member of Nomination Committee and Remuneration Committee.

Datuk oh undertook his accountancy training in London and qualified as a Chartered Accountant in 1969. He is a Fellow of the Institute of Chartered Accountants, England and Wales. Datuk oh joined Coopers & Lybrand in London in 1969 and in Malaysia in 1971. He was a partner of Coopers and Lybrand Malaysia from 1974 until his retirement in 1997.

Datuk oh is currently the Chairman of Alliance Financial Group Berhad. He is also a Non-Executive Director of several public listed companies, such as British American Tobacco (Malaysia) Berhad, Dialog Group Berhad and Malayan Flour Mills Berhad and also, unlisted Ingenious Growth Berhad.

dato’ aBdul Hamid Bin muStapHa

datuK oH CHong peng

Dato’ Abdul Hamid graduated with Bachelor of Arts from university of Malaya. He has served the Royal Malaysia Police Force in various capacities since 1971 until his retirement as the Commissioner of Police, Director of Public order and Internal Security in 2002. He was appointed as a member of the Police Force Commission in Malaysia in May 2003 to May 2005.

Dato’ Abdul Hamid has no family relationship with any other directors and/or major shareholders of the Company. There is no conflict of interest with the Company. He has no convictions for offences within the past ten (10) years.

Dato’ Abdul Hamid has attended all six (6) Board of Directors’ meetings held during the financial year ended 31 January 2013.

He is a Government appointed member of the Labuan Financial Services Authority (LFSA).

His past appointments include being a Government appointed Member of the Kuala Lumpur Stock Exchange (1990-1996), a Council member (1981-2002) and a past President (1994-1996) of the Malaysian Institute of Certified Public Accountants (MICPA).

Datuk oh has no family relationship with any other directors and/or major shareholders of the Company. There is no conflict of interest with the Company. He has no convictions for offences within the past ten (10) years.

Datuk oh has attended all six (6) Board of Directors’ meetings held during the financial year ended 31 January 2013.

5A n n u a l R e p o r t 2 0 1 3

Loy Boon Chen, a Malaysian, aged 61, Executive Director, joined the Board of KEuRo on 28 September 2007. He is the Chairman of Executive Committee of KEuRo. He is also an Executive Director of Trinity Corporation Berhad, a 30%-associate of KEuRo.

Mr Loy Boon Chen holds a Master Degree in Business Administration from Golden Gate university, San Francisco, uSA and is a Certified Public Accountant, Malaysia.

Mr Loy worked as an auditor for an international accounting firm for seven (7) years prior to joining Mudajaya Construction Sdn Bhd as Chief Accountant before being appointed Group Financial Controller of IJM Corporation Berhad in 1994. Mr Loy was appointed the Financial Director of IJM Corporation Berhad from 1998, and was the Head of the Finance & Accounts Department and Chairman of IJM Group Risk Management Committee up till the end of 2006. Mr Loy had also represented IJM to head companies in the PR China,

loy Boon CHen

Hong Kong and Vietnam where IJM Group have substantial business interests. Since 2007, he was assigned to be in charge of special projects.

Mr Loy was a member of the Accounting Standards Sub-Committee of the Federation of Public Listed Companies Berhad (1998-2006).

He was an Independent and Non-Executive Director of Guangdong Provincial Expressway Development Co. Limited, a company listed on the Shenzhen Stock Exchange, China, for more than 10 years until his retirement in 2010.

He has no family relationship with any other directors and/or major shareholders of the Company. There is no conflict of interest with the Company. He has no convictions for offences within the past ten (10) years.

He has attended all six (6) Board of Directors’ meetings held during the financial year ended 31 January 2013.


u Chin Wei, a Malaysian, aged 62, Independent Non-Executive Director of KEuRo, joined the Board of KEuRo on 1 July 2003. He is a member of the Audit Committee, Nomination Committee and Remuneration Committee. He is also currently a Director of TA Enterprise Berhad and TA Global Berhad.

Mr u is a Fellow of Institute of Chartered Accountants in England and Wales and a member of the Malaysian Institute of Accountants and carries with him a wealth of experience from international companies and local conglomerates. Before returning to Malaysia, he worked in the London office of Coopers & Lybrand Chartered Accountants (now known as PriceWaterhouse Coopers). His initial years of career were with Inchcape and YTL Group. He was with the MuI Group from 1980 to 1989 where he served as General Manager. He was appointed as an Executive Director of Pegi Malaysia

u CHin Wei

Berhad for a year and he was subsequently appointed as an Executive Director of TA Enterprise Berhad, a position he held until october 1998. He was reappointed as an Independent Non-Executive Director from July 1999.

on 5 october 2009 he was appointed as an Independent Non-Executive Director of TA Global Berhad.

He has no family relationship with any other directors and/or major shareholders of the Company. There is no conflict of interest with the Company. He has no conviction for offences within the past ten (10) years.

He has attended five (5) out of six (6) Board of Directors’ meetings held during the financial year ended 31 January 2013.



Chee Heng Tong, a Malaysian, aged 72, Non-Independent Non-Executive Director, joined the Board of KEuRo on 9 August 2004. He is a member of the Executive Committee of KEuRo.

Mr Chee graduated with a Bachelor of Arts (Hons) Degree in Economics from the university of Malaya. He joined Bank Negara Malaysia as an Economist in 1965 and served in various capacities, before being appointed as Manager of Bank Regulations Department in 1974. From 1980 to 1996, he was involved in senior management positions in several financial institutions in the country.

He was the Executive Director of Kampong Lanjut Tin Dredging Berhad, a property development company, listed on the Main Board of Bursa Malaysia Securities Berhad, from 1990 to 1994.

CHee Heng tong

He has no family relationship with any other directors and/or major shareholders of the Company. There is no conflict of interest with the Company. He has no conviction for offences within the past ten (10) years.

He has attended all six (6) Board of Directors’ meetings held during the financial year ended 31 January 2013.

7A n n u a l R e p o r t 2 0 1 3

Financial Highlights

2013rm’million

2012rm’million

2011 rm’million

2010 rm’million

2009 rm’million

group

Total assets 375 398 473 471 488

Shareholders’ fund 101 125 98 87 119

Net current assets / (liabilities) (198) (46) 22 (1) (5)

Revenue 18 20 28 50 44

Profit / (Loss) before taxation (22) 29 (46) (35) (11)

Earnings / (Loss) per share (sen) (4.45) 5.32 (10.66) (7.24) 2.37

Net assets per share (RM) 0.19 0.24 0.19 0.18 0.25

Return on Assets

Return on Equity

Gearing Ratios

(5%)

(19%)

1.23

7%

21%

1.06

(10%)

(44%)

2.40

(7%)

(36%)

2.68

2%

8%

2.05

Company

Total assets 298 348 410 371 416

Shareholders’ fund 154 201 164 118 160

Net current assets (25) 98 126 74 74

Profit / (Loss) before taxation (47) 37 (11) (42) (6)

Return on Assets

Return on Equity

Gearing Ratios

(15%)

(31%)

0.45

11%

18%

0.34

(3%)

(7%)

1.00

(11%)

(36%)

1.36

(1%)

(3%)

1.06


Chairman’s Statement

finanCial HigHligHtS

The Group recorded a revenue of RM17.86 million which is a decrease of 10% compared to the revenue of RM19.78 million recorded in preceding financial year mainly due to completion of certain construction projects during the financial year ended 31 January 2013. The Group recorded a pre-tax loss of RM22.11 million compared to the pre-tax profit of RM28.71 million recorded in the preceding financial year mainly as a result of provision for doubtful debts of RM6.30 million and share of losses in associates of RM8.64 million, whilst the preceding financial year result was mainly attributable to gains of RM44.20 million on redemption of financial instruments and RM52.87 million on accretion of shares in an associate, Trinity Corporation Berhad.

The proposed Arc at Bandar Rimbayu development.

dear Shareholders,

On behalf of the Board of Directors of Kumpulan Europlus Berhad (“the Company”), I wish to present the Annual Report and Audited Financial Statements of the Group and the Company for the financial year ended 31 January 2013.

9A n n u a l R e p o r t 2 0 1 3


dividend

The Board of Directors do not recommend payment of a dividend for the financial year ended 31 January 2013 so as to enable the Group to retain its limited financial resources for its business operations.

revieW of proSpeCtS

(a) on 2 January 2013, West Coast Expressway Sdn. Bhd. (“WCESB”), an 80%-owned subsidiary of the Company signed the Concession Agreement (“CA”) with the Government of Malaysia in relation to the West Coast Expressway Project (“WCE Project”). The WCE Project involves the development of the West Coast Expressway from Banting in Selangor to Taiping in Perak with 233 km of tolled highway (including 40 km of highway to be constructed later). The project cost is estimated to be in the region of RM6.0 billion and the construction period will take up to 5 years.

The key agreed terms of the CA are as follows:-

(i) the WCE Project is a build-operate-transfer or BoT project with a concession period of 50 years. The concession period will be extended for another 10 years if the agreed targeted Internal Rate of Return (“IRR”) is not achieved;

(ii) to enhance the viability of the WCE Project, a Government Support Loan (“GSL”) of RM2.24 billion at an interest rate of 4% per annum will be provided by the Government of Malaysia subject to separate negotiations and an agreement to be executed with the Ministry of Finance;

(iii) the land acquisition cost of up to RM980 million for the WCE Project will be borne by the Government of Malaysia;

(iv) toll revenue in excess of an agreed traffic volume will be shared as follows:-

• duringtheGSLtenure,70%oftheexcessrevenue will be utilised as repayment or prepayment of the GSL; and

• aftersettlementof theGSL,onthebasisof 30:70 between the Government of Malaysia & WCESB if the targeted IRR is not achieved and 70:30 if the actual IRR is more than the targeted IRR.

(v) the construction works of the WCE Project will be implemented by WCESB through open tender presided over by a tender committee;

(vi) liquidated and ascertained damages of RM100,000 shall be paid by WCESB to the Government of Malaysia for each day of delay of construction if the construction is not completed by the agreed completion date; and

(vii) cost savings from the construction costs shall be utilised to review the GSL amount or for other purposes as may be determined by the Government of Malaysia.

WCESB shall within 9 months from the date of execution of the CA meet the conditions precedent of the CA which includes the financial close of the WCE Project. A further 3 months extension may be granted by the Government of Malaysia if required.

The directors are of the opinion that the Group will be able to fulfill the conditions precedent in the CA within the stipulated timeframe. The WCE Project, once implemented, shall enhance the future profitability and improve the financial position of the Group as this project is one of the key projects that will drive the Group and place it on solid financial standing.

YBhg Datuk Himmat Singh, Secretary General of Ministry of Works handing over the signed CA to YBhg Dato’ Abdul Hamid, the Group’s Chairman, after the signing ceremony. Together with them is YBhg Dato’ Neoh Soon Hong, CEO of WCESB.


revieW of proSpeCtS (Cont’d)

(b) Radiant Pillar Sdn Bhd (“RP”) a 50%-owned associate of the Company successfully launched phase 1 of its 1,878 - acre Bandar Rimbayu development on 2 March 2013 which saw an overwhelming response to its balloting exercise for 115 of non-Bumiputra units when 2,000 people turned up for this event . Phase 2 is expected to be launched in the third quarter of this year with phase 3 in early 2014. The Bandar Rimbayu development is a certified Green Township with an emphasis on sustainable development with abundant use of trees for landscaping, creeks and canals to add scenic charm while cooling the environment. This development is expected to take 15 years to complete and is expected to contribute positively to the Group’s financial results.

(c) Trinity Corporation Berhad (“TCB”) a 30.04%-owned associate of the Company continues to record losses in the wake of a challenging environment because it is unable to launch any new projects or developments until it has been able to fully complete all past projects successfully. Nevertheless, in the meantime, TCB has been actively working on strategic alliances and joint venture arrangements to unlock value in some of its land bank. It has also disposed of some of its land and investment properties in order to generate sufficient cash flow to ensure its business operations continue smoothly. The Company is confident that TCB will be able to turn around in the not-to-distant future.

appreCiation

The Board wishes to extend its appreciation and gratitude to our shareholders, customers, lenders, business associates and management & staff for their continuous support and commitment to the Group.

Last but not least, I wish to extend my sincere gratitude and appreciation to the Government of Malaysia, Securities Commission, Bursa Malaysia Securities Berhad and all the relevant authorities for their guidance, advice and support.


Participants at Bandar Rimbayu development’s inaugural or 1st launch comprising terrace house units.

Balloting process underway at the 1st launch, officiated by both the CEO/MD of IJM Corporation Berhad and CEO/MD of IJM Land Berhad, the Group’s JV partner of Bandar Rimbayu development.

11A n n u a l R e p o r t 2 0 1 3

Statement on Corporate Governance

The Board of Kumpulan Europlus Berhad recognises and appreciates the importance of good corporate governance and fully support the principles and recommendations as set out in the Malaysian Code on Corporate Governance 2012 (“MCCG 2012”). The Board further acknowledges the recommendations set out in MCCG 2012 and continues to evaluate the status of the Group’s practices and procedures.

The Board, is therefore, committed towards instilling high standards of corporate governance throughout the Group as a fundamental part of discharging its responsibility to enhance shareholder value and the financial performance of the Group.

The Board is pleased to disclose below the manner in which it has applied the principles of good governance and the extent of compliance with the best practices set out in the MCCG 2012.

SeCtion 1: direCtorS

Board’s duties and responsibilities

The Board is fully responsible for the effective control of the Group. This includes responsibility for determining the Group’s strategic direction, financial performance, allocation of resources and standards of conduct.

In manifestation of its commitment to MCCG 2012, the Board has established a Board Charter to ensure that all Board members are aware of their fiduciary duties and responsibilities, various legislations and regulations affecting their conduct, the need to safeguard the interests of the shareholders, customers and other stakeholders and that a high standard of corporate governance is applied in all their dealings on behalf of the Company.

The duties and responsibilities of the Board as outlined in the Board Charter include amongst others, the following:

(1) reviewing and adopting the overall strategic plans and programmes for the Group;

(2) overseeing and evaluating the conduct of business of the Company and the Group;

(3) identifying principal risks and ensuring implementation of a proper risk management system to manage such risks;

(4) establishing a succession plan;

(5) developing and implementing a shareholder communication policy for the Company; and

(6) reviewing the adequacy and the integrity of the management information and internal control systems of the Company and the Group.



SeCtion 1: direCtorS (Cont’d)

Composition of the Board

The Board currently has five (5) members comprising one (1) Executive Director, three (3) Independent Non-Executive Directors (including the Chairman) and one (1) Non-Independent Non-Executive Director. Amongst the Non-Executive Directors, three (3) are Independent Non-Executive Directors. The composition reflects that more than one third (1/3) of its members are independent.

The roles of the Chairman and Executive Director are distinct and separated to ensure that there is a balance of power and authority. The Chairman is responsible for the leadership, effectiveness, conduct and governance of the Board, while the Executive Director has overall responsibility for the day-to-day management of the business and implementation of the Board’s policies and decisions. The Executive Director is also responsible to ensure due execution of the strategic goals, effective operation within the Group, and to explain, clarify and inform the Board on matters pertaining to the Group.

The four (4) Non-Executive Directors provide the necessary balance of power and authority to the Board with a mix of industry-specific knowledge and broad business and commercial experience. They ensure that all proposals by management are fully deliberated and examined, taking into account the interest of shareholders and stakeholders. The Independent Non-Executive Directors play a crucial role in providing unbiased and independent views, advice and judgment to the Board to safeguard the interest of minority shareholders. Dato’ Abdul Hamid Bin Mustapha, the Chairman has been identified as the Senior Independent Non-Executive Director to whom concerns relating to the Company may be conveyed.

In ensuring that each of the Directors possesses good integrity and character, the Company has adopted the Code of Ethics and Conduct for its Directors.

The profiles of the Directors are set out on pages 4 to 6 of this Annual Report.

The Board is supportive of gender diversity in the boardroom and endeavours to promote the representation of women in the composition of the Board in the coming years.

Board meetings

The Board holds at least five (5) regular scheduled meetings annually, with additional meetings convened as and when necessary.

During the financial year ended 31 January 2013, six (6) Board meetings were held and the attendance record of each Director is set out below:

directors number of meetings attended

Dato’ Abdul Hamid Bin Mustapha (Chairman) 6 out of 6

Datuk oh Chong Peng 6 out of 6

Loy Boon Chen 6 out of 6

u Chin Wei 5 out of 6

Chee Heng Tong 6 out of 6

Tan Sri Dato’ (Dr) Ir Chan Ah Chye @ Chan Chong Yoon (Retired on 1 April 2012)

1 out of 1

Puan Sri Datin Thong Nyok Choo (Resigned on 1 April 2012)

1 out of 1

All Directors have complied with the minimum requirements on the attendance at Board meetings as stipulated in the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”).

The Directors also observe the requirement that they do not participate in the deliberations on matters of which they have material personal interest, and abstain from voting in such matters.

13A n n u a l R e p o r t 2 0 1 3



Supply of information

Board papers are issued prior to the Board Meetings to enable the Directors to review and consider the agenda items to be discussed at the meeting and where necessary, to obtain further explanations in order to be fully briefed before the meeting. The Board papers include reports relevant to the issues of the meeting, covering the areas of strategic, financial, operational and regulatory compliance matters.

In exercising their duties, the Directors have access to all information within the Company and to the advice and services of the Company Secretary. If necessary, the Directors are entitled to seek independent professional advice from external consultants, so as to ensure the Directors are able to make independent and informed decisions. Any such request is presented to the Board for approval.

Senior management staff, as well as advisers and professionals appointed to advise on corporate proposals, may be invited to attend Board meetings to provide the Board with their views and explanations on certain agenda items tabled to the Board, and to provide clarification on issues that may be raised by the Directors.

appointment to the Board

The Nomination Committee is responsible for making recommendations to the Board, suitable candidates for appointment as Director after which the Company Secretary ensures that all appointments are properly made and all legal and regulatory compliance are met. In making these recommendations, the Nomination Committee considers the required mix of skills and experience, which the Directors should bring to the Board.

re-election and re-appointment of directors

In accordance with the Articles of Association of the Company (“Articles”), all Directors who are appointed by the Board, are subject to re-election by shareholders subsequent to their appointment at the immediate Annual General Meeting (“AGM”). The Articles also provide that one-third (1/3) of the Directors shall retire from office and be eligible for re-election at every AGM. All Directors shall submit themselves for re-election at least once every three (3) years.

The re-election of each Director is voted on separately. To assist shareholders in their decision, sufficient information, such as personal profile, meetings’ attendance and the shareholdings of each Director standing for re-election, are furnished in the Annual Report.

Pursuant to Section 129(6) of the Companies Act, 1965 (“the Act”), Directors who are over seventy (70) years of age are required to submit themselves for re-appointment at every AGM.

directors’ training and Continuing education

All the Directors have attended the Mandatory Accreditation Programme prescribed by Bursa Malaysia Securities Berhad (“Bursa Securities”). The Directors are also aware of their duty to continuously update their knowledge and enhance their skills through appropriate continuing education programmes. This will enable the Directors to effectively discharge their duties and actively participate in Board deliberations.

The Directors are provided with the opportunity, and are encouraged, to attend training to keep themselves updated on relevant new legislation, financial reporting requirements, best practices and changing commercial and other risks.




directors’ training and Continuing education (Cont’d)

All the Directors have attended at least one training session during the financial year ended 31 January 2013. Some of these training programmes, seminars and forum are as follows:

1. Impact of Amendments to Listing Requirements of Bursa Malaysia & Malaysian Code on Corporate Governance 2012

2. Role of the Audit Committee in Assuring Audit Quality (organised by Bursa Malaysia)

3. Impact of Amendments to Listing Requirements & optimising IFRS Convergence (organised by Malaysia Investor Relations Association)

4. update on Competition, Data Protection & Whistleblowing

5. NIEW (NAM Institute For the Empowerment of Women) Seminar on women in decision making position

Company Secretary

The Company Secretary plays an important advisory role and is a source of information and advice to the Board and Committees on issues relating to compliance with laws, rules, procedures and regulations affecting the Company and Group.

The Board ensures that the Company Secretary appointed shall be someone who is capable of carrying out the duties. The Company Secretary shall be of a senior position with adequate authority and shall report directly to the Board.

Board Committees

The Board has delegated certain functions to several Board Committees, which operate within the approved Terms of Reference. These Committees have authority, inter-alia, to examine particular issues and report back to the Board with their recommendations. The ultimate responsibility for the final decision on all matters, however, lies with the entire Board.

The composition of each Board Committee, the terms of reference, the activities carried out during the financial year ended 31 January 2013 and the number of meetings held during the financial year are set out below:

a. audit Committee

The Audit Committee is chaired by Datuk oh Chong Peng. other members of the Audit Committee are Dato’ Abdul Hamid Bin Mustapha and Mr u Chin Wei.

The Terms of Reference and activities of the Audit Committee during the financial year are set out under the Audit Committee Report on pages 25 to 28 of this Annual Report.

A Risk Management Committee (“RMC”) was established and it reports to the Audit Committee. The RMC is headed by the Executive Director and comprises of senior management personnel of the Group, to assist the Board in ensuring that the implementation of the approved Risk Management Framework has in place an on-going process for identifying, evaluating, assessing, monitoring and managing key business risks that may affect the achievement of the Group’s business objectives. The RMC deliberates and determines the Group’s major risks to be escalated for the attention of the Audit Committee and the Board.

15A n n u a l R e p o r t 2 0 1 3


a. audit Committee (Cont’d)

During the financial year ended 31 January 2013 and as at the date of this statement, the members of RMC are as follows:

members designation

Loy Boon Chen (Chairman) Executive Director

Ng Lai Tin Senior Vice President I

Zakaria Bin Saparon Head of Internal Audit

Raw Koon Beng(Retired on 28 March 2013)

Company Secretary

Lourdes Puspham Dass(Appointed on 28 March 2013)

Chief Financial officer

During the financial year, the RMC held a meeting, which was attended by all the members.

B. nomination Committee

The Nomination Committee comprises three (3) Independent Non-Executive Directors. During the financial year ended 31 January 2013, the members are as follows:

members designation

Dato’ Abdul Hamid Bin Mustapha (Chairman) Independent Non-Executive Director

Datuk oh Chong Peng Independent Non-Executive Director

u Chin Wei Independent Non-Executive Director

The main Terms of Reference of the Nomination Committee include, amongst others, the following:

(1) to recommend to the Board, candidates for directorships. In making its recommendations, the Nomination Committee should consider the candidates’ skills, knowledge, expertise and experience, professionalism and integrity. In the case of candidates for the position of independent non-executive directors, the Nomination Committee should also evaluate the candidates’ ability to discharge such responsibilities/functions as expected from independent non-executive directors.

(2) to recommend to the Board, directors to fill the seats on Board committees;

(3) to review the required mix of skills, experience and other qualities, including core competencies which non-executive directors should bring to the Board, on an annual basis; and

(4) to assess the effectiveness of the Board as a whole, the committees of the Board, and the contribution of each individual director, including independent non-executive directors, on an annual basis.





B. nomination Committee (Cont’d)

During the financial year, the Nomination Committee held one (1) meeting, which was attended by all the members.

The key activities undertaken by the Nomination Committee during the financial year were:

(1) assess the effectiveness of the Board as a whole and the contribution of the various Board Committees and each individual director;

(2) assess the independence of the Independent Directors;

(3) review the overall composition of the Board in terms of its structure and appropriate size, mix of skills, experience and core competencies of its Directors; and

(4) update its terms of reference.

C. remuneration Committee

The Remuneration Committee comprises three (3) Independent Non-Executive Directors. During the financial year ended 31 January 2013 and as at the date of this statement, the members are as follows:

members designation

Dato’ Abdul Hamid Bin Mustapha (Chairman) Independent Non-Executive Director

Datuk oh Chong Peng Independent Non-Executive Director

u Chin Wei Independent Non-Executive Director

Tan Sri Dato’ (Dr) Ir Chan Ah Chye @ Chan Chong Yoon(Retired on 1 April 2012)

President/Chief Executive

The main Terms of Reference of the Remuneration Committee include, amongst others, the following:

(1) to recommend to the Board, the reward framework for executive directors and perform an on-going review of the executive directors’ remuneration structure;

(2) to recommend to the Board, changes in remuneration, if required, or in the event the present structure and remuneration policy are deemed inappropriate;

(3) the remuneration of the non-executive directors are to be determined by the Board and on the recommendation of the Remuneration Committee; and

(4) to review and approve annual salaries, incentive arrangements, service agreements and other employment conditions for the executive directors with consideration of their performance. This can be performed by linking executive directors’ remuneration to corporate and individual performance, such as, performance of the Company, growth of the Company vis-à-vis the growth of the industry, contribution of the executive directors to the Group etc.

During the financial year, the Remuneration Committee held a meeting, which was attended by all the members.

The key activities undertaken by the Remuneration Committee during the year were:-

(1) review and recommend the remuneration of the Executive Director for the next financial year; and

(2) update its terms of reference.

17A n n u a l R e p o r t 2 0 1 3


d. executive Committee

The Executive Committee consists of the Directors and senior management personnel of the Group. The Executive Committee shall preferably meet on quarterly basis or whenever deemed necessary to review the performance of the Group’s operating divisions. During the financial year ended 31 January 2013 and as at the date of this statement, the members are as follows:

members designation

Loy Boon Chen (Chairman) Executive Director

Chee Heng Tong Non-Independent Non-Executive Director

Tan Sri Dato’ (Dr) Ir Chan Ah Chye @ Chan Chong Yoon(Retired on 1 April 2012)

President/Chief Executive

Raw Koon Beng(Retired on 28 March 2013)

Company Secretary

Lourdes Puspham Dass(Appointed on 28 March 2013)

Chief Financial officer

The main Terms of Reference of the Executive Committee include the following:

(1) to propose strategic business direction and business plan to the Board periodically or whenever deemed necessary;

(2) to evaluate and decide on transactions (including acquisition or disposal of assets or investments) and matters relating to the Group’s core businesses (which includes construction and operation of tolled highway, general construction activities, manufacturing, property development and sand mining) or existing investments (or such future investments as may be approved by the Board of Directors), and where the value of each of such transactions does not exceed five percent (5%) of the Group’s shareholders fund/net assets value;

(3) to review, on periodically basis, the performance of all business units of the Group and suggest corrective actions, if necessary;

(4) to undertake such function and decide on all matters as may be approved or delegated by the Board of Directors.

During the financial year, the Executive Committee held six (6) meetings.




SeCtion 2: direCtorS’ remuneration

The Remuneration Committee carries out annual review of the Executive Director’s remuneration whereupon recommendation will be submitted to the Board for approval. Such annual review shall ensure the remuneration package of the Executive Director remains sufficiently attractive to attract and retain the Executive Director.

The Executive Director does not participate in the decision with regards to his remuneration. The determination of the remuneration package of the Non-Executive Directors are a matter for the Board as a whole following the relevant recommendation made by the Remuneration Committee, with the Director concerned abstaining from deliberation and voting on his own remuneration.

The details of the Directors’ remuneration (including Directors who retired and resigned during the financial year ended 31 January 2013) are as follows:

Categoryfees

(rm’000)

Salaries and other

emoluments(rm’000)

epf contributions

(rm’000)total

(rm’000)

Executive Directors 50 283 18 351

Non-Executive Directors 155 250 - 405

The number of Directors whose total remuneration falls within the following bands:

number of directors

executive non-executive

RM50,000 and below - 2

RM50,001 to RM100,000 - 4

RM150,000 to RM200,000 2 -

total 2 6

SeCtion 3: SHareHolderS

The Board recognises the importance of establishing a direct line of communication with shareholders and investors through timely dissemination of information on the Group’s performance and major developments via appropriate channels of communication. Dissemination of information includes the distribution of Annual Report and relevant circulars, information by way of material announcements, issuance of quarterly financial result of the Group to Bursa Securities and the public as well as through press conferences. In addition, stakeholders who wish to reach the Group can do so through the “Contact us” page in our current website.

The Annual General Meeting is the principal forum for dialogue with shareholders. Besides the usual agenda for the Annual General Meeting, the Board presents the progress and performance of the business as contained in the Annual Report and provides opportunities for shareholders to raise questions pertaining to the business activities of the Group. Members of the Board as well as the Auditors of the Company are present to provide responses to questions from the shareholders during these meetings.

Each item of special business included in the notice of the meeting will be accompanied by an explanatory statement on the proposed resolution.

19A n n u a l R e p o r t 2 0 1 3

SeCtion 4: aCCountaBility and audit

financial reporting

The Board, in presenting the annual audited financial statements, aims to present a balanced and rational assessment of the Group’s position. The Board is also responsible for ensuring that the financial statements prepared are drawn up in accordance with the provisions of the Act and the applicable approved accounting standards in Malaysia.

The quarterly financial results and audited financial statements were reviewed by the Audit Committee and approved by the Board before being released to Bursa Securities. The details of the Company and the Group’s financial statements for the financial year ended 31 January 2013 are set out on pages 34 to 93 of this Annual Report.

The Board is required by the Act to prepare financial statements for each financial year, which give a true and fair view of the state of affairs of the Company and the Group at the end of the financial year and their results for the financial year.

As required by the Act and the Listing Requirements of Bursa Securities, the financial statements have been prepared in accordance with the approved accounting standards in Malaysia and complied with the provisions of the Act.

In preparing the financial statements for the financial year ended 31 January 2013, the Group has used appropriate accounting policies, consistently applied and supported by reasonable and prudent judgments and estimates.

The Directors have responsibility for ensuring that the Company and the Group maintain accounting records, which disclose, with reasonable accuracy, the financial position of the Company and the Group and which enable them to ensure that the financial statements comply with the Act. The Directors have general responsibilities for taking such steps as are reasonably available to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

internal Control

The Board acknowledges its overall responsibility for maintaining a system of internal control including risks assessment processes, which provides reasonable assurance in ensuring the effectiveness and efficiency of operations and the safeguards of assets and interests in compliance with laws and regulations as well as with internal procedures and guidelines.

The Statement on Risk Management and Internal Control, which provides an overview of the state of internal control within the Group, is set out on page 23 and 24 of this Annual Report.

relationship with auditors

The Company has always maintained a close and transparent professional relationship with its auditors in seeking professional advice and ensuring compliance with the accounting standards in Malaysia. The role of the Audit Committee in relation to the external auditors is set out on pages 25 to 28 of this Annual Report.




SeCtion 5: SuStainaBility report and Corporate SoCial reSponSiBility (CSr)

The Group is firmly committed to undertaking responsible corporate practices and upholding the sustainability elements to develop the Company as a long term sustainable business that delivers value for all our stakeholders including our employees, customers, shareholders and the wider environment and community that we operate in. During the financial year, we have identified our sustainability priorities which comprise of Employee Welfare, Environmental Management and Corporate Social Responsibility for charitable and volunteering causes.

employee Welfare

The Company values its employees as they are the heart of the Group and the key to the competitive success in the marketplace which is vital in sustaining its business. We endeavour to provide them the relevant training to acquire the rights skills and help deliver our business strategy. As a policy, we do not discriminate against any race, gender, age and minorities. The employees are also provided adequate medical benefits as well as hospitalisation and personal accident insurance coverage.

environmental management

As part of our continuing efforts towards environmental sustainability, the Group will ensure that there are sufficient measures at all construction sites and work places to prevent any adverse impact on the environment.

The Group’s Bandar Rimbayu development through its 50%-owned associate, Radiant Pillar Sdn Bhd, features sustainable environmental initiatives like rain water harvesting and solar panels for its housing units, amongst others. Abundant use of trees for landscape, creeks and canals to add to the scenic charm while cooling the environment. More than 50,000 trees, palms, shrubs, flower garden, aquatic plants, herbs and climbers will be planted around the Arc and sales gallery. The Bandar Rimbayu development which has been certified as a Green Township is poised to become a premier green township in the Klang Valley.

Environmental sustainability is an on-going initiative and we will continue to incorporate environmental consideration into our processes.

Corporate Social responsibility

We encourage our employees to get involved in volunteering activities and encourage them to use their knowledge, skills and resources to make a positive contribution to the local communities.

This Statement is made in accordance with a resolution of the Board of Directors dated 19 June 2013.

21A n n u a l R e p o r t 2 0 1 3

Additional Compliance InformationAs at 31 January 2013

1. optionS, WarrantS or ConvertiBle SeCuritieS

There were no options, warrants or convertible securities exercised during the financial year as the Company had not issued any options, warrants or convertible securities.

2. ameriCan depoSitory reCeipt (adr) / gloBal depoSitory reCeipt (gdr) programmeS

The Company did not sponsor any ADR or GDR programmes during the financial year.

3. impoSition of SanCtionS and/or penaltieS

There were no sanctions and/or penalties imposed by any regulatory bodies on the Company or its subsidiaries or Directors or management during the financial year.

4. non-audit feeS

During the financial year, the Company did not incur any non-audit fees to the Auditors of the Company.

5. variation in reSultS

There were no material variations between the audited and unaudited results for the financial year ended 31 January 2013.

6. material ContraCtS

There were no material contracts entered by the Company and its subsidiaries involving its Directors’ and Major Shareholders’ interests which were still subsisting as at the end of the financial year.

7. utiliSation of proCeedS

The Company did not raise funds through any corporate proposal during the financial year.

8. SHareS Buy-BaCK

The Company did not buy back any of its shares during the financial year.

9. reCurrent related party tranSaCtionS of a revenue or trading nature

Details of recurrent related party transactions made during the financial year ended 31 January 2013 pursuant to the shareholders’ mandate obtained by the Company at the Annual General Meeting held on 17 July 2012 are as follows:

nature of transactions undertaken by Kumpulan europlus Berhad (“Keuro”) and/or its Subsidiaries

transacting Companytransacted

value(rm’000)

interested related party

a. rental of office premises at menara maxisegar, Jalan pandan indah 4/2, pandan indah, 55100 Kuala lumpur

KEB Builders Sdn Bhd(“KEBB”)

Abra Development Sdn Bhd (“ADSB”), a subsidiary of Trinity Corporation Berhad (“TCB”)

251 TSDCAC & PSDTNC(Notes 1 and 2)

West Coast Expressway Sdn Bhd(“WCESB”)

ADSB 34 TSDCAC & PSDTNC(Notes 1 and 2)


Additional Compliance Information

nature of transactions undertaken by Keuro and/or its Subsidiaries transacting Company

transacted value

(rm’000)

interested related party

B. interest income charged by Keuro

KEuRo Europlus Berhad, a subsidiary of TCB


KEuRo Galian Juta Sdn Bhd, a former subsidiary of TCB^

60^ TSDCAC & PSDTNC(Notes 1 and 2)

KEuRo Maxisegar Sdn Bhd, a subsidiary of TCB


C. Construction Contract Cost charged by KeBB

KEBB Galian Juta Sdn Bhd, a former subsidiary of TCB^

266^ TSDCAC & PSDTNC(Notes 1 and 2)

d. interest Charged by iJm Corporation Berhad (“iJm”) group

KEuRo IJM 404 IJM & KEuRo(Note 3)

KEuRo IJM Construction Sdn Bhd (“IJMC”), a subsidiary of IJM

406 IJM & KEuRo(Note 3)

KEBB IJM Properties Sdn Bhd, a subsidiary of IJM

227 IJM & KEuRo(Note 3)

WCESB IJMC 1,268 IJM & KEuRo(Note 3)

notes:

1. Tan Sri Dato’ (Dr) Ir Chan Ah Chye @ Chan Chong Yoon (“TSDCAC”) and Puan Sri Datin Thong Nyok Choo (“PSDTNC”) are Major Shareholders of KEuRo. By virtue of their interest in the shares of KEuRo, TSDCAC and PSDTNC are deemed interested in the shares of all the subsidiary companies of KEuRo to the extent KEuRo has an interest.

2. TSDCAC is a Director of TCB. TSDCAC and PSDTNC are also Major Shareholders of TCB. By virtue of their interest in the shares of TCB, TSDCAC and PSDTNC are deemed interested in the shares of all the subsidiary companies of TCB to the extent TCB has an interest.

3. IJM is a Major Shareholder of KEuRo by virtue of its 22.72% direct interest in KEuRo.

^ Disposed and ceased as subsidiary of TCB on 31 January 2013. The transacted value disclosed was up to the date of disposal.

9. reCurrent related party tranSaCtionS of a revenue or trading nature (Cont’d)

23A n n u a l R e p o r t 2 0 1 3

Statement on Risk Managementand Internal Control

Set out below is the Board of Directors’ (“the Board”) Statement on Risk Management and Internal Control for Kumpulan Europlus Berhad and its subsidiaries (“the Group”), made in compliance with Paragraph 15.26(b) of the Listing Requirements of Bursa Malaysia Securities Berhad and the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers.

BOARD’S RESPONSIBILITIES

The Board recognises the importance of a sound system of risk management and internal control in order to achieve good corporate governance. The Board acknowledges that the Board is ultimately responsible for the Group’s system of risk management and internal control, which includes the establishment of an appropriate risk management framework, as well as reviewing its adequacy, integrity and effectiveness. The system covers risk management and internal controls relating to financial, operational, achievement of strategic goals and compliance with applicable laws and regulations.

Generally, the Group’s system of risk management and internal control is designed to manage the risks to which the Group is exposed to while pursuing its business objectives. The Group’s system of risk management and internal control is designed to mitigate rather than eliminate the risks. Therefore, the system of risk management and internal control can only provide reasonable but not absolute assurance against material misstatement, loss or fraud.

Risk Management Framework

A sound framework of risk management and internal control is fundamental to good corporate governance. The Risk Management System (“RMS”) is used to manage key business risks and to provide assurance to the Board and stakeholders that the risks faced by the Group are adequately and effectively managed and the shareholders’ investments and the Group’s assets are safeguarded. The effectiveness of the Group’s RMS is reviewed on a regular basis and where necessary, improved, both at the management and the Board levels.

The Risk Management Committee (“RMC”), comprising of senior management and chaired by the Executive Director, reports to the Audit Committee. The RMC ensures the Group has in place an on-going process for identifying, evaluating, assessing, monitoring and managing key business risks that may affect the achievement of the Group’s business objectives. The processes which have been instituted throughout the Group are updated and reviewed from time to time to respond to the changes in the business environment throughout the financial year under review, up to the date this statement was approved by the Board. The RMC deliberates and determines the Group’s major risks to be escalated for the attention of the Audit Committee and the Board.

Associates

In the case of material associates, the Group ensures that its interests and investments are protected by having board representation at the respective associates. Notwithstanding this, the management of the associates are responsible for the administration, operation and performance of these associates. Financial and operational information of these associates are provided regularly to the management of the Group and the Board.

INTERNAL AUDIT’S RESPONSIBILITIES

The Group’s internal audit service provided by its associate company, Trinity Corporation Berhad, performs regular reviews of business processes to assess the effectiveness of internal controls and reports regularly to the Audit Committee. The internal audit provides assessment as to whether risk, which may hinder the Group from achieving its objectives are being adequately evaluated, managed and controlled or mitigated. It also evaluates all aspect of internal control and effectiveness of governance and facilitates enhancement, where appropriate.


Statement on Risk Management and Internal Control

otHer Key elementS of internal Control

1. operational organisation structure with defined lines of responsibilities and delegation of authority which facilitates a process of reporting and provides for a documented and auditable trail of accountability.

2. Management reports, which are presented by the respective division heads to the Executive Committee, provides

financial information, including key performance indicators and information of significant changes in accounting standards and reporting;

3. Periodic Executive Committee meetings convened to discuss the Group’s operations and performance. The meetings enable the regular monitoring of results against budget, with significant variance explained and appropriate action taken;

4. Defined limits of authority for various transactions, including purchasing and payments;

5. Standing Instructions and Standard operating Procedures of all departments are regularly reviewed and updated to ensure effective management of the Group’s operations; and

6. Monitoring of quarterly financial results by the Audit Committee and the Board. The Board is of the opinion that there are no significant weaknesses in the system of internal control during the financial year, which has significant financial impact on the Group’s performance or operations. The Board and the management continue to take measures to strengthen the internal control environment to safeguard shareholders’ investment and the Group’s assets.

Board’S Commitment

The Board recognises that the Group operates in a dynamic business environment in which the risk management and internal control system must be responsive in order to be able to support its business objectives. To this end, the Board remains committed towards maintaining a sound system of risk management and internal control and believe that a balanced achievement of its business objectives and operational efficiency can be attained.

ConCluSion

The Board is pleased to report that it has received the assurance from the Executive Director and the Chief Financial officer that the Group’s risk management and internal control system is operating adequately and effectively in all material aspects. They have further assured the Board that the risk management practices are able to meet the Group’s objective to ensure good corporate governance. There was no material control failure or weakness that would have material adverse effect on the results of the Group for the year under review, up to the date this statement was approved by the Board on 19 June 2013.

25A n n u a l R e p o r t 2 0 1 3

Audit Committee Report

CompoSition

members of the Committee designation

1. Datuk oh Chong Peng (Chairman) Independent Non-Executive Director

2. Dato’ Abdul Hamid Bin Mustapha Independent Non-Executive Director

3. u Chin Wei Independent Non-Executive Director

termS of referenCe

The following terms of reference of the Audit Committee have been adopted.

Constitution

The Audit Committee was established by the Board on 17 July 2003.

membership

The Committee shall be appointed by the Board of Directors from amongst their numbers and shall consist of not less than 3 members, of whom a majority shall be independent directors. An independent director shall be one who fulfils the requirement as provided for in the Listing Requirements of Bursa Malaysia Securities Berhad.

At least one member of the Audit Committee must be a member of the Malaysian Institute of Accountants, or if he is not a member of the Malaysian Institute of Accountants, he must have:

(i) at least 3 years’ working experience and passed the examinations specified in Part I of the First Schedule of the Accountants Act 1967; or

(ii) at least 3 years’ working experience and is a member of one of the associations of accountants specified in Part II of the First Schedule of the Accountants Act 1967; or

(iii) a degree / masters / doctorate in accounting or finance and at least 3 years’ post qualification experience in accounting or finance; or

(iv) at least 7 years’ experience being a chief financial officer of a corporation, or having the function of being primarily responsible for the management of the financial affairs of a corporation.

The members of the Audit Committee shall elect a Chairman from amongst their number, who shall be an independent director. If a member of the Audit Committee resigns, dies or for any other reason ceases to be a member with the result that the number of members is reduced to below 3, the Board of Directors shall, within 3 months of that event, appoint such number of new members as may be required to make up the minimum number of 3 members.

No alternate director can be appointed as a member of the Audit Committee.



termS of referenCe (Cont’d)

authority

The Audit Committee is granted the authority to investigate any activity of the Company and its subsidiaries within its terms of reference. In particular, the Audit Committee has the authority to:

(i) have resources, which are required to perform its duties;

(ii) have full and unrestricted access to any information, including any information it requires from any employee, and all employees are directed to co-operate with any request made by the Audit Committee;

(iii) be able to obtain independent professional or other advice; and

(iv) have direct communication channels with the external and internal auditors.

meetings and reporting procedures

The Audit Committee will meet at least four (4) times a year. A quorum for a meeting shall be two members, both being independent directors. At least twice a year, the Audit Committee shall meet with the external auditors without any executive directors being present. The external auditors may request for a meeting, if they consider necessary.

The directors and employees will attend any particular Audit Committee meeting only at the Audit Committee’s invitation, specific to the relevant meeting.

The Company Secretary shall be the secretary of the Audit Committee. Minutes of the meeting shall be duly entered in the books provided therefrom. The minutes will be circulated to all members of the Board of Directors and shall be presented at the Board of Directors’ meeting.

duties and functions

The duties and functions of the Audit Committee shall be:

(i) To consider the appointment of the external auditors, the audit fee, and any questions of resignation or dismissal of the external auditors before making recommendation to the Board of Directors;

(ii) To discuss with the external auditors before the audit commences, the audit plan, the nature and scope of

the audit and ensure coordination where more than one audit firm is involved; (iii) To review the quarterly results and year-end financial statements prior to the approval by the Board of Directors,

focusing particularly on:

(a) any changes in accounting policies and practices;

(b) significant and unusual events;

(c) the going concern assumption; and

(d) compliance with accounting standards, stock exchange and legal requirements.

(iv) To review any related party transaction and conflict of interest situation that may arise in the Company including any transaction, procedure or course of conduct that raises questions of management integrity;

(v) To discuss problems and reservations arising from the interim and final audits, and matters the auditors may wish to discuss (in the absence of management where necessary); The duties and functions of the Audit Committee shall be:

27A n n u a l R e p o r t 2 0 1 3


termS of referenCe (Cont’d)

duties and functions (Cont;d)

(vi) In relation to internal audit function / service:

(a) to review the adequacy of the scope, functions, competency and resources of the internal audit function/ service that it has the necessary authority to carry out its work;

(b) to review the internal audit programme and results of the internal audit process and, where necessary, ensure that appropriate actions are taken on the recommendations of the internal audit function/service;

(c) to review any appraisal or assessment of the performance of members of the internal audit function/service;

(d) to approve any appointment or termination of senior staff members of the internal audit function/service; and

(e) to take cognizance of resignations of internal audit staff members and provide the resigning staff member an opportunity to submit his reasons for resigning.

(vii) To keep under review the effectiveness of internal control system and in particular review the external auditors’ management letter and management’s response;

(viii) To review the audit reports;

(ix) To review the reports of the Risk Management Committee;

(x) To make periodic report to the Board of Directors summarizing the work performed in fulfilling the Audit Committee’s primary responsibilities; and

(xi) To consider other topics, as defined by the Board of Directors.

attendanCe at audit Committee meetingS

During the financial year ended 31 January 2013, there were five (5) Audit Committee Meetings held and the number of meetings attended by each Audit Committee member are as follows:

audit Committee members number of meetings attended

1. Datuk oh Chong Peng (Chairman) 5 out of 5

2. Dato’ Abdul Hamid Bin Mustapha 5 out of 5

3. u Chin Wei 5 out of 5



Summary of audit Committee aCtivitieS

During the financial year ended 31 January 2013, the Audit Committee carried out its duties, amongst others, in accordance with its terms of reference, as follows:

(i) Reviewed the quarterly financial results prior to recommending them for consideration and approval by the Board of Directors;

(ii) Reviewed and discussed with the external auditors the audit planning memorandum before commencement of the year end audit;

(iii) Reviewed and discussed with external auditors’ findings during the course of their audit and the management’s response, including having confidential private session with the external auditors;

(iv) Reviewed the annual audited financial statements and recommend for approval by the Board of Directors;

(v) Reviewed and deliberated the recurrent related party transactions;

(vi) Reviewed and approved the internal audit plan;

(vii) Reviewed and deliberated the internal audit reports; and

(viii) Reviewed the Risk Management Committee’s reports and assessment.

internal audit ServiCe

The Audit Committee is supported in its duties by the internal audit service provided by the associate, Trinity Corporation Berhad. The Committee is aware of the fact that the internal audit service is essential to assist in obtaining the assurance and consulting services it requires, regarding the effectiveness of the system of internal control in the Group.

The primary objective of the internal audit service is to review the effectiveness of the system of internal control and this is performed with impartiality, proficiency and due professional care. The internal audit service enables the Audit Committee to discharge its duties by undertaking independent regular and systematic reviews of the system of internal control, so as to provide reasonable assurance that such system continue to operate satisfactorily and effectively.

However, in recent years, due to the continued reduced business activities in the Group, the internal audit activities were also scaled down accordingly. Total cost incurred in respect of internal audit services during the financial year ended 31 January 2013 was RM27,114.

During the financial year, the following main internal audit activities were carried out:

(i) Conducted internal audit in accordance with the risk based / driven internal audit plan. Three routine audits and one ad-hoc audit were carried out during the year;

(ii) Reviewed the internal control procedures as stipulated in the Group’s Standing Instructions and Standard of operating Procedures. During the same period, Standing Instructions and Standard of operating Procedures of the departments/ subsidiaries were jointly reviewed and updated, and practical internal control procedures were incorporated;

(iii) Reviewed the recurrent related party transactions of the Company and its Group;

(iv) Attended the Risk Management Committee Meeting.

All internal audit reports were deliberated by the Audit Committee and recommendations made to the Board and / or the Management, were acted upon.

30 Directors’ Report

34 Statements of Financial Position

35 Statements of Comprehensive Income

36 Statements of Changes in Equity

38 Statements of Cash Flows

40 Notes to the Financial Statements

94 Supplementary Information on the Breakdown of Realised and Unrealised Losses

95 Statement by Directors

95 Statutory Declaration

96 Independent Auditors’ Report

Financial Statements

KUmPULAN EURoPLUS BERhAD (534368-A)

30 KUmPULAN EURoPLUS BERhAD (534368-A)

Directors’ Report

DIRECTORS’ REPORT

The directors hereby submit their report together with the audited financial statements of Kumpulan Europlus Berhad (“the Company”) and its subsidiaries (“the Group”) for the financial year ended 31 January 2013.

PRINCIPAL ACTIVITIES

The Company is principally involved in investment holding. The principal activities of its subsidiaries and associates are set out in Note 6 and Note 7 to the financial statements.

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

RESULTS

Group RM’000

Company RM’000

Loss for the financial year (23,151) (46,982)

Attributable to:

owners of the Company (23,191) (46,982)

Non-controlling interests 40 -

(23,151) (46,982)

DIVIDEND

No dividend was paid or declared by the Company since the end of the previous financial year.

The directors do not recommend the payment of any dividend in respect of the financial year ended 31 January 2013.

RESERVES AND PROVISIONS

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

BAD AND DOUBTFUL DEBTS

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 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 had satisfied themselves that all known bad debts had been written off and adequate allowance had been made for doubtful debts.

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

31A n n u a l R e p o r t 2 0 1 3

Directors’ Report

CURRENT ASSETS

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 to ensure that any current assets, other than debts, which were unlikely to be realised in the ordinary course of business, their values as shown in the accounting records of the Group and of the Company had been written down to an amount that they might be expected to be realised.

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

VALUATION METHODS

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

CONTINGENT AND OTHER LIABILITIES

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

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

(ii) any contingent liabilities in respect of the Group and of the Company that has arisen since the end of the financial year, other than as disclosed in Note 25 to the financial statements.

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

CHANGE OF CIRCUMSTANCES

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

ITEMS OF AN UNUSUAL NATURE

In the opinion of the directors, other than disclosed in Note 22 to the financial statements, the results of the operations of the Group and of the Company for the financial year were not substantially affected by any item, transaction or event of a material and unusual nature.

ISSUE OF SHARES AND DEBENTURES

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


Directors’ Report

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’ Abdul hamid Bin mustaphaDatuk oh Chong Peng Loy Boon ChenU Chin WeiChee heng Tong

In accordance to Section 129(2) of the Companies Act, 1965 in malaysia, Chee heng Tong, being over the age of seventy years retires and seek re-appointment as director under the provision of Section 129(6) of the Companies Act, 1965 in malaysia and to hold office until the next Annual General meeting.

In accordance with Article 97 of the Company’s Articles of Association, U Chin Wei retires by rotation at the forthcoming Annual General meeting and, being eligible, offers himself for re-election.

DIRECTORS’ INTERESTS

According to the register of directors’ shareholdings kept by the Company under Section 134 of the Companies Act, 1965 in malaysia, the interests of those directors who held office at the end of the financial year in shares in the Company during the financial year ended 31 January 2013 are as follows:-

Number of ordinary shares of RM1/- each

At 1.2.2012 Bought Sold

At 31.1.2013

Shares in the Company

Direct interest

U Chin Wei 30,000 - - 30,000

Loy Boon Chen 61,500 - - 61,500

Indirect interest

U Chin Wei 11,500 - - 11,500

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

DIRECTORS’ BENEFITS

Since the end of the previous financial year, no director of the Company 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 or the fixed salary of a full time employee of the Company as shown in Note 22 and Note 26(c) to the financial statements) by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest.

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

33A n n u a l R e p o r t 2 0 1 3

Directors’ Report

AUDITORS

The auditors, messrs Baker Tilly monteiro heng, have expressed their willingness to continue in office.

on behalf of the Board,

DATO’ ABDUL HAMID BIN MUSTAPHADirector

LOY BOON CHENDirector

Kuala Lumpur

Date: 31 may 2013


Group Company

Note 2013RM’000

2012RM’000

2013RM’000

2012RM’000

ASSETS

Non-current assets

Property, plant and equipment 4 19,743 20,499 - -

Infrastructure development expenditure 5 115,221 90,462 - -

Investment in subsidiaries 6 - - 27,170 21,912

Investment in associates 7 165,411 171,061 151,480 150,458

Goodwill on consolidation 8 7,086 7,086 - -

Total non-current assets 307,461 289,108 178,650 172,370

Current assets

Inventories 9 1,792 1,189 - -

Trade and other receivables 10 61,243 102,457 118,262 175,513

Prepayments 121 93 - -

Amount due from customers for contract works 11 - 1,554 - -

Deposits placed with licensed banks 12 1,638 - - -

Cash and bank balances 3,192 3,655 1,112 60

Total current assets 67,986 108,948 119,374 175,573

TOTAL ASSETS 375,447 398,056 298,024 347,943

Equity attributable to the owners of the Company

Share capital 13 520,992 520,992 520,992 520,992

Reserves 14 (419,975) (395,982) (366,997) (320,015)

Shareholders’ funds 101,017 125,010 153,995 200,977

Non-controlling interests 7,952 8,625 - -

Total equity 108,969 133,635 153,995 200,977

Non-current liabilities

Loans and borrowings 15 - 109,035 - 69,002

Deferred tax liabilities 16 135 113 - -

Total non-current liabilities 135 109,148 - 69,002

Current liabilities

Trade and other payables 17 128,880 116,968 75,027 77,380

Amount due to customers for contract works 11 221 - - -

Loans and borrowings 15 133,549 32,961 69,002 -

Tax payable 3,693 5,344 - 584

Total current liabilities 266,343 155,273 144,029 77,964

Total liabilities 266,478 264,421 144,029 146,966

TOTAL EQUITY AND LIABILITIES 375,447 398,056 298,024 347,943

Statements of Financial PositionAs at 31 January 2013

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

35A n n u a l R e p o r t 2 0 1 3

Statements of Comprehensive IncomeFor the financial year ended 31 January 2013


Group Company

Note 2013RM’000

2012RM’000

2013RM’000

2012RM’000

Revenue 18 17,857 19,775 - -

Cost of sales 19 (14,713) (16,951) - -

GROSS PROFIT 3,144 2,824 - -

other income 4,404 64,971 4,530 60,195

other items of expenses

- administrative expenses (3,982) (6,378) (1,794) (2,358)

- selling and marketing expenses (621) (655) - -

- other expenses (5,866) (34,038) (39,933) (8,020)

Finance costs 20 (10,550) (15,860) (9,785) (12,683)

Share of results of associates 21 (8,638) 17,846 - -

(Loss)/profit before taxation 22 (22,109) 28,710 (46,982) 37,134

Taxation 23 (1,042) (643) - 301

(Loss)/profit for the financial year (23,151) 28,067 (46,982) 37,435

other comprehensive income/(loss)

- share of foreign exchange reserves of an associate 1,966 (389) - -

Total comprehensive (loss)/income for the financial year (21,185) 27,678 (46,982) 37,435

(Loss)/profit for the financial year attributable to:

owners of the Company (23,191) 27,725 (46,982) 37,435

Non-controlling interests 40 342 - -

(23,151) 28,067 (46,982) 37,435

Total comprehensive (loss)/income for the financial year attributable to:

owners of the Company (21,225) 27,336 (46,982) 37,435

Non-controlling interests 40 342 - -

(21,185) 27,678 (46,982) 37,435

(Loss)/earnings per ordinary share attributable to owners of the Company (sen)

Basic (loss)/earnings per ordinary share 24 (4.5) 5.3

Diluted (loss)/earnings per ordinary share 24 (4.5) 5.3


Attributable to owners of the Company Non-distributable

Group

ShareCapitalRM’000

Share Premium

RM’000

Foreign Exchange Reserves

RM’000

Accumulated Losses

RM’000Total

RM’000

Non-controlling

InterestsRM’000

Total Equity

RM’000

Balance at 1 February 2011 520,992 36,965 (2,035) (458,248) 97,674 8,283 105,957

Total comprehensive income for the financial year - - (389) 27,725 27,336 342 27,678

Balance at 31 January 2012 520,992 36,965 (2,424) (430,523) 125,010 8,625 133,635

Total comprehensive loss for the financial year - - 1,966 (23,191) (21,225) 40 (21,185)

Transaction with owners:

Acquisition of additional equity interest in a subsidiary - - - (2,768) (2,768) (2,568) (5,336)

Issuance of shares to non-controlling interest of a subsidiary - - - - - 1,890 1,890

Dividend paid to non-controlling interest of a subsidiary - - - - - (35) (35)

Balance at 31 January 2013 520,992 36,965 (458) (456,482) 101,017 7,952 108,969

Consolidated Statement ofChanges in EquityFor the financial year ended 31 January 2013


37A n n u a l R e p o r t 2 0 1 3

Non-distributable

Company

ShareCapitalRM’000

Share Premium

RM’000

Accumulated LossesRM’000

TotalEquity

RM’000

Balance at 1 February 2011 520,992 36,965 (394,415) 163,542

Total comprehensive income for the financial year - - 37,435 37,435

Balance at 31 January 2012 520,992 36,965 (356,980) 200,977

Total comprehensive loss for the financial year - - (46,982) (46,982)

Balance at 31 January 2013 520,992 36,965 (403,962) 153,995

Statement of Changes in EquityFor the financial year ended 31 January 2013



Statements of Cash FlowsFor the financial year ended 31 January 2013

Group Company

Note 2013RM’000

2012RM’000

2013RM’000

2012RM’000

CASH FLOWS FROM OPERATING ACTIVITIES:

(Loss)/profit before taxation (22,109) 28,710 (46,982) 37,134

Adjustments for:

Bad debts written off 17 2 - -

Deposit written off - 150 - -

Depreciation of property, plant and equipment 499 559 - -

Gain on disposal of investments - (47,903) - (47,903)

Gain on disposal of property, plant and equipment (223) (62) - -

Impairment loss on goodwill - 338 - -

Impairment loss on investment in a subsidiary - - 78 -

Impairment loss on receivables

- third parties 6,298 25,783 3,453 6,798

- subsidiaries - - 36,402 19

Impairment loss on receivables no longer required

- third parties (811) (101) (511) -

- subsidiaries - - - (2,663)

Interest income (2,867) (5,451) (2,840) (5,441)

Interest expenses 10,550 15,860 9,785 12,683

Property, plant and equipment written off 68 6,152 - -

Share of results of associates 8,638 (17,846) - -

Waiver of term loans interest - (6,619) - -

Operating cash flows before changes in working capital 60 (428) (615) 627

Changes In Working Capital:

Inventories (603) 159 - -

Receivables 3,684 (27,019) 7,699 (23,250)

Payables 18,938 19,421 5,946 5,336

Balances with customers for contract works 1,775 (22) - -

Associate balances 6,379 37,718 - -

Increase in infrastructure development expenditure (24,611) (18,633) - -

Cash flows generated from/(used in) operations 5,622 11,196 13,030 (17,287)

Interest paid (20) (1,694) - (828)

Income tax paid (2,671) (957) (584) -

Net cash flows generated from/(used in) operating activities 2,931 8,545 12,446 (18,115)

39A n n u a l R e p o r t 2 0 1 3

Statements of Cash FlowsFor the financial year ended 31 January 2013

Group Company

Note 2013RM’000

2012RM’000

2013RM’000

2012RM’000

CASH FLOWS FROM INVESTING ACTIVITIES:

Net change in amount owing by/to associates

17,771 61,456 10,365

46,703

Proceeds from disposal of investments - 85,646 - 85,646

Interest received 2,867 5,451 2,840 5,441

Proceeds from disposal of property, plant and equipment 1,194 424 - -

Addition to investment in an associate - (64,265) - (64,265)

Additions to property, plant and equipment (930) (1,404) - -

Net cash flows generated from investing activities 20,902 87,308 13,205 73,525

CASH FLOWS FROM FINANCING ACTIVITIES:

Net change in amount owing to directors (200) (4,214) - (3,817)

Dividend paid to non-controlling interest of a subsidiary

(35) - - -

Interest paid (10,530) (14,166) (9,785) (11,855)

Net change in amount owing by/to subsidiaries

- - (9,478) 25,252

Repayment of borrowings (7,495) (46,657) - (43,757)

Repayment of finance lease liabilities (81) (50) - -

Acquisition of additional equity interest in a subsidiary 6 (5,336) - (5,336) -

Issuance of shares to non-controlling interest of a subsidiary 1,890 - - -

Net cash flows used in financing activities (21,787) (65,087) (24,599) (34,177)

NET CHANGE IN CASH AND CASH EQUIVALENTS 2,046 30,766 1,052 21,233

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE FINANCIAL YEAR 1,028 (29,738) 60 (21,173)

CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR 3,074 1,028 1,112 60

ANALYSIS OF CASH AND CASH EQUIVALENTS:

Deposits placed with licensed banks 1,638 - - -

Cash and bank balances 3,192 3,655 1,112 60

Bank overdrafts 15 (1,756) (2,627) - -

3,074 1,028 1,112 60



Notes to the Financial Statements

1. PRINCIPAL ACTIVITIES AND GENERAL INFORMATION

The Company is principally involved in investment holding. The principal activities of its subsidiaries and associates are set out in Note 6 and Note 7 to the financial statements. There have been no significant changes in the nature of these principal activities during the financial year.

The Company is a public limited liability company, incorporated and domiciled in malaysia and listed on the main market of Bursa malaysia Securities Berhad.

The registered office and principal place of business of the Company is located at Suite 2.12, Level 2, menara maxisegar, Jalan Pandan Indah 4/2, Pandan Indah, 55100 Kuala Lumpur.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 31 may 2013.

As at 31 January 2013, the carrying value of infrastructure development expenditure of the Group is Rm115,221,000/- (2012: Rm90,462,000/-). The Group had incurred Rm24,759,000/- (2012: Rm18,671,000/-) in infrastructure development expenditure during the financial year as disclosed in Note 5 to the financial statements.

on 2 January 2013, West Coast Expressway Sdn. Bhd. (“WCESB”), an 80%-owned subsidiary of the Company signed the Concession Agreement (“CA”) with the Government of malaysia in relation to the West Coast Expressway Project (“WCE Project”). The WCE Project involves the development of the West Coast Expressway from Banting in Selangor to Taiping in Perak with 233km of toll highway. The project cost is estimated to be in the region of Rm6.0 billion and the construction period is for 5 years.


(i) the WCE Project is a build-operate-transfer project with a concession period of 50 years. The concession period will be extended for another 10 years if the agreed targeted Internal Rate of Return (“IRR”) is not achieved;

(ii) to enhance the viability of the WCE Project, a Government Support Loan (“GSL”) of Rm2.24 billion at an interest rate of 4% per annum will be provided by the Government of malaysia subject to a separate negotiation and agreement to be executed with the ministry of Finance;

(iii) the land acquisition cost of up to Rm980 million for the WCE Project will be borne by the Government of malaysia;

(iv) toll revenue in excess of an agreed traffic volume will be shared as follows:-• duringtheGSLtenure,70%oftheexcessrevenuewillbeutilisedasrepaymentorprepaymentofthe

GSL; and• aftersettlementoftheGSL,onthebasisof30:70betweentheGovernmentofMalaysiaandWCESBif

the targeted IRR is not achieved and 70:30 if the actual IRR is more than the targeted IRR.(v) the construction works of the WCE Project will be implemented by WCESB through a tender committee;(vi) a liquidated and ascertained damages of Rm100,000/- shall be paid by WCESB to the Government of malaysia

for each day of delay of construction if the construction is not completed by the agreed completion date; and(vii) cost savings from the construction costs shall be utilised to review the GSL amount or for other purposes as

may be determined by the Government of malaysia.

WCESB shall within 9 months from the date of execution of the CA meet the conditions precedent of the CA which includes the financial close of WCE Project. A further 3 months extension may be granted by the Government of malaysia if required.

The directors are of the opinion that the Group will fulfil the conditions precedent in the CA within the stipulated timeframe. The WCE Project once implemented shall enhance the future profitability and improve the financial position of the Group based on the cash flow projections of WCE Project covering a 50-year period.

41A n n u a l R e p o r t 2 0 1 3


2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of Preparation

The financial statements of the Group and of the Company have been prepared in accordance with the Financial Reporting Standards (“FRSs”) and the requirements of the Companies Act, 1965 in malaysia.

The financial statements of the Group and of the Company have been prepared under the historical cost basis, except as disclosed in the significant accounting policies in Note 2.3 to the financial statements.

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

The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 3 to the financial statements.

2.2 New and Revised FRSs, Amendments/Improvements to FRSs, New IC Interpretations (“IC Int”), Amendments to IC Int and New Malaysian Accounting Standards Board (“MASB”) Approved Accounting Standards, Malaysian Financial Reporting Standards (“MFRSs”)

(a) Adoption of Revised FRS, Amendments/Improvements to FRSs, New IC Int and Amendments to IC Int

The Group and the Company had adopted the following revised FRS, amendments/improvements to FRSs, new IC Int and amendments to IC Int that are mandatory for the current financial year:-

Revised FRS

FRS 124 Related Party Disclosures

Amendments/Improvements to FRSs

FRS 1 First-time Adoption of Financial Reporting Standards

FRS 7 Financial Instruments: Disclosures

FRS 112 Income Taxes

New IC Int

IC Int 19 Extinguishing Financial Liabilities with Equity Instruments

Amendments to IC Int

IC Int 14 FRS 119 – The Limit on a Defined Benefit Asset, minimum Funding Requirements and their Interaction



2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

2.2 New and Revised FRSs, Amendments/Improvements to FRSs, New IC Interpretations (“IC Int”), Amendments to IC Int and New Malaysian Accounting Standards Board (“MASB”) Approved Accounting Standards, Malaysian Financial Reporting Standards (“MFRSs”) (Cont’d)

(a) Adoption of Revised FRS, Amendments/Improvements to FRSs, New IC Int and Amendments to IC Int (Cont’d)

The adoption of the above revised FRS, amendments/improvements to FRSs, new IC Int and amendments to IC Int do not have any effect on the financial statements of the Group and of the Company except for those as discussed below:-

Revised FRS 124 Related Party Disclosures

The revised FRS 124 simplifies and clarifies the definition of related party and eliminates inconsistencies from the definition. The Revised FRS 124 expands the definition of a related party and would treat two entities as related to each other whenever a person (or a close member of that person’s family) or a third party has control or joint control over the entity, or has significant influence over the entity. The revised standard also introduced a partial exemption from disclosures for government-related entities. Prior to this, no disclosure of transactions is required in financial statements of state-controlled entities of transactions with other state-controlled entities. The additional disclosures are intended to draw attention to users that such related party transactions have occurred and to give an indication of their extent. It requires disclosure of related party transactions between government-related entities only if the transactions are individually or collectively significant.

Amendments to FRS 7 Financial Instruments: Disclosures

These amendments to FRS 7 requires disclosures for all transferred financial assets that are not derecognised and for any continuing involvement in a transferred asset, existing at the reporting date, irrespective of when the related transfer transaction occurred. The additional disclosures will help users of financial statements to evaluate the risk of exposures relating to transfer of financial assets and the effect of those risks on an entity’s financial position.

Amendments to FRS 112 Income Taxes

This amendment to FRS 112 addresses the measurement approach for deferred tax assets and liabilities in respect of investment properties which are measured at fair value. The amendment introduces a rebuttable presumption that the investment property is recovered entirely through sale. In such cases, deferred tax assets or liabilities are provided at tax rates applicable when recovering the property entirely through sale. If this presumption is rebutted, deferred tax assets or liabilities are provided based on tax rates applicable when consuming substantially the economic benefits embodied in the property over a period of time (for example via rental income).

New IC Int 19 Extinguishing Financial Liabilities with Equity Instruments

This Interpretation addresses the accounting by an entity when the terms of a financial liability are renegotiated and result in the entity issuing equity instruments to a creditor to extinguish all or part of the financial liability. It does not address the accounting by the creditor.

43A n n u a l R e p o r t 2 0 1 3




(a) Adoption of Revised FRS, Amendments/Improvements to FRSs, New IC Int and Amendments to IC Int (Cont’d)

New IC Int 19 Extinguishing Financial Liabilities with Equity Instruments (Cont’d)

IC Int 19 will standardise practice among debtors applying FRSs to a debt for equity swap. This interpretation clarifies that the equity instruments issued shall be measured at their fair value. If the fair value cannot be reliably measured, the equity instruments shall be measured to reflect the fair value of the financial liability extinguished. The difference between the carrying amount of the financial liability (or part of a financial liability) extinguished, and the consideration paid, shall be recognised in profit or loss. When only part of the financial liability is extinguished and if part of the consideration paid does relate to a modification of the terms of the remaining part of the liability, the entity shall allocate the consideration paid between the part of the liability extinguished and the part of the liability that remains outstanding. A substantial modification of the terms of an existing financial liability or a part of it shall be accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability.

Amendments to IC Int 14 FRS119 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction

The amendments to IC Int 14 apply in the limited circumstances when an entity is subject to minimum funding requirement and makes an early payment of contributions to cover those requirements. The amendments permit the entity to treat the benefit of such early payment as an asset.

(b) New and Revised FRSs, Amendments/Improvements to FRSs, New IC Int and Amendments to IC Int that are issued, but not yet effective and have not been early adopted

The Group and the Company have not adopted the following new and revised FRSs, amendments/improvements to FRSs, new IC Int and amendments to IC Int that have been issued as at the date of authorisation of these financial statements but are not yet effective for the Group and the Company:-

Effective for financial periods beginning on

or after

New FRSs

FRS 9 Financial Instruments 1 January 2015

FRS 10 Consolidated Financial Statements 1 January 2013

FRS 11 Joint Arrangements 1 January 2013

FRS 12 Disclosure of Interests in other Entities 1 January 2013

FRS 13 Fair Value measurement 1 January 2013

Revised FRSs

FRS 119 Employee Benefits 1 January 2013

FRS 127 Separate Financial Statements 1 January 2013

FRS 128 Investments in Associates and Joint Ventures 1 January 2013





(b) New and Revised FRSs, Amendments/Improvements to FRSs, New IC Int and Amendments to IC Int that are issued, but not yet effective and have not been early adopted (Cont’d)

Effective for financial periods beginning on

or after

Amendments/Improvements to FRSs

FRS 1 First-time Adoption of Financial Reporting Standards 1 January 2013

FRS 7 Financial Instruments: Disclosures 1 January 2013

FRS 10 Consolidated Financial Statements 1 January 2013 and 1 January 2014

FRS 11 Joint Arrangements 1 January 2013

FRS 12 Disclosure of Interests in other Entities 1 January 2013 and 1 January 2014

FRS 101 Presentation of Financial Statements 1 July 2012 and 1 January 2013

FRS 116 Property, Plant and Equipment 1 January 2013

FRS 127 Separate Financial Statements 1 January 2014

FRS 132 Financial Instruments: Presentation 1 January 2013 and 1 January 2014

FRS 134 Interim Financial Reporting 1 January 2013

New IC Int

IC Int 20 Stripping Costs in the Production Phase of a Surface mine 1 January 2013

Amendments to IC Int

IC Int 2 members’ Shares in Co-operative Entities and Similar Instruments

1 January 2013

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

FRS 9 Financial Instruments

FRS 9 specifies how an entity should classify and measure financial assets and financial liabilities.

This standard requires all financial assets to be classified based on how an entity manages its financial assets (its business model) and the contractual cash flow characteristics of the financial asset. Financial assets are to be initially measured at fair value. Subsequent to initial recognition, depending on the business model under which these assets are acquired, they will be measured at either fair value or at amortised cost.

45A n n u a l R e p o r t 2 0 1 3





FRS 9 Financial Instruments (Cont’d)

In respect of the financial liabilities, the requirements are generally similar to the former FRS 139. however, this standard requires that for financial liabilities designated as at fair value through profit or loss, changes in fair value attributable to the credit risk of that liability are to be presented in other comprehensive income, whereas the remaining amount of the change in fair value will be presented in the profit or loss.

FRS 10 Consolidated Financial Statements and FRS 127 Separate Financial Statements (Revised)

FRS 10 replaces the consolidation part of the former FRS 127 Consolidated and Separate Financial Statements. The revised FRS 127 will deal only with accounting for investment in subsidiaries, joint ventures and associates in the separate financial statements of an investor and require the entity to account for such investments either at cost, or in accordance with FRS 9.

FRS 10 brings about convergence between FRS 127 and IC Int 12 Consolidation-Special Purpose Entities, which interprets the requirements of FRS 10 in relation to special purpose entities. FRS 10 introduces a new single control model to identify a parent-subsidiary relationship by specifying that “an investor controls an investee when the investor is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee”. It provides guidance on situations when control is difficult to assess such as those involving potential voting rights, or in circumstances involving agency relationships, or where the investor has control over specific assets of the entity, or where the investee entity is designed in such a manner where voting rights are not the dominant factor in determining control.

FRS 11 Joint Arrangements

FRS 11 supersedes the former FRS 131 Interests in Joint Ventures. Under FRS 11, an entity accounts for its interest in a jointly controlled entity based on the type of joint arrangement, as determined based on an assessment of its rights and obligations arising from the arrangement. There are two types of joint arrangement namely joint venture or joint operation as specified in this new standard. A joint venture recognises its interest in the joint venture as an investment and account for its using the equity method. The proportionate consolidation method is disallowed in such joint arrangement. A joint operator accounts for the assets, liabilities, revenue and expenses related to its interest directly.

FRS 12 Disclosures of Interests in Other Entities

FRS 12 is a single disclosure standard for interests in subsidiary companies, joint ventures, associated companies and unconsolidated structured entities. The disclosure requirements in this FRS are aimed at providing standardised and comparable information that enable users of financial statements to evaluate the nature of, and risks associated with, the entity’s interests in other entities, and the effects of those interests on its financial position, financial performance and cash flows.

FRS 13 Fair Value Measurement

FRS 13 defines fair value and sets out a framework for measuring fair value, and the disclosure requirements about fair value. This standard is intended to address the inconsistencies in the requirements for measuring fair value across different accounting standards. As defined in this standard, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.






FRS 128 Investments in Associates and Joint Ventures (Revised)

This revised FRS 128 incorporates the requirements for accounting for joint ventures into the same accounting standard as that for accounting for investments in associated companies, as the equity method was applicable for both investments in joint ventures and associated companies. however, the revised FRS 128 exempts the investor from applying equity accounting where the investment in the associated company or joint venture is held indirectly via venture capital organisations or mutual funds and similar entities. In such cases, the entity shall measure the investment at fair value through profit or loss, in accordance with FRS 9.

Amendments to FRS10, FRS12 and FRS127 Investment Entities

These amendments introduce an exception to consolidation for investment entities. Investment entities are entities whose business purpose is to invest funds solely for returns from capital appreciation, investment income or both. The amendments require investment entities to measure particular subsidiaries at fair value through profit or loss in accordance with FRS 139 Financial Instruments: Recognition and measurement instead of consolidating them. In addition, the amendments also introduce new disclosure requirements related to investment entities in FRS 12 Disclosure of Interests in other Entities and FRS 127 Separate Financial Statements.

(c) MASB Approved Accounting Standards, MFRSs

In conjunction with the planned convergence of FRSs with International Financial Reporting Standards as issued by the International Accounting Standards Board on 1 January 2012, the mASB had on 19 November 2011 issue a new mASB approved accounting standards, mFRSs (“mFRSs Framework”) for application in the annual periods beginning on or after 1 January 2012.

The mFRSs Framework is mandatory for adoption by all Entities other Than Private Entities for annual periods beginning on or after 1 January 2012, with the exception of entities subject to the application of mFRS 141 Agriculture and/or IC Int 15 Agreements for the Construction of Real Estate (“Transitioning Entities”). The Transitioning Entities are given an option to defer adoption of the mFRSs framework to financial periods beginning on or after 1 January 2014. Transitioning Entities also includes those entities that consolidate or equity account or proportionately consolidate another entity that has chosen to continue to apply the FRSs framework for annual periods beginning on or after 1 January 2012.

Accordingly, the Group which is Transitioning Entity has chosen to defer the adoption of the mFRSs framework to financial year beginning on 1 February 2014. The Group and the Company will prepare their first mFRSs financial statements using the mFRSs framework for the financial year ending 31 January 2015.

As at 31 January 2013, all FRSs issued under the existing FRSs framework are equivalent to the mFRSs issued under mFRSs framework except for differences in relation to the transitional provisions, the adoption of mFRS 141 Agriculture and IC Int 15 Agreements for the Construction of Real Estate as well as differences in effective dates contained in certain of the existing FRSs. As such, other than those as discussed below, the main effects arising from the transition to the mFRSs Framework has been discussed in Note 2.2(b) to the financial statements. The effect is based on the Group’s and the Company’s best estimates at the reporting date. The financial effect may change or additional effects may be identified, prior to the completion of the Group’s and the Company’s first mFRSs based financial statements.

47A n n u a l R e p o r t 2 0 1 3




(c) MASB Approved Accounting Standards, MFRSs (Cont’d)

Application of MFRS 1: First-time Adoption of Malaysian Financial Reporting Standards (“MFRS 1”)

mFRS 1 requires comparative information to be restated as if the requirements of mFRSs effective for annual periods beginning on or after 1 January 2014 have always been applied, except when mFRS 1 allows certain elective exemptions from such full retrospective application or prohibits retrospective application of some aspects of mFRSs. The Group and the Company are currently assessing the impact of adoption of mFRS 1, including identification of the differences in existing accounting policies as compared to the new mFRSs and the use of optional exemptions as provided for in mFRS 1. As at the date of authorisation of issue of the financial statements, accounting policy decisions or elections have not been finalised. Thus, the impact of adoption of mFRS 1 cannot be determined and estimated reliably until the process is completed.

MFRS 141 Agriculture

mFRS 141 requires a biological asset shall be measured on initial recognition and at the end of each reporting period at its fair value less costs to sell, except where the fair value cannot be measured reliably. mFRS 141 also requires agricultural produce harvested from an entity’s biological assets shall be measured at its fair value less costs to sell at the point of harvest. Gains or losses arising on initial recognition of a biological asset and the agricultural produce at fair value less costs to sell and from a change in fair value less costs to sell of a biological asset shall be included in the profit or loss for the period in which it arises. The Group does not expect any impact on the financial statements arising from the adoption of this standard.

IC Int 15 Agreements for the Construction of Real Estate

IC Int 15 establishes that the developer will have to evaluate whether control and significant risks and rewards of the ownership of work in progress, can be transferred to the buyer as construction progresses before revenue can be recognised. The Group is currently assessing the impact of the adoption of this Interpretation.

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 separate financial statements at cost less any impairment losses, unless the investment is held for sale or distribution. 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.




2.3 Summary of Significant Accounting Policies (Cont’d)

(a) Basis of Consolidation (Cont’d)

(ii) Accounting for business combination

The consolidated financial statements include the financial statements of the Company and its subsidiaries made up to the end of the financial year.

The financial statements of the Company and its subsidiaries are all drawn up to the same report date.

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.

Acquisition on or after 1 February 2011 For acquisition on or after 1 February 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.

Acquisition between 1 February 2006 and 1 February 2011 For acquisition between 1 February 2006 and 1 February 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 February 2006 For acquisition prior to 1 February 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.

49A n n u a l R e p o r t 2 0 1 3





(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 interests holders. Any difference between the Group’s share of net assets before and after the change and any consideration received or paid is adjusted to or against Group reserves.

(iv) Loss of control

Upon the loss of control of a subsidiary, the Group derecognised 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 equity accounted investee or as an available-for-sale financial asset depending on the level of influence retained.

(v) Associates

Associates are entities, including unincorporated entities, in which the Group has significant influence, but not control, over the financial and operating policies.

Investments in associates are accounted for in the consolidated financial statements using the equity method less any impairment losses, unless it is classified as held for sale or distribution. The cost of the investment includes transaction costs. The consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of the equity accounted associates, after adjustments if any, to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases.

When the Group’s share of losses exceeds its interest in an associate, the carrying amount of that interest including any long-term investments is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the associate.

Investments in associates are measured in the Company’s statement of financial position at cost less any impairment losses, unless the investment is classified as held for sale or distribution. The cost of investments includes transaction costs.

(vi) Non-controlling interest

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

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






(vii) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with equity accounted associates are eliminated against the investment to the extent of the Group’s interest in the associates. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

(b) Goodwill on Consolidation

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 may 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.

(c) Property, Plant and Equipment and Depreciation

Property, plant and equipment are stated at cost less accumulated depreciation and impairment loss, if any. The policy of recognition of impairment losses is in accordance with Note 2.3(o) to the financial statements. Cost includes expenditure that is directly attributable to the acquisition of the asset. When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.

The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognised in the profit or loss as incurred.

No depreciation is provided on the freehold land as it has infinite useful life.

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

Depreciation of other property, plant and equipment is provided on the straight line basis to write off the cost of each asset to its residual value over their estimated useful life at the following rates:-

Leasehold land Remaining79 - 95 years

Buildings 2%

Renovation 10 - 20%

Plant and machinery 10 - 20%

Furniture, fixtures and fittings 10 - 20%

office equipment 10 - 50%

motor vehicles 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.

Fully depreciated assets are retained in the accounts until the assets are no longer in use.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. The difference between the net disposals proceeds and the net carrying amount, if any, is recognised in the profit or loss.

(d) Infrastructure Development Expenditure

The Group recognises an intangible asset arising from a service concession arrangement when it has a right to charge for usage of the concession infrastructure. Infrastructure development expenditure comprises all direct infrastructure costs and other costs incurred in relation to the concession infrastructure. Infrastructure development expenditure is measured at cost less accumulated amortisation and accumulated impairment loss.

Where the Group provides construction services in exchange for the concession infrastructure, the revenue and costs relating to the construction services are recognised using the stage of completion method.

Upon completion of construction works and commencement of road tolling operations, the infrastructure development expenditure is to be amortised. Amortisation is calculated to write off the cost of intangible assets arising from a service concession arrangement on a unit of usage basis over the estimated useful life, which is the period when it is available to the end of the concession period.

All interests and fees incurred during the period are capitalised in the infrastructure development expenditure which in turn to be amortised in the profit or loss. Interests and fees incurred after the completion of construction are charged to the profit or loss.





(e) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted average method.

The cost of raw materials comprises cost of purchase and incidental costs bringing the inventories to their present locations and conditions. The cost of finished goods consists of raw materials, direct labour and a proportion of manufacturing overheads.

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

(f) Construction Contracts

Construction works are stated at cost plus attributable profit less progress billings. Cost comprises direct labour, material costs, sub-contract sum and an allocated proportion of directly related overheads. Administrative and general expenses are charged to the profit or loss as and when incurred.

When the outcome of a construction contract can be readily estimated, contract revenue is recognised by using the stage of completion method. The stage of completion is measured by reference to the proportion that contract costs incurred for work performed to date bear to the estimated total contract costs. Costs incurred in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. They are presented as inventories, prepayments or other assets, depending on their nature.

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

Irrespective of whether the outcome of a construction contracts can be estimated reliably, when it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised in profit or loss immediately. Provision is made for all anticipated losses on construction work. Provision for warranties is made for expected/estimated repair costs for making good certain defects and damages during the warranty periods.

When costs incurred on construction contracts plus recognised profits (less recognised losses) exceed progress billings, the balance is shown as amount due from customers for contract works. When progress billings exceed costs incurred plus recognised profit (less recognised losses), the balance is shown as amount due to customers for contract works.

(g) Financial Instruments

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

A financial instrument is recognised initially, at its fair value, plus, in the case of a financial instrument not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial instrument.

53A n n u a l R e p o r t 2 0 1 3




(g) Financial Instruments (Cont’d)

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

(i) Financial Assets

Financial assets at fair value through profit or loss

Financial assets are classified as fair value through profit or loss if they are held for trading, including derivatives, or are designated as such upon initial recognition.

A financial asset is classified as held for trading if it is acquired principally for the purpose of selling

in the near future or part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short term profit taking.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value with the gain or loss recognised in profit or loss. Exchange differences, interest and dividend income on financial assets at fair value through profit or loss are recognised as other gains or losses in profit or loss.

Loans and receivables

Financial assets with fixed or determinable payments that are not quoted in an active market, trade and other receivables and cash and cash equivalents 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.

Held-to-maturity investments

Financial assets with fixed or determinable payments and fixed maturity and the Group have the positive intention and ability to hold the investment to maturity is classified as held-to-maturity investments.

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

Available-for-sale financial assets

Available-for-sale are financial assets that are designated as available for sale or are not classified in any of the three preceding categories.

After initial recognition, available-for-sale financial assets are measured at fair value with the gain or loss recognised in other comprehensive income, except for 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.

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





(g) Financial Instruments (Cont’d)

(ii) Financial Liabilities

All financial liabilities are subsequently measured at amortised cost other than those categorised as fair value through profit or loss.

Fair value through profit or loss comprises financial liabilities that are held for trading, derivatives (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument) or financial liabilities that are specifically designated as fair value through profit or loss upon initial recognition.

Derivatives that are linked to and must be settled by delivery of unquoted equity instruments whose fair values cannot be reliably measured are measured at cost.

other financial liabilities categorised as fair value through profit or loss is subsequently measured at their fair values with the gain or loss recognised in profit or loss.

(iii) 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 in accordance with the original or modified terms of a debt instrument.

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.

(iv) Derecognition

A financial asset is derecognised when the contractual right to receive cash flows from the asset has expired or is transferred to another party without retaining control or substantially all risks and rewards of the asset. on derecognition of a financial asset, 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.

A financial liability is derecognised when the obligation specified in the contract is discharged or cancelled or expires. on derecognition of a financial liability, the difference between the carrying amount and the consideration paid is recognised in profit or loss.

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(h) Leases

(i) Finance Leases

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

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, if any. The corresponding liability is included in the statement of financial position as borrowings. In calculating the present value of the minimum lease payments, the discount factor used in the interest rate implicit in the lease, when it is practicable to determine; otherwise, the Group’s incremental borrowings 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 and assets under hire purchase is consistent with that for depreciable property, plant and equipment.

(ii) Operating Leases

Leases of assets where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases.

operating lease payments are recognised as an expense on a straight-line basis over the term of the relevant lease. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.

(i) Borrowing Costs

Borrowings are initially recognised based on the proceeds received, net of transaction costs incurred. In the subsequent periods, borrowings are stated at amortised cost using the effective yield method; any difference between proceeds (net of transaction costs) and the redemption value is recognised in the profit or loss over the period of the borrowings.

Interest, dividends, losses and gains relating to a financial instrument, or a component part classified as a liability is reported within finance cost in the profit or loss.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.





(j) Employee Benefits

(i) Short term employee benefits

Wages, salaries, social security contribution, bonuses and non-monetary benefits are accrued in the period in which the associated services are rendered by the employees. 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. Short term non-accumulating compensated absences sick leave, maternity and paternity leave are recognised when absences occur.

(ii) Post-employment benefits

The Group contributes to the Employees’ Provident Fund, the national defined contribution plan. The contributions are charged to the profit or loss in the period to which they are related. once the contributions have been paid, the Group has no further payment obligations.

(k) Provision for Liabilities

Provisions 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 not recognised for future operating losses. Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate.

(l) Foreign Currencies

(i) Functional and presentation currency

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

(ii) Functional currency transactions and translations

Transactions in foreign currencies are translated to Ringgit malaysia at exchange rates ruling at the transaction date. monetary assets and liabilities in foreign currencies at the statement of financial position are translated into Ringgit malaysia at the rates ruling at the reporting date. All exchange differences are included in the profit or loss.

Non-monetary items are measured in term of historical cost in a foreign currency or translated using the exchange rates as at the date of the initial transaction. Non-monetary items measured at fair value in foreign currency are translated using the exchange rates at the date when the fair value was determined.

(m) Taxation

The tax expense in the profit or loss represents the aggregate amount of current and deferred tax. Current tax is the expected amount of income taxes payable in respect of the taxable profit for the year and is measured using the tax rates that have been enacted at the reporting date.

57A n n u a l R e p o r t 2 0 1 3




(m) Taxation

Deferred tax is provided for, using the liability method, on temporary differences at the reporting date arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credit can be utilised. Deferred tax is not recognised if the temporary difference arises from goodwill or negative goodwill or from the initial recognition of an asset or liability in a transaction which is not a business combination and at time of the transaction, affects neither accounting profit nor taxable profit.

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted at the reporting date. Deferred tax is recognised in the profit or loss, except when it arises from transaction which is recognised in other comprehensive income or directly in equity, in which case the deferred tax is also charged or credited in other comprehensive income or directly in equity or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or negative goodwill.

(n) Revenue Recognition

The Group recognised revenue when the amount of revenue can be reliably measured, it is probable that future economic benefit will flow to the entity and specific criteria have been met for each of the Group’s activities as described below:-

(i) Construction

Revenue from construction is recognised based on the stage of completion method as described in Note 2.3(f) to the financial statements.

(ii) Sales of goods

Revenue is recognised upon delivery of products and customers’ acceptance, net of sales tax, discounts and returns and when the significant risk and rewards of ownership have been passed to the buyer.

(iii) Interest income

Interest income from provisioning of financial facilities is recognised using the sum-of digits method. Interest income on loans and other financing facilities are recognised on accrual basis. Where an account becomes non-performing, interest is suspended and is recognised on a cash basis. Customers’ accounts are deemed to be non-performing when repayments are in arrears for more than six months.

Service charges and other related fees on financing facilities extended to customers are recognised on inception of such transactions.

(iv) Management fee

management fee is recognised upon completion of services rendered in accordance with the terms of the agreement entered into.

(v) Rental fee

Rental income is recognised on accrual basis.





(o) Impairment of Assets

(i) Impairment of Financial Assets

All financial assets (except for financial assets categorised as fair value through profit or loss, investment in subsidiaries and associates) are assessed at each reporting date whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset. Losses expected as a result of future events, no matter how likely, are not recognised. For an equity instrument, a significant or prolonged decline in the fair value below its cost is an objective evidence of impairment.

An impairment loss in respect of loans and receivables and held-to-maturity investments is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account.

An impairment loss in respect of available-for-sale financial assets is recognised in the profit or loss and is measured as the difference between the asset’s acquisition cost (net of any principal repayment and amortisation) and the asset’s current fair value, less any impairment loss previously recognised. Where a decline in the fair value of an available-for-sale financial asset has been recognised in the other comprehensive income, the cumulative loss in other comprehensive income is reclassified from equity and recognised to profit or loss.

An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in profit or loss and 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.

Impairment losses recognised in profit or loss for an investment in an equity instrument is not reversed through the profit or loss.

If, in a subsequent period, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed, to the extent that the asset’s carrying amount does not exceed what the carrying amount would have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in the profit or loss.

(ii) Impairment of Non-financial Assets

The Group and the Company assess 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 and the Company make an estimate of the asset’s recoverable amount.

For goodwill that has an indefinite useful life and is not available for use, the recoverable amount is estimated at each reporting date or more frequently when indicators of impairment are identified.

An asset’s recoverable amount is the higher of an asset’s or cash generating units (“CGU”) fair value less cost to sell and its value in use. In assessing value in use, the estimated future cash flows 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 risk specific to the asset. Where the carrying amounts of an asset exceed its recoverable amount, the asset is considered impaired and 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 or groups of units and then, to reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis.

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(o) Impairment of Assets (Cont’d)

(ii) Impairment of Non-financial Assets (Cont’d)

An impairment loss is recognised in the profit or loss in the period in which it arises.

Impairment loss on goodwill is not reversed in a subsequent period. An impairment loss for an asset other than goodwill is reversed if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment was recognised. The carrying amount of an asset other than goodwill is increased to its revised recoverable amount, provided that this amount does not exceed its carrying amount that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of impairment loss for an asset other than goodwill is recognised in the profit or loss.

(p) Cash and Cash Equivalents

For the purpose of statements of cash flows, cash and cash equivalents comprise cash in hand, bank balances, demand deposits and other short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Cash and cash equivalents are stated net of bank overdrafts which are repayable on demand.

(q) Equity Instruments

ordinary shares are recorded at the nominal value and the consideration in excess of nominal value of shares issued, if any, is accounted for as share premium. Both ordinary shares and share premium are classified as equity.

Dividends on ordinary shares are recognised as liabilities when proposed or declared before the reporting date. A dividend proposed or declared after the reporting date, but before the financial statements are authorised for issue, is not recognised as a liability at the reporting date.

Cost incurred directly attributable to the issuance of the shares are accounted for as a deduction from share premium, if any, otherwise it is charged to the profit or loss. Equity transaction costs comprise only those incremental external costs directly attributable to the equity transaction which would otherwise have been avoided.

(r) Segmental Reporting

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



3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS

3.1 Critical judgements in applying the Group’s and the Company’s accounting policies

In the process of applying the Group’s and the Company’s accounting policies, which are described in Note 2.3 above, the directors are of the opinion that there are no instances of application of judgement which are expected to have a significant effect on the amounts recognised in the financial statements.

3.2 Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material judgement to the carrying amounts of assets and liabilities within the next financial year are as stated below:-

(i) Impairment of goodwill

Goodwill is tested for impairment annually and at other times when such indicators exist. This requires an estimation of the value-in-use of the cash-generating units to which goodwill is allocated.

When value-in-use calculations are undertaken, management must estimate the expected future cash flows from the asset or cash-generating unit and choose a suitable discount rate in order to calculate the present value of those cash flows. Further details of the carrying value, the key assumptions applied in the impairment assessment of goodwill and sensitivity analysis to changes in the assumptions are disclosed in Note 8 to the financial statements.

(ii) Useful lives of property, plant and equipment

The Group estimates the useful lives of property, plant and equipment based on period over which the assets are expected to be available for use. The estimated useful lives of property, plant and equipment are reviewed periodically and are updated if expectation differs from previous estimates due to physical wear and tear, technical or commercial obsolescence and legal or other limits on the use of the relevant assets. In addition, the estimation of useful lives of property, plant and equipment are based on internal technical evaluation and experience with similar assets. It is possible, however, that future results of operations could be materially affected by changes in the estimates brought about by changes in factors mentioned above. The amounts and timing of recorded expenses for any period would be affected by changes in these factors and circumstances. A reduction in estimated useful lives of the property, plant and equipment would increase the recorded expenses and decrease the non-current assets.

(iii) Impairment of investment in subsidiaries and recoverability of amount owing by subsidiaries

The Company tests investment in subsidiaries and amount owing by subsidiaries for impairment annually in accordance with its accounting policy. more regular reviews are performed if events indicate that this is necessary. The assessment of the net tangible assets of the subsidiaries affects the result of the impairment test. Costs of investments in subsidiaries which have ceased operations were impaired up to net assets of the subsidiaries. The impairment made on investment in subsidiaries entails an impairment to be made to the amount owing by these subsidiaries.

Significant judgement is required in the estimation of the present value of future cash flows generated by the subsidiaries, which involve uncertainties and are significantly affected by assumptions used and judgement made regarding estimates of future cash flows and discount rates. Changes in assumptions could significantly affect the results of the Company’s tests for impairment of investment in subsidiaries.

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3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (CONT’D)

3.2 Key sources of estimation uncertainty (Cont’d)

(iv) Impairment of investment in associates and recoverability of amount owing by associates

The Group and the Company test investment in associates and amount owing by associates for impairment annually in accordance with its accounting policy. more regular reviews are performed if events indicate that this is necessary.

Significant judgement is required in the estimation of the present value of future cash flows generated by the associates, which involve uncertainties and are significantly affected by assumptions used and judgement made regarding estimates of future cash flows and discount rates. Changes in assumptions could significantly affect the results of the Group’s and of the Company’s tests for impairment of investment in associates.

(v) Impairment of property, plant and equipment

The Group reviews the carrying amount of its property, plant and equipment, to determine whether there is an indication that those assets have suffered an impairment loss in accordance with relevant accounting policies on the property, plant and equipment. Independent professional valuations to determine the carrying amount of these assets will be procured when the need arise.

As at the end of the financial year under review, the directors are of the view that there is no indication of impairment to these assets and therefore no independent professional valuation was procured by the Group during the financial year to determine the carrying amount of these assets. The carrying amounts of property, plant and equipment are disclosed in Note 4 to the financial statements.

(vi) Impairment of infrastructure development expenditure

The Group assesses the carrying amount of its infrastructure development expenditure at each reporting date whether there is an indication that an asset may be impaired. If such indication exists, or when an annual impairment assessment for an asset is required, the Group makes an estimate of the infrastructure development expenditure’s recoverable amount based on the value-in-use calculation using the cash flow projections from financial budgets approved by the management covering a 50-year period.

(vii) Allowance for write down in inventories

Reviews are made periodically by management on damaged, obsolete and slow-moving inventories. These reviews require judgement and estimates. Possible changes in these estimates can result in revisions to the valuation of inventories.

(viii) Impairment of loans and receivables

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

Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. The carrying amount of the Group’s receivable at the reporting date is disclosed in Note 10 to the financial statements.



3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (CONT’D)

3.2 Key sources of estimation uncertainty (Cont’d)

(ix) Taxation

Significant judgement is required in determining the capital allowances and deductibility of certain expenses during the estimation of the provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the course of business. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred income tax provisions in the period in which such determination is made.

(x) Deferred tax assets

Deferred tax assets are recognised for all deductible temporary differences and unused tax credits to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and unused tax credits can be utilised. Significant management judgement 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.

(xi) 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.

(xii) Construction contracts

The Group recognised contract revenue and cost in the profit or loss by using the stage of completion method. The stage of completion is measured by reference to the proportion that contract costs incurred for work performed to date over the estimated total contract costs.

Significant judgements are required in determining the stage of completion, the extent of the contract cost incurred, the estimated total contract revenue and cost, as well as recoverability of the construction projects. In making the judgement, the management’s evaluation is based on past experience and by relying on the work of specialists.

(xiii) Construction revenue recognition in relation to Concession Agreement

In accordance with IC Int 12 Service Concession Agreements, revenue associated with construction works under the Concession Agreement shall be recognised and measured in accordance with FRS 111 Construction Contracts using the percentage of completion method. The directors are required to use judgement in determining the stage of completion, the estimated total construction costs, effective interest rates, as well as the recoverability of the construction contracts. The directors are of the opinion that the application of IC Int 12 does not have any impact to the financial results of the Group during the financial year as the construction works has not commenced, the Group is to meet the conditions precedent of the Concession Agreement and no consideration has become received or is receivable from the Government of malaysia for the construction of the highway.

63A n n u a l R e p o r t 2 0 1 3


4. PROPERTY, PLANT AND EQUIPMENT

Group 2013

Freeholdland

RM’000

Leaseholdland

RM’000Buildings

RM’000Renovation

RM’000

Plant and machinery

RM’000

Furniture, fixtures

and fittingsRM’000

Office equipment

RM’000

Motor vehiclesRM’000

TotalRM’000

Cost

At 1 February 2012 3,063 15,387 13,550 655 10,726 208 1,466 717 45,772

Additions - - - 68 341 - 76 445 930

Disposals - - (1,016) - (106) - - (305) (1,427)

Write-offs - - - (62) (551) (148) (580) - (1,341)

At 31 January 2013 3,063 15,387 12,534 661 10,410 60 962 857 43,934

Accumulated Depreciation

At 1 February 2012 - 1,954 606 295 9,953 154 1,187 251 14,400

Depreciation charges for the financial year - 32 190 26 143 10 81 165 647

Disposals - - (116) - (106) - - (234) (456)

Write-offs - - - (60) (505) (143) (565) - (1,273)

At 31 January 2013 - 1,986 680 261 9,485 21 703 182 13,318

Accumulated Impairment loss

At 1 February 2012/ 31 January 2013 - 10,873 - - - - - - 10,873

Net carrying amount at

31 January 2013 3,063 2,528 11,854 400 925 39 259 675 19,743



Group 2012

Freeholdland

RM’000

Leaseholdland

RM’000Buildings

RM’000Renovation

RM’000

Plant and machinery

RM’000

Furniture, fixtures

and fittingsRM’000

Office equipment

RM’000

Motor vehiclesRM’000

TotalRM’000

Cost

At 1 February 2011 3,063 21,727 13,948 612 10,195 163 1,277 363 51,348

Additions - 183 - 43 531 45 189 413 1,404

Disposals - - (398) - - - - (59) (457)

Write-offs - (6,523) - - - - - - (6,523)

At 31 January 2012 3,063 15,387 13,550 655 10,726 208 1,466 717 45,772

Accumulated Depreciation

At 1 February 2011 - 2,219 450 270 9,863 145 1,118 204 14,269

Depreciation charges for the financial year - 106 199 25 90 9 69 99 597

Disposals - - (43) - - - - (52) (95)

Write-offs - (371) - - - - - - (371)

At 31 January 2012 - 1,954 606 295 9,953 154 1,187 251 14,400

Accumulated Impairment loss

At 1 February 2011/ 31 January 2012 - 10,873 - - - - - - 10,873

Net carrying amount at 31 January 2012 3,063 2,560 12,944 360 773 54 279 466 20,499

4. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

65A n n u a l R e p o r t 2 0 1 3


4. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

The depreciation charges of the Group are allocated as follows:-

Group

2013RM’000

2012RM’000

Profit or loss (Note 22) 499 559

Infrastructure development expenditure (Note 5) 148 38

647 597

The carrying amount of property, plant and equipment of the Group that have been charged to financial institutions for banking facilities granted to the Group as disclosed in Note 15 to the financial statements are as follows:-

Group

2013RM’000

2012RM’000

Freehold land 3,061 3,061

Leasehold land 416 421

Buildings 7,021 8,016

10,498 11,498

The carrying amount of property, plant and equipment acquired under hire purchase arrangement is as follows:-

Group

2013RM’000

2012RM’000

motor vehicle - 92

As at the reporting date, the certificate of the title to the freehold and leasehold land and buildings of the subsidiaries with carrying amount of Rm11,737,000/- (2012: Rm12,751,000/-) was not registered under the name of the subsidiaries.

5. INFRASTRUCTURE DEVELOPMENT EXPENDITURE

Group

2013RM’000

2012RM’000

At cost

At 1 February 90,462 71,791

Incurred during the financial year 24,759 18,671

At 31 January 115,221 90,462



5. INFRASTRUCTURE DEVELOPMENT EXPENDITURE (CONT’D)

Included in the infrastructure development expenditure capitalised during the financial year are as follows:-

Group

2013RM’000

2012RM’000

Depreciation of property, plant and equipment 148 38

Director’s remuneration 855 294

Interest expense 5,336 3,719

Pre-construction enabling works 22,477 -

Project advisory cum management fee - 12,000

Rental of premises * (1,413) 805

Staff costs 1,020 464

* Rental in the current year includes the overprovision in prior years.

Included in infrastructure development expenditure are amounts of Rm22,477,000/- and Rm1,268,000/- representing the pre-construction enabling works and the interest charged by IJm Construction Sdn. Bhd. for the West Coast Expressway Project (“WCE Project”). IJm Construction Sdn. Bhd. is a subsidiary of IJm Corporation Berhad, a corporate shareholder of the Company.

on 2 January 2013, West Coast Expressway Sdn. Bhd. (“WCESB”), an 80%-owned subsidiary of the Company signed the Concession Agreement (“CA”) with the Government of malaysia in relation to the WCE Project. The WCE Project involves the development of the West Coast Expressway from Banting in Selangor to Taiping in Perak with 233km of toll highway. The project cost is estimated to be in the region of Rm6.0 billion and the construction period is for 5 years.


(i) the WCE Project is a build-operate-transfer project with a concession period of 50 years. The concession period will be extended for another 10 years if the agreed targeted Internal Rate of Return (“IRR”) is not achieved;

(ii) to enhance the viability of the WCE Project, a Government Support Loan (“GSL”) of Rm2.24 billion at an interest rate of 4% per annum will be provided by the Government of malaysia subject to a separate negotiation and agreement to be executed with the ministry of Finance;

(iii) the land acquisition cost of up to Rm980 million for the WCE Project will be borne by the Government of malaysia;

(iv) toll revenue in excess of an agreed traffic volume will be shared as follows:-• duringtheGSLtenure,70%oftheexcessrevenuewillbeutilisedasrepaymentorprepaymentofthe

GSL; and• aftersettlementoftheGSL,onthebasisof30:70betweentheGovernmentofMalaysiaandWCESBif

the targeted IRR is not achieved and 70:30 if the actual IRR is more than the targeted IRR.(v) the construction works of the WCE Project will be implemented by WCESB through a tender committee;(vi) a liquidated and ascertained damages of Rm100,000/- shall be paid by WCESB to the Government of malaysia

for each day of delay of construction if the construction is not completed by the agreed completion date; and(vii) cost savings from the construction costs shall be utilised to review the GSL amount or for other purposes as

may be determined by the Government of malaysia.

WCESB shall within 9 months from the date of execution of the CA meet the conditions precedent of the CA which includes the financial close of WCE Project. A further 3 months extension may be granted by the Government of malaysia if required.

The directors are of the opinion that the Group will fulfil the conditions precedent in the CA within the stipulated timeframe. The WCE Project once implemented shall enhance the future profitability and improve the financial position of the Group based on the cash flow projections of WCE Project covering a 50-year period.

67A n n u a l R e p o r t 2 0 1 3


6. INVESTMENT IN SUBSIDIARIES

Company

2013RM’000

2012RM’000

Unquoted shares, at cost 43,820 38,484

Less: Impairment loss (16,650) (16,572)

27,170 21,912

The following information relates to the subsidiaries all of which are incorporated in malaysia:-

Effective EquityInterest

2013 2012

Name of Companies % % Principal Activities

Direct subsidiaries

Ambang Vista Sdn. Bhd. 100 100 Property investment, development and trading of building materials.

Asian Resinated Felt Sdn. Bhd. 82.8 82.8 manufacturing and distribution of resinated felt.

Angsana mestika Sdn. Bhd. 100 100 Inactive.

KEB management Sdn. Bhd. 100 100 Provision of management services.

KEB Plantations holdings Sdn. Bhd. 100 100 Inactive.

Keuro Leasing Sdn. Bhd. 100 100 hire purchase, lease financing, letter of credit, money lending and factoring services.

Keuro Trading Sdn. Bhd. 100 100 Inactive.

West Coast Expressway Sdn. Bhd. 80 64.2 Design, construction and development of the West Coast Expressway Project and managing its toll operations.



6. INVESTMENT IN SUBSIDIARIES (CONT’D)


2013 2012


Indirect subsidiaries

Held through KEB Plantations Holdings Sdn. Bhd.

KEB Builders Sdn. Bhd. 100 100 Construction contracting.

Tiasa Ria Sdn. Bhd. 63 63 Inactive.

Held through KEB Management Sdn. Bhd.

Irama Bijak Sdn. Bhd. 70 70 Dormant.

Tiasa Ria Sdn. Bhd. 7 7 Inactive.

Held through Ambang Vista Sdn. Bhd.

Ratus Prestij Sdn. Bhd. 100 100 Dormant.

Held through Angsana Mestika Sdn. Bhd.

Europlus holdings Sdn. Bhd. 50.1 50.1 Dormant.

Held through Keuro Trading Sdn. Bhd.

maximix Sdn. Bhd. 100 100 Inactive.

Held through Maximix Sdn. Bhd.

Perkasa Jati holdings Sdn. Bhd. 100 100 Inactive. The Company had on 17 February 2012 subscribed for additional 15.80% equity interest in West Coast Expressway

Sdn. Bhd. from the non-controlling interest comprising 4,590,191 units of ordinary shares at Rm1/- each for a cash consideration of Rm5,336,097/-.

69A n n u a l R e p o r t 2 0 1 3


7. INVESTMENT IN ASSOCIATES

Investment in associates consists of:-

Group Company

2013RM’000

2012RM’000

2013RM’000

2012RM’000

At Cost

Quoted shares 342,706 341,684 342,706 341,684

Unquoted shares 500 500 - -

343,206 342,184 342,706 341,684

Share of post-acquisition results, net of dividends received (177,795) (171,123) - -

Less: Impairment loss - - (191,226) (191,226)

165,411 171,061 151,480 150,458

At Market Value

Quoted shares 61,142 73,370 61,142 73,370

The following information relates to the associates which are all incorporated in malaysia:-


2013 2012


Held by the Company

Trinity Corporation Berhad (“Trinity”) 30.17 30.17 Provision of management services, investment holding and property development.

Held through direct subsidiary

Held through KEB Management Sdn. Bhd.

Radiant Pillar Sdn. Bhd. + # 10 10 Investment holding and property development.

Held through indirect subsidiary

Held through KEB Builders Sdn. Bhd.

Radiant Pillar Sdn. Bhd. + # 40 40 Investment holding and property development.

Ambang Usaha Sdn. Bhd. 50 50 Construction contracting.

Held through Radiant Pillar Sdn. Bhd.

Bandar Rimbayu Sdn. Bhd. (formerly known as Canal City Construction

Sdn. Bhd.) + #

35 35 Property development.

+ These companies were audited by another firm of chartered accountants other than Baker Tilly monteiro heng.

# The audited financial statements and auditor’s reports of these associates are not available for equity accounting.



7. INVESTMENT IN ASSOCIATES (CONT’D)

As at 31 January 2013, certain investments in Trinity has been charged to the local banks for bank borrowings as mentioned in Note 15 to the financial statements.

The directors are of the opinion that the impairment loss as at 31 January 2013 is adequate as the carrying value of the investment approximates the net assets of the associates.

The summarised financial information in respect of the associates are as follows:-

Group

2013RM’000

2012RM’000

Assets and liabilities

Current assets 1,693,145 1,450,555

Non-current assets 913,274 1,315,911

Total assets 2,606,419 2,766,466

Current liabilities (1,852,699) (1,981,907)

Non-current liabilities (186,849) (201,715)

Total liabilities (2,039,548) (2,183,622)

Net assets 566,871 582,844

The Group’s share of net assets 171,276 177,293

Results

Revenue 209,160 637,424

Loss for the financial year (23,232) (128,524)

8. GOODWILL ON CONSOLIDATION

Group

2013RM’000

2012RM’000

At cost

At 31 January 8,955 8,955

Accumulated impairment loss

At 1 February (1,869) (1,531)

Charge for the financial year - (338)

At 31 January (1,869) (1,869)

Net carrying amount

At 31 January 7,086 7,086

71A n n u a l R e p o r t 2 0 1 3


8. GOODWILL ON CONSOLIDATION (CONT’D)

Goodwill on consolidation has been allocated to the Group’s cash generating units (“CGU”) identified according to business segments as follows:-

Group

2013RM’000

2012RM’000

Infrastructure 5,369 5,369

Construction 1,717 1,717

7,086 7,086

The recoverable amount of the goodwill on consolidation is determined based on a value-in-use calculation using cash flow projections from financial budgets approved by the management as follows:-

Infrastructure

• Cashflowscoveringa50-yearperiodwhichistheperiodoftheconcession;• WestCoastExpresswaySdn.Bhd.’srevenuewillmainlybederivedfromtollcollectionwheretollratesare

expected to increase at regular intervals;• Operationalexpenseswereprojectedbythemanagementbasedonpastexperience;and• Theafter-taxdiscountrateof6.38%(2012:6.60%)wasusedindeterminingthevalue-in-useofthegoodwillon

consolidation. The discount rate was estimated based on the weighted average cost of capital of the Group.

The value assigned to the key assumptions represents the managements’ assessment on the future trends of the expressway operation services industry and are based on both external and internal sources.

Construction

• Cashflowsof theconstructionactivitieswhich includecashflowsfrom its40%-ownedassociate,RadiantPillar Sdn. Bhd.; and

• Theafter-taxdiscountrateof6.38%(2012:6.60%)wasusedindeterminingthevalue-in-useofthegoodwillon consolidation as discussed above.

Sensitivity to changes in assumption

There are no reasonable possible changes in key assumptions which would cause the carrying value of goodwill on consolidation to exceed its recoverable amount.

9. INVENTORIES

Group

2013RM’000

2012RM’000

At cost:

Raw materials 1,414 846

Finished goods 378 343

1,792 1,189



10. TRADE AND OTHER RECEIVABLES

Group Company

2013RM’000

2012RM’000

2013RM’000

2012RM’000

Trade receivables

Trade receivables 20,266 16,585 - -

Amount owing by associates 1,345 7,724 - -

21,611 24,309 - -

Less: Impairment loss

- Trade receivables (12,020) (10,805) - -

(12,020) (10,805) - -

Trade receivables, net 9,591 13,504 - -

Other receivables

other receivables 90,148 98,483 43,563 51,221

Amount owing by subsidiaries - - 117,593 109,414

Amount owing by associates 37,635 63,254 36,806 55,193

Refundable deposits 268 229 71 112

128,051 161,966 198,033 215,940

Less: Impairment loss

- other receivables (76,399) (73,013) (31,502) (28,560)

- Amount owing by subsidiaries - - (48,269) (11,867)

(76,399) (73,013) (79,771) (40,427)

other receivables, net 51,652 88,953 118,262 175,513

Total trade and other receivables 61,243 102,457 118,262 175,513

(a) Trade and other receivables

Trade receivables are non-interest bearing and are generally on 60 to 90 (2012: 60 to 90) days terms except for an amount of Nil (2012: Rm1,579,000/-) owing by an associate of the Group which bears interest rates ranging from 9.50% to 10.50% per annum. other credit terms are assessed and approved by a case-by-case basis.

In the previous financial year, included in trade receivables of the Group is an amount of Rm3,000/- owing by a company in which a substantial shareholder has interest.

Included in other receivables of the Group is an amount of Rm7,948,000/- (2012: Nil) which bear an interest rate of 6% per annum.

In the previous financial year, included in other receivables of the Group and of the Company are amounts of Rm420,000/- and Rm2,000/- respectively owing by companies in which certain directors and a substantial shareholder have interest.

73A n n u a l R e p o r t 2 0 1 3


10. TRADE AND OTHER RECEIVABLES (CONT’D)

(a) Trade and other receivables (Cont’d)

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

Group

2013RM’000

2012RM’000

Neither past due nor impaired 1,061 3,447

Past due 1 - 30 days but not impaired 929 1,245

Past due 31 - 120 days but not impaired 2,075 1,160

Past due more than 120 days but not impaired 5,526 7,652

8,530 10,057

Impaired 12,020 10,805

21,611 24,309

Receivables that are neither past due nor impaired Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records

with the Group. None of the Group’s trade receivables that are neither past due nor impaired have been renegotiated during the financial year.

Receivables that are past due There were no significant concentrations of credit risk of the Group’s and of the Company’s receivables that

are past due but not impaired and are unsecured in nature.

Receivables that are impaired The Group’s trade and other receivables that are impaired at the reporting date and the movement of the

impairment used to record the impairment are as follows:-

Individually impaired

Group Company

2013RM’000

2012RM’000

2013RM’000

2012RM’000

Trade and other receivables

- nominal amounts 89,636 88,074 79,866 73,776

Less: Impairment loss (88,419) (83,818) (79,771) (40,427)

1,217 4,256 95 33,349



10. TRADE AND OTHER RECEIVABLES (CONT’D)

(a) Trade and other receivables (Cont’d)

movements in impairment:-

Group Company

2013RM’000

2012RM’000

2013RM’000

2012RM’000

At 1 February 83,818 63,963 40,427 36,273

Reversal of impairment loss (811) (101) (511) (2,663)

Charge for the financial year 6,298 25,783 39,855 6,817

Written off (886) (5,827) - -

At 31 January 88,419 83,818 79,771 40,427

Receivables that are individually determined to be impaired at the reporting date relate to debtors that are in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements.

(b) Amount owing by subsidiaries

The amount owing by subsidiaries is unsecured, non-interest bearing and repayable on demand.

(c) Amount owing by associates

The amount owing by associates is unsecured, bears interest at rates ranging from 7.60% to 8.60% (2012: 7.60% to 8.60%) per annum and repayable on demand.

An agreement had been entered into between the Company and an associate in respect of the amount owing by the associate to the Group. The terms of the agreement include, amongst others, the following:-

(i) The properties of the associate which have been charged to various lenders in favour of the Group as disclosed in Note 15 shall be used as security and collateral against the amount owing by the associates of the Group; and

(ii) Upon the release of the charges by the various lenders of the abovementioned properties while the abovementioned amounts owing still remain outstanding, the Group’s right over the properties shall remain in force until the amounts owing have been fully settled.

75A n n u a l R e p o r t 2 0 1 3


11. AMOUNT DUE (TO)/FROM CUSTOMERS FOR CONTRACT WORKS

Group

2013RM’000

2012RM’000

Aggregate costs incurred to date 37,656 33,310

Recognised profits less recognised losses 1,506 1,346

39,162 34,656

Progress billings (39,383) (33,102)

(221) 1,554

Amount due (to)/from customers for contract works included in current assets (221) 1,554

Construction contracts costs recognised as contract expenses during the financial year 4,346 6,133

Construction contracts costs recognised as contract revenue during the financial year 4,506 6,318

12. DEPOSITS PLACED WITH LICENSED BANKS

The effective interest rates as at the reporting date of the deposits placed with licensed banks range from 2.30% to 3.25% per annum. The deposits placed with licensed banks have maturity periods ranging from 1 day to 3 months.

13. SHARE CAPITAL

Group and Company2013 2012

Number of Shares

‘000 Units RM’000

Number of Shares

‘000 Units RM’000

ordinary shares of Rm1/- each

Authorised:

At the beginning/end of the financial year 1,000,000 1,000,000 1,000,000 1,000,000

Issued and fully paid:

At the beginning/end of the financial year 520,992 520,992 520,992 520,992



14. RESERVES

Group Company

2013RM’000

2012RM’000

2013RM’000

2012RM’000

Non-distributable reserves

Share premium 36,965 36,965 36,965 36,965

Foreign exchange reserves (458) (2,424) - -

Accumulated losses (456,482) (430,523) (403,962) (356,980)

(419,975) (395,982) (366,997) (320,015)

15. LOANS AND BORROWINGS

Group Company

2013RM’000

2012RM’000

2013RM’000

2012RM’000

Current (secured)

Finance lease liabilities - 48 - -

Floating rate bank loan 113,931 6,801 69,002 -

Trust receipts and revolving credit 6,888 4,527 - -

Bank overdrafts 1,755 1,602 - -

122,574 12,978 69,002 -

Current (unsecured)

Floating rate bank loan 10,974 12,058 - -

Bankers’ acceptance - 2,520 - -

Trust receipts and revolving credit - 4,380 - -

Bank overdrafts 1 1,025 - -

10,975 19,983 - -

Total current 133,549 32,961 69,002 -

Non-current (secured)

Finance lease liabilities - 33 - -

Floating rate bank loan - 109,002 - 69,002

Total non-current - 109,035 - 69,002

Total loans and borrowings 133,549 141,996 69,002 69,002

The remaining maturities of the loans and borrowings as at 31 January 2013 are as follows:-

Group Company

2013RM’000

2012RM’000

2013RM’000

2012RM’000

on demand and within one year 133,549 32,961 69,002 -

Later than one year but not later than two years - 109,035 - 69,002

133,549 141,996 69,002 69,002

77A n n u a l R e p o r t 2 0 1 3


15. LOANS AND BORROWINGS (CONT’D)

Finance lease liabilities In the previous financial year, the effective interest rate as at the reporting date is 4.73% per annum. Interest rates

are fixed at the inception of the finance lease arrangements.

The finance lease liabilities are effectively secured on the rights of the assets under finance lease.

Floating rate bank loan The effective interest rate as at the reporting date is 8.98% (2012: 8.68%) per annum.

Bankers’ acceptances The bankers’ acceptances of the Company are granted on the undertaking that the Company will not pledge or

execute any charges on its assets, other than those assets under finance lease.

The effective interest rates as at the reporting date range from 10.03% to 10.58% (2012: 10.25% to 10.58%) per annum.

Trust receipts and revolving credit The effective interest rates as at the reporting date range from 9.49% to 10.03% (2012: 9.71% to 10.03%) per

annum.

Bank overdrafts The bank overdrafts of the Group and of the Company are granted on the undertaking that the Group and the

Company will not pledge or execute any charges on its assets, other than those assets under finance lease.

The effective interest rate as at the reporting date is 9.53% (2012: 9.16% to 9.49%) per annum.

The Group has floating rate bank loan facilities of Rm124,905,000/- of which Rm113,931,000/- are secured by way of the following:-

(i) First legal charge over several parcels of land of subsidiaries;(ii) First party charge over 72,874,167 units of the ordinary shares of Rm0.20/- each in Trinity Corporation

Berhad;(iii) Third party first legal charge over several parcels of land of Trinity Group;(iv) Corporate guarantee by the Company;(v) Specific debenture creating legal charge over several parcels of land of Trinity Group;(vi) Pledge of 18,649,046 units of the ordinary shares of Rm1/- each in a subsidiary; and(vii) Personal guarantee of a substantial shareholder of the Company.

The Group has an overdraft facility of Rm1,755,000/- which is secured by way of the following:-

(i) Third party legal charge over a leasehold land of Trinity Group; and(ii) Corporate guarantee by the Company.



16. DEFERRED TAX LIABILITIES

Group Company

2013RM’000

2012RM’000

2013RM’000

2012RM’000

Balance at 1 February 113 358 - 301

Transfer to profit or loss (Note 23) 22 (245) - (301)

Balance at 31 January 135 113 - -

Representing the tax effects of:-

Temporary differences between net book values and the corresponding tax written down values 135 113 - -

17. TRADE AND OTHER PAYABLES

Group Company

2013RM’000

2012RM’000

2013RM’000

2012RM’000

Trade payables

Trade payables 40,351 21,924 - -

Other payables

Accruals 59,018 50,769 44,713 38,263

other payables 28,382 34,949 13,784 13,266

Amount owing to subsidiaries - - 15,829 17,128

Amount owing to associates 1,129 8,977 701 8,723

Amount owing to directors - 349 - -

88,529 95,044 75,027 77,380

Total trade and other payables 128,880 116,968 75,027 77,380

Add: Loans and borrowings (Note 15) 133,549 141,996 69,002 69,002

Total financial liabilities 262,429 258,964 144,029 146,382

(a) Trade payables The Group normal trade credit term ranges from 14 to 90 (2012: 14 to 90) days.

Included in trade payables of the Group is retention sum payable of Rm927,000/- (2012: Rm914,000/-).

Included in trade payables of the Group is an amount of Rm23,794,000/- (2012: Rm49,000/-) owing to a corporate shareholder of the Company. The amount owing of Rm23,745,000/- bears interest rate of 8.60% per annum.

(b) Accruals

Included in accrued operating expenses of the Group and of the Company are amounts of Rm54,400,000/- and Rm41,949,000/- (2012: Rm43,015,000/- and Rm33,548,000/-) respectively which represent overdue interest owing to financial institutions in relation to the borrowings of the Group and of the Company.

79A n n u a l R e p o r t 2 0 1 3


17. TRADE AND OTHER PAYABLES (CONT’D)

(c) Other payables

Included in other payables of the Group and of the Company are amounts of Rm21,957,000/- and Rm12,496,000/- (2012: Rm25,885,000/- and Rm11,333,000/-) respectively owing to a corporate shareholder of the Company and companies in which certain directors have interest. The amounts owing are unsecured, interest free and repayable on demand except for the amounts of Rm16,634,000/- and Rm12,496,000/- (2012: Rm15,243,000/-and Rm11,333,000/-) with interest rates ranging from 7.60% to 8.60% (2012: 7.60% to 8.60%) per annum.

(d) Amount owing to subsidiaries

The amount owing to subsidiaries is unsecured, interest free and repayable on demand.

(e) Amount owing to associates

The amount owing to associates is unsecured, bears interest at rates ranging from 7.60% to 8.60% (2012: 7.60% to 8.60%) per annum and is repayable on demand.

(f) Amount owing to directors

The amount owing to directors is unsecured, interest free and repayable on demand.

18. REVENUE

Group

2013RM’000

2012RM’000

manufacturing and trading of industrial products 13,351 12,900


Leasing, management services and investment holding - 557

17,857 19,775

19. COST OF SALES

Group

2013RM’000

2012RM’000

manufacturing and trading of industrial products 7,996 8,525


Leasing, management services and investment holding 2,371 2,293

14,713 16,951



20. FINANCE COSTS

Group Company

2013RM’000

2012RM’000

2013RM’000

2012RM’000

Bank overdrafts 20 1,694 - 828

Term loans 3,434 5,073 3,434 4,838

Bridging loans 4,967 4,925 4,967 4,925

others 2,129 4,168 1,384 2,092

10,550 15,860 9,785 12,683

21. SHARE OF RESULTS OF ASSOCIATES

Group

2013RM’000

2012RM’000

Share of loss in associates (8,638) (34,821)

Gain on accretion of equity interest in associate - 52,667

(8,638) 17,846

22. (LOSS)/PROFIT BEFORE TAXATION

(Loss)/profit before taxation has been arrived at:-

Group Company

2013RM’000

2012RM’000

2013RM’000

2012RM’000

After charging:

Audit fees

- statutory 185 186 108 108

- non-statutory 10 10 10 10

- under/(over) accrual in prior year 9 (16) - (6)

Bad debts written off 17 2 - -

Deposit written off - 150 - -

Impairment loss on receivables

- third parties 6,298 25,783 3,453 6,798

- subsidiaries - - 36,402 19

Depreciation of property, plant and equipment 499 559 - -

Directors’ remuneration 872 1,918 756 1,781

Staff costs

- Salaries, wages, overtime, bonus and allowances 3,638 2,746 - -

- EPF 294 190 - -

- SoCSo 25 21 - -

- other staff related expenses 84 251 - -

81A n n u a l R e p o r t 2 0 1 3


Group Company

2013RM’000

2012RM’000

2013RM’000

2012RM’000

After charging (Cont’d):

Impairment loss on goodwill - 338 - -

Impairment loss on investment in a subsidiary - - 78 -

Property, plant and equipment written off 68 6,152 - -

Rental of premises * (2,009) 1,422 7 -

Rental of equipment 31 31 - -

And crediting:

Impairment loss on receivables no longer required

- third parties 811 101 511 -

- subsidiaries - - - 2,663

Gain on disposal of property,

plant and equipment 223 62 - -

Gain on disposal of investments - 47,903 - 47,903

Interest income 2,867 5,451 2,840 5,441

Rental income 32 445 - -

Realised gain on foreign exchange 17 35 - -

Waiver of term loans interest - 6,619 - -

* Rental in the current year includes the overprovision in prior years.

23. TAXATION

Group Company

2013RM’000

2012RM’000

2013RM’000

2012RM’000

Taxation

- current year (862) (804) - -

- underaccrual in prior year (158) (84) - -

(1,020) (888) - -

Deferred taxation (Note 16)

- current year (28) (44) - -

- overaccrual in prior year 6 289 - 301

(22) 245 - 301

(1,042) (643) - 301

22. (LOSS)/PROFIT BEFORE TAXATION (CONT’D)



23. TAXATION (CONT’D)

The reconciliation of income tax expense applicable to (loss)/profit before taxation at the statutory tax rate to income tax expense at the effective income tax rate of the Group and of the Company are as follows:-

Group Company

2013RM’000

2012RM’000

2013RM’000

2012RM’000

(Loss)/profit before taxation (22,109) 28,710 (46,982) 37,134

Taxation at statutory tax rate of 25% 5,527 (7,178) 11,746 (9,284)

Tax effects of:

- non-deductible expenses (31,872) (11,615) (12,160) (4,104)

- origination of deferred tax assets not recognised (181) (1,298) - -

- Tax effect on share of results of associates (2,160) (8,705) - -

- non-taxable income 27,796 27,948 414 13,388

- prior year (152) 205 - 301

Tax expense for the financial year (1,042) (643) - 301

Deferred tax assets have not been recognised in respect of the following items:-

Group Company

2013RM’000

2012RM’000

2013RM’000

2012RM’000

Unutilised tax losses 72,899 71,901 - -

other taxable temporary differences 1,356 1,631 - -

74,255 73,532 - -

Potential deferred tax assets not recognised at 25% 18,564 18,383 - -

83A n n u a l R e p o r t 2 0 1 3


24. (LOSS)/EARNINGS PER ORDINARY SHARE

(a) Basic (loss)/earnings per ordinary share

Basis (loss)/earnings per ordinary share is calculated by dividing the net (loss)/profit for the financial year attributable to owners of the Company by the weighted average number of ordinary shares in issue during the financial year:-

Group

2013RM’000

2012RM’000

Net (loss)/profit for the financial year attributable to owners of the Company (Rm’000) (23,191) 27,725

Number of ordinary shares (’000 units) 520,992 520,992

Effects of shares issued during the year - -

Weighted average number of shares (‘000 unit) 520,992 520,992

Basic (loss)/earnings per ordinary share (sen) (4.5) 5.3

(b) Diluted (loss)/earnings per ordinary share

The diluted (loss)/earnings per ordinary share is equal to the basic (loss)/earnings per ordinary share as there were no dilutive potential ordinary shares in issue.

25. CONTINGENT LIABILITIES

Group Company

2013RM’000

2012RM’000

2013RM’000

2012RM’000

Guarantees given to financial institutions/third parties for credit facilities granted to subsidiaries and an associate. 52,200 52,200 129,196 130,421

A subsidiary was indebted to a bank which had on 7 September 2010 auctioned and disposed of a piece of land (“Land”) belonging to Trinity Group which secured the borrowing. The Group is contigently liable to Trinity Group, should Trinity Group be unsucessful in its court actions to recover the Land. 33,700 33,700 - -



26. SIGNIFICANT RELATED PARTY TRANSACTIONS

other than as disclosed elsewhere in the financial statements, the related parties and their relationship with the Company and its subsidiaries are as follows:-

Name of related parties Relationship

Tan Sri Dato’ (Dr.) Ir. Chan Ah Chye @ Chan Chong Yoon

A former director and a substantial shareholder of the Company.

Trinity Group Trinity Corporation Berhad (formerly known as Talam Corporation Berhad) (“Trinity”) and its subsidiaries. Trinity is an associate of the Company.

A company in which Tan Sri Dato’ (Dr.) Ir. Chan Ah Chye @ Chan Chong Yoon and Puan Sri Datin Thong Nyok Choo, the former directors and major shareholders of the Company, have substantial direct and indirect equity interests.

Sze Choon holdings Sdn. Bhd. (“SChSB”) A company in which Tan Sri Dato’ (Dr.) Ir. Chan Ah Chye @ Chan Chong Yoon and Puan Sri Datin Thong Nyok Choo have substantial interests.

Perkhidmatan Sanjung (m) Sdn. Bhd. (“PSSB”)

PSSB is a wholly owned subsidiary of Pengurusan Projek Bersistem Sdn. Bhd., which in turn is a subsidiary of Sze Choon holdings Sdn. Bhd., in which Tan Sri Dato’ (Dr.) Ir. Chan Ah Chye @ Chan Chong Yoon and Puan Sri Datin Thong Nyok Choo have substantial interests.

Radiant Group Radiant Pillar Sdn. Bhd. (“Radiant”), an associate of the Company, and its subsidiary.

IJm Group IJm Corporation Berhad (“IJm”) and its subsidiaries. IJm is a corporate shareholder of the Company.

KLPB holdings Sdn. Bhd. A company in which Tan Sri Dato’ (Dr.) Ir. Chan Ah Chye @ Chan Chong Yoon is a director and a substantial shareholder.

Tekal Perkasa Sdn. Bhd. A company in which Khairul Yusri Bin mohd. Yaacob is a director. he is also a director of the subsidiaries.

multi Route malaysia Sdn. Bhd. A company in which Yunas Bin Ismail and Khairul Yusri Bin mohd. Yaacob are the directors and substantial shareholders. They are also directors of the subsidiaries.

85A n n u a l R e p o r t 2 0 1 3


26. SIGNIFICANT RELATED PARTY TRANSACTIONS (CONT’D)

(a) Transactions with related parties

Group Company

2013RM’000

2012RM’000

2013RM’000

2012RM’000

Trinity Group:

Construction billings 749 6,318 - -

Rental of premises 2,032 (1,388) - -

Interest income 667 3,188 667 3,188

Interest expenses - (1,144) - (1,144)

Radiant Group:

Interest income 1,616 2,054 1,616 2,054

Interest expenses (581) (367) (581) (367)

IJm Group:

Construction works (22,477) - - -

Interest expenses (2,305) (982) (810) (687)

(b) Significant outstanding balances with related parties

Group Company

2013RM’000

2012RM’000

2013RM’000

2012RM’000

Trade receivables

Perkhidmatan Sanjung (m) Sdn. Bhd. - 3 - -

- 3 - -

Other receivables

KLPB holdings Sdn. Bhd. - 1 - -

multi Route malaysia Sdn. Bhd. - 413 - 2

Sze Choon holdings Sdn. Bhd. - 6 - -

- 420 - 2

Trade payables

IJm Group 23,794 49 - -

23,794 49 - -

Other payables

IJm Group 17,207 20,623 12,496 11,333

Tekal Perkasa Sdn. Bhd. 90 602 - -

multi Route management Sdn. Bhd. 4,660 4,660 - -

21,957 25,885 12,496 11,333



Group Company

2013RM’000

2012RM’000

2013RM’000

2012RM’000

Amount owing by associates

Trinity Group 33,149 46,940 30,989 31,170

Radiant Group 5,821 24,032 5,809 24,019

Ambang Usaha Sdn. Bhd. 10 6 8 4

38,980 70,978 36,806 55,193

Amount owing to associates

Trinity Group 701 8,723 701 8,723

Radiant Group 428 254 - -

1,129 8,977 701 8,723

(c) Key management compensation

The remuneration of key management personnel and directors’ remuneration (including directors who retired and resigned during the financial year), are disclosed as follows:-

Group Company

2013RM’000

2012RM’000

2013RM’000

2012RM’000

Directors

Executive directors:

- Fees 50 50 50 50

- Salaries and other emoluments 1,127 1,445 283 1,074

- EPF contributions 135 170 18 110

1,312 1,665 351 1,234

Non-executive directors:

- Fees 165 175 155 175

- Salaries and other emoluments 250 372 250 372

415 547 405 547

1,727 2,212 756 1,781

Other key management personnel

- Remuneration 521 285 - -

521 285 - -

2,248 2,497 756 1,781

The director’s remuneration of a subsidiary incurred and capitalised in infrastructure development expenditure amounted to Rm855,000/- (2012: Rm294,000/-).


(b) Significant outstanding balances with related parties (Cont’d)

87A n n u a l R e p o r t 2 0 1 3



(c) Key management compensation (Cont’d)

Remuneration of the directors of the Company in respect of services rendered to the Company and its subsidiaries is represented by the following bands:-

2013No.

2012No.

Executive directors

Rm100,001 to Rm150,000 - 1

Rm150,001 to Rm200,000 2 -

Rm1,050,001 to Rm1,100,000 - 1

Non-executive directors

Rm100,000 and below 6 7

27. SEGMENTAL INFORMATION

Business segments

The Group’s operating businesses are classified according to the nature of activities as follows:-

- manufacturing and trading of industrial products;- construction; and- leasing, management services, investment holding and others.

Segment revenue, expenses and results include between segments. The prices charged on inter-segment transactions are the same as those charged for similar goods to parties outside the economic entity and are at arm’s length. These transfers are eliminated on consolidation.



27. SEGMENTAL INFORMATION (CONT’D)

Business segments (Cont’d)

2013Group

Manufacturing and trading of

industrialproducts

RM’000Construction

RM’000

Leasing, managementservices and investmentholding and

othersRM’000

EliminationRM’000

ConsolidatedRM’000

Revenue

External sales 13,351 4,506 - - 17,857

Inter-segment sales - - - - -

Total revenue 13,351 4,506 - - 17,857

Results

Segment results 3,409 1,823 (11,020) - (5,788)

Finance costs (10,550)

Share of results of associates (8,638)

Interest income 2,867

Loss before tax (22,109)

Taxation (1,042)

Loss for the financial year (23,151)

Consolidated Statement of Financial Position

Assets

Segment assets 15,507 6,846 187,683 - 210,036

Investment in associates - 400 165,011 - 165,411

Consolidated total assets 15,507 7,246 352,694 - 375,447

Liabilities

Segment liabilities 1,349 15,243 246,058 - 262,650

Tax liabilities 303 - 3,525 - 3,828

Consolidated total liabilities 1,652 15,243 249,583 - 266,478

Other Information

Capital expenditure 454 - 476 - 930

Depreciation of property, plant and equipment 270 70 307 - 647

Non-cash expenses other than depreciation 587 6,357 108,228 (108,789) 6,383

89A n n u a l R e p o r t 2 0 1 3


27. SEGMENTAL INFORMATION (CONT’D)

Business segments (Cont’d)

2012Group

Manufacturing and trading of

industrialproducts

RM’000Construction

RM’000

Leasing, managementservices and investmentholding and

othersRM’000

EliminationRM’000

ConsolidatedRM’000

Revenue

External sales 12,900 6,318 557 - 19,775

Inter-segment sales - - - - -

Total revenue 12,900 6,318 557 - 19,775

Results

Segment results 3,158 (20,250) 38,365 - 21,273

Finance costs (15,860)

Share of results of associates 17,846

Interest income 5,451

Profit before tax 28,710

Taxation (643)

Profit for the financial year 28,067

Consolidated Statement of Financial Position

Assets

Segment assets 13,360 10,679 202,956 - 226,995

Investment in associates - 400 170,661 - 171,061

Consolidated total assets 13,360 11,079 373,617 - 398,056

Liabilities

Segment liabilities 1,782 21,872 235,310 - 258,964

Tax liabilities 525 - 4,932 - 5,457

Consolidated total liabilities 2,307 21,872 240,242 - 264,421

Other Information

Capital expenditure 867 - 537 - 1,404

Depreciation of property, plant and equipment 196 84 317 - 597

Non-cash expenses other than depreciation 154 18,985 13,457 (171) 32,425



28. FAIR VALUE OF FINANCIAL INSTRUMENTS

The following are classes of financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value:-

Note

Trade and other receivables 10

Loans and borrowings 15

Trade and other payables 17

The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values, either due to their short term nature or that they are floating rate instruments that are re-priced to market interest rates on or near the reporting date.

The carrying amounts of the current portion of loans and borrowings are reasonable approximations of fair values due to the insignificant impact of discounting.

The fair values of current loans and borrowings are estimated by discounting expected future cash flows at market incremental lending rate for similar types of lending, borrowing or leasing arrangements at the reporting date.

29. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The operations of the Group and of the Company are subject to a variety of financial risks, including credit risk, liquidity risk and interest rate risk. The Group and the Company have formulated a financial risk management framework whose principal objective is to minimise the Group’s and the Company’s exposure to risks and/or costs associated with the financing, investing and operating activities of the Group and of the Company.

(i) 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’s and the Company’s exposure to credit risk arises primarily from trade and other receivables. For other financial assets (including investment securities, cash and bank balances and derivatives), the Group and the Company minimise credit risk by dealing exclusively with high credit rating counterparties.

The Group and the Company does not hold any collateral as security and other credit enhancements for the above financial assets.

The management has a credit policy in place to monitor and minimise the exposure of default. The Group trades only with recognised and credit worthy third parties. Trade receivables are monitored on an ongoing basis.

As at reporting date, there were no significant concentrations of credit risk in the Group. The maximum exposure to credit risk for the Group is represented by the carrying amount of each financial instrument.

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

10 to the financial statements. Deposits with banks that are neither past due nor impaired are placed with reputable financial institutions with no history of default.

Financial assets that are either past due or impaired Information regarding financial assets that are past due or impaired is disclosed in Note 10 to the financial

statements.

91A n n u a l R e p o r t 2 0 1 3


29. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D)

(ii) Liquidity risk

Liquidity risk is the risk that the Group or the Company will not be able to meet its financial obligations as they fall due. The Group’s exposure to liquidity risk arises principally from its various payables, loans and borrowings.

The Group maintains a level of cash and cash equivalents and bank facilities deemed adequate by the management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they fall due.

maturity analysis The table below summarises the maturity profile of the Group’s and of the Company’s liabilities as at the

reporting date based on contractual undiscounted repayment obligations:-

On demand or within one year RM’000

One to five years

RM’000

Over five years

RM’000 Total

RM’000

2013

Group

Financial liabilities

Trade and other payables 128,880 - - 128,880

Loans and borrowings 133,549 - - 133,549

Total undiscounted financial liabilities 262,429 - - 262,429

Company


other payables 75,027 - - 75,027

Loans and borrowings 69,002 - - 69,002

Total undiscounted financial liabilities 144,029 - - 144,029

2012

Group


Trade and other payables 116,968 - - 116,968

Loans and borrowings 32,961 109,035 - 141,996

Total undiscounted financial liabilities 149,929 109,035 - 258,964

Company


other payables 77,380 - - 77,380

Loans and borrowings - 69,002 - 69,002

Total undiscounted financial liabilities 77,380 69,002 - 146,382



29. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D)

(iii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s and of the Company’s financial instruments will fluctuate because of changes in market interest rates.

The Group’s and the Company’s exposure to interest rate risk arises primarily from their loans and borrowings.

The Group and the Company manage the net exposure to interest rate risks by maintaining sufficient lines of credit to obtain acceptable lending costs and by monitoring the exposure to such risks on an ongoing basis. management does not enter into interest rate hedging transactions since it considers that the cost of such instruments outweigh the potential risk of interest rate fluctuation.

The information on maturity dates and effective interest rate of financial assets and liabilities are disclosed in their respective notes.

Sensitivity analysis for interest rate risk Fair value sensitivity analysis for fixed rate instruments The Company and the Group do not account for any fixed rate financial assets at fair value through profit or

loss and equity. Therefore a change in interest rates at the reporting date would not affect profit or loss and equity.

Cash flow sensitivity analysis for variable rate instruments A change of 100 basis points in interest rates at the reporting date would have increased/(decreased) equity

and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.

Profit or loss/Equity

100bpdecrease

RM’000

100bpincreaseRM’000

2013

Group

Variable rate instruments (1,336) 1,336

Company

Variable rate instruments (690) 690

2012

Group

Variable rate instruments (1,419) 1,419

Company

Variable rate instruments (690) 690

93A n n u a l R e p o r t 2 0 1 3


30. CAPITAL MANAGEMENT

The primary objective of the Group’s capital management is to ensure that it maintains a strong capital base and safeguard the Group’s ability to continue as a going concern, so as to maintain investor, creditor and market confidence and to sustain future development of the business. The directors monitor and determine to maintain an optimal debt-to-equity ratio that complies with debt covenants and regulatory requirements.

The debt-to-equity ratio at 31 January 2013 and 31 January 2012 was as follows:-

Group

2013RM’000

2012RM’000

Total borrowings 133,549 141,996

Equity attributable to owners of the Company 101,017 125,010

Debt-to-equity ratio 1.32 1.14

There were no changes in the Group’s approach to capital management during the financial year.

The Group is also required to comply with the disclosure and necessary capital requirements as prescribed in the main market Listing Requirements of Bursa malaysia Securities Berhad.

31. FINANCE LEASE COMMITMENTS

Group

2013RM’000

2012RM’000

minimum hire purchase payments

- not later than one year - 51

- later than one year and not later than five years - 33

- 84

Future interest charges - (3)

Present value of hire purchase liabilities - 81

Represented by:

Current - 48

Non-current - 33

- 81


on 25 march 2010, Bursa malaysia Securities Berhad (“Bursa malaysia”) issued a directive to all listed issuers pursuant to Paragraphs 2.06 and 2.23 of Bursa malaysia main market Listing Requirements. The directive requires all listed issuers to disclose the breakdown of the retained profits or accumulated losses as at the end of the reporting period, into realised and unrealised profits and losses.

on 20 December 2010, Bursa malaysia further issued guidance on the disclosure and the format required.

Pursuant to the directive, the amounts of realised and unrealised profits or losses included in the accumulated losses of the Group and of the Company as at 31 January 2013 are as follows:-

Group Company

2013RM’000

2012RM’000

2013RM’000

2012RM’000

The accumulated losses of the Group and of the Company:

- realised (278,822) (259,513) (403,962) (356,980)

- unrealised 135 113 - -

(278,687) (259,400) (403,962) (356,980)

Total share of accumulated losses of associates:

- realised (172,239) (162,963) - -

- unrealised (5,556) (8,160) - -

(456,482) (430,523) (403,962) (356,980)

The determination of realised and unrealised profits is based on Guidance on Special matter No. 1, Determination of Realised and Unrealised Profits and Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the malaysian Institute of Accountants on 20 December 2010.

The disclosure of realised and unrealised profits above is solely for complying with the disclosure requirements stipulated in the directive of Bursa malaysia and should not be applied for any other purposes.

Supplementary InformationOn the Breakdown of Realised and Unrealised Losses

95A n n u a l R e p o r t 2 0 1 3

We, DATO’ ABDUL HAMID BIN MUSTAPHA and LOY BOON CHEN being two of the directors of Kumpulan Europlus Berhad, do hereby state that in the opinion of the directors, the financial statements set out on pages 34 to 93 are properly drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 January 2013 and of the results and cash flows of the Group and of the Company for the financial year ended on that date in accordance with the Financial Reporting Standards and the Companies Act, 1965 in malaysia.

The supplementary information set out on page 94 has been compiled in accordance with the Guidance on Special matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the malaysian Institute of Accountants.

on behalf of the Board,

DATO’ ABDUL HAMID BIN MUSTAPHADirector

LOY BOON CHENDirector

Kuala LumpurDate: 31 may 2013

Statement by Directors

Statutory DeclarationI, LOURDES PUSPHAM DASS, being the officer primarily responsible for the financial management of Kumpulan Europlus Berhad, do solemnly and sincerely declare that to the best of my knowledge and belief, the accompanying financial statements set out on pages 34 to 93, and the supplementary information set out on page 94 are 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, 1960.

LOURDES PUSPHAM DASS

Subscribed and solemnly declared by the abovenamed at Kuala Lumpur in the Federal Territory on 31 may 2013.

Before me,

ARSHAD ABDULLAH W 550Commissioner for oaths


Independent Auditor’s ReportTo the Members of Kumpulan Europlus Berhad (Incorporated in Malaysia)

REPORT ON THE FINANCIAL STATEMENTS

We have audited the financial statements of Kumpulan Europlus Berhad, which comprise the statements of financial position as at 31 January 2013 of the Group and of the Company, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 34 to 93.

Directors’ Responsibility for the Financial Statements

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

Auditors’ Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal controls relevant to the Company’s preparation of 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 controls. 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 give a true and fair view of the financial position of the Group and of the Company as at 31 January 2013 and of their financial performance and cash flows for the financial year then ended in accordance with the Financial Reporting Standards and the requirements of the Companies Act, 1965 in malaysia.

Emphasis of Matter

Without qualifying our opinion, as at 31 January 2013, the carrying value of infrastructure development expenditure of the Group is Rm115,221,000/-. The Group had incurred Rm24,759,000/- in infrastructure development expenditure during the financial year, the details of which are disclosed in Note 5 to the financial statements.

on 2 January 2013, West Coast Expressway Sdn. Bhd., an 80%-owned subsidiary of the Company signed the Concession Agreement with the Government of malaysia in relation to the West Coast Expressway Project. The West Coast Expressway Project involves the development of the West Coast Expressway from Banting in Selangor to Taiping in Perak with 233km of toll highway. The project cost is estimated to be in the region of Rm6.0 billion and the construction period is for 5 years. West Coast Expressway Sdn. Bhd. shall within 9 months from the date of execution of the CA meet the conditions precedent of the Concession Agreement as detailed in Note 5 to the financial statements.

The directors are of the opinion that the Group will fulfil the conditions precedent of the Concession Agreement within the stipulated timeframe and the West Coast Expressway Project once implemented shall enhance the future profitability and improve the financial position of the Group based on the cash flow projections of WCE Project covering a 50-year period.

We have considered the importance of these factors that are fundamental to the understanding of the financial statements and draw your attention to them, but our opinion is not qualified.

97A n n u a l R e p o r t 2 0 1 3

Independent Auditor’s Report

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 Companies Act, 1965 in malaysia to be kept by the Company and its subsidiaries have been properly kept in accordance with the provisions of the Companies Act, 1965 in malaysia.

(b) 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; and

(c) The auditors’ reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Companies Act, 1965 in malaysia.

OTHER REPORTING RESPONSIBILITIES

The supplementary information set out in page 94 is disclosed to meet the requirement of Bursa malaysia Securities Berhad and is not part of the financial statements. The directors are responsible for the preparation of the supplementary information in accordance with the Guidance on Special matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa malaysia Securities 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 contents of this report.

Baker Tilly Monteiro Heng Heng Ji KengNo. AF 0117 No. 578/05/14 (J/Ph)Chartered Accountants Chartered Accountant

Kuala Lumpur

Date: 31 may 2013


List of Properties

Owner Location

Land/Built Up

Area

Development/Proposed

DevelopmentDate of

Acquisition Tenure Expiry

Approximate Age of

Building (Years)

Net Book Value as at

31.1.2013 RM’000

1. Asian Resinated Lot PT15656 16,812.00 Factory Building 30.06.2010 Leasehold 01.11.2089 20 5,708

Felt Sdn Bhd Nilai Industrial Estate sq.m. land

71800 Nilai (99 years)

Negeri Sembilan

2. KEURo Trading mukim of Ampang 1,775.41 13 parcels of 24.1.1990 Leasehold 29.10.2100 - 416

Sdn Bhd District of hulu Langat sq.m. residential land at land

Selangor Darul Ehsan Pandan Perdana (99 years)

3. KEURo Trading 1-1A, 1st Flr 164.71 4 units of shop 17.7.2001 Leasehold 10.10.2100 10 543

Sdn Bhd Jalan U/P 1/3 sq.m. office at land

Taman Ukay Perdana Ukay Perdana (99 years)

68000 Ampang, Selangor

1-1B, 1st Flr 172.61

Jalan U/P 1/3 sq.m.

Taman Ukay Perdana


3-1B, 3rd Flr 60.66

Jalan U/P 1/3 sq.m.

Taman Ukay Perdana


26-3B, 1st Flr 114.17

Jalan U/P 1/2 sq.m.

Taman Ukay Perdana


4. KEURo Trading mukim of Ampang 545.88 4 parcels of 21.1.2005 Leasehold 30.10.2195 - 161

75

Sdn Bhd District of hulu Langat sq.m. residential land land

Selangor Darul Ehsan at Pandan (99 years)

Perdana

5. KEURo Trading mukim of Ampang 248.06 2 parcels of 21.1.2005 Leasehold 11.1.2091 -



Perdana

6. KEURo Trading mukim of Ampang 783.00 9 parcels of 21.1.2005 Leasehold 10.12.2195 - 232



Perdana

7. KEURo Trading No. 11, Jalan orkid 10 600.52 1 unit 1.7.2008 Freehold - - 116

Sdn Bhd Seksyen BB1 sq.m. Bungalow lot

Bandar Bukit Beruntung

48300 Rawang, Selangor

As at 31 January 2013

99A n n u a l R e p o r t 2 0 1 3

List of Properties

Owner Location

Land/Built Up

Area

Development/Proposed

DevelopmentDate of

Acquisition Tenure Expiry

Approximate Age of

Building (Years)

Net Book Value as at

31.1.2013 RM’000

8. KEURo Trading No. 63, Jalan Widuri 2B 1,179.00 4 units Single 1.4.2009 Freehold - - 475

Sdn Bhd Seksyen BB18 sq.m. Storey house

Bukit Beruntung 3


No. 63, Jalan Widuri 2D/2

Seksyen BB18

Bukit Beruntung 3


No. 21, Jalan Widuri 2F

Seksyen BB18

Bukit Beruntung 3


No. 2, Jalan Widuri 2F/3

Seksyen BB18

Bukit Beruntung 3


9. KEURo Trading Bukit Beruntung Zone 8 3,084.54 10 units Cluster 29.1.2009 Freehold - - 292

Sdn Bhd Selangor sq.m. Bungalow lots

10. KEURo Leasing metro Larkin 1,464.00 22 units of shop 30.7.2005 Leasehold 21.4.2094 6 6,003

Sdn Bhd District of Johor Bahru sq.m. office and land

Johor Darul Ta’zim retail space (99 years)

11. KEURo Leasing F05 & F06, 1st Floor 1,011.00 2 units of 31.1.2009 Leasehold 8.3.2092 6 769

Sdn Bhd Pandan Safari Lagoon sq.m. shop office lots land

1 Jalan Pandan Perdana at Pandan (99 years)

6/10A Pandan Perdana Perdana

55100 Kuala Lumpur

12. KEURo Leasing Bukit Beruntung Zone 8 27,518.00 60 units Cluster 29.1.2009 Freehold - - 2,653

Sdn Bhd Selangor sq.m. Bungalow lots

As at 31 January 2013


Statement on Directors’ InterestAs at 3 June 2013

THE COMPANY

ORDINARY SHARES

No. of Ordinary Shares of RM1.00 each

Direct Interest % Deemed Interest %

The Company

1. Loy Boon Chen 61,500 0.01 - -

2. U Chin Wei 30,000 0.01 11,500*1 0.002

Notes:

*1 Deemed interested through his spouse, madam Goh Siew Thing pursuant to Section 134(12)(c) of the Companies Act, 1965.

Save as disclosed above, none of the other Directors of the Company have any interests in the securities of the Company and its related corporation as at 3 June 2013.

101A n n u a l R e p o r t 2 0 1 3

Analysis of ShareholdingsAs at 3 June 2013

ANALYSIS OF SHARE CAPITAL

Authorised share capital : Rm1,000,000,000Issued and paid-up share capital : Rm520,991,765

DISTRIBUTION OF SHAREHOLDINGS

Size of Holdings No. of Shareholders

% of Shareholders

No. ofShares held

% ofShares held

1 – 99 782 7.769 30,556 0.005

100 – 1,000 2,471 24.550 1,955,666 0.375

1,001 – 10,000 5,320 52.856 22,015,956 4.225

10,001 – 100,000 1,239 12.309 41,018,160 7.873

100,001 – 26,049,587* 249 2.473 181,677,390 34.871

26,049,588 and above** 4 0.039 274,294,037 52.648

Total 10,065 100.000 520,991,765 100.000

NoTES:

There is only one class of shares in the paid-up share capital of the Company. Each share entitles the holder to one vote.

* Less than 5% of issued shares** 5% and above of issued shares

THIRTY LARGEST SHAREHOLDERS

Name of Shareholders No. of Shares %

1 IJm CoRPoRATIoN BERhAD 119,625,300 22.961

2 m & A NomINEE (TEmPATAN) SDN BhD 56,856,771 10.913

Insas Credit & Leasing Sdn Bhd for Chan Ah Chye @ Chan Chong Yoon

3 TA NomINEES (TEmPATAN) SDN BhD 51,522,466 9.889

Pledged Securities Account for Chan Ah Chye @ Chan Chong Yoon

4 hSBC NomINEES (ASING) SDN BhD 46,289,500 8.884

Exempt An For Credit Suisse (hK BR-TST-Asing)

5 CITIGRoUP NomINEES (ASING) SDN BhD 19,464,200 3.735

Exempt An For UBS AG Singapore (Foreign)

6 AmSEC NomINEES (TEmPATAN) SDN BhD 15,492,009 2.973

Pledged Securities Account for Chan Ah Chye @ Chan Chong Yoon

7 ADVANCE INVESTmENTS WoRLDGRoUP LTD 13,000,000 2.495

8 hSBC NomINEES (ASING) SDN BhD 7,043,300 1.351

Exempt An For Credit Suisse (SG BR-TST-Asing)


Analysis of Shareholdings

THIRTY LARGEST SHAREHOLDERS (CONT’D)

Name of Shareholders No. of Shares %

9 TASEC NomINEES (TEmPATAN) SDN BhD 6,000,000 1.151

Sze Choon holdings Sdn Bhd

10 mAYBANK SECURITIES NomINEES (ASING) SDN BhD 5,000,000 0.959

Pledged Securities Account for Lim Seak Koon (margin)

11 oNG YENG TIAN @ oNG WENG TIAN 4,095,032 0.786

12 hDm NomINEES (TEmPATAN) SDN BhD 4,094,500 0.785

Pledged Securities Account for ong Kah huat (m03)

13 UoBm NomINEES (ASING) SDN BhD 3,718,400 0.713

Exempt An for Societe Generale Bank & Trust, Singapore Branch (Cust Asset)

14 ChAN Ah ChYE @ ChAN ChoNG YooN 3,500,000 0.671

15 AZIZ BIN BAhAmAN 3,300,000 0.633

16 LIEW KhANG @ LIEW WAN KhANG 2,753,800 0.528

17 LIEW YAU TIT 2,524,300 0.484

18 GENERAL TEChNoLoGY SDN BhD 2,396,914 0.460

19 ChAN Ah ChYE @ ChAN ChoNG YooN 2,304,300 0.442

20 PUBLIC INVEST NomINEES (TEmPATAN) SDN BhD 2,130,000 0.408

Exempt An For Phillip Securities Pte Ltd (Clients)

21 mULTI PURPoSE INSURANCE BhD 2,110,000 0.404

22 CITIGRoUP NomINEES (ASING) SDN BhD 1,930,100 0.370

CBNY For DFA Emerging markets Small Cap Series

23 oNG SIoK LIAN 1,689,600 0.324

24 oNG KAh hUAT 1,588,000 0.304

25 ChEoNG KooN WAN 1,547,000 0.296

26 SI Tho YoKE mENG 1,500,000 0.287

27 RESoN SDN BhD 1,479,029 0.283

28 oNG SEh YEW 1,300,000 0.249

29 LIm Soo LEE 1,240,400 0.238

30 CITIGRoUP NomINEES (TEmPATAN) SDN BhD 1,181,400 0.226

Employees Provident Fund Board (hDBS)

386,676,321 74.219

As at 3 June 2013

103A n n u a l R e p o r t 2 0 1 3

Analysis of Shareholdings

LIST OF SUBSTANTIAL SHAREHOLDERSAs shown in the Register of Substantial Shareholders

Name of Substantial Shareholders No. of Ordinary Shares of RM1.00 each

Direct Interest % Deemed Interest %

1. Tan Sri Dato’ (Dr) Ir Chan Ah Chye @ Chan Chong Yoon (“TSDCAC”)

131,893,546 25.31 6,761,761*1 1.30

2. Puan Sri Datin Thong Nyok Choo (“PSDTNC”) - - 138,655,307*2 26.61

3. IJm Corporation Berhad (“IJm”) 119,625,300 22.96 - -

Notes:

*1 Deemed interested through his spouse, PSDTNC, his daughter, Chan Siu Wei and by virtue of his interest in Pengurusan Projek Bersistem Sdn Bhd (“PPBSB”) and Sze Choon holdings Sdn Bhd (“SChSB”) pursuant to Section 134(12)(c) and Section 6A of the Companies Act, 1965 (“the Act”).

*2 Deemed interested through her spouse, TSDCAC, her daughter, Chan Siu Wei and by virtue of her interest in PPBSB and SChSB pursuant to Section 134(12)(c) and Section 6A of the Act.

As at 3 June 2013


Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN THAT the 12th Annual General meeting of Kumpulan Europlus Berhad (“the Company”) will be held at Perdana Ballroom, Pandan Lake Club, Lot 28, Jalan Perdana 3/8, Pandan Perdana, 55300 Kuala Lumpur on Tuesday, 23 July 2013 at 2.00 p.m. for the following purposes:

AGENDA

AS ORDINARY BUSINESS

1. To receive the Audited Financial Statements of the Company for the year ended 31 January 2013 and the Reports of the Directors and Auditors thereon.

(Please refer to Explanatory

Note A)

2. To approve the payment of Directors’ fees of Rm25,000 for each Director for the year ended 31 January 2013.

(Resolution 1)

3. To re-elect the Director, mr U Chin Wei who is retiring in accordance with Article 97 of the Company’s Articles of Association.

(Resolution 2)

4. To consider and, if thought fit, to pass the following special resolution pursuant to Section 129(6) of the Companies Act, 1965:

“THAT pursuant to Section 129(6) of the Companies Act, 1965, mr Chee heng Tong who is over 70 years of age be re-appointed a Director of the Company and to hold office until the conclusion of the next Annual General meeting of the Company.”

(Resolution 3)

5. To re-appoint messrs Baker Tilly monteiro heng as Auditors of the Company and to authorise the Directors to fix their remuneration.

(Resolution 4)

AS SPECIAL BUSINESS

To consider and if thought fit, to pass the following Resolutions:

6. ORDINARY RESOLUTION Authority to allot and issue shares pursuant to Section 132D of the Companies Act, 1965

(Resolution 5)

“THAT pursuant to Section 132D of the Companies Act, 1965 and subject always to the approval of all relevant authorities, the Directors of the Company be and are hereby empowered to issue shares in the Company at any time and upon such terms and conditions for such purposes as the Directors may in their absolute discretion deem fit provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the issued share capital of the Company for the time being and that the Directors be and are also empowered to obtain approval for the listing of and quotation for the additional shares so issued on Bursa malaysia Securities Berhad and that such authority shall continue to be in force until the conclusion of the next Annual General meeting of the Company unless revoked or varied by the Company at a general meeting.”

105A n n u a l R e p o r t 2 0 1 3


7. ORDINARY RESOLUTION Proposed renewal of shareholders’ mandate for existing recurrent related party transactions and new shareholders’ mandate for additional recurrent related party transactions of a revenue or trading nature (“Proposed Shareholders’ Mandate”)

(Resolution 6)

“THAT, subject always to the Listing Requirements of Bursa malaysia Securities Berhad, the Company and its subsidiary companies shall be mandated to enter into such recurrent transactions of a revenue or trading nature which are necessary for their day-to-day operations and with those related parties as specified in Section 2.4 of the Circular to Shareholders dated 1 July 2013 subject further to the following:

(i) the transactions are in the ordinary course of business of the Company and its subsidiary companies on terms not more favourable to the related parties than those generally available to the public and are not detrimental to the minority shareholders of the Company; and

(ii) disclosure will be made in the Annual Report of the aggregate value of transactions of the Proposed Shareholders’ mandate conducted during the financial year, including amongst others, the following information:

(a) the type of the recurrent transactions made; and

(b) the names of the related parties involved in each of the recurrent transactions made and their relationship with the Company and/or its subsidiary companies.

AND THAT such mandate shall commence upon passing of this resolution and shall continue to be in force until:

(i) the conclusion of the next Annual General meeting (“AGm”) of the Company following the AGm at which such mandate was passed, at which time it shall lapse unless by a resolution passed at a general meeting, the authority is renewed; or

(ii) the expiration of the period within which the next AGm after that date is required to be held pursuant to Section 143(1) of the Companies Act, 1965 (“Act”) (but must not extend to such extension as may be allowed pursuant to Section 143(2) of the Act); or

(iii) revoked or varied by resolution passed by the shareholders of the Company in general meeting;

whichever is the earlier;

AND FURTHER THAT the Directors of the Company be authorised to complete and do all such acts and things (including executing all such documents as may be required) as they may consider expedient or necessary to give effect to the Proposed Shareholders’ mandate.”



8. SPECIAL RESOLUTIONProposed Amendments to the Company’s Articles of Association

(Resolution 7)

“THAT, the Proposed Amendments to the Company’s Articles of Association as set out in Appendix 1 of the Circular to Shareholders dated 1 July 2013 be and are hereby approved and adopted AND THAT the Directors and Secretary of the Company be and are hereby authorised to take all steps as are necessary and expedient in order to implement, finalise and give full effect to the Proposed Amendments to the Company’s Articles of Association.”

9. To transact any other ordinary business which due notice shall have been given.

BY ORDER OF THE BOARD

RAW KOON BENG (MIA 8521)Secretary

Kuala Lumpur1 July 2013

NOTES:

1. A member entitled to attend and vote at this meeting is entitled to appoint one (1) proxy to attend and vote in his stead. A proxy need not be a member of the Company and the provision of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend and vote at a meeting of the Company shall have the same rights as the members to speak at a meeting.

2. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing or if the appointor is a corporation under its common seal or the hand of its attorney duly authorised.

3. Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, 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.

4. A member shall not be entitled to appoint more than two (2) proxies to attend and vote at the same meeting and where a member appoints two (2) proxies, the appointment shall be invalid unless the member specifies the proportions of his holdings to be represented by each proxy.

5. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

6. All Proxy Forms must be deposited at the Registered Office of the Company situated at Suite 2.12, Level 2, Menara Maxisegar, Jalan Pandan Indah 4/2, Pandan Indah, 55100 Kuala Lumpur not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

7. For the purpose of determining members who shall be entitled to attend the Annual General Meeting, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd to issue a Record of Depositors as at 17 July 2013. Only depositors whose names appear therein shall be entitled to attend the said meeting or appoint a proxy to attend and vote on their behalf.

107A n n u a l R e p o r t 2 0 1 3


EXPLANATORY NOTE A

This Agenda item is meant for discussion only as the provision of Section 169(1) of the Companies Act, 1965 does not require a formal approval of the shareholders for the Audited Financial Statements. hence, this Agenda item is not put forward for voting.

EXPLANATORY NOTES TO THE SPECIAL BUSINESSES

1. Resolution Pursuant to Section 132D of the Companies Act, 1965

The proposed ordinary Resolution 5, if passed, will give authority to the Board of Directors to issue and allot ordinary shares from the unissued capital of the Company at any time in their absolute discretion and that such authority shall continue to be in force until the conclusion of the next Annual General meeting of the Company or the expiration of the period within which the next Annual General meeting is required by law to be held or revoked/varied by resolution passed by the shareholders in general meeting whichever is the earlier.

The renewed general mandate will provide flexibility to the Company for any possible fund raising activities, including

but not limited to placing of shares, for purpose of funding future investment project(s), working capital and/or acquisitions.

As at the date of this Notice, no new shares in the Company were issued pursuant to the mandate granted to the Directors at the 11th Annual General meeting held on 17 July 2012 and which will lapse at the conclusion of the 12th Annual General meeting.

2. The detailed information on Proposed ordinary Resolution 6 pertaining to the Proposed Shareholders’ mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature, is set out in the Circular to Shareholders dated 1 July 2013 which is enclosed together with the Company’s Annual Report 2013.

3. The Proposed Special Resolution 7, if passed will render the Company’s Articles of Association to be in line with the main market Listing Requirements of Bursa malaysia Securities Berhad and to update the Company’s Articles of Association to be consistent with the prevailing laws, guidelines or requirements of the relevant authorities. The details of the amendments are set out in Appendix I of the Circular to Shareholders dated 1 July 2013.

This page has been intentionally left blank.

Proxy Form

I/We (NRIC / Passport / Company No. ) (Name in full and in block letters)

of (Full address)

being a member/members of KUMPULAN EUROPLUS BERHAD (534368-A) hereby appoint

(NRIC / Passport No. ) (Name in full and in block letters)

of (Full address)

or failing him/her, the Chairman of the meeting as my/our proxy to vote on my/our behalf at the 12th Annual General meeting of the Company to be held at the Perdana Ballroom, Pandan Lake Club, Lot 28, Jalan Perdana 3/8, Pandan Perdana, 55300 Kuala Lumpur on Tuesday, 23 July 2013 at 2.00 p.m. and at any adjournment thereof, on the resolutions referred to in the Notice of the Annual General meeting.

my/our proxy is to vote as indicated below:

No. Resolutions For Against

As Ordinary Business

1 To approve the payment of Directors’ fees of Rm25,000 for each Director for the year ended 31 January 2013

2 To re-elect the Director, mr U Chin Wei who is retiring in accordance with Article 97 of the Company’s Articles of Association

3 To re-appoint mr Chee heng Tong who is over 70 years of age as Director of the Company

4 To re-appoint messrs Baker Tilly monteiro heng as Auditors of the Company and to authorise the Directors to fix their remuneration

As Special Business

5 ordinary Resolution - Authority to allot and issue new shares pursuant to Section 132D of the Companies Act, 1965

6 ordinary Resolution - Proposed Shareholders’ mandate

7 Special Resolution - Proposed Amendments to the Company’s Articles of Association

(Please indicate with an “X” in the appropriate spaces how you wish your vote to be casted. If you do not indicate how you wish your proxy to vote on any resolution, the proxy shall vote as he thinks fit, or at his discretion, abstains from voting).

Signed this day of 2013

Signature/Common Seal of member

CDS ACCoUNT No.

No. oF ShARES hELD

NOTES:

1. A member entitled to attend and vote at this meeting is entitled to appoint one (1) proxy to attend and vote in his stead. A proxy need not be a member of the Company and the provision of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend and vote at a meeting of the Company shall have the same rights as the members to speak at a meeting.

2. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing or if the appointor is a corporation under its common seal or the hand of its attorney duly authorised.

3. Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, 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.

4. A member shall not be entitled to appoint more than two (2) proxies to attend and vote at the same meeting and where a member appoints two (2) proxies, the appointment shall be invalid unless the member specifies the proportions of his holdings to be represented by each proxy.

5. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

6. All Proxy Forms must be deposited at the Registered office of the Company situated at Suite 2.12, Level 2, menara maxisegar, Jalan Pandan Indah 4/2, Pandan Indah, 55100 Kuala Lumpur not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

7. For the purpose of determining members who shall be entitled to attend the Annual General meeting, the Company shall be requesting Bursa malaysia Depository Sdn Bhd to issue a Record of Depositors as at 17 July 2013. only depositors whose names appear therein shall be entitled to attend the said meeting or appoint a proxy to attend and vote on their behalf.

(Incorporated in malaysia)

ThE ComPANY SECRETARYKUMPULAN EUROPLUS BERHAD (534368-A)

Suite 2.12, Level 2, menara maxisegarJalan Pandan Indah 4/2, Pandan Indah

55100 Kuala Lumpur

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