kumpulan europlus berhad - malaysiastock.biz kumpulan europlus berhad (534368-a) annual report 2011...

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Content

Corporate Structure 2

Corporate Information 3

Profile of Board of Directors 4

Financial Highlights 8

Chairman’s Statement 9

Statement on Corporate Governance 11

Additional Compliance Information 17

Statement on Internal Control 21

Audit Committee Report 22

Financial Statements 26

List of Properties 100

Statement on Directors’ Interests in the Company and Related Corporations 102

Analysis of Shareholdings 103

Notice of Annual General Meeting 106

Statement Accompanying Notice of Annual General Meeting 110

Proxy Form

KUMPULAN EUROPLUS BERHAD (534368-A) ANNUAL REPORT 2011

2

Corporate Structure

TalamCorporation

Berhad(Listed)

TalamCorporation

Berhad(Listed)

AmbangUsaha

Sdn Bhd

RadiantPillar

Sdn Bhd

Canal CityConstruction

Sdn Bhd

KEBPlantations

HoldingsSdn Bhd

Tiasa RiaSdn Bhd

Perkasa JatiHoldingsSdn Bhd

IramaBijak

Sdn Bhd

EuroplusHoldingsSdn Bhd

RatusPrestij

Sdn Bhd

West Coast Expressway

Sdn Bhd

AngsanaMestikaSdn Bhd

KEUROLeasingSdn Bhd

AmbangVista

Sdn Bhd

KEUROTradingSdn Bhd

AsianResinated

Felt Sdn Bhd

KEBManagement

Sdn Bhd

KEBBuildersSdn Bhd

MaximixSdn Bhd

40%50%

10%

70%

7%

100%100%

(as at 24 June 2011)

100%100%64.20%82.83997%

50.10% 100% 100%

100%63%

100%100%22.16%

0.00003%

70%100%

Listed Subsidiaries Associate


3

Corporate Information

Board of directors

dato’ abdul Hamid Bin Mustapha (Chairman/Independent Non-Executive Director)

tan sri dato’ (dr) ir chan ah chye @ chan chong Yoon(President/Chief Executive - Executive Director)

Puan sri datin thong Nyok choo(Non-Independent Non-Executive Director)

datuk oh chong Peng(Independent Non-Executive Director)

dato’ Goh chye Koon(Non-Independent Non-Executive Director)

Loy Boon chen(Executive Director)

U chin Wei (Independent Non-Executive Director)

chee Heng tong(Non-Independent Non-Executive Director)

coMPaNY secretarY

raw Koon Beng(MIA 8521)

aUdit coMMittee

datuk oh chong Peng Chairman

dato’ abdul HamidBin MustaphaMember

U chin Wei Member

PriNciPaL BaNKers

EON Bank BerhadCIMB Bank BerhadRHB Investment Bank Berhad

reGistered office

Suite 2.05, Level 2, Menara MaxisegarJalan Pandan Indah 4/2Pandan Indah55100 Kuala LumpurTel No. : 03 – 4296 2000Fax No. : 03 – 4294 5072

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)22-1, Monteiro & Heng ChambersJalan Tun Sambanthan 350470 Kuala LumpurTel No. : 03-2274 8988Fax No. : 03-2260 1708

stocK excHaNGe ListiNG

Main Market of Bursa Malaysia Securities Berhad


4

Profile of Board of Directors

Malaysian, aged 65, 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.

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 four (4) out of five (5) Board of Directors’ meetings held during the financial year ended 31 January 2011.

Malaysian, aged 65, President/Chief Executive, joined the Board of KEURO as Director on 1 March 2001 and was appointed as President/Chief Executive on 1 July 2003. Tan Sri Chan is the Chairman of the Executive Committee and a member of the Remuneration Committee of KEURO. He is also a Non-Independent Non-Executive Director of Talam Corporation Berhad.

Tan Sri Chan graduated with a Bachelor Degree in Civil Engineering from the University of Malaya in 1970 and is a member of the Institution of Engineers, Malaysia since 1974 and was subsequently made a Fellow in 1984. Tan Sri Chan has over 40 years experience in the property and construction industry since Tan Sri Chan started his career with Messrs Binnie & Partners (M) Sdn Bhd and later joined Perbadanan Kemajuan Negeri Selangor in 1971 as a Project Manager handling project designs, management and property development. Tan Sri Chan was awarded the prestigious “Property Man of the Year 1998” by Federation Internationale Des Professions Immobilieres (“FIABCI”) in recognition of his achievements in property development. Tan Sri Chan was conferred the Honorary Doctorate of Science (Engineering) by the University Malaya on 11 August 2003.

Tan Sri Chan is the spouse of Puan Sri Datin Thong Nyok Choo, who is also a Director of KEURO. There is no conflict of interest with the Company except for those transactions disclosed in pages 17 to 20 of this Annual Report. Tan Sri Chan has no convictions for offences within the past ten (10) years.

Tan Sri Chan has attended all five (5) Board of Directors’ meetings held during the financial year ended 31 January 2011.

Dato’ Abdul Hamid Bin

Mustapha

Tan Sri Dato’ (Dr) Ir Chan Ah Chye @ Chan Chong Yoon


5


Malaysian, aged 66, 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, IJM Corporation Berhad, IJM Plantations Berhad, Malayan Flour Mills Berhad and Ingenious Growth Berhad. 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 five (5) Board of Directors’ meetings held during the financial year ended 31 January 2011.

Malaysian, aged 66, Non-Independent Non-Executive Director, joined the Board of KEURO on 1 March 2001.

Puan Sri Thong graduated with a Bachelor of Arts (Hons) Degree in 1971 and a Diploma in Education in 1973 from the University of Malaya. Puan Sri Thong served as General Manager with Pembangunan Brisdale Sdn Bhd (“PB”), a property development company, from 1984 to 1989 and was appointed a Director of PB in March 1992. Puan Sri Thong is presently a director of several private limited companies.

Puan Sri Thong is the spouse of Tan Sri Dato’ (Dr) Ir Chan Ah Chye @ Chan Chong Yoon, who is the President/Chief Executive of KEURO. There is no conflict of interest with the Company except for those transactions disclosed in pages 17 to 20 of this Annual Report. Puan Sri Thong has no conviction for offences within the past ten (10) years.

Puan Sri Thong has attended all five (5) Board of Directors’ meetings held during the financial year ended 31 January 2011.Puan Sri Datin

Thong Nyok Choo

Datuk Oh Chong Peng


6


Malaysian, aged 62, Non-Independent Non-Executive Director, joined the Board of KEURO on 28 September 2007.

Dato’ Goh graduated with a Bachelor of Engineering (Honours) Degree from University of Malaya in 1973, and served as an engineer in the Ministry of Works for 11 years and was its Superintending Engineer prior to joining IJM Corporation Berhad (“IJM”) as Senior Engineer in 1984. He was promoted as General Manager (Central Region) in 1986 and was made Alternate Director on 25 July 1995 before assuming the position of Deputy Group Managing Director on 1 January 1997. He was redesignated Deputy Chief Executive Officer and Deputy Managing Director on 26 February 2004, and upon his retirement in June 2008, he remained as Executive Director of IJM for a year till June 2009. He is presently the Non-Executive Director of IJM.

He was a member of the Technical Resource Group on Human Resource of the National Productivity Corporation (2003-January 2010). He was the Chairman of the Building Industry Presidents’ Council and the President of the Master Builders Association Malaysia for session 2004/2006, and was its Deputy President for session 2002/2004, Vice President from 1990 to 2002 and Deputy Secretary General from 1998 to 1990. He was also a member of the Construction Industry Development Board, Malaysia (2004-2006), Construction Consultative Panel of the National Productivity Corporation (2003-2006) and Presidential Consultative Council of the Board of Engineers, Malaysia (2002-2004). He is presently an Advisory Peer Group (APG) member of the School of Science and Technology (SST), Wawasan Open University (March 2010).

Dato’ Goh 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’ Goh has attended three (3) out of five (5) Board of Directors’ meetings held during the financial year ended 31 January 2011.

Malaysian, aged 70, Non-Independent Non-Executive Director, joined the Board of KEURO on 9 August 2004. He is a member of 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.

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 except for those transactions disclosed in pages 17 to 20 of this Annual Report. He has no conviction for offences within the past ten (10) years.

He has attended all five (5) Board of Directors’ meetings held during the financial year ended 31 January 2011.

Dato’ Goh Chye Koon

Chee Heng Tong


7


Malaysian, aged 60, Independent Non-Executive Director of KEURO, joined the Board of KEURO on 1 July 2003. He is a member of the Audit Committee and Nomination Committee. He is also a Director of TA Enterprise 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 Accountant (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 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 Gobal 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 four (4) out of five (5) Board of Directors’ meetings held during the financial year ended 31 January 2011.

Malaysian, aged 59, Executive Director, joined the Board of KEURO on 28 September 2008. He is a member of Executive Committee of KEURO. He is also an Executive Director of Talam Corporation Berhad.

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. Thereafter, 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 five (5) Board of Directors’ meetings held during the financial year ended 31 January 2011.

Loy Boon Chen

U Chin Wei


8

Financial Highlights

2011rM’Million

2010rM’Million

2009 rM’Million

2008 rM’Million

2007 rM’Million

GroUP

Total assets 473 471 488 466 462

Shareholders’ fund 98 87 119 119 144

Net current assets / (liabilities) 22 (1) (5) (92) (32)

Revenue 28 50 44 59 39

Profit / (Loss) before taxation (46) (35) 11 (25) (112)

Earnings / (Loss) per share (sen) (10.66) (7.24) 2.37 (5.24) (23.51)

Weighted average number of ordinary shares (’Million)

476 474 474 474 474

Net assets per share (RM) 0.187 0.185 0.251 0.251 0.303

coMPaNY

Total assets 410 371 416 384 377

Shareholders’ fund 164 118 160 166 196

Net current assets 126 74 74 13 56

Profit / (Loss) before taxation (11) (42) (6) (30) (102)


9

Chairman’s Statement

Dear ShareholDerS,

On behalf of the Board of Directors of Kumpulan Europlus

Berhad, I would like to present the Annual Report and Audited

Financial Statements of the Group and the Company for the

financial year ended 31 January 2011.

fiNaNciaL HiGHLiGHts

For the financial year ended 31 January 2011, the Group achieved total revenue of RM28.00 million, a decrease of 44.39% compared to the preceding year of RM50.35 million. The lower revenue achieved in the current period was attributable to lower billings from the manufacturing division due to the disposal of the Group’s 60.4%-owned subsidiary Kekwa Indah Sdn Bhd in June 2010 and cessation of sand mining activities since August 2010. The Group recorded a pre-tax loss of RM46.49 million for the financial year, compared to a pre-tax loss of RM34.85 million in the preceding year. The pre-tax loss recorded by the Group was mainly due to provision made for doubtful and bad debts of RM19.07 million and share of loss of RM29.58 million incurred by associate Talam Corporation Berhad.

During the financial year, the company increased its paid-up share capital to RM520.99 million by way of placement of ordinary shares of RM1.00 each for RM1.22, raising cash of RM57.70 million to meet its working capital requirement.

diVideNd

The Board of Directors does not recommend payment of a dividend for the financial year ended 31 January 2011 so as to enable the Group to retain its limited financial resources for its business operation.

reVieW of ProsPects

(a) On West Coast Expressway (“WCE”) project, as disclosed in Note 1 & 6 of the Financial Statement for the financial year ended 31 January 2011, West Coast Expressway Sdn Bhd, a 64.2%-subsidiary of the Company has on 1 April 2011, received a letter from Unit Kerjasama Awam Swasta of the Prime Minister’s Department (“UKAS”) approving in-principle the project which is subject to certain conditions precedent which include, amongst others, further negotiations on the detailed technical and financial terms and conditions before entering into a revised Concession Agreement. The negotiation is expected to be completed within six months from the date of the letter. The project is to be on Build, Operate and Transfer basis. The Directors are of the opinion that long term viability of the WCE project will further enhance the future earnings and financial position of the Group.


10

Chairman’s Statement

(b) Construction work at Canal City project commenced towards the end of 2007. However, the State Government of Selangor has requested changes to the original privatisation plan, including amongst others, omission of the main canal and its related work. After protracted negotiations lasting more than two years, the revised terms and conditions were finally agreed upon culminating in a termination agreement dated 13 August 2010. As compensation, the State Government agreed to alienate 1,877.87 acres of land to Radiant Pillar Sdn Bhd (“RPSB”) for costs incurred. RPSB, which is 50%-owned by the Company, is currently revising the planning layout, and intends to launch property development projects when planning approval is obtained and market condition permits.

aPPreciatioN

The Board wishes to place on record its appreciation and gratitude to Dato’ Seri Abdul Azim Bin Mohd Zabidi who resigned on 12 April 2011, having served as a Director of the Group since 1 July 2003. The Board also wishes to extend its appreciation and gratitude to our staff members, shareholders, customers, bankers and associates for their continuing commitment and support for the Group.


11

Statement On Corporate Governance

The Board of Directors (“the Board”) of Kumpulan Europlus Berhad (“KEURO” or “the Company”) recognises and appreciates the importance of good corporate governance to ensure the Company’s continued growth and success.

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 Malaysian Code on Corporate Governance (“the Code”).

sectioN 1: directors

Board’s responsibilities

The Board is fully responsible for the effective control of the KEURO Group. This includes responsibility for determining the Group’s strategic direction, financial performance, allocation of resources and standards of conduct. The Board holds at least four (4) regular scheduled meetings annually, with additional meetings convened as and when necessary.

During the financial year ended 31 January 2011, five (5) Board meetings were held. The attendance of each Director is set out below:-

directors Number of meetings attended

Dato’ Abdul Hamid Bin Mustapha (Chairman) 4 out of 5Tan Sri Dato’ (Dr) Ir Chan Ah Chye @ Chan Chong Yoon 5 out of 5Puan Sri Datin Thong Nyok Choo 5 out of 5Datuk Oh Chong Peng 5 out of 5Dato’ Goh Chye Koon 3 out of 5Loy Boon Chen 5 out of 5U Chin Wei 4 out of 5Chee Heng Tong 5 out of 5Dato’ Seri Abdul Azim Bin Mohd Zabidi (resigned on 12 April 2011) 3 out of 5

At these meetings, strategies and performance of the Group are reviewed and evaluated in the light of any changing circumstances, whether economic, social or political.

composition of the Board

The Board currently has eight (8) members comprising two (2) Executive Directors, three (3) Independent Non-Executive Directors (including the Chairman) and three (3) Non-Independent Non-Executive Directors.

The roles of the Chairman and Executive Directors are segregated to ensure that there is a balance of power and authority. Dato’ Abdul Hamid Bin Mustapha is the Chairman of the Board while Tan Sri Dato’ (Dr) Ir Chan Ah Chye @ Chan Chong Yoon is the President/Chief Executive. The Chairman is responsible for the orderly conduct and working of the Board and ensures that all Directors receive sufficient relevant information on financial and non-financial matters to enable them to participate actively in Board decisions whilst the President/Chief Executive is responsible for the day-to-day management of the business and implementation of Board decisions.


12


The six (6) 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, take 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. The Chairman, an Independent Non-Executive Director has been identified as the Senior Independent Non-Executive Director to whom concerns relating to the Company may be conveyed.

A brief profile of each Director is presented on pages 4 to 7 of this Annual Report.

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. 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 state their clarification on issues that may be raised by the Directors.

Board committees

The Board has delegated certain functions to the 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.

a. executive committee

The Executive Committee was established on 28 September 2007 and its membership 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. The members are as follows:-

Members designation

Tan Sri Dato’ (Dr) Ir Chan Ah Chye @ Chan Chong Yoon (Chairman)

President / Chief Executive

Loy Boon Chen Executive Director

Chee Heng Tong Non-Independent Non-Executive Director


13


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

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

(ii) to evaluate and decide on transactions (including acquisition or disposal of assets or investments) and matters relating to the Group’s core businesses (which are building and operation of tolled highway, property development, construction, manufacturing 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;

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

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

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

B. audit committee

The Audit Committee was established on 17 July 1993 and is chaired by Datuk Oh Chong Peng. Other members of the Audit Committee are Dato’ Abdul Hamid Bin Mustapha and Mr U Chin Wei. All of them are independent non-executive directors.

The Terms of Reference and activities of the Audit Committee during the financial year are set out under the

Audit Committee Report on pages 22 to 25 of this Annual Report.

c. Nomination committee

The Nomination Committee was established on 4 December 2003. As at the date of this statement, the Committee comprises three (3) Non-Executive Directors. 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:-

(i) to recommend to the Board, candidates for directorships as and when deemed necessary;

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

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

(iv) 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, as well as the chief executive officer on an annual basis.

The Nomination Committee held a meeting during the financial year, which was attended by all the members.


14

d. remuneration committee

The Remuneration Committee was established on 4 December 2003. As at the date of this statement, the Remuneration Committee comprises two (2) Independent Directors and one (1) Executive Director. The members are as follows:-

Members designation

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

Tan Sri Dato’ (Dr) Ir Chan Ah Chye@ Chan Chong Yoon

President/Chief Executive

Datuk Oh Chong Peng Independent Non-Executive Director

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

(i) to make recommendation to the Board the reward framework for executive directors and perform an on-going review of the executive directors remuneration structure;

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

(iii) the remuneration of the non-executive directors are to be determined by the Board and not the Remuneration Committee.

During the financial year, the Remuneration Committee held two (2) meetings which were attended by all the members.

appointment to the Board

The Nomination Committee recommends to the Board, suitable candidates for appointment as Director and to fill vacant seats on committees of the Board after which the Company Secretary ensures that all appointments are properly made and all legal and regulatory compliance are met. However, the main decision lies with the Board after taking into consideration the nomination by the Committee. The Nomination Committee also assesses the effectiveness of the Board and Board Committees.

The Board, through the Nomination Committee, reviews annually the required mix of skills, expertise, attributes and core competencies of its Directors as well as the Board structure, size and composition.

directors’ training

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 undergo appropriate training from time to time to ensure that they be better equipped to carry out their duties as Directors.

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 practice and changing commercial and other risks.

The Directors have attended at least one training session each on topics such as financial reporting standards, corporate governance, taxation, corporate social responsibility and regulatory & legal developments.



15

re-election

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. The Articles also provide that one-third (1/3) of the Directors shall retire from office at every annual general meeting and shall be eligible for re-election. All Directors shall retire from office at least once every three (3) years but shall be eligible for re-election.

The 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”), a Director who is over the age of seventy (70) years shall retire at every annual general meeting and shall be eligible for re-appointment to hold office until the next annual general meeting.

sectioN 2 : directors’ reMUNeratioN

The details of the remuneration of Directors during the financial year ended 31 January 2011 are as follows:-

categoryfees

(rM’000)

salaries and other emoluments

(rM’000)ePf contributions

(rM’000) total (rM’000)

Executive Directors Non-Executive Directors

50175

959578

110–

1,119753

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

Number of directorsexecutive Non-executive

RM1,150,000 to RM1,200,000 RM1,050,000 to RM1,100,000RM100,000 to RM150,000RM100,000 and below

–11–

–––7

totaL 2 7

sectioN 3 : sHareHoLders

The Group 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, issuance of quarterly financial result of the Group to Bursa Securities and the public as well as through press conferences.

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.



16

sectioN 4 : accoUNtaBiLitY aNd aUdit

financial reporting

The Board, in presenting the annual 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 2011 can be found from pages 31 to 95 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 comply with the provisions of the Act.

In preparing the financial statements for the financial year ended 31 January 2011, 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, 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 Group’s Statement on Internal Control is set out on page 21 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 22 to 25 of this Annual Report.

sectioN 5 : corPorate sociaL resPoNsiBiLitY (csr)

As a responsible corporate citizen, the Group will continuously ensure that all pertinent activities relating to corporate social responsibility are considered and supported in its operations for the well being of stakeholders, community and environment.

Our employees are the heart of the Group and the key to the competitive success in the marketplace. 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. We believe that employees’ involvement is vital to the success of the Group.

As part of efforts towards the preservation of environment, the Group would ensure there are sufficient measures at all construction sites and work places to prevent any adverse impact on the environment.

This Statement is made in accordance with a resolution of the Board of Directors dated 8 June 2011.



17

Additional Compliance InformationAs At 31 January 2011

1.0 oPtioNs, WarraNts or coNVertiBLe secUrities

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

2.0 aMericaN dePositorY receiPt (adr)/GLoBaL dePositorY receiPt (Gdr) ProGraMMes

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

3.0 iMPositioN of saNctioNs/PeNaLties

The sanction and/or penalties imposed on the Company and Directors during the financial year are as follows:-

date Breach/sanction

11 August 2010 Paragraph 10.04(1) of the Listing Requirements of Bursa Malaysia Securities Berhad (“LR”) for failing to make immediate announcement of the Company’s disposal of 169,398,800 shares in Talam Corporation Berhad on 10 February 2009 and between 17 February 2009 and 25 June 2009 (“Disposal”) when the percentage ratio of the Disposal had exceeded 5%.

The percentage ratio of the Disposal represented 29.97% of the Company’s net assets as at 31 January 2009.

Paragraph 10.06(1) read together with paragraph 1.03(1) of the LR for failing of obtain prior shareholders’ approval in respect of the Disposal when the percentage ratio of the Disposal had exceeded 25%.

4.0 NoN-aUdit fees

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

5.0 VariatioN iN resULt

There was no material variations between the audited result for the financial year ended 31 January 2011 and the unaudited results for the quarter ended 31 January 2011 of the Group.

6.0 MateriaL coNtracts

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

7.0 statUs of UtiLisatioN of Proceeds raised froM corPorate ProPosaL

During the financial year ended 31 January 2011, the Company undertook a private placement of up to 10% of the issued and paid-up share capital of the Company (“Private Placement”) of which 47,300,000 new ordinary shares of RM1.00 each were issued at RM1.22 per share and raised RM57.71 million. The status of utilization of proceeds as at 31 January 2011 is set out below :-

No. Purpose actual Utilisation (rM)

i. Working Capital 57,454,686

ii. Expenses for the Private Placement 251,314

total 57,706,000


18


8.0 sHares BUY-BacK

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

9.0 recUrreNt reLated PartY traNsactioNs of a reVeNUe or tradiNG NatUre

Details of recurrent related party transactions made during the financial year ended 31 January 2011 pursuant to the shareholders’ mandate obtained by the Company at the Annual General Meeting held on 30 July 2010 are as follow :-

Nature of transactions Undertaken by KeUro and/or its subsidiaries transacting company

transacted 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 Abra Development Sdn Bhd, a subsidiary of Talam Corporation Berhad (“Talam”)

1,388 TSDCAC & PSDTNC(Notes 1 and 2)

West Coast Expressway Sdn Bhd(formerly known as Konsortium LPB Sdn Bhd)

Abra Development Sdn Bhd, a subsidiary of Talam


B. Provision of Leasing facilities by KeUro Leasing sdn Bhd (“KeUro Leasing”)

KEURO Leasing Talam 2,194 TSDCAC & PSDTNC(Notes 1 and 2)

c. interest income charged by Kumpulan europlus Berhad (“KeUro”)

KEURO Bukit Beruntung Nurseries Sdn Bhd, a subsidiary of Talam

1 TSDCAC & PSDTNC(Notes 1 and 2)

KEURO Europlus Berhad, a subsidiary of Talam


KEURO Galian Juta Sdn Bhd, a subsidiary of Talam



19





c. interest income charged by Kumpulan europlus Berhad (“KeUro”) (cont’d)

KEURO Inti Johan Sdn Bhd, a subsidiary of Talam


KEURO Kenshine Corporation Sdn Bhd, a subsidiary of Talam


KEURO L.C.B. Management Sdn Bhd, a subsidiary of Talam


KEURO Lestari Puchong Sdn Bhd, a subsidiary of Talam


KEURO Maxisegar Sdn Bhd, a subsidiary of Talam


KEURO Talam 1,763 TSDCAC & PSDTNC(Notes 1 and 2)

KEURO TCB Resources Sdn Bhd, a subsidiary of Talam


KEURO Terang Tanah Sdn Bhd, a subsidiary of Talam


KEURO Ukay Land Sdn Bhd, a subsidiary of Talam


d. constructioncontract cost charged by KeB Builders sdn Bhd (“KeBB”)

KEBB Expand Factor Sdn Bhd, a subsidiary of Talam


KEBB Europlus Construction Sdn Bhd, a subsidiary of Talam



20





d. constructioncontract cost charged by KeB Builders sdn Bhd (“KeBB”) (cont’d)

KEBB Galian Juta Sdn Bhd, a subsidiary of Talam


KEBB Lestari Puchong Sdn Bhd, a subsidiary of Talam


KEBB Abra Development Sdn Bhd, a subsidiary of Talam


Notes:

1. Tan Sri Dato’ (Dr) Ir Chan Ah Chye @ Chan Chong Yoon (“TSDCAC”) and Puan Sri Datin Thong Nyok Choo (“PSDTNC”) are Directors and 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 subsidiary companies of KEURO to the extent KEURO has an interest.

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


21

Statement On Internal Control

The Board of Directors, guided by the “Statement on Internal Control : Guidance for Directors of Public Listed Companies”, is pleased to provide the following statement on internal control pursuant to Paragraph 15.26 of the Bursa Malaysia Securities Berhad Main Market Listing Requirements which outlines the key elements of the internal control system within the Group for the financial year ended 31 January 2011.

resPoNsiBiLitY

The Board recognises its responsibility for the Group’s system of internal control and for reviewing its adequacy and integrity. The system of internal control is designed to manage, rather than eliminate, the risk of failure to achieve the business objectives of the Group. In pursuing these objectives, internal control can only provide reasonable and not absolute assurance against material misstatement or loss. The system of internal control has been regularly reviewed by the Board which incorporates, inter alia, risk management, financial, operational and compliance control as well as the governance process.

risK MaNaGeMeNt fraMeWorK

The Board has established an organisational structure with clearly defined lines of accountability and delegated authority. It has extended the responsibilities of the Audit Committee to include the work of monitoring all internal control on its behalf, with the assistance of the provider of internal audit service.

The Group has put in place a Risk Management Committee (“RMC”), which is chaired by the Group’s Executive Director and includes representatives from all the divisions. Each business division’s risk management function is led by the respective head of the division. The RMC is tasked to develop and maintain an effective risk management system in the Group. There is an ongoing process for identifying, evaluating and managing significant risk faced by the Group and this process has been in place for the year under review. The RMC reviews cover matters such as responses to significant risks identified, changes to internal control system and output from monitoring processes. It reports to the Audit Committee, which dedicates separate time for discussion of this subject.

otHer KeY eLeMeNts of iNterNaL coNtroLs

Other key elements of the Group’s system of internal control are:-

• the Group’s internal audit service provided by its associate company, Talam Corporation Berhad, performs regular reviews of business processes to assess the effectiveness of internal controls and reports are made regularly to the Audit Committee;

• operational organisation structure with defined lines of responsibilities and delegation of authority. A process of hierarchical reporting has been established, which provides for a documented and auditable trail of accountability;

• management reports, which are presented by the respective division heads to the Exco, provides financial information, including key performance indicators and information of significant changes in accounting standards and reporting;

• 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;

• defined limits of authority for various transactions, including purchasing and payments;

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

• Monitoring of quarterly financial results by the Audit Committee and the Board.

The Board of Directors is of the opinion that there are no significant weaknesses in the system of internal control during the financial year, which have significant financial impact on the Group’s performance or operations. The Board of Director and the management continue to take measures to strengthen the internal control environment to safeguard shareholders’ investment and the Group’s assets.

This Statement is made in accordance with the resolution approved by the Board of Directors on 8 June 2011.


22

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 1st 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 1st 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 b e i n g 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.


23

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 auditor 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 auditor, the audit fee, and any questions of resignation or dismissal of the external auditor before making recommendation to the Board of Directors;

(ii) To discuss with the external auditor 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(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 auditor may wish to discuss (in the absence of management where necessary);



24

(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 that effectiveness of internal control system and in particular review the external auditor’s 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 2011, 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 4 out of 5

3. U Chin Wei 4 out of 5



25

sUMMarY of aUdit coMMittee actiVities

During the financial year ended 31 January 2011, 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 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, Talam 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 2011 was RM 21,098.

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. One routine audit was carried out during the year;

(ii) Reviewed operations, processes and governance of subsidiary Asian Resinated Felt Sdn Bhd, and made recommendations for improvement; and

(iii) Reviewed the recurrent related party transactions of the Company and its Group and made the necessary recommendations.

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


Directors’ Report 27

Consolidated Statement of Financial Position 31

Statement of Financial Position 33

Statements of Comprehensive Income 34

Statements of Changes In Equity 35

Statements of Cash Flows 36

Notes to the Financial Statements 38

Supplementary Information on the Breakdown of Realised and Unrealised Losses 96

Statement By Directors 97

Statutory Declaration 97

Independent Auditors’ Report 98

Fin

an

cia

l Sta

tem

en

t


27

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 2011.

PriNciPaL actiVities

The Company is principally involved in investment holding. The principal activities of its subsidiaries and associates are set out in Note 7 and Note 8 to the financial statements.

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

resULts

Group company rM’000 rM’000

Loss for the financial year (50,622) (12,273)

Attributable to:Owners of the Company (50,787) (12,273)Non-controlling interests 165 –

(50,622) (12,273)

Total comprehensive loss (47,297) (12,273)

Attributable to:Owners of the Company (47,462) (12,273)Non-controlling interests 165 –

(47,297) (12,273)

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 dividends in respect of the financial year ended 31 January 2011.

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.


28

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.

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 impairment loss on receivables of RM9,009,000/- and impairment of amount owing by subsidiaries of amounting to RM2,221,000/-, 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

During the financial year, the Company increased its issued and paid-up ordinary share capital from RM473,691,765/- to RM520,991,765/- by way of the issuance of 47,300,000 ordinary shares of RM1/- each at par for RM1.22 per share for working capital purposes.

The new shares rank pari-passu with the existing shares of the Company.

During the financial year, the Company did not issue any debentures.

Directors’ Report


29

Directors’ Report

directors

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

Tan Sri Dato’ (Dr.) Ir. Chan Ah Chye @ Chan Chong YoonPuan Sri Datin Thong Nyok ChooU Chin WeiChee Heng Tong Dato’ Abdul Hamid Bin Mustapha Datuk Oh Chong Peng Dato’ Goh Chye Koon Loy Boon Chen Dato’ Seri Abdul Azim bin Mohd Zabidi (resigned on 12.4.2011)

In accordance with Article 97 of the Company’s Articles of Association, Datuk Oh Chong Peng, Dato’ Goh Chye Koon and Loy Boon Chen retire by rotation at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-election.

directors’ iNterests

According to the register of directors’ shareholdings kept by the Company under Section 134 of the Companies Act, 1965, 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 2011 are as follows:-

Number of ordinary shares of rM1/- eachat

1.2.2010 Bought soldat

31.1.2011shares in the company

direct interest

Tan Sri Dato’ (Dr.) Ir. Chan Ah Chye @ Chan Chong Yoon 136,748,545 550,000 (550,000) 136,748,545Puan Sri Datin Thong Nyok Choo 145,001 – – 145,001U Chin Wei 10,000 20,000 – 30,000Loy Boon Chen 61,500 – – 61,500

indirect interest

Tan Sri Dato’ (Dr.) Ir. Chan Ah Chye @ Chan Chong Yoon 6,906,762 – – 6,906,762Puan Sri Datin Thong Nyok Choo 143,510,306 550,000 (550,000) 143,510,306U Chin Wei 11,500 – – 11,500

Tan Sri Dato’ (Dr.) Ir. Chan Ah Chye @ Chan Chong Yoon and Puan Sri Datin Thong Nyok Choo, by virtue of their interest in shares of the Company, are also deemed interested in shares of all the Company’s subsidiaries to the extent of the Company’s interest in the subsidiaries.

Other than as disclosed above, none of the other 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.


30

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 23 and Note 27(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.

aUditors

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

On behalf of the Board,

taN sri dato’ (dr.) ir. cHaN aH cHYe @ cHaN cHoNG YooNDirector

LoY BooN cHeNDirector

Kuala Lumpur

Date: 31 May 2011

Directors’ Report


31

Consolidated Statement of Financial Positionas at 31 January 2011

Group 31.1.2011 31.1.2010 1.2.2009 Note rM’000 rM’000 rM’000 (restated) (restated)

assets Non-current assetsProperty, plant and equipment 4 26,206 25,196 36,978Infrastructure developmentexpenditure 6 71,791 66,814 62,242Investment in associates 8 121,439 139,136 166,866Goodwill on consolidation 9 7,424 8,506 9,377

total non-current assets 226,860 239,652 275,463

current assetsInventories 10 1,348 1,515 2,744Trade and other receivables 11 204,018 227,565 208,105Prepayments 85 122 561Amount due from customer forcontract works 12 1,532 1,624 –Tax recoverable – 106 132Short term investments 13 6,774 – –Fixed deposits 14 – 78 692Cash and bank balances 31,888 629 740

total current assets 245,645 231,639 212,974

totaL assets 472,505 471,291 488,437


32

Group 31.1.2011 31.1.2010 1.2.2009 Note rM’000 rM’000 rM’000 (restated) (restated)

equity attributable to owners of the companyShare capital 15 520,992 473,692 473,692Reserves 16 (423,318) (386,261) (355,030)

Shareholders’ funds 97,674 87,431 118,662Non-controlling interests 8,283 8,736 9,475

total equity 105,957 96,167 128,137

Non-current liabilitiesLoans and borrowings 18 142,086 142,123 142,210Deferred tax liabilities 19 358 – 219

total non-current liabilities 142,444 142,123 142,429

current liabilitiesTrade and other payables 17 105,919 115,136 94,938Loans and borrowings 18 112,235 115,660 121,155Tax payable 5,950 2,205 1,778

total current liabilities 224,104 233,001 217,871

total liabilities 366,548 375,124 360,300

totaL eQUitY aNd LiaBiLities 472,505 471,291 488,437

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

Consolidated Statement of Financial Positionas at 31 January 2011


33


Statement of Financial Positionas at 31 January 2011

company 31.1.2011 31.1.2010 Note rM’000 rM’000

assetsNon-current assetsInvestment in subsidiaries 7 21,912 33,628Investment in associates 8 118,293 112,586

total non-current assets 140,205 146,214

current assetsTrade and other receivables 11 232,942 224,696Short term investments 13 6,774 –Cash and bank balances 29,973 *

total current assets 269,689 224,696

totaL assets 409,894 370,910

equity attributable to owners of the companyShare capital 15 520,992 473,692Reserves 16 (357,450) (355,582)

Shareholders’ funds 163,542 118,110

Non-current liabilitiesLoans and borrowings 18 102,000 102,000Deferred tax liabilities 19 301 –

total non-current liabilities 102,301 102,000

current liabilitiesTrade and other payables 17 81,562 91,810Loans and borrowings 18 61,905 58,990Tax payable 584 –

total current liabilities 144,051 150,800

total liabilities 246,352 252,800

totaL eQUitY aNd LiaBiLities 409,894 370,910

* Represented by less than RM1,000


34

Group company 2011 2010 2011 2010 Note rM’000 rM’000 rM’000 rM’000

Revenue 20 27,995 50,353 – –Cost of sales 21 (23,750) (67,528) – –

Gross Profit/(Loss) 4,245 (17,175) – – Other items of income- interest income 7,863 7,960 7,855 7,957- other income 22,815 47,422 17,014 1,511Other items of expenses- administrative expenses (2,689) (5,206) (3,037) (6,464)- selling and marketing expenses (705) (950) – –- other expenses (27,591) (44,011) (14,789) (21,873)Finance costs 22 (19,845) (25,325) (18,431) (23,186)Share of results of associate (30,582) 2,435 – –

Loss before taxation 23 (46,489) (34,850) (11,388) (42,055)

Taxation 24 (4,133) (182) (885) –

Loss for the financial year (50,622) (35,032) (12,273) (42,055)

Other comprehensive income 3,325 3,062 – –

total comprehensive loss for the financial year (47,297) (31,970) (12,273) ( 42,055)

Loss for the financial year attributable to: Owners of the Company (50,787) (34,293) (12,273) (42,055) Non–controlling interests 165 (739) – –

(50,622) (35,032) (12,273) (42,055)

total comprehensive loss attributable to: Owners of the Company (47,462) (31,231) (12,273) (42,055) Non–controlling interests 165 (739) – –

(47,297) (31,970) (12,273) (42,055)

Loss per ordinary share attributable to owners of the company (sen) 25 - basic (10.7) (7.2) - diluted (10.7) (7.2)

Statements of Comprehensive IncomeFor The Financial Year Ended 31 January 2011



35

Statements of Changes in EquityFor The Financial Year Ended 31 January 2011


<--- attributable to owners of the company ---> <--------------- Non-distributable ---------------->

Group

share capital rM’000

share Premium rM’000

foreign exchange reserves

rM’000

accumulated

Losses rM’000

total rM’000

Non-controlling

interests rM’000

total

equity rM’000

At 1 February 2009 473,692 26,560 (8,422) (373,168) 118,662 9,475 128,137Total comprehensive loss for the financial year – – 3,062 (34,293) (31,231) (739) (31,970)

Balance at 31 January 2010 473,692 26,560 (5,360) (407,461) 87,431 8,736 96,167

Issuance of shares 47,300 10,405 – – 57,705 – 57,705Disposal of equity interestin a subsidiary – – – – – (618) (618)Total comprehensive loss for the financial year – – 3,325 (50,787) (47,462) 165 (47,297)

Balance at 31 January 2011 520,992 36,965 (2,035) (458,248) 97,674 8,283 105,957

<----------- Non-distributable ----------->

company

sharecapitalrM’000

share Premium

rM’000

accumulated LossesrM’000

totalequity

rM’000

At 1 February 2009 473,692 26,560 (340,087) 160,165Total comprehensive loss for the financial year – – (42,055) (42,055)

Balance at 31 January 2010 473,692 26,560 (382,142) 118,110Issuance of shares 47,300 10,405 – 57,705Total comprehensive loss for the financial year – – (12,273) (12,273)

Balance at 31 January 2011 520,992 36,965 (394,415) 163,542


36

Statements of Cash FlowsFor The Financial Year Ended 31 January 2011

Group company 2011 2010 2011 2010 rM’000 rM’000 rM’000 rM’000

oPeratiNG actiVities:Loss before taxation (46,489) (34,850) (11,388) (42,055)Adjustments for:Bad debts written off 10,068 – 2,143 –Impairment loss on receivables- Third parties 9,009 11,864 – 6,626- Subsidiaries – – 2,221 –Impairment of goodwill – 871 – –Depreciation of property, plant and equipment 633 991 – –Loss on disposal of investment in associates 1,681 19,793 811 14,949Gain on disposal of investment (14,939) – (14,939) –Accretion on equity interest in an associate (4,722) (1,322) – –Share of results of associates 30,582 (2,435) – –Impairment loss on receivables no longer required (867) (3,386) (867) (1,511)Interest income (7,863) (7,960) (7,855) (7,957)Interest expenses 19,845 25,325 18,431 23,186Gain on disposal of property,plant and equipment (37) (65) – –Property, plant and equipment written off 1 3 – –Fair value gains on short term investments (1,204) – (1,204) –Impairment loss on investment in subsidiaries – – 9,615 298Impairment loss on property, plant and equipment – 10,873 – –Gain on purchase of debts – (37,068) – –Gain on disposal of interest in a subsidiary (109) – * –

operating cash flows before changes in working capital (4,411) (17,366) (3,032) (6,464)

Changes In Working Capital:Inventories (924) 1,229 – –Receivables (2,944) 9,576 (7,497) 5,417Payables (4,135) 49,945 9,940 5,642Associate balances (10,350) (9,264) – –

Net cash flows from operations (22,764) 34,120 (589) 4,595Interest paid – (5,194) – (4,156)Income tax (paid)/refunded (368) 52 – –

Net cash flows (used in)/fromoperating activities (23,132) 28,978 (589) 439

iNVestiNG actiVities:Increase/(decrease) in amount owing to associates 18,338 (29,132) 13,278 1,038Increase in amount owing to shareholders – 2,594 – –Increase in infrastructure development expenditure (4,965) (4,560) – –Proceeds from disposal of investment in associates 81,466 15,886 81,466 15,886Interest received 7,863 7,960 7,855 7,957


37

Statements of Cash FlowsFor The Financial Year Ended 31 January 2011


iNVestiNG actiVities: (cont’d)Proceeds from disposal of property, plant and equipment 37 577 – –Addition to investment in associates (78,616) (1,131) (78,616) (1,131)Deposits released as security values 78 614 – 574Additions to property, plant and equipment (5,925) (3,505) – –Repayment from subsidiaries – – – 2,968Net cash inflows arising from disposal of a subsidiary (Note 7) 2,149 – 2,100 –

Net cash flows from/(used in) investing activities 20,425 (10,697) 26,083 27,292

fiNaNciNG actiVities:Increase in amount owing to associates 2,449 797 2,640 5,076(Decrease)/increase in amount owing to directors (569) 2,360 (1,315) 2,360(Decrease)/increase in amount owing toshareholders (3,682) 4,164 (1,018) 1,015Issuance of shares 57,705 – 57,705 –Interest paid (19,845) (20,131) (18,431) (19,030)Advances from repayment to subsidiaries – – (38,017) (7,953)Drawdown from borrowings – 1,366 – –Repayment of borrowings (550) (54,538) – (57,430)Repayment of hire purchase payables (40) (99) – –

Net cash flows used in financing activities 35,468 (66,081) 1,564 (75,962)

Net cHaNGe iN casH aNd casH eQUiVaLeNts 32,761 (47,800) 27,058 (48,231)

casH aNd casH eQUiVaLeNts at tHe BeGiNNiNG of tHe fiNaNciaL Year (62,499) (14,699) (48,231) –

casH aNd casH eQUiVaLeNts at tHe eNd of tHe fiNaNciaL Year (29,738) (62,499) (21,173) (48,231)

aNaLYsis of casH aNd casH eQUiVaLeNts:

Cash and bank balances 31,888 629 29,973 *Fixed deposits – 78 – –Bank overdrafts (Note 18) (61,626) (63,128) (51,146) (48,231)

(29,738) (62,421) (21,173) (48,231)Less: Fixed deposits pledged to banks (Note 14) – (78) – –

(29,738) (62,499) (21,173) (48,231)




Notes To The Financial Statements

38

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 7 and 8 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 2.05, 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 2011.

The Group incurred a net loss of RM50,622,000/- during the current financial year, the net current assets position of the Group as at 31 January 2011 was RM21,541,000/- as opposed to a net current liabilities position of RM1,362,000/- in the previous financial year.

As disclosed in Note 6 to the financial statements, West Coast Expressway Sdn. Bhd. (“WCESB”), a subsidiary

of the Company, entered into a Concession Agreement (“CA”) with the Government of Malaysia (“Government”) for the construction of the West Coast Expressway (“WCE”), which will connect the North South Expressway at Taiping in the North to Banting in the South leading to Kuala Lumpur International Airport. The WCE will be built and operated over a concession period of 33 years.

On 17 March 2009, WCESB had submitted the documents to the Government to satisfy the conditions precedent pursuant to the CA. On 6 July 2009, via a letter received from Kementerian Kerja Raya (“KKR”), WCESB was informed that the submission of the necessary documents was not satisfactorily received. On 7 July 2009, WCESB replied to KKR that it had met all the conditions precedent and is in the process of finalising the matters in relation to the financing of this project (“Financial Close”). In addition, on 2 September 2009, WCESB submitted an appeal letter requesting for further extension of time to finalise the Financial Close and to allow financially stronger parties to participate as consortium partners. On 15 October 2009, WCESB received a notice from the Government to deliberate on the WCE appeal. After several meetings, on 10 February 2010, WCESB submitted to the Government a revised proposal to include a potential new consortium partner to carry out the implementation of this project. On 24 March 2010, a notice was received from KKR inviting WCESB to deliberate and discuss the WCE project further on 29 March 2010. Subsequent to this, several presentations and meetings have been held with several Ministries of the Government. On 1 April 2011, WCESB received a letter from Unit Kerjasama Awam Swasta of the Prime Minister’s Department (“UKAS”) approving in-principle the project which is subject to certain conditions precedent which include, amongst others further negotiations on the detailed technical and financial terms and conditions before entering into a revised CA. The negotiation is expected to be completed within six (6) months from the date of the letter. The project is to be on Build, Operate and Transfer basis.

The Directors are of the opinion that the long term viability of the WCE project will further enhance the future earnings and financial position of the Group.



39

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 (“FRS”) and the Companies Act, 1965 in Malaysia.

At the beginning of current financial year, the Group and the Company adopted new and revised FRSs which are mandatory for financial periods beginning on or after 1 January 2010 as describe fully in Note 2.2(a) to the financial statements.

The financial statements of the Group and of the Company have also been prepared on the historical cost basis.

The preparation of financial statements in conformity with FRS 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 the directors’ best knowledge of current events and actions, and therefore 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, ic interpretations (“ic int”) and amendments to ic int

(a) adoption of New and revised frss, amendments/improvements to frss, ic int and amendments to ic int

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

New FRSsFRS 4 Insurance ContractsFRS 7 Financial Instruments: DisclosuresFRS 8 Operating SegmentsFRS 139 Financial Instruments: Recognition and Measurement

Revised FRSsFRS 101 Presentation of Financial StatementsFRS 123 Borrowing Costs

Amendments/Improvements to FRSsFRS 1 First-time Adoption of Financial Reporting Standwards FRS 2 Share-based Payment – Vesting Conditions and CancellationsFRS 5 Non-current Assets Held for Sale and Discontinued Operations FRS 7 Financial Instruments: Disclosures FRS 8 Operating SegmentsFRS 107 Statement of Cash FlowsFRS 108 Accounting Policies, Changes in Accounting Estimates and ErrorsFRS 110 Events After the Reporting PeriodFRS 116 Property, Plant and EquipmentFRS 117 LeasesFRS 118 RevenueFRS 119 Employee Benefits



40

2. siGNificaNt accoUNtiNG PoLicies (continued)

2.2 New and revised frss, amendments/improvements to frss, ic int and amendments to ic int (continued)

(a) adoption of New and revised frss, amendments/improvements to frss, ic int and amendments to ic int (continued)

FRS 120 Accounting for Government Grants and Disclosures of Government AssistanceFRS 123 Borrowing CostsFRS 127 Consolidated and Separate Financial Statements: Cost of an Investment in a

Subsidiary, Jointly Controlled Entity or AssociateFRS 128 Investments in AssociatesFRS 129 Financial Reporting in Hyperinflationary EconomiesFRS 131 Interests in Joint VenturesFRS 132 Financial Instruments: PresentationFRS 134 Interim Financial ReportingFRS 136 Impairment of AssetsFRS 138 Intangible AssetsFRS 140 Investment Property

IC IntIC Int 9 Reassessment of Embedded DerivativesIC Int 10 Interim Financial Reporting and ImpairmentIC Int 11 FRS 2 – Group and Treasury Share TransactionsIC Int 13 Customer Loyalty ProgrammesIC Int 14 FRS 119 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements

and their Interaction

Amendments to IC IntIC Int 9 Reassessment of Embedded Derivatives

Adoption of the above standards and interpretations did not have any effect on the financial performance or position of the Group and the Company except for those discussed below:-

FrS 7 Financial Instruments: Disclosures

FRS 7 requires enhanced disclosures about financial instruments. It requires the disclosure of qualitative and quantitative information about exposure to risk arising from financial instruments, including specified minimum disclosures about credit risk, liquidity risk and market risk, including sensitivity analysis to market risk.

The Group and the Company have applied FRS 7 prospectively in accordance with the transitional provisions. Hence, the new disclosures have not been applied to the comparatives. The new disclosures are included throughout the Group’s and the Company’s financial statements for the year ended 31 January 2011.

FrS 8 operating Segments

FRS 8, which replaces FRS 114 Segment Reporting, specifies how an entity should report information about its operating segments, based on internal reports that are regularly reviewed by the entity’s chief operating decision maker for the purposes of allocating resources to the segments and assessing their performance. The standard also requires the disclosure of information about the products and services provided by the segments, the geographical areas in which the Group operates, and revenue from the Group’s major customers.

The Group concluded that the reportable operating segments determined in accordance with FRS 8 are the same as the business segments previously identified under FRS 114.



41




FrS 101 Presentation of Financial Statements (revised)

The revised FRS 101 introduces changes in the presentation and disclosures of financial statements. The revised FRS 101 separates owner and non-owner changes in equity. The statement of changes in equity includes only details of transactions with owners, with all non-owner changes equity presented as a single line. This standard also introduce the statement of comprehensive income, together with all items of income and expense recognised directly in equity, either in one single statement, or in two linked statements. The Group and the Company have elected to present this statement as one single statement.

In addition, a statement of financial position is required at the beginning of the earliest comparative period following a change in accounting policy, the correction of an error or the classification of items in the financial statements.

The revised FRS 101 also requires the Group to make new disclosures to enable users of the financial statements to evaluate the Group’s objectives, policies and processes for managing capital.

The revised FRS 101 was adopted retrospectively by the Group and the Company.

amendments to FrS 117 leases

Prior to 1 February 2010, for all leasehold land and buildings, if title is not expected to pass to the lessee by the end of the lease term, the lessee normally does not receive substantially the entire risks and rewards incidental to ownership. Hence, all leasehold land held for own use was classified by the Group as operating lease and where necessary, the minimum lease payments or the up-front payments made were allocated between the land and the building elements in proportion to the relative fair values for leasehold interests in the land element and building element of the lease at the inception of the lease. The up-front payment represented prepaid lease payments and were amortised on a straight-line basis over the lease term.

The Group adopted the amendments to FRS 117. The Group has reassessed and determined that all leasehold land of the Group are in substance finance leases and has reclassified the leasehold land to property, plant and equipment. The change in accounting policy has been made retrospectively in accordance with the transitional provisions of the amendment.

The reclassification does not affect the basic and diluted earnings per ordinary share for the current and prior periods.



42




amendments to FrS 117 leases (Continued)

The following comparative figures have been restated following the adoption of the amendment to FRS 117:-

effect of as adopting the previously amendments reported to frs 117 as restated rM’000 rM’000 rM’000

statements of financial position1 february 2010Property, plant and equipment- Cost 39,918 21,429 61,347- Accumulated amortisation (22,930) (2,348) (25,278)- Accumulated impairment – (10,873) (10,873)

16,988 8,208 25,196

Leasehold land- Cost 21,429 (21,429) –- Accumulated amortisation (2,348) 2,348 –- Accumulated impairment (10,873) 10,873 –

8,208 (8,208) –

1 february 2009Property, plant and equipment- Cost 40,349 21,429 61,778- Accumulated amortisation (22,691) (2,109) (24,800)

17,658 19,320 36,978

Leasehold land- Cost 21,429 (21,429) –- Accumulated amortisation (2,109) 2,109 –

19,320 (19,320) –



43




amendments to FrS 117 leases (Continued)

effect of as adopting the previously amendments reported to frs 117 as restated rM’000 rM’000 rM’000

statements of comprehensive income31 January 2010

Depreciation of property, plant and equipment – 239 239Amortisation of leasehold land 239 ( 239) –

Impairment ofproperty, plant and equipment – 10,873 10,873Impairment of leasehold land 10,873 (10,873) –

FrS 139 Financial Instruments: recognition and Measurement

FRS 139 establishes principles for recognising and measuring financial assets, financial liabilities and some contracts to buy and sell non-financial items. The Group and the Company have adopted FRS 139 prospectively on 1 February 2010 in accordance with the transitional provisions. The details of the changes in accounting policies and the effects arising from the adoption of FRS 139 are discussed below:-

• Impairmentoftradeandotherreceivables

Prior to 1 February 2010, allowance for doubtful debts was recognised when it was considered uncollectible. Upon the adoption of FRS 139, an impairment loss is recognised when there is objective evidence that an impairment loss has been incurred. The amount of the loss is measured as the difference between the receivable’s carrying amount and the present value of the estimated future cash flows discounted at the receivable’s original effective interest rate. As at 1 February 2010, the Group and the Company have re-measured the allowance for impairment losses at that date in accordance with FRS 139 and the amount of allowance for impairment loss to be recognised as at 1 February 2010 is equal to the allowance for doubtful debts recognised prior to 1 February 2010. Thus, no adjustments to the opening balance of accumulated losses as at that date.



44



(b) revised frss, amendments/improvements to frss, ic int and amendments to ic int that are issued, but not yet effective and have not been adopted early

The Group and the Company have not adopted the following revised FRSs, amendments/

improvements to FRSs, 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 onor after

Revised FRSsFRS 1 First-time Adoption of Financial Reporting Standards 1 July 2010FRS 3 Business Combinations 1 July 2010FRS 124 Related Party Disclosures 1 January 2012FRS 127 Consolidated and Separate Financial Statements 1 July 2010

Amendments/Improvements to FRSsFRS 1 First-time Adoption of Financial Reporting Standards 1 January 2011FRS 2 Share-based Payment 1 July 2010 and

1 January 2011FRS 3 Business Combinations 1 January 2011FRS 5

FRS 7FRS 101FRS 121FRS 128FRS 131FRS 132

FRS 134FRS 138FRS 139

Non-current Assets Held for Sale and Discontinued OperationsFinancial Instruments: DisclosuresPresentation of Financial StatementsThe Effects of Changes in Foreign Exchange RatesInvestments in AssociatesInvestments in Joint VenturesFinancial Instruments: Presentation

Interim Financial Reporting Intangible AssetsFinancial Instruments: Recognition and Measurements

1 July 2010

1 January 20111 January 20111 January 20111 January 20111 January 2011

1 March 2010 and 1January 2011

1 January 20111 July 2010

1 January 2011



45



(b) revised frss, amendments/improvements to frss, ic int and amendments to ic int that are issued, but not yet effective and have not been adopted early (continued)

effective for financial periods

beginning onor after

IC IntIC Int 4 Determining Whether an Arrangement contains a Lease 1 January 2011IC Int 12 Service Concession Arrangements 1 July 2010IC Int 15 Agreements for the Construction of Real Estate 1 January 2012IC Int 16 Hedges of a Net Investment in a Foreign Operation 1 July 2010IC Int 17 Distributions of Non-cash Assets to Owners 1 July 2010IC Int 18IC Int 19

Transfers of Assets from CustomersExtinguishing Financial Liabilities with Equity Instruments

1 January 20111 July 2011

Amendments to IC IntIC Int 9 Reassessment of Embedded Derivatives 1 July 2010IC Int 13 Customer Loyalty Programmes 1 January 2011IC Int 14 Prepayments of a Minimum Funding Requirement 1 July 2011

The directors do not anticipate that the application of the above revised FRSs, amendments/improvements to FRSs, IC Int and amendments to IC Int, when they are effective, will have a material impact on the results and the financial position of the Group and of the Company, except for those discussed below:-

FrS 3 Business Combinations (revised) and amendments to FrS 127 Consolidated and Separate Financial Statements (revised)

The revised standards are effective for annual periods beginning on or after 1 July 2010. The revised FRS 3 introduces a number of changes which will impact the amount of goodwill recognised, the reported results in the period that an acquisition occurs, and future reported results. The amendments to FRS 127 require that a change in the ownership interest of a subsidiary company (without loss of control) is accounted for as an equity transaction. Therefore, such transactions will no longer give rise to goodwill, nor will they give rise to a gain or loss. Furthermore, the amendments to FRS 127 require all losses attributable to non-controlling interest to be absorbed by minority interest. Any excess and any further losses exceeding the minority interest in the equity of a subsidiary company are no longer charged against the Group’s interest. Currently, such losses are accounted for in accordance with the accounting policies as described in Note 2.3(a) to the financial statements. The Group does not intend to early adopt the above revised FRS and amendments to FRS.



46



(b) revised frss, amendments/improvements to frss, ic int and amendments to ic int that are issued, but not yet effective and have not been adopted early (continued)

ic interpretation 15 agreement for the construction of real estate

IC Interpretation 15 establishes the developer will have to evaluate whether control and significant risk and rewards of the ownership of work in progress, can be transferred to the buyer as construction progress before revenue can be recognised.

2.3 summary of significant accounting Policies

(a) Basis of consolidation

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 parent and its subsidiaries are all drawn up to the same reporting date.

The financial statements of the subsidiaries are consolidated from the date on which control is transferred to the Group and are no longer consolidated from the date that control ceases.

Acquisitions of subsidiaries are accounted for using the purchase method. The purchase method of accounting involves allocating the cost of the acquisition to the fair value of the assets acquired and liabilities and contingent liabilities assumed at the date of acquisition. The cost of an acquisition is measured as the aggregate of the fair values, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity instruments issued, plus any costs directly attributable to the acquisition.

Any excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities represents goodwill. The accounting policy on goodwill is set out in Note 2.3(c) to the financial statements.

Any excess of the Group’s interest in the net fair value of identifiable assets, liabilities and contingent liabilities over the cost of acquisition is recognised immediately in profit or loss.

Intra-group transactions, balances and resulting unrealised gains are eliminated on consolidation

and the consolidated financial statements reflect external transactions only. Unrealised losses are eliminated on consolidation unless costs cannot be recovered. Uniform accounting policies are adopted in the consolidated financial statement for like transactions and events in similar circumstances.

The gain or loss on disposal of a subsidiary company is the difference between net disposal proceeds and the Group’s share of its assets together with the balance of goodwill.

Non-controlling interest represents the portion of profit or loss and net assets in subsidiaries not held by the Group. It is measured at the minorities’ share of the fair value of the subsidiaries’ identifiable assets and liabilities at the acquisition date and the non-controlling share of changes in the subsidiaries equity since then.

Where losses applicable to the non-controlling exceed the non-controlling interest in the equity

of a subsidiary company, the excess and any further losses applicable to the non-controlling, are charged against the Group’s interest except to the extent that the non-controlling has a binding obligation to, and is able to, make additional investment to cover the losses. If the subsidiary company subsequently reports profits, the Group’s interest is allocated all such profit until the non-controlling share of losses previously absorbed by the Group has been recovered.



47


2.3 summary of significant accounting Policies (continued)

(b) subsidiaries

Subsidiaries are entities in which the Group has power to exercise control over the financial and operating policies so as to obtain benefits from its activities, generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group has such power over another entity.

An investment in subsidiaries which is eliminated on consolidation, is stated in the Company’s separate financial statements at cost less impairment losses, if any. The policy for the recognition and measurement of impairment losses is in accordance with Note 2.3(q) to the financial statements. On disposal of such an investment, the difference between the net disposal proceeds and its carrying amount is recognised in the profit or loss.

(c) Goodwill on consolidation

Goodwill arising on acquisition represents the excess of cost of business combination over the Group’s share of the net fair values of the identifiable assets, liabilities and contingent liabilities. Following the initial recognition, goodwill is stated at cost less impairment losses, if any. The policy for recognition and measurement of impairment losses is in accordance with Note 2.3(q) to the financial statements.

Goodwill is not amortised but is reviewed for impairment, annually or more frequently for impairment in value and is written down where it is considered necessary. Gain or losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the synergies of the business combination in which the goodwill arise.

Negative goodwill represents the excess of the fair value of the Group’s share of net assets acquired over the cost of acquisition. Negative goodwill is recognised directly in the profit or loss.

(d) associates

Associates are an entity in which the Group exercises influence, but which it does not control, generally accompanying a shareholding of between 20% and 50% of the voting rights, and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the associates but not the power to exercise control over those policies.

Investments in associates are accounted for in the consolidated financial statements using the equity method of accounting and are initially recognised at cost. The Group’s investment in associates includes goodwill identified on acquisition, net of any accumulated impairment loss. The policy for the recognition and measurement of impairment losses is in accordance with Note 2.3(q) to the financial statements.

Under the equity method, the investment in associate is carried in the consolidated statement of financial position at cost adjusted for post acquisition changes in the Group’s share of net assets of the associate. The Group’s share of the net profit or loss of the associate is recognised in the profit or loss. Where there has been a change that is recognised directly in the equity of the associate, the Group recognises its share of such changes.



48



(d) associates (continued)

When the Group’s share of losses in an associate equals or exceeds its interest in the associate including any other unsecured receivables, the Group’s interest is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate.

Goodwill relating to an associate is included in the carrying amount of the investment and is not amortised. Any excess of the Group’s share of the net fair value of the associate identifiable assets, liabilities and contingent liabilities over the cost of the investment is excluded from the carrying amount of the investment and is instead included as income in the determination of the Group’s share of the associate profit or loss in the period in which the investment is acquired.

On disposal of such investment, the difference between net disposal proceed and the carrying amount of the investment in an associate is reflected as a gain or loss on disposal in the profit or loss.

(e) 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(q) 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.

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 Remaining 79 - 95 yearsBuildings 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.



49



(e) Property, Plant and equipment and depreciation (continued)

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.

(f) infrastructure development expenditure

Infrastructure development expenditure includes all direct infrastructure costs and other cost incurred in relation to contract work. The infrastructure development expenditure will be reclassified to amounts due from contract customers when significant contract work has been undertaken.

(g) 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 in 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.

(h) 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 are 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.



50



(i) 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.

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.



51



(i) financial instruments (continued)

(i) financial assets: (continued)

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.

(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.



52



(i) financial instruments (continued)

(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.

(j) 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.

In previous financial year, leasehold land that normally had an indefinite economic life and title was not expected to pass to the lessee by the end of the lease term was treated as operating lease.



53



(j) Leases (continued)

(ii) operating Leases (continued)

The Group has adopted the amendment made of FRS 117 Lease on 1 February 2010 in relation to the classification of leasehold land. Leasehold land which in substance is a finance lease has been reclassified measured as such retrospectively.

(k) Borrowing costs

Borrowing 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 12 months after the reporting date.

(l) 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.

(m) Provisions 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.



54



(n) 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) foreign 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.

(o) 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.

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.



55



(p) 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 contracts

Revenue from construction is recognised based on the stage of completion method.

(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 income Rental income is recognised on accrual basis.

(q) 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.



56



(q) impairment of assets (continued)

(i) impairment of financial assets (continued)

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 are 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.

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



57



(q) impairment of assets (continued)

(ii) impairment of Non-financial assets (continued)

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.

(r) 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.

(s) 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.

(t) segmental reporting

In the previous years, a segment was distinguishable component of the Group that was engaged either in providing products or services (business information), or in providing products or services within a particular economic environment (geographical information) which was subject to risks and rewards that were different from those of other segments.

Following the adoption of FRS 8 Operating Segments, an operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. 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.



58

3. siGNificaNt accoUNtiNG estiMates aNd JUdGeMeNts

3.1 critical judgements in applying 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 management has made the following judgement, apart from those involving estimations, which have a significant effect on the amounts recognised in the financial statements:-

(i) Leases

The Group has reassessed and judged that the leasehold land of the Group which in substance is finance leases and has reclassified the leasehold land to property, plant and equipment.

(ii) classification of financial assets

The Group classifies the short term investment with the total carrying value of RM6,774,000/- as at the reporting date into held for trading financial assets.

The management exercise critical judgement to maintain of at least 20% equity interest in investment in associates.

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 The Group determines whether goodwill is impaired at least on an annual basis. This requires an

estimation of the value-in-use of the cash generating units (“CGU”) to which goodwill is allocated. Estimating the value-in-use amount requires management to make an estimation of the expected future cash flows from the CGU and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The carrying amount of goodwill as at 31 January 2011 was RM7,424,000/- (2010: RM8,506,000/-).

(ii) Useful lives of property, plant and equipment

The Group estimate 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.



59

3. siGNificaNt accoUNtiNG estiMates aNd JUdGeMeNts (continued)

3.2 Key sources of estimation uncertainty (continued)

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

The Company tests investment in 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.

(iv) Impairment of investment in associates

The Group and the Company test investment in 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 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

The Group assess 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-used calculation using the cash flow projection based on the financial budget approved by the management covering 33 years period.



60

3. siGNificaNt accoUNtiNG estiMates aNd JUdGeMeNts (continued)

3.2 Key sources of estimation uncertainty (continued)

(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 assess 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 11 to the financial statements.

(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.



61

4. ProPertY, PLaNt aNd eQUiPMeNt

furniture, fixtures freehold Leasehold Plant and and office Motor land land Buildings renovation machinery fittings equipment vehicles total rM’000 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000

Group2011costAt 1 February 2010, as previously stated 3,063 – 13,829 612 20,070 522 1,207 615 39,918Effect of adopting the amendments to FRS 117 – 21,429 – – – – – – 21,429

At 1 February 2010,as restated 3,063 21,429 13,829 612 20,070 522 1,207 615 61,347Additions – 1,516 4,284 – 44 – 72 9 5,925Disposals – – – – – * – (200) (200)Disposal of a subsidiary – (1,218) (4,165) – (9,903) (359) (2) (61) (15,708)Write–offs – – – – (16) – – – (16)

At 31 January 2011 3,063 21,727 13,948 612 10,195 163 1,277 363 51,348

accumulateddepreciationAt 1 February 2010, as previously stated – – 1,632 246 19,127 481 1,056 388 22,930Effect of adopting the amendments to FRS 117 – 2,348 – – – – – – 2,348

At 1 February 2010, as restated – 2,348 1,632 246 19,127 481 1,056 388 25,278Depreciation charged for the financial year – 99 203 24 181 10 62 66 645Disposals – – – – – * – (200) (200)Disposal of a subsidiary – (228) (1,385) – (9,430) (346) – (50) (11,439)Write–offs – – – – (15) – – – (15)

At 31 January 2011 – 2,219 450 270 9,863 145 1,118 204 14,269




62

4. ProPertY, PLaNt aNd eQUiPMeNt (continued)


accumulatedimpairmentAt 1 February 2010, as previously stated – – – – – – – – –Effect of adopting the amendments to FRS 117 – 10,873 – – – – – – 10,873

At 31 January 2011 – 10,873 – – – – – – 10,873

Net Book Value at 31 January 2011 3,063 8,635 13,498 342 332 18 159 159 26,206

Group2010costAt 1 February 2009,as previously stated 548 – 16,211 612 20,327 513 1,240 898 40,349Effect of adopting the amendments to FRS 117 – 21,429 – – – – – – 21,429

At 1 February 2010,as restated 548 21,429 16,211 612 20,327 513 1,240 898 61,778Additions 2,946 – 515 – 23 9 12 – 3,505Disposals (431) – (2,897) – (6) – – (283) (3,617)Write–offs – – – – (274) – (45) – (319)

At 31 January 2010 3,063 21,429 13,829 612 20,070 522 1,207 615 61,347



63



accumulateddepreciationAt 1 February 2009,as previously stated – – 1,438 221 19,026 468 1,036 502 22,691Effect of adopting the amendments to FRS 117 – 2,109 – – – – – – 2,109

At 1 February 2009, as restated – 2,109 1,438 221 19,026 468 1,036 502 24,800Depreciation charged for the financial year – 239 194 25 380 13 62 90 1,003Disposals – – – – (5) – – (204) (209)Write–offs – – – – (274) – (42) – (316)

At 31 January 2010 – 2,348 1,632 246 19,127 481 1,056 388 25,278

accumulatedimpairmentAt 1 February 2009, as previously stated – – – – – – – – –Impairment charged during the year – 10,873 – – – – – – 1 0,873

At 31 January 2011, as restated – 10,873 – – – – – – 10,873

Net Book Value at31 January 2010 3,063 8,208 12,197 366 943 41 151 227 25,196



64


The depreciation charges of the Group are allocated as follows:

Group 2011 2010 rM’000 rM’000

Profit or loss (Note 23) 633 991Infrastructure development expenditure (Note 6) 12 12 645 1,003

The net book values 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 18 are as follows:

Group

2011 2010 rM’000 rM’000

Leasehold land 7,131 8,208Buildings 1,827 5,170

8,958 13,378

The net book values of property, plant and equipment acquired under hire-purchase arrangements are as

follows:

Group 2011 2010 rM’000 rM’000

Motor vehicles 153 213



65

5. LeaseHoLd LaNd

Long term leasehold land which represents prepaid land lease payments is as follows:

Group Leasehold land with unexpired period of more than 50 years

2011 2010 rM’000 rM’000costAt 1 February, as previously stated 21,429 21,429Effects of adopting the amendments to FRS 117 (21,429) (21,429)

At 1 February/1 January, as restated – –

accumulated amortisationAt 1 February, as previously stated 2,348 2,109Effects of adopting the amendments to FRS 117 (2,348) (2,109)

At 1 February/1 January, as restated – –Amortisation during the financial year – 239Effects of adopting the amendments to FRS 117 – (239)

At 1 January, as restated – –

accumulated impairmentAt 1 February, as previously stated 10,873 10,873Effects of adopting the amendments to FRS 117 (10,873) (10,873)

At 1 February/1 January, as restated – –

carrying amount at 31 January – –

6. iNfrastrUctUre deVeLoPMeNt exPeNditUre

Group 2011 2010 rM’000 rM’000

at cost

At 1 February 66,814 62,242Incurred during the financial year 4,977 4,572

At 31 January 71,791 66,814



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6. iNfrastrUctUre deVeLoPMeNt exPeNditUre (continued)

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

Group 2011 2010 rM’000 rM’000

Interest expense 3,368 2,761Staff costs 160 273Director remuneration and other emoluments – 121Rental of premises 1,230 710Depreciation of property, plant and equipment 12 12

On 25 May 2007, West Coast Expressway Sdn. Bhd. (“WCESB”), a subsidiary of the Company, entered into a Concession Agreement (“CA”) with the Government of Malaysia (“Government”) for the construction of the West Coast Expressway (“WCE”), which will connect the North South Expressway at Taiping in the North to Banting in the South leading to Kuala Lumpur International Airport. The WCE will be built and operated over a concession period of 33 years.

The salient terms of the Concession Agreement are as follows:-

(a) Concession

The Government grants to WCESB, the right to:-

(i) Design and construct the WCE;(ii) Supply and install tolling and other equipment at the toll plaza and operate and maintain it;(iii) Demand, collect and retain toll;(iv) Exclusively design, construct, operate, manage and maintain the Ancillary Facilities and to retain

the income received and receivable;(v) Operate, manage and maintain at its own cost and expense for the WCE;(vi) Design, construct, operate, manage and maintain administrative offices;(vii) Carry out the connection and upgrade works; and(viii) All other activities incidental to the performance of the above works.

(b) Conditions Precedent

(i) WCESB shall appoint an independent consultant to conduct a public opinion survey within 6 months from the execution of the agreement and submit the survey report to the Government; and

(ii) WCESB shall within 12 months from the execution of this agreement submit evidence that WCESB has the capacity to finance the construction work in respect of the Selangor Alignment and cause its shareholders to execute a joint venture agreement or shareholders agreement which shall be consistent with the terms of the CA.

On 15 December 2008, a financial institution (the “financial institution”) was appointed as the mandated Principal Advisor and Lead Arranger in connection to the proposed financing of the construction of the Selangor Alignment of the WCE by WCESB (the “Proposal”).



67

6. iNfrastrUctUre deVeLoPMeNt exPeNditUre (continued)

Subsequent to the financial institution’s appointment, the financial institution had reviewed the Proposal and is of the opinion that the Proposal is financially viable. Accordingly, on 6 March 2009, the financial institution informed the Board of Directors of WCESB that the financial institution supports and agrees in principle to the abovementioned Proposal. The financial institution had proposed that the Proposal be undertaken by way of a Two-Tiered Syndicated Musharakah financing with local and foreign institutions for both the Musharakah Equity Contributors and the Musharakah Financiers amounting to RM0.568 billion and RM1.324 billion, respectively.

On 17 March 2009, WCESB had submitted the documents to the Government to satisfy the conditions precedent pursuant to the CA. On 6 July 2009, via a letter received from Kementerian Kerja Raya (“KKR”), WCESB was informed that the submission of the necessary documents was not satisfactorily received. On 7 July 2009, WCESB replied to KKR that it had met all the conditions precedent and is in the process of finalising the matters in relation to the financing of this project (“Financial Close”). In addition, on 2 September 2009, WCESB submitted an appeal letter requesting for further extension of time to finalise the Financial Close and to allow financially stronger parties to participate as consortium partners.

On 15 October 2009, WCESB received a notice from the Government to deliberate on the WCE appeal. After several meetings, on 10 February 2010, WCESB submitted to the Government a revised proposal to include a potential new consortium partner to carry out the implementation of this project. On 24 March 2010, a notice was received from KKR inviting WCESB to deliberate and discuss the WCE project further on 29 March 2010. Subsequent to this, several presentations and meetings have been held with several Ministries of the Government. On 1 April 2011, WCESB received a letter from Unit Kerjasama Awam Swasta of the Prime Minister’s Department (“UKAS”) approving in-principle the project which is subject to certain conditions precedent which include, amongst others further negotiations on the detailed technical and financial terms and conditions before entering into a revised CA. The negotiation is expected to be completed within six (6) months from the date of the letter. The project is to be on Build, Operate and Transfer basis.

The Directors are of the opinion that long term viability of the WCE project will further enhance the future earnings and financial position of the Group.

7. iNVestMeNt iN sUBsidiaries

company 2011 2010 rM’000 rM’000

Unquoted shares, at cost 38,484 43,048Less: Impairment loss (16,572) (9,420)

21,912 33,628

The following information relates to the subsidiaries all of which are incorporated in Malaysia.



68

7. iNVestMeNt iN sUBsidiaries (continued)

Name of companies

effective equity interest

Principal activities2011 2010

% %

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 *

Kekwa Indah Sdn. Bhd.

100

–

100

60.4

Inactive.

Manufacture and sale of granular and powder activated carbon and related products.

West Coast Expressway Sdn Bhd #

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



69


Name of companies


Principal activities2011 2010

% %

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 auditor’s report of this subsidiary company contained an emphasis of matter in relation to the infrastructure development expenditure.

* In view of the net current liabilities recorded by these subsidiaries, the Auditors’ Report of each of these subsidiaries did contain an emphasis of matter relating to the appropriateness of the going concern basis of accounting used in the preparation of the respective financial statements. The total current liabilities of these subsidiaries exceeded its current assets by RM191,854,000/-.



70


disposal of a subsidiary

On 15 June 2010, the Group disposed off its 60.4% equity interest in Kekwa Indah Sdn. Bhd. for the total consideration of RM2,100,002/-. The subsidiary company’s principal activities were the manufacturing and trading of industrial products.

The disposal had the following effects on the financial position of the Group for the financial year:

2010 rM’000

Current assets 5,786Current liabilities (4,259)Goodwill 1,082Non-controlling interests (618)

Net assets disposed 1,991Gain on disposal of a subsidiary 109

Proceeds from disposal 2,100Add: cash and cash equivalents 49

Net cash inflows arising from disposal of a subsidiary 2,149

8. iNVestMeNt iN associates

Investment in associates consists of:-


at costQuoted shares 309,519 311,454 309,519 311,454Unquoted shares 500 500 – –

310,019 311,954 309,519 311,454

Share of post - acquisition results, net of dividends received (188,580) (172,818) – –Less: Accumulated impairment loss – – (191,226) (198,868)

121,439 139,136 118,293 112,586

at Market ValueQuoted shares 68,209 81,073 68,209 81,703



71

8. iNVestMeNt iN associates (continued)

The following information relates to the associates which are all incorporated in Malaysia.


Name of companies 2011 2010 Principal activities% %

Held by the company Talam Corporation Berhad (“Talam”)

20 27 Provision of management services, investment holding and property development

Held through indirect subsidiaries

KeB Builders sdn Bhd

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

Ambang Usaha Sdn Bhd 50 50 Dormant

radiant Pillar sdn Bhd

Canal City Construction Sdn Bhd + # 35 35 Construction contracting

KeB Management sdn Bhd

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

+ These companies were audited by another chartered accountant other than Baker Tilly Monteiro Heng. # The audited financial statements and auditors’ reports of these associates are not available for

consolidation.

As at 31 January 2010, investment in a quoted associate of the Company has been charged to the local banks for bank borrowings as mentioned in Note 18.

The Directors’ are of the opinion that the impairment loss as of 31 January 2011 is adequate as the carrying value of the investment approximates the net assets of the associates.



72

8. iNVestMeNt iN associates (continued)

The summarised financial information in respect of the Group’s associates are as follows: Group

2011 2010 rM’000 rM’000

assets and liabilitiesCurrent assets 1,792,905 1,799,684Non-current assets 1,359,534 1,485,997

Total assets 3,152,439 3,285,681

Current liabilities (2,067,519) (1,902,033)Non-current liabilities (449,057) (809,243)

Total liabilities (2,516,576) (2,711,276)

Net Assets 635,863 574,405

The Group’s share of net assets 115,649 139,136

resultsRevenue 213,617 257,877(Loss)/profit for the financial year (161,468) 6,849

The results of Talam Corporation Berhad (“Talam”) and its subsidiaries (“Talam Group”) have been equity accounted for based on the audited financial statements.

9. GoodWiLL oN coNsoLidatioN

Group 2011 2010 rM’000 rM’000

at costAt 1 February 10,037 10,037Disposal of interest in a subsidiary (1,082) -

At 31 January 8,955 10,037

accumulated impairment of goodwillAt 1 February (1,531) (660)Charge for the financial year - (871)

At 31 January (1,531) (1,531)

Net carrying amountAt 31 January 7,424 8,506



73

9. GoodWiLL oN coNsoLidatioN (continued)

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

Group 2011 2010 rM’000 rM’000

Construction 7,086 7,086Manufacturing and trading of industrial products 338 1,420

7,424 8,506

The recoverable amount of the goodwill on consolidation is determined based on value-in-use calculation using cash flow projection based on financial budget approved by the management covering 33 years period which show positive net cash inflow throughout the period.

The key assumptions used for value-in-use calculations are as follow:

Gross margin 38%Pre-tax discount rate 12.56%

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.

10. iNVeNtories

Group 2011 2010 rM’000 rM’000

At cost: Raw materials 1,001 915 Finished goods 347 600

1 ,348 1,515



74

11. trade aNd otHer receiVaBLes


currenttrade receivables Third parties 15,540 28,567 – – Amount owing by associates 45,442 35,092 – –

60,982 63,659 – –Less: Impairment - Third parties (12,674) (10,211) – –

(12,674) (10,211) – –

Trade receivables, net 48,308 53,448 – –

other receivables Other receivables 78,355 73,041 28,083 22,729 Amount owing by associates 128,274 146,612 105,567 118,845 Amount owing by subsidiaries – – 135,565 118,041 Refundable deposits 370 276 – –

206,999 219,929 269,215 259,615Less: Impairment - Other receivables (51,289) (45,812) (21,762) (22,629) - Amount owing by subsidiaries – – (14,511) (12,290)

(51,289) (45,812) (36,273) (34,919)

Other receivables, net 155,710 174,117 232,942 224,696

total trade and other receivables 204,018 227,565 232,942 224,696

(a) Receivables

Trade receivables are non-interest bearing and are generally on 60 to 90 (2010: 60 to 90) days terms. Other credit terms are assessed and approved by a case-by-case basis.

Included in trade receivable of the Group is an amount of RM3,270/- (2010: RM1,213,000/-) owing by companies in which certain directors have interest.

Included in other receivable of the Group and the Company are amount of RM2,846,000/- and RM2,000/- (2010: RM3,613,000/- and RM Nil) respectively owing by companies in which certain directors have interest.



75

11. trade aNd otHer receiVaBLes (continued)

Ageing analysis on trade receivables

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

Group 2011 2010 rM’000 rM’000

Neither past due nor impaired 24,663 25,664

Past due 1 - 30 days 2,805 2,685Past due 31 - 120 days 2,171 9,508Past due more than 120 days 5,995 5,380

10,971 17,573Impaired 12,674 10,211

48,308 53,448

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. More than 38% (2010: 30%) of the Group’s trade receivables arise from customers with more than four years of experience with the Group and losses have incurred infrequently.

Receivables that are past due Trade receivables that are past due were impaired as the reporting date of the terms have not been renegotiated

during the financial year. There were no significant concentrations of credit risk of the Group’s and 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

2011 2010 2011 2010 rM’000 rM’000 rM’000 rM’000

GroupTrade and other receivables- nominal amounts 65,452 73,891 82,502 83,469Less: Impairment (63,963) (56,023) (36,273) (34,919)

1,489 17,868 46,229 48,550



76

11. trade aNd otHer receiVaBLes (continued)

Movements in impairment:-

Group Group 2011 2010 2011 2010 rM’000 rM’000 rM’000 rM’000

At 1 February 56,023 51,485 34,919 29,804 Reversal of impairment (867) (3,386) (867) (1,511) Charge for the financial year 9,009 11,864 2,221 6,626 Written off (150) (3,940) – –Disposal of a subsidiary (52) – – –

At 31 January 63,963 56,023 36,273 34,919

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

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, bear interest at rates ranging from 6.55% to 7.55% (2010: 6.55% to 7.55%) and is 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 18 shall be used as security and collateral against the amount owing by the associate 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.

Included in amount owing by associates is an amount of RM21 million owing by Maxisegar Sdn. Bhd. (“Maxisegar”), a subsidiary of the associate which arose out of an Assignment of Balance Judgment Agreement dated 29 April 2009. The Agreement was signed between Ambang Vista Sdn. Bhd., a subsidiary of the Company with a third party to purchase the amount owing by Maxisegar to the third party amounting to RM38.32 million at a purchase consideration of RM1.25 million. On 16 May 2011, the associate had settled the bank facilities owed by the Group amounting to RM57 million and the associate had on 24 May 2011 issued a letter to the Company to set-off the amount owing by Maxisegar Sdn Bhd, a wholly owned subsidiary of the associate to Ambang Vista Sdn Bhd.



77

12. aMoUNt dUe froM cUstoMer for coNtract WorKs Group

2011 2010 rM’000 rM’000

Aggregate costs incurred to date 11,473 15,692Recognised profits less recognised losses 2,545 241

14,018 15,933Progress billings (12,486) (14,309)

1,532 1,624

Amount due from customers for contract works included in current assets 1,532 1,624

Construction contracts costs recognised as contract expenses during the financial year 11,652 32,627

Construction contracts costs recognised as contract revenue during the financial year 12,525 15,814

13. sHort terM iNVestMeNts

Group and company 2011 2010

carrying Market carrying Market amount value amount value rM’000 rM’000 rM’000 rM’000

Held for trading instruments- quoted in Malaysia 6,774 6,774 – –

14. fixed dePosits

In previous financial year, fixed deposits of the Group are pledged to local banks as security for banking facilities granted as disclosed in Note 18.

In previous financial year, the weighted average effective interest rate of fixed deposits at the reporting date was 2.5% per annum.



78

15. sHare caPitaL Group and company 2011 2010 Number Number of shares of shares

’000 Units rM’000 ’000 Units rM’000

Ordinary shares of RM1/- eachAuthorised:At the beginning/endof the financial year 1,000,000 1,000,000 1,000,000 1,000,000

Issued and fully paid:At 1 February 473,692 473,692 473,692 473,692Issued during the financial year 47,300 47,300 – –

At 31 January 520,992 520,992 473,692 473,692

During the financial year, the Company increased its issued and paid-up ordinary share capital from RM473,691,765/- to RM520,991,765/- by way of the issuance of 47,300,000 ordinary shares of RM1/- each at par for RM1.22 per share for working capital purposes.

The new shares rank pari-passu with the existing shares of the Company.

16. reserVes


Non-distributable reservesShare premium 36,965 26,560 36,965 26,560Foreign exchange reserves (2,035) (5,360) – –Accumulated losses (458,248) (407,461) (394,415) (382,142)

(423,318) (386,261) (357,450) (355,582)



79

17. trade aNd otHer PaYaBLes Group company

2011 2010 2011 2010 rM’000 rM’000 rM’000 rM’000

currenttrade payablesThird parties 36,204 31,551 – –

other payables Accrued operating expenses 36,151 19,632 30,965 17,571 Other payables 16,460 41,826 16,359 18,058 Refundable deposits – 2,396 – 1,755 Amount owing to directors 4,563 5,132 3,817 5,132 Amount owing to subsidiaries – – 18,028 38,522 Amount owing to shareholders – 4,506 – 1,018 Amount owing to associates 12,541 10,093 12,393 9,754

69,715 83,585 81,562 91,810

Total trade and other payables 105,919 115,136 81,562 91,810Add: Loans and borrowings (Note 18) 254,321 257,783 163,905 160,990

total financial liabilities 360,240 372,919 245,467 252,800

(a) Trade payables

The Group normal trade credit term ranges from 14 to 90 days (2010: 14 to 90 days).

Included in trade payables of the Group is retention sum payable of RM1,101,000/- (2010: RM1,345,000/-).

(b) Other payables

Included in other payables of the Group is an amount of RM1,081,000/- (2010: RM9,169,000/-) owing to a Company in which certain directors have interest. The amount owing is unsecured, interest free and repayable upon demand.

(c) Accrued operating expenses

Included in accrued operating expenses of the Group and of the Company is an amount of RM29,781,000/- and RM25,424,000/- (2010: RM18,831,000/- and RM17,521,000/-) respectively which represent overdue interest owing to financial institutions in relation to the borrowings of the Group and of the Company.

(d) Amount owing to subsidiaries

The amount owing to subsidiaries is non-trade in nature, unsecured, interest free and are repayable on demand.

(e) Amount owing to associates

The amount owing to associates is unsecured, bear interest at rates ranging from 6.55% to 7.55% (2010: 6.55% to 7.55%) and is repayable on demand.

(f) Amount owing to shareholders

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

(g) Amount owing to directors

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



80

18. LoaNs aNd BorroWiNGs


Current (secured)Obligations under finance leases 45 48 – –Floating rate bank loan 23,260 29,381 10,759 10,759Bankers’ acceptance – 1,967 – –Block discounting, trust receiptsand revolving credit 4,527 5,751 – –Bank overdrafts 52,611 57,481 51,146 48,114

80,443 94,628 61,905 58,873

Current (unsecured)Floating rate bank loan 17,732 9,968 – –Bankers’ acceptance 1,439 1,869 – –Block discounting, trust receiptsand revolving credit 3,606 3,548 – –Bank overdrafts 9,015 5,647 – 117

31,792 21,032 – 117

Total current 112,235 115,660 61,905 58,990

Non-current (secured)Obligations under finance leases 86 123 – –Floating rate bank loan 142,000 142,000 102,000 102,000

Total non-current 142,086 142,123 102,000 102,000

The remaining maturities of the loans and borrowings as at 31st January 2011 are as follows:


On demand and within one year 112,235 115,660 61,905 58,990Later than one year but not later than two years 142,086 142,123 102,000 102,000

254,321 257,783 163,905 160,990



81

18. LoaNs aNd BorroWiNGs (continued)

Obligations under finance leases The effective interest rate is at 4.73% (2010: 3.80% to 4.75%) per annum. Interest rates are fixed at the

inception of the hire purchase arrangements.

The hire purchase liabilities are effectively secured on the rights of the assets under hire purchase. Floating rate bank loan The effective interest rate as at the reporting date is 8.94% (2010: 7.05%) 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 hire purchase.

Effective interest rates as at reporting date range from 9.55% to 9.80% (2010: 5.02% to 6.25%) per annum.

Block discounting, trust receipts and revolving credit The effective interest rates as at the reporting date range from 8.55% to 9.00% (2010: 6.50% to 7.70%) per

annum.

Bank overdrafts The bank overdrafts of the Group and 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 hire purchase.

The effective interest rates as at the reporting date range from 8.55% to 9.00% (2010: 7.50% to 8.20%) per annum.

The Group has term loan facilities of RM208.9 million of which RM171.1 million are secured by way of the following:

(i) Fixed and floating charge over all assets of a subsidiary;

(ii) First party charge over the ordinary shares in Talam Corporation Berhad;

(iii) Third party first legal charge over several parcel of land of an associate, Talam Corporation Berhad;

(iv) Third party assignment of progress billings of contracts undertaken by a subsidiary;

(v) Charge over the fixed deposits with a licensed bank; and

(vi) Corporate guarantee by the Company and a subsidiary.

The Group has bank overdraft and revolving credit facilities of RM8.8 million obtained from local banks of which RM1.72 million are secured by way of the following:

(i) Third party legal charge over freehold land and buildings of a subsidiary; and

(ii) Corporate guarantee by the Company.



82

19. deferred tax LiaBiLities


Balance at 1 February – 219 – –Transfer to profit or loss (Note 24) 358 (219) 301 –

Balance at 31 January 358 – 301 –

Representing the tax effects of:-

Temporary defferences between net book values and the corresponding tax written down values 57 – – –Other temporary differences 301 – 301 –

358 – 301 –

20. reVeNUe

Group 2011 2010 rM’000 rM’000

Manufacturing and trading of industrial products 13,238 33,129Construction contracts 12,525 15,814Leasing, management services and investment holding 2,232 1,410

27,995 50,353

21. cost of saLes

Group 2011 2010 rM’000 rM’000

Manufacuring and trading of industrial products 9,034 31,878Construction contracts 11,652 32,627Leasing, management services and investment holding 3,064 3,023

23,750 67,528



83

22. fiNaNce costs


Bank overdrafts 4,463 5,194 4,133 4,156Term loans 7,443 11,373 6,737 10,839Bridging loans 4,390 3,225 4,390 3,225Finance lease 7 12 – –Others 3,542 5,521 3,171 4,966

19,845 25,325 18,431 23,186

23. Loss Before taxatioN

Loss before taxation has been arrived at:


after charging:Audit fees- current year 180 127 95 45- underaccrual in prior year 32 9 30 –Bad debts written off 10,068 – 2,143 –Impairment loss on receivables- third parties 9,009 11,864 – 6,626- subsidiaries – – 2,221 –Depreciation of property, plant and equipment (Note 4) 633 991 – –Directors’ remuneration (Note 27) 2,287 2,454 1,872 1,781Staff costs- Salaries, wages, overtime, bonus and allowances 1,572 2,997 – –- EPF 150 287 – –- SOCSO 17 32 – –- Other staff related expenses 97 15 – –



84

23. Loss Before taxatioN (continued)

Loss before taxation has been arrived at: (Continued)


Impairment of goodwill – 871 – –Impairment loss on investment in subsidiaries – – 9,615 298Impairment loss on property, plant and equipment – 10,873 – –Loss on disposal of investment in associates 1,681 19,793 811 14,949Loss on disposal of interest in a subsidiary – – * –Property, plant and equipment written off 1 3 – –Rental of premises 1,463 1,469 – –Rental of equipment 31 31 – –

and crediting:Fair value gain on short term investments 1,204 – 1,204 –Impairment for receivables no longer required 867 3,386 867 1,511Gain on disposal of property, plant and equipment 37 65 – –Gain on disposal of investment 14,939 – 14,939 –Gain on disposal of interest in a subsidiary 109 – * –Accretion on equity interest in an associate 4,722 1,322 – –Interest income 7,863 7,960 7,855 7,957Rental income 497 87 – –Realised gain on foreign exchange 2 17 – –Gain on purchase of debts – 37,068 – –


The estimated monetary value of benefits-in-kind received and receivable by the directors other than in cash from the Group and the Company amounted to RM Nil (2010: RM16,002/-) and RM Nil (2010: RM13,602/-) respectively.

The directors remuneration of a subsidiary incurred and capitalised in infrastructure development expenditure amounted to RM Nil (2010: RM121,000/-).



85

24. taxatioN


Taxation- current year (655) (102) – –- underaccrual in prior year (3,120) (299) (584) –

(3,775) (401) (584) –Deferred taxation (Note 19)- current year (358) – (301) –- overaccrual in prior year – 219 – –

(4,133) (182) (885) –

The reconciliation of income tax expense applicable to loss 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:


Loss before tax (46,489) (34,850) (11,388) (42,055)

Taxation at statutory tax rate of 25% (2010: 25%) 11,622 8,713 2,847 10,514

Tax effects of:- non-deductible expenses (7,356) (14,703) (6,097) (7,084)- origination of deferred tax assets not recognised (611) (9,052) – (3,807)- Tax effect on share of results of associates (7,646) 609 – –- non-taxable income 2,978 14,331 2,949 377- prior year (3,120) (80) (584) –

Tax expense for the financial year (4,133) (182) (885) –

Deferred tax assets have not been recognised in respect of the following items:


Unutilised tex losses 74,081 71,818 – –Other taxable temporary differences (2,118) (2,299) – –

71,963 69,519 – –

Potential deferred tax assers not recognised at 25% (2010: 25%) 17,991 17,380 – –



86

25. Loss Per ordiNarY sHare

(a) Basic

Basis loss per share is calculated by dividing the net loss 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 2011 2010 rM’000 rM’000

Net loss for the financial year attributable to owners of the Company (RM’000) (50,787) (34,293)

Weighted average number of shares (‘000 unit) 476,284 473,692

Basic loss per ordinary share (sen) (10.7) (7.2)

(b) diluted

Diluted loss per share was not presented as there were no dilutive potential ordinary shares in issue.

26. coNtiNGeNt LiaBiLities


Unsecured: Guarantees given to financial institutions/third parties for credit facilities granted to subsidiaries – – 31,188 38,696

A subsidiary was indebted to Bangkok Bank Berhad (“BBB”). BBB had on 7 September 2010 auctioned and disposed a piece of land belongs to Talam which is a secured on the borrowings. The Group is contigently liable to Talam. 15,000 – – –



87

27. 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

Talam Group Talam Corporation Berhad and its subsidiaries. Talam 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 Directors and major shareholders of the Group, have substantial direct and indirect equity interests.

Intelbest Corporation Sdn Bhd A substantial shareholder of the Company.

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”) and its subsidiary is an associate of the Company.

IJM Group IJM Corporation Berhad and its subsidiaries, a substantial 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.

(a) Transactions with related parties


Talam’s Group: Construction billings 12,525 15,814 – – Rental of premises 1,388 1,387 – – Interest income 6,261 6,363 6,261 6,363

Radiant: Interest income 1,507 1,591 1,507 1,591

The Directors of the Company are of the opinion that the above transactions have been entered into the normal course of business and the terms are no less favourable than those arranged with third parties



88

27. siGNificaNt reLated PartY traNsactioNs (continued)

(b) Significant outstanding balances with related parties are as follows:


trade receivables Perkhidmatan Sanjung (M) SdnBhd 3 1,213 – –

other receivables Perkhimatan Sanjung (M) Sdn Bhd – 632 – – KLPB Holdings Sdn Bhd 1 1 – –Tekal Perkasa Sdn Bhd 2,702 2,702 – –Multi Route Malaysia Sdn Bhd 143 278 2 –

2,846 3,613 2 –

other payablesPerspektif Perkasa Sdn Bhd – 4,935 – –IJM Group 11,165 13,796 10,610 9,829 Tekal Perkasa Sdn Bhd 1,081 2,394 – – Multi Route Malaysia Sdn Bhd – 1,840 – –

12,246 22,965 10,610 9,829

amount owing to a shareholder Intelbest Corporation Sdn Bhd – 4,506 – 1,018

amount owing by associates Talam Group 151,372 159,634 83,235 97,615 Radiant Group 22,345 22,070 22,332 21,230 173,717 181,704 105,567 118,845

amount owing to associates Talam Group 12,393 10,060 12,393 9,754 Radiant Group 148 33 – –

12,541 10,093 12,393 9,754



89

27. siGNificaNt reLated PartY traNsactioNs (continued)

(c) Key management compensation

The remuneration of key management personnel, which are the Directors’ remuneration, is disclosed as follows:-


directors of the companyExecutive directors:Fees 50 50 50 50Salaries and otheremoluments 959 1,082 959 1,082EPF contributions 110 125 110 125

1,119 1,257 1,119 1,257

Non-executive directors: Fees 175 200 175 200 Other emoluments 578 324 578 324

753 524 753 524

1,872 1,781 1,872 1,781Directors of subsidiariesExecutive directors: Other emoluments 372 605 – – EPF contributions 43 67 – –

415 672 – –

Non-executive directors: Other emoluments – 1 – –

415 673 – –

2,287 2,454 1,872 1,781

There is no disclosure for compensation of other key management personnel of the Group and the Company as the authority and responsibility for planning, directing and controlling the activities of the Group and the Company is performed by the Board of Directors.

Remuneration of the Directors of the Company in respect of services rendered to the Company and its subsidiaries is represented by the following bands:

2011 2010 No. No.executive directors RM100,000 to RM150,000 1 1 RM1,050,000 to RM1,100,000 1 – RM1,150,000 to RM1,200,000 – 1

Non-executive directors RM100,000 and below 7 7



90

28. seGMeNtaL iNforMatioN

(a) Business segments

The Group’s operating business are classified according to the nature of activities as follows:

- manufacturing and trading of industrial products;- construction; and- leasing, management services and investment holding.

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.

Leasing, Manufacturing management and trading of services and industrial investment2011 products construction holding elimination consolidatedGroup rM’000 rM’000 rM’000 rM’000 rM’000

revenueExternal sales 13,238 12,525 2,232 – 27,995Inter–segment sales – – 420 (420) –

Total revenue 13,238 12,525 2,652 (420) 27,995

resultsSegment results (7,500) (3,619) 7,194 – (3,925)

Finance costs (19,845)Share of results of associates (30,582)Interest income 7,863

Loss before tax (46,489)Taxation (4,133)

Loss for the financial year (50,622)

consolidated statement of financial Position

assetsSegment assets 37,487 110,041 203,538 – 351,066Investment in associates – 400 121,039 – 121,439

Consolidated total assets 37,487 110,441 324,577 – 472,505

LiabilitiesSegment liabilities 27,965 68,702 263,573 – 360,240Tax liabilities 1,202 12 5,094 – 6,308Consolidatedtotal liabilities 29,167 68,714 268,667 – 366,548

other informationCapital expenditure 5,925 – – – 5,925Depreciation of property, plant and equipment 305 87 241 – 633



91

28. seGMeNtaL iNforMatioN (continued)

(a) Business segments (continued)

Leasing, Manufacturing management and trading of services and industrial investment2010 products construction holding elimination consolidatedGroup rM’000 rM’000 rM’000 rM’000 rM’000

revenueExternal sales 33,129 15,814 1,410 – 50,353Inter–segment sales – – 246 (246) –

Total revenue 33,129 15,814 1,656 (246) 50,353

resultsSegment results 4,346 (17,358) (33,103) – (46,115)

Gain on purchase of debts 37,068Impairment of property, plant and equipment (10,873)Finance costs (25,325)Share of results of associates 2,435Interest income 7,960

Profit before tax (34,850)Taxation (182)Loss for the financial year (35,032)

consolidated statement of financial Position

assetsSegment assets 39,437 112,275 180,337 – 332,049Tax assets – – – – 106Investment in associates – 3,780 135,356 – 139,136

Consolidated total assets 39,437 116,055 315,693 – 471,291

LiabilitiesSegment liabilities 37,909 82,464 252,546 – 372,919Tax liabilities – – – – 2,205

Consolidated total liabilities 37,909 82,464 252,546 – 375,124

other informationCapital expenditure 851 – 2,654 – 3,505Depreciation of property, plant and equipment 504 88 399 – 991



92

29. 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 (current) 11Trade and other payables (current) 17Loans and borrowings 18

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.

30. 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, interest rate risk and foreign currency 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 11 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 11 to the

financial statements.



93

30. fiNaNciaL risK MaNaGeMeNt oBJectiVes aNd PoLicies (continued)

(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 the Company’s liabilities at the

reporting date based on contractual undiscounted repayment obligations.

2011 on demand or within one to over five one year five years years total rM’000 rM’000 rM’000 rM’000

Groupfinancial liabilitiesTrade and other payables 105,919 – – 105,919Loans and borrowings 112,235 142,086 – 254,321

Total undiscounted financial liabilities 218,154 142,086 – 360,240

companyfinancial liabilitiesTrade and other payables 81,562 – – 81,562Loans and borrowings 61,905 102,000 – 163,905

Total undiscounted financial liabilities 143,467 102,000 – 245,467

(iii) interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s and 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.



94

30. fiNaNciaL risK MaNaGeMeNt oBJectiVes aNd PoLicies (continued)

(iii) interest rate risk

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 100bp 100bp increase increase rM’000 rM’000

Group

Variable rate instruments (2,022) 2,022

company

Variable rate instruments (1,689) 1,689

31. 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.

During the financial year of 2011, the Group’s strategy, which was unchanged from year 2010, was to maintain the debt-to-equity ratio at 31 January 2011 and 31 January 2010 was as follows:

Group 2011 2010 rM’000 rM’000

Total borrowings 254,321 257,783

Equity attributable to owners of the Company 97,674 87,431

Debt-to-equity ratio 2.60 2.95

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.



95

32. coMMitMeNts

(a) Capital commitments

Group and company 2011 2010

rM’000 rM’000

Capital expenditure contracted for but not provided 68,694 123,000

On 29 Jun 2009, the Company had entered into a sales and purchase agreement with Abrar Discounts Berhad (“Abrar”) to acquire all the rights, title, interests and benefits to the entire Redeemable Convertible Preference Shares, 5-year Redeemable Convertible Secured Loan Stocks, 5-year Redeemable Convertible Secured Loan Stocks and 10-year Al-Bai Bithaman Ajil Islamic Debt Securities of Talam Corporation Berhad at a total purchase price of RM125,000,000/-.

(b) Finance lease commitment

Group 2011 2010 rM’000 rM’000

Minimum hire purchase payments- not later than one year 46 55- later than one year and not later than five years 93 131

139 186Future interest charges (8) (15)

Present value of hire purchase liabilities 131 171

Represented by:Current- not later than one year 45 48Non-current- later than one year but not later than five years 86 123

131 171


96

Supplementary Information on the Breakdown of Realised and Unrealised Losses

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 the Company as at 1 January 2011 are as follows:-

The determination of realised and unrealised profits is based on Guidance of 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.

2011 Group company rM’000 rM’000

The accumulated losses of the Company and its subsidiaries:- realised (270,514) (395,318)- unrealised 846 903

(269,668) (394,415)Total share of accumulated losses of associates:- realised (179,181) –- unrealised (9,399) –

(458,248) (394,415)

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.


97

Statement By Directors

We, taN sri dato’ (dr.) ir. cHaN aH cHYe @ cHaN cHoNG YooN 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 31 to 95 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 2011 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 96 has been compiled in accordance with the Guidance of 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,

taN sri dato’ (dr.) ir. cHaN aH cHYe @ cHaN cHoNG YooNDirector

LoY BooN cHeNDirector

Kuala LumpurDate: 31 May 2011

Statutory Declaration

I, raW KooN BeNG, 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 31 to 95, and the supplementary information set out on page 96 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.

raW KooN BeNG

Subscribed and solemnly declared by the abovenamed at Kuala Lumpur in the Federal Territory on 31 May 2011.

Before me,

ZULKifLa MoHd daHLiM (W541)Commissioner for Oaths


98

rePort oN tHe fiNaNciaL stateMeNts

We have audited the financial statements of Kumpulan Europlus Berhad (“the Company”), which comprise the statements of financial position of the Group and of the Company at 31st January 2011, 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 31 to 95.

Directors’ responsibility for the financial statements

The directors of the Company are responsible for the preparation of financial statements that give a true and fair view in accordance with the Financial Reporting Standards (“FRS”) and the Companies Act, 1965 (“the Act”) in Malaysia, and 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 and 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 as to 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 have been properly drawn up in accordance with the FRS and the Act in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31st January 2011 and of their financial performance and cash flows for the financial year then ended.

Emphasis of Matter

We draw your attention to Note 6 to the financial statements wherein as at 31 January 2011 the Group had recognised infrastructure development expenditure amounting to RM71,791,000/- in respect of a Concession Agreement (“CA”) entered into between West Coast Expressway Sdn. Bhd. (“WCESB”), a subsidiary of the Company and the Government of Malaysia for the construction of the West Coast Expressway (“WCE”). On 15 October 2009, WCESB received a notice from the Government to deliberate on the WCE appeal. After several meetings, on 10 February 2010, WCESB submitted to the Government a revised proposal to include a potential new consortium partner to carry out the implementation of this project. On 24 March 2010, a notice was received from Kementerian Kerja Jaya (“KKR”) inviting WCESB to deliberate and discuss the WCE project further on 29 March 2010. Subsequent to this, several presentations and meetings have been held with several Ministries of the Government. On 1 April 2011, WCESB received a letter from Unit Kerjasama Awam Swasta of the Prime Minister’s Department approving in-principle the project which is subject to certain conditions precedent which include, amongst others further negotiations on the detailed technical and financial terms and conditions before entering into a revised CA. The negotiation is expected to be completed within six (6) months from the date of the letter. The project is to be on Build, Operate and Transfer basis.

Independent Auditors’ Report to the members of Kumpulan Europlus Berhad


99

Independent Auditors’ Report to the members of Kumpulan Europlus Berhad

The Directors are of the opinion that the long term viability of the WCE project will further enhance the future earnings and financial position of the Group.

We have considered that these factors are of significance, and draw your attention to it, but our opinion is not qualified. In this respect, we also draw your attention to Note 1 to the financial statements.

rePort oN otHer LeGaL aNd reGULatorY reQUireMeNts

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

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

(b) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’s financial statements are in a 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) Other than those subsidiaries with modified opinions in the auditors’ reports as disclosed in Note 7 to the financial statements, the auditors’ reports on the financial statements of the remaining subsidiaries did not contain any qualification or any adverse comment made under Section 174 (3) of the Act.

otHer Matters

The supplementary information set out on page 96 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.

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

Baker tilly Monteiro HengNo. af 0117Chartered Accountants

Heng Ji KengNo. 578/05/12 (J/PH)Partner

Kuala LumpurDate: 31 May 2011


100

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

31.1.2011 rM’000

1. Asian Lot PT 15656, 16,812 Factory 30.6.2010 Leasehold 1.11.2089 19 4,234Resinated Felt Nilai Industrial, sq.m. Building LandSdn Bhd Estate, (99 years)

71800 Nilai,Negeri Sembilan

2. KEURO Trading Mukim of Ampang, 1,775.41 13 parcels of 24.1.1990 Leasehold 29.10.2100 – 425 Sdn Bhd District of Hulu Langat, sq.m. residential land land

Selangor Darul Ehsan at Pandan (99 years)Perdana

3. KEURO Trading 1-1A, 1st Flr, 164.71 8 units of shop 17.7.2001 Leasehold 10.10.2100 9 1,826 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,68000 Ampang, Selangor

3-1B, 3rd Flr, 60.66 Jalan U/P 1/3, sq.m. Taman Ukay Perdana,68000 Ampang, Selangor

26-1A, 1st Flr, 145.11 Jalan U/P 1/2, sq.m. Taman Ukay Perdana,68000 Ampang, Selangor

26-3B, 1st Flr, 114.17Jalan U/P 1/2, sq.m. Taman Ukay Perdana,68000 Ampang, Selangor

1-G, Ground Flr, 129.13Jalan U/P 1/2, sq.m. Taman Ukay Perdana,68000 Ampang, Selangor

7-G, Ground Flr, 145.11 Jalan U/P 1/2, sq.m. Taman Ukay Perdana,68000 Ampang, Selangor

8-G, Ground Flr, 129.13Jalan U/P 1/2, sq.m. Taman Ukay Perdana,68000 Ampang, Selangor

4. KEURO Trading Mukim of Ampang, 545.88 4 parcels of 21.1.2005 Leasehold 30.10.2195 – 166 Sdn Bhd District of Hulu Langat, sq.m. residential land land



101

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

31.1.2011 rM’000





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

8. KEURO Trading No. 63, Jalan Widuri 2B, 1,179.00 4 units Cluster 1.4.2009 Freehold – – 495 Sdn Bhd Seksyen BB18, sq.m. Bungalow Lots

Bukit Beruntung 3,48300 Rawang, Selangor

No. 21, Jalan Widuri 2F, Seksyen BB18,Bukit Beruntung 3,48300 Rawang, Selangor

No. 2, Jalan Widuri 2F/3, Seksyen BB18,Bukit Beruntung 3,48300 Rawang, Selangor

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 Shop 30.7.2005 Leasehold 21.4.2094 5 6,153 Sdn Bhd District of Johor Bahru sq.m. office and land

Johor Darul Ta’zim retail space (99 years)

11. KEURO Leasing No:11031 Lot No. 103, 19,886.00 A parcel of 28.2.2005 Leasehold 9.11.2096 5 6,226 Sdn Bhd Kawasan Bandar XLIII, sq.m. Commercial land

Daerah Melaka, Melaka complex land (99 years)

12. KEURO Leasing F05 & F06, 1st Floor, 1,011.00 2 units of 31.1.2009 Leasehold 8.3.2092 5 788 Sdn Bhd Pandan Safari Lagoon, sq.m. shop office lots land

1 Jalan Pandan Perdana, at Pandan (99 years)6/10A Pandan Perdana, Perdana55100 Kuala Lumpur

13. 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


102

Statement on Directors’ Interestsin the Company and Related Corporations as at 8 June 2011

THE COMPANY ORDINARY SHARES

No. of ordinary shares of rM1.00 eachdirect

interest %deemed interest %

the company1. Tan Sri Dato’ (Dr) Ir Chan Ah Chye

@ Chan Chong Yoon (“TSDCAC”)136,748,545 26.25 6,906,762*1 1.33

2. Puan Sri Datin Thong Nyok Choo (“PSDTNC”) 145,001 0.03 143,510,306*2 27.55

3. Loy Boon Chen 61,500 0.01 – –

4. U Chin Wei 30,000 0.00 11,500*3 0.00

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 and Sze Choon Holdings Sdn Bhd pursuant to 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 Pengurusan Projek Bersistem Sdn Bhd and Sze Choon Holdings Sdn Bhd pursuant to Section 6A of the Act.

*3 Deemed interested through his spouse, Madam Goh Siew Thing pursuant to Section 6A of the Act.

Tan Sri Dato’ (Dr) Ir Chan Ah Chye @ Chan Chong Yoon and Puan Sri Datin Thong Nyok Choo, by virtue of their interest in the shares of the Company are also deemed interested in the shares of all the subsidiary companies of the Company to the extent the Company has an interest.

Save as disclosed, none of the Directors of the Company has any interests in the securities of the Company and its related corporations as at 8 June 2011.


103

aNaLYsis of sHare caPitaL

Authorised share capital : RM1,000,000,000Issued and paid-up capital : RM520,991,765

distriBUtioN of sHareHoLdiNGs

size of HoldingsNo. of

shareholders% of

shareholdersNo. of

shares held% of

shares held

1 – 99 776 7.012 30,534 0.006100 – 1,000 2,732 24.686 2,164,600 0.4161,001 – 10,000 5,947 53.736 24,305,710 4.66510,001 – 100,000 1,368 12.361 44,925,299 8.623100,001 – 26,049,587* 239 2.160 154,933,377 29.73826,049,588 and above** 5 0.045 294,632,245 56.552

Total 11,067 100.000 520,991,765 100.000

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 118,373,600 22.720

2 M & A NOMINEE (TEMPATAN) SDN BHDInsas Credit & Leasing Sdn Bhd for Chan Ah Chye @ Chan Chong Yoon

56,856,771 10.913

3 TA NOMINEES (TEMPATAN) SDN BHDPledged Securities Account for Chan Ah Chye @ Chan Chong Yoon

51,522,466 9.889

4 HSBC NOMINEES (ASING) SDN BHDExempt An for Credit Suisse (HK BR-TST-Asing)

41,814,400 8.025

5 EB NOMINEES (TEMPATAN) SENDIRIAN BERHADChan Ah Chye @ Chan Chong Yoon

26,065,008 5.002

6 ADVANCE INVESTMENT WORLDGROUP LTD 13,000,000 2.495

7 HDM NOMINEES (TEMPATAN) SDN BHDPledged Securities Account for Chee Chi Vun (M02)

6,822,500 1.309

8 CITIGROUP NOMINEES (ASING) SDN BHDUBS AG Singapore for Etonian Capital Limited

6,489,200 1.245

9 MARCO LOW PENG KIAT 6,187,200 1.187

Analysis of Shareholdingsas at 8 June 2011


104

Name of shareholders No. of shares %

10 SZE CHOON HOLDINGS SDN BHD 6,137,121 1.177

11 CIMSEC NOMINEES (TEMPATAN) SDN BHDCIMB for Khoo Boo Tee (PB)

6,000,000 1.151

12 PUBLIC INVEST NOMINEES (ASING) SDN BHDExempt An for Phillip Securities Pte Ltd (Clients)

5,010,000 0.961

13 KOPERASI POLIS DIRAJA MALAYSIA BERHAD 4,790,000 0.919

14 HDM NOMINEES (TEMPATAN) SDN BHDPledged Securities Account for Ong Kah Huat (M03)

3,816,900 0.732

15 EB NOMINEES (TEMPATAN) SENDIRIAN BERHADProminent Xtreme Sdn Bhd

3,589,404 0.688

16 AZIZ BIN BAHAMAN 3,300,000 0.633

17 OW CHEE CHEOON 2,338,000 0.448

18 CHAN AH CHYE @ CHAN CHONG YOON 2,304,300 0.442

19 LIEW YAU TIT 2,268,300 0.435

20 UOBM NOMINEES (ASING) SDN BHDExempt An for Societe Generale Bank & Trust, Singpore Branch (Cust Asset)

2,202,200 0.422

21 LIEW KHANG @ LIEW WAN KHANG 2,200,000 0.422

22 SJ SEC NOMINEES (TEMPATAN) SDN BHDPledged Securities Account for Low Siew Moi (SMT)

2,134,000 0.409

23 CITIGROUP NOMINEES (TEMPATAN) SDN BHDExempt an for Merrill Lynch Pierce Fenner & Smith Incorporated (Local Resident)

2,100,000 0.403

24 GENERAL TECHNOLOGY SDN BHD 2,097,054 0.402

25 ONG YENG TIAN @ ONG WENG TIAN 1,769,632 0.339

26 ONG SIOK LIAN 1,689,600 0.324

27 CHEONG KOON WAN 1,400,000 0.268

28 LIEW YAU KOON 1,379,700 0.264

29 PERMODALAN NEGERI SELANGOR BERHAD 1,327,644 0.254

30 RHB CAPITAL NOMINEES (TEMPATAN) SDN BHDPledged Securities Account for Ong Kah Huat (CEB)

1,196,700 0.229

386,181,700 74.124



105

List of sUBstaNtiaL sHareHoLdersas shown in the register of substantial shareholders

Name of substantial shareholders No. of ordinary shares of rM1.00 eachdirect

interest %deemed interest %

1. Tan Sri Dato’ (Dr) Ir Chan Ah Chye @ Chan Chong Yoon (“TSDCAC”)

136,748,545 26.25 6,906,762 *1 1.33

2. Puan Sri Datin Thong Nyok Choo (“PSDTNC”) 145,001 0.03 143,510,306 *2 27.55

3. IJM Corporation Berhad 118,373,600 22.72 – –

4. Employee Provident Fund Board – – 118,373,600 22.72

5. Intelbest Corporation Sdn Bhd 34,911,904 6.70 – –

6. Yue Keng Nam – – 34,911,904*3 6.70

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 and Sze Choon Holdings Sdn Bhd pursuant to Section 6A of the Companies Act, 1965 (“the Act”).

*2 Deemed interested through her spouse, TSDCAC, his daughter, Chan Siu Wei and by virtue of his interest in Pengurusan Projek Bersistem Sdn Bhd and Sze Choo Holdings Sdn Bhd pursuant to Section 6A of the Act.

*3 Deemed interested by virtue of his interest in Intelbest Corporation Sdn Bhd pursuant to Section 6A of the Act.



106

Notice of Annual General Meeting

Notice is HereBY GiVeN tHat the 10th Annual General Meeting of Kumpulan Europlus Berhad (“KEURO” or “the Company”) will be held at Perdana Ballroom, Pandan Lake Club, Lot 28, Jalan Perdana 3/8, Pandan Perdana, 55300 Kuala Lumpur on Wednesday, 27 July 2011 at 2.00 p.m. for the following purposes:-

aGeNda

as ordiNarY BUsiNesses

1. To receive and adopt the Audited Financial Statements of the Company for the year ended 31 January 2011 and the Reports of the Directors and Auditors thereon.

2. To approve the payment of Directors’ fees of RM25,000 for each Director for the year ended 31 January 2011.

3. To re-elect the following Directors who retire in accordance with Article 97 of the Company’s Articles of Association:-

3.1 Datuk Oh Chong Peng

3.2 Dato’ Goh Chye Koon

3.3 Loy Boon Chen

4. To consider and, if thought fit, 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, 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.”

5. To re-appoint Messrs Baker Tilly Monteiro Heng as Auditors of the Company and to authorise the Directors to fix their remuneration.

6. as sPeciaL BUsiNesses

(a) To consider, and if thought fit, to pass the following Ordinary Resolutions:-

6.1 ordinary resolution authority to allot and issue shares pursuant to section 132d of the

companies act, 1965

“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and they are hereby authorised to issue shares in the Company at anytime until the conclusion of the next Annual General Meeting and upon such terms and conditions and for such purposes as the Directors may in their absolute deem fit, provided that the aggregate number of shares to be issued does not exceed ten percent (10%) of the issued share capital of the Company for the time being subject always to the approval of all the relevant regulatory bodies being obtained for such allotments and issues.”

6.2 ordinary resolution authority pursuant to section 132e of the companies act, 1965

“THAT pursuant to Section 132E of the Companies Act, 1965, authority be and is hereby given for the Company and each of its subsidiaries to enter into any arrangement or transaction with any Director of the Company or any person connected with such Director to acquire from or dispose to such Director or person connected with such Director any non-cash assets or requisite value that is less than 5% of the total consolidated net assets of the Company at the time of such acquisition or disposal.

(Resolution 1)

(Resolution 2)

(Resolution 3)

(Resolution 4)

(Resolution 5)

(Resolution 6)

(Resolution 7)

(Resolution 8)

(Resolution 9)


107


AND THAT such authority shall continue to be in force until:-

(i) the conclusion of the next Annual General Meeting of the Company; or

(ii) the expiration of the period within which the next Annual General Meeting of the Company is required to be tabled pursuant to Section 143(1) of the Companies Act, 1965 ( but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Companies Act, 1965); or

(iii) revoked or varied by resolution passed by the shareholders in a general meeting;

whichever is earlier.”

6.3 ordinary resolution Proposed renewal of and new shareholders’ mandate for recurrent related

party transactions of a revenue or trading nature (“Proposed shareholders’ Mandate”)

“THAT, subject to the provisions of the Listing Requirements of Bursa Malaysia Securities Berhad, approval be and is hereby given for the Company and its subsidiary companies, to enter into recurrent related party transactions of a revenue or trading nature with the related parties as specified in Section 2.4 of the Circular to Shareholders dated 5 July 2011 which are necessary for their day-to-day operations subject 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 subsidiaries.

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 of the Company following the general meeting 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;

(ii) the expiration of the period within which the next Annual General Meeting after that date is required to be held pursuant to Section 143(1) of the 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 earlier;

(Resolution 10)


108

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.”

(b) To consider and, if thought fit, to pass the following Special Resolution:-

6.4 special resolution Proposed amendments to the company’s articles of association

“THAT the Articles of Association of the Company be and is hereby amended by the deletion of the existing Articles 127 in its entirety and substituting it with the following new Article 127:-

Article 127 Dividends payable by cheque and Electronic dividend payment

(i) Any dividend, interest or other moneys payable in cash in respect of shares may be paid by cheque or warrant sent through the post to the last registered address of the member or person entitled thereto. Every such cheque or warrant shall be payable to the order of the person to whom it is sent and payment of the cheque shall be a good discharge to the Company. Every such cheque or warrant shall be sent at the risk of the person entitled to the money represented thereby with; or

(ii) Any dividend, interest or other moneys payable in cash in respect of shares deposited with the Depository may be paid by direct transfer or any other electronic means to the bank account of the member as provided to the Central Depository from time to time. Every such payment shall be effected in accordance with the provisions of the Act, the Central Depositories Act and the Rules, the Listing Requirements and/or any other legislative or regulatory provisions. Every such payment shall be a good discharge to the Company and be effected at the risk of the person entitled to the money represented thereby.”

7. To transact any ordinary business which due notice shall have been given.

BY order of tHe Board

raW KooN BeNGSecretary

Kuala Lumpur5 July 2011

(Resolution 11)

Notes:

1. aPPoiNtMeNt of ProxY

i. 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.

ii. 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.



109

iii. The instrument appointing a proxy and the power of attorney or other authority under which it is signed, shall be deposited at the Registered Office of the Company at Suite 2.05, Level 2, Menara Maxisegar, Jalan Pandan Indah 4/2, Pandan Indah, 55100 Kuala Lumpur not less than forty-eight (48) hours before the time appointed for holding the meeting or any adjournment thereof.

2. exPLaNatorY Notes to tHe sPeciaL BUsiNesses

i. Resolution Pursuant to Section 132D of the Companies Act, 1965

The proposed Ordinary Resolution 8, if passed, will give authority to the Board 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 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.

As at the date of this Notice, the Company has issued 47,300,000 new ordinary shares pursuant to Section 132D of the Companies Act, 1965 under the general mandate which was approved at the 9th Annual General Meeting held on 30 July 2010 and which will lapse at the conclusion of the 10th Annual General Meeting.

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.

ii. Resolution Pursuant to Section 132E of the Companies Act, 1965

Section 132E of the Companies Act, 1965 prohibits a company or its subsidiaries from entering into any arrangement or transaction with its directors or persons connected with such directors in respect of the acquisition from or disposal to such directors or connected persons of any non-cash assets of the requisite value without prior approval of the Company in general meeting. According to the Companies Act, 1965, a non-cash asset is considered to be of the requisite value, if at the time of arrangement or transaction, its value is greater than RM250,000.00 or 10% of the Company’s net assets, whichever is the lesser, subject to a minimum of RM10,000.00.

The proposed Ordinary Resolution 9, if passed, will authorize the Company and each of its subsidiaries

to enter into any arrangement or transaction with a Director of the Company or with a person connected with such a Director to acquire from or dispose to such a Director or person connected with such Director any non-cash assets of the requisite value that is less than 5% of the total net assets of the Group at the time of such acquisition or disposal.

iii. The detailed information on Resolution 10 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 5 July 2011 which is enclosed together with the Company’s 2011 Annual Report.

iv. The proposed Special Resolution 11 is for the purpose of updating the Company’s Articles of Association to include the payment of dividend, interest or other money payable in cash in respect of shares of the Company by way of direct transfer or any other electronic means pursuant to the recent implementation of electronic dividend payment or eDividend by Bursa Malaysia Securities Berhad.

3. stateMeNt accoMPaNYiNG tHe Notice of aNNUaL GeNeraL MeetiNG

Additional information pursuant to Paragraph 8.27 of the Listing Requirements of Bursa Malaysia Securities Berhad is set out in page 110 of the Company’s 2011 Annual Report.



110

Statement Accompanying Notice Of Annual General Meeting(Pursuant to Paragraph 8.27 (2) of the Listing Requirements of Bursa Malaysia Securities Berhad)

directors WHo are seeKiNG re-eLectioN or re-aPPoiNtMeNt at tHe 10tH aNNUaL GeNeraL MeetiNG of tHe coMPaNY

The Directors retiring by rotation pursuant to Article 97 of the Articles of Association and seeking re-election are as follows :-

• Datuk Oh Chong Peng• Dato’ Goh Chye Koon• Loy Boon Chen

The Director who is over seventy years of age and is seeking re-appointment is as follow:-

• Chee Heng Tong

The details of the four (4) Directors seeking re-election or re-appointment are set out in their respective profile which appear in the Directors’ Profiles on pages 4 to 7 of this Annual Report. Their securities holdings in the Company and its related corporations are set out in the Statement on Directors’ Interest in the Company and Related Corporations which appear on pages 102 of this Annual Report.

ProxY forM NO. OF SHARES HELD

I/We .......................................................................................... (NRIC/Co. No. ........................................................ ) (Name in full and in block letters)

of .................................................................................................................................................................................(Full address)

being a member/members of KUMPULaN eUroPLUs BerHad (534368-a) hereby appoint .........................

......................................................................................................... (NRIC 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 10th 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 Wednesday, 27 July 2011 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 againstas ordinary Businesses

1 To receive and adopt the Audited Financial Statements of the Company for the year ended 31 January 2011 and the Reports of the Directors and Auditors thereon

2 To approve the payment of Directors’ fees of RM25,000 for each Director for the year ended 31 January 2011

3 To re-elect the Director, Datuk Oh Chong Peng who retire in accordance with Article 97 of the Company’s Articles of Association

4 To re-elect the Director, Dato’ Goh Chye Koon who retire in accordance with Article 97 of the Company’s Articles of Association

5 To re-elect the Director, Loy Boon Chen who retire in accordance with Article 97 of the Company’s Articles of Association

6 To re-appoint Chee Heng Tong who is over 70 years of age as Director of the Company7 To re-appoint Messrs Baker Tilly Monteiro Heng as Auditors of the Company and to

authorise the Directors to fix their remunerationas special Businesses

8 Ordinary Resolution - Authority to allot and issue new shares pursuant to Section 132D of the Companies Act, 1965

9 Ordinary Resolution - Authority pursuant to Section 132E of the Companies Act 196510 Ordinary Resolution - Proposed Shareholders’ Mandate11 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 ................................2011

................................................................ Signature/Common Seal of member

NoTeS:

aPPoINTMeNT oF ProXY

i. 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.

ii. 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.

iii. The instrument appointing a proxy and the power of attorney or other authority under which it is signed, shall be deposited at the Registered Office of the Company at Suite 2.05, Level 2, Menara Maxisegar, Jalan Pandan Indah 4/2, Pandan Indah, 55100 Kuala Lumpur not less than forty-eight (48) hours before the time appointed for holding the meeting or any adjournment thereof.✄

AFFIXSTAMP

THE COMPANY SECRETARY KUMPULaN eUroPLUs BerHad (534368-A)

Suite 2.05, Level 2, Menara MaxisegarJalan Pandan Indah 4/2

Pandan Indah55100 Kuala Lumpur

Suite 2.05, Level 2, Menara Maxisegar,Jalan Pandan Indah 4/2, Pandan Indah, 55100 Kuala Lumpur.

Tel : 03-4296 2000 Fax : 03-4294 5072

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