realising kumpulan europlus berhad (534368-a) annual report 2016 realising new hor zons annual...

www.keb.com.my

KUMPULAN EUROPLUS BERHAD (534368-A)

Corporate Office:

37-2, No. 8, Jalan Anggerik Vanilla BE 31/BEKota Kemuning, Seksyen 3140460 Shah AlamMalaysia

Tel : (60)3 5525 8800Fax : (60)3 5525 8666

Registered Office:

Unit 30-01, Level 30, Tower A

Vertical Business Suite

Avenue 3, Bangsar South

8 Jalan Kerinchi

59200 Kuala Lumpur

Tel : (60)3 2783 9191Fax : (60)3 2783 9111

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RealisingNew Hor zonsANNUAL REPORT

2016

Incorporated in December 2000 and listed on 17 November 2003,

Kumpulan Europlus Berhad (KEB) is primed and focussed on the

execution of the nation’s RM6 billion West Coast Expressway

(WCE) project by its subsidiary West Coast Expressway Sdn Bhd,

an ISO9001:2008 company. This build-operate-transfer privatisation

project involves the development of a 233km highway from Banting

in Selangor to Taiping in Perak. The construction of this highway is

ongoing and is expected to be completed in 2019.

CORPORATEPROFILE

WE CONTINUE TO MAKE INROADS

WORKING AS ONE

CONTENTS

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15

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In the property sector, the Group via

its indirect 40% equity stake in Bandar

Rimbayu Sdn Bhd has also enjoyed

successes in the development of the

1,879-acre Bandar Rimbayu mixed

development project located next to

Kota Kemuning, Shah Alam.

Moving forward, the Group is confident

that its ventures in infrastructure and

properties will position itself positively

on a sustainable growth path.

Corporate Structure

Corporate Information

Profile of Board of Directors

Profile of Chief Executive Officer

Key Management Team

Financial Highlights

Chairman’s Statement

Statement on Corporate Governance

Corporate Social Responsibility

Additional Compliance Information

Audit Committee Report

Financial Statements

List of Properties

Statement on Directors’ and Chief Executive Officer’s Interests

Analysis of Shareholdings

Analysis of Warrantholdings

Notice of Annual General Meeting

Proxy Form

Statement on Risk Management and Internal Control

CORPORATESTRUCTUREAS AT 30 JUNE 2016

100%KEURO Trading Sdn Bhd

30%IJMC – KEB Joint Venture

82.84%Asian Resinated Felt Sdn Bhd

100%Maximix Sdn Bhd

100%Perkasa Jati Holdings Sdn Bhd

100%Ratus Prestij Sdn Bhd

50.10%Europlus Holdings Sdn Bhd

100%Ambang Vista Sdn Bhd

63%Tiasa Ria Sdn Bhd

100%KEB Management Sdn Bhd

70%Irama Bijak Sdn Bhd

100%KEURO Leasing Sdn Bhd

100%Angsana Mestika Sdn Bhd

100%KEB Plantations Holdings Sdn Bhd

100%KEB Builders Sdn Bhd

80%West Coast Expressway Sdn Bhd

11.68%Talam Transform Berhad (Listed)

50%Ambang Usaha Sdn Bhd

30%Radiant Pillar Sdn Bhd

100%Bandar Rimbayu Sdn Bhd

0.00003%

10% 7%

Listed Associates Jointly controlled entitySubsidiaries

2

CORPORATEINFORMATION

COMPANY SECRETARY

Raw Koon Beng (MIA 8521)

AUDIT COMMITTEE

CHAIRMAN

Datuk Oh Chong Peng

MEMBER

Dato’ Abdul Hamid bin Mustapha

U Chin Wei

Tang King Hua

NOMINATION COMMITTEE

CHAIRMAN


MEMBER

Datuk Oh Chong Peng

U Chin Wei

Tang King Hua

BOARD OF DIRECTORS

Dato’ Abdul Hamid bin MustaphaChairman/Independent Non-Executive Director

REGISTERED OFFICE

Unit 30-01, Level 30, Tower AVertical Business SuiteAvenue 3, Bangsar South8 Jalan Kerinchi59200 Kuala LumpurTel : 03-2783 9191Fax : 03-2783 9111

SHARE REGISTRAR

Metra Management Sdn Bhd30.02, 30th FloorMenara Multi-PurposeCapital SquareNo. 8, Jalan Munshi Abdullah50100 Kuala LumpurTel : 03-2698 3232Fax : 03-2698 0313

AUDITORS

Baker Tilly Monteiro Heng (AF0117)Chartered AccountantsBaker Tilly MH TowerLevel 10, Tower 1, Avenue 5Bangsar South City59200 Kuala LumpurTel : 03-2297 1000Fax : 03-2282 9980

STOCK EXCHANGE LISTING

Main Market of Bursa Malaysia Securities BerhadStock Code : 3565Stock Name: KEURO

REMUNERATION COMMITTEE

CHAIRMAN


MEMBER

Datuk Oh Chong Peng

U Chin Wei

Lee Chun Fai

PRINCIPAL BANKERS

RHB Investment Bank Berhad

RHB Bank Berhad

Malayan Banking Berhad

CORPORATE OFFICE

37-2, No. 8Jalan Anggerik Vanilla BE 31/BEKota Kemuning, Seksyen 3140460 Shah AlamTel : 03-5525 8800Fax : 03-5525 8666Website : www.keb.com.my

Datuk Oh Chong PengSenior Independent Non-Executive Director

U Chin WeiIndependent Non-Executive Director

Datuk Ir. Hamzah bin HasanIndependent Non-Executive Director

Tan Sri Pang Tee ChewNon-Independent Non-Executive Director

Vuitton Pang Hee CheahAlternate director to Tan Sri Pang Tee Chew

Lee Chun FaiNon-Independent Non-Executive Director

Tang King HuaNon-Independent Non-Executive Director

3KUMPULAN EUROPLUS BERHADANNUAL REPORT 2016

PROFILE OFBOARD OF DIRECTORS

DATO’ ABDUL HAMID BIN MUSTAPHA

Dato’ Abdul Hamid bin Mustapha, a Malaysian, male, aged 70, Chairman/Independent Non-Executive Director, joined the Board of Kumpulan Europlus Berhad (“KEB”) 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 KEB. Dato’ Abdul Hamid also sits on the Board of a public listed company 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 from 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 five (5) years. There were no public sanction or penalty imposed by any regulatory bodies on him during the financial year.

Dato’ Abdul Hamid has attended all five (5) Board of Directors’ meetings held during the financial year ended 31 March 2016.

DATUK OH CHONG PENG

Datuk Oh Chong Peng, a Malaysian, male, aged 72, a Senior Independent Non-Executive Director, joined the Board of Kumpulan Europlus Berhad (“KEB”) on 28 September 2007. Datuk Oh is the Chairman of the Audit Committee and a member of the 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, a public listed company. He is also a Non-Executive Director of several public listed companies, such as British American Tobacco (Malaysia) Berhad, Dialog Group Berhad and Malayan Flour Mills Berhad. He is also a director in unlisted Saujana Resort (M) 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 five (5) years. There were no public sanction or penalty imposed by any regulatory bodies on him during the financial year.

Datuk Oh has attended all five (5) Board of Directors’ meetings held during the financial year ended 31 March 2016.

LEFT TO RIGHT


Datuk Oh Chong Peng

U Chin Wei

Datuk Ir. Hamzah bin Hasan

4

U CHIN WEI

Mr U Chin Wei, a Malaysian, male, aged 65, Independent Non-Executive Director, joined the Board of Kumpulan Europlus Berhad (“KEB”) on 1 July 2003. He was formerly a Non-Independent Non-Executive Director of KEB prior to his re-designation as an Independent Non-Executive Director on 28 March 2008. He is a member of the Audit Committee, Nomination Committee and Remuneration Committee. He is also currently a Director of public listed companies, TA Enterprise Berhad and TA Global Berhad.

Mr U is a Fellow of Institute of Chartered Accountants in England and Wales and a member of the Malaysian Institute of Accountants and carries with him a wealth of experience from international companies and local conglomerates. Before returning to Malaysia, he worked in the London office of Coopers & Lybrand Chartered Accountants (now known as PriceWaterhouseCoopers). 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 Global Berhad.

He has no family relationship with any other directors and/or major shareholders of the Company. There is no conflict of interest with the Company. He has no convictions for offences within the past five (5) years. There were no public sanction or penalty imposed by any regulatory bodies on him during the financial year.

He has attended all five (5) Board of Directors’ meetings held during the financial year ended 31 March 2016.

DATUK IR. HAMZAH BIN HASAN

Datuk Ir. Hamzah bin Hasan, a Malaysian, male, aged 65, Independent Non-Executive Director, joined the Board of Kumpulan Europlus Berhad (“KEB”) on 2 January 2015. He was also appointed as the Chairman and Director of West Coast Expressway Sdn Bhd, a subsidiary of KEB on 15 April 2015. Presently, he is also an Independent Non-Executive Director of IJM Corporation Berhad, a public listed company.

Datuk Hamzah holds a Bachelor of Science (Honours) degree in Civil Engineering from Glasgow University, United Kingdom in 1975 and obtained his Master of Science (Construction Management) from Loughborough University, United Kingdom in 1987. He is a Professional Engineer of the Board of Engineers Malaysia, Fellow of Chartered Institute of Building, Royal Institute of Chartered Surveyors, Institution of Engineers Malaysia, Institute of Value Engineering Malaysia, ASEAN Federation of Engineering Organisations and Honorary Fellow of the Project Management Institution Malaysia.

He started his career as a Civil Engineer in the Public Works Department (“JKR”) in 1975. Since then he has served JKR for 23 years until 1998. In 1998, he joined Ahmad Zaki Resources Berhad, a public listed company, as Group Managing Director until 2002. With his vast experience in both the public and private sectors, he was appointed as Chief Executive Officer of the Construction Industry Development Board (“CIDB”), Malaysia in 2003 and then served as the Chairman of CIDB from 2011 to February 2014 and the Chairman of Malaysian Highway Authority from 17 February 2014 to 31 December 2014.

His directorships in other public companies include Construction Research Institute of Malaysia and School of Professional and Continuing Education, University of Technology Malaysia.

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 five (5) years. There were no public sanction or penalty imposed by any regulatory bodies on him during the financial year.

He has attended all five (5) Board of Directors’ meetings held during the financial year ended 31 March 2016.


PROFILE OFBOARD OF DIRECTORS(cont’d)

TAN SRI PANG TEE CHEW

Tan Sri Pang Tee Chew, a Malaysian, male, aged 63, Non-Independent Non-Executive Director, joined the Board of Kumpulan Europlus Berhad (“KEB”) on 17 February 2014.

Tan Sri Pang is the Managing Director and Chief Executive Officer of Mamee Double Decker (M) Sdn Bhd (“Mamee”). He has been with Mamee since its inception in 1971 and is currently in charge of the corporate affairs of Mamee. He also sits on the Board of several private limited companies.

He is a member of the British Institute of Management. He was previously trained in Japan on food processing in the area of canning and packaging and has attended the Advanced Management Program at Harvard University, United States of America. With close to 40 years of experience in the food industries, he has acquired a wide knowledge of both the local and overseas food markets.

He was conferred the award of Panglima Jasa Negara by DYMM YDP Agong on 7 June 2014.

Tan Sri Pang is the father of Mr Vuitton Pang Hee Cheah. Datuk Wira Pang Tee Nam, a substantial shareholder of the Company is the brother of Tan Sri Pang. There is no conflict of interest with the Company. He has no convictions for offences within the past five (5) years. There were no public sanction or penalty imposed by any regulatory bodies on him during the financial year.

He has attended all four (4) out of five (5) Board of Directors’ meetings held during the financial year ended 31 March 2016.

VUITTON PANG HEE CHEAH(Alternate Director to Tan Sri Pang Tee Chew)

Mr Vuitton Pang Hee Cheah, a Malaysian, male, aged 35, joined the Board of Kumpulan Europlus Berhad (“KEB”) on 28 August 2014 as an alternate director to Tan Sri Pang Tee Chew. He graduated with a double degree in Information Systems and Commerce from the University of Melbourne in 2004. Mr Vuitton Pang is currently the Group General Manager of Finance for Mamee-Double Decker (M) Sdn Bhd (“Mamee”).

He started his career as a Management Associate for OSK Investment Bank Berhad (“OSK”). While at OSK, he was exposed to different aspects of banking namely Asset Management, Corporate Finance and Venture Capital to name a few. After 3 years with OSK, Mr Vuitton Pang joined Mamee in April 2009 and assumed the role of Business Development Manager. He was responsible for managing the Group’s investor relations and corporate exercise which saw the Group’s market capitalisation more than doubling in value. He also played an instrumental role in the privatisation of Mamee in 2012.

Mr Vuitton Pang is the son of Tan Sri Pang Tee Chew. Datuk Wira Pang Tee Nam, a substantial shareholder of the Company, is the uncle of Mr Vuitton Pang. There is no conflict of interest with the Company. He has no convictions for offences within the past five (5) years. There were no public sanction or penalty imposed by any regulatory bodies on him during the financial year.

LEFT TO RIGHT

Tan Sri Pang Tee Chew

Vuitton Pang Hee Cheah

Lee Chun Fai

Tang King Hua

6

LEE CHUN FAI

Mr Lee Chun Fai, a Malaysian, male, aged 45, Non-Independent Non-Executive Director, joined the Board of Kumpulan Europlus Berhad (“KEB”) on 17 February 2014. Mr Lee is also a member of the Remuneration Committee.

Mr Lee graduated with a Bachelor of Accountancy (Honours) Degree from University Utara Malaysia in 1995 and a Master of Business Administration from Northwestern University (Kellogg) and The Hong Kong University of Science & Technology (2012).

He started his career with a public accounting firm. In October 1995, he joined Road Builder (M) Holdings Bhd (“RBH Group”) and was the Head of Corporate Services Division of RBH Group prior to the acquisition of RBH Group by IJM Corporation Berhad (“IJM”) a public listed company in 2007. Currently, he is the Deputy Chief Executive Officer and Deputy Managing Director of IJM and also Head of Corporate Strategy & Investment of IJM Group. Previously, he has served as the Deputy Chief Financial Officer.

His directorships in other public listed companies include Scomi Group Bhd and Scomi Energy Services Bhd. His directorships in public companies include IJM Land Berhad and Road Builder (M) Holdings Bhd.

Mr Lee 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 five (5) years. There were no public sanction or penalty imposed by any regulatory bodies on him during the financial year.

Mr Lee has attended all five (5) Board of Directors’ meetings held during the financial year ended 31 March 2016.

TANG KING HUA

Mr Tang King Hua, a Malaysian, male, aged 58, Non-Independent Non-Executive Director, joined the Board of Kumpulan Europlus Berhad (“KEB”) on 17 February 2014. Mr Tang is also a member of the Audit Committee and Nomination Committee.

Mr Tang graduated with a Bachelor’s degree in Industrial Engineering from Canada Technical University of Nova Scotia in 1982. He is an Industrial Engineer by profession and held various managerial positions in related industries before joining Eastrade Electronics (M) Sdn Bhd (“EESB”) in 1986 as Operations Manager. Subsequently, he was appointed as Managing Director of EESB and was actively involved in the operations of EESB.

In 1991, he joined Davex Group of Companies, an electronic division of a public listed company, MWE Holdings Berhad as a Managing Director where he was responsible for the overall profitability and viability of Davex Group. On 2 February 2000, Mr Tang was appointed an Executive Director of MWE Holdings Berhad and subsequently as a Managing Director of MWE Holdings Berhad on 28 August 2002. He is also a Director of MWE Golf & Country Club Berhad and several private limited companies.

Mr Tang 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 five (5) years. There were no public sanction or penalty imposed by any regulatory bodies on him during the financial year.

Mr Tang has attended all five (5) Board of Directors’ meetings held during the financial year ended 31 March 2016.


PROFILE OFCHIEF EXECUTIVE OFFICER

DATO’ NEOH SOON HIONG

Dato’ Neoh Soon Hiong, a Malaysian, male, aged 60, was appointed as the Chief Executive Officer of Kumpulan Europlus Berhad (“KEB”) and Managing Director of West Coast Expressway Sdn Bhd a subsidiary of KEB on 17 February 2014.

Dato’ Neoh graduated from the Paris Graduate School of Management, France with a European Masters Degree in Business Administration.

He was with the Public Works Department (“JKR”) for more than 10 years before he joined PLUS Expressways Berhad as an engineer of its Maintenance Management Department in 1990. In 1995, he was transferred to Metramac Corporation Sdn Bhd and served as an engineer until he joined Besraya (M) Sdn Bhd (“BSB”) as a Project Manager in 1997. His subsequent appointments included Head of Operations of BSB (1999-2000), General Manager of BSB and New Pantai Expressway Sdn Bhd (“NPE”) (2001-2004), Executive Director of BSB and NPE (2004-2006), Managing Director of BSB and NPE (2006-2011) and Chief Executive Officer of Lebuhraya Kajang-Seremban Sdn Bhd (2007-2011). BSB and NPE are wholly-owned subsidiaries of Road Builder (M) Holdings Berhad, which in turn is a wholly-owned subsidiary of IJM Corporation Berhad (“IJM”). He was appointed as the Chief Executive Officer of West Coast Expressway Sdn Bhd after he retired as the Head of IJM Toll Division in 2011. He has more than 20 years’ experience in highway concession and operations.

His interest in the securities of Kumpulan Europlus Berhad is stated in page 130 of this Annual Report (Statement on Directors’ and Chief Executive Officer’s Interests).

Dato’ Neoh 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 five (5) years. There were no public sanction or penalty imposed by any regulatory bodies on him during the financial year.

8

KEY MANAGEMENTTEAM

LYNDON ALFRED FELIXChief Financial Officer

Mr. Lyndon, Malaysian, male, aged 42, was appointed as the Chief Financial Officer of KEB on 17 February 2014 and joined the Board of West Coast Expressway Sdn Bhd (WCE), an 80%-owned subsidiary of KEB on 2 April 2014. He graduated as a Bachelor of Arts (Hons) in Accounting & Finance from Middlesex University, United Kingdom in 1996 and completed the Association of Chartered Certified Accountants professional examinations and appointed as member in 2001. He started his career with PricewaterhouseCoopers where he was attached to the audit/assurance division from 1997 to 2002. He then joined IJM Corporation Berhad (IJM) and was the Head of Internal Audit before he joined KEB. During his eleven (11) years in the IJM Group, he gained extensive experience in the audit, finance and accounting functions in various businesses such as construction, properties, infrastructure, manufacturing and plantations.

Mr Lyndon has no directorship in any public companies or listed public companies. 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 five (5) years. There were no public sanction or penalty imposed by any regulatory bodies on him during the financial year.

RAW KOON BENGCompany Secretary

Mr. Raw, Malaysian, male, aged 51, was appointed Company Secretary of KEB on 11 August 2010. He is a member of the Malaysia Institute of Accountants and Certified Public Accountant since 1994. He has 12 years of working experience in public auditing / accounting firms, six years each in KPMG Peat Marwick and Ernst & Young respectively. Thereafter, 15 years of working experience in public listed companies. Prior to his appointment as Company Secretary in KEB, he was employed in IJM as a Senior Manager in the Accounts and Finance Department.

Mr Raw has no directorship in any public companies or listed public companies. 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 five (5) years. There were no public sanction or penalty imposed by any regulatory bodies on him during the financial year.

KAM JIN LEONGSenior Finance Manager

Mr. Kam, Malaysian, male, aged 51, joined KEB on 1 August 2014 as Senior Manager of Finance and Accounts. He graduated from Monash University, Melbourne, Australia with a Bachelor of Economics (Hons) degree in 1986 and is a member of the Malaysia Institute of Accountants since 1990.

He started his career with a public accounting firm and thereafter gained more than 25 years of work experience with various public listed companies, including Tan Chong Motor Holdings Berhad, APM Automotive Holdings Berhad, Lay Hong Berhad and Ajinomoto (Malaysia) Berhad.

Mr. Kam has no directorship in any public companies or listed public companies. 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 five (5) years. There were no public sanction or penalty imposed by any regulatory bodies on him during the financial year.

MEJ (B) IR. GNANASEKARAN A/L MARIASOOSAYGeneral Manager

Ir. Gnanasekaran, Malaysian, male, aged 55, joined WCE as General Manager on 1 March 2014. He holds a Bachelor’s Degree in Engineering from the University of New South Wales, Sydney, Australia. He started his career in the Malaysian Armed Forces in 1985 and left upon the completion of his contract in 1995 with the rank of Major. Prior to joining WCE, he has been involved in various construction projects, including the Petronas Gas Processing Plant 5 & 6 in Paka, Terengganu, the Kuala Lumpur Middle Ring Road Package 3 (Seri Gombak Interchange) and the Seremban – Gemas Electrified Double Track Project. He is a member of the Institution of Engineers Malaysia and a Professional Engineer registered with the Board of Engineers Malaysia since 1996.

Ir. Gnanasekaran has no directorship in any public companies or listed public companies. 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 five (5) years. There were no public sanction or penalty imposed by any regulatory bodies on him during the financial year.


KEY MANAGEMENTTEAM(cont’d)

CHAN KIM HONGSenior Manager, Human Resources and Administration

Ms Chan, Malaysian, female, aged 56, joined WCE on 1 December 2011 as the Senior Manager, Human Resources and Administration in WCE. She graduated from Taiwan Normal University in 1984 with a Bachelor Degree in Social Education.

She was a Sub-Editor in Shin Min Daily News, an Executive in the Taiwan Representative Office in Malaysia, before she joined Road Builder (M) Holdings Bhd (RBH Group) as Secretary to an executive director in 1994. She was promoted as Property Executive in 1999 and Assistant Administration Manager in 2002. She continued her service with IJM Group after the acquisition of RBH Group by IJM Corporation Berhad in 2007. She was transferred to Besraya (M) Sdn Bhd (BSB), a wholly-owned subsidiary of RBH Group which in turn is a wholly-owned subsidiary of IJM Corporation Berhad as Assistant Manager to the Human Resources and Administration Department in 2010 and was promoted as Manager the following year. She left BSB in December 2011.

Ms Chan has no directorship in any public companies or listed public companies. She has no family relationship with any other directors and/or major shareholders of the Company. There is no conflict of interest with the Company. She has no convictions for offences within the past five (5) years. There were no public sanction or penalty imposed by any regulatory bodies on her during the financial year.

IR MAZLI BIN AB. RAHMANSenior Manager, Technical

Ir Mazli, Malaysian, male, aged 48, joined WCE on 1 November 2013 as Senior Manager of the Technical Department. He holds a Bachelor degree in Civil Engineering from Marquette University, United States of America. He is a member of the Board of Engineers Malaysia and the Institution of Engineers Malaysia.

He worked for various engineering consultants undertaking design works for civil and infrastructure since 1989, after gaining more than 15 years of work experience, he became an Assistant Resident Engineer for 3 years and thereafter, Resident Engineer until 2013, supervising the construction of roads, highways and the Mass Rapid Transit.

Ir. Mazli has no directorship in any public companies or listed public companies. 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 five (5) years. There were no public sanction or penalty imposed by any regulatory bodies on him during the financial year.

HWA TEE HAISenior Manager, Management Information System

Mr Hwa, Malaysian, male, aged 44, joined WCE on 1 November 2013 as Senior Manager of the Management Information System (MIS) Department. He graduated from University Putra Malaysia (“UPM”) in 1988 with a Bachelor Degree in Computer Science. He completed his Master Degree in Business Administration from Putra Business School of UPM in year 2014.

He started his career as a System Administrator (1998-2002) in BSB and New Pantai Expressway Sdn Bhd, wholly-owned subsidiaries of RBH Group. Subsequently, he was promoted to Assistant Manager (2003-2005), Manager (2006-2008) and Senior Manager (2009-2013) in the MIS Department of the IJM Malaysia Toll Division responsible for toll operations and management information system for highways in Malaysia. He was seconded to WCE in 2013.

Mr. Hwa has no directorship in any public companies or listed public companies. 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 five (5) years. There were no public sanction or penalty imposed by any regulatory bodies on him during the financial year.

10

FINANCIALHIGHLIGHTS

2016 2015 2014 2013 2012 RM MILLION RM MILLION RM MILLION RM MILLION RM MILLION

GROUP

Total assets 2,358 755 410 375 398

Shareholders’ fund 650 623 127 101 125

Net current assets/(liabilities) 1,058 444 (102) (198) (46)

Revenue 535 19 14 18 20

Profit/(loss) before taxation 30 41 (33) (22) 29

Earnings/(loss) per share (sen) 2.67 4.69 (5.99) (4.55) 5.32

Net assets per share (RM) 0.65 0.62 0.22 0.19 0.24

Return on assets 1% 5% (8%) (5%) 7%

Return on equity 4% 6% (25%) (19%) 21%

Gearing ratio 1.66 0.01 0.96 1.23 1.06

COMPANY

Total assets 721 592 292 298 348

Shareholders’ fund 584 580 120 154 201

Net current assets 334 416 (136) (25) 98

Profit/(loss) before taxation 3 2 (92) (47) 37

Return on assets 0.5% 0.2% (31%) (15%) 11%

Return on equity 0.6% 0.3% (77%) (31%) 18%

Gearing ratio 0.00 0.00 0.93 0.45 0.34


STATEMENTCHAIRMAN’S

Dear Shareholders,

On behalf of the Board of Directors of

Kumpulan Europlus Berhad (“the Company”),

I wish to present the Annual Report and

Audited Financial Statements of the Group and the

Company for the financial year ended

31 March 2016.

DATO’ ABDUL HAMID BIN MUSTAPHA

Chairman/Independent Non-Executive Director

12

FINANCIAL HIGHLIGHTS

The Group recorded a revenue of RM535.0 million compared to revenue of RM18.5 million recorded in the preceding financial period due mainly to the RM529.3 million revenue recognised pursuant to IC Interpretation 12 Service Arrangements from the construction of the Group’s highway project during the financial year.

The Group recorded a lower pre-tax profit of RM29.6 million compared to a pre-tax profit of RM40.5 million in the preceding financial year. The decline was mainly due to the reversal of impairment loss on an associate no longer required amounting to RM15.7 million in the preceding financial year but only amounting to RM7.0 million in the current financial year. In addition, distribution income from unit trust also declined from RM10.2 million in the preceding financial year to RM5.4 million in the current financial year.

DIVIDEND

The Board of Directors do not recommend payment of a dividend for the financial year ended 31 March 2016 so as to enable the Group to retain its limited financial resources for its business operations.

REVIEW OF PROSPECTS

(a) The Group’s West Coast Expressway (WCE) project is progressing well whereby the construction of 5 of the 11 packages are currently ongoing. The 5 packages are:

• Package3(ShahAlamExpressway,KESAS–FederalHighway Route 2),

• Package4(FederalHighwayRoute2–NewNorthKlang Straits Bypass),

• Package 5 (New North Klang Straits Bypass –Kapar),

• Package8(HutanMelintang–TelukIntan),and• Package9(KampungLekir–ChangkatCermin)

The design and land acquisition elements of these sections are almost completed and the focus is now on the execution of construction works at the respective sites.

The tender process for the open tender packages have already commenced and the awards to the successful work contractors for Package 6 (Kapar – Assam Jawa) and Package 10 (Changkat Cermin – Beruas) are expected to be finalised by August 2016.

20

16

20

15

20

14

20

13

20

12

53

5

19

141820

REVENUE(’000 mil)


WCE, which will provide an alternative to travellers from North and South of the peninsular, is on track to open for sectional tolling towards the end of 2018 and for full completion by August 2019 as per the original schedule. Once completed, WCE will stand out from other expressways for its unique rest and service area (RSA) and landscape concepts. The landscape concept proposed for WCE is already a winner when it won the Merit Award from the Institute of Landscape Architects Malaysia (ILAAM) this year. West Coast Expressway Sdn Bhd, the concession company of WCE and 80% owned subsidiary of KEB, also notched up another milestone in 2016 when it successfully attained the ISO14001:2004 accreditation for Environmental Management Systems.

(b) The property market in Malaysia had remained challenging in the past year as it continued to be weighed down by weak consumer sentiments due to weaker economic prospects, weakening of the Malaysian Ringgit, rising cost of living and banks stringent lending rules.

Against this backdrop, the Group’s share of profit from Radiant Pillar Sdn Bhd Group (“RPSB Group”) saw a decrease of 36.7% from RM121.9 million in the previous financial year to RM77.2 million in the current financial year. The decrease in share of profit was mainly due to:

• lowersalesrecorded,• thecompletionofPhase1–Chimesintheprevious

financial year,

• completion of Phase 2 – Perennia and Phase 3 –Periwinkle during the current financial year, and

• earlystageofdevelopmentintheongoingphases.

During the financial year, the additional launches within the Bandar Rimbayu township include the Blossom Drive shop offices and the Penduline linked homes, both of which have attained reasonable take-up rates.

Moving forward, new launches in the pipeline include serviced apartments and terrace houses which are targeted at first time home buyers and young working adults. RPSB Group will also be entering into a partnership with Northstar Associates Sdn Bhd to build the Oasis International School offering American curricular programmes with its first intake target in 2018.

APPRECIATION

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

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

CHAIRMAN’SSTATEMENT(cont’d)

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STATEMENT ONCORPORATE GOVERNANCE

The Board of Directors (“Board”) of Kumpulan Europlus Berhad (“KEB” or “the Company”) recognises the importance of good corporate governance and fully supports the principles and recommendations as set out in the Malaysian Code on Corporate Governance 2012 (“Code”). The Board is therefore, committed towards instilling a high standard of corporate governance throughout the Group as a fundamental part of discharging its responsibility to enhance shareholders’ value and the financial performance of the Group. The Board will continue to apply the recommendations as set out in the Code and evaluate the status of the Group’s practices and procedures from time to time.

This statement describes the manner in which the Group has applied the principles of the Code and the extent of its compliance with the recommendations of the Code pursuant to paragraph 15.25 of Bursa Malaysia Securities Berhad (“Bursa Securities”) Main Market Listing Requirements (“Listing Requirements”). The reason for not applying specific principles in the Code is explained in this statement.

1. ESTABLISH CLEAR ROLES AND RESPONSIBILITIES

(i) Board Composition

The Board currently has seven (7) members comprising four (4) Independent Non-Executive Directors and three (3) Non-Independent Non-Executive Directors. The Chairman is one of the Independent Non-Executive Director. The Senior Independent Non-Executive Director is Datuk Oh Chong Peng who will attend to any query or concern relating to the Group where the Chairman and the Chief Executive Officer are conflicted.

The 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 after taking into account the interest of shareholders and stakeholders. The Independent Non-Executive Directors play crucial roles in providing unbiased and independent views, advice and judgment to the Board to safeguard the interest of minority shareholders.

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

(ii) Board Diversity

The Directors have a diverse set of skills, experience and knowledge necessary to govern the Group. The Directors are professionals in the field of engineering, finance, accounting, economics, manufacturing and experienced senior public administrators. Together, they bring a wide range of competencies, capabilities, technical skills and relevant business experience to ensure that the Group continues to be a competitive leader with a strong reputation for technical and professional competence. In evaluating candidates for appointment to the Board, the Nomination Committee and the Board will always evaluate and match the criteria of the candidate based on experience, skill, competency, knowledge, potential contribution and boardroom diversity (including gender, ethnicity and age). The Board is mindful of the Recommendation 2.2 of the Code and female candidates will be considered as part of the recruitment exercise of new directors for the Company.

(iii) Board Functions and Delegation to Management

The Board is fully responsible for the Group’s overall strategic plans on business performance, overseeing the proper conduct of business, succession planning, risk management, shareholders’ communication, internal control, management information systems and statutory matters, while the management is accountable for the execution of the expressed policies and attainment of the Group’s expressed corporate objectives. This demarcation complements and reinforces the supervisory role of the Board. Nevertheless, the Board is always guided by the Board Charter which outlines the duties and responsibilities and matters reserved for the Board in discharging their duties.


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

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

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

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

(4) establishing a succession plan;

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

(6) reviewing the adequacy and the integrity of the management information and internal controls system of the Company and the Group.

In all Board meetings, major operating divisions report their respective progress, financial achievement, performance compared to approved budget, business outlook and challenges including proposed resolutions thereon.

The Board consists of qualified individuals with diverse set of skills, experience and knowledge to govern the Group. The Non-Executive Directors are professionals in the field of engineering, finance, accounting, economics, manufacturing and senior public administrators.

The profiles of the Directors are set out on pages 4 to 7 of this Annual Report. Such information is also available on the Company’s website, www.keb.com.my.

(iv) Code of Conduct

The Board has made a commitment to create a corporate culture within the Group to operate the business in an ethical manner and to uphold a high standard of professionalism and exemplary corporate conduct. The Code of Ethics and Conduct which sets out the principles and standards of business ethics and conduct of the Group has been adopted and is applicable to all Directors and employees of the Group.

Briefly, the Code of Ethics and Conduct, which is to assist the Directors and Employees in defining ethical standards and conduct at work, as follows:

(a) Avoidance of Conflict of Interest

Directors and Employees must not use their position or knowledge to gain in the course of duties or employment for private or personal advantage. In addition, they are to avoid any situation in which they have an interest in any entity or matter that may influence their judgment in the discharge of responsibilities.

(b) Safeguard of Confidential Information

Directors and Employees are to exercise caution and due care to safeguard any information of a confidential and sensitive nature relating to the Group which is acquired in the course of duties, and is strictly prohibited to disclose to any person, unless the disclosure is authorised or legally mandated.

(c) Inside Information and Securities Trading

Directors and Employees shall not use price sensitive non-public information, which can affect prices of securities of the Company and/or related listed companies (“Inside Information”), for personal benefit or to trade in securities or to provide information to others to trade in securities of the Company and/or related listed companies until the Inside Information is publicly released. They shall also not trade in securities in any other companies where they have Inside Information which they obtain in the performance of duties.

STATEMENT ONCORPORATE GOVERNANCE(cont’d)

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(d) Protection of Assets and Funds

Directors and Employees must protect assets and funds of the Group to ensure availability for legitimate business purposes and none of these be used for personal gain.

(e) Business Record and Control

All books, records and accounts to conform to generally accepted and applicable accounting principles, all applicable laws and regulations, are accurate, reliable and timely.

(f) Compliance to the Law

Directors and Employees are expected to understand and comply with the laws, rules and regulations including the Anti-Money Laundering and Anti-Terrorism Financing Act 2001, Malaysian Anti-Corruption Commission Act 2009, Personal Data Protection Act 2010 and Competition Act 2010.

(g) Personal Gifting

No personal gifts, favours, entertainment or services, in cash or kind, that influence objective and fair business decisions, will be accepted or provided.

(h) Health and Safety

To provide a safe workplace, Directors and Employees are required to understand and abide by the Group’s policies and procedures.

(i) Sexual Harassment

Policy to provide all Employees with a working environment free from any form of sexual harassment.

(j) Outside Interest

Directors and Employees are not permitted to engage in any outside interest, which will undermine their performance or bring disrepute to the Group.

(k) Fair and Courteous Behaviour

Employees are to treat their fellow Employees fairly and courteously without regard to race, creed, religion, gender, nationality, age or disability, and shall not create any form of discrimination or prejudice in the workplace.

(l) Misconduct

Not involved in or abet in any activity that is deemed by the Group to be an act of misconduct.

The Company recognises that any genuine commitment of detecting and preventing actual or suspected unethical, unlawful, illegal, wrongful or other improper conduct must include a mechanism whereby employees can report his/her concerns freely without fear, reprisal or intimidation. Accordingly, the Company has adopted a Whistle Blowing Policy which has been disseminated to all employees.

Briefly, the policy and procedure is to provide and facilitate a mechanism for any reporting individual (“RI”) to report concerns about any suspected and/or known misconduct, wrongdoings, corruption, fraud and/or abuse in writing, by telephone, fax or e-mail to Datuk Oh Chong Peng, the Audit Committee Chairman or Dato’ Neoh Soon Hiong, the Chief Executive Officer. The policy allows the RI to either identify oneself or if the RI prefers, to remain anonymous. The policy assures and protects the RI against reprisal and/or retaliation from his/her superior and provides immunity from disciplinary actions as long as the RI does not provide false information and is not malicious in nature. All costs in relation to any legal liabilities or proceedings that may be brought against the RI will be borne by the Company.

The Code of Ethics and Conduct and Whistle Blowing Policy was updated on 23 May 2016 and is available on the Company’s website, www.keb.com.my.



(v) Business Sustainability Plan

The Company focuses on key areas of environment conservation and social contribution with the aim to promote sustainable development. A detailed report on sustainability activities, demonstrating the Company’s commitment to the global environment, social, governance and sustainability agenda, appears in the Corporate Social Responsibility Statement of this Annual Report.

(vi) Access to Information and Advice

A full agenda of the meeting and all Board papers are distributed on a timely manner prior to 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 discharging their duties, the Directors have access to all information within the Company and to the advice and services of senior management staff and Company Secretary. If necessary, the Directors may seek independent professional advice and information in furtherance of their duties at the Company’s expense, so as to ensure the Directors are able to make independent and informed decisions. Any such request is presented to the Board for approval.

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

The Directors are notified of any corporate announcements released to Bursa Securities. Minutes of each Board meeting were circulated to all Directors at least five (5) business days before the Board meeting for their perusal prior to confirmation of the minutes at the commencement of the Board meeting. The Directors could request for clarifications or raise comments before the minutes were tabled for confirmation as a correct record of proceedings of the Board meeting.

(vii) Company Secretary

The Company Secretary plays an important advisory role and is a source of information and advice to the Board and its Committees on issues relating to compliance with laws, rules, regulations, board policies and procedures and compliance with the relevant regulatory requirements affecting the Company and Group. The Board is supported by a suitably qualified and competent Company Secretary who is a member of a professional body.

Every Board member has ready and unrestricted access to the advice and services of the Company Secretary who is capable of carrying out the duties and responsibilities, to which the post entails. The roles and responsibilities of the Company Secretary include the following:

(1) advise the Board and management on governance issues;

(2) ensure compliance of listing and related statutory obligations;

(3) attend Board, Committees and general meetings, and ensure the proper recording of minutes;

(4) ensure proper upkeep of statutory registers and records;

(5) assist Chairman in the preparation for and conduct of meetings;

(6) assist Chairman in determining the annual Board plan and the administration of other strategic issues; and

(7) assist the induction of new directors, and continuously update the Board on changes to listing rules, other related legislations and regulations.

The Company Secretaries ensures that deliberations at Board and Board Committee meetings are documented and subsequently communicated to the Management for appropriate actions. The Board is updated by the Company Secretaries on the follow-up of its decisions and recommendations by the Management.

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(viii) Board Charter

The Board Charter was adopted by the Board on 28 March 2013, updated on 23 May 2016 and is available on the Company’s website at www.keb.com.my. The Board undertakes that the Board Charter will be periodically reviewed and updated in accordance with the needs of the Company and new regulations that may have an impact on the discharge of the Board’s responsibilities.

The Board Charter was established to ensure that all Board members are aware of their fiduciary duties and responsibilities, various legislations and regulations affecting their conduct, the need to safeguard the interests of the shareholders, customers and other stakeholders and that a high standard of corporate governance is applied in all their dealings on behalf of the Company. The Board Charter also serves as a source of reference and primary induction literature, providing insights to prospective board members and senior management. The Board Charter clearly sets out the division of responsibility and powers of duties between the Board and management, the different committees established by the Board and between the Chairman and the Chief Executive Officer.

2. STRENGTHEN COMPOSITION

(i) Board Committees

The Board has delegated certain functions to the Committees it established to assist in the execution of its responsibilities. The Committees operate under clearly defined terms of reference. The Committees are authorised by the Board to deal with and to deliberate on matters delegated to them within their terms of reference.

The Chairman of the respective Committees report to the Board the outcome of the Committee meetings and such reports are included in the Board papers.

(a) Audit Committee

The Audit Committee comprises three (3) Independent Non-Executive Directors and one (1) Non-Independent Non-Executive Director. The Audit Committee is chaired by Datuk Oh Chong Peng. Other members of the Audit Committee are Dato’ Abdul Hamid bin Mustapha, U Chin Wei and Tang King Hua.

The terms of reference and summary of activities of the Audit Committee during the financial year are set out under the Audit Committee Report on pages 36 to 40 of this Annual Report and is available on the Company’s website, www.keb.com.my.

(b) Nomination Committee

The Nomination Committee comprises three (3) Independent Non-Executive Directors and one (1) Non-Independent Non-Executive Director. During the financial year ended 31 March 2016, three (3) meetings were held and attended by all the members. The details of 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

Tang King Hua Non-Independent Non-Executive Director



The main terms of reference of the Nomination Committee include, amongst others, the following:

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

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

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

(4) to assess the effectiveness of the Board as a whole, the Committees of the Board, the contribution of each individual Director, including Independent Non-Executive Directors and Chief Executive Officer on an annual basis.

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

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

(2) assessed the independence of the Independent Directors;

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

(4) reviewed and assessed the effectiveness of the Chief Executive Officer.

(c) Remuneration Committee

The Remuneration Committee comprises three (3) Independent Non-Executive Directors and one (1) Non-Independent Non-Executive Director.

During the financial year ended 31 March 2016, two (2) meetings were held and were attended by all the members. The details of 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

Lee Chun Fai Non-Independent Non-Executive Director

The main terms of reference of the Remuneration Committee include, amongst others, the following:

(1) to recommend to the Board, the reward framework for Executive Directors/Chief Executive Officer and perform an on-going review of the Executive Directors/Chief Executive Officer remuneration structure;

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

(3) the remuneration of the Non-Executive Directors are to be determined by the Board based on the recommendation of the Remuneration Committee; and

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(4) to review and approve annual salaries, incentive arrangements, service agreements and other employment conditions for the Executive Directors/Chief Executive Officer after considering the performance of Executive Director/Chief Executive Officer. This is performed by linking the Executive Directors/Chief Executive Officers’ remuneration to corporate and individual performance, such as, performance of the Company, growth of the Company vis-à-vis the growth of the industry, contribution of the Executive Directors/Chief Executive Officer to the Group etc.

The key activities undertaken by the Remuneration Committee during the financial year were as follows:

(1) Review and recommend incentive plan of the Chief Executive Officer, and

(2) Review and recommend the payment of Directors’ fee for the financial year ended 31 March 2016.

(d) Executive Committee

The Executive Committee consists of the Directors and senior management staff of the Group. The Executive Committee shall preferably meet on quarterly basis or whenever deemed necessary to review the performance of the Group’s operating divisions. During the financial year ended 31 March 2016, four (4) meetings were held which were attended by the members of the Committee except for Dato’ Neoh Soon Hiong who had attended three (3) out of the four (4) meetings held. The details of the members are as follows:

MEMBERS DESIGNATION

Dato’ Neoh Soon Hiong (Chairman) Chief Executive Officer

Lyndon Alfred Felix Chief Financial Officer

Tang King Hua Non-Independent Non-Executive Director

The main terms of reference of the Executive Committee include the following:

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

(2) to evaluate and decide on transactions (including acquisition or disposal of assets or investments) and matters relating to the Group’s core businesses consisting mainly of construction, manufacturing and existing investment (or such investments as may be approved by the Board of Directors), but excluding businesses relating to the construction and/or operations of tolled highway and where the value of each of such transaction does not exceed RM10 million;

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

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

(ii) Board Evaluation

The Nomination Committee assesses the effectiveness of the Board as a whole and the contribution of each individual Director including the Independent Non-Executive Directors and the Chief Executive Officer.

During the financial year, the Nomination Committee conducted an annual assessment of the required mix of skills, experience and other qualities including core competencies which the Non-Executive Directors should bring to the Board and identified areas for improvement. It also conducted an annual assessment of the Directors and the effectiveness of the Board as a whole, Board committees and the contribution of each individual Director, including the Independent Non-Executive Directors and the Chief Executive Officer. All assessments and evaluations carried out by the Nomination Committee in discharging its functions have been properly documented.



Board evaluation comprises Self & Peer Assessment and Independence of Independent Director. The assessment criteria include contributions to interaction, roles and duties, knowledge and integrity, governance and risk management whilst the criteria for assessing the Independence of an Independent Director include the relationship between the Independent Director and the Group, tenure of independence and his involvement in any significant transaction with the Group. The Audit Committee members were evaluated on the basis of Self-Assessment and Peer Assessment by the Nomination Committee.

(iii) Appointments to the Board

The Nomination Committee is responsible for making recommendations to the Board of suitable candidates for appointment as Director, after which the Company Secretary ensures that all appointments are properly made and all legal and regulatory compliance are met.

In making these recommendations, the Nomination Committee evaluate and match the criteria of the candidate based on experience, skill, competency, knowledge, potential contribution and boardroom diversity (including gender, ethnicity and age). The Committee is mindful of the Recommendation 2.2 of the Code and female candidates will be considered as part of the recruitment exercise of new directors for the Company.

(iv) Re-election and Re-appointment of Directors

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

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

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

The re-appointment of an Independent Director who has served for a cumulative term of more than twelve (12) years, to continue serving in the same capacity, will require the Board of Directors to justify, recommend and seek shareholders’ approval in order for that individual to continue as such, on a yearly basis.

(v) Remuneration Committee

The Remuneration Committee is primarily responsible for recommending the policy and framework of directors’ remuneration including the terms and remuneration of the Chief Executive Officer, to the Board for approval in order to align with the business strategy and long term objectives of the Company. The remuneration of the Chief Executive Officer will be reviewed annually to ensure that the remuneration package of the Chief Executive Officer remains sufficiently attractive to attract and retain the Chief Executive Officer with the relevant experience and expertise to govern the Group effectively. The Chief Executive Officer does not participate in the decision with regards to his remuneration.

The determination of the remuneration package of the Non-Executive Directors are a matter for the Board as a whole following the relevant recommendation made by the Remuneration Committee, with the Director concerned abstaining from deliberation and voting on his own remuneration. The remuneration of the Non-Executive Directors comprises of Director’s fee and other emoluments which are determined by the Board. The remuneration of the Non-Executive Directors reflects the contribution and level of responsibilities undertaken by the particular Non-Executive Director. The Director’s fee will be subject to the approval of shareholders at the Annual General Meeting.

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The details of the Directors’ remuneration in the Company and Group for the financial year ended 31 March 2016 were as follows:

CATEGORY

FEES (RM’000)

BENEFIT IN KIND (RM’000)

TOTAL (RM’000)

Non-Executive Directors – Company 885 – 885

Non-Executive Directors – Group – 24 24

TOTAL 885 24 909

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

NUMBER OF NON-EXECUTIVE DIRECTORS

RM50,000 and below –

RM50,001 to RM100,000 1

RM100,001 to RM150,000 4

RM150,001 to RM200,000 2

TOTAL 7

3. REINFORCE INDEPENDENCE

(i) Annual Assessment of Independent Directors

The Board through the Nomination Committee assessed the Independent Directors on annual basis, with a view to ensure that the Independent Directors bring independent and objective judgment to the Board and this mitigates risks arising from conflict of interest or undue influence from interested parties. Where there is a likely conflict of interest in any matter under deliberation, he is required to disclose his interest and abstain from participating or discussion on the matter.

The concept of independence adopted by the Board is in line with the definition of an Independent Director in Section 1.01 of the Listing Requirements of Bursa Securities and Practice Note 13 (Revised July 2015). The main element for fulfilling the criteria is the appointment of an Independent Director who is not a member of management and free from any relationship which could interfere in the exercise of independent judgment or the ability to act in the best interest of the Company. The Board complies with paragraph 15.02 of the Listing Requirements of Bursa Securities which requires that at least two Directors or one-third of the Board, whichever is higher, are Independent Directors.

The Nomination Committee and Board have upon their annual assessment, concluded that each of the Independent Non-Executive Directors had demonstrated in conduct and behavior that indicate independence and each of them continues to fulfill the definition of independence as set out in the Code and Listing Requirements of Bursa Securities.

(ii) Tenure of an Independent Director

The Board noted that one of the recommendations of the Code states that the tenure of an Independent Director shall not exceed a cumulative terms of nine (9) years. Upon completion of the nine (9) years tenure in office, an Independent Director may continue to serve on the Board subject to the Director’s redesignation as a Non-Independent Director.



However, the Board is of the view that the ability of long serving independent directors to remain independent and to discharge their duties with integrity and competency should not be measured solely by tenure of service. The extended service should not affect their independence, as they are still able to provide independent judgment, experience and objectivity without being subordinated to operational considerations. They are able to ensure that the interest of all shareholders are indeed taken into account by the Board and that relevant issues are subjected to objective and impartial consideration by the Board. The Nomination Committee and the Board have decided that the service of independent Directors will not be extended beyond a cumulative term of twelve (12) years. Accordingly, Dato’ Abdul Hamid bin Mustapha being the longest serving Independent Non-Executive Director since 27 October 2005 and has completed the nine year tenure on 27 October 2014, will continue to be an Independent Director of the Company until 27 October 2017. The Board will ensure that either the position of Chairman will continue to be independent, or that the majority of its members will comprise of independent directors should the Chairman of the Board be a Non-Independent Director.

4. FOSTER COMMITMENT

(i) Time Commitment

The Board conduct at least five (5) regular scheduled meetings annually, with additional meetings convened as and when necessary, to consider all matters relating to the overall control, business performance and strategy of the Company. Additional meetings will be convened as and when necessary.

In fostering the commitment of the Board that the Directors shall devote sufficient time to carry out their responsibilities, the Directors are required to notify the Chairman before accepting any new directorship and to indicate the time expected to be spent on the new appointment. The Chairman shall also notify the Board if he has any new directorship or significant commitments outside the Company. All the Directors hold not more than five (5) directorships in public listed companies.

The Board is satisfied with the level of time commitment given by the Directors towards fulfilling their roles and responsibilities as Directors of the Company. During the financial year ended 31 March 2016, five (5) Board meetings were held and the attendance record of the Directors were satisfactory as evidenced in the table set out below:

DIRECTORS NUMBER OF MEETINGS ATTENDED

Dato’ Abdul Hamid bin Mustapha (Chairman) 5 out of 5

Datuk Oh Chong Peng 5 out of 5

U Chin Wei 5 out of 5

Tan Sri Pang Tee Chew 4 out of 5

Lee Chun Fai 5 out of 5

Tang King Hua 5 out of 5

Datuk Ir. Hamzah bin Hasan 5 out of 5

All the Directors have complied with the minimum requirements on the attendance at Board meetings as stipulated in the Listing Requirements of Bursa Securities. In the intervals between Board meetings, for any matters requiring Board’s decisions, the Board’s approvals are obtained through circular resolutions. The resolutions passed by way of such circular resolutions are then noted at the next Board meeting.

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(ii) Directors’ Training and Continuing Education Programme

All the Directors have attended the Mandatory Accreditation Programme prescribed by Bursa Securities. The Company is aware of the importance of continuous training for its Directors to enable them to effectively discharge their duties and sustain active participation in the Board deliberations and will continuously evaluate and determine the training needs of its Directors.

The Directors are also aware of their duty to continuously update their knowledge and enhance their skills through appropriate continuing education programmes. They are provided with the opportunity, and are encouraged, to attend training to keep themselves updated on relevant new legislation, financial reporting requirements, best practices and changing commercial and other risks.

All the Directors have attended at least one training session during the financial year ended 31 March 2016. Some of these training programmes, seminars or forum are as follows:

(1) The Interplay between Corporate Governance, Non-Financial Information and Investment Decisions,

(2) Trans-Pacific Partnership Agreement,

(3) Cyber Security – What Directors Should Know,

(4) Anti Money Laundering, Anti Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLATFPUAA),

(5) Sustainability Symposium,

(6) Global Transformation Forum – Operationalising Transformation,

(7) Construction Research Achievement International Conference,

(8) Leadership for sustainable growth,

(9) FMM Factory Management Conference 2015,

(10) Independent Directors Programme: “The Essence of Independence”,

(11) Future of Auditor Reporting – The Game Changer for Boardroom, and

(12) 2016 OCBC Global Outlook

The Company Secretary has circulated the relevant guidelines on statutory and regulatory requirements to the Board for reference. The external auditors have also briefed the Board members on the changes to the Malaysian Financial Reporting Standards that affect the Company’s financial statements during the financial year.

5. UPHOLD INTEGRITY IN FINANCIAL REPORTING

(i) Financial Statements Compliance

The Board is responsible to ensure that the quarterly announcements of results of the Group presents a fair, balanced and meaningful assessment of the Group’s financial position, performance and prospects. The Board ensures that the Group’s financial statements are drawn up in accordance with the provisions of the Companies Act, 1965 (“Act”) and the applicable approved accounting standards in Malaysia. The Board is assisted by the Audit Committee in reviewing and scrutinising the information in terms of the overall accuracy, adequacy and completeness of disclosure and ensuring the Group’s financial statements comply with applicable financial reporting standards.



The Audit Committee meets with the Company’s external auditors to review the scope and adequacy of the audit processes, the annual financial statements and their audit findings. In line with the good corporate governance practices, the Audit Committee also meets with the external auditors at least twice a year to discuss audit plans, audit findings and the financial statements of the Company. These meetings are held without the presence of the Chief Executive Officer and senior management. The Audit Committee also meets with the external auditors whenever it deems necessary.

(ii) Directors’ Responsibility Statement

The Directors are required by the Act, to prepare financial statements for each financial year in accordance with the provisions of the Act and applicable approved accounting standards to give a true and fair view of the state of affairs of the Group and the Company at the end of the financial year and of their results and cash flows for the financial year then ended. Where there are new accounting standards or policies that become effective during the year, the impact of these new treatments would be stated in the notes to the financial statements accordingly.

In preparing the financial statements for the financial year ended 31 March 2016, the Directors have:

(1) adopted appropriate accounting policies which were consistently applied;

(2) made judgments and estimates that are reasonable and prudent;

(3) ensured that all applicable approved accounting standards have been followed; and

(4) prepared financial statements on going concern basis as the Directors have a reasonable expectation, having made enquiries, that the Group and the Company have adequate resources to continue in operational existence in the foreseeable future.

The Directors are responsible for ensuring that the Company keeps accounting records, which discloses with reasonable accuracy the financial position of the Group and the Company and comply with the provisions of the Companies Act, 1965. The Directors are also responsible for taking reasonable steps to safeguard the assets of the Group and Company and to prevent and detect material fraud and other irregularities.

(iii) External Auditors

On an annual basis, the Audit Committee will review the suitability and independence of the external auditors. The Audit Committee would also review the provision of audit and non-audit services by the external auditor and noted the following for the financial year ended 31 March 2016:

AUDIT FEES RM’000

NON-AUDIT FEES RM’000

TOTAL RM’000

By Company 125 59 184

By Subsidiaries 109 45 154

TOTAL 234 104 338

The Audit Committee noted high non-audit fees services incurred by the auditor mainly due to the preparation of reports by the external auditor as a Reporting Accountant for the Circular to Shareholders in relation to the Proposed Disposal by the Company of 900,000,000 Ordinary Shares of RM0.20 each in Talam Transform Berhad representing 21.34% Equity Interest held in TTB to Tan Sri Dato’ (Dr) Ir. Chan Ah Chye @ Chan Chong Yoon for a total Cash Consideration of RM80.50 million.

26

The Audit Committee had obtained written assurance from the external auditors confirming that they were, and had been, independent throughout the conduct of the audit engagement in accordance with the terms of all relevant professional and regulatory requirements.

The Audit Committee is satisfied with the competence and independence of the external auditors and had recommended the re-appointment of the external auditors to the shareholders at the Annual General Meeting. The external auditors are invited to attend the Annual General Meeting of the Company and are available to answer shareholders’ questions on the matters with regard to the audit, its preparation and content of the audit report.

6. RECOGNISE AND MANAGE RISKS

(i) Risk Management and Internal Control

The Board acknowledges its responsibilities for maintaining a reliable system of internal controls within the Group which covers the financial controls, the operational and compliance controls and risks management. The internal control system is designed to meet the Group’s needs and to manage risks. This is a continuing process which included risk assessments, internal controls reviews and internal audit checks on all companies within the Group. This will ensure that the Group and Company’s assets are safeguarded to preserve shareholders’ investment.

The Audit Committee is entrusted to provide advice and assistance to the Board in fulfilling its statutory and fiduciary responsibilities relating to the Group and Company’s internal and external audit functions, risk management and compliance systems and practices, financial statements, accounting and control systems and matters that may significantly impact the financial condition or affairs of the business.

The Statement on Risk Management and Internal Control, which provides an overview of the state of risk management and internal control and processes within the Group, is set out on pages 33 to 35 of this Annual Report.

(ii) Internal Audit Function

The Board has an overall responsibility for maintaining a sound system of internal controls to safeguard shareholders’ investment. As the system of internal controls are designed to mitigate rather than eliminate the likelihood of errors or fraud, the system can only provide reasonable assurance against material misstatement or loss.

The Group and Company’s internal audit service was outsourced to an independent professional service provider. The internal audit service performs regular reviews of business processes, appraisal on the effectiveness of governance, risk management and internal controls processes and reports regularly to the Audit Committee. The internal audit engagement is focused on areas of priority according to their risk assessment and in accordance with the annual audit plans approved by the Audit Committee. The Audit Committee reviews and approves the internal audit plan on an annual basis. Areas of improvement as highlighted by the internal audit service were implemented by management.

7. ENSURE TIMELY AND HIGH QUALITY DISCLOSURE

(i) Corporate Disclosure Policy

The Board is aware of the need to establish corporate disclosure policies and procedures to enable a comprehensive, accurate and timely disclosures relating to the Company, to the regulators, shareholders and stakeholders. The Company has identified persons authorised and responsible to approve and disclose material information to shareholders and stakeholders to ensure compliance with the Listing Requirements of Bursa Securities. The Board has delegated the authority to the Chief Executive Officer to approve all announcements for release to Bursa Malaysia Securities Berhad. The Chief Executive Officer works closely with the Board, senior management and the Company Secretary who are privy to the information to maintain strict confidentiality of the information.



(ii) Information Dissemination

The Company continues to recognise the importance of transparency and accountability to its shareholders. The Board ensures that shareholders are informed of the financial performance and major development in the Group. Such information is communicated to shareholders by timely release of quarterly financial results, circulars, annual reports, announcements and press releases.

Apart from the mandatory announcements through Bursa Securities, the information on the Company is available on the Company’s website at www.keb.com.my.

8. STRENGTHEN RELATIONSHIP BETWEEN COMPANY AND SHAREHOLDERS

(i) Shareholder Participation at General Meetings

The Company provides information to the shareholders with regards to, amongst others, details of the Annual General Meeting, their entitlements to attend the Annual General Meeting, the right to appoint proxy and also, the qualifications of a proxy.

General meetings are an important venue through which the shareholders can exercise their rights. The Board would ensure suitability of venue and timing of meeting to encourage shareholders’ participation in the meetings.

(ii) Poll Voting

In line with recent requirement of the Main Market Listing Requirement, voting at the 15th Annual General Meeting will be conducted by poll, instead of by show of hand. Poll voting more accurately and fairly reflects shareholders’ view by ensuring that every vote is recognised, in accordance with the principal of “one share one vote”.

(iii) Effective Communications with Shareholders

The Board recognises the importance of establishing a direct line of communication with shareholders and investors through timely dissemination of information on the Group and Company’s performance and major developments via appropriate channels of communications. Dissemination of information includes the distribution of Annual Report and relevant circulars, information by way of material announcements, issuance of quarterly financial results of the Group to Bursa Securities and the public as well as through press conferences. In addition, stakeholders who wish to reach the Group or Company can do so through the “Contact Us” page in our website at www.keb.com.my. The Group believes that by consistently maintaining a high level of disclosure and extensive communication with its shareholders, the shareholders and investors will be able to make informed investment decision.

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 and Company. Members of the Board as well as the external auditors of the Company are present to provide responses to questions from the shareholders during these meetings.

This Statement is made in accordance with a resolution of the Board of Directors dated 28 June 2016.

28

The Group is firmly committed to undertake responsible corporate practices and uphold the sustainability elements of the Group and Company, as in the longer term, the sustainable business will deliver value for the shareholders and/or stakeholders which include employees, customers, shareholders and the wider environment and community that we operate in. We have identified our sustainability priorities which comprise of Employee Welfare, Environmental Management, Community and Marketplace.

EMPLOYEE WELFARE

The Group and Company value its employees as they are key to competitive success in the marketplace which is vital in sustaining its businesses. We endeavour to provide relevant training in order for them to acquire the right skill sets to deliver results.

As a policy, the Group and Company do not discriminate against any race, gender, age or minorities. The employees are also provided adequate medical benefits as well as hospitalisation and personal accident insurance coverage.

ENVIRONMENTAL MANAGEMENT

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

The Group’s Bandar Rimbayu development through its 40%-owned associate, Radiant Pillar Sdn Bhd, features sustainable environmental initiatives like rain water harvesting and solar panels for its housing units, amongst others. Abundant use of trees for landscape, creeks and canals adds to the scenic charm while cooling the environment. More than 50,000 trees, palms, shrubs, flower garden, aquatic plants, herbs and climbers will be planted around the Arc and sales gallery. The Bandar Rimbayu development which has been certified as a Green Township is poised to become a premier green township in the Klang Valley.

Our West Coast Expresssway via 80%-owned subsidiary, West Coast Expressway Sdn Bhd will be constructed based on the latest green technology and in compliance to the Environmental Impact Assessment (“EIA”) Approval Conditions resulting in minimal impact to the environment. In addition, it will employ a full electronic system which not only reduces the usage of printed tickets but is proven to be very accurate and reliable thus vastly reducing descrepancies/errors/pilferages.

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

COMMUNITY

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

On 30 April 2016, the Group, Lembaga Lebuhraya Malaysia and the National Blood Bank jointly organised a blood donation campaign at AEON Mall, Bukit Tinggi, Klang. The campaign successfully collected approximately 123 pints of blood both from public and members of the organising corporations.

MARKETPLACE

The Group ensures that its operations are in line with the best practices guidelines set in the Malaysian Code on Corporate Governance 2012.

As part of promoting investor relations, the Group maintains an online platform via its website which provides information on the Group encompassing formal announcements, quarterly financial results and updates on the Group’s performance and development with the objective of fostering and maintaining good relations and providing timely information to various stakeholders of the Group.

CORPORATE SOCIALRESPONSIBILITY (CSR)


ADDITIONALCOMPLIANCE INFORMATIONAS AT 31 MARCH 2016

1.0 OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES

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

The Company had in issue 214,871,911 number of 2014/2016 Warrants. Each Warrant entitles registered holder to subscribe for one new share in the Company at an exercise price of RM1.18 and the maturity date of the Warrant is 26 August 2016. There is no exercise of Warrant during the financial year ended 31 March 2016.

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 AND/OR PENALTIES

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

4.0 NON-AUDIT FEES

During the financial year, the Company incurred fees for non-audit services of RM104,400 by the Auditors of the Company.

5.0 VARIATION IN RESULTS

There were no material variations between the audited results for the financial year ended 31 March 2016 and the unaudited results for the quarter ended 31 March 2016 of the Group.

6.0 MATERIAL CONTRACTS

There were no material contracts entered by the Company and its subsidiaries involving its Directors’, Chief Executive Officer’s and Major Shareholders’ interests, either still subsisting at the end of the financial year or entered into since the end of the previous financial year end.

30

7.0 STATUS OF UTILISATION OF PROCEEDS RAISED FROM CORPORATE PROPOSAL

In August 2015, the Company undertook a Renounceable Rights Issue of 429,743,823 new ordinary shares of RM1.00 each in the Company at an issue price of RM1.08 per Rights Share, together with 214,871,911 free detachable Warrants, on the basis of three Rights Shares for every four existing shares in the Company held and one free Warrant for every two Rights Shares subscribed for. The status of utilisation of proceeds as at 31 March 2016 is set out below:

PROPOSED UTILISATION

(RM’ MIL)

UTILISATION

(RM’ MIL)

BALANCE AS AT 31 MAR 2016

(RM’ MIL)

– Injection as equity, convertible and or subordinated advances into WCESB

357.0 (255.5)^ 101.5

– Repayment of bank borrowings 92.0 (92.0) –

– Working capital and contingencies 8.1 (8.1) –

– Defray Rights Issue expenses 7.0 (4.8) 2.2*

464.1 (360.4) 103.7

^ As the capital injection into WCE is not due, the Company had utilised approximately RM27.1 million from the amount allocated for such purpose, to repay bank borrowings of the Company to avoid incurring unnecessary interest cost in the interim. On 17 October 2014, the Company had announced the proposed disposal of 900,000,000 ordinary shares of RM0.20 each in Talam Transform Berhad (“Talam”) to Tan Sri Dato’ (Dr) Ir Chan Ah Chye @ Chan Chong Yoon. The proceeds from this disposal of Talam shares will be utilised as capital injection into WCE to replenish the shortfall.

* This excess amount will be utilised as working capital

8.0 SHARES BUY-BACK

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


ADDITIONALCOMPLIANCE INFORMATION(cont’d)

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 March 2016 pursuant to the shareholders’ mandate obtained by the Company at the Annual General Meeting held on 29 September 2015 are as follows:

NATURE OF TRANSACTIONS UNDERTAKEN BY KUMPULAN EUROPLUS BERHAD (“KEB”) AND/OR ITS SUBSIDIARIES

TRANSACTING COMPANY

TRANSACTED

VALUE (RM’000)

INTERESTED RELATED PARTY

A. Transactions by KEB

Interest Radiant Pillar Sdn Bhd (60% owned subsidiary of IJM Group)

1,112 IJM (Note 2)

B. Transactions by IJM Corporation Berhad (“IJM”) Group

Project billings for construction work

Interest

Interest

IJMC-KEB Joint Venture (Note 1)

IJM Construction Sdn Bhd (wholly owned subsidiary of IJM Group)

Radiant Pillar Sdn Bhd

519,516

4,629

2,039

IJM (Note 2)

IJM (Note 2)

IJM (Note 2)

C. Transactions by MWE Holdings Berhad (“MWE”) Group

Share registration services Metra Management Sdn Bhd (wholly owned subsidiary of MWE Group)

118 MWE (Note 3)

NOTES:

1. IJMC-KEB Joint Venture is an unincorporated joint venture with the participating interest of KEB and IJM Construction Sdn Bhd of 30% and 70% respectively.

2. IJM Corporation Berhad is a Major Shareholder of KEB by virtue of its 26.18% direct interest in KEB.

3. MWE Holdings Berhad is a Major Shareholder of KEB by virtue of its 25.58% direct interest in KEB.

32

STATEMENT ON RISK MANAGEMENTAND INTERNAL CONTROL

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

BOARD’S RESPONSIBILITIES

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

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

RISK MANAGEMENT FRAMEWORK

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

The Risk Management Committee (“RMC”) is chaired by the Chief Executive Officer and its members comprise senior management of the Group. The RMC ensures the Group has an on-going process in place for the year under review and up to the date of approval of this statement for identifying, evaluating, assessing, monitoring and managing key business risks that may affect the achievement of the Group’s business objectives and also ensure that the Group’s corporate objectives are achieved within an acceptable risk appetite. The review covers responses to significant risks identified including non-compliance with applicable laws, rules, regulations and guidelines and provides assurance to the Board that processes put in place continue to operate adequately and effectively. As the business risk profile changes, new areas are introduced in the risk management process.

Key business risks are documented in the risk profile that addresses risks to the achievement of strategic, financial and operational objectives. The risk profile lists all identified risks and thereafter assesses the likelihood of it occurring and its quantitative and qualitative impact to the Group. It also lists controls and measures used to monitor and mitigate those risks.

Risks that are likely or almost certain to occur and have major or catastrophic impact (“Principal Risks”) are specially assessed to ascertain measures taken to monitor and mitigate the risks are adequate and effective and are reported to the Audit Committee.


The main identified Principal Risks during the financial year are as follows:

(a) Political Risk The Group is exposed to changes or introduction of new laws, rules, regulations and guidelines caused by changes of policy by both State Government and Federal Government.

To mitigate the risk, the Group had made it a requirement to include as an agenda item in the monthly Management Committee Meeting to discuss changes or introduction of new laws, rules, regulations and guidelines by any State Government or Federal Government agencies. In addition, the Group mandates the compliance by all employees to the Group’s Code of Ethics and Conduct.

(b) Non-fulfilment of Loan The Group’s Project loans require strict adherence to Project status and progress Covenants Risk reporting, failing which may affect funding of the Project.

To mitigate the risk, the Group prepares an annual cash flow budget with detailed monthly expenditures to be incurred throughout project construction to be approved by the Chief Executive Officer. Furthermore, any material changes that impacts the Projects will be discussed in the monthly Management Committee Meeting before approval is given.

INTERNAL AUDIT’S RESPONSIBILITIES

The Group’s internal audit service is outsourced to a professional firm that performs reviews of business processes to assess the effectiveness of internal controls and reports to the Audit Committee. The internal audit provides an assessment as to whether risk, which may hinder the Group from achieving its objectives, are being adequately evaluated, managed and controlled or mitigated. It also evaluates the system of internal control and effectiveness of governance in accordance with the approved annual internal audit plan.

OTHER KEY ELEMENTS OF RISK MANAGEMENT AND INTERNAL CONTROL

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

(2) Management reports, which are presented by the respective division heads to the Executive Committee, provides financial information, including information of significant changes in accounting standards and reporting;

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

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

(5) Standing Instructions and Standard Operating Procedures are reviewed and updated as and when necessary to ensure effective management of the Group’s operations; and

(6) Review of quarterly financial results by the Audit Committee and the Board.

STATEMENT ON RISK MANAGEMENTAND INTERNAL CONTROL(cont’d)

34

ASSOCIATES

The Statement on Risk Management and Internal Control does not deal with the associates as the Group does not have management control over their operations.

JOINT VENTURE

The Statement on Risk Management and Internal Control does not cover the joint venture as the joint venture is jointly controlled by the Group and another joint venture partner. In respect of the joint venture entered by the Group, the Management of the joint venture, which consists of representation from the Group and the other joint venture partner, are responsible to oversee the administration, operation and performance of the joint venture. Financial and operational reports of this joint venture are provided monthly to the Management of the Group.

BOARD’S COMMITMENT

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

REVIEW OF STATEMENT BY EXTERNAL AUDITORS

The External Auditors have performed a limited assurance engagement on the Statement on Risk Management and Internal Control for inclusion in the Annual Report of the Company for the financial year ended 31 March 2016 pursuant to the scope set out in Recommended Practice Guide 5 (Revised): Guidance for Auditors on Enggements to Report on the Statement on Risk Management and Internal Control, issued by Malaysia Institute of Accountants and reported that nothing has come to their attention that would cause them to believe that the Statement is not prepared, in all material aspects, in accordance with the disclosures required by paragraphs 41 and 42 of the “Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers” nor is the same factually inaccurate.

CONCLUSION

The Board is pleased to report that it has received the assurance from the Chief Executive Officer and the Chief Financial Officer that the Group’s Risk Management and Internal Control system is operating adequately and effectively in all material aspects.

The Board is of the view that the Risk Management and Internal Control system is adequate and effective and there were no material weakness in the system of internal control during the financial year that would have material adverse effect on the results of the Group for the period under review. The Board will continue to take measures to strengthen the internal control environment to safeguard shareholders’ investment and the Group’s asset.

This Statement is approved by the Board on 28 June 2016.


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

4. Tang King Hua Non-Independent Non-Executive Director

TERMS OF REFERENCE

The following are the terms of reference of the Audit Committee and is available on the Company’s website, www.keb.com.my.

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:

– at least 3 years’ working experience and passed the examinations specified in Part I of the First Schedule of the Accountants Act 1967, or

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

– a degree/masters/doctorate in Accounting or Finance and at least 3 years’ post qualification experience in Accounting or Finance, or

– at least 7 years’ experience being a Chief Financial Officer of a corporation, or having the function of being primarily responsible for the management of the financial affairs of a corporation.

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

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

AUDIT COMMITTEEREPORT

36

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:

– have resources, which are required to perform its duties,

– 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,

– be able to obtain independent professional or other advice, and

– have direct communication channels with the external and internal auditors.

Meetings and Reporting Procedures

The Audit Committee will meet at least four times a year. A quorum for a meeting shall be two members, both being Independent Directors. At least twice a year, the Audit Committee shall meet with the External Auditors without any Executive Directors being present. The External Auditors may request for a meeting, if they consider necessary.

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

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

Duties and Functions

The duties and functions of the Audit Committee shall be:

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

(ii) To discuss with external auditors before the audit commences, audit plan, nature and scope of the audit and to ensure coordination where more than one audit firms are involved;

(iii) To review the quarterly results and year-end financial statements prior to the approval by the Board of Directors, focusing particularly on:

– any changes in accounting policies and practices,

– significant and unusual events,

– the going concern assumption, and

– compliance with accounting standards, stock exchange and legal requirements.

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

(v) To discuss problems and reservations arising from the interim and final audits, and matters the auditors may wish to discuss (in the absence of management where necessary);


AUDIT COMMITTEEREPORT(cont’d)

Duties and Functions

(vi) In relation to Internal Audit function/service:

– 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;

– 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;

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

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

– to take cognizance of resignations of internal audit staff members and provide the resigning staff member an opportunity to submit his reason for resigning.

(vii) To keep under review the effectiveness of Internal Control system and in particular review External Auditors’ management letter and management’s response;

(viii) To review the audit reports;

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

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

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

ATTENDANCE AT AUDIT COMMITTEE MEETINGS

During the financial year ended 31 March 2016, there were five (5) Audit Committee Meetings held and the number of meetings attended by each Audit Committee member are as follows:

AUDIT COMMITTEE MEMBERS NUMBER OF MEETINGS ATTENDED

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

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

3. U Chin Wei 5 out of 5

4. Tang King Hua 5 out of 5

REVIEW OF THE AUDIT COMMITTEE

An annual assessment and evaluation on the performance and effectiveness of the Audit Committee was undertaken by the Board of Directors for the financial year ended 31 March 2016. The Audit Committee was assessed based on four (4) key areas, namely effectiveness and quality, internal and external audit, risk management and internal control and financial reporting, to determine whether the Audit Committee had carried out its duties in accordance with its terms of reference.

38

SUMMARY OF AUDIT COMMITTEE ACTIVITIES

During the financial year ended 31 March 2016, 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 Management’s response, including having two confidential private sessions with the External Auditors;

(iv) Reviewed the Annual Audited Financial Statements and recommend for approval by the Board of Directors;

(v) Reviewed and deliberated the Recurrent Related Party Transactions;

(vi) Reviewed and approved the appointment of outsourced professional firm engaged to assist the Risk Management Committee to perform Enterprise Risk Managements review and Internal Audit Services;

(vii) Reviewed and deliberated the Internal Audit reports; and

(viii) Reviewed Risk Management report by the Risk Management Committee.

Financial Reporting

In overseeing KEB’s financial reporting, the AC reviewed the quarterly financial statements and the annual audited financial statements. The quarterly financial statements for the first, second, third and fourth quarters ended 31 March 2016 were prepared in compliance with the Malaysian Financial Reporting Standards (“MRFS”) 134 Interim Financial Reporting, International Accounting Standards 34 Interim Financial Reporting and paragraph 9.22, including Appendix 9B of the Main Market Listing Requirement (“MMLR”), were reviewed at the AC meetings on 17 August 2017, 15 November 2015, 22 February 2016 and 23 May 2016 respectively.

On 28 June 2016, the AC reviewed the annual audited financial statements for financial year ended 31 March 2016.

In all of the deliberations, the Chief Financial Officer had given the following assurances to the AC:

(a) Appropriate accounting policies had been adopted and applied consistently,

(b) The going concern basis applied in the Interim Financial Statements and Annual Financial Statements was appropriate,

(c) Prudent judgement and reasonable estimates had been made in accordance with the requirement set out in the MFRSs,

(d) Adequate processes and controls were in place for effective and efficient financial reporting and disclosures under the MFRSs and MMLR, and

(e) The Interim Financial Statements and Annual Financial Statements did not contain material misstatements and gave a true and fair view of the financial position of the Company and Group.


AUDIT COMMITTEEREPORT(cont’d)

External Audit (EA)

On 22 February 2016, the AC reviewed the EAs’ Audit Planning Memorandum for the audit for the financial year ending 31 March 2016 outlining the scope of their audit work including other related services such as Review of Statement on Risk Management and Internal Controls and Review of Supplementary Information on Realised and Unrealised Profits or Losses. The Audit Planning Memorandum also provided an explicit assurance to the AC that the EA have complied with the requirements for independence in accordance with the terms of all relevant professional and regulatory requirements.

On 23 May 2016, the AC reviewed the EAs’ Audit Review Memorandum (ARM) for the financial year ended 31 March 2016 detailing the status, findings and outstanding matters of the annual audit. The ARM also provided an explicit assurance to the AC that the EA have complied with the requirements for independence in accordance with the terms of all relevant professional and regulatory requirements.

On 28 June 2016, the AC reviewed the Audited Financial Statements for the financial year ended 31 March 2016. At the invitation of the AC, the EA briefed the AC salient points of the Audited Financial Statements and the basis of the EA’s audit opinion before recommending the Audited Financial Statements to the Board.

For the financial year ended 31 March 2016, the AC had two private meetings with the EA without the presence of senior management and company secretaries.

Internal Audit (IA)

On 22 February 2016, the AC reviewed the Internal Audit Report on one of KEB’s major operating subsidiaries conducted by an outsourced internal audit service provider. The IA Report was a follow-up to an IA review carried out during the financial year ended 31 March 2015. The results of the IA reports provided a satisfactory assessment of the system of internal control.

INTERNAL AUDIT SERVICE

The Audit Committee is supported in its duties by the Internal Audit service provided by an independent professional service provider. The Committee is aware of the fact that the Internal Audit Service is essential to assist in obtaining assurance 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 with 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.

The internal audit approach was risk based and in accordance with the IIA Standard. During the financial year, the internal audit service carried out one follow-up internal audit assessment on West Coast Expressway Sdn Bhd. The internal audit service assessed the key internal controls for selected process and key associated risks in the areas of Finance and Construction of the WCE Expressway.

The internal audit report was deliberated at the Audit Committee and recommendations made, were acted upon by Management.

Total cost incurred in respect of internal audit services during the financial year ended 31 March 2016 was RM24,500.

40

FINANCIAL STATEMENTS

42

47

49

50

52

54

124

125

125

126

Directors’ Report

Statements of Financial Position

Statements of Comprehensive Income

Statements of Changes in Equity

Statements of Cash Flows

Notes to the Financial Statements

Supplementary Information

Statement by Directors

Statutory Declaration

Independent Auditors’ Report

DIRECTORS’ REPORT

The directors hereby submit their report together with the audited financial statements of Kumpulan Europlus Berhad (“the Company”) and its subsidiaries (“the Group”) for the financial year ended 31 March 2016.

PRINCIPAL ACTIVITIES

The Company is principally involved in investment holding. The principal activities of its subsidiaries and associates are disclosed in Note 8 and Note 9 to the financial statements.

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

RESULTS

GROUP COMPANY RM’000 RM’000

Profit for the financial year 27,760 3,412

Profit attributable to:Owners of the Company 26,894 3,412Non-controlling interests 866 –

27,760 3,412

DIVIDEND

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

The directors do not recommend the payment of any dividend in respect of the financial year ended 31 March 2016.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year.

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.

42

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 so to realise.

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

The results of the operations of the Group and of the Company for the financial year were not, in the opinion of directors, substantially affected by any item, transaction or event of a material and unusual nature other than as disclosed in Note 25 to the financial statements.

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

ISSUE OF SHARES AND DEBENTURES

There were no shares or debentures issued during the financial year.


WARRANTS

On 3 September 2014, the Company allotted and issued 214,871,911 warrants which were constituted under the Deed Poll dated 16 July 2014.

Salient features of the above warrants are as follows:

(i) each of the warrant entitles the holder to the right of exercise of one ordinary share in the Company. The number of warrants is subject to adjustments under certain circumstances in accordance with the provisions of Deed Poll;

(ii) the warrants may be exercised any time over a period of two (2) years including and commencing from the issue date of the warrants. Any warrants not exercise during the Exercise Period will thereafter lapse and become void;

(iii) the new ordinary shares allotted and issued upon exercise of the warrants shall be fully paid and rank pari passu with the existing ordinary shares of the Company. The warrant holders will not have any voting rights in any general meeting of the Company unless the warrants are exercised into new ordinary shares and registered prior to the date of the general meeting of the Company; and

(iv) each warrant entitles its holder the right to subscribe for one ordinary share of RM1/- each in the Company at any time up to the expiry date of 26 August 2016 at an exercise price of RM1.18/- each payable in cash.

The movement in the warrants during the financial year are as follows:

NUMBER OF WARRANTS AT AT 1.4.2015 EXERCISED LAPSED 31.3.2016

Warrants 214,871,911 – – 214,871,911

DIRECTORS

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

Dato’ Abdul Hamid bin MustaphaDatuk Oh Chong PengU Chin WeiLee Chun FaiTang King HuaDatuk Ir. Hamzah bin HasanTan Sri Pang Tee ChewVuitton Pang Hee Cheah (Alternate director to Tan Sri Pang Tee Chew)

DIRECTORS’ REPORT(cont’d)

44

DIRECTORS’ INTERESTS

According to the register of directors’ shareholdings kept by the Company under Section 134 of the Companies Act, 1965 in Malaysia, the interests of those directors who held office at the end of the financial year in shares of the Company during the financial year ended 31 March 2016 are as follows:

NUMBER OF ORDINARY SHARES OF RM1/- EACH AT AT 1.4.2015 BOUGHT SOLD 31.3.2016

The Company

Direct interestU Chin Wei 30,000 – – 30,000Tan Sri Pang Tee Chew 35,000 – – 35,000Tang King Hua 350,000 – – 350,000

Indirect interestU Chin Wei 11,500 – – 11,500#

Tan Sri Pang Tee Chew 93,415,100 – – 93,415,100^

NUMBER OF WARRANTS AT AT 1.4.2015 BOUGHT SOLD 31.3.2016

The Company

Direct interestTan Sri Pang Tee Chew 7,500 – – 7,500

Indirect interestTan Sri Pang Tee Chew 20,148,800 – – 20,148,800^

# Deemed interested in the shares held by his spouse, Madam Goh Siew Thing by virtue of Section 134(12)(c) of the Companies Act, 1965 in Malaysia.

^ Deemed interested in the shares held by United Frontiers Holdings Limited by virtue of Section 6A(4) of the Companies Act, 1965 in Malaysia.

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.

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 disclosed in 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.


DIRECTORS’ REPORT(cont’d)

SIGNIFICANT EVENTS

Details of significant events during the financial year and subsequent to the end of the financial year are disclosed in Note 36 and Note 37 to the financial statements.

AUDITORS

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

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

DATO’ ABDUL HAMID BIN MUSTAPHADirector

DATUK OH CHONG PENGDirector

Kuala Lumpur28 June 2016

46

STATEMENTS OF FINANCIAL POSITIONAS AT 31 MARCH 2016

GROUP COMPANY 2016 2015 2016 2015 NOTE RM’000 RM’000 RM’000 RM’000

ASSETSNon-current assetsProperty, plant and equipment 5 10,581 10,092 190 209Goodwill on consolidation 6 5,369 5,369 – –Infrastructure development expenditure 7 691,411 155,732 – –Investment in subsidiaries 8 – – 163,931 163,931Investment in associates 9 73,219 50,193 – –

Total non-current assets 780,580 221,386 164,121 164,140

Current assetsInventories 10 2,151 2,133 – –Trade receivables, other receivables

and prepayments 11 78,166 43,283 360,575 34,702Tax recoverable 1,046 498 – –Other investments 12 109,017 398,254 108,618 309,939Deposits placed with licensed banks 13 1,296,751 3,803 1,500 1,801Cash and bank balances 4,709 7,471 478 2,670

1,491,840 455,442 471,171 349,112Associate classified as non-current asset

held for sale 14 85,470 78,505 85,470 78,505

Total current assets 1,577,310 533,947 556,641 427,617

TOTAL ASSETS 2,357,890 755,333 720,762 591,757


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


Equity attributable to the owners of the Company

Share capital 15 1,002,736 1,002,736 1,002,736 1,002,736Reserves 16 (352,761) (379,655) (418,834) (422,246)

Equity attributable to the owners of the Company 649,975 623,081 583,902 580,490

Non-controlling interests 42,964 42,098 – –

Total equity 692,939 665,179 583,902 580,490

Non-current liabilitiesDeferred tax liabilities 17 1,683 232 – –Deferred income 18 120,294 – – –Loans and borrowings 19 1,109,131 – – –

Total non-current liabilities 1,231,108 232 – –

Current liabilitiesTrade and other payables 20 427,096 83,042 88,561 11,267Amount due to customers for contract works 21 – – 48,299 –Loans and borrowings 19 6,625 6,416 – –Tax payable 122 464 – –

Total current liabilities 433,843 89,922 136,860 11,267

Total liabilities 1,664,951 90,154 136,860 11,267

TOTAL EQUITY AND LIABILITIES 2,357,890 755,333 720,762 591,757

STATEMENTS OF FINANCIAL POSITION(cont’d)

48


STATEMENTS OF COMPREHENSIVE INCOMEFOR THE FINANCIAL YEAR ENDED 31 MARCH 2016


Revenue 22 535,009 18,500 122,073 –Cost of sales 23 (528,929) (17,584) (122,073) –

Gross profit 6,080 916 – –

Other income 17,422 31,281 16,549 23,577Administrative expenses (6,144) (4,494) (3,905) (2,866)Selling and marketing expenses (468) (729) – –

Operating profit 16,890 26,974 12,644 20,711Other expenses (7,046) (13,593) (7,199) (12,184)Finance costs 24 (3,221) (5,985) (2,033) (6,963)Share of results of associates, net of tax 23,026 33,089 – –

Profit before taxation 25 29,649 40,485 3,412 1,564Taxation 26 (1,889) (1,541) – (118)

Profit for the financial year 27,760 38,944 3,412 1,446

Other comprehensive loss, net of taxItem that may be reclassified subsequently

to profit or loss– share of foreign exchange reserves

of an associate – (1,399) – –

Total comprehensive income for the financial year 27,760 37,545 3,412 1,446

Profit for the financial year attributable to:Owners of the Company 26,894 38,438 3,412 1,446Non-controlling interests 866 506 – –

27,760 38,944 3,412 1,446

Total comprehensive income for the financial year attributable to:Owners of the Company 26,894 37,039 3,412 1,446Non-controlling interests 866 506 – –

27,760 37,545 3,412 1,446

Earnings per ordinary share attributable to owners of the Company (sen)

Basic earnings per ordinary share 2.67 4.69

Diluted earnings per ordinary share 2.67 4.69


STATEMENTS OF CHANGES IN EQUITYFOR THE FINANCIAL YEAR ENDED 31 MARCH 2016

ATTRIBUTABLE TO OWNERS OF THE COMPANY

NON-DISTRIBUTABLE

FOREIGN EXCHANGE RESERVE FOREIGN CLASSIFIED NON- SHARE SHARE WARRANT EXCHANGE AS HELD ACCUMULATED CONTROLLING TOTAL CAPITAL PREMIUM RESERVE RESERVE FOR SALE LOSSES TOTAL INTERESTS EQUITY GROUP NOTE RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 April 2014 572,992 42,345 – 870 – (489,509) 126,698 41,592 168,290Total comprehensive income

for the financial yearProfit for the financial year – – – – – 38,438 38,438 506 38,944Other comprehensive income:– Share of foreign exchange

reserves of an associate – – – (1,399) – – (1,399) – (1,399)

Total comprehensive income – – – (1,399) – 38,438 37,039 506 37,545Reserve attributable to associate

classified as held for sale – – – 529 (529) – – – –Transactions with owners:Rights issue with free warrants 15 429,744 4,779 51,569 – – (21,969) 464,123 – 464,123Share issuance costs 15 – (4,779) – – – – (4,779) – (4,779)

Total transactions with owners 429,744 – 51,569 – – (21,969) 459,344 – 459,344

At 31 March 2015 1,002,736 42,345 51,569 – (529) (473,040) 623,081 42,098 665,179Total comprehensive income

for the financial yearProfit for the financial year – – – – – 26,894 26,894 866 27,760

Total comprehensive income – – – – – 26,894 26,894 866 27,760

At 31 March 2016 1,002,736 42,345 51,569 – (529) (446,146) 649,975 42,964 692,939

50


NON-DISTRIBUTABLE

SHARE SHARE WARRANT ACCUMULATED TOTAL CAPITAL PREMIUM RESERVE LOSSES EQUITY COMPANY NOTE RM’000 RM’000 RM’000 RM’000 RM’000

At 1 April 2014 572,992 42,345 – (495,637) 119,700Total comprehensive income

for the financial yearProfit for the financial year – – – 1,446 1,446

Total comprehensive income – – – 1,446 1,446Transaction with owners:Rights issue with free warrants 15 429,744 4,779 51,569 (21,969) 464,123Share issuance costs 15 – (4,779) – – (4,779)

Total transactions with owners 429,744 – 51,569 (21,969) 459,344

At 31 March 2015 1,002,736 42,345 51,569 (516,160) 580,490Total comprehensive income

for the financial yearProfit for the financial year – – – 3,412 3,412

Total comprehensive income – – – 3,412 3,412

At 31 March 2016 1,002,736 42,345 51,569 (512,748) 583,902


STATEMENTS OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 MARCH 2016


CASH FLOWS FROM OPERATING ACTIVITIES:Profit before taxation 29,649 40,485 3,412 1,564

Adjustments for:Depreciation of property, plant and equipment 360 501 28 25Distribution income from unit trusts (5,374) (10,243) (4,857) (7,283)Fair value (gain)/loss on other investments (2,153) 242 (1,933) 10Loss on disposal of investment in an associate – 2,483 – 2,483Impairment loss on property, plant and equipment – 9,677 – –Impairment loss on receivables– trade and other receivables 6,940 1,008 6,891 –– subsidiaries – – 280 8,743Impairment loss on investment in associate

no longer required – (15,687) – (11,145)Reversal of write down of associate

classified as non-current asset held for sale (6,965) – (6,965) –Impairment loss– trade and other receivables –* (11) – –– subsidiary – – – (43)Interest income (1,328) (952) (1,256) (886)Interest expenses 3,221 5,985 2,033 6,963Share of results of associates (23,026) (33,089) – –Waiver of interest – (4,347) – (4,264)Waiver of debt (8) – – –

Operating profit/(loss) before changes in working capital 1,316 (3,948) (2,367) (3,833)

Changes In Working Capital:Inventories (18) (571) – –Receivables (4,162) 1,127 (125,743) 26Payables 4,862 (1,502) 78,004 (8,002)Balances with customers for contract works – 181 48,299 –

Cash flows from/(used in) operations 1,998 (4,713) (1,807) (11,809)Interest paid – (283) – (283)Income tax paid (1,394) (2,207) – (118)Income tax refunded 66 – – –

Net cash from/(used in) operating activities 670 (7,203) (1,807) (12,210)

52



CASH FLOWS FROM INVESTING ACTIVITIES:Additions to property, plant and equipment (1,158) (179) (9) (37)Additions to infrastructure development

expenditure 7 (195,081) (15,849) – –Interest received 216 952 144 886Net change in amount owing by subsidiaries – – (208,019) (8,833)Net change in amount owing by associates (43) (489) (203) (516)Proceeds from/(placement of) other investments 296,764 (302,227) 208,111 (302,666)Proceeds from disposal of investment

in an associate – 21,620 – 21,620Placement of fixed deposits (946,185) – – –

Net cash (used in)/from investing activities (845,487) (296,172) 24 (289,546)

CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from issuance of bonds 1,000,000 – – –Drawdown of government support loan 250,000 – – –Drawdown of term loan 39,161 – – –Expenses in relation to rights issue – (4,779) – (4,779)Transaction costs of financing facilities (99,370) (3,000) – –Interest paid (1,182) (39,390) – (40,368)Net change in amount owing to subsidiaries – – (710) (8,186)Proceeds from issuance of shares – 464,123 – 464,123Repayment of borrowings – (111,678) – (106,771)

Net cash from/(used in) financing activities 1,188,609 305,276 (710) 304,019

NET CHANGE IN CASH AND CASH EQUIVALENTS 343,792 1,901 (2,493) 2,263

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE FINANCIAL YEAR 9,135 7,234 4,471 2,208

CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR 352,927 9,135 1,978 4,471

ANALYSIS OF CASH AND CASH EQUIVALENTS:Deposits placed with licensed banks 1,296,751 3,803 1,500 1,801Cash and bank balances 4,709 7,471 478 2,670Bank overdrafts 19 (2,348) (2,139) – –Less:Deposits with maturity of more than 3 months (946,185) – – –

352,927 9,135 1,978 4,471

*represent amounts less than RM1,000/-


NOTES TO THE FINANCIAL STATEMENTS

1. PRINCIPAL ACTIVITIES AND GENERAL INFORMATION

Kumpulan Europlus Berhad (“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 of the Company is located at Unit 30-01, Level 30, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200, Kuala Lumpur. The principal place of business of the Company is located at 37-2, No. 8, Jalan Anggerik Vanilla BE 31/BE, Kota Kemuning, Seksyen 31, 40460 Shah Alam, Selangor Darul Ehsan.

The Company is principally involved in investment holding. The principal activities of its subsidiaries and associates are disclosed in Note 8 and Note 9 to the financial statements. There have been no significant changes in the nature of these principal activities during the financial year.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 28 June 2016.

2. BASIS OF PREPARATION

2.1 Statement of Compliance

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

2.2 Basis of measurement

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

2.3 Use of estimates and judgement

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

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

2.4 Functional and presentation currency

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

54

2. BASIS OF PREPARATION (cont’d)

2.5 Adoption of amendments/improvements to FRSs

The Group and the Company had adopted the following amendments/improvements to FRSs that are mandatory for the current financial year:

Amendments/Improvements to FRSs

FRS 1 First-time Adoption of Financial Reporting StandardsFRS 2 Share-based PaymentFRS 3 Business CombinationsFRS 8 Operating SegmentsFRS 13 Fair Value MeasurementFRS 116 Property, Plant and EquipmentFRS 119 Employee BenefitsFRS 124 Related Party DisclosuresFRS 138 Intangible AssetsFRS 140 Investment Property

The adoption of the above amendments/improvements to FRSs did not have any significant effect on the financial statements of the Group and of the Company and did not result in significant changes to the Group’s and the Company’s existing accounting policies.

2.6 New FRS and amendments/improvements to FRSs that have been issued, but yet to be effective

The Group and the Company have not adopted the following new FRS and amendments/improvements to FRSs that have been issued, but yet to be effective.

EFFECTIVE FOR FINANCIAL PERIODS BEGINNING ON OR AFTER

New FRSFRS 9 Financial Instruments 1 January 2018

Amendments/Improvements to FRSsFRS 5 Non-current Assets Held for Sale and Discontinued Operations 1 January 2016FRS 7 Financial Instruments: Disclosures 1 January 2016FRS 10 Consolidated Financial Statements Deferred/1 January 2016FRS 11 Joint Arrangements 1 January 2016FRS 12 Disclosures of Interests in Other Entities 1 January 2016FRS 14 Regulatory Deferral Accounts 1 January 2016FRS 101 Presentation of Financial Statements 1 January 2016FRS 107 Statement of Cash Flows 1 January 2017FRS 112 Income Taxes 1 January 2017FRS 116 Property, Plant and Equipment 1 January 2016FRS 119 Employee Benefits 1 January 2016FRS 127 Separate Financial Statements 1 January 2016FRS 128 Investment in Associates and Joint Ventures Deferred/1 January 2016FRS 134 Interim Financial Reporting 1 January 2016FRS 138 Intangible Assets 1 January 2016



2.6 New FRS and amendments/improvements to FRSs that have been issued, but yet to be effective (cont’d)

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

FRS 9 Financial Instruments

Key requirements of FRS 9:

• FRS9introducesanapproachforclassificationoffinancialassetswhichisdrivenbycashflowcharacteristicsandthe business model in which an asset is held. The new model also results in a single impairment model being applied to all financial instruments.

In essence, if a financial asset is a simple debt instrument and the objective of the entity’s business model within whichitisheldistocollectitscontractualcashflows,thefinancialassetismeasuredatamortisedcost.Incontrast,ifthatassetisheldinabusinessmodeltheobjectiveofwhichisachievedbybothcollectingcontractualcashflowsand selling financial assets, then the financial asset is measured at fair value in the statements of financial position, and amortised cost information is provided through profit or loss. If the business model is neither of these, then fair value information is increasingly important, so it is provided both in the profit or loss and in the statements of financial position.

• FRS9 introducesanew,expected-loss impairmentmodel thatwill requiremoretimely recognitionofexpectedcredit losses. Specifically, this Standard requires entities to account for expected credit losses from when financial instruments are first recognised and to recognise full lifetime expected losses on a more timely basis. The model requires an entity to recognise expected credit losses at all times and to update the amount of expected credit losses recognisedateachreportingdatetoreflectchangesinthecreditriskoffinancialinstruments.Thismodeleliminatesthe threshold for the recognition of expected credit losses, so that it is no longer necessary for a trigger event to have occurred before credit losses are recognised.

• FRS 9 introduces a substantially-reformedmodel for hedge accounting, with enhanced disclosures about riskmanagement activity. The new model represents a significant overhaul of hedge accounting that aligns the accountingtreatmentwithriskmanagementactivities,enablingentitiestobetterreflecttheseactivities intheirfinancial statements. In addition, as a result of these changes, users of the financial statements will be provided with better information about risk management and the effect of hedge accounting on the financial statements.

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

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

Amendments to FRS 7 Financial Instruments: Disclosures

Amendments to FRS 7 provide additional guidance to clarify whether servicing contracts constitute continuing involvement for the purposes of applying the disclosure requirements of FRS 7.

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

NOTES TO THE FINANCIAL STATEMENTS(cont’d)

56



Amendments to FRS 11 Joint Arrangements

Amendments to FRS 11 clarify that when an entity acquires an interest in a joint operation in which the activity of the joint operation constitutes a business, as defined in FRS 3, it shall apply the relevant principles on business combinationsaccountinginFRS3,andotherFRSs,thatdonotconflictwithFRS11.Someoftheimpactarisingmaybe the recognition of goodwill, recognition of deferred tax assets/ liabilities and recognition of acquisition-related costs as expenses. The amendments do not apply to joint operations under common control and also clarify that previously held interests in a joint operation are not re-measured if the joint operator retains joint control.

Amendments to FRS 101 Presentation of Financial Statements

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

Amendments to FRS 107 Statement of Cash Flows

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

Amendments to FRS 112 Income Taxes

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

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

Amendments to FRS 116 Property, Plant and Equipment

AmendmentstoFRS116prohibitrevenue-baseddepreciationbecauserevenuedoesnotreflectthewayinwhichanitem of property, plant and equipment is used or consumed.

Amendments to FRS 127 Separate Financial Statements

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




Amendments to FRS 138 Intangible Assets

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

•whentheintangibleassetisexpressedasameasureofrevenue,i.e.inthecircumstanceinwhichthepredominantlimiting factor that is inherent in an intangible asset is the achievement of a revenue threshold; or

•whenitcanbedemonstratedthatrevenueandtheconsumptionoftheeconomicbenefitsoftheintangibleassetare highly correlated.

Amendments to FRS 10 Consolidated Financial Statements and FRS 128 Investments in Associates and Joint Ventures

These amendments address an acknowledged inconsistency between the requirements in FRS 10 and those in FRS 128, in dealing with the sale or contribution of assets between an investor and its associate or joint venture.

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

MASB Approved Accounting Standards, MFRSs

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

The MFRSs Framework is mandatory for adoption by all Entities Other Than Private Entities for annual periods beginning on or after 1 January 2012, with the exception of entities subject to the application of MFRS 141 Agriculture and/or IC Int 15 Agreements for the Construction of Real Estate (“Transitioning Entities”). The Transitioning Entities are given an option to defer the adoption of MFRSs Framework and shall apply the MFRSs framework for annual periods beginning on or after 1 January 2018. Transitioning Entities also include those entities that consolidate or equity account or proportionately consolidate another entity that has chosen to continue to apply the FRSs framework for annual periods beginning on or after 1 January 2012.

Accordingly, the Group and the Company which are Transitioning Entities have chosen to defer the adoption of the MFRSs framework. As such, the Group and the Company will prepare their first MFRSs financial statements using the MFRSs framework for financial year ended 31 March 2019. The main effects arising from the transition to the MFRSs Framework are discussed below.

MASB also has issued MFRS 15 Revenue from Contracts with Customers and Amendments to MFRS 116 and MFRS 141 (Agriculture: Bearer Plants). MFRS 15 is effective for annual periods beginning on or after 1 January 2018 while the Bearer Plants amendments is effective for annual periods beginning on or after 1 January 2016.

The effect is based on the Group’s and the Company’s best estimates at the reporting date. The financial effects may change or additional effects may be identified, prior to the completion of the Group’s and the Company’s first MFRSs based financial statements.


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MASB Approved Accounting Standards, MFRSs (cont’d)

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

MFRS 1 requires comparative information to be restated as if the requirements of MFRSs have always been applied, except when MFRS 1 allows certain elective exemptions from such full retrospective application or prohibits retrospective application of some aspects of MFRSs.

The Group and the Company are currently assessing the impact of adoption of MFRS 1, including identification of the differences in existing accounting policies as compared to the new MFRSs and the use of optional exemptions as provided for in MFRS 1. As at the date of authorisation of issue of the financial statements, accounting policy decisions or elections have not been finalised. Thus, the impact of adoption of MFRS 1 cannot be determined and estimated reliably until the process is completed.

MFRS 15 Revenue from Contracts with Customers

The core principle of MFRS 15 is that an entity recognises revenue to depict the transfer of promised goods or services tocustomersinanamountthatreflectstheconsiderationtowhichtheentityexpectstobeentitledinexchangeforthose goods or services. An entity recognises revenue in accordance with the core principle by applying the following steps:

• Identifythecontractswithacustomer;

• Identifytheperformanceobligationinthecontract;

• Determinethetransactionprice;.

• Allocatethetransactionpricetotheperformanceobligationsinthecontract;.

• Recogniserevenuewhen(oras)theentitysatisfiesaperformanceobligation.

MFRS 15 also includes new disclosures that would result in an entity providing users of financial statements about the nature,amount,timinganduncertaintyofrevenueandcashflowsfromcontractswithcustomers.

MFRS 16 Leases

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

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



3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

3.1 Economic Entities and Basis of Consolidation

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

(i) Subsidiaries and business combination

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

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

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

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

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

• therecognisedamountofanynon-controllinginterestsintheacquireeeitheratfairvalueorattheproportionateshare of the acquiree’s identifiable net assets at the acquisition date (the choice of measurement basis is made on an acquisition-by-acquisition basis); plus

• ifthebusinesscombinationisachievedinstages,theacquisition-datefairvalueofthepreviouslyheldequityinterest in the acquiree; less

• thenetfairvalueoftheidentifiableassetsacquiredandtheliabilities(includingcontingentliabilities)assumedat the acquisition date.

The accounting policy for goodwill is set out in Note 3.6 to the financial statements.

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

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

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

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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

3.1 Economic Entities and Basis of Consolidation (cont’d)

(i) Subsidiaries and business combination (cont’d)

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

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

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

(ii) Non-controlling interests

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

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

(iii) Associates

Associates are entities overwhich theGroup has significant influence, but not control, to the financial andoperating policies.

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

Under the equity method, the investment in associates are initially recognised at cost. The cost of investment includes transaction costs. Subsequently, the carrying amount is adjusted to recognise changes in the Group’ share of net assets of the associate.

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

When theGroup ceases to have significant influence over an associate, any retained interest in the formerassociateatthedatewhensignificantinfluenceislostismeasuredatfairvalueandthisamountisregardedastheinitial carrying amount of an available-for-sale financial asset or a held for trading financial asset. Any difference betweenthecarryingamountoftheassociateuponlossofsignificantinfluenceandthefairvalueoftheretainedinvestment and proceeds from disposal is recognised in profit or loss.




3.1 Economic Entities and Basis of Consolidation (cont’d)

(iii) Associates (cont’d)

WhentheGroup’sinterest inanassociatedecreasesbutdoesnotresult inalossofsignificantinfluence,anyretained interest is not re-measured. Any gain or loss arising from the decrease in interest is recognised in profit or loss. Any gains or losses previously recognised in other comprehensive income are also reclassified proportionately to the profit or loss if that gain or loss would be required to be reclassified to profit or loss on the disposal of the related assets or liabilities.

(iv) Joint arrangements

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

Joint arrangements are classified and accounted for as follows:

• Ajointarrangementisclassifiedasa“jointoperation”whentheGrouphasrightstotheassetsandobligationsfor the liabilities relating to the arrangement.

• A joint arrangement is classified as “joint venture” when the Group has rights to the net assets of thearrangements.

The Group has assessed the nature of its joint arrangement and determined it to be a joint operation. The Group accounts for its share of the assets (including its share of any assets held jointly), the liabilities (including its share of any liabilities incurred jointly), its revenue from sale of its share of the output arising from the joint operation, its shares of the revenue from the sale of output by the joint operation and its expenses (including its share of any expenses incurred jointly).

The Group accounts for the assets, liabilities, revenues and expenses relating to its interest in a joint operation in accordance with the FRSs applicable to the particular assets, liabilities, revenues and expenses.

Profits and losses resulting from transactions between the Group and its joint operation are recognised in the Group’s financial statements only to the extent of unrelated investors’ interests in the joint operation.

(v) Transactions eliminated on consolidation

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

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

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3.2 Separate Financial Statements

In the Company’s statement of financial position, investment in subsidiaries, joint ventures and associates are measured at cost less any accumulated impairment losses, unless the investment is classified as held for sale or distribution. The cost of investment includes transaction costs. The policy for the recognition and measurement of impairment losses shall be applied on the same basis as would be required for impairment of non-financial assets as disclosed in Note 3.18(ii) to the financial statements.

3.3 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 instrument.

Financial instruments are recognised initially at fair value, except for financial instruments not measured at fair value through profit or loss, they are measured at fair value plus transaction costs that are directly attributable to the acquisition or issue of the financial instruments.

(i) Subsequent measurement

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

(a) Financial assets

Financial assets at fair value through profit or loss

Financial assets are classified as financial assets at fair value through profit or loss when the financial assets is either held for trading, including derivatives or it is designated into this category upon initial recognition.

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

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 costs.

Loans and receivables

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

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method less accumulated impairment losses, if any. The policy for the recognition and measurement of impairment losses is in accordance with Note 3.18(i) to the financial statements. Gains and losses are recognised in profit or loss through the amortisation process.

Held-to-maturity investments

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

Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using the effective interest method less accumulated impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 3.18(i) to the financial statements. Gains and losses are recognised in profit or loss through the amortisation process.




3.3 Financial Instruments (cont’d)

(i) Subsequent measurement (cont’d)

(a) Financial assets (cont’d)

Available-for-sale financial assets

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

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

(b) Financial liabilities

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading, including derivatives or financial liabilities designated into this category upon initial recognition.

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

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

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

Other financial liabilities

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

(ii) Financial Guarantee Contracts

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the 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.

Financial guarantee contracts are recognised initially as a liability at fair value, net of transaction costs that are directly attributable to the issuance of the guarantee. Subsequent to initial recognition, 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.

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3.3 Financial Instruments (cont’d)

(iii) Derecognition

A financial asset or a part of it is derecognised when, and only when, the contractual rights to receive the cash flowsfromthefinancialassetexpireorcontroloftheassetisnotretainedorsubstantiallyalloftherisksandrewards of ownership of the financial asset are transferred to another party. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss.

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

(vi) Offsetting of financial instruments

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

3.4 Property, Plant and Equipment

(i) Recognition and measurement

Property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment loss, if any. The policy for the recognition and measurement of impairment losses is in accordance with Note 3.18 (ii) to the financial statements.

Cost of assets includes expenditure that are directly attributable to the acquisition of the asset and any other cost that are directly attributable to bringing the asset to working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. The cost of self-constructed assets also includes cost of materials, direct labour, and any other direct attributable costs but excludes internal profit. For qualifying assets, borrowing costs are capitalised in accordance with the accounting policy on borrowing costs in Note 3.11 to the financial statements.

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

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

(ii) Subsequent costs

The cost of replacing part of an item of property, plant and equipment is included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that the future economic benefitsassociatedwiththepartwillflowtotheGrouportheCompanyanditscostcanbemeasuredreliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the profit or loss as incurred.




3.4 Property, Plant and Equipment (cont’d)

(iii) Depreciation

Freehold land has an unlimited useful life and therefore is not depreciated.

All other property, plant and equipment are depreciated on straight-line basis by allocating their depreciable amounts over their remaining useful lives at the following rates:

Leasehold land 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 value, useful lives and depreciation methods are reviewed at the end of each reporting period and adjusted as appropriate.

(iv) Derecognition

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

3.5 Leases

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

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

(i) Leasee accounting

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

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

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

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

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3.5 Leases (cont’d)

(ii) Lessor accounting

If an entity in the Group is a lessor in a finance lease, it derecognises the underlying asset and recognises a lease receivable at an amount equal to the net investment in the lease. Finance income is recognised in profit or loss basedonapatternreflectingaconstantperiodic rateof returnonthe lessor’snet investment inthefinancelease.

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

3.6 Goodwill on Consolidation

Goodwill arising from business combinations is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. After initially recognition, goodwill is measured at cost less any accumulated impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 3.18 to the financial statements.

In respect of equity-accounted associates and joint venture, goodwill is included in the carrying amount of the investment and is not tested for impairment individually. Instead, the entire carrying amount of the investment is tested for impairment as a single asset when there is objective evidence of impairment.

3.7 Other Intangible Asset

The Group recognises infrastructure development expenditure as an intangible asset. This arises from a service concession arrangement where it has a right to charge users for usage of the concession infrastructure under the intangible asset model, as defined in IC Interpretation 12 Service Concession Arrangements (“IC Int 12”). Intangible asset received as consideration for providing construction work in a service concession arrangement is measured at fair value upon initial recognition. Subsequent to initial recognition, intangible asset is measured at cost less accumulated amortisation and any accumulated impairment loss.

The intangible asset model, as defined in IC Int 12, applies to service concession arrangements where the grantor has not provided a contractual guarantee in respect of the amount receivable for constructing and operating the assets. Under this model, during construction phase, the Group records an intangible asset representing the right to charge users of the public service and recognise profits from the construction of the public service infrastructure. Income and expenses associated with construction contracts are recognised in accordance with FRS 111 Construction Contracts.

Upon completion of construction works and commencement of road tolling operations, the intangible asset is to be amortised. Amortisation is calculated to write off the cost of intangible assets arising from a service concession arrangement on systematic basis over the estimated useful life. Both the period and method of amortisation are reviewed annually.

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific assets to which it relates. All other expenditure is recognised in the profit or loss as incurred.

At the end of each of the reporting period, the Group assesses whether there is any indication of impairment. If such indication exists, the carrying amount is assessed and written down immediately to its recoverable amount.




3.8 Inventories

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

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

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

3.9 Non-current Assets Held for Sale

Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than continuing use. The criteria for held for sale classification is regarded as met only when:

• theassetisavailableforimmediatesaleinpresentcondition;

• themanagementiscommittedtoaplantoselltheassetandtheassetisactivelymarketedforsaleatapricethatis reasonable in relation to its current fair value; and

• the sale is expected to be completed within one year from the date of classification and action required tocomplete the plan indicates that is unlikely that significant changes to the plan will be made or that the sale will withdrawn.

Immediately before classification as held for sale, the assets, are remeasured in accordance with the Group’s accounting policies. Thereafter, generally the assets are measure at the lower of carrying amount and fair value less cost to sell.

Impairment losses on initial classification as held for sale and subsequent gains or losses on remeasurement are recognised in profit or loss. Gains are not recognised in excess of any cumulative impairment loss.

Intangible assets and property, plant and equipment once classified as held for sale are not amortised or depreciated. In addition, equity accounting of equity-accounted associates and joint venture ceases once classified as held for sale.

Assets and liabilities classified as held for sale are presented separately as current items in the statements of financial position.

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

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

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3.10 Construction Contracts (cont’d)

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.

3.11 Borrowing Costs

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

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

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

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

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

3.12 Government Grants

Grants from the government are recognised at their fair values where there is a reasonable assurance that the grant will be received and the Group will comply with all attached conditions.

Where the grant relates to an asset, it is recognised as deferred income in the statements of financial position and transferred to profit or loss over the expected useful life of the related asset. Where the grant relates to an expense item, it is recognised in profit or loss, under the heading of “other income”, on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed.

The benefit derived from a government loan at a below-market rate of interest is treated as a government grant, measured as the difference between proceeds received and the fair value of the loan based on prevailing market interest rates, which will be credited to the statements of comprehensive income over the expected life of the related assets on bases consistent with the depreciation or amortisation of the related assets for which the loan was granted to the Group.




3.13 Employee Benefits

(i) Short term employee benefits

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

(ii) Defined contribution plans

As required by law, the Group and the Company contribute to the Employees Provident Fund (“EPF”), the national defined contribution plan. Such contributions are recognised as an expense in the profit or loss in the period in which the employees render their services.

3.14 Contingencies

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

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

(a) it is not probable that an outflow of resources embodying economic benefitswill be required to settle theobligation; or

(b) the amount of the obligation cannot be measured with sufficient reliability.

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

3.15 Foreign Currencies

(i) Translation of foreign currency transactions

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

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

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

Foreign exchange differences arising on settlement or retranslation of monetary items are recognised in profit orlossexceptformonetaryitemthatisdesignatedasahedginginstrumentineitheracashflowhedgeorahedge of the Group’s net investment of a foreign operation. When settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, exchange differences are recognised in profit or loss in the separate financial statements of the parent company or the individual financial statements of the foreign operation. In the consolidated financial statements, the exchange differences are considered to form part of a net investment in a foreign operation and are recognised initially in other comprehensive income until its disposal, at which time, the cumulative amount is reclassified to profit or loss.

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3.15 Foreign Currencies (cont’d)

(i) Translation of foreign currency transactions (cont’d)

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

(ii) Foreign Operations

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

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

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

3.16 Taxes

(a) Income Tax

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

(i) Current tax

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

(ii) Deferred tax

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




3.16 Taxes (cont’d)

(a) Income Tax (cont’d)

(ii) Deferred tax (cont’d)

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

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

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

Deferred tax 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 and tax laws that have been enacted or substantively enacted at the reporting date.

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

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

(b) Goods and services tax

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

•wheretheGSTincurredinapurchaseofassetsorservicesisnotrecoverablefromthetaxationauthority,inwhich case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

• receivablesandpayablesthatarestatedwiththeamountofGSTincluded.

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

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3.17 Revenue Recognition

The Group recognised revenue when the amount of revenue can be reliably measured, it is probable that future economicbenefitwill flow to theentity and specific criteriahavebeenmet for eachof theGroup’s activities asdescribed below:

(i) Construction

Revenue from construction is recognised based on the stage of completion method as described in Note 3.10 to the financial statements.

(ii) Sales of goods

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

(iii) Interest income

Interest income is recognised using the effective interest method.

(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 over the lease period.

(vi) Distribution income from unit trusts

Distribution income from unit trusts is recognised when the right to receive the payment is established.

3.18 Impairment of Assets

(i) Impairment and uncollectibility of financial assets

At each reporting date, all financial assets (except for financial assets categorised as fair value through profit or loss and investment in subsidiaries, associates and joint ventures) are assessed as to whether there is any objective evidenceofimpairmentasaresultofoneormoreeventshavinganimpactontheestimatedfuturecashflowsof the financial asset that can be reliably estimated. Losses expected as a result of future events, no matter how likely, are not recognised.

Evidence of impairment may include indications that the debtors or a group of debtors are experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation, and where observable data indicate that there is a measurable decreaseintheestimatedfuturecashflows,suchaschangesinarrearsoreconomicconditionsthatcorrelatewith defaults.




3.18 Impairment of Assets (cont’d)

(i) Impairment and uncollectibility of financial assets (cont’d)

Loans and receivables and held-to-maturity investments

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

The amount of impairment loss is measured as the difference between the financial asset’s carrying amount and thepresentvalueofestimatedfuturecashflowsdiscountedatthefinancialasset’soriginaleffectiveinterestrate.The carrying amount of the financial asset is reduced through the use of an allowance account and the loss is recognised in profit or loss.

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

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

Available-for-sale financial assets

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

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

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

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

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3.18 Impairment of Assets (cont’d)

(ii) Impairment of non-financial assets

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

For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cashinflowsfromcontinuingusethatarelargelyindependentofthecashinflowsofnon-financialassetsorcash-generating units (“CGUs”). Subject to an operating segment ceiling test, for the purpose of goodwill impairment testing, CGUs to which goodwill has been allocated are aggregated so that the level at which impairment testing isperformed reflects the lowest levelatwhichgoodwill ismonitored for internal reportingpurposes. The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to a CGU or a group of CGUs that are expected to benefit from the synergies of business combination.

The recoverable amount of an asset of CGU is the higher of its fair value less costs of disposal and its value inuse.Inassessingvalueinuse,theestimatedfuturecashflowsarediscountedtotheirpresentvalueusinga pre-taxdiscountratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecificto the asset or CGU. In determining the fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used.

Where the carrying amount of an asset exceed its recoverable amount, the carrying amount of asset is reduced to 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.

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

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




3.19 Cash and Cash Equivalents

Forthepurposeofthestatementsofcashflows,cashandcashequivalentscomprisecashonhand,bankbalancesand deposits and other short-term, highly liquid investments with a maturity of three months or less, that are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value. Cash and cash equivalents are presented net of bank overdrafts.

3.20 Share Capital

(i) Ordinary shares

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

(ii) Warrants

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

3.21 Operating segments

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

3.22 Fair Value Measurements

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

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

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

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at the measurement date.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Unobservable inputs for the asset or liability.

The Group recognises transfers between levels of the fair value hierarchy as of the date of the event or change in circumstances that caused the transfers.

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3.23 Earnings Per Share

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

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

4. SIGNIFICANT ACCOUNTING JUDGEMENT, ESTIMATES AND ASSUMPTIONS

Significant areas of estimation, uncertainty and critical judgements in applying accounting policies that have significant effect in determining the amount recognised in the financial year included the following:

(i) Impairment of goodwill

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

Whenvalue-in-usecalculationsareundertaken,managementmustestimatetheexpectedfuturecashflowsfromtheasset or cash-generating unit and choose a suitable discount rate in order to calculate the present value of those cash flows.Furtherdetailsofthecarryingvalue,thekeyassumptionsappliedintheimpairmentassessmentofgoodwillandsensitivity analysis to changes in the assumptions are disclosed in Note 6 to the financial statements.

(ii) Useful lives of property, plant and equipment

The Group and the Company estimate the useful lives of property, plant and equipment based on the periods 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 experience with similar assets in the industries. 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. The carrying amount of property, plant and equipment are disclosed in Note 5 to the financial statements.

(iii) Impairment of investment in subsidiaries

The Company assesses the carrying amount of its investment in subsidiaries at each reporting date whether there is an indication that an asset may be impaired. More regular reviews are performed if events indicate that this is necessary. Costs of investments in subsidiaries which have ceased operations were impaired up to net assets of the subsidiaries.

Significantjudgementisrequiredintheestimationofthepresentvalueoffuturecashflowsgeneratedbythesubsidiaries,which involve uncertainties and are significantly affected by assumptions used and judgement made regarding estimates offuturecashflowsanddiscountrates.ChangesinassumptionscouldsignificantlyaffecttheresultsoftheCompany’stests for impairment of investment in subsidiaries. The carrying amounts of investment in subsidiaries are disclosed in Note 8 to the financial statements.



4. SIGNIFICANT ACCOUNTING JUDGEMENT, ESTIMATES AND ASSUMPTIONS (cont’d)

(iv) Impairment of property, plant and equipment

The Group and the Company review 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. Independent professional valuations to determine the carrying amount of these assets will be procured when the need arises.

As at the end of the financial year under review, there is no events or changes in circumstances to indicate that the carrying amount of an asset may suffer further impairment based on internal management assessment. The carrying amounts of property, plant and equipment are disclosed in Note 5 to the financial statements.

(v) Impairment of infrastructure development expenditure

The Group tests infrastructure development expenditure for impairment annually in accordance with its accounting policy. The Group makes an estimate of the infrastructure development expenditure’s recoverable amount based on the value-in-usecalculationusingthecashflowprojectionsfromfinancialbudgetsapprovedbythemanagementcoveringthe remaining period of the concession agreement.

Significant judgement is required in the estimation of the present value of future cash flows generated from theinfrastructure development expenditure, which involve uncertainties and are significantly affected by assumptions usedandjudgementmaderegardingestimatesoffuturecashflowsanddiscountrates.Changesinassumptionscouldsignificantly affect the results of the Group’s tests for impairment of infrastructure development expenditure.

The carrying amount of the infrastructure development expenditure is disclosed in Note 7 to the financial statements.

(vi) 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.

The carrying amount of the inventories are disclosed in Note 10 to the financial statements.

(vii) Impairment of loans and receivables (including amounts owing by subsidiaries and associates)

The Group and the Company 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 and the Company consider factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments.

Wherethereisobjectiveevidenceofimpairment,theamountandtimingoffuturecashflowsareestimatedbasedonhistorical loss experience for assets with similar credit risk characteristics. The carrying amount of the Group’s and the Company’s receivables at the reporting date is disclosed in Note 11 to the financial statements.

(viii) 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. The income tax amount of the Group and the Company is disclosed in Note 26 to the financial statements.

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4. SIGNIFICANT ACCOUNTING JUDGEMENT, ESTIMATES AND ASSUMPTIONS (cont’d)

(ix) Contingent liabilities

Determination of the treatment of contingent liabilities in the financial statements is based on the management’s view of the expected outcome of the applicable contingency. The contingent liabilities of the Group is disclosed on Note 29 to the financial statements.

(x) Construction contracts

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

Significant judgements are required in determining the stage of completion, the extent of the contract cost incurred, the estimated total contract revenue and cost, as well as recoverability of the construction projects. In making the judgement, the management’s evaluation is based on past experience. The amount due to customers for contact works is disclosed in Note 21 to the financial statements.

(xi) Construction revenue recognition in relation to Concession Agreement

In accordance with IC Int 12 Service Concession Arrangements, revenue associated with construction works under the Concession Agreement shall be recognised and measured in accordance with FRS 111 Construction Contracts using the percentage of completion method. Revenue generated by construction work rendered by the Group is measured at fair value of the consideration received or receivable.

In order to determine the construction revenue to be recognised, the directors have estimated and recognised a construction margin in the construction of the infrastructure asset. The estimated margin is based on relative comparison with general industry trend although actual margins may differ.

(xii) Classification of associate classified as held for sale

In previous financial year, the Group has classified investment in associate as held for sale as the Group is expected to complete the disposals within one year from the date of classification. As at reporting date, the disposal has yet to be completed after one year from the date of classification. The Group is of the opinion that the investment in associate shall continue to be classified as held for sale as the extension of the period to complete the sale beyond one year is caused by events or circumstances beyond the Group’s control and there is sufficient evidence that the Group remains committed to its plan to sell the assets. The associate classified as non-current asset held for sale is disclosed in Note 14 to the financial statements.

(xiii) Classification of joint arrangement

The Company has 30% participating interest in unincorporated IJMC – KEB Joint Venture (“IJMC-KEB JV”). In accordance to the Joint Venture Agreement (“JVA”), the Company had assessed that the contractual arrangement with the joint venture party has given rise to joint control over the relevant activities of IJMC – KEB JV. In addition, both the joint venture parties have rights to the assets and obligations for the liabilities relating to the IJMC – KEB JV. Accordingly, the IJMC – KEB JV is accounted for as a joint operation of the Group and of the Company in accordance with FRS 11 Joint Arrangements.



5. PROPERTY, PLANT AND EQUIPMENT FURNITURE, FREEHOLD LEASEHOLD PLANT AND FIXTURES OFFICE MOTOR GROUP LAND LAND BUILDINGS RENOVATION MACHINERY AND FITTINGS EQUIPMENT VEHICLES TOTAL 2016 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

CostAt 1 April 2015 117 15,387 15,909 1,181 10,714 68 1,072 788 45,236Additions – – – 484 31 1 78 564 1,158

At 31 March 2016 117 15,387 15,909 1,665 10,745 69 1,150 1,352 46,394

Accumulated DepreciationAt 1 April 2015 – 2,055 1,177 249 9,744 31 823 515 14,594Depreciation for the financial year – 32 112 83 129 2 75 236 669

At 31 March 2016 – 2,087 1,289 332 9,873 33 898 751 15,263

Accumulated Impairment LossAt 1 April 2015/31 March 2016 31 10,873 9,646 – – – – – 20,550

Carrying AmountAt 31 March 2016 86 2,427 4,974 1,333 872 36 252 601 10,581

FURNITURE, FREEHOLD LEASEHOLD PLANT AND FIXTURES OFFICE MOTOR GROUP LAND LAND BUILDINGS RENOVATION MACHINERY AND FITTINGS EQUIPMENT VEHICLES TOTAL 2015 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

CostAt 1 April 2014 117 15,387 15,909 1,181 10,645 58 972 788 45,057Additions – – – – 69 10 100 – 179

At 31 March 2015 117 15,387 15,909 1,181 10,714 68 1,072 788 45,236

Accumulated DepreciationAt 1 April 2014 – 2,023 943 211 9,620 26 744 345 13,912Depreciation for the financial year – 32 234 38 124 5 79 170 682

At 31 March 2015 – 2,055 1,177 249 9,744 31 823 515 14,594

Accumulated Impairment LossAt 1 April 2014 – 10,873 – – – – – – 10,873Impairment for the financial year 31 – 9,646 – – – – – 9,677

At 31 March 2015 31 10,873 9,646 – – – – – 20,550

Carrying AmountAt 31 March 2015 86 2,459 5,086 932 970 37 249 273 10,092

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5. PROPERTY, PLANT AND EQUIPMENT (cont’d)

OFFICE COMPANY RENOVATION EQUIPMENT TOTAL 2016 RM’000 RM’000 RM’000

CostAt 1 April 2015 215 37 252Additions – 9 9

At 31 March 2016 215 46 261

Accumulated DepreciationAt 1 April 2015 39 4 43Depreciation for the financial year 22 6 28

At 31 March 2016 61 10 71

Carrying AmountAt 31 March 2016 154 36 190

OFFICE COMPANY RENOVATION EQUIPMENT TOTAL 2015 RM’000 RM’000 RM’000

CostAt 1 April 2014 215 – 215Additions – 37 37

At 31 March 2015 215 37 252

Accumulated DepreciationAt 1 April 2014 18 – 18Depreciation for the financial year 21 4 25

At 31 March 2015 39 4 43

Carrying AmountAt 31 March 2015 176 33 209

The depreciation of the Group and the Company are allocated as follows:-

GROUP COMPANY 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000

Profit or loss 360 501 28 25Infrastructure development expenditure 309 181 – –

669 682 28 25


5. PROPERTY, PLANT AND EQUIPMENT (cont’d)

(a) Impairment Loss

In the previous financial year, the Group assessed the recoverable amount of its freehold land and buildings in view of the softness in property market and that the properties are non-income generating. The assessment was performed by the management by reference to an independent valuation carried out by a professional valuer which led to the recognition of an impairment loss of RM9,677,000/- in the statements comprehensive income in other expenses line item.

The estimated recoverable amount of RM665,000/- (2015: RM665,000/-) on freehold land and buildings with cost of RM11,011,000/- (2015: RM11,011,000/-) is determined using fair value less costs of disposal, which is based on comparison method by reference to independent valuation carried out by a professional valuer. The fair value is within Level 3 of the fair value hierarchy. The key assumptions used in estimating the fair value are the price per square foot and the adjustments on the differences in location, size and shapes, accessibility, infrastructure available and other value considerations.

(b) Land Titles

As at the reporting date, the titles to the freehold and leasehold land and buildings of the Group with net carrying amount of RM1,697,000/- (2015: RM1,727,000/-) are not registered in the name of the Group.

(c) Lease period for leasehold land

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

6. GOODWILL ON CONSOLIDATION

GROUP 2016 2015 RM’000 RM’000

At costAt the beginning/end of the financial year 8,955 8,955

Accumulated impairment lossAt the beginning/end of the financial year (3,586) (3,586)

Carrying amountAt the end of the financial year 5,369 5,369

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

GROUP 2016 2015 RM’000 RM’000

Toll concession 5,369 5,369


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6. GOODWILL ON CONSOLIDATION (cont’d)

Therecoverableamountofthegoodwillonconsolidationisdeterminedbasedonavalue-in-usecalculationusingcashflowprojections from financial budgets approved by the management as follows:-

• Cashflowscoveringa49-year(2015:50-year)periodwhichistheremainingperiodoftheconcession;

•WestCoast Expressway Sdn. Bhd.(“WCESB”)’s revenuewillmainly bederived from toll collectionbasedonprojectedtraffic-volume and where toll rates are expected to increase at regular intervals;

• Operationalexpenseswereprojectedbythemanagementbasedontheirpastexperience;and

• Thepre-taxdiscountrateof7%(2015:6%)wasusedindeterminingthevalue-in-useofthegoodwillonconsolidation.The discount rate was estimated based on the weighted average cost of capital derived from industry average.

The value assigned to the key assumptions represents the management’s assessment on the future trends of the expressway operation services industry and are based on both external and internal sources. The Directors are of the opinion that the key bases and assumption used are reasonable and there is no impairment to the carrying amount of goodwill.

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.

7. INFRASTRUCTURE DEVELOPMENT EXPENDITURE

GROUP 2016 2015 RM’000 RM’000

At costAt the beginning of the financial year 155,732 139,702Additions 535,679 16,030

At the end of the financial year 691,411 155,732

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

GROUP 2016 2015 RM’000 RM’000

Depreciation of property, plant and equipment 309 181Interest expense 6,344 4,425Pre-construction enabling works – 7,336Rental of premises 65 75Staff costs– Salaries, bonus and allowances 5,437 3,017– Employees Provident Fund 554 459

Included in the staff costs are director’s remuneration amounting to RM1,587,000/- (2015: RM1,531,000/-). The estimated monetary value of benefits–in-kind received and receivable by the directors from the Group amounting to RM24,000/- (2015: RM nil).


7. INFRASTRUCTURE DEVELOPMENT EXPENDITURE (cont’d)

During the financial year, the Group made the following cash payments for infrastructure development expenditure:-

GROUP 2016 2015 RM’000 RM’000

Additions during the financial year 535,679 16,030Movement in payables and accruals (340,289) –Capitalised depreciation (309) (181)

Cash payments 195,081 15,849

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

The key agreed terms of the CA are as follows:

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

(ii) to enhance the viability of the WCE Project, a Government Support Loan (“GSL”) of RM2.24 billion at an interest rate of 4% per annum is provided by the Government of Malaysia subject to the Government Support Loan Facility Agreement executed with the Ministry of Finance as disclosed in Note 19(b);

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

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

• duringtheGSLtenure,70%oftheexcessrevenuewillbeutilisedasrepaymentorprepaymentoftheGSL;and

• aftersettlementoftheGSL,onthebasisof30:70betweentheGovernmentofMalaysiaandWCESBifthetargetedIRR is not achieved and 70:30 if the actual IRR is more than the targeted IRR.

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

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

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

On 19 May 2014, the Government of Malaysia approved the appointment of a consortium comprising of IJM Construction Sdn. Bhd. and the Company (known as the “IJMC-KEB Joint Venture”) as the Turnkey/Engineering and Procurement Contractor for the construction of the WCE Project.

On 25 August 2014, WCESB received a letter from Lembaga Lebuhraya Malaysia to confirm the date of commencement of construction.


84

8. INVESTMENT IN SUBSIDIARIES

COMPANY 2016 2015 RM’000 RM’000

Unquoted shares, at cost 180,581 180,581Less: Accumulated impairment loss (16,650) (16,650)

163,931 163,931

The following information relates to the subsidiaries all of which have their principal place of business and are incorporated in Malaysia:-

EFFECTIVE OWNERSHIP INTEREST/VOTING RIGHTS

2016 2015 NAME OF COMPANY % % PRINCIPAL ACTIVITIES

Direct subsidiaries

Ambang Vista Sdn. Bhd. 100 100 Inactive.

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 Inactive.

KEB Plantations Holdings Sdn. Bhd. 100 100 Inactive.

Keuro Leasing Sdn. Bhd. 100 100 Inactive.

Keuro Trading Sdn. Bhd. 100 100 Inactive.

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

Indirect subsidiaries

Held through KEB Plantations Holdings Sdn. Bhd.

KEB Builders Sdn. Bhd. 100 100 Inactive.

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.


8. INVESTMENT IN SUBSIDIARIES (cont’d)

The following information relates to the subsidiaries all of which have their principal place of business and are incorporated in Malaysia:- (cont’d)


2016 2015 NAME OF COMPANY % % PRINCIPAL ACTIVITIES

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.

(b) Non-controlling interests in subsidiaries

The Group’s subsidiaries that have material non-controlling interests (“NCI”) are as follows:

2016 ASIAN OTHER WEST COAST RESINATED INDIVIDUALLY EXPRESSWAY FELT IMMATERIAL SDN. BHD. SDN. BHD. SUBSIDIARIES TOTAL RM’000 RM’000 RM’000 RM’000

NCI percentage of ownership interest and voting interest 20% 17.16%

Carrying amount of NCI 39,567 3,401 (4) 42,964

Profit/(loss) allocated to NCI in current financial year 903 (36) (1) 866

Summarised financial information before intra-group elimination

As at 31 March 2016Non-current assets 740,927 7,050Current assets 1,338,538 13,029Non-current liabilities (1,230,935) (172)Current liabilities (658,180) (1,476)

Net assets 190,350 18,431

Financial year ended 31 March 2016Revenue 577,634 5,674Profit/(loss) for the financial year 4,516 (209)Total comprehensive income/(loss) 4,516 (209)

Cashflowsfrom/(usedin)operatingactivities 378 (599)Cashflowsusedininvestingactivities (863,862) (37)Cashflowsfromfinancingactivities 1,192,866 –

Net increase/(decrease) in cash and cash equivalents 329,382 (636)


86

8. INVESTMENT IN SUBSIDIARIES (cont’d)

(b) Non-controlling interests in subsidiaries (cont’d)

2015 ASIAN OTHER WEST COAST RESINATED INDIVIDUALLY EXPRESSWAY FELT IMMATERIAL SDN. BHD. SDN. BHD. SUBSIDIARIES TOTAL RM’000 RM’000 RM’000 RM’000

NCI percentage of ownership interest and voting interest 20% 17.16%

Carrying amount of NCI 38,665 3,437 (4) 42,098

Profit/(loss) allocated to NCI in current financial period 509 (2) (1) 506

Summarised financial information before intra-group elimination

As at 31 March 2015Non-current assets 156,195 7,260Current assets 92,884 13,177Non-current liabilities – (232)Current liabilities (63,319) (1,565)

Net assets 185,760 18,640

Financial year ended 31 March 2015Revenue 10,065 8,175Profit/(loss) for the financial year 2,546 (11)Total comprehensive income/(loss) 2,546 (11)

Cashflowsfromoperatingactivities 9,743 110Cashflowsusedininvestingactivities (10,060) (37)Cashflowsfromfinancingactivities – –

Net (decrease)/increase in cash and cash equivalent (317) 73

(c) There are no significant restrictions on the Group’s ability to access or use the assets of the subsidiaries and settle the liabilities of the Group except for West Coast Expressway Sdn. Bhd. (“WCESB”) which is restricted to make any distribution of profits and create any contract or obligation to pay money or money’s worth to the Group unless prior approval is obtained from the non-controlling interests shareholder and upon fulfilment of certain financial covenants underlying the borrowings of WCESB. The assets to which such restrictions apply are the cash and cash equivalents and other investments included in the consolidated financial statements totalling RM1,295,071,000/- (2015: RM89,420,000/-).



9. INVESTMENT IN ASSOCIATES

Investment in associates consists of:-


At CostUnquoted shares 400 400 – –

400 400 – –

Share of post-acquisition reserves, net of dividends received 72,819 49,793 – –

Less:Accumulated impairment loss

At the beginning of the financial year – (266,966) – (251,243)Reversal of impairment loss – 15,687 – 11,145

At the end of the financial year – (251,279) – (240,098)Transfer to associate classified as non-current

asset held for sale – 251,279 – 240,098

73,219 50,193 – –

Investment in associates is accounted for in the consolidated financial statements using the equity method.

The following information relates to the associates which have principal place of business and are all incorporated in Malaysia:-


2016 2015 NAME OF COMPANIES % % NATURE OF THE RELATIONSHIP

Held by the Company

Talam Transform Berhad (“Talam”) – –* Provision of management services, investment holding and property development.

Held through direct subsidiary

Held through KEB Management Sdn. Bhd.

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

Held through indirect subsidiary

Held through KEB Builders Sdn. Bhd.

Radiant Pillar Sdn. Bhd.+ 30 30 Investment holding and property development.

Ambang Usaha Sdn. Bhd. 50 50 Dormant.

* In previous financial year, the Group’s investment in Talam with equity interest of 23.53% has been transferred to associate classified as non-current asset held for sale as disclosed in Note 14 to the financial statements.

+ This company was audited by another firm of chartered accountants other than Messrs. Baker Tilly Monteiro Heng.

88

9. INVESTMENT IN ASSOCIATES (cont’d)

In the previous financial year:-

(a) the Company had on 24 July 2014 disposed of 230,000,000 ordinary shares of RM0.20 each held in Talam for a total consideration of RM21,620,000/-, thereby reducing the Group’s equity interest in Talam from 29.92% to 23.53%.

(b) the Company had on 17 October 2014 entered into a share sale agreement (“SSA”) with Tan Sri Dato’ (Dr.) Ir Chan Ah Chye @ Chan Chong Yoon for the disposal of 900,000,000 ordinary shares of RM0.20 each held in Talam (“Talam Shares”) for a total consideration of RM99,000,000/-. The investment in Talam of the Group and the Company with carrying amount of RM78,505,000/- are transferred to associate classified as non-current asset held for sale as disclosed in Note 14 to the financial statements.

The following table summarises the information of the Group’s material associates, adjusted for any differences in accounting policies and reconciles the information to the carrying amount of the Group’s interest in the associate.

2016 RADIANT PILLAR OTHER SDN. BHD. INDIVIDUALLY AND ITS IMMATERIAL SUBSIDIARIES ASSOCIATE TOTAL GROUP RM’000 RM’000 RM’000

Summarised financial information

As at 31 March 2016Non-current assets 71,308Current assets 1,083,165Non-current liabilities (205,687)Current liabilities (771,388)

Net assets 177,398

Financial year ended 31 March 2016Profit for the financial year 57,568Other comprehensive income –Total comprehensive income 57,568

Included in the total comprehensive income is:Revenue 268,401

As at 31 March 2016Group’s share of net assets less accumulated impairment losses 72,271 948 73,219

Group’s share of results

Financial year ended 31 March 2016Group’s share of profit/(loss) 23,027 (1) 23,026Group’s share of other comprehensive income – – –

Group’s share of total comprehensive income/(loss) 23,027 (1) 23,026



9. INVESTMENT IN ASSOCIATES (cont’d)

2015 RADIANT PILLAR OTHER TALAM SDN. BHD. INDIVIDUALLY TRANSFORM AND ITS IMMATERIAL BERHAD SUBSIDIARIES ASSOCIATE TOTAL GROUP RM’000 RM’000 RM’000 RM’000

Summarised financial information

As at 31 March 2015Non-current assets – 34,633Current assets – 996,736Non-current liabilities – (205,629)Current liabilities – (706,428)

Net assets – 119,312

Financial year ended 31 March 2015Profit for the financial year – 90,557Other comprehensive income – –Total comprehensive income – 90,557

Included in the total comprehensive income is:Revenue – 472,964

Group’s share of net assets less accumulated impairment losses – 49,244 949 50,193

Group’s share of results

Financial year ended 31 March 2015Group’s share of profit/(loss) (3,133) 36,223 (1) 33,089Group’s share of other comprehensive loss (1,399) – – (1,399)

Group’s share of total comprehensive (loss)/income (4,532) 36,223 (1) 31,690

10. INVENTORIES

GROUP 2016 2015 RM’000 RM’000

At cost:Raw materials 783 1,031Finished goods 562 314Consumables 806 788

2,151 2,133

Recognised in profit or loss:Inventories recognised as cost of sales 4,707 6,393

90

11. TRADE AND OTHER RECEIVABLES


Trade receivablesTrade receivables 13,451 13,392 – –Amount owing by subsidiary – – 123,842 –Amount owing by associates 696 745 – –

14,147 14,137 123,842 –

Less:Accumulated impairment lossTrade receivables (12,059) (12,010) – –

(12,059) (12,010) – –

Trade receivables, net 2,088 2,127 123,842 –

Other receivablesOther receivables 90,755 78,738 39,872 32,980GST refundable 1,874 – 1,894 –Amount owing by subsidiaries – – 279,747 71,728Amount owing by associates 30,175 37,789 26,990 34,599Refundable deposits 228 221 12 8

123,032 116,748 348,515 139,315

Less:Accumulated impairment lossOther receivables (85,607) (78,716) (39,857) (32,966)Amount owing by subsidiaries – – (71,918) (71,638)Amount owing by associates (11) (11) (11) (11)

(85,618) (78,727) (111,786) (104,615)

Other receivables, net 37,414 38,021 236,729 34,700

Prepayments 38,664 3,135 4 2

Total trade receivables, other receivables and prepayments 78,166 43,283 360,575 34,702



11. TRADE AND OTHER RECEIVABLES (cont’d)

(a) Trade and other receivables

Trade receivables are non-interest bearing and are generally on 30 to 90 (2015: 60 to 90) days terms. Other credit terms are assessed and approved by a case-by-case basis.

Ageing analysis on trade receivables

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


Neither past due nor impaired 626 560 60,962 –

Past due 1 – 30 days but not impaired 297 479 – –Past due 31 – 120 days but not impaired 377 338 20,648 –Past due more than 120 days but not impaired 788 750 42,232 –

1,462 1,567 62,880 –Impaired 12,059 12,010 – –

14,147 14,137 123,842 –

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

Receivables that are past due but not impaired

There were no significant concentrations of credit risk of the Group’s and the Company’s trade receivables that are past due but not impaired and are unsecured in nature. The management is confident that the amounts due are still recoverable as there has not been a significant change in the credit quality of these receivables.

Receivables that are impaired

The Group’s and the Company’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 impairedTrade and other receivables– nominal amounts 97,693 90,753 111,844 104,721Less: Accumulated Impairment loss (97,677) (90,737) (111,786) (104,615)

16 16 58 106

92

11. TRADE AND OTHER RECEIVABLES (cont’d)

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

Movements in accumulated impairment loss:-

Movements in impairment


Trade receivablesAt the beginning of the financial year 12,010 11,013 – –Reversal of impairment loss –* (11) – –Charge for the financial year 49 1,008 – –

At the end of the financial year 12,059 12,010 – –

Other receivablesAt the beginning of the financial year 78,727 78,727 104,615 95,872Charge for the financial year 6,891 – 7,171 8,743

At the end of the financial year 85,618 78,727 111,786 104,615

Total impairment loss 97,677 90,737 111,786 104,615

* represent amount less than RM1,000/-.

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

(b) Amount owing by subsidiaries

The amount owing by subsidiaries is non-trade in nature, unsecured, non-interest bearing, repayable on demand and expected to be settled in cash.

(c) Amount owing by associates

The amount owing by associates of the Group and of the Company is non-trade in nature, unsecured, repayable on demand, expected to be settled in cash and non-interest bearing except for amounts of RM2,305,000/- and RM2,293,000/- (2015: RM2,970,000/- and RM nil) respectively which bear interest at rate of 7.85% (2015: nil) per annum.

(d) Prepayments

Included in prepayments of the Group is amount of RM38,230,000/- (2015: RM3,000,000/-) which represent transaction costs in relation to the undrawn loan facilities of the Group.



12. OTHER INVESTMENTS


CurrentFinancial assets at fair value through profit or loss– Unquoted unit trusts in Malaysia 109,017 398,254 108,618 309,939

Unit trusts are funds invested mainly in money market and fixed income instruments and are managed by investment management companies.

13. DEPOSIT PLACED WITH LICENSED BANKS

The effective interest rates as at the reporting date of the deposits placed with licensed banks range from 2.30% to 4.60% (2015: 2.30% to 3.00%) per annum. The deposits placed with licensed banks have maturity periods ranging from 1 day to 12 months (2015: 1 day to 1 month).

14. ASSOCIATE CLASSIFIED AS NON-CURRENT ASSET HELD FOR SALE

In the previous financial year:-

On 17 October 2014, the Company had entered into a conditional share sale agreement (“SSA”) with Tan Sri Dato’ (Dr.) Ir Chan Ah Chye @ Chan Chong Yoon for the disposal of 900,000,000 ordinary shares of RM0.20 each held in Talam (“Sale Shares”) as further disclosed in Note 9 to the financial statements. In addition, the Company also intended and committed to dispose of the remaining 92,840,517 ordinary shares of RM0.20 each held in Talam. The entire investment in the associate is classified as held for sale as the investment is expected to be recovered primarily through sale rather than continuing use.

During the financial year:-

(a) the Company had on 28 August 2015 entered into a supplemental agreement to the SSA with Tan Sri Dato’ (Dr.) Ir Chan Ah Chye @ Chan Chong Yoon to amend and vary certain provision in the SSA which entails, amongst others, the proposed disposal of the Sale Shares in two separate tranches as follows:

• 500,000,000unitsofTalamSharesatthepriceofRM0.085perTalamShareandtobecompletedwithin30daysafterthe Unconditional Date or such other extension of time or later date the parties may agree in writing; and

• 400,000,000unitsofTalamSharesatthepriceofRM0.095perTalamShareandtobecompletedwithin18monthsafter the Unconditoinal Date or such other extension of time or later date the parties may agree in writing.

(b) the solicitors of the Company had vide its letter dated 16 February 2016 confirmed that all conditions precedent set out in the SSA as amended in the supplemental agreement has been fulfilled. The SSA has become unconditional on 16 February 2016.

94

14. ASSOCIATE CLASSIFIED AS NON-CURRENT ASSET HELD FOR SALE (cont’d)

GROUP AND COMPANY 2016 2015 RM’000 RM’000

At lower of carrying amount and fair value less costs to sell:Investment in associate:At the beginning of the financial year 78,505 –Reversal during the financial year (Note 25) 6,965 –Transfer from investment in associates (Note 9) – 78,505

At the end of the financial year 85,470 78,505

15. SHARE CAPITAL

GROUP AND COMPANY 2016 2015

NUMBER NUMBER OF SHARES OF SHARES ’000 UNITS RM’000 ’000 UNITS RM’000

Ordinary shares of RM1/- each

Authorised:At the beginning/end of the financial year 3,000,000 3,000,000 3,000,000 3,000,000

Issued and fully paid:At the beginning of the financial year 1,002,736 1,002,736 572,992 572,992Issued during the financial year – – 429,744 429,744

At the end of the financial year 1,002,736 1,002,736 1,002,736 1,002,736

The holder of ordinary shares is entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restrictions and rank equally with regards to the Company’s residual interests.

16. RESERVES


Share premium 42,345 42,345 42,345 42,345Foreign exchange reserve classified as held for sale (529) (529) – –Warrant reserve 51,569 51,569 51,569 51,569Accumulated losses (446,146) (473,040) (512,748) (516,160)

(352,761) (379,655) (418,834) (422,246)



16. RESERVES (cont’d)

(a) Share Premium

This reserve comprises premium paid on subscription of shares of the Company above par value of the shares.

The share premium is not distributable by way of dividends and may be utilised in the manner set out in Section 60(3) of the Companies Act, 1965 in Malaysia.

(b) Foreign Exchange Reserve Classified as Held for Sale

The foreign exchange reserves comprise all foreign currency differences arising from the translation of the financial statements of foreign operations of an associate classified as non-current asset held for sale.

(c) Warrant Reserve

On 3 September 2014, the Company allotted and issued 214,871,911 warrants which were constituted under the Deed Poll dated 16 July 2014.

Salient features of the above warrants are as follows:

(i) each of the warrant entitles the holder to the right of exercise of one ordinary share in the Company. The number of warrants is subject to adjustments under certain circumstances in accordance with the provisions of Deed Poll;

(ii) the warrants may be exercised any time over a period of two (2) years including and commencing from the issue date of the warrants. Any warrants not exercise during the Exercise Period will thereafter lapse and become void;

(iii) the new ordinary shares allotted and issued upon exercise of the warrants shall be fully paid and rank pari passu with the then existing ordinary shares of the Company. The warrant holders will not have any voting rights in any general meeting of the Company unless the warrants are exercised into new ordinary shares and registered prior to the date of the general meeting of the Company; and

(iv) each warrant entitles its holder the right to subscribe for one ordinary share of RM1/- each in the Company at any time up to the expiry date of 26 August 2016 at an exercise price of RM1.18/- each payable in cash.

The number of warrants remains unexercised at the end of the financial year are follows:

GROUP AND COMPANY 2016 2015 ’000 UNITS ’000 UNITS

Unexercised warrants 214,872 214,872

The warrant reserve is computed based on fair value per warrant of RM0.24. The key assumptions used to arrive at this fair value are as follows:

Valuation model : Black ScholesShare price : RM1.18Exercise price : RM1.18Expiry date : 2 yearsVolatility : 31.421%Risk free rate : 3.849%

96

17. DEFERRED TAX LIABILITIES

GROUP 2016 2015 RM’000 RM’000

Deferred tax assets (3,026) –Deferred tax liabilities 4,709 232

1,683 232

At the begninning of the year 232 244Charge to profit or loss (Note 26) 1,451 (12)

At the end of the year 1,683 232

Representing the tax effects of:-

Deferred tax assets:-Property, plant and equipment (203) –Unutilised tax losses (2,823) –

(3,026) –

Deferred tax liabilities:-Property, plant and equipment 181 232Infrastructure development expenditure 4,528 –

4,709 232

18. DEFERRED INCOME

GROUP 2016 2015 RM’000 RM’000

Non-currentGovernment grant:At 31 March 120,294 –

On 30 June 2015, West Coast Expressway Sdn. Bhd. (“WCESB”), an 80%-owned subsidiary of the Company, had entered into a Government Support Loan Facility Agreement with the Government of Malaysia for a term loan facility of RM2.24 billion at an interest rate of 4% per annum to finance the construction and operation of West Coast Expressway Project (“WCE Project”) over the concession period of 50 years.

During the financial year, the Company received the first drawdown RM250,000,000/- from the Government Support Loan Facility. The repayment of the loan commences on the 6th year from the first draw down. The fair value of the loan is estimated using the prevailing market interest rate of 6.5% per annum for an equivalent loan. The difference of the net of gross proceeds and the fair value of the loan is recognised as deferred income.



19. LOANS AND BORROWINGS

GROUP 2016 2015 NOTE RM’000 RM’000

Non-current (secured)Bond – Sukuk Murabahah (“Sukuk”) (a) 942,486 –Government support loan (b) 128,173 –Term loans (c) 38,472 –

Total non-current 1,109,131 –

Current (secured)Trust receipts and revolving credit (d) 4,277 4,277Bank overdrafts (e) 2,347 2,138

6,624 6,415

Current (unsecured)Bank overdrafts 1 1

Total current 6,625 6,416

Total loans and borrowings 1,115,756 6,416

(a) Bond – Sukuk Murabahah (“Sukuk”)

GROUP 2016 RM’000

Proceeds from issuance of bond 1,000,000Transaction costs (57,514)

942,486

On 28 August 2015, West Coast Expressway Sdn. Bhd. (“WCESB”), an 80%-owned subsidiary of the Company, issued RM1,000,000,000/- secured Sukuk under an Islamic Securities Programme.

The Sukuk was issued at its nominal value with a profit rates ranging from 4.95% to 5.38% per annum. It is repayable in 10 annual instalments, commencing on the 12th year after the issue date.

As at 31 March 2016, the effective profit rate of the Sukuk range from 5.60% to 5.87% (2015: nil) per annum.

The Sukuk is guaranteed by financial guarantors and contains covenants which require WCESB to maintain a financial service cover ratio of at least 1.25 times and debt equity ratio of not greater than 80:20 upon the commencement of toll collection.

98

19. LOANS AND BORROWINGS (cont’d)

(b) Government support loan

On 30 June 2015, WCESB has entered into a Government Support Loan Facility Agreement with the Government of Malaysia for a term loan facility of RM2.24 billion at interest rate of 4% per annum.

On 15 December 2015, the Company received the first drawdown RM250,000,000/- from the Government Support Loan Facility. The repayment of the loan commences on the 6th year from the first draw down. The fair value of the loan is estimated using the prevailing market interest rate of 6.5% per annum for an equivalent loan.

(c) Term loans

The effective interest rate of the term loans of the Group as at reporting date ranges from 6.69% to 6.80% (2015: nil) per annum.

(d) Trust receipts and revolving credit

The effective interest rate of the trust receipts and revolving credit of the Group as at the reporting date is 10.03% (2015: 10.03%) per annum and is secured and supported as follows:

(i) third party legal charge over a leasehold land of an associate; and

(ii) corporate guarantee by the Company.

(e) Bank overdrafts

The bank overdrafts of the Group are granted on the undertaking that the Group and the Company will not pledge or execute any charges on its assets.

The effective interest rate of the bank overdraft of the Group as at the reporting date is 10.03% (2015: 10.03%) per annum and is secured and supported as follows:-

(i) third party legal charge over a leasehold land of an associate; and

(ii) corporate guarantee by the Company.

(f) Security

The bond, government support loan and terms loan are secured as follows:-

(i) Commercial Financier’s Debenture;

(ii) Assignment and Charge I

• anassignmentofallWCESB’spresentandfuturerights, title, interestandbenefits in, toandundertheWCEProject Document including any and all monies which may now or hereafter or from time to time be due, paid or payable to WCESB under or arising from or in connection with any of the WCE Project Document; and

• allpropertyasmaybeaddedtheretofromtimetotimebywayofretentioninvestmentand/orreinvestmentofincome.



19. LOANS AND BORROWINGS (cont’d)

(f) Security (cont’d)

(iii) Assignment and Charge II

• Proceeds of all toll collection, income and other revenue ofWCESB arising from or in connection with theConcession Agreement (“CA”);

• anycompensationpayabletoWCESBforanyreductionintollrateundertheCA;

•WCESB’spresentandfuturerights,interest,titleandbenefitsinrelationtotheMoneyInsurance;

• thecreditbalanceandallofWCESB’spresentandfuturerights,title,interestandbenefitinandtotheCreditBalance and each of the Designated Accounts and all other accounts as may be required to be opened in relation to the financing of the WCE Project;

• allPermittedInvestmentmadeorheldbyoronbehalfofWCESBorstandingtothecreditoforpayabletoWCESB,the proceeds and all income and or profit earned or derived from the Permitted Investment and all of WCESB’s present and future rights, title, interest and benefit therein and thereto; and

• theShareholderAgreementandalloftheWCESB’spresentandfuturerights,titleinterestandbenefitsthereinand thereto.

(iv) Assignment and Charge III

• thecreditbalanceandalloftheWCESB’spresentandfuturerights,title,interestandbenefitinandtotheCreditBalance and each of the Disbursement Account; and

• allPermitted Investment inrelationtotheDisbursementAccountmadeorheldbyoronbehalfofWCESBorstanding to the credit of or payable to WCESB, the proceeds and all income and or profit earned or derived from the Permitted Investment and all of WCESB’s present and future rights, title, interest and benefit therein and thereto.

20. TRADE AND OTHER PAYABLES


Trade payablesTrade payables 385,441 61,641 75,991 –

Other payablesOther payables 13,806 9,644 4,688 3,103GST payable 19 – – –Deposits 126 126 – –Accruals 19,507 3,644 1,364 936Amount owing to subsidiaries – – 3,592 4,302Amount owing to associates 8,197 7,987 2,926 2,926

41,655 21,401 12,570 11,267

Total trade and other payables 427,096 83,042 88,561 11,267

100

20. TRADE AND OTHER PAYABLES (cont’d)

(a) Trade payables

The Group normal trade credit term ranges from 14 to 90 (2015: 14 to 90) days.

Included in trade payables of the Group and of the Company is retention sum payable of RM8,284,000/- and RM7,359,000/- (2015: RM925,000/- and RM nil) respectively.

Included in trade payables of the Group and of the Company is an amount of RM378,632,000/- and RM75,991,000/- (2015: RM54,545,000/- and RM nil) respectively owing to IJM Group, a major shareholder of the Company.

(b) Other payables

Included in other payables of the Group and of the Company are amounts of RM6,766,000/- and RM1,689,000/- (2015: RM5,078,000/- and RM1,901,000/-) respectively owing to IJM Group, a major shareholder of the Company and companies in which certain directors have interest. The amounts owing are unsecured, interest free and repayable on demand except for the amounts of RM1,689,000/- (2015: RM nil) bearing interest ranging from 7.85% to 8.85% (2015: nil) per annum.

(c) Accruals

Included in accruals of the Group are amounts of RM10,402,000/- (2015: RM1,578,000/-) which represent interest charges in relation to the borrowings of the Group.

(d) Amount owing to subsidiaries

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

(e) Amount owing to associates

The amount owing to associate is non-trade in nature, unsecured, repayable on demand, expected to be settled in cash and non-interest bearing except for the amount of RM2,695,000/- (2015: RM2,485,000/-) which bear interest at rate of 7.85% (2015: nil) per annum.



21. AMOUNT DUE TO CUSTOMERS FOR CONTRACT WORKS


Aggregate costs incurred to date – 39,715 122,073 –Recognised profits less recognised losses – 1,400 – –

– 41,115 122,073 –Progress billings – (41,115) (170,372) –

– – (48,299) –

Amount due to customers for contract works included in current liabilities – – (48,299) –

Construction contracts costs recognised as contract expenses during the financial year – 430 122,073 –

Progress billings recognised as contract revenue during the financial year – 259 122,073 –

During the financial year, the following expenses have been included in the aggregate costs incurred to date of the Company:

COMPANY 2016 2015 RM’000 RM’000

Staff costs– Wages, salaries and bonus 636 –– Defined contribution retirement plan 99 –– Other employee benefits 84 –

22. REVENUE


Manufacturing and trading of industrial products 5,674 8,175 – –Construction contracts 529,335 10,325 122,073 –

535,009 18,500 122,073 –

Included in revenue from construction contracts is an amount of RM529,335,000/- (2015: RM10,065,000/-) which represents construction revenue recognised pursuant to IC Interpretation 12 Service Concession Arrangements from the construction of a public service infrastructure.

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23. COST OF SALES


Manufacturing and trading of industrial products 4,707 6,393 – –Construction contracts 523,616 10,396 122,073 –Leasing, management services and investment holding 606 795 – –

528,929 17,584 122,073 –

Included in cost of sales from construction contracts is an amount of RM523,616,000/- (2015: RM9,966,000/-) which represents construction cost recognised pursuant to IC Interpretation 12 Service Concession Arrangements from the construction of a public service infrastructure.

24. FINANCE COSTS


Term loans – 5,702 – 5,702Others– Amount owing to associate 2,039 – 1,829 –– Other payables 1,182 283 204 1,261

3,221 5,985 2,033 6,963



25. PROFIT BEFORE TAXATION

Profit before taxation has been arrived at:


After charging:Audit fees– statutory•currentyear 234 200 125 115•underaccrualinprioryears 18 48 – 21

– non-statutory 13 11 13 11Depreciation of property, plant and equipment 360 501 28 25Directors’ remuneration– fees 885 821 885 821– salaries and allowances – 308 – 307Fair value loss on other investments – 242 – 10Impairment loss on receivables– trade and other receivables 6,940 1,008 6,891 –– subsidiaries – – 281 8,743Impairment loss on property, plant and equipment – 9,677 – –Loss on disposal of investment in an associate – 2,483 – 2,483Rental of premises- current year 53 71 28 28Rental of equipment – 23 – –Realised loss on foreign exchange – 35 – –Staff costs– Salaries, wages, overtime, bonus and allowances 2,723 2,699 958 642– Employees Provident Fund 277 188 130 27– Other staff related expenses 137 86 68 13

And crediting:Distribution income from unit trusts 5,374 10,243 4,857 7,283Fair value gain on other investments 2,153 – 1,933 –Impairment loss on investment in associate

no longer required – 15,687 – 11,145Reversal of write down of associate classified as

non-current asset held for sale 6,965 – 6,965 –Impairment loss no longer required– trade and other receivable – 11 – –– subsidiary – – – 43Interest income– deposits with licensed banks 216 310 144 244– others 1,112 642 1,112 642Rental income 24 24 – –Waiver of interest – 4,347 – 4,264Waiver of debt 8 – – –

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26. TAXATION


Current taxation– current year (6) (104) – –– under accrual in prior year (432) (1,449) – (118)

(438) (1,553) – (118)Deferred taxation (Note 17)– current year (1,330) (6) – –– (under)/over accrual in prior year (121) 18 – –

(1,451) 12 – –

Tax expense for the financial year (1,889) (1,541) – (118)

The income tax is calculated at the statutory tax rate of 24% (2015: 25%) of the estimated taxable profit for the financial year.

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


Profit before taxation 29,649 40,485 3,412 1,564

Taxation at statutory tax rate of 24% (2015: 25%) (7,116) (10,121) (819) (391)Tax effects of:– non-deductible expenses (3,382) (2,218) (2,851) (5,281)– origination of deferred tax assets not recognised (147) (2,351) – –– difference in tax rate – (97) – –– tax effect on share of results of associates 5,526 8,272 – –– non-taxable income 3,783 6,405 3,670 5,672– under accrual in prior year (553) (1,431) – (118)

Tax expense for the financial year (1,889) (1,541) – (118)

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


Unutilised tax losses 79,606 78,997 – –Unabsorbed capital allowances 399 399 – –Other deductible temporary differences 368 367 – –

80,373 79,763 – –

Potential deferred tax assets not recognised at 24% (2015: 24%) 19,290 19,143 – –



27. EARNINGS PER ORDINARY SHARE

(a) Basic earnings per ordinary share

Basic earnings per ordinary share is calculated by dividing the net profit for the financial year attributable to owners of the Company by the weighted average number of ordinary shares in issue during the financial year:

GROUP 2016 2015 RM’000 RM’000

Net profit for the financial year attributable to owners of the Company 26,894 38,438

Number of ordinary shares (’000 units) 1,002,736 572,992Effects of shares issued during the financial year (‘000 units) – 247,250

Weighted average number of shares (‘000 unit) 1,002,736 820,242

Basic earnings per ordinary share (sen) 2.67 4.69

(b) Diluted earnings per ordinary share

The diluted earnings per ordinary share is equal to the basic earnings per ordinary share as the outstanding warrants are anti-dilutive as the average market price of the Company’s shares are lower than the exercise price of the warrants.

There have been no transactions involving ordinary shares or potential ordinary shares since the reporting date and before the authorisation of these financial statements.

28. INTEREST IN JOINT OPERATION

Details of the joint operation are as follows:

PROPORTION INTEREST 2016 2015 NAME OF JOINT OPERATION % % ECONOMIC ACTIVITY

Unincorporated in Malaysia

IJM Construction Sdn. Bhd. 30 – Undertake engineering, procurement and – Kumpulan Europlus Berhad construction of West Coast Expressway Project Joint Venture (“IJMC – KEB JV”)*

* audited by another firm of chartered accountant other than Baker Tilly Monteiro Heng.

Pursuant to FRS 11 Joint Arrangements, IJMC – KEB JV is deemed to be joint operation of the Company as the parties involved that have joint control have rights to the assets and obligations for the liabilities relating to the arrangement.

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29. CONTINGENT LIABILITIES (UNSECURED)

A subsidiary was indebted to a bank which had on 7 September 2010 auctioned and disposed of a piece of land belonging to Talam Group which secured the borrowings of this subsidiary. Talam is taking legal action against the bank for foreclosing and auctioned the pledged land. The difference between the auction price and the market value of the land amounts to RM33,700,000 (2015: RM33,700,000). During the financial year, the High Court has dismissed Talam’s claim against the bank and subsequently Talam had filed an appeal to the Court of Appeal (“the Court”). At the date of the authorisation of these financial statements, the Court has yet to fix the date for decision. In the event that Talam is unable to succeed in its claim, the Group may be liable for the amount claimed by Talam. Talam is a related party as disclosed in Note 31 to the financial statements.

30. CAPITAL COMMITMENT

The outstanding commitment in respect of infrastructure development expenditure as follows:

GROUP 2016 2015 RM’000 RM’000

Infrastructure development expenditure– Contracted but not provided for 4,472,085 5,009,120

31. RELATED PARTY DISCLOSURES

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 Transform Berhad (“Talam”) and its subsidiaries. Talam is an associate of the Company.

Radiant Group Radiant Pillar Sdn. Bhd. (“Radiant”), an associate of the Group, and its subsidiary. IJM Group has substantial direct and indirect equity interests in Radiant Group. Radiant Group became subsidiaries of IJM Group with effect from 24 January 2014.

IJM Group IJM Corporation Berhad (“IJM”) and its subsidiaries. IJM is a major shareholder of the Company.

Ambang Usaha Sdn. Bhd. Ambang Usaha Sdn. Bhd. is an associate of the Group. IJM Group is the shareholder of its remaining equity interest.

MWE Group MWE Holdings Berhad (“MWE”) and its subsidiaries. MWE is a major shareholder of the Company.

IJMC- KEB Joint Venture A joint operation between the Company and IJM Construction Sdn. Bhd.



31. RELATED PARTY DISCLOSURES (cont’d)

(a) Transactions with related parties


Talam Group:Interest income – 107 – 107Rental of premises – (26) – –Rental of equipment (6) (23) (6) –

Radiant Group:Interest income 1,112 454 1,112 454Interest expenses (2,039) (739) (1,829) (739)

IJM Group:Pre-construction enabling works – (7,336) – –Interest expenses (4,629) (4,425) (204) (978)Construction works (519,516) – (122,074) –

MWE Group:Share registration fees (118) (18) (118) (18)

West Coast Expressway Sdn. Bhd.Construction works – – 170,372 –

(b) Balances with related parties


Other receivablesIJM Group 98 – – –

Trade payablesIJM Group 378,632 54,545 75,991 –

Other payablesIJM Group 6,766 5,078 1,689 1,901

Amount owing by associatesTalam Group 28,550 35,497 24,685 31,576Radiant Group 2,305 3,024 2,293 3,012Ambang Usaha Sdn. Bhd. 5 2 1 –

30,860 38,523 26,979 34,588

Amount owing to associatesTalam Group 5,502 5,502 2,926 2,926Radiant Group 2,695 2,485 – –

8,197 7,987 2,926 2,926

Amount owing by subsidiaryWest Coast Expressway Sdn. Bhd. – – 123,842 –

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31. RELATED PARTY DISCLOSURES (cont’d)

(c) Key management compensation

The remuneration of key management personnel and directors’ remuneration (including directors who retired or resigned during the financial year), are disclosed as follows:


DirectorsExecutive directors:– Salaries 1,368 1,501 – –– Estimated monetary value of benefits-in-kind 24 – – –– Employees Provident Fund 219 30 – –

1,611 1,531 – –Non-executive directors:– Fees 885 821 885 821– Other emoluments 24 307 – 307

909 1,128 885 1,128

2,529 2,659 885 1,128

Other key management personnel– Salaries, allowance and bonus 656 455 495 280– Other emoluments 175 – 175 –– Employees Provident Fund 67 67 50 47

898 522 720 327

3,418 3,181 1,605 1,455

The director’s remuneration of a subsidiary incurred and capitalised in other intangible asset amounted to RM1,611,000/- (2015: RM1,530,000/-).

32. OPERATING SEGMENTS

Measurement of reportable segments

Operating segments are prepared in a manner consistent with the internal reporting provided to the Group in order to allocate resources to segments and to assess their performance. For management purposes, the Group is organised into business units based on their products and services provided.

The Group assesses the performance of the operating segments based on operating profit or loss which is measured differently from those disclosed in the consolidated financial statements.

Assets, liabilities and expenses which are common and cannot be meaningfully allocated to the operating segments are presented under unallocated items. Unallocated items comprise mainly associate classified as non-current asset held for sale, investment in associates, other investments, tax refundable, tax payable and deferred tax liabilities.



32. OPERATING SEGMENTS (cont’d)

Business segments

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

Manufacturing segment : Involved in the business of manufacturing and distribution of industrial products;Toll concession segment : Involved in the business of construction, management and tolling of highway operation;Construction segment : Involved in the business of construction contracting; andOthers : Involved in the business of construction contracting, leasing, management services, and investment

holding.

MANUFACTURING AND TRADING OF INDUSTRIAL TOLL 2016 PRODUCTS CONCESSION CONSTRUCTION OTHERS ELIMINATION CONSOLIDATED GROUP RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

RevenueExternal sales 5,674 529,335^ – – – 535,009Inter-segment sales – 122,074 – – (122,074) –

Total revenue 5,674 651,409 – – (122,074) 535,009

ResultsSegment results (415) 7,657 (52) 1,554 (228)A 8,516

Finance costs (3,221)Share of results of associates 23,026Interest income 1,328

Profit before tax 29,649Taxation (1,889)

Profit for the financial year 27,760

Consolidated Statement of Financial Position

AssetsSegment assets 19,314 2,206,571 3,604 407,667 (548,018)B 2,089,138Associate classified as non-current asset held for sale – – – 85,470 – 85,470Investment in associates – – 300 72,919 – 73,219Other investments – 399 – 108,618 – 109,017Tax recoverable 1,044 2 – – – 1,046

Consolidated total assets 20,358 2,206,972 3,904 674,674 (548,018) 2,357,890

LiabilitiesSegment liabilities 17,909 2,013,632 55,730 176,716 (600,841)C 1,663,146Tax payables/deferred tax liabilities 202 1,511 – 92 – 1,805

Consolidated total liabilities 18,111 2,015,143 55,730 176,808 (600,841) 1,664,951

Other InformationCapital expenditure 85 585,042 – 9 (48,299) 536,837D

Depreciation of property, plant and equipment 294 – – 66 – 360Non-cash expenses other than depreciation –* – – 7,221 (281) 6,940E

Other non-cash income 5 220 22 8,924 (53) 9,118F

* represent amount less than RM1,000/-

110


Business segments (cont’d)

MANUFACTURING AND TRADING OF INDUSTRIAL TOLL 2015 PRODUCTS CONCESSION CONSTRUCTION OTHERS ELIMINATION CONSOLIDATED GROUP RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

RevenueExternal sales 8,175 10,065^ 260 – – 18,500Inter-segment sales – – – – – –

Total revenue 8,175 10,065 260 – – 18,500

ResultsSegment results 4 2,538 (1,666) 20,253 (8,700)A 12,429

Finance costs (5,985)Share of results of associates 33,089Interest income 952

Profit before tax 40,485Taxation (1,541)

Profit for the financial year 38,944

Consolidated Statement of Financial Position

AssetsSegment assets 19,939 160,764 3,671 212,378 (168,869)B 227,883Associate classified as non-current asset held for sale – – – 78,505 – 78,505Investment in associates – – 300 49,893 – 50,193Other investments – 88,315 – 309,939 – 398,254Tax recoverable 498 – – – – 498

Consolidated total assets 20,437 249,079 3,971 650,715 (168,869) 755,333

LiabilitiesSegment liabilities 17,713 63,319 55,789 174,099 (221,462)C 89,458Tax payables/deferred tax liabilities 262 – – 434 – 696

Consolidated total liabilities 17,975 63,319 55,789 174,533 (221,462) 90,154

Other InformationCapital expenditure 100 16,072 – 37 – 16,209D

Depreciation of property, plant and equipment 320 – 5 176 – 501Non-cash expenses other than depreciation – 232 1,426 11,752 – 13,410E

Other non-cash income – – 11 15,687 – 15,698F

^ Represents construction revenue recognised pursuant to IC Interpretation 12 Service Concession Arrangements from the construction of a public service infrastructure.





Note: Nature of adjustments and eliminations to arrive at amounts reported in the consolidated financial statements.

A The following items are added in/(deducted from) segment results to arrive at profit before taxation:

2016 2015 RM’000 RM’000

Impairment loss on amount owing by subsidiaries 281 8,743Impairment loss on amount owing by subsidiaries no longer required (53) (43)

228 8,700

B The following items are deducted from segment assets to arrive at total assets reported in the consolidated statement of financial position:

2016 2015 RM’000 RM’000

Investment in subsidiaries (163,931) (163,931)Inter-segment assets (384,087) (4,938)

(548,018) (168,869)

C The following items are deducted from segment liabilities to arrive at total liabilities reported in the consolidated statement of financial position:

2016 2015 RM’000 RM’000

Inter-segment liabilities (600,841) (221,462)

D Additions of capital expenditure consist of:

2016 2015 RM’000 RM’000

Property, plant and equipment 1,158 179Infrastructure development expenditure 535,679 16,030

536,837 16,209

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E Other non-cash expenditure consist of:

2016 2015 RM’000 RM’000

Fair value loss on other investment – 242Impairment loss on receivables– trade and other receivables 6,940 1,008Impairment loss on property, plant and equipment – 9,677Loss on disposal of investment in associate – 2,483

6,940 13,410

F Other non-cash income consist of:

2016 2015 RM’000 RM’000

Fair value gain on other investment 2,153 –Impairment loss on other receivables no longer required – 11Impairment loss on investment in associate no longer required – 15,687Reversal of write down in associate classified as non-current asset held for sale 6,965 –

9,118 15,698

Geographical segment

The activities of the Group mainly carried out in Malaysia and as such, geographical segment reporting is not presented.

Information about major customers

A major customer with revenue of RM577,634,000/- (2015: RM10,065,000/-) from the toll concession segment accounted for more than 10% of the Group revenue.



33. FINANCIAL INSTRUMENTS

(a) Categories of financial instruments

The following table analyses the financial assets and liabilities in the statements of financial position by the class of financial instruments to which they are assigned, and therefore by the measurement basis:

FINANCIAL FAIR VALUE LIABILITIES THROUGH AT LOANS AND PROFIT AMORTISED RECEIVABLES OR LOSS COST TOTAL RM’000 RM’000 RM’000 RM’000

2016GroupFinancial assetsOther investments – 109,017 – 109,017Trade receivables 2,088 – – 2,088Other receivables and deposits 35,540 – – 35,540Deposits with licensed banks 1,296,751 – – 1,296,751Cash and bank balances 4,709 – – 4,709

1,339,088 109,017 – 1,448,105

Financial liabilitiesLoans and borrowings – – (1,115,756) (1,115,756)Trade payables – – (385,441) (385,441)Other payables and accruals – – (41,636) (41,636)

– – (1,542,833) (1,542,833)

CompanyFinancial assetsOther investments – 108,618 – 108,618Trade receivables 123,842 – – 123,842Other receivables and deposits 234,835 – – 234,835Deposits with licensed banks 1,500 – – 1,500Cash and bank balances 478 – – 478

360,655 108,618 – 469,273

Financial liabilitiesTrade payables – – (75,991) (75,991)Other payables and accruals – – (12,570) (12,570)

– – (88,561) (88,561)

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33. FINANCIAL INSTRUMENTS (cont’d)

(a) Categories of financial instruments (cont’d)

FINANCIAL FAIR VALUE LIABILITIES THROUGH AT LOANS AND PROFIT AMORTISED RECEIVABLES OR LOSS COST TOTAL RM’000 RM’000 RM’000 RM’000

2015GroupFinancial assetsOther investments – 398,254 – 398,254Trade receivables 2,127 – – 2,127Other receivables and deposits 38,021 – – 38,021Deposits with licensed banks 3,803 – – 3,803Cash and bank balances 7,471 – – 7,471

51,422 398,254 – 449,676

Financial liabilitiesLoans and borrowings – – (6,416) (6,416)Trade payables – – (61,641) (61,641)Other payables and accruals – – (21,401) (21,401)

– – (89,458) (89,458)

CompanyFinancial assetsOther investments – 309,939 – 309,939Other receivables and deposits 34,700 – – 34,700Deposits with licensed banks 1,801 – – 1,801Cash and bank balances 2,670 – – 2,670

39,171 309,939 – 349,110

Financial liabilityOther payables and accruals – – (11,267) (11,267)

– – (11,267) (11,267)




(b) Fair values

(i) Fair value of financial instruments that are carried at fair value

The fair value hierarchy used to measure the fair value of financial asset carried at fair value are as follows:

Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

Level 3 fair value measurements are those derived from inputs for the asset or liability that are not based on observable market data (observable inputs).

As at 31 March 2016, the fair value of other investments as disclosed in Note 12 to the financial statements is measured under Level 1, of which is determined directly by reference to prices provided by investment management companies.

During the financial year ended 31 March 2016, there were no transfers between Level 1 and Level 2 fair value measurements.

(ii) Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value

The following are classes of financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value at the reporting date:

NOTE

Trade and other receivables 11Deposits placed with licensed banks 13Cash and bank balances –Loans and borrowings (current) 19Trade and other payables 20

The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values, either due totheirshorttermnatureorthattheyarefloatingrateinstrumentsthatarere-pricedtomarketinterestratesonornear the reporting date.

The carrying amounts of the current portion of loans and borrowings are reasonable approximation of fair values due to the insignificant impact of discounting.

116


(b) Fair values (cont’d)

(ii) Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value (cont’d)

Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are not reasonable approximation of fair value are as follows:

GROUP CARRYING FAIR AMOUNT VALUE NOTE RM’000 RM’000

2016Financial liabilitiesLoans and borrowings:– Bond 19 942,486 942,203– Government support loan 19 128,173 130,230

1,070,659 1,072,433

The following table provides the fair value measurement hierarchy of the Group’s financial instruments:

FAIR VALUE OF FINANCIAL INSTRUMENTS NOT CARRIED AT FAIR VALUE FAIR FAIR VALUE VALUE LEVEL 1 LEVEL 2 LEVEL 3 TOTAL NOTE RM’000 RM’000 RM’000 RM’000 RM’000

2016GroupFinancial liabilitiesLoans and borrowings:– Bond 19 942,203 – 942,203 – –– Government support loan 19 130,230 – 130,230 – –

1,072,433 – 1,072,433 – –



34. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The operations of the Group and of the Company are subject to a variety of financial risks, including credit risk, liquidity risk and interest rate risk. The Group and the Company have formulated a financial risk management framework whose principal objective is to minimise the Group’s and the Company’s exposure to risks and/or costs associated with the financing, investing and operating activities of the Group and of the Company.

(i) Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Group’s and the Company’s exposure to credit risk arises primarily from trade and other receivables. For other financial assets (including other investments, deposits placed with licensed banks and cash and bank balances), the Group and the Company minimise credit risk by dealing exclusively with high credit rating counterparties.

The Group and the Company do 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 the reporting date, there were no significant concentration 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. The Company also has credit risk exposure arising form of financial guarantees given to banks in respect of loans granted to a subsidiary.

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 licensed 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.

Financial guarantee contract

The Company is exposed to credit risk in relation of financial guarantees given to banks in respect of loans granted to a subsidiary. The maximum exposure to credit risk amounted to RM7,000,000/- (2015: RM7,000,000/-) representing the maximum amount the Company could pay if the guarantee is called on as disclosed in Note 34(ii) to the financial statements. As at the reporting date, there was no indication that the subsidiary would default on repayment.

The financial guarantees have not been recognised since the fair value on initial recognition was not material.

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34. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont’d)

(ii) Liquidity risk

Liquidity risk is the risk that the Group or the Company will not be able to meet their financial obligations as they fall due. The Group’s exposure to liquidity risk arises principally from its various payables, loans and borrowings.

The Group maintains a level of cash and cash equivalents and bank facilities deemed adequate by the management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they fall due.

Maturity analysis

The table below summarises the maturity profile of the Group’s and of the Company’s liabilities as at the reporting date based on contractual undiscounted repayment obligations:

CONTRACTUAL CASH FLOWS ON DEMAND CARRYING OR WITHIN ONE TO OVER FIVE AMOUNT ONE YEAR FIVE YEARS YEARS TOTAL RM’000 RM’000 RM’000 RM’000 RM’000

2016GroupFinancial liabilitiesTrade payables 385,441 385,441 – – 385,441Other payables and accruals 41,636 41,636 – – 41,636Loans and borrowings:– Bond 942,486 51,778 206,797 1,612,990 1,871,565 – Government support loan 128,173 – – 731,791 731,791– Term loans 38,472 3,098 10,140 53,557 66,795– Bank overdrafts 2,348 2,348 – – 2,348– Trust receipts and revolving credit 4,277 4,277 – – 4,277

Total undiscounted financial liabilities 1,542,833 488,578 216,937 2,398,338 3,103,853

CompanyFinancial liabilitiesTrade payables 75,991 75,991 – – 75,991Other payables and accruals 12,570 12,570 – – 12,570Financial guarantee contract# – 7,000 – – 7,000

Total undiscounted financial liabilities 88,561 95,561 – – 95,561




(ii) Liquidity risk (cont’d)

Maturity analysis (cont’d)

CONTRACTUAL CASH FLOWS ON DEMAND CARRYING OR WITHIN ONE TO OVER FIVE AMOUNT ONE YEAR FIVE YEARS YEARS TOTAL RM’000 RM’000 RM’000 RM’000 RM’000

2015GroupFinancial liabilitiesTrade payables 61,641 61,641 – – 61,641Other payables and accruals 21,401 21,401 – – 21,401Loans and borrowings:– Bank overdrafts 2,139 2,139 – – 2,139– Trust receipts and revolving credit 4,277 4,277 – – 4,277


CompanyFinancial liabilitiesOther payables and accruals 11,267 11,267 – – 11,267Financial guarantee contract# – 7,000 – – 7,000


# The Company has given corporate guarantee to bank on behalf of a subsidiary. The potential exposure of the financial guarantee contract is equivalent to the amount of the banking facilities of the said subsidiary.

(iii) Interest rate risk

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

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 potentialriskofinterestratefluctuation.

120


(iii) Interest rate risk (cont’d)

The fixed deposit placed with licensed bank at fixed rate exposes the Group to fair value interest rate risk. The bank overdraft,revolvingcreditsandtermloanstotallingRM45,097,000/-(2015:RM6,416,000/-)atfloatingrateexposetheGrouptocashflowinterestratewhilstthebondandgovernmentsupportloanofRM1,070,659/-(2015:RMnil)exposethe Group to fair value interest rate risk.

The information on maturity dates and effective interest rate of financial assets and liabilities are disclosed in their respective notes.

Sensitivity analysis for interest rate risk

Fair value sensitivity analysis for fixed rate instruments

The Group and the Company 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 DECREASE INCREASE RM’000 RM’000

2016GroupVariable rate instruments (66) 66

2015GroupVariable rate instruments (64) 64



35. CAPITAL MANAGEMENT

The primary objective of the Group’s capital management is to ensure that it maintains a strong capital base and safeguard the Group’s ability to continue as a going concern, so as to maintain investor, creditor and market confidence and to sustain future development of the business. The directors monitor and determine to maintain an optimal debt-to-equity ratio that complies with debt covenants and regulatory requirements.

The debt-to-equity ratio as at 31 March 2016 and 31 March 2015 were as follows:

GROUP 2016 2015 RM’000 RM’000

Total borrowings 1,115,756 6,416

Equity attributable to owners of the Company 649,975 623,081

Debt-to-equity ratio 1.72 0.01

There were no changes in the Group’s approach to capital management during the financial year.

A subsidiary is required to maintain a financial service cover ratio of at least 1.25 times and debt equity ratio of not greater than 80:20 upon the toll commencement.

36. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

(a) Debt Financing Facility Agreements for the West Coast Expressway Project (“WCE Project”)

On 30 June 2015, a subsidiary of the Company, West Coast Expressway Sdn. Bhd. (“WCESB”), an 80%-owned subsidiary of the Company, has entered into Debt Financing Facility Agreements of RM4.74 billion for the funding requirement of WCE Project as follows:

(i) Government Support Loan Facility Agreement between WCESB and the Government of Malaysia for a term loan facility of RM2.24 billion;

(ii) Facility Agreement between WCESB, RHB Investment Bank Berhad, RHB Bank Berhad and Malayan Banking Berhad for a syndicated team loan facility of RM1.5 billion; and

(iii) Guaranteed Sukuk Murabahah Programme Agreement between WCESB, Bank Pembangunan Malaysia Berhad and RHB Investment Bank Berhad for an Islamic medium term notes programme of RM1.0 billion to be guaranteed by Bank Pembangunan Malaysia Berhad and Danajamin Nasional Berhad pursuant to Kafalah facility.

122

36. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (cont’d)

(b) Supplemental Share Sales Agreement

(i) The Company had on 28 August 2015 entered into a supplemental agreement to the Share Sales Agreement (“SSA”) with Tan Sri Dato’ (Dr.) Ir Chan Ah Chye @ Chan Chong Yoon to amend and vary certain provision in the SSA which entails, amongst others, the proposed disposal of the sale shares in two separate tranches as follows:

• 500,000,000unitsofTalamSharesatthepriceofRM0.085perTalamSharesandtobecompletedwithin30daysafter the Unconditional Date or such other extension of time or later date the parties may agree in writing (“First Tranche”); and

• 400,000,000 units of Talam Shares at the price of RM0.095 per Talam Shares and to be completed within 18 months after the Unconditional Date or such other extension of time or later date the parties may agree in writing (“Second Tranche”).

(ii) The solicitors of the Company had vide its letter dated 16 February 2016 confirmed that all conditions precedent set out in the SSA as amended in the supplemental agreement has been fulfilled. The SSA has become unconditional on 16 February 2016.

37. SIGNIFICANT EVENTS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR

(a) Proposed disposal of 900,000,000 ordinary shares of RM0.20 each in Talam

Further to Note 36(b) to the financial statements, the First Tranche share sale was completed on 18 April 2016 following the transfer of First Tranche sale shares to the purchaser in accordance to the terms and conditions of the share sales agreement. The sales consideration of RM42,431,000/- was received on 21 April 2016.

(b) Proposed change of the Company’s name

On 2 June 2016, the Company received approval from the Companies Commission of Malaysia (“CCM”) for the proposed name of WCE Holdings Berhad. The proposed change of name is subject to shareholders’ approval at the forthcoming Annual General Meeting.

The proposed change of name will be effective from the date of the Certificate of Incorporation on the Change of Name issued by CCM after the shareholders’ approval.

(c) Disposal of an 82.84% owned subsidiary, Asian Resinated Felt Sdn. Bhd.

The Company had on 21 June 2016 entered into a Share Purchase Agreement (“SPA”) binding the Company, KEB Management Sdn. Bhd., a wholly owned subsidiary of the Company and United Geofelt Sdn. Bhd. for the disposal of the Group’s entire equity interest comprising 2,535,000 ordinary shares of RM1/- each and 650,000 5% cumulative redeemable preference shares of RM1/- each held in the total issued and paid-up capital of Asian Resinated Felt Sdn. Bhd. (“ARF”) to United Geofelt Sdn. Bhd., at a total consideration of RM5,372,059/-. The Group estimated a loss after non-controlling interest of approximately RM3.5 million based on the financial position of ARF as at 31 March 2016 arising from the disposal.


SUPPLEMENTARY INFORMATIONON THE BREAKDOWN OF REALISED AND UNREALISED PROFITS OR LOSSES

On 25 March 2010, Bursa Malaysia Securities Berhad (“Bursa Malaysia”) issued a directive to all listed issuers pursuant to Paragraphs 2.06 and 2.23 of Bursa Malaysia Main Market Listing Requirements. The directive requires all listed issuers to disclose the breakdown of the retained profits or accumulated losses as at the end of the reporting period, into realised and unrealised profits and losses.

On 20 December 2010, Bursa Malaysia further issued guidance on the disclosure and the format required.

Pursuant to the directive, the amounts of realised and unrealised profits or losses included in the accumulated losses of the Group and of the Company as at the reporting date are as follows:


Total accumulated losses of the Company and its subsidiaries:– realised (747,279) (751,082) (514,681) (516,160)– unrealised 470 (232) 1,933 –

(746,809) (751,314) (512,748) (516,160)Total share of retained earnings associates– realised 52,854 39,441 – –– unrealised 19,967 10,352 – –

72,821 49,793 – –

Add: Consolidation adjustments 227,842 228,481 – –

Total accumulated losses (446,146) (473,040) (512,748) (516,160)

The determination of realised and unrealised profits or losses is based on Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits and Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants on 20 December 2010.

The disclosure of realised and unrealised profits or losses 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.

124

STATEMENT BY DIRECTORSPURSUANT TO SECTION 169(15) OF THE COMPANIES ACT, 1965

STATUTORY DECLARATIONPURSUANT TO SECTION 169 (16) OF THE COMPANIES ACT, 1965

We, DATO’ ABDUL HAMID BIN MUSTAPHA and DATUK OH CHONG PENG being two of the directors of Kumpulan Europlus Berhad, do hereby state that in the opinion of the directors, the accompanying financial statements as set out on pages 47 to 123 are drawn up in accordance with the Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of Group and of the Company as at 31 March 2016 and of their financial performanceandcashflowsforthefinancialyearthenended.

The supplementary information set out on page 124 has been prepared in accordance with the Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.

On behalf of the Board,

DATO’ ABDUL HAMID BIN MUSTAPHADirector

DATUK OH CHONG PENGDirector


I, LYNDON ALFRED FELIX, 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 as set out on pages 47 to 123 and the supplementary information set out on page 124 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.

LYNDON ALFRED FELIX

Subscribed and solemnly declared by the abovenamed at Kuala Lumpur in the Federal Territory on 28 June 2016.

Before me,

TAN KIM CHOOI (W 661)Commissioner for Oaths


INDEPENDENT AUDITORS’ REPORTTO THE MEMBERS OF KUMPULAN EUROPLUS BERHAD

REPORT ON THE FINANCIAL STATEMENTS

We have audited the financial statements of Kumpulan Europlus Berhad, which comprise the statements of financial position as at 31 March 2016 of the Group and of the Company, and the statements of comprehensive income, statements of changes in equity andstatementsofcashflowsoftheGroupandoftheCompanyforthefinancialyearthenended,andasummaryofsignificantaccounting policies and other explanatory information, as set out on pages 47 to 123.

Directors’ Responsibility for the Financial Statements

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

Auditors’ Responsibility

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

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

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

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as at 31March2016andoftheirfinancialperformanceandcashflowsforthefinancialyearthenendedinaccordancewiththeFinancialReporting Standards and the requirements of the Companies Act, 1965 in Malaysia.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

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

(a) In our opinion, the accounting and other records and the registers required by the Companies Act, 1965 in Malaysia to be kept by the Company and its subsidiaries have been properly kept in accordance with the provisions of the Companies Act, 1965 in Malaysia;

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

(c) Our auditors’ reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Companies Act, 1965 in Malaysia.

126

OTHER REPORTING RESPONSIBILITIES

The supplementary information set out on page 124 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The directors are responsible for the preparation of the supplementary information in accordance with the Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

OTHER MATTERS

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

BAKER TILLY MONTEIRO HENG LEE KONG WENGNo. AF 0117 No. 2967/07/17(J)Chartered Accountants Chartered Accountant



OWNER

LOCATION

LAND/

BUILT UP AREA

DEVELOPMENT/

PROPOSED DEVELOPMENT

DATE OF ACQUISITION

TENURE

EXPIRY

APPROXIMATE AGE OF

BUILDING (YEAR)

NET BOOK VALUE AS AT

31.03.2016 RM’000


31.03.2015 RM’000

1. Asian Resinated Felt Sdn Bhd

Lot PT15656 Nilai Industrial Estate 71800 Nilai Negeri Sembilan

16,812 sq.m.

Factory building

30.06.2010 Leasehold – 99 years

01.11.2089 23 5,368 5,476

2. KEURO Trading Sdn Bhd

Mukim of Ampang District of Hulu Langat Selangor Darul Ehsan

1,775 sq.m.

13 parcels of residential land at

Pandan Perdana


29.10.2100 – 401 406


1-1A, 1st Floor Jalan U/P 1/3 Taman Ukay Perdana 68000 Ampang Selangor

165 sq.m.

4 units of shop office at Ukay Perdana


10.10.2100 13 523 525

1-1B, 1st Floor Jalan U/P 1/3 Taman Ukay Perdana 68000 Ampang Selangor

173 sq.m.

3-1B, 3rd Floor Jalan U/P 1/3 Taman Ukay Perdana 68000 Ampang Selangor

61 sq.m.

26-3B, 1st Floor Jalan U/P 1/2 Taman Ukay Perdana 68000 Ampang Selangor

114 sq.m.



546 sq.m.


Pandan Perdana


30.10.2195 – 155 157



248 sq.m.


Pandan Perdana


11.01.2091 – 72 73



783 sq.m.


Pandan Perdana


10.12.2195 – 223 226


No. 11, Jalan Orkid 10 Seksyen BB1 Bandar Bukit Beruntung 48300 Rawang Selangor

601 sq.m.

1 unit of bungalow lot

01.07.2008 Freehold – – 85 85

LIST OF PROPERTIESAS AT 31 MARCH 2016

128

OWNER

LOCATION

LAND/

BUILT UP AREA

DEVELOPMENT/

PROPOSED DEVELOPMENT

DATE OF ACQUISITION

TENURE

EXPIRY

APPROXIMATE AGE OF

BUILDING (YEAR)


31.03.2016 RM’000


31.03.2014 RM’000


No. 63, Jalan Widuri 2B Seksyen BB18 Bukit Beruntung 3 48300 Rawang Selangor

1,179 sq.m.

4 units of single storey

house

01.04.2009 Freehold – – 420 429

No. 63, Jalan Widuri 2D/2 Seksyen BB18 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


Metro Larkin District of Johor Bahru Johor Darul Ta’zim

58 sq.m.

2 units of shop office and

retail space


21.04.2094 8 – –

10. KEURO Leasing Sdn Bhd


1,397 sq.m.


retail space


21.04.2094 8 – –


F05 & F06, 1st Floor Pandan Safari Lagoon 1, Jalan Pandan Perdana 6/10A Pandan Perdana 55100 Kuala Lumpur

1,011 sq.m.

2 units of shop office

lots at Pandan Perdana


08.03.2092 9 240 250



321 sq.m.


retail space


21.04.2094 8 – –

13. KEB Builders Sdn Bhd


72 sq.m.

1 unit of shop office and

retail space


21.04.2094 8 – –


THE COMPANY

ORDINARY SHARES

NO. OF ORDINARY SHARES OF RM1.00 EACH DIRECT DEEMED INTEREST % INTEREST %

The Company

1. Tan Sri Pang Tee Chew 35,000 0.003 93,451,100*¹ 9.312. U Chin Wei 30,000 0.003 11,500*² 0.0013. Tang Kim Hua 350,000 0.035 – –4. Dato’ Neoh Soon Hiong – – 397,000*³ 0.039

WARRANTS

NO. OF WARRANTS DIRECT DEEMED INTEREST % INTEREST %

The Company

1. Tan Sri Pang Tee Chew 7,500 0.003 20,148,800*¹ 9.37

Notes:

*1 Deemed interested by virtue of his interest in United Frontiers Holdings Limited pursuant to Section 6A of the Companies Act, 1965 (“Act”).

*2 Deemed interested through his spouse, Madam Goh Siew Thing pursuant to Section 134(12)(c) of the Act.

*³ Deemed interested through his spouse, Datin Tan Yoke Sum and through his son, Mr Neoh Xiao Minn, 385,000 and 12,000 ordinary shares of RM1.00 each respectively in Kumpulan Europlus Berhad.

Save as disclosed above, none of the other Directors of the Company have any interests in the securities of the Company and its related corporation as at 30 June 2016.

STATEMENT ON DIRECTORS’ AND CHIEF EXECUTIVE OFFICER’S INTERESTSAS AT 30 JUNE 2016

130

ANALYSIS OF SHAREHOLDINGSAS AT 30 JUNE 2016

ANALYSIS OF SHARE CAPITAL

Authorised share capital : RM3,000,000,000

Issued and paid-up share capital : RM1,002,735,588

Class of share : Ordinary share of RM1.00 each

DISTRIBUTION OF SHAREHOLDINGS

NO. OF % OF NO. OF % OF SIZE OF HOLDINGS SHAREHOLDERS SHAREHOLDERS SHARES HELD SHARES HELD

1 – 99 770 8.833 29,564 0.003100 – 1,000 1,873 21.484 1,443,424 0.1441,001 – 10,000 4,322 49.576 17,386,859 1.73410,001 – 100,000 1,369 15.703 44,328,434 4.421100,001 – 50,136,780* 379 4.347 327,175,983 32.62850,136,781 and above** 5 0.057 612,371,324 61.070

Total 8,718 100.000 1,002,735,588 100.000

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 262,390,724 26.1675

2 MWE Holdings Berhad 110,765,500 11.0463

3 United Frontiers Holdings Limited 93,415,100 9.3160

4 Malaysia Nominees (Tempatan) Sendirian Berhad 90,000,000 8.9754 Pledged Securities Account for MWE Holdings Berhad (30-00098-000)

5 EB Nominees (Tempatan) Sendirian Berhad 55,800,000 5.5648 Pledged Securities Account for MWE Holdings Berhad (KLM)

6 HSBC Nominees (Asing) Sdn Bhd 43,560,300 4.3441 Exempt An for Credit Suisse (HK BR-TST-Asing)

7 Citigroup Nominees (Asing) Sdn Bhd 35,314,200 3.5218 Exempt An for UBS AG Singapore (Foreign)

8 HSBC Nominees (Asing) Sdn Bhd 28,580,400 2.8502 Exempt An for Credit Suisse (SG BR-TST-Asing)

9 HSBC Nominees (Asing) Sdn Bhd 7,326,400 0.7306 Exempt An for Bank Julius Baer & Co. Ltd. (Singapore BCH)

10 Liew Khang @ Liew Wan Khang 6,440,000 0.6422


ANALYSIS OF SHAREHOLDINGS(cont’d)

THIRTY LARGEST SHAREHOLDERS (cont’d)

NAME OF SHAREHOLDERS NO. OF SHARES %

11 Aziz bin Bahaman 5,775,000 0.5759

12 MPI Generali Insurans Berhad 5,525,275 0.5510

13 OSK Technology Ventures Sdn Bhd 5,250,000 0.5236

14 Ong Yeng Tian @ Ong Weng Tian 4,797,993 0.4785

15 Alliancegroup Nominees (Tempatan) Sdn Bhd 4,000,000 0.3989 Pledged Securities Account for Si Tho Yoke Meng (6000156)

16 CIMSEC Nominee (Tempatan) Sdn Bhd 4,000,000 0.3989 CIMB for Seow Lun Hoo @ Seow Wah Chong (PB)

17 Sai Yee @ Sia Say Yee 3,720,000 0.3710

18 General Technology Sdn Bhd 3,582,099 0.3572

19 DB (Malaysia) Nominee (Tempatan) Sendirian Berhad 3,256,900 0.3248 Exempt An for Bank 0f Singapore Limited

20 Maybank Nominees (Tempatan) Sdn Bhd 3,180,000 0.3171 Pledged Securities Account for Yoong Kah Yin

21 Ong Siok Lian 2,956,800 0.2949

22 Reson Sdn Bhd 2,588,300 0.2581

23 HSBC Nominees (Tempatan) Sdn Bhd 2,444,000 0.2437 Exempt An for Credit Suisse (SG BR-TST-Temp)

24 Sio Tat Hiang 2,287,600 0.2281

25 Ong She Yew 2,275,000 0.2269

26 Alliancegroup Nominees (Tempatan) Sdn Bhd 2,249,600 0.2243 Pledged Securities Account for Tan Kian Chuan (8059299)

27 RHB Capital Nominees (Tempatan) Sdn Bhd 2,162,800 0.2157 Pledged Securities Account for Loke See Ooi (CEB)

28 Sow Huey Shan 2,148,900 0.2143

29 Low Chu Mooi 2,100,000 0.2094

30 HLB Nominees (Tempatan) Sdn Bhd 2,013,600 0.2008 Pledged Securities Account for Oh Kim Sun

799,906,491 79.7720

132

LIST OF SUBSTANTIAL SHAREHOLDERS AS SHOWN IN THE REGISTER OF SUBSTANTIAL SHAREHOLDERS

NO. OF ORDINARY SHARES OF RM1.00 EACH DIRECT DEEMED NAME OF SUBSTANTIAL SHAREHOLDERS INTEREST % INTEREST %

1. IJM Corporation Berhad 262,574,474 26.18 – –2. MWE Holdings Berhad 256,565,500 25.58 – –3. United Frontiers Holdings Limited 93,415,100 9.31 – –4. Pinjaya Sdn Bhd – – 256,565,500 ¹ 25.585. Tan Sri Dato’ Surin Upatkoon – – 256,565,500 ² 25.586. Tan Sri Pang Tee Chew 35,000 0.003 93,415,100 ³ 9.317. Datuk Wira Pang Tee Nam – – 93,415,100 ³ 9.31

NOTES:

¹ Deemed interested by virtue of its interest in MWE Holdings Berhad pursuant to Section 6A of the Companies Act, 1965 (“Act”).

² Deemed interested by virtue of his interest in Pinjaya Sdn Bhd pursuant to the Act.

³ Deemed interested by virtue of their interest in United Frontiers Holdings Limited pursuant to the Act.


Warrant 2014/2016 : 214,871,911 outstanding

DISTRIBUTION OF WARRANTHOLDINGS

SIZE OF HOLDINGS NO. OF % OF NO. OF % OF WARRANT- WARRANT- WARRANTS WARRANTS HOLDERS HOLDERS HELD HELD

1 – 99 187 8.454 8,719 0.004100 – 1,000 709 32.052 378,801 0.1761,001 – 10,000 883 39.919 2,952,758 1.37410,001 – 100,000 299 13.517 10,760,302 5.008100,001 – 10,743,595* 131 5.922 76,331,175 35.52410,743,596 and above** 3 0.136 124,440,156 57.914

Total 2,212 100.000 214,871,911 100.000

NOTES:

* Less than 5% of outstanding warrants

** 5% and above of outstanding warrants

THIRTY LARGEST WARRANTHOLDERS

NAME OF WARRANTHOLDERS NO. OF WARRANTS %

1 IJM Corporation Berhad 55,689,606 25.9176

2 MWE Holdings Berhad 54,582,750 25.4025

3 United Frontiers Holdings Limited 14,167,800 6.5936

4 HSBC Nominees (Asing) Sdn Bhd 7,834,387 3.6461 Exempt An for Credit Suisse (HK BR-TST-Asing)

5 Citigroup Nominees (Asing) Sdn Bhd 7,076,350 3.2933 Exempt An for UBS AG Singapore (Foreign)

6 RHB Nominees (Tempatan) Sdn Bhd 5,947,850 2.7681 Pledged Securities Account for Lee Cheng Lock

7 RHB Capital Nominees (Tempatan) Sdn Bhd 2,521,300 1.1734 Pledged Securities Account for Loke See Ooi (CEB)

8 Chua Kian Lam 2,173,100 1.0113

9 HSBC Nominees (Asing) Sdn Bhd 2,062,500 0.9599 Exempt An for Credit Suisse (SG BR-TST-Asing)

10 Ng Poh Seng 1,570,000 0.7307

ANALYSIS OF WARRANTHOLDINGSAS AT 30 JUNE 2016

134

THIRTY LARGEST WARRANTHOLDERS (cont’d)

NAME OF WARRANTHOLDERS NO. OF WARRANTS %

11 Public Invest Nominees (Tempatan) Sdn Bhd 1,474,000 0.6860 Exempt An for Phillip Securities Pte Ltd (Clients)

12 Lee Beng Heok 1,467,100 0.6828

13 Tee Sie Kai 1,450,000 0.6748

14 UOB Kay Hian Nominees (Asing) Sdn Bhd 1,337,625 0.6225 Pledged Securities Account for Citibase Limited

15 HSBC Nominees (Asing) Sdn Bhd 1,288,200 0.5995 Exempt An for Bank Julius Baer & Co. Ltd. (Singapore BCH)

16 Aziz bin Bahaman 1,237,500 0.5759

17 RHB Nominees (Tempatan) Sdn Bhd 1,235,400 0.5749 Pledged Securities Account for Teoh Teik Keng

18 Seng Shun Mun 1,235,400 0.5749

19 Lee Beng Choo 1,178,400 0.5484

20 Hiew Fook Sang @ Fook Hew San 1,123,500 0.5229

21 Tee See Kim 1,123,000 0.5226

22 Public Nominees (Tempatan) Sdn Bhd 1,067,700 0.4969 Pledged Securities Account for Fun Wai Ling (E-SPG)

23 Public Nominees (Tempatan) Sdn Bhd 982,700 0.4573 Pledged Securities Account for Yeoh Chu Lung (E-SKC/SEM)

24 Alliancegroup Nominees (Tempatan) Sdn Bhd 943,000 0.4389 Pledged Securities Account for Tan Chee Kui

25 TA Nominees (Tempatan) Sdn Bhd 820,000 0.3816 Pledged Securities Account for You Swee Lang @ Yeo Swee Lan

26 Liew Siew Lan 750,000 0.3490

27 Ong Siok Lian 633,600 0.2949

28 Maybank Securities Nominees (Tempatan) Sdn Bhd 607,000 0.2825 Pledged Securities Account for Woon Teik (REM 663)

29 Teoh Cha Boo 600,000 0.2792

30 Lee Joo Kai 594,300 0.2766

174,774,068 81.3386


NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the 15th Annual General Meeting of Kumpulan Europlus Berhad (“the Company”) will be held at Victorian Ballroom, Level 1, Holiday Villa Hotel & Suites Subang, 9 Jalan SS12/1, 47500 Subang Jaya, Selangor Darul Ehsan on Tuesday, 30 August 2016 at 2.30 p.m. for the following purposes:

AGENDA

AS ORDINARY BUSINESS

1. To receive the Audited Financial Statements of the Company for the financial year ended 31 March 2016 and the Reports of the Directors and Auditors thereon.

(Please refer to Explanatory Note A)

2. To approve the payment of the Directors’ fees of RM885,000.00 for the financial year ended 31 March 2016.

(Ordinary Resolution 1)

3. To re-elect the following Directors who are retiring by rotation pursuant to Article 97 of the Company’s Articles of Association:

3.1 U Chin Wei

3.2 Tan Sri Pang Tee Chew



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


AS SPECIAL BUSINESS

5. To consider and if thought fit, to pass the following ordinary resolutions pursuant to Section 129(6) of the Companies Act, 1965:

(i) “THAT Dato’ Abdul Hamid Bin Mustapha who is over the age of 70 years and retiring pursuant to Section 129 of the Companies Act, 1965 be and is hereby re-appointed a Director of the Company and to hold office until the conclusion of the next Annual General Meeting of the Company.”

(ii) “THAT Datuk Oh Chong Peng who is over the age of 70 years and retiring pursuant to Section 129 of the Companies Act, 1965 be and is hereby re-appointed a Director of the Company and to hold office until the conclusion of the next Annual General Meeting of the Company.”



To consider and if thought fit, to pass the following Ordinary Resolutions:

6. AUTHORITY TO ISSUE SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965

“THAT pursuant to Section 132D of the Companies Act, 1965 and subject always to the approval of all relevant authorities, the Directors of the Company be and are hereby empowered to issue shares in the Company at any time and upon such terms and conditions for such purposes as the Directors may in their absolute discretion deem fit provided that the aggregate number of shares issued to this resolution does not exceed 10% of the issued share capital of the Company for the time being and that the Directors be and are also empowered to obtain approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad and that such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company unless revoked or varied by the Company at a general meeting.”


136

7. PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE (“PROPOSED SHAREHOLDERS’ MANDATE FOR RRPT”)

“THAT, subject always to the Listing Requirements of Bursa Malaysia Securities Berhad, the Company and its subsidiary companies shall be mandated to enter into such recurrent transactions of a revenue or trading nature which are necessary for their day-to-day operations and with those related parties as specified in Section 2.4 of the Circular to Shareholders dated 28 July 2016 subject further to the following:

(i) the transactions are in the ordinary course of business of the Company and its subsidiary companies on terms not more favourable to the related parties than those generally available to the public and are not detrimental to the minority shareholders of the Company; and

(ii) disclosure will be made in the Annual Report of the aggregate value of transactions of the Proposed Shareholders’ Mandate for RRPT 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 type of the recurrent related party transactions made and their relationship with the Company and/or its subsidiary companies.

AND THAT such mandate shall commence upon passing of this resolution and shall continue to be in force until:

(i) the conclusion of the next Annual General Meeting (“AGM”) of the Company following the AGM at which such mandate was passed, at which time it will lapse unless by the resolution passed at a general meeting, the authority is renewed; or

(ii) the expiration of the period within which the next AGM after that date is required to be held pursuant to Section 143(1) of the Companies Act, 1965 (“Act”) (but must not extend to such extension as may be allowed pursuant to Section 143(2) of the Act); or

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

whichever is the earlier;

AND FURTHER THAT the Directors of the Company be and are hereby 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 for RRPT.”


8. PROPOSED AMENDMENT TO THE ARTICLES OF ASSOCIATION OF THE COMPANY

“THAT the proposed amendment to the Articles of Association of the Company as contained in Appendix I of the Annual Report of the Company be and is hereby approved.

AND THAT the Directors of the Company be and are hereby authorised to do all such acts, deeds and things as are necessary and/or expedient in order to give full effect to the amendment to the Articles of Association of the Company with full powers to assent to any conditions, modifications and/ or amendments as may be required by the relevant authorities.”

(Special Resolution 1)


9. PROPOSED CHANGE OF THE COMPANY’S NAME FROM “KUMPULAN EUROPLUS BERHAD” TO “WCE HOLDINGS BERHAD” (“PROPOSED CHANGE OF NAME”)

“THAT the name of the Company be and is hereby changed from “Kumpulan Europlus Berhad” to “WCE Holdings Berhad” effective from the date of the issuance of the Certificate of Incorporation on the Change of Name by the Companies Commission of Malaysia.

AND THAT all references in the Memorandum and Articles of Association of the Company to the name “Kumpulan Europlus Berhad”, whenever the same may appear, shall be deleted and substituted with “WCE Holdings Berhad”.

AND FURTHER THAT the Directors and/ or Company Secretaries be and are hereby authorised to give effect to the Proposed Change of Name with full power to assent to any condition, modification, variation and/ or amendment (if any) as may be required by the relevant authorities.”

(Special Resolution 2)

10. To transact any other ordinary business of which due notice shall have been given in accordance with the Company’s Articles of Association and the Companies Act, 1965.

BY ORDER OF THE BOARD

RAW KOON BENG (MIA 8521)WONG WAI FOONG (MAICSA 7001358)LIM POH YEN (MAICSA 7009745)Company Secretaries

Kuala Lumpur28 July 2016

NOTICE OF ANNUAL GENERAL MEETING(cont’d)

NOTES:

1. A member entitled to attend and vote at this meeting is entitled to appoint one (1) proxy to attend the meeting and vote in his stead. A member shall not be entitled to appoint more than two (2) proxies to attend and vote at the same meeting and where a member appoints two (2) proxies, the appointment shall be invalid unless the member specifies the proportions of his holdings to be represented by each proxy. A proxy need not be a member of the Company and a member may appoint any person to be his proxy. There shall be no restriction as to the qualification of the proxy and the provision of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. A proxy appointed to attend and vote at the meeting of the Company shall have the same rights as the members to speak at the meeting.

2. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing or if the appointor is a corporation, either under seal or in some other manner approved by the Directors.

3. Where a member of the Company is an Authorised Nominee, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account. An Authorised Nominee shall not be entitled to appoint more than two (2) proxies to attend and vote at the same meeting and where an Authorised Nominee appoints two (2) proxies in respect of each Securities Account, the appointment shall be invalid unless the Authorised Nominee specifies the proportions of his holdings to be represented by each proxy.

4. Where a member of the Company is an Exempt Authorised Nominee which holds ordinary shares of the Company for multiple beneficial owners in one securities account (“Omnibus Account”), there is no limit to the number of proxies which the Exempt Authorised Nominee may appoint in respect of each Omnibus Account it holds. Where an Exempt Authorised Nominee appoints more than one (1) proxy in respect of each Omnibus Account, the appointment shall not be invalid unless the Exempt Authorised Nominee specifies the proportions of his holdings to be represented by each proxy.

138

5. All Proxy Forms must be deposited at the Registered Office of the Company situated at Unit 30-01, Level 30, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur, Wilayah Persekutuan, Malaysia not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

6. For the purpose of determining members who shall be entitled to attend the Annual General Meeting, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd to issue a Record of Depositors as at 22 August 2016. Only depositors whose names appear therein shall be entitled to attend the said meeting or appoint a proxy to attend and vote on their behalf.

EXPLANATORY NOTE A

This Agenda item is meant for discussion only as the provision of Section 169(1) of the Companies Act, 1965 does not require a formal approval of the shareholders for the Audited Financial Statements. Hence, this Agenda item is not put forward for voting.

EXPLANATORY NOTES TO THE SPECIAL BUSINESSES

1. Ordinary Resolution 7 – Authority to issue shares pursuant to Section 132D of the Companies Act, 1965

The Proposed Ordinary Resolution 7 is a renewal of the general mandate pursuant to Section 132D of the Companies Act, 1965 (“General Mandate”) obtained from the shareholders of the Company at the previous Annual General Meeting and, if passed, will empower the Directors of the Company to issue new shares in the Company from time to time provided that the aggregate number of shares issued pursuant to the General Mandate does not exceed 10% of the issued share capital of the Company for the time being.

The General Mandate, unless revoked or varied by the Company in general meeting, will expire at the conclusion of the next Annual General Meeting of the Company.

As at the date of this Notice, no new ordinary shares in the Company were issued pursuant to Section 132D of the Companies Act, 1965 under the general mandate which was approved at the 14th Annual General Meeting held on 29 September 2015 and which will lapse at the conclusion of the 15th Annual General Meeting.

TheGeneralMandatewillprovideflexibilitytotheCompanyforanypossiblefundraisingactivities,includingbutnotlimitedtofurtherplacingof shares, for purpose of funding current and/or future investment project(s), working capital, acquisition and/or for issuance of shares as settlement of purchase consideration.

2. Ordinary Resolution 8 – Proposed Shareholders’ Mandate for RRPT

The detailed information on Resolution 8 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 28 July 2016 which is enclosed together with the Company’s 2016 Annual Report.

3. Special Resolution 1 – Proposed Amendment to the Articles of Association of the Company

The proposed Special Resolution 1, if passed, will enable the Company to be consistent with the recent amendment to the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.

4. Special Resolution 2 – Proposed Change of Company Name

The proposed Special Resolution 2, if passed, will be effective from the date of the Certificate of Incorporation on the Change of Name of the Company (Form 13) issued by the Companies Commission of Malaysia.

TheProposedChangeofCompanyNameisbettertoreflectthemainbusinessoftheGroup.


PROPOSED AMENDMENT TO THE ARTICLES OF ASSOCIATION OF THE COMPANY

THAT the existing Article 133 of the Company’s Articles of Association be amended by deleting in its entirety and substituting thereof with the new Article 133 as set out below:

EXISTING ARTICLE NO. AMENDED ARTICLE NO.

133. Profit and loss account and balance sheet

At the Annual General Meeting in each year, the Directors shall lay before the Company a duly audited profit and loss account and a balance sheet containing a summary of the property and liabilities of the Company as are referred to in Section 169 of the Act. PROVIDED ALWAYS that the interval between the close of the relevant financial year of the Company and the issue of the annual audited accounts, the directors’ and auditors’ reports in printed form or in CD-ROM form or in such other form of electronic media, shall not exceed four months or such period as may be prescribed by the Listing Requirements.

133. Audited financial statement

At the Annual General Meeting in each year, the Directors shall lay before the Company the audited financial statement, made up to end of the applicable financial year together with a copy of the directors’ and auditors’ reports of the Company, in accordance with Section 169 of the Act.

APPENDIX I

140

I/We ______________________________________________________________ (NRIC / Passport / Company No. _______________________________)(Name in full and in block letters)

of _____________________________________________________________________________________________________________________________(Full address)

being a member/members of KUMPULAN EUROPLUS BERHAD (534368-A) hereby appoint _____________________________________________

_____________________________________________________________________________ (NRIC / Passport No. _______________________________)(Name in full and in block letters)

of _____________________________________________________________________________________________________________________________(Full address)

or failing him/her, the Chairman of the meeting as my/our proxy to vote on my/our behalf at the 15th Annual General Meeting of the Company to be held at Victorian Ballroom, Level 1, Holiday Villa Hotel & Suites Subang, 9 Jalan SS12/1, 47500 Subang Jaya, Selangor Darul Ehsan on Tuesday, 30 August 2016 at 2.30 p.m. and at any adjournment thereof, on the resolutions referred to in the Notice of the Annual General Meeting.

My/our proxy is to vote as indicated below:

NO. RESOLUTIONS FOR AGAINST

As Ordinary Business

1 To approve the payment of the Directors’ fees of RM885,000.00 for each financial year

2 To re-elect the Director, U Chin Wei who is retiring by rotation in accordance with Article 97 of the Company’s Articles of Association

3 To re-elect the Tan Sri Pang Tee Chew who is retiring by rotation in accordance with Article 97 of the Company’s Articles of Association

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

As Special Business

5 To re-appoint Dato’ Abdul Hamid Bin Mustapha as Director pursuant to Section 129 of the Companies Act, 1965

6 To re-appoint Datuk Oh Chong Peng as Director pursuant to Section 129 of the Companies Act, 1965

7 Authority to issue shares pursuant to Section 132D of the Companies Act, 1965

8 Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature

9 Proposed Amendment to the Articles of Association of the Company

10 Proposed Change of the Company’s Name from “Kumpulan Europlus Berhad” to “WCE Holdings Berhad”

(Please indicate with an “X” in the spaces as to how you wish your vote to be casted. If you do not do so, the Proxy will vote or abstain from voting at his/her discretion.

Signed this _________________________ day of _________________________ 2016

________________________________________Signature/Common Seal of member

NOTES:

1. A member entitled to attend and vote at this meeting is entitled to appoint one (1) proxy to attend the meeting and vote in his stead. A member shall not be entitled to appoint more than two (2) proxies to attend and vote at the same meeting and where a member appoints two (2) proxies, the appointment shall be invalid unless the member specifies the proportions of his holdings to be represented by each proxy. A proxy need not be a member of the Company and a member may appoint any person to be his proxy. There shall be no restriction as to the qualification of the proxy and the provision of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. A proxy appointed to attend and vote at the meeting of the Company shall have the same rights as the members to speak at the meeting.

2. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing or if the appointor is a corporation, either under seal or in some other manner approved by the Directors.

3. Where a member of the Company is an Authorised Nominee, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account. An Authorised Nominee shall not be entitled to appoint more than two (2) proxies to attend and vote at the same meeting and where an Authorised Nominee appoints two (2) proxies in respect of each Securities Account, the appointment shall be invalid unless the Authorised Nominee specifies the proportions of his holdings to be represented by each proxy.

4. Where a member of the Company is an Exempt Authorised Nominee which holds ordinary shares of the Company for multiple beneficial owners in one securities account (“Omnibus Account”), there is no limit to the number of proxies which the Exempt Authorised Nominee may appoint in respect of each Omnibus Account it holds. Where an Exempt Authorised Nominee appoints more than one (1) proxy in respect of each Omnibus Account, the appointment shall not be invalid unless the Exempt Authorised Nominee specifies the proportions of his holdings to be represented by each proxy.

5. All Proxy Forms must be deposited at the Registered Office of the Company situated at Unit 30-01, Level 30, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur, Wilayah Persekutuan, Malaysia not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

6. For the purpose of determining members who shall be entitled to attend the Annual General Meeting, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd to issue a Record of Depositors as at 22 August 2016. Only depositors whose names appear therein shall be entitled to attend the said meeting or appoint a proxy to attend and vote on their behalf.

PROXY FORM

(Company No. 534368-A)CDS ACCOUNT NO.

NO. OF SHARES HELD

For appointment of two proxies, percentage of shareholdings to be represented by the proxies:

PROXY NO. OF UNITS PERCENTAGE (%)

1

2

TOTAL 100


Unit 30-01, Level 30, Tower A, Vertical Business SuiteAvenue 3, Bangsar South, No. 8, Jalan Kerinchi59200 Kuala Lumpur

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AFFIX STAMP

www.keb.com.my


Corporate Office:

37-2, No. 8, Jalan Anggerik Vanilla BE 31/BEKota Kemuning, Seksyen 3140460 Shah AlamMalaysia

Tel : (60)3 5525 8800Fax : (60)3 5525 8666

Registered Office:

Unit 30-01, Level 30, Tower A

Vertical Business Suite

Avenue 3, Bangsar South

8 Jalan Kerinchi

59200 Kuala Lumpur

Tel : (60)3 2783 9191Fax : (60)3 2783 9111

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RealisingNew Hor zonsANNUAL REPORT

2016

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