Transcript
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PLU
S E
xpressw
ays Berhad (570244-T)
annual reporT 2010
PLUS EXPRESSWAYS BERHAD (570244-T)
Menara Korporat, persada pluSpersimpangan Bertingkat Subang, KM15, lebuhraya Baru lembah Klang47301 petaling Jaya, Selangor Darul ehsan, MalaysiaT +603 7801 6666/7666 4666 F +603 7801 6600/7666 4400
Th
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10
Annual General Meeting
th
DATE 29 June 2011
TIME 2.30 p.m.
VENUE BanquetHall,MenaraKorporat, PersadaPLUS, PersimpanganBertingkat Subang, KM15, LebuhrayaBaru LembahKlang, 47301Petaling Jaya, SelangorDarul Ehsan,Malaysia.
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PLUSEXPRESSWAYSISTHELARGEST TOLL
EXPRESSWAY OPERATOR IN
SOUTH EAST ASIA ANDONEOFTHELARGESTINTHE
WORLDINTERMSOFMARKETCAPITALISATION
VISIONSTATEMENT
MISSION STATEMENT
“To be a PremierGlobal ExpresswayGroup”
“Providing Efficient and SafeExpresswayNetwork that EnhancesQuality of Life”
1. Passion for Success2. Integrity3. Caring4. Trustworthiness5. Teamwork6. Sincerity7. Financial Prudence
CORPORATESTATEMENT
…OUR GUIdING PRINcIPLE WILL bE TO cREATE vALUE
THAT cAN ELEvATE THE GROUP TO GREATER HEIGHTS ANd SUSTAIN THE dEEP ANd cONTINUEd cONfIdENcE Of
ALL OUR STAkEHOLdERS.TAN SRI DATO’ MOhD ShERIff MOhD KASSIMCHAIRMAN
“
“
PASSION fOR SUCCESS
Our passion for successkeeps us enthusiastic anddrives us forward to excelin all thatwe undertake todo.
OURTRUSTWORThINESS
By being trustworthy,we takeresponsibility for all thatwe doand say.
OURTEAMWORK
Teamwork enables us to tap thediverse range of talent, skillsand experience amongst us todeliver outstandingperformance.
OURSINCERITY
Sincerity underlines all ouractions and business activities.
OURINTEGRITY
Integrity is embedded in all ouractions and business activities.
OURCARING
By caring for all ourstakeholders and theenvironment,we help toenrich peoples’ lives.
Notice of Annual GeneralMeetingStatement Accompanying theNotice of TheNinth Annual GeneralMeetingFinancial Calendar 2010/2011Milestones 2010 – 2011
CompanyProfileOur ExpresswaysGroupCorporate StructureAwards andRecognition 2010Five-YearGroup FinancialHighlights2010GroupOperationalHighlightsGroupQuarterly PerformanceGroup Financial ReviewSharePrice& Volume TradedChairman’s StatementOperationsReviewCorporate InformationCompany SecretariesProfile of Board of DirectorsManagement TeamStatement of CorporateGovernanceStatement on Internal ControlStatement of Additional Compliance Information Audit CommitteeReport
Directors’ ReportStatement byDirectorsStatutoryDeclarationIndependent Auditors’ ReportIncomeStatementsStatements of Comprehensive IncomeStatements of Financial PositionStatements of Changes in EquityStatements of Cash FlowsNotes to the Financial Statements
RecurrentRelatedParty TransactionsRelationshipwithRelatedPartiesAnalysis of ShareholdingsList of PropertiesGroupDirectory
• Form of Proxy
contents
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NOTICEISHEREBYGIVENTHATtheNinthAnnualGeneralMeetingoftheCompanywillbeheldattheBanquetHall,MenaraKorporat,PersadaPLUS,PersimpanganBertingkatSubang,KM15,LebuhrayaBaruLembahKlang,47301PetalingJaya,SelangorDarulEhsan,MalaysiaonWednesday,29June2011at2.30p.m.forthepurposeoftransactingthefollowingbusinesses:
AGENdA:
As Ordinary business1. ToreceivetheAuditedFinancialStatementsfortheyearended
31December2010togetherwiththeReportsoftheDirectorsandAuditorsthereon.
2. Tore-electthefollowingDirectorsretiringinaccordancewithArticle76oftheCompany’sArticlesofAssociation:
i. TanSriDatukK.Ravindranii. DatukSeriPanglimaMohdAnnuarZaini
iii. QuahPohKeat
3. Toconsiderand,ifthoughtfit,topassthefollowingresolutionpursuanttoSection129oftheCompaniesAct,1965:
i. “ThatTanSriDato’MohdSheriffMohdKassim,whoretiresinaccordancewithSection129(2)oftheCompaniesAct,1965,beandisherebyre-appointedasaDirectoroftheCompanyinaccordancewithSection129(6)oftheCompaniesAct,1965toholdofficeuntilthenextAnnualGeneralMeeting”
4. ToapprovetheDirectors’remuneration.
5. Tore-appointMessrsErnst&YoungasAuditorsandtoauthorisetheDirectorstofixtheirremuneration.
As Special businessToconsiderandifthoughtfit,topassthefollowingasordinaryresolutions:
6. PROPOSED RENEWAL Of ShAREhOLDERS’ MANDATE fOR RECURRENT RELATED PARTY TRANSACTIONS Of A REVENUE OR TRADING NATURE
“THATpursuanttoparagraph10.09oftheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad,approvalbeandisherebygivenfortherenewaloftheShareholders’MandatefortheCompanyand/oritssubsidiaries(“PLUSExpresswaysGroup”)toenterintorecurrentrelatedpartytransactionsofarevenueortradingnature,whicharenecessaryfortheday-to-dayoperationsofthePLUSExpresswaysGrouptobeenteredintobythePLUSExpresswaysGroupprovidedsuchtransactionsareintheordinarycourseofbusinessandareontermsnotmorefavourabletotherelatedpartythanthosegenerallyavailabletothepublic,particularsofwhicharesetoutinSection2.2
RESOLUTION 1RESOLUTION 2RESOLUTION 3
RESOLUTION 4
RESOLUTION 5
RESOLUTION 6
NOT
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oftheCirculartoShareholdersoftheCompanydated7June2011,ANDTHATsuchapprovalconferredbytheShareholders’Mandateshallcontinuetobeinforceuntil:
(a) theconclusionofthenextAnnualGeneralMeeting(“AGM”)oftheCompanyfollowingthisAGMatwhichsuchmandateispassed,atwhichtimeitwilllapse,unlessbyaresolutionpassedatsuchgeneralmeetingwherebytheauthorityisrenewed;
(b) theexpirationoftheperiodwithinwhichthenextAGMoftheCompanyafterthedateisrequiredtobeheldpursuanttoSection143(1)oftheCompaniesAct,1965(Act)(butshallnotextendtosuchextensionasmaybeallowedpursuanttoSection143(2)oftheAct);or
(c) revokedorvariedbyresolutionpassedbytheshareholdersinageneralmeeting,
whicheveristheearlier,
ANDFURTHERTHATtheDirectorsoftheCompanyand/oranyofthembeandare/is(asthecasemaybe)herebyauthorisedtocompleteanddoallsuchactsandthings(includingexecutingsuchdocumentsunderthecommonsealinaccordancewiththeprovisionsoftheArticlesofAssociationoftheCompany,asmayberequired)togiveeffecttotheProposedRenewalofShareholders’Mandate.”
7. PROPOSED NEW MANDATE fOR ADDITIONAL RECURRENT RELATED PARTY TRANSACTIONS Of A REVENUE OR TRADING NATURE
“THATpursuanttoparagraph10.09oftheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad,approvalbeandisherebygivenfortheShareholders’MandateforPLUSExpresswaysGrouptoenterintoadditionalrecurrentrelatedpartytransactionsofarevenueortradingnature,whicharenecessaryfortheday-to-dayoperationsofthePLUSExpresswaysGrouptobeenteredintobythePLUSExpresswaysGroupprovidedsuchtransactionsareintheordinarycourseofbusinessandareontermsnotmorefavourabletotherelatedpartythanthosegenerallyavailabletothepublic,particularsofwhicharesetoutinSection2.3oftheCirculartoShareholdersoftheCompanydated7June2011,ANDTHATsuchapprovalconferredbytheShareholders’Mandateshallcontinuetobeinforceuntil:
(a) theconclusionofthenextAnnualGeneralMeeting(“AGM”)oftheCompanyfollowingthisAGMatwhichsuchmandateispassed,atwhichtimeitwilllapse,unlessbyaresolutionpassedatsuchgeneralmeetingwherebytheauthorityisrenewed;
(b) theexpirationoftheperiodwithinwhichthenextAGMoftheCompanyafterthedateisrequiredtobeheldpursuanttoSection143(1)oftheCompaniesAct,1965(Act)(butshallnotextendtosuchextensionasmaybeallowedpursuanttoSection143(2)oftheAct);or
RESOLUTION 7
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(c) revokedorvariedbyresolutionpassedbytheshareholdersinageneralmeeting,
whicheveristheearlier,
ANDFURTHERTHATtheDirectorsoftheCompanyand/oranyofthembeandare/is(asthecasemaybe)herebyauthorisedtocompleteanddoallsuchactsandthings(includingexecutingsuchdocumentsunderthecommonsealinaccordancewiththeprovisionsoftheArticlesofAssociationoftheCompany,asmayberequired)togiveeffecttotheProposedShareholders’Mandate.”
bY ORdER Of THE bOARd
Tan hwee Thian(MIA1904)Noor Meiza Ahmad(LS0009016)Company Secretaries
PetalingJaya,SelangorDated7June2011
RESOLUTION 8NO
TICE
OF
ANNUALGEN
ERALMEE
TING(C
ON
TIN
UED
)
NOTE 1
1. Everymemberisentitledtoappointaproxyorinthecaseofacorporation,toappointarepresentativetoattendandvoteinhisplace.AproxymaybutneednotbeamemberoftheCompanyandtheprovisionofSection149(1)(b)oftheCompaniesAct,1965neednotbecompliedwith.
2. Tobevalid,theoriginalformofproxydulycompletedmustbedepositedattheShareRegistrar’soffice,SymphonyShareRegistrarsSdnBhd,Level6,SymphonyHouse,BlockD13,PusatDaganganDana1,JalanPJU1A/46,47301PetalingJaya,Selangornotlessthan48hoursbeforethetimeofholdingtheMeeting.
3. Theinstrumentappointingaproxyshallbeinwritingunderthehandoftheappointerorhisattorneydulyauthorisedinwritingorifsuchappointerisacorporation,underitscommonsealorunderthehandofitsattorney.
4. Amemberholdingonethousand(1,000)ordinarysharesorlessmayappointonlyone(1)proxytoattendandvoteatageneralmeetingwhoshallrepresentallthesharesheldbysuchmember.Amemberholdingmorethanonethousand(1,000)ordinarysharesmayappointuptoten(10)proxiestoattendandvoteatthesameMeetingandeachproxyappointedshallrepresentaminimumofonethousand(1,000)ordinaryshares.Whereamemberappointsone(1)ormoreproxiestoattendandvoteatthesameMeeting,suchappointment(s)shallbeinvalidunlessthememberspecifiestheproportionofhisshareholdingtoberepresentedbyeachproxy.
5. Iftheformofproxyisreturnedwithoutanyindicationastohowtheproxyshallvote,theproxywillvoteorabstainashedeemsfit.
6. Ifnonameisinsertedinthespaceprovidedforthenameofyourproxy,theChairmanoftheMeetingwillactasyourproxy.
NOTE 2
Resolutions pertaining to the Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions and Proposed New Mandate for Additional Recurrent Related Party Transactions of a Revenue or Trading Nature.
ForResolutions7and8,furtherinformationontheRecurrentRelatedPartyTransactionsaresetoutintheCirculartoShareholdersoftheCompanydated7June2011whichisdispatchedtogetherwiththeCompany’s2010AnnualReport.
NOTE 3
Thefollowingpersonhasbeendesignatedtoattendtoshareholders’request:Name :KhalilahDato’MohdTalhaDesignation :Head,CorporateCommunicationsDepartmentContactNo :+60376664666
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dIREcTORS WHO ARE SEEkING RE-ELEcTION AT THE NINTH ANNUAL GENERAL MEETING Of THE cOMPANY:
DirectorsretiringpursuanttoArticle76oftheCompany’sArticlesofAssociationandseekingre-electionareasfollows:
• TanSriDatukK.Ravindran• DatukSeriPanglimaMohdAnnuarZaini• QuahPohKeat
Directorwhoisovertheageof70yearsandseekingre-appointmentpursuanttoSection129oftheCompaniesAct,1965isTanSriDato’MohdSheriffMohdKassim.
Thedetailsofthefour(4)Directorsseekingre-electionaresetoutintheirrespectiveprofileswhichappearfrompages44to49ofthisAnnualReport.ThedetailsoftheirinterestinthesecuritiesoftheCompanyaresetoutintheAnalysisofShareholdingsonpage218ofthisAnnualReport.
STAT
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FIN
ANCI
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ALEN
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2010/2011
2010
2011
fEbRUARY 23• Announcementof
financialresultsforthe4thquarterandyearended31December2009.
• AnnouncementofKeyPerformanceIndicators(KPI)for2010.
JUNE 2• Completionof
subscriptionof49%ofInduNavayugaInfraProjectPrivateLimited(“INIPPL”),India,makingINIPPLaforeignsubsidiaryofPEB.
AUGUST 19• Announcementof
financialresultsforthe2ndquarterended30June2010.
dEcEMbER 20• PEBreceivedanoffer
fromJelasUlungSdnBhd(“JelasUlung”)toacquireallofthebusinessandundertakingincludingallassetsandliabilitiesofPEB.
fEbRUARY 23• EGMontheUEM-
EPFoffer.• Announcementof
financialresultsforthe4thquarterandyearended31December2010.
MAY 21• Announcementof
financialresultsforthe1stquarterended31March2010.
JULY 28• PEBenteredintoa
conditionalsaleandpurchaseagreementwithPTBakrie&BrothersTBK(“Bakrie”)forthedisposalofPEBofitsentireequityinterestof60%inPTCimanggisCibitungTollways(“CCTW”).
NOvEMbER 24• Announcementof
financialresultsforthe3rdquarterended30September2010.
fEbRUARY 7• Signingof
ConcessionAgreementfortheJetpur-SomnathHighwayintheStateofGujarat,India.
APRIL 9• Paymentoffinal
singletierdividendof10.0senperordinaryshareforfinancialyearended31December2009.
JUNE 11• Completionof
acquisitionof20%equityinterestinTouch‘nGoSdnBhd(“TnG”),makingTnGanassociateofPEB.
SEPTEMbER 24• Paymentofinterim
singletierdividendof7.5senperordinaryshareforfinancialyearended31December2010.
dEcEMbER 23• Extraordinary
GeneralMeeting(“EGM”)toadjourntheEGM.
APRIL 29• EighthAnnual
GeneralMeeting.
JUNE 15• Completionof
acquisitionof100%equityinterestinTerasTeknologiSdnBhd(“TERAS”).
OcTObER 15• PEBreceivedanoffer
fromUEMGroupBerhad(“UEM”)andEmployeesProvidentFundBoard(“EPF”)as“JointOfferors”toacquireallofthebusinessandundertakingincludingallassetsandliabilitiesofPEB.
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MIL
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2010/2011
2010
5 JANUARY• PersadaPLUS,theheadquartersofPLUS
ExpresswaysBerhad,isofficiallylaunchedbythePrimeMinisterofMalaysia.
25 fEbRUARY• Acourtesycampaign,“Salam,Senyum,
Sabar”(Greet,Smile,Patience)islaunchedforfrontliners.
5 – 7 APRIL• Thefirst-everPLUSInternationalExpressway
Conference&ExhibitionorPIECE2010forindustryplayersisheldinKualaLumpur,attracting400localandforeigndelegatesfrom15countries.
29 APRIL• The8thPLUSExpresswaysBerhadAnnual
GeneralMeetingisheldatPersadaPLUS.
19 JULY• ThenewlookSungaiPerakRestandService
Area(Southbound)withtheconceptof“GreenTrail”isofficiallyunveiled.
4 AUGUST• MalaysiansUniteforRoadSafety(MUFORS),a
PLUSCSRinitiative,launchesitsRoadReelsShortFilmCompetitionforstudentsofhigherlearning.
20 AUGUST• MUFORSGallery,acentretocreateawareness
andeducatethepubliconroadsafety,isofficiallylaunchedbytheMinisterofWorks.
3 SEPTEMbER• PLUScontributessixambulancesand15
vehiclestoRedCrescent,StJohn’sandPDRMrespectivelyataWorksMinistry-organisedroadsafetycampaignforuniversitystudents.
12 NOvEMbER• “JomJalanBersamaPLUS”,a13-part
travelogueseriesjointlyproducedwithTV3,islaunchedattheDengkilRestandserviceArea(Southbound).
23 dEcEMbER• AnExtraordinaryGeneralMeetingisheldat
PersadaPLUS.
2011
25 JANUARY• PLUSTravelTimeAdvisoryisissuedto
motoristsheadinghomefortheChineseNewYearholidays.
26 JANUARY• Inconjunctionwiththefestiveseason,OPS
SikapXXIIislaunchedatPersadaPLUS.
28 JANUARY • MUFORSRoadReelsShortFilmAwards
ceremonyisheldtoannounceandcelebratethewinners.
23 fEbRUARY• AsecondExtraordinaryGeneralMeetingisheld
atPersadaPLUS.
19 APRIL• The‘MUFORSRespectYourLimits’roadshow
getsunderwaywithanewco-sponsorandprogrammepartner,PUSPAKOMSdnBhd.
25 – 26 APRIL• PLUSisaplatinumsponsorandco-organiser
ofthePermanentInternationalAssociationofRoadCongress(PIARC)Seminarwhichaimedtoshareandgathernewknowledgeonroadconstructionandengineering.
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INDIA
MALAYSIA
INDONESIA
International Ventures (Indonesia)
PT Lintas Marga Sedaya (“LMS”)• Cikampek-PalimananExpressway,West Java, Indonesia
• Length: 116 km•Status: Land acquisition in
progress (89% as atJanuary 2011)
OUR OVERSEAS PROJECTSIndia
PLUSExpressways’maidenhighwayprojectinIndia,the21.6kmBhiwandi-Kalyan-ShilPhataHighway,commencedoperationsinAugust2009.
InJanuary2010,PLUSExpresswaysannouncedtheproposedacquisitionofequityinterestinInduNavayugaInfraProjectPrivateLimited,India,theconcessionairefora38.6kmhighwayintheStateofTamilNadu,India.
InFebruary2011,aforeignassociatecompanywhichwasformedtogetherwithIDFCProjectsLimitedinIndia,Jetpur-SomnathTollwaysLimited(“SPV”),andtheNationalHighwayAuthorityofIndiaenteredintoaConcessionAgreementforthe127.6kmJetpur-SomnathHighwayintheStateofGujarat,Indiaonadesign,build,finance,operateandtransferbasiswithaconcessionperiodof30years.
International Ventures (India)
Jetpur-Somnath Tollways Limited (“Jetpur – Somnath”)• Jetpur-SomnathHighway, Gujarat, India
• Length: 127.6 km•Status: Concession Agreement
signed on 7 February 2011
PLUS BKSP Toll Limited (“PLUS BKSP”)• Bhiwandi-Kalyan-Shil PhataHighway,Mumbai, India
• Length: 21.6 km•Status: Commenced operations
on 22 August 2009
International Ventures (India)
Indu Navayuga Infra Project Private Limited (“INIPPL”) • Padalur-TrichyHighway, TamilNadu, India
• Length: 38.6 km•Status: Commenced
operations on 6May 2010
COM
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Domestic Operations (Malaysia)
Projek Lebuhraya Utara-Selatan Berhad (PLUS)•North-South Expressway• NewKlang Valley Expressway• FederalHighwayRoute 2• Seremban-PortDicksonHighway• Length: 846 km•ConcessionPeriod: March 1988 –December 2038 (50 Years)
Expressway Lingkaran Tengah Sdn Bhd (ELITE)• North-South ExpresswayCentral Link• Length: 63 km•ConcessionPeriod: April 1994 –May 2030 (36 Years)
Linkedua (Malaysia) Berhad (Linkedua)• Malaysia-Singapore SecondCrossing• Length: 47 km•ConcessionPeriod: July 1993 –December 2038 (45 Years)
Konsortium Lebuh Raya Butterworth-Kulim Sdn Bhd (KLBK) • Butterworth-KulimExpressway• Length: 17 km• ConcessionPeriod: June 1994 – June 2026 (32 Years)
OUR
EXPR
ESSW
AYS
Indonesia
InJuly2007,PLUSExpresswaysacquired55%ofPTLintasMargaSedaya,theconcessionairetoconstructandoperatea116kmtollhighwayfromCikampektoPalimananonJavaIsland,Indonesia.
PLUSExpressways,backedbyconsistentfinancialperformance,strongcapitalisationandmorethan20yearsofexperienceintheoperationsandmaintenanceofexpressways,isontracktoachieveourgoalofbeingapremierglobalexpresswaygroup.
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GROU
PCO
RPO
RATESTRUCT
URE
asat12M
ay2011 KhAzANAh NASIONAL BERhAD
100%
UEM GROUP BERhAD38.51%
DOMESTIC
•Projek LebuhrayaUtara-SelatanBerhad 100%• Expressway Lingkaran Tengah SdnBhd 100%• Linkedua (Malaysia) Berhad 100%• KonsortiumLebuhRayaButterworth-Kulim(KLBK) SdnBhd
100%•PLUSHelicopter Services SdnBhd 100%• Teras Teknologi SdnBhd 100%
DOMESTIC
• Touch ‘nGo SdnBhd 20%
INTERNATIONAL
• Jetpur Somnath Tollways Limited (India) 26%***
INTERNATIONAL
•PLUSBKSP Toll Limited (India) 94.12%*•PT LintasMarga Sedaya (Indonesia) 55%•PTCimanggis Cibitung Tollways (Indonesia) 60%• InduNavayuga Infra Projects Private Limited (India) 49%**
Teras Control Systems Sdn Bhd 100% Teras Research Sdn Bhd 100%
MyWeb Online Sdn Bhd 100%
Krishost.Com Sdn Bhd 100%
* PEB holds 94.12% direct and indirect interest in PLUS BKSP via PLUS Kalyan (Mauritius) Private Limited** PEB holds 49% interest in INIPPL via PLUS Plaza (Mauritius) Private Limited*** PEB holds 26% direct interest in Jetpur Somnath Tollways Limited
15.53%
ASSOCIATE COMPANIESSUBSIDIARIES
PLUS Expressways Berhad
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AWAR
DSAN
DREC
OGNITION2010
Awards & Recognition 2010
8May MasterclassBumiputraCEO of the Year –MalaysiaBusiness Leadership Awards 2010(MBLA)
8May MalaysiaBusiness Leadership Award(Concession Sector) –MalaysiaBusinessLeadership Awards 2010 (MBLA)
30 June Merit AwardBest Community Campaign –TheGlobal CSRSummit 2010 Awards,Singapore
29 July Sri CendekiawanAward-SPM:NajmuFatihahMohd Zain (Mohd Zain Zakaria,Supervisor Seremban Toll Plaza) –UEMGroup
29 July AnugerahKhas Award –MasbanuHj Laili–UEMGroup
29 July SriMulia Award –Noor AmaliMahat –UEMGroup
29 July SriWira Award – Shaffe P.CMohammadUnni –UEMGroup
29 July Sri Cipta Team –PLUSMiles LoyaltySystemTeam–UEMGroup
October Sustainability Reporting Awards (MaSRa)2010 – ACCA
15Nov R&RGunung Semanggol (Utara) –Winner,Private Sector PremisesCategory, PerakLandscapingCompetition 2010 – PejabatSetiausahaKerajaanNegeri PerakDarulRedzuan
14Dec Best Conduct of AGM 2009 –MinorityShareholderWatchdogGroup (MSWG)
14Dec Industry Excellence Award (Infrastructure)–Minority ShareholderWatchdogGroup(MSWG)
14Dec Distinction Award –Minority ShareholderWatchdogGroup (MSWG)
15Dec Practice Solution for Public ListedCompany –MIA&CIMA
Awards & Recognition for 2011
17 Jan Platinum 2010 - Annual Report inBahasaMelayu –National Annual Report Awards(NACRA)
17 Jan Gold 2010 -Best CSR report –NationalAnnual Report Awards (NACRA)
17 Jan Silver 2010 - TheMost Outstanding AnnualReport Of The Year –National AnnualReport Awards (NACRA)
11March Bronze – Transportation, Travel& Tourismcategory – PUTRABrandAwards
29March Marketplace StarBiz – ICRMalaysiaCorporateResponsibility Awards (Marketcapitalisation aboveRM1 billion) – The Star& Institute of CorporateResponsibilityMalaysia
29March Workplace StarBiz – ICRMalaysiaCorporateResponsibility Awards (Marketcapitalisation aboveRM1 billion) – The Star& Institute of CorporateResponsibilityMalaysia
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FIVE
-YEA
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OUP
FINAN
CIAL
HIGHLIGH
TS 2010 2009 2008 2007 2006
PROfITABILITY (RM million)Tollcollection 2,573 2,366 2,237 1,820 1,691Revenue 3,351 3,179 2,968 2,282 2,091EBITDA* 2,789 2,660 2,448 2,187 1,977Profitbeforetax 1,777 1,624 1,516 1,308 1,108Profitattributabletoownersoftheparent 1,306 1,186 1,079 1,248 1,105
KEY BALANCE ShEET DATA (RM million)Totalassets 19,248 18,367 17,021 15,893 12,588Totalborrowings&financialliabilities 11,534 10,999 10,473 10,080 7,315Totalliabilities 13,002 12,270 11,324 10,543 8,070Sharecapital 1,250 1,250 1,250 1,250 1,250Shareholders'equity 6,190 6,076 5,678 5,340 4,518
fINANCIAL STATISTICSTollcollectiongrowth(%) 8.7 5.8 22.9 7.7 1.6EBITDAmargin(%)* 82.9 83.7 82.5 86.7 84.0Returnonaverageequity(%) 21.3 20.2 19.6 25.3 25.5Returnonaverageassets(%) 6.9 6.7 6.6 8.8 9.0Debt/equity(Times) 1.9 1.8 1.8 1.9 1.6
ShARE INfORMATIONPer Share (sen)Earnings 26.1 23.7 21.6 25.0 22.1Netassets 124.9 121.9 113.9 107.0 90.4
Share price (RM)High 4.62 3.38 3.28 3.44 3.12Low 3.20 2.75 2.53 2.78 2.57Closing 4.52 3.26 2.98 3.28 2.81
DividendsDividend(RMmillion) 375 825 800 700 625Dividendpershare(sen) 7.5 16.5 16.0 14.0 12.5Dividendgrowth(%) ** 3 14 12 39Dividendpayoutratio(%) ** 70 74 56 57
* 2006 – 2007 : before deduction for notional tax on tax exempt dividends and notional interest on Government Support Loan pursuant to toll compensation arrangement per Second Supplemental concession Agreement.
2008 – 2010 : No provision for notional tax on tax exempt dividends following election of single tier tax system in 2008.
** No further dividends will be proposed for shareholders’ approval in respect of the financial year ended 31 December 2010.
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10’09’08’07’06’
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2,23
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2,57
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10’09’08’07’06’
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TOLLCOLLECTION(RMMillion)
PROFITBEFORETAX(RMMillion)
TOTALSHAREHOLDERS’EQUITY(RMMillion)
10’09’08’07’06’
12.5
Sen
14.0
16.0 16.5
7.5
10’09’08’07’06’
22.1
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25.0
21.6 23
.7 26.1
10’09’08’07’06’
90.4
Sen
107.0
113.9
121.9
124.9
DIVIDENDSPERSHARE(SEN)
EARNINGSPERSHARE(SEN)
NETASSETSPERSHARE(SEN)
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PLUS 2010 2009 2008 2007 2006
TRAffIC VOLUME ANALYSIS
Trafficvolumegrowth(%) 7.7% 7.1% 5.2% 7.7% 1.6%Totaltrafficvolume(No.ofvehicles) 416,712,194 392,699,697 376,531,093 367,666,873 342,424,316Averagedailytrafficvolume(No.ofvehicles)
1,141,677 1,075,890 1,028,773 1,007,307 938,149
METhOD Of PAYMENT (%)
Cashpayments 46.6% 48.9% 51.4% 54.1% 57.4%
ElectronicTollCollection(ETC) 53.4% 51.1% 48.6% 45.9% 42.6%
2010
GROU
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ERATIONAL
HIGHLIGH
TS
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Thou
sand
1,00
7
1,02
9
1,07
6
1,14
2
10’09’08’07’06’
57.4
42.6
%
54.1
45.9
51.4
48.6
48.9
51.1
46.6
53.4
10’09’08’07’06’
1.6
%
7.7
7.7
5.2
7.1
10’09’08’07’06’
342
Mill
ion
368
377 39
3 417
Cash paymentsElectronic Toll Collection (ETC)
Traffic Volume Growth
Average Daily Traffic Volume(Numberofvehicles)
Total Traffic Volume(Numberofvehicles)
Method of Toll Payment
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ELITE 2010 2009 2008 2007 2006
TRAffIC VOLUME ANALYSIS
Trafficvolumegrowth(%) 11.4% 9.3% 4.0% 6.0% 2.8%Totaltrafficvolume(No.ofvehicles) 78,349,663 71,521,948 64,878,032 61,436,481 57,951,567Averagedailytrafficvolume(No.ofvehicles)
214,657 195,951 177,262 168,319 158,771
METhOD Of PAYMENT (%)
Cashpayments 42.8% 44.6% 45.4% 47.5% 51.1%
ElectronicTollCollection(ETC) 57.2% 55.4% 54.6% 52.5% 48.9%
10’09’08’07’06’
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Thou
sand
168 17
7 195 21
4
10’09’08’07’06’
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48.9
%
47.5
52.5
45.4
54.6
44.6
55.4
42.8
57.2
10’09’08’07’06’
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%
6.0
4.0
9.3 11
.4
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Mill
ion
61
65
72
78
Cash paymentsElectronic Toll Collection (ETC)
Traffic Volume Growth
Average Daily Traffic Volume(Numberofvehicles)
Total Traffic Volume(Numberofvehicles)
Method of Toll Payment
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LINKEDUA 2010 2009 2008 2007 2006
TRAffIC VOLUME ANALYSIS
Trafficvolumegrowth(%) 21.5% 11.4% 19.6% 11.9% 4.4%Totaltrafficvolume(No.ofvehicles) 26,066,051 21,735,431 19,885,326 17,185,244 15,457,326Averagedailytrafficvolume(No.ofvehicles)
71,414 59,549 54,331 47,083 42,349
METhOD Of PAYMENT (%)
Cashpayments 26.1% 52.3% 69.4% 75.4% 78.3%
ElectronicTollCollection(ETC) 73.9% 47.7% 30.6% 24.6% 21.7%
10’09’08’07’06’
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54
60
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10’09’08’07’06’
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21.7
%
75.4
24.6
69.4
30.6
52.3
47.7
26.1
73.9
10’09’08’07’06’
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%
11.9
19.6 21
.5
11.4
10’09’08’07’06’
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Mill
ion
17
20
22
26
Cash paymentsElectronic Toll Collection (ETC)
Traffic Volume Growth
Average Daily Traffic Volume(Numberofvehicles)
Total Traffic Volume(Numberofvehicles)
Method of Toll Payment
2010
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BKE 2010 2009 2008 2007 2006
TRAffIC VOLUME ANALYSIS
Trafficvolumegrowth(%) 9.2% 4.4% –1.9% 4.1% 4.0%Totaltrafficvolume(No.ofvehicles) 22,887,010 21,017,369 20,206,780 20,662,169 19,811,951Averagedailytrafficvolume(No.ofvehicles)
62,704 57,582 55,210 56,609 54,279
METhOD Of PAYMENT (%)
Cashpayments 53.5% 55.1% 56.1% 60.5% 63.6%
ElectronicTollCollection(ETC) 46.5% 44.9% 43.9% 39.5% 36.4%
10’09’08’07’06’
54
Thou
sand
57 55 58
63
10’09’08’07’06’
63.6
36.4
%
60.5
39.5
56.1
43.9
55.1
44.9
53.5
46.5
Cash payments
10’09’08’07’06’
4.0
%
4.1
-1.9
4.4
9.2
10’09’08’07’06’
20
Mill
ion
21 20
21
23
Electronic Toll Collection (ETC)
Traffic Volume Growth
Average Daily Traffic Volume(Numberofvehicles)
Total Traffic Volume(Numberofvehicles)
Method of Toll Payment
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GROU
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2009
FirstQuarter
SecondQuarter
ThirdQuarter
FourthQuarter
fullYear
financial Performance(RM’Million)Revenue 813 860 873 806 3,352Directcostofoperations (225) (245) (259) (262) (991)
588 615 614 544 2,361Financeandotherincome 36 37 36 135 244
Generalandadministrationexpenses (19) (20) (24) (16) (79)
Financecosts (188) (188) (191) (184) (751)Shareofresultsfromassociate – – 1 1 2
Profitbeforetax 417 444 436 480 1,777Profitaftertax 299 319 348 335 1,301Earningspershare(sen) 6.0 6.4 7.0 6.8 26.1Dividendpershare(sen) – – 7.5 – 7.5
FirstQuarter
SecondQuarter
ThirdQuarter
FourthQuarter
FullYear
financial Performance(RM’Million)Revenue 738 772 815 854 3,179Directcostofoperations (218) (212) (229) (256) (915)
520 560 586 598 2,264Financeandotherincome 33 31 31 40 135
Generalandadministrationexpenses (17) (19) (20) (19) (75)
Financecosts (165) (177) (175) (183) (700)Profitbeforetax 371 395 422 436 1,624Profitaftertax 279 281 312 313 1,185Earningspershare(sen) 5.6 5.6 6.2 6.3 23.7Dividendpershare(sen) – 6.5 – 10.0 16.5
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GROU
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Revenues 2010 2009 Variance %Change(RMMillion)Tollcollection 2,574 2,366 208 9%Tollcompensationrevenue 885 813 72 9%Less:Fairvalueadjustmentontoll
compensationrevenuefortheyear (113) – (113) >100%772 813 (41) –5%
Less:AccrualforGovernment’sshareoftollrevenue (13) – (13) >100%
Otherrevenues 19 – 19 100%
Totalrevenues 3,352 3,179 173 5%
For2010,totalrevenue(excludingthefairvalueadjustmentontollcompensation)ofRM3,465millionwasRM286millionor9%higherthanyear2009ofRM3,179million.
ThemaincontributortothegrowthwerehighertollcollectionfromPLUSofRM154milliononthebackofayear-on-yeartrafficgrowthof7.7%,highertollcompensationofRM72millionandcontributionofrevenuefromnewsubsidiariesacquiredduringtheyear.
In2010,highernon-cashtollcompensationwasrecordedinlinewithhighertrafficvolumefortheyear.ThetollcompensationofRM885millionconsistsofnon-cashgrosscompensationofRM629millionandtheremainingwascompensationfornon-tollrateincreasein2010aswellascompensationfordiscountonbuses.
ThefairvalueadjustmentontollcompensationarosefromadoptionofnewFinancialReportingStandards(FRS)in2010.WhiletheaccrualforGovernment’sshareoftollrevenueofRM13millionwasmadepursuanttothetermsofPLUS’sSCA,whenthetollrevenueearnedduringtheyearismorethanthethresholdtollrevenue(2009:RMNilastollrevenueearnedwaslessthanthethresholdtollrevenue).
breakdown of Toll collection 2010
84%(PLUS)
(ELITE)
(LINKEDUA)
(PLUS BKSP)(INIPPL)
(KLBK)
9%
4%
2% 0.6%0.4%
2010
TheanalysisoftollcollectionbyconcessioncompanyshowsthatPLUSremainsthemaincontributorof84%,followedbyEliteof9%,Linkeduaof4%,KLBKof2%,PLUSBKSPof0.6%andINIPPLof0.4%for2010.
Operating costs (RMMillion)
2010 2009 Variance %Change
Routinemaintenance 241 235 (6) –3%Managementexpenditure
397 345 (52) –15%
Depreciation&amortisation
432 410 (22) –5%
Totaloperatingcosts 1,070 990 (80) –8%
Increaseinoperatingcostsfor2010weremainlyattributedtohigheremployeecostsandtheinclusionofTERASaswellasincreaseinamortisationchargesincorrespondencewithhighertollcollection.
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Thebreakdownofmanagementexpenditureisshownasfollows:
breakdown of Management Expenditure
Significantcostsundermanagementexpenditureareemployeecosts.Attheendof2010,therewas4,578staff(2009:4,233staff)with77%arefrontlinersforoperationalrequirements.Inclusionofnewsubsidiariesandincreaseintrainingactivitiesalsoledtohigheremployeecosts.
MaterialsandsubcontractorexpensesincurredbyTERASmakeupnewcategoryofexpenditurefortheGroup.Generalexpensesandprofessionalfeeswerelowerin2010,whileothercostsweremostlykeptundercontrol.
bALANcE SHEET
Assets (RMMillion) 2010 2009 Variance %ChangeNon-currentassets Concessionassets 12,612 12,418 194 2% Property,plantandequipment 82 76 6 8% Investments 181 159 22 14% TollcompensationrecoverablefromtheGovernment
2,460 2,486 (26) -1%
Others 29 12 17 142%
Currentassets Depositsandcash 3,478 2,883 595 21% Others 406 333 73 22%
Totalassets 19,248 18,367 881 5%
52% 52%
12%
10%
9%
8%
5%4%
12%
8%
7%
6%
5%
5%5%
Employee CostsGeneral ExpensesToll Consumables & CommissionRepairs & Maintenance
UtilitiesMaterials & SubcontractorProfessional FeesAdvertising & Marketing
2010 2009
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In2010,totalassetsreachedRM19,248million,5%higherthan2009.
ThetollcompensationrecoverablefromtheGovernmentispursuanttoPLUS’stollcompensationsettlementarrangementintheSecondSupplementalConcessionAgreement.ThedecreaseisduetothefairvalueadjustmentontollcompensationfollowingtheadoptionofthenewFRSin2010andhighersetoffofPLUS’sincometaxpayableintheyear.Excludingthefairvalueadjustment,thetollcompensationishigherinlinewithhighertrafficvolumegrowthforPLUSof7.7%(2009:7.1%).
Higherdepositsandcashwasattributedtohighertollrevenueduringtheyear.
Concessionassetswhichconsistsofexpresswaydevelopmentexpenditure,heavyrepairsandtollequipmentusuallymakeupmajorityoftotalassetsforhighwaycompanies.Thecomponentsofconcessionassetsareshownbelow.
breakdown of concession Assets
92%
6% 1%1% 1%1%6%
92%
Expressway Development Expenditure
Heavy Repairs
Capital Work-In-Progress
Other Concession Assets
2010 2009
Equity And Liabilities (RMMillion) 2010 2009 Variance %ChangeEquitySharecapital 1,250 1,250 0 0%Reserves 741 753 (12) -2%Retainedearnings 4,200 4,074 126 3%
Shareholders'equity 6,191 6,077 114 2%Minorityinterests 56 21 35 167%
Totalequity 6,247 6,098 149 2%
Non-currentLiabilitiesLongtermfinancialliabilitiesandborrowings 10,455 10,417 38 0%
Others 1,132 987 145 15%
CurrentLiabilities 0Tradeandsundrypayable 207 162 45 28%Shorttermfinancialliabilitiesandborrowings 1,080 582 498 86%Others 127 121 6 5%
Totalliabilities 13,001 12,269 732 6%
Totalequityandliabilities 19,248 18,367 881 5%
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RetainedearningsofRM4,200millionisafterdividenddistributionsofRM875million,madeupoffinalsingletierdividendforFY2009ofRM500millionandinterimsingletierdividendforFY2010ofRM375million.
Theanalysisoftotaldebtisasfollows:
Net debt (RMMillion) 2010 2009FinancialLiabilities 9,569 9,321BorrowingsGovernmentloans 1,647 1,552Otherloans 319 126
Totalfinancialliabilitiesandborrowings 11,535 10,999Cashandcashequivalents 3,478 2,883NetDebt 8,057 8,116NetDebt/Equity(times) 1.30 1.34
Theadditionalfinancialliabilitiesduringyear2010are:
– issuanceofPLUSSukukSeries3ofRM1billionnominalvalue(RM443millionpresentvalueonissuedate)inMay2010undertheRM4,500millionnominalvaluePLUSSukukSeries3MTNProgrammetopartiallyredeemtheSeniorSukukinaccordancewiththeSeniorSukuktrustdeed;
– issuanceofCommercialPapersbyPLUSBKSPofRs192crores(Rs175crorespresentvalueontheissuedate)torefinancetheexistingdebtsandforwokingcapitalrequirements;and
– consolidationofINIPPLTermLoanofRs266crorespursuanttotheacquisitionofthecompanyinJune2010.
AlldebtsundertheGroupareringgitbasedexceptforPLUSBKSPCommercialPapersandINIPPLTermLoan(inrupees)obtainedfortheIndianprojects.
Debt Rating and Outlook Rating Outlook
PEB PLUSSPVSukuk AA1 StablePLUS PLUSSeniorSukuk AAA Stable PLUSSukuk1 AAA Stable PLUSSukuk2 AAA Stable PLUSSukuk3 AAA StableELITE SeafieldSukuk AA2 StableKLBK KLBKBAIDS AA3 Stable
TheaboveIslamicfinancialfacilitiesareratedbyaMalaysianratingagency,RAMRatingServices.
dIvIdENdS
Forfinancialyear2010,PEBhaspaidaninterimdividendof7.5senperordinaryshareofRM0.25eachamountingtoRM375million(2009:interimsingletierdividendof6.5senpershareofRM0.25each)on24September2010.
Nofurtherdividendwillbeproposedforfinancialyearended31December2010(2009:finalsingletierdividendof10.0senpershareofRM0.25eachamountingtoRM500million).
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Million Shares
Jan’10
Feb’10
Mar’10
Apr’10
May’10
Jun’10
Jul’10
Aug’10
Sep’10
Oct’10
Nov’10
Dec‘10
5
10
15
20
25
30
35
40
2.00
2.50
3.00
3.50
4.00
4.50
5.00RM
Volume Traded Closing Price
ShAR
E PR
ICE
&VOL
UMETR
ADED
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Tan Sri Dato’ Mohd Sheriff Mohd Kassimchairman
ChAI
RMAN
’SSTATEM
ENT Dear Shareholders,
It is with great pleasure that I present to you the Annual Report of PLUS Expressways Berhad (“PLUS Expressways” or “the Group”) for the year ended 31 December 2010. It has been an eventful year in which we have seen many new developments taking place both in our operations and on the corporate front. As the journey continues, we remain confident on the strength of our numerous achievements to date and are committed towards maintaining excellent services in every aspect of the business.
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EcONOMIc OvERvIEW
2010sawtheMalaysianeconomycontinueonitspathtorecoveryfollowingtheglobalrecessionwhichresultedinanoverallGDPcontractionof1.7%in2009.Economicgrowthin2010increasedby7.2%fortheyearasaresultofthemeasuresintroducedbytheGovernmenttostimulatetheeconomy.
AsMalaysiaworkstowardsbuildingthehigh-incomesocietyenvisagedintheNewEconomicModellaunchedon30March2010,growthin2011isexpectedtoremainstrongonthebackofdomesticdemandandinlinewithglobalrecovery.Generally,theMalaysianeconomyisexpectedtobenefitfromtheGovernment’simplementationoftheEconomicTransformationProgrammefrom2011onwards,aswellasthepolicyreformstofurtherliberalisetheeconomy.
PERfORMANcE REvIEW
headline KPIs
TheGroupexceededtheHeadlineKeyPerformanceIndicator(KPI)targetssetfortheyear,achievingagrowthinrevenue*of9.5%againstthetargetof5%andareturnonequityof21.3%,higherthanthetargetof18%.WithregardtotheKPItargetondividendpayout,aninterimsingletierdividendof7.5senperordinaryshareamountingtoRM375millionwaspaidon24September2010.Nofinaldividendwasproposedinviewoftheon-goingcorporateexercisetoacquirethebusiness
ofPLUSExpresswaysbytheJointOfferorscomprisingUEMGroupBerhad(UEM)andEmployeesProvidentFundBoard(EPF).
OurPLUSRondapatrollingteamalsodeliveredonourpromisetokeepresponsetimesbelowthethresholdof20minutes,achievinga95%successrateagainsttheKPItargetof94%.
* Excludes non-cash toll compensation and the fair value adjustment of RM113.2 million arising from the adoption of new accounting standards.
financial Performance
StrongtrafficvolumegrowthexperiencedacrossalltheGroup’shighwayscontributedpositivelytotheoverallfinancialperformanceastollcollectionforthefinancialyearended31December2010increasedby8.8%toRM2,573.3millionfromRM2,366.0milliontheprecedingyear,andtotalrevenuefortheGrouprosetoRM3,351.5million.ExcludingthefairvalueadjustmentofRM113.2millionarisingfromtheadoptionofnewaccountingstandards,totalrevenuewasRM3,464.7million,anincreaseof9.0%fromtheprecedingyear’srevenueofRM3,179.0million.TheincreaseinGrouprevenuecorrespondedprimarilytoanincreaseintollcollectionofRM153.6millionbyPLUS,theGroup’slargesttollconcession,drivenbytrafficgrowthof7.7%fortheyearunderreview.
Coupledwithvariouscostsavinginitiativesandimprovementsinefficiency,theGroupregisteredprofitbeforetax(PBT)for2010ofRM1,777.0million,agrowthof9.4%againstthePBTofRM1,623.6millionthepreviousyear.Correspondingly,Groupprofitaftertax(PAT)increasedby9.8%orRM115.7milliontoRM1,300.8millionagainstthePATofRM1,185.1millionin2009.
Asat31December2010,theGroup’scashbalancestoodatRM3,483.0millionafterdividendpaymentsofRM875million,withcashgeneratedfromoperatingactivitiesofRM2,246.4million.
MILESTONE EvENTS
Network Expansion and Acquisitions
Onthehomefront,PLUSExpresswayscontinuedtoprovidebetteraccessibilitytoitsexpresswaynetworksandbeganworkontheconstructionoftheinterchangeandtollplazaatBukitGambirinJohor.AnothertwointerchangesatAlorPongsuinPerakandSgBuayainSelangorarescheduledtocommenceearthworksinthesecondhalfof2011.
2010alsosawtheGroupbroadenitsrecurringearningsbaseandimprovethevaluechainthroughtheacquisitionof100%equityintollsystemsprovider,TERASTeknologiSdnBhd(TERAS)and20%interestinTouch‘nGoSdnBhd(TnG).
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ThislattertransactionisexpectedtoallowPLUSExpresswaystheopportunitytoparticipateintheElectronicPaymentSystemorEPSmarketinlinewiththeGovernment’smovetowardsthecreationofane-paymentsocietyinMalaysia.
In termsof internationalbusiness, theGroupcontinuedtoconsolidate itspresencein Indiawithasuccessfulbidfor theRM655millionJetpur–Somnath four laningprojectinGujarat, tobeundertakenwithour jointbiddingpartner,IDFCProjectsLimited (IP).Togetherwith thecompletedacquisitionof49%interest inInduNavayuga InfraProjectPvt.Ltd. (INIPPL)andtheon-goingoperationsof theBhiwandiKalyanShilphataTollRoad (BKSP)nearMumbai,thismostrecentadditionto theGroup’s internationalportfoliohaspositionedPLUSExpresswayswell for furtherexpansion in India inyears tocome.
InIndonesiameanwhile,thedisposalofPLUSExpressways’entireequityinterestinPTCimanggisCibitungTollways(CCTW)willallowtheGroup
tofocusitsresourcesonconstructionofthe116kmCikampek–PalimananExpresswayinWestJava,targetedtocommenceinQ4of2011.Todate,closeto90%ofthelandrequiredfortheprojecthasbeenacquired.
Operational Efficiency
On15July2010,fullElectronicTollCollection(ETC)operationscommencedattheLimaKedaiTollPlazaonLINKEDUA,increasinglanecapacitybyatleast50%toallowgreaterthroughputforimprovedlaneefficiencyandreducedcongestionduringpeakperiods.ThisbringsthenumberoftollplazasalongthePLUSexpresswayscurrentlyenforcingcashlesstolltransactionstothree,theothertwolocationsbeingattheTanjungKupangTollPlazaalsoonLINKEDUAandBangunanSultanIskandarattheJohorBahruCauseway.
ThetransitiontofullETCoperationsalongLINKEDUAprecededa30percenttollreductionatTanjungKupangforallclassesofvehicleseffective1August2010.Thesignificantreductionintollchargesisintendedtoencouragemorecross-bordertravelwhileeasingtrafficcongestionattheJohorBahruCausewaybypromotinggreateruseofthealternativeconnectionbetweenMalaysiaandSingaporeviaLINKEDUA.
Inadditiontoimprovingefficienciesintollcollection,PLUSExpresswaysalsocontinuedwiththephasedexecutionofprojectBETA
whichwasfirstimplementedin2009.Standingfor“BoostingEfficiencyTransformingAttitude”,projectBETAhasenabledPLUSExpresswaystorealisefinancialandotherbenefitsinroutinemaintenance,claimsmanagement,operationsmanpowerplanningandemployeeperformancemanagementthroughtheuseofsimpletoolssuchastheShortIntervalControlwhichallowscorrectiveactionstobetakeninaproactivemanner.TheresultingsavingsincostshavehadapositiveimpactontheoperatingmarginoftheGroup.
Leading The field
PLUSExpresswayssuccessfullyorganisedthefirstPLUSInternationalExpresswaysConferenceandExhibition(PIECE2010),whichtookplaceinKualaLumpurfrom5thto7thApril2010.Attendedbymorethan350delegatesincluding107industryprofessionalsfromover15countriesworldwide,theconferencereceivedseveralaccoladesfromkeyparticipantsincludingconferencepartnersRoadEngineeringAssociationofAsiaandAustralasia(REAAA),onceagaindistinguishingPLUSExpresswaysasatrueleaderinthefieldoftollexpresswaymanagementinAsia.
Wealsoearnednumerousawardsduringtheyear,notably(amongothers):
theSilverAwardforMost•OutstandingAnnualReportoftheYear,PlatinumAwardforBestAnnualReportinBahasaMelayuandGold
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AwardforBestCSRReportawardedbytheNationalAnnualCorporateReportAwards(NACRA);
theInternationalBusiness•ReviewAwardforExcellenceintheRealEstateSector,HighwayConcessionManagement;
thePracticeSolutionAward•forPublicListedCompaniesfromtheNationalAwardforManagementAccounting(NAFMA)organisedbytheMalaysianInstituteofAccountants(MIA)andtheCharteredInstituteofManagementAccountants(CIMA);
theStarbiz-ICRMalaysia•CorporateResponsibilityAwardforMarketplaceandWorkplace;and
theIndustryExcellence•Award,DistinctionAwardandBestConductofAGMAwardfromtheMinorityShareholderWatchdogGroup.
Inaddition,ournewlyacquiredsubsidiary,TERAS,receivedthefollowingawardsin2010:
CertificateofMerit,STAR•OutstandingBusinessAwardsfromtheSTARNewspaper;
EthicalBusinessExcellence•AwardintheLargeCorporationCategoryfromtheMinistryofDomesticTrade,CooperativesandConsumerism;and
4-StarSMECompetitiveness•RatingforEnhancement(SCORE)fromSMECorpMalaysia.
ThesesymbolsofrecognitionfortheprofessionalismandhardworkputinbytheGroup’smanagementandemployeesstandasatestamenttotheimpactthatwehavemadenotonlyonthetollexpresswayindustry,butonthefaceofMalaysianbusinessitself.
corporate Responsibility
Asthelargesttollexpresswayoperatorinthecountry,ourcommitmenttocorporateresponsibilityremainsfocusedoncreatingasaferenvironmentonMalaysianroads,particularlyonthePLUSexpressways.Towardsthisend,theGroupinvestedoverRM73millionin2010ontheimplementationofvariousroadsafetymeasuresatseveralstrategiclocationsalongourexpressways.Asaresultofthesemeasures,thenumberofaccidentsrecordedattheselocationsin2009hasbeenreducedbyabout75%in2010.
Onawidernationalscale,ouraward-winningMalaysiansUniteForRoadSafety(MUFORS)campaignentereditssecondyearof implementationfollowingtheinaugurationon9September2009.InreachingouttotheMalaysianpublictodrivehometheimportanceofroadsafety,weunveiledtheMUFORSGalleryinAugust2010,providingavenueforexhibitions,workshopsandotheractivitiesaimedatraisingroadsafetyawarenessthrougheducation.WealsocontinuedourseminarsonRespectYourLimitsacross13statesinPeninsularMalaysia,SabahandSarawak,aimedprimarilyatdrivers,ownersandoperatorsofheavyvehiclesandbuses.
Thehighlightfor2010however,wasMUFORSRoadReels,ashortfilmcompetitioncarryingthethemeAttitudesonRoads–AMalaysianJourney.Openedtostudentsoflocaluniversitiesandinstitutionsofhigherlearning,RoadReelswasaimedatempoweringstudentstohavetheirsaywhileprovidingaplatformfortheirparticipationinchangingattitudesandbehavioursonMalaysianroadsthroughtheuseofcreative
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media.WeareexcitedandproudtoreportthatcreativefilmmakingisaliveandwellinMalaysiaasevidencedbythewinnersinallcategoriesofMUFORSRoadReels!
Althoughroadsafetyformsthecoreofouron-goingcorporateresponsibilityprogramme,werecognisethatwehavearesponsibilitytopreservetheenvironmentaroundusinordertoprotectthewell-beingoffuturegenerationsofMalaysians.Inthisrespect,oureffortsin2010centredaroundimprovingETCpenetrationatourtollplazasinordertoreduceourimpactonairqualityanddevelopingnewelectronicforms,ticketingandcomputerisedsystemsasameansofreducingtheuseofpaper.InresponsetothenewEnvironmentalQuality(Sewage)Regulations2009whichcameintoeffectinDecemberofthatyear,wealsoimplementedanumberofupgradingprojectstoimprovetheperformanceofSewageTreatmentPlants(STPs)atselectedRestandServiceAreas.InSeptember2010,welaunchedourfirstGreenRSAatSg.Perak(Southbound)withtheimplementationofenergy-
efficientdesignsolutionsaspartoftherenovationworksandtheintroductionofvariousgreentechnologiesincludingfoodwastecompostingandtheuseofbio-degradableproductssuchasbio-baseddetergents.
Ofcourse,ourresponsibilityasagoodcorporatecitizenalsoextendstoallouremployees,contractorsandotheragents.Withthisinmind,weundertookin2010toextendtheOccupationalHealthandSafetyManagementSystem(OHSAS18001)developedatPLUStoallotherconcessioncompaniesintheGroup.Also,whilewehaveconsistentlypromotedsportsandotheroutdooractivitiesamongourstaffovertheyears,in2010some300PLUSRondaofficersweregiventheopportunitytoattendacourseonHealthandFitnessforPatrolmen,designedtoaddressspecifichealthandsafetyissuesfacedbythisgroupoffrontlineemployeeswhileonthejob.
WealsocontinuedtoofferbusinessopportunitiesatourRestandServiceAreasandselectedlaybystolocalcommunitiesfromsurroundingareas,andtoassistthemasmuchaspossiblebyorganisingcoursesonFoodSafety&Hygiene,the2009FoodActandMinistryofHealthRegulationsandGuidelines.
fUTURE cHALLENGES
On15October2010,YangAmatBerhormatthePrimeMinisterofMalaysiaannouncedunderthe2011NationalBudget,thattherewouldbeafreezeontollratesforthenextfiveyearsapplicabletoalldomestichighwaysunderPLUSExpressways.Subsequently,theBoardofDirectorsofPLUSExpresswaysreceivedajointofferfromUEMandEPFtoacquirethebusinessandundertakingsoftheGroup,inclusiveofallassetsandliabilitiesforaconsiderationofRM23billion.ThetransactionwasapprovedbytheshareholdersattheCompany’sadjournedEGMon23February2011.
Notwithstandingthechangeinshareholdingstructureuponcompletionofthistransaction,attheoperationallevel,itwillbebusinessasusual.ThiswillleadtotheprivatisationofPLUSExpresswaysfromapubliclistedcompanytoaprivatecompany.PLUSExpresswaysremainscommittedtoprovidingthehighestlevelofserviceandoperationalefficiencythathavecometobeexpectedbyour
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customersandthepublicasawhole.Infacingthechallengesthatlieahead,wewillcontinuetoimplementinnovativecostsavinginitiativesandotherimprovementswhilecarryingonourstrategicbusinessexpansionplans,bothdomesticallyandintheinternationalarena.Asalways,ourguidingprinciplewillbetocreatevaluethatcanelevatetheGrouptogreaterheightsandsustainthedeepandcontinuedconfidenceofallourstakeholders.
AckNOWLEdGEMENTS
OnbehalfoftheBoardofDirectorsofPLUSExpressways,IwouldliketotakethisopportunitytothankeveryoneinvolvedintheGroup’ssuccesstodate.Toourcustomers,thankyouforyourcontinuingsupportasPLUSExpresswaysentersanewerainthehistoryofitsoperations.
TothePrimeMinister’sDepartment,MinistryofWorks,MinistryofFinance,MinistryofTransport,EconomicPlanningUnit,Public-PrivatePartnershipUnit,PublicWorksDepartment,MalaysianHighwayAuthority,RoyalMalaysianPolice,RoadTransportDepartment,RoadSafetyDepartment,MalaysianInstituteofRoadSafetyResearch,therespectivestategovernmentsandlocalauthoritiesandallotherministriesandagencieswhohavelentustheirutmostsupportduringtheyear,thankyouforallyourguidanceandcooperation.
Toourotherbusinesspartners,suppliersandfinanciers,yourcontributionstoourmanyaccomplishmentsasaGrouparehighlyappreciated,andwehopeyouwillstaywithusasourjourneycontinues.Ourmajorshareholders,KhazanahNasionalBerhadandUEMhavealsosupportedtheCompanyinmeetingthechallengesinourbusiness.
Thisyear,IwouldliketorecordmyspecialthankstoallthoseinvolvedinmakingMUFORSandourRespectYourLimitsroadsafetycampaignaresounding,award-winningsuccess.Truly,youreffortshavehelpedsaveliveswhilecreatinggreaterawarenessabouttheimportanceofpersonalresponsibilityinimprovingthesafetyofMalaysia’sroadsandhighways.
MydeepestgratitudemustgototheManagementandstaffofPLUSExpresswayswhomakeitallpossiblethroughtheirunyieldingcommitmenttoexcellenceineveryaspectoftheGroup’sbusinessoperations.TotheManagingDirector,YBhgDato’Noorizah,congratulationsonbeingnamedMasterclassBumiputeraWomanCEOoftheYearfor2010andonreceivingtheMalaysiaBusinessLeadershipAwardfortheConcessionSectorawardedbytheKualaLumpurChamberofCommerce.YoursuccessreflectstheGroup’ssuccessandweareproudtohaveyouatthehelmoftheorganisationinthesetimeswhengreatleadershipiscalledfor.
TomyesteemedcolleaguesontheBoardofDirectors,thankyouallforyourcontinuedhardworkanddedicationinfulfillingtheGroup’sobligationtogoodcorporategovernanceandethicalbusinesspractices.
WewillcontinuetobuildthePLUSExpresswaysGroupintoaglobalplayerinthetollexpresswaysbusinesswhileservingthenationandtherakyatofMalaysia,inlinewiththeGovernment’semphasison“PeopleFirst,PerformanceNow”.
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TRAffIc GROWTH
TrafficgrowthacrosstheGroup’ssubsidiariesinMalaysiaexceededexpectationsin2010,buoyedbythestrongeconomicrecoverywhichresultedinaGDPof7.2%.
DespitetheemergenceofalternativeroutesintheformofLebuhrayaKajang–Seremban(LEKAS)andLebuhrayaKemuning–ShahAlam(LKSA),PLUSrecordedahealthyyear-on-yeargrowthintrafficvolumeof7.7%whileELITEsurpassedprojectedfigurestoregisteranimpressivegrowthof11.4%.TherapiddevelopmentofnewtownshipsatSetiaAlamandKotaDamansaraalongtheNewKlangValleyExpresswayandatFederalHighwayRoute2contributedtothegrowthalongthePLUSurbanhighways,withhighertrafficatELITEattributedtosimilartownshipdevelopmentsatShahAlam,PutraHeightsandBandarSaujanaPutra.
AtLINKEDUA,year-on-yeartrafficgrowthjumpedto21.5%,dueinparttothe30%reductionintollfaresatTanjungKupangwhichcameintoeffecton1August2010,aswellasrapiddevelopmentatNusajaya,KotaIskandarandGelangPatah.ForKLBK,trafficgrowthmorethandoubledto9.2%comparedagainst4.4%growthachievedin2009.
LEvERAGING ON NETWORk EXPANSION ANd AcQUISITIONS
deferred Interchanges
UndertheSupplementalConcessionAgreementbetweenPLUSBerhadandtheGovernmentofMalaysia,atotalofthreenewinterchangesaretobebuiltatBukitGambirinJohorandatAlorPongsuandTaipingWestinPerak.
ConstructionofthetrumpetinterchangeandtollplazaatBukitGambircommencedin2010withtheadvanceearthworksscheduledforcompletioninAugust2011.ProvidingadirectlinkfromtheNSEtoBukitGambirandSgMativiatheJ33StateRoad,thenewinterchangeisexpectedtoreducetraveltimetoMuarbyapproximately15minutes.
Similarly,theproposedtrumpetinterchangeandtollplazaatAlorPongsu,scheduledtocommenceconstructioninQ4of2011,willprovideadirectlinkfromtheNSEtoSelamaandBaganSeraiviatheFederalRouteFT147,reducingtraveltimetoBaganSeraibyasmuchas30minutes.
InthecaseoftheproposedTaipingWestInterchange,theGovernmenthasagreedforPLUStoconstructaninterchangeandtollplazaatSgBuayainSelangorinstead,linkingtheNSEdirectlytoBandarBaruSgBuayaandKgTanjungviatheB56StateRoad.WithearthworksscheduledtocommenceinQ2of2011,thenewtrumpetinterchangeatSgBuayawillprovideanalternativeaccessfortravellersheadingtoSgBuaya,SgChoh,SerendahandNorthRawang,reducingtraveltimetotheseareasby15to30minutes.
Acquisitions
On15June2010,PLUSExpresswaysenteredintoasharesaleagreementwiththeUEMGrouptoacquire1,000,000ordinarysharesofRM1eachrepresenting100%equityinterestinTERASTeknologiSdnBhd(TERAS)foratotalcashconsiderationofRM44.0million.TheacquisitionofthetollsystemsproviderwasinlinewiththeCompany’sstrategicplantodrivebusinessgrowththroughvalueaccretiveexpansionopportunitiesand
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isexpectedtoimprovethevaluechainoftheGroupwhilebroadeningitsrecurringearningsbase.
Afewdaysearlieron11June2010,PLUSExpresswayshadconcludedtheacquisitionof3,334,000ordinarysharesofRM1eachinTouch‘nGoSdnBhd(TnG)fromUEMLandHoldingsBerhad.Theresulting20%equityinterestinTnGwillprovideanimportantopportunityforPLUSExpresswaystoparticipateintheElectronicPaymentSystemorEPSmarketasthenationmovestowardstheconvenienceandefficiencyofane-paymentsociety.
International Projects
InIndia,PLUSExpresswayscompletedtheacquisitionof49%interestinInduNavayugaInfraProjectPvt.Ltd.(INIPPL)on2June2010,thussecuringmajorityrepresentationontheBoardofDirectorsandmanagementcontroloverthebusinessoperationsofINIPPL.TollcollectionalongtheINIPPL’s
38.6kmstretchofhighwayfromPadalurtoTrichyinTamilNadu,hadcommencedslightlylessthanamonthearlieron6May2010,withaconcessionperiodof25yearsendingon26November2031.
InthestateofMaharashtra,ourIndiansubsidiaryPLUSBKSPTollLimited,succeededinobtaininganextensionoftheconcessionperiodfortheBhiwandi-Kalyan-Shilphata(BKSP)TollRoad.Theextensionto3March2015from28April2013wasgiveninconsiderationofdelaysinthehandingoveroflandforconstruction.Tolloperations,whichcommencedinAugust2009,contributedtotheGroup’soverallrevenuegrowthforthefirsttime,recordingarevenueofRM15.1millionfortheyearunderreview.
InadditiontotheacquisitionoftheINIPPLandon-goingoperationsoftheBKSPTollRoad,PLUSExpresswaysalsomadeasuccessfulbidfortheRM655millionJetpur–SomnathfourlaningprojectinGujarat.On13September2010,the30-yearconcessionwasawardedbytheNationalHighwayAuthority
ofIndia(NHAI)toPLUSExpresswaysanditsjointbiddingpartner,IDFCProjectsLtd.Aspecialpurposevehiclewassubsequentlyformedbythetwopartiestoundertaketheprojectandon7February2011,theNHAIenteredintoaConcessionAgreementwiththeresultingforeignassociatecompany,Jetpur–SomnathTollwaysLtd.
Meanwhile,inIndonesia,PLUSExpresswaysdisposedofitsentireequityinterestinPTCimanggisCibitungTollways(CCTW)toPTBakrieandBrothersTBK.ThiswillallowtheGrouptofocusitsresourcesonconstructionofthe116kmCikampek–PalimananExpresswayinWestJavaviaits55%stakeinPTLintasMargaSedaya(LMS).
TodatetheGovernmentofIndonesiahasacquired90%ofthelandrequiredfortheprojectwhichconstitutesthelongestsectionoftheTransJavaExpressway.
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Asatend2010,internationalprojectsaccountedforabout24%ofthetotallengthofexpresswaysundertheGroup’sportfolio.
ENHANcING OPERATIONAL EffIcIENcY
Going cashless
ThecommencementoffullElectronicTollCollection(ETC)operationsatLINKEDUA’sLimaKedaiTollPlazaon15July2010sawtheGroupmoveonestepclosertowardsthegoalofmakingcashlesstolltransactionsanationwidereality.
ThethirdtollplazatogocashlessafterBangunanSultanIskandarattheJohorBahruCausewayandTanjungKupangalsoonLINKEDUA,themovetofullETCoperationsatLimaKedaiprecededa30%tollreductionatTanjungKupangwhichcameintoeffecton1August2010toencouragemorecross-bordertravelbetweenMalaysiaandSingaporeviaLINKEDUA.
OtherinitiativesundertakentowardsencouraginggreateruseofETClanesatalltoll
plazasincludedthecontinuedpromotionofthePLUSTrackfleetcardandPLUSMilesloyaltyprogramme.With33PLUSTrackCorporatemembersconstituting2,760fleetvehiclesandmorethan300,000PLUSMilessubscribersregisteredtodate,theGroupsawoverallETCpenetrationincreaseby3.4%from51.1%in2009to54.5%in2010.
Improving Traffic Management
AsofDecember2010,atotalof57CCTVcamerashavebeeninstalledatstrategiclocationsalongourexpressways,providingasurveillancecapabilitythatallowsthelatesttrafficsituationtobemonitoredandassessedfromourTrafficMonitoringCentre(TMC)atPersadaPLUS.
Inmeetingoperationalneedsduringtheyear,wealsoinstalledthreenewVariableMessageSigns(VMS)atSlimRiver,SimpangPulaiandChangkatJering,increasingthetotalnumberofVMSto24.TogetherwiththeAutomaticVehicleDetectionSystem(AVDS)installedathighvolume
stretchesintheKlangValley,thecombinedsystemisabletoprovideexpresswayuserswithreal-timetravelinformationviatheVMStherebyimprovingthewaywemanagetrafficonourexpressways.2010alsosawtheintroductionoftwitterasanalternativetothePLUSMobileAlert(PLUSMA)smsservicefordisseminatingtrafficinformationtoexpresswayusers.
Inanefforttoimprovetrafficmanagementfurtherthroughthedistributionoftraveltononpeak-hours,thePLUSTravelIncentive(PTI)implementedon1January2009wascontinueduntil31December2010,offeringdailyoff-peakdiscountsof10%toClass1userspayingtollatPLUSandELITEexpresswaysbetween12midnightand7a.m.ThePTIwasalsoimplementedforoff-peaktravelonsixselecteddaysduringmajorfestiveseasonssuchasChineseNewYearandHariRayaAidilFitri.Over30millionClass1vehiclestookadvantageoftheprogrammewithdiscountstotallingmorethanRM20millionfortheyear.
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TheTravelTimeAdvisory(TTA)firstintroducedtwoyearsagoalsocontinuedtocontributetosmoothertrafficflowduringthefestiveseasons.
2010 Savings from Efficiency Initiatives
AtotalsavingofRM15.0millionwasrealisedin2010fromthecontinuedexecutionofProjectBETA,whichstandsfor“BoostingEfficiencyTransformingAttitude”.Asthenamesuggests,ProjectBETAwasfirstimplementedin2009asameansofimprovingvarioussystemsandprocesseswithintheorganisationintermsofefficiency.Focusingonroutinemaintenance,claimsmanagement,operationsmanpowerplanningandemployeeperformancemanagement,ProjectBETAhashadapositiveimpactonoverallproductivitythroughimprovedplanning,resourceutilisationandstreamliningofactivities.Theprojecthasalsoledtogreaterempowermentandanincreasedsenseofownershipamongouremployeesaswellasourcontractors.
AfurthersavingofRM11.3millionwasachievedin2010throughseveralprocessimprovementsbroughtaboutbyelevenSixSigmaprojectsundertakenduringtheyear.TheseincludedthereductionoftolloperationscoststhroughtheintroductionofElectronicFormsForToll(eFforT),reductionofrejectedETCtransactionsand
othertollviolationsthroughtheupgradingofsystemsoftwareandintroductionofthePLUSTrackfleetcard,revenueenhancementthroughtheoptimisedutilisationofPoint-of-Sales(POS)andcostreductionsthroughtheoptimisationofmanpowerresources,introductionofanti-theftcomponentstoreducevandalismandearlydetectionofrepairandreplacementworkstoavoidmoreexpensiveheavyrepairs.TheSixSigmaprojectsalsoservedtofosterbetterteamintegrationanddevelopleadershiptalentamongparticipatingemployees.
E-biddingproceduresintroducedatGrouplevelin2009continuedtoyieldbenefitstotheCompany,recordingasavingofRM7.6million.
Upgrading Projects
Thetotalspendonupgradingworkscarriedoutin2010wasapproximatelyRM60million.
Ofthisamount,RM26.6millionwasspentonthemajorrefurbishmentofpublicfacilitiesatRestandServiceAreas(RSAs)locatedatAyerKeroh(Northbound),Pagoh(Northbound)andDengkil(Southbound)aswellastheSouthboundlaybysatNilaiandSgBakap.TheAyerKerohRSArefurbishmentworkswereconstructedusingtheIndustrialisedBuildingSystem(IBS)andwerecertifiedaccordinglybytheCIDBinline
withtheGovernment’sgoalfortheconstructionindustrytomovetowardstechnologyintensiveactivitiesasameansofstayingcompetitivewhiledeliveringhighqualityproductsandvalueformoney.
AfurtherRM7.8millionwasusedfortolllaneextensionworksandupgradingofthetollsystemattheAlorSetarSelatan,JalanDutaandLukutTollPlazaswhileRM5.0millionwenttowardstheinstallationofnewVMSequipmentatstrategiclocationsontheNSEand
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LINKEDUAtoproviderealtimetravelinformationtoexpresswayusers.NewstreetlightingwasalsoinstalledattheBangi,KajangandPermatangPauhInterchangesforimprovedsafetyandsecurityatacostofRM2.1million.
OtherupgradingworksundertakenatRSAsandlaybysduringtheyearincludedtheinstallationofnewsewagetreatmentplantfacilitiesatJuruLayby(Southbound)andatMambaualongtheSeremban–PortDicksonHighway,whilethesurauandtoiletfacilitiesatGunungSemanggolRSA(Northbound)andtheChangkatJering,SgBulohandTgMalimTollPlazaswerealsogivenafacelift.
Maintenance Works
TheGroupcontinueditsstructuredapproachtomaintenancein2010,focusingonapreventivemaintenancestrategythatintegratesnetworkplanningactivitieswithassetconditionassessment,defectsinvestigation,designandimplementationofrectificationworksandinformationmanagement.Plannedinspectionsconductedatperiodicintervalsensuredtheearlydetectionofdefectsandoptimisationofrepaircostsandotherresources.
PavementStructuralOverlayworks,beingakeycomponentofannualplannedpreventivemaintenancemeasures,werecarriedouttorestorestructuralcapacityatelevenlocationscovering165lane-kmofasphalticpavements.Other
pavementrepairstoimprovefunctionalityandridingqualityandalleviatesoftgroundproblemswereimplementedatover80locationsalongthePLUSexpressways.
Wealsoundertooksloperehabilitationworksat57locationsduringtheyeartomaintainthesafety,serviceabilityandintegrityofthePLUSexpresswayswhileexpandingourReal-TimeMonitoringSystem(RTMS)tocoverthemonitoringofidentifiedfloodproneareasinadditiontomonitoringrainfallandgroundwaterfluctuationstofacilitateearlyinterventionforthepreventivemaintenanceofslopes.
SpecialbridgeinspectionswerecarriedoutbytheoriginaldesignconsultantsfortheMalaysia-SingaporeSecondCrossingandtwootherbridgesalongtheNSEatSgJunjungandSgMalai.Afurther110repairswerecarriedouttobridges,culvertsandotherdrainagestructures.
HUMAN cAPITAL dEvELOPMENT
Performance culture
Asaservice-orientedcompany,theworkcultureatPLUSExpresswaysisverymuchperformance-drivenwitheachindividualemployeeresponsibleforasetofKeyPerformanceIndicators(KPIs)orKeyResultAreas(KRAs)designedtoensureorganisationalperformanceasdefinedintheCorporateScorecard.
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ThePerformanceManagementSystem(PMS)measuresindividualKPI/KRAachievementsaswellasbehaviouralcompetenciesandformsthebasisforthedistributionofrewardsandotherformsofrecognitiontoemployeesthroughouttheCompany.
2010sawtheGroupcontinuetofosterthecloserelationshipestablishedbetweenouremployeesandSeniorManagementthroughaseriesofcommunicationprogrammeswhichincluded:
• QuarterlyManagementBriefingstoDivision/DepartmentHeads,RegionManagersandSectionManagers;
• QuarterlyStaffBriefingstoallemployeesatheadquartersandallregions;and
• InformaldialoguesessionsreferredtoasSepetang Bersama Pengarah Urusan,heldbetweentheManagingDirectorandnon-managerialstaff.
WealsointroducedtheTalian SahabatprogrammeinJuly2010toprovideaplatformforstafftobeabletohighlightanygrievancestheymayhaveandtoputforwardideasandsuggestionsforimprovement.TheinformationreceivedthroughTalian SahabatistreatedasconfidentialinlinewiththeWhistleBlowerPolicythatwasintroducedayearearlierinJuly2009.
Talent ManagementOnastrategiclevel,theGrouphasidentifiedapoolof131talentedemployeeswhoarecurrentlythefocusofathree-yearon-goingexercisetotake
onleadershiproleswithintheorganisationaspartofanestablishedformalSuccessionPlan.CareeraspirationsandcompetencylevelsformthebasisfordesigningtheIndividualDevelopmentPlanforeachoftheseemployeestomeetoverallorganisationalneedsintermsofhumancapitaldevelopment.
Naturally,traininganddevelopmentprogrammescontinuetoplayakeyroleinsupportofourTalentManagementinitiativesandouraspirationtoremainanemployerofchoice.Employeesateverylevelintheorganisationareexposedtoawidevarietyoflearningexperiencesrangingfromskillstrainingandmotivationalcoursestotechnicalvisitsand
opportunitiestoparticipateinaformalContinuingEducationProgramme(CEP)fromCertificateuptoMastersDegreelevel.
EmployeesarealsoencouragedtoparticipateinKnowledgeSharingsessionsasameansoftransferringlearning,informationandskillstoothercolleagues.
In2010,selectedemployeesattendedanumberofinternationalconferencesandseminarsheldeitheroverseasorhereinMalaysia,includingITSCanadaandthe3rdInternationalConference&ExhibitiononSlopes.WesentanothertwocandidatestoNagoyainJapantoundergotrainingunderourPersonnelExchangeProgrammewiththeCentralNipponExpresswayCompanyLimitedwhileathirdcandidatewassecondedtothePublic-PrivatePartnershipUnit(UKAS)inthePrimeMinister’sDepartment.
AfurthersixemployeesattheJuniorExecutivelevelweregiventheopportunitytoparticipateintheEmergingLeadershipProgramme,an18-monthleadershipdevelopmentcourseorganisedbytheUEMLearningCentre.
Firminourbeliefthatleadersmustbenurturedinallechelonsoftheorganisationstructure,wealsoorganisedatotalofsevenin-housetrainingprogrammesduringtheyear,designedspecificallyforourfrontlineandclericalstaffwhomakeupmore
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than75%ofourtotalworkforce.Inordertoaccommodateourin-housetrainingneeds,weexpandedourTrainingCentreatPersadaPLUS,increasingourclassroomcapacityfrom40to140withtheadditionofthreenewtrainingrooms,whilstmaintainingtheITTrainingRoomwhichhas25computerworkstationsforITtrainingpurposes.
cORPORATE RESPONSIbILITY
corporate Responsibility Is About People
Aswithcharity,corporateresponsibilitybeginsathome,andwiththisinmind,PLUSExpresswaysconsistentlystrivestoprovideasafeandhealthyworkenvironmentforallouremployees,contractorsandotheragents.
In2010,weextendedtheOccupationalHealthandSafetyManagementSystem(OHSAS18001)developedatPLUStoallotherconcessioncompaniesintheGroup.OtherinitiativesduringtheyearincludedtheimplementationofacourseonHealthandFitnessforPatrolmenwhichwasattendedbyabout300PLUSRondastaff,anda2-daycourseonemergencyresponseconductedbytheSelangorCivilDefenceDepartmentaswellasabriefingbytheFireDepartmentonBuildingEvacuation,foroccupantsofPersadaPLUS.EmployeeslocatedwithintheCompany’sheadquarters
complexinSubangarealsoabletomakeuseofthewell-equippedgymandothersportsfacilitiesincludingtwoindoorbadmintoncourts,twotenniscourtsandafootballfieldbuilttoFAMstandards.
ThePLUSChildDevelopmentCentre(PLUSCDC)isanotherfacilityofferedtoemployeesatPersadaPLUSwhoaretheparentsofveryyoungchildren.
Officiallylaunchedon8January2010bythewifeoftheHonourablePrimeMinisterofMalaysia,DatinSeriRosmahMansor,thePLUSCDCisaMontessorischoolthatpromoteslearningthroughplayforchildrenbetweentwoandahalfandfouryearsofage.Enrolment
in2010grewfrom24to40childrenwithannualeventssuchastheAnnualGraduationConcertandSportsDayformingthehighlightinthePLUSCDCcalendarfortheyear.
Improvingaccessforpeoplewhoarephysicallydisabledwasalsohighonthelistofissuesthatwecontinuedtoaddressin2010,bothatourownofficepremisesaswellasatourRSAsandlaybysundergoingrefurbishment.Towardsthisend,itisarequirementforthedesignofallupgradingworkstocomplywiththeCodeofPracticeforAccessforDisabledPeopletoPublicBuildings(MS1184:1991).Improvementsthathavebecomeastandardfeatureinourdesignsincludetheprovisionofdedicatedparkingforthedisabledwithunobstructedaccessfromtheparkingareatothebuilding,specialisedwheel-chairfriendlyfittingssuchastoilets,sinksandgrabbarsandrampswithhandrailsandnon-slipfinishes.
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PLUSExpresswayshasbeeninvolvedinthepromotionanddevelopmentofmotorsportsatthegrassrootslevelsince2009throughtheFormulaPLUSGo-KartTalentSearch.In2010,theprogrammewasexpandedfromfourtoninestatescomprisingPahang,Terengganu,Kelantan,Kedah,Johor,NegeriSembilan,Melaka,SelangorandKualaLumpur.EndorsedbytheAutomobileAssociationofMalaysia(AAM)andsupportedbytheMinistryofYouthandSports,aRoadTourtotheninestateswasheadedbyTeamPLUSMotorsportambassador,NabilJefriwho,at16yearsold,madehisdebutasFormulaOne’syoungestTestDriverinthesameyear.InnurturingouryoungMalaysiandriverstobecomenationalkartingchampions,theprogrammehasalsoinstilleddiscipline,teamwork,responsibility,timemanagementanddefensivedrivingskillsaswellasbasicknowledgeofenginesandcartechnologytothetargetgroupofyoungtalents.
Road Safety
AtotalofRM73.0millionwasinvestedin2010ontheimplementationofvariousroadsafetymeasuresatseveralstrategiclocationsalongourexpressways.Theseincludedtheconstructionofhighfrictioncoursepavementsurfacing,installationofcrashcushions,theuseofstrongerright-of-wayfencingmaterials,upgradingtohighcontainmentguardrailswithpostsat2-meterspacingandenhancementoftrafficsignsanddirectionalsignboardsforimprovedvisibilityandguidance.Wealsointroducednewinnovationstoouroperationssuchastheuseofportablescreensataccidentsitesdesignedtodiscourageothermotoristsfromslowingdowntolookattheseaccidents.Asaresultofthesemeasures,thenumberofaccidentsrecordedattheselocationsin2009hasbeenreducedbyabout75%in2010.
TheMalaysiansUniteForRoadSafety(MUFORS)campaignalsogainedmomentumin2010,earningtheMeritAwardforBestCommunityCampaignattheGlobalCSRAwardsinSingapore.Duringtheyearmorethan250,000peopleloggedontotheMUFORSwebsitetoVotetoSaveLivesandVotetoReduceAccidentsandDeathsontheRoad.
WelaunchedtheMUFORSGalleryon20August2010incollaborationwiththeMinistryofWorks,MalaysianHighwayAuthority,RoadSafetyDepartment,MalaysianInstituteofRoadSafetyResearch(MIROS)andotherrelevantagencies,creatingaspaceforexhibitions,workshopsandotherexperientialactivitiesdesignedtogiveroadsafetyadvocacyafreshapproach.
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WealsocollaboratedwithsomeofMalaysia’smosttalentedcelebritypersonalitiestoproducetheMUFORSthemesongandpromotionalvideoandcontinuedourseminarsonRespectYourLimitsacross13statesinPeninsularMalaysia,SabahandSarawak.Thehalf-dayprogrammeaimedatpromotingroadsafetyawarenessamongdriver,ownersandoperatorsofheavyvehicleshasbeenshowntohavehadapositiveimpactonthenumberofaccidentsinvolvingexpressbusesandlorriestravellingontheNorth-SouthExpressway(NSE).In2010,thisnumberfelltojust6accidentsper1,000vehicles,comparedto7accidentsper1,000vehiclesin2009.
On4August2010,welaunchedMUFORSRoadReels,ashortfilmcompetitionopenedtostudentsoflocaluniversitiesandinstitutionsofhigherlearning.CarryingthethemeAttitudeson
Roads–AMalaysianJourney,thecompetitionattractedover140entries,withatotalof264studentsparticipatingfrom35universitiesandcollegesfromalloverMalaysiaincludingSarawak.Apartfromempoweringthesestudentstomakeadifferenceonourroadsthroughtheuseofcreativemedia,thecompetitionalsosoughttoencouragemorepeoplefromallwalksoflifetotakeownershipofroadsafetyissues.
Reducing Our Impact On The Environment
PLUSExpresswayshaslongrecognisedtheneedtoadvocatesustainablebusinesspractices,productsandservicesthataredesignedtopreserveandprotecttheenvironmentfromharm.OurEnvironmentalManagementSystemensuresthesystematicmonitoringofday-to-dayoperationalactivitiesandisatestamenttoourcommitmenttowardsencouragingsustainableandequitabledevelopmentthroughthepromotionofenvironmentalawarenessamongouremployees,stalloperatorsandcontractorsaswellasourcustomersandbusinesspartners.
In2010,wetookstepstoreduceourimpactonairqualitythrougheffortstoincreasetheusageofElectronicTollCollection(ETC)andbyaskingourcustomerstoturnofftheirengineswhenparkedatanyofourRSAsorlaybys.WealsocarriedoutanumberofupgradingprojectstoimprovetheperformanceofselectedSewageTreatmentPlants(STPs)inaccordancewiththenewEnvironmentalQuality(Sewage)Regulations2009whichcameintoeffecton10December2009.
InSeptember2010welaunchedourfirstGreenRSAatSgPerak(Southbound),withthethemeJejak HijauorGreenTrail.TheRSAunderwentextensiverenovationwiththeconstructionofanewtoiletcomplexdesignedtoincorporatenaturalventilation
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andprayerroomsthattakeadvantageofnaturallightingtosaveenergycosts.Thedeckareawasbuiltonstiltsandcolumnsinordertoavoiderosionbymaintainingthenaturalcontourofthesurroundingland,andnoisebarrierswereconstructedtoreducenoisepollutioncreatedbyvehiclesontheexpressway.
OthergreentechnologiesintroducedatthisRSAincluderecyclingbinsforseparationofrecyclablewasteatsourceandtheuseofarecycledEcoCleanerMachineandnaturalbio-degradableproductssuchasbio-baseddetergents.Inaddition,theimplementationoffoodwastecompostingatthislocationisexpectedtoreduceourcarbon-footprintwhileprovidingasourceofnaturalfertiliserstooffsetlandscapemaintenancecosts.
OtherinitiativesundertakenbytheGroupduringtheyearthatcontinuetohaveapositiveimpactontheenvironmentincludedeffortstoreduceroadaccidents,monitorslopestabilityandmanagescheduledwastes.Inaddition,thedevelopmentandimplementationofinnovativeproductsandtechnologiessuchastheeFforT,ReceiptonDemand(ROD),VehicleRegistrationNumber(VRN)systemandGeneralOnlineData(GOLD)havereducedourneedforpaper,therebyreducingtheneedtodestroymoretreesandforests.
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ChAIRMAN Tan Sri Dato’ Mohd Sheriff Mohd Kassim
NON-EXECUTIVE DEPUTY ChAIRMANDato’MohdIzzaddinIdris
MANAGING DIRECTORDato’NoorizahHjAbdHamid
TanSriDatukK.RavindranSenior Independent Non-Executive Director
HassanJa’afarNon-Independent Non-Executive Director
DatukMohamedAzmanYahyaNon-Independent Non-Executive Director
QuahPohKeatIndependent Non-Executive Director
DatukSeriPanglimaMohdAnnuarZainiIndependent Non-Executive Director
Dato’SeriIsmailShahudinNon-Independent Non-Executive Director
AUdIT cOMMITTEE MEMbERS•QuahPohKeat(Chairman)
•TanSriDatukK.Ravindran•DatukSeriPanglimaMohdAnnuarZaini
INvESTMENT cOMMITTEE MEMbERS•TanSriDato’MohdSheriffMohdKassim(Chairman)
•Dato’MohdIzzaddinIdris•DatukMohamedAzmanYahya•Dato’NoorizahHjAbdHamid•Dato’SeriIsmailShahudin
NOMINATIONS ANd REMUNERATION cOMMITTEE MEMbERS•TanSriDato’MohdSheriffMohdKassim(Chairman)
•TanSriDatukK.Ravindran•QuahPohKeat
cOMPANY SEcRETARIES•TanHweeThian[MIA1904]
•NoorMeizaAhmad[LS0009016]
REGISTEREd OffIcEMenaraKorporat,PersadaPLUSPersimpanganBertingkatSubangKM15,LebuhrayaBaruLembahKlang47301PetalingJayaSelangorDarulEhsan,MalaysiaTel:+60376664666/78016666Fax:+60376664400/78016600www.plus.com.my
HEAd/MANAGEMENT OffIcEMenaraKorporat,PersadaPLUSPersimpanganBertingkatSubangKM15,LebuhrayaBaruLembahKlang47301PetalingJayaSelangorDarulEhsan,MalaysiaTel: +60376664666/78016666Fax:+60376664400/78016600www.plus.com.my
AUdITORSMessrsErnst&YoungCharteredAccountantsLevel23A,MenaraMileniumJalanDamanlelaPusatBandarDamansara50490KualaLumpur,MalaysiaP.O.Box1104050734KualaLumpurTel:+60374958000Fax:+60320955332www.ey.com
PRINcIPAL bANkERS
CIMBBankBerhadMalayanBankingBerhadHSBCBankMalaysiaBerhad
SHARE REGISTRAR
SymphonyShareRegistrarsSdnBhdLevel6,SymphonyHouseBlockD13,PusatDaganganDana1JalanPJU1A/4647301PetalingJayaSelangor,MalaysiaTel: +60378418000Fax:+60378418008www.symphony.com.my
STOck EXcHANGE LISTING
MainMarketBursaMalaysiaSecuritiesBerhad
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TanHweeThianistheDirector,SecretarialofUEMGroupManagementSdnBhdandtheJointCompanySecretaryofPLUSExpresswaysBerhad.HeisalsotheJointCompanySecretaryofUEMGroupBerhad,UEMLandHoldingsBerhadandothercompaniesintheUEMGroup.HeisaFellowoftheAssociationofChartedCertifiedAccountants,UnitedKingdom,amemberofTheMalaysianInstituteofCharteredSecretariesandAdministratorsandaChartedAccountantoftheMalaysianInstituteofAccountants(MIA).
Hestartedhiscareerwithapublicaccountingfirmandhadalsoworkedinagroupofcompanieswithdiversebusinessinterestsspanninginsurance,propertydevelopmentandmanagementservices.Hisworkexperienceinvolvedcompanysecretarial,administration,shareregistration,auditingandaccounting.
NoorMeizaAhmadistheHeadofLegalandSecretarialSupportDepartmentofPLUSExpresswaysBerhad(“PEB”).ShejoinedPEBon12October2009andwasappointedastheJointComapanySecretaryofPEBon2December2009.
PuanNoorMeizahasvastexperienceinlegalandsecretarialmattersandpriortojoiningPEB,shewastheHeadofLegalandCorporateServicesDepartmentofMISCIntegratedLogisticsSdnBhd,asubsidiaryofMISCBerhad.
TAN hWEE ThIAN
NOOR MEIzA AhMAD
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Members of the BoardStanding, left to right
DatukSeriPanglimaMohdAnnuarZaini,Dato’SeriIsmailShahudin,TanSriK.Ravindran,Dato’MohdIzzaddinIdris,TanSriDato’MohdSheriffMohdKassim(Chairman),Dato’NoorizahHjAbdHamid,DatukMohamedAzmanYahya,QuahPohKeat,HassanJa’afar
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> Tan Sri Dato’ Mohd Sheriff Mohd Kassim chairman
TanSriDato’MohdSheriffMohdKassim,aMalaysianaged71,isaNon-IndependentNon-ExecutiveDirectorandChairmanofPLUSExpresswaysBerhad.HewasappointedasaDirectoroftheCompanyon29January2002andwasmadeChairmanon7February2002.
TanSriDato’MohdSheriffholdsaB.A.(Honours)EconomicsdegreefromUniversityofMalaya,aDiplomainEconomicDevelopmentfromOxfordUniversity,UnitedKingdomandaM.A.EconomicsfromVanderbiltUniversity,USA.HewastheManagingDirectorofKhazanahNasionalBerhadfrom1994toAugust2003afterservingastheSecretaryGeneralofTreasury,MinistryofFinancefor3years.HewastheDirectorGeneraloftheEconomicPlanningUnitfrom1989to1991.TanSriDato’MohdSheriffistheChairmanoftheMalaysianInstituteofEconomicResearch,PresidentoftheMalaysianEconomicAssociationandalsoservesastheNon-ExecutiveChairmanofManulifeHoldingsBerhad,ScientexBerhad,StandardCharteredBankMalaysiaBerhad,ProjekLebuhrayaUtara-SelatanBerhad,KonsortiumLebuhrayaButterworth-Kulim(KLBK)SdnBhdandProjekPenyelenggaraanLebuhrayaBerhad.TanSriDato’MohdSheriffisaNon-ExecutiveDirectornominatedbyKhazanahNasionalBerhad,amajorshareholderofPLUSExpresswaysBerhad.HecurrentlyservesasChairmanoftheNominationsandRemunerationCommitteeandtheInvestmentCommitteeoftheBoard.
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> dato’ Mohd Izzaddin Idris DeputyChairman
Dato’MohdIzzaddinIdris,aged48,wasappointedasNon-IndependentNon-ExecutiveDeputyChairmanofPLUSExpresswaysBerhadon7July2009.HeisalsotheManagingDirector/ChiefExecutiveOfficerofUEMGroupBerhad.
Dato’MohdIzzaddinholdsaBachelorofCommerceDegree(FirstClassHonoursinFinance)fromUniversityofNewSouthWalesAustraliaandisaFellowofCPAAustraliaandamemberofMalaysianInstituteofAccountants(MIA).Hehasover20years’experienceininvestmentbanking,financialandgeneralmanagementandwaspreviouslytheChiefFinancialOfficer/SeniorVicePresident(GroupFinance)ofTenagaNasionalBerhad,apositionheheldfromSeptember2004toJune2009.
HewasformerlyaSeniorVicePresident(CorporateFinance)ofSouthernBankBerhadandtheChiefFinancialOfficerofRanhillBerhadandalsoheldthepositionofChiefOperatingOfficerofMalaysianResourcesCorporationBerhadinthelate1990s.AftergraduatinginJune1985,Dato’MohdIzzaddinservedwithMalaysianInternationalMerchantBankersBerhadforalmost11yearswhichincludeda3-yearsecondmentinthelate1980stoBarclaysdeZoeteWeddLimited,aLondon-basedinvestmentbankandasubsidiaryofBarclaysBankPLCthen.
Dato’MohdIzzaddincurrentlysitsontheBoardofProjekLebuhrayaUtara-SelatanBerhad,UEMLandHoldingsBerhad,CementIndustriesofMalaysiaBerhad,TIMEEngineeringBerhad,OpusGroupBerhad,FaberGroupBerhad,UEMBuildersBerhad,SunriseBerhadandseveralotherprivatelimitedcompanies.Dato’IzzaddinalsositsontheBoardofCommissionerofPTLintasMargaSedayaandBoardofCommissionerofPTCimanggis-CibitungTollways,PLUSExpresswaysBerhad’ssubsidiariesinIndonesia.
Dato’MohdIzzaddinisaNon-ExecutiveDirectornominatedbyUEMGroupBerhad,amajorshareholderofPLUSExpresswaysBerhad.HeservesasamemberoftheInvestmentCommittee.
> dato’ Noorizah Hj Abd Hamid Managing director
Dato’NoorizahHjAbdHamid,aMalaysianaged51,wasappointedastheManagingDirectorofPLUSExpresswaysBerhad(PEB)on1April2007.Priortothat,shewastheManagingDirectorofFaberGroupBerhadfrom17March2003.ShewasalsotheManagingDirectorofFaberHotelsHoldingsSdnBhdsince3August2002.SheholdsaMastersinBusinessAdministration,majoringinFinanceandManagementandaBachelorofScienceinBusinessAdministrationfromtheCentralMichiganUniversity,UnitedStatesofAmerica.
PriortojoiningRenongBerhadastheManagerofGroupCorporateAffairsinSeptember1991,shewasattachedtovariouspositionsinfinanceandcorporateadvisorywithasubsidiaryoftheTerengganuStateDevelopmentCorporation,PermodalanNasionalBerhadandAmanahMerchantBankBerhad.
InJanuary1992,shejoinedHBNManagementSdnBhdandwaslatertransferredtoProjekLebuhrayaUtara-SelatanBerhad(PLUS)asaSeniorManagerintheTreasuryDepartmentinJanuary1994.ShewastransferredbacktoHBNManagementSdnBhdinJanuary1996andappointedtothepostofSeniorManagerofGroupCorporateAffairs.
ShewaspostedbacktoPLUSasSeniorGeneralManager,Financein1997beforeassumingherdesignationastheChiefOperatingOfficerofFaberGroupon9August1999.DuringhertenureinFaberGroupshehasalsobeenappointedasaDirectorofvarioussubsidiarycompaniesofFaberGroup.
Currently,shealsositsontheBoardofCommissionerofPTLintasMargaSedayaandBoardofCommissionerofPTCimanggis-CibitungTollways,PEB’ssubsidiariesinIndonesia,BoardofDirectorsofPLUSBKSPTollLimited,InduNavayugaInfraProjectPrivateLimited,PEB’ssubsidiariesinIndia,BoardofProjekLebuhrayaUtara-SelatanBerhadandBoardofKonsortiumLebuhrayaButterworth-Kulim(KLBK)SdnBhd.SheisalsotheExecutiveDirectorofExpresswayLingkaranTengahSdn.Bhd.(ELITE),Linkedua(Malaysia)Berhad,PLUSHelicopterServicesSdnBhdandChairmanofTerasTeknologiSdnBhd.
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> Hassan Ja’afar Non-IndependentNon-ExecutiveDirector
HassanJa’afar,aMalaysianaged64,isaNon-IndependentNon-ExecutiveDirectorofPLUSExpresswaysandwasappointedasaDirectoroftheCompanyon18March2002.HassanwasthepastManagingDirectorofBBMBSecuritiesSdnBhd.HeholdsaBachelorofScienceDegreeinChemicalEngineeringfromtheUniversityofNewBrunswick,Canada.
HewasaprojectofficerfortheEconomicDevelopmentBoardofSingaporeandtheDevelopmentBankofSingaporeLimitedfrom1969to1974.HewasanInvestmentManagerforBankPembangunanMalaysiaBerhadfrom1974to1978.From1978to1990,hewastheGeneralManagerforBapemaCorporationSdnBhd.HewasappointedasanExecutiveDirectorofUMBCSecuritiesSdnBhdin1990andheserveduntil1994.HethenbecameanExecutiveDirectorofCapitalCorpSecuritiesSdnBhduntil1995.In1995,hewasappointedastheExecutiveDirectorofBBMBSecuritiesSdnBhd.
HealsositsontheBoardofCommissionerofPTLintasMargaSedayaandPTCimanggis-CibitungTollways,PLUSExpresswaysBerhad’ssubsidiariesinIndonesiaandholddirectorshipinProjekLebuhrayaUtara-SelatanBerhad.
HassanisaNon-ExecutiveDirectornominatedbyKhazanahNasionalBerhad,amajorshareholderofPLUSExpresswaysBerhad.
> datuk Mohamed Azman Yahya Non-IndependentNon-ExecutiveDirector
DatukMohamedAzmanYahya,aMalaysianaged47,isaNon-IndependentNon-ExecutiveDirectorofPLUSExpresswaysBerhad.HewasappointedasaDirectoroftheCompanyon3May2002.DatukMohamedAzmangraduatedwithfirstclasshonoursdegreeinEconomicsfromtheLondonSchoolofEconomicsandPoliticalScienceandisamemberoftheInstituteofCharteredAccountantsinEnglandandWales,theMalaysianInstituteofAccountantsandafellowoftheMalaysianInstituteofBanks.Heisthefounder,GroupChiefExecutiveandaDirectorofSymphonyHouseBerhad,alistedoutsourcinggroupandtheExecutiveChairmanofBoltonBerhad,alistedpropertygroup.
HesitsontheadvisorypanelsfortheNationalInnovationCouncilandtheSpecialTaskforcetoFacilitateBusiness(Pemudah)andisamemberoftheFinancialReportingFoundation.HesitsontheBoardsofKhazanahNasionalBerhad,MalaysianAirlineSystemBerhad,ScomiGroupBerhad,EkuitiNasionalBerhadandseveralotherprivatelimitedcompanies.DatukMohamedAzmanisaNon-ExecutiveDirectornominatedbyUEMGroupBerhadandamajorshareholderofPLUSExpresswaysBerhad.HecurrentlyservesasamemberoftheInvestmentCommittee.
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> Tan Sri datuk k. Ravindran SeniorIndependentNon-ExecutiveDirector
TanSriDatukK.Ravindran,aMalaysianaged53,isaSeniorIndependentNon-ExecutiveDirectorofPLUSExpresswaysBerhad.HewasappointedaDirectorofthePLUSExpresswaysBerhadon6May2002.TanSriDatukK.RavindranistheGroupExecutiveDirectorandco-founderoftheARAgroupofcompanieswhichhasinterestsininfrastructuredevelopment,engineering,constructionandtransportation.Aidedbyateamofablecolleagues,hewasinstrumentalindevelopingthegroupintoamulti-millionringgitcompany.
TanSriDatukK.RavindranholdsaBachelorofScienceHonoursdegreefromtheUniversityofMadras,India.Hehasblendedhiscorporateexertionswithinvolvementincharitablecauses,mainlyineducation.ThemainvehicleforthelatteristheAll-MalaysiaMalayaliEducationFoundation(AEF)ofwhichheisthePresident.Hesitsontheboardofseveralprivatelimitedcompanies.TanSriDatukK.RavindranservesasamemberoftheAuditCommitteeandtheNominationsandRemunerationCommittee.
> Quah Poh keat IndependentNon-ExecutiveDirector
QuahPohKeat,aMalaysianaged58,isanIndependentNon-ExecutiveDirectorofPLUSExpresswaysBerhad.HewasappointedasaDirectoron14January2008.HeisalsocurrentlyanIndependentNon-ExecutiveDirectorofIOICorporationBhd,TelekomMalaysiaBerhad,LonpacInsuranceBerhad,LPICapitalBerhad,CampubankLonpacInsurancePlcandPublicBankBhdandsomeofitsgroupcompanies.
PKQuahwasadmittedasamemberoftheMalaysianInstituteofCertifiedPublicAccountants(MICPA)in1976.HewasalsothebeststudentforallthreepartsoftheMICPAExaminationandwonmanyawardsintheInstituteofManagementAccountantsExaminations.
PKQuahisaFellowoftheMalaysianInstituteoftheTaxation,MemberoftheMalaysianInstituteofAccountants,MemberoftheMalaysianInstituteofCertifiedPublicAccountants,MemberoftheCharteredInstituteofManagementAccountantsandFellowoftheAssociationofCharteredCertifiedAccountants.
HewastheSeniorPartnerofKPMG(knowninsomepracticesasManagingPartner)from1October2000to30September2007andhasvastexperienceinAuditandTaxationinbothMalaysiaandUnitedKingdom.HeretiredfromKPMGMalaysiaon31December2007.HeisamemberofFMMStrategicPoliciesCommitteeandwasaformerVice-PresidentoftheMalaysianInstituteofTaxation.
PKQuahservesasamemberoftheAuditCommitteeandNominationsandRemunerationCommittee.
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> datuk Seri Panglima Mohd Annuar bin Zaini IndependentNon-ExecutiveDirector
DatukSeriPanglimaMohdAnnuarBinZaini,aMalaysianaged59,isanIndependentNon-ExecutiveDirectorofPLUSExpresswaysBerhad.HewasappointedasaDirectoron19December2008.
HeholdsaMasterofArtsinLaw&DiplomacyfromTheFletcherSchoolofLaws&Diplomacy,TuftsUniversity,USAandaBachelorofArtswithhonoursinEconomicsfromUniversitiKebangsaanMalaysia.
HebeganhiscareerinthegovernmentserviceasanAdministrativeandDiplomaticOfficerin1977.HeservedtheMalaysianGovernmentatvariousministriesanddepartmentsandalsothePerakStateGovernmentuntilhechosetotakeanoptionalretirementfromthegovernmentservicein1999.
HewasAdvisorandChiefExecutiveofNorthernCorridorImplementationAuthorityfrom2007to2009.HewastheChairmanofMalaysianNationalNewsAgency(BERNAMA)fromFebruary2004toJanuary2010.InFebruary2004,HRHTheSultanofPerakconsentedhisappointmentasMemberoftheCouncilofElderstoHRHSultanofPerak.HeisaMemberofthePerakCouncilofIslamicReligionandMalayCustomsandthePerakStateIslamicEconomicDevelopmentCorporation.HeisalsoaDistinguishedFellowtoInstituteofStrategicandInternationalStudies(ISIS)Malaysia,AdjunctProfessorofNorthernCorridorEconomicRegionResearchCentre,UniversitiUtaraMalaysia.
HealsoholdsdirectorshipsinMalaysianAirlineSystemBerhad,DijayaCorporationBerhadandafewprivatelimitedcompanies.
> dato’ Seri Ismail Shahudin Non-IndependentNon-ExecutiveDirector
Dato’SeriIsmailShahudin,aMalaysianaged60isaNon-IndependentNon-ExecutiveDirectorofPLUSExpresswaysBerhad.HewasappointedasaDirectoron21April2009.
Dato’SeriIsmailholdsaBachelorofEconomics(Honours)degreefromUniversityofMalaya,majoringinBusinessAdministration.
Dato’SeriIsmailShahudinjoinedESSOMalaysiaBerhad,uponhisgraduationin1974andservedfor5yearsinitsFinanceDivision.HethenjoinedCitibankMalaysiain1979andservedattheBank’sheadquartersinNewYorkin1984aspartoftheteaminAsiaPacificDivision.UponhisreturntoMalaysia,hewaspromotedtothepositionofVicePresident&GroupHeadofthePublicSectorandFinancialInstitutionsGroupinCitibankMalaysia.In1992,hejoinedMalayanBankingBerhadasGeneralManager,CorporateBankingandbecametheExecutiveDirectorin1997.In2002heleftMalayanBankingGroupBerhadtobecometheGroupCEOofMMCCorporationBerhad.HewasappointedtotheBoardofBankMuamalatMalaysiaBerhadandsubsequentlyappointedasitsChairmaninMarch2004untilhisretirementinJuly2008.
Dato’SeriIsmailShahudincurrentlysitsontheBoardsofMalayanBankingBerhad,UEMGroupBerhad,CementIndustriesofMalaysiaBerhad(CIMA),SMPCCorporationBerhad,EPManufacturingBerhad,MutiaraGoodYearBerhad,AseanaPropertiesLimited(acompanylistedontheLondonStockExchange),OpusInternationalConsultantsLtd,NewZealand,MCBBankLahore,Pakistanandseveralotherprivatelimitedcompanies.
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MOHAMMAd fUAd kHUSAIRIOperations
HOW SEET MENGFinance
MOHd ZULASTRI MOHd AMINMaintenance&Development
JAMAL-Ud-dEEN NASIR kHANHumanCapitalServices&Regional
kHALILAH MOHd TALHACorporateCommunications
NOOR MEIZA AHMAdLegalandSecretarialSupport
MOHd HALMI MOHd HASSANInternalAudit
PLUS EXPRESSWAYS BERhAD
DATO’ NOORIzAh hJ ABD hAMIDManaging Director
TAJUL AzWA BANI hAShIMChief Operating Officer
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PLUS HELIcOPTER SERvIcES SdN bHdAZIZUddIN AbdULLAH AYEOPAviationManager
TERAS TEkNOLOGI SdN bHdAbd RAHIM SULAIMAN @ SELIMANChiefOperatingOfficer
HEAd Of OvERSEAS SUbSIdIARIES
PT LINTAS MARGA SEdAYA; PT cIMANGGIS cIbITUNG TOLLWAYSMUHAMMAd fAdZIL AbdUL HAMIdPresidentDirector
PLUS bkSP TOLL LIMITEd; INdU NAvAYUGA INfRA PROJEcT PRIvATE LIMITEd (INIPPL)AZMEE NINExecutiveDirector;ChiefExecutiveOfficer
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TheBoardisfullydedicatedinensuringthatthestructureandprocedurestosupportexcellentcorporateconductwillcontinuetoexist,notonlyintheirpresentform,butwillcontinuallybeenhancedandfortified.
ThisstatementsetsoutthecommitmentoftheBoardtowardstheprinciplesofgoodcorporategovernanceandtheextenttowhichithascompliedwiththebestpracticesoftheCodeonCorporateGovernance(Revised2007)(“Code”)throughoutthefinancialyearended31December2010.
A. THE bOARd Of dIREcTORS
The board
PLUSExpresswaysisledbyanexperiencedBoardcomprisinga
mixofmemberswithawiderangeofexperienceandexpertiseintherelevantfieldssuchasaccounting,economicsandmanagement,businessandbanking.Withtheirbroadrangeofskills,experienceandknowledge,theyeffectivelyoverseePLUSExpresswaysGroup’s(“theGroup”)businessactivities.
Asateam,theBoardbringstobearindependentandsoundjudgementonissuesencompassingstrategy,performance,resourcesandstandardsofconduct.TherolesandfunctionsoftheBoardaswellasthedifferingrolesofExecutiveDirectorsandNon-ExecutiveDirectorshavebeenclearlydefined.
The Board of Directors (“Board”) of PLUS Expressways Berhad (“PLUS Expressways” or “the Company”) upholds a high standard of corporate governance to safeguard the interests of all stakeholders, which include customers, shareholders, employees and the community.
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board composition
TheBoardhasnine(9)directorscomprisingone(1)Executivememberandeight(8)Non-Executivemembers,three(3)ofwhomareindependent.AbriefprofileofeachDirectorissetoutonpages44to49ofthisAnnualReport.
TheIndependentNon-ExecutiveDirectorsareindependentofmanagementandfreefromanybusinessrelationshipswhichcouldmateriallyinterferewiththeexerciseoftheirindependentjudgement.Theyplayanimportantrolein:
• EnsuringthatthestrategiesproposedbytheManagementareanalysedanddeliberated.
• Representingtheinterestsofnotonlytheminorityshareholders,butalsoofemployees,customers,suppliersandotherstakeholders.
• ProvidinganobjectiveandindependentviewtotheBoard.
TheCompanycompliedwiththeMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad(“BursaSecurities”)whichrequiresatleasttwo(2)Directorsorone-third(1/3)oftheBoard,whicheverishigher,tobeindependentandnon-executive.TheindependenceoftheNon-ExecutiveDirectorsisconstantlyreviewedandbenchmarkedagainstbestpracticesandregulatoryprovisions.
TheBoard’scompositionissuchthatnoindividualorgroupofindividualsdominatestheBoard’sdecisionmaking.
InaccordancewiththeguidelinesoftheCode,TanSriDatukK.RavindranistheSeniorIndependentNon-ExecutiveDirectorwhoseprimaryresponsibilityistodealwithconcernsregardingtheCompanywhichareinappropriatetobedealtwithbytheChairmanortheManagingDirector.
Roles of chairman and Managing director
TherolesoftheNon-IndependentNon-ExecutiveChairman,TanSriDato’MohdSheriffMohdKassimandtheManagingDirector,Dato’Noorizah
HjAbdHamidareseparatedwithcleardistinctionofresponsibilitiesbetweenthem.
TheChairmanisresponsibleinensuringtheintegrityandeffectivenessoftheBoardinallaspectsofitsroleandagenda,aswellasprovidingeffectivecommunicationchannelfortheBoardtoexpressviewsontheManagingDirectorandmanagement.TheManagingDirectorisresponsiblefortheimplementationofbroadpoliciesapprovedbytheBoardandsheisobligedtoreportanddiscussatboardmeetingsallmaterialmatterscurrentlyorpotentiallyaffectingtheGroupanditsperformance,includingallstrategicprojectsandregulatorydevelopments.
conflict of Interest
TheDirectorshaveacontinuingresponsibilitytodeterminewhethertheyhaveapotentialoractualconflictofinterestinrelationtoanymatter,whichcomesbeforetheBoard.TheCompanyandtheGrouphaveadoptedaprocesswherebyeachDirectorisrequiredtomakewrittendeclarationswhethertheyhaveanyinterestintransactionstabledatregularboardmeetingsoftheGroup.
board Appointment Process
TheCompanyhasinplaceformalandtransparentproceduresfortheappointmentofnewDirectors.TheseproceduresensurethatallnomineestotheBoardarefirstconsideredbytheNominationsandRemunerationCommittee,takingintoaccounttherequiredmixofskillsandexperienceandotherqualities,beforemakingarecommendationtotheBoardandmajorshareholders.
Forthebenefitofnewlyappointeddirectors,aninductionprogrammeisconductedinorderforthemtofamiliariseandunderstandtheGroup’soperationsandaffairs.
board Appraisal Process
InlinewiththeMalaysianCodeonCorporateGovernance,theBoardhasimplementedaprocesscarriedoutbytheNominationandRemunerationCommitteefortheannualassessmentoftheeffectivenessoftheBoardanditscommitteesaswellascontributionsofeachDirector.
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TheassessmentisbeingcarriedoutbywayofanAssessmentSurveyFormthatistobecompletedbyeachDirector.TheformcoversareasofBoardStructure,BoardMeetings,BoardPapers,BoardCommunication,StrategicPlanning,PerformanceManagement,HumanCapitalManagement,RiskManagement,OverallComments,Directors’SelfandPeersEvaluationandBoardCommittees.AsummaryofthefindingsispresentedtotheNominationandRemunerationCommitteeforitsreviewandtheCommitteewillthenrecommendimprovementactionplansbeforebeingpresentedtotheBoardforfinaldeliberationandapproval.
board Responsibilities
TheBoardretainsfullandeffectivecontroloftheCompany.ThisincludesresponsibilitiesindeterminingtheCompany’soverallstrategicdirection,thedevelopmentandmanagementoftheGroup’sbusinessesaswellasreviewingtheadequacyandeffectivenessoftheinternalcontrolsystemoftheCompanyandtheGroupasawhole.TheBoardisalsoresponsibleinidentifyingprincipalrisksandensuringtheimplementationoftheappropriatesystemstomanagetheserisks.
Keymatters,suchasapprovalofannualandinterimfinancialresults,materialacquisitionsanddisposals,materialagreements,majorcapitalexpenditures,budgets,theKeyPerformanceIndicator,theCorporateScorecard,long-termplansandsuccessionplanningforthetopmanagementarereservedfortheBoard’sdeliberationanddecisionmaking.
TheBoard,asawhole,overseesresponsibilityfordevelopingandrevisingtheGroup’sstrategies.TheManagingDirectorisresponsibleformakingandimplementingoperationaldecisionsgenerallybasedontheDiscretionaryAuthorityLimit(“DAL”)asapprovedbytheBoard.TheNon-ExecutiveDirectorscomplementtheskillsandexperienceoftheManagingDirectorbycontributingtheirknowledgeandexperienceofotherbusinessesandsectorstotheformulationofpoliciesanddecisionmakingoftheCompany.
fiduciary duties of directors
TherelationshipbetweenaDirectorandtheCompanyisbasedonprincipleoffiduciaryduties,wherebyeachDirectorisrequiredtoactbonafideinthebestinterestoftheCompany,asawhole.Inthisrespect,theDirectorsarerequiredtodeclaretheirrespectiveshareholdingsintheCompanyandrelatedcompanies.DirectorsarealsorequiredtodeclaretotheBoardtheirinterestsinanycontractsorproposedcontractswiththeCompanyoranyofitsrelatedcompanies.TheDirectorswillabstainfromanydecisionmakinginrelationtotransactionsinwhichtheyhaveaninterest.
TofurtherassisttheBoardindischargingitsresponsibilitiesmoreeffectively,three(3)committeeshavebeensetup:Audit,NominationsandRemunerationandInvestmentCommittees.EachcommitteehastheauthoritytoreviewspecificissuesdelegatedbytheBoardandtoreporttotheBoardwithitsrecommendations.Theultimateresponsibilityforthefinaldecisiononallmatters,however,lieswiththeBoard.
Number of directorships in companies
EachDirectoroftheCompanyholdsnotmorethanten(10)directorshipsinpubliclistedcompaniesandnotmorethanfifteen(15)directorshipsinnon-listedcompaniesasdefinedandinaccordancewiththeMainMarketListingRequirements.CompliancewiththeBursaSecuritiesListingRequirementsinthisrespectensuresthattheDirectorsareabletocommitsufficienttimeandresourcestoeffectivelydischargetheirresponsibilitiestotheCompany.DetailsofdirectorshipsofeachDirectorareasfollows:
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board Meetings
TheBoardmetthirteen(13)timesforthefinancialyearended31December2010whereitdeliberatedonandconsideredvariousmattersincludingbutnotlimitedto:
TheGroup’sfinancialandoperational•performance,
Budgetsanddividends,•
AnnualReport,•
Relatedpartytransactionsandrecurrent•relatedpartytransactions,
AnnualOperatingPlan2011,Corporate•ScorecardandManagingDirector’sScorecardandHeadlineKeyPerformanceIndexforfinancialyear2010,
Localandforeigninvestmentopportunities,•
Localandforeignacquisitionnamely•acquisitionof49%equityinInduNavayugaInfraProjectsPvt.LtdinIndia,100%equityinTerasTeknologiSdnBhdand20%equityinterestinTouch‘nGoSdnBhd;
Statusandprogressupdates–existing•projectsinIndonesiaandIndia(includingbutlimitedtooperationsandfinancialupdates).
TheGroup’sInvestorRelationsPolicy.•
MattersrelatingtoHumanResourceandstaff•benefits;
Progressof2010RiskRegisterforPLUS•ExpresswaysBerhad;and
OfferbyUEMandEPF(“JointOfferrors”)to•acquireallofthebusinessandundertaking,includingallassetsandliabilitiesofPLUSExpresswaysBerhad.
No Name of director Status
Number of directorships
In Listed company
In Non Listed company
1TanSriDato’MohdSheriffMohdKassim
Non-IndependentNon-ExecutiveChairman
3 6
2 Dato’MohdIzzaddinIdrisNon-Independent
Non-ExecutiveDeputyChairman
4 9
3 Dato’NoorizahHjAbdHamid ManagingDirector 1 1
4 HassanJa’afarNon-Independent
Non-ExecutiveDirector1 1
5DatukMohamedAzmanYahya
Non-IndependentNon-ExecutiveDirector
5 5
6 TanSriDatukK.RavindranSeniorIndependent
Non-ExecutiveDirector1 9
7 QuahPohKeatIndependent
Non-ExecutiveDirector5 3
8DatukSeriPanglimaMohdAnnuarZaini
IndependentNon-ExecutiveDirector
3 5
9 Dato’SeriIsmailShahudinNon-Independent
Non-ExecutiveDirector5 6
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TheBoardisallowedtoconductitsmeetingbywayoftele-conferencingasprovidedinArticle57BoftheCompany’sMemorandumofAssociation.PriortoBoardmeetings,theBoardisfurnishedwithsufficientandappropriatequalityinformationfromtheManagementand,wherenecessary,thirdpartyconsultantsareengagedtoadvisetheBoard
onthemattertoenabletheBoardtoeffectivelydischargetheirresponsibilities.AllproceedingsoftheBoardmeetingsarerecorded.
DetailsofeachDirector’smeetingattendanceduringthefinancialyearended31December2010areasfollows:
No Name of director StatusNo. of board
Meetings Attended
1TanSriDato’MohdSheriffMohdKassim
Non-IndependentNon-ExecutiveChairman
11/13*
2 Dato’MohdIzzaddinIdrisNon-Independent
Non-ExecutiveDeputyChairman11/13*
3 Dato’NoorizahHjAbdHamid ManagingDirector 13/13*
4 HassanJa’afarNon-Independent
Non-ExecutiveDirector11/13*
5 DatukMohamedAzmanYahyaNon-Independent
Non-ExecutiveDirector10/13#*
6 TanSriDatukK.RavindranSeniorIndependent
Non-ExecutiveDirector13/13
7 QuahPohKeat IndependentNon-ExecutiveDirector 13/13#
8DatukSeriPanglimaMohdAnnuarZaini
IndependentNon-ExecutiveDirector 13/13#
9 Dato’SeriIsmailShahudinNon-Independent
Non-ExecutiveDirector7/13#*
# The total number is inclusive of meeting attended via tele-conference.
* The Board meetings held on 15 October 2010, 27 November 2010, 21 December 2010 and 23 December 2010 were Special Board meetings held specifically to deliberate on the offers that PEB received to acquire all the business and undertaking, including all assets and liabilities of PEB and were not part of the annual calendar of Board Meetings. The offers received included the Joint Offer from UEM and EPF. Several directors, namely Tan Sri Dato’ Mohd Sheriff Mohd Kassim, Dato’ Mohd Izzaddin Idris, Dato’ Noorizah Hj Abd Hamid, Datuk Mohamed Azman Yahya, Encik Hassan Ja’afar and Dato’ Seri Ismail Shahudin are directors interested in the Joint Offer (Interested Directors). Hence, Interested Directors abstained from all deliberations pertaining to the Joint Offer, and did not attend the above mentioned Special Board meetings other than Dato’ Noorizah Hj Abd Hamid who attended the Special Board meetings to provide information to the Independent Directors due to her role as Managing Director of the Company.
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Access to Information and Advice
TheBoardrecognisesthatthedecisionmakingprocessishighlydependentonthereliabilityandcompletenessofinformationfurnishedtoit.Assuch,theBoardmembershavefullandunrestrictedaccesstoinformationontheGroup’sbusinessandaffairs,whetherasafullBoardorintheirindividualcapacity,indischargingtheirduties.TheBoardreceivestimelyadviceonallrelevantinformationabouttheGroup.
PriortoBoardmeetings,theDirectorsreceivetheagendawithrelevantreportsandafullsetofBoardpaperscontaininginformationrelevanttothematterstobedeliberatedatthemeeting.TheBoardpapersarecomprehensiveandencompassbothquantitativeandqualitativefactorstofacilitateprudentandinformeddecisionmaking.TheminutesofthepreviousBoardmeetingarealsocirculatedtotheDirectorsandconfirmedateachmeeting.MinutesoftheBoardMeetingsaremaintainedattheRegisteredOfficeoftheCompany.
AllDirectorsalsohavefullaccesstotheadviceandserviceoftheCompanySecretariesinthecourseoftheirduties.TheCompanySecretaries
areresponsibleforensuringthatBoardmeetingproceduresareadheredtoatalltimesandthatapplicablerulesandregulationsarecompliedwith.Wherenecessary,theDirectorsmayobtainindependentprofessionaladviceattheCompany’sexpenseonspecificissuestoenabletheBoardtodischargetheirdutiesonmattersbeingdeliberated.
directors’ Training
TheCompanyacknowledgesthatcontinuouseducationisvitalforBoardmemberstogaininsightintothestateoftheeconomy,technologicaldevelopment,latestregulatorydevelopmentsandmanagementstrategiesinrelationstotheGroup’scorebusiness.
EveryDirectoroftheCompanyundergoescontinuoustraining.Inyear2010,theDirectorshaveattendedtraininginrelationtoamongstotherscorporategovernance,riskmanagement,securitiesmarketregulationanddirectors’dutiesandliabilities.
ThetrainingstatusofDirectorsasat31December2010,areasfollows:
NoName of director
List of Training/conference/Seminar/Workshop Attended
1TanSriDato’MohdSheriffMohdKassim
RiskManagementinIslamicforFIDEAlumni&CurrentParticipants•CompositeRiskRatingCommunicationMeetingwithBankNegaraMalaysia•TalkonCompetitionLawandItsImpactonUEMGroupofCompanies•Hi-TeaPresentationbyDrAbbasMirakhor,INCEIF’s•Directors’TrainingonUpdateofFinancialReportingStandards•UEMDirectorsGathering2010•
2Dato’MohdIzzaddinIdris
TalkonCompetitionLawandItsImpactonUEMGroupofCompanies•UEMDirectorsGathering2010•
3Dato’NoorizahHjAbdHamid
BursaMalaysiaEveningTalkonCorporateGovernance•UEMDirectorsGathering2010•MSWGIndexSeminar–CorporateGovernance•INVESTMalaysia•PLUSInternationalExpresswayConference&Exhibition2010(PIECE2010)•GlobalInfrastructureConferenceinNewYork•AsiaConferenceinNewYork•RBSInvestorsConferenceinSingapore•PEMANDU–EconomicTransformationProgram•MINDA–CEORoundtablewithDrMontekSinghAhluwalia•
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NoName of director
List of Training/conference/Seminar/Workshop Attended
ASEAN100LeadershipFORUM2010•KHAZANAHMegatrendsForum•8thMalaysiaRoadConference&Exhibition2010•KHAZANAHGlobalLectures•TheAsiaPacificConference2010•ASEANFinanceMinister’sInvestorSeminar•
4 HassanJa’afar
PLUSInternationalExpresswayConference&Exhibition2010(PIECE2010)•ManagingTheRiskofDelay,DisruptionsandDisputesInConstruction•ContractsIn2010KhazanahMegatrendsForum2010–ReclaimingtheCommonCollaborating•&CompletingintheNewEconomicOrderUEMDirectorsGathering2010•
5DatukMohamedAzmanYahya
BoltonBODin-houseworkshop:CrisisCommunication•PLUSInternationalExpresswayConference&Exhibition(PIECE2010)Gala•Dinner:ModeratorfordialoguesessionwithF1driverHeikkiKovlainen&ex-F1andA1driverAlexYoongonroadsafetyetcLSEMalaysiaAlumniPublicLecture:Malaysia’sNewEconomicModel:The•NextStepsbyProfessorDannyQuahSCOMIGroupBerhad:ImplementingEffectiveProjectStrategies:Case•StudyontheMonorailProjectforMumbaiTalkonCompetitionLawandItsImpactonUEMGroupofCompanies.•KementerianKewanganMalaysia:MajlisKonsultasiBajet2010/2011–•SeizingGlobalOpportunities.ChairedbythePrimeMinisterThe7thSimeDarbyLectureSeries:SecuringTomorrow’sWorld–Using•Nature’sWealthMoreSustainablybyJonathonPorrittThe13thNationalHousing&PropertySummit.CEOPanel–“Whereisthe•HousingandpropertySectorHeading?”.OrganisedbyASLIPerdanaLeadershipFoundationCEOForum–“Approaching2020:•Malaysia’sDecadeForGrowth?–WhatMakesACorporationExceptional?”KhazanahMegatrendsForum2010•HARVARDCLUB/INTANCOLLOQUIUM:Talkonentrepreneurialfinanceand•venturecapital:WhatyouneedtoKnowbyProf.RobertC.HigginsUEMDirectors’Gathering2010•
6TanSriDatukK.Ravindran
DawnoftheNewDecade•EconomicTransformationProgrammeRoadmapLaunch•KhazanahGlobalLectures•
7 QuahPohKeat
MINDABreakfastTalk–MoralFoundationfromGoodGovernance•KPMGMalaysiaGSTSeminar2010,EveningTalkonCorporateGovernance•GuideBDOTaxForumService–GST:WhichHatAreYouWearing•RiskManagementinIslamicFinance•RiskManagementofDerivatives•BuildingOrganisationalCapacityfromStrategicTransformation•BuildingAuditCommitteeforTomorrow•KPMGMalaysianTaxSummit2010•FinancialIndustryConference2010•UEMDirectors’Gathering2010•
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Re-election of directors
TheCompany’sArticlesofAssociationprovidesthatone-third(1/3)oftheDirectorsinofficeforthetimebeing,oriftheirnumberisnotthree(3)oramultipleofthree(3),thenthenumbernearesttoone-third(1/3),aresubjecttoretirementbyrotationateachAnnualGeneralMeeting(AGM)andshallbeeligibleforre-election.TheDirectorslongestinofficesincetheirlastelectionshallretirefromofficeattheforthcomingAGMandshallbeeligibleforre-election.Directorswhoareover70yearsofagearerequiredtosubmitthemselvesforre-appointmentandre-electionannuallyinaccordancewithSection129(2)andSection129(6)oftheCompaniesAct,1965.DetailsoftheDirectorsseekingre-electionandre-appointmentattheforthcomingAGMaredisclosedintheNoticeoftheAGMonpage4ofthisAnnualReport.
b. bOARd cOMMITTEES
TheBoardhasdelegatedspecificresponsibilitiestothree(3)committeesi.e.AuditCommittee,NominationsandRemunerationCommitteeandInvestmentCommittee.TheseCommitteeshaveclearlydefinedtermsofreferencetoassistandsupporttheBoardinitsresponsibilitytooverseetheCompany’soperationsandtomakethenecessaryrecommendationsrelatingtheretofortheBoards’consideration.Atalltimes,theultimateresponsibilityforthefinaldecisiononallmatters,lieswiththeBoard.
(i) Audit committee
ThecompositionoftheAuditCommitteeandtheSummaryofattendanceofthemembersattherespectiveAuditCommitteemeetingsissetoutinAuditCommitteeReportonpage70ofthisAnnualReport.
TheBoardhasdelegatedcertainresponsibilitiestotheAuditCommittee,whichoperateswithinclearlydefinedtermsofreference.ThetermsofreferenceoftheAuditCommitteeandtheiractivitiesaresetoutonpages71to75ofthisAnnualReport.
(ii) Nominations and Remuneration committee
TheNominationsandRemunerationCommitteeisresponsibletoassisttheBoardinreviewingtheperformanceofSeniorManagementanddirectors.ThecommitteeisalsoresponsibleinrecommendingtotheBoard,theappointmentofnewdirectors,afterdueconsiderationoftheirskills,knowledge,expertise,experience,professionalismandintegrity.ItalsoreviewsandrecommendstotheBoardannualincrements,bonusandex-gratiapaymentfortheManagingDirectors,andifinstructedbytheBoard,reviewsproposalsfortheremunerationpackagesofeachmemberoftheCompany’sBoardCommittees.
NoName of director
List of Training/conference/Seminar/Workshop Attended
8
DatukSeriPanglimaMohdAnnuarZaini
GovernanceRiskManagement&Compliance:WhatAuditCommitteesand•ChiefAuditExecutiveShouldKnowUEMDirectorsGathering2010•
9Dato’SeriIsmailShahudin
TalkonCompetitionLawandItsImpactonUEMGroupofCompanies•UEMDirectorsGathering2010•
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TheNominationsandRemunerationCommitteedeliberatedandrecommendedtotheBoardtoapproveforinclusionintheNoticeforthe8thAnnualGeneralMeeting,theRetirementandRe-electionofDirectors.TheNominationsandRemunerationCommitteealsodeliberatedandrecommendedtotheBoardthe2009BonuspaymentandsalaryadjustmentsfortheManagingDirector,theChiefOperatingOfficerandtopmanagementofthePEBGroup,salaryadjustmentfortheChiefOperatingOfficerandrenewalofemploymentcontractforSeniorManagement.
(iii) Investment committee
ThecompositionofInvestmentCommitteeandtheattendanceofmembersatInvestmentCommitteemeetingsareasfollows:
Name of director Status Meeting Attendance
TanSriDato’MohdSheriffMohdKassim
Non-IndependentNon-ExecutiveChairman
4/4
Dato’MohdIzzaddinIdrisNon-Independent
Non-ExecutiveDeputyChairman2/4
Dato’NoorizahHjAbdHamid ManagingDirector 4/4
DatukMohamedAzmanYahyaNon-Independent
Non-ExecutiveDirector4/4
Dato’SeriIsmailShahudinNon-Independent
Non-ExecutiveDirector2/4
TheInvestmentCommitteeisonlyallowedtomakedecisionsinrespectofinvestmentsinexpresswaysrelatedbusinessinMalaysiaandoverseasatthetender/pre-qualificationstage.Intheeventthatthetender/pre-qualificationaresuccessful,furtherdetailsontheinvestmentwillbepresentedtotheBoardforitsfinaldecision.Inaddition,theInvestmentCommitteealsorecommendstotheBoardforallacquisitionsoflocalandforeigncompanies.OthertypesofinvestmentswhicharenotrelatedtotheexpresswaysindustrywillbedeliberatedbytheInvestmentCommitteeandrecommendedtotheBoardforfinaldecision.
c. dIREcTORS’ REMUNERATION
OtherthantheManagingDirector,allDirectorsarepaidafixedfeeandreceiveameetingallowanceforeachBoardorCommitteemeetingtheyattend.Directors’remunerationissubjecttoapprovalbytheshareholders.TheChairmanispaidahigherfeecomparedtootherBoardmembersinrecognitionofhisadditionalresponsibilities.
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atthree(3)NominationsandRemunerationCommitteemeetingsheldduringtheyearareasfollows:
Name of director Status Meeting Attendance
TanSriDato’MohdSheriffMohdKassim
Non-IndependentNon-ExecutiveChairman 3/3
TanSriDatukK.Ravindran SeniorIndependentNon-ExecutiveDirector 3/3
QuahPohKeat IndependentNon-ExecutiveDirector 3/3
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No Name of directorSalary fees
Other benefits and Emolument
benefit in kind Total
RM(‘000)
1 TanSriDato’MohdSheriffMohdKassim – 90 71 – 161
2 Dato’MohdIzzaddinIdris – 40 12 – 52**
3 Dato’NoorizahHjAbdHamid 938* – 35 77 1,050
4 HassanJa’afar – 40 11 – 51
5 DatukMohamedAzmanYahya – 40 12 – 52
6 TanSriDatukK.Ravindran – 54 18 – 72
7 QuahPohKeat – 72 21 – 93
8 DatukSeriPanglimaMohdAnnuarZaini – 54 17 – 71
9 Dato’SeriIsmailShahudin – 40 8 – 48
Total 938 430 205 77 1,650
* The amount is inclusive of salary, bonus and EPF (employer’s contribution)
** Paid to UEM Group Berhad
d. RELATIONSHIP WITH SHAREHOLdERS/INvESTORS
TheCompanyrecognisestheimportanceofeffectivecommunicationwithitsshareholders,otherstakeholdersandthefinancialcommunityonallmajordevelopmentsoftheGrouponatimelyandaccuratebasis.TheCompanymaintainsahighlevelofdisclosureandcommunicationswithitsstakeholdersthroughanumberofreadilyaccessiblechannels.
Annual Report and Annual General Meeting
TheannualreportisthekeychannelofcommunicationwithshareholdersandinvestorswhichincorporatescomprehensiveandsufficientdetailsaboutfinancialresultsandactivitiesoftheGroupthroughouttheyear.Aspartofcost-savinginitiativesandinsupportofthegovernment’sefforttoincreaseITawarenessamongmembersofthepublic,theGrouphasinitiatedthedespatchofitsannualreportinelectronicform(CD)toshareholders.Asummaryoffinancialdata,noticeofAGMandotherinformationisdistributedtogetherwiththeCDtoshareholders.ShareholdersmayalsorequestforprintedcopiesoftheannualreportineithertheEnglishorBahasaMalaysiaversions.TheannualreportisalsomadeavailableontheCompany’swebsite.
TheremunerationfortheDeputyChairmanispaidtoUEMGroup.TheManagingDirector’sremunerationiscontractualandreflectstheBoard’srecognitionofherskillsandexperienceintheindustry.ThelevelofremunerationofNon-ExecutiveDirectorscommensuratewiththeirexperiencesandlevelofresponsibilitiesandisdeterminedbytheBoard.
ThedetailsoftheremunerationoftheDirectors,paidandpayable,forthefinancialyearended31December2010areasfollows:
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TheAGMistheprincipalforumfordialogueandinteractionbetweentheshareholdersandtheBoardofDirectorsandseniormanagement.AttheAGM,shareholdersarebriefedoftheGroup’sfinancialperformanceandsignificantoperationaldevelopmentsforthefinancialyearaswellasthestrategyandoutlookfortheGroup.Shareholders’participationishighlyencouragedthroughthequestionandanswersessionontheGroup’sfinancialandoperationalperformance.ApressconferenceisheldimmediatelyaftertheAGMwheretheChairmanandManagingDirectorarepresenttoclarifyandexplainissuesraisedbythemedia.ItistheCompany’spolicytopromoteinteractionwithitsshareholdersinordertogivetheshareholdersafullerunderstandingoftheGroup’saffairs.
Website Information
TheGroup’swebsite,www.plus.com.myisaneffectivemediumofcommunicationandsourceofinformationtoshareholdersandthegeneralpublicbyprovidingcomprehensiveandup-to-dateinformationonPLUSExpresswaysandallitssubsidiaries.Thewebsiteisbeingupdatedregularlytoincludeallrelevantfinancialandoperationalinformationonatimelybasis.
E. AccOUNTAbILITY ANd AUdIT
Inpresentingtheannualfinancialstatementsandannouncementofthequarterlyfinancialresultstotheshareholders,theBoardaimstopresentabalancedandcomprehensibleassessmentoftheGroup’spositionandprospects.TheBoardisassistedbytheAuditCommitteetooverseetheGroup’sfinancialreportingprocessesandthequalityofitsfinancialreporting.
director’s Responsibility Statement in respect of the Preparation of the Audited financial Statements
TheDirectorsarerequiredbytheCompaniesAct,1965toensurethattheGroup’sfinancialstatementsarepreparedinaccordancewithapplicableapprovedaccountingstandardsandgiveatrueandfairviewofthestateofaffairsoftheGroupandtheCompanyattheendofthefinancialyearandoftheresultsandcashflowsoftheGroupandtheCompanyforthefinancialyear.
Inthecourseofpreparingtheannualfinancialstatements,theDirectorshave:
adoptedapplicableaccountingpoliciesand•appliedthemconsistently;
madejudgementsandestimatesthatare•prudentandreasonable;
ensuredthatallapplicableaccounting•standardshavebeenfollowed;and
preparedthefinancialstatementsonagoing•concernbasis.
TheDirectorsareresponsibleinensuringthattheCompanykeepsproperaccountingrecordsinaccordancewiththeprovisionsoftheCompaniesAct,1965.
TheDirectorshavetheoverallresponsibilitiesofmaintainingasoundsystemofinternalcontroltosafeguardshareholders’investmentandtheassetsoftheGroupwhichincludetakingreasonablestepsforthedetectionandpreventionoffraudandotherirregularities.
Statement on Internal control
TheStatementonInternalControlissetoutinpages64to68oftheAnnualReport.ItprovidesanoverviewoftheinternalcontrolenvironmentoftheGroup.
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fees paid/payable: Group (RM‘000) company (RM‘000)
StatutoryAuditServices 537 60
OtherServices* 458 232
Total 995 292
* Other services include amongst others cost verification, tender exercise, and dividend certification, review of cash flow projections, quarterly review and government compensation.
TheAuditCommitteealsomettwicewiththeExternalAuditorwithoutthepresenceofManagementforthefinancialyear2010.
AfullAuditCommitteereportissetoutinpages70to77ofthisAnnualReport.
financial Reporting
TheBoardaimstoprovideandpresentabalancedandmeaningfulassessmentoftheCompany’sfinancialperformanceprimarilythroughtheannualfinancialstatementsandquarterlyannouncementsoftheresultstotheshareholdersaswellastheChairman’sStatementandreviewofoperationsintheannualreport.
f. cOMPLIANcE STATEMENT
Forthefinancialyearended31December2010,theCompanyhascompliedwiththeprinciplesandbestpracticesassetoutintheCode.
G. AddITIONAL cOMPLIANcE INfORMATION
TheStatementonAdditionalComplianceInformationissetoutinpage69ofthisAnnualReport.
Relationship with the Auditors
AnappropriaterelationshipismaintainedwiththeCompany’sAuditorsthroughtheAuditCommitteeandtheBoardofDirectors.TheAuditCommitteehasbeenexplicitlyaccordedthepowertocommunicatedirectlywithboththeexternalandinternalauditors.
TheAuditCommitteemeetswiththeexternalandinternalauditorstodiscusstheauditplan,annualfinancialstatementsandtheirauditfindings.TheAuditCommitteemaintainsaformalyetopenandtransparentrelationshipwiththeexternalauditorsandisatlibertytorequestforameetingattheirdiscretion.
Thedetailsofthestatutoryaudit,auditrelatedandnon-auditfeespaid/payablein2010totheexternalauditorsareasfollows:
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TheBoardofDirectors(“Board”)ofPLUSExpresswaysBerhad(“PLUSExpressways”or“theCompany”)acknowledgesandaffirmstheimportanceofsoundinternalcontrolandriskmanagementpracticestoenablegoodcorporategovernance.Takingcognisanceoftheabove,
ThE BOARD ENSURES ThAT ThE SAID PRACTICES ARE IMPLEMENTED IN PLUS EXPRESSWAYS GROUP’S (“ThE GROUP”) WIDE BASIS INCLUDING ThE NEW ACqUIRED LOCAL AND OVERSEAS SUBSIDIARIES,namelyTERASTeknologiSdn.Bhd.andInduNavayugaInfraProjectPrivateLimitedIndia(“INIPPL”).TheBoardisultimatelyresponsibleandaccountablefortheoverallsystemofinternalcontrolandriskmanagement,whichincludestheestablishmentofanappropriatesystemaswellasthereviewofitseffectivenessandintegrity.
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Inviewofthelimitationsinherentinanysystemofinternalcontrol,suchasystemisdesignedtomitigateratherthaneliminaterisksoffailuretoachievecorporateobjectives.Accordingly,thesystemprovidesreasonableandnotabsoluteassuranceagainstmaterialerror,misstatementorloss.Thesystemofinternalcontrolcovers,interalia,riskmanagement,financial,operationalandcompliancecontrols.TheBoardconfirmsthatthesystemofinternalcontroloftheGroupwasinplaceduringthefinancialyear.ThesystemissubjecttoregularreviewbytheBoard.
KeyelementsoftheGroup’sinternalcontrolsystem,includingtheprocessesinplacetoreviewitsadequacy,areasfollows:
ORGANISATIONAL STRUcTURE
TheGrouphasawell-definedorganisationalstructurethatisalignedtoitsbusinessandoperationalrequirementsandeachstrategicoperatingfunctionisheadedbyaresponsibleDivisionalorDepartmentalHead.Clearlinesofaccountabilityandresponsibility,approval,authorisation,andcontrolprocedureshavebeenlaiddownandcommunicatedthroughouttheGroup.
cONTROL ENvIRONMENT
TheinternalcontrolmechanismisembeddedinthevariousworkprocessesandproceduresatappropriatelevelsintheGroup.TheworkprocessesandproceduresaredocumentedintheGroup’sStandardOperatingManualswhichhasbeencertifiedtobeinconformancewithISO9001:2008Standards.Thesemanualsassistinensuringcontinuityofworkpracticeandeffectivecontrolofvarioustasks.Asaresult,astructureforanorganisationwidecontrolhasbeenestablishedthroughouttheGroup.Continuouseffortsarealsobeingundertakenbytheheadsofdepartmentstoreviewandupdatethemanualsregularlyorwhenitisdeemednecessary,aidinginthesuccessfulimplementationofinternalcontrols.
HUMAN RESOURcE MANAGEMENT
TheGroupbelievesthatthekeystrategytomaintainbusinessgrowthinanenvironmentofintensecompetitionistoenhancetheoperationalefficiencyandproductivityofhumancapital.Thus,formalappraisalsguidedbyKeyPerformanceIndicator(“KPI”)parametersprovideaframeworktotranslateandalignthestrategyofhumancapitaldevelopmenttothetheGroup’sStrategicPlanandisbeingusedasaperformancemeasurementtool.TheGroupcontinuedtoemphasiseonthetalentandcompetenciesofemployeesthroughstrategicrecruitmentpracticesandcontinuoustraininganddevelopment.ThroughtheKPI’sparametersandTrainingNeedsAnalysis(“TNA”),employees’competenciesandgapsarebeingproperlyaddressedandsuitabletrainingprogrammesareidentifiedinordertomaximisehumancapitaldevelopmenttotheoptimumlevel.
INSURANcE ANd PHYSIcAL SAfEGUARdS
TheGroupundertakesadequateinsuranceandensurephysicalsafeguardonassetsinplacetoensurethattheassetsaresufficientlycoveredagainstanymishapthatwillresultinmateriallosses.
bUSINESS PLAN ANd bUdGET
TheGroupundertakesacomprehensivebusinessplanningandbudgetingprocesseachyear,toestablishgoalsandtargetsagainstwhichperformanceismonitoredonanongoingbasis.TheBoardparticipatesinthereviewandapprovaloftheBusinessPlanandBudget.Amonthlyreportingandreviewoffinancialresultsandforecasthasbeenestablishedandisconsistentlyobserved.ThequarterlyperformanceagainstbudgetisconstantlypresentedtotheBoard.
AUTHORITY LEvELS
TheGroupdocumenteditsDiscretionaryAuthorityLimits(“DAL”)whichclearlydefinethelevelofauthorityandresponsibilityinmakingoperationalandcommercialbusinessdecisions.Approving
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authoritiescovervariouslevelsofmanagementandincludestheBoard.TheDALisreviewedregularlyandanyamendmentsmadetotheDALmustbetabledtoandapprovedbytheBoard.
INfORMATION ANd cOMMUNIcATION
Whilethemanagementisresponsibletoensureproperimplementationofinternalcontrolprocedures,theBoardcanrequesttoreviewthestateofinternalcontrolsasandwhenitdeemsnecessary.TheBoardcanrequestforinformationandclarificationfrommanagementaswellastoseekinputsfromtheAuditCommittee,externalandinternalauditors,andotherexperts,andanycostsshallbebornebytheGroup.
AUdIT cOMMITTEE
TheAuditCommitteehasbeenestablishedbytheBoardsinceyear2002.TheAuditCommitteecomprisesthree(3)membersoftheBoard,allofwhomareindependentdirectors.ItstermsofreferencetogetherwiththeAuditCommitteeReportaredisclosedinpages70to77ofthisAnnualReport.
INTERNAL AUdIT fUNcTION
TheInternalAuditDepartment(“IAD”or“theDepartment”)ofPLUSExpresswaysBerhadactsasanindependentappraisalfunctiontoassisttheAuditCommitteeindischargingtheirdutiesandtoprovideassurancetoManagementandtheBoardthatallinternalcontrolsareinplace,adequate,andfunctioningeffectivelywithintheacceptablelimitsandexpectations.IADstrivestoprovidethemeansfortheGrouptoaccomplishitscontrolobjectivesbyintroducingasystematicanddisciplinedapproachinevaluatingandimprovingtheeffectivenessofriskmanagement,internalcontrolandgovernanceprocesses.Thepurpose,authorityandresponsibilityofIADaswellasthenatureofassuranceandconsultancyactivitiesprovidedtotheGroupareclearlyexpressedintheInternalAuditCharterasapprovedbytheAuditCommittee.Inordertopreserveitsindependence,IADdirectlyreportstotheAuditCommitteeregularlyaspartofitsfunctionsand
alsoprovideupdatestotheManagingDirectoronadministrationmatters.
ActivitiesofIADareguidedbytheAnnualInternalAuditPlanwhichisreviewedandapprovedbytheAuditCommitteeonayearlybasis.Therisk-basedauditplanisdevelopedtocoveroperational,informationtechnology,strategicandfinancialactivitiesthataresignificanttotheoverallperformanceoftheGroup.Atpresent,IADhasbeenstructuredtohavetwo(2)auditunits,CorporateAuditUnit(“CAU”)andOperationsAuditUnit(“OAU”),andanAnalysisUnit(“AU”).AUisresponsibletoprovideoverallmanagementofthedepartmentaswellasrendertechnicalandanalyticsupporttoCAUandOAU.CAUprimarilyactsasanassuranceunitwhichreviewstheeffectivenessofthesystemofinternalcontrol,highlightinganyareasforimprovementandsubsequentlymonitorstheimplementationofitsrecommendations.Ontheotherhand,OAU’sobjectivesaretoevaluatetheeffectivenessandefficiencyofexistinginternalcontrolsfortolloperations,recommendenhancementtotheinternalcontrolswherenecessaryandtominimiseoreliminatetheriskofinternaltollfraud.
Asanintegralpartofthemanagementprocess,IADfurnishestheManagementwithindependentanalysis,appraisals,counselandinformationontheactivitiesunderreview.ThekeyinternalauditactivitiesthataddvaluetotheGroupcanbesummarisedasfollows:
1. ReviewtheoperationalactivitiesandverifythattheprincipalobjectivesarealignedtooverallGroup’sobjectives.
2. Identifyallauditableactivitiesandrelevantriskfactorsandassesstheirsignificance.
3. Performresearchandgatherinformationthatisaccurate,factualandcomplete.
4. Analyseandexaminetheoperationseffectivenessandefficiency.
5. Analyseandexaminetransactionsdatatoidentifyelementsoffraudulentactivities.
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6. Provideassuranceoncompliancetostatutoryrequirements,laws,Grouppoliciesandguidelines.
7. RecommendappropriatecontrolstoovercomedeficienciesandenhanceGroupoperations.
8. EvaluateproceduresinplacetosafeguardGroup’sassets.
9. AssistManagementinestablishingaproperriskmanagementframework,assessingrisks,monitoringtheeffectivenessoftheriskmanagementprogramandensuringtheadequacyoftheinternalcontrolsystem.
Inyear2010,CAUconductedfifteen(15)auditsinaccordancetotheapprovedAnnualAuditPlanandthree(3)adhocassignmentsasrequestedbytheAuditCommitteeortheManagement.OAU,whichfocusesonthecompliancetotolloperationalprocedures,conductedeighteen(18)complianceauditsatallSectionsandseventyseven(77)spotchecksatselectedtollplazas.Thefrequencyandselectionoftollplazastobespotcheckedweredeterminedbythelevelofpossibleinternaltollfraudriskofeachofthetollplazas.Fortheyear2010,nine(9)internaltollfraudcaseswereinvestigatedbyOAU.TheinvestigationprocessinvolvedverificationoftolltransactionsdocumentationaswellasvalidityusingtheCloseCircuitTelevision(“CCTV”)imagerecordings.Astoprovidefurtherassuranceontheintegrityofthetolltransaction,OAUalsoconductedtransactiondataanalysisaswellasmonitoringofcompliancetoproceduresduringmajorfestiveperiods.Thescopeofauditengagementsisalsoalignedwiththeprimaryrisksoftheorganisationanditskeystrategicinitiatives.
Summary of audits conducted were in the areas of:
1. TollandNonTollOperations
a. CompliancetoIdentifiedKeyInternalControl–TollProcedures(AllSections)
b. ManagementofPlusRondaOperations
c. ManagementofOperationalConsumableItems
d. ManagementofInsuranceandClaims
e. Managementof3rdPartyAdvertisement
2. ExpresswaysandAssetsMaintenance
a. ManagementofSecurityatPEBGroup’sPremises
b. ExpresswaysAssets–Pavement
3. Financial
a. BalanceSheetReview–AccountPayable,Cash&BankBalances
4. HumanResource
a. ManagementofStaffRecruitment,Compensation&Benefits
b. ManagementofHumanCapitalDevelopment
c. PayrollProcesses
5. InformationTechnology(“IT”)
a. PEBNetworkSecurity
6. OverseasSubsidiary
a. PLUSBKSPTollLimited
b. InduNavayugaInfraProjectPvt.Ltd
7. Strategies
a. CorporateBranding,Image&SocialResponsibilityActivities
b. PEB’sBusinessStrategies
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IADalsoworkswiththeGroupInternalAudit(“GIA”)ofUEMGroupBerhadinauditsthatrequirespecificskillsandknowledgenotavailablewithinIAD.In2010,ajointauditwasconductedwithGIAfortheareaofInformationTechnology(IT)aswellasBusinessStrategies.Movingforward,thecollaborationinITauditswillcontinueasthisservesasthefieldofskillslearningandknowledgesharingforIAD’sITauditors.Inaddition,IADalsoworkscloselywiththeExternalAuditorstoresolveanycontrolissuesraisedbythem.
Inordertoexamineandevaluatetheeffectivenessandefficiencyoftheinternalcontrolsystem,IADperformsanalysisontrafficvolumesandtollcollectionsusingComputerAidedAuditTools(“CAAT”)toidentifyanyanomaliesintolltransactionsasaguideforevaluatingtheoveralltolloperations.IADalsomaintainsandutilisestheInternalAuditInformationSystem(“IAIS”)whichisain-housedevelopeddatabasethatstorestheauditrelateddataandinformation.IAISallowsIADtomanageandupdatetheauditrelateddatainamoreeffectiveandefficientmanner.
TheHeadofIAD,MohdHalmiMohdHassan,holdsaBachelorofElectricalEngineeringDegreefromMemorialUniversityofNewfoundland,Canada.With14yearsofexperienceofoverseeingthetolloperationalaspects,revenueassuranceandinternalauditactivitiesinPLUSExpressways,theHeadofIADoffersawealthofexperienceinfocusingonachievingoperationalefficiencies,bytakingintoconsiderationtherisksinvolvedandwithoutcompromisingtheelementsofcontrols.
TheHeadofIADcurrentlysitsasanobserverintheManagementMeetingwheretheseniormanagementoftheGroupdiscussesanddeliberatesonissuespertainingtotheoperationsoftheGroup.Hewouldprovidehisinputandopiniononmattersdiscussedwithregardstointernalcontrol,wherenecessary.Asat31December2010,thetotalheadcountforIADstoodattwenty-eight(28)comprisingnineteen(19)executivesandnine(9)non-executives.ThetotalcostincurredbyIADfor2010wasRM2.04Million.
QualityAssessmentReview(“QAR”)isperformedbyqualifiedindependentrevieweronceeveryfiveyears.TheobjectiveofthereviewistoassessIAD’scompliancetotheInternationalStandardsfortheProfessionalPracticeofInternalAuditing(“Standards”).BasedonthelastestQARconductedin2008,IADhasconformedtotheStandardsingeneral.Inaddition,IADalsoperformsaninternalassessmentreviewannually.
REvIEW Of THE STATEMENT bY EXTERNAL AUdITORS
TheexternalauditorshavereviewedthisstatementonInternalControlfortheinclusionintheannualreportofPLUSExpresswaysBerhadfortheyearended31December2010andreportedtotheBoardthatnothinghascometotheirattentionthatwarrantsthemtobelievethatthestatementisinconsistentwiththeirunderstandingoftheprocessadoptedbytheBoardinreviewingtheadequacyandintegrityofthesystemofinternalcontrols.
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TheinformationsetoutbelowisdisclosedincompliancewiththeMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad(“BursaSecurities”).
MATERIAL cONTRAcTS
Otherthanthosedisclosedinthefinancialstatements,therewerenomaterialcontractsrelatingtoanyloansenteredintobytheCompanyanditssubsidiaryinvolvingDirectorsandmajorshareholders’interests.
REcURRENT RELATEd PARTY TRANSAcTIONS (“RRPT”) STATEMENT
TheCompanyhad,duringthelastAGMheldon29April2010obtainedageneralmandatefromitsshareholderstoenabletheGroupintheirordinarycourseofbusiness,toenterintorecurrenttransactionsofarevenueortradingnaturewithrelatedpartieswhicharenecessaryforitsday-to-dayoperations,ontermsnotmorefavourabletotherelatedpartyotherthanthosegenerallyavailabletothepublicandarenottothedetrimentoftheminorityshareholders(“RRPTMandate”).TheRRPTMandateisvaliduntiltheconclusionoftheforthcomingAGMoftheCompanytobeheldon29June2011.DetailsoftherecurrentrelatedpartytransactionsenteredintopursuanttotheRRPTMandatefortheyearended31December2010aresetoutinpage216ofthisAnnualReport.
IMPOSITION Of SANcTIONS ANd/OR PENALTIES
Therewerenosanctionsand/orpenaltiesimposedontheCompany,Directorsormanagementbytherelevantregulatoryauthorities.
SHARE bUY-bAckS
Therewasnosharebuy-backsduringthefinancialyearended31December2010.
OPTIONS, WARRANTS OR cONvERTIbLE SEcURITIES EXERcISEd
TheCompanyhasnotissuedanyoptions,warrantsorconvertiblesecuritiesinrespectofthefinancialyearended31December2010.
AMERIcAN dEPOSITORY REcEIPT (“AdR ”) OR GLObAL dEPOSITORY REcEIPT (“GdR ”)
TheCompanyhasnotsponsoredanyADRorGDRprogrammeforthefinancialyearended31December2010.
vARIATION IN RESULTS
TheCompanydidnotissueanyprofitforecastforthefinancialyearended31December2010.Assuch,nocommentaryismadeonvariationinresults.
PROfIT GUARANTEE
TheCompanydidnotissueanyprofitguaranteeforthefinancialyearended31December2010.
REvALUATION POLIcY
TheCompanyhasnotadoptedarevaluationpolicyonlandedproperties.
UTILISATION Of PROcEEdS
TherewasnocapitalraisingexercisecarriedoutbytheCompanyforthefinancialyearended31December2010.
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Name designation directorship
QuahPohKeat Chairman
IndependentNon-ExecutiveDirectorandamemberoftheMalaysianInstituteofCertifiedPublicAccountants(MICPA)andtheMalaysianInstituteofAccountants(MIA)
TanSriDatukK.Ravindran Member SeniorIndependentNon-ExecutiveDirector
DatukSeriPanglimaMohdAnnuarZaini
Member IndependentNon-ExecutiveDirector
2. cONSTITUTION
TheAuditCommitteeofPLUSExpresswaysBerhad(“PLUSExpressways”or“theCompany”)wasestablishedbytheBoardofDirectors(“Board”)on22May2002.
3. MEETINGS
Nine(9)meetings(inclusiveofone(1)SpecialAuditCommitteeMeeting)wereheldduringthefinancialyearended31December2010.AllmeetingswereheldatMenaraKorporat,PersadaPLUS,PersimpanganBertingkatSubang,KM15,LebuhrayaBaruLembahKlang,47301PetalingJaya,SelangorDarulEhsan.Thedatesandtimesofthemeetingswereasfollows:
date Time
13.01.10 10.00a.m.
22.02.10 6.30p.m.
12.04.10 2.30p.m.
19.05.10 9.00a.m.
18.08.10 9.30a.m.
20.09.10 9.30a.m.
08.11.10(SpecialAuditCommitteeMeeting)
4.00p.m.
23.11.10 2.30p.m.
23.12.10 2.30p.m.
SummaryofattendanceofthemembersattherespectiveAuditCommitteemeetingswereasfollows:
Name of Audit committee Member No. of Meetings Attended
QuahPohKeat 9/9
TanSriDatukK.Ravindran 8/9
DatukSeriPanglimaMohdAnnuarZaini 9/9
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SeniorManagementincludingtheManagingDirector,theChiefOperatingOffice,theSeniorGeneralManager,FinanceDivision,theHeadoftheInternalAuditDepartmentandtherepresentativesfromtheexternalauditorshadparticipatedindeliberationsonrelevantitemsattheAuditCommitteemeetingsconductedduringtheyearunderreviewattheinvitationoftheAuditCommittee.
4. cOMPOSITION ANd TERMS Of REfERENcE
4.1 composition of the Audit committee
TheAuditCommitteeshallbeappointedbytheBoardofDirectorsfromamongstitsnumbers,whichfulfilsthefollowingrequirements:
a. TheAuditCommitteemustcompriseofatleastthree(3)members;
b. AllmembersoftheAuditCommitteemustbeNon-ExecutiveDirectorsandamajorityofwhommustbeIndependentDirectors;
c. AllmembersoftheAuditCommitteemustbefinanciallyliterateandatleastonememberoftheCommitteemustbeamemberofanaccountingassociationorbody.
d. NoalternatedirectorshallbeappointedasamemberoftheAuditCommittee.
ThemembersoftheAuditCommitteeshallthenelectfromamongthemselvesanIndependentDirectortobetheChairman.AllmembersoftheAuditCommittee,includingtheChairman,willholdofficeonlysolongastheyserveasDirectorsofPLUSExpressways.
4.2 Secretaries of the Audit committee (committee Secretaries)
TheCompanySecretaryorCompanySecretaries(iftherearemorethan1)ofPLUSExpresswaysorhis/her/theirrepresentativeshallbetheSecretary(ies)oftheAuditCommittee.
4.3 Objectives of the Audit committee TheobjectiveoftheAuditCommittee
istoassisttheBoardindischargingitsresponsibilitiesbyreviewingtheadequacyandintegrityofPLUSExpresswaysgroup’s(“theGroup”)internalcontrolsystemsandmanagementofinformationsystems,includingsystemsforcompliancewithapplicablelaws,regulations,rules,directivesandguidelines.
TheAuditCommitteeshallreinforcetheindependenceoftheexternalauditors,assurethattheywillhavefreereinintheauditprocessandprovidealineofcommunicationbetweentheBoardandtheexternalauditors.
TheAuditCommitteeshallalsoenhancetheinternalauditfunctionbyincreasingtheobjectivityandindependenceoftheinternalauditorsandprovideaforumfordiscussionthatisindependentofthemanagement.ThequalityoftheauditsconductedbytheinternalandexternalauditorsoftheCompanyshallbereviewedbytheAuditCommittee.
Inaddition,theAuditCommitteewillensurehighstandardsofcorporatedisclosureandtransparency.TheAuditCommitteewillendeavourtoadoptcertainpracticesaimedatmaintainingappropriatestandardsofcorporateresponsibility,integrityandaccountabilitytoPLUSExpressways’shareholders.
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ThefollowingarethemaindutiesandresponsibilitiesoftheAuditCommittee:
4.4.1 OverseetheCompany’sinternalcontrolstructuretoassureoperationaleffectivenessandefficiency,reducetheriskofunreliablefinancialreporting,protecttheCompany’sassetsfrommisappropriationandencouragelegalandregulatorycompliance.
4.4.2 AssisttheBoardinidentifyingtheprincipalrisksinensuringtheCompany’sobjectivesandensuringtheimplementationofappropriatesystemstomanagetheserisks.
4.4.3 Recommendto theBoardtheappointmentandannualre-appointmentof theexternalauditorsandtheiraudit fee,after taking intoconsiderationthe independenceandobjectivityof theexternalauditorsandthecosteffectivenessof theiraudit.
4.4.4 Reviewwiththeexternalauditorbeforetheauditcommencesthenatureandscopeoftheaudit,theauditplanandensureco-ordinationwheremorethanoneauditfirmisinvolved.
4.4.5 Reviewwithexternalauditors,theirauditreport.
4.4.6 Reviewthequarterlyinterimresults,half-yearandannualfinancialstatementsoftheGrouppriortoapprovalbytheBoardwhilstensuringthattheyarepreparedinatimelyandaccuratemannercomplyingwithallaccountingandregulatoryrequirementsandarepromptlypublished.
4.4.7 Discussproblemsandreservationsarisingfromtheinterimandfinalauditsandanymattertheexternalauditormaywishtodiscussintheabsenceofthemanagementwherenecessary.
4.4.8 Reviewtheexternalauditor’smanagementlettersandmanagement’sresponse.
4.4.9 Reviewtheassistanceandco-operationgivenbyPLUSExpresswaysanditsgroup’sofficerstotheexternalandinternalauditors.
4.4.10Reviewtheadequacyofthescope,functionsandresourcesoftheInternalAuditfunctionandthatithasappropriatestandingwithintheGrouptoundertakeitsactivitiesindependentlyandobjectively,includingbutnotlimitedtothefollowing:
• ReviewingandapprovingtheAnnualInternalAuditPlanandensuringadequateriskandgovernancecoverage.
• Reviewingtheresultsoftheinternalauditprocessandwherenecessaryensuringappropriateactionsaretakenontherecommendationsoftheinternalauditors.
• ReviewingtheoverallperformanceoftheInternalAuditfunctions.
• ApprovinganyappointmentorterminationofseniorstaffmembersoftheInternalAuditfunction.
• Takingcognisanceofresignationofinternalauditstaffmembersandprovidingtheresigningmemberanopportunitytosubmithis/herreasonsforresigning.
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4.4.11AppraisetheperformanceoftheHeadofInternalAuditandtoreviewtheappraisalsofseniorstaffmembersoftheinternalauditfunctions.
4.4.12ApproveanyappointmentorterminationoftheHeadofInternalAuditandseniorstaffmembersoftheinternalauditfunctionandtoreviewanyresignationsofinternalauditstaffmembersandprovideresigningstaffmembersanopportunitytosubmitreasonsforresigning,wherenecessary.
4.4.13ReviewanyrelatedpartytransactionsandconflictofinterestsituationthatmayarisewithintheGroup,includinganytransaction,procedureorcourseofconductthatraisesquestionsonmanagementintegrity.
4.4.14Considerthemajorfindingsofinternalinvestigationsandmanagement’sresponses.
4.4.15ConsideranyotherissuesasdefinedbytheBoard.
4.5 Powers of the Audit committee
Incarryingoutitsdutiesandresponsibilities,theAuditCommitteeshallhavethefollowingauthority:
a. Explicitauthoritytoinvestigateanymatterwithinitstermsofreference;
b. Theresourcesrequiredtoperformitsduties;
c. Fullandunrestrictedaccesstoanyinformation,records,propertiesandpersonnelofthePLUSExpresswaysandanyofothercompanieswithinthePLUSExpressways’group;
d. Directcommunicationchannelswiththeexternalauditorsandperson(s)carryingouttheinternalauditfunctionsoractivity(ifany);
e. BeabletoobtainindependentprofessionalorotheradviceandtoinviteoutsiderswithrelevantexperienceandexpertisetoattendtheAuditCommittee’smeeting(ifrequired)andtobrieftheAuditCommittee;
f. TheattendanceofanyparticularAuditCommitteemeetingbyotherdirectorsandemployeesofPLUSExpresswaysshallbeatAuditCommittee’sinvitationanddiscretionandmustbeforthespecificagendarelevanttotherelevantAuditCommitteemeeting;
g. Beabletoconvenemeetingswithexternalauditorswithoutthepresenceoftheexecutiveboardmembersandmanagementwheneverdeemednecessary;and
h. WheretheAuditCommitteeisoftheviewthatamatterreportedbyittotheBoardhasnotbeensatisfactorilyresolvedresultinginabreachofMainMarketListingRequirements,theAuditCommitteemustpromptlyreportsuchmattertoBursaMalaysiaSecuritiesBerhad.
4.6 Audit committee Meetings
a. TheAuditCommitteeshallholdaminimumoffour(4)meetingsinafinancialyear.ThenumberofAuditCommitteemeetingsheldinafinancialyearandthedetailsofattendanceofeachindividualmemberinrespectofmeetingsheldshallbedisclosedannually.
b. TheAuditCommitteemeetingsshallbechairedbytheChairmanoftheAuditCommitteeorintheabsenceoftheChairman,anothercommitteememberwhoisanIndependentDirectornominatedbythecommitteemembers.ThequorumforthemeetingoftheAuditCommitteeshallbetwo(2)members,bothofwhommustbeIndependentDirectors.
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c. TheChairmanalsohasthediscretiontocallforadditionalmeetingsatanytime,ashedeemsnecessary.
d. TheCommitteeSecretariesortheirrepresentativesshallattendeachAuditCommitteemeetingandrecordtheproceedingsofthemeetings.
e. MinutesofeachmeetingshallbekeptaspartofthestatutoryrecordofPLUSExpresswaysuponadoptionbytheAuditCommittee.
f. AresolutioninwritingsignedandapprovedbyalltheAuditCommitteememberswhomayatthetimebepresentinMalaysiaandwhoaresufficienttoformaquorum,shallbevalidandeffectualasifithadbeenpassedatameetingoftheAuditCommitteedulycalledandconstituted.AllsuchresolutionshallbeforwardedorotherwisedeliveredtotheSecretariesoftheAuditCommitteewithoutdelayandshallberecordedbyhim/herintheCompany’sMinutesBook.AnysuchresolutionmayconsistofseveraldocumentsinlikeformeachsignedbyoneormoreAuditCommitteemembers.
g. AmeetingoftheAuditCommitteemaybeheldbymeansoftelephone,videoconferenceortelephoneconferenceorothertelecommunicationfacilities,whichpermitsallpersonsparticipatinginthemeetingtocommunicatewitheachother.Apersonsoparticipatingshallbedeemedtobepresentinpersonatsuchmeetingandshallbecountedinaquorumandbeentitledtovote.
h. TheManagingDirectorand/ortheChiefExecutiveOfficerand/orotherappropriateofficermaybeinvitedtoattendwheretheirpresenceareconsideredappropriatebytheAuditCommitteeChairman.
i. TheinternalandexternalauditorshavetherighttoappearandbeheardatanymeetingoftheAuditCommittee.TheinternalauditorsareexpectedtoattendeachAuditCommitteemeeting.
j. Upontherequestoftheauditor(s),theAuditCommitteeChairmanshallalsoconveneameetingoftheAuditCommitteetoconsideranymattertheauditor(s)believesshouldbebroughttotheattentionoftheBoardortheshareholders.
k. TheAuditCommitteeshallmeetwithexternalauditorswithoutthepresenceoftheexecutivedirector(s)andmanagementatleasttwiceayearandwheneverdeemednecessary.
4.7 Audit committee Report
TheBoardisrequiredtoprepareanAuditCommitteeReportattheendofeachfinancialyeartobeincludedandpublishedintheannualreportoftheCompany.Thesaidreportshallincludethefollowing:
a. ThecompositionoftheAuditCommitteeincludingthename,designation(indicatingtheChairman)anddirectorshipofthemembers(whethertheDirectorsareindependentorotherwise)anddetailsoftherelevanttrainingattendedbyeachDirector.
b. ThetermsofreferenceoftheAuditCommittee.
c. ThenumberofAuditCommitteemeetingsheldduringthefinancialyearanddetailsofattendanceofeachAuditCommitteemember.
d. AsummaryoftheactivitiescarriedoutbytheAuditCommitteeinthedischargeofitsfunctionsanddutiesforthatfinancialyearoftheCompany.
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e. AsummaryoftheactivitiesoftheInternalAuditfunction.
f. TheidentityoftheHeadoftheInternalAuditfunctionwhoreportsdirectlytotheAuditCommittee.
4.8 chairman of the Audit committee
ThefollowingarethemaindutiesandresponsibilitiesoftheAuditCommitteeChairman:
a. HelpstheAuditCommitteefulfilsitsgoalsbyassigningspecifictaskstomembersoftheAuditCommittee,identifiesguidelinesfortheconductofthemembersandensuresthateachmemberismakingasignificantcontribution.
b. Looksto theCompanySecretary(ies)forguidanceonwhat theirresponsibilitiesareunder therulesandregulationstowhichtheyaresubject toandhowthoseresponsibilitiesshouldbedischarged.Thecomplianceadviceshouldextendtoembraceall lawsandregulationsandnotmerely theroutine filingrequirementsandotheradministrativerequirementsof theCompaniesAct.
c. Providesareasonabletimefordiscussionatthemeeting.Organisesandpresentstheagendaforregularorspecialcommitteemeetingsbasedoninputfrommembersandensuresthatallrelevantissuesareontheagenda.Inaddition,theChairmanshouldencouragedebateontheissuesbeforethecommittee.
d. ProvidesleadershiptotheAuditCommitteeandensureproperflowofinformationtotheAuditCommittee,reviewingtheadequacyandtimingofdocumentation.
e. Securesgoodcorporategovernanceandensuresthatmemberslookbeyondtheircommitteefunctionsandaccepttheirfullshareofresponsibilitiesinreviewingmanagement’sproposals.
f. ManagestheprocessesandworkingoftheAuditCommitteeandensuresthattheAuditCommitteedischargesitsresponsibilitiesinaccordancewithitsTermsofReference.AppropriateproceduresmaybeinvolvedintheAuditCommitteemeetingwithoutthepresenceofmanagement.
g. EnsuresthateveryAuditCommitteeresolutionisputtovotetoensurethatthewillofthemajorityprevails.
h. Engagesonacontinuousbasiswithseniormanagement,suchastheChairman,ManagingDirector,theHeadofInternalAuditandtheexternalauditorsinordertobekeptinformedofmattersaffectingtheCompany.
4.9 Audit committee Members
EachAuditCommitteememberisexpectedto:
a. Provideindependentopinionstothefact-finding,analysisanddecisionmakingprocessoftheAuditCommittee,basedonhis/herexperienceandknowledge.
b. Considerviewpointsfromtheothercommitteemembers;makedecisionsandrecommendationforthebestinterestsoftheBoardcollectively.
c. Keepabreastofthelatestcorporategovernanceguidelinesandbestpractices inrelationtothefunctionsoftheAuditCommitteeandtheBoardasawhole.
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5. INTERNAL AUdIT fUNcTIONS
TheInternalAuditDepartment(“IAD”)oftheGroupsupportstheAuditCommittee indischarging itsdutiesandresponsibilities,givingassurancethatadequate,efficientandeffective internalcontrolssystemare inplace.Theprincipalroleof IADistoundertakeanindependent,regularandsystematicreviewofthesystemof internalcontrolssoastoprovidereasonableassurancethatsuchasystemcontinuestooperatesatisfactorilyandeffectively.
It istheresponsibilityoftheIADtoprovidetheAuditCommitteewith independentandobjectivereportsonthestateofthe internalcontrolsofthevariousoperatingdivisionswithintheGroup,andtheextentofcomplianceofthedivisionswiththeGroup’sestablishedpoliciesandproceduresaswellasrelevantstatutoryrequirements.TheIADiscurrentlyheadedbyMohdHalmiMohdHassan.
FurtherdetailsoftheactivitiesoftheIADaresetoutinStatementonInternalControlonpages64to68.
6. EXTERNAL AUdITORS
TheAuditCommitteecontinuestomonitortheperformanceoftheexternalauditorstoensurethattheexternalauditorsareindependent,objectiveandeffectiveincarryingouttheirduties.
7. AcTIvITIES
InlinewiththetermsofreferenceoftheAuditCommittee,thefollowingswereamongsttheactivitiescarriedoutbytheAuditCommitteeduringthefinancialyearended31December2010,indischargingitsfunctions:
1. Reviewedwiththeexternalauditorstheresultsoftheannualfinancialaudit,theauditedfinancialstatementsandthemanagementletters.
2. Reviewedthequarterlyunaudited financialresultandrelatedannouncementsandrecommendedtheseto theBoard forconsiderationandapproval.Thereview is toensurecompliancewith therequirementsof theBursaMalaysiaSecuritiesBerhad’s,applicableaccountingstandardsandotherrelevant legalandregulatoryrequirements.
3. Reviewedthescopeofworkandtheauditplansoftheexternalandinternalauditors.
4. ReviewedtheinternalauditreportspresentedbyInternalAuditDepartmentanddiscussedthecorrectiveactionstakenbymanagementtoimprovethesystemofinternalcontrolandanyoutstandingmatters.
5. ReviewedtheprogressofPLUSExpressways’2010riskregisterandrecommendedfortheBoardofDirectorsbeupdatedofthesame.
6. ReviewedtherelatedpartytransactionsandrecommendedtotheBoardforconsiderationandapproval.
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7. Mettwicewiththeexternalauditorsduringtheyear,withoutthepresenceofthemanagement.
8. RecommendsfortheBoard’sconsiderationthere-appointmentofexternalauditorsandtheauditfee.
9. Deliberatedontheproposedacquisitionof20%equityinterestinTouch‘nGoSdnBhdbyPLUSExpressways(“ProposedAcquisition”)andrecommendedtotheBoardtoapprovetheProposedAcquisition.
10. Deliberatedontheproposedacquisitionof100%equity interest inTerasTeknologiSdnBhdbyPLUSExpresswaysandrecommendedtotheBoardtoapprovethesaidproposal.
11. DeliberatedontheoffermadebyUEMGroupBerhadandEmployeesProvidentFundBoard(“EPF”)(“JointOfferors”)toacquireallofthebusinessandundertaking,includingallassetsandliabilities,ofPLUSExpresswaysBerhad(“Offer”)foraconsiderationofRM23billionandrecommendedtotheBoardofDirectorsofPLUSExpresswaystoacceptthesaidOffer(subjecttoallconditionsbeingfulfilledbytheofferors).
12. DeliberatedontheoffermadefromJelasUlungSdnBhdtoacquireallofthebusinessandundertaking,includingallassetsandliabilitiesofPLUSExpresswaysBerhadforatotalpurchaseconsiderationofRM26billionandsetrequirementstoanypotentialofferorsandextensionoftheoffertimeline.
13. ReviewedthecirculartoshareholdersinrelationtotheProposedDisposaloftheentirebusinessandundertaking,includingallassetsandliabilitiesofPLUSExpresswaystotheJointOfferorsforatotalconsiderationofRM23billion(“ProposedDisposal”)andProposedDistributionofthecashproceedsarisingfromtheProposedDisposaltoallentitledshareholdersofPLUSExpresswaysviaaselectivecapitalrepaymentandspecialdividend(“ProposedDistribution”).
TheAuditCommitteemeetingswereappropriatelystructuredthroughtheuseofagendasofmeetingandAuditCommitteePapers,whichweredistributedtoAuditCommitteememberswithsufficientnotification.
Directors’ Report 79Statement byDirectors 86StatutoryDeclaration 87Independent Auditors’ Report 88IncomeStatements 90Statements of Comprehensive Income 91Statements of Financial Position 92Statements of Changes in Equity 94Statements of Cash Flows 96Notes to the Financial Statements 98
fINANCIALSTATEMENTS
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TheDirectorspresenttheirannualreporttogetherwiththeauditedfinancialstatementsoftheGroupandoftheCompanyfortheyearended31December2010.
PRINcIPAL AcTIvITIES
TheprincipalactivitiesofthePLUSExpresswaysBerhad(“theCompany”or“PEB”)areinvestmentholdingandprovisionofexpresswayoperationservices.Theprincipalactivitiesofthesubsidiariesandassociatesareinvestmentholding,highwayconcessionairesandrelatedservices.
TheMalaysiansubsidiariesandassociateoftheCompanyareasfollows:
(i) Projek LebuhrayaUtara-SelatanBerhad (“PLUS”); PLUS is involved in the construction, operation,maintenance and toll collection of the North-South Expressway (“NSE”), the New Klang ValleyExpressway(“NKVE”),asectionofFederalHighwayRoute2(“FHR2”)betweenSubangandKlang,andtheSeremban-PortDicksonHighway(“SPDH”).
(ii) Expressway Lingkaran Tengah SdnBhd (“ELITE”); ELITE is involved in the construction, operation,maintenance and toll collection of the North-South Expressway Central Link (“NSECL”) and anextensionoftheKLIAExpressway(“KLIAExpressway”).
(iii) Linkedua (Malaysia) Berhad (“LINKEDUA”); LINKEDUA is involved in the construction, operation,maintenanceandtollcollectionoftheMalaysia-SingaporeSecondCrossing(“MSSC”).
(iv) Konsortium Lebuhraya Butterworth-Kulim (KLBK) Sdn Bhd (“KLBK”); KLBK is involved in theconstruction, operation,maintenance and toll collection of the Butterworth-Kulim Expressway(“BKE”).
(v) PLUS Helicopter Services Sdn Bhd (“PHS”); PHS is a dedicated aviation company that provideshelicoptercharterservices,includingaerialsurveillanceofexpressways.
(vi) Touch‘nGoSdnBhd(“TnG”);TnGisacompanyprimarily involvedinprovidingcontactlessmeansoffarepaymentservicesviaapre-paide-paymentcardknownasTouch‘nGo.PEBacquired20%equityinterestinTnGon11June2010.
(vii) TerasTeknologiSdnBhd(“TERAS”)anditssubsidiaries;TERAS,whichwasacquiredon15June2010,isacompanyprincipally involved in investmentholdingand theprovisionof information technology,outsourcing,e-commerceservicesandinternetrelatedservices.
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PEB’sinternationalsubsidiariesandassociateareasfollows:
(i) Theprincipalactivitiesofallof theCompany’ssubsidiaries inMauritiusare investmentholdinganddetailsareasfollows:
a) PLUSKalyan(Mauritius)PrivateLimited(“PLUSKalyan”).
b) PLUSPlaza(Mauritius)PrivateLimited(“PLUSPlaza”).
c) PLUSJetpur(Mauritius)PrivateLimited(“PLUSJetpur”).
(ii) PEB’sforeigninvestmentsinIndiaare:
a) PLUSBKSPTollLimited (“PLUSBKSP”),a94%-ownedsubsidiaryof theCompany,helddirectlyand indirectly through PLUS Kalyan. PLUS BKSP is principally involved in the construction,operation,maintenance and toll collection of the 22-kilometre Bhiwandi-Kalyan-Shil PhataHighway(“BKSPHighway”)intheStateofMaharashtra,India.
b) InduNavayuga Infra Project Private Limited (“INIPPL”), a 49%-owned company held indirectlythroughPLUSPlaza. INIPPL is principally involved in the construction, operation,maintenanceandtollcollectionofthePadalurtoTrichysectionfromKm285toKm325ofNH-45intheStateofTamilNadu,India.
c) Jetpur-SomnathHighwayLimited(“JSHL”),a26%-ownedcompanyheld indirectlythroughPLUSJetpur. JSHL is principally involved in the design, engineering, procurement, construction,maintenance,operationsand toll collectionofKm0 toKm127.6onJetpur-SomnathsectionofNH-8DintheStateofGujarat,India.
(iii) PEB’sforeigninvestmentsinIndonesiaare:
a) PT Lintas Marga Sedaya (“LMS”), a 55%-owned subsidiary of PEB which undertakes thedesign,construction,operation,maintenanceandtollcollectionofthe116-kilometreCikampek-PalimananHighwayinIndonesia.
b) PT Cimanggis-Cibitung Tollways (“CCTW”), a 60%-owned subsidiary of PEBwhich is involvedin the construction, operationandmaintenanceof theproposed25.4kmPackage4-Cimanggis-CibitungTollRoadinIndonesia.
Therehavebeennosignificantchanges in thenatureof theprincipalactivitiesduring thefinancial yearexcept for the principal activity of TERAS asmentioned inNote 19 to the financial statements. FurtherdetailsofthesubsidiariesandassociatesareinNotes19and20respectively.
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fINANcIAL RESULTS
Group RM’000
Company RM’000
Profitbeforetax 1,776,965 388,046
Incometaxexpense (476,181) 8,700
Profitfortheyear 1,300,784 396,746
Attributable to:
Ownersoftheparent 1,306,170 396,746
Minorityinterests (5,386) –
1,300,784 396,746
Therewerenomaterialtransferstoorfromreservesorprovisionsduringthefinancialyearotherthanasdisclosedinthefinancialstatements.
IntheopinionoftheDirectors,theresultsoftheoperationsoftheGroupandoftheCompanyduringthefinancial year have not been substantially affected by any item, transaction or event of amaterial andunusualnature,otherthanasdisclosedinthenotestothefinancialstatements.
dIvIdENdS
TheamountofdividendspaidbytheCompanysince31December2009wereasfollows:
2010RM’000
Finalsingletierdividendfortheyearended31December2009of10.0senperordinarysharedeclaredon29April2010andpaidon18May2010 500,000
Interimsingletierdividendfortheyearended31December2010of7.5senperordinarysharedeclaredon19August2010andpaidon24September2010 375,000
875,000
No further dividendwill be proposed for shareholders’ approval in respect of the financial year ended31December2010.
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dIREcTORS
Thenamesof theDirectorsof theCompany inofficesince thedateof the last reportandat thedateofthisreportare:
TanSriDato’MohdSheriffbinMohdKassimDato’MohdIzzaddinbinIdrisDato’NoorizahbintiHjAbdHamidHassanbinJa’afarDatukMohamedAzmanbinYahyaTanSriDatukK.Ravindrans/oC.KuttyKrishnanQuahPohKeatDatukSeriPanglimaMohdAnnuarbinZainiDato’SeriIsmailbinShahudin
InaccordancewithArticle76of theCompany’sArticlesofAssociation,MrQuahPohKeat,TanSriDatukK. Ravindran s/o C. Kutty Krishnan andDatuk Seri PanglimaMohdAnnuar bin Zaini shall retire at theforthcomingAnnualGeneralMeetingandbeingeligible,offerthemselvesforre-election.
In accordancewith Section 129(2) of the Companies Act, 1965, Tan Sri Dato’Mohd Sheriff binMohdKassimhavingalreadyattainedtheageof70,shallvacatetheofficeofDirectoroftheCompany.However,pursuant to Section 129(6), hemay be re-appointed by resolution passed by amajority of not less thanthree-fourthofsuchnumberofshareholdersoftheCompanyentitledtovoteatageneralmeetingoftheCompany.TheappointmenttoholdofficeshallbeuntilthenextAnnualGeneralMeetingoftheCompany.Theresolutiontore-appointhimasDirectoroftheCompanywillbeproposedattheforthcomingAnnualGeneralMeeting.
dIREcTORS’ bENEfITS
Neitherattheendofthefinancialyear,noratanytimeduringtheyear,didtheresubsistanyarrangementtowhichtheCompanywasaparty,wherebytheDirectorsmightacquirebenefitsbymeansofacquisitionofsharesin,ordebenturesoftheCompanyoranyotherbodycorporate.
Since the endof the previousfinancial year, noDirector has received or becomeentitled to receive anybenefits (other than benefits included in the aggregate amount of emoluments received or due andreceivablebytheDirectorsorthefixedsalaryofafull-timeemployeeoftheCompanyasdisclosedinNote10tothefinancialstatements)byreasonofacontractmadebytheCompanyorarelatedcorporationwithanyDirectororwithafirmofwhichtheDirectorisamemberorwithacompanyinwhichtheDirectorhasasubstantialfinancialinterest,requiredtobedisclosedbySection169(8)oftheCompaniesAct,1965.
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dIREcTORS’ INTERESTS
AccordingtotheregisterofDirectors’shareholdingstobekeptunderSection134oftheCompaniesAct,1965, the interestofDirectors inofficeat theendof thefinancialyear inshares in theCompanyand itsrelatedcorporationduringthefinancialyearwereasfollows:
The company
Number of Ordinary Shares of RM0.25 each
As at During the year As at
1.1.2010 Bought Sold 31.12.2010
Direct Interest
TanSriDato’MohdSheriffbinMohdKassim 55,000 – – 55,000
Dato’NoorizahbintiHjAbdHamid 20,000 – – 20,000
HassanbinJa’afar 40,000 – – 40,000
DatukMohamedAzmanbinYahya 40,000 – – 40,000
TanSriDatukK.Ravindran 40,000 – – 40,000
DatukSeriPanglimaMohdAnnuarbinZaini 15,000 – – 15,000
UEM Land Holdings berhad
Number of Ordinary Shares of RM0.50 each
As at During the year As at
1.1.2010 Bought Sold 31.12.2010
Direct Interest
TanSriDato'MohdSheriffbinMohdKassim 114,000 – 79,000 35,000
Dato'SeriIsmailbinShahudin 4,688 2,344 – 7,032
Pharmaniaga berhad
Number of Ordinary Shares of RM1.00 each
As at During the year As at
1.1.2010 Bought Sold 31.12.2010
Direct Interest
Dato'NoorizahbintiHjAbdHamid 100 – – 100
None of the otherDirectorswho held office at the end of the financial year had an interest directly orindirectlyinsharesoftheCompanyanditsrelatedcorporationsduringthefinancialyear.
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HOLdING cOMPANY
TheDirectorsregardUEMGroupBerhad(“UEM”),acompanyincorporatedinMalaysiawhichowns38.51%oftheCompany’sequityasat31December2010,astheimmediateholdingcompany.
OTHER STATUTORY INfORMATION
(a) BeforethefinancialstatementsoftheGroupandoftheCompanyweremadeout,theDirectorstookreasonablesteps:
(i) toascertainthatproperactionhadbeentakeninrelationtothewritingoffofbaddebtsandthemakingofallowance fordoubtfuldebtsandsatisfied themselves that therewerenoknownbaddebtsandthatadequateallowancehadbeenmadefordoubtfuldebts;and
(ii) to ensure that any current assetswhichwere unlikely to realise their value as shown in theaccountingrecordsintheordinarycourseofbusinesshadbeenwrittendowntoanamountwhichtheymightbeexpectedsotorealise.
(b) Atthedateofthisreport,theDirectorsarenotawareofanycircumstanceswhichwouldrender:
(i) itnecessarytowriteoffanydebtsortheamountofallowancefordoubtfuldebtsintheGroupandoftheCompanyinadequatetoanysubstantialextent;and
(ii) the values attributed to current assets in the financial statements of the Group and of theCompanymisleading.
(c) Atthedateofthisreport,theDirectorsarenotawareofanycircumstanceswhichhavearisenwhichwouldrenderadherencetotheexistingmethodofvaluationofassetsandliabilitiesoftheGroupandoftheCompanymisleadingorinappropriate.
(d) Atthedateofthisreport,theDirectorsarenotawareofanycircumstancesnototherwisedealtwithin this reportor thefinancialstatementsof theGroupandof theCompanywhichwouldrenderanyamountstatedinthefinancialstatementsmisleading.
(e) Asatthedateofthisreport,theredoesnotexist:
(i) anychargeontheassetsoftheGroupandoftheCompanywhichhasarisensincetheendofthefinancialyearwhichsecurestheliabilitiesofanyotherperson;or
(ii) any contingent liability in respect of theGroupandof theCompanywhichhasarisensince theendofthefinancialyear.
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OTHER STATUTORY INfORMATION (cONTINUEd)
(f) IntheopinionoftheDirectors:
(i) nocontingentliabilityorotherliabilityhasbecomeenforceableorislikelytobecomeenforceablewithintheperiodoftwelvemonthsaftertheendofthefinancialyearwhichwillormayaffecttheabilityoftheGroupandoftheCompanytomeetitsobligationswhentheyfalldue;and
(ii) noitem,transactionoreventofamaterialandunusualnaturehasarisenintheintervalbetweentheendofthefinancialyearandthedateofthisreportwhichislikelytoaffectsubstantiallytheresultsoftheGroupandoftheCompanyforthefinancialyearinwhichthisreportismade.
SIGNIfIcANT EvENTS ANd EvENT OccURRING AfTER REPORTING dATE
Significant events and event occurring after reporting date are disclosed in Note 47 to the financialstatements.
AUdITORS
Theauditors,Ernst&Young,haveexpressedtheirwillingnesstoacceptreappointment.
SignedonbehalfoftheBoardinaccordancewitharesolutionoftheDirectors,
TAN SRI DATO’ MOhD ShERIff BIN MOhD KASSIM DATO’ NOORIzAh BINTI hJ ABD hAMID
Selangor,Malaysia25February2011
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We,TANSRIDATO’MOHDSHERIFFBINMOHDKASSIMandDATO’NOORIZAHBINTIHJABDHAMID,beingtwooftheDirectorsofPLUSEXPRESSWAYSBERHAD,doherebystatethatintheopinionoftheDirectors,theaccompanyingfinancial statementssetoutonpages90 to214aredrawnup inaccordancewith theprovisionsoftheCompaniesAct,1965andapplicableFinancialReportingStandardsinMalaysiasoastogive a true and fair view of the financial position of theGroup and of theCompany as at 31December2010andoftheirfinancialperformanceandthecashflowsoftheGroupandoftheCompanyfortheyearthenended.
TheinformationsetoutinNote50ofthefinancialstatementshavebeenpresentedinaccordancewiththedirective issued byBursaMalaysia SecuritiesBerhad dated 25March 2010 and prepared in accordancewithGuidanceonSpecialMatterNo.1,DeterminationofRealisedandUnrealisedProfitsorLossesintheContextofDisclosurePursuant toBursaMalaysiaSecuritiesBerhadListingRequirements,as issuedbytheMalaysianInstituteofAccountants.
SignedonbehalfoftheBoardinaccordancewitharesolutionoftheDirectors,
TAN SRI DATO’ MOhD ShERIff BIN MOhD KASSIM DATO’ NOORIzAh BINTI hJ ABD hAMID
Selangor,Malaysia25February2011
STAT
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PURSU
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169(15)OFTH
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NIESAC
T,1965
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STAT
UTOR
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169(16)OFTH
ECO
MPA
NIESAC
T,1965I, HOW SEETMENG, being the Officer primarily responsible for the financialmanagement of PLUS
EXPRESSWAYSBERHAD,dosolemnlyandsincerelydeclarethatthefinancialstatementssetoutonpages90to215areinmyopinioncorrect,andImakethissolemndeclarationconscientiouslybelievingthesametobetrue,andbyvirtueoftheprovisionsoftheStatutoryDeclarationsAct,1960.
SubscribedandsolemnlydeclaredbytheabovenamedHOWSEETMENGinSelangor,Malaysiaon25February2011
Beforeme, hOW SEET MENG
M.KhANDIMADDICommissionerforOaths(No.B106)
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Report on the financial statements
WehaveauditedthefinancialstatementsofPLUSEXPRESSWAYSBERHAD,whichcomprisethestatementsoffinancialpositionasat31December2010oftheGroupandoftheCompany,andtheincomestatements,statementsofcomprehensiveincome,statementsofchangesinequityandstatementsofcashflowsoftheGroupandoftheCompanyfortheyearthenended,andasummaryofsignificantaccountingpoliciesandotherexplanatorynotes,assetoutonpages90to214.
directors' responsibility for the financial statements
Directors are responsible for the preparation and fair presentation of these financial statements inaccordancewithapplicableFinancialReportingStandardsandtheCompaniesAct,1965inMalaysia.Thisresponsibilityincludes:designing,implementingandmaintaininginternalcontrolrelevanttothepreparationand fair presentation of financial statements that are free frommaterialmisstatement,whether due tofraudorerror;selectingandapplyingappropriateaccountingpolicies;andmakingaccountingestimatesthatarereasonableinthecircumstances.
Auditors’ responsibility
Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.WeconductedourauditinaccordancewithapprovedstandardsonauditinginMalaysia.Thosestandardsrequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassurancewhetherthefinancialstatementsarefreefrommaterialmisstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures inthefinancialstatements.Theproceduresselecteddependonourjudgement,includingtheassessmentofrisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.Inmakingthoseriskassessments,weconsiderinternalcontrolrelevanttotheCompany’spreparationandfairpresentationofthefinancialstatementsinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheCompany’sinternalcontrol.Anauditalsoincludesevaluatingtheappropriatenessoftheaccountingpoliciesusedandthereasonablenessof accounting estimatesmade by the directors, as well as evaluating the overall presentation of thefinancialstatements.
We believe that the audit evidencewe have obtained is sufficient and appropriate to provide a basis forourauditopinion.
Opinion
In our opinion, the financial statements have been properly drawn up in accordance with applicableFinancialReportingStandardsandtheCompaniesAct,1965inMalaysiasoastogiveatrueandfairviewof thefinancialpositionof theGroupandof theCompanyasat31December2010andof theirfinancialperformanceandcashflowsoftheGroupandoftheCompanyfortheyearthenended.
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Report on other legal and regulatory requirements
Inaccordancewith the requirementsof theCompaniesAct, 1965 inMalaysia (“theAct”),wealso reportthefollowing:
(a) Inouropinion,theaccountingandotherrecordsandtheregistersrequiredbytheActtobekeptbytheCompanyanditssubsidiarieshavebeenproperlykeptinaccordancewiththeprovisionsoftheAct.
(b) Wehaveconsidered theaccountsand theauditors’ reportsof all thesubsidiariesofwhichwehavenotactedasauditors,whichareindicatedinNote19tothefinancialstatements.
(c) Wearesatisfiedthat theaccountsof thesubsidiaries thathavebeenconsolidatedwith thefinancialstatementsof theCompanyare in formandcontentappropriateandproper for thepurposesof thepreparation of the consolidated financial statements andwe have received satisfactory informationandexplanationsrequiredbyusforthosepurposes.
(d) Theauditors’reportsontheaccountsof thesubsidiarieswerenotsubjecttoanyqualificationtotheconsolidatedfinancialstatementsanddidnotincludeanycommentrequiredtobemadeunderSection174(3)oftheAct.
Other matters
The supplementary information set out inNote 50onpage215 is disclosed tomeet the requirement ofBursaMalaysiaSecuritiesBerhad.TheDirectorsareresponsibleforthepreparationofthesupplementaryinformationinaccordancewithGuidanceonSpecialMatterNo.1,DeterminationofRealisedandUnrealisedProfits or Losses in the Context of Disclosure Pursuant to BursaMalaysia Securities Berhad ListingRequirements, as issued by theMalaysian Institute of Accountants (“MIA Guidance”) and the directiveof BursaMalaysia SecuritiesBerhad. In our opinion, the supplementary information is prepared, in allmaterial respects, in accordancewith theMIAGuidance and the directive of BursaMalaysia SecuritiesBerhad.
Thisreport ismadesolelytothemembersoftheCompany,asabody, inaccordancewithSection174oftheCompaniesAct, 1965 inMalaysia and for no other purpose.Wedonot assume responsibility to anyotherpersonforthecontentofthisreport.
Ernst&Young AHMADZAHIRUDINBINABDULRAHIMAF:0039 No.2607/12/12(J)CharteredAccountants CharteredAccountant
KualaLumpur,Malaysia25February2011
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Group Company
Note 2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Continuing operations
Revenue 5 3,351,481 3,179,022 594,106 930,607
Directcostofoperations (990,905) (914,935) (101,135) (91,148)
Gross profit 2,360,576 2,264,087 492,971 839,459
Otherincome 6 244,058 134,733 9,971 6,619
Generalandadministrationexpenses (74,729) (73,196) (18,970) (17,807)
Otherexpenses (4,102) (1,864) (3,884) (1,697)
Financecosts 7 (751,297) (700,188) (92,042) (81,237)
Shareofresultsfromassociate 2,459 – – –
Profit before tax 8 1,776,965 1,623,572 388,046 745,337
Incometaxexpense 12 (476,181) (438,460) 8,700 (2,568)
Profit for the year 1,300,784 1,185,112 396,746 742,769
Attributable to:
Ownersoftheparent 1,306,170 1,186,378 396,746 742,769
Minorityinterests (5,386) (1,266) – –
1,300,784 1,185,112 396,746 742,769
Earnings per share attributable to owners of the parent (sen) 13 26.12 23.73 7.93 14.86
Interim single tier dividend per ordinary share in respect of the year (sen) 14 7.50 6.50
final single tier dividend per ordinary share in respect of the year (sen) 14 – 10.00
INCO
ME
STAT
EMEN
TSFO
RTHEYEAR
ENDED
31DEC
EMBER
2010
Theaccompanyingnotesformanintegralpartofthefinancialstatements.
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STAT
EMEN
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F CO
MPR
EhEN
SIVE
INCO
ME
FORTHEYEAR
ENDED
31DEC
EMBER
2010
Theaccompanyingnotesformanintegralpartofthefinancialstatements.
Group Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Profit for the year 1,300,784 1,185,112 396,746 742,769
Foreigncurrencytranslation (18,305) 15,570 – –
Other comprehensive income for the year, net of tax (18,305) 15,570 – –
Total comprehensive income for the year 1,282,479 1,200,682 396,746 742,769
Attributable to:
Ownersoftheparent 1,291,003 1,199,026 396,746 742,769
Minorityinterests (8,524) 1,656 – –
1,282,479 1,200,682 396,746 742,769
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Group Company Note 2010 2009 1.1.2009 2010 2009 1.1.2009
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000Restated Restated Restated Restated
ASSETS
Non-current assets
Concessionassets 15 12,612,505 12,417,516 12,380,531 – – –
Property,plantandequipment 16 81,631 76,134 75,124 114,577 112,915 112,317
Intangibleassets 18 4,212 3,729 3,667 2,962 2,668 1,632
Investmentsinsubsidiaries 19 – – – 2,204,822 2,300,001 2,284,361
Investmentsinassociates 20 35,884 – – 33,407 – –
Investmentsecurities 22 145,489 159,192 165,925 – – –
Deferredtaxassets 23 3,023 8,316 7,154 1,186 7,890 4,898
TollcompensationrecoverablefromtheGovernment 24 2,460,346 2,486,189 1,909,498 – – –
Amountowingbysubsidiary 26 – – – 43,716 65,378 85,378
Longtermdeposits 28 20,946 501 483 20,480 – –
15,364,036 15,151,577 14,542,382 2,421,150 2,488,852 2,488,586
Current assets
TollcompensationrecoverablefromtheGovernment 24 181,872 117,879 104,269 – – –
Inventories 332 118 27 332 118 27
Tradereceivables 25 10,324 – – – – –
Amountduefromcustomersoncontracts 17 17,629 – – – – –
Sundryreceivables,depositsandprepayments 25 56,377 77,688 63,391 5,834 5,899 6,006
Amountowingbyimmediateholdingcompany 26 500 – – – – –
Amountowingbysubsidiaries 26 – – – 73,793 573,269 535,823
Amountowingbyrelatedcompanies 26 45,969 1,937 7,568 124 131 74
Taxrecoverable 11,023 4,812 5,575 9,171 4,812 5,554
Shortterminvestments 27 49,933 129,936 63,389 9,996 24,968 –
Shorttermdepositswithlicensedbanks 28 3,440,123 2,851,406 2,209,124 281,028 163,029 6,190
Cashandbankbalances 28 38,412 32,124 25,306 15,000 325 253
3,852,494 3,215,900 2,478,649 395,278 772,551 553,927
Assetsofdisposalgroupclassifiedasheldforsale 21 31,625 – – 17,760 – –
TOTAL ASSETS 19,248,155 18,367,477 17,021,031 2,834,188 3,261,403 3,042,513
Theaccompanyingnotesformanintegralpartofthefinancialstatements.
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Group Company Note 2010 2009 1.1.2009 2010 2009 1.1.2009
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000Restated Restated Restated Restated
EqUITY AND LIABILITIES
Equity attributable to owners of the parent
Sharecapital 29 1,250,000 1,250,000 1,250,000 1,250,000 1,250,000 1,250,000Otherreserves 30 741,275 752,308 739,660 – – –Retainedearnings 31 4,199,527 4,074,326 3,687,948 41,418 519,672 576,903Reserveofdisposalgroupclassifiedasheldforsale 21 (477) – – – – –
6,190,325 6,076,634 5,677,608 1,291,418 1,769,672 1,826,903Minority interests 56,208 21,000 19,344 – – –Total equity 6,246,533 6,097,634 5,696,952 1,291,418 1,769,672 1,826,903
Non-current liabilitiesLongtermfinancialliabilities 34 8,629,565 8,763,035 7,965,604 1,429,054 1,377,021 776,174Longtermborrowings 35(A) 1,824,805 1,654,284 1,551,694 – – –AmountduetoGovernment 35(C) 38,096 38,096 38,096 – – –Amountowingtoimmediateholdingcompany 26 3,422 6,885 6,885 – – –
Amountowingtosubsidiary 26 – – – 64,535 84,850 86,850Retirementbenefits 38 17,545 15,698 14,071 – – –Deferredliabilities 39(a) 75,288 76,001 73,224 – – –Deferredrevenue 39(b) 40,740 43,789 46,622 – – –Deferredtaxliabilities 23 957,621 806,779 388,239 – – –
11,587,082 11,404,567 10,084,435 1,493,589 1,461,871 863,024Current liabilitiesTradepayables 32 60,709 35,454 27,331 – – –Amountduetocustomersoncontracts 17 1,074 – – – – –
Sundrypayablesandaccruals 40 145,291 127,160 135,739 47,775 28,238 22,955AmountreceivedfromtheGovernmentforAdditionalWorks 41 19,407 19,216 20,445 – – –Deferredliabilities 39(a) 7,788 6,920 6,473 – – –Deferredrevenue 39(b) 5,482 3,194 1,187 – – –Shorttermfinancialliabilities 34 938,959 557,917 623,132 – – –Shorttermborrowings 35(B) 140,945 23,947 332,801 – – 325,806Amountowingtoimmediateholdingcompany 26 4,492 4,255 1,338 777 796 265
Amountowingtosubsidiaries 26 – – – 15 – 3,203Amountowingtorelatedcompanies 26 88,700 86,406 91,073 614 826 357
Taxpayable 33 1,626 807 125 – – –1,414,473 865,276 1,239,644 49,181 29,860 352,586
Liabilitiesdirectlyassociatedwithdisposalgroupclassifiedasheldforsale 21 67 – – – – –
Total liabilities 13,001,622 12,269,843 11,324,079 1,542,770 1,491,731 1,215,610
TOTAL EqUITY AND LIABILITIES 19,248,155 18,367,477 17,021,031 2,834,188 3,261,403 3,042,513
Theaccompanyingnotesformanintegralpartofthefinancialstatements.
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Theaccompanyingnotesformanintegralpartofthefinancialstatements.
Attributable to Owners of the Parent
Non-Distributable Reserves
Distributable
NoteShare
CapitalOther
Reserves
Reserve ofdisposal
groupclassified asheld for sale
RetainedEarnings Total
Minority Interests Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
(Note 29) (Note 30) (Note 21) (Note 31)
GROUP
At 1 January 2010 (as previously stated) 1,250,000 752,308 – 4,074,326 6,076,634 21,000 6,097,634
EffectsofadoptingFRS139 – 3,657 – (305,969) (302,312) – (302,312)
Balance as at 1 January 2010 (restated) 1,250,000 755,965 – 3,768,357 5,774,322 21,000 5,795,322
Totalcomprehensiveincomefortheyear – (15,167) – 1,306,170 1,291,003 (8,524) 1,282,479
Acquisitionofsubsidiary 19(b) – – – – – 43,047 43,047
Issuanceofadditionalsharestominorityinterests – – – – – 685 685
Reserveattributabletodisposalgroupclassifiedasheldforsale – 477 (477) – – – –
Dividends 14 – – – (875,000) (875,000) – (875,000)
At 31 December 2010 1,250,000 741,275 (477) 4,199,527 6,190,325 56,208 6,246,533
At 1 January 2009 1,250,000 739,660 – 3,687,948 5,677,608 19,344 5,696,952
Totalcomprehensiveincomefortheyear – 12,648 – 1,186,378 1,199,026 1,656 1,200,682
Dividends 14 – – – (800,000) (800,000) – (800,000)
At 31 December 2009 1,250,000 752,308 – 4,074,326 6,076,634 21,000 6,097,634
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Attributable to Owners of the Parent
NoteShare
Capital
Distributable RetainedEarnings Total
RM’000 RM’000 RM’000
(Note 29) (Note 31)
COMPANY
At 1 January 2010 1,250,000 519,672 1,769,672
Totalcomprehensiveincomefortheyear – 396,746 396,746
Dividends 14 – (875,000) (875,000)
At 31 December 2010 1,250,000 41,418 1,291,418
At 1 January 2009 1,250,000 576,903 1,826,903
Totalcomprehensiveincomefortheyear – 742,769 742,769
Dividends 14 – (800,000) (800,000)
At 31 December 2009 1,250,000 519,672 1,769,672
Theaccompanyingnotesformanintegralpartofthefinancialstatements.
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Group Company
Note 2010 2009 2010 2009RM’000 RM’000 RM’000 RM’000
Cash flows from Operating ActivitiesTollcollections 2,735,035 2,577,608 – –Expresswayoperationservicesfees – – 117,787 97,558Receiptsfromexpresswayancillaryfacilities 18,922 22,702 – –
Otherincome 70,806 36,348 1,476 988Futuremaintenanceexpenditurereceived 1,936 11,887 – –
Paymentstocontractorsforroutinemaintenance (213,213) (225,167) – –
Otheroperatingexpenses (372,280) (340,848) (107,363) (92,525)Taxespaid (10,193) (7,275) (4,428) (4,817)Taxesrefunded 15,386 – 15,386 –Netcashgeneratedfromoperatingactivities 2,246,399 2,075,255 22,858 1,204
Cash flows from Investing ActivitiesProfitelementandinterestincomereceived 91,446 73,341 4,806 4,684
Proceedsfromdisposalofproperty,plantandequipment 115 576 36 80
Dividendsreceived – – 985,000 800,000Proceedsfrommaturityofshortterminvestments 291,000 171,000 60,000 14,000
ProceedsfromELITE'scapitalreduction – – 200,000 –
InterestearnedonamountreceivedfromtheGovernmentforAdditionalWorks 41 463 435 – –
Acquisitionsofsubsidiaries,netofcashandcashequivalentsacquired 19(b) (82,373) – (44,000) –
Investmentinsubsidiaries – – (76,099) (15,635)Investmentinassociates (33,425) – (33,407) –Longtermdeposits (22,047) – (22,047) –Purchaseofproperty,plantandequipment (12,984) (6,992) (5,814) (3,565)
Paymentforleaseholdland – – (2,000) (2,000)Purchaseofcomputersoftwares (1,320) (1,761) (740) (1,453)Purchaseofinvestments (215,954) (228,021) (44,895) (38,855)AdditionalWorks (4,639) (70,490) – –Concessionassets (421,860) (385,873) – –Netcash(usedin)/generatedfrominvestingactivities (411,578) (447,785) 1,020,840 757,256
Theaccompanyingnotesformanintegralpartofthefinancialstatements.
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Theaccompanyingnotesformanintegralpartofthefinancialstatements.
Group Company
Note 2010 2009 2010 2009RM’000 RM’000 RM’000 RM’000
Cash flows from financing Activities
ProceedsfromissuanceofIslamicSukuk 443,060 1,739,565 – 555,413
Drawdownofborrowings 135,585 26,934 – –
Proceedsfromminorityshareholdersinrespectofadditionalcapitalinjectionduringtheyear 428 – – –
Advancereceivedforadditionalsharesissuedtominorityinterests 5,680 – – –
RedemptionofSeniorSukuk/BAIDS (558,000) (1,265,000) – –
Settlementofborrowings (117,817) (326,268) – (325,249)
Dividendspaid (875,000) (800,000) (875,000) (800,000)
Interestpaid – (3,218) – (3,218)
ProfitelementsonSeniorSukuk,BAIDSandPLUSSPVSukuk (269,077) (355,983) (36,024) (28,495)
Netcashusedinfinancingactivities (1,235,141) (983,970) (911,024) (601,549)
Netincreaseincashandcashequivalents 599,680 643,500 132,674 156,911
Effectsofforeignexchangeratechanges (174) 5,600 – –
Cashandcashequivalentsatthebeginningoftheyear 2,883,530 2,234,430 163,354 6,443
Cashandcashequivalentsattheendoftheyear 3,483,036 2,883,530 296,028 163,354
Representedby:
Shorttermdepositswithlicensedbanks 28 3,440,123 2,851,406 281,028 163,029
Cashandbankbalances 28 38,412 32,124 15,000 325
Cashandcashequivalentsincludedinassetsofdisposalgroupclassifiedasheldforsale 21 4,501 – – –
3,483,036 2,883,530 296,028 163,354
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1 cORPORATE INfORMATION
PLUSExpresswaysBerhad(“theCompany”or“PEB”)isapubliclimitedliabilitycompany,incorporatedanddomiciledinMalaysia,andislistedontheMainBoardoftheBursaMalaysiaSecuritiesBerhad.TheregisteredofficeandtheprincipalplaceofbusinessoftheCompanyislocatedatMenaraKorporatPersada PLUS, Persimpangan Bertingkat Subang, KM 15, Lebuhraya Baru Lembah Klang, 47301PetalingJaya,SelangorDarulEhsan.
TheDirectorsregardUEMGroupBerhad(“UEM”),whichisincorporatedinMalaysiaandowns38.51%of theCompany’sequity asat 31December2010, as the immediateholding company. TheultimateholdingcompanyisKhazanahNasionalBerhad(“Khazanah”),whichisincorporatedinMalaysia.
TheprincipalactivitiesoftheCompanyareinvestmentholdingandprovisionofexpresswayoperationservices.Theprincipalactivitiesof thesubsidiariesandassociatesare investmentholding,highwayconcessionairesandrelatedservices.
TheMalaysiansubsidiariesandassociateoftheCompanyareasfollows:
(i) ProjekLebuhrayaUtara-SelatanBerhad(“PLUS”);PLUSisinvolvedintheconstruction,operation,maintenance and toll collection of theNorth-South Expressway (“NSE”), theNewKlang ValleyExpressway(“NKVE”),asectionofFederalHighwayRoute2(“FHR2”)betweenSubangandKlang,andtheSeremban-PortDicksonHighway(“SPDH”).
(ii) ExpresswayLingkaranTengahSdnBhd(“ELITE”);ELITEisinvolvedintheconstruction,operation,maintenance and toll collection of theNorth-South ExpresswayCentral Link (“NSECL”) and anextensionoftheKLIAExpressway(“KLIAExpressway”).
(iii) Linkedua(Malaysia)Berhad(“LINKEDUA”);LINKEDUAis involvedintheconstruction,operation,maintenanceandtollcollectionoftheMalaysia-SingaporeSecondCrossing(“MSSC”).
(iv) Konsortium LebuhrayaButterworth-Kulim (KLBK) SdnBhd (“KLBK”); KLBK is involved in theconstruction, operation,maintenance and toll collection of theButterworth-Kulim Expressway(“BKE”).
(v) PLUSHelicopterServicesSdnBhd (“PHS”);PHS is a dedicated aviation company that provideshelicoptercharterservices,includingaerialsurveillanceofexpressways.
(vi) Touch‘nGoSdnBhd(“TnG”);TnGisacompanyprimarilyinvolvedinprovidingcontactlessmeansoffarepaymentservicesviaapre-paide-paymentcardknownasTouch‘nGo.PEBacquired20%equityinterestinTnGon11June2010.
(vii) TerasTeknologiSdnBhd(“TERAS”)anditssubsidiaries;TERAS,whichwasacquiredon15June2010, is a company principally involved in investment holding and the provision of informationtechnology,outsourcing,e-commerceservicesandinternetrelatedservices.
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PEB’sinternationalsubsidiariesandassociateareasfollows:
(i) Theprincipalactivitiesofallof theCompany’ssubsidiaries inMauritiusare investmentholdinganddetailsareasfollows:
(a) PLUSKalyan(Mauritius)PrivateLimited(“PLUSKalyan”).
(b) PLUSPlaza(Mauritius)PrivateLimited(“PLUSPlaza”).
(c) PLUSJetpur(Mauritius)PrivateLimited(“PLUSJetpur”).
(ii) PEB’sforeigninvestmentsinIndiaare:
(a) PLUSBKSP Toll Limited (“PLUSBKSP”), a 94%-owned subsidiary of the Company, helddirectly and indirectly through PLUS Kalyan. PLUS BKSP is principally involved in theconstruction, operation,maintenance and toll collection of the 22-kilometre Bhiwandi-Kalyan-ShilPhataHighway(“BKSPHighway”)intheStateofMaharashtra,India.
(b) InduNavayugaInfraProjectPrivateLimited(“INIPPL”),a49%-ownedcompanyheldindirectlythroughPLUSPlaza.INIPPLisprincipallyinvolvedintheconstruction,operation,maintenanceandtollcollectionof thePadalurtoTrichysectionfromKm285toKm325ofNH-45 in theStateofTamilNadu,India.
(c) Jetpur-SomnathHighway Limited (“JSHL”), a 26%-owned company held indirectly throughPLUS Jetpur. JSHL is principally involved in the design, engineering, procurement,construction,maintenance, operations and toll collection of Km 0 to Km 127.6 on Jetpur-SomnathsectionofNH-8DintheStateofGujarat,India.
(iii) PEB’sforeigninvestmentsinIndonesiaare:
(a) PT LintasMarga Sedaya (“LMS”), a 55%-owned subsidiary of PEBwhich undertakes thedesign, construction, operation, maintenance and toll collection of the 116-kilometreCikampek-PalimananHighwayinIndonesia.
(b) PTCimanggis-CibitungTollways(“CCTW”),a60%-ownedsubsidiaryofPEBwhichisinvolvedintheconstruction,operationandmaintenanceoftheproposed25.4kmPackage4-Cimanggis-CibitungTollRoadinIndonesia.
There have beenno significant changes in the nature of the principal activities during the financialyearexcept for theprincipalactivityofTERASasmentioned inNote19 to thefinancial statements.FurtherdetailsofthesubsidiariesandassociatesareinNotes19and20respectively.
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(a) PLUS
TheGovernmentofMalaysia(“theGovernment”)andUEMenteredintoaConcessionAgreementdated18March1988inconnectionwiththeNSE,theNKVEandtheFHR2projectsforaconcessionperiodof30years,ending31May2018.
Subsequently,UEMandPLUSenteredintoaNovationAgreementwiththeGovernmentdated20July1988whereby,withtheapprovaloftheGovernment,UEMassigneditsrightsandtransferreditsliabilitiesandobligationsundertheConcessionAgreementtoPLUS.
On 8 July 1999, PLUS entered into a Supplemental Concession Agreement (“SCA”) with theGovernmentwherebythetollratestructurewasrevisedandtollrevenuesharingarrangementswere established between the parties. As a result of the revision in the toll rate structure, theconcessionperiodwasextendedforanother12yearstoendon31May2030.
On11May2002,PLUSenteredintoaSecondSupplementalConcessionAgreement(“SSCA”)withthe Governmentwhereby toll rate structurewas further revised for the remaining concessionperiod and toll compensation and set off arrangementswere established between the parties.Thenewtollratestructuresareasfollows:
(i) increaseofClass1tollrateby10%from11.24sen/kmto12.36sen/km,whichcommencedfrom1January2002until31December2004;
(ii) scheduledincreasesofClass1tollrateby10%every3yearsthereafter.
Thesecond10%scheduled increase in toll rate from12.36sen/kmto13.60sen/kmtookeffectfrom1January2005until31December2007.Thethird10%scheduledincreaseintollratefrom13.60sento14.96senwhichwastotakeeffectfrom1January2008hasnotbeenappliedasyet.BasedonthetermsoftheConcessionAgreement,theGovernmenthasagreedtocompensateinfullforthedifferentialintollrates.
Toll rates forotherclassesofvehiclesaredeterminedbasedonpre-set factorsbyreference toratesapplicabletoClass1vehicles.
On22April2005,PLUSenteredintoaThirdSupplementalConcessionAgreement(“TSCA”)(whichtook effect on 31 December 2004) with the Government which amongst others, sets out thesettlementarrangementforthefundingoftheconstructionofthirdlanesalongcertainstretchesof NSE and the construction of a non-stop through traffic between Ipoh Selatan Toll Plazaand Jelapang Toll Plaza (collectively referred to as “AdditionalWorks”) and the compensationreceivable fromtheGovernment for theclosureof theSenaiTollPlaza (“SenaiCompensation”).ThesettlementarrangementincludesthetakeoverofSPDH,thesetoffagainsttheGovernmentSupportLoan(“GSL”)andtheAdditionalSupportLoan(“ASL”)andtheextensionoftheconcessionperiodforanother8yearsand7monthstoendon31December2038.Inaddition,PLUSenteredintoaProceedsAccountAgreementtoadministerthecashpertainingtoAdditionalWorksassetoutinNote41.
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(a) PLUS (CONTINUED)
Furthermore, the TSCA states that all rights and entitlement of PLUS in respect of the Senai-JohorBahrusection shall be reverted to and vested in theGovernmentandPLUSwill havenofurther liabilities and responsibilities in relation thereto following the closure of the Senai TollPlazaeffective1March2004.
Details of the toll compensation arrangement pursuant to the SSCA, and the settlementarrangementpursuanttotheTSCAaresetoutinNote3,‘RevisedTollRates,TollCompensationArrangementsandSettlementArrangements’.
(b) ELITE
TheGovernmentandUEMenteredintoaConcessionAgreementdated26April1994inconnectionwiththeconstruction,operation,maintenanceandtollcollectionof theNSECLforaconcessionperiodof24years,ending31May2018.
Subsequently, UEM and ELITE entered into a Novation Agreement with the Government on27 January 1995whereby, with the approval of the Government, UEM assigned its rights andtransferreditsliabilitiesandobligationsundertheConcessionAgreementtoELITE.
On9January1997,ELITEenteredintoaSCAwiththeGovernmentwhereby,amongstothers,tobuild three additional interchanges along theNSECLExpressway and an extension of theKLIAExpressway.
On23March2001,ELITEenteredintoaSSCAwiththeGovernmentwhereby,amongstothers,theconcessionperiodwasextendedfrom31May2018to31May2025.
On10January2003,ELITEentered intoaTSCAwiththeGovernmentwhereby,amongstothers,toll rate structureswere further revised, uponwhich the Companywas compensated throughamongstothers,afurtherextensionoftheconcessionperiodto31May2030.
(c) LINKEDUA
TheGovernmentandUEMenteredintoaConcessionAgreementdated27July1993inconnectionwith the design, construction,management, operations,maintenance and toll collection of theMSSCforaconcessionperiodof30years,ending26July2023.
Subsequently,UEMandLINKEDUAentered intoaNovationAgreementwith theGovernmenton10May1994whereby,UEMassigneditsrightsandtransferreditsliabilitiesandobligationsundertheConcessionAgreementtoLINKEDUA.
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(c) LINKEDUA (CONTINUED)
On12September1994,LINKEDUAenteredintoaSCAwiththeGovernmenttotakeintoaccounttheInter-GovernmentAgreementbetweentheGovernmentandtheGovernmentofSingaporeon22March1994(“Inter-GovernmentAgreement”)suchthat,theLINKEDUAConcessionAgreementareconsistentwiththeGovernment’sobligationundertheInter-GovernmentAgreementrelatingto theworks and rights in connectionwith theMalaysian side of the bridge and theCustoms,Immigration&QuarantineComplex.
On30May2000,LINKEDUAenteredintoaSSCAwiththeGovernmentwhereby,amongstothers,theconcessionperiodwasextendedby15yearsto31December2038.Thetollratestructurewasalsorevised.Inaddition,revenuesharingarrangementswereestablishedbetweentheparties.
(d) KLBK
The Government and KLBK entered into a Concession Agreement dated 28 June 1994 inconnectionwith thedesign,construction,operation,maintenanceand toll collectionof theBKEforaconcessionperiodof32yearsending27June2026.
On 4 June 2007,KLBKentered into aSCAwith theGovernment to restructure the toll rate forKubangSemangandLunasTollPlaza,commencingfrom1June2005.Thenewagreedtollratesis applicable for the remaining concession years until the expiry of the concession period in2026.
(e) PLUS BKSP
On25August2006,theCompanyandConceptManagementConsultingPrivateLimitedthroughanunincorporated consortium (“PEB-CMCLConsortium”), PLUSBKSP and theMaharashtra StateRoad Development Corporation Limited (“MSRDC”) entered into a Concession Agreement toundertake the proposed four-laning and improvement, operation andmaintenance and tollcollection of Bhiwandi-Kalyan-Shil PhataHighway (“BKSPHighway”) on a Build, Operate andTransfer basis (“BKSPProject”). Concurently, PEB-CMCLConsortium andPLUSBKSP enteredintoanIntraGroupAgreementwhichprovidesforthetransferofallrights,benefitsandobligationsofPEB-CMCLConsortiumtoPLUSBKSPwhichinturnagreedtoexecuteandcompletetheBKSPProject in compliancewith the terms and conditions of the Concession Agreement. The initialconcession period is for 6 years, 8months and 4 days from the date of the execution of theConcessionAgreement.
PLUSBKSP has received an approval fromMSRDC for a further extension to the constructionuntil29December2009ofwhichanadditionalextensionof249daysweregrantedon30October2009 thusmaking the totalextensionreceivedof674days for theproject.ThedeterminationoftheRevisedConcessionPeriodshallbefinalisedonceallclaimsresultedfromvariationsworks,additionalworks,reimbursablecostsandothercostclaimsrelatedtotheprojectareapprovedbyMSRDC.
PLUSBKSPcommencedoperationsandstartedtollingon22August2009.
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(f) LMS
On 21 July 2006, LMS and the Government of the Republic of Indonesia have entered into aConcession Agreement in which LMSwas appointed as the concessionaire to undertake thedesign, construction, ownership,management, financing, operation,maintenance as well astoll collection of the 116-kilometre Cikampek-Palimanan toll highway (“Cikampek-PalimananHighway”) on a build, operate and transfer basis. The concession period for the Cikampek-PalimananHighwayis35years.
(g) CCTW
On 18 September 2007, the Company has received a letter from theMinister of PublicWorks,Republicof Indonesia informingthesuccessof thetenderbid jointlysubmittedbytheCompanyanditsIndonesianpartners,namelyPTBakrie&BrothersTbkandPTCapitalincInvestmentTbk(“Consortium”) for the proposed 25.4 kilometer Package 4-Cimanggis-Cibitung Toll Road on aBuild,OperateandTransferbasis.TheCimanggis-CibitungTollRoadformspartoftheproposedJakarta Outer Ring Road 2 and is located on the outskirts of the Jakartametropolitan area.Theconcessionshallbeforaperiodof35yearsfromthedateof theproposedexecutionof therelevantConcessionAgreement.
(h) INIPPL
INIPPLandNationalHighwaysAuthorityof India(“NHAI”)enteredintoaConcessionAgreementdated 30May 2006 for INIPPL to undertake the design, engineering, construction, finance,operation,maintenance and toll collection of the four laning and strengthening of Padalur toTrichy section fromKm 285 to Km 325 onNH-45 in the State of Tamil Nadu, India, on BuiltOperateTransfer(BOT)basis.Theconcessionperiodforthisprojectis25years.
INIPPLhascommencedoperationandstartedtollingon6May2010.
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ARRANGEMENTS Of PLUS, ELITE ANd kLbk
(i) PLUS
(a) Revised Toll Rate Structures
In consideration of PLUS agreeing to the revised toll rate structures applicable from 1January2002(detailsofwhicharesetoutinNote2(a)above)theGovernmentagreedtothefollowing:
(i) towaivePLUS’sobligation topay the interestaccrued to1January2002amounting toRM1,729.22milliononitsGSL;
(ii) towaivePLUS’sobligationtopay interestontheremainingprincipalamountofRM750millionontheGSL,after(i)above;and
(iii) toaddressthemannerinwhichtheGovernmentwoulddischargeitsliability inrespectoftheamountofcompensationduethatwouldariseineachoftheremainingconcessionyears; such compensationwould arise as the new toll rateswhich took effect from 1January2002are lowerthanthetollratescontemplated in theSCApreviouslyenteredinto;andthearrangementshavebeenformalisedthroughtheSSCA,andinthemannerdescribedin(b)below,‘TollCompensationArrangements’.
(b) Toll Compensation Arrangements
UnderthetollcompensationarrangementspursuanttotheSSCA,compensationrecoverablefromtheGovernmentfortheeffectsofimposingtollrateslowerthanthosepreviouslyagreedshallbeadjustedforthefollowing:
(i) deductionforthenotionaltaxondividendsthatPLUSwilldeclareandpay(ifany)fromthe tax exempt profits earned during the five year tax-exempt period from 2002 to2006;
(ii) deductionforinterestthatwouldhavebeenpayabletotheGovernmentontheGSL,hadtheGovernmentnotwaivedPLUSfromitsobligationtopaysuchinterest;
(iii) setoffofPLUS’sincometaxliabilitiesagainstsuchcompensationduetoPLUSafterthedeductionsreferredtoin(i)and(ii)above;and
(iv) setoffofanyTollSharingAmountduetotheGovernmentagainsttheresultantfrom(iii)above.
UndertheSSCA,inanyconcessionyearafterthetaxexemptperiod,ifthereisanytaxamountowingbyPLUS to theGovernmentafter taking intoconsideration theadjustments referredtoin(i),(ii)and(iii)above,PLUSshallpaysuchtaxamountowedbyittotheGovernmentincash.
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(i) PLUS (CONTINUED)
(b) Toll Compensation Arrangements (Continued)
TheSSCAprovides that thepaymentof such taxamount shallnot includeany toll sharingtobepaid to theGovernment (ifapplicable),whichshallcontinue tobecarried forward forutilisationagainst future tollcompensationamounts.Uponexpiryof theconcessionperiod,anyamountsoftaxpayableandtollsharingamountswhichhavenotbeenutilisedunderthecompensation arrangements referred to above are to be paid byPLUS to theGovernment.However, if thereareanyamountsduefromtheGovernmentuponexpiryoftheconcessionperiod,suchamountsaretobewaivedbyPLUS.
In the event that the Government imposes a toll rate which is lower than the toll ratesstated in the SSCA for any concession year, the SSCA provides that the amount of furthercompensationarisingwillbepaidinfull.
(c) Settlement Arrangements
The TSCA sets out the settlement arrangement between the Government and PLUS forthe funding of AdditionalWorks estimated at RM1,042.48million and Senai CompensationamountingtoRM331.68million,inthefollowingmanner:
(a) TakeoverofSPDHbyPLUSatavalueofRM50.27millionaspartsettlementfortheSenaiCompensation;
(b) Set off against amount outstanding under the GSL and ASL amounting to RM962.00million,comprising:
(i) RM281.41milliontosettlethebalanceoftheSenaiCompensation;and
(ii) RM680.59milliontopartsettlethecostfortheAdditionalWorks;and
(c) Thebalanceof thecost for theAdditionalWorksofRM361.89millionhasbeensettledbytheGovernmentbywayofextendingtheconcessionperiodforafurther8yearsand7months,toendon31December2038.
The key consequential changes under the TSCA in respect of the Toll CompensationArrangementsasperNote3(i)(b),asaresultofthesettlementarrangementareasfollows:
(i) The toll compensationshallbecalculatedup to31May2030 insteadof theendof theconcessionperiodwhichhasnowbeenextendedto31December2038.
(ii) InterestthatwouldhavebeenpayabletotheGovernmentasreferredtoinNote3(i)(b)(ii)above,shallbeequivalent tonil commencing fromtheyear inwhichGSLandASLarefullysettled.
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ARRANGEMENTS Of PLUS, ELITE ANd kLbk (cONTINUEd)
(i) PLUS (CONTINUED)
(c) Settlement Arrangements (Continued)
(iii) The toll compensation shall be calculatedwithout taking into account SPDH’s trafficvolume.
(iv) Any toll compensation amount due from the Government as at 31May 2030 shallcontinue to be deducted against the toll sharing for that concession year and eachconcessionyearthereafter.
(ii) ELITE
(a) Revised Toll Rate Structures
ThroughtheTSCA(asreferredtoinNote2(b)),thenewtollratestructureshavebeenrevisedto increase by 10% every three years commencing 1 January 2002 until the expiry of theconcessionperiod.Thetollratehadbeenincreasedfrom12.36senperkmto13.60senperkmeffectivefrom1January2005.Thenext10%tollrateincreasehadbeenimplementedon1January2008.
(b) Toll Compensation Arrangements
In consideration of ELITE agreeing to the revised toll rate structures as referred in theprecedingparagraph,theGovernmentagreedtothefollowing:
(i) toprovideELITEwithaninterest-freetermloanfacilityofuptothemaximumprincipalamount of RM300million and the loan shall be repaid in full at the repayment datedisclosedinNote34;
(ii) towaive all its rights to interestwhichhasaccruedon theexistingGovernmentLoan,ofRM89.9million, for theperiod from15December2000 to31December2001and tochargenointerestontheRM89.9millionloanfortheperiodfrom1January2002uptothefinalrepaymentdateoftheloan;
(iii) toanextensionoftheconcessionperiodforafurther5yearsfrom31May2025to31May2030;and
(iv) toallowandauthoriseELITEtocollectandretainthelevyontheextensionoftheKLIAExpressway throughout the concessionperiodand to increase the levyby10%every3yearsuntil theexpiryoftheconcessionperiod,ofwhichthefirst increasewaseffectedon1January2002.
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(ii) ELITE (CONTINUED)
(b) Toll Compensation Arrangements (Continued)
ELITEenteredintoanAdditionalGovernmentLoanAgreement(“AGLA”)andaSupplementalLoanAgreement (“SLA”)with theGovernmenton15January2003 in respectof theRM300million additional loan and the waiver of interest on the existing Government Loan, asdescribedin(i)and(ii)aboverespectively.
(iii) LINKEDUA
(a) Revised Toll Rates Structure
TheGovernmenthas,on1August2010,imposeda30%reductionfor2yearsupto30June2012inthetollrateforallclassesofvehiclesatTanjungKupangtollplaza,thedifferenceofwhichwillbecompensatedbytheGovernment.
(b) Toll Compensation Arrangement
In the event that the Government imposes a toll rate which is lower than the toll ratesstatedintheSSCAforanyconcessionyear,theGovernmentshallcompensatebasedonthecomputationprovidedintheSSCA.
(iv) KLBK
(a) Revised Toll Rates Structure
Through the SCA (as referred to inNote 2(d)), the toll rate structures for Class 1 vehiclehave been revised toRM1.30 per entry commencing 1 June 2005 until 31December 2007.Thereafter, the toll rate increasesbyRM0.30perentry for everyfive yearsuntil theexpiryoftheconcessionperiod.Thefirsttollrate increaseofRM0.30hadbeenimplementedon1January2008.
Tollratesforotherclassesofvehiclesaredeterminedbasedonpre-setfactorsbyreferencetoratesapplicabletoClass1vehicles.
(b) Toll Compensation Arrangement
In consideration of KLBK agreeing to the revised toll rate structures as referred in theprecedingparagraph,theGovernmenthascompensatedtheamountofRM60.59millionin2installments in2005and2006, for thedifference in the toll rates for futureyearsup to theendoftheconcessionperiodbasedonthetrafficprojections.
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4.1 basis of Accounting and Preparation of the financial Statements
The financial statements of the Group and of the Company complywith the provisions of theCompanies Act, 1965 and applicable Financial Reporting Standards inMalaysia. The financialstatementsoftheGroupandoftheCompanyhavealsobeenpreparedonahistoricalbasis,unlessotherwisestatedintheaccountingpoliciesbelow.
ThefinancialstatementsarepresentedinRinggitMalaysia(RM)andallvaluesareroundedtothenearestthousand(RM’000)exceptwhenotherwiseindicated.
4.2 Summary of Significant Accounting Policies
(a) Subsidiaries
Subsidiaries are entities overwhich the Group has the ability to control the financial andoperatingpolicies soas toobtainbenefits from their activities. Theexistenceandeffect ofpotential voting rights that are currently exercisable or convertible are consideredwhenassessingwhethertheGrouphassuchpoweroveranotherentity.
TheCompany’s investments in subsidiaries are stated at cost less impairment losses. ThepolicyfortherecognitionandmeasurementofimpairmentlossesisinaccordancewithNote4.2(i).
On disposal of such investments, the difference between net disposal proceeds and theircarryingamountsisrecognisedintheincomestatements.
(b) Associates
Associates are entities inwhich the Group has significant influence and that is neither asubsidiarynoraninterestinajointventure.Significantinfluenceisthepowertoparticipateinthefinancialandoperatingpolicydecisionsoftheinvesteebutnotincontrolorjointcontroloverthosepolicies.
Investments inassociatesareaccounted for in theconsolidatedfinancial statementsusingthe equitymethod of accounting. Under the equitymethod, the investment in associate iscarriedinthestatementoffinancialpositionatcostadjustedforpost-acquisitionchangesintheGroup’sshareofnetassetsof theassociate.TheGroup’sshareofthenetprofitor lossoftheassociate isrecognisedintheconsolidated incomestatement.Wheretherehasbeenachangerecogniseddirectlyintheequityoftheassociate,theGrouprecognisesitsshareofsuchchanges.
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4.2 Summary of Significant Accounting Policies (continued)
(b) Associates(Continued)
In applying the equitymethod, unrealised gains and losses on transactions between theGroupandtheassociateareeliminatedtotheextentoftheGroup’sinterestintheassociate.After application of the equitymethod, the Group determineswhether it is necessary torecogniseanyadditional impairment losswithrespect to theGroup’snet investment in theassociate.Theassociate isequityaccountedfor fromthedatetheGroupobtainssignificantinfluenceuntilthedatetheGroupceasestohavesignificantinfluenceovertheassociate.
Goodwill relating to anassociate is included in the carryingamountof the investmentandis not amortised. Any excess of the Group’s share of the net fair value of the associate’sidentifiable assets, liabilities and contingent liabilities over the cost of the investment isexcluded from thecarryingamountof the investmentand is instead includedas income inthedeterminationoftheGroup’sshareoftheassociate’sprofitorlossintheperiodinwhichtheinvestmentisacquired.
When the Group’s share of losses in an associate equals or exceeds its interest in theassociate, including any long-term interests that, in substance, form part of the Group’snetinvestmentintheassociates,theGroupdoesnotrecognisefurtherlosses,unlessithasincurredobligationsormadepaymentsonbehalfoftheassociate.
Themost recent available audited financial statements of the associates are used by theGroup in applying the equitymethod.Where the dates of the audited financial statementsusedarenotcoterminouswiththoseoftheGroup,theshareofresultsisarrivedatfromthelastauditedfinancialstatementsavailableandmanagementfinancialstatementstotheendof theaccountingperiod.Uniformaccountingpolicesareadopted for like transactionsandeventsinsimilarcircumstances.
In the Company’s separate financial statements, investments in associates are stated atcostlessimpairmentlosses.ThepolicyfortherecognitionandmeasurementofimpairmentlossesisinaccordancewithNote4.2(i).
On disposal of such investments, the difference between net disposal proceeds and theircarryingamountsisincludedinincomestatement.
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4.2 Summary of Significant Accounting Policies (continued)
(c) BasisofConsolidation The consolidated financial statements comprise the financial statements of the Company
anditssubsidiariesasatthereportingdate.ThefinancialstatementsofthesubsidiariesarepreparedforthesamereportingdateastheCompany.
Themergermethodofaccountingwasused inconsolidatingtheCompanyandPLUSintheyear2002whichmeetstherelevantcriteriasetoutintheFRS1222004“BusinessCombination”,thusdepicting thecombinationof theseentitiesas if theyhadbeen in combination for theentireperiod.
Forothersubsidiaries,theyareconsolidatedfromthedateofacquisition,beingthedateonwhich theGroup obtains control, and continue to be consolidated until the date that suchcontrol ceases. In preparing the consolidated financial statements, intragroup balances,transactions and unrealised gains or losses are eliminated in full. Uniform accountingpoliciesareadoptedintheconsolidatedfinancialstatementsforliketransactionsandeventsinsimilarcircumstances.
Acquisitions of subsidiaries are accounted for using the purchasemethod. The purchasemethodof accounting involvesallocating the cost of theacquisition to the fair valueof theassetsacquiredand liabilitiesandcontingent liabilitiesassumedat thedateofacquisition.The cost of an acquisition ismeasured as the aggregate of the fair values, at the date ofexchange,oftheassetsgiven,liabilitiesincurredorassumed,andequityinstrumentsissued,plusanycostsdirectlyattributabletotheacquisition.
AnyexcessofthecostoftheacquisitionovertheGroup’sinterestinthenetfairvalueoftheidentifiable assets, liabilities and contingent liabilities represents goodwill. Any excess oftheGroup’s interest in thenet fairvalueof the identifiableassets, liabilitiesandcontingentliabilitiesoverthecostofacquisitionisrecognisedimmediatelyintheincomestatement.
Minority interests represent the portion of profit or loss andnet assets in subsidiaries notheldbytheGroup.Itismeasuredattheminorities’shareofthefairvalueofthesubsidiaries’identifiableassetsandliabilitiesattheacquisitiondateandtheminorities’shareofchangesinthesubsidiaries’equitysincethen.
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4.2 Summary of Significant Accounting Policies (continued)
(d) Property,PlantandEquipment,andDepreciation
Property, plant and equipment are stated at cost less accumulated depreciation andimpairmentlosses.ThepolicyfortherecognitionandmeasurementofimpairmentlossesisinaccordancewithNote4.2(i).
Freeholdlandisnotdepreciated.Depreciationisprovidedforonastraightlinebasisovertheestimatedusefullivesoftheproperty,plantandequipment.Theannualratesofdepreciationareasfollows:
Renovations 10%Aircrafts 12%MotorVehicles 20%FurnitureandFittings 20%OfficeEquipment 20%Computers 20%TelecommunicationSystem 20%OperationToolsandEquipment 20%Buildings 2%LeaseholdLand Overleaseholdperiodof99years
Upondisposalofan itemofproperty,plantandequipment, thedifferencebetween thenetdisposalproceedsandthenetcarryingamountisrecognisedintheincomestatement.
The residual value, useful life and depreciationmethod are reviewed at each financialyear-endtoensurethat theamount,methodandperiodofdepreciationareconsistentwithpreviousestimatesandtheexpectedpatternofconsumptionofthefutureeconomicbenefitsembodiedintheitemsofproperty,plantandequipment.
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4.2 Summary of Significant Accounting Policies (continued)
(e) IntangibleAssets
Intangible assets acquired separately aremeasured on initial recognition at cost. The costof intangible assets acquired in a business combination is their fair values as at the dateof acquisition. Following initial recognition, intangible assets are carried at cost less anyaccumulated amortisation and any accumulated impairment losses. The useful lives ofintangible assets are assessed to be either finite or indefinite. Intangible assetswith finitelives are amortised on a straight-line basis over the estimated economic useful lives andassessed for impairmentwhenever there is an indication that the intangible assetmay beimpaired.Theamortisationperiodandtheamortisationmethodforanintangibleassetwithafiniteusefullifearereviewedatleastateachreportingdate.
Computersoftwareand licensesthatdonot forman integralpartof therelatedhardwaresaretreatedasintangibleassetswithfinitelivesandareamortisedovertheirestimatedlivesattherateof20%.
Intangible assetswith indefinite useful lives are not amortised but tested for impairmentannually ormore frequently if the events or changes in circumstances indicate that thecarryingvaluemaybe impairedeither individuallyorat thecash-generatingunit level.Theusefullifeofanintangibleassetwithanindefinitelifeisalsoreviewedannuallytodeterminewhethertheusefullifeassessmentcontinuestobesupportable.
(f) Leases
AleaseisrecognisedasafinanceleaseifittransferssubstantiallytotheGroupalltherisksandrewards incidental toownership.Leases thatdonot transfersubstantiallyall therisksandrewardsareclassifiedasoperatingleases.
(g) ConcessionAssets
Items classified as Concession Assets comprise Expressway Development Expenditure,HeavyRepairsandOtherConcessionAssets.
(i) Expressway Development Expenditure
ExpresswayDevelopment Expenditure (“EDE”) comprises development and upgradingexpenditure(includinginterestchargesrelatingtofinancingofthedevelopment)incurredinconnectionwiththeconcession.
EDEisstatedatcostlessaccumulatedamortisationandimpairmentlosses.Thepolicyfor therecognitionandmeasurementof impairment losses is inaccordancewithNote4.2(i).
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4.2 Summary of Significant Accounting Policies (continued)
(g) ConcessionAssets(Continued)
(i) Expressway Development Expenditure (Continued)
EDE is amortisedover the concessionperiod. Theamortisation formulaapplied in thepreparationof thefinancialstatements toarriveat theannualamortisationcharge foreachfinancialperiodisasfollows:
Tollrevenuefortheyear
[Actualtollrevenuefortheyear+Projectedtotaltollrevenueforthesubsequentyearstotheend
oftheconcessionperiod]
[NetBookValueofEDEatbeginningoftheyear+Additionsfortheyear]
Tollrevenueandprojectedtotaltollrevenueincludetollcollection,tollcompensationnetofanynotionaltaxontaxexemptdividend.
The projected total toll revenue is based on the latest available base case trafficprojections prepared by independent traffic consultantsmultiplied by the toll ratestructuresdescribed inNote2.Thetrafficvolumeprojection is independentlyreviewedonaperiodicbasis.
(ii) Heavy Repairs
Heavy repairs relate to costs incurred to repair bridges, slopes and embankments,rectification of settlements and pavement rehabilitation ofmedium and high trafficsectionsalongtheExpressways.Thecostsofheavyrepairsareamortisedonastraightlinebasisover7yearscommencingfromthedateofincurrence,thisbeingtheanticipatedeconomiclifeofsuchworks.
(iii) Other concession assets
Other concession assets comprise toll equipment, video surveillance equipment,telecommunicationnetwork,centralisedlighting,andtolloperationcomputerhardwareand software, and are stated at cost less accumulated amortisation and impairmentlosses. The policy for the recognition andmeasurement of impairment losses is inaccordance with Note 4.2(i). The annual amortisation in respect of these assets iscomputed on a straight line basis over their estimated useful lives at the followingrates:
%Softwareandcomputerhardware 12.5Others 10
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4.2 Summary of Significant Accounting Policies (continued)
(g) ConcessionAssets(Continued)
(iv) Capital Work-In-Progress
Capital work-in-progress is not depreciated until the asset is fully completed andbroughtintouse.
(h) Amountduefrom/toCustomersonContracts
Profitoncontracts is recognisedassoonas theoutcomeof thecontract canbeestimatedreliably.TheGroupusesthepercentageofcompletionmethodtodeterminetheappropriateamount to be recognised as contract revenue in a givenperiod; the stage of completion ismeasuredbyreferencetoworkperformedandontheproportionofcontractcosts incurredforworkperformedtodateovertheestimatedtotalcontractcosts.
Wheretheoutcomeofacontractcannotbeestimatedreliably,contractrevenueisrecognisedto theextentofcontractcosts incurred that isprobablewillberecoverable.Contractcostsarerecognisedasexpensesintheperiodinwhichtheyareincurred.
Whenitisprobablethattotalcontractcostswillexceedtotalcontractrevenue,theexpectedloss is recognised as an expense immediately. When costs incurred on contracts plusrecognised profit (less recognised losses) exceeds progress billings, the balance is shownasamountduefromcustomersoncontracts.Whenprogressbillingsexceedcosts incurredplus recognised profits (less recognised losses), the balance is shown as amount due tocustomersoncontracts.
(i) ImpairmentofNon-financialAssets
For the purpose of impairment testing of the non-financial assets, recoverable amount isdeterminedonanindividualassetbasisunlesstheassetdoesnotgeneratecashflowsthatarelargelyindependentofthosefromotherassets.Ifthisisthecase,recoverableamountisdeterminedforthecash-generatingunit(“CGU”)towhichtheassetbelongsto.
Anasset’srecoverableamountisthehigherofanasset’sorCGU’sfairvaluelesscoststosellanditsvalueinuse.Inassessingvalueinuse,theestimatedfuturecashflowsarediscountedtotheirpresentvalueusingapre-taxdiscountratethatreflectscurrentmarketassessmentsof the time valueofmoneyand the risksspecific to theasset.Where thecarryingamountofanassetexceedsitsrecoverableamount,theassetisconsideredimpairedandiswrittendowntoitsrecoverableamount.ImpairmentlossesrecognisedinrespectofaCGUorgroupsofCGUsareallocatedfirsttoreducethecarryingamountofanygoodwillallocatedtothoseunitsorgroupsofunitsandthen, toreducethecarryingamountof theotherassets in theunitorgroupsofunitsonapro-ratabasis.
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4.2 Summary of Significant Accounting Policies (continued)
(i) ImpairmentofNon-financialAssets(Continued)
Animpairmentlossisrecognisedinprofitorlossintheperiodinwhichitarises,unlesstheassetiscarriedatarevaluedamount,inwhichcasetheimpairmentlossisaccountedforasa revaluationdecrease to theextent that the impairment lossdoesnotexceed theamountheldintheassetrevaluationreserveforthesameasset.
(j) IncomeTaxes
Incometaxontheprofitorlossfortheyearcomprisescurrentanddeferredtax.Currenttaxistheexpectedamountof incometaxespayable inrespectofthetaxableprofitfortheyearandismeasuredusingthetaxratesthathavebeenenactedatthereportingdate.
Deferred tax is provided for, using the liabilitymethod, on temporary differences at thereportingdatebetweenthetaxbasesofassetsandliabilitiesandtheircarryingamountsinthe financial statements. In principle, deferred tax liabilities are recognised for all taxabletemporary differences and deferred tax assets are recognised for all deductible temporarydifferences, unused tax lossesandunused tax credits to theextent that it is probable thattaxable profitwill be available againstwhich the deductible temporary differences, unusedtax losses and unused tax credits can be utilised. Deferred tax is not recognised if thetemporarydifferencearisesfromgoodwillornegativegoodwillorfromtheinitialrecognitionofanassetor liability inatransactionwhich isnotabusinesscombinationandat thetimeofthetransaction,affectsneitheraccountingprofitnortaxableprofit.
Deferred tax ismeasured at the tax rates that are expected to apply in the periodwhenthe asset is realised or the liability is settled, based on tax rates that have been enactedor substantively enacted at the reporting date. Deferred tax is recognised in the incomestatements,exceptwhen itarises froma transactionwhich isrecogniseddirectly inequity,inwhichcasethedeferredtaxisalsochargedorcrediteddirectlyinequity,orwhenitarisesfromabusinesscombinationthatisanacquisition,inwhichcasethedeferredtaxisincludedintheresultinggoodwillornegativegoodwill.
Deferredtaxassetsanddeferredtaxliabilitiesareoffset,ifalegallyenforceablerightexiststosetoffcurrenttaxassetsagainstcurrenttaxliabilitiesandthedeferredtaxesrelatetothesameentityandthesametaxauthority.
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4.2 Summary of Significant Accounting Policies (continued)
(k) ProvisionsforLiabilities
Provisions for liabilities are recognisedwhen the Company has a present obligation as aresult of a past event and it is probable that anoutflowof resources embodyingeconomicbenefitswillberequiredtosettletheobligation,andareliableestimateoftheamountcanbemade.Provisionsarereviewedateachreportingdateandadjustedtoreflectthecurrentbestestimate.Wheretheeffectofthetimevalueofmoneyismaterial,theamountofaprovisionisthepresentvalueoftheexpenditureexpectedtoberequiredtosettletheobligation.
(l) EmployeeBenefits
(i) Short term benefits
Wages, salaries, bonuses and social security contributions are recognised as anexpense intheyear inwhichtheassociatedservicesarerenderedbyemployeesoftheCompany. Short termaccumulating compensated absences such as paid annual leavearerecognisedwhenservicesarerenderedbyemployeesthatincreasetheirentitlementtofuturecompensatedabsences.Shorttermnon-accumulatingcompensatedabsencessuchassickleavearerecognisedwhentheabsencesoccur.
(ii) Defined contribution plans
As required by law, companies in Malaysiamake contributions to the EmployeesProvidentFund(“EPF”).Suchcontributionsarerecognisedasanexpenseintheincomestatementsasincurred.SomeoftheGroup’sforeignsubsidiariesalsomakecontributionstotheirrespectivecountries’statutorypensionschemes.
(iii) Defined benefit plans
PLUS, ELITE and LINKEDUA operate unfunded, defined benefit Retirement BenefitScheme (“the Scheme”) for their personnel whose employment contracts weretransferred in 1988 fromMalaysian Highway Authority, pursuant to the ConcessionAgreement. Their obligations under the Scheme, calculated using the ProjectedUnitCreditMethod,isdeterminedbasedonactuarialcomputationsbyindependentactuaries,throughwhich the amount of benefit that employees have earned in return for theirservice in thecurrentandprior years isestimated.Thatbenefit isdiscounted inorderto determine its present value. Actuarial gains and losses are recognised as incomeor expense over the expected average remaining working lives of the participatingemployeeswhenthecumulativeunrecognisedactuarialgainsorlossesfortheSchemeexceed10%ofthepresentvalueofthedefinedbenefitobligation.Pastservicecostsarerecognisedimmediatelytotheextentthatthebenefitsarealreadyvested,andotherwiseare amortised on a straight-line basis over the average period until the amendedbenefitsbecomevested.
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4.2 Summary of Significant Accounting Policies (continued)
(l) EmployeeBenefits(Continued)
(iii) Defined benefit plans (Continued)
The amount recognised in the statement of financial position represents the presentvalue of the defined benefit obligations adjusted for unrecognised actuarial gains andlossesandunrecognisedpastservicecosts.Anyassetresultingfromthiscalculationislimitedtothenettotalofanyunrecognisedactuariallossesandpastservicecosts,andthepresentvalueofanyeconomicbenefitsintheformofrefundsorreductionsinfuturecontributionstotheplan.
(m) DeferredLiabilities
Fees received from third parties as advance payments of futuremaintenance expenditure,in consideration for right-of-way access granted by the Group, are classified as deferredliabilities.Deferredliabilitiesareamortisedovertheperiodoftheindividualcontracts.
(n) ForeignCurrencies
(i) Functional and Presentation Currency
The individual financial statements of each entity in the Group aremeasured usingthe currency of the primary economic environment inwhich the entity operates (“thefunctional currency”). The consolidated financial statements are presented in RinggitMalaysia(“RM”),whichisalsotheCompany’sfunctionalcurrency.
(ii) Foreign Currency Transactions
Inpreparingthefinancialstatementsoftheindividualentities,transactionsincurrenciesother than the entity’s functional currency (“foreign currencies”) are recorded in thefunctionalcurrenciesusingtheexchangeratesprevailingatthedatesofthetransactions.Ateachreportingdate,monetaryitemsdenominatedinforeigncurrenciesareretranslatedat theratesprevailingon thereportingdate.Non-monetary itemscarriedat fair valuethat are denominated in foreign currencies are retranslated at the rates prevailing onthedatewhenthefairvaluewasdetermined.Non-monetaryitemsthataremeasuredintermsofhistoricalcostinaforeigncurrencyarenotretranslated.
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4.2 Summary of Significant Accounting Policies (continued)
(n) ForeignCurrencies(Continued)
(ii) Foreign Currency Transactions (Continued)
Exchangedifferencesarisingonthesettlementofmonetaryitems,andonthetranslationofmonetary items, are included in the income statement for the period except forexchange differences arising onmonetary items that form part of the Group’s netinvestment in foreign operation. Exchange differences arising onmonetary items thatformpartof theGroup’snet investment in foreignoperationare initially takendirectlytotheforeigncurrencytranslationreservewithinequityuntilthedisposaloftheforeignoperations,atwhichtimetheyarerecognisedintheincomestatements.
Exchange differences arising onmonetary items that form part of the Company’s netinvestment in foreign operation, regardless of the currency of themonetary item, arerecognisedinincomestatementsintheCompany’sfinancialstatementsortheindividualfinancialstatementsoftheforeignoperation,asappropriate.
(iii) Foreign Operations
Theresultsandfinancialpositionof foreignoperations thathavea functionalcurrencydifferent from thepresentation currency (RM) of the consolidatedfinancial statementsaretranslatedintoRMasfollows:
– Assets and liabilities for each statements of financial position presented aretranslatedattheclosingrateprevailingatthereportingdate;
– Income and expenses for each income statements are translated at averageexchangeratesfortheyear,whichapproximatestheexchangeratesatthedatesofthetransactions;and
– All resulting exchange differences are taken to the foreign currency translationreservewithinequity.
Goodwilland fairvalueadjustmentsarisingon theacquisitionof foreignoperationsonorafter1January2006aretreatedasassetsandliabilitiesoftheforeignoperationsandare recorded in the functionalcurrencyof the foreignoperationsand translatedat theclosing rateat the reportingdate.Goodwilland fair valueadjustmentswhicharoseontheacquisitionof foreign subsidiariesbefore 1 January 2006aredeemed tobeassetsand liabilitiesof theparentcompanyandarerecorded inRMat theratesprevailingatthedateofacquisition.
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4.2 Summary of Significant Accounting Policies (continued)
(o) Inventories
Inventoriesarevaluedatthelowerofcostandnetrealisablevalue.Costisdeterminedontheweighted average basis and comprises all expenditure incurred in bringing the inventoriesto theirpresent locationandcondition. Inarrivingatnet realisablevalue,dueallowance ismadeforallobsoleteandslowmovingitems.
(p) StatementsofCashFlows
Thestatementsofcashflows,whichispreparedusingthedirectmethod,classifieschangesin cash and cash equivalents according to operating, investing and financing activities.TheGroup does not consider any of its assets other than depositswith licensed financialinstitutionsandcashandbankbalancestomeetthedefinitionofcashandcashequivalents.The use of the cash and cash equivalents in the subsidiaries, however, is subject to therestrictionssetoutinNotes28,34and37.
(q) RevenueRecognition
Revenue is recognisedwhen it is probable that the economic benefits associatedwith thetransactionwillflowtotheenterpriseandtheamountofrevenuecanbemeasuredreliably.
(i) Toll Revenue
Toll revenue is accounted for as and when toll is chargeable for the usage of theexpressways.
(ii) Investment Income
Investment income is recognised when the right to receive is established and nosignificantuncertaintyexistsasregardtoitsrecovery.
(iii) Revenue from Services
Revenue from services rendered is recognised net of service taxes if applicable, anddiscountsasandwhentheservicesareperformed.
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4.2 Summary of Significant Accounting Policies (continued)
(q) RevenueRecognition(Continued)
(iv) Toll Compensation
PursuanttotherelevantConcessionAgreements,theGovernmentofMalaysiareservestherighttorestructureortorestricttheimpositionofunittollrateincreases,andinsuchevent, theGovernmentshallcompensate therelevantconcessionaire forany reductionin toll revenue, subject to negotiation and other considerations that the Governmentmaydeemfit.Toll compensation foranyconcessionyear is recognised in thefinancialstatementsasrevenuewhenrecoveryisprobableandtheamountthatisrecoverablecanbemeasured reliably.Theamountof toll compensationaccruedand recognised in theincomestatements for theyearhasbeenestimatedafter taking intoconsideration theeffectsofthearrangementsdescribedinNote3(i)(b)andNote3(ii)(b).
(v) Interest Income/Profit Element
Interestincome/profitelementisrecognisedonatimeproportionbasisthatreflectstheeffectiveyieldontheasset.
(vi) Dividend Income
Dividendincomeisrecognisedwhentherighttoreceivepaymentisestablished.
(vii) Revenue on Award Credits
Revenueonawardcreditsisrecognisedbasedonthenumberofawardcreditsthathavebeenredeemedinexchangefortollrebates,relativetothetotalnumberofawardscreditexpectedtoberedeemed.
(viii) Revenue from Contract Jobs
Revenue on fixed price contract jobs are recognised in the income statements on thepercentage of completionmethod based on the proportionate value of work done onthe projectswhich is the cost incurred to date over the total expected costs for thatcontract.
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4.2 Summary of Significant Accounting Policies (continued)
(r) FinancialAssets
Financialassetsarerecognisedinthestatementsoffinancialpositionwhen,andonlywhen,the Group and the Company become a party to the contractual provisions of the financialinstrument.
Whenfinancial assetsare recognised initially, theyaremeasuredat fair value,plus, in thecaseoffinancialassetsnotatfairvaluethroughprofitorloss,directlyattributabletransactioncosts.
Afinancialasset isderecognisedwhenthecontractualright toreceivecashflowsfromtheassethasexpired.Onderecognitionofafinancialassetinitsentirety,thedifferencebetweenthecarryingamountand thesumof theconsiderationreceivedandanycumulativegainorloss that had been recognised in other comprenhensive income is recognised in profit orloss.
TheGroup and theCompany determine the classification of their financial assets at initialrecognition, and the categories includefinancial assets at fair value throughprofit or loss,loansandreceivables,held-to-maturityinvestmentsandavailable-for-salefinancialassets.
Financial assets at fair value through profit or loss
Financialassetsareclassifiedasfinancialassetsat fairvalue throughprofitor loss if theyareheldfortradingoraredesignatedassuchuponinitialrecognition.Financialassetsheldfor trading are derivatives (including separated embedded derivatives) or financial assetsacquiredprincipallyforthepurposeofsellinginthenearterm.
Subsequent to initial recognition, financial assets at fair value through profit or loss aremeasuredatfairvalue.Anygainsorlossesarisingfromchangesinfairvaluearerecognisedinprofitorloss.Netgainsornetlossesonfinancialassetsatfairvaluethroughprofitorlossdo not include exchange differences, interest and dividend income. Exchange differences,interest and dividend income on financial assets at fair value through profit or loss arerecognisedseparatelyinprofitorlossaspartofotherlossesorotherincome.
Financial assets at fair value throughprofit or loss could be presented as current or non-current.Financialassetsthatisheldprimarilyfortradingpurposesarepresentedascurrentwhereas financial assets that is not held primarily for trading purposes are presented ascurrentornon-currentbasedonthesettlementdate.
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4.2 Summary of Significant Accounting Policies (continued)
(r) FinancialAssets(Continued)
Loans and receivables
Loansandreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenotquotedinanactivemarket.Suchassetsarecarriedatamortisedcostusingtheeffective interestmethod.Gainsand lossesare recognised in incomestatementswhen theloans and receivables are derecognised or impaired, aswell as through the amortisationprocess.
Loansandreceivablesareclassifiedascurrentassets,exceptforthosehavingmaturitydateslaterthan12monthsafterthereportingdatewhichareclassifiedasnon-current.
Held-to-maturity investments
Non-derivativefinancialassetswithfixedordeterminablepaymentsandfixedmaturityareclassifiedasheld-to-maturitywhentheGrouphastheexpressedintentionandabilitytoholdtomaturity.
Investmentsthatareintendedtobeheld-to-maturityaresubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod.Amortisedcostiscalculatedbytakingintoaccountany discount or premium on acquisition, over the period tomaturity. For investmentscarried at amortised cost, gains and losses are recognised in income statementwhen theinvestmentsarederecognisedorimpaired,aswellasthroughtheamortisationprocess.
Held-to-maturity investmentsare classifiedasnon-current assets, except for thosehavingmaturitywithin12monthsafterthereportingdatewhichareclassifiedascurrent.
Available-for-sale financial assets
Available-for-sale are financial assets that are designated as available for sale or are notclassifiedinanyofthethreeprecedingcategories.
After initial recognition, available-for-sale financial assets aremeasured at fair value. Anygains or losses from changes in fair value of the financial asset are recognised in othercomprehensive income, except that impairment losses, foreign exchange gains and lossesonmonetary instruments and interest calculated using the effective interestmethod arerecognised in profit or loss. The cumulative gain or loss previously recognised in othercomprehensive income is reclassified from equity to profit or loss as a reclassificationadjustmentwhen the financial asset is derecognised. Interest income calculated using theeffective interestmethod is recognised in profit or loss.Dividends on an available-for-saleequity instrumentarerecognised inprofitor losswhen theGroupand theCompany’srighttoreceivepaymentisestablished.
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4.2 Summary of Significant Accounting Policies (continued)
(r) FinancialAssets(Continued)
Available-for-sale financial assets
Investments in equity instruments whose fair value cannot be reliably measured aremeasuredatcostlessimpairmentloss.
Available-for-sale financial assets are classified as non-current assets unless they areexpectedtoberealisedwithin12monthsafterthereportingdate.
(s) ImpairmentofFinancialAssets
TheGroup and theCompany assess at each reporting datewhether there is any objectiveevidencethatafinancialassetisimpaired.
(i) Receivables and other financial assets carried at amortised cost
Todeterminewhether there isobjectiveevidence thatan impairment lossonfinancialassets has been incurred, the Group and the Company consider factors such as theprobabilityof insolvencyorsignificantfinancialdifficultiesof thedebtoranddefaultorsignificant delay in payments. If any such evidence exists, the amount of impairmentlossismeasuredasthedifferencebetweentheasset’scarryingamountandthepresentvalueofestimatedfuturecashflowsdiscountedatthefinancialasset’soriginaleffectiveinterestrate.Theimpairmentlossisrecognisedinprofitorloss.
The carrying amount of the financial asset is reduced by the impairment loss directlyfor all financial assetswith the exception of receivables,where the carrying amountis reduced through the use of an allowance account. When a receivable becomesuncollectible,itiswrittenoffagainsttheallowanceaccount.
Ifinasubsequentperiod,theamountoftheimpairmentlossdecreasesandthedecreasecan be related objectively to an event occurring after the impairmentwas recognised,the previously recognised impairment loss is reversed to the extent that the carryingamountoftheassetdoesnotexceeditsamortisedcostatthereversaldate.Theamountofreversalisrecognisedinprofitorloss.
(ii) Toll compensation recoverable from the Government
TollcompensationrecoverablefromtheGovernmentiscarriedatanticipatedrealisablevalueaftertaking intoconsiderationtheeffectsofthearrangementsdescribedinNote3. An assessment of the recoverability of the amount is performed annually basedon estimated recoverable amount pursuant to the settlement arrangement as setout inNote 3. Please seeNote 4.2(q)(iv) for the recognition of toll compensation. Anyimpairmentlossisrecognisedinprofitorloss.
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4.2 Summary of Significant Accounting Policies (continued)
(s) ImpairmentofFinancialAssets(Continued)
(iii) Unquoted equity securities at cost
If there is objective evidence (such as significant adverse changes in the businessenvironmentwheretheissueroperates,probabilityofinsolvencyorsignificantfinancialdifficultiesoftheissuer)thatanimpairmentlossonfinancialassetscarriedatcosthasbeenincurred,theamountofthelossismeasuredasthedifferencebetweentheasset’scarryingamountandthepresentvalueofestimatedfuturecashflowsdiscountedatthecurrentmarketrateofreturnforasimilarfinancialasset.Suchimpairmentlossesarenotreversedinsubsequentperiods.
(iv) Available-for-sale financial assets
Significantorprolongeddeclineinfairvaluebelowcost,significantfinancialdifficultiesoftheissuerorobligor,andthedisappearanceofanactivetradingmarketareconsiderationstodeterminewhetherthereisobjectiveevidencethatinvestmentsecuritiesclassifiedasavailable-for-salefinancialassetsareimpaired.
Ifanavailable-for-salefinancialassetisimpaired,anamountcomprisingthedifferencebetween its cost (net of any principal payment and amortisation) and its current fairvalue, less any impairment loss previously recognised in profit or loss, is transferredfromequitytoprofitorloss.
Impairmentlossesonavailable-for-saleequityinvestmentsarenotreversedinprofitorlossinthesubsequentperiods.Increaseinfairvalue,ifany,subsequenttoimpairmentlossis recognised inothercomprehensive income.Foravailable-for-saledebt investments,impairment losses are subsequently reversed in profit or loss if an increase in thefair value of the investment can be objectively related to an event occurring after therecognitionoftheimpairmentlossinprofitorloss.
(t) FinancialLiabilities
Financialliabilitiesareclassifiedaccordingtothesubstanceofthecontractualarrangementsentered intoand thedefinitionsof afinancial liability. Financial liabilities,within the scopeof FRS 139 Financial Instruments: Recognition and Measurement, are recognised in thestatementsoffinancialpositionwhen,andonlywhen,theGroupandtheCompanybecomeapartytothecontractualprovisionsofthefinancialinstrument.
A financial liability is derecognisedwhen the obligationunder the liability is dischargedorcancelledorexpires.
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4.2 Summary of Significant Accounting Policies (continued)
(t) FinancialLiabilities(Continued)
Where an existing financial liability is replaced by another from the same lender onsubstantiallydifferent terms,or thetermsofanexisting liabilityaresubstantiallymodified,such an exchange ormodification is treated as a derecognition of the original liability andthe recognition of a new liability, and the difference in the respective carrying amounts isrecognisedinincomestatements.
Financial liabilitiesareclassifiedaseitherfinancial liabilitiesat fairvalue throughprofitorlossorotherfinancialliabilities.
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held fortrading and financial liabilities designated upon initial recognition as at fair value throughprofitorloss.
Financial liabilities held for trading include derivatives entered into by the Group and theCompany that do notmeet the hedge accounting criteria. Derivative liabilities are initiallymeasured at fair value and subsequently stated at fair value, with any resultant gains orlosses recognised in profit or loss. Net gains or losses on derivatives include exchangedifferences.
The Group and the Company have not designated any financial liabilities as at fair valuethroughprofitorloss.
Other financial liabilities
The Group’s and the Company’s other financial liabilities include trade payables, otherpayablesandloansandborrowings.
Trade and other payables are recognised initially at fair value plus directly attributabletransactioncostsandsubsequentlymeasuredatamortisedcostusingtheeffective interestmethod.
Loansandborrowingsarerecognisedinitiallyatfairvalue,netoftransactioncostsincurred,andsubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod.Borrowingsare classified as current liabilities unless the Group has an unconditional right to defersettlementoftheliabilityforatleast12monthsafterthereportingdate.
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4.2 Summary of Significant Accounting Policies (continued)
(t) FinancialLiabilities(Continued)
Other financial liabilities (Continued)
For other financial liabilities, gains and losses are recognised in profit or losswhen theliabilities are derecognised, and through the amortisation process.Details of certain loansandborrowingsoftheGroupareasfollows:
(i) Bai’ Bithaman Ajil Islamic Debt Securities (“BAIDS”)
The BAIDS are bonds issued in accordancewith the Islamic finance concept of Bai’BithamanAjil.Inaccordancewithsuchconcept,theissuerassignedcertainassetstoatrustee,andrepurchasedthematthesamepricetogetherwithanagreedprofitmargin.ThepaymentofthepurchasepriceisdeferredinaccordancewiththematuritiesoftheBAIDS,whilsttheprofitelementispaidhalf-yearly.
BAIDSareinitiallyrecognisedatcost,beingthefairvalueoftheconsiderationreceived.After initial recognition, the profit element attributable to theBAIDS in each period isrecognisedasanexpenseataconstantratetothematurityofeachseriesrespectively.
(ii) Sukuk Musyarakah with periodic payments
The SukukMusyarakah (“Sukuk”)with periodic payments is issued under the IslamicprincipleofMusyarakahwhichisacontractofpartnershipinaventure.
TheSukuk is initially statedat cost, being the fair valueof the consideration received.After initial recognition, the profit element attributable to the Sukuk in each period isrecognisedasanexpenseataconstantratetoitsmaturity.
(iii) Sukuk Musyarakah without periodic payments
TheSukukwithoutperiodicpaymentsisissuedundertheIslamicprincipleofMusyarakahwhichisacontractofpartnershipinaventure.
TheSukuk is initially statedat cost, being the fair valueof the consideration received.The profit elements on the Sukuk are recognised as an expense and accreted to theprincipalamountataconstantratetoitsmaturity.
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4.2 Summary of Significant Accounting Policies (continued)
(u) AmountreceivedfromtheGovernmentforAdditionalWorks
Pursuant to the TSCA,monies received from the Government for the AdditionalWorks,are classified as “Amount received from the Government for AdditionalWorks”.With theexecutionoftheProceedsAccountAgreementon17November2006,theexpensesincurredfortheAdditionalWorkshavebeenoffsetagainsttheamountreceivedfromtheGovernmentasdisclosedinNote41.
(v) BorrowingCosts
Borrowing costs directly attributable to the acquisition, construction or production ofqualifyingassets,whichareassets thatnecessarily takeasubstantialperiodof timetogetreadyfortheirintendeduseorsale,arecapitalisedaspartofthecostofthoseassets,untilsuch timeas theassetsaresubstantially ready for their intendeduseorsale.Theamountofborrowingcostseligible for capitalisation isdeterminedbyapplyinga capitalisation ratewhichistheweightedaverageoftheborrowingcostsapplicabletotheCompanyborrowingsthatareoutstandingduringtheyear,otherthanborrowingsmadespecificallyforthepurposeof obtaining another qualifying asset. For borrowingsmade specifically for the purpose ofobtaining a qualifying asset, the amount of borrowing cost eligible for capitalisation is theactual borrowing costs incurred on that borrowing during the period less any investmentincomeonthetemporaryinvestmentofthatborrowing.
All other borrowing costs are recognised as an expense in the income statements in theperiodinwhichtheyareincurred.
(w) Non-currentAssetsHeldforSale
Non-current assets or disposal groups are classified as held for sale if theymeet certainconditionsandtheircarryingamountswillberecoveredprincipallythroughasaletransactionratherthanthroughcountinuinguse.Theconditionisregardedasmetonlywhentheassetsordisposalgroupsareavailableforimmediatesaleinitspresentconditionsubjecttotermsthatareusualandcustomaryandthesaleishighlyprobable.
Non-currentassetsordisposalgroupsheld forsalearemeasuredat the lowerofcarryingamount and fair value less costs to sell. Any differences are recognised in the incomestatements.
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4.2 Summary of Significant Accounting Policies (continued)
(x) EquityInstruments
Ordinary shares are classified as equity. Dividends on ordinary shares are recognised inequityintheperiodinwhichtheyaredeclared.
(y) SegmentReporting
Formanagement purposes, the Group is organised into operating segments based ontheir products and serviceswhich are independentlymanaged by the respective segmentmanagers responsible for theperformanceof the respectivesegmentsunder their charge.The segmentmanagers report directly to themanagement of the Companywho regularlyreviewthesegmentresultsinordertoallocateresourcestothesegmentsandtoassessthesegmentperformance.AdditionaldisclosuresoneachofthesesegmentsareshowninNote48, including the factors used to identify the reportable segments and themeasurementbasisofsegmentinformation.
(z) Contingencies
Acontingent liabilityorasset isapossibleobligationorasset thatarises frompasteventsandwhoseexistencewillbeconfirmedonlybytheoccurrenceornon-occurrenceofuncertainfutureevent(s)notwhollywithinthecontroloftheGroup.
ContingentliabilitiesandassetsarenotrecognisedinthestatementsoffinancialpositionoftheGroup.
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4.3 New Standards and Interpretations that are effective beginning on or after 1 January 2010
On 1 January 2010, the Group and the Company adopted the following applicable new andamended FRSs and IC Interpretationsmandatory for annual financial periods beginning on orafter1January2010.
FRS7 FinancialInstruments:DisclosuresFRS101 PresentationofFinancialStatements(Revised)FRS123 BorrowingCostsFRS139 FinancialInstruments:RecognitionandMeasurementAmendments to FRS 1 First Time Adoption of Financial Reporting Standards and FRS 127
Consolidated and Separate Financial Statements: Cost of an Investment in a Subsidiary,JointlyControlledEntityorAssociate
AmendmentstoFRS132 FinancialInstruments:PresentationAmendments to FRS 139 Financial Instruments: Recognition andMeasurement and FRS 7
Financial Instruments: Disclosures and IC Interpretation 9 Reassessment of EmbeddedDerivatives
AmendmentstoFRSs‘ImprovementstoFRSs(2009)’ICInterpretation9:ReassessmentofEmbeddedDerivativesICInterpretation10:InterimFinancialReportingandImpairmentICInterpretation11:FRS2–GroupandTreasuryShareTransactionsICInterpretation13:CustomerLoyaltyProgrammesIC Interpretation 14: FRS 119 – The Limit on a Defined Benefit Asset, Minimum Funding
RequirementsandtheirInteraction
Adoption of the above standards and interpretations did not have any effect on the financialperformanceorpositionoftheGroupandtheCompanyexceptforthosediscussedbelow:
4.3.1 fRS 7 financial Instruments: disclosures
Prior to 1 January 2010, information about financial instruments was disclosed inaccordancewith the requirements of FRS 132 Financial Instruments: Disclosure and Presentation.FRS7introducesnewdisclosurestoimprovetheinformationaboutfinancialinstruments. Itrequiresthedisclosureofqualitativeandquantitative informationaboutexposure to risks arising from financial instruments, including specifiedminimumdisclosuresaboutcreditrisk,liquidityriskandmarketrisk,includingsensitivityanalysistomarketrisk.
The Group and the Company have applied FRS 7 prospectively in accordance withthe transitional provisions. Hence, the new disclosures have not been applied to thecomparatives. The new disclosures are included throughout the Group’s and theCompany’sfinancialstatementsfortheyearended31December2010.
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4.3 New Standards and Interpretations that are effective beginning on or after 1 January 2010 (continued)
4.3.2 fRS 101 Presentation of financial Statements (Revised)
TherevisedFRS101introduceschangesinthepresentationanddisclosuresoffinancialstatements. The revised Standard separates owner and non-owner changes in equity.Thestatementsofchanges inequity includesonlydetailsof transactionswithowners,with all non-owner changes in equity presented as a single line. The Standard alsointroduces the statements of comprehensive income, with all items of income andexpenserecognisedinprofitorloss,togetherwithallotheritemsofrecognisedincomeandexpenserecogniseddirectlyinequity,eitherinonesinglestatement,orintwolinkedstatements.TheGroupandtheCompanyhaveelectedtopresentintwostatements.
Inaddition,astatementoffinancialpositionisrequiredatthebeginningoftheearliestcomparativeperiodfollowingachangeinaccountingpolicy,thecorrectionofanerrorortheclassificationofitemsinthefinancialstatements.
TherevisedFRS101alsorequires theGrouptomakenewdisclosurestoenableusersofthefinancialstatementstoevaluatetheGroup’sobjectives,policiesandprocessesformanagingcapital.PleaseseeNote46.
TherevisedFRS101wasadoptedretrospectivelybytheGroupandtheCompany.
4.3.3 fRS 139 financial Instruments: Recognition and Measurement
TheGroupandtheCompanyhaveadoptedFRS139prospectivelyon1January2010 inaccordancewith the transitional provisions. As at 1 January 2010, the effects arisingfromtheadoptionofthisStandardhasbeenaccountedforasfollowsandcomparativeswerenotrestated:
(a) Toll compensation recoverable from the Government
PriortotheadoptionofFRS139,tollcompensationrecoverablefromtheGovernmentwasaccruedatcostby theGroupafter taking intoconsideration theeffectsof thetoll compensation arrangement in accordancewith the SSCA as detailed out inNote 3(i)(b). With the adoption of FRS 139, the toll compensation recoverablefromtheGovernment is recorded initiallyat its fair value that is lower thancosts.Subsequenttoinitialrecognition,theamountismeasuredatamortisedcost.Asat1January2010,theGroupremeasuredthetollcompensationrecoverablefromtheGovernment at amortised cost and an adjustment of RM305,969,000 to adjust thepreviouscarryingamountwasrecognisedtoretainedearnings.
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4.3 New Standards and Interpretations that are effective beginning on or after 1 January 2010 (continued)
4.3.3 fRS 139 financial Instruments: Recognition and Measurement (continued)
(b) Interest-free non-current amount owing to immediate holding company
PriortotheadoptionofFRS139,theGroup’sinterest-freenon-currentamountdueto immediate holding companywas stated at cost.With the adoption of FRS 139,this interest-free amount ismeasured at amortised cost. As at 1 January 2010,the Group remeasured the amount owing to immediate holding company at itsamortisedcostandtheadjustmenttothepreviouscarryingamountwasrecognisedas an adjustment of RM3,657,000 to other non-distributable reserve as at thatdate.
(c) Interest-free non-current amount owing to/from subsidiaries
PriortotheadoptionofFRS139, theCompany’s interest-freenon-currentamountowing to/fromsubsidiarieswerestatedatcost.With theadoptionofFRS139, thisinterest-free amounts aremeasured at amortised cost. As at 1 January 2010, theCompany remeasured the amount owing to/from its subsidiaries at its amortisedcostand theadjustment to thepreviouscarryingamountwasrecognisedasanetadjustmenttocostofinvestmentinthatsubsidiariesofRM2,485,000.
FurtherdetailsaresetoutinNote4.3.6.
4.3.4 Ic Interpretation 13: customer Loyalty Programmes
The Group adopted IC Interpretation 13 (“IC INT 13”), which became effective on 1January 2010. Pursuant to this IC INT 13, award credits shall be accounted for as aseparately identifiable component of the sales transactions inwhich they are granted(the“initialsale”).Thefairvalueoftheconsiderationreceivedorreceivableinrespectofthe initialsaleshallbeallocatedbetweentheawardcreditsandtheothercomponentsofthesale.
The consideration allocated to the award credits is recognised as a liability (deferredrevenue) in the statements of financial position and recognised as revenuewhen thepointsareredeemed,haveexpiredorarenolongerexpectedtoberedeemed.
Theadoptionof ICINT13doesnothaveanymaterial impacttotheopeningbalanceofretainedearnings,thusnoretrospectiveadjustmentwasmade.Inthecurrentyear,tollrevenuewasreducedbyRM2,434,000withtheadoptionofICINT13.
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4.3 New Standards and Interpretations that are effective beginning on or after 1 January 2010 (continued)
4.3.5 Amendments to fRSs ‘Improvements to fRSs (2009)’
Amendments to FRS 117 Leases
Prior to 1 January 2010, for all leases of landandbuildings, if title is not expected topass to the lesseeby the endof the lease term, the lesseenormally doesnot receivesubstantiallyallof therisksandrewards incidental toownership.Hence,all leaseholdland held for own use was classified by the Group as operating lease and wherenecessary,theminimumleasepaymentsortheup-frontpaymentsmadewereallocatedbetween the land and the buildings elements in proportion to the relative fair valuesfor leasehold interests in the land element and buildings element of the lease at theinception of the lease. Theup-front payment representedprepaid leasepayments andwereamortisedonastraight-linebasisovertheleaseterm.
The amendments to FRS 117 Leases clarify that leases of land and buildings areclassifiedasoperatingorfinanceleasesinthesamewayasleasesofotherassets.Theyalsoclarifythatthepresentvalueoftheresidualvalueofthepropertyinaleasewithatermofseveraldecadeswouldbenegligibleandaccounting for the landelementasafinancelease insuchcircumstanceswouldbeconsistentwiththeeconomicpositionofthe lessee.Hence, theadoptionof theamendmentstoFRS117hasresulted incertainunexpiredlandleasestobereclassifiedasfinanceleases.
The Group has reassessed the leasehold land previously disclosed as prepaid landleasepaymentsanddetermined that it is insubstancefinance lease innature.Hence,theleaseholdlandhasbeenreclassifiedfromprepaidlandleasepaymentstoproperty,plant and equipmentwithin non-current assets. The change in accounting policy hasbeen adopted retrospectively in accordance with the transitional provisions of theamendmentstoFRS117.
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4.3 New Standards and Interpretations that are effective beginning on or after 1 January 2010 (continued)
4.3.5 Amendments to fRSs ‘Improvements to fRSs (2009)’ (continued)
Amendments to FRS 117 Leases (Continued)
The following comparative figures have been restated following the adoption of theamendmentstoFRS117:
Group Company
RM’000 RM’000
Prepaid land lease payments
At31December2009,aspreviouslystated: 26,988 97,618
– Reclassificationtoproperty,plantandequipment (26,988) (97,618)
At31December2009,asrestated – –
At1January2009,aspreviouslystated: 27,269 98,635
– Reclassificationtoproperty,plantandequipment (27,269) (98,635)
At1January2009,asrestated – –
Group Company
RM’000 RM’000
Property, plant and equipment
At31December2009,aspreviouslystated: 49,146 15,297
– Reclassificationfromprepaidlandleasepayments 26,988 97,618
At31December2009,asrestated 76,134 112,915
At1January2009,aspreviouslystated: 47,855 13,682
– Reclassificationfromprepaidlandleasepayments 27,269 98,635
At1January2009,asrestated 75,124 112,317
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4.3 New Standards and Interpretations that are effective beginning on or after 1 January 2010 (continued)
4.3.5 Amendments to fRSs ‘Improvements to fRSs (2009)’ (continued)
Amendments to FRS 120 Accounting for Government Grants and Disclosures of Government Assistance
On 1 January 2010, the Group adopted the amendments to FRS 120 Accounting forGovernmentGrantsandDisclosuresofGovernmentAssistance.
TheamendmentstoFRS120removedtheexemptiontoimputeinterestsongovernmentloansatbelowmarketinterestrate.Thedifferencebetweentheamountreceivedandthepresentvalueofestimatedcashflowsdiscountedatmarketinterestrateisaccountedforas government grants. The amendments shall be applied prospectively to governmentloans received on or after 1 January 2010. The Group obtained government loans atbelowmarket interest rate amounting to RM389million prior to 1 January 2010 andhence the amendments to FRS 120 did not have any impact on the Group’s financialstatements.
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4.3 New Standards and Interpretations that are effective beginning on or after 1 January 2010 (continued)
4.3.6 Summary of effects arising from the changes in accounting policies
Thefollowingareeffectsarisingfromtheabovechangesinaccountingpolicies:
As at As at As at 31.12.2010 1.1.2010 1.1.2009
RM’000 RM’000 RM’000
Statements of financial positionIncrease/(decrease) in:GroupRetainedearnings (323,243) (305,969) –Otherreserves 3,657 3,657 –Property,plantandequipment – 26,988 27,269Prepaidlandleasepayments – (26,988) (27,269)TollcompensationrecoverablefromtheGovernment (326,373) (305,969) –
Amountowingtoimmediateholdingcompany (3,463) (3,657) –
Deferredrevenue 2,434 – –
CompanyRetainedearnings (675) – –Investmentsinsubsidiaries 2,485 2,485 –Amountowingby/tosubsidiaries (3,385) (2,485) –Property,plantandequipment – 97,618 98,635Prepaidlandleasepayments – (97,618) (98,635)
Group company2010 2010
RM’000 RM’000
Income statementsIncrease/(decrease) in:Revenue (115,643) –Otherincome 92,805 3,282Financecosts 194 4,182Profitbeforetax (23,032) (900)Incometaxexpense (5,758) (225)Profitfortheyear (17,274) (675)
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4.4 Standards issued but not yet effective
TheGrouphasnotadoptedthefollowingapplicablestandardsandinterpretationsthathavebeenissuedbutnotyeteffective:
Effective for financial period beginning on or after 1 July 2010
FRS1 First-timeAdoptionofFinancialReportingStandardsFRS3 BusinessCombinations(Revised)AmendmentstoFRS5 Non-currentAssetsHeldforSaleandDiscontinuedOperationsAmendmentstoFRS127 ConsolidatedandSeparateFinancialStatementsAmendmentstoFRS138 IntangibleAssetsICInterpretation12 ServiceConcessionArrangementsICInterpretation16 HedgesofaNetInvestmentinaForeignOperation
Effective for financial period beginning on or after 1 January 2011
AmendmentstoFRS1 LimitedExemptionfromComparativeFRS7DisclosuresforFirst-timeAdopters
AmendmentstoFRS7 ImprovingDisclosuresaboutFinancialInstrumentsICInterpretation4 DeterminingWhetherAnArrangementcontainsaLease
ExceptforthechangesinaccountingpoliciesarisingfromtheadoptionoftherevisedFRS3,theamendmentstoFRS127andICInterpretation12aswellasthenewdisclosuresrequiredunderthe Amendments to FRS 7, theDirectors expect that the adoption of the other standards andinterpretations abovewill have nomaterial impact on the financial statements in the period ofinitialapplication.Thenatureof the impendingchanges inaccountingpolicyonadoptionof therevisedFRS3,theamendmentstoFRS127andICInterpretation12aredescribedbelow.
Revised fRS 3 Business Combinations and Amendments to fRS 127 Consolidated and Separate financial Statements
The revised standards are effective for annual periods beginning on or after 1 July 2010. Therevised FRS 3 introduces a number of changes in the accounting for business combinationsoccurring after 1 July 2010. These changes will impact the amount of goodwill recognised,the reported results in the period that an acquisition occurs, and future reported results. TheAmendmentstoFRS127requirethatachangeintheownershipinterestofasubsidiary(withoutloss of control) is accounted for as an equity transaction. Therefore, such transactionswill nolongergiverisetogoodwill,norwill theygiverisetoagainor loss.Furthermore, theamendedstandard changes the accounting for losses incurred by the subsidiary aswell as the loss ofcontrolofasubsidiary.OtherconsequentialamendmentshavebeenmadetoFRS107Statement of Cash Flows,FRS112 Income Taxes,FRS121The Effects of Changes in Foreign Exchange Rates,FRS 128 Investments in Associates and FRS 131 Interests in Joint Ventures. The changes fromrevisedFRS3andAmendmentstoFRS127willaffect futureacquisitionsor lossofcontrolandtransactionswithminorityinterests.
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4.4 Standards issued but not yet effective (continued)
IC Interpretation 12: Service Concession Arrangements
This Interpretationapplies toserviceconcessionoperatorsandexplainshow toaccount for theobligations undertaken and rights received in service concession arrangements. The adoptionof IC Interpretation12will likelyhave impact to thefinancialstatementand theGroup is in theprocessofassessing theextentof the impact.However, theGroup isexempted fromdisclosingthepossibleimpacttothefinancialstatementsupontheinitialapplicationofthisInterpretation.
The Group and the Company plans to adopt the above pronouncements when they becomeeffectiveintherespectivefinancialperiod.
4.5 key Sources of Estimation Uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty atthereportingdate, thathaveasignificant riskofcausingamaterialadjustment to thecarryingamountsofassetsandliabilitieswithinthenextfinancialyeararediscussedbelow.
(i) Amortisation of heavy repairs and other concession assets
Thecostofheavyrepairsandotherconcessionassetsareamortisedonastraight-linebasisover their useful lives over 7 to 10 years. These are common life expectancies applied inthe industry.Changes in theexpected levelofusageand technologicaldevelopmentscouldimpact the economic useful lives and the residual values of these assets, therefore futuredepreciationchargescouldberevised.
(ii) Amortisation of EDE
The cost of EDE is amortised over the concession period by applying the formula inNote4.2(g)(i) above. The denominator of the formula includes projected total toll revenue forsubsequentyearstotheendofconcessionperiodand isbasedonthelatestavailablebasecase traffic volume projections prepared by independent traffic consultantsmultiplied bytherelevant tollrates.Theassumptionstoarriveat thetrafficvolumeprojectionstake intoconsiderationthegrowthratebasedoncurrentmarketandeconomicalconditions.Changesintheexpectedtrafficvolumecouldimpactfutureamortisationcharges.
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4.5 key Sources of Estimation Uncertainty (continued)
(iii) Income taxes
Judgement is involved in determining the provision for income taxes. There are certaintransactionsandcomputationsforwhichtheultimatetaxdeterminationisuncertainduringtheordinarycourseofbusiness.TheGrouprecognisesliabilitiesforexpectedtaxissuesbasedonestimatesofwhetheradditional taxeswillbedue.Where thefinal taxoutcomeof thesematters is different from the amounts thatwere initially recognised, such differenceswillimpacttheincometaxanddeferredtaxprovisionsintheperiodinwhichsuchdeterminationismade.Thecarryingamountoftaxationanddeferredtaxationatreportingdateisdisclosedinthestatementsoffinancialposition.
(iv) Toll Compensation Recoverable from Government
Profit projections are used in determining adequacy of the future income tax payable forset-off against Toll Compensation Recoverable from Government as at reporting date.Profit projections aredependent on various assumptionsamongst others traffic volumeasmentionedinNote4.5(ii)above.TherearealsojudgementinvolvedindeterminingtheamountrecoverableforsetoffagainstNote4.5(iii)above.ThecarryingamountofTollCompensationRecoverable fromGovernment at reporting date is disclosed in the statements of financialposition.
(v) Contract Accounting
TheGroup recognises contract revenue and expenses in the income statements using thepercentage of completionmethod. The percentage of completion is determined by theproportionofcostsincurredfortheworkperformedtodateovertheestimatedtotalcosts.
Significantjudgementisrequiredindeterminingthepercentageofcompletion,theextentofthecostsincurredandtheestimatedtotalrevenueandcosts,aswellasrecoverabilityofthecontracts.Inmakingthejudgement,theGroupevaluatesbasedonpastexperience,externaleconomicfactorsandbyrelyingontheworkofspecialists.
TherevenueandcostsrecognisedinthecurrentyearisasdisclosedinNote17.
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5 REvENUE
Group Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Tollrevenue 2,573,345 2,365,960 – –
Tollcompensationrevenue 885,332 813,062 – –
Less:Fairvalueadjustmentontollcompensationrevenuefortheyear (113,209) – – –
772,123 813,062 – –
Less:AccrualforGovernment’sshareoftollrevenue (13,256) – – –
Nettollrevenue 3,332,212 3,179,022 – –
Expresswayoperationservicefees – – 109,106 105,607
Dividendincomefromasubsidiary – – 485,000 825,000
Otherrevenues 19,269 – – –
3,351,481 3,179,022 594,106 930,607
Tollcompensationrevenuearosefromrevisions intollratestructuresasdescribed inNote2(a)andNotes3(i)to3(iv).
As referred to in Note 3(i)(b), the notional tax on tax exempt dividends is computed based ontaxexemptdividenddeclaredbyPLUS.There isnonotional taxon taxexemptdividend for theyear2010and2009asPLUSdidnotpayanydividendfromitstaxexemptaccountinbothyears.
BasedonthetermsofPLUS’sSCA,thetollrevenueearnedduringtheyearismorethanthethresholdtoll revenueandas suchanaccrualwasmade for theGovernment’s shareof toll revenueofRM13million(2009:RMNilastollrevenueearnedwaslessthanthethresholdtollrevenue).
OtherrevenuesarecontributedbyPHSwhichcommencedoperation inJune2010andTERASwhichwasacquiredbytheCompanyon15June2010.
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Otherincomecomprisesthefollowing:
Group Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Incomefromrentaloffacilities 19,224 22,919 – –
Incomefromrentaloffibreoptictelecommunicationssystemandwayleaverights 17,592 16,754 – –
ProfitelementfromIslamicshorttermdeposits 75,463 61,546 152 527
Interestincomefromshorttermdeposits 13,309 12,629 4,979 4,419
Interestincomearisingfromcumulativefairvalueadjustmentsoffinancialassets 92,805 – 3,282 –
Others 25,665 20,885 1,558 1,673
244,058 134,733 9,971 6,619
7 fINANcE cOSTS
Financecostsfortheyearareasfollows:
Group Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
ProfitelementsonIslamicfinancialliabilities 613,245 604,767 87,860 78,576
Interestexpensearisingfromcumulativefairvalueadjustmentsoffinancialliabilities 194 – 4,182 –
Otherinterestexpense 137,858 95,421 – 2,661
751,297 700,188 92,042 81,237
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8 PROfIT bEfORE TAX
Group Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Profitbeforetaxisarrivedataftercharging/(crediting):
Auditors’remuneration
–statutoryauditfee 537 515 60 60
–otherservicesfee 458 539 232 149
Depreciationofproperty,plantandequipment(Note16) 7,023 5,742 3,943 3,386
Property,plantandequipmentwrittenoff(Note16) 60 111 1 39
Lossondisposalofproperty,plantandequipment 13 122 14 291
Amortisationchargeforconcessionassets(Note15) 423,597 402,948 – –
Amortisationchargeforintangibleassets(Note18) 1,369 1,649 872 751
Netbookvalueofheavyrepairswrittenoff(Note15) – 9,732 – –
Directors’remuneration(Note10) 2,342 2,222 1,650 1,485
Provisionforretirementbenefits(Note38) 1,930 1,803 – –
Rentalofequipment 886 536 76 134
Rentalofpremises 613 217 205 218
Employeecosts(Note9) 207,077 176,294 77,370 67,573
Negativegoodwillonacquisitionofsubsidiaries(Note19(b)) (510) – – –
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Group Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Salaries,wages,bonusandovertime 144,958 127,218 56,020 49,427
Contributionstodefinedcontributionplan 17,786 16,580 7,459 7,130
Socialsecuritycontributions 1,939 1,769 629 563
Otheremployeeemoluments/overheads 27,871 24,435 8,130 7,538
Trainingandwelfare 14,523 6,292 5,132 2,915
207,077 176,294 77,370 67,573
10 dIREcTORS’ REMUNERATION
Group Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Executive:
Salaries,bonusandotheremoluments 1,281 1,271 972 808
Benefits-in-kind 169 94 77 79
Non-Executive:
Fees 554 576 389 399
Otheremoluments 229 177 160 118
Director’sremunerationpaidandpayabletothirdparty – 34 – 34
Director’sremunerationpaidandpayabletoimmediateholdingcompany 91 70 52 47
Director’sremunerationpaidandpayabletorelatedcompany 18 – – –
2,342 2,222 1,650 1,485
11 kEY MANAGEMENT PERSONNEL REMUNERATION
Group Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Shorttermbenefits 7,710 6,774 4,759 4,987
Keymanagement personnel is defined as the persons who have authority and responsibility forplanning, directing and controlling the activities of the Company or the Group either directly orindirectly.
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12 INcOME TAX EXPENSE
Group Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Incometax:
Malaysianincometax 334,968 21,051 905 5,560
Foreignincometax 8 – 8 –
Overprovisioninprioryears (16,255) (18) (16,317) –
Subtotal 318,721 21,033 (15,404) 5,560
Deferredtax:
Relatingtooriginationandreversaloftemporarydifferences 156,565 430,906 200 (3,195)
Under/(Over)provisioninprioryears 895 (13,479) 6,504 203
Subtotal 157,460 417,427 6,704 (2,992)
Total 476,181 438,460 (8,700) 2,568
Thereconciliationofthetaxeffectsofaccountingandtaxableincomeareasfollows:
Group Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Profitbeforetax 1,776,965 1,623,572 388,046 745,337
Taxatapplicablestatutoryrateof25%(2009:25%) 444,241 405,893 97,012 186,334
Taxeffectofexpensesthatarenotdeductibleindeterminingtaxableprofit 47,915 46,065 25,352 22,281
Taxeffectofincomenotsubjecttotax – – (121,250) (206,250)
Taxeffectofshareofassociate’sprofitaftertax (615) – – –
Overprovisionofincometaxexpenseinprioryears (16,255) (18) (16,317) –
Under/(Over)provisionofdeferredtaxinprioryears 895 (13,479) 6,504 203
Taxexpense 476,181 438,460 (8,700) 2,568
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Basicearningspersharehasbeencalculatedbydividingtheprofitfortheyearattributabletoownersoftheparentbythenumberofordinarysharesinissueduringthefinancialyear.
Group Company
2010 2009 2010 2009
Profitfortheyearattributabletoownersoftheparent(RM’000) 1,306,170 1,186,378 396,746 742,769
Numberofordinaryshares(‘000) 5,000,000 5,000,000 5,000,000 5,000,000
Basicearningspershare(sen) 26.12 23.73 7.93 14.86
14 dIvIdENdS
Dividend in respect of year
Dividend recognised in year
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Finalsingletierdividendfortheyearended31December2008of9.5senperordinarysharedeclaredon4June2009andpaidon2July2009 – – – 475,000
Interimsingletierdividendfortheyearended31December2009of6.5senperordinarysharedeclaredon20August2009andpaidon25September2009 – 325,000 – 325,000
Finalsingletierdividendfortheyearended31December2009of10.0senperordinarysharedeclaredon29April2010andpaidon18May2010 – 500,000 500,000 –
Interimsingletierdividendfortheyearended31December2010of7.5senperordinarysharedeclaredon19August2010andpaidon24September2010 375,000 – 375,000 –
375,000 825,000 875,000 800,000
Dividendperordinaryshare(sen) 7.5 16.5
Nofurtherdividendswillbeproposedforshareholders’approvalinrespectofthefinancialyearended31December2010.
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15 cONcESSION ASSETS
Concessionassetsconsistofthefollowing:
– NSE,NKVE,FHR2,andSPDHmaintainedbyPLUS;– NSECLandKLIAExpresswaymaintainedbyELITE;– MSSCmaintainedbyLINKEDUA;– BKEmaintainedbyKLBK;– BKSPHighwayinIndiamaintainedbyPLUSBKSP;– Padalur-TrichyHighwayinIndiamaintainedbyINIPPL;– Cikampek-PalimananHighwayinIndonesiaundertakenbyLMS;and– Cimanggis-CibitungTollRoadinIndonesiaundertakenbyCCTW.
Thebreakdownoftheconcessionassetsaccordingtoexpresswaysareasfollows:
Group2010 Cost
Accumulated amortisation
Net carrying amount
RM’000 RM’000 RM’000
ExpresswayDevelopmentExpenditure(“EDE”)
–NSE,NKVE,FHR2,SPDH 9,791,740 1,455,513 8,336,227
–NSECLandKLIAExpressway 1,799,629 235,164 1,564,465
–MSSC 1,109,832 97,349 1,012,483
–BKE 349,926 83,684 266,242
–BKSPHighway 195,890 4,076 191,814
–Padalur-TrichyHighway 269,742 2,099 267,643
13,516,759 1,877,885 11,638,874
HeavyRepairs
–NSE,NKVE,FHR2,SPDH 1,831,622 1,147,922 683,700
–NSECLandKLIAExpressway 145,906 76,929 68,977
–MSSC 41,429 12,940 28,489
–BKE 3,190 250 2,940
2,022,147 1,238,041 784,106
OtherConcessionAssets
–NSE,NKVE,FHR2,SPDH 522,304 439,884 82,420
–NSECLandKLIAExpressway 84,297 74,903 9,394
–MSSC 36,937 36,472 465
–BKE 18,080 8,407 9,673
661,618 559,666 101,952
CapitalWork-In-Progress
–Cikampek-PalimananHighway 87,573 – 87,573
87,573 – 87,573
Total 16,288,097 3,675,592 12,612,505
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Thebreakdownoftheconcessionassetsaccordingtoexpresswaysareasfollows(Continued):
Group2009 Cost
Accumulated amortisation
Net carrying amount
RM’000 RM’000 RM’000
EDE
–NSE,NKVE,FHR2,SPDH 9,703,961 1,316,924 8,387,037
–NSECLandKLIAExpressway 1,792,888 182,899 1,609,989
–MSSC 1,106,152 93,214 1,012,938
–BKE 349,183 65,051 284,132
–BKSPHighway 209,520 7,344 202,176
13,161,704 1,665,432 11,496,272
HeavyRepairs
–NSE,NKVE,FHR2,SPDH 1,627,683 975,774 651,909
–NSECLandKLIAExpressway 123,128 62,622 60,506
–MSSC 32,265 7,973 24,292
–BKE 565 21 544
1,783,641 1,046,390 737,251
OtherConcessionAssets
–NSE,NKVE,FHR2,SPDH 508,388 426,452 81,936
–NSECLandKLIAExpressway 83,458 70,982 12,476
–MSSC 36,472 36,472 –
–BKE 17,687 6,634 11,053
646,005 540,540 105,465
CapitalWork-In-Progress
–Cikampek-PalimananHighway 78,010 – 78,010
–Cimanggis-CibitungTollRoad 518 – 518
78,528 – 78,528
Total 15,669,878 3,252,362 12,417,516
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15 cONcESSION ASSETS (cONTINUEd)
DetailsofConcessionAssetsasat31December2010and31December2009areasfollows:
Group
EDEheavy
Repairs
Other Concession
Assets
Capital Work-In-Progress Total
RM’000 RM’000 RM’000 RM’000 RM’000CostAt1January2010 13,161,704 1,783,641 646,005 78,528 15,669,878Additions 111,261 238,506 15,613 14,379 379,759Acquisitionofsubsidiary(Note19(b)) 275,984 – – – 275,984
Assetsofdisposalgroupclassifiedasheldforsale(Note21) – – – (660) (660)
Translationdifference (32,190) – – (4,674) (36,864)
At31December2010 13,516,759 2,022,147 661,618 87,573 16,288,097
Accumulated AmortisationAt1January2010 1,665,432 1,046,390 540,540 – 3,252,362Chargefortheyear 212,820 191,651 19,126 – 423,597Acquisitionofsubsidiary(Note19(b)) 11 – – – 11
Translationdifference (378) – – – (378)
At31December2010 1,877,885 1,238,041 559,666 – 3,675,592
NetBookValueat31December2010 11,638,874 784,106 101,952 87,573 12,612,505
CostAt1January2009 12,796,324 1,583,973 625,827 232,065 15,238,189Additions 181,884 217,644 20,178 15,428 435,134Reclassification 183,496 – – (183,496) –Writtenoff – (17,976) – – (17,976)Translationdifference – – – 14,531 14,531
At31December2009 13,161,704 1,783,641 646,005 78,528 15,669,878
Accumulated AmortisationAt1January2009 1,467,294 875,334 515,030 – 2,857,658Chargefortheyear 198,138 179,300 25,510 – 402,948Writtenoff – (8,244) – – (8,244)
At31December2009 1,665,432 1,046,390 540,540 – 3,252,362
NetBookValueat31December2009 11,496,272 737,251 105,465 78,528 12,417,516
Interest expense capitalised during the financial year under CapitalWork-In-Progress amounted toRM6,691,782(2009:RM16,672,311).
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Group furniture, fittings,
Telecom-munication
and Office Equipment Aircrafts
Motor Vehicles Computers
Operation Tools and
Equipment Buildingsfreehold
LandLeasehold
Land Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Cost
At1January2010 28,007 31,237 30,091 21,075 3,089 4,253 279 30,174 148,205
Additions 1,753 – 6,617 2,065 53 – – – 10,488
Acquisitionsofsubsidiaries(Note19(b)) 2,427 – 1,576 5,317 – – 40 – 9,360
Disposals (612) – (155) (152) – – – – (919)
Writtenoff (82) – (305) (207) – – – – (594)
Translationdifference (37) – (100) (9) – (14) (1) – (161)
At31December2010 31,456 31,237 37,724 28,089 3,142 4,239 318 30,174 166,379
Accumulated Depreciation
At1January2010 21,321 13,385 12,113 17,830 3,034 1,202 – 3,186 72,071
Chargefortheyear 2,408 27 2,477 1,720 30 80 – 281 7,023
Acquisitionsofsubsidiaries(Note19(b)) 1,509 – 1,215 4,415 – – – – 7,139
Disposals (598) – (105) (146) – – – – (849)
Writtenoff (81) – (247) (206) – – – – (534)
Translationdifference (14) – (71) (4) – (13) – – (102)
At31December2010 24,545 13,412 15,382 23,609 3,064 1,269 – 3,467 84,748
NetBookValueat31December2010 6,911 17,825 22,342 4,480 78 2,970 318 26,707 81,631
16 PROPERTY, PLANT ANd EQUIPMENT
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Group furniture, fittings,
Telecom-munication
and Office Equipment Aircrafts
Motor Vehicles Computers
Operation Tools and
Equipment Buildingsfreehold
LandLeasehold
Land Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Cost
At1January2009(restated) 24,805 31,237 29,778 19,848 3,083 4,224 279 30,174 143,428
Additions 3,202 – 2,442 1,846 17 – – – 7,507
Disposals – – (2,052) (6) – – – – (2,058)
Writtenoff (28) – (120) (621) (11) – – – (780)
Translationdifference 28 – 43 8 – 29 – – 108
At31December2009(restated) 28,007 31,237 30,091 21,075 3,089 4,253 279 30,174 148,205
Accumulated Depreciation
At1January2009(restated) 19,545 13,359 11,930 16,723 2,772 1,070 – 2,905 68,304
Chargefortheyear 1,784 26 1,574 1,698 272 107 – 281 5,742
Disposals – – (1,355) (5) – – – – (1,360)
Writtenoff (19) – (51) (589) (10) – – – (669)
Translationdifference 11 – 15 3 – 25 – – 54
At31December2009(restated) 21,321 13,385 12,113 17,830 3,034 1,202 – 3,186 72,071
NetBookValueat31December2009(restated) 6,686 17,852 17,978 3,245 55 3,051 279 26,988 76,134
16 PROPERTY, PLANT ANd EQUIPMENT (cONTINUEd)
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Company furniture, fittings,Telecommunication and
Office EquipmentMotor
Vehicles Computers
Operation Tools and
EquipmentLeasehold
Land Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Cost
At1January2010 4,589 14,531 7,158 792 100,669 127,738
Additions 413 4,081 1,162 – – 5,656
Disposals – (96) – – – (96)
Writtenoff (26) – – – – (26)
At31December2010 4,976 18,516 8,320 792 100,669 133,272
Accumulated Depreciation
At1January2010 1,466 4,249 5,285 772 3,051 14,823
Chargefortheyear 811 1,258 849 8 1,017 3,943
Disposals – (46) – – – (46)
Writtenoff (25) – – – – (25)
At31December2010 2,252 5,461 6,134 780 4,068 18,695
NetBookValueat31December2010 2,724 13,055 2,186 12 96,601 114,577
Cost
At1January2009(restated) 2,583 13,838 6,696 522 100,669 124,308
Additions 2,015 1,288 1,082 10 – 4,394
Disposals – (595) – – – (595)
Writtenoff (9) – (620) – – (629)
Reclassification – – – 260 – 260
At31December2009(restated) 4,589 14,531 7,158 792 100,669 127,738
Accumulated Depreciation
At1January2009(restated) 691 3,845 5,013 408 2,034 11,991
Chargefortheyear 779 628 858 104 1,017 3,386
Disposals – (224) – – – (224)
Writtenoff (4) – (586) – – (590)
Reclassification – – – 260 – 260
At31December2009(restated) 1,466 4,249 5,285 772 3,051 14,823
NetBookValueat31December2009(restated) 3,123 10,282 1,873 20 97,618 112,915
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17 AMOUNT dUE fROM/(TO) cUSTOMERS ON cONTRAcTS
Group
2010 2009
RM’000 RM’000
Costsincurredtodate 124,069 –
Add:Attributableprofits 53,744 –
177,813 –
Less:Progressbillings (161,258) –
16,555 –
Presentedasfollows:
Grossamountduefromcustomersoncontractwork 17,629 –
Grossamountduetocustomersoncontractwork (1,074) –
16,555 –
Contractrevenue 37,947 –
Contractcosts 26,646 –
Retentionsumsoncontractincludedintradereceivables 6,880 –
18 INTANGIbLE ASSETS
Group Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Cost
At1January 15,172 13,461 5,390 3,603
Additions 1,828 1,711 1,166 1,787
Acquisitionofsubsidiary(Note19(b)) 163 – – –
Writtenoff (62) – – –
At31December 17,101 15,172 6,556 5,390
Accumulated Amortisation
At1January 11,443 9,794 2,722 1,971
Chargefortheyear 1,369 1,649 872 751
Acquisitionofsubsidiary(Note19(b)) 139 – – –
Writtenoff (62) – – –
At31December 12,889 11,443 3,594 2,722
NetBookValueat1January 3,729 3,667 2,668 1,632
NetBookValueat31December 4,212 3,729 2,962 2,668
Intangibleassetsconsistsofcomputersoftwareandlicensesthatdonotformanintegralpartoftherelatedhardwares.
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Company
2010 2009
RM’000 RM’000
Unquotedsharesatcost–InMalaysia 2,010,122 2,166,122
Unquotedsharesatcost–OutsideMalaysia 192,215 133,879
2,202,337 2,300,001
Fairvalueadjustmentonamountdueto/fromsubsidiaries(Note4.3.3(c)) 2,485 –
2,204,822 2,300,001
Thesubsidiariesareasfollows:
Effective Equity Interest
Name Principal Activity 2010 2009
Subsidiaries of PEB
IncorporatedinMalaysia
ProjekLebuhrayaUtara-SelatanBerhad
Undertake the construction, operation,maintenance and toll collection of NSE,NKVE,FHR2,andSPDHwitha total lengthof846kilometres
100% 100%
ExpresswayLingkaranTengahSdnBhd
Undertake the construction, operation,maintenance and toll collection of the63-kilometreNSECLandKLIAExpressway
100% 100%
Linkedua(Malaysia)Berhad
Undertake the construction, operation,maintenance and toll collection of the47-kilometreMSSC
100% 100%
KonsortiumLebuhrayaButterworth-Kulim(KLBK)SdnBhd
Undertake the construction, operation,maintenance and toll collection of the17-kilometreBKE
100% 100%
PLUSHelicopterServicesSdnBhd
Provisionofhelicoptercharterservicesandaerialsurveillanceofexpressways
100% 100%
TerasTeknologiSdnBhd Principally involved in investment holdingandtheprovisionofinformationtechnology,outsourcing, e-commerce service andinternetrelatedservices
100% –
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19 INvESTMENTS IN SUbSIdIARIES (cONTINUEd)
Thesubsidiariesareasfollows(Continued):
Effective Equity Interest
Name Principal Activity 2010 2009
Subsidiaries of PEB (Continued)
IncorporatedoutsideMalaysia
PTLintasMargaSedaya(IncorporatedinIndonesia)
Design, construction, management,financing, operation,maintenance and tollcollection of the 116-kilometre Cikampek-PalimananHighwayinIndonesia
55% 55%
PTCimanggis-CibitungTollways
(IncorporatedinIndonesia)
Construction, operation andmaintenanceoftheproposed25.4-kilometrePackage4-Cimanggis-CibitungTollRoadinIndonesia
60% 60%
PLUSKalyan(Mauritius)PrivateLimited(IncorporatedinMauritius)
Investmentholding 100% 100%
PLUSPlaza(Mauritius)PrivateLimited(IncorporatedinMauritius)
Investmentholding 100% –
PLUSJetpur(Mauritius)PrivateLimited(IncorporatedinMauritius)
Investmentholding 100% –
Subsidiaries of Teras Teknologi Sdn Bhd
IncorporatedinMalaysia
TerasControlSystemsSdnBhd
Engaged in supply, installation andmaintenanceoftollsystemsandequipmentforexpresswayprojects
100% –
TerasResearchSdnBhd Dormant 100% –
Krishost.ComSdnBhd Dormant 100% –
MyWebOnlineSdnBhd Dormant 100% –
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Thesubsidiariesareasfollows(Continued):
Effective Equity Interest
Name Principal Activity 2010 2009
Subsidiary of PLUS Kalyan
PLUSBKSPTollLimited(IncorporatedinIndia)
Undertake the construction, operation,maintenance and toll collection of the fourlaningofthe22-kilometreBKSPHighwayintheStateofMaharashtra,India
94% 94%
Subsidiary of PLUS Plaza
InduNavayugaInfraProjectPrivateLimited(IncorporatedinIndia)
Undertake the construction, operation,maintenance and toll collection of the fourlaning and strengthening of Padalur toTrichy section fromKm 285 to Km 325 ofNH-45intheStateofTamilNadu,India
49% –
AllcompaniesareauditedbymemberfirmsofErnst&YoungGlobalintherespectivecountriesexceptforPLUSBKSP,INIPPL,LMSandCCTW.
(a) Incorporationsofforeignsubsidiaries
On24February2010,theCompanyincorporatedaforeignsubsidiaryinPortLouis,Mauritiusvideasubscriptionof1ordinaryshareofUSD1.00representing100%equityinterestinPLUSPlazaforacashconsiderationofUSD1.00.
Asat 31December2010,PEBsubscribed16,400,461ordinarysharesofPLUSPlaza fora cashconsiderationofUSD16,400,461.
On26October2010,theCompanyincorporatedaforeignsubsidiaryinPortLouis,Mauritiusvideasubscriptionof1ordinaryshareofUSD1.00representing100%equity interest inPLUSJetpurforacashconsiderationofUSD1.00.
On 12 November 2010, PEB subscribed 6,200 ordinary shares of PLUS Jetpur for a cashconsiderationofUSD6,200.
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19 INvESTMENTS IN SUbSIdIARIES (cONTINUEd)
(b) Acquisitionsofsubsidiaries
On2June2010,PLUSPlazacompletedthesubscriptionoftheFirstTrancheSharesof54,880,000ordinarysharesofRs10.00eachrepresenting49%equityinterestofINIPPLforacashconsiderationofRs688,500,000(equivalenttoapproximatelyRM52.6million).Followingthis,INIPPLhasbecomeaforeignsubsidiaryofPEB,throughitswhollyownedsubsidiary,PLUSPlaza,wherePEBnowhasthemanagementcontrolover thebusinessoperationof thecompanyaswellasmajorityboardcompositionpursuanttotheSharePurchaseCumShareholders’AgreementbetweenPLUSPlazaandothershareholdersofINIPPL.
On15June2010,theCompanyenteredintoaShareSaleAgreementwithUEMfortheacquisitionof 1,000,000 ordinary shares of RM1.00 each representing 100% equity interest in TERAS fromUEMforatotalcashconsiderationofRM44,000,000.
The fair values and carrying amounts of assets acquired and liabilities assumed from theacquisitionsofINIPPLandTERASareasfollows:
Note
fair values recognised
on acquisition
Acquiree’scarryingamounts
INIPPL RM’000 RM’000
ASSETS
Concessionassets 15 275,973 265,578
Property,plantandequipment 16 95 95
Sundryreceivables,depositsandprepayments 6,780 6,780
Cashandbankbalances 237 237
TOTAL ASSETS 283,085 272,690
LIABILITIES
Borrowing (187,628) (187,628)
Sundryandtradepayables (7,449) (7,449)
TOTAL LIABILITIES (195,077) (195,077)
Totalnetassets 88,008 77,613
Less:Minorityinterests (43,047)
Group'sshareofnetassets 44,961
Foreignexchangedifference 7,670
Considerationsettledincash 52,631
Cashandcashequivalentsofsubsidiaryacquired (237)
Netcashoutflowonacquisition 52,394
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(b) Acquisitionsofsubsidiaries(Continued)
fair values recognised
on acquisition
Acquiree’scarryingamounts
TERAS Note RM’000 RM’000
ASSETS
Property,plantandequipment 16 2,126 2,126
Intangibleassets 18 24 24
Deferredtaxassets 23 1,358 1,358
Tradereceivables 19,900 19,900
Sundryreceivables,depositsandprepayments 19,620 19,620
Shorttermdepositswithlicensedbanks 12,410 12,410
Cashandbankbalances 1,611 1,611
Othercurrentassets 15,335 15,335
TOTAL ASSETS 72,384 72,384
LIABILITIES
Tradeandsundrypayables (27,460) (27,460)
Taxpayable (414) (414)
TOTAL LIABILITIES (27,874) (27,874)
Totalnetassets 44,510 44,510
Less:NegativegoodwillonacquisitionofTERAS (510)
Considerationsettledincash 44,000
Cashandcashequivalentsofsubsidiaryacquired (14,021)
Netcashoutflowonacquisition 29,979
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(b) Acquisitionsofsubsidiaries(Continued)
TheeffectoftheacquistionsonthefinancialresultsoftheGroupfromthedateofacquisitionstothereportingdateisasfollows:
Group 2010
RM’000
Revenue 25,780
Lossfortheyear (5,776)
The acquisitions of INIPPL and TERAS were completed on 2 June 2010 and 15 June 2010respectively.However, iftheacquisitionsof INIPPLandTERAShadoccurredon1January2010,therevenueandprofit for theGroupwouldhavebeenRM3,357.2millionandRM1,301.1millionrespectivelyforthefinancialyearended31December2010.
(c) Proposeddisposalofasubsidiary
On 28 July 2010, the Company had entered into a conditional sale and purchase agreementwithPTBakrie&Brothers TBK (“Bakrie”) for the disposal by theCompany of its entire equityinterestof60%inCCTW,toBakrieforatotalcashconsiderationofRp57,823,830,725(equivalenttoRM20,122,693).Theconditionsprecedent in thesaleandpurchaseagreementhavenotbeenfulfilledandtheproposeddisposalofCCTWisexpectedtobecompletedinthefirsthalfof2011.PleaseseeNote21fordetails.
(d) CapitalreductionofELITE
Duringthefinancialyear,ELITEhascompletedthereductionof its issuedandpaid-upordinarysharesfrom294,105,932ordinarysharesofRM1.00eachto94,105,932ordinarysharesofRM1.00each,bywayofcancellationofRM1.00oftheparvalueofeachofthe200,000,000issuedandpaidupordinaryshares.
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(CO
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Group Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Unquotedsharesatcost-InMalaysia 33,407 – 33,407 –
Unquotedsharesatcost-OutsideMalaysia 18 – – –
33,425 – 33,407 –
Shareofpost-acquisitionreserves 2,459 – – –
35,884 – 33,407 –
(a) Acquisitionofanassociate
On11June2010,theCompanyhadacquired20%equityinterestinTnGfromUEMLandHoldings,asubsidiaryofUEM,foratotalcashconsiderationofRM33,406,680.
(b) Subscriptionofshareinforeignassociate
On 15 November 2010, PLUS Jetpur subscribed 26,000 ordinary shares of Rs10.00 eachrepresenting26%equity interest inJSHLforatotalcashconsiderationofRs260,000(equivalenttoapproximatelyRM18,000).
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20 INvESTMENT IN ASSOcIATES (cONTINUEd)
Detailsoftheassociatesareasfollows:
Effective Equity Interest
Name Principal Activity 2010 2009
IncorporatedinMalaysia
Touch‘nGoSdnBhd TnG is a company primarily involved inproviding contactless means of farepaymentservicesviaapre-paide-paymentcardknownasTouch‘nGo.
20% –
IncorporatedoutsideMalaysia
Jetpur-SomnathHighwayLimited(IncorporatedinIndia)
To carry on bus iness o f des ign,engineering, procurement, construction,maintenance, management, operationsand toll collections and to augment theexisting route from Km 0 to Km 127 onJetpur-Somnath section of NH-8D inthe State of Gujarat, India by four laningon Design, Build, Finance, Operate andTransferbasis.
26% –
Thesummarisedfinancialstatementsoftheassociates,notadjustedfortheproportionofownershipinterestheldbytheGroup,isasfollows:
Group 2010
RM’000
ASSETS AND LIABILITIES
Totalassets 297,933
Totalliabilities 246,397
RESULTS
Revenue 104,905
Profitfortheyear 20,237
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Asmentioned inNote 19(c), the Company announced the proposed disposal of CCTW. Accordingly,theassets,liabilitiesandotherreserveofCCTWhavebeenpresentedintheStatementsofFinancialPositionasat31December2010as“Assetsofdisposalgroupclassifiedasheldforsale”,“Liabilitiesdirectly associatedwith disposal group classified as held for sale” and “Reserve of disposal groupclassifiedasheldforsale”,detailedasfollows:
Group
Note RM’000
ASSETS
Concessionassets 15 660
Deferredtaxassets 23 7
Sundryreceivables,depositsandprepayments 6,739
Shortterminvestment 19,718
Shorttermdepositswithlicencedbanks 341
Cashandbankbalances 4,160
Assets of disposal group classified as held for sale 31,625
LIABILITIES
Sundrypayablesandaccruals (67)
Liabilities directly associated with disposal group classified as held for sale (67)
Net assets of disposal group classified as held for sale 31,558
RESERVE
Othernon-distributablereserve (477)
Thenon-currentassetsclassifiedasheldforsaleontheCompany’sstatementsoffinancialpositionasat31December2010isasfollows:
Company
RM’000
ASSETS
Investmentinsubsidiary 17,760
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Group
2010 2009
RM’000 RM’000
held-to-maturity investments
Unquotedprivatedebtsecurities,atcost 100,000 115,000
Add:Premium 1,277 1,638
Less:Discountamortised (5,788) (7,446)
95,489 109,192
Structuredproducts 50,000 50,000
Totalotherinvestments 145,489 159,192
Indicativemarketvalueofunquotedprivatedebtsecurities 97,756 111,673
Indicativefairvalueofstructuredproducts 48,020 46,810
MaturityprofileofinvestmentsecuritiesisdisclosedinNote44.
23 dEfERREd TAXATION
Group Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
At1January (798,463) (381,085) 7,890 4,898
Recognisedintheincomestatements(Note12) (157,460) (417,427) (6,704) 2,992
Acquisitionofsubsidiary(Note19(b)) 1,358 – – –
Disposalgroupclassifiedasheldforsale(Note21) (7) – – –
Translationdifference (26) 49 – –
At31December (954,598) (798,463) 1,186 7,890
Presentedafterappropriateoffsettingasfollows:
Deferredtaxassets 3,023 8,316 1,186 7,890
Deferredtaxliabilities (957,621) (806,779) – –
(954,598) (798,463) 1,186 7,890
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Thecomponentsandmovementsofdeferredtaxassetsandliabilitiesduringthefinancialyearpriortooffsettingareasfollows:
Deferred Tax Assets of the Group:
Unabsorbed tax losses
Unabsorbed capital
allowance
Timing difference on
property, plant and equipment Provisions Total
RM’000 RM’000 RM’000 RM’000 RM’000
At1January2010 156,245 189,151 4,240 312,377 662,013
Recognisedintheincomestatements (90,346) (19,157) (7,372) (290,287) (407,162)
Acquisitionofsubsidiary(Note19(b)) – – – 1,358 1,358
Disposalgroupclassifiedasheldforsale(Note21) – (7) – – (7)
Translationdifference – – – (26) (26)
At31December2010 65,899 169,987 (3,132) 23,422 256,176
At1January2009 232,904 492,171 1,150 261,510 987,735
Recognisedintheincomestatements (76,659) (303,020) 3,090 50,816 (325,773)
Translationdifference – – – 51 51
At31December2009 156,245 189,151 4,240 312,377 662,013
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23 dEfERREd TAXATION (cONTINUEd)
Deferred Tax Liabilities of the Group:
Unabsorbed capital
allowance
Timing difference on
EDE
Timing difference on
property, plant and equipment Provisions Total
RM’000 RM’000 RM’000 RM’000 RM’000
At1January2010 21,083 (1,481,542) (17) – (1,460,476)
Recognisedintheincomestatements (21,083) (45,525) (45,046) 361,356 249,702
At31December2010 – (1,527,067) (45,063) 361,356 (1,210,774)
At1January2009 21,083 (1,389,862) (41) – (1,368,820)
Recognisedintheincomestatements – (91,680) 24 – (91,656)
At31December2009 21,083 (1,481,542) (17) – (1,460,476)
Deferredtaxassetshavenotbeenrecognisedinrespectofthefollowingitems:
Group
2010 2009
RM’000 RM’000
Unusedtaxlosses 533,770 526,373
Unabsorbedcapitalallowances 768,220 713,268
1,301,990 1,239,641
TheunusedtaxlossesandunabsorbedcapitalallowancesoftheGroupareinrespectofasubsidiaryinMalaysia and have not been recognised due to uncertainty of its recovery arising fromhistoricallosses.TheavailabilityforoffsettingagainstfuturetaxableprofitsoftherespectiveentitieswithintheGroupissubjecttonosubstantialchangeinshareholdingsofthoseentitiesundertheIncomeTaxAct,1967andguidelinesissuedbythetaxauthority.
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Deferred Tax Assets of the Company:
Timing difference
on property, plant
and equipment Provisions Total
RM’000 RM’000 RM’000
At1January2010 (3,130) 11,020 7,890
Recognisedintheincomestatements (324) (6,380) (6,704)
At31December2010 (3,454) 4,640 1,186
At1January2009 (2,287) 7,185 4,898
Recognisedintheincomestatements (843) 3,835 2,992
At31December2009 (3,130) 11,020 7,890
24 TOLL cOMPENSATION REcOvERAbLE fROM THE GOvERNMENT
Group
2010 2009
RM’000 RM’000
At1January,aspreviouslystated 2,604,068 2,013,767
Less:RemeasurementonadoptionofFRS139 (305,969) –
At1January,asrestated 2,298,099 2,013,767
Accretionofinterestarisingfromcumulativefairvalueadjustments 92,805 –
Tollcompensationrevenuefortheyear 885,332 813,062
Fairvalueadjustmentontollcompensationrevenuefortheyear (113,209) –
Compensationreceived/recognised (178,878) (210,424)
Setoffagainsttollrevenuesharing (13,256) –
SetoffagainstincometaxpayableofPLUS(Note33) (328,675) (12,337)
At31December 2,642,218 2,604,068
Analysedas:
Tollcompensationrecoverablewithin12months 181,872 117,879
Tollcompensationrecoverableafter12months 2,460,346 2,486,189
Totaltollcompensationrecoverable 2,642,218 2,604,068
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25 TRAdE ANd SUNdRY REcEIvAbLES, dEPOSITS ANd PREPAYMENTS
Group Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Tradereceivables 10,324 – – –
Sundryreceivables 47,478 68,783 2,180 1,582
Less:Allowancefordoubtfuldebts (1,747) (353) (104) –
45,731 68,430 2,076 1,582
Depositsandprepayments 10,646 9,258 3,758 4,317
56,377 77,688 5,834 5,899
TheGrouphasnosignificantconcentrationofcreditriskthatmayarisefromexposurestoanygroupofdebtors.
Thetradeandsundryreceivablesarenon-interestbearingandaregenerallyon30to90days(2009:30to90days)terms.
Ageinganalysisoftradereceivables
Group
2010 2009
RM’000 RM’000
Neitherpastduenotimpaired 2,378 –
1to30dayspastduenotimpaired 1,346 –
31to60dayspastduenotimpaired 4,532 –
61to90dayspastduenotimpaired 2,068 –
10,324 –
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Group Company
Note 2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Current
Amountowingby:
–immediateholdingcompany (i) 500 – – –
–subsidiaries (ii) – – 73,793 573,269
–relatedcompanies (iii) 45,969 1,937 124 131
Amountowingto:
–immediateholdingcompany (i) (4,492) (4,255) (777) (796)
–subsidiaries (ii) – – (15) –
–relatedcompanies (iii) (88,700) (86,406) (614) (826)
Non-current
Amountowingbysubsidiary (ii) – – 43,716 65,378
Amountowingtoimmediateholdingcompany (i) (3,422) (6,885) – –
Amountowingtosubsidiary (ii) – – (64,535) (84,850)
TheDirectors regardUEM,which is incorporated inMalaysia and owns 38.51% of the Company’sequityasat31December2010,astheimmediateholdingcompany.TheultimateholdingcompanyisKhazanah,acompanyincorporatedinMalaysia.
(i) Amountowingby/(to)immediateholdingcompany
Theamountowingby/(to)immediateholdingcompanyistradeinnatureexceptamountowingtoUEMtotallingRM777,208(2009:RM796,298)whichisnon-tradeinnature.
Theamountowing isnon-interestbearing.Thenon-currentamountowing ispayableonlyafterPLUShasrepaidallamountsborrowedfromfinancialinstitutions.
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26 HOLdING, SUbSIdIARIES ANd RELATEd cOMPANIES (cONTINUEd)
(ii) Subsidiaries
Thecurrentamountowingby/(to)subsidiariesarenon-tradeinnature,non-interestbearingandrepayableondemand.
Thenon-currentamountowingtosubsidiary,PLUS, ispayable from31December2008until31December2016inninefixedannualinstallments.
The non-current amount owing by subsidiary, KLBK, relates to the shareholder’s advance thatwaspreviouslyowedbyKLBKtoitspreviousholdingcompany.FollowingtheacquisitionofKLBK,theshareholder’sadvanceisnowanamountowingbythesubsidiarytoPEB.Theamountisnotrepayablewithinthenexttwelvemonths.
(iii) Relatedcompanies
Related companies in these financial statements refer tomembers of Khazanah group ofcompanies. The amounts owing by/(to) related companies are trade in nature, non-interestbearingandrepayableondemand.
27 SHORT TERM INvESTMENTS
Group Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
held-to-maturity investments
CommercialPapers/MediumTermNotes(“MTNs”) 50,000 70,000 10,000 25,000
Add:Premium 3 – – –
Less:Discount (70) (64) (4) (32)
49,933 69,936 9,996 24,968
Structuredproducts – 60,000 – –
49,933 129,936 9,996 24,968
IndicativemarketvalueofCommercialPapers/MTNs 50,287 69,710 9,995 21,813
Indicativemarketvalueofstructuredproducts – 59,213 – –
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bALANcES
Group Company
Note 2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Current
Islamicshorttermdeposits (i) 2,828,609 2,434,444
Conventionalshorttermdeposits
–ProceedsAccount (ii) 19,402 19,210 – –
–Others 592,112 397,752 281,028 163,029
3,440,123 2,851,406 281,028 163,029
Cashandbankbalances
–ProceedsAccount (ii) 1 2 – –
–Others 38,411 32,122 15,000 325
38,412 32,124 15,000 325
Totalcashandcashequivalents 3,478,535 2,883,530 296,028 163,354
Non-current
Longtermdeposits (iii) 20,946 501 20,480 –
(i) CertainIslamicshorttermdepositsamountingtoRM990.23million(2009:RM995.28million)areheldundertheFinanceServiceReserveAccountandMaintenanceReserveAccountpursuanttotheborrowings’covenantsandrestrictionsassetoutinNotes34and37.
AlsoincludedinIslamicshorttermdepositsplacedisanamountofRM1.98million(2009:RM1.98million)whichhasbeenpledgedassecurityforaperformancebondbyasubsidiaryassetoutinNote37.
(ii) ThisrelatestotheamountreceivedfromtheGovernmentofwhichshallbeusedinthemannerasprescribedintheProceedsAccountAgreementofPLUSassetoutinNote41.
(iii) This relates to PEB’s long term deposit of Rs31.05 crores (equivalent to RM22.0million attransactiondate) in theEscrowAccount, being consideration for theSecondTrancheSharesof25%ofINIPPL’ssharecapital,pursuanttooneoftheconditionsprecedentintheSharePurchaseCumShareholders’Agreementdated22January2010.Uponthirdanniversaryofthecommercialoperationdate,theSecondTrancheSharesof25%shallbetransferredtoPLUSPlaza.
AlsointhelongtermdepositisPLUSBKSP’splacementwithalicensedbankforthepurposeofobtainingperformanceguaranteeforitsconcession.
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29 SHARE cAPITAL
Group and Company
2010 2009
RM’000 RM’000
Authorised:
10,000,000,000ordinarysharesofRM0.25eachatbeginning/endoftheyear 2,500,000 2,500,000
Issued and fully paid up:
5,000,000,000ordinarysharesofRM0.25eachatbeginning/endoftheyear 1,250,000 1,250,000
30 OTHER RESERvES
Thebreakdownandmovementofothernon-distributablereservesareasfollows:
NON-DISTRIBUTABLE:Group Capital
redemption reserve
Share premium
Merger reserve
foreign currency
translation reserve
Capital reserve Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
(a) (b) (c) (d) (e)
At1January2010,aspreviouslystated 10,000 451,138 298,834 (7,664) – 752,308
FRS139remeasurementofnon-currentamountowingtoimmediateholdingcompany – – – – 3,657 3,657
At1January2010,asrestated 10,000 451,138 298,834 (7,664) 3,657 755,965
Foreigncurrencytranslation – – – (15,167) – (15,167)
Transfertoreserveattributabletodisposalgroupclassifiedasheldforsale(Note21) – – – 477 – 477
At31December2010 10,000 451,138 298,834 (22,354) 3,657 741,275
At1January2009 10,000 451,138 298,834 (20,312) – 739,660
Foreigncurrencytranslation – – – 12,648 – 12,648
At31December2009,asrestated 10,000 451,138 298,834 (7,664) – 752,308
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Thenatureandpurposeofeachcategoryofreserveareasfollows:
(a) ThecapitalredemptionreservearoseupontheredemptionbyPLUSofRedeemableConvertibleCumulativePreferenceSharesin1999.
(b) SharepremiumoftheGrouprepresentsthepremiumarisingfromtherightsissueandfromtheconversionof theRedeemableConvertibleBonds (“RCB”)asa result of adebt restructuring in2002.
(c) ThemergerreserveofRM298millionrepresentstheexcessofthenominalvalueofsharesoftheCompany issuedover thenominalvalueof thesharesacquireduponacquisitionofsubsidiariesin2002whichwereaccountedforunderthemergermethod.
(d) The foreign currency translation reserve is used to record exchange differences arising fromthetranslationofthefinancialstatementsofforeignoperationswhosefunctionalcurrenciesaredifferent from that of theGroup’spresentation currency. It is alsoused to record theexchangedifferencesarisingfrommonetaryitemswhichformpartoftheGroup’snetinvestmentinforeignoperations, where themonetary item is denominated in either the functional currency of thereportingentityortheforeignoperation.
(e) Thecapitalreserverepresentsthedifferencebetweenthefairvalueandcostoftheinterest-freenon-currentamountowingtotheimmediateholdingcompanyasat1January2010onadoptionofFRS139.
31 RETAINEd EARNINGS
TheCompanyelectedtopaydividendsunderthesingletiersystemin2008.TheCompanywillbeabletodistributedividendsoutofitsentireretainedearningsasat31December2010underthesingletiersystem.
In addition, as at 31 December 2010, PLUS has tax exempt profits available for distribution ofapproximatelyRM4,677million(2009:RM4,677million).
32 TRAdE PAYAbLES
Group Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Tradepayables 60,709 35,454 – –
Payables are non-interest bearing and are normally settled on 30 to 60 days (2009: 30 to 60 days)terms.
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33 cURRENT TAX PAYAbLE
Group
2010 2009
RM’000 RM’000
Currenttaxpayablebeforesetoff 330,301 13,144
SetoffagainsttollcompensationrecoverablefromtheGovernment(Note24) (328,675) (12,337)
At31December 1,626 807
Following the expiry of PLUS’s tax exemption period in 2006, PLUS’s income is subject to tax. Theincome tax payable is set off against the toll compensation recoverable from the Government inaccordancewiththeSSCAasdetailedoutinNote3(i)(b).
34 LONG TERM ANd SHORT TERM fINANcIAL LIAbILITIES
Group Company
Note 2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Long Term financial Liabilities
PEB
PLUSSPVSukuk (a)(i) 1,429,054 1,377,021 1,429,054 1,377,021
PLUS
SeniorSukuk (a)(ii) 1,350,000 1,900,000 – –
SukukSeries1 (a)(iii) 1,491,547 1,764,492 – –
SukukSeries2 (a)(iv) 1,507,544 1,411,799 – –
SukukSeries3 (a)(v) 1,821,749 1,282,307 – –
ELITE
SeafieldSukuk (a)(vi) 862,137 859,566 – –
KLBK
BAIDS (a)(vii) 167,534 167,850 – –
At31December 8,629,565 8,763,035 1,429,054 1,377,021
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Group
Note 2010 2009
RM’000 RM’000
Short Term financial Liabilities
PLUS
SeniorSukuk (a)(ii) 550,000 550,000
SukukSeries1 (a)(iii) 384,016 –
KLBK
BAIDS (a)(vii) 4,943 7,917
At31December 938,959 557,917
PEb
(a)(i) PLUSSPVSukuk
Group and Company
2010 2009
RM’000 RM’000
Principal 1,317,024 1,317,024
Accretedprofitelement 112,030 59,997
1,429,054 1,377,021
ThePLUSSPVSukukareconstitutedbyaTrustDeeddated13June2008enteredintobyPLUSSPVBerhadastheIssuerandtheTrusteefortheholdersofthePLUSSPVSukuk.
PEBthroughan independentspecialpurposecompany,PLUSSPVBerhad(whosesharesareheld by a share trustee for and on behalf of charitable organisations), had until December2010 issued RM1.8 billion nominal value PLUS SPV Sukuk under amedium term notesprogrammeofuptoRM4billionnominalvaluePLUSSPVSukukbasedontheIslamicprincipleofMusyarakahto investors identifiedviaabook-buildingprocess.ThePLUSSPVSukukwereissued in 13 series, withmaturities commencing from 2013 to 2019. The yield tomaturityrangesfrom5.55%to7.55%perannumandiscompoundedsemi-annually.
Theprofitrateis2%perannumandtheprofitispayablesemi-annuallyoneachseriesofthePLUSSPVSukuk.
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34 LONG TERM ANd SHORT TERM fINANcIAL LIAbILITIES (cONTINUEd)
PEb (cONTINUEd)
(a)(i) PLUSSPVSukuk(Continued)
ThetermsofthePLUSSPVSukukcontainvariouscovenantsincludingthefollowing:
PEB(theObligor)shallmaintainanannualDebttoEquityRatio(“theD:ERatio”)notexceeding1.5 times throughout the tenure of the Sukuk Programme. The D:E Ratio is the ratio ofindebtednessoftheObligorrepresentedby:
(i) theobligationsoftheObligorunderthePurchaseUndertaking(whichisdeemedtobeanamountequivalenttotheaggregatenominalvalueofalloutstandingSukuk,adjustedtobeequivalenttotheaccretedvalueonthedatetheD:ERatioiscalculated);
(ii) allotherindebtednessoftheObligorforborrowedmonies(beitactualorcontingentandwhether Islamic or conventional) for principal only, hire purchase obligations, financelease obligations, net exposure determined on amarked tomarket basis under anyderivative instrument and obligations/contingent liabilities under guarantees/call or putoptionsof theObligorbutexcluding (a)any intercompany loanswhicharesubordinatedtotheSukuk,(b)non-recourseindebtednessincurredbytheObligor’ssubsidiariesand(c)anyperformancebonds/performanceguarantees/shareholderundertakings inrelation tocostoverrunsissuedbytheObligorinrespectofprojectsundertakenbytheObligorand/oritssubsidiaries;
to the shareholders’ funds of the Obligor including, if any, preference equity, subordinatedshareholders’advances/loansandretainedearnings/losseslessintangibles(ifany).
TheD:ERatio shall be calculated on a yearly basis and as andwhen such calculations arerequired tobemadeunder the termsof the transactiondocumentsduring the tenureof theSukuk Programme. In the case of D:ERatio calculated on a yearly basis, such calculationsshallbebasedonthelatestconsolidatedauditedaccountsoftheObligorandinthecaseofD:ERatiocalculatedatanyothertimes,thecalculationsshallbebasedonthelatestconsolidatedmanagementaccountsoftheObligor.
ThematurityprofileofPLUSSPVSukukisanalysedinNote36,‘MaturityProfileofBondsandBorrowings’.
TherelevantdetailsofthesecurityarrangementsarestatedinNote37,‘SecurityArrangementsofBondsandBorrowings’.
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PLUS
(a)(ii) SeniorSukuk
Group
2010 2009
RM’000 RM’000
Repayablewithin12months 550,000 550,000
Repayableafter12months 1,350,000 1,900,000
1,900,000 2,450,000
TheSenior Sukuk is constituted by the TrustDeed dated 18December 2007 entered into byPLUSandtheTrusteefortheholdersoftheSeniorSukuk.
TheSeniorSukukwas issuedon27December2007withanominalvalueofRM3,550millionunder the Islamic principle ofMusyarakahwhich is a contract of partnership in a venture.Underthisstructure,potentialinvestorsformedaMusyarakahamongthemselvestoinvestintheSeniorSukuk.
TheSeniorSukukwasissuedin10seriesasprimarysukukwithmaturitiescommencingfrom2008 to2017.Theexpected returnspecified foreachseriesofprimarysukuk is representedbysecondarysukuk.Thefacevalueofsecondarysukukarecomputedbasedontheexpectedreturn specified for each series of primary sukuk i.e. from 5.70% to 7.50% per annum. Thesecondarysukukareredeemableeverysixmonthscommencing30May2008.
Theproceedsof theSeniorSukukwasutilised toreplaceBAIDSofwhichRM3,550million innominalvaluewasoutstanding.Hence,noadditionalproceedswereraisedfromtheissuanceof the Senior Sukuk. The Senior Sukukwas issued at par to the face value, to the existingholdersoftheBAIDSinexchangeforthesurrenderandcancellationbysuchholdersoftheirrespectiveBAIDS. The existing holders of theBAIDSwere allottedwith such amount of thenominalvalueof theSeniorSukukwhich isequivalent to theamountofnominalvalueof theBAIDSasheldbythematacertaincutoffdate.
ThetermsoftheSeniorSukukcontainvariouscovenantsincludingthefollowing:
(i) PLUSmustmaintainaFinanceServiceCoverageRatio(“FSCR”)ofatleast1.25timesoneachcalculationdate,being30Juneand31Decemberineachyear.TheFSCRshallbeatleast2.25timespriortoanypaymentordeclarationofdividend,oranyadvances;
(ii) PLUSmustmaintain a Finance Service Reserve Account (“FSRA”) at any time duringthe tenure of the Senior Sukukwhich has aminimum balance equivalent to the next12months’ finance service due under the Senior Sukuk. The amount thereinmay bewithdrawntomeetanypaymentundertheSeniorSukuk,providedalwaysthatPLUSshalltransfermonies into such accountwithin 30 days from suchwithdrawal tomaintain theminimumbalancedescribedabove;and
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34 LONG TERM ANd SHORT TERM fINANcIAL LIAbILITIES (cONTINUEd)
PLUS (cONTINUEd)
(a)(ii) SeniorSukuk(Continued)
(iii) PLUSmustmaintainaMaintenanceReserveAccount(“MRA”)atanytimeduringthetenureof the Senior Sukukwhich has aminimum balance equivalent to the projected capitalexpenditureoftheexpresswaysforthenext6months.However,aminimumbalancemaybewithdrawntomeetanypaymentof theprojectedcapitalexpenditure forexpressways,subject always to the condition that PLUS shall transfermonies into theMRAwithin 30daysofsuchwithdrawaltomaintaintheminimumbalancedescribedabove.
Thematurity profile of Senior Sukuk is analysed inNote 36, ‘Maturity Profile of Bonds andBorrowings’.
TherelevantdetailsofthesecurityarrangementsarestatedinNote37,‘SecurityArrangementsofBondsandBorrowings’.
(a)(iii) SukukSeries1
Group
2010 2009
RM’000 RM’000
SukukSeries1 1,148,930 1,148,930
Accretedprofitelement 726,633 615,562
1,875,563 1,764,492
Repayablewithin12months 384,016 –
Repayableafter12months 1,491,547 1,764,492
1,875,563 1,764,492
TheSukukSeries1areconstitutedbyaTrustDeeddated28September2006enteredintobyPLUSandtheTrusteefortheholdersoftheSukukSeries1.
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PLUS (cONTINUEd)
(a)(iii) SukukSeries1(Continued)
SukukSeries1wasissuedon10October2006undertheIslamicprincipleofMusyarakahwithanominalvalueofRM2,260millionviaexchangeforBBASerialBondspreviouslyissuedon20December2002.SukukSeries1arenegotiablenon-interestbearingsecuredBondsinbearerformevidencingapromisebyPLUStopaystatedsumsonspecifieddates.TheSukukSeries1are issued in12serieswith tenures from8.5years to14years fromthedateof issue.Theyieldtomaturityrangesfrom5.75%to6.95%perannumandiscompoundedsemi-annually.
TheSukukSeries1entitleholdersoftheSukukSeries1toaone-offpaymentoftheExercisePriceontheMaturityDateandDistributionontheDistributionDate.
The terms of the Trust Deed prescribes that in the event of default, the nominal amountoutstandingoftheSukukSeries1willbecomeimmediatelydueandpayable.
ThematurityprofileofSukukSeries1 isanalysed inNote36, ‘MaturityProfileofBondsandBorrowings’.
TherelevantdetailsofthesecurityarrangementsarestatedinNote37,‘SecurityArrangementsofBondsandBorrowings’.
(a)(iv) SukukSeries2
Group
2010 2009
RM’000 RM’000
SukukSeries2 1,047,972 1,047,972
Accretedprofitelement 459,572 363,827
1,507,544 1,411,799
TheSukukSeries2areconstitutedbyaTrustDeeddated28September2006enteredintobyPLUSandtheTrusteefortheholdersoftheSukukSeries2.
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PLUS (cONTINUEd)
(a)(iv) SukukSeries2(Continued)
SukukSeries2wasissuedon10October2006undertheIslamicprincipleofMusyarakahwithanominalvalueofRM2,410millionviaexchangeforZeroSerialBBApreviously issuedon17June2005.SukukSeries2arenegotiablenon-interestbearingsecuredBondsinbearerformevidencingapromisebyPLUStopaystatedsumsonspecifieddates.TheSukukSeries2areissued in4serieswithtenuresfrom11yearsto14yearsfromthedateof issue.Theyieldtomaturityrangesfrom6.35%to6.95%perannumandiscompoundedsemi-annually.
TheSukukSeries2entitleholdersoftheSukukSeries2toaone-offpaymentoftheExercisePriceontheMaturityDateandDistributionontheDistributionDate.
The terms of the Trust Deed prescribes that in the event of default, the nominal amountoutstandingoftheSukukSeries2willbecomeimmediatelydueandpayable.
ThematurityprofileofSukukSeries2 isanalysed inNote36, ‘MaturityProfileofBondsandBorrowings’.
TherelevantdetailsofthesecurityarrangementsarestatedinNote37,‘SecurityArrangementsofBondsandBorrowings’.
(a)(v) SukukSeries3
Group
2010 2009
RM’000 RM’000
SukukSeries3 1,561,543 1,118,483
Accretedprofitelement 260,206 163,824
1,821,749 1,282,307
TheSukukSeries3areconstitutedbyaTrustDeeddated28September2006enteredintobyPLUSandtheTrusteefortheholdersoftheSukukSeries3.
PLUS issued2 tranchesofSukukSeries3under the IslamicprincipleofMusyarakahwithanominal valueofRM1,375millionon10October2006with tenuresof 14 yearsand15 yearsfrom the date of issue. Further, PLUS has issued the third, fourth and fifth tranchewith anominalvalueofRM700million,RM600millionandRM1,000millionon29May2008,29May2009and31May2010 respectively.All three trancheswere issuedwitha tenureof14 yearsfrom the date of issue. SukukSeries 3 are negotiable non-interest bearing securedMediumTermNotes (“MTNs”) in bearer form evidencing a promise by PLUS to pay stated sums onspecifieddates.
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(a)(v) SukukSeries3(Continued)
The yield tomaturity ranges from 5.90% to 6.52% per annum and is compounded semi-annually.
Therewill be two (2) types of Sukuk Series 3 namely thoseMTNswith Periodic PaymentsandthoseMTNswithoutPeriodicPaymentsprovidedthatSukukSeries3involvingMTNswithPeriodicPaymentsmayonlybeissueduponeither(a)redemptioninfulloftheSeniorSukuk,theSukukSeries1andtheSukukSeries2;or(b)consentoftheholdersoftheSeniorSukuk,the Sukuk Series 1 and the Sukuk Series 2; or (c) from 30 June 2019 onwards, whicheverearlier.
MTNswith Periodic Paymentswill be entitled to Periodic Payments and a payment of theExercisePrice.
MTNswithout Periodic Paymentswill only be entitled to a one-off payment of the ExercisePriceontheMaturityDateandDistributionontheDistributionDate.
The terms of the Trust Deed prescribes that in the event of default, the nominal amountoutstandingoftheSukukSeries3willbecomeimmediatelydueandpayable.
ThematurityprofileofSukukSeries3 isanalysed inNote36, ‘MaturityProfileofBondsandBorrowings’.
TherelevantdetailsofthesecurityarrangementsarestatedinNote37,‘SecurityArrangementsofBondsandBorrowings’.
ELITE
(a)(vi) SeafieldSukuk
Group
2010 2009
RM’000 RM’000
Principal 921,904 921,904
Accretedprofitelement 2,215 798
Unamortisedpremiumonredemption (61,982) (63,136)
862,137 859,566
TheSeafieldSukukisconstitutedbytheTrustDeeddated5May2009enteredintobySeafieldCapital Berhad (“Seafield”) as the Issuer and Universal Trustee (Malaysia) Berhad, as theTrusteefortheholdersoftheSeafieldSukuk.
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34 LONG TERM ANd SHORT TERM fINANcIAL LIAbILITIES (cONTINUEd)
ELITE (cONTINUEd)
(a)(vi) SeafieldSukuk(Continued)
Seafieldwas incorporated inMalaysiaon28December2007under theCompaniesAct, 1965asaspecialpurposecompanywhosesharesareheldbyasharetrusteeforandonbehalfofcharitableorganisation. Itsprincipalactivity is toundertake the issueof Islamicsecurities inaccordancewiththeSyariahprinciples.
ELITE, through Seafield, had on 27May 2009 issued RM950million nominal value SeafieldSukukunderthemediumtermnotesprogrammeofuptoRM1.5billionnominalvalueSeafieldSukuk based on the Islamic Principle ofMusyarakah. The Seafield Sukukwere issued in 9serieswithmaturitiescommencingfrom2018to2026.
The proceeds from this issuance, of RM921.9millionwere used to replace the outstandingELITE BAIDS of RM640million together with the associated accrued profit and premium,to fund the fees and expenses under the IslamicMTNProgramme, general funding, capitalexpenditureandworkingcapitalrequirementsofELITE.
TheprofitratefortheSeafieldSukukrangesfrom6.00%to7.35%andarepaidsemi-annuallyoneachseriesoftheSeafieldSukuk.
ThetermsoftheSeafieldSukukcontainvariouscovenantsincludingthefollowing:
(i) Under thePurchaseUndertakingdated5May2009,ELITEshall, as longas theSeafieldSukuk shall remain outstanding, ensure that the Finance Service Cover Ratio (“FSCR”)at each calculation date shall not be less than 1.25 times throughout the tenure of theIslamicMTNProgramme.TheFSCRshallbeat least2.00timesprior toanypaymentordeclarationofdividend,oranyadvances;and
(ii) ELITE shall open andmaintain a Syariah compliant Finance Service Reserve Account(“FSRA”)andensure that fundsshallbedeposited intoandmaintained in theFSRAwithan amount equivalent to the next six (6)months finance service due under the SeafieldSukuk.
The terms of the Trust Deed prescribes that in the event of default, the nominal amountoutstandingoftheSeafieldSukukwillbecomeimmediatelydueandpayable.
ThematurityprofileofSeafieldSukuk is analysed inNote36, ‘MaturityProfileofBondsandBorrowings’.
TherelevantdetailsofthesecurityarrangementsarestatedinNote37,‘SecurityArrangementsofBondsandBorrowings’.
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kLbk
(a)(vii) BAIDS
Group
2010 2009
RM’000 RM’000
BAIDS 150,177 159,052
Accretedprofitelement 22,300 16,715
172,477 175,767
Repayablewithin12months 4,943 7,917
Repayableafter12months 167,534 167,850
172,477 175,767
The KLBKBAIDS are constituted pursuant to a Trust Deed between KLBK andMalaysianTrusteesBerhaddated5July2005.KLBKissuedRM247millionsecuredPrimaryBAIDSbasedontheIslamicfinancingprincipleofBaiBithamanAjil.
ThePrimaryBAIDScomprise25series,withtotalproceedsofRM173.18millionandredemptionvalueofRM247millionmaturingannually fromyear2006 toyear2022.Theyield tomaturityranges from 4.00% to 9.00% per annum and is compounded semi-annually. Attached to thePrimary BAIDS are non-detachable Secondary BAIDSwhich represents the profit elementattributable to thePrimaryBAIDS.Theprofit rate is4%perannumand theprofit ispayablesemi-annuallyoneachseriesof thePrimaryBAIDS.TheSecondaryBAIDShavea facevalueofRM119.54million.
TheprofitelementonthePrimaryBAIDSisrecognisedasfinancecostoverthetenureofthePrimaryBAIDS’seriesandischargedtotheincomestatementasanexpenseinthefinancialyearitisincurred.
Thematurity profile of KLBKBAIDS is analysed inNote 36, ‘Maturity Profile of Bonds andBorrowings’.
TherelevantdetailsofthesecurityarrangementsarestatedinNote37,‘SecurityArrangementsofBondsandBorrowings’.
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35 LONG TERM ANd SHORT TERM bORROWINGS ANd AMOUNT dUE TO GOvERNMENT
Group
Note 2010 2009
RM’000 RM’000
LongTermBorrowings (A) 1,824,805 1,654,284
ShortTermBorrowings (B) 140,945 23,947
AmountduetoGovernment (C) 38,096 38,096
2,003,846 1,716,327
(A) Long Term Borrowings
ELITE
GovernmentLoans
–Amountdrawndown 89,916 89,916
–AdditionalGovernmentLoan 300,000 300,000
(a)(i) 389,916 389,916
LINKEDUA
GovernmentLoan
–Principalandcapitalisedinterest 1,161,985 1,074,320
–Accruedinterest 94,818 87,664
(a)(ii) 1,256,803 1,161,984
PLUS BKSP
TermLoans (a)(iii) – 102,384
INIPPL
TermLoan (a)(iv) 178,086 –
Total Long Term Borrowings 1,824,805 1,654,284
(B) Short Term Borrowings
PLUS BKSP
TermLoans (a)(iii) 2,254 23,947
CommercialPaper (b)(i) 131,844 –
INIPPL
TermLoan (a)(iv) 6,847 –
Total Short Term Borrowings 140,945 23,947
(C) ELITE
AmountduetoGovernment (c)(i) 38,096 38,096
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(cONTINUEd)
ELITE
(a)(i) GovernmentLoans
ELITE entered into an agreement on 15 December 2000with the Governmentwhereby theGovernmentprovidesfinancingup toamaximumofRM100million,atan interest rateof8%perannumcapitalisedonanannualbasis.
TheGovernmentandELITEenteredintoaSupplementalLoanAgreement(“SLA”)andAdditionalGovernmentLoanAgreement(“AGLA”)dated15January2003,wherebytheGovernmentagreedtowaiveELITE’sobligation topay intereston the thenexistingGovernmentLoanswitheffectfrom15December2000to31December2001andtoprovideELITEwithaninterestfreetermloan facility at a principal of RM300million. It was also agreed that the aforesaid existingGovernmentLoanshallbeinterestfreewitheffectfrom1January2002tothefinalrepaymentdate.
PursuanttoELITE’sSLAandAGLA,theGovernmentLoanandAdditionalGovernmentLoanarerepayableinfullon30June2015.
ThematurityprofileoftheELITE’sGovernmentLoansisanalysedinNote36,‘MaturityProfileofBondsandBorrowings’.
TherelevantdetailsofthesecurityarrangementsarestatedinNote37,‘SecurityArrangementsofBondsandBorrowings’.
LINkEdUA
(a)(ii) GovernmentLoan
LINKEDUA’sGovernmentLoanisrepayablein13semi-annualinstalmentsrangingfromRM58milliontoRM346millioncommencingfrom14June2014andbearsinterestatrateof8%perannum.
Thematurity profile of the LINKEDUA’s Government Loan is analysed inNote 36, ‘MaturityProfileofBondsandBorrowings’.
TherelevantdetailsofthesecurityarrangementsarestatedinNote37,‘SecurityArrangementsofBondsandBorrowings’.
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35 LONG TERM ANd SHORT TERM bORROWINGS ANd AMOUNT dUE TO GOvERNMENT (cONTINUEd)
PLUS bkSP
(a)(iii) TermLoans
PLUSBKSPhassecuredatermloanandadditionaltermloan,denominatedinIndianRupees,whichbears interestrateof12.25%perannumand13.25%respectively.BothtermloansaresecuredbyfuturetollcollectionofPLUSBKSP.
The term loans have been refinanced with a Rs192 crores Commercial Paper facility(“CommercialPaper”)inOctober2010,thedetailsofwhicharedisclosedinNote35b(i).
INIPPL
(a)(iv) TermLoan
The term loan isconstitutedbyaCommonRupeeLoanAgreementdated18November2006entered intoby INIPPLas theborrower,CanaraBankas the lender’sagent, security trusteeandthelenders.
TheloanisdenominatedinIndianRupeesamountingtoRs266croresandtheinterestrateisat12.25%perannum.
ThematurityprofileofINIPPLtermloanisanalysedinNote36,‘MaturityProfileofBondsandBorrowings’.
TherelevantdetailsofthesecurityarrangementsarestatedinNote37,‘SecurityArrangementsofBondsandBorrowings’.
(b)(i) CommercialPaper
TheCommercialPaperwasissuedon25October2010,withanominalvalueofRs192croresandayieldtomaturityof10.00%perannum,amountingtoRs192croreswithproceedsamountofRs174.5crores,andconstitutedbyLetterofOffer,DealConfirmationNoteandIssuingandPayingAgencyAgreemententeredintobetweenPLUSBKSPandAxisBank, in itscapacityasanIssuingandPayingAgent.
TheCommercialPaperwasissuedtorefinancetheexistingdebtsandfulfillingworkingcapitalrequirementofPLUSBKSPandwillmatureon4October2011.
ThematurityprofileoftheCommercialPaperisanalysedinNote36,‘MaturityProfileofBondsandBorrowings’.
TherelevantdetailsofthesecurityarrangementsarestatedinNote37,‘SecurityArrangementsofBondsandBorrowings’.
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(cONTINUEd)
ELITE
(c)(i) AmountduetoGovernment
Under the Supplemental Concession Agreement entered on 9 January 1997 between theGovernment ofMalaysia andELITE, ELITEundertook to implement the design, construction,maintenance,operationandmanagementofthreeadditionalinterchangesnamelythePutrajayaInterchange, the proposed Salak Tinggi Interchange (later relocated to Ampar Tenang andthereaftercalledtheAmparTenangInterchange)andBandarBaruNilaiInterchangealongtheNSECLExpressway,andanextensionoftheKLIAExpressway(“AdditionalExpressway”).
To assist in the financing of the acquisition of the additional land required of the aboveAdditionalExpressway,theGovernmentofMalaysiaagreedtopaytothirdpartiesonbehalfofELITEanamountinaggregatenotexceedingRM120million(referredtoasthe“ReimbursementLandCost”). TheReimbursement LandCost is interest free and is payable by ELITE to theGovernmentinfourequalinstallments,asfollows:
DateofRepayment Percentage
(i) Onorbefore31December2015 25%ofReimbursableLandCosts
(ii) Onorbefore31December2016 25%ofReimbursableLandCosts
(iii) Onorbefore31December2017 25%ofReimbursableLandCosts
(iv) Onorbefore31December2018 25%ofReimbursableLandCosts
As at 31 December 2010, the amount payable to the Governmentwas RM38,095,662 (2009:RM38,095,662).
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Amountsoutstandingandrepayableasat31December2010and31December2009oftheGrouparetabulatedasfollows:
NoteWithin 1 year
Between 1 and 2 years
Between 2 and 5 years
After 5 years Total
RM’000 RM’000 RM’000 RM’000 RM’000
2010
PEB
PLUSSPVSukuk 34(a)(i) – – 569,695 859,359 1,429,054
PLUS
SeniorSukuk 34(a)(ii) 550,000 350,000 800,000 200,000 1,900,000
SukukSeries1 34(a)(iii) 384,016 361,691 951,185 178,671 1,875,563
SukukSeries2 34(a)(iv) – – – 1,507,544 1,507,544
SukukSeries3 34(a)(v) – – – 1,821,749 1,821,749
ELITE
SeafieldSukuk 34(a)(vi) – – – 862,137 862,137
GovernmentLoans 35(a)(i) – – 389,916 – 389,916
LINKEDUA
GovernmentLoan 35(a)(ii) – – 877,613 379,190 1,256,803
KLBK
BAIDS 34(a)(vii) 4,943 5,775 29,653 132,106 172,477
PLUS BKSP
TermLoans 35(a)(iii) 2,254 – – – 2,254
CommercialPaper 35(b)(i) 131,844 – – – 131,844
INIPPL
TermLoan 35(a)(iv) 6,847 5,047 32,034 141,005 184,933
1,079,904 722,513 3,650,096 6,081,761 11,534,274
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Amountsoutstandingandrepayableasat31December2010and31December2009oftheGrouparetabulatedasfollows(Continued):
NoteWithin 1 year
Between 1 and 2 years
Between 2 and 5 years
After 5 years Total
RM’000 RM’000 RM’000 RM’000 RM’000
2009
PEB
PLUSSPVSukuk 34(a)(i) – – 345,044 1,031,977 1,377,021
PLUS
SeniorSukuk 34(a)(ii) 550,000 550,000 950,000 400,000 2,450,000
SukukSeries1 34(a)(iii) – 362,766 958,323 443,403 1,764,492
SukukSeries2 34(a)(iv) – – – 1,411,799 1,411,799
SukukSeries3 34(a)(v) – – – 1,282,307 1,282,307
ELITE
SeafieldSukuk 34(a)(vi) – – – 859,566 859,566
GovernmentLoans 35(a)(i) – – – 389,916 389,916
LINKEDUA
GovernmentLoan 35(a)(ii) – – 340,066 821,918 1,161,984
KLBK
BAIDS 34(a)(vii) 7,917 4,841 21,766 141,243 175,767
PLUS BKSP
TermLoans 35(a)(iii) 23,947 25,434 76,950 - 126,331
581,864 943,041 2,692,149 6,782,129 10,999,183
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The security arrangements as at 31 December 2010 in connection with the Group’s bonds andborrowingsareasfollows:
(i) SecurityarrangementforPLUSSPVSukuk
(a) AfirstrankingdebentureincorporatingafixedandfloatingchargeoverallpresentandfutureassetsoftheIssuer;and
(b) AnassignmentoftheIssuer’srevenueandincomeincludingbutnotlimitedtoanydividendsanddistributions,whetherincomeorcapitalinnature.
(ii) SecurityarrangementforSeniorSukuk
(a) Anassignmentandcharge (rankingfirst inpointof security) over theTollAmounts,CreditBalances, Additional Project Accounts (save and except in respect of the Additional TollRevenue Account, it would exclude the ELITE Amount) and PLUS Amount (except forDistribution Amount 1, Distribution Amount 2, Distribution Amount 3, Charged Amount1, Charged Amount 2 and Charged Amount 3 and themonies in the Proceeds Account,Performance Bonds Proceeds Account, Distribution Account 1, Distribution Account 2,DistributionAccount3,PaymentAccount1,PaymentAccount2andPaymentAccount3andallthecreditbalancestherein)(“AssignmentandCharge”).
(b) Anassignment(rankingfirstinpointofsecurity)oftherightsovertheConcession,ConstructionGuarantees(otherthanthePerformanceBonds),ConstructionContractsandInsurance.
(c) A debenture over the fixed andfloating assets of PLUS (other than those security interestalready covered under (a) and (b) above, the PerformanceBonds, the PerformanceBondsProceeds Account, the Proceeds Account, Distribution Account 1, Distribution Account 2,DistributionAccount3,PaymentAccount1,PaymentAccount2,PaymentAccount3andallthecreditbalancesthereinaswellastheChargedAmount1,ChargedAmount2andChargedAmount3).
(d) Anassignment (rankingfirst inpointofsecurity)overPLUS’rights, titleand interest in theAdditionalProjectAgreements.
(e) Anassignment(rankingsecondinpointofsecurityaftertheGovernment)overthePerformanceBondsandPerformanceBondsProceedsAccount.
(hereinafterreferredtoasthe“Security”)
ThesecuritydocumentsshallallformpartofthetermsoftheSeniorSukuk.
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(ii) SecurityarrangementforSeniorSukuk(Continued)
TheSecurityTrusteeshallholdthebenefitoftheSecurityfortheDesignatedDebtfinanciers(asdefinedbelow)rankingparipassuamongstthemselvessubjecttothefollowing:
(a) thesecurityinrespectofthePerformanceBondsandPerformanceBondsProceedsAccountshallranksecondaftertheassignmentofthesameinfavouroftheGovernment;and
(b) the security in respect of the FSRA (as hereinafter defined) shall rank as between theDesignatedDebtfinanciersasfollows:
(i) rankingfirst,theSukukholders;and
(ii) ranking second, the lenders of theMaintenance Bond facility and Overdraft facility(excludingtheTradeLines)whichshallrankparipassuamongstthemselves.
TheDistributionAccount1 (andall creditbalances therein)and theDistributionAmount1, andthePaymentAccount1(andallcreditbalancestherein)andtheChargedAmount1areexcludedfrom the Security and is held for the benefit of/charged to the holders of the Sukuk Series 1respectively.
The Proceeds Account and all credit balances in the Proceeds Account are excluded from theSecurityandareforthebenefitoftheGovernment.
TheDistributionAccount2 (andall creditbalances therein)and theDistributionAmount2, andthePaymentAccount2(andallcreditbalancestherein)andtheChargedAmount2areexcludedfrom the Security and is held for the benefit of/charged to the holders of the Sukuk Series 2respectively.
TheDistributionAccount3 (andall creditbalances therein)and theDistributionAmount3, andthePaymentAccount3(andallcreditbalancestherein)andChargedAmount3areexcludedfromtheSecurityandisheldforthebenefitof/chargedtotheholdersoftheSukukSeries3.
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(iii) SecurityarrangementsforSukukSeries1
(a) AssignmentovertheSukukSeries1ChargedAmounts;and
(b) ChargeoverPaymentAccount1.
TheSukukSeries 1 Security Account to receive theSukukSeries 1ChargedAmounts shall besolelymanagedbytheSukukSeries1Trustee.
TheSukukSeries1ChargedAmountsare thesumnotexceedingRM400millionof thepositiveCashFlowProceedspercalendaryearinrespectoftheperiodcommencing1January2011to31December2015andRM260millioninrespectoftheperiodfrom1January2016to31December2016.
DeterminationoftheCashflowProceedsshallbeinthefollowingmanner:
– Sixmonthspriortoandendingonthedatefalling65daysbeforematuritydateoftheSukukSeries1(the“RelevantPeriod”),PLUSshalldeterminetheexcesscashflowofPLUS(otherthanproceedsfromtheissuanceofnewsharesbyPLUSandexcludingtheFSRAandMRA)at theendofeachRelevantPeriodafterprovidingorpayment,as thecasemaybe, for thefollowing:
(i) for PLUS’s budgeted operating and capital expenditure requirements for the followingRelevantPeriod;
(ii) forsuchoftheMaintenanceBondfacilityandOverdraftfacilityasremainsoutstanding;
(iii) totheFSRAandMRAduringthesaidRelevantPeriod;and
(iv) inrespectoftheredemptionofSeniorSukukduringthesaidRelevantPeriod.
(iv) SecurityarrangementsforSukukSeries2
(a) AssignmentovertheSukukSeries2ChargedAmounts;and
(b) ChargeoverPaymentAccount2.
The Sukuk Series 2 Charged Amounts in relation to each series of the Sukuk Series 2 shallbe deposited into the Sinking Fund Account within five (5) days after the certification of theCashflowProceedsby theauditors (which shall bewithin thirty (30) days from theendof eachDeterminationPeriod) and in any event not less than 30 days prior to thematurity date of therelevantseriesoftheSukukSeries2.
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(iv) SecurityarrangementsforSukukSeries2(Continued)
DeterminationoftheCashflowProceedsshallbeinthefollowingmanner:
– PLUSshalldetermineitsexcessrevenueandincome(otherthanproceedsfromtheissuanceof new shares by PLUS and excluding the FSRA andMRA) at the end of a DeterminationPeriodafterprovidingorpayment,asthecasemaybe,forthefollowing:
(i) for PLUS’s budgeted operating and capital expenditure requirements for the followingDeterminationPeriod;
(ii) forsuchoftheMaintenanceBondfacilityandOverdraftfacilityasremainsoutstanding;
(iii)totheFSRAandMRAduringthesaidDeterminationPeriod;
(iv) inrespectoftheSeniorSukukduringthesaidDeterminationPeriod;and
(v) inrespectoftheSukukSeries1duringthesaidDeterminationPeriod.
“Determination Period”means the period beginning six (6)months and 65 days prior to thematuritydateofeachtranchesoftheSukukSeries2andendingonthedatefallingsixtyfive(65)daysbeforethematuritydateofthattranchesoftheSukukSeries2.
Tranches Sukuk Series 2 charged Amounts
(RM million)
Maturity date (years from the
Issue date)
1 350.0 11
2 650.0 12
3 800.0 13
4 610.0 14
Total 2,410.0
The proceeds in the Sinking Fund Account shall be utilised towards redemption of the SukukSeries2ontheirrespectivematuritydates.TheSinkingFundAccountshallbeoperatedsolelybytheTrustee.
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(v) SecurityarrangementsforSukukSeries3
(a) AssignmentovertheSukukSeries3ChargedAmounts;and
(b) ChargeoverPaymentAccount3.
The Sukuk Series 3 Charged Amounts in relation to each series of the Sukuk Series 3 shallbe deposited into the Sinking Fund Account within five (5) days after the certification of theCashflowProceedsby theauditors (which shall bewithin thirty (30) days from theendof eachDeterminationPeriod)andinanyeventnotlessthanthirty(30)dayspriortothematuritydateoftherelevantseriesoftheSukukSeries3.
DeterminationoftheCashflowProceedsshallbeinthefollowingmanner:
– PLUSshalldetermineitsexcessrevenueandincome(otherthanproceedsfromtheissuanceof new shares byPLUS and excluding theFSRAandMRA) at end ofDeterminationPeriodafterprovidingorpayment,asthecasemaybe,forthefollowing:
(i) for PLUS’s budgeted operating and capital expenditure requirements for the followingDeterminationPeriod;
(ii) forsuchoftheMaintenanceBondfacilityandOverdraftfacilityasremainsoutstanding;
(iii) totheFSRAandMRAduringthesaidDeterminationPeriod;
(iv) inrespectoftheSeniorSukukduringthesaidDeterminationPeriod;
(v) inrespectoftheSukukSeries1duringthesaidDeterminationPeriod;and
(vi) inrespectoftheSukukSeries2duringthesaidDeterminationPeriod.
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(v) SecurityarrangementsforSukukSeries3(Continued)
“DeterminationPeriod”meanstheperiodbeginningsix (6)monthsandsixtyfive(65)dayspriortothematuritydateofeachtranchesoftheSukukSeries3andendingonthedatefallingsixtyfive(65)daysbeforethematuritydateofthattranchesoftheSukukSeries3.
Tranches Sukuk Series 2 charged Amounts
(RM million)
Maturity date (years from the
Issue date)
1 675.0 14
2 700.0 15
3 700.0 14
4 600.0 14
5 1,000.0 14
Total 3,675.0
The proceeds in the Sinking Fund Account shall be utilised towards redemption of the SukukSeries3ontheirrespectivematuritydates.TheSinkingFundAccountshallbeoperatedsolelybytheTrustee.
(vi) SecurityarrangementsforELITE’sSeafieldSukuk,GovernmentLoanandAdditionalGovernmentLoan
The security arrangements in connectionwith ELITE’s Seafield Sukuk, Government Loan andAdditional Government Loan (collectively referred to as the “Secured Indebtedness”) are asfollows:
(a) DebentureincorporatingafirstfixedandfloatingchargeontheassetsofELITE,bothpresentandfuture;
(b) Assignment of all ELITE’s contractual rights, interests, title, and benefits in and to theConcession Agreement and any other amendment(s) or variation(s) thereof and addition(s)thereto from time to time executed supplemental thereto on in substitution thereof, theProjectDocumentsandproceedstherefrom-fortheavoidanceofdoubt,thisinterestoftheSukukholdersshallnotbesharedwiththeGovernment;
(c) Assignment ofELITE’s contractual rights, interests, titles, andbenefits in theperformancebonds and the proceeds therefrom, where such performance bonds are secured to theGovernment inaccordancewiththeConcessionAgreementandanyotheramendment(s)orvariation(s)thereofandaddition(s)theretofromtimetotimeexecutedsupplementaltheretoorinsubstitutionthereof-fortheavoidanceofdoubt,thisinterestoftheSukukholdersshallrankaftertheinterestoftheGovernment;
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(vi) SecurityarrangementsforELITE’sSeafieldSukuk,GovernmentLoanandAdditionalGovernmentLoan(Continued)
(d) First fixed charge over the Additional Operating Account (other than the toll amountscollected and held on behalf of PLUS, theRevenue Account, the Finance Service ReserveAccount,theGovernmentLoansServiceReserveAccount,theIPOAccountandCompensationAccount)andfirstfloatingchargeovertheOperationsAccountsandCapexAccountincludingall investmentsand income thereonand theassignmentof thecreditbalancesstanding intheDesignatedAccounts;
(e) AssignmentofallrelevantInsurancesrequiredtobeundertakeninrespectoftheConcession(asdefinedbelow);
(f) AnyothersecurityasrequiredandadvisedbytheSoleLegalCounselof theLeadManagerandasagreedbyELITE.
TheConcessionshallmeantheconcessiongrantedbytheGovernmentundertheConcessionAgreementtoELITE.
Theabove-mentionedsecurity(exceptfor(b)and(c)above),aretobesharedwiththeGovernmentinthefollowingmanner:
(i) OnaparipassubasiswiththeGovernmentinrespectoftheloangrantedbytheGovernmenttoELITEforthemaximumprincipalamountofRM100million;and
(ii) InprioritytotheGovernmentinrespectoftheloangrantedbytheGovernmenttoELITEforthemaximumprincipalamountofRM300million.
(vii) SecurityarrangementsforLINKEDUA’sGovernmentLoan
ThesecurityarrangementsforLINKEDUA’sGovernmentLoanareasfollows:
(a) an assignment and charge (ranking pari passu in point of security) of the rights over theConstructionContracts,InsuranceandPerformanceBonds;
(b) chargeoverSecurityAccount3andSecurityAccount5(rankingparipassuinpointofsecurity)beingtheaccountsmaintainedforthesurpluscashflowforthepurposeofGovernmentLoanrepaymentandfortheproceedsofanyissuanceofnewsharesrespectively;
(c) achargeovertheTollAmountsandthecreditbalancestherein(rankingparipassuinpointofsecurity);and
(d) a debenture over the fixed and floating assets of LINKEDUA (other than those securityalreadycoveredunder(a)and(b)above)rankingparipassuinpointofsecurity.
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(viii)SecurityarrangementsforKLBK’sBAIDS
ThesecurityarrangementforKLBK’sPrimaryBAIDSareasfollows:
Security under the Debenture
(a) bywayoffirstfixedcharge:
(i) anyfreeholdorleaseholdpropertyfromtimetotimeandatanytimeownedbyKLBK;
(ii) all thegoodwillofKLBK,anypatents, trademarks,copyrights, registereddesignsandsimilar assets or rights from time to time and at any time owned by KLBK, and anyuncalledcapitalfromtimetotimeandatanytimeofKLBK;and
(iii) allbookdebtsandotherdebtsandallotheramountswhatsoeverfromtimetotimeandat any time due, owing or payable to KLBK, and the benefit of any Security InterestsfromtimetotimeandatanytimeheldbyKLBKinrespectofanysuchdebtsoramountsincludingsuchamountsasinvestedbyKLBKfromtheamountsstandingtothecreditofanyaccountschargedtotheSecurityAgentandanyincomederivedthereon.
(b) byway of firstfloating charge, theundertaking ofKLBKand all its other property, assets,revenues and rights,whatsoever andwheresoever, both present and future (including anyPermittedInvestmentsnotchargedpursuantto(viii)(a)above).
Security under the Deed of Assignment
(a) allitspresentandfuturerightsundertheConcessionAgreementincludingallamountsfromtimetotimeandatanytimepayabletoKLBKthereunderbytheGovernmentofMalaysia;
(b) all itspresentand future rights, title and interest inandunder the Insurance includingallamountswhatsoever payable under the Insurance and all other rights accruing to KLBKthereunderincludingallclaimsandanyreturnedpremiums;
(c) therighttopursueanyaction,proceeding,suitorarbitrationarisinginrelationtoanyoftherightsassignedtotheSecurityAgentpursuanttothissecurityandtoenforcesuchrightsinthenameoftheSecurityAgentorofKLBK.
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37 SEcURITY ARRANGEMENTS Of bONdS ANd bORROWINGS (cONTINUEd)
(viii)SecurityarrangementsforKLBK’sBAIDS(Continued)
Security under the Charge
Allitspresentandfuturerights,titleandinterestinandto:
(a) theProceeds;
(b) theDesignatedAccounts;and
(c) theCreditBalance.
(ix) SecurityarrangementsforBKSPCommonRupeeLoan
ThesecurityarrangementforBKSP’sCommonRupeeLoanareasfollows:
(a) Assignmentofprojectrevenuesi.etollreceivableandotherreceivables.
(b) SubstitutionRightsinfavourofCanaraBanktosubstituteconcessionaireupon30daysnoticeintheeventofdefaultatanypointoftimeduringtheconcession.
(c) EscrowingofprojectedtollcollectionofRs275.57croresovertheconcessionperiod.
(d) FixedDepositequivalentto3monthsofrepaymentobligationtowardsDebtServiceReserveAccount-theDepositshallbecreatedoutof tollcollectionsduring initialrepaymentholidayof6monthsandsurplus ineachof thesubsequentperiods,andshallhavea lien in favourofBankanditistobereleaseduponfullrepaymentoftheloan.
(x) SecurityarrangementsforPLUSBKSPCommercialPaper
TheCommercialPaperissupportedbytheCorporateGuaranteeprovidedbyPEBfortheamountofRs192crorestoguaranteetheperformanceofPLUSBKSP’sobligationsunderitsCommercialPaperprogramme.TheamountpayableundertheguaranteewillbeinUSDequivalenttoRs.
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(xi) SecurityarrangementsforINIPPLCommonRupeeLoan
TheCommonRupeeLoantogetherwithinterest,additionalinterest,defaultinterest,prepaymentpremium,upfrontfees,costs,charges,expensesandothermonieswhatsoeverstipulatedanddueto the lenders inaccordancewith theCommonRupeeLoanAgreementsubject to the termsoftheConcessionAgreementshallbesecuredby:
(a) afirstrankingparipassumortgageonalltheborrower’simmovableassetsandfirstchargebywayofhypothecationonallmoveableassets(includingbutnotlimitedtoallcurrent/non-currentassets)bothpresentandfuture;
(b) a first ranking pari passu charge/assignment on all the intangible assets of the borrowerincluding but not limited to the goodwill, rights, undertakings and uncalled capital bothpresentandfuture;
(c) a negative lien in respect of the sharesheld by the sponsorswhich shall not be less than51% of the total issued and fully paid up equity of the borrower up to 36months fromcommencementoperationdateand thereafter26%of thesharessubject to therebeingnooutstandingeventofdefaultandconditionsstipulatedin3.1.11(i)oftheCommonRupeeLoanAgreementaresatisfied;
(d) afirstrankingparipassuchargeoverallbankaccounts for theborrower includingwithoutlimitation,theEscrowAccount(oranyaccount insubstitutionthereof)andtheDebtServiceReserve Account in all funds from time to time deposited therein and in all PermittedInvestmentsorothersecuritiesrepresentingallamountscreditedtotheEscrowAccountandtheDebtServiceReserveAccountandanyotherbankaccountsoftheborrowerestablishedpursuanttotheprojectdocumentsorotherwise;
(e) afirstrankingparipassuchargeover/assignmentofallprojectdocuments,allguarantees,performance guarantees or bonds, letters of credit thatmay provided by any party to anyprojectdocument in favourof theborrowerandclearancesandall rights, titles,approvals,permits,clearancesand interestsandtheborrower’sright, title, interest,benefitandclaimin,toorundertheprojectdocumentsandclearances;
(f) afirstrankingparipassuchargeover/assignmentofall theborrower’sright, title, interest,benefitandclaimoftheborrowerin,toorundertheinsurancecontracts,insurancepoliciesandtheinsuranceproceeds;
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(xi) SecurityarrangementsforINIPPLCommonRupeeLoan(Continued)
(g) afirstrankingparipassucharge/assignmentofallreceivableandrevenuesoftheborrowerfromtheprojectorotherwise;and
(h) an undertaking to provide equity/provide subordinated debt from the sponsors for anycostoverrun,gap infinancingandanydelay in receiptof thegrant fromNationalHighwayAuthorityofIndia.
38 RETIREMENT bENEfITS
Group
2010 2009
RM’000 RM’000
Group
At1January 15,698 14,071
Recognisedintheincomestatement 1,930 1,803
Underprovisionforpreviousyears – 28
Benefitspaid (83) (204)
At31December 17,545 15,698
PLUS,ELITEandLINKEDUAoperateanunfunded,definedbenefitRetirementBenefitScheme (“theScheme”)fortheirpersonnelwhoseemploymentcontractsweretransferredin1988fromMalaysianHighwayAuthority,pursuanttotheConcessionAgreement.UndertheScheme,eligibleemployeesareentitledtoretirementbenefitsinaccordancewithapre-determinedformulaasfollows:
RetirementBenefitsasat31December=(2 lastdrawnmonthlybasicsalary lengthofservicewiththecompany)–EPFOffset*
* Definedas total employer’s contributions to theEPF,madeat the statutoryemployer’s contribution rateandaccumulatedEPFdividend.
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Theamountrecognisedinthestatementsoffinancialpositionaredeterminedasfollows:
Group
2010 2009
RM’000 RM’000
Presentvalueofunfundeddefinedbenefitobligations 17,545 15,698
Theamountrecognisedintheincomestatementareasfollows:
Currentservicecost 879 834
Interestcost 1,051 949
Amortisationofnetloss – 20
1,930 1,803
Principalactuarialassumptionsused:
2010 2009
% %
Discountrate 6.00 6.00
Expectedrateonsalaryincreases 5.00 5.00
EPFdividendrate 5.00 5.00
TheGroupvalueditsretirementbenefitsobligationinaccordancewiththeactuarialvaluationpreparedbyanindependentactuary.
The amount charged to direct cost of operations and general and administration expenses areRM1,929,437(2009:RM1,771,683)andRM972(2009:RM60,012)respectively.
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39 dEfERREd LIAbILITIES/dEfERREd REvENUE
(a) Deferredliabilities
Deferred liabilitiescomprise fees received inadvance for futuremaintenanceexpenditure tobeincurred, in consideration for right-of-way access granted by PLUS, ELITE, andKLBK to thirdparties,analysedasfollows:
Group
2010 2009
RM’000 RM’000
Amountreceivedinadvance 124,630 117,723
Transferredtoincomestatementstodate (41,554) (34,802)
83,076 82,921
Deferredliabilitiesrealisablewithin12months 7,788 6,920
Deferredliabilitiesrealisableafter12months 75,288 76,001
83,076 82,921
(b) Deferredrevenue
Deferredrevenuerelatestothefollowing:
(i) TollcompensationreceivedbyKLBKfromtheGovernment inrespectofrevision intollratestructure fromyear2005until theexpiryof theconcessionperiod in2026asmentioned inNote3(iv)(b).
Group
2010 2009
RM’000 RM’000
Amountreceivedinadvance 60,590 60,590
Amountrecognised (16,802) (13,607)
43,788 46,983
Deferredrevenuerealisablewithin12months 3,048 3,194
Deferredrevenuerealisableafter12months 40,740 43,789
43,788 46,983
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(b) Deferredrevenue(Continued)
(ii) Consideration received from the toll revenue that is allocated to the points issued underthe Group’s customer loyalty programme that are expected to be redeemed but are stilloutstandingasatreportingdate.
Group
2010 2009
RM’000 RM’000
Amountawarded 3,229 –
Amountredeemed (795) –
Deferredrevenuerealisablewithin12months 2,434 –
40 SUNdRY PAYAbLES ANd AccRUALS
Group Company
Note 2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Sundrypayables (i) 19,975 9,957 4,396 2,931
Profitelementpayablesfor: (ii)
–PLUSSPVSukuk 4,507 4,705 4,507 4,705
–SeniorSukuk 11,734 14,829 – –
–ELITE’sSeafieldSukuk 5,568 5,394 – –
–KLBK’sBAIDS – 4,253 – –
Accruals 53,399 59,357 16,871 20,213
Advance for share capital fromminorityshareholders 26,317 28,085 – –
Amount received for proposeddisposalofCCTW 20,123 – 20,123 –
Others 3,668 580 1,878 389
145,291 127,160 47,775 28,238
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40 SUNdRY PAYAbLES ANd AccRUALS (cONTINUEd)
(i) Payablesarenon-interestbearingandarenormallysettledon30to60days(2009:30to60days)terms.
(ii) Profit element payables are settled in accordancewith the respective borrowings’ repaymenttermsasdisclosedinNotes34,35and36.
41 AMOUNT REcEIvEd fROM THE GOvERNMENT fOR AddITIONAL WORkSGroup
2010 2009
RM’000 RM’000
AmountreceivedfromtheGovernment 680,590 680,590
Add: Cumulativeinterestincome 47,741 47,279
Less: AdditionalWorksexpenditure (705,553) (705,282)
Compensationforlossofinterestincome (3,371) (3,371)
19,407 19,216
On 17November 2006, PLUS executed the Proceeds Account Agreementwith the Government toformalise therights,utilisationandadministrationof theamount received fromtheGovernment fortheAdditionalWorksofRM680.59millionand the interestearned therefrom.Pursuant to theTSCA,the amount shall be utilised solely for the purposes of the AdditionalWorks and togetherwith theinterestearned,havebeendepositedintotheProceedsAccountasdisclosedinNote28.
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Group Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Dividendincomereceived/receivablefromPLUS – – 485,000 825,000
ManagementfeesreceivedforexpresswayoperationservicesrenderedbytheCompanytoitssubsidiaries – – 108,986 105,606
ManagementfeesrenderedbytheCompanytoitssubsidiary – – 120 –
TERAS’srevenueinrelationtocontractswithsubsidiariesofUEM 3,139 – – –
Incomefromtrainingfeesreceived/receivablefromsubsidiariesofPEB – – 166 205
Trainingfeespaid/payabletoasubsidiaryofUEM 102 – – –
TradepurchasesfromTERASbyasubsidiaryofUEM 253 – – –
ProvisionofinformationtechnologyservicesbyasubsidiaryofPEB(formerlyasubsidiaryofUEM) – 2,953 2,940 2,940
Corporateandadministrativesupportservicespaid/payableto:
–UEM 92 807 92 758
–subsidiariesofUEM 3,860 7,146 1,460 1,591
–anassociateofUEM 600 227 161 137
–asubsidiaryofPEB(formerlyasubsidiaryofUEM) – 304 43 304
AmountspayabletoUEMinrespectofDirector’sremuneration(Note10) 52 70 12 47
Leaserentalincomereceived/receivableinrespectoffibreoptictelecommunicationsfromassociateofKhazanah(Note6) 17,592 16,754 – –
Utilitiesrentalpaid/payableinrespectoftelecommunicationsnetworkfromanassociateofUEM 218 407 – –
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42 SIGNIfIcANT RELATEd PARTY TRANSAcTIONS (cONTINUEd)
Group Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
ExpresswaysdevelopmentexpenditureworksperformedforPEB’ssubsidiariesby:
–UEM – 30,896 – –
–subsidiariesofUEM 234,368 237,607 – –
Expresswaymaintenanceexpenditurepaid/payable
–subsidiariesofUEM 228,483 205,545 – –
–subsidiariesofPEB(formerlysubsidiariesofUEM) – 13,379 – –
AdditionalWorksperformedforPLUSbysubsidiariesofUEM 29,342 27,669 – –
Projectmanagementfeespaid/payabletoasubsidiaryofUEM 770 3,287 – –
NetworkmaintenancemanagementandtechnicalservicesperformedbyasubsidiaryofUEM 18,305 18,254 – –
Commissionreceived/receivableforsaleofTouch‘nGocardsfromanassociateofPEB(formerlyasubsidiaryofUEM) 235 1,676 – –
CommissionfortollcollectionviaTouch‘nGopaid/payabletoanassociateofPEB(formerlyasubsidiaryofUEM) 24,881 21,607 – –
Incomefromrentaloffacilitiesreceived/receivablefrom:
–associatesofUEM 353 411 – –
–asubsidiaryofUEM 21 6 – –
Professionalfeespaid/payabletoSymphonyShareRegistrarsSdnBhd,inwhichadirectoroftheCompany,DatukMohamedAzmanYahya,hasinterest 71 68 71 68
PurchaseofTERASfromUEM(Note19(b)) 44,000 – 44,000 –
PurchaseofTnGfromasubsidiaryofUEM(Note20(a)) 33,407 – 33,407 –
KeymanagementpersonnelremunerationisdisclosedinNote11.
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Group Company
Note 2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Amountauthorisedandcontractedfor (i) 868,091 669,774 57,000 44
Amountauthorisedbutnotcontractedfor 5,802 114,584 – 73,926
Note(i):
Includedintheamountarethefollowing:
(a) amount committed by LMS for land acquisition costs for the Cikampek-Palimanan HighwayprojecttotallingRp524.8billion(equivalenttoRM186.3million);and
(b) amount committed by the Company for the proposed acquisition of interest in PLUS JetpurtotallingRM57million.
44 fINANcIAL RISk MANAGEMENT ObJEcTIvES ANd POLIcIES
TheGroupandtheCompanyareexposedtofinancialrisksarisingfromtheiroperationsandtheuseoffinancialinstruments.Thekeyfinancialrisksincludeinterestraterisk,marketrisk,foreigncurrencyrisk,creditriskandliquidityrisk.
TheBoardofDirectorsreviewsandagreespoliciesandproceduresforthemanagementoftheserisks,whichareexecutedbytheHeadofFinanceDivisionandheadsofdepartmentswithinFinanceDivision.The audit committee provides independent oversight to the effectiveness of the riskmanagementprocess.
The Group has not undertake any derivatives throughout the current and previous financial year.The followingsectionsprovidedetails regarding theGroup’sandCompany’sexposure to theabove-mentioned financial risks and the objectives, policies and processes for themanagement of theserisks.
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44 fINANcIAL RISk MANAGEMENT ObJEcTIvES ANd POLIcIES (cONTINUEd)
(a) InterestRateRisk
TheGroupobtains itsexternalfinancing throughPLUSSPVSukuk,SeniorSukuk,SukukSeries1,SukukSeries 2,SukukSeries 3,SeafieldSukuk,KLBKBAIDS,GovernmentLoans,OverdraftFacilities,TradeFacilities,MaintenanceBondFacilities,CommercialPaperand termloans.TheGroup’sprofitelementforPLUSSPVSukuk,SeniorSukuk,SukukSeries1,SukukSeries2,SukukSeries 3, Seafield Sukuk, KLBKBAIDS, and interest on Government Loan and term loans arebasedonagreedfixedratesrespectively. Intereston theOverdraftFacilities ranges from0.75%to1.50%perannumoverthebaselendingrate.
InformationrelatingtotheGroup’sinterestratesandprofitelementonbondsandborrowingsaredisclosedinNotes7,34and35.
SincetheinterestratesforGroup’sfinancialinstrumentsareeitherfixedrateorinterest-free,theGroup’sprofitandreservesarenotsensitivetothemarketmovementininterestrates.
Theinterest/profitprofileofthefinancialliabilitiesoftheGroupisasfollows:
Group
2010 2009
RM’000 RM’000
Fixedratefinancialliabilities 11,144,358 10,609,267
Interestfreefinancialliabilities 389,916 389,916
11,534,274 10,999,183
Theweightedaverageinterestrate/profitelementperannumandaverageperiodonthefinancialliabilitiesasat31December2010areasfollows:
Group
2010 2009
Weighted average interest rate/profit element (%)
Fixedrate 6.74 6.82
Average period (years)
Fixedrate 7.6 7.9
Interestfree 4.5 5.5
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(a) InterestRateRisk(Continued)
Theinterest/profitprofileofthefinancialassetsoftheGroupisasfollows:
Group
2010 2009
RM’000 RM’000
Fixedratefinancialassets(Notei) 3,656,491 3,141,035
Financialassetsonwhichnointerestisearned(Noteii) 38,412 32,124
3,694,903 3,173,159
Notei
Fixedratefinancialassetsmainlycompriseshortterminvestments,longterminvestments,shorttermdepositsandlongtermdeposits,placedwithlicensedbanksandcorporateissuers.
The short term deposits and short term investments placed with the licensed banks andcorporate issuers inMalaysiaattracted interest/profitelementduring the yearat rates rangingfrom1.50% to 3.80% (2009: 1.50% to 4.50%) per annumwhereas the profit obtained from longterminvestmentsinMalaysiarangesfrom3.30%to7.99%(2009:3.30%to7.99%).
Theshort termandlongtermdepositsof foreignsubsidiariesplacedwiththeirrespective localbanksattractedinterestratesrangingfrom0.05%to8.50%(2009:6.00%to13.30%)perannum.
Noteii
Financialassetsonwhichnointerestisearnedcomprisecashandbankbalances.
(b) MarketRisk
TheGroup holds investment in Commercial Papers/Securities/MediumTermNotes/Bonds. Thevalueofthesecuritiesissubjecttofluctuationsasaresultofchangesinmarketpriceswhetherthose changes are caused by factors specific to the individual security or its issuer or factorsaffecting all securities traded in themarket. The investment inCommercial Papers/Securities/MediumTermNotes/Bondsareheldtomaturity.
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44 fINANcIAL RISk MANAGEMENT ObJEcTIvES ANd POLIcIES (cONTINUEd)
(c) ForeignCurrencyRisk
Foreigncurrencyriskistheriskthatthefairvalueorfuturecashflowsofafinancialinstrumentswillfluctuatebecauseofchangesinforeignexchangerates.
TheGroupandtheCompanyholdcashandcashequivalentsdenominated in foreigncurrenciesfor investment in subsidiaries purposes. At the reporting date, theGroup’s and theCompany’sforeign currency balances (denominated in US Dollars (“USD”) and Indonesia Rupiah (“Rp”))amountedtoRM35,208,110(2009:Nil).
TheGroupisalsoexposedtocurrencytranslationriskarisingfromitsnetinvestmentsinforeignoperationsinMauritius,IndiaandIndonesia.
(d) CreditRisk
Credit risks, or the risk of counterparties defaulting, are controlled by the application of creditlimitsandmonitoringprocedure.TheGrouphasnosignificantconcentrationsofcreditriskasthemajorityofitsdepositsareplacedwithvariousmajorfinancialinstitutionsinMalaysia.
ThetollcompensationrecoverablefromtheGovernmentofMalaysiaisnotexposedtoanycreditrisk toPLUSother than if thereareanyamountsdue from theGovernmentuponexpiry of theConcessionPeriodin2038,whichwillberequiredtobewaivedbyPLUS,asdisclosedinNote3(i)(b).However, the toll compensationarrangement furtherprovides that thepartiesmay ingoodfaith,makenecessary adjustment or variation to the arrangement to restorePLUS’s position ifthereisanychangeinlawthatmaypreventthepartiesfromsuccessfully implementingthetollcompensationarrangement.
(e) LiquidityRisk
The Group’s objectives on liquidity are tomaintain a balance betweenmeeting debt serviceobligationsandcovenants,expresswayscapitalandoperatingexpenditureandmeetingshareholderdistributionexpectations.
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(f) AnalysisOfFinancialInstrumentsByRemainingContractualMaturities
Thetablebelowsummarisesthematurityprofileof theGroup’sandtheCompany’s liabilitiesatthereportingdatebasedonthecontractualundiscountedrepaymentobligations:
Group
2010
On demand or within
1 year
between 1 and
2 years
between 2 and
5 yearsAfter
5 years Total
RM’000 RM’000 RM’000 RM’000 RM’000
PLUSSPVSukuk 35,959 36,058 740,019 1,196,509 2,008,544
SeniorSukuk 665,050 434,638 924,725 214,950 2,239,363
SukukSeries1 400,000 400,000 1,200,000 260,000 2,260,000
SukukSeries2 – – – 2,410,000 2,410,000
SukukSeries3 – – – 3,675,000 3,675,000
SeafieldSukuk 63,336 63,510 190,530 1,399,077 1,716,453
KLBKBAIDS 13,960 14,760 57,400 209,700 295,820
GovernmentLoans – – 888,422 1,617,640 2,506,062
TermLoans 29,617 26,601 91,036 189,728 336,982
CommercialPaper 131,844 – – – 131,844
1,339,766 975,566 4,092,132 11,172,604 17,580,068
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45 fAIR vALUE Of fINANcIAL INSTRUMENTS
Thefollowingarethecarryingamountsandfairvaluesofcertainfinancial instrumentsof theGroupatreportingdate:
Group
2010 2009
NotecarryingAmount
fairvalue
carryingAmount
fairvalue
RM’000 RM’000 RM’000 RM’000
PLUSSPVSukuk* 34(a)(i) (1,433,561) (1,590,800) (1,381,726) (1,482,470)
SeniorSukuk* 34(a)(ii) (1,911,734) (2,047,820) (2,464,829) (2,649,405)
SukukSeries1 34(a)(iii) (1,875,563) (2,016,876) (1,764,492) (1,922,102)
SukukSeries2 34(a)(iv) (1,507,544) (1,788,930) (1,411,799) (1,634,352)
SukukSeries3 34(a)(v) (1,821,749) (2,136,700) (1,282,307) (1,400,577)
SeafieldSukuk* 34(a)(vi) (867,705) (1,099,453) (864,960) (1,016,786)
KLBKBAIDS* 34(a)(vii) (176,730) (210,910) (180,020) (202,573)
Governmentloans 35(a) (1,646,719) (1,623,849) (1,551,900) (1,530,654)
AmountduetoGovernment 35(c)(i) (38,096) (37,509) (38,096) (37,367)
Termloans(non-current) 35 (178,086) (178,086) (102,384) (100,540)
Investmentsecurities 22 145,489 145,776 159,192 158,483
Shortterminvestments 27 49,933 50,287 129,936 128,923
* The carrying amounts for PLUSSPVSukuk, Senior Sukuk, Seafield Sukuk andKLBKBAIDS are inclusive ofprofitelementsasdisclosedinNote40(ii)onsundrypayables.
Thecarryingamountsforthecurrentportionofthetermloansarereasonableapproximationsoftheirfairvaluesduetoinsignificantimpactofdiscounting.
The carrying amounts of trade and other payables, trade and other receivables and the currentamountsowingby/(to)subsidiaries,relatedcompaniesandimmediateholdingcompanyarereasonableapproximationoffairvaluesduetotheirshort-termnature.
The fair values of non-current amount owing by/(to) subsidiaries and non-current amount owingto immediate holding company are estimated by discounting expected future cash flows atmarketincrementallendingrateforsimilartypesoflendingorborrowingatthereportingdate.
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TheprimaryobjectiveoftheGroup’scapitalmanagement istomaintainanoptimalcapitalstructureinordertosupportitsbusinessactivitiesandenhanceitsshareholders’value.
TheGroupmanagesitscapitalstructureandmakesadjustmentstoit,inlightofchangesineconomicenvironment,riskinherentinitsbusinessoperationsorexpansionplansoftheGroup,whilstensuringfullcompliancewith itsrelevantfinancingcovenants.The initiatives inmanaging theGroup’scapitalstructure include issuance of new capital or debt securities, refinancing of existing borrowings,returningcapitaltoshareholdersoradjustingdividendpaymenttoshareholders.
47 SIGNIfIcANT EvENTS ANd EvENT OccURRING AfTER REPORTING dATE
Other thanasdisclosedas inNotes19,20and21 to thefinancialstatements, the followingare thesignificantandsubsequenteventswhichhaveoccurred.
(a) ProposedFourLaningofJetpur-SomnathSectionofNH-8DfromKm0toKm127.6intheStateofGujarat,India
On 20 September 2010, an unincorporated consortium consisting of PEB and its joint biddingpartner,IDFCProjectsLimited(“IP”)(“Consortium”)hason14September2010,receivedaletterdated 13 September 2010 from theNational Highways Authority of India (“NHAI”) informingthat the Consortium haswon the tender bid for the proposed Four Laning of Jetpur-SomnathSectionofNH-8DfromKm0toKm127.6intheStateofGujarat,India,tobeexecutedonDesign,Built,Finance,OperateandTransfer (“DBFOT”)basis (“ProposedProject”).TheConsortiumhasaccordinglyrevertedtoNHAIon20September2010acceptingtheoffertoundertaketheProposedProject.
On 16November 2010, PEB subscribed to the 26% equity interest in Jetpur-SomnathHighwayLimited(“JSHL”),viaPLUSJetpur,toundertaketheProposedProject.However,on23December2010, in compliancewith the Request for Proposal (“RFP”) documentation for this ProposedProject, NHAI has requested that a new special purpose vehicle to be incorporated,wherebyequity investment by PEB shall be direct. As at 31 December 2010, JSHL remains as PEB’sassociatecompany.
On11January2011,JetpurSomnathTollwaysLimited(“JSTL”),anewspecialpurposevehiclewasincorporatedunderthe lawofRepublicof India toundertaketheProposedProject.ThepaidupcapitalofJSTL isRs10 lakhscomprising100,000sharesofRs10eachofwhichPEBholds26%andtheremaining74%sharesareheldbyIPandsix(6)othernominalsubscribers.On7February2011,JSTLandNHAIhaveenteredintotheconcessionagreementfortheProposedProject.
The Proposed Project is a section of National Highway 8Dwhich starts at Jetpur and endsat Somnath, with total length of 127.6 kilometres. The concession shall be for a period of 30years from thedateof theproposedexecutionof the relevant concessionagreement, includingconstructionperiodofapproximately30months.
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47 SIGNIfIcANT EvENTS ANd EvENT OccURRING AfTER REPORTING dATE (cONTINUEd)
(a) ProposedFourLaningofJetpur-SomnathSectionofNH-8DfromKm0toKm127.6intheStateofGujarat,India(Continued)
The estimated total cost of the project at present is approximatelyRs950 crores (equivalent toapproximatelyRM660million)andthefundingdetailsarebeingfinalised.
(b) OffertoacquirethebusinessandundertakingincludingassetsandliabilitiesofPEBbyUEMandEmployeesProvidentFundBoard
On15October 2010, theBoardofDirectors ofPEB received a letter fromUEMandEmployeesProvidentFundBoard (“EPF”) (“JointOfferors”),whichsetsoutanoffer toacquire thebusinessandundertaking,includingallassetsandliabilitiesofPEBatanaggregatepurchaseconsiderationofRM23billion(“PurchaseConsideration”) (“Offer”).Basedonthe issuedandpaid-upcapitalofPEBasat14October2010,thePurchaseConsiderationrepresentsaconsiderationofRM4.60perordinarysharesofRM0.25eachinPEB.
FurthertothediscussionsheldbetweenPEBandtheJointOfferors,theBoardhadon9November2010receivedarevised letterofofferwhichshallsupersede theearlier letterofofferdated15October2010(“OfferLetter”).
The Joint Offerors shall incorporate a private limited company to undertake this Offer (“SPV”),withUEMandEPFeachholding51%and49%equityinterestrespectivelyintheSPV.
After the disposal of thePEBBusiness pursuant to theOffer, the Joint Offerors proposed thatPEB,subject toobtainingall requisiteapprovals, returnallproceeds fromthedisposal thatareattributable to the entitled shareholders, being the remaining shareholders of PEB (other thanEPF, UEM and Khazanah) including PEB’s shares held by Khazanahwhich form part of theexchange property, via a special dividend and selective capital repayment exercise (collectivelyreferredtoasthe“ProposedDistribution”).
On 20December 2010, the Board of Directors of PEB received a letter from JelasUlung SdnBhd (“JelasUlung”)whichsetsoutanoffer toacquirePEBBusinessatanaggregatepurchaseconsiderationofRM26billion,representingRM5.20perordinaryshareofRM0.25eachinPEB.
The scheduledExtraordinaryGeneralMeeting (“EGM”)washeldon23December2010and theshareholdershadapproved theadjournmentof theEGM tobeheldona laterdate.TheBoard,save for the Interested Directors, also announced that it will not consider any offer for PEBBusiness received after 5.00 p.m. on 10 January 2011 (“Final Deadline”). All offers submittedby theFinalDeadlinearealsosubject to theconditionsasannounced toBursaMalaysiaon21December 2010which include: (i) remit a cash deposit of RM50million into an account to bedesignatedbyPEB;and(ii)submitunconditionalwrittenconfirmation(s)addressedtoPEB,frominstitution(s)andintheform,whichareacceptabletoPEB,thattheofferorhasthefinancialabilitytoundertakeandcomplete itsproposedacquisitionof thePEBBusiness inaccordancewiththetermsofitsoffer(“Financiers’Letter”).
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(b) OffertoacquirethebusinessandundertakingincludingassetsandliabilitiesofPEBbyUEMandEmployeesProvidentFundBoard(Continued)
On 10 January 2011, being the Final Deadline, therewere no new offers received by PEB andonlyUEMandEPFhadremittedthecashdepositofRM50millionandsubmittedtheFinanciers’Letter.
Inviewoftheabove,theadjournedEGMwasheldon23February2011wherebytheshareholdersapprovedtheProposedDisposalandtheProposedDistribution.
48 SEGMENT INfORMATION
In the prior year’s audited consolidated financial statement, the basis of segmentation was ongeographicalsegment.Inthecurrentfinancialyearended31December2010,thebasisofsegmentationhas been changed to operating segments based on information reported internally to theBoard ofDirectorsoftheCompany.TheGroupisorganisedintolegalentitiesbasedontheconcessionsofthehighwaysandseparatebusinessasheldbyeachentity.PLUSisthelargestcontributortotheGroupintermsofrevenue,profitfortheperiodandtotalassetsandhenceisreportedasaseparateoperatingsegmentwhilsttherestarereportedas‘Others’.
Operatingsegmentinformationforthecurrentfinancialyearended31December2010isasfollows:
PLUS Others Total
RM’000 RM’000 RM’000
2010
Revenue 2,910,948 440,533 3,351,481
Profit/(loss)fortheyear 1,367,457 (66,673) 1,300,784
Totalassets 14,350,671 4,897,484 19,248,155
2009
Revenue 2,824,327 354,695 3,179,022
Profit/(loss)fortheyear 1,262,509 (77,397) 1,185,112
Totalassets 13,966,480 4,400,997 18,367,477
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48 SEGMENT INfORMATION (cONTINUEd)
Inaddition, theGroupoperate in threegeographicalsegments,basedonthe locationof theGroup’sassets:
(i) Malaysia – the operations in this area are principally investment holding and provision ofexpresswayoperationservices.
(ii) IndiaandMauritius–theoperationinthisareaareinvestmentholdingandexpresswayoperationservices.
(iii) Indonesia–theoperationinthisareaisexpresswayoperationservices.
The following table provides an analysis of the Group’s carrying amount of non-current assets,analysedbygeographicalsegments:
Non-current Assets
2010 2009
RM’000 RM’000
Malaysia 12,150,402 12,221,930
IndiaandMauritius 460,329 200,970
Indonesia 87,617 74,479
12,698,348 12,497,379
Non-current assets information presented above consist of concession assets, property, plant andequipmentandintangibleassetsaspresentedintheconsolidatedstatementsoffinancialposition.
Noanalysisonrevenueandresultsbygeographicalsegments ispreparedas theGroup isprimarilyengaged in theoperationandmaintenanceof toll roadsandexpressways inMalaysia.Revenueandresults for the current and prior financial years of the subsidiaries located outsideMalaysia areinsignificanttotheGroup’sresultstorenderseparatereporting.
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The presentation and classification of items in the current year financial statements have beenconsistentwith thepreviousfinancialyearexcept forcertaincomparativeamountswhichhavebeenreclassifiedtoconformwithcurrentyear’spresentation.
As Restated Reclassified
As Previously
Stated
RM’000 RM’000 RM’000
Income statements:
Generalandadministrationexpenses (73,196) (4,458) (77,654)
Financecosts (700,188) 4,458 (695,730)
Statements of financial positions:
Assets:
Property,plantandequipment 76,134 (26,988) 49,146
Prepaidlandleasepayments – 26,988 26,988
Liabilities:
Otherlongtermpayables – 97 97
Sundrypayablesandaccruals 127,160 (97) 127,063
Equity:
Capitalreserve – 461,138 461,138
Mergerreserve – 298,834 298,834
Otherreserves 752,308 (759,972) (7,664)
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50 SUPPLEMENTARY INfORMATION – bREAkdOWN Of RETAINEd EARNINGS INTO REALISEd ANd UNREALISEd
Thebreakdownof the retainedearningsof theGroupandof theCompanyasat 31December2010intorealisedandunrealisedearningsispresentedasfollows,inaccordancewiththedirectiveissuedbyBursaMalaysiaSecuritiesBerhaddated25March2010andpreparedinaccordancewithGuidanceonSpecialMatterNo.1,DeterminationofRealisedandUnrealisedProfitsorLosses in theContextofDisclosurePursuant toBursaMalaysiaSecuritiesBerhadListingRequirements,as issuedby theMalaysianInstituteofAccountants:
Group RM’000
Company RM’000
TotalretainedearningsoftheCompanyanditssubsidiaries
Realised 4,917,278 40,232
Unrealised (975,337) 1,186
3,941,941 41,418
Totalshareofretainedearningsfromassociate
Realised 2,459 –
Unrealised – –
3,944,400 41,418
Add:Consolidationadjustments 255,127 –
Retainedearningsasperfinancialstatements 4,199,527 41,418
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On29April2010,thePLUSExpresswaysBerhadGroupsoughtapprovalforashareholders’mandateforthePLUSExpresswaysBerhadGrouptorenewandenterintonewRecurrentTransactions(asdefinedintheCirculartoShareholdersdated5April2010)intheirordinarycourseofbusinesswithrelatedparties(“ShareholdersMandate”)asdefinedinChapter10oftheBursaMalaysiaSecuritiesBerhadMainMarketListingRequirement.ThebreakdownoftheactualvaluetransactedforthesaidRecurrentTransactionsmadefromthedatetheShareholdersMandatecameintoeffectupto30April2011areasfollows:-
RM
1. ConstructionandotherrelatedworksforthewideningofcertainstretchesoftheExpresswayandthemodificationoftheExpresswaybetweenJelapangandIpohSelatanTollPlaza(“AdditionalWorks”)byUEManditssubsidiariesandassociatedcompaniesforPLUS.
NIL
2. ProvisionofmaintenanceworksandmaintenancemanagementservicesinrelationtotheExpresswaysanditsAncillaryFacilitiesbyUEManditssubsidiariesandassociatedcompaniestoPLUSExpresswaysGroup.
42,316,143.86
3. ConstructionandotherrelatedworksinrelationtotheExpresswaysanditsAncillaryFacilitiesbyUEManditssubsidiariesandassociatedcompaniestoPLUSExpresswaysGroup.
NIL
4. ProvisionofITrelatedservices,maintenanceandupgradingworksandsupplyofITequipmentandsoftware,electricalandtollequipmentsparepartsinrelationtotheExpresswaysandAncillaryFacilitiesbyUEManditssubsidiariesandassociatedcompaniestoPLUSExpresswaysGroup.
1,503,230.00
5. ProvisionofservicesandaccessoriesinrelationtoTouch‘nGoCardsSystemandSmartTAGbyUEManditssubsidiariesandassociatedcompaniestoPLUSExpresswaysGroup.
631,927.68
6. ProvisionofupgradingworksinrelationtotheExpresswaysanditsAncillaryFacilitiesbyUEMBuildersanditssubsidiariesandassociatedcompaniesforPLUSExpresswaysGroup.
24,078,850.51
7. ConstructionandotherrelatedworksinrelationtotollroadprojectsinIndiabyUEManditssubsidiariesandassociatedcompaniestoPLUSExpresswaysGroup.
NIL
8. ProvisionofprojectmanagementservicesinrelationtotheExpresswaysanditsAncillaryFacilitiesbyUEManditssubsidiariesandassociatedcompanies.
NIL
9. ProvisionofservicescarriedoutalongtheExpresswaysinrelationtowastedisposalmanagementbyUEManditssubsidiariesandassociatedcompaniestoPLUSExpresswaysGroup.
NIL
10. ProvisionofSupportServices,suchasOperationandMaintenanceServicesinrelationtohighwayoperationsbyPLUSExpresswaystoPLUSBKSP.
73,944.43
11. GrantofaccesstoTelekomanditssubsidiariesandassociatedcompaniestoentertheExpresswaysanditsAncillaryFacilitiesforthecarryingoutofrelevantworksinrelationtotelecommunication.
40,000.00
12. GrantofaccesstoTNBanditssubsidiariesandassociatedcompaniestoentertheExpresswaysanditsAncillaryFacilitiesforthecarryingoutofrelevantworksinrelationtopowersupply.
96,000.00
13. ProcurementforthepurposeofmaintenanceandupgradingoftheExpresswaysbyUEManditssubsidiariesandassociatedcompaniestoPLUSExpresswaysGroup.
NIL
14. GrantofaccesstoTIMEanditssubsidiariesandassociatedcompaniestoentertheExpresswaysanditsAncillaryFacilitiesforthecarryingoutofrelevantworksinrelationtotelecommunication.
40,000.00
15. TenancyAgreementforaperiodoftwo(2)yearswithanoptiontorenewforafurtherperiodofone(1)yearforthepurposeofPLUSExpresswaysGroup’sBusinessContinuityPlanbyTIMEanditssubsidiariesandassociatedcompaniestoPLUSExpresswaysGroup.
NIL
16. ProjectmanagementandITrelatedservicesinrelationtotollroadprojectsinIndonesiabyUEManditssubsidiariesandassociatedcompaniestoPLUSExpresswaysGroup.
NIL
17. Provisionoftheoverallmanagementoftollcollection,operationsandmaintenanceinrelationtotheBhiwandi-Kalyan-ShilPhataHighwayandvariousconsultingservicesbyCMCLtoPLUSBKSP.
NIL
RECU
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RELA
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ShIP
WIT
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REL
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Therelationshipoftherelatedpartiesasat30April2011isasfollows:-
No. Names of Related Party Relationship
1. UEManditssubsidiariesandassociatedcompanies
UEMisamajorshareholderofPLUSExpresswaysBerhad.UEMalsohasindirectinterestinPLUSheldthroughPLUSExpresswaysBerhad.
2. UEMBuildersBerhadanditssubsidiariesandassociatedcompanies
UEMBuildersisawholly-ownedsubsidiaryofUEM.UEMalsohasindirectinterestinPROPELheldthroughUEMBuilders.
3. TelekomMalaysiaBerhad(“Telekom”)anditssubsidiariesandassociatedcompanies
KhazanahisamajorshareholderofTelekom.UEMisawholly-ownedsubsidiaryofKhazanah.
4. TenagaNasionalBerhad(“TNB”)anditssubsidiariesandassociatedcompanies
KhazanahisamajorshareholderofTNB.
5. TIMEanditssubsidiariesandassociatedcompanies
UEMisamajorshareholderofTIME.TIMEisanassociatecompanyofUEM.
6. PLUSBKSPTollLimited(“PLUSBKSP”) PLUSExpresswayshasdirectandindirectinterestinPLUSBKSPthroughitswholly-ownedsubsidiary,PLUSKalyan(Mauritius)PrivateLimited.
7. ConceptManagementConsultingPrivateLimited(“CMCL”)
CMCLisashareholderofPLUSBKSP.
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AuthorisedCapital :RM2,500,000,000.00IssuedandPaid-Up :RM1,250,000,000.00ClassofShares :OrdinarySharesof25seneachNo.ofShareholders :22,944VotingRights :OneVoteperOrdinaryShare
Size of holdings No. of holders % No. of Shares held %
Lessthan100 641 2.79 16,888 0.00
100to1,000 11,397 49.67 10,821,947 0.22
1,001to10,000 9,246 40.30 34,013,829 0.68
10,001to100,000 1,187 5.17 35,464,312 0.71
100,001tolessthan5%ofissuedshares 470 2.05 1,747,605,701 34.95
5%andaboveofissuedshares 3 0.01 3,172,077,323 63.44
Total 22,944 100.00 5,000,000,000 100.00
SUbSTANTIAL SHAREHOLdERS asat12May2011:(AspertheRegisterofSubstantialShareholders)
Name Direct holdings % Indirect holdings %
UEMGroupBerhad 1,924,230,835 38.48 – –
KhazanahNasionalBerhadExemptAn 690,663,376 13.81 a1,924,230,835 38.48
CitigroupNominees(Tempatan)SdnBhdEmployeesProvidentFundBoard
557,183,112 11.14 – –
Note: a Held via UEM Group Berhad
dIREcTORS dIREcT ANd INdIREcT INTEREST IN THE cOMPANY ANd ITS RELATEd cORPORATIONS AS PER THE REGISTER Of dIREcTORS’ SHAREHOLdINGSIn the company – PLUS Expressways berhad
Name of DirectorNo. of shares of
RM0.25 each %
TanSriDato’MohdSheriffMohdKassim 55,000 *
Dato’IzzaddinIdris – –
Dato’NoorizahHjAbdHamid 20,000 *
HassanJa’afar 40,000 *
TanSriDatukKRavindran 40,000 *
DatukMohamedAzmanYahya 40,000 *
QuahPohKeat – –
DatukSeriPanglimaMohdAnnuarZaini 15,000 *
Dato’SeriIsmailShahudin – –
* less than 0.01%
ANAL
YSIS
OF
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AT12MAY2011
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IN ITS RELATEd cORPORATIONSSaveforthefollowing,noneoftheDirectorsoftheCompanyhasanyinterest,directorindirect,insharesinitsrelatedcorporations:
No. of ordinary shares of RM0.50 each
Name of Director Direct % Indirect %
UEM Land Holdings berhad
TanSriDato’MohdSheriffMohdKassim 35,000 * – –
Dato’SeriIsmailBinShahudin 7,032 * – –
* less than 0.01%
LIST Of PLUS EXPRESSWAYS’ TOP 30 HOLdERS asat12May2011
No. Name holdings %
1. UEMGroupBerhad 1,924,230,835 38.48
2. KhazanahNasionalBerhadExempt An
690,663,376 13.81
3. CitigroupNominees(Tempatan)SdnBhdEmployees Provident Fund Board
557,183,112 11.14
4. AmanahrayaTrusteesBerhadSkim Amanah Saham Bumiputera
230,000,000 4.60
5. KumpulanWangPersaraan(Diperbadankan) 181,352,612 3.63
6. AmanahrayaTrusteesBerhadAmanah Saham Malaysia
93,637,000 1.87
7. KhazanahNasionalBerhad 85,849,287 1.72
8. ValuecapSdnBhd 85,700,000 1.71
9. AmanahrayaTrusteesBerhadAmanah Saham Wawasan 2020
60,944,000 1.22
10. CartabanNominees(Asing)SdnBhdExempt An For State Street Bank & Trust Company (West CLT OD67)
49,186,515 0.98
11. PertubuhanKeselamatanSosial 48,293,597 0.97
12. HSBCNominees(Asing)SdnBhdBBH And Co Boston for Matthews Asian Growth And Income Fund
44,171,359 0.88
13. AmanahrayaTrusteesBerhadAmanah Saham Didik
38,809,400 0.78
14. LembagaTabungHaji 35,471,800 0.71
15. MalaysiaNominees(Tempatan)SendirianBerhadGreat Eastern Life Assurance (Malaysia) Berhad (PAR1)
35,366,400 0.71
16. HSBCNominees(Asing)SdnBhdBBH And Co Boston for Merill Lynch Global Allocation Fund
30,494,461 0.61
17. AmanahrayaTrusteesBerhadAS 1 Malaysia
30,000,000 0.60
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No. Name holdings %
18. MaybanNominees(Tempatan)SdnBhdMayban Trustees Berhad For Public Ittikal Fund (N14011970240)
26,462,000 0.53
19. CitigroupNominees(Tempatan)SdnBhdEmployees Provident Fund Board (Nomura)
26,000,000 0.52
20. HSBCNominees(Asing)SdnBhdBBH And Co Boston For Vanguard Emerging Markets Stock Index Fund
23,458,182 0.47
21. PermodalanNasionalBerhad 20,496,800 0.41
22. CitigroupNominees(Tempatan)SdnBhdExempt An For Prudential Fund Management Berhad
18,826,800 0.38
23. CitigroupNominees(Tempatan)SdnBhdExempt An For American International Assurance Berhad
17,811,200 0.36
24. HSBCNominees(Asing)SdnBhdExempt An For JPMorgan Chase Bank, National Association (U.A.E)
15,898,905 0.32
25. HSBCNominees(Asing)Sdn.Bhd.Exempt An for Morgan Stanley & Co. International PLC (IPB Client ACCT)
13,972,900 0.28
26. OCBCBank(Malaysia)BerhadAs Beneficial Owner (ELCI-TRE)
13,011,100 0.26
27. CartabanNominees(Asing)SdnBhdGovernment of Singapore Investment Corporation Pte Ltd For Government Of Singapore (C)
12,998,300 0.26
28. DB(Malaysia)Nominee(Asing)SdnBhdExempt An For Deutsche Bank AG London (Prime Brokerage)
12,973,389 0.26
29. HSBCNominees(Asing)Sdn.Bhd.Exempt An For Morgan Stanley & Co. Incorporated (Client)
12,935,506 0.26
30. HSBCNominees(Asing)SdnBhdExempt An For The Bank Of New York Mellon (Mellon Acct)
12,712,787 0.25
AN
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LIST
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PROP
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No.
Description and Existing Usage of Properties Address
Age of Building
Land Area and Status
Date of Acquisition/Last Revaluation
Net Book Value as at 31 December 2010(RM’000)
1 Ayer Keroh landFutureCommercialDevelopment
PartofMukimofGadek,MukimofPegoh&MukimofMelakaPindahDistrictofAlorGajahStateofMelaka
Notapplicable
338acresLeaseholdof99yearsendingAugust2106
August2007^Revaluationdoneon23December2006
26,707
2 ShoplotsVacant
No.4&6JalanHangLekiuTamanSkudaiBaruSkudaiJohorBahruJohor
16years 3,080sqmFreehold
12January1993 396
3 Double storey terrace houseStaffaccommodation
No.72JalanSS7/30TamanKelanaIndahKelanaJayaSelangor
17years 121sqmLeaseholdof99yearsending27September2091
15April1997^Revaluationdoneon2October2006
176
4 Double storey terrace houseStaffaccommodation
No.46JalanSS7/30TamanKelanaIndahKelanaJayaSelangor
17years 121sqmLeaseholdof99yearsending27September2091
1August1996^Revaluationdoneon13May2004
171
5 Double storey terrace houseStaffaccommodation
No.43JalanSR6/4TamanKudaEmasSection6SerdangJayaSelangor
16years 133sqmLeaseholdof99yearsending31March2092
5January1996^Revaluationdoneon13May2004
161
6 Double storey terrace houseStaffaccommodation
No.41JalanSR6/4TamanKudaEmasSection6SerdangJayaSelangor
16years 133sqmLeaseholdof99yearsending31March2092
5January1996^Revaluationdoneon10May2004
161
7 Double storey terrace houseStaffaccommodation
No.39JalanSR6/4TamanKudaEmasSection6SerdangJayaSelangor
16years 133sqmLeaseholdof99yearsending31March2092
5January1996^Revaluationdoneon13May2004
161
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No.
Description and Existing Usage of Properties Address
Age of Building
Land Area and Status
Date of Acquisition/Last Revaluation
Net Book Value as at 31 December 2010(RM’000)
8 Apartment unitStaffaccommodation
1508BlokDNo.2JalanSS7/2647301PetalingJayaSelangor
14years 125sqmLeaseholdof99yearsending13April2089
7December1995^Revaluationdoneon24April2003
155
9 Double storey terrace houseStaffaccommodation
14Jalan3/38BTamanSPPKSegambutKualaLumpur
17years 195sqmFreehold
28November1996^Revaluationdoneon21March2003
148
10 Double storey terrace houseStaffaccommodation
68Jalan3/38BTamanSPPKSegambut,KualaLumpur
17years 130sqmFreehold
12June1996^Revaluationdoneon21March2003
148
11 Double storey terrace houseStaffaccommodation
No.87JalanMahkota2BandarBaruKlangSelangor
15years 130sqmLeaseholdof99yearsending8May2093
26December1995^Revaluationdoneon12July2003
145
12 Double storey terrace houseStaffaccommodation
No.51JalanMahkota2BandarBaruKlangSelangor
15years 130sqmLeaseholdof99yearsending8May2093
26December1995^Revaluationdoneon12July2003
145
13 Double storey terrace houseStaffaccommodation
No.53JalanMahkota2BandarBaruKlangSelangor
15years 130sqmLeaseholdof99yearsending8May2093
26December1995^Revaluationdoneon28October2004
145
14 Double storey terrace houseStaffaccommodation
No.85JalanMahkota2BandarBaruKlangSelangor
15years 130sqmLeaseholdof99yearsending8May2093
26December1995^Revaluationdoneon12July2003
145
15 Double storey terrace houseStaffaccommodation
No.15JalanKayak13/25TTDI,ShahAlamSelangor
11years 120.75sqmLeaseholdof99yearsending1November2092
16December1996^Revaluationdoneon31March2005
138
LIST
OF
PROPER
TIES
(CO
NTI
NU
ED)
PLU
S Expressways b
erhad 2010 Annual R
eport
223
No.
Description and Existing Usage of Properties Address
Age of Building
Land Area and Status
Date of Acquisition/Last Revaluation
Net Book Value as at 31 December 2010(RM’000)
16 Double storey terrace houseStaff accommodation
No.17JalanKayak13/25TTDI,ShahAlamSelangor
11years 120.75sqmLeaseholdof99yearsending1November2092
16February1996^Revaluationdoneon5July2004
138
17 Double storey terrace houseStaffaccommodation
No.27JalanKayak13/25TTDI,ShahAlamSelangor
11years 120.75sqmLeaseholdof99yearsending28December2084
16February1996^Revaluationdoneon13May2004
138
18 Double storey terrace houseStaffaccommodation
No.35JalanKayak13/25TTDI,ShahAlamSelangor
11years 120.75sqmLeaseholdof99yearsending1November2092
16February1996^Revaluationdoneon13May2004
138
19 Apartment unitStaffaccommodation
1303BlokDNo.2JalanSS7/2647301PetalingJayaSelangor
14years 100sqmLeaseholdof99yearsending13April2089
7December1995^Revaluationdoneon5March2003
128
20 Single storey terrace houseStaffaccommodation
No.33JalanRawa21TamanPerlingJohorBahruJohor
24years 155.33sqmFreehold(Bumiputrarestricted)
1November1996^Revaluationdoneon3January2008
106
21 Single storey terrace houseStaffaccommodation
No.35JalanRawa21TamanPerlingJohorBahruJohor
24years 155.33sqmFreehold(Bumiputrarestricted)
1November1996^Revaluationdoneon3January2008
106
22 Single storey terrace houseStaffaccommodation
No.1443Jalan1/10TamanSenaiUtamaJohorBahruJohor
12years 143sqmFreehold(Bumiputrarestricted)
29August1996^Revaluationdoneon11July2007
82
Note:
* Revaluation was done on the properties by the Stamp Duty office/valuation office for the purpose of determining the stamp duty for transfer documents.
TheaforesaidpropertiesusedasstaffaccommodationareforProjekLebuhrayaUtara-SelatanBerhad’sfrontlinerswhoworkatthetollplazas.
PLU
S Ex
pres
sway
s b
erha
d 20
10 A
nnua
l Rep
ort
224
List of Land and Landed Properties by Location and by company
Location No. of Properties Land Area Net Book Value
freehold Leasehold
Land
acres (RM’000)
PEb
Melaka – – 338 26,707
Landed Properties
Unit Unit sqm (RM’000)
PLUS
Selangor 2 13 1,583 2,245
KualaLumpur 2 – 260 296
Johor 3 – 454 294
LINkEdUA
Johor 2 – 286 396
9 13 2,583 3,231
LIST
OF
PROPER
TIES
(CO
NTI
NU
ED)
PLU
S Expressways b
erhad 2010 Annual R
eport
225
GROU
P
DIREC
TORYPLUS EXPRESSWAYS bERHAd
MenaraKorporat,PersadaPLUSPersimpanganBertingkatSubangKM15,LebuhrayaBaruLembahKlang47301PetalingJayaSelangorDarulEhsanMalaysiaT+60378016666/76664666F+60378016600/76664400www.plus.com.my
PROJEk LEbUHRAYA UTARA-SELATAN bERHAdMenaraKorporat,PersadaPLUSPersimpanganBertingkatSubangKM15,LebuhrayaBaruLembahKlang47301PetalingJayaSelangorDarulEhsanMalaysiaT+60378016666/76664666F+60378016600/76664400www.plus.com.my
EXPRESSWAY LINGkARAN TENGAH SdN bHdMenaraKorporat,PersadaPLUSPersimpanganBertingkatSubangKM15,LebuhrayaBaruLembahKlang47301PetalingJayaSelangorDarulEhsanMalaysiaT+60378016666/76664666F+60378016600/76664400www.plus.com.my
LINkEdUA (MALAYSIA) bERHAd MenaraKorporat,PersadaPLUSPersimpanganBertingkatSubangKM15,LebuhrayaBaruLembahKlang47301PetalingJayaSelangorDarulEhsanMalaysiaT+60378016666/76664666F+60378016600/76664400www.plus.com.my
kONSORTIUM LEbUH RAYA bUTTERWORTH-kULIM (kLbk) SdN bHdMenaraKorporat,PersadaPLUSPersimpanganBertingkatSubangKM15,LebuhrayaBaruLembahKlang47301PetalingJayaSelangorDarulEhsanMalaysiaT+60378016666/76664666F+60378016600/76664400www.plus.com.my
PLUS HELIcOPTER SERvIcES SdN bHdMenaraKorporat,PersadaPLUSPersimpanganBertingkatSubangKM15,LebuhrayaBaruLembahKlang47301PetalingJayaSelangorDarulEhsanMalaysiaT+60378016666/76664666F+60378016600/76664400www.plus.com.my
TERAS TEkNOLOGI SdN bHdMenaraKorporat,PersadaPLUSPersimpanganBertingkatSubangKM15,LebuhrayaBaruLembahKlang47301PetalingJayaSelangorDarulEhsanMalaysiaT+60378016666/76664666F+60378016600/76664400www.terasworld.com
PLUS kALYAN (MAURITIUS) PRIvATE LIMITEd c/o Multiconsult LimitedRogersHouse5,PresidentJohnKennedyStreetPortLouis,MauritiusT+2304052000F+2302125265/2080572
PLU
S Ex
pres
sway
s b
erha
d 20
10 A
nnua
l Rep
ort
226
GR
OU
P
DIREC
TORY
(CO
NTI
NU
ED) PLUS PLAZA (MAURITIUS) PRIvATE LIMITEd
c/o Multiconsult LimitedRogersHouse5,PresidentJohnKennedyStreetPortLouis,MauritiusT+2304052000F+2302125265/2080572
PLUS JETPUR (MAURITIUS) PRIvATE LIMITEd c/o Multiconsult LimitedRogersHouse5,PresidentJohnKennedyStreetPortLouis,MauritiusT+2304052000F+2302125265/2080572
PLUS bkSP TOLL LIMITEd413,BWing,ShreeNandDham4thFloor,Sector11,CBDBelapurNaviMumbai400614IndiaT+912227573777F+912227573767
INdU NAvAYUGA INfRA PROJEcTS PRIvATE LIMITEd2ndFloor,J.C.TowerKarurBypassRoadTrichy-620018TamilNaduIndiaT+914314024648F+914314021648
PT LINTAS MARGA SEdAYAJICibitungIINo.34KebayoranBaruJakarta12170IndonesiaT+62217245870F+62217222436
PT cIMANGGIS cIbITUNG TOLLWAYSWismaBakrie1Lantai17Jl.HR.RasunaSaidKav.B2Jakarta12920IndonesiaT+622152920266F+622152920837
FORM
OF
PROX
Y
No.ofOrdinarySharesHeld
CDSAccountNo.
I/We(PLEASEUSEBLOCKLETTERS)
of(fulladdress)
beingamember/membersofPLUS EXPRESSWAYS BERhAD,herebyappoint
of
orfailinghim,theChairmanoftheMeetingasmy/ourproxytovoteforme/usandonmy/ourbehalfattheNinthAnnualGeneralMeetingoftheCompanytobeheldattheBanquetHall,MenaraKorporat,PersadaPLUS, Persimpangan Bertingkat Subang, KM15, Lebuhraya Baru Lembah Klang, 47301 Petaling Jaya,SelangorDarulEhsanonWednesday,29June2011at2.30p.m.
My/Ourproxyistovoteasindicatedbelow:(Please indicate with a “ ” or “ ” in the boxes provided how you wish your vote to be cast. If you do not do so, the proxy will vote or abstain from voting at his discretion.)
for Against
Resolution1 To re-elect the followingDirectors retiring in accordancewithArticle76oftheCompany’sArticlesofAssociation:
i) TanSriDatukK.Ravindran
Resolution2 ii) DatukSeriPanglimaMohdAnnuarZaini
Resolution3 iii) QuahPohKeat
Resolution4 To re-appoint Tan Sri Dato’Mohd SheriffMohd KassimretiringinaccordancewithSection129(6)oftheCompaniesAct,1965.
Resolution5 ToapprovetheDirectors’remuneration.
Resolution6 To re-appointMessrs Ernst& Young as Auditors and toauthorisetheDirectorstofixtheirremuneration.
Resolution7 To approve the Proposed Renewal of Shareholders’Mandate for Recurrent Related Party Transactions of aRevenueorTradingNature.
Resolution8 To approve the Proposed NewMandate for AdditionalRecurrent Related Party Transactions of a Revenue orTradingNature.
Datedthis dayof 2011.
Signature/Seal
NOTES
1. Everymemberisentitledtoappointaproxyorinthecaseofacorporation,toappointarepresentativetoattendandvoteinhisplace.AproxymaybutneednotbeamemberoftheCompanyandtheprovisionofSection149(1)(b)oftheCompaniesAct,1965neednotbecompliedwith.
2. Tobevalid,thisoriginalformofproxydulycompletedmustbedepositedattheShareRegistrar’soffice,SymphonyShareRegistrarsSdnBhd,Level6,SymphonyHouse,BlockD13,PusatDaganganDana1,JalanPJU1A/46,47301PetalingJaya,Selangor,notlessthan48hoursbeforethetimeofholdingthemeeting.
3. Theinstrumentappointingaproxyshallbeinwritingunderthehandoftheappointerorhisattorneydulyauthorisedinwritingorifsuchappointerisacorporation,underitscommonsealorunderthehandofitsattorney.
4. Amemberholdingone thousand (1,000)ordinarysharesor lessmayappointonlyone (1)proxy toattendandvoteatageneralmeetingwhoshallrepresentallthesharesheldbysuchmember.Amemberholdingmorethanonethousand(1,000)ordinarysharesmayappointuptoten(10)proxiesto attend and vote at the samemeeting and each proxy appointed shall represent aminimumof one thousand (1,000) ordinary shares.Where amemberappointsone(1)ormoreproxiestoattendandvoteatthesamemeeting,suchappointment(s)shallbeinvalidunlessthememberspecifiestheproportionofhisshareholdingtoberepresentedbyeachproxy.
5. Ifthisformofproxyisreturnedwithoutanyindicationastohowtheproxyshallvote,theproxywillvoteorabstainashedeemsfit.
6. Ifnonameisinsertedinthespaceprovidedforthenameofyourproxy,theChairmanofthemeetingwillactasyourproxy.
TheShareRegistrar’sOfficeSymphony Share Registrars Sdn BhdLevel6,SymphonyHouse,BlockD13,PusatDaganganDana1,JalanPJU1A/46,47301PetalingJaya,Selangor,Malaysia
STAMP
1stfoldhere
2ndfoldhere
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